IN
Indiana Senate Bill SB0468

Indiana 2023 Regular Session

Indiana Senate Bill SB0468 Compare Versions

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1+*ES0468.2*
2+Reprinted
3+April 4, 2023
4+ENGROSSED
5+SENATE BILL No. 468
6+_____
7+DIGEST OF SB 468 (Updated April 3, 2023 2:24 pm - DI 101)
8+Citations Affected: IC 26-1; IC 32-34.
9+Synopsis: Uniform Commercial Code amendments. Incorporates into
10+Indiana's Uniform Commercial Code (UCC) the Amendments to the
11+Uniform Commercial Code (2022) approved and recommended for
12+enactment in all states by the Uniform Law Commission (ULC) to
13+address emerging technologies. Makes conforming amendments to
14+general provisions and definitions that apply throughout the UCC.
15+Makes conforming amendments to chapters of the UCC governing the
16+following: (1) Sales. (2) Leases. (3) Negotiable instruments. (4) Fund
17+transfers. (5) Letters of credit. (6) Documents of title. (7) Investment
18+securities. (8) Secured transactions. Repeals the chapter in the UCC
19+governing controllable electronic records. Amends the definition of
20+"money" for purposes of Indiana's Uniform Commercial Code (UCC)
21+(Continued next page)
22+Effective: July 1, 2023.
23+Garten, Koch, Taylor G,
24+Charbonneau, Brown L, Pol Jr.,
25+Freeman, Glick, Randolph Lonnie M
26+(HOUSE SPONSORS — JETER, STEUERWALD, JUDY)
27+January 19, 2023, read first time and referred to Committee on Judiciary.
28+February 2, 2023, amended, reported favorably — Do Pass.
29+February 7, 2023, read second time, amended, ordered engrossed.
30+February 8, 2023, engrossed.
31+February 9, 2023, read third time, passed. Yeas 48, nays 1.
32+HOUSE ACTION
33+February 28, 2023, read first time and referred to Committee on Financial Institutions.
34+March 30, 2023, amended, reported — Do Pass.
35+April 3, 2023, read second time, amended, ordered engrossed.
36+ES 468—LS 7443/DI 101 Digest Continued
37+to specify that money: (1) is a medium of exchange that is not in an
38+electronic form; and (2) does not include a central bank digital
39+currency that is currently adopted, or that may be adopted, by the
40+United States government, a foreign government, a foreign reserve, or
41+a foreign sanctioned central bank. Establishes a new chapter in the
42+UCC that: (1) governs controllable electronic records; and (2)
43+incorporates the provisions of the ULC's amendments governing
44+controllable electronic records. Provides that a "controllable electronic
45+record" does not include an electronic record that is currently
46+authorized or adopted by a domestic or foreign government and is not
47+a medium of exchange that was recorded and transferable in a system
48+that existed and operated for the medium of exchange before the
49+medium of exchange was authorized or adopted by a government.
50+Establishes a new chapter in the UCC that: (1) addresses the validity,
51+enforceability, and perfection of certain commercial transactions,
52+including secured transactions, entered into before the effective date of
53+the amendments on July 1, 2023; and (2) establishes July 1, 2025, as
54+an "adjustment date" on or after which certain transactions must
55+conform to the requirements of the amendments to remain valid,
56+enforceable, or perfected. Adds language to incorporate into Indiana's
57+UCC the Amendments to Uniform Commercial Code Article 9 (2018),
58+as approved by the American Law Institute and the National
59+Conference of Commissioners of Uniform State Laws. Provides,
60+through the incorporation of these amendments, that the provisions in
61+the UCC providing that restrictions on the transfer of property pledged
62+as collateral are ineffective do not apply in the case of a security
63+interest in an ownership interest in a general partnership, limited
64+partnership, or limited liability company.
65+ES 468—LS 7443/DI 101ES 468—LS 7443/DI 101 Reprinted
66+April 4, 2023
167 First Regular Session of the 123rd General Assembly (2023)
268 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
369 Constitution) is being amended, the text of the existing provision will appear in this style type,
470 additions will appear in this style type, and deletions will appear in this style type.
571 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
672 provision adopted), the text of the new provision will appear in this style type. Also, the
773 word NEW will appear in that style type in the introductory clause of each SECTION that adds
874 a new provision to the Indiana Code or the Indiana Constitution.
975 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
1076 between statutes enacted by the 2022 Regular Session of the General Assembly.
11-SENATE ENROLLED ACT No. 468
12-AN ACT to amend the Indiana Code concerning commercial law.
77+ENGROSSED
78+SENATE BILL No. 468
79+A BILL FOR AN ACT to amend the Indiana Code concerning
80+commercial law.
1381 Be it enacted by the General Assembly of the State of Indiana:
14-SECTION 1. IC 26-1-1-201, AS AMENDED BY P.L.54-2011,
15-SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
16-JULY 1, 2023]: Sec. 201. Subject to additional definitions contained
17-in IC 26-1-2 through IC 26-1-10 which are applicable to specific
18-provisions, and unless the context otherwise requires, in IC 26-1:
19-(1) "Action" in the sense of a judicial proceeding includes
20-recoupment, counterclaim, setoff, suit in equity, and any other
21-proceedings in which rights are determined.
22-(2) "Aggrieved party" means a party entitled to resort to a remedy.
23-(3) "Agreement" means the bargain of the parties in fact as found
24-in their language or by implication from other circumstances
25-including course of dealing or usage of trade or course of
26-performance as provided in IC 26-1-1-205. Whether an agreement
27-has legal consequences is determined by the provisions of
28-IC 26-1, if applicable; otherwise by the law of contracts
29-(IC 26-1-1-103). (Compare "Contract".)
30-(4) "Bank" means a person engaged in the business of banking
31-and includes a savings bank, savings and loan association, credit
32-union, and trust company.
33-(5) "Bearer" means the person:
34-(A) in control of a negotiable electronic document of title; or
35-(B) in possession of a negotiable instrument, a negotiable
36-tangible document of title, or a certificated security payable to
37-SEA 468 — Concur 2
38-bearer or endorsed in blank.
39-(6) "Bill of lading" means a document of title evidencing the
40-receipt of goods for shipment issued by a person engaged in the
41-business of directly or indirectly transporting or forwarding
42-goods. The term does not include a warehouse receipt. The term
43-includes an airbill. "Airbill" means a document serving for air
44-transportation as a bill of lading does for marine or rail
45-transportation, and includes an air consignment note or air
46-waybill.
47-(7) "Branch" includes a separately incorporated foreign branch of
48-a bank.
49-(8) "Burden of establishing" a fact means the burden of
50-persuading the triers of fact that the existence of the fact is more
51-probable than its nonexistence.
52-(9) "Buyer in ordinary course of business" means a person that
53-buys goods in good faith without knowledge that the sale violates
54-the rights of another person in the goods, and in the ordinary
55-course from a person, other than a pawnbroker, in the business of
56-selling goods of that kind. A person buys goods in the ordinary
57-course of business if the sale to the person comports with the
58-usual or customary practices in the kind of business in which the
59-seller is engaged or with the seller's own usual or customary
60-practices. A person that sells oil, gas, or other minerals at the
61-wellhead or minehead is a person in the business of selling goods
62-of that kind. A buyer in ordinary course of business may buy for
63-cash, by exchange of other property, or on secured or unsecured
64-credit, and may require goods or documents of title under a
65-preexisting contract for sale. Only a buyer that takes possession
66-of the goods or has a right to recover the goods from that seller
67-under IC 26-1-2 may be a buyer in ordinary course of business. A
68-person that acquires goods in a transfer in bulk or as security for
69-or total or partial satisfaction of a money debt is not a buyer in
70-ordinary course of business.
71-(10) "Conspicuous", A with reference to a term, or clause is
72-conspicuous when it is means so written, displayed, or
73-presented that, based on the totality of the circumstances, a
74-reasonable person against whom which it is to operate ought to
75-have noticed it. A printed heading in capitals (as:
76-NONNEGOTIABLE BILL OF LADING) is conspicuous.
77-Language in the body of a form is conspicuous if it is in larger or
78-other contrasting type or color. But in a telegram any stated term
79-is conspicuous. Whether a term or clause is "conspicuous" or not
80-SEA 468 — Concur 3
81-is for a decision by for the court.
82-(11) "Contract" means the total legal obligation which results
83-from the parties' agreement as affected by this Act and any other
84-applicable rules of law. (Compare "Agreement".)
85-(12) "Creditor" includes a general creditor, a secured creditor, a
86-lien creditor and any representative of creditors, including an
87-assignee for the benefit of creditors, a trustee in bankruptcy, a
88-receiver in equity, and an executor or administrator of an
89-insolvent debtor's or assignor's estate.
90-(13) "Defendant" includes a person in the position of defendant
91-in a cross-action or counterclaim.
92-(14) "Delivery", means the following: with respect to:
93-(A) With respect to an electronic document of title, means
94-voluntary transfer of control; and
95-(B) With respect to instruments, an instrument, a tangible
96-documents document of title, or an authoritative tangible
97-copy of a record evidencing chattel paper, or certificated
98-securities, means voluntary transfer of possession.
99-(15) "Document of title" means a record that:
100-(A) in the regular course of business or financing, is treated as
101-adequately evidencing that the person in possession or control
102-of the record is entitled to receive, control, hold, and dispose
103-of the record and the goods it covers; and
104-(B) purports to be issued by or addressed to a bailee and
105-purports to cover goods in the bailee's possession which are
106-either identified or are fungible portions of an identified mass.
107-The term includes a bill of lading, transport document, dock
108-warrant, dock receipt, warehouse receipt, or order for delivery of
109-goods. An electronic document of title means a document of title
110-evidenced by a record consisting of information stored in an
111-electronic medium. A tangible document of title means a
112-document of title evidenced by a record consisting of information
113-that is inscribed on a tangible medium.
114-(16) The following terms have the following meanings:
115-(A) "Electronic" means relating to technology having
116-electrical, digital, magnetic, wireless, optical,
117-electromagnetic, or similar capabilities.
118-(B) "Fault" means wrongful act, omission, or breach.
119-(17) "Fungible" with respect to goods or securities means goods
120-or securities of which any unit is, by nature or usage of trade, the
121-equivalent of any other like unit. Goods which are not fungible
122-shall be deemed fungible for the purposes of IC 26-1 to the extent
123-SEA 468 — Concur 4
124-that under a particular agreement or document unlike units are
125-treated as equivalents.
126-(18) "Genuine" means free of forgery or counterfeiting.
127-(19) "Good faith", except as otherwise provided by IC 26-1-4 or
128-IC 26-1-5.1, means honesty in fact and the observance of
129-reasonable commercial standards of fair dealing.
130-(20) "Holder" means:
131-(A) the person in possession of a negotiable instrument that is
132-payable either to bearer or to an identified person if the
133-identified person is in possession of the instrument;
134-(B) the person in possession of a negotiable tangible document
135-of title if the goods are deliverable either to bearer or to the
136-order of the person in possession; or
137-(C) the person in control, other than under IC 26-1-7-106(g),
138-of a negotiable electronic document of title.
139-(21) To "honor" is to pay or to accept and pay or where a credit so
140-engages to purchase or discount a draft complying with the terms
141-of the credit.
142-(22) "Insolvency proceedings" includes any assignment for the
143-benefit of creditors or other proceedings intended to liquidate or
144-rehabilitate the estate of the person involved.
145-(23) A person is "insolvent" who either has ceased to pay the
146-person's debts in the ordinary course of business or cannot pay the
147-person's debts as they become due or is insolvent within the
148-meaning of the federal bankruptcy law.
149-(24) "Money" means a medium of exchange that is currently
150-authorized or adopted by a domestic or foreign government and
151-is not in an electronic form. The term includes a monetary unit
152-of account established by an intergovernmental organization or by
153-agreement between two (2) or more nations. The term does not
154-include a central bank digital currency that is currently
155-adopted, or that may be adopted, by the United States
156-government, a foreign government, a foreign reserve, or a
157-foreign sanctioned central bank.
158-(25) A person has "notice" of a fact when:
159-(a) the person has actual knowledge of it;
160-(b) the person has received a notice or notification of it; or
161-(c) from all the facts and circumstances known to the person
162-at the time in question, the person has reason to know that it
163-exists.
164-A person "knows" or has "knowledge" of a fact when the person
165-has actual knowledge of it. "Discover" or "learn" or a word or
166-SEA 468 — Concur 5
167-phrase of similar import refers to knowledge rather than to reason
168-to know. The time and circumstances under which a notice or
169-notification may cease to be effective are not determined by
170-IC 26-1.
171-(26) A person "notifies" or "gives" a notice or notification to
172-another by taking such steps as may be reasonably required to
173-inform the other in ordinary course whether or not such other
174-actually comes to know of it. A person "receives" a notice or
175-notification when:
176-(a) it comes to the person's attention; or
177-(b) it is duly delivered at the place of business through which
178-the contract was made or at any other place held out by the
179-person as the place for receipt of such communications.
180-(27) Notice, knowledge, or a notice of notification received by an
181-organization is effective for a particular transaction from the time
182-when it is brought to the attention of the individual conducting
183-that transaction and, in any event, from the time when it would
184-have been brought to the person's attention if the organization had
185-exercised due diligence. An organization exercises due diligence
186-if it maintains reasonable routines for communicating significant
187-information to the person conducting the transaction and there is
188-reasonable compliance with the routines. Due diligence does not
189-require an individual acting for the organization to communicate
190-information unless such communication is part of the person's
191-regular duties or unless the person has reason to know of the
192-transaction and that the transaction would be materially affected
193-by the information.
194-(28) "Organization" includes a corporation, government or
195-governmental subdivision or agency, business trust, estate, trust,
196-partnership or association, two (2) or more persons having a joint
197-or common interest, or any other legal or commercial entity.
198-(29) "Party", as distinct from "third party", means a person who
199-has engaged in a transaction or made an agreement within
200-IC 26-1.
201-(30) "Person" includes means an individual, or an organization.
202-(See IC 26-1-1-102.) corporation, business trust, estate, trust,
203-partnership, limited liability company, association, joint
204-venture, government, governmental subdivision, agency, or
205-instrumentality, or any other legal or commercial entity. The
206-term includes a protected series, however denominated, of an
207-entity if the protected series is established under law other
208-than IC 26-1 that limits, or limits if conditions specified under
209-SEA 468 — Concur 6
210-the law are satisfied, the ability of a creditor of the entity or
211-of any other protected series of the entity to satisfy a claim
212-from assets of the protected series.
213-(31) "Presumption" or "presumed" means that the trier of fact
214-must find the existence of the fact presumed unless and until
215-evidence is introduced which would support a finding of its
216-nonexistence.
217-(32) "Purchase" includes taking by sale, discount, negotiation,
218-mortgage, pledge, lien, security interest, issue or reissue, gift, or
219-any other voluntary transaction creating an interest in property.
220-(33) "Purchaser" means a person who takes by purchase.
221-(33a) "Registered mail" includes certified mail.
222-(33b) "Record", except as used in IC 26-1-2.1-309, means
223-information that is inscribed on a tangible medium or that is
224-stored in an electronic or other medium and is retrievable in
225-perceivable form.
226-(34) "Remedy" means any remedial right to which an aggrieved
227-party is entitled with or without resort to a tribunal.
228-(35) "Representative" includes an agent, an officer of a
229-corporation or association, and a trustee, executor, or
230-administrator of an estate, or any other person empowered to act
231-for another.
232-(36) "Rights" includes remedies.
233-(37) "Security interest" means an interest in personal property or
234-fixtures which secures payment or performance of an obligation.
235-The term also includes any interest of a consignor and a buyer of
236-accounts, chattel paper, a payment intangible, or a promissory
237-note in a transaction that is subject to IC 26-1-9.1. The special
238-property interest of a buyer of goods on identification of such
239-goods to a contract for sale under IC 26-1-2-401 is not a security
240-interest, but a buyer may also acquire a security interest by
241-complying with IC 26-1-9.1. Except as otherwise provided in
242-IC 26-1-2-505, the right of a seller or lessor of goods under
243-IC 26-1-2 or IC 26-1-2.1 to retain or acquire possession of the
244-goods is not a "security interest", but a seller or lessor may also
245-acquire a "security interest" by complying with IC 26-1-9.1. The
246-retention or reservation of title by a seller of goods
247-notwithstanding shipment or delivery to the buyer
248-(IC 26-1-2-401) is limited in effect to a reservation of a "security
249-interest". Whether a transaction creates a lease or security interest
250-is determined by the facts of each case. However, a transaction
251-creates a security interest if the consideration the lessee is to pay
252-SEA 468 — Concur 7
253-the lessor for the right to possession and use of the goods is an
254-obligation for the term of the lease not subject to termination by
255-the lessee and:
256-(a) the original term of the lease is equal to or greater than the
257-remaining economic life of the goods;
258-(b) the lessee is bound to renew the lease for the remaining
259-economic life of the goods or is bound to become the owner of
260-the goods;
261-(c) the lessee has an option to renew the lease for the
262-remaining economic life of the goods for no additional
263-consideration or nominal additional consideration upon
264-compliance with the lease agreement; or
265-(d) the lessee has an option to become the owner of the goods
266-for no additional consideration or nominal additional
267-consideration upon compliance with the lease agreement.
268-A transaction does not create a security interest merely because
269-it provides that:
270-(a) the present value of the consideration the lessee is
271-obligated to pay the lessor for the right to possession and use
272-of the goods is substantially equal to or is greater than the fair
273-market value of the goods at the time the lease is entered into;
274-(b) the lessee assumes risk of loss of the goods, or agrees to
275-pay taxes, insurance, filing, recording, or registration fees, or
276-service or maintenance costs with respect to the goods;
277-(c) the lessee has an option to renew the lease or to become the
278-owner of the goods;
279-(d) the lessee has an option to renew the lease for a fixed rent
280-that is equal to or greater than the reasonably predictable fair
281-market rent for the use of the goods for the term of the renewal
282-at the time the option is to be performed; or
283-(e) the lessee has an option to become the owner of the goods
284-for a fixed price that is equal to or greater than the reasonably
285-predictable fair market value of the goods at the time the
286-option is to be performed.
287-For purposes of this subsection:
288-(x) Additional consideration is not nominal if:
289-(i) when the option to renew the lease is granted to the lessee
290-the rent is stated to be the fair market rent for the use of the
291-goods for the term of the renewal determined at the time the
292-option is to be performed; or
293-(ii) when the option to become the owner of the goods is
294-granted to the lessee the price is stated to be the fair market
295-SEA 468 — Concur 8
296-value of the goods determined at the time the option is to be
297-performed.
298-Additional consideration is nominal if it is less than the
299-lessee's reasonably predictable cost of performing under the
300-lease agreement if the option is not exercised.
301-(y) "Reasonably predictable" and "remaining economic life of
302-the goods" are to be determined with reference to the facts and
303-circumstances at the time the transaction is entered into.
304-(z) "Present value" means the amount as of a date certain of
305-one (1) or more sums payable in the future, discounted to the
306-date certain. The discount is determined by the interest rate
307-specified by the parties if the rate is not manifestly
308-unreasonable at the time the transaction is entered into.
309-Otherwise, the discount is determined by a commercially
310-reasonable rate that takes into account the facts and
311-circumstances of each case at the time the transaction was
312-entered into.
313-(38) "Send" in connection with any writing a record or notice
314-notification means:
315-(A) to deposit in the mail, or deliver for transmission, or
316-transmit by any other usual means of communication, with
317-postage or cost of transmission provided for, and properly
318-addressed and, in the case of an instrument, to an address
319-specified thereon or otherwise agreed or, if there be none, to
320-any address reasonable under the circumstances; or The
321-receipt of any writing or notice within the time at which it
322-would have arrived if properly sent has the effect of a proper
323-sending.
324-(B) to cause the record or notification to be received within
325-the time it would have been received if properly sent under
326-clause (A).
327-(39) "Signed" includes any symbol executed or adopted by a party
328-"Sign" means, with present intention intent to authenticate a
329-writing. or adopt a record, to:
330-(A) execute or adopt a tangible symbol; or
331-(B) attach to or logically associate with the record an
332-electronic symbol, sound, or process.
333-"Signed", "signing", and "signature" have corresponding
334-meanings.
335-(40) "Surety" includes guarantor.
336-(41) "Telegram" includes a message transmitted by radio,
337-teletype, cable, any mechanical method of transmission, or the
338-SEA 468 — Concur 9
339-like.
340-(42) "Term" means that portion of an agreement which relates to
341-a particular matter.
342-(43) "Unauthorized" signature means one made without actual,
343-implied, or apparent authority and includes a forgery.
344-(44) "Value". Except as otherwise provided with respect to
345-negotiable instruments and bank collections (IC 26-1-3.1-303,
346-IC 26-1-4-208, and IC 26-1-4-209) in IC 26-1-3.1, IC 26-1-4,
347-IC 26-1-5.1, IC 26-1-6.2, and IC 26-1-12, a person gives value
348-for rights if the person acquires them:
349-(a) in return for a binding commitment to extend credit or for
350-the extension of immediately available credit whether or not
351-drawn upon and whether or not a chargeback is provided for
352-in the event of difficulties in collection;
353-(b) as security for or in total or partial satisfaction of a
354-preexisting claim;
355-(c) by accepting delivery pursuant to a preexisting contract for
356-purchase; or
357-(d) generally, in return for any consideration sufficient to
358-support a simple contract.
359-(45) "Warehouse receipt" means a document of title issued by a
360-person engaged in the business of storing goods for hire.
361-(46) "Written" or "writing" includes printing, typewriting, or any
362-other intentional reduction to tangible form.
363-SECTION 2. IC 26-1-1-301, AS ADDED BY P.L.143-2007,
364-SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
365-JULY 1, 2023]: Sec. 301. (1) Except as otherwise provided in this
366-section, if a transaction bears a reasonable relation to Indiana and also
367-to another state or nation, the parties may agree that the law either of
368-Indiana or of the other state or nation shall govern their rights and
369-duties.
370-(2) In the absence of an agreement under subsection (1), and except
371-as provided in subsection (3), IC 26-1 applies to transactions bearing
372-an appropriate relation to Indiana.
373-(3) If any of the following provisions specifies the applicable law,
374-that provision governs, and a contrary agreement is effective only to the
375-extent permitted by the law so specified:
376-(a) IC 26-1-2-402.
377-(b) IC 26-1-2.1-105 and IC 26-1-2.1-106.
378-(c) IC 26-1-4-102.
379-(d) IC 26-1-4.1-507.
380-(e) IC 26-1-5.1-116.
381-SEA 468 — Concur 10
382-(f) IC 26-1-8.1-110.
383-(g) IC 26-1-9.1-301 through IC 26-1-9.1-307.
384-(h) IC 26-1-12-107.
385-SECTION 3. IC 26-1-2-102 IS AMENDED TO READ AS
386-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 102. (1) Unless the
387-context otherwise requires, IC 26-1-2 applies to transactions in goods.
388-It does not apply to any transaction which although in the form of an
389-unconditional contract to sell or present sale is intended to operate only
390-as a security transaction, nor does IC 26-1-2 impair or repeal any
391-statute regulating sales to consumers, farmers, or other specified
392-classes of buyers. IC 26-1-2 does not impair or repeal IC 9-14, IC 9-17,
393-or IC 9-22-5. and except as provided in subsection (3), this chapter
394-applies to transactions in goods and, in the case of a hybrid
395-transaction, this chapter applies to the extent provided in
396-subsection (2).
397-(2) In a hybrid transaction, the following apply:
398-(a) If the sale of goods aspects do not predominate, only the
399-provisions of this chapter which relate primarily to the sales
400-of goods aspects of the transaction apply, and the provisions
401-that relate to the transaction as a whole do not apply.
402-(b) If the sale of goods aspects predominate, this chapter
403-applies to the transaction but does not preclude the
404-application in appropriate circumstances of other law to
405-aspects of the transaction that do not relate to the sale of
406-goods.
407-(3) This chapter does not:
408-(a) apply to a transaction that, even though in the form of an
409-unconditional contract to sell or present sale, operates to
410-create a security interest; or
411-(b) impair or repeal a statute regulating sales to consumers,
412-farmers, or other specified classes of buyers.
413-SECTION 4. IC 26-1-2-106 IS AMENDED TO READ AS
414-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 106. (1) In IC 26-1-2,
415-unless the context otherwise requires, "contract" and "agreement" are
416-limited to those relating to the present or future sale of goods. "Contract
417-for sale" includes both a present sale of goods and a contract to sell
418-goods at a future time. A "sale" consists in the passing of title from the
419-seller to the buyer for a price (IC 26-1-2-401). A "present sale" means
420-a sale which is accomplished by the making of the contract.
421-(2) Goods or conduct including any part of a performance are
422-"conforming" or conform to the contract when they are in accordance
423-with the obligations under the contract.
424-SEA 468 — Concur 11
425-(3) "Termination" occurs when either party pursuant to a power
426-created by agreement or law puts an end to the contract otherwise than
427-for its breach. On "termination" all obligations which are still executory
428-on both sides are discharged but any right based on prior breach or
429-performance survives.
430-(4) "Cancellation" occurs when either party puts an end to the
431-contract for breach by the other, and its effect is the same as that of
432-"termination" except that the cancelling party also retains any remedy
433-for breach of the whole contract or of any unperformed balance.
434-(5) "Hybrid transaction" means a single transaction involving
435-a sale of goods and:
436-(a) the provision of services;
437-(b) a lease of other goods; or
438-(c) a sale, lease, or license of property other than goods.
439-SECTION 5. IC 26-1-2-201 IS AMENDED TO READ AS
440-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 201. (1) Except as
441-otherwise provided in this section, a contract for the sale of goods for
442-the price of five hundred dollars ($500) or more is not enforceable by
443-way of action or defense unless there is some writing a record
444-sufficient to indicate that a contract for sale has been made between the
445-parties and signed by the party against whom enforcement is sought or
446-by his the party's authorized agent or broker. A writing record is not
447-insufficient because it omits or incorrectly states a term agreed upon,
448-but the contract is not enforceable under this paragraph section beyond
449-the quantity of goods shown in such writing. the record.
450-(2) Between merchants, if within a reasonable time a writing record
451-in confirmation of the contract and sufficiently against the sender is
452-received and the party receiving it has reason to know its contents, it
453-satisfies the requirements of subsection (1) against such the party
454-unless written notice in a record of objection to its contents is given
455-within ten (10) days after it is received.
456-(3) A contract which does not satisfy the requirements of subsection
457-(1) but which is valid in other respects is enforceable:
458-(a) if the goods are to be specially manufactured for the buyer and
459-are not suitable for sale to others in the ordinary course of the
460-seller's business and the seller, before notice of repudiation is
461-received and under circumstances which reasonably indicate that
462-the goods are for the buyer, has made either a substantial
463-beginning of their manufacture or commitments for their
464-procurement; or
465-(b) if the party against whom enforcement is sought admits in his
466-pleading, testimony, or otherwise in court that a contract for sale
467-SEA 468 — Concur 12
468-was made, but the contract is not enforceable under this provision
469-beyond the quantity of goods admitted; or
470-(c) with respect to goods for which payment has been made and
471-accepted or which have been received and accepted
472-(IC 26-1-2-606).
473-SECTION 6. IC 26-1-2-202, AS AMENDED BY P.L.143-2007,
474-SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
475-JULY 1, 2023]: Sec. 202. Terms with respect to which the confirmatory
476-memoranda of the parties agree or which are otherwise set forth in a
477-writing record intended by the parties as a final expression of their
478-agreement with respect to such terms as are included therein may not
479-be contradicted by evidence of any prior agreement or of a
480-contemporaneous oral agreement but may be explained or
481-supplemented:
482-(a) by course of dealing or usage of trade (IC 26-1-1-205) or by
483-course of performance (IC 26-1-1-205); and
484-(b) by evidence of consistent additional terms, unless the court
485-finds the writing record to have been intended also as a complete
486-and exclusive statement of the terms of the agreement.
487-SECTION 7. IC 26-1-2-203 IS AMENDED TO READ AS
488-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 203. The affixing of a
489-seal to a writing record evidencing a contract for sale or an offer to buy
490-or sell goods does not constitute the writing record a sealed instrument
491-and the law with respect to sealed instruments does not apply to such
492-a contract or offer.
493-SECTION 8. IC 26-1-2-205 IS AMENDED TO READ AS
494-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 205. An offer by a
495-merchant to buy or sell goods in a signed writing record which by its
496-terms gives assurance that it will be held open is not revocable, for lack
497-of consideration, during the time stated or if no time is stated for a
498-reasonable time, but in no event may such period of irrevocability
499-exceed three (3) months; but any such term of assurance on a form
500-supplied by the offeree must be separately signed by the offeror.
501-SECTION 9. IC 26-1-2-209 IS AMENDED TO READ AS
502-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 209. (1) An agreement
503-modifying a contract within IC 26-1-2 needs no consideration to be
504-binding.
505-(2) A signed agreement which excludes modification or rescission,
506-except by a signed writing or another signed record, cannot be
507-otherwise modified or rescinded, but except as between merchants such
508-a requirement on a form supplied by the merchant must be separately
509-signed by the other party.
510-SEA 468 — Concur 13
511-(3) The requirements of the statute of frauds section (IC 26-1-2-201)
512-must be satisfied if the contract as modified is within its provisions.
513-(4) Although an attempt at modification or rescission does not
514-satisfy the requirements of subsection (2) or (3), it can operate as a
515-waiver.
516-(5) A party who has made a waiver affecting an executory portion
517-of the contract may retract the waiver by reasonable notification
518-received by the other party that strict performance will be required of
519-any term waived, unless the retraction would be unjust in view of a
520-material change of position in reliance on the waiver.
521-SECTION 10. IC 26-1-2.1-102 IS AMENDED TO READ AS
522-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 102. (1) IC 26-1-2.1
523-applies to any transaction, regardless of form, that creates a lease and,
524-in the case of a hybrid lease, it applies to the extent provided in
525-subsection (2).
526-(2) In a hybrid lease, the following apply:
527-(a) If the lease of goods aspects do not predominate:
528-(i) only the provisions of this chapter that relate primarily
529-to the lease of goods aspects of the transaction apply, and
530-the provisions that relate primarily to the transaction as a
531-whole do not apply;
532-(ii) section 209 of this chapter applies if the lease is a
533-finance lease; and
534-(iii) section 407 of this chapter applies to the promises of
535-the lessee in a finance lease to the extent the promises are
536-consideration for the right to possession and use of the
537-leased goods.
538-(b) If the lease of goods aspects predominate, this chapter
539-applies to the transaction, but does not preclude the
540-application in appropriate circumstances of other law to
541-aspects of the lease that do not relate to the lease of goods.
542-SECTION 11. IC 26-1-2.1-103, AS AMENDED BY P.L.32-2021,
543-SECTION 72, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
544-JULY 1, 2023]: Sec. 103. (1) Unless the context otherwise requires, in
545-IC 26-1-2.1:
546-(a) "Buyer in ordinary course of business" means a person who in
547-good faith and without knowledge that the sale to the person is in
548-violation of the ownership rights or security interest or leasehold
549-interest of a third party in the goods, buys in ordinary course from
550-a person in the business of selling goods of that kind but does not
551-include a pawnbroker. "Buying" may be for cash or by exchange
552-of other property or on secured or unsecured credit and includes
553-SEA 468 — Concur 14
554-acquiring goods or documents of title under a pre-existing
555-contract for sale but does not include a transfer in bulk or as
556-security for or in total or partial satisfaction of a money debt.
557-(b) "Cancellation" occurs when either party puts an end to the
558-lease contract for default by the other party.
559-(c) "Commercial unit" means such a unit of goods as by
560-commercial usage is a single whole for purposes of lease and
561-division of which materially impairs its character or value on the
562-market or in use. A commercial unit may be a single article, as a
563-machine, or a set of articles, as a suite of furniture or a line of
564-machinery, or a quantity, as a gross or carload, or any other unit
565-treated in use or in the relevant market as a single whole.
566-(d) "Conforming" goods or performance under a lease contract
567-means goods or performance that are in accordance with the
568-obligations under the lease contract.
569-(e) "Consumer lease" means a lease that a lessor regularly
570-engaged in the business of leasing or selling makes to a lessee
571-who is an individual and who takes under the lease primarily for
572-a personal, family, or household purpose if the total payments to
573-be made under the lease contract, excluding payments for options
574-to renew or buy, do not exceed twenty-five thousand dollars
575-($25,000).
576-(f) "Fault" means wrongful act, omission, breach, or default.
577-(g) "Finance lease" means a lease with respect to which:
578-(i) the lessor does not select, manufacture, or supply the goods;
579-(ii) the lessor acquires the goods or the right to possession and
580-use of the goods in connection with the lease; and
581-(iii) one (1) of the following occurs:
582-(A) the lessee receives a copy of the contract by which the
583-lessor acquired the goods or the right to possession and use
584-of the goods before signing the lease contract;
585-(B) the lessee's approval of the contract by which the lessor
586-acquired the goods or the right to possession and use of the
587-goods is a condition to effectiveness of the lease contract;
588-(C) the lessee, before signing the lease contract, receives an
589-accurate and complete statement designating the promises
590-and warranties, and any disclaimers of warranties,
591-limitations, or modifications of remedies, or liquidated
592-damages, including those of a third party, such as the
593-manufacturer of the goods, provided to the lessor by the
594-person supplying the goods in connection with or as part of
595-the contract by which the lessor acquired the goods or the
596-SEA 468 — Concur 15
597-right to possession and use of the goods; or
598-(D) if the lease is not a consumer lease, the lessor, before the
599-lessee signs the lease contract, informs the lessee in writing:
600-(a) of the identity of the person supplying the goods to the
601-lessor, unless the lessee has selected that person and
602-directed the lessor to acquire the goods or the right to
603-possession and use of the goods from that person; (b) that
604-the lessee is entitled under IC 26-1-2.1 to the promises and
605-warranties, including those of any third party, provided to
606-the lessor by the person supplying the goods in connection
607-with or as part of the contract by which the lessor acquired
608-the goods or the right to possession and use of the goods;
609-and (c) that the lessee may communicate with the person
610-supplying the goods to the lessor and receive an accurate
611-and complete statement of those promises and warranties,
612-including any disclaimers and limitations of them or of
613-remedies.
614-(h) The following terms have the following meanings:
615-(i) "Goods" means all things that are movable at the time of
616-identification to the lease contract, or are fixtures
617-(IC 26-1-2.1-309), but the term does not include money,
618-documents, instruments, accounts, chattel paper, general
619-intangibles, or minerals or the like, including oil and gas,
620-before extraction. The term also includes the unborn young of
621-animals.
622-(ii) "Hybrid lease" means a single transaction involving a
623-lease of goods and either the provision of services, a sale of
624-other goods, or a sale, lease, or license of property other
625-than goods.
626-(i) "Installment lease contract" means a lease contract that
627-authorizes or requires the delivery of goods in separate lots to be
628-separately accepted, even though the lease contract contains a
629-clause "each delivery is a separate lease" or its equivalent.
630-(j) "Lease" means a transfer of the right to possession and use of
631-goods for a term in return for consideration, but a sale, including
632-a sale on approval or a sale or return, or retention or creation of a
633-security interest is not a lease. Unless the context clearly indicates
634-otherwise, the term includes a sublease.
635-(k) "Lease agreement" means the bargain, with respect to the
636-lease, of the lessor and the lessee in fact as found in their
637-language or by implication from other circumstances including
638-course of dealing or usage of trade or course of performance as
639-SEA 468 — Concur 16
640-provided in IC 26-1-2.1. Unless the context clearly indicates
641-otherwise, the term includes a sublease agreement.
642-(l) "Lease contract" means the total legal obligation that results
643-from the lease agreement as affected by IC 26-1-2.1 and any other
644-applicable rules of law. Unless the context clearly indicates
645-otherwise, the term includes a sublease contract.
646-(m) "Leasehold interest" means the interest of the lessor or the
647-lessee under a lease contract.
648-(n) "Lessee" means a person who acquires the right to possession
649-and use of goods under a lease. Unless the context clearly
650-indicates otherwise, the term includes a sublessee.
651-(o) "Lessee in ordinary course of business" means a person who
652-in good faith and without knowledge that the lease to the person
653-is in violation of the ownership rights or security interest or
654-leasehold interest of a third party in the goods leases in ordinary
655-course from a person in the business of selling or leasing goods of
656-that kind but does not include a pawnbroker. "Leasing" may be for
657-cash or by exchange of other property or on secured or unsecured
658-credit and includes acquiring goods or documents of title under a
659-pre-existing lease contract but does not include a transfer in bulk
660-or as security for or in total or partial satisfaction of a money debt.
661-(p) "Lessor" means a person who transfers the right to possession
662-and use of goods under a lease. Unless the context clearly
663-indicates otherwise, the term includes a sublessor.
664-(q) "Lessor's residual interest" means the lessor's interest in the
665-goods after expiration, termination, or cancellation of the lease
666-contract.
667-(r) "Lien" means a charge against or interest in goods to secure
668-payment of a debt or performance of an obligation, but the term
669-does not include a security interest.
670-(s) "Lot" means a parcel or a single article that is the subject
671-matter of a separate lease or delivery, whether or not it is
672-sufficient to perform the lease contract.
673-(t) "Merchant lessee" means a lessee that is a merchant with
674-respect to goods of the kind subject to the lease.
675-(u) "Present value" means the amount as of a date certain of one
676-(1) or more sums payable in the future, discounted to the date
677-certain. The discount is determined by the interest rate specified
678-by the parties if the rate was not manifestly unreasonable at the
679-time the transaction was entered into; otherwise, the discount is
680-determined by a commercially reasonable rate that takes into
681-account the facts and circumstances of each case at the time the
682-SEA 468 — Concur 17
683-transaction was entered into.
684-(v) "Purchase" includes taking by sale, lease, mortgage, security
685-interest, pledge, gift, or any other voluntary transaction creating
686-an interest in goods.
687-(w) "Sublease" means a lease of goods the right to possession and
688-use of which was acquired by the lessor as a lessee under an
689-existing lease.
690-(x) "Supplier" means a person from whom a lessor buys or leases
691-goods to be leased under a finance lease.
692-(y) "Supply contract" means a contract under which a lessor buys
693-or leases goods to be leased.
694-(z) "Termination" occurs when either party pursuant to a power
695-created by agreement or law puts an end to the lease contract
696-otherwise than for default.
697-(2) Other definitions applying to IC 26-1-2.1 and the sections in
698-which they appear are:
699-"Accessions". IC 26-1-2.1-310(1).
700-"Construction mortgage". IC 26-1-2.1-309(1)(d).
701-"Encumbrance". IC 26-1-2.1-309(1)(e).
702-"Fixtures". IC 26-1-2.1-309(1)(a).
703-"Fixture filing". IC 26-1-2.1-309(1)(b).
704-"Purchase money lease". IC 26-1-2.1-309(1)(c).
705-(3) The following definitions in other chapters apply to IC 26-1-2.1:
706-"Account". IC 26-1-9.1-102(a)(2).
707-"Between merchants". IC 26-1-2-104(3).
708-"Buyer". IC 26-1-2-103(1)(a).
709-"Chattel paper". IC 26-1-9.1-102(a)(11).
710-"Consumer goods". IC 26-1-9.1-102(a)(23).
711-"Document". IC 26-1-9.1-102(a)(30).
712-"Entrusting". IC 26-1-2-403(3).
713-"General intangibles". IC 26-1-9.1-102(a)(42).
714-"Good faith". IC 26-1-2-103(1)(b).
715-"Instrument". IC 26-1-9.1-102(a)(47).
716-"Merchant". IC 26-1-2-104(1).
717-"Mortgage". IC 26-1-9.1-102(a)(55).
718-"Pursuant to commitment". IC 26-1-9.1-102(a)(69).
719-"Receipt". IC 26-1-2-103(1)(c).
720-"Sale". IC 26-1-2-106(1).
721-"Sale on approval". IC 26-1-2-326.
722-"Sale or return". IC 26-1-2-326.
723-"Seller". IC 26-1-2-103(1)(d).
724-(4) In addition, IC 26-1-1 contains general definitions and principles
725-SEA 468 — Concur 18
726-of construction and interpretation applicable throughout IC 26-1-2.1.
727-SECTION 12. IC 26-1-2.1-107 IS AMENDED TO READ AS
728-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 107. Any claim or right
729-arising out of an alleged default or breach of warranty may be
730-discharged in whole or in part without consideration by a written
731-waiver or renunciation in a signed and record delivered by the
732-aggrieved party.
733-SECTION 13. IC 26-1-2.1-201 IS AMENDED TO READ AS
734-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 201. (1) A lease
735-contract is not enforceable by way of action or defense unless:
736-(a) the total payments to be made under the lease contract,
737-excluding payments for options to renew or buy, are less than one
738-thousand dollars ($1,000); or
739-(b) there is a writing, record, signed by the party against whom
740-enforcement is sought or by that party's authorized agent,
741-sufficient to indicate that a lease contract has been made between
742-the parties and to describe the goods leased and the lease term.
743-(2) Any description of leased goods or of the lease term is sufficient
744-and satisfies subsection (1)(b), whether or not it is specific, if it
745-reasonably identifies what is described.
746-(3) A writing record is not insufficient because it omits or
747-incorrectly states a term agreed upon, but the lease contract is not
748-enforceable under subsection (1)(b) beyond the lease term and the
749-quantity of goods shown in the writing. record.
750-(4) A lease contract that does not satisfy the requirements of
751-subsection (1), but which is valid in other respects, is enforceable:
752-(a) if the goods are to be specially manufactured or obtained for
753-the lessee and are not suitable for lease or sale to others in the
754-ordinary course of the lessor's business, and the lessor, before
755-notice of repudiation is received and under circumstances that
756-reasonably indicate that the goods are for the lessee, has made
757-either a substantial beginning of their manufacture or
758-commitments for their procurement;
759-(b) if the party against whom enforcement is sought admits in that
760-party's pleading, testimony or otherwise in court that a lease
761-contract was made, but the lease contract is not enforceable under
762-this provision beyond the quantity of goods admitted; or
763-(c) with respect to goods that have been received and accepted by
764-the lessee.
765-(5) The lease term under a lease contract referred to in subsection
766-(4) is:
767-(a) if there is a writing record signed by the party against whom
768-SEA 468 — Concur 19
769-enforcement is sought or by that party's authorized agent
770-specifying the lease term, the term so specified;
771-(b) if the party against whom enforcement is sought admits in that
772-party's pleading, testimony, or otherwise in court a lease term, the
773-term so admitted; or
774-(c) a reasonable lease term.
775-SECTION 14. IC 26-1-2.1-202 IS AMENDED TO READ AS
776-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 202. Terms with
777-respect to which the confirmatory memoranda of the parties agree or
778-which are otherwise set forth in a writing record intended by the
779-parties as a final expression of their agreement with respect to such
780-terms as are included therein may not be contradicted by evidence of
781-any prior agreement or of a contemporaneous oral agreement but may
782-be explained or supplemented:
783-(a) by course of dealing or usage of trade or by course of
784-performance; and
785-(b) by evidence of consistent additional terms unless the court
786-finds the writing record to have been intended also as a complete
787-and exclusive statement of the terms of the agreement.
788-SECTION 15. IC 26-1-2.1-203 IS AMENDED TO READ AS
789-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 203. The affixing of a
790-seal to a writing record evidencing a lease contract or an offer to enter
791-into a lease contract does not render the writing record a sealed
792-instrument and the law with respect to sealed instruments does not
793-apply to the lease contract or offer.
794-SECTION 16. IC 26-1-2.1-205 IS AMENDED TO READ AS
795-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 205. An offer by a
796-merchant to lease goods to or from another person in a signed writing
797-record that by its terms gives assurance it will be held open is not
798-revocable, for lack of consideration, during the time stated or, if no
799-time is stated, for a reasonable time, but in no event may the period of
800-irrevocability exceed three (3) months. Any such term of assurance on
801-a form supplied by the offeree must be separately signed by the offeror.
802-SECTION 17. IC 26-1-2.1-208 IS AMENDED TO READ AS
803-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 208. (1) An agreement
804-modifying a lease contract needs no consideration to be binding.
805-(2) A signed lease agreement that excludes modification or
806-rescission except by a signed writing record may not be otherwise
807-modified or rescinded, but, except as between merchants, such a
808-requirement on a form supplied by a merchant must be separately
809-signed by the other party.
810-(3) Although an attempt at modification or rescission does not
811-SEA 468 — Concur 20
812-satisfy the requirements of subsection (2), it may operate as a waiver.
813-(4) A party who has made a waiver affecting an executory portion
814-of a lease contract may retract the waiver by reasonable notification
815-received by the other party that strict performance will be required of
816-any term waived, unless the retraction would be unjust in view of a
817-material change of position in reliance on the waiver.
818-SECTION 18. IC 26-1-3.1-104 IS AMENDED TO READ AS
819-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 104. (a) Except as
820-provided in subsections (c) and (d), "negotiable instrument" means an
821-unconditional promise or order to pay a fixed amount of money, with
822-or without interest or other charges described in the promise or order,
823-if it:
824-(1) is payable to bearer or to order at the time it is issued or first
825-comes into possession of a holder;
826-(2) is payable on demand or at a definite time; and
827-(3) does not state any other undertaking or instruction by the
828-person promising or ordering payment to do any act in addition to
829-the payment of money, but the promise or order may contain:
830-(A) an undertaking or power to give, maintain, or protect
831-collateral to secure payment;
832-(B) an authorization or power to the holder to confess
833-judgment or realize on or dispose of collateral; or
834-(C) a waiver of the benefit of any law intended for the
835-advantage or protection of an obligor;
836-(D) a term that specifies the law that governs the promise
837-or order; or
838-(E) an undertaking to resolve in a specified forum a
839-dispute concerning the promise or order.
840-(b) "Instrument" means a negotiable instrument.
841-(c) An order that meets all of the requirements of subsection (a),
842-except subdivision (1), and otherwise falls within the definition of
843-"check" in subsection (f) is a negotiable instrument and a check.
844-(d) A promise or order other than a check is not an instrument if, at
845-the time it is issued or first comes into possession of a holder, it
846-contains a conspicuous statement, however expressed, to the effect that
847-the promise or order is not negotiable or is not an instrument governed
848-by IC 26-1-3.1.
849-(e) An instrument is a "note" if it is a promise and is a "draft" if it is
850-an order. If an instrument falls within the definition of both "note" and
851-"draft", a person entitled to enforce the instrument may treat it as either.
852-(f) "Check" means:
853-(1) a draft, other than a documentary draft, payable on demand
854-SEA 468 — Concur 21
855-and drawn on a bank; or
856-(2) a cashier's check or teller's check.
857-An instrument may be a check even though it is described on its face
858-by another term, such as "money order".
859-(g) "Cashier's check" means a draft with respect to which the drawer
860-and drawee are the same bank or branches of the same bank.
861-(h) "Teller's check" means a draft drawn by a bank:
862-(1) on another bank; or
863-(2) payable at or through a bank.
864-(i) "Traveler's check" means an instrument that:
865-(1) is payable on demand;
866-(2) is drawn on or payable at or through a bank;
867-(3) is designated by the term "traveler's check" or by a
868-substantially similar term; and
869-(4) requires, as a condition to payment, a countersignature by a
870-person whose specimen signature appears on the instrument.
871-(j) "Certificate of deposit" means an instrument containing an
872-acknowledgment by a bank that a sum of money has been received by
873-the bank and a promise by the bank to repay the sum of money. A
874-certificate of deposit is a note of the bank.
875-SECTION 19. IC 26-1-3.1-105 IS AMENDED TO READ AS
876-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 105. (a) "Issue" means:
877-(1) the first delivery of an instrument by the maker or drawer,
878-whether to a holder or nonholder, for the purpose of giving rights
879-on the instrument to any person; or
880-(2) if agreed by the payee, the first transmission by the drawer
881-to the payee of an image of an item and information derived
882-from the item that enables the depository bank to collect the
883-item by transferring or presenting under federal law an
884-electronic check.
885-(b) An unissued instrument, or an unissued incomplete instrument
886-that is completed, is binding on the maker or drawer, but nonissuance
887-is a defense. An instrument that is conditionally issued or is issued for
888-a special purpose is binding on the maker or drawer, but failure of the
889-condition or special purpose to be fulfilled is a defense.
890-(c) "Issuer" applies to issued and unissued instruments and means
891-a maker or drawer of an instrument.
892-SECTION 20. IC 26-1-3.1-401 IS AMENDED TO READ AS
893-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 401. (a) A person is not
894-liable on an instrument unless:
895-(1) the person signed the instrument; or
896-(2) the person is represented by an agent or representative who
897-SEA 468 — Concur 22
898-signed the instrument and the signature is binding on the
899-represented person under IC 26-1-3.1-402.
900-(b) A signature may be made:
901-(1) manually or by means of a device or machine; and
902-(2) by the use of any name, including a trade or assumed name, or
903-by a word, mark, or symbol executed or adopted by a person with
904-present intention to authenticate a writing.
905-SECTION 21. IC 26-1-3.1-604, AS AMENDED BY P.L.135-2009,
906-SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
907-JULY 1, 2023]: Sec. 604. (a) A person entitled to enforce an
908-instrument, with or without consideration, may discharge the obligation
909-of a party to pay the instrument:
910-(1) by an intentional voluntary act, such as surrender of the
911-instrument to the party, destruction, mutilation, or cancellation of
912-the instrument, cancellation or striking out of the party's signature,
913-or the addition of words to the instrument indicating discharge; or
914-(2) by agreeing not to sue or otherwise renouncing rights against
915-the party by a signed record.
916-The obligation of a party to pay a check is not discharged solely by
917-destruction of the check in connection with a process in which
918-information is extracted from the check and an image of the check
919-is made and, subsequently, the information and image are
920-transmitted for payment.
921-(b) Cancellation or striking out of an endorsement under subsection
922-(a) does not affect the status and rights of a party derived from the
923-endorsement.
924-(c) As used in this section, "signed", with respect to a record that is
925-not a writing, includes the attachment to or logical association with the
926-record of an electronic symbol, sound, or process with the present
927-intent to adopt or accept the record.
928-SECTION 22. IC 26-1-4.1-103 IS AMENDED TO READ AS
929-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 103. (a) In IC 26-1-4.1:
930-(1) "Payment order" means an instruction of a sender to a
931-receiving bank, transmitted orally electronically, or in writing, a
932-record, to pay, or to cause another bank to pay, a fixed or
933-determinable amount of money to a beneficiary if:
934-(i) the instruction does not state a condition to payment to the
935-beneficiary other than time of payment;
936-(ii) the receiving bank is to be reimbursed by debiting an
937-account of, or otherwise receiving payment from, the sender;
938-and
939-(iii) the instruction is transmitted by the sender directly to the
940-SEA 468 — Concur 23
941-receiving bank or to an agent, funds-transfer system, or
942-communication system for transmittal to the receiving bank.
943-(2) "Beneficiary" means the person to be paid by the beneficiary's
944-bank.
945-(3) "Beneficiary's bank" means the bank identified in a payment
946-order in which an account of the beneficiary is to be credited
947-pursuant to the order or which otherwise is to make payment to
948-the beneficiary if the order does not provide for payment to an
949-account.
950-(4) "Receiving bank" means the bank to which the sender's
951-instruction is addressed.
952-(5) "Sender" means the person giving the instruction to the
953-receiving bank.
954-(b) If an instruction complying with subsection (a)(1) is to make
955-more than one (1) payment to a beneficiary, the instruction is a separate
956-payment order with respect to each payment.
957-(c) A payment order is issued when it is sent to the receiving bank.
958-SECTION 23. IC 26-1-4.1-201 IS AMENDED TO READ AS
959-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 201. "Security
960-procedure" means a procedure established by agreement of a customer
961-and a receiving bank for the purpose of (i) verifying that a payment
962-order or communication amending or canceling a payment order is that
963-of the customer, or (ii) detecting error in the transmission or the content
964-of the payment order or communication. A security procedure may
965-impose an obligation on the receiving bank or the customer and
966-may require the use of algorithms or other codes, identifying words, or
967-numbers, symbols, sounds, biometrics, encryption, callback
968-procedures, or similar security devices. Comparison of a signature on
969-a payment order or communication with an authorized specimen
970-signature of the customer or requiring a payment order to be sent
971-from a known electronic mail address, Internet protocol address,
972-or telephone number is not by itself a security procedure.
973-SECTION 24. IC 26-1-4.1-202 IS AMENDED TO READ AS
974-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 202. (a) A payment
975-order received by the receiving bank is the authorized order of the
976-person identified as sender if that person authorized the order or is
977-otherwise bound by it under the law of agency.
978-(b) If a bank and its customer have agreed that the authenticity of
979-payment orders issued to the bank in the name of the customer as
980-sender will be verified pursuant to a security procedure, a payment
981-order received by the receiving bank is effective as the order of the
982-customer, whether or not authorized, if (i) the security procedure is a
983-SEA 468 — Concur 24
984-commercially reasonable method of providing security against
985-unauthorized payment orders, and (ii) the bank proves that it accepted
986-the payment order in good faith and in compliance with the bank's
987-obligations under the security procedure and any written agreement
988-or instruction of the customer, evidenced by a record, restricting
989-acceptance of payment orders issued in the name of the customer. The
990-bank is not required to follow an instruction that violates a written an
991-agreement with the customer, evidenced by a record, or notice of
992-which is not received at a time and in a manner affording the bank a
993-reasonable opportunity to act on it before the payment order is
994-accepted.
995-(c) Commercial reasonableness of a security procedure is a question
996-of law to be determined by considering the wishes of the customer
997-expressed to the bank, the circumstances of the customer known to the
998-bank, including the size, type, and frequency of payment orders
999-normally issued by the customer to the bank, alternative security
1000-procedures offered to the customer, and security procedures in general
1001-use by customers and receiving banks similarly situated. A security
1002-procedure is deemed to be commercially reasonable if (i) the security
1003-procedure was chosen by the customer after the bank offered, and the
1004-customer refused, a security procedure that was commercially
1005-reasonable for that customer, and (ii) the customer expressly agreed in
1006-writing a record to be bound by any payment order, whether or not
1007-authorized, issued in its name and accepted by the bank in compliance
1008-with the bank's obligations under the security procedure chosen by
1009-the customer.
1010-(d) The term "sender" in IC 26-1-4.1 includes the customer in whose
1011-name a payment order is issued if the order is the authorized order of
1012-the customer under subsection (a), or it is effective as the order of the
1013-customer under subsection (b).
1014-(e) This section applies to amendments and cancellations of
1015-payment orders to the same extent it applies to payment orders.
1016-(f) Except as provided in this section and in IC 26-1-4.1-203(a)(1),
1017-rights and obligations arising under this section or IC 26-1-4.1-203 may
1018-not be varied by agreement.
1019-SECTION 25. IC 26-1-4.1-203 IS AMENDED TO READ AS
1020-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 203. (a) If an accepted
1021-payment order is not, under IC 26-1-4.1-202(a), an authorized order of
1022-a customer identified as sender, but is effective as an order of the
1023-customer pursuant to IC 26-1-4.1-202(b), the following rules apply:
1024-(1) By express written agreement, evidenced by a record, the
1025-receiving bank may limit the extent to which it is entitled to
1026-SEA 468 — Concur 25
1027-enforce or retain payment of the payment order.
1028-(2) The receiving bank is not entitled to enforce or retain payment
1029-of the payment order if the customer proves that the order was not
1030-caused, directly or indirectly, by a person:
1031-(i) entrusted at any time with duties to act for the customer
1032-with respect to payment orders or the security procedure; or
1033-(ii) who obtained access to transmitting facilities of the
1034-customer or who obtained, from a source controlled by the
1035-customer and without authority of the receiving bank,
1036-information facilitating breach of the security procedure,
1037-regardless of how the information was obtained or whether the
1038-customer was at fault. Information includes any access device,
1039-computer software, or the like.
1040-(b) This section applies to amendments of payment orders to the
1041-same extent it applies to payment orders.
1042-SECTION 26. IC 26-1-4.1-207 IS AMENDED TO READ AS
1043-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 207. (a) Subject to
1044-subsection (b), if, in a payment order received by the beneficiary's
1045-bank, the name, bank account number, or other identification of the
1046-beneficiary refers to a nonexistent or unidentifiable person or account,
1047-no person has rights as a beneficiary of the order and acceptance of the
1048-order cannot occur.
1049-(b) If a payment order received by the beneficiary's bank identifies
1050-the beneficiary both by name and by an identifying or bank account
1051-number and the name and number identify different persons, the
1052-following rules apply:
1053-(1) Except as otherwise provided in subsection (c), if the
1054-beneficiary's bank does not know that the name and number refer
1055-to different persons, it may rely on the number as the proper
1056-identification of the beneficiary of the order. The beneficiary's
1057-bank need not determine whether the name and number refer to
1058-the same person.
1059-(2) If the beneficiary's bank pays the person identified by name or
1060-knows that the name and number identify different persons, no
1061-person has rights as beneficiary except the person paid by the
1062-beneficiary's bank if that person was entitled to receive payment
1063-from the originator of the funds transfer. If no person has rights as
1064-beneficiary, acceptance of the order cannot occur.
1065-(c) If (i) a payment order described in subsection (b) is accepted, (ii)
1066-the originator's payment order described the beneficiary inconsistently
1067-by name and number, and (iii) the beneficiary's bank pays the person
1068-identified by number as permitted by subsection (b)(1), the following
1069-SEA 468 — Concur 26
1070-rules apply:
1071-(1) If the originator is a bank, the originator is obliged to pay its
1072-order.
1073-(2) If the originator is not a bank and proves that the person
1074-identified by number was not entitled to receive payment from the
1075-originator, the originator is not obliged to pay its order unless the
1076-originator's bank proves that the originator, before acceptance of
1077-the originator's order, had notice that payment of a payment order
1078-issued by the originator might be made by the beneficiary's bank
1079-on the basis of an identifying or bank account number even if it
1080-identifies a person different from the named beneficiary. Proof of
1081-notice may be made by any admissible evidence. The originator's
1082-bank satisfies the burden of proof if it proves that the originator,
1083-before the payment order was accepted, signed a writing record
1084-stating the information to which the notice relates.
1085-(d) In a case governed by subsection (b)(1), if the beneficiary's bank
1086-rightfully pays the person identified by number and that person was not
1087-entitled to receive payment from the originator, the amount paid may
1088-be recovered from that person to the extent allowed by the law
1089-governing mistake and restitution as follows:
1090-(1) If the originator is obliged to pay its payment order as stated
1091-in subsection (c), the originator has the right to recover.
1092-(2) If the originator is not a bank and is not obliged to pay its
1093-payment order, the originator's bank has the right to recover.
1094-SECTION 27. IC 26-1-4.1-208 IS AMENDED TO READ AS
1095-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 208. (a) This
1096-subsection applies to a payment order identifying an intermediary bank
1097-or the beneficiary's bank only by an identifying number.
1098-(1) The receiving bank may rely on the number as the proper
1099-identification of the intermediary or beneficiary's bank and need
1100-not determine whether the number identifies a bank.
1101-(2) The sender is obliged to compensate the receiving bank for
1102-any loss and expenses incurred by the receiving bank as a result
1103-of its reliance on the number in executing or attempting to
1104-execute the order.
1105-(b) This subsection applies to a payment order identifying an
1106-intermediary bank or the beneficiary's bank both by name and an
1107-identifying number if the name and number identify different persons.
1108-(1) If the sender is a bank, the receiving bank may rely on the
1109-number as the proper identification of the intermediary or
1110-beneficiary's bank if the receiving bank, when it executes the
1111-sender's order, does not know that the name and number identify
1112-SEA 468 — Concur 27
1113-different persons. The receiving bank need not determine whether
1114-the name and number refer to the same person or whether the
1115-number refers to a bank. The sender is obliged to compensate the
1116-receiving bank for any loss and expenses incurred by the
1117-receiving bank as a result of its reliance on the number in
1118-executing or attempting to execute the order.
1119-(2) If the sender is not a bank and the receiving bank proves that
1120-the sender, before the payment order was accepted, had notice
1121-that the receiving bank might rely on the number as the proper
1122-identification of the intermediary or beneficiary's bank even if it
1123-identifies a person different from the bank identified by name, the
1124-rights and obligations of the sender and the receiving bank are
1125-governed by subdivision (1), as though the sender were a bank.
1126-Proof of notice may be made by any admissible evidence. The
1127-receiving bank satisfies the burden of proof if it proves that the
1128-sender, before the payment order was accepted, signed a writing
1129-record stating the information to which the notice relates.
1130-(3) Regardless of whether the sender is a bank, the receiving bank
1131-may rely on the name as the proper identification of the
1132-intermediary or beneficiary's bank if the receiving bank, at the
1133-time it executes the sender's order, does not know that the name
1134-and number identify different persons. The receiving bank need
1135-not determine whether the name and number refer to the same
1136-person.
1137-(4) If the receiving bank knows that the name and number identify
1138-different persons, reliance on either the name or the number in
1139-executing the sender's payment order is a breach of the obligation
1140-stated in IC 26-1-4.1-302(a)(1).
1141-SECTION 28. IC 26-1-4.1-210 IS AMENDED TO READ AS
1142-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 210. (a) A payment
1143-order is rejected by the receiving bank by a notice of rejection
1144-transmitted to the sender orally electronically, or in writing. a record.
1145-A notice of rejection need not use any particular words and is sufficient
1146-if it indicates that the receiving bank is rejecting the order or will not
1147-execute or pay the order. Rejection is effective when the notice is given
1148-if transmission is by a means that is reasonable in the circumstances.
1149-If notice of rejection is given by a means that is not reasonable,
1150-rejection is effective when the notice is received. If an agreement of the
1151-sender and receiving bank establishes the means to be used to reject a
1152-payment order, (i) any means complying with the agreement is
1153-reasonable and (ii) any means not complying is not reasonable unless
1154-no significant delay in receipt of the notice resulted from the use of the
1155-SEA 468 — Concur 28
1156-noncomplying means.
1157-(b) This subsection applies if a receiving bank other than the
1158-beneficiary's bank fails to execute a payment order despite the
1159-existence on the execution date of a withdrawable credit balance in an
1160-authorized account of the sender sufficient to cover the order. If the
1161-sender does not receive notice of rejection of the order on the execution
1162-date and the authorized account of the sender does not bear interest, the
1163-bank is obliged to pay interest to the sender on the amount of the order
1164-for the number of days elapsing after the execution date to the earlier
1165-of the day the order is canceled pursuant to IC 26-1-4.1-211(d) or the
1166-day the sender receives notice or learns that the order was not executed,
1167-counting the final day of the period as an elapsed day. If the
1168-withdrawable credit balance during that period falls below the amount
1169-of the order, the amount of interest is reduced accordingly.
1170-(c) If a receiving bank suspends payments, all unaccepted payment
1171-orders issued to it are deemed rejected at the time the bank suspends
1172-payments.
1173-(d) Acceptance of a payment order precludes a later rejection of the
1174-order. Rejection of a payment order precludes a later acceptance of the
1175-order.
1176-SECTION 29. IC 26-1-4.1-211 IS AMENDED TO READ AS
1177-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 211. (a) A
1178-communication of the sender of a payment order canceling or
1179-amending the order may be transmitted to the receiving bank orally
1180-electronically, or in writing. a record. If a security procedure is in
1181-effect between the sender and the receiving bank, the communication
1182-is not effective to cancel or amend the order unless the communication
1183-is verified pursuant to the security procedure or the bank agrees to the
1184-cancellation or amendment.
1185-(b) Subject to subsection (a), a communication by the sender
1186-canceling or amending a payment order is effective to cancel or amend
1187-the order if notice of the communication is received at a time and in a
1188-manner affording the receiving bank a reasonable opportunity to act on
1189-the communication before the bank accepts the payment order.
1190-(c) After a payment order has been accepted, cancellation or
1191-amendment of the order is not effective unless the receiving bank
1192-agrees or a funds-transfer system rule allows cancellation or
1193-amendment without agreement of the bank.
1194-(1) With respect to a payment order accepted by a receiving bank
1195-other than the beneficiary's bank, cancellation or amendment is
1196-not effective unless a conforming cancellation or amendment of
1197-the payment order issued by the receiving bank is also made.
1198-SEA 468 — Concur 29
1199-(2) With respect to a payment order accepted by the beneficiary's
1200-bank, cancellation or amendment is not effective unless the order
1201-was issued in execution of an unauthorized payment order, or
1202-because of a mistake by a sender in the funds transfer which
1203-resulted in the issuance of a payment order:
1204-(i) that is a duplicate of a payment order previously issued by
1205-the sender;
1206-(ii) that orders payment to a beneficiary not entitled to receive
1207-payment from the originator; or
1208-(iii) that orders payment in an amount greater than the amount
1209-the beneficiary was entitled to receive from the originator. If
1210-the payment order is canceled or amended, the beneficiary's
1211-bank is entitled to recover from the beneficiary any amount
1212-paid to the beneficiary to the extent allowed by the law
1213-governing mistake and restitution.
1214-(d) An unaccepted payment order is canceled by operation of law at
1215-the close of the fifth funds-transfer business day of the receiving bank
1216-after the execution date or payment date of the order.
1217-(e) A canceled payment order cannot be accepted. If an accepted
1218-payment order is canceled, the acceptance is nullified and no person
1219-has any right or obligation based on the acceptance. Amendment of a
1220-payment order is deemed to be cancellation of the original order at the
1221-time of amendment and issue of a new payment order in the amended
1222-form at the same time.
1223-(f) Unless otherwise provided in an agreement of the parties or in a
1224-funds-transfer system rule, if the receiving bank, after accepting a
1225-payment order, agrees to cancellation or amendment of the order by the
1226-sender or is bound by a funds-transfer system rule allowing
1227-cancellation or amendment without the bank's agreement, the sender,
1228-whether or not cancellation or amendment is effective, is liable to the
1229-bank for any loss and expenses, including reasonable attorney's fees,
1230-incurred by the bank as a result of the cancellation or amendment or
1231-attempted cancellation or amendment.
1232-(g) A payment order is not revoked by the death or legal incapacity
1233-of the sender unless the receiving bank knows of the death or of an
1234-adjudication of incapacity by a court of competent jurisdiction and has
1235-reasonable opportunity to act before acceptance of the order.
1236-(h) A funds-transfer system rule is not effective to the extent it
1237-conflicts with subsection (c)(2).
1238-SECTION 30. IC 26-1-4.1-305 IS AMENDED TO READ AS
1239-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 305. (a) If a funds
1240-transfer is completed but execution of a payment order by the receiving
1241-SEA 468 — Concur 30
1242-bank in breach of IC 26-1-4.1-302 results in delay in payment to the
1243-beneficiary, the bank is obliged to pay interest to either the originator
1244-or the beneficiary of the funds transfer for the period of delay caused
1245-by the improper execution. Except as provided in subsection (c),
1246-additional damages are not recoverable.
1247-(b) If execution of a payment order by a receiving bank in breach of
1248-IC 26-1-4.1-302 results in (i) noncompletion of the funds transfer, (ii)
1249-failure to use an intermediary bank designated by the originator, or (iii)
1250-issuance of a payment order that does not comply with the terms of the
1251-payment order of the originator, the bank is liable to the originator for
1252-its expenses in the funds transfer and for incidental expenses and
1253-interest losses, to the extent not covered by subsection (a), resulting
1254-from the improper execution. Except as provided in subsection (c),
1255-additional damages are not recoverable.
1256-(c) In addition to the amounts payable under subsections (a) and (b),
1257-damages, including consequential damages, are recoverable to the
1258-extent provided in an express written agreement of the receiving bank,
1259-evidenced by a record.
1260-(d) If a receiving bank fails to execute a payment order it was
1261-obliged by express agreement to execute, the receiving bank is liable
1262-to the sender for its expenses in the transaction and for incidental
1263-expenses and interest losses resulting from the failure to execute.
1264-Additional damages, including consequential damages, are recoverable
1265-to the extent provided in an express written agreement of the receiving
1266-bank, evidenced by a record, but are not otherwise recoverable.
1267-(e) Reasonable attorney's fees are recoverable if demand for
1268-compensation under subsection (a) or (b) is made and refused before
1269-an action is brought on the claim. If a claim is made for breach of an
1270-agreement under subsection (d) and the agreement does not provide for
1271-damages, reasonable attorney's fees are recoverable if demand for
1272-compensation under subsection (d) is made and refused before an
1273-action is brought on the claim.
1274-(f) Except as stated in this section, the liability of a receiving bank
1275-under subsections (a) and (b) may not be varied by agreement.
1276-SECTION 31. IC 26-1-5.1-104 IS AMENDED TO READ AS
1277-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 104. A letter of credit,
1278-confirmation, advice, transfer, amendment, or cancellation may be
1279-issued in any form that is a signed record. and is authenticated:
1280-(i) by a signature; or
1281-(ii) in accordance with the agreement of the parties or the
1282-standard practice referred to in IC 26-1-5.1-108(e).
1283-SECTION 32. IC 26-1-5.1-116 IS AMENDED TO READ AS
1284-SEA 468 — Concur 31
1285-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 116. (a) The liability of
1286-an issuer, nominated person, or adviser for action or omission is
1287-governed by the law of the jurisdiction chosen by an agreement in the
1288-form of a record signed or otherwise authenticated by the affected
1289-parties in the manner provided in IC 26-1-5.1-104 or by a provision in
1290-the person's letter of credit, confirmation, or other undertaking. The
1291-jurisdiction whose law is chosen need not bear any relation to the
1292-transaction.
1293-(b) Unless subsection (a) applies, the liability of an issuer,
1294-nominated person, or adviser for action or omission is governed by the
1295-law of the jurisdiction in which the person is located. The person is
1296-considered to be located at the address indicated in the person's
1297-undertaking. If more than one (1) address is indicated, the person is
1298-considered to be located at the address from which the person's
1299-undertaking was issued.
1300-(c) For the purpose of jurisdiction, choice of law, and recognition of
1301-interbranch letters of credit, but not enforcement of a judgment, all
1302-branches of a bank are considered separate juridical entities and a bank
1303-is considered to be located at the place where its relevant branch is
1304-considered to be located under this subsection (d).
1305-(d) A branch of a bank is considered to be located at the address
1306-indicated in the branch's undertaking. If more than one (1) address
1307-is indicated, the branch is considered to be located at the address
1308-from which the undertaking was issued.
1309-(c) (e) Except as otherwise provided in this subsection, the liability
1310-of an issuer, nominated person, or adviser is governed by any rules of
1311-custom or practice, such as the Uniform Customs and Practice for
1312-Documentary Credits, to which the letter of credit, confirmation, or
1313-other undertaking is expressly made subject. If:
1314-(i) IC 26-1-5.1 would govern the liability of an issuer, nominated
1315-person, or adviser under subsection (a) or (b);
1316-(ii) the relevant undertaking incorporates rules of custom or
1317-practice; and
1318-(iii) there is conflict between IC 26-1-5.1 and those rules as
1319-applied to that undertaking;
1320-those rules govern except to the extent of any conflict with the
1321-nonvariable provisions specified in IC 26-1-5.1-103(c).
1322-(d) (f) If there is conflict between IC 26-1-5.1 and IC 26-1-3.1,
1323-IC 26-1-4, IC 26-1-4.1, or IC 26-1-9.1, IC 26-1-5.1 governs.
1324-(e) (g) The forum for settling disputes arising out of an undertaking
1325-within IC 26-1-5.1 may be chosen in the manner and with the binding
1326-effect that governing law may be chosen in accordance with subsection
1327-SEA 468 — Concur 32
1328-(a).
1329-SECTION 33. IC 26-1-7-102, AS AMENDED BY P.L.143-2007,
1330-SECTION 25, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1331-JULY 1, 2023]: Sec. 102. (a) In this chapter unless the context
1332-otherwise requires:
1333-(1) "Bailee" means a person that by a warehouse receipt, bill of
1334-lading, or other document of title acknowledges possession of
1335-goods and contracts to deliver them.
1336-(2) "Carrier" means a person that issues a bill of lading.
1337-(3) "Consignee" means a person named in a bill of lading to
1338-which or to whose order the bill promises delivery.
1339-(4) "Consignor" means a person named in a bill of lading as the
1340-person from which the goods have been received for shipment.
1341-(5) "Delivery order" means a record that contains an order to
1342-deliver goods directed to a warehouse, carrier, or other person that
1343-in the ordinary course of business issues warehouse receipts or
1344-bills of lading.
1345-(6) "Good faith" means honesty in fact and the observance of
1346-reasonable commercial standards of fair dealing.
1347-(7) "Goods" means all things that are treated as movable for the
1348-purposes of a contract for storage or transportation.
1349-(8) "Issuer" means a bailee that issues a document of title or, in
1350-the case of an unaccepted delivery order, the person that orders
1351-the possessor of goods to deliver. The term includes a person for
1352-which an agent or employee purports to act in issuing a document
1353-if the agent or employee has real or apparent authority to issue
1354-documents, even if the issuer did not receive any goods, the goods
1355-were misdescribed, or in any other respect the agent or employee
1356-violated the issuer's instructions.
1357-(9) "Person entitled under the document" means the holder, in the
1358-case of a negotiable document of title, or the person to which
1359-delivery of the goods is to be made by the terms of, or pursuant to
1360-instructions in a record under, a nonnegotiable document of title.
1361-(10) "Record" means information that is inscribed on a tangible
1362-medium or that is stored in an electronic or other medium and is
1363-retrievable in perceivable form. [Reserved.]
1364-(11) "Shipper" means a person that enters into a contract of
1365-transportation with a carrier.
1366-(12) "Sign" means, with present intent to authenticate or adopt a
1367-record:
1368-(A) to execute or adopt a tangible symbol; or
1369-(B) to attach to or logically associate with the record an
1370-SEA 468 — Concur 33
1371-electronic sound, symbol, or process. [Reserved.]
1372-(13) "Warehouse" means a person engaged in the business of
1373-storing goods for hire.
1374-(b) Other definitions applying to this chapter and the sections in
1375-which they appear are:
1376-"Duly negotiate". IC 26-1-7-501.
1377-"Contract for sale". IC 26-1-2-106.
1378-"Lessee in the ordinary course of business". IC 26-1-2.1-103(o).
1379-"Receipt" of goods. IC 26-1-2-103.
1380-(c) In addition, IC 26-1-1 contains general definitions and principles
1381-of construction and interpretation applicable throughout this chapter.
1382-SECTION 34. IC 26-1-7-106, AS ADDED BY P.L.143-2007,
1383-SECTION 29, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1384-JULY 1, 2023]: Sec. 106. (a) A person has control of an electronic
1385-document of title if a system employed for evidencing the transfer of
1386-interests in the electronic document reliably establishes that person as
1387-the person to which the electronic document was issued or transferred.
1388-(b) A system satisfies subsection (a), and a person is deemed to have
1389-has control of an electronic document of title, if the document is
1390-created, stored, and assigned transferred in such a manner that:
1391-(1) a single authoritative copy of the document exists that is
1392-unique, identifiable, and, except as otherwise provided in
1393-subdivisions (4), (5), and (6), unalterable;
1394-(2) the authoritative copy identifies the person asserting control
1395-as:
1396-(A) the person to which the document was issued; or
1397-(B) if the authoritative copy indicates that the document has
1398-been transferred, the person to which the document was most
1399-recently transferred;
1400-(3) the authoritative copy is communicated to and maintained by
1401-the person asserting control or its designated custodian;
1402-(4) copies or amendments that add or change an identified
1403-assignee transferee of the authoritative copy can be made only
1404-with the consent of the person asserting control;
1405-(5) each copy of the authoritative copy and any copy of a copy is
1406-readily identifiable as a copy that is not the authoritative copy;
1407-and
1408-(6) any amendment of the authoritative copy is readily identifiable
1409-as authorized or unauthorized.
1410-(c) A system satisfies subsection (a), and a person has control of
1411-an electronic document of title, if an authoritative electronic copy
1412-of the document, a record attached to or logically associated with
1413-SEA 468 — Concur 34
1414-the electronic copy, or a system in which the electronic copy is
1415-recorded:
1416-(1) enables the person readily to identify each electronic copy
1417-as either an authoritative copy or a nonauthoritative copy;
1418-(2) enables the person readily to identify itself in any way,
1419-including by name, identifying number, cryptographic key,
1420-office, or account number, as the person to which each
1421-authoritative electronic copy was issued or transferred; and
1422-(3) gives the person exclusive power, subject to subsection (d),
1423-to:
1424-(A) prevent others from adding or changing the person to
1425-which each authoritative electronic copy has been issued or
1426-transferred; and
1427-(B) transfer control of each authoritative electronic copy.
1428-(d) Subject to subsection (e), a power is exclusive under
1429-subsection (c)(3)(A) and (c)(3)(B) even if:
1430-(1) the authoritative electronic copy, a record attached to or
1431-logically associated with the authoritative electronic copy, or
1432-a system in which the authoritative electronic copy is
1433-recorded limits the use of the document of title or has a
1434-protocol programmed to cause a change, including a transfer
1435-or loss of control; or
1436-(2) the power is shared with another person.
1437-(e) A power of a person is not shared with another person under
1438-subsection (d)(2), and the person's power is not exclusive if:
1439-(1) the person can exercise the power only if the power also is
1440-exercised by the other person; and
1441-(2) the other person:
1442-(A) can exercise the power without exercise of the power
1443-by the person; or
1444-(B) is the transferor to the person of an interest in the
1445-document of title.
1446-(f) If a person has the powers specified in subsection (c)(3)(A)
1447-and (c)(3)(B), the powers are presumed to be exclusive.
1448-(g) A person has control of an electronic document of title if
1449-another person, other than the transferor to the person of an
1450-interest in the document:
1451-(1) has control of the document and acknowledges that it has
1452-control on behalf of the person; or
1453-(2) obtains control of the document after having
1454-acknowledged that it will obtain control of the document on
1455-behalf of the person.
1456-SEA 468 — Concur 35
1457-(h) A person that has control under this section is not required
1458-to acknowledge that it has control on behalf of another person.
1459-(i) If a person acknowledges that it has or will obtain control on
1460-behalf of another person, unless the person otherwise agrees, or
1461-law other than this chapter or IC 26-1-9.1 otherwise provides, the
1462-person does not owe any duty to the other person and is not
1463-required to confirm the acknowledgment to any other person.
1464-SECTION 35. IC 26-1-8.1-102 IS AMENDED TO READ AS
1465-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 102. (a) In IC 26-1-8.1:
1466-(1) "Adverse claim" means a claim that a claimant has a property
1467-interest in a financial asset and that it is a violation of the rights
1468-of the claimant for another person to hold, transfer, or deal with
1469-the financial asset.
1470-(2) "Bearer form", as applied to a certificated security, means a
1471-form in which the security is payable to the bearer of the security
1472-certificate according to its terms but not by reason of an
1473-endorsement.
1474-(3) "Broker" means a person defined as a broker or dealer under
1475-the federal securities laws, but without excluding a bank acting in
1476-that capacity.
1477-(4) "Certificated security" means a security that is represented by
1478-a certificate.
1479-(5) "Clearing corporation" means:
1480-(i) a person that is registered as a "clearing agency" under the
1481-federal securities laws;
1482-(ii) a federal reserve bank; or
1483-(iii) any other person that provides clearance or settlement
1484-services with respect to financial assets that would require it
1485-to register as a clearing agency under the federal securities
1486-laws but for an exclusion or exemption from the registration
1487-requirement, if its activities as a clearing corporation,
1488-including promulgation of rules, are subject to regulation by a
1489-federal or state governmental authority.
1490-(6) "Communicate" means to:
1491-(i) send a signed writing; record; or
1492-(ii) transmit information by any mechanism agreed upon by
1493-the persons transmitting and receiving the information.
1494-(7) "Entitlement holder" means a person identified in the records
1495-of a securities intermediary as the person having a security
1496-entitlement against the securities intermediary. If a person
1497-acquires a security entitlement by virtue of IC 26-1-8.1-501(b)(2)
1498-or IC 26-1-8.1-501(b)(3), that person is the entitlement holder.
1499-SEA 468 — Concur 36
1500-(8) "Entitlement order" means a notification communicated to a
1501-securities intermediary directing transfer or redemption of a
1502-financial asset to which the entitlement holder has a security
1503-entitlement.
1504-(9) "Financial asset", except as otherwise provided in
1505-IC 26-1-8.1-103, means:
1506-(i) a security;
1507-(ii) an obligation of a person or a share, participation, or other
1508-interest in a person or in property or an enterprise of a person,
1509-that is, or is of a type, dealt in or traded on financial markets,
1510-or that is recognized in any area in which it is issued or dealt
1511-in as a medium for investment; or
1512-(iii) any property that is held by a securities intermediary for
1513-another person in a securities account if the securities
1514-intermediary has expressly agreed with the other person that
1515-the property is to be treated as a financial asset under
1516-IC 26-1-8.1.
1517-As context requires, the term means either the interest itself or the
1518-means by which a person's claim to it is evidenced, including a
1519-certificated or an uncertificated security, a security certificate, or
1520-a security entitlement.
1521-(10) "Good faith", for purposes of the obligation of good faith in
1522-the performance or enforcement of contracts or duties within
1523-IC 26-1-8.1, means honesty in fact and the observance of
1524-reasonable commercial standards of fair dealing.
1525-(11) "Endorsement" means a signature that alone or accompanied
1526-by other words is made on a security certificate in registered form
1527-or on a separate document for the purpose of assigning,
1528-transferring, or redeeming the security or granting a power to
1529-assign, transfer, or redeem it.
1530-(12) "Instruction" means a notification communicated to the
1531-issuer of an uncertificated security which directs that the transfer
1532-of the security be registered or that the security be redeemed.
1533-(13) "Registered form", as applied to a certificated security,
1534-means a form in which:
1535-(i) the security certificate specifies a person entitled to the
1536-security; and
1537-(ii) a transfer of the security may be registered upon books
1538-maintained for that purpose by or on behalf of the issuer, or the
1539-security certificate so states.
1540-(14) "Securities intermediary" means:
1541-(i) a clearing corporation; or
1542-SEA 468 — Concur 37
1543-(ii) a person, including a bank or broker, that in the ordinary
1544-course of its business maintains securities accounts for others
1545-and is acting in that capacity.
1546-(15) "Security", except as otherwise provided in IC 26-1-8.1-103,
1547-means an obligation of an issuer or a share, participation, or other
1548-interest in an issuer or in property or an enterprise of an issuer:
1549-(i) which is represented by a security certificate in bearer or
1550-registered form, or the transfer of which may be registered
1551-upon books maintained for that purpose by or on behalf of the
1552-issuer;
1553-(ii) which is one (1) of a class or series or by its terms is
1554-divisible into a class or series of shares, participations,
1555-interests, or obligations; and
1556-(iii) which:
1557-(A) is, or is of a type, dealt in or traded on securities
1558-exchanges or securities markets; or
1559-(B) is a medium for investment and by its terms expressly
1560-provides that it is a security governed by IC 26-1-8.1.
1561-(16) "Security certificate" means a certificate representing a
1562-security.
1563-(17) "Security entitlement" means the rights and property interest
1564-of an entitlement holder with respect to a financial asset specified
1565-in IC 26-1-8.1-501 through IC 26-1-8.1-511.
1566-(18) "Uncertificated security" means a security that is not
1567-represented by a certificate.
1568-(b) Other The following definitions applying to in IC 26-1-8.1 and
1569-the sections in which they appear are: in IC 26-1 apply to this article:
1570-"Appropriate person". IC 26-1-8.1-107.
1571-"Control". IC 26-1-8.1-106.
1572-"Controllable account". IC 26-1-9.1-102.
1573-"Controllable electronic record". IC 26-1-12-102.
1574-"Controllable payment intangible". IC 26-1-9.1-102.
1575-"Delivery". IC 26-1-8.1-301.
1576-"Investment company security". IC 26-1-8.1-103.
1577-"Issuer". IC 26-1-8.1-201.
1578-"Overissue". IC 26-1-8.1-210.
1579-"Protected purchaser". IC 26-1-8.1-303.
1580-"Securities account". IC 26-1-8.1-501.
1581-(c) In addition, IC 26-1-1 contains general definitions and principles
1582-of construction and interpretation applicable throughout IC 26-1-8.1.
1583-(d) The characterization of a person, business, or transaction for
1584-purposes of IC 26-1-8.1 does not determine the characterization of the
1585-SEA 468 — Concur 38
1586-person, business, or transaction for purposes of any other law,
1587-regulation, or rule.
1588-SECTION 36. IC 26-1-8.1-103, AS AMENDED BY P.L.143-2007,
1589-SECTION 64, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1590-JULY 1, 2023]: Sec. 103. (a) A share or similar equity interest issued
1591-by a corporation, business trust, joint stock company, or similar entity
1592-is a security.
1593-(b) An "investment company security" is a security. "Investment
1594-company security" means a share or similar equity interest issued by an
1595-entity that is registered as an investment company under the federal
1596-investment company laws, an interest in a unit investment trust that is
1597-so registered, or a face amount certificate issued by a face amount
1598-certificate company that is so registered. Investment company security
1599-does not include an insurance policy or endowment policy or annuity
1600-contract issued by an insurance company.
1601-(c) An interest in a partnership or limited liability company is not a
1602-security unless it is dealt in or traded on securities exchanges or in
1603-securities markets, its terms expressly provide that it is a security
1604-governed by IC 26-1-8.1, or it is an investment company security.
1605-However, an interest in a partnership or limited liability company is a
1606-financial asset if it is held in a securities account.
1607-(d) A writing that is a security certificate is governed by IC 26-1-8.1
1608-and not by IC 26-1-3.1, even though it also meets the requirements of
1609-that article. However, a negotiable instrument governed by IC 26-1-3.1
1610-is a financial asset if it is held in a securities account.
1611-(e) An option or a similar obligation issued by a clearing corporation
1612-to its participants is not a security, but it is a financial asset.
1613-(f) A commodity contract (as defined in IC 26-1-9.1-102(a)(15)) is
1614-not a security or a financial asset.
1615-(g) A document of title is not a financial asset unless section
1616-102(a)(9)(iii) of this chapter applies.
1617-(h) A controllable account, a controllable electronic record, or
1618-a controllable payment intangible is not a financial asset unless
1619-section 102(a)(9)(iii) of this chapter applies.
1620-SECTION 37. IC 26-1-8.1-106 IS AMENDED TO READ AS
1621-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 106. (a) A purchaser
1622-has "control" of a certificated security in bearer form if the certificated
1623-security is delivered to the purchaser.
1624-(b) A purchaser has "control" of a certificated security in registered
1625-form if the certificated security is delivered to the purchaser, and:
1626-(1) the certificate is endorsed to the purchaser or in blank by an
1627-effective endorsement; or
1628-SEA 468 — Concur 39
1629-(2) the certificate is registered in the name of the purchaser, upon
1630-original issue or registration of transfer by the issuer.
1631-(c) A purchaser has "control" of an uncertificated security if:
1632-(1) the uncertificated security is delivered to the purchaser; or
1633-(2) the issuer has agreed that it will comply with instructions
1634-originated by the purchaser without further consent by the
1635-registered owner.
1636-(d) A purchaser has "control" of a security entitlement if:
1637-(1) the purchaser becomes the entitlement holder;
1638-(2) the securities intermediary has agreed that it will comply with
1639-entitlement orders originated by the purchaser without further
1640-consent by the entitlement holder; or
1641-(3) another person, has control of the security entitlement on
1642-behalf of the purchaser or, having previously acquired control of
1643-the security entitlement, acknowledges that it has control on
1644-behalf of the purchaser. other than the transferor to the
1645-purchaser of an interest in the security entitlement:
1646-(A) has control of the security entitlement and
1647-acknowledges that it has control on behalf of the
1648-purchaser; or
1649-(B) obtains control of the security entitlement after having
1650-acknowledged that it will obtain control of the security
1651-entitlement on behalf of the purchaser.
1652-(e) If an interest in a security entitlement is granted by the
1653-entitlement holder to the entitlement holder's own securities
1654-intermediary, the securities intermediary has control.
1655-(f) A purchaser who has satisfied the requirements of subsection (c)
1656-or (d) has control even if the registered owner in the case of subsection
1657-(c) or the entitlement holder in the case of subsection (d) retains the
1658-right to make substitutions for the uncertificated security or security
1659-entitlement, to originate instructions or entitlement orders to the issuer
1660-or a securities intermediary, or otherwise to deal with the uncertificated
1661-security or security entitlement.
1662-(g) An issuer or a securities intermediary may not enter into an
1663-agreement of the kind described in subsection (c)(2) or (d)(2) without
1664-the consent of the registered owner or entitlement holder, but an issuer
1665-or a securities intermediary is not required to enter into such an
1666-agreement even though the registered owner or entitlement holder so
1667-directs. An issuer or securities intermediary that has entered into such
1668-an agreement is not required to confirm the existence of the agreement
1669-to another party unless requested to do so by the registered owner or
1670-entitlement holder.
1671-SEA 468 — Concur 40
1672-(h) A person that has control under this section is not required
1673-to acknowledge that it has control on behalf of a purchaser.
1674-(i) If a person acknowledges that it has or will obtain control on
1675-behalf of a purchaser, unless the person otherwise agrees, or law
1676-other than this chapter or IC 26-1-9.1 otherwise provides, the
1677-person does not owe any duty to the purchaser and is not required
1678-to confirm the acknowledgment to any other person.
1679-SECTION 38. IC 26-1-8.1-110 IS AMENDED TO READ AS
1680-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 110. (a) The local law
1681-of the issuer's jurisdiction, as specified in subsection (d), governs:
1682-(1) the validity of a security;
1683-(2) the rights and duties of the issuer with respect to registration
1684-of transfer;
1685-(3) the effectiveness of registration of transfer by the issuer;
1686-(4) whether the issuer owes any duties to an adverse claimant to
1687-a security; and
1688-(5) whether an adverse claim can be asserted against a person to
1689-whom transfer of a certificated or uncertificated security is
1690-registered or a person who obtains control of an uncertificated
1691-security.
1692-(b) The local law of the securities intermediary's jurisdiction, as
1693-specified in subsection (e), governs:
1694-(1) acquisition of a security entitlement from the securities
1695-intermediary;
1696-(2) the rights and duties of the securities intermediary and
1697-entitlement holder arising out of a security entitlement;
1698-(3) whether the securities intermediary owes any duties to an
1699-adverse claimant to a security entitlement; and
1700-(4) whether an adverse claim can be asserted against a person
1701-who acquires a security entitlement from the securities
1702-intermediary or a person who purchases a security entitlement or
1703-interest therein from an entitlement holder.
1704-(c) The local law of the jurisdiction in which a security certificate
1705-is located at the time of delivery governs whether an adverse claim can
1706-be asserted against a person to whom the security certificate is
1707-delivered.
1708-(d) "Issuer's jurisdiction" means the jurisdiction under which the
1709-issuer of the security is organized or, if permitted by the law of that
1710-jurisdiction, the law of another jurisdiction specified by the issuer. An
1711-issuer organized under the law of this state may specify the law of
1712-another jurisdiction as the law governing the matters specified in
1713-subsection (a)(2) through (a)(5).
1714-SEA 468 — Concur 41
1715-(e) The following rules determine a "securities intermediary's
1716-jurisdiction" for purposes of this section:
1717-(1) If an agreement between the securities intermediary and its
1718-entitlement holder governing the securities account expressly
1719-provides that a particular jurisdiction is the securities
1720-intermediary's jurisdiction for purposes of IC 26-1-8.1-101
1721-through IC 26-1-8.1-116, that jurisdiction is the securities
1722-intermediary's jurisdiction.
1723-(2) If subdivision (1) does not apply, and an agreement between
1724-the securities intermediary and its entitlement holder expressly
1725-provides that the agreement is governed by the law of a particular
1726-jurisdiction, that jurisdiction is the securities intermediary's
1727-jurisdiction.
1728-(3) If neither subdivision (1) nor subdivision (2) applies, and an
1729-agreement between the securities intermediary and its entitlement
1730-holder governing the securities account expressly provides that
1731-the securities account is maintained at an office in a particular
1732-jurisdiction, that jurisdiction is the securities intermediary's
1733-jurisdiction.
1734-(4) If none of the preceding subdivisions apply, the securities
1735-intermediary's jurisdiction is the jurisdiction in which the office
1736-identified in an account statement as the office serving the
1737-entitlement holder's account is located.
1738-(5) If none of the preceding subdivisions apply, the securities
1739-intermediary's jurisdiction is the jurisdiction in which the chief
1740-executive office of the securities intermediary is located.
1741-(f) A securities intermediary's jurisdiction is not determined by the
1742-physical location of certificates representing financial assets, or by the
1743-jurisdiction in which is organized the issuer of the financial asset with
1744-respect to which an entitlement holder has a security entitlement, or by
1745-the location of facilities for data processing or other record keeping
1746-concerning the account.
1747-(g) The local law of the issuer's jurisdiction or the securities
1748-intermediary's jurisdiction governs a matter or transaction
1749-specified in subsection (a) or (b) even if the matter or transaction
1750-does not bear any relation to the jurisdiction.
1751-SECTION 39. IC 26-1-8.1-303 IS AMENDED TO READ AS
1752-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 303. (a) "Protected
1753-purchaser" means a purchaser of a certificated or uncertificated
1754-security, or of an interest therein, who:
1755-(1) gives value;
1756-(2) does not have notice of any adverse claim to the security; and
1757-SEA 468 — Concur 42
1758-(3) obtains control of the certificated or uncertificated security.
1759-(b) In addition to acquiring the rights of a purchaser, A protected
1760-purchaser also acquires its interest in the security free of any adverse
1761-claim.
1762-SECTION 40. IC 26-1-9.1-102, AS AMENDED BY P.L.110-2022,
1763-SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1764-JULY 1, 2023]: Sec. 102. (a) In IC 26-1-9.1:
1765-(1) "Accession" means goods that are physically united with other
1766-goods in such a manner that the identity of the original goods is
1767-not lost.
1768-(2) "Account", except as used in "account for", "account
1769-statement", "account to", "commodity account" in
1770-subdivision (14), "customer's account", "deposit account" in
1771-subdivision (29), "on account of", and "statement of account",
1772-means a right to payment of a monetary obligation, whether or not
1773-earned by performance:
1774-(A) for property that has been or is to be sold, leased, licensed,
1775-assigned, or otherwise disposed of;
1776-(B) for services rendered or to be rendered;
1777-(C) for a policy of insurance issued or to be issued;
1778-(D) for a secondary obligation incurred or to be incurred;
1779-(E) for energy provided or to be provided;
1780-(F) for the use or hire of a vessel under a charter or other
1781-contract;
1782-(G) arising out of the use of a credit or charge card or
1783-information contained on or for use with the card; or
1784-(H) as winnings in a lottery or other game of chance operated
1785-or sponsored by a state other than Indiana, a governmental unit
1786-of a state, or a person licensed or authorized to operate the
1787-game by a state or governmental unit of a state.
1788-The term does not include a right to a payment of a prize awarded
1789-by the state lottery commission in the Indiana state lottery
1790-established under IC 4-30. The term includes controllable
1791-accounts and health-care-insurance receivables. The term does
1792-not include (i) rights to payment evidenced by chattel paper, or an
1793-instrument, (ii) commercial tort claims, (iii) deposit accounts, (iv)
1794-investment property, (v) letter-of-credit rights or letters of credit,
1795-or (vi) rights to payment for money or funds advanced or sold,
1796-other than rights arising out of the use of a credit or charge card
1797-or information contained on or for use with the card, or (vii)
1798-rights to payment evidenced by an instrument.
1799-(3) "Account debtor" means a person obligated on an account,
1800-SEA 468 — Concur 43
1801-chattel paper, or general intangible. The term does not include
1802-persons obligated to pay a negotiable instrument, even if the
1803-negotiable instrument constitutes part of evidences chattel paper.
1804-(4) "Accounting", except as used in "accounting for", means a
1805-record:
1806-(A) authenticated signed by a secured party;
1807-(B) indicating the aggregate unpaid secured obligations as of
1808-a date not more than thirty-five (35) days earlier or thirty-five
1809-(35) days later than the date of the record; and
1810-(C) identifying the components of the obligations in
1811-reasonable detail.
1812-(5) "Agricultural lien" means an interest, other than a security
1813-interest, in farm products:
1814-(A) that secures payment or performance of an obligation for:
1815-(i) goods or services furnished in connection with a debtor's
1816-farming operation; or
1817-(ii) rent on real property leased by a debtor in connection
1818-with the debtor's farming operation;
1819-(B) that is created by statute in favor of a person that:
1820-(i) in the ordinary course of its business furnished goods or
1821-services to a debtor in connection with the debtor's farming
1822-operation; or
1823-(ii) leased real property to a debtor in connection with the
1824-debtor's farming operation; and
1825-(C) whose effectiveness does not depend on the person's
1826-possession of the personal property.
1827-(6) "As-extracted collateral" means:
1828-(A) oil, gas, or other minerals that are subject to a security
1829-interest that:
1830-(i) is created by a debtor having an interest in the minerals
1831-before extraction; and
1832-(ii) attaches to the minerals as extracted; or
1833-(B) accounts arising out of the sale at the wellhead or
1834-minehead of oil, gas, or other minerals in which the debtor had
1835-an interest before extraction.
1836-(7) "Authenticate" means: The following terms have the
1837-following meanings:
1838-(A) to sign; or "Assignee", except as used in "assignee for
1839-benefit of creditors", means a person (i) in whose favor a
1840-security interest that secures an obligation is created or
1841-provided for under a security agreement, whether or not
1842-the obligation is outstanding or (ii) to which an account,
1843-SEA 468 — Concur 44
1844-chattel paper, payment intangible, or promissory note has
1845-been sold. The term includes a person to which a security
1846-interest has been transferred by a secured party.
1847-(B) with present intent to adopt or accept a record, to attach to
1848-or logically associate with the record an electronic sound,
1849-symbol, or process. "Assignor" means a person that (i)
1850-under a security agreement creates or provides for a
1851-security interest that secures an obligation or (ii) sells an
1852-account, chattel paper, payment intangible, or promissory
1853-note. The term includes a secured party that has
1854-transferred a security interest to another person.
1855-(8) "Bank" means an organization that is engaged in the business
1856-of banking. The term includes savings banks, savings and loan
1857-associations, credit unions, and trust companies.
1858-(9) "Cash proceeds" means proceeds that are money, checks,
1859-deposit accounts, or the like.
1860-(10) "Certificate of title" means a certificate of title with respect
1861-to which a statute provides for the security interest in question to
1862-be indicated on the certificate as a condition or result of the
1863-security interest's obtaining priority over the rights of a lien
1864-creditor with respect to the collateral. The term includes another
1865-record maintained as an alternative to a certificate of title by the
1866-governmental unit that issues certificates of title if a statute
1867-permits the security interest in question to be indicated on the
1868-record as a condition or result of the security interest's obtaining
1869-priority over the rights of a lien creditor with respect to the
1870-collateral.
1871-(11) "Chattel paper" means: a record or records that evidence both
1872-a monetary obligation and a security interest in specific goods, a
1873-security interest in specific goods and software used in the goods,
1874-a security interest in specific goods and license of software used
1875-in the goods, a lease of specific goods, or a lease of specific goods
1876-and license of software used in the goods. In this subdivision,
1877-"monetary obligation" means a monetary obligation secured by
1878-the goods or owed under a lease of the goods and includes a
1879-monetary obligation with respect to software used in the goods.
1880-The term "chattel paper" does not include: (i) charters or other
1881-contracts involving the use or hire of a vessel; or (ii) records that
1882-evidence a right to payment arising out of the use of a credit or
1883-charge card or information contained on or for use with the card.
1884-If a transaction is evidenced by records that include an instrument
1885-or series of instruments, the group of records taken together
1886-SEA 468 — Concur 45
1887-constitutes chattel paper.
1888-(A) a right to payment of a monetary obligation secured by
1889-specific goods, if the right to payment and security interest
1890-are evidenced by a record; or
1891-(B) a right to payment of a monetary obligation owed by a
1892-lessee under a lease agreement with respect to specific
1893-goods and a monetary obligation owed by the lessee in
1894-connection with the transaction giving rise to the lease if:
1895-(i) the right to payment and lease agreement are
1896-evidenced by a record; and
1897-(ii) the predominant purpose of the transaction giving
1898-rise to the lease was to give the lessee the right to
1899-possession and use of the goods.
1900-The term does not include a right to payment arising out of a
1901-charter or other contract involving the use or hire of a vessel,
1902-or a right to payment arising out of the use of a credit or
1903-charge card or information contained on or for use with the
1904-card.
1905-(12) "Collateral" means the property subject to a security interest
1906-or agricultural lien. The term includes:
1907-(A) proceeds to which a security interest attaches;
1908-(B) accounts, chattel paper, payment intangibles, and
1909-promissory notes that have been sold; and
1910-(C) goods that are the subject of a consignment.
1911-(13) "Commercial tort claim" means a claim arising in tort with
1912-respect to which:
1913-(A) the claimant is an organization; or
1914-(B) the claimant is an individual and the claim:
1915-(i) arose in the course of the claimant's business or
1916-profession; and
1917-(ii) does not include damages arising out of personal injury
1918-to or the death of an individual.
1919-(14) "Commodity account" means an account maintained by a
1920-commodity intermediary in which a commodity contract is carried
1921-for a commodity customer.
1922-(15) "Commodity contract" means a commodity futures contract,
1923-an option on a commodity futures contract, a commodity option,
1924-or another contract if the contract or option is:
1925-(A) traded on or subject to the rules of a board of trade that has
1926-been designated as a contract market for such a contract
1927-pursuant to federal commodities laws; or
1928-(B) traded on a foreign commodity board of trade, exchange,
1929-SEA 468 — Concur 46
1930-or market, and is carried on the books of a commodity
1931-intermediary for a commodity customer.
1932-(16) "Commodity customer" means a person for which a
1933-commodity intermediary carries a commodity contract on its
1934-books.
1935-(17) "Commodity intermediary" means a person that:
1936-(A) is registered as a futures commission merchant under
1937-federal commodities law; or
1938-(B) in the ordinary course of its business provides clearance or
1939-settlement services for a board of trade that has been
1940-designated as a contract market pursuant to federal
1941-commodities law.
1942-(18) "Communicate" means:
1943-(A) to send a written or other tangible record;
1944-(B) to transmit a record by any means agreed upon by the
1945-persons sending and receiving the record; or
1946-(C) in the case of transmission of a record to or by a filing
1947-office, to transmit a record by any means prescribed by
1948-filing-office rule.
1949-(19) "Consignee" means a merchant to which goods are delivered
1950-in a consignment.
1951-(20) "Consignment" means a transaction, regardless of its form,
1952-in which a person delivers goods to a merchant for the purpose of
1953-sale and:
1954-(A) the merchant:
1955-(i) deals in goods of that kind under a name other than the
1956-name of the person making delivery;
1957-(ii) is not an auctioneer; and
1958-(iii) is not generally known by its creditors to be
1959-substantially engaged in selling the goods of others;
1960-(B) with respect to each delivery, the aggregate value of the
1961-goods is one thousand dollars ($1,000) or more at the time of
1962-delivery;
1963-(C) the goods are not consumer goods immediately before
1964-delivery; and
1965-(D) the transaction does not create a security interest that
1966-secures an obligation.
1967-(21) "Consignor" means a person that delivers goods to a
1968-consignee in a consignment.
1969-(22) "Consumer debtor" means a debtor in a consumer
1970-transaction.
1971-(23) "Consumer goods" means goods that are used or bought for
1972-SEA 468 — Concur 47
1973-use primarily for personal, family, or household purposes.
1974-(24) "Consumer-goods transaction" means a consumer transaction
1975-in which:
1976-(A) an individual incurs an obligation primarily for personal,
1977-family, or household purposes; and
1978-(B) a security interest in consumer goods secures the
1979-obligation.
1980-(25) "Consumer obligor" means an obligor who is an individual
1981-and who incurred the obligation as part of a transaction entered
1982-into primarily for personal, family, or household purposes.
1983-(26) "Consumer transaction" means a transaction in which (i) an
1984-individual incurs an obligation primarily for personal, family, or
1985-household purposes, (ii) a security interest secures the obligation,
1986-and (iii) the collateral is held or acquired primarily for personal,
1987-family, or household purposes. The term includes
1988-consumer-goods transactions.
1989-(27) The following terms have the following meanings:
1990-(A) "Continuation statement" means an amendment of a
1991-financing statement that:
1992-(A) (i) identifies, by its file number, the initial financing
1993-statement to which it relates; and
1994-(B) (ii) indicates that it is a continuation statement for, or
1995-that it is filed to continue the effectiveness of, the identified
1996-financing statement.
1997-(B) "Controllable account" means an account evidenced by
1998-a controllable electronic record that provides that the
1999-account debtor undertakes to pay the person that has
2000-control under IC 26-1-12-105 of the controllable electronic
2001-record.
2002-(C) "Controllable payment intangible" means a payment
2003-intangible evidenced by a controllable electronic record
2004-that provides that the account debtor undertakes to pay
2005-the person that has control under IC 26-1-12-105 of the
2006-controllable electronic record.
2007-(28) "Debtor" means:
2008-(A) a person having an interest, other than a security interest
2009-or other lien, in the collateral, whether or not the person is an
2010-obligor;
2011-(B) a seller of accounts, chattel paper, payment intangibles, or
2012-promissory notes; or
2013-(C) a consignee.
2014-(29) "Deposit account" means a demand, time, savings, passbook,
2015-SEA 468 — Concur 48
2016-or similar account maintained with a bank. The term does not
2017-include investment property or accounts evidenced by an
2018-instrument.
2019-(30) "Document" means a document of title or a receipt of the
2020-type described in IC 26-1-7-201(b).
2021-(31) "Electronic chattel paper" means chattel paper evidenced by
2022-a record or records consisting of information stored in an
2023-electronic medium. [Reserved.]
2024-(32) "Encumbrance" means a right, other than an ownership
2025-interest, in real property. The term includes mortgages and other
2026-liens on real property.
2027-(33) "Equipment" means goods other than inventory, farm
2028-products, or consumer goods.
2029-(34) "Farm products" means goods, other than standing timber,
2030-with respect to which the debtor is engaged in a farming operation
2031-and which are:
2032-(A) crops grown, growing, or to be grown, including:
2033-(i) crops produced on trees, vines, and bushes; and
2034-(ii) aquatic goods produced in aquacultural operations;
2035-(B) livestock, born or unborn, including aquatic goods
2036-produced in aquacultural operations;
2037-(C) supplies used or produced in a farming operation; or
2038-(D) products of crops or livestock in their unmanufactured
2039-states.
2040-(35) "Farming operation" means raising, cultivating, propagating,
2041-fattening, grazing, or any other farming, livestock, or aquacultural
2042-operation.
2043-(36) "File number" means the number assigned to an initial
2044-financing statement pursuant to IC 26-1-9.1-519(a).
2045-(37) "Filing office" means an office designated in IC 26-1-9.1-501
2046-as the place to file a financing statement.
2047-(38) "Filing-office rule" means a rule adopted pursuant to
2048-IC 26-1-9.1-526.
2049-(39) "Financing statement" means a record or records composed
2050-of an initial financing statement and any filed record relating to
2051-the initial financing statement.
2052-(40) "Fixture filing" means the filing of a financing statement
2053-covering goods that are or are to become fixtures and satisfying
2054-IC 26-1-9.1-502(a) and IC 26-1-9.1-502(b). The term includes the
2055-filing of a financing statement covering goods of a transmitting
2056-utility which are or are to become fixtures.
2057-(41) "Fixtures" means goods that have become so related to
2058-SEA 468 — Concur 49
2059-particular real property that an interest in them arises under real
2060-property law.
2061-(42) "General intangible" means any personal property, including
2062-things in action, other than accounts, chattel paper, commercial
2063-tort claims, deposit accounts, documents, goods, instruments,
2064-investment property, letter-of-credit rights, letters of credit,
2065-money, and oil, gas, or other minerals before extraction. The term
2066-includes controllable electronic records, payment intangibles,
2067-and software.
2068-(43) "Good faith" means honesty in fact and the observance of
2069-reasonable commercial standards of fair dealing.
2070-(44) "Goods" means all things that are movable when a security
2071-interest attaches. The term includes (i) fixtures, (ii) standing
2072-timber that is to be cut and removed under a conveyance or
2073-contract for sale, (iii) the unborn young of animals, (iv) crops
2074-grown, growing, or to be grown, even if the crops are produced on
2075-trees, vines, or bushes, and (v) manufactured homes. The term
2076-also includes a computer program embedded in goods and any
2077-supporting information provided in connection with a transaction
2078-relating to the program if (i) the program is associated with the
2079-goods in such a manner that it customarily is considered part of
2080-the goods, or (ii) by becoming the owner of the goods, a person
2081-acquires a right to use the program in connection with the goods.
2082-The term does not include a computer program embedded in
2083-goods that consist solely of the medium in which the program is
2084-embedded. The term also does not include accounts, chattel
2085-paper, commercial tort claims, deposit accounts, documents,
2086-general intangibles, instruments, investment property,
2087-letter-of-credit rights, letters of credit, money, or oil, gas, or other
2088-minerals before extraction.
2089-(45) "Governmental unit" means a subdivision, agency,
2090-department, county, parish, municipality, or other unit of the
2091-government of the United States, a state, or a foreign country. The
2092-term includes an organization having a separate corporate
2093-existence if the organization is eligible to issue debt on which
2094-interest is exempt from income taxation under the laws of the
2095-United States.
2096-(46) "Health-care-insurance receivable" means an interest in or
2097-claim under a policy of insurance that is a right to payment of a
2098-monetary obligation for health-care goods or services provided.
2099-(47) "Instrument" means a negotiable instrument or any other
2100-writing that evidences a right to the payment of a monetary
2101-SEA 468 — Concur 50
2102-obligation, is not itself a security agreement or lease, and is of a
2103-type that in the ordinary course of business is transferred by
2104-delivery with any necessary endorsement or assignment. The term
2105-does not include (i) investment property, (ii) letters of credit, or
2106-(iii) writings that evidence a right to payment arising out of the
2107-use of a credit or charge card or information contained on or for
2108-use with the card, or (iv) writings that evidence chattel paper.
2109-(48) "Inventory" means goods, other than farm products, that:
2110-(A) are leased by a person as lessor;
2111-(B) are held by a person for sale or lease or to be furnished
2112-under a contract of service;
2113-(C) are furnished by a person under a contract of service; or
2114-(D) consist of raw materials, work in process, or materials
2115-used or consumed in a business.
2116-(49) "Investment property" means a security, whether certificated
2117-or uncertificated, security entitlement, securities account,
2118-commodity contract, or commodity account.
2119-(50) "Jurisdiction of organization", with respect to a registered
2120-organization, means the jurisdiction under whose law the
2121-organization is formed or organized.
2122-(51) "Letter-of-credit right" means a right to payment or
2123-performance under a letter of credit, whether or not the
2124-beneficiary has demanded or is at the time entitled to demand
2125-payment or performance. The term does not include the right of
2126-a beneficiary to demand payment or performance under a letter of
2127-credit.
2128-(52) "Lien creditor" means:
2129-(A) a creditor that has acquired a lien on the property involved
2130-by attachment, levy, or the like;
2131-(B) an assignee for benefit of creditors from the time of
2132-assignment;
2133-(C) a trustee in bankruptcy from the date of the filing of the
2134-petition; or
2135-(D) a receiver in equity from the time of appointment.
2136-(53) "Manufactured home" means a structure, transportable in one
2137-(1) or more sections, which, in the traveling mode, is eight (8)
2138-body feet or more in width or forty (40) body feet or more in
2139-length, or, when erected on site, is three hundred twenty (320) or
2140-more square feet, and which is built on a permanent chassis and
2141-designed to be used as a dwelling with or without a permanent
2142-foundation when connected to the required utilities, and includes
2143-the plumbing, heating, air conditioning, and electrical systems
2144-SEA 468 — Concur 51
2145-contained therein. The term includes any structure that meets all
2146-of the requirements of this subdivision except the size
2147-requirements, and with respect to which the manufacturer
2148-voluntarily files a certification required by the United States
2149-Secretary of Housing and Urban Development and complies with
2150-the standards established under Title 42 of the United States
2151-Code.
2152-(54) The following terms have the following meanings:
2153-(A) "Manufactured-home transaction" means a secured
2154-transaction:
2155-(A) (i) that creates a purchase-money security interest in a
2156-manufactured home, other than a manufactured home held
2157-as inventory; or
2158-(B) (ii) in which a manufactured home, other than a
2159-manufactured home held as inventory, is the primary
2160-collateral.
2161-(B) "Money" has the meaning set forth in
2162-IC 26-1-1-201(24), but does not include a deposit account.
2163-(55) "Mortgage" means a consensual interest in real property,
2164-including fixtures, that secures payment or performance of an
2165-obligation.
2166-(56) "New debtor" means a person that becomes bound as debtor
2167-under IC 26-1-9.1-203(d) by a security agreement previously
2168-entered into by another person.
2169-(57) "New value" means (i) money, (ii) money's worth in
2170-property, services, or new credit, or (iii) release by a transferee of
2171-an interest in property previously transferred to the transferee.
2172-The term does not include an obligation substituted for another
2173-obligation.
2174-(58) "Noncash proceeds" means proceeds other than cash
2175-proceeds.
2176-(59) "Obligor" means a person that, with respect to an obligation
2177-secured by a security interest in or an agricultural lien on the
2178-collateral, (i) owes payment or other performance of the
2179-obligation, (ii) has provided property other than the collateral to
2180-secure payment or other performance of the obligation, or (iii) is
2181-otherwise accountable in whole or in part for payment or other
2182-performance of the obligation. The term does not include issuers
2183-or nominated persons under a letter of credit.
2184-(60) "Original debtor", except as used in IC 26-1-9.1-310(c),
2185-means a person that, as debtor, entered into a security agreement
2186-to which a new debtor has become bound under
2187-SEA 468 — Concur 52
2188-IC 26-1-9.1-203(d).
2189-(61) "Payment intangible" means a general intangible under
2190-which the account debtor's principal obligation is a monetary
2191-obligation. The term includes a controllable payment intangible.
2192-(62) "Person related to", with respect to an individual, means:
2193-(A) the spouse of the individual;
2194-(B) a brother, brother-in-law, sister, or sister-in-law of the
2195-individual;
2196-(C) an ancestor or lineal descendant of the individual or the
2197-individual's spouse; or
2198-(D) any other relative, by blood or marriage, of the individual
2199-or the individual's spouse who shares the same home with the
2200-individual.
2201-(63) "Person related to", with respect to an organization, means:
2202-(A) a person directly or indirectly controlling, controlled by,
2203-or under common control with the organization;
2204-(B) an officer or director of, or a person performing similar
2205-functions with respect to, the organization;
2206-(C) an officer or director of, or a person performing similar
2207-functions with respect to, a person described in clause (A);
2208-(D) the spouse of an individual described in clause (A), (B), or
2209-(C); or
2210-(E) an individual who is related by blood or marriage to an
2211-individual described in clause (A), (B), (C), or (D) and shares
2212-the same home with the individual.
2213-(64) "Proceeds", except as used in IC 26-1-9.1-609(b), means the
2214-following property:
2215-(A) Whatever is acquired upon the sale, lease, license,
2216-exchange, or other disposition of collateral.
2217-(B) Whatever is collected on, or distributed on account of,
2218-collateral.
2219-(C) Rights arising out of collateral.
2220-(D) To the extent of the value of collateral, claims arising out
2221-of the loss, nonconformity, or interference with the use of,
2222-defects or infringement of rights in, or damage to, the
2223-collateral.
2224-(E) To the extent of the value of collateral and to the extent
2225-payable to the debtor or the secured party, insurance payable
2226-by reason of the loss or nonconformity of, defects or
2227-infringement of rights in, or damage to, the collateral.
2228-(65) "Promissory note" means an instrument that evidences a
2229-promise to pay a monetary obligation, does not evidence an order
2230-SEA 468 — Concur 53
2231-to pay, and does not contain an acknowledgment by a bank that
2232-the bank has received for deposit a sum of money or funds.
2233-(66) "Proposal" means a record authenticated signed by a secured
2234-party that includes the terms on which the secured party is willing
2235-to accept collateral in full or partial satisfaction of the obligation
2236-it secures pursuant to IC 26-1-9.1-620, IC 26-1-9.1-621, and
2237-IC 26-1-9.1-622.
2238-(67) "Public-finance transaction" means a secured transaction in
2239-connection with which:
2240-(A) debt securities are issued;
2241-(B) all or a portion of the securities issued have an initial
2242-stated maturity of at least twenty (20) years; and
2243-(C) the debtor, obligor, secured party, account debtor, or other
2244-person obligated on collateral, assignor or assignee of a
2245-secured obligation, or assignor or assignee of a security
2246-interest is a state or a governmental unit of a state.
2247-(68) "Public organic record" means a record that is available to
2248-the public for inspection and is:
2249-(A) a record consisting of the record initially filed with or
2250-issued by a state or the United States to form or organize an
2251-organization and any record filed with or issued by the state or
2252-the United States which amends or restates the initial record;
2253-(B) an organic record of a business trust consisting of the
2254-record initially filed with a state and any record filed with the
2255-state which amends or restates the initial record, if a statute of
2256-the state governing business trusts requires that the record be
2257-filed with the state; or
2258-(C) a record consisting of legislation enacted by the legislature
2259-of a state or the Congress of the United States which forms or
2260-organizes an organization, any record amending the
2261-legislation, and any record filed with or issued by the state or
2262-the United States which amends or restates the name of the
2263-organization.
2264-(69) "Pursuant to commitment", with respect to an advance made
2265-or other value given by a secured party, means pursuant to the
2266-secured party's obligation, whether or not a subsequent event of
2267-default or other event not within the secured party's control has
2268-relieved or may relieve the secured party from its obligation.
2269-(70) "Record", except as used in "for record", "of record", "record
2270-or legal title", and "record owner", means information that is
2271-inscribed on a tangible medium or that is stored in an electronic
2272-or other medium and is retrievable in perceivable form.
2273-SEA 468 — Concur 54
2274-(71) "Registered organization" means an organization formed or
2275-organized solely under the law of a single state or the United
2276-States by the filing of a public organic record with, the issuance
2277-of a public organic record by, or the enactment of legislation by
2278-the state or the United States. The term includes a business trust
2279-that is formed or organized under the law of a single state if a
2280-statute of the state governing business trusts requires that the
2281-business trust's organic record be filed with the state.
2282-(72) "Secondary obligor" means an obligor to the extent that:
2283-(A) the obligor's obligation is secondary; or
2284-(B) the obligor has a right of recourse with respect to an
2285-obligation secured by collateral against the debtor, another
2286-obligor, or property of either.
2287-(73) "Secured party" means:
2288-(A) a person in whose favor a security interest is created or
2289-provided for under a security agreement, whether or not any
2290-obligation to be secured is outstanding;
2291-(B) a person that holds an agricultural lien;
2292-(C) a consignor;
2293-(D) a person to which accounts, chattel paper, payment
2294-intangibles, or promissory notes have been sold;
2295-(E) a trustee, indenture trustee, agent, collateral agent, or other
2296-representative in whose favor a security interest or agricultural
2297-lien is created or provided for; or
2298-(F) a person that holds a security interest arising under
2299-IC 26-1-2-401, IC 26-1-2-505, IC 26-1-2-711(3),
2300-IC 26-1-2.1-508(5), IC 26-1-4-210, or IC 26-1-5.1-118.
2301-(74) "Security agreement" means an agreement that creates or
2302-provides for a security interest.
2303-(75) "Send", in connection with a record or notification, means:
2304-(A) to deposit in the mail, deliver for transmission, or transmit
2305-by any other usual means of communication, with postage or
2306-cost of transmission provided for, addressed to any address
2307-reasonable under the circumstances; or
2308-(B) to cause the record or notification to be received within the
2309-time that it would have been received if properly sent under
2310-clause (A). [Reserved.]
2311-(76) "Software" means a computer program and any supporting
2312-information provided in connection with a transaction relating to
2313-the program. The term does not include a computer program that
2314-is included in the definition of goods.
2315-(77) "State" means a state of the United States, the District of
2316-SEA 468 — Concur 55
2317-Columbia, Puerto Rico, the United States Virgin Islands, or any
2318-territory or insular possession subject to the jurisdiction of the
2319-United States.
2320-(78) "Supporting obligation" means a letter-of-credit right or
2321-secondary obligation that supports the payment or performance of
2322-an account, chattel paper, a document, a general intangible, an
2323-instrument, or investment property.
2324-(79) "Tangible chattel paper" means chattel paper evidenced by
2325-a record or records consisting of information that is inscribed on
2326-a tangible medium. [Reserved.]
2327-(80) "Termination statement" means an amendment of a financing
2328-statement that:
2329-(A) identifies, by its file number, the initial financing
2330-statement to which it relates; and
2331-(B) indicates either that it is a termination statement or that the
2332-identified financing statement is no longer effective.
2333-(81) "Transmitting utility" means a person primarily engaged in
2334-the business of:
2335-(A) operating a railroad, subway, street railway, or trolley bus;
2336-(B) transmitting communications electrically,
2337-electromagnetically, or by light;
2338-(C) transmitting goods by pipeline or sewer; or
2339-(D) transmitting or producing and transmitting electricity,
2340-steam, gas, or water.
2341-(b) "Control" as provided in IC 26-1-7-106 and the following
2342-definitions outside IC 26-1-9.1 apply to IC 26-1-9.1:
2343-"Applicant" IC 26-1-5.1-102.
2344-"Beneficiary" IC 26-1-5.1-102.
2345-"Broker" IC 26-1-8.1-102.
2346-"Certificated security" IC 26-1-8.1-102.
2347-"Check" IC 26-1-3.1-104.
2348-"Clearing corporation" IC 26-1-8.1-102.
2349-"Contract for sale" IC 26-1-2-106.
2350-"Controllable account" IC 26-1-11-103.
2351-"Controllable electronic record" IC 26-1-11-104. IC 26-1-12-102.
2352-"Controllable payment intangible" IC 26-1-11-105.
2353-"Customer" IC 26-1-4-104.
2354-"Entitlement holder" IC 26-1-8.1-102.
2355-"Financial asset" IC 26-1-8.1-102.
2356-"Holder in due course" IC 26-1-3.1-302.
2357-"Issuer" (with respect to a letter of credit or letter-of-credit right)
2358-IC 26-1-5.1-102.
2359-SEA 468 — Concur 56
2360-"Issuer" (with respect to a security) IC 26-1-8.1-201.
2361-"Issuer" (with respect to documents of title) IC 26-1-7-102.
2362-"Lease" IC 26-1-2.1-103.
2363-"Lease agreement" IC 26-1-2.1-103.
2364-"Lease contract" IC 26-1-2.1-103.
2365-"Leasehold interest" IC 26-1-2.1-103.
2366-"Lessee" IC 26-1-2.1-103.
2367-"Lessee in ordinary course of business" IC 26-1-2.1-103.
2368-"Lessor" IC 26-1-2.1-103.
2369-"Lessor's residual interest" IC 26-1-2.1-103.
2370-"Letter of credit" IC 26-1-5.1-102.
2371-"Merchant" IC 26-1-2-104.
2372-"Negotiable instrument" IC 26-1-3.1-104.
2373-"Nominated person" IC 26-1-5.1-102.
2374-"Note" IC 26-1-3.1-104.
2375-"Proceeds of a letter of credit" IC 26-1-5.1-114.
2376-"Protected purchaser" IC 26-1-8.1-303.
2377-"Prove" IC 26-1-3.1-103.
2378-"Qualifying purchaser" IC 26-1-11-106. IC 26-1-12-102.
2379-"Sale" IC 26-1-2-106.
2380-"Securities account" IC 26-1-8.1-501.
2381-"Securities intermediary" IC 26-1-8.1-102.
2382-"Security" IC 26-1-8.1-102.
2383-"Security certificate" IC 26-1-8.1-102.
2384-"Security entitlement" IC 26-1-8.1-102.
2385-"Uncertificated security" IC 26-1-8.1-102.
2386-(c) IC 26-1-1 contains general definitions and principles of
2387-construction and interpretation applicable throughout IC 26-1-9.1.
2388-SECTION 41. IC 26-1-9.1-104 IS AMENDED TO READ AS
2389-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 104. (a) A secured
2390-party has control of a deposit account if:
2391-(1) the secured party is the bank with which the deposit account
2392-is maintained;
2393-(2) the debtor, secured party, and bank have agreed in an
2394-authenticated a signed record that the bank will comply with
2395-instructions originated by the secured party directing disposition
2396-of the funds in the account without further consent by the debtor;
2397-or
2398-(3) the secured party becomes the bank's customer with respect to
2399-the deposit account; or
2400-(4) another person, other than the debtor:
2401-(A) has control of the deposit account and acknowledges
2402-SEA 468 — Concur 57
2403-that it has control on behalf of the secured party; or
2404-(B) obtains control of the deposit account after having
2405-acknowledged that it will obtain control of the deposit
2406-account on behalf of the secured party.
2407-(b) A secured party that has satisfied subsection (a) has control,
2408-even if the debtor retains the right to direct the disposition of funds
2409-from the deposit account.
2410-SECTION 42. IC 26-1-9.1-105, AS AMENDED BY P.L.54-2011,
2411-SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2412-JULY 1, 2023]: Sec. 105. (a) A secured party purchaser has control of
2413-an authoritative electronic copy of a record evidencing chattel paper
2414-if a system employed for evidencing the transfer assignment of
2415-interests in the chattel paper reliably establishes the secured party
2416-purchaser as the person to which the chattel paper authoritative
2417-electronic copy was assigned.
2418-(b) A system satisfies subsection (a) if the record or records
2419-comprising evidencing the chattel paper are created, stored, and
2420-assigned in such a manner that:
2421-(1) a single authoritative copy of the record or records exists
2422-which is unique, identifiable and, except as otherwise provided in
2423-subdivisions (4), (5), and (6), unalterable;
2424-(2) the authoritative copy identifies the secured party purchaser
2425-as the assignee of the record or records;
2426-(3) the authoritative copy is communicated to and maintained by
2427-the secured party purchaser or its designated custodian;
2428-(4) copies or amendments that add or change an identified
2429-assignee of the authoritative copy can be made only with the
2430-consent of the secured party; purchaser;
2431-(5) each copy of the authoritative copy and any copy of a copy is
2432-readily identifiable as a copy that is not the authoritative copy;
2433-and
2434-(6) any amendment of the authoritative copy is readily identifiable
2435-as authorized or unauthorized.
2436-(c) A system satisfies subsection (a), and a purchaser has control
2437-of an authoritative electronic copy of a record evidencing chattel
2438-paper, if the electronic copy, a record attached to or logically
2439-associated with the electronic copy, or a system in which the
2440-electronic copy is recorded:
2441-(1) enables the purchaser readily to identify each electronic
2442-copy as either an authoritative copy or a nonauthoritative
2443-copy;
2444-(2) enables the purchaser readily to identify itself in any way,
2445-SEA 468 — Concur 58
2446-including by name, identifying number, cryptographic key,
2447-office, or account number, as the assignee of the authoritative
2448-electronic copy; and
2449-(3) gives the purchaser exclusive power, subject to subsection
2450-(d), to:
2451-(A) prevent others from adding or changing an identified
2452-assignee of the authoritative electronic copy; and
2453-(B) transfer control of the authoritative electronic copy.
2454-(d) Subject to subsection (e), a power is exclusive under
2455-subsection (c)(3)(A) and (c)(3)(B) even if:
2456-(1) the authoritative electronic copy, a record attached to or
2457-logically associated with the authoritative electronic copy, or
2458-a system in which the authoritative electronic copy is
2459-recorded limits the use of the authoritative electronic copy or
2460-has a protocol programmed to cause a change, including a
2461-transfer or loss of control; or
2462-(2) the power is shared with another person.
2463-(e) A power of a purchaser is not shared with another person
2464-under subsection (d)(2), and the purchaser's power is not exclusive
2465-if:
2466-(1) the purchaser can exercise the power only if the power
2467-also is exercised by the other person; and
2468-(2) the other person:
2469-(A) can exercise the power without exercise of the power
2470-by the purchaser; or
2471-(B) is the transferor to the purchaser of an interest in the
2472-chattel paper.
2473-(f) If a purchaser has the powers specified in subsection
2474-(c)(3)(A) and (c)(3)(B), the powers are presumed to be exclusive.
2475-(g) A purchaser has control of an authoritative electronic copy
2476-of a record evidencing chattel paper if another person, other than
2477-the transferor to the purchaser of an interest in the chattel paper:
2478-(1) has control of the authoritative electronic copy and
2479-acknowledges that it has control on behalf of the purchaser;
2480-or
2481-(2) obtains control of the authoritative electronic copy after
2482-having acknowledged that it will obtain control of the
2483-authoritative electronic copy on behalf of the purchaser.
2484-SECTION 43. IC 26-1-9.1-107.1, AS ADDED BY P.L.110-2022,
2485-SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2486-JULY 1, 2023]: Sec. 107.1. (a) A secured party has control of a
2487-controllable electronic record as provided for in IC 26-1-11-108.
2488-SEA 468 — Concur 59
2489-IC 26-1-12-105.
2490-(b) A secured party has control of a controllable account or
2491-controllable payment intangible if the secured party has control of the
2492-controllable electronic record that evidences the controllable account
2493-or controllable payment intangible.
2494-SECTION 44. IC 26-1-9.1-107.2 IS ADDED TO THE INDIANA
2495-CODE AS A NEW SECTION TO READ AS FOLLOWS
2496-[EFFECTIVE JULY 1, 2023]: Sec. 107.2. (a) A person that has
2497-control under section 104 or 105 of this chapter is not required to
2498-acknowledge that it has control on behalf of another person.
2499-(b) If a person acknowledges that it has or will obtain control on
2500-behalf of another person, unless the person otherwise agrees or law
2501-other than this chapter otherwise provides, the person does not owe
2502-any duty to any other person and is not required to confirm the
2503-acknowledgment to any other person.
2504-SECTION 45. IC 26-1-9.1-203, AS AMENDED BY P.L.143-2007,
2505-SECTION 66, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2506-JULY 1, 2023]: Sec. 203. (a) A security interest attaches to collateral
2507-when it becomes enforceable against the debtor with respect to the
2508-collateral, unless an agreement expressly postpones the time of
2509-attachment.
2510-(b) Except as otherwise provided in subsections (c) through (i), a
2511-security interest is enforceable against the debtor and third parties with
2512-respect to the collateral only if:
2513-(1) value has been given;
2514-(2) the debtor has rights in the collateral or the power to transfer
2515-rights in the collateral to a secured party; and
2516-(3) one (1) of the following conditions is met:
2517-(A) The debtor has authenticated signed a security agreement
2518-that provides a description of the collateral and, if the security
2519-interest covers timber to be cut, a description of the land
2520-concerned.
2521-(B) The collateral is not a certificated security and is in the
2522-possession of the secured party under IC 26-1-9.1-313
2523-pursuant to the debtor's security agreement.
2524-(C) The collateral is a certificated security in registered form
2525-and the security certificate has been delivered to the secured
2526-party under IC 26-1-8.1-301 pursuant to the debtor's security
2527-agreement.
2528-(D) The collateral is controllable accounts, controllable
2529-electronic records, controllable payment intangibles,
2530-deposit accounts, electronic chattel paper, documents,
2531-SEA 468 — Concur 60
2532-investment property, or letter-of-credit rights, or electronic
2533-documents, and the secured party has control under
2534-IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
2535-IC 26-1-9.1-106, or IC 26-1-9.1-107, or IC 26-1-9.1-107.1
2536-pursuant to the debtor's security agreement.
2537-(E) The collateral is chattel paper and the secured party
2538-has possession and control under IC 26-1-9.1-314.1
2539-pursuant to the debtor's security agreement.
2540-(c) Subsection (b) is subject to IC 26-1-4-210 on the security
2541-interest of a collecting bank, IC 26-1-5.1-118 on the security interest of
2542-a letter-of-credit issuer or nominated person, IC 26-1-9.1-110 on a
2543-security interest arising under IC 26-1-2 or IC 26-1-2.1, and
2544-IC 26-1-9.1-206 on security interests in investment property.
2545-(d) A person becomes bound as debtor by a security agreement
2546-entered into by another person if, by operation of law other than
2547-IC 26-1-9.1 or by contract:
2548-(1) the security agreement becomes effective to create a security
2549-interest in the person's property; or
2550-(2) the person becomes generally obligated for the obligations of
2551-the other person, including the obligation secured under the
2552-security agreement, and acquires or succeeds to all or
2553-substantially all of the assets of the other person.
2554-(e) If a new debtor becomes bound as debtor by a security
2555-agreement entered into by another person:
2556-(1) the agreement satisfies subsection (b)(3) with respect to
2557-existing or after-acquired property of the new debtor to the extent
2558-the property is described in the agreement; and
2559-(2) another agreement is not necessary to make a security interest
2560-in the property enforceable.
2561-(f) The attachment of a security interest in collateral gives the
2562-secured party the rights to proceeds provided by IC 26-1-9-315
2563-IC 26-1-9.1-315 and is also attachment of a security interest in a
2564-supporting obligation for the collateral.
2565-(g) The attachment of a security interest in a right to payment or
2566-performance secured by a security interest or other lien on personal or
2567-real property is also attachment of a security interest in the security
2568-interest, mortgage, or other lien.
2569-(h) The attachment of a security interest in a securities account is
2570-also attachment of a security interest in the security entitlements
2571-carried in the securities account.
2572-(i) The attachment of a security interest in a commodity account is
2573-also attachment of a security interest in the commodity contracts
2574-SEA 468 — Concur 61
2575-carried in the commodity account.
2576-SECTION 46. IC 26-1-9.1-204 IS AMENDED TO READ AS
2577-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 204. (a) Except as
2578-otherwise provided in subsection (b), a security agreement may create
2579-or provide for a security interest in after-acquired collateral.
2580-(b) Subject to subsection (d), a security interest does not attach
2581-under a term constituting an after-acquired property clause to:
2582-(1) consumer goods, other than an accession when given as
2583-additional security, unless the debtor acquires rights in them
2584-within ten (10) days after the secured party gives value; or
2585-(2) a commercial tort claim.
2586-(c) A security agreement may provide that collateral secures, or that
2587-accounts, chattel paper, payment intangibles, or promissory notes are
2588-sold in connection with, future advances or other value, whether or not
2589-the advances or value are given pursuant to commitment.
2590-(d) Subsection (b) does not prevent a security interest from
2591-attaching:
2592-(1) to consumer goods as proceeds under section 315(a) of this
2593-chapter or commingled goods under section 336(c) of this
2594-chapter;
2595-(2) to a commercial tort claim as proceeds under section
2596-315(a) of this chapter; or
2597-(3) under an after-acquired property clause to property that
2598-is proceeds of consumer goods or a commercial tort claim.
2599-SECTION 47. IC 26-1-9.1-207, AS AMENDED BY P.L.143-2007,
2600-SECTION 67, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2601-JULY 1, 2023]: Sec. 207. (a) Except as otherwise provided in
2602-subsection (d), a secured party shall use reasonable care in the custody
2603-and preservation of collateral in the secured party's possession. In the
2604-case of chattel paper or an instrument, reasonable care includes taking
2605-necessary steps to preserve rights against prior parties unless otherwise
2606-agreed.
2607-(b) Except as otherwise provided in subsection (d), if a secured
2608-party has possession of collateral:
2609-(1) reasonable expenses, including the cost of insurance and
2610-payment of taxes or other charges, incurred in the custody,
2611-preservation, use, or operation of the collateral are chargeable to
2612-the debtor and are secured by the collateral;
2613-(2) the risk of accidental loss or damage is on the debtor to the
2614-extent of a deficiency in any effective insurance coverage;
2615-(3) the secured party shall keep the collateral identifiable, but
2616-fungible collateral may be commingled; and
2617-SEA 468 — Concur 62
2618-(4) the secured party may use or operate the collateral:
2619-(A) for the purpose of preserving the collateral or its value;
2620-(B) as permitted by an order of a court having competent
2621-jurisdiction; or
2622-(C) except in the case of consumer goods, in the manner and
2623-to the extent agreed by the debtor.
2624-(c) Except as otherwise provided in subsection (d), a secured party
2625-having possession of collateral or control of collateral under
2626-IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105, IC 26-1-9.1-106, or
2627-IC 26-1-9.1-107, or IC 26-1-9.1-107.1:
2628-(1) may hold as additional security any proceeds, except money
2629-or funds, received from the collateral;
2630-(2) shall apply money or funds received from the collateral to
2631-reduce the secured obligation, unless remitted to the debtor; and
2632-(3) may create a security interest in the collateral.
2633-(d) If the secured party is a buyer of accounts, chattel paper,
2634-payment intangibles, or promissory notes or a consignor:
2635-(1) subsection (a) does not apply unless the secured party is
2636-entitled under an agreement:
2637-(A) to charge back uncollected collateral; or
2638-(B) otherwise to full or limited recourse against the debtor or
2639-a secondary obligor based on the nonpayment or other default
2640-of an account debtor or other obligor on the collateral; and
2641-(2) subsections (b) and (c) do not apply.
2642-SECTION 48. IC 26-1-9.1-208, AS AMENDED BY P.L.143-2007,
2643-SECTION 68, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2644-JULY 1, 2023]: Sec. 208. (a) This section applies to cases in which
2645-there is no outstanding secured obligation, and the secured party is not
2646-committed to make advances, incur obligations, or otherwise give
2647-value.
2648-(b) Within ten (10) days after receiving an authenticated a signed
2649-demand by the debtor:
2650-(1) a secured party having control of a deposit account under
2651-IC 26-1-9.1-104(a)(2) shall send to the bank with which the
2652-deposit account is maintained an authenticated statement a signed
2653-record that releases the bank from any further obligation to
2654-comply with instructions originated by the secured party;
2655-(2) a secured party having control of a deposit account under
2656-IC 26-1-9.1-104(a)(3) shall:
2657-(A) pay the debtor the balance on deposit in the deposit
2658-account; or
2659-(B) transfer the balance on deposit into a deposit account in
2660-SEA 468 — Concur 63
2661-the debtor's name;
2662-(3) a secured party, other than a buyer, having control under
2663-section 105 of this chapter of an authoritative electronic copy
2664-of a record evidencing chattel paper under IC 26-1-9.1-105 shall
2665-transfer control of the electronic copy to the debtor or a
2666-person designated by the debtor;
2667-(A) communicate the authoritative copy of the electronic
2668-chattel paper to the debtor or its designated custodian;
2669-(B) if the debtor designates a custodian that is the designated
2670-custodian with which the authoritative copy of the electronic
2671-chattel paper is maintained for the secured party, communicate
2672-to the custodian an authenticated record releasing the
2673-designated custodian from any further obligation to comply
2674-with instructions originated by the secured party and
2675-instructing the custodian to comply with instructions
2676-originated by the debtor; and
2677-(C) take appropriate action to enable the debtor or its
2678-designated custodian to make copies of or revisions to the
2679-authoritative copy that add or change an identified assignee of
2680-the authoritative copy without the consent of the secured party;
2681-(4) a secured party having control of investment property under
2682-IC 26-1-8.1-106(d)(2) or IC 26-1-9.1-106(b) shall send to the
2683-securities intermediary or commodity intermediary with which the
2684-security entitlement or commodity contract is maintained an
2685-authenticated a signed record that releases the securities
2686-intermediary or commodity intermediary from any further
2687-obligation to comply with entitlement orders or directions
2688-originated by the secured party;
2689-(5) a secured party having control of a letter-of-credit right under
2690-IC 26-1-9.1-107 shall send to each person having an unfulfilled
2691-obligation to pay or deliver proceeds of the letter of credit to the
2692-secured party an authenticated a signed release from any further
2693-obligation to pay or deliver proceeds of the letter of credit to the
2694-secured party; and
2695-(6) a secured party having control under IC 26-1-7-106 of an
2696-authoritative electronic copy of an electronic document of title
2697-shall transfer control of the electronic copy to the debtor or a
2698-person designated by the debtor; and
2699-(A) give control of the electronic document to the debtor or its
2700-designated custodian;
2701-(B) if the debtor designates a custodian that is the designated
2702-custodian with which the authoritative copy of the electronic
2703-SEA 468 — Concur 64
2704-document is maintained for the secured party, communicate to
2705-the custodian an authenticated record releasing the designated
2706-custodian from any further obligation to comply with
2707-instructions originated by the secured party and instructing the
2708-custodian to comply with instructions originated by the debtor;
2709-and
2710-(C) take appropriate action to enable the debtor or its
2711-designated custodian to make copies of or revisions to the
2712-authoritative copy that add or change an identified assignee of
2713-the authoritative copy without the consent of the secured party.
2714-(7) a secured party having control under IC 26-1-12-105 of a
2715-controllable electronic record, other than a buyer of a
2716-controllable account or controllable payment intangible
2717-evidenced by the controllable electronic record, shall transfer
2718-control of the controllable electronic record to the debtor or
2719-a person designated by the debtor.
2720-SECTION 49. IC 26-1-9.1-209 IS AMENDED TO READ AS
2721-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 209. (a) Except as
2722-otherwise provided in subsection (c), this section applies if:
2723-(1) there is no outstanding secured obligation; and
2724-(2) the secured party is not committed to make advances, incur
2725-obligations, or otherwise give value.
2726-(b) Within ten (10) days after receiving an authenticated a signed
2727-demand by the debtor, a secured party shall send to an account debtor
2728-that has received notification under IC 26-1-9.1-406(a) or
2729-IC 26-1-12-106(b) of an assignment to the secured party as assignee
2730-under IC 26-1-9.1-406(a) an authenticated a signed record that releases
2731-the account debtor from any further obligation to the secured party.
2732-(c) This section does not apply to an assignment constituting the
2733-sale of an account, chattel paper, or payment intangible.
2734-SECTION 50. IC 26-1-9.1-210 IS AMENDED TO READ AS
2735-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 210. (a) In this section
2736-the following definitions apply:
2737-(1) "Request" means a record of a type described in subdivision
2738-(2), (3), or (4).
2739-(2) "Request for an accounting" means a record authenticated
2740-signed by a debtor requesting that the recipient provide an
2741-accounting of the unpaid obligations secured by collateral and
2742-reasonably identifying the transaction or relationship that is the
2743-subject of the request.
2744-(3) "Request regarding a list of collateral" means a record
2745-authenticated signed by a debtor requesting that the recipient
2746-SEA 468 — Concur 65
2747-approve or correct a list of what the debtor believes to be the
2748-collateral securing an obligation and reasonably identifying the
2749-transaction or relationship that is the subject of the request.
2750-(4) "Request regarding a statement of account" means a record
2751-authenticated signed by a debtor requesting that the recipient
2752-approve or correct a statement indicating what the debtor believes
2753-to be the aggregate amount of unpaid obligations secured by
2754-collateral as of a specified date and reasonably identifying the
2755-transaction or relationship that is the subject of the request.
2756-(b) Subject to subsections (c), (d), (e), and (f), a secured party, other
2757-than a buyer of accounts, chattel paper, payment intangibles, or
2758-promissory notes or a consignor, shall comply with a request within
2759-fourteen (14) days after receipt:
2760-(1) in the case of a request for an accounting, by authenticating
2761-signing and sending to the debtor an accounting; and
2762-(2) in the case of a request regarding a list of collateral or a
2763-request regarding a statement of account, by authenticating
2764-signing and sending to the debtor an approval or correction.
2765-(c) A secured party that claims a security interest in all of a
2766-particular type of collateral owned by the debtor may comply with a
2767-request regarding a list of collateral by sending to the debtor an
2768-authenticated a signed record, including a statement to that effect
2769-within fourteen (14) days after receipt.
2770-(d) A person that receives a request regarding a list of collateral,
2771-claims no interest in the collateral when it receives the request, and
2772-claimed an interest in the collateral at an earlier time shall comply with
2773-the request within fourteen (14) days after receipt by sending to the
2774-debtor an authenticated a signed record:
2775-(1) disclaiming any interest in the collateral; and
2776-(2) if known to the recipient, providing the name and mailing
2777-address of any assignee of or successor to the recipient's interest
2778-in the collateral.
2779-(e) A person that receives a request for an accounting or a request
2780-regarding a statement of account, claims no interest in the obligations
2781-when the person receives the request, and claimed an interest in the
2782-obligations at an earlier time shall comply with the request within
2783-fourteen (14) days after receipt by sending to the debtor an
2784-authenticated a signed record:
2785-(1) disclaiming any interest in the obligations; and
2786-(2) if known to the recipient, providing the name and mailing
2787-address of any assignee of or successor to the recipient's interest
2788-in the obligations.
2789-SEA 468 — Concur 66
2790-(f) A debtor is entitled without charge to one (1) response to a
2791-request under this section during any six (6) month period. The secured
2792-party may require payment of a charge not exceeding twenty-five
2793-dollars ($25) for each additional response.
2794-SECTION 51. IC 26-1-9.1-301, AS AMENDED BY P.L.143-2007,
2795-SECTION 69, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2796-JULY 1, 2023]: Sec. 301. Except as otherwise provided in
2797-IC 26-1-9.1-303 through IC 26-1-9.1-306, IC 26-1-9.1-306.2, the
2798-following rules determine the law governing perfection, the effect of
2799-perfection or nonperfection, and the priority of a security interest in
2800-collateral:
2801-(1) Except as otherwise provided in this section, while a debtor is
2802-located in a jurisdiction, the local law of that jurisdiction governs
2803-perfection, the effect of perfection or nonperfection, and the
2804-priority of a security interest in collateral.
2805-(2) While collateral is located in a jurisdiction, the local law of
2806-that jurisdiction governs perfection, the effect of perfection or
2807-nonperfection, and the priority of a possessory security interest in
2808-that collateral.
2809-(3) Except as otherwise provided in subdivision (4), while
2810-tangible negotiable tangible documents, goods, instruments, or
2811-money or tangible chattel paper is located in a jurisdiction, the
2812-local law of that jurisdiction governs:
2813-(A) perfection of a security interest in the goods by filing a
2814-fixture filing;
2815-(B) perfection of a security interest in timber to be cut; and
2816-(C) the effect of perfection or nonperfection and the priority of
2817-a nonpossessory security interest in the collateral.
2818-(4) The local law of the jurisdiction in which the wellhead or
2819-minehead is located governs perfection, the effect of perfection or
2820-nonperfection, and the priority of a security interest in
2821-as-extracted collateral.
2822-SECTION 52. IC 26-1-9.1-304 IS AMENDED TO READ AS
2823-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 304. (a) The local law
2824-of a bank's jurisdiction governs perfection, the effect of perfection or
2825-nonperfection, and the priority of a security interest in a deposit
2826-account maintained with that bank even if the transaction does not
2827-bear any relation to the bank's jurisdiction.
2828-(b) The following rules determine a bank's jurisdiction for purposes
2829-of IC 26-1-9.1-301 through IC 26-1-9.1-342:
2830-(1) If an agreement between the bank and the debtor governing
2831-the deposit account expressly provides that a particular
2832-SEA 468 — Concur 67
2833-jurisdiction is the bank's jurisdiction for purposes of IC 26-1, that
2834-jurisdiction is the bank's jurisdiction.
2835-(2) If subdivision (1) does not apply and an agreement between
2836-the bank and its customer governing the deposit account expressly
2837-provides that the agreement is governed by the law of a particular
2838-jurisdiction, that jurisdiction is the bank's jurisdiction.
2839-(3) If neither subdivision (1) nor subdivision (2) applies, and an
2840-agreement between the bank and its customer governing the
2841-deposit account expressly provides that the deposit account is
2842-maintained at an office in a particular jurisdiction, that
2843-jurisdiction is the bank's jurisdiction.
2844-(4) If none of the preceding subdivisions apply, the bank's
2845-jurisdiction is the jurisdiction in which the office identified in an
2846-account statement as the office serving the customer's account is
2847-located.
2848-(5) If none of the preceding subdivisions apply, the bank's
2849-jurisdiction is the jurisdiction in which the chief executive office
2850-of the bank is located.
2851-SECTION 53. IC 26-1-9.1-305 IS AMENDED TO READ AS
2852-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 305. (a) Except as
2853-otherwise provided in subsection (c), the following rules apply:
2854-(1) While a security certificate is located in a jurisdiction, the
2855-local law of that jurisdiction governs perfection, the effect of
2856-perfection or nonperfection, and the priority of a security interest
2857-in the certificated security represented thereby.
2858-(2) The local law of the issuer's jurisdiction as specified in
2859-IC 26-1-8.1-110(d) governs perfection, the effect of perfection or
2860-nonperfection, and the priority of a security interest in an
2861-uncertificated security.
2862-(3) The local law of the securities intermediary's jurisdiction as
2863-specified in IC 26-1-8.1-110(e) governs perfection, the effect of
2864-perfection or nonperfection, and the priority of a security interest
2865-in a security entitlement or securities account.
2866-(4) The local law of the commodity intermediary's jurisdiction
2867-governs perfection, the effect of perfection or nonperfection, and
2868-the priority of a security interest in a commodity contract or
2869-commodity account.
2870-(5) Subdivisions (2) through (4) apply even if the transaction
2871-does not bear any relation to the jurisdiction.
2872-(b) The following rules determine a commodity intermediary's
2873-jurisdiction for purposes of IC 26-1-9.1-301 through IC 26-1-9.1-342:
2874-(1) If an agreement between the commodity intermediary and
2875-SEA 468 — Concur 68
2876-commodity customer governing the commodity account expressly
2877-provides that a particular jurisdiction is the commodity
2878-intermediary's jurisdiction for purposes of IC 26-1, that
2879-jurisdiction is the commodity intermediary's jurisdiction.
2880-(2) If subdivision (1) does not apply, and an agreement between
2881-the commodity intermediary and commodity customer governing
2882-the commodity account expressly provides that the agreement is
2883-governed by the law of a particular jurisdiction, that jurisdiction
2884-is the commodity intermediary's jurisdiction.
2885-(3) If neither subdivision (1) nor subdivision (2) applies, and an
2886-agreement between the commodity intermediary and commodity
2887-customer governing the commodity account expressly provides
2888-that the commodity account is maintained at an office in a
2889-particular jurisdiction, that jurisdiction is the commodity
2890-intermediary's jurisdiction.
2891-(4) If none of the preceding subdivisions apply, the commodity
2892-intermediary's jurisdiction is the jurisdiction in which the office
2893-identified in an account statement as the office serving the
2894-commodity customer's account is located.
2895-(5) If none of the preceding subdivisions apply, the commodity
2896-intermediary's jurisdiction is the jurisdiction in which the chief
2897-executive office of the commodity intermediary is located.
2898-(c) The local law of the jurisdiction in which the debtor is located
2899-governs:
2900-(1) perfection of a security interest in investment property by
2901-filing;
2902-(2) automatic perfection of a security interest in investment
2903-property created by a broker or securities intermediary; and
2904-(3) automatic perfection of a security interest in a commodity
2905-contract or commodity account created by a commodity
2906-intermediary.
2907-SECTION 54. IC 26-1-9.1-306.1 IS ADDED TO THE INDIANA
2908-CODE AS A NEW SECTION TO READ AS FOLLOWS
2909-[EFFECTIVE JULY 1, 2023]: Sec. 306.1. (a) Except as provided in
2910-subsection (d), if chattel paper is evidenced only by an
2911-authoritative electronic copy of the chattel paper or is evidenced by
2912-an authoritative electronic copy and an authoritative tangible copy,
2913-the local law of the chattel paper's jurisdiction governs perfection,
2914-the effect of perfection or nonperfection, and the priority of a
2915-security interest in the chattel paper, even if the transaction does
2916-not bear any relation to the chattel paper's jurisdiction.
2917-(b) The following rules govern the chattel paper's jurisdiction
2918-SEA 468 — Concur 69
2919-under this section:
2920-(1) If the authoritative electronic copy of the record
2921-evidencing chattel paper, or a record that is attached to or
2922-logically associated with the electronic copy and that is readily
2923-available for review, expressly provides that a particular
2924-jurisdiction is the chattel paper's jurisdiction for purposes of
2925-this section, this chapter, or IC 26-1, that jurisdiction is the
2926-chattel paper's jurisdiction.
2927-(2) If subdivision (1) does not apply, and the rules of the
2928-system in which the authoritative electronic copy is recorded
2929-are readily available for review and expressly provide that a
2930-particular jurisdiction is the chattel paper's jurisdiction for
2931-purposes of this section, this chapter, or IC 26-1, that
2932-jurisdiction is the chattel paper's jurisdiction.
2933-(3) If subdivisions (1) and (2) do not apply, and the
2934-authoritative electronic copy, or a record that is attached to
2935-or logically associated with the electronic copy and that is
2936-readily available for review, expressly provides that the
2937-chattel paper is governed by the law of a particular
2938-jurisdiction, that jurisdiction is the chattel paper's
2939-jurisdiction.
2940-(4) If subdivisions (1) through (3) do not apply, and the rules
2941-of the system in which the authoritative electronic copy is
2942-recorded are readily available for review and expressly
2943-provide that the chattel paper or the system is governed by
2944-the law of a particular jurisdiction, that jurisdiction is the
2945-chattel paper's jurisdiction.
2946-(5) If subdivisions (1) through (4) do not apply, the chattel
2947-paper's jurisdiction is the jurisdiction in which the debtor is
2948-located.
2949-(c) If an authoritative tangible copy of a record evidences
2950-chattel paper and the chattel paper is not evidenced by an
2951-authoritative electronic copy, while the authoritative tangible copy
2952-of the record evidencing the chattel paper is located in a
2953-jurisdiction, the local law of that jurisdiction governs:
2954-(1) perfection of a security interest in the chattel paper by
2955-possession under section 314.1 of this chapter; and
2956-(2) the effect of perfection or nonperfection and the priority
2957-of a security interest in the chattel paper.
2958-(d) The local law of the jurisdiction in which the debtor is
2959-located governs perfection of a security interest in chattel paper by
2960-filing.
2961-SEA 468 — Concur 70
2962-SECTION 55. IC 26-1-9.1-306.2 IS ADDED TO THE INDIANA
2963-CODE AS A NEW SECTION TO READ AS FOLLOWS
2964-[EFFECTIVE JULY 1, 2023]: Sec. 306.2. (a) Except as provided in
2965-subsection (b), the local law of the controllable electronic record's
2966-jurisdiction under IC 26-1-12-107(c) and IC 26-1-12-107(d)
2967-governs perfection, the effect of perfection or nonperfection, and
2968-the priority of a security interest in a controllable electronic record
2969-and a security interest in a controllable account or controllable
2970-payment intangible evidenced by the controllable electronic record.
2971-(b) The local law of the jurisdiction in which the debtor is
2972-located governs:
2973-(1) perfection of a security interest in a controllable account,
2974-controllable electronic record, or controllable payment
2975-intangible by filing; and
2976-(2) automatic perfection of a security interest in a controllable
2977-payment intangible created by a sale of the controllable
2978-payment intangible.
2979-SECTION 56. IC 26-1-9.1-310, AS AMENDED BY P.L.110-2022,
2980-SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2981-JULY 1, 2023]: Sec. 310. (a) Except as otherwise provided in
2982-subsection (b) and IC 26-1-9.1-312(b), a financing statement must be
2983-filed to perfect all security interests and agricultural liens.
2984-(b) The filing of a financing statement is not necessary to perfect a
2985-security interest:
2986-(1) that is perfected under IC 26-1-9.1-308(d),
2987-IC 26-1-9.1-308(e), IC 26-1-9.1-308(f), or IC 26-1-9.1-308(g);
2988-(2) that is perfected under IC 26-1-9.1-309 when it attaches;
2989-(3) in property subject to a statute, regulation, or treaty described
2990-in IC 26-1-9.1-311(a);
2991-(4) in goods in possession of a bailee that are perfected under
2992-IC 26-1-9.1-312(d)(1) or IC 26-1-9.1-312(d)(2);
2993-(5) in certificated securities, documents, goods, or instruments
2994-which is perfected without filing, control, or possession under
2995-IC 26-1-9.1-312(e), IC 26-1-9.1-312(f), or IC 26-1-9.1-312(g);
2996-(6) in collateral in the secured party's possession under
2997-IC 26-1-9.1-313;
2998-(7) in a certificated security which is perfected by delivery of the
2999-security certificate to the secured party under IC 26-1-9.1-313;
3000-(8) in:
3001-(A) controllable accounts, controllable electronic records,
3002-controllable payment intangibles, deposit accounts, electronic
3003-chattel paper, electronic documents, investment property, or
3004-SEA 468 — Concur 71
3005-letter-of-credit rights that are perfected by control under
3006-IC 26-1-9.1-314; or
3007-(B) chattel paper which is perfected by possession under
3008-section 314.1 of this chapter;
3009-(9) in proceeds which is perfected under IC 26-1-9.1-315; or
3010-(10) that is perfected under IC 26-1-9.1-316.
3011-(c) If a secured party assigns a perfected security interest or
3012-agricultural lien, a filing under IC 26-1-9.1 is not required to continue
3013-the perfected status of the security interest against creditors of and
3014-transferees from the original debtor.
3015-SECTION 57. IC 26-1-9.1-312, AS AMENDED BY P.L.110-2022,
3016-SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3017-JULY 1, 2023]: Sec. 312. (a) A security interest in chattel paper,
3018-controllable accounts, controllable electronic records, controllable
3019-payment intangibles, negotiable documents, instruments, or investment
3020-property, or negotiable documents may be perfected by filing.
3021-(b) Except as otherwise provided in IC 26-1-9.1-315(c) and
3022-IC 26-1-9.1-315(d), for proceeds:
3023-(1) a security interest in a deposit account may be perfected only
3024-by control under IC 26-1-9.1-314;
3025-(2) and except as otherwise provided in IC 26-1-9.1-308(d), a
3026-security interest in a letter-of-credit right may be perfected only
3027-by control under IC 26-1-9.1-314; and
3028-(3) a security interest in money may be perfected only by the
3029-secured party's taking possession under IC 26-1-9.1-313.
3030-(c) While goods are in the possession of a bailee that has issued a
3031-negotiable document covering the goods:
3032-(1) a security interest in the goods may be perfected by perfecting
3033-a security interest in the document; and
3034-(2) a security interest perfected in the document has priority over
3035-any security interest that becomes perfected in the goods by
3036-another method during that time.
3037-(d) While goods are in the possession of a bailee that has issued a
3038-nonnegotiable document covering the goods, a security interest in the
3039-goods may be perfected by:
3040-(1) issuance of a document in the name of the secured party;
3041-(2) the bailee's receipt of notification of the secured party's
3042-interest; or
3043-(3) filing as to the goods.
3044-(e) A security interest in certificated securities, negotiable
3045-documents, or instruments is perfected without filing or the taking of
3046-possession or control for a period of twenty (20) days from the time it
3047-SEA 468 — Concur 72
3048-attaches to the extent that it arises for new value given under an
3049-authenticated a signed security agreement.
3050-(f) A perfected security interest in a negotiable document or goods
3051-in possession of a bailee, other than one that has issued a negotiable
3052-document for the goods, remains perfected for twenty (20) days without
3053-filing if the secured party makes available to the debtor the goods or
3054-documents representing the goods for the purpose of:
3055-(1) ultimate sale or exchange; or
3056-(2) loading, unloading, storing, shipping, transshipping,
3057-manufacturing, processing, or otherwise dealing with them in a
3058-manner preliminary to their sale or exchange.
3059-(g) A perfected security interest in a certificated security or
3060-instrument remains perfected for twenty (20) days without filing if the
3061-secured party delivers the security certificate or instrument to the
3062-debtor for the purpose of:
3063-(1) ultimate sale or exchange; or
3064-(2) presentation, collection, enforcement, renewal, or registration
3065-of transfer.
3066-(h) After the twenty (20) day period specified in subsection (e), (f),
3067-or (g) expires, perfection depends upon compliance with IC 26-1-9.1.
3068-SECTION 58. IC 26-1-9.1-313, AS AMENDED BY P.L.143-2007,
3069-SECTION 72, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3070-JULY 1, 2023]: Sec. 313. (a) Except as otherwise provided in
3071-subsection (b), a secured party may perfect a security interest in
3072-tangible negotiable documents, goods, instruments, negotiable
3073-tangible documents, or money, or tangible chattel paper by taking
3074-possession of the collateral. A secured party may perfect a security
3075-interest in certificated securities by taking delivery of the certificated
3076-securities under IC 26-1-8.1-301.
3077-(b) With respect to goods covered by a certificate of title issued by
3078-this state, a secured party may perfect a security interest in the goods
3079-by taking possession of the goods only in the circumstances described
3080-in IC 26-1-9.1-316(e).
3081-(c) With respect to collateral other than certificated securities and
3082-goods covered by a document, a secured party takes possession of
3083-collateral in the possession of a person other than the debtor, the
3084-secured party, or a lessee of the collateral from the debtor in the
3085-ordinary course of the debtor's business, when:
3086-(1) the person in possession authenticates signs a record
3087-acknowledging that it holds possession of the collateral for the
3088-secured party's benefit; or
3089-(2) the person takes possession of the collateral after having
3090-SEA 468 — Concur 73
3091-authenticated signed a record acknowledging that it will hold
3092-possession of the collateral for the secured party's benefit.
3093-(d) If perfection of a security interest depends upon possession of
3094-the collateral by a secured party, perfection occurs not earlier than the
3095-time the secured party takes possession and continues only while the
3096-secured party retains possession.
3097-(e) A security interest in a certificated security in registered form is
3098-perfected by delivery when delivery of the certificated security occurs
3099-under IC 26-1-8.1-301 and remains perfected by delivery until the
3100-debtor obtains possession of the security certificate.
3101-(f) A person in possession of collateral is not required to
3102-acknowledge that it holds possession for a secured party's benefit.
3103-(g) If a person acknowledges that it holds possession for the secured
3104-party's benefit:
3105-(1) the acknowledgment is effective under subsection (c) or
3106-IC 26-1-8.1-301(a), even if the acknowledgment violates the
3107-rights of a debtor; and
3108-(2) unless the person otherwise agrees or a law other than
3109-IC 26-1-9.1 otherwise provides, the person does not owe any duty
3110-to the secured party and is not required to confirm the
3111-acknowledgment to another person.
3112-(h) A secured party having possession of collateral does not
3113-relinquish possession by delivering the collateral to a person other than
3114-the debtor or a lessee of the collateral from the debtor in the ordinary
3115-course of the debtor's business if the person was instructed before the
3116-delivery or is instructed contemporaneously with the delivery:
3117-(1) to hold possession of the collateral for the secured party's
3118-benefit; or
3119-(2) to redeliver the collateral to the secured party.
3120-(i) A secured party does not relinquish possession, even if a delivery
3121-under subsection (h) violates the rights of a debtor. A person to which
3122-collateral is delivered under subsection (h) does not owe any duty to
3123-the secured party and is not required to confirm the delivery to another
3124-person unless the person otherwise agrees or law other than IC 26-1-9.1
3125-otherwise provides.
3126-SECTION 59. IC 26-1-9.1-314, AS AMENDED BY P.L.110-2022,
3127-SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3128-JULY 1, 2023]: Sec. 314. (a) A security interest in controllable
3129-accounts, controllable electronic records, controllable payment
3130-intangibles, investment property, deposit accounts, electronic
3131-documents, investment property, or letter-of-credit rights electronic
3132-chattel paper, or electronic documents may be perfected by control of
3133-SEA 468 — Concur 74
3134-the collateral under IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
3135-IC 26-1-9.1-106, IC 26-1-9.1-107, or IC 26-1-9.1-107.1, as applicable.
3136-(b) A security interest in controllable accounts, controllable
3137-electronic records, controllable payment intangibles, deposit accounts,
3138-electronic chattel paper, documents, or letter-of-credit rights or
3139-electronic documents is perfected by control under IC 26-1-7-106,
3140-IC 26-1-9.1-104, IC 26-1-9.1-105, IC 26-1-9.1-107, or
3141-IC 26-1-9.1-107.1, as applicable, when not earlier than the time the
3142-secured party obtains control and remains perfected by control only
3143-while the secured party retains control.
3144-(c) A security interest in investment property is perfected by control
3145-under IC 26-1-9.1-106 from not earlier than the time the secured party
3146-obtains control and remains perfected by control until:
3147-(1) the secured party does not have control; and
3148-(2) one of the following occurs:
3149-(A) if the collateral is a certificated security, the debtor has or
3150-acquires possession of the security certificate;
3151-(B) if the collateral is an uncertificated security, the issuer has
3152-registered or registers the debtor as the registered owner; or
3153-(C) if the collateral is a security entitlement, the debtor is or
3154-becomes the entitlement holder.
3155-SECTION 60. IC 26-1-9.1-314.1 IS ADDED TO THE INDIANA
3156-CODE AS A NEW SECTION TO READ AS FOLLOWS
3157-[EFFECTIVE JULY 1, 2023]: Sec. 314.1. (a) A secured party may
3158-perfect a security interest in chattel paper by taking possession of
3159-each authoritative tangible copy of the record evidencing the
3160-chattel paper and obtaining control of each authoritative electronic
3161-copy of the electronic record evidencing the chattel paper.
3162-(b) A security interest is perfected under subsection (a) not
3163-earlier than the time the secured party takes possession and
3164-obtains control, and remains perfected under subsection (a) only
3165-while the secured party retains possession and control.
3166-(c) Section 313(c) of this chapter and section 313(f) through
3167-313(i) of this chapter apply to perfection by possession by an
3168-authoritative tangible copy of a record evidencing chattel paper.
3169-SECTION 61. IC 26-1-9.1-316, AS AMENDED BY P.L.54-2011,
3170-SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3171-JULY 1, 2023]: Sec. 316. (a) A security interest perfected pursuant to
3172-the law of the jurisdiction designated in IC 26-1-9.1-301(1), or
3173-IC 26-1-9.1-305(c), IC 26-1-9.1-306.1(d), or IC 26-1-9.1-306.2(b)
3174-remains perfected until the earliest of:
3175-(1) the time perfection would have ceased under the law of that
3176-SEA 468 — Concur 75
3177-jurisdiction;
3178-(2) the expiration of four (4) months after a change of the debtor's
3179-location to another jurisdiction; or
3180-(3) the expiration of one (1) year after a transfer of collateral to a
3181-person that thereby becomes a debtor and is located in another
3182-jurisdiction.
3183-(b) If a security interest described in subsection (a) becomes
3184-perfected under the law of the other jurisdiction before the earliest time
3185-or event described in that subsection, it remains perfected thereafter.
3186-If the security interest does not become perfected under the law of the
3187-other jurisdiction before the earliest time or event, it becomes
3188-unperfected and is deemed never to have been perfected as against a
3189-purchaser of the collateral for value.
3190-(c) A possessory security interest in collateral, other than goods
3191-covered by a certificate of title and as-extracted collateral consisting of
3192-goods, remains continuously perfected if:
3193-(1) the collateral is located in one (1) jurisdiction and subject to
3194-a security interest perfected under the law of that jurisdiction;
3195-(2) thereafter the collateral is brought into another jurisdiction;
3196-and
3197-(3) upon entry into the other jurisdiction, the security interest is
3198-perfected under the law of the other jurisdiction.
3199-(d) Except as otherwise provided in subsection (e), a security
3200-interest in goods covered by a certificate of title which is perfected by
3201-any method under the law of another jurisdiction when the goods
3202-become covered by a certificate of title from this state remains
3203-perfected until the security interest would have become unperfected
3204-under the law of the other jurisdiction had the goods not become so
3205-covered.
3206-(e) A security interest described in subsection (d) becomes
3207-unperfected as against a purchaser of the goods for value and is deemed
3208-never to have been perfected as against a purchaser of the goods for
3209-value if the applicable requirements for perfection under
3210-IC 26-1-9.1-311(b) or IC 26-1-9.1-313 are not satisfied before the
3211-earlier of:
3212-(1) the time the security interest would have become unperfected
3213-under the law of the other jurisdiction had the goods not become
3214-covered by a certificate of title from this state; or
3215-(2) the expiration of four (4) months after the goods had become
3216-so covered.
3217-(f) A security interest in chattel paper, controllable accounts,
3218-controllable electronic records, controllable payment intangibles,
3219-SEA 468 — Concur 76
3220-deposit accounts, letter-of-credit rights, or investment property which
3221-is perfected under the law of the chattel paper's jurisdiction, the
3222-controllable electronic record's jurisdiction, the bank's jurisdiction,
3223-the issuer's jurisdiction, a nominated person's jurisdiction, the securities
3224-intermediary's jurisdiction, or the commodity intermediary's
3225-jurisdiction, as applicable, remains perfected until the earlier of:
3226-(1) the time the security interest would have become unperfected
3227-under the law of that jurisdiction; or
3228-(2) the expiration of four (4) months after a change of the
3229-applicable jurisdiction to another jurisdiction.
3230-(g) If a security interest described in subsection (f) becomes
3231-perfected under the law of the other jurisdiction before the earlier of the
3232-time or the end of the period described in that subsection, it remains
3233-perfected thereafter. If the security interest does not become perfected
3234-under the law of the other jurisdiction before the earlier of that time or
3235-the end of that period, it becomes unperfected and is deemed never to
3236-have been perfected as against a purchaser of the collateral for value.
3237-(h) The following rules apply to collateral to which a security
3238-interest attaches within four (4) months after the debtor changes its
3239-location to another jurisdiction:
3240-(1) A financing statement filed before the change under the law
3241-of the jurisdiction designated in IC 26-1-9.1-301(1) or
3242-IC 26-1-9.1-305(c) is effective to perfect a security interest in the
3243-collateral if the financing statement would have been effective to
3244-perfect a security interest in the collateral had the debtor not
3245-changed its location.
3246-(2) If a security interest perfected by a financing statement that is
3247-effective under subdivision (1) becomes perfected under the law
3248-of the other jurisdiction before the earlier of the time the
3249-financing statement would have become ineffective under the law
3250-of the jurisdiction designated in IC 26-1-9.1-301(1) or
3251-IC 26-1-9.1-305(c) or the expiration of the four (4) month period,
3252-it remains perfected thereafter. If the security interest does not
3253-become perfected under the law of the other jurisdiction before
3254-the earlier time or event, it becomes unperfected and is deemed
3255-never to have been perfected as against a purchaser of the
3256-collateral for value.
3257-(i) If a financing statement naming an original debtor is filed under
3258-the law of the jurisdiction designated in IC 26-1-9.1-301(1) or
3259-IC 26-1-9.1-305(c) and the new debtor is located in another
3260-jurisdiction, the following rules apply:
3261-(1) The financing statement is effective to perfect a security
3262-SEA 468 — Concur 77
3263-interest in collateral acquired by the new debtor before, and
3264-within four (4) months after, the new debtor becomes bound
3265-under IC 26-1-9.1-203(d), if the financing statement would have
3266-been effective to perfect a security interest in the collateral had
3267-the collateral been acquired by the original debtor.
3268-(2) A security interest perfected by the financing statement and
3269-which becomes perfected under the law of the other jurisdiction
3270-before the earlier of the time the financing statement would have
3271-become ineffective under the law of the jurisdiction designated in
3272-IC 26-1-9.1-301(1) or IC 26-1-9.1-305(c) or the expiration of the
3273-four (4) month period remains perfected thereafter. A security
3274-interest that is perfected by the financing statement but which
3275-does not become perfected under the law of the other jurisdiction
3276-before the earlier time or event becomes unperfected and is
3277-deemed never to have been perfected as against a purchaser of the
3278-collateral for value.
3279-SECTION 62. IC 26-1-9.1-317, AS AMENDED BY P.L.54-2011,
3280-SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3281-JULY 1, 2023]: Sec. 317. (a) A security interest or agricultural lien is
3282-subordinate to the rights of:
3283-(1) a person entitled to priority under IC 26-1-9.1-322; and
3284-(2) except as provided in subsection (e), a person that becomes a
3285-lien creditor before the earlier of the time:
3286-(A) the security interest or agricultural lien is perfected; or
3287-(B) one (1) of the conditions specified in
3288-IC 26-1-9.1-203(b)(3) is met;
3289-and a financing statement covering the collateral is filed.
3290-(b) Except as otherwise provided in subsection (e), a buyer, other
3291-than a secured party, of tangible chattel paper, tangible documents,
3292-goods, instruments, tangible documents, or a certificated security
3293-takes free of a security interest or agricultural lien if the buyer gives
3294-value and receives delivery of the collateral without knowledge of the
3295-security interest or agricultural lien and before it is perfected.
3296-(c) Except as otherwise provided in subsection (e), a lessee of goods
3297-takes free of a security interest or agricultural lien if the lessee gives
3298-value and receives delivery of the collateral without knowledge of the
3299-security interest or agricultural lien and before it is perfected.
3300-(d) Subject to subsections (f) through (i), a licensee of a general
3301-intangible or a buyer, other than a secured party, of collateral other than
3302-tangible chattel paper, tangible documents, goods, instruments,
3303-tangible documents, or a certificated security takes free of a security
3304-interest if the licensee or buyer gives value without knowledge of the
3305-SEA 468 — Concur 78
3306-security interest and before it is perfected.
3307-(e) Except as otherwise provided in IC 26-1-9.1-320 and
3308-IC 26-1-9.1-321, if a person files a financing statement with respect to
3309-a purchase-money security interest before or within twenty (20) days
3310-after the debtor receives delivery of the collateral, the security interest
3311-takes priority over the rights of a buyer, lessee, or lien creditor that
3312-arise between the time the security interest attaches and the time of
3313-filing.
3314-(f) A buyer, other than a secured party, of chattel paper takes
3315-free of a security interest if, without knowledge of the security
3316-interest and before it is perfected, the buyer gives value and:
3317-(1) receives delivery of each authoritative tangible copy of the
3318-record evidencing the chattel paper; and
3319-(2) if each authoritative electronic copy of the record
3320-evidencing the chattel paper can be subjected to control under
3321-section 105 of this chapter, obtains control of each
3322-authoritative electronic copy.
3323-(g) A buyer of an electronic document takes free of a security
3324-interest if, without knowledge of the security interest and before it
3325-is perfected, the buyer gives value and, if each authoritative
3326-electronic copy of the document can be subjected to control under
3327-IC 26-1-7-106, obtains control of each authoritative electronic
3328-copy.
3329-(h) A buyer of a controllable electronic record takes free of a
3330-security interest if, without knowledge of the security interest and
3331-before it is perfected, the buyer gives value and obtains control of
3332-the controllable electronic record.
3333-(i) A buyer, other than a secured party, of a controllable
3334-account or a controllable payment intangible takes free of a
3335-security interest if, without knowledge of the security interest and
3336-before it is perfected, the buyer gives value and obtains control of
3337-the controllable account or controllable payment intangible.
3338-SECTION 63. IC 26-1-9.1-323 IS AMENDED TO READ AS
3339-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 323. (a) Except as
3340-otherwise provided in subsection (c), for purposes of determining the
3341-priority of a perfected security interest under IC 26-1-9.1-322(a)(1),
3342-perfection of the security interest dates from the time an advance is
3343-made to the extent that the security interest secures an advance that:
3344-(1) is made while the security interest is perfected only:
3345-(A) under IC 26-1-9.1-309 when it attaches; or
3346-(B) temporarily under IC 26-1-9.1-312(e), IC 26-1-9.1-312(f),
3347-or IC 26-1-9.1-312(g); and
3348-SEA 468 — Concur 79
3349-(2) is not made pursuant to a commitment entered into before or
3350-while the security interest is perfected by a method other than
3351-under IC 26-1-9.1-309, IC 26-1-9.1-312(e), IC 26-1-9.1-312(f), or
3352-IC 26-1-9.1-312(g).
3353-(b) Except as otherwise provided in subsection (c), a security
3354-interest is subordinate to the rights of a person that becomes a lien
3355-creditor to the extent that the security interest secures an advance made
3356-more than forty-five (45) days after the person becomes a lien creditor
3357-unless the advance is made:
3358-(1) without knowledge of the lien; or
3359-(2) pursuant to a commitment entered into without knowledge of
3360-the lien.
3361-(c) Subsections (a) and (b) do not apply to a security interest held by
3362-a secured party that is a buyer of accounts, chattel paper, payment
3363-intangibles, or promissory notes or a consignor.
3364-(d) Except as otherwise provided in subsection (e), a buyer of goods
3365-other than a buyer in ordinary course of business takes free of a security
3366-interest to the extent that it secures advances made after the earlier of:
3367-(1) the time the secured party acquires knowledge of the buyer's
3368-purchase; or
3369-(2) forty-five (45) days after the purchase.
3370-(e) Subsection (d) does not apply if the advance is made pursuant to
3371-a commitment entered into without knowledge of the buyer's purchase
3372-and before the expiration of the forty-five (45) day period.
3373-(f) Except as otherwise provided in subsection (g), a lessee of goods
3374-other than a lessee in ordinary course of business, takes the leasehold
3375-interest free of a security interest to the extent that it secures advances
3376-made after the earlier of:
3377-(1) the time the secured party acquires knowledge of the lease; or
3378-(2) forty-five (45) days after the lease contract becomes
3379-enforceable.
3380-(g) Subsection (f) does not apply if the advance is made pursuant to
3381-a commitment entered into without knowledge of the lease and before
3382-the expiration of the forty-five (45) day period.
3383-SECTION 64. IC 26-1-9.1-324 IS AMENDED TO READ AS
3384-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 324. (a) Except as
3385-otherwise provided in subsection (g), a perfected purchase-money
3386-security interest in goods other than inventory or livestock has priority
3387-over a conflicting security interest in the same goods, and, except as
3388-otherwise provided in IC 26-1-9.1-327, a perfected security interest in
3389-its identifiable proceeds also has priority, if the purchase-money
3390-security interest is perfected when the debtor receives possession of the
3391-SEA 468 — Concur 80
3392-collateral or within twenty (20) days thereafter.
3393-(b) Subject to subsection (c) and except as otherwise provided in
3394-subsection (g), a perfected purchase-money security interest in
3395-inventory has priority over a conflicting security interest in the same
3396-inventory, has priority over a conflicting security interest in chattel
3397-paper or an instrument constituting proceeds of the inventory and in
3398-proceeds of the chattel paper, if so provided in IC 26-1-9.1-330, and,
3399-except as otherwise provided in IC 26-1-9.1-327, also has priority in
3400-identifiable cash proceeds of the inventory to the extent the identifiable
3401-cash proceeds are received on or before the delivery of the inventory to
3402-a buyer, if:
3403-(1) the purchase-money security interest is perfected when the
3404-debtor receives possession of the inventory;
3405-(2) the purchase-money secured party sends an authenticated a
3406-signed notification to the holder of the conflicting security
3407-interest;
3408-(3) the holder of the conflicting security interest receives the
3409-notification within five (5) years before the debtor receives
3410-possession of the inventory; and
3411-(4) the notification states that the person sending the notification
3412-has or expects to acquire a purchase-money security interest in
3413-inventory of the debtor and describes the inventory.
3414-(c) Subsection (b)(2) through (b)(4) apply only if the holder of the
3415-conflicting security interest had filed a financing statement covering
3416-the same types of inventory:
3417-(1) if the purchase-money security interest is perfected by filing,
3418-before the date of the filing; or
3419-(2) if the purchase-money security interest is temporarily
3420-perfected without filing or possession under IC 26-1-9.1-312(f),
3421-before the beginning of the twenty (20) day period thereunder.
3422-(d) Subject to subsection (e) and except as otherwise provided in
3423-subsection (g), a perfected purchase-money security interest in
3424-livestock that are farm products has priority over a conflicting security
3425-interest in the same livestock, and, except as otherwise provided in
3426-IC 26-1-9.1-327, a perfected security interest in their identifiable
3427-proceeds and identifiable products in their unmanufactured states also
3428-has priority, if:
3429-(1) the purchase-money security interest is perfected when the
3430-debtor receives possession of the livestock;
3431-(2) the purchase-money secured party sends an authenticated a
3432-signed notification to the holder of the conflicting security
3433-interest;
3434-SEA 468 — Concur 81
3435-(3) the holder of the conflicting security interest receives the
3436-notification within six (6) months before the debtor receives
3437-possession of the livestock; and
3438-(4) the notification states that the person sending the notification
3439-has or expects to acquire a purchase-money security interest in
3440-livestock of the debtor and describes the livestock.
3441-(e) Subsection (d)(2) through (d)(4) apply only if the holder of the
3442-conflicting security interest had filed a financing statement covering
3443-the same types of livestock:
3444-(1) if the purchase-money security interest is perfected by filing,
3445-before the date of the filing; or
3446-(2) if the purchase-money security interest is temporarily
3447-perfected without filing or possession under IC 26-1-9.1-312(f),
3448-before the beginning of the twenty (20) day period thereunder.
3449-(f) Except as otherwise provided in subsection (g), a perfected
3450-purchase-money security interest in software has priority over a
3451-conflicting security interest in the same collateral, and, except as
3452-otherwise provided in IC 26-1-9.1-327, a perfected security interest in
3453-its identifiable proceeds also has priority, to the extent that the
3454-purchase-money security interest in the goods in which the software
3455-was acquired for use has priority in the goods and proceeds of the
3456-goods under this section.
3457-(g) If more than one (1) security interest qualifies for priority in the
3458-same collateral under subsection (a), (b), (d), or (f):
3459-(1) a security interest securing an obligation incurred as all or part
3460-of the price of the collateral has priority over a security interest
3461-securing an obligation incurred for value given to enable the
3462-debtor to acquire rights in or the use of collateral; and
3463-(2) in all other cases, IC 26-1-9.1-322(a) applies to the qualifying
3464-security interests.
3465-SECTION 65. IC 26-1-9.1-326.1 IS ADDED TO THE INDIANA
3466-CODE AS A NEW SECTION TO READ AS FOLLOWS
3467-[EFFECTIVE JULY 1, 2023]: Sec. 326.1. A security interest in a
3468-controllable account, a controllable electronic record, or a
3469-controllable payment intangible held by a secured party having
3470-control of the account, electronic record, or payment intangible has
3471-priority over a conflicting security interest held by a secured party
3472-that does not have control.
3473-SECTION 66. IC 26-1-9.1-330 IS AMENDED TO READ AS
3474-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 330. (a) A purchaser of
3475-chattel paper has priority over a security interest in the chattel paper
3476-which is claimed merely as proceeds of inventory subject to a security
3477-SEA 468 — Concur 82
3478-interest if:
3479-(1) in good faith and in the ordinary course of the purchaser's
3480-business, the purchaser gives new value, and takes possession of
3481-each authoritative tangible copy of the record evidencing the
3482-chattel paper, or and obtains control under section 105 of this
3483-chapter of each authoritative electronic copy of the record
3484-evidencing the chattel paper; under IC 26-1-9.1-105; and
3485-(2) the chattel paper does authoritative copies of the record
3486-evidencing the chattel paper do not indicate that it the chattel
3487-paper has been assigned to an identified assignee other than the
3488-purchaser.
3489-(b) A purchaser of chattel paper has priority over a security interest
3490-in the chattel paper which is claimed other than merely as proceeds of
3491-inventory subject to a security interest if the purchaser gives new value,
3492-and takes possession of each authoritative tangible copy of the
3493-record evidencing the chattel paper, or and obtains control under
3494-section 105 of this chapter of each authoritative electronic copy of
3495-the record evidencing the chattel paper under IC 26-1-9.1-105 in good
3496-faith, in the ordinary course of the purchaser's business, and without
3497-knowledge that the purchase violates the rights of the secured party.
3498-(c) Except as otherwise provided in IC 26-1-9.1-327, a purchaser
3499-having priority in chattel paper under subsection (a) or (b) also has
3500-priority in proceeds of the chattel paper to the extent that:
3501-(1) IC 26-1-9.1-322 provides for priority in the proceeds; or
3502-(2) the proceeds consist of the specific goods covered by the
3503-chattel paper or cash proceeds of the specific goods, even if the
3504-purchaser's security interest in the proceeds is unperfected.
3505-(d) Except as otherwise provided in IC 26-1-9.1-331(a), a purchaser
3506-of an instrument has priority over a security interest in the instrument
3507-perfected by a method other than possession if the purchaser gives
3508-value and takes possession of the instrument in good faith and without
3509-knowledge that the purchase violates the rights of the secured party.
3510-(e) For purposes of subsections (a) and (b), the holder of a
3511-purchase-money security interest in inventory gives new value for
3512-chattel paper constituting proceeds of the inventory.
3513-(f) For purposes of subsections (b) and (d), if the authoritative
3514-copies of the record evidencing chattel paper or an instrument
3515-indicates that it the chattel paper or instrument has been assigned to
3516-an identified secured party other than the purchaser, a purchaser of the
3517-chattel paper or instrument has knowledge that the purchase violates
3518-the rights of the secured party.
3519-SECTION 67. IC 26-1-9.1-331, AS AMENDED BY P.L.110-2022,
3520-SEA 468 — Concur 83
3521-SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3522-JULY 1, 2023]: Sec. 331. (a) This article does not limit the rights of a
3523-holder in due course of a negotiable instrument, a holder to which a
3524-negotiable document of title has been duly negotiated, a protected
3525-purchaser of a security, or a qualifying purchaser (as defined in
3526-IC 26-1-11-106) of a controllable account, controllable electronic
3527-record, or controllable payment intangible. These holders or purchasers
3528-take priority over an earlier security interest, even if perfected, to the
3529-extent provided in IC 26-1-3.1, IC 26-1-7, IC 26-1-8.1, and IC 26-1-11.
3530-IC 26-1-12.
3531-(b) This article does not limit the rights of or impose liability on a
3532-person to the extent that the person is protected against the assertion of
3533-an adverse claim under IC 26-1-8.1 or IC 26-1-11. IC 26-1-12.
3534-(c) Filing under IC 26-1-9.1 does not constitute notice of a claim or
3535-defense to the holders, purchasers, or persons described in subsections
3536-(a) and (b).
3537-SECTION 68. IC 26-1-9.1-332 IS AMENDED TO READ AS
3538-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 332. (a) A transferee
3539-of money takes the money free of a security interest unless if the
3540-transferee acts receives possession of the money without acting in
3541-collusion with the debtor in violating the rights of the secured party.
3542-(b) A transferee of funds from a deposit account takes the funds free
3543-of a security interest in the deposit account unless if the transferee acts
3544-receives the funds without acting in collusion with the debtor in
3545-violating the rights of the secured party.
3546-SECTION 69. IC 26-1-9.1-334 IS AMENDED TO READ AS
3547-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 334. (a) A security
3548-interest under IC 26-1-9.1 may be created in goods that are fixtures or
3549-may continue in goods that become fixtures. A security interest does
3550-not exist under IC 26-1-9.1 in ordinary building materials incorporated
3551-into an improvement on land.
3552-(b) IC 26-1-9.1 does not prevent creation of an encumbrance upon
3553-fixtures under real property law.
3554-(c) In cases not governed by subsections (d) through (h), a security
3555-interest in fixtures is subordinate to a conflicting interest of an
3556-encumbrancer or owner of the related real property other than the
3557-debtor.
3558-(d) Except as otherwise provided in subsection (h), a perfected
3559-security interest in fixtures has priority over a conflicting interest of an
3560-encumbrancer or owner of the real property if the debtor has an interest
3561-of record in or is in possession of the real property and:
3562-(1) the security interest is a purchase-money security interest;
3563-SEA 468 — Concur 84
3564-(2) the interest of the encumbrancer or owner arises before the
3565-goods become fixtures; and
3566-(3) the security interest is perfected by a fixture filing before the
3567-goods become fixtures or within twenty (20) days thereafter.
3568-(e) A perfected security interest in fixtures has priority over a
3569-conflicting interest of an encumbrancer or owner of the real property
3570-if:
3571-(1) the debtor has an interest of record in the real property or is in
3572-possession of the real property and the security interest:
3573-(A) is perfected by a fixture filing before the interest of the
3574-encumbrancer or owner is of record; and
3575-(B) has priority over any conflicting interest of a predecessor
3576-in title of the encumbrancer or owner;
3577-(2) before the goods become fixtures, the security interest is
3578-perfected by any method permitted by IC 26-1-9.1 and the fixtures
3579-are readily removable:
3580-(A) factory or office machines;
3581-(B) equipment that is not primarily used or leased for use in
3582-the operation of the real property; or
3583-(C) replacements of domestic appliances that are consumer
3584-goods;
3585-(3) the conflicting interest is a lien on the real property obtained
3586-by legal or equitable proceedings after the security interest was
3587-perfected by any method permitted by IC 26-1-9.1; or
3588-(4) the security interest is:
3589-(A) created in a manufactured home in a manufactured-home
3590-transaction; and
3591-(B) perfected pursuant to a statute described in
3592-IC 26-1-9.1-311(a)(2).
3593-(f) A security interest in fixtures, whether or not perfected, has
3594-priority over a conflicting interest of an encumbrancer or owner of the
3595-real property if:
3596-(1) the encumbrancer or owner has, in an authenticated a signed
3597-record, consented to the security interest or disclaimed an interest
3598-in the goods as fixtures; or
3599-(2) the debtor has a right to remove the goods against the
3600-encumbrancer or owner.
3601-(g) The priority of the security interest under subsection (f)
3602-continues for a reasonable time if the debtor's right to remove the goods
3603-as against the encumbrancer or owner terminates.
3604-(h) A mortgage is a construction mortgage to the extent that it
3605-secures an obligation incurred for the construction of an improvement
3606-SEA 468 — Concur 85
3607-on land, including the acquisition cost of the land, if a recorded record
3608-of the mortgage so indicates. Except as otherwise provided in
3609-subsections (e) and (f), a security interest in fixtures is subordinate to
3610-a construction mortgage if a record of the mortgage is recorded before
3611-the goods become fixtures and the goods become fixtures before the
3612-completion of the construction. A mortgage has this priority to the
3613-same extent as a construction mortgage to the extent that it is given to
3614-refinance a construction mortgage.
3615-(i) A perfected security interest in crops growing on real property
3616-has priority over a conflicting interest of an encumbrancer or owner of
3617-the real property if the debtor has an interest of record in or is in
3618-possession of the real property.
3619-SECTION 70. IC 26-1-9.1-341 IS AMENDED TO READ AS
3620-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 341. Except as
3621-otherwise provided in IC 26-1-9.1-340(c), and unless the bank
3622-otherwise agrees in an authenticated a signed record, a bank's rights
3623-and duties with respect to a deposit account maintained with the bank
3624-are not terminated, suspended, or modified by:
3625-(1) the creation, attachment, or perfection of a security interest in
3626-the deposit account;
3627-(2) the bank's knowledge of the security interest; or
3628-(3) the bank's receipt of instructions from the secured party.
3629-SECTION 71. IC 26-1-9.1-404 IS AMENDED TO READ AS
3630-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 404. (a) Unless an
3631-account debtor has made an enforceable agreement not to assert
3632-defenses or claims, and subject to subsections (b) through (e), the rights
3633-of an assignee are subject to:
3634-(1) all terms of the agreement between the account debtor and
3635-assignor and any defense or claim in recoupment arising from the
3636-transaction that gave rise to the contract; and
3637-(2) any other defense or claim of the account debtor against the
3638-assignor which accrues before the account debtor receives a
3639-notification of the assignment authenticated signed by the
3640-assignor or the assignee.
3641-(b) Subject to subsection (c) and except as otherwise provided in
3642-subsection (d), the claim of an account debtor against an assignor may
3643-be asserted against an assignee under subsection (a) only to reduce the
3644-amount the account debtor owes.
3645-(c) This section is subject to law other than IC 26-1-9.1 that
3646-establishes a different rule for an account debtor who is an individual
3647-and who incurred the obligation primarily for personal, family, or
3648-household purposes.
3649-SEA 468 — Concur 86
3650-(d) In a consumer transaction, if a record evidences the account
3651-debtor's obligation, law other than IC 26-1-9.1 requires that the record
3652-include a statement to the effect that the account debtor's recovery
3653-against an assignee with respect to claims and defenses against the
3654-assignor may not exceed amounts paid by the account debtor under the
3655-record, and the record does not include such a statement, the extent to
3656-which a claim of an account debtor against the assignor may be
3657-asserted against an assignee is determined as if the record included
3658-such a statement.
3659-(e) This section does not apply to an assignment of a
3660-health-care-insurance receivable.
3661-SECTION 72. IC 26-1-9.1-406, AS AMENDED BY P.L.54-2011,
3662-SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3663-JULY 1, 2023]: Sec. 406. (a) Subject to subsections (b) through (i) and
3664-(l), an account debtor on an account, chattel paper, or a payment
3665-intangible may discharge its obligation by paying the assignor until, but
3666-not after, the account debtor receives a notification, authenticated
3667-signed by the assignor or the assignee, that the amount due or to
3668-become due has been assigned and that payment is to be made to the
3669-assignee. After receipt of the notification, the account debtor may
3670-discharge its obligation by paying the assignee and may not discharge
3671-the obligation by paying the assignor.
3672-(b) Subject to subsection (h), subsections (h) and (l), notification
3673-is ineffective under subsection (a):
3674-(1) if it does not reasonably identify the rights assigned;
3675-(2) to the extent that an agreement between an account debtor and
3676-a seller of a payment intangible limits the account debtor's duty to
3677-pay a person other than the seller and the limitation is effective
3678-under law other than IC 26-1-9.1; or
3679-(3) at the option of an account debtor, if the notification notifies
3680-the account debtor to make less than the full amount of any
3681-installment or other periodic payment to the assignee, even if:
3682-(A) only a portion of the account, chattel paper, or payment
3683-intangible has been assigned to that assignee;
3684-(B) a portion has been assigned to another assignee; or
3685-(C) the account debtor knows that the assignment to that
3686-assignee is limited.
3687-(c) Subject to subsection (h), subsections (h) and (l), if requested
3688-by the account debtor, an assignee shall seasonably furnish reasonable
3689-proof that the assignment has been made. Unless the assignee
3690-complies, the account debtor may discharge its obligation by paying the
3691-assignor, even if the account debtor has received a notification under
3692-SEA 468 — Concur 87
3693-subsection (a).
3694-(d) As used in this subsection, "promissory note" includes a
3695-negotiable instrument that evidences chattel paper. Except as
3696-otherwise provided in subsection subsections (e) and (k) and
3697-IC 26-1-2.1-303 and IC 26-1-9.1-407, and subject to subsection (h), a
3698-term in an agreement between an account debtor and an assignor or in
3699-a promissory note is ineffective to the extent that it:
3700-(1) prohibits, restricts, or requires the consent of the account
3701-debtor or person obligated on the promissory note to the
3702-assignment or transfer of, or the creation, attachment, perfection,
3703-or enforcement of a security interest in, the account, chattel paper,
3704-payment intangible, or promissory note; or
3705-(2) provides that the assignment or transfer or the creation,
3706-attachment, perfection, or enforcement of the security interest
3707-may give rise to a default, breach, right of recoupment, claim,
3708-defense, termination, right of termination, or remedy under the
3709-account, chattel paper, payment intangible, or promissory note.
3710-(e) Subsection (d) does not apply to the sale of a payment intangible
3711-or promissory note other than a sale pursuant to a disposition under
3712-IC 26-1-9.1-610 or an acceptance of collateral under IC 26-1-9.1-620.
3713-(f) Except as provided in subsection (k) and IC 26-1-2.1-303 and
3714-IC 26-1-9.1-407, and subject to subsections (h) and (i), a rule of law,
3715-statute, or regulation that prohibits, restricts, or requires the consent of
3716-a government, governmental body or official, or account debtor to the
3717-assignment or transfer of, or creation of a security interest in, an
3718-account or chattel paper is ineffective to the extent that the rule of law,
3719-statute, or regulation:
3720-(1) prohibits, restricts, or requires the consent of the government,
3721-governmental body or official, or account debtor to the
3722-assignment or transfer of, or the creation, attachment, perfection,
3723-or enforcement of a security interest in the account or chattel
3724-paper; or
3725-(2) provides that the assignment or transfer or the creation,
3726-attachment, perfection, or enforcement of the security interest
3727-may give rise to a default, right of recoupment, claim, defense,
3728-termination, right of termination, or remedy under the account or
3729-chattel paper.
3730-(g) Subject to subsection (h), subsections (h) and (l), an account
3731-debtor may not waive or vary its option under subsection (b)(3).
3732-(h) This section is subject to law other than IC 26-1-9.1 which
3733-establishes a different rule for an account debtor who is an individual
3734-and who incurred the obligation primarily for personal, family, or
3735-SEA 468 — Concur 88
3736-household purposes.
3737-(i) This section does not apply to an assignment of a
3738-health-care-insurance receivable.
3739-(j) This section prevails over any inconsistent provision in
82+1 SECTION 1. IC 26-1-1-201, AS AMENDED BY P.L.54-2011,
83+2 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
84+3 JULY 1, 2023]: Sec. 201. Subject to additional definitions contained
85+4 in IC 26-1-2 through IC 26-1-10 which are applicable to specific
86+5 provisions, and unless the context otherwise requires, in IC 26-1:
87+6 (1) "Action" in the sense of a judicial proceeding includes
88+7 recoupment, counterclaim, setoff, suit in equity, and any other
89+8 proceedings in which rights are determined.
90+9 (2) "Aggrieved party" means a party entitled to resort to a remedy.
91+10 (3) "Agreement" means the bargain of the parties in fact as found
92+11 in their language or by implication from other circumstances
93+12 including course of dealing or usage of trade or course of
94+13 performance as provided in IC 26-1-1-205. Whether an agreement
95+14 has legal consequences is determined by the provisions of
96+15 IC 26-1, if applicable; otherwise by the law of contracts
97+16 (IC 26-1-1-103). (Compare "Contract".)
98+17 (4) "Bank" means a person engaged in the business of banking
99+ES 468—LS 7443/DI 101 2
100+1 and includes a savings bank, savings and loan association, credit
101+2 union, and trust company.
102+3 (5) "Bearer" means the person:
103+4 (A) in control of a negotiable electronic document of title; or
104+5 (B) in possession of a negotiable instrument, a negotiable
105+6 tangible document of title, or a certificated security payable to
106+7 bearer or endorsed in blank.
107+8 (6) "Bill of lading" means a document of title evidencing the
108+9 receipt of goods for shipment issued by a person engaged in the
109+10 business of directly or indirectly transporting or forwarding
110+11 goods. The term does not include a warehouse receipt. The term
111+12 includes an airbill. "Airbill" means a document serving for air
112+13 transportation as a bill of lading does for marine or rail
113+14 transportation, and includes an air consignment note or air
114+15 waybill.
115+16 (7) "Branch" includes a separately incorporated foreign branch of
116+17 a bank.
117+18 (8) "Burden of establishing" a fact means the burden of
118+19 persuading the triers of fact that the existence of the fact is more
119+20 probable than its nonexistence.
120+21 (9) "Buyer in ordinary course of business" means a person that
121+22 buys goods in good faith without knowledge that the sale violates
122+23 the rights of another person in the goods, and in the ordinary
123+24 course from a person, other than a pawnbroker, in the business of
124+25 selling goods of that kind. A person buys goods in the ordinary
125+26 course of business if the sale to the person comports with the
126+27 usual or customary practices in the kind of business in which the
127+28 seller is engaged or with the seller's own usual or customary
128+29 practices. A person that sells oil, gas, or other minerals at the
129+30 wellhead or minehead is a person in the business of selling goods
130+31 of that kind. A buyer in ordinary course of business may buy for
131+32 cash, by exchange of other property, or on secured or unsecured
132+33 credit, and may require goods or documents of title under a
133+34 preexisting contract for sale. Only a buyer that takes possession
134+35 of the goods or has a right to recover the goods from that seller
135+36 under IC 26-1-2 may be a buyer in ordinary course of business. A
136+37 person that acquires goods in a transfer in bulk or as security for
137+38 or total or partial satisfaction of a money debt is not a buyer in
138+39 ordinary course of business.
139+40 (10) "Conspicuous", A with reference to a term, or clause is
140+41 conspicuous when it is means so written, displayed, or
141+42 presented that, based on the totality of the circumstances, a
142+ES 468—LS 7443/DI 101 3
143+1 reasonable person against whom which it is to operate ought to
144+2 have noticed it. A printed heading in capitals (as:
145+3 NONNEGOTIABLE BILL OF LADING) is conspicuous.
146+4 Language in the body of a form is conspicuous if it is in larger or
147+5 other contrasting type or color. But in a telegram any stated term
148+6 is conspicuous. Whether a term or clause is "conspicuous" or not
149+7 is for a decision by for the court.
150+8 (11) "Contract" means the total legal obligation which results
151+9 from the parties' agreement as affected by this Act and any other
152+10 applicable rules of law. (Compare "Agreement".)
153+11 (12) "Creditor" includes a general creditor, a secured creditor, a
154+12 lien creditor and any representative of creditors, including an
155+13 assignee for the benefit of creditors, a trustee in bankruptcy, a
156+14 receiver in equity, and an executor or administrator of an
157+15 insolvent debtor's or assignor's estate.
158+16 (13) "Defendant" includes a person in the position of defendant
159+17 in a cross-action or counterclaim.
160+18 (14) "Delivery", means the following: with respect to:
161+19 (A) With respect to an electronic document of title, means
162+20 voluntary transfer of control; and
163+21 (B) With respect to instruments, an instrument, a tangible
164+22 documents document of title, or an authoritative tangible
165+23 copy of a record evidencing chattel paper, or certificated
166+24 securities, means voluntary transfer of possession.
167+25 (15) "Document of title" means a record that:
168+26 (A) in the regular course of business or financing, is treated as
169+27 adequately evidencing that the person in possession or control
170+28 of the record is entitled to receive, control, hold, and dispose
171+29 of the record and the goods it covers; and
172+30 (B) purports to be issued by or addressed to a bailee and
173+31 purports to cover goods in the bailee's possession which are
174+32 either identified or are fungible portions of an identified mass.
175+33 The term includes a bill of lading, transport document, dock
176+34 warrant, dock receipt, warehouse receipt, or order for delivery of
177+35 goods. An electronic document of title means a document of title
178+36 evidenced by a record consisting of information stored in an
179+37 electronic medium. A tangible document of title means a
180+38 document of title evidenced by a record consisting of information
181+39 that is inscribed on a tangible medium.
182+40 (16) The following terms have the following meanings:
183+41 (A) "Electronic" means relating to technology having
184+42 electrical, digital, magnetic, wireless, optical,
185+ES 468—LS 7443/DI 101 4
186+1 electromagnetic, or similar capabilities.
187+2 (B) "Fault" means wrongful act, omission, or breach.
188+3 (17) "Fungible" with respect to goods or securities means goods
189+4 or securities of which any unit is, by nature or usage of trade, the
190+5 equivalent of any other like unit. Goods which are not fungible
191+6 shall be deemed fungible for the purposes of IC 26-1 to the extent
192+7 that under a particular agreement or document unlike units are
193+8 treated as equivalents.
194+9 (18) "Genuine" means free of forgery or counterfeiting.
195+10 (19) "Good faith", except as otherwise provided by IC 26-1-4 or
196+11 IC 26-1-5.1, means honesty in fact and the observance of
197+12 reasonable commercial standards of fair dealing.
198+13 (20) "Holder" means:
199+14 (A) the person in possession of a negotiable instrument that is
200+15 payable either to bearer or to an identified person if the
201+16 identified person is in possession of the instrument;
202+17 (B) the person in possession of a negotiable tangible document
203+18 of title if the goods are deliverable either to bearer or to the
204+19 order of the person in possession; or
205+20 (C) the person in control, other than under IC 26-1-7-106(g),
206+21 of a negotiable electronic document of title.
207+22 (21) To "honor" is to pay or to accept and pay or where a credit so
208+23 engages to purchase or discount a draft complying with the terms
209+24 of the credit.
210+25 (22) "Insolvency proceedings" includes any assignment for the
211+26 benefit of creditors or other proceedings intended to liquidate or
212+27 rehabilitate the estate of the person involved.
213+28 (23) A person is "insolvent" who either has ceased to pay the
214+29 person's debts in the ordinary course of business or cannot pay the
215+30 person's debts as they become due or is insolvent within the
216+31 meaning of the federal bankruptcy law.
217+32 (24) "Money" means a medium of exchange that is currently
218+33 authorized or adopted by a domestic or foreign government and
219+34 is not in an electronic form. The term includes a monetary unit
220+35 of account established by an intergovernmental organization or by
221+36 agreement between two (2) or more nations. The term does not
222+37 include a central bank digital currency that is currently
223+38 adopted, or that may be adopted, by the United States
224+39 government, a foreign government, a foreign reserve, or a
225+40 foreign sanctioned central bank.
226+41 (25) A person has "notice" of a fact when:
227+42 (a) the person has actual knowledge of it;
228+ES 468—LS 7443/DI 101 5
229+1 (b) the person has received a notice or notification of it; or
230+2 (c) from all the facts and circumstances known to the person
231+3 at the time in question, the person has reason to know that it
232+4 exists.
233+5 A person "knows" or has "knowledge" of a fact when the person
234+6 has actual knowledge of it. "Discover" or "learn" or a word or
235+7 phrase of similar import refers to knowledge rather than to reason
236+8 to know. The time and circumstances under which a notice or
237+9 notification may cease to be effective are not determined by
238+10 IC 26-1.
239+11 (26) A person "notifies" or "gives" a notice or notification to
240+12 another by taking such steps as may be reasonably required to
241+13 inform the other in ordinary course whether or not such other
242+14 actually comes to know of it. A person "receives" a notice or
243+15 notification when:
244+16 (a) it comes to the person's attention; or
245+17 (b) it is duly delivered at the place of business through which
246+18 the contract was made or at any other place held out by the
247+19 person as the place for receipt of such communications.
248+20 (27) Notice, knowledge, or a notice of notification received by an
249+21 organization is effective for a particular transaction from the time
250+22 when it is brought to the attention of the individual conducting
251+23 that transaction and, in any event, from the time when it would
252+24 have been brought to the person's attention if the organization had
253+25 exercised due diligence. An organization exercises due diligence
254+26 if it maintains reasonable routines for communicating significant
255+27 information to the person conducting the transaction and there is
256+28 reasonable compliance with the routines. Due diligence does not
257+29 require an individual acting for the organization to communicate
258+30 information unless such communication is part of the person's
259+31 regular duties or unless the person has reason to know of the
260+32 transaction and that the transaction would be materially affected
261+33 by the information.
262+34 (28) "Organization" includes a corporation, government or
263+35 governmental subdivision or agency, business trust, estate, trust,
264+36 partnership or association, two (2) or more persons having a joint
265+37 or common interest, or any other legal or commercial entity.
266+38 (29) "Party", as distinct from "third party", means a person who
267+39 has engaged in a transaction or made an agreement within
268+40 IC 26-1.
269+41 (30) "Person" includes means an individual, or an organization.
270+42 (See IC 26-1-1-102.) corporation, business trust, estate, trust,
271+ES 468—LS 7443/DI 101 6
272+1 partnership, limited liability company, association, joint
273+2 venture, government, governmental subdivision, agency, or
274+3 instrumentality, or any other legal or commercial entity. The
275+4 term includes a protected series, however denominated, of an
276+5 entity if the protected series is established under law other
277+6 than IC 26-1 that limits, or limits if conditions specified under
278+7 the law are satisfied, the ability of a creditor of the entity or
279+8 of any other protected series of the entity to satisfy a claim
280+9 from assets of the protected series.
281+10 (31) "Presumption" or "presumed" means that the trier of fact
282+11 must find the existence of the fact presumed unless and until
283+12 evidence is introduced which would support a finding of its
284+13 nonexistence.
285+14 (32) "Purchase" includes taking by sale, discount, negotiation,
286+15 mortgage, pledge, lien, security interest, issue or reissue, gift, or
287+16 any other voluntary transaction creating an interest in property.
288+17 (33) "Purchaser" means a person who takes by purchase.
289+18 (33a) "Registered mail" includes certified mail.
290+19 (33b) "Record", except as used in IC 26-1-2.1-309, means
291+20 information that is inscribed on a tangible medium or that is
292+21 stored in an electronic or other medium and is retrievable in
293+22 perceivable form.
294+23 (34) "Remedy" means any remedial right to which an aggrieved
295+24 party is entitled with or without resort to a tribunal.
296+25 (35) "Representative" includes an agent, an officer of a
297+26 corporation or association, and a trustee, executor, or
298+27 administrator of an estate, or any other person empowered to act
299+28 for another.
300+29 (36) "Rights" includes remedies.
301+30 (37) "Security interest" means an interest in personal property or
302+31 fixtures which secures payment or performance of an obligation.
303+32 The term also includes any interest of a consignor and a buyer of
304+33 accounts, chattel paper, a payment intangible, or a promissory
305+34 note in a transaction that is subject to IC 26-1-9.1. The special
306+35 property interest of a buyer of goods on identification of such
307+36 goods to a contract for sale under IC 26-1-2-401 is not a security
308+37 interest, but a buyer may also acquire a security interest by
309+38 complying with IC 26-1-9.1. Except as otherwise provided in
310+39 IC 26-1-2-505, the right of a seller or lessor of goods under
311+40 IC 26-1-2 or IC 26-1-2.1 to retain or acquire possession of the
312+41 goods is not a "security interest", but a seller or lessor may also
313+42 acquire a "security interest" by complying with IC 26-1-9.1. The
314+ES 468—LS 7443/DI 101 7
315+1 retention or reservation of title by a seller of goods
316+2 notwithstanding shipment or delivery to the buyer
317+3 (IC 26-1-2-401) is limited in effect to a reservation of a "security
318+4 interest". Whether a transaction creates a lease or security interest
319+5 is determined by the facts of each case. However, a transaction
320+6 creates a security interest if the consideration the lessee is to pay
321+7 the lessor for the right to possession and use of the goods is an
322+8 obligation for the term of the lease not subject to termination by
323+9 the lessee and:
324+10 (a) the original term of the lease is equal to or greater than the
325+11 remaining economic life of the goods;
326+12 (b) the lessee is bound to renew the lease for the remaining
327+13 economic life of the goods or is bound to become the owner of
328+14 the goods;
329+15 (c) the lessee has an option to renew the lease for the
330+16 remaining economic life of the goods for no additional
331+17 consideration or nominal additional consideration upon
332+18 compliance with the lease agreement; or
333+19 (d) the lessee has an option to become the owner of the goods
334+20 for no additional consideration or nominal additional
335+21 consideration upon compliance with the lease agreement.
336+22 A transaction does not create a security interest merely because
337+23 it provides that:
338+24 (a) the present value of the consideration the lessee is
339+25 obligated to pay the lessor for the right to possession and use
340+26 of the goods is substantially equal to or is greater than the fair
341+27 market value of the goods at the time the lease is entered into;
342+28 (b) the lessee assumes risk of loss of the goods, or agrees to
343+29 pay taxes, insurance, filing, recording, or registration fees, or
344+30 service or maintenance costs with respect to the goods;
345+31 (c) the lessee has an option to renew the lease or to become the
346+32 owner of the goods;
347+33 (d) the lessee has an option to renew the lease for a fixed rent
348+34 that is equal to or greater than the reasonably predictable fair
349+35 market rent for the use of the goods for the term of the renewal
350+36 at the time the option is to be performed; or
351+37 (e) the lessee has an option to become the owner of the goods
352+38 for a fixed price that is equal to or greater than the reasonably
353+39 predictable fair market value of the goods at the time the
354+40 option is to be performed.
355+41 For purposes of this subsection:
356+42 (x) Additional consideration is not nominal if:
357+ES 468—LS 7443/DI 101 8
358+1 (i) when the option to renew the lease is granted to the lessee
359+2 the rent is stated to be the fair market rent for the use of the
360+3 goods for the term of the renewal determined at the time the
361+4 option is to be performed; or
362+5 (ii) when the option to become the owner of the goods is
363+6 granted to the lessee the price is stated to be the fair market
364+7 value of the goods determined at the time the option is to be
365+8 performed.
366+9 Additional consideration is nominal if it is less than the
367+10 lessee's reasonably predictable cost of performing under the
368+11 lease agreement if the option is not exercised.
369+12 (y) "Reasonably predictable" and "remaining economic life of
370+13 the goods" are to be determined with reference to the facts and
371+14 circumstances at the time the transaction is entered into.
372+15 (z) "Present value" means the amount as of a date certain of
373+16 one (1) or more sums payable in the future, discounted to the
374+17 date certain. The discount is determined by the interest rate
375+18 specified by the parties if the rate is not manifestly
376+19 unreasonable at the time the transaction is entered into.
377+20 Otherwise, the discount is determined by a commercially
378+21 reasonable rate that takes into account the facts and
379+22 circumstances of each case at the time the transaction was
380+23 entered into.
381+24 (38) "Send" in connection with any writing a record or notice
382+25 notification means:
383+26 (A) to deposit in the mail, or deliver for transmission, or
384+27 transmit by any other usual means of communication, with
385+28 postage or cost of transmission provided for, and properly
386+29 addressed and, in the case of an instrument, to an address
387+30 specified thereon or otherwise agreed or, if there be none, to
388+31 any address reasonable under the circumstances; or The
389+32 receipt of any writing or notice within the time at which it
390+33 would have arrived if properly sent has the effect of a proper
391+34 sending.
392+35 (B) to cause the record or notification to be received within
393+36 the time it would have been received if properly sent under
394+37 clause (A).
395+38 (39) "Signed" includes any symbol executed or adopted by a party
396+39 "Sign" means, with present intention intent to authenticate a
397+40 writing. or adopt a record, to:
398+41 (A) execute or adopt a tangible symbol; or
399+42 (B) attach to or logically associate with the record an
400+ES 468—LS 7443/DI 101 9
401+1 electronic symbol, sound, or process.
402+2 "Signed", "signing", and "signature" have corresponding
403+3 meanings.
404+4 (40) "Surety" includes guarantor.
405+5 (41) "Telegram" includes a message transmitted by radio,
406+6 teletype, cable, any mechanical method of transmission, or the
407+7 like.
408+8 (42) "Term" means that portion of an agreement which relates to
409+9 a particular matter.
410+10 (43) "Unauthorized" signature means one made without actual,
411+11 implied, or apparent authority and includes a forgery.
412+12 (44) "Value". Except as otherwise provided with respect to
413+13 negotiable instruments and bank collections (IC 26-1-3.1-303,
414+14 IC 26-1-4-208, and IC 26-1-4-209) in IC 26-1-3.1, IC 26-1-4,
415+15 IC 26-1-5.1, IC 26-1-6.2, and IC 26-1-12, a person gives value
416+16 for rights if the person acquires them:
417+17 (a) in return for a binding commitment to extend credit or for
418+18 the extension of immediately available credit whether or not
419+19 drawn upon and whether or not a chargeback is provided for
420+20 in the event of difficulties in collection;
421+21 (b) as security for or in total or partial satisfaction of a
422+22 preexisting claim;
423+23 (c) by accepting delivery pursuant to a preexisting contract for
424+24 purchase; or
425+25 (d) generally, in return for any consideration sufficient to
426+26 support a simple contract.
427+27 (45) "Warehouse receipt" means a document of title issued by a
428+28 person engaged in the business of storing goods for hire.
429+29 (46) "Written" or "writing" includes printing, typewriting, or any
430+30 other intentional reduction to tangible form.
431+31 SECTION 2. IC 26-1-1-301, AS ADDED BY P.L.143-2007,
432+32 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
433+33 JULY 1, 2023]: Sec. 301. (1) Except as otherwise provided in this
434+34 section, if a transaction bears a reasonable relation to Indiana and also
435+35 to another state or nation, the parties may agree that the law either of
436+36 Indiana or of the other state or nation shall govern their rights and
437+37 duties.
438+38 (2) In the absence of an agreement under subsection (1), and except
439+39 as provided in subsection (3), IC 26-1 applies to transactions bearing
440+40 an appropriate relation to Indiana.
441+41 (3) If any of the following provisions specifies the applicable law,
442+42 that provision governs, and a contrary agreement is effective only to the
443+ES 468—LS 7443/DI 101 10
444+1 extent permitted by the law so specified:
445+2 (a) IC 26-1-2-402.
446+3 (b) IC 26-1-2.1-105 and IC 26-1-2.1-106.
447+4 (c) IC 26-1-4-102.
448+5 (d) IC 26-1-4.1-507.
449+6 (e) IC 26-1-5.1-116.
450+7 (f) IC 26-1-8.1-110.
451+8 (g) IC 26-1-9.1-301 through IC 26-1-9.1-307.
452+9 (h) IC 26-1-12-107.
453+10 SECTION 3. IC 26-1-2-102 IS AMENDED TO READ AS
454+11 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 102. (1) Unless the
455+12 context otherwise requires, IC 26-1-2 applies to transactions in goods.
456+13 It does not apply to any transaction which although in the form of an
457+14 unconditional contract to sell or present sale is intended to operate only
458+15 as a security transaction, nor does IC 26-1-2 impair or repeal any
459+16 statute regulating sales to consumers, farmers, or other specified
460+17 classes of buyers. IC 26-1-2 does not impair or repeal IC 9-14, IC 9-17,
461+18 or IC 9-22-5. and except as provided in subsection (3), this chapter
462+19 applies to transactions in goods and, in the case of a hybrid
463+20 transaction, this chapter applies to the extent provided in
464+21 subsection (2).
465+22 (2) In a hybrid transaction, the following apply:
466+23 (a) If the sale of goods aspects do not predominate, only the
467+24 provisions of this chapter which relate primarily to the sales
468+25 of goods aspects of the transaction apply, and the provisions
469+26 that relate to the transaction as a whole do not apply.
470+27 (b) If the sale of goods aspects predominate, this chapter
471+28 applies to the transaction but does not preclude the
472+29 application in appropriate circumstances of other law to
473+30 aspects of the transaction that do not relate to the sale of
474+31 goods.
475+32 (3) This chapter does not:
476+33 (a) apply to a transaction that, even though in the form of an
477+34 unconditional contract to sell or present sale, operates to
478+35 create a security interest; or
479+36 (b) impair or repeal a statute regulating sales to consumers,
480+37 farmers, or other specified classes of buyers.
481+38 SECTION 4. IC 26-1-2-106 IS AMENDED TO READ AS
482+39 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 106. (1) In IC 26-1-2,
483+40 unless the context otherwise requires, "contract" and "agreement" are
484+41 limited to those relating to the present or future sale of goods. "Contract
485+42 for sale" includes both a present sale of goods and a contract to sell
486+ES 468—LS 7443/DI 101 11
487+1 goods at a future time. A "sale" consists in the passing of title from the
488+2 seller to the buyer for a price (IC 26-1-2-401). A "present sale" means
489+3 a sale which is accomplished by the making of the contract.
490+4 (2) Goods or conduct including any part of a performance are
491+5 "conforming" or conform to the contract when they are in accordance
492+6 with the obligations under the contract.
493+7 (3) "Termination" occurs when either party pursuant to a power
494+8 created by agreement or law puts an end to the contract otherwise than
495+9 for its breach. On "termination" all obligations which are still executory
496+10 on both sides are discharged but any right based on prior breach or
497+11 performance survives.
498+12 (4) "Cancellation" occurs when either party puts an end to the
499+13 contract for breach by the other, and its effect is the same as that of
500+14 "termination" except that the cancelling party also retains any remedy
501+15 for breach of the whole contract or of any unperformed balance.
502+16 (5) "Hybrid transaction" means a single transaction involving
503+17 a sale of goods and:
504+18 (a) the provision of services;
505+19 (b) a lease of other goods; or
506+20 (c) a sale, lease, or license of property other than goods.
507+21 SECTION 5. IC 26-1-2-201 IS AMENDED TO READ AS
508+22 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 201. (1) Except as
509+23 otherwise provided in this section, a contract for the sale of goods for
510+24 the price of five hundred dollars ($500) or more is not enforceable by
511+25 way of action or defense unless there is some writing a record
512+26 sufficient to indicate that a contract for sale has been made between the
513+27 parties and signed by the party against whom enforcement is sought or
514+28 by his the party's authorized agent or broker. A writing record is not
515+29 insufficient because it omits or incorrectly states a term agreed upon,
516+30 but the contract is not enforceable under this paragraph section beyond
517+31 the quantity of goods shown in such writing. the record.
518+32 (2) Between merchants, if within a reasonable time a writing record
519+33 in confirmation of the contract and sufficiently against the sender is
520+34 received and the party receiving it has reason to know its contents, it
521+35 satisfies the requirements of subsection (1) against such the party
522+36 unless written notice in a record of objection to its contents is given
523+37 within ten (10) days after it is received.
524+38 (3) A contract which does not satisfy the requirements of subsection
525+39 (1) but which is valid in other respects is enforceable:
526+40 (a) if the goods are to be specially manufactured for the buyer and
527+41 are not suitable for sale to others in the ordinary course of the
528+42 seller's business and the seller, before notice of repudiation is
529+ES 468—LS 7443/DI 101 12
530+1 received and under circumstances which reasonably indicate that
531+2 the goods are for the buyer, has made either a substantial
532+3 beginning of their manufacture or commitments for their
533+4 procurement; or
534+5 (b) if the party against whom enforcement is sought admits in his
535+6 pleading, testimony, or otherwise in court that a contract for sale
536+7 was made, but the contract is not enforceable under this provision
537+8 beyond the quantity of goods admitted; or
538+9 (c) with respect to goods for which payment has been made and
539+10 accepted or which have been received and accepted
540+11 (IC 26-1-2-606).
541+12 SECTION 6. IC 26-1-2-202, AS AMENDED BY P.L.143-2007,
542+13 SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
543+14 JULY 1, 2023]: Sec. 202. Terms with respect to which the confirmatory
544+15 memoranda of the parties agree or which are otherwise set forth in a
545+16 writing record intended by the parties as a final expression of their
546+17 agreement with respect to such terms as are included therein may not
547+18 be contradicted by evidence of any prior agreement or of a
548+19 contemporaneous oral agreement but may be explained or
549+20 supplemented:
550+21 (a) by course of dealing or usage of trade (IC 26-1-1-205) or by
551+22 course of performance (IC 26-1-1-205); and
552+23 (b) by evidence of consistent additional terms, unless the court
553+24 finds the writing record to have been intended also as a complete
554+25 and exclusive statement of the terms of the agreement.
555+26 SECTION 7. IC 26-1-2-203 IS AMENDED TO READ AS
556+27 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 203. The affixing of a
557+28 seal to a writing record evidencing a contract for sale or an offer to buy
558+29 or sell goods does not constitute the writing record a sealed instrument
559+30 and the law with respect to sealed instruments does not apply to such
560+31 a contract or offer.
561+32 SECTION 8. IC 26-1-2-205 IS AMENDED TO READ AS
562+33 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 205. An offer by a
563+34 merchant to buy or sell goods in a signed writing record which by its
564+35 terms gives assurance that it will be held open is not revocable, for lack
565+36 of consideration, during the time stated or if no time is stated for a
566+37 reasonable time, but in no event may such period of irrevocability
567+38 exceed three (3) months; but any such term of assurance on a form
568+39 supplied by the offeree must be separately signed by the offeror.
569+40 SECTION 9. IC 26-1-2-209 IS AMENDED TO READ AS
570+41 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 209. (1) An agreement
571+42 modifying a contract within IC 26-1-2 needs no consideration to be
572+ES 468—LS 7443/DI 101 13
573+1 binding.
574+2 (2) A signed agreement which excludes modification or rescission,
575+3 except by a signed writing or another signed record, cannot be
576+4 otherwise modified or rescinded, but except as between merchants such
577+5 a requirement on a form supplied by the merchant must be separately
578+6 signed by the other party.
579+7 (3) The requirements of the statute of frauds section (IC 26-1-2-201)
580+8 must be satisfied if the contract as modified is within its provisions.
581+9 (4) Although an attempt at modification or rescission does not
582+10 satisfy the requirements of subsection (2) or (3), it can operate as a
583+11 waiver.
584+12 (5) A party who has made a waiver affecting an executory portion
585+13 of the contract may retract the waiver by reasonable notification
586+14 received by the other party that strict performance will be required of
587+15 any term waived, unless the retraction would be unjust in view of a
588+16 material change of position in reliance on the waiver.
589+17 SECTION 10. IC 26-1-2.1-102 IS AMENDED TO READ AS
590+18 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 102. (1) IC 26-1-2.1
591+19 applies to any transaction, regardless of form, that creates a lease and,
592+20 in the case of a hybrid lease, it applies to the extent provided in
593+21 subsection (2).
594+22 (2) In a hybrid lease, the following apply:
595+23 (a) If the lease of goods aspects do not predominate:
596+24 (i) only the provisions of this chapter that relate primarily
597+25 to the lease of goods aspects of the transaction apply, and
598+26 the provisions that relate primarily to the transaction as a
599+27 whole do not apply;
600+28 (ii) section 209 of this chapter applies if the lease is a
601+29 finance lease; and
602+30 (iii) section 407 of this chapter applies to the promises of
603+31 the lessee in a finance lease to the extent the promises are
604+32 consideration for the right to possession and use of the
605+33 leased goods.
606+34 (b) If the lease of goods aspects predominate, this chapter
607+35 applies to the transaction, but does not preclude the
608+36 application in appropriate circumstances of other law to
609+37 aspects of the lease that do not relate to the lease of goods.
610+38 SECTION 11. IC 26-1-2.1-103, AS AMENDED BY P.L.32-2021,
611+39 SECTION 72, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
612+40 JULY 1, 2023]: Sec. 103. (1) Unless the context otherwise requires, in
613+41 IC 26-1-2.1:
614+42 (a) "Buyer in ordinary course of business" means a person who in
615+ES 468—LS 7443/DI 101 14
616+1 good faith and without knowledge that the sale to the person is in
617+2 violation of the ownership rights or security interest or leasehold
618+3 interest of a third party in the goods, buys in ordinary course from
619+4 a person in the business of selling goods of that kind but does not
620+5 include a pawnbroker. "Buying" may be for cash or by exchange
621+6 of other property or on secured or unsecured credit and includes
622+7 acquiring goods or documents of title under a pre-existing
623+8 contract for sale but does not include a transfer in bulk or as
624+9 security for or in total or partial satisfaction of a money debt.
625+10 (b) "Cancellation" occurs when either party puts an end to the
626+11 lease contract for default by the other party.
627+12 (c) "Commercial unit" means such a unit of goods as by
628+13 commercial usage is a single whole for purposes of lease and
629+14 division of which materially impairs its character or value on the
630+15 market or in use. A commercial unit may be a single article, as a
631+16 machine, or a set of articles, as a suite of furniture or a line of
632+17 machinery, or a quantity, as a gross or carload, or any other unit
633+18 treated in use or in the relevant market as a single whole.
634+19 (d) "Conforming" goods or performance under a lease contract
635+20 means goods or performance that are in accordance with the
636+21 obligations under the lease contract.
637+22 (e) "Consumer lease" means a lease that a lessor regularly
638+23 engaged in the business of leasing or selling makes to a lessee
639+24 who is an individual and who takes under the lease primarily for
640+25 a personal, family, or household purpose if the total payments to
641+26 be made under the lease contract, excluding payments for options
642+27 to renew or buy, do not exceed twenty-five thousand dollars
643+28 ($25,000).
644+29 (f) "Fault" means wrongful act, omission, breach, or default.
645+30 (g) "Finance lease" means a lease with respect to which:
646+31 (i) the lessor does not select, manufacture, or supply the goods;
647+32 (ii) the lessor acquires the goods or the right to possession and
648+33 use of the goods in connection with the lease; and
649+34 (iii) one (1) of the following occurs:
650+35 (A) the lessee receives a copy of the contract by which the
651+36 lessor acquired the goods or the right to possession and use
652+37 of the goods before signing the lease contract;
653+38 (B) the lessee's approval of the contract by which the lessor
654+39 acquired the goods or the right to possession and use of the
655+40 goods is a condition to effectiveness of the lease contract;
656+41 (C) the lessee, before signing the lease contract, receives an
657+42 accurate and complete statement designating the promises
658+ES 468—LS 7443/DI 101 15
659+1 and warranties, and any disclaimers of warranties,
660+2 limitations, or modifications of remedies, or liquidated
661+3 damages, including those of a third party, such as the
662+4 manufacturer of the goods, provided to the lessor by the
663+5 person supplying the goods in connection with or as part of
664+6 the contract by which the lessor acquired the goods or the
665+7 right to possession and use of the goods; or
666+8 (D) if the lease is not a consumer lease, the lessor, before the
667+9 lessee signs the lease contract, informs the lessee in writing:
668+10 (a) of the identity of the person supplying the goods to the
669+11 lessor, unless the lessee has selected that person and
670+12 directed the lessor to acquire the goods or the right to
671+13 possession and use of the goods from that person; (b) that
672+14 the lessee is entitled under IC 26-1-2.1 to the promises and
673+15 warranties, including those of any third party, provided to
674+16 the lessor by the person supplying the goods in connection
675+17 with or as part of the contract by which the lessor acquired
676+18 the goods or the right to possession and use of the goods;
677+19 and (c) that the lessee may communicate with the person
678+20 supplying the goods to the lessor and receive an accurate
679+21 and complete statement of those promises and warranties,
680+22 including any disclaimers and limitations of them or of
681+23 remedies.
682+24 (h) The following terms have the following meanings:
683+25 (i) "Goods" means all things that are movable at the time of
684+26 identification to the lease contract, or are fixtures
685+27 (IC 26-1-2.1-309), but the term does not include money,
686+28 documents, instruments, accounts, chattel paper, general
687+29 intangibles, or minerals or the like, including oil and gas,
688+30 before extraction. The term also includes the unborn young of
689+31 animals.
690+32 (ii) "Hybrid lease" means a single transaction involving a
691+33 lease of goods and either the provision of services, a sale of
692+34 other goods, or a sale, lease, or license of property other
693+35 than goods.
694+36 (i) "Installment lease contract" means a lease contract that
695+37 authorizes or requires the delivery of goods in separate lots to be
696+38 separately accepted, even though the lease contract contains a
697+39 clause "each delivery is a separate lease" or its equivalent.
698+40 (j) "Lease" means a transfer of the right to possession and use of
699+41 goods for a term in return for consideration, but a sale, including
700+42 a sale on approval or a sale or return, or retention or creation of a
701+ES 468—LS 7443/DI 101 16
702+1 security interest is not a lease. Unless the context clearly indicates
703+2 otherwise, the term includes a sublease.
704+3 (k) "Lease agreement" means the bargain, with respect to the
705+4 lease, of the lessor and the lessee in fact as found in their
706+5 language or by implication from other circumstances including
707+6 course of dealing or usage of trade or course of performance as
708+7 provided in IC 26-1-2.1. Unless the context clearly indicates
709+8 otherwise, the term includes a sublease agreement.
710+9 (l) "Lease contract" means the total legal obligation that results
711+10 from the lease agreement as affected by IC 26-1-2.1 and any other
712+11 applicable rules of law. Unless the context clearly indicates
713+12 otherwise, the term includes a sublease contract.
714+13 (m) "Leasehold interest" means the interest of the lessor or the
715+14 lessee under a lease contract.
716+15 (n) "Lessee" means a person who acquires the right to possession
717+16 and use of goods under a lease. Unless the context clearly
718+17 indicates otherwise, the term includes a sublessee.
719+18 (o) "Lessee in ordinary course of business" means a person who
720+19 in good faith and without knowledge that the lease to the person
721+20 is in violation of the ownership rights or security interest or
722+21 leasehold interest of a third party in the goods leases in ordinary
723+22 course from a person in the business of selling or leasing goods of
724+23 that kind but does not include a pawnbroker. "Leasing" may be for
725+24 cash or by exchange of other property or on secured or unsecured
726+25 credit and includes acquiring goods or documents of title under a
727+26 pre-existing lease contract but does not include a transfer in bulk
728+27 or as security for or in total or partial satisfaction of a money debt.
729+28 (p) "Lessor" means a person who transfers the right to possession
730+29 and use of goods under a lease. Unless the context clearly
731+30 indicates otherwise, the term includes a sublessor.
732+31 (q) "Lessor's residual interest" means the lessor's interest in the
733+32 goods after expiration, termination, or cancellation of the lease
734+33 contract.
735+34 (r) "Lien" means a charge against or interest in goods to secure
736+35 payment of a debt or performance of an obligation, but the term
737+36 does not include a security interest.
738+37 (s) "Lot" means a parcel or a single article that is the subject
739+38 matter of a separate lease or delivery, whether or not it is
740+39 sufficient to perform the lease contract.
741+40 (t) "Merchant lessee" means a lessee that is a merchant with
742+41 respect to goods of the kind subject to the lease.
743+42 (u) "Present value" means the amount as of a date certain of one
744+ES 468—LS 7443/DI 101 17
745+1 (1) or more sums payable in the future, discounted to the date
746+2 certain. The discount is determined by the interest rate specified
747+3 by the parties if the rate was not manifestly unreasonable at the
748+4 time the transaction was entered into; otherwise, the discount is
749+5 determined by a commercially reasonable rate that takes into
750+6 account the facts and circumstances of each case at the time the
751+7 transaction was entered into.
752+8 (v) "Purchase" includes taking by sale, lease, mortgage, security
753+9 interest, pledge, gift, or any other voluntary transaction creating
754+10 an interest in goods.
755+11 (w) "Sublease" means a lease of goods the right to possession and
756+12 use of which was acquired by the lessor as a lessee under an
757+13 existing lease.
758+14 (x) "Supplier" means a person from whom a lessor buys or leases
759+15 goods to be leased under a finance lease.
760+16 (y) "Supply contract" means a contract under which a lessor buys
761+17 or leases goods to be leased.
762+18 (z) "Termination" occurs when either party pursuant to a power
763+19 created by agreement or law puts an end to the lease contract
764+20 otherwise than for default.
765+21 (2) Other definitions applying to IC 26-1-2.1 and the sections in
766+22 which they appear are:
767+23 "Accessions". IC 26-1-2.1-310(1).
768+24 "Construction mortgage". IC 26-1-2.1-309(1)(d).
769+25 "Encumbrance". IC 26-1-2.1-309(1)(e).
770+26 "Fixtures". IC 26-1-2.1-309(1)(a).
771+27 "Fixture filing". IC 26-1-2.1-309(1)(b).
772+28 "Purchase money lease". IC 26-1-2.1-309(1)(c).
773+29 (3) The following definitions in other chapters apply to IC 26-1-2.1:
774+30 "Account". IC 26-1-9.1-102(a)(2).
775+31 "Between merchants". IC 26-1-2-104(3).
776+32 "Buyer". IC 26-1-2-103(1)(a).
777+33 "Chattel paper". IC 26-1-9.1-102(a)(11).
778+34 "Consumer goods". IC 26-1-9.1-102(a)(23).
779+35 "Document". IC 26-1-9.1-102(a)(30).
780+36 "Entrusting". IC 26-1-2-403(3).
781+37 "General intangibles". IC 26-1-9.1-102(a)(42).
782+38 "Good faith". IC 26-1-2-103(1)(b).
783+39 "Instrument". IC 26-1-9.1-102(a)(47).
784+40 "Merchant". IC 26-1-2-104(1).
785+41 "Mortgage". IC 26-1-9.1-102(a)(55).
786+42 "Pursuant to commitment". IC 26-1-9.1-102(a)(69).
787+ES 468—LS 7443/DI 101 18
788+1 "Receipt". IC 26-1-2-103(1)(c).
789+2 "Sale". IC 26-1-2-106(1).
790+3 "Sale on approval". IC 26-1-2-326.
791+4 "Sale or return". IC 26-1-2-326.
792+5 "Seller". IC 26-1-2-103(1)(d).
793+6 (4) In addition, IC 26-1-1 contains general definitions and principles
794+7 of construction and interpretation applicable throughout IC 26-1-2.1.
795+8 SECTION 12. IC 26-1-2.1-107 IS AMENDED TO READ AS
796+9 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 107. Any claim or right
797+10 arising out of an alleged default or breach of warranty may be
798+11 discharged in whole or in part without consideration by a written
799+12 waiver or renunciation in a signed and record delivered by the
800+13 aggrieved party.
801+14 SECTION 13. IC 26-1-2.1-201 IS AMENDED TO READ AS
802+15 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 201. (1) A lease
803+16 contract is not enforceable by way of action or defense unless:
804+17 (a) the total payments to be made under the lease contract,
805+18 excluding payments for options to renew or buy, are less than one
806+19 thousand dollars ($1,000); or
807+20 (b) there is a writing, record, signed by the party against whom
808+21 enforcement is sought or by that party's authorized agent,
809+22 sufficient to indicate that a lease contract has been made between
810+23 the parties and to describe the goods leased and the lease term.
811+24 (2) Any description of leased goods or of the lease term is sufficient
812+25 and satisfies subsection (1)(b), whether or not it is specific, if it
813+26 reasonably identifies what is described.
814+27 (3) A writing record is not insufficient because it omits or
815+28 incorrectly states a term agreed upon, but the lease contract is not
816+29 enforceable under subsection (1)(b) beyond the lease term and the
817+30 quantity of goods shown in the writing. record.
818+31 (4) A lease contract that does not satisfy the requirements of
819+32 subsection (1), but which is valid in other respects, is enforceable:
820+33 (a) if the goods are to be specially manufactured or obtained for
821+34 the lessee and are not suitable for lease or sale to others in the
822+35 ordinary course of the lessor's business, and the lessor, before
823+36 notice of repudiation is received and under circumstances that
824+37 reasonably indicate that the goods are for the lessee, has made
825+38 either a substantial beginning of their manufacture or
826+39 commitments for their procurement;
827+40 (b) if the party against whom enforcement is sought admits in that
828+41 party's pleading, testimony or otherwise in court that a lease
829+42 contract was made, but the lease contract is not enforceable under
830+ES 468—LS 7443/DI 101 19
831+1 this provision beyond the quantity of goods admitted; or
832+2 (c) with respect to goods that have been received and accepted by
833+3 the lessee.
834+4 (5) The lease term under a lease contract referred to in subsection
835+5 (4) is:
836+6 (a) if there is a writing record signed by the party against whom
837+7 enforcement is sought or by that party's authorized agent
838+8 specifying the lease term, the term so specified;
839+9 (b) if the party against whom enforcement is sought admits in that
840+10 party's pleading, testimony, or otherwise in court a lease term, the
841+11 term so admitted; or
842+12 (c) a reasonable lease term.
843+13 SECTION 14. IC 26-1-2.1-202 IS AMENDED TO READ AS
844+14 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 202. Terms with
845+15 respect to which the confirmatory memoranda of the parties agree or
846+16 which are otherwise set forth in a writing record intended by the
847+17 parties as a final expression of their agreement with respect to such
848+18 terms as are included therein may not be contradicted by evidence of
849+19 any prior agreement or of a contemporaneous oral agreement but may
850+20 be explained or supplemented:
851+21 (a) by course of dealing or usage of trade or by course of
852+22 performance; and
853+23 (b) by evidence of consistent additional terms unless the court
854+24 finds the writing record to have been intended also as a complete
855+25 and exclusive statement of the terms of the agreement.
856+26 SECTION 15. IC 26-1-2.1-203 IS AMENDED TO READ AS
857+27 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 203. The affixing of a
858+28 seal to a writing record evidencing a lease contract or an offer to enter
859+29 into a lease contract does not render the writing record a sealed
860+30 instrument and the law with respect to sealed instruments does not
861+31 apply to the lease contract or offer.
862+32 SECTION 16. IC 26-1-2.1-205 IS AMENDED TO READ AS
863+33 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 205. An offer by a
864+34 merchant to lease goods to or from another person in a signed writing
865+35 record that by its terms gives assurance it will be held open is not
866+36 revocable, for lack of consideration, during the time stated or, if no
867+37 time is stated, for a reasonable time, but in no event may the period of
868+38 irrevocability exceed three (3) months. Any such term of assurance on
869+39 a form supplied by the offeree must be separately signed by the offeror.
870+40 SECTION 17. IC 26-1-2.1-208 IS AMENDED TO READ AS
871+41 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 208. (1) An agreement
872+42 modifying a lease contract needs no consideration to be binding.
873+ES 468—LS 7443/DI 101 20
874+1 (2) A signed lease agreement that excludes modification or
875+2 rescission except by a signed writing record may not be otherwise
876+3 modified or rescinded, but, except as between merchants, such a
877+4 requirement on a form supplied by a merchant must be separately
878+5 signed by the other party.
879+6 (3) Although an attempt at modification or rescission does not
880+7 satisfy the requirements of subsection (2), it may operate as a waiver.
881+8 (4) A party who has made a waiver affecting an executory portion
882+9 of a lease contract may retract the waiver by reasonable notification
883+10 received by the other party that strict performance will be required of
884+11 any term waived, unless the retraction would be unjust in view of a
885+12 material change of position in reliance on the waiver.
886+13 SECTION 18. IC 26-1-3.1-104 IS AMENDED TO READ AS
887+14 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 104. (a) Except as
888+15 provided in subsections (c) and (d), "negotiable instrument" means an
889+16 unconditional promise or order to pay a fixed amount of money, with
890+17 or without interest or other charges described in the promise or order,
891+18 if it:
892+19 (1) is payable to bearer or to order at the time it is issued or first
893+20 comes into possession of a holder;
894+21 (2) is payable on demand or at a definite time; and
895+22 (3) does not state any other undertaking or instruction by the
896+23 person promising or ordering payment to do any act in addition to
897+24 the payment of money, but the promise or order may contain:
898+25 (A) an undertaking or power to give, maintain, or protect
899+26 collateral to secure payment;
900+27 (B) an authorization or power to the holder to confess
901+28 judgment or realize on or dispose of collateral; or
902+29 (C) a waiver of the benefit of any law intended for the
903+30 advantage or protection of an obligor;
904+31 (D) a term that specifies the law that governs the promise
905+32 or order; or
906+33 (E) an undertaking to resolve in a specified forum a
907+34 dispute concerning the promise or order.
908+35 (b) "Instrument" means a negotiable instrument.
909+36 (c) An order that meets all of the requirements of subsection (a),
910+37 except subdivision (1), and otherwise falls within the definition of
911+38 "check" in subsection (f) is a negotiable instrument and a check.
912+39 (d) A promise or order other than a check is not an instrument if, at
913+40 the time it is issued or first comes into possession of a holder, it
914+41 contains a conspicuous statement, however expressed, to the effect that
915+42 the promise or order is not negotiable or is not an instrument governed
916+ES 468—LS 7443/DI 101 21
917+1 by IC 26-1-3.1.
918+2 (e) An instrument is a "note" if it is a promise and is a "draft" if it is
919+3 an order. If an instrument falls within the definition of both "note" and
920+4 "draft", a person entitled to enforce the instrument may treat it as either.
921+5 (f) "Check" means:
922+6 (1) a draft, other than a documentary draft, payable on demand
923+7 and drawn on a bank; or
924+8 (2) a cashier's check or teller's check.
925+9 An instrument may be a check even though it is described on its face
926+10 by another term, such as "money order".
927+11 (g) "Cashier's check" means a draft with respect to which the drawer
928+12 and drawee are the same bank or branches of the same bank.
929+13 (h) "Teller's check" means a draft drawn by a bank:
930+14 (1) on another bank; or
931+15 (2) payable at or through a bank.
932+16 (i) "Traveler's check" means an instrument that:
933+17 (1) is payable on demand;
934+18 (2) is drawn on or payable at or through a bank;
935+19 (3) is designated by the term "traveler's check" or by a
936+20 substantially similar term; and
937+21 (4) requires, as a condition to payment, a countersignature by a
938+22 person whose specimen signature appears on the instrument.
939+23 (j) "Certificate of deposit" means an instrument containing an
940+24 acknowledgment by a bank that a sum of money has been received by
941+25 the bank and a promise by the bank to repay the sum of money. A
942+26 certificate of deposit is a note of the bank.
943+27 SECTION 19. IC 26-1-3.1-105 IS AMENDED TO READ AS
944+28 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 105. (a) "Issue" means:
945+29 (1) the first delivery of an instrument by the maker or drawer,
946+30 whether to a holder or nonholder, for the purpose of giving rights
947+31 on the instrument to any person; or
948+32 (2) if agreed by the payee, the first transmission by the drawer
949+33 to the payee of an image of an item and information derived
950+34 from the item that enables the depository bank to collect the
951+35 item by transferring or presenting under federal law an
952+36 electronic check.
953+37 (b) An unissued instrument, or an unissued incomplete instrument
954+38 that is completed, is binding on the maker or drawer, but nonissuance
955+39 is a defense. An instrument that is conditionally issued or is issued for
956+40 a special purpose is binding on the maker or drawer, but failure of the
957+41 condition or special purpose to be fulfilled is a defense.
958+42 (c) "Issuer" applies to issued and unissued instruments and means
959+ES 468—LS 7443/DI 101 22
960+1 a maker or drawer of an instrument.
961+2 SECTION 20. IC 26-1-3.1-401 IS AMENDED TO READ AS
962+3 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 401. (a) A person is not
963+4 liable on an instrument unless:
964+5 (1) the person signed the instrument; or
965+6 (2) the person is represented by an agent or representative who
966+7 signed the instrument and the signature is binding on the
967+8 represented person under IC 26-1-3.1-402.
968+9 (b) A signature may be made:
969+10 (1) manually or by means of a device or machine; and
970+11 (2) by the use of any name, including a trade or assumed name, or
971+12 by a word, mark, or symbol executed or adopted by a person with
972+13 present intention to authenticate a writing.
973+14 SECTION 21. IC 26-1-3.1-604, AS AMENDED BY P.L.135-2009,
974+15 SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
975+16 JULY 1, 2023]: Sec. 604. (a) A person entitled to enforce an
976+17 instrument, with or without consideration, may discharge the obligation
977+18 of a party to pay the instrument:
978+19 (1) by an intentional voluntary act, such as surrender of the
979+20 instrument to the party, destruction, mutilation, or cancellation of
980+21 the instrument, cancellation or striking out of the party's signature,
981+22 or the addition of words to the instrument indicating discharge; or
982+23 (2) by agreeing not to sue or otherwise renouncing rights against
983+24 the party by a signed record.
984+25 The obligation of a party to pay a check is not discharged solely by
985+26 destruction of the check in connection with a process in which
986+27 information is extracted from the check and an image of the check
987+28 is made and, subsequently, the information and image are
988+29 transmitted for payment.
989+30 (b) Cancellation or striking out of an endorsement under subsection
990+31 (a) does not affect the status and rights of a party derived from the
991+32 endorsement.
992+33 (c) As used in this section, "signed", with respect to a record that is
993+34 not a writing, includes the attachment to or logical association with the
994+35 record of an electronic symbol, sound, or process with the present
995+36 intent to adopt or accept the record.
996+37 SECTION 22. IC 26-1-4.1-103 IS AMENDED TO READ AS
997+38 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 103. (a) In IC 26-1-4.1:
998+39 (1) "Payment order" means an instruction of a sender to a
999+40 receiving bank, transmitted orally electronically, or in writing, a
1000+41 record, to pay, or to cause another bank to pay, a fixed or
1001+42 determinable amount of money to a beneficiary if:
1002+ES 468—LS 7443/DI 101 23
1003+1 (i) the instruction does not state a condition to payment to the
1004+2 beneficiary other than time of payment;
1005+3 (ii) the receiving bank is to be reimbursed by debiting an
1006+4 account of, or otherwise receiving payment from, the sender;
1007+5 and
1008+6 (iii) the instruction is transmitted by the sender directly to the
1009+7 receiving bank or to an agent, funds-transfer system, or
1010+8 communication system for transmittal to the receiving bank.
1011+9 (2) "Beneficiary" means the person to be paid by the beneficiary's
1012+10 bank.
1013+11 (3) "Beneficiary's bank" means the bank identified in a payment
1014+12 order in which an account of the beneficiary is to be credited
1015+13 pursuant to the order or which otherwise is to make payment to
1016+14 the beneficiary if the order does not provide for payment to an
1017+15 account.
1018+16 (4) "Receiving bank" means the bank to which the sender's
1019+17 instruction is addressed.
1020+18 (5) "Sender" means the person giving the instruction to the
1021+19 receiving bank.
1022+20 (b) If an instruction complying with subsection (a)(1) is to make
1023+21 more than one (1) payment to a beneficiary, the instruction is a separate
1024+22 payment order with respect to each payment.
1025+23 (c) A payment order is issued when it is sent to the receiving bank.
1026+24 SECTION 23. IC 26-1-4.1-201 IS AMENDED TO READ AS
1027+25 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 201. "Security
1028+26 procedure" means a procedure established by agreement of a customer
1029+27 and a receiving bank for the purpose of (i) verifying that a payment
1030+28 order or communication amending or canceling a payment order is that
1031+29 of the customer, or (ii) detecting error in the transmission or the content
1032+30 of the payment order or communication. A security procedure may
1033+31 impose an obligation on the receiving bank or the customer and
1034+32 may require the use of algorithms or other codes, identifying words, or
1035+33 numbers, symbols, sounds, biometrics, encryption, callback
1036+34 procedures, or similar security devices. Comparison of a signature on
1037+35 a payment order or communication with an authorized specimen
1038+36 signature of the customer or requiring a payment order to be sent
1039+37 from a known electronic mail address, Internet protocol address,
1040+38 or telephone number is not by itself a security procedure.
1041+39 SECTION 24. IC 26-1-4.1-202 IS AMENDED TO READ AS
1042+40 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 202. (a) A payment
1043+41 order received by the receiving bank is the authorized order of the
1044+42 person identified as sender if that person authorized the order or is
1045+ES 468—LS 7443/DI 101 24
1046+1 otherwise bound by it under the law of agency.
1047+2 (b) If a bank and its customer have agreed that the authenticity of
1048+3 payment orders issued to the bank in the name of the customer as
1049+4 sender will be verified pursuant to a security procedure, a payment
1050+5 order received by the receiving bank is effective as the order of the
1051+6 customer, whether or not authorized, if (i) the security procedure is a
1052+7 commercially reasonable method of providing security against
1053+8 unauthorized payment orders, and (ii) the bank proves that it accepted
1054+9 the payment order in good faith and in compliance with the bank's
1055+10 obligations under the security procedure and any written agreement
1056+11 or instruction of the customer, evidenced by a record, restricting
1057+12 acceptance of payment orders issued in the name of the customer. The
1058+13 bank is not required to follow an instruction that violates a written an
1059+14 agreement with the customer, evidenced by a record, or notice of
1060+15 which is not received at a time and in a manner affording the bank a
1061+16 reasonable opportunity to act on it before the payment order is
1062+17 accepted.
1063+18 (c) Commercial reasonableness of a security procedure is a question
1064+19 of law to be determined by considering the wishes of the customer
1065+20 expressed to the bank, the circumstances of the customer known to the
1066+21 bank, including the size, type, and frequency of payment orders
1067+22 normally issued by the customer to the bank, alternative security
1068+23 procedures offered to the customer, and security procedures in general
1069+24 use by customers and receiving banks similarly situated. A security
1070+25 procedure is deemed to be commercially reasonable if (i) the security
1071+26 procedure was chosen by the customer after the bank offered, and the
1072+27 customer refused, a security procedure that was commercially
1073+28 reasonable for that customer, and (ii) the customer expressly agreed in
1074+29 writing a record to be bound by any payment order, whether or not
1075+30 authorized, issued in its name and accepted by the bank in compliance
1076+31 with the bank's obligations under the security procedure chosen by
1077+32 the customer.
1078+33 (d) The term "sender" in IC 26-1-4.1 includes the customer in whose
1079+34 name a payment order is issued if the order is the authorized order of
1080+35 the customer under subsection (a), or it is effective as the order of the
1081+36 customer under subsection (b).
1082+37 (e) This section applies to amendments and cancellations of
1083+38 payment orders to the same extent it applies to payment orders.
1084+39 (f) Except as provided in this section and in IC 26-1-4.1-203(a)(1),
1085+40 rights and obligations arising under this section or IC 26-1-4.1-203 may
1086+41 not be varied by agreement.
1087+42 SECTION 25. IC 26-1-4.1-203 IS AMENDED TO READ AS
1088+ES 468—LS 7443/DI 101 25
1089+1 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 203. (a) If an accepted
1090+2 payment order is not, under IC 26-1-4.1-202(a), an authorized order of
1091+3 a customer identified as sender, but is effective as an order of the
1092+4 customer pursuant to IC 26-1-4.1-202(b), the following rules apply:
1093+5 (1) By express written agreement, evidenced by a record, the
1094+6 receiving bank may limit the extent to which it is entitled to
1095+7 enforce or retain payment of the payment order.
1096+8 (2) The receiving bank is not entitled to enforce or retain payment
1097+9 of the payment order if the customer proves that the order was not
1098+10 caused, directly or indirectly, by a person:
1099+11 (i) entrusted at any time with duties to act for the customer
1100+12 with respect to payment orders or the security procedure; or
1101+13 (ii) who obtained access to transmitting facilities of the
1102+14 customer or who obtained, from a source controlled by the
1103+15 customer and without authority of the receiving bank,
1104+16 information facilitating breach of the security procedure,
1105+17 regardless of how the information was obtained or whether the
1106+18 customer was at fault. Information includes any access device,
1107+19 computer software, or the like.
1108+20 (b) This section applies to amendments of payment orders to the
1109+21 same extent it applies to payment orders.
1110+22 SECTION 26. IC 26-1-4.1-207 IS AMENDED TO READ AS
1111+23 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 207. (a) Subject to
1112+24 subsection (b), if, in a payment order received by the beneficiary's
1113+25 bank, the name, bank account number, or other identification of the
1114+26 beneficiary refers to a nonexistent or unidentifiable person or account,
1115+27 no person has rights as a beneficiary of the order and acceptance of the
1116+28 order cannot occur.
1117+29 (b) If a payment order received by the beneficiary's bank identifies
1118+30 the beneficiary both by name and by an identifying or bank account
1119+31 number and the name and number identify different persons, the
1120+32 following rules apply:
1121+33 (1) Except as otherwise provided in subsection (c), if the
1122+34 beneficiary's bank does not know that the name and number refer
1123+35 to different persons, it may rely on the number as the proper
1124+36 identification of the beneficiary of the order. The beneficiary's
1125+37 bank need not determine whether the name and number refer to
1126+38 the same person.
1127+39 (2) If the beneficiary's bank pays the person identified by name or
1128+40 knows that the name and number identify different persons, no
1129+41 person has rights as beneficiary except the person paid by the
1130+42 beneficiary's bank if that person was entitled to receive payment
1131+ES 468—LS 7443/DI 101 26
1132+1 from the originator of the funds transfer. If no person has rights as
1133+2 beneficiary, acceptance of the order cannot occur.
1134+3 (c) If (i) a payment order described in subsection (b) is accepted, (ii)
1135+4 the originator's payment order described the beneficiary inconsistently
1136+5 by name and number, and (iii) the beneficiary's bank pays the person
1137+6 identified by number as permitted by subsection (b)(1), the following
1138+7 rules apply:
1139+8 (1) If the originator is a bank, the originator is obliged to pay its
1140+9 order.
1141+10 (2) If the originator is not a bank and proves that the person
1142+11 identified by number was not entitled to receive payment from the
1143+12 originator, the originator is not obliged to pay its order unless the
1144+13 originator's bank proves that the originator, before acceptance of
1145+14 the originator's order, had notice that payment of a payment order
1146+15 issued by the originator might be made by the beneficiary's bank
1147+16 on the basis of an identifying or bank account number even if it
1148+17 identifies a person different from the named beneficiary. Proof of
1149+18 notice may be made by any admissible evidence. The originator's
1150+19 bank satisfies the burden of proof if it proves that the originator,
1151+20 before the payment order was accepted, signed a writing record
1152+21 stating the information to which the notice relates.
1153+22 (d) In a case governed by subsection (b)(1), if the beneficiary's bank
1154+23 rightfully pays the person identified by number and that person was not
1155+24 entitled to receive payment from the originator, the amount paid may
1156+25 be recovered from that person to the extent allowed by the law
1157+26 governing mistake and restitution as follows:
1158+27 (1) If the originator is obliged to pay its payment order as stated
1159+28 in subsection (c), the originator has the right to recover.
1160+29 (2) If the originator is not a bank and is not obliged to pay its
1161+30 payment order, the originator's bank has the right to recover.
1162+31 SECTION 27. IC 26-1-4.1-208 IS AMENDED TO READ AS
1163+32 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 208. (a) This
1164+33 subsection applies to a payment order identifying an intermediary bank
1165+34 or the beneficiary's bank only by an identifying number.
1166+35 (1) The receiving bank may rely on the number as the proper
1167+36 identification of the intermediary or beneficiary's bank and need
1168+37 not determine whether the number identifies a bank.
1169+38 (2) The sender is obliged to compensate the receiving bank for
1170+39 any loss and expenses incurred by the receiving bank as a result
1171+40 of its reliance on the number in executing or attempting to
1172+41 execute the order.
1173+42 (b) This subsection applies to a payment order identifying an
1174+ES 468—LS 7443/DI 101 27
1175+1 intermediary bank or the beneficiary's bank both by name and an
1176+2 identifying number if the name and number identify different persons.
1177+3 (1) If the sender is a bank, the receiving bank may rely on the
1178+4 number as the proper identification of the intermediary or
1179+5 beneficiary's bank if the receiving bank, when it executes the
1180+6 sender's order, does not know that the name and number identify
1181+7 different persons. The receiving bank need not determine whether
1182+8 the name and number refer to the same person or whether the
1183+9 number refers to a bank. The sender is obliged to compensate the
1184+10 receiving bank for any loss and expenses incurred by the
1185+11 receiving bank as a result of its reliance on the number in
1186+12 executing or attempting to execute the order.
1187+13 (2) If the sender is not a bank and the receiving bank proves that
1188+14 the sender, before the payment order was accepted, had notice
1189+15 that the receiving bank might rely on the number as the proper
1190+16 identification of the intermediary or beneficiary's bank even if it
1191+17 identifies a person different from the bank identified by name, the
1192+18 rights and obligations of the sender and the receiving bank are
1193+19 governed by subdivision (1), as though the sender were a bank.
1194+20 Proof of notice may be made by any admissible evidence. The
1195+21 receiving bank satisfies the burden of proof if it proves that the
1196+22 sender, before the payment order was accepted, signed a writing
1197+23 record stating the information to which the notice relates.
1198+24 (3) Regardless of whether the sender is a bank, the receiving bank
1199+25 may rely on the name as the proper identification of the
1200+26 intermediary or beneficiary's bank if the receiving bank, at the
1201+27 time it executes the sender's order, does not know that the name
1202+28 and number identify different persons. The receiving bank need
1203+29 not determine whether the name and number refer to the same
1204+30 person.
1205+31 (4) If the receiving bank knows that the name and number identify
1206+32 different persons, reliance on either the name or the number in
1207+33 executing the sender's payment order is a breach of the obligation
1208+34 stated in IC 26-1-4.1-302(a)(1).
1209+35 SECTION 28. IC 26-1-4.1-210 IS AMENDED TO READ AS
1210+36 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 210. (a) A payment
1211+37 order is rejected by the receiving bank by a notice of rejection
1212+38 transmitted to the sender orally electronically, or in writing. a record.
1213+39 A notice of rejection need not use any particular words and is sufficient
1214+40 if it indicates that the receiving bank is rejecting the order or will not
1215+41 execute or pay the order. Rejection is effective when the notice is given
1216+42 if transmission is by a means that is reasonable in the circumstances.
1217+ES 468—LS 7443/DI 101 28
1218+1 If notice of rejection is given by a means that is not reasonable,
1219+2 rejection is effective when the notice is received. If an agreement of the
1220+3 sender and receiving bank establishes the means to be used to reject a
1221+4 payment order, (i) any means complying with the agreement is
1222+5 reasonable and (ii) any means not complying is not reasonable unless
1223+6 no significant delay in receipt of the notice resulted from the use of the
1224+7 noncomplying means.
1225+8 (b) This subsection applies if a receiving bank other than the
1226+9 beneficiary's bank fails to execute a payment order despite the
1227+10 existence on the execution date of a withdrawable credit balance in an
1228+11 authorized account of the sender sufficient to cover the order. If the
1229+12 sender does not receive notice of rejection of the order on the execution
1230+13 date and the authorized account of the sender does not bear interest, the
1231+14 bank is obliged to pay interest to the sender on the amount of the order
1232+15 for the number of days elapsing after the execution date to the earlier
1233+16 of the day the order is canceled pursuant to IC 26-1-4.1-211(d) or the
1234+17 day the sender receives notice or learns that the order was not executed,
1235+18 counting the final day of the period as an elapsed day. If the
1236+19 withdrawable credit balance during that period falls below the amount
1237+20 of the order, the amount of interest is reduced accordingly.
1238+21 (c) If a receiving bank suspends payments, all unaccepted payment
1239+22 orders issued to it are deemed rejected at the time the bank suspends
1240+23 payments.
1241+24 (d) Acceptance of a payment order precludes a later rejection of the
1242+25 order. Rejection of a payment order precludes a later acceptance of the
1243+26 order.
1244+27 SECTION 29. IC 26-1-4.1-211 IS AMENDED TO READ AS
1245+28 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 211. (a) A
1246+29 communication of the sender of a payment order canceling or
1247+30 amending the order may be transmitted to the receiving bank orally
1248+31 electronically, or in writing. a record. If a security procedure is in
1249+32 effect between the sender and the receiving bank, the communication
1250+33 is not effective to cancel or amend the order unless the communication
1251+34 is verified pursuant to the security procedure or the bank agrees to the
1252+35 cancellation or amendment.
1253+36 (b) Subject to subsection (a), a communication by the sender
1254+37 canceling or amending a payment order is effective to cancel or amend
1255+38 the order if notice of the communication is received at a time and in a
1256+39 manner affording the receiving bank a reasonable opportunity to act on
1257+40 the communication before the bank accepts the payment order.
1258+41 (c) After a payment order has been accepted, cancellation or
1259+42 amendment of the order is not effective unless the receiving bank
1260+ES 468—LS 7443/DI 101 29
1261+1 agrees or a funds-transfer system rule allows cancellation or
1262+2 amendment without agreement of the bank.
1263+3 (1) With respect to a payment order accepted by a receiving bank
1264+4 other than the beneficiary's bank, cancellation or amendment is
1265+5 not effective unless a conforming cancellation or amendment of
1266+6 the payment order issued by the receiving bank is also made.
1267+7 (2) With respect to a payment order accepted by the beneficiary's
1268+8 bank, cancellation or amendment is not effective unless the order
1269+9 was issued in execution of an unauthorized payment order, or
1270+10 because of a mistake by a sender in the funds transfer which
1271+11 resulted in the issuance of a payment order:
1272+12 (i) that is a duplicate of a payment order previously issued by
1273+13 the sender;
1274+14 (ii) that orders payment to a beneficiary not entitled to receive
1275+15 payment from the originator; or
1276+16 (iii) that orders payment in an amount greater than the amount
1277+17 the beneficiary was entitled to receive from the originator. If
1278+18 the payment order is canceled or amended, the beneficiary's
1279+19 bank is entitled to recover from the beneficiary any amount
1280+20 paid to the beneficiary to the extent allowed by the law
1281+21 governing mistake and restitution.
1282+22 (d) An unaccepted payment order is canceled by operation of law at
1283+23 the close of the fifth funds-transfer business day of the receiving bank
1284+24 after the execution date or payment date of the order.
1285+25 (e) A canceled payment order cannot be accepted. If an accepted
1286+26 payment order is canceled, the acceptance is nullified and no person
1287+27 has any right or obligation based on the acceptance. Amendment of a
1288+28 payment order is deemed to be cancellation of the original order at the
1289+29 time of amendment and issue of a new payment order in the amended
1290+30 form at the same time.
1291+31 (f) Unless otherwise provided in an agreement of the parties or in a
1292+32 funds-transfer system rule, if the receiving bank, after accepting a
1293+33 payment order, agrees to cancellation or amendment of the order by the
1294+34 sender or is bound by a funds-transfer system rule allowing
1295+35 cancellation or amendment without the bank's agreement, the sender,
1296+36 whether or not cancellation or amendment is effective, is liable to the
1297+37 bank for any loss and expenses, including reasonable attorney's fees,
1298+38 incurred by the bank as a result of the cancellation or amendment or
1299+39 attempted cancellation or amendment.
1300+40 (g) A payment order is not revoked by the death or legal incapacity
1301+41 of the sender unless the receiving bank knows of the death or of an
1302+42 adjudication of incapacity by a court of competent jurisdiction and has
1303+ES 468—LS 7443/DI 101 30
1304+1 reasonable opportunity to act before acceptance of the order.
1305+2 (h) A funds-transfer system rule is not effective to the extent it
1306+3 conflicts with subsection (c)(2).
1307+4 SECTION 30. IC 26-1-4.1-305 IS AMENDED TO READ AS
1308+5 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 305. (a) If a funds
1309+6 transfer is completed but execution of a payment order by the receiving
1310+7 bank in breach of IC 26-1-4.1-302 results in delay in payment to the
1311+8 beneficiary, the bank is obliged to pay interest to either the originator
1312+9 or the beneficiary of the funds transfer for the period of delay caused
1313+10 by the improper execution. Except as provided in subsection (c),
1314+11 additional damages are not recoverable.
1315+12 (b) If execution of a payment order by a receiving bank in breach of
1316+13 IC 26-1-4.1-302 results in (i) noncompletion of the funds transfer, (ii)
1317+14 failure to use an intermediary bank designated by the originator, or (iii)
1318+15 issuance of a payment order that does not comply with the terms of the
1319+16 payment order of the originator, the bank is liable to the originator for
1320+17 its expenses in the funds transfer and for incidental expenses and
1321+18 interest losses, to the extent not covered by subsection (a), resulting
1322+19 from the improper execution. Except as provided in subsection (c),
1323+20 additional damages are not recoverable.
1324+21 (c) In addition to the amounts payable under subsections (a) and (b),
1325+22 damages, including consequential damages, are recoverable to the
1326+23 extent provided in an express written agreement of the receiving bank,
1327+24 evidenced by a record.
1328+25 (d) If a receiving bank fails to execute a payment order it was
1329+26 obliged by express agreement to execute, the receiving bank is liable
1330+27 to the sender for its expenses in the transaction and for incidental
1331+28 expenses and interest losses resulting from the failure to execute.
1332+29 Additional damages, including consequential damages, are recoverable
1333+30 to the extent provided in an express written agreement of the receiving
1334+31 bank, evidenced by a record, but are not otherwise recoverable.
1335+32 (e) Reasonable attorney's fees are recoverable if demand for
1336+33 compensation under subsection (a) or (b) is made and refused before
1337+34 an action is brought on the claim. If a claim is made for breach of an
1338+35 agreement under subsection (d) and the agreement does not provide for
1339+36 damages, reasonable attorney's fees are recoverable if demand for
1340+37 compensation under subsection (d) is made and refused before an
1341+38 action is brought on the claim.
1342+39 (f) Except as stated in this section, the liability of a receiving bank
1343+40 under subsections (a) and (b) may not be varied by agreement.
1344+41 SECTION 31. IC 26-1-5.1-104 IS AMENDED TO READ AS
1345+42 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 104. A letter of credit,
1346+ES 468—LS 7443/DI 101 31
1347+1 confirmation, advice, transfer, amendment, or cancellation may be
1348+2 issued in any form that is a signed record. and is authenticated:
1349+3 (i) by a signature; or
1350+4 (ii) in accordance with the agreement of the parties or the
1351+5 standard practice referred to in IC 26-1-5.1-108(e).
1352+6 SECTION 32. IC 26-1-5.1-116 IS AMENDED TO READ AS
1353+7 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 116. (a) The liability of
1354+8 an issuer, nominated person, or adviser for action or omission is
1355+9 governed by the law of the jurisdiction chosen by an agreement in the
1356+10 form of a record signed or otherwise authenticated by the affected
1357+11 parties in the manner provided in IC 26-1-5.1-104 or by a provision in
1358+12 the person's letter of credit, confirmation, or other undertaking. The
1359+13 jurisdiction whose law is chosen need not bear any relation to the
1360+14 transaction.
1361+15 (b) Unless subsection (a) applies, the liability of an issuer,
1362+16 nominated person, or adviser for action or omission is governed by the
1363+17 law of the jurisdiction in which the person is located. The person is
1364+18 considered to be located at the address indicated in the person's
1365+19 undertaking. If more than one (1) address is indicated, the person is
1366+20 considered to be located at the address from which the person's
1367+21 undertaking was issued.
1368+22 (c) For the purpose of jurisdiction, choice of law, and recognition of
1369+23 interbranch letters of credit, but not enforcement of a judgment, all
1370+24 branches of a bank are considered separate juridical entities and a bank
1371+25 is considered to be located at the place where its relevant branch is
1372+26 considered to be located under this subsection (d).
1373+27 (d) A branch of a bank is considered to be located at the address
1374+28 indicated in the branch's undertaking. If more than one (1) address
1375+29 is indicated, the branch is considered to be located at the address
1376+30 from which the undertaking was issued.
1377+31 (c) (e) Except as otherwise provided in this subsection, the liability
1378+32 of an issuer, nominated person, or adviser is governed by any rules of
1379+33 custom or practice, such as the Uniform Customs and Practice for
1380+34 Documentary Credits, to which the letter of credit, confirmation, or
1381+35 other undertaking is expressly made subject. If:
1382+36 (i) IC 26-1-5.1 would govern the liability of an issuer, nominated
1383+37 person, or adviser under subsection (a) or (b);
1384+38 (ii) the relevant undertaking incorporates rules of custom or
1385+39 practice; and
1386+40 (iii) there is conflict between IC 26-1-5.1 and those rules as
1387+41 applied to that undertaking;
1388+42 those rules govern except to the extent of any conflict with the
1389+ES 468—LS 7443/DI 101 32
1390+1 nonvariable provisions specified in IC 26-1-5.1-103(c).
1391+2 (d) (f) If there is conflict between IC 26-1-5.1 and IC 26-1-3.1,
1392+3 IC 26-1-4, IC 26-1-4.1, or IC 26-1-9.1, IC 26-1-5.1 governs.
1393+4 (e) (g) The forum for settling disputes arising out of an undertaking
1394+5 within IC 26-1-5.1 may be chosen in the manner and with the binding
1395+6 effect that governing law may be chosen in accordance with subsection
1396+7 (a).
1397+8 SECTION 33. IC 26-1-7-102, AS AMENDED BY P.L.143-2007,
1398+9 SECTION 25, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1399+10 JULY 1, 2023]: Sec. 102. (a) In this chapter unless the context
1400+11 otherwise requires:
1401+12 (1) "Bailee" means a person that by a warehouse receipt, bill of
1402+13 lading, or other document of title acknowledges possession of
1403+14 goods and contracts to deliver them.
1404+15 (2) "Carrier" means a person that issues a bill of lading.
1405+16 (3) "Consignee" means a person named in a bill of lading to
1406+17 which or to whose order the bill promises delivery.
1407+18 (4) "Consignor" means a person named in a bill of lading as the
1408+19 person from which the goods have been received for shipment.
1409+20 (5) "Delivery order" means a record that contains an order to
1410+21 deliver goods directed to a warehouse, carrier, or other person that
1411+22 in the ordinary course of business issues warehouse receipts or
1412+23 bills of lading.
1413+24 (6) "Good faith" means honesty in fact and the observance of
1414+25 reasonable commercial standards of fair dealing.
1415+26 (7) "Goods" means all things that are treated as movable for the
1416+27 purposes of a contract for storage or transportation.
1417+28 (8) "Issuer" means a bailee that issues a document of title or, in
1418+29 the case of an unaccepted delivery order, the person that orders
1419+30 the possessor of goods to deliver. The term includes a person for
1420+31 which an agent or employee purports to act in issuing a document
1421+32 if the agent or employee has real or apparent authority to issue
1422+33 documents, even if the issuer did not receive any goods, the goods
1423+34 were misdescribed, or in any other respect the agent or employee
1424+35 violated the issuer's instructions.
1425+36 (9) "Person entitled under the document" means the holder, in the
1426+37 case of a negotiable document of title, or the person to which
1427+38 delivery of the goods is to be made by the terms of, or pursuant to
1428+39 instructions in a record under, a nonnegotiable document of title.
1429+40 (10) "Record" means information that is inscribed on a tangible
1430+41 medium or that is stored in an electronic or other medium and is
1431+42 retrievable in perceivable form. [Reserved.]
1432+ES 468—LS 7443/DI 101 33
1433+1 (11) "Shipper" means a person that enters into a contract of
1434+2 transportation with a carrier.
1435+3 (12) "Sign" means, with present intent to authenticate or adopt a
1436+4 record:
1437+5 (A) to execute or adopt a tangible symbol; or
1438+6 (B) to attach to or logically associate with the record an
1439+7 electronic sound, symbol, or process. [Reserved.]
1440+8 (13) "Warehouse" means a person engaged in the business of
1441+9 storing goods for hire.
1442+10 (b) Other definitions applying to this chapter and the sections in
1443+11 which they appear are:
1444+12 "Duly negotiate". IC 26-1-7-501.
1445+13 "Contract for sale". IC 26-1-2-106.
1446+14 "Lessee in the ordinary course of business". IC 26-1-2.1-103(o).
1447+15 "Receipt" of goods. IC 26-1-2-103.
1448+16 (c) In addition, IC 26-1-1 contains general definitions and principles
1449+17 of construction and interpretation applicable throughout this chapter.
1450+18 SECTION 34. IC 26-1-7-106, AS ADDED BY P.L.143-2007,
1451+19 SECTION 29, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1452+20 JULY 1, 2023]: Sec. 106. (a) A person has control of an electronic
1453+21 document of title if a system employed for evidencing the transfer of
1454+22 interests in the electronic document reliably establishes that person as
1455+23 the person to which the electronic document was issued or transferred.
1456+24 (b) A system satisfies subsection (a), and a person is deemed to have
1457+25 has control of an electronic document of title, if the document is
1458+26 created, stored, and assigned transferred in such a manner that:
1459+27 (1) a single authoritative copy of the document exists that is
1460+28 unique, identifiable, and, except as otherwise provided in
1461+29 subdivisions (4), (5), and (6), unalterable;
1462+30 (2) the authoritative copy identifies the person asserting control
1463+31 as:
1464+32 (A) the person to which the document was issued; or
1465+33 (B) if the authoritative copy indicates that the document has
1466+34 been transferred, the person to which the document was most
1467+35 recently transferred;
1468+36 (3) the authoritative copy is communicated to and maintained by
1469+37 the person asserting control or its designated custodian;
1470+38 (4) copies or amendments that add or change an identified
1471+39 assignee transferee of the authoritative copy can be made only
1472+40 with the consent of the person asserting control;
1473+41 (5) each copy of the authoritative copy and any copy of a copy is
1474+42 readily identifiable as a copy that is not the authoritative copy;
1475+ES 468—LS 7443/DI 101 34
1476+1 and
1477+2 (6) any amendment of the authoritative copy is readily identifiable
1478+3 as authorized or unauthorized.
1479+4 (c) A system satisfies subsection (a), and a person has control of
1480+5 an electronic document of title, if an authoritative electronic copy
1481+6 of the document, a record attached to or logically associated with
1482+7 the electronic copy, or a system in which the electronic copy is
1483+8 recorded:
1484+9 (1) enables the person readily to identify each electronic copy
1485+10 as either an authoritative copy or a nonauthoritative copy;
1486+11 (2) enables the person readily to identify itself in any way,
1487+12 including by name, identifying number, cryptographic key,
1488+13 office, or account number, as the person to which each
1489+14 authoritative electronic copy was issued or transferred; and
1490+15 (3) gives the person exclusive power, subject to subsection (d),
1491+16 to:
1492+17 (A) prevent others from adding or changing the person to
1493+18 which each authoritative electronic copy has been issued or
1494+19 transferred; and
1495+20 (B) transfer control of each authoritative electronic copy.
1496+21 (d) Subject to subsection (e), a power is exclusive under
1497+22 subsection (c)(3)(A) and (c)(3)(B) even if:
1498+23 (1) the authoritative electronic copy, a record attached to or
1499+24 logically associated with the authoritative electronic copy, or
1500+25 a system in which the authoritative electronic copy is
1501+26 recorded limits the use of the document of title or has a
1502+27 protocol programmed to cause a change, including a transfer
1503+28 or loss of control; or
1504+29 (2) the power is shared with another person.
1505+30 (e) A power of a person is not shared with another person under
1506+31 subsection (d)(2), and the person's power is not exclusive if:
1507+32 (1) the person can exercise the power only if the power also is
1508+33 exercised by the other person; and
1509+34 (2) the other person:
1510+35 (A) can exercise the power without exercise of the power
1511+36 by the person; or
1512+37 (B) is the transferor to the person of an interest in the
1513+38 document of title.
1514+39 (f) If a person has the powers specified in subsection (c)(3)(A)
1515+40 and (c)(3)(B), the powers are presumed to be exclusive.
1516+41 (g) A person has control of an electronic document of title if
1517+42 another person, other than the transferor to the person of an
1518+ES 468—LS 7443/DI 101 35
1519+1 interest in the document:
1520+2 (1) has control of the document and acknowledges that it has
1521+3 control on behalf of the person; or
1522+4 (2) obtains control of the document after having
1523+5 acknowledged that it will obtain control of the document on
1524+6 behalf of the person.
1525+7 (h) A person that has control under this section is not required
1526+8 to acknowledge that it has control on behalf of another person.
1527+9 (i) If a person acknowledges that it has or will obtain control on
1528+10 behalf of another person, unless the person otherwise agrees, or
1529+11 law other than this chapter or IC 26-1-9.1 otherwise provides, the
1530+12 person does not owe any duty to the other person and is not
1531+13 required to confirm the acknowledgment to any other person.
1532+14 SECTION 35. IC 26-1-8.1-102 IS AMENDED TO READ AS
1533+15 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 102. (a) In IC 26-1-8.1:
1534+16 (1) "Adverse claim" means a claim that a claimant has a property
1535+17 interest in a financial asset and that it is a violation of the rights
1536+18 of the claimant for another person to hold, transfer, or deal with
1537+19 the financial asset.
1538+20 (2) "Bearer form", as applied to a certificated security, means a
1539+21 form in which the security is payable to the bearer of the security
1540+22 certificate according to its terms but not by reason of an
1541+23 endorsement.
1542+24 (3) "Broker" means a person defined as a broker or dealer under
1543+25 the federal securities laws, but without excluding a bank acting in
1544+26 that capacity.
1545+27 (4) "Certificated security" means a security that is represented by
1546+28 a certificate.
1547+29 (5) "Clearing corporation" means:
1548+30 (i) a person that is registered as a "clearing agency" under the
1549+31 federal securities laws;
1550+32 (ii) a federal reserve bank; or
1551+33 (iii) any other person that provides clearance or settlement
1552+34 services with respect to financial assets that would require it
1553+35 to register as a clearing agency under the federal securities
1554+36 laws but for an exclusion or exemption from the registration
1555+37 requirement, if its activities as a clearing corporation,
1556+38 including promulgation of rules, are subject to regulation by a
1557+39 federal or state governmental authority.
1558+40 (6) "Communicate" means to:
1559+41 (i) send a signed writing; record; or
1560+42 (ii) transmit information by any mechanism agreed upon by
1561+ES 468—LS 7443/DI 101 36
1562+1 the persons transmitting and receiving the information.
1563+2 (7) "Entitlement holder" means a person identified in the records
1564+3 of a securities intermediary as the person having a security
1565+4 entitlement against the securities intermediary. If a person
1566+5 acquires a security entitlement by virtue of IC 26-1-8.1-501(b)(2)
1567+6 or IC 26-1-8.1-501(b)(3), that person is the entitlement holder.
1568+7 (8) "Entitlement order" means a notification communicated to a
1569+8 securities intermediary directing transfer or redemption of a
1570+9 financial asset to which the entitlement holder has a security
1571+10 entitlement.
1572+11 (9) "Financial asset", except as otherwise provided in
1573+12 IC 26-1-8.1-103, means:
1574+13 (i) a security;
1575+14 (ii) an obligation of a person or a share, participation, or other
1576+15 interest in a person or in property or an enterprise of a person,
1577+16 that is, or is of a type, dealt in or traded on financial markets,
1578+17 or that is recognized in any area in which it is issued or dealt
1579+18 in as a medium for investment; or
1580+19 (iii) any property that is held by a securities intermediary for
1581+20 another person in a securities account if the securities
1582+21 intermediary has expressly agreed with the other person that
1583+22 the property is to be treated as a financial asset under
1584+23 IC 26-1-8.1.
1585+24 As context requires, the term means either the interest itself or the
1586+25 means by which a person's claim to it is evidenced, including a
1587+26 certificated or an uncertificated security, a security certificate, or
1588+27 a security entitlement.
1589+28 (10) "Good faith", for purposes of the obligation of good faith in
1590+29 the performance or enforcement of contracts or duties within
1591+30 IC 26-1-8.1, means honesty in fact and the observance of
1592+31 reasonable commercial standards of fair dealing.
1593+32 (11) "Endorsement" means a signature that alone or accompanied
1594+33 by other words is made on a security certificate in registered form
1595+34 or on a separate document for the purpose of assigning,
1596+35 transferring, or redeeming the security or granting a power to
1597+36 assign, transfer, or redeem it.
1598+37 (12) "Instruction" means a notification communicated to the
1599+38 issuer of an uncertificated security which directs that the transfer
1600+39 of the security be registered or that the security be redeemed.
1601+40 (13) "Registered form", as applied to a certificated security,
1602+41 means a form in which:
1603+42 (i) the security certificate specifies a person entitled to the
1604+ES 468—LS 7443/DI 101 37
1605+1 security; and
1606+2 (ii) a transfer of the security may be registered upon books
1607+3 maintained for that purpose by or on behalf of the issuer, or the
1608+4 security certificate so states.
1609+5 (14) "Securities intermediary" means:
1610+6 (i) a clearing corporation; or
1611+7 (ii) a person, including a bank or broker, that in the ordinary
1612+8 course of its business maintains securities accounts for others
1613+9 and is acting in that capacity.
1614+10 (15) "Security", except as otherwise provided in IC 26-1-8.1-103,
1615+11 means an obligation of an issuer or a share, participation, or other
1616+12 interest in an issuer or in property or an enterprise of an issuer:
1617+13 (i) which is represented by a security certificate in bearer or
1618+14 registered form, or the transfer of which may be registered
1619+15 upon books maintained for that purpose by or on behalf of the
1620+16 issuer;
1621+17 (ii) which is one (1) of a class or series or by its terms is
1622+18 divisible into a class or series of shares, participations,
1623+19 interests, or obligations; and
1624+20 (iii) which:
1625+21 (A) is, or is of a type, dealt in or traded on securities
1626+22 exchanges or securities markets; or
1627+23 (B) is a medium for investment and by its terms expressly
1628+24 provides that it is a security governed by IC 26-1-8.1.
1629+25 (16) "Security certificate" means a certificate representing a
1630+26 security.
1631+27 (17) "Security entitlement" means the rights and property interest
1632+28 of an entitlement holder with respect to a financial asset specified
1633+29 in IC 26-1-8.1-501 through IC 26-1-8.1-511.
1634+30 (18) "Uncertificated security" means a security that is not
1635+31 represented by a certificate.
1636+32 (b) Other The following definitions applying to in IC 26-1-8.1 and
1637+33 the sections in which they appear are: in IC 26-1 apply to this article:
1638+34 "Appropriate person". IC 26-1-8.1-107.
1639+35 "Control". IC 26-1-8.1-106.
1640+36 "Controllable account". IC 26-1-9.1-102.
1641+37 "Controllable electronic record". IC 26-1-12-102.
1642+38 "Controllable payment intangible". IC 26-1-9.1-102.
1643+39 "Delivery". IC 26-1-8.1-301.
1644+40 "Investment company security". IC 26-1-8.1-103.
1645+41 "Issuer". IC 26-1-8.1-201.
1646+42 "Overissue". IC 26-1-8.1-210.
1647+ES 468—LS 7443/DI 101 38
1648+1 "Protected purchaser". IC 26-1-8.1-303.
1649+2 "Securities account". IC 26-1-8.1-501.
1650+3 (c) In addition, IC 26-1-1 contains general definitions and principles
1651+4 of construction and interpretation applicable throughout IC 26-1-8.1.
1652+5 (d) The characterization of a person, business, or transaction for
1653+6 purposes of IC 26-1-8.1 does not determine the characterization of the
1654+7 person, business, or transaction for purposes of any other law,
1655+8 regulation, or rule.
1656+9 SECTION 36. IC 26-1-8.1-103, AS AMENDED BY P.L.143-2007,
1657+10 SECTION 64, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1658+11 JULY 1, 2023]: Sec. 103. (a) A share or similar equity interest issued
1659+12 by a corporation, business trust, joint stock company, or similar entity
1660+13 is a security.
1661+14 (b) An "investment company security" is a security. "Investment
1662+15 company security" means a share or similar equity interest issued by an
1663+16 entity that is registered as an investment company under the federal
1664+17 investment company laws, an interest in a unit investment trust that is
1665+18 so registered, or a face amount certificate issued by a face amount
1666+19 certificate company that is so registered. Investment company security
1667+20 does not include an insurance policy or endowment policy or annuity
1668+21 contract issued by an insurance company.
1669+22 (c) An interest in a partnership or limited liability company is not a
1670+23 security unless it is dealt in or traded on securities exchanges or in
1671+24 securities markets, its terms expressly provide that it is a security
1672+25 governed by IC 26-1-8.1, or it is an investment company security.
1673+26 However, an interest in a partnership or limited liability company is a
1674+27 financial asset if it is held in a securities account.
1675+28 (d) A writing that is a security certificate is governed by IC 26-1-8.1
1676+29 and not by IC 26-1-3.1, even though it also meets the requirements of
1677+30 that article. However, a negotiable instrument governed by IC 26-1-3.1
1678+31 is a financial asset if it is held in a securities account.
1679+32 (e) An option or a similar obligation issued by a clearing corporation
1680+33 to its participants is not a security, but it is a financial asset.
1681+34 (f) A commodity contract (as defined in IC 26-1-9.1-102(a)(15)) is
1682+35 not a security or a financial asset.
1683+36 (g) A document of title is not a financial asset unless section
1684+37 102(a)(9)(iii) of this chapter applies.
1685+38 (h) A controllable account, a controllable electronic record, or
1686+39 a controllable payment intangible is not a financial asset unless
1687+40 section 102(a)(9)(iii) of this chapter applies.
1688+41 SECTION 37. IC 26-1-8.1-106 IS AMENDED TO READ AS
1689+42 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 106. (a) A purchaser
1690+ES 468—LS 7443/DI 101 39
1691+1 has "control" of a certificated security in bearer form if the certificated
1692+2 security is delivered to the purchaser.
1693+3 (b) A purchaser has "control" of a certificated security in registered
1694+4 form if the certificated security is delivered to the purchaser, and:
1695+5 (1) the certificate is endorsed to the purchaser or in blank by an
1696+6 effective endorsement; or
1697+7 (2) the certificate is registered in the name of the purchaser, upon
1698+8 original issue or registration of transfer by the issuer.
1699+9 (c) A purchaser has "control" of an uncertificated security if:
1700+10 (1) the uncertificated security is delivered to the purchaser; or
1701+11 (2) the issuer has agreed that it will comply with instructions
1702+12 originated by the purchaser without further consent by the
1703+13 registered owner.
1704+14 (d) A purchaser has "control" of a security entitlement if:
1705+15 (1) the purchaser becomes the entitlement holder;
1706+16 (2) the securities intermediary has agreed that it will comply with
1707+17 entitlement orders originated by the purchaser without further
1708+18 consent by the entitlement holder; or
1709+19 (3) another person, has control of the security entitlement on
1710+20 behalf of the purchaser or, having previously acquired control of
1711+21 the security entitlement, acknowledges that it has control on
1712+22 behalf of the purchaser. other than the transferor to the
1713+23 purchaser of an interest in the security entitlement:
1714+24 (A) has control of the security entitlement and
1715+25 acknowledges that it has control on behalf of the
1716+26 purchaser; or
1717+27 (B) obtains control of the security entitlement after having
1718+28 acknowledged that it will obtain control of the security
1719+29 entitlement on behalf of the purchaser.
1720+30 (e) If an interest in a security entitlement is granted by the
1721+31 entitlement holder to the entitlement holder's own securities
1722+32 intermediary, the securities intermediary has control.
1723+33 (f) A purchaser who has satisfied the requirements of subsection (c)
1724+34 or (d) has control even if the registered owner in the case of subsection
1725+35 (c) or the entitlement holder in the case of subsection (d) retains the
1726+36 right to make substitutions for the uncertificated security or security
1727+37 entitlement, to originate instructions or entitlement orders to the issuer
1728+38 or a securities intermediary, or otherwise to deal with the uncertificated
1729+39 security or security entitlement.
1730+40 (g) An issuer or a securities intermediary may not enter into an
1731+41 agreement of the kind described in subsection (c)(2) or (d)(2) without
1732+42 the consent of the registered owner or entitlement holder, but an issuer
1733+ES 468—LS 7443/DI 101 40
1734+1 or a securities intermediary is not required to enter into such an
1735+2 agreement even though the registered owner or entitlement holder so
1736+3 directs. An issuer or securities intermediary that has entered into such
1737+4 an agreement is not required to confirm the existence of the agreement
1738+5 to another party unless requested to do so by the registered owner or
1739+6 entitlement holder.
1740+7 (h) A person that has control under this section is not required
1741+8 to acknowledge that it has control on behalf of a purchaser.
1742+9 (i) If a person acknowledges that it has or will obtain control on
1743+10 behalf of a purchaser, unless the person otherwise agrees, or law
1744+11 other than this chapter or IC 26-1-9.1 otherwise provides, the
1745+12 person does not owe any duty to the purchaser and is not required
1746+13 to confirm the acknowledgment to any other person.
1747+14 SECTION 38. IC 26-1-8.1-110 IS AMENDED TO READ AS
1748+15 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 110. (a) The local law
1749+16 of the issuer's jurisdiction, as specified in subsection (d), governs:
1750+17 (1) the validity of a security;
1751+18 (2) the rights and duties of the issuer with respect to registration
1752+19 of transfer;
1753+20 (3) the effectiveness of registration of transfer by the issuer;
1754+21 (4) whether the issuer owes any duties to an adverse claimant to
1755+22 a security; and
1756+23 (5) whether an adverse claim can be asserted against a person to
1757+24 whom transfer of a certificated or uncertificated security is
1758+25 registered or a person who obtains control of an uncertificated
1759+26 security.
1760+27 (b) The local law of the securities intermediary's jurisdiction, as
1761+28 specified in subsection (e), governs:
1762+29 (1) acquisition of a security entitlement from the securities
1763+30 intermediary;
1764+31 (2) the rights and duties of the securities intermediary and
1765+32 entitlement holder arising out of a security entitlement;
1766+33 (3) whether the securities intermediary owes any duties to an
1767+34 adverse claimant to a security entitlement; and
1768+35 (4) whether an adverse claim can be asserted against a person
1769+36 who acquires a security entitlement from the securities
1770+37 intermediary or a person who purchases a security entitlement or
1771+38 interest therein from an entitlement holder.
1772+39 (c) The local law of the jurisdiction in which a security certificate
1773+40 is located at the time of delivery governs whether an adverse claim can
1774+41 be asserted against a person to whom the security certificate is
1775+42 delivered.
1776+ES 468—LS 7443/DI 101 41
1777+1 (d) "Issuer's jurisdiction" means the jurisdiction under which the
1778+2 issuer of the security is organized or, if permitted by the law of that
1779+3 jurisdiction, the law of another jurisdiction specified by the issuer. An
1780+4 issuer organized under the law of this state may specify the law of
1781+5 another jurisdiction as the law governing the matters specified in
1782+6 subsection (a)(2) through (a)(5).
1783+7 (e) The following rules determine a "securities intermediary's
1784+8 jurisdiction" for purposes of this section:
1785+9 (1) If an agreement between the securities intermediary and its
1786+10 entitlement holder governing the securities account expressly
1787+11 provides that a particular jurisdiction is the securities
1788+12 intermediary's jurisdiction for purposes of IC 26-1-8.1-101
1789+13 through IC 26-1-8.1-116, that jurisdiction is the securities
1790+14 intermediary's jurisdiction.
1791+15 (2) If subdivision (1) does not apply, and an agreement between
1792+16 the securities intermediary and its entitlement holder expressly
1793+17 provides that the agreement is governed by the law of a particular
1794+18 jurisdiction, that jurisdiction is the securities intermediary's
1795+19 jurisdiction.
1796+20 (3) If neither subdivision (1) nor subdivision (2) applies, and an
1797+21 agreement between the securities intermediary and its entitlement
1798+22 holder governing the securities account expressly provides that
1799+23 the securities account is maintained at an office in a particular
1800+24 jurisdiction, that jurisdiction is the securities intermediary's
1801+25 jurisdiction.
1802+26 (4) If none of the preceding subdivisions apply, the securities
1803+27 intermediary's jurisdiction is the jurisdiction in which the office
1804+28 identified in an account statement as the office serving the
1805+29 entitlement holder's account is located.
1806+30 (5) If none of the preceding subdivisions apply, the securities
1807+31 intermediary's jurisdiction is the jurisdiction in which the chief
1808+32 executive office of the securities intermediary is located.
1809+33 (f) A securities intermediary's jurisdiction is not determined by the
1810+34 physical location of certificates representing financial assets, or by the
1811+35 jurisdiction in which is organized the issuer of the financial asset with
1812+36 respect to which an entitlement holder has a security entitlement, or by
1813+37 the location of facilities for data processing or other record keeping
1814+38 concerning the account.
1815+39 (g) The local law of the issuer's jurisdiction or the securities
1816+40 intermediary's jurisdiction governs a matter or transaction
1817+41 specified in subsection (a) or (b) even if the matter or transaction
1818+42 does not bear any relation to the jurisdiction.
1819+ES 468—LS 7443/DI 101 42
1820+1 SECTION 39. IC 26-1-8.1-303 IS AMENDED TO READ AS
1821+2 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 303. (a) "Protected
1822+3 purchaser" means a purchaser of a certificated or uncertificated
1823+4 security, or of an interest therein, who:
1824+5 (1) gives value;
1825+6 (2) does not have notice of any adverse claim to the security; and
1826+7 (3) obtains control of the certificated or uncertificated security.
1827+8 (b) In addition to acquiring the rights of a purchaser, A protected
1828+9 purchaser also acquires its interest in the security free of any adverse
1829+10 claim.
1830+11 SECTION 40. IC 26-1-9.1-102, AS AMENDED BY P.L.110-2022,
1831+12 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
1832+13 JULY 1, 2023]: Sec. 102. (a) In IC 26-1-9.1:
1833+14 (1) "Accession" means goods that are physically united with other
1834+15 goods in such a manner that the identity of the original goods is
1835+16 not lost.
1836+17 (2) "Account", except as used in "account for", "account
1837+18 statement", "account to", "commodity account" in
1838+19 subdivision (14), "customer's account", "deposit account" in
1839+20 subdivision (29), "on account of", and "statement of account",
1840+21 means a right to payment of a monetary obligation, whether or not
1841+22 earned by performance:
1842+23 (A) for property that has been or is to be sold, leased, licensed,
1843+24 assigned, or otherwise disposed of;
1844+25 (B) for services rendered or to be rendered;
1845+26 (C) for a policy of insurance issued or to be issued;
1846+27 (D) for a secondary obligation incurred or to be incurred;
1847+28 (E) for energy provided or to be provided;
1848+29 (F) for the use or hire of a vessel under a charter or other
1849+30 contract;
1850+31 (G) arising out of the use of a credit or charge card or
1851+32 information contained on or for use with the card; or
1852+33 (H) as winnings in a lottery or other game of chance operated
1853+34 or sponsored by a state other than Indiana, a governmental unit
1854+35 of a state, or a person licensed or authorized to operate the
1855+36 game by a state or governmental unit of a state.
1856+37 The term does not include a right to a payment of a prize awarded
1857+38 by the state lottery commission in the Indiana state lottery
1858+39 established under IC 4-30. The term includes controllable
1859+40 accounts and health-care-insurance receivables. The term does
1860+41 not include (i) rights to payment evidenced by chattel paper, or an
1861+42 instrument, (ii) commercial tort claims, (iii) deposit accounts, (iv)
1862+ES 468—LS 7443/DI 101 43
1863+1 investment property, (v) letter-of-credit rights or letters of credit,
1864+2 or (vi) rights to payment for money or funds advanced or sold,
1865+3 other than rights arising out of the use of a credit or charge card
1866+4 or information contained on or for use with the card, or (vii)
1867+5 rights to payment evidenced by an instrument.
1868+6 (3) "Account debtor" means a person obligated on an account,
1869+7 chattel paper, or general intangible. The term does not include
1870+8 persons obligated to pay a negotiable instrument, even if the
1871+9 negotiable instrument constitutes part of evidences chattel paper.
1872+10 (4) "Accounting", except as used in "accounting for", means a
1873+11 record:
1874+12 (A) authenticated signed by a secured party;
1875+13 (B) indicating the aggregate unpaid secured obligations as of
1876+14 a date not more than thirty-five (35) days earlier or thirty-five
1877+15 (35) days later than the date of the record; and
1878+16 (C) identifying the components of the obligations in
1879+17 reasonable detail.
1880+18 (5) "Agricultural lien" means an interest, other than a security
1881+19 interest, in farm products:
1882+20 (A) that secures payment or performance of an obligation for:
1883+21 (i) goods or services furnished in connection with a debtor's
1884+22 farming operation; or
1885+23 (ii) rent on real property leased by a debtor in connection
1886+24 with the debtor's farming operation;
1887+25 (B) that is created by statute in favor of a person that:
1888+26 (i) in the ordinary course of its business furnished goods or
1889+27 services to a debtor in connection with the debtor's farming
1890+28 operation; or
1891+29 (ii) leased real property to a debtor in connection with the
1892+30 debtor's farming operation; and
1893+31 (C) whose effectiveness does not depend on the person's
1894+32 possession of the personal property.
1895+33 (6) "As-extracted collateral" means:
1896+34 (A) oil, gas, or other minerals that are subject to a security
1897+35 interest that:
1898+36 (i) is created by a debtor having an interest in the minerals
1899+37 before extraction; and
1900+38 (ii) attaches to the minerals as extracted; or
1901+39 (B) accounts arising out of the sale at the wellhead or
1902+40 minehead of oil, gas, or other minerals in which the debtor had
1903+41 an interest before extraction.
1904+42 (7) "Authenticate" means: The following terms have the
1905+ES 468—LS 7443/DI 101 44
1906+1 following meanings:
1907+2 (A) to sign; or "Assignee", except as used in "assignee for
1908+3 benefit of creditors", means a person (i) in whose favor a
1909+4 security interest that secures an obligation is created or
1910+5 provided for under a security agreement, whether or not
1911+6 the obligation is outstanding or (ii) to which an account,
1912+7 chattel paper, payment intangible, or promissory note has
1913+8 been sold. The term includes a person to which a security
1914+9 interest has been transferred by a secured party.
1915+10 (B) with present intent to adopt or accept a record, to attach to
1916+11 or logically associate with the record an electronic sound,
1917+12 symbol, or process. "Assignor" means a person that (i)
1918+13 under a security agreement creates or provides for a
1919+14 security interest that secures an obligation or (ii) sells an
1920+15 account, chattel paper, payment intangible, or promissory
1921+16 note. The term includes a secured party that has
1922+17 transferred a security interest to another person.
1923+18 (8) "Bank" means an organization that is engaged in the business
1924+19 of banking. The term includes savings banks, savings and loan
1925+20 associations, credit unions, and trust companies.
1926+21 (9) "Cash proceeds" means proceeds that are money, checks,
1927+22 deposit accounts, or the like.
1928+23 (10) "Certificate of title" means a certificate of title with respect
1929+24 to which a statute provides for the security interest in question to
1930+25 be indicated on the certificate as a condition or result of the
1931+26 security interest's obtaining priority over the rights of a lien
1932+27 creditor with respect to the collateral. The term includes another
1933+28 record maintained as an alternative to a certificate of title by the
1934+29 governmental unit that issues certificates of title if a statute
1935+30 permits the security interest in question to be indicated on the
1936+31 record as a condition or result of the security interest's obtaining
1937+32 priority over the rights of a lien creditor with respect to the
1938+33 collateral.
1939+34 (11) "Chattel paper" means: a record or records that evidence both
1940+35 a monetary obligation and a security interest in specific goods, a
1941+36 security interest in specific goods and software used in the goods,
1942+37 a security interest in specific goods and license of software used
1943+38 in the goods, a lease of specific goods, or a lease of specific goods
1944+39 and license of software used in the goods. In this subdivision,
1945+40 "monetary obligation" means a monetary obligation secured by
1946+41 the goods or owed under a lease of the goods and includes a
1947+42 monetary obligation with respect to software used in the goods.
1948+ES 468—LS 7443/DI 101 45
1949+1 The term "chattel paper" does not include: (i) charters or other
1950+2 contracts involving the use or hire of a vessel; or (ii) records that
1951+3 evidence a right to payment arising out of the use of a credit or
1952+4 charge card or information contained on or for use with the card.
1953+5 If a transaction is evidenced by records that include an instrument
1954+6 or series of instruments, the group of records taken together
1955+7 constitutes chattel paper.
1956+8 (A) a right to payment of a monetary obligation secured by
1957+9 specific goods, if the right to payment and security interest
1958+10 are evidenced by a record; or
1959+11 (B) a right to payment of a monetary obligation owed by a
1960+12 lessee under a lease agreement with respect to specific
1961+13 goods and a monetary obligation owed by the lessee in
1962+14 connection with the transaction giving rise to the lease if:
1963+15 (i) the right to payment and lease agreement are
1964+16 evidenced by a record; and
1965+17 (ii) the predominant purpose of the transaction giving
1966+18 rise to the lease was to give the lessee the right to
1967+19 possession and use of the goods.
1968+20 The term does not include a right to payment arising out of a
1969+21 charter or other contract involving the use or hire of a vessel,
1970+22 or a right to payment arising out of the use of a credit or
1971+23 charge card or information contained on or for use with the
1972+24 card.
1973+25 (12) "Collateral" means the property subject to a security interest
1974+26 or agricultural lien. The term includes:
1975+27 (A) proceeds to which a security interest attaches;
1976+28 (B) accounts, chattel paper, payment intangibles, and
1977+29 promissory notes that have been sold; and
1978+30 (C) goods that are the subject of a consignment.
1979+31 (13) "Commercial tort claim" means a claim arising in tort with
1980+32 respect to which:
1981+33 (A) the claimant is an organization; or
1982+34 (B) the claimant is an individual and the claim:
1983+35 (i) arose in the course of the claimant's business or
1984+36 profession; and
1985+37 (ii) does not include damages arising out of personal injury
1986+38 to or the death of an individual.
1987+39 (14) "Commodity account" means an account maintained by a
1988+40 commodity intermediary in which a commodity contract is carried
1989+41 for a commodity customer.
1990+42 (15) "Commodity contract" means a commodity futures contract,
1991+ES 468—LS 7443/DI 101 46
1992+1 an option on a commodity futures contract, a commodity option,
1993+2 or another contract if the contract or option is:
1994+3 (A) traded on or subject to the rules of a board of trade that has
1995+4 been designated as a contract market for such a contract
1996+5 pursuant to federal commodities laws; or
1997+6 (B) traded on a foreign commodity board of trade, exchange,
1998+7 or market, and is carried on the books of a commodity
1999+8 intermediary for a commodity customer.
2000+9 (16) "Commodity customer" means a person for which a
2001+10 commodity intermediary carries a commodity contract on its
2002+11 books.
2003+12 (17) "Commodity intermediary" means a person that:
2004+13 (A) is registered as a futures commission merchant under
2005+14 federal commodities law; or
2006+15 (B) in the ordinary course of its business provides clearance or
2007+16 settlement services for a board of trade that has been
2008+17 designated as a contract market pursuant to federal
2009+18 commodities law.
2010+19 (18) "Communicate" means:
2011+20 (A) to send a written or other tangible record;
2012+21 (B) to transmit a record by any means agreed upon by the
2013+22 persons sending and receiving the record; or
2014+23 (C) in the case of transmission of a record to or by a filing
2015+24 office, to transmit a record by any means prescribed by
2016+25 filing-office rule.
2017+26 (19) "Consignee" means a merchant to which goods are delivered
2018+27 in a consignment.
2019+28 (20) "Consignment" means a transaction, regardless of its form,
2020+29 in which a person delivers goods to a merchant for the purpose of
2021+30 sale and:
2022+31 (A) the merchant:
2023+32 (i) deals in goods of that kind under a name other than the
2024+33 name of the person making delivery;
2025+34 (ii) is not an auctioneer; and
2026+35 (iii) is not generally known by its creditors to be
2027+36 substantially engaged in selling the goods of others;
2028+37 (B) with respect to each delivery, the aggregate value of the
2029+38 goods is one thousand dollars ($1,000) or more at the time of
2030+39 delivery;
2031+40 (C) the goods are not consumer goods immediately before
2032+41 delivery; and
2033+42 (D) the transaction does not create a security interest that
2034+ES 468—LS 7443/DI 101 47
2035+1 secures an obligation.
2036+2 (21) "Consignor" means a person that delivers goods to a
2037+3 consignee in a consignment.
2038+4 (22) "Consumer debtor" means a debtor in a consumer
2039+5 transaction.
2040+6 (23) "Consumer goods" means goods that are used or bought for
2041+7 use primarily for personal, family, or household purposes.
2042+8 (24) "Consumer-goods transaction" means a consumer transaction
2043+9 in which:
2044+10 (A) an individual incurs an obligation primarily for personal,
2045+11 family, or household purposes; and
2046+12 (B) a security interest in consumer goods secures the
2047+13 obligation.
2048+14 (25) "Consumer obligor" means an obligor who is an individual
2049+15 and who incurred the obligation as part of a transaction entered
2050+16 into primarily for personal, family, or household purposes.
2051+17 (26) "Consumer transaction" means a transaction in which (i) an
2052+18 individual incurs an obligation primarily for personal, family, or
2053+19 household purposes, (ii) a security interest secures the obligation,
2054+20 and (iii) the collateral is held or acquired primarily for personal,
2055+21 family, or household purposes. The term includes
2056+22 consumer-goods transactions.
2057+23 (27) The following terms have the following meanings:
2058+24 (A) "Continuation statement" means an amendment of a
2059+25 financing statement that:
2060+26 (A) (i) identifies, by its file number, the initial financing
2061+27 statement to which it relates; and
2062+28 (B) (ii) indicates that it is a continuation statement for, or
2063+29 that it is filed to continue the effectiveness of, the identified
2064+30 financing statement.
2065+31 (B) "Controllable account" means an account evidenced by
2066+32 a controllable electronic record that provides that the
2067+33 account debtor undertakes to pay the person that has
2068+34 control under IC 26-1-12-105 of the controllable electronic
2069+35 record.
2070+36 (C) "Controllable payment intangible" means a payment
2071+37 intangible evidenced by a controllable electronic record
2072+38 that provides that the account debtor undertakes to pay
2073+39 the person that has control under IC 26-1-12-105 of the
2074+40 controllable electronic record.
2075+41 (28) "Debtor" means:
2076+42 (A) a person having an interest, other than a security interest
2077+ES 468—LS 7443/DI 101 48
2078+1 or other lien, in the collateral, whether or not the person is an
2079+2 obligor;
2080+3 (B) a seller of accounts, chattel paper, payment intangibles, or
2081+4 promissory notes; or
2082+5 (C) a consignee.
2083+6 (29) "Deposit account" means a demand, time, savings, passbook,
2084+7 or similar account maintained with a bank. The term does not
2085+8 include investment property or accounts evidenced by an
2086+9 instrument.
2087+10 (30) "Document" means a document of title or a receipt of the
2088+11 type described in IC 26-1-7-201(b).
2089+12 (31) "Electronic chattel paper" means chattel paper evidenced by
2090+13 a record or records consisting of information stored in an
2091+14 electronic medium. [Reserved.]
2092+15 (32) "Encumbrance" means a right, other than an ownership
2093+16 interest, in real property. The term includes mortgages and other
2094+17 liens on real property.
2095+18 (33) "Equipment" means goods other than inventory, farm
2096+19 products, or consumer goods.
2097+20 (34) "Farm products" means goods, other than standing timber,
2098+21 with respect to which the debtor is engaged in a farming operation
2099+22 and which are:
2100+23 (A) crops grown, growing, or to be grown, including:
2101+24 (i) crops produced on trees, vines, and bushes; and
2102+25 (ii) aquatic goods produced in aquacultural operations;
2103+26 (B) livestock, born or unborn, including aquatic goods
2104+27 produced in aquacultural operations;
2105+28 (C) supplies used or produced in a farming operation; or
2106+29 (D) products of crops or livestock in their unmanufactured
2107+30 states.
2108+31 (35) "Farming operation" means raising, cultivating, propagating,
2109+32 fattening, grazing, or any other farming, livestock, or aquacultural
2110+33 operation.
2111+34 (36) "File number" means the number assigned to an initial
2112+35 financing statement pursuant to IC 26-1-9.1-519(a).
2113+36 (37) "Filing office" means an office designated in IC 26-1-9.1-501
2114+37 as the place to file a financing statement.
2115+38 (38) "Filing-office rule" means a rule adopted pursuant to
2116+39 IC 26-1-9.1-526.
2117+40 (39) "Financing statement" means a record or records composed
2118+41 of an initial financing statement and any filed record relating to
2119+42 the initial financing statement.
2120+ES 468—LS 7443/DI 101 49
2121+1 (40) "Fixture filing" means the filing of a financing statement
2122+2 covering goods that are or are to become fixtures and satisfying
2123+3 IC 26-1-9.1-502(a) and IC 26-1-9.1-502(b). The term includes the
2124+4 filing of a financing statement covering goods of a transmitting
2125+5 utility which are or are to become fixtures.
2126+6 (41) "Fixtures" means goods that have become so related to
2127+7 particular real property that an interest in them arises under real
2128+8 property law.
2129+9 (42) "General intangible" means any personal property, including
2130+10 things in action, other than accounts, chattel paper, commercial
2131+11 tort claims, deposit accounts, documents, goods, instruments,
2132+12 investment property, letter-of-credit rights, letters of credit,
2133+13 money, and oil, gas, or other minerals before extraction. The term
2134+14 includes controllable electronic records, payment intangibles,
2135+15 and software.
2136+16 (43) "Good faith" means honesty in fact and the observance of
2137+17 reasonable commercial standards of fair dealing.
2138+18 (44) "Goods" means all things that are movable when a security
2139+19 interest attaches. The term includes (i) fixtures, (ii) standing
2140+20 timber that is to be cut and removed under a conveyance or
2141+21 contract for sale, (iii) the unborn young of animals, (iv) crops
2142+22 grown, growing, or to be grown, even if the crops are produced on
2143+23 trees, vines, or bushes, and (v) manufactured homes. The term
2144+24 also includes a computer program embedded in goods and any
2145+25 supporting information provided in connection with a transaction
2146+26 relating to the program if (i) the program is associated with the
2147+27 goods in such a manner that it customarily is considered part of
2148+28 the goods, or (ii) by becoming the owner of the goods, a person
2149+29 acquires a right to use the program in connection with the goods.
2150+30 The term does not include a computer program embedded in
2151+31 goods that consist solely of the medium in which the program is
2152+32 embedded. The term also does not include accounts, chattel
2153+33 paper, commercial tort claims, deposit accounts, documents,
2154+34 general intangibles, instruments, investment property,
2155+35 letter-of-credit rights, letters of credit, money, or oil, gas, or other
2156+36 minerals before extraction.
2157+37 (45) "Governmental unit" means a subdivision, agency,
2158+38 department, county, parish, municipality, or other unit of the
2159+39 government of the United States, a state, or a foreign country. The
2160+40 term includes an organization having a separate corporate
2161+41 existence if the organization is eligible to issue debt on which
2162+42 interest is exempt from income taxation under the laws of the
2163+ES 468—LS 7443/DI 101 50
2164+1 United States.
2165+2 (46) "Health-care-insurance receivable" means an interest in or
2166+3 claim under a policy of insurance that is a right to payment of a
2167+4 monetary obligation for health-care goods or services provided.
2168+5 (47) "Instrument" means a negotiable instrument or any other
2169+6 writing that evidences a right to the payment of a monetary
2170+7 obligation, is not itself a security agreement or lease, and is of a
2171+8 type that in the ordinary course of business is transferred by
2172+9 delivery with any necessary endorsement or assignment. The term
2173+10 does not include (i) investment property, (ii) letters of credit, or
2174+11 (iii) writings that evidence a right to payment arising out of the
2175+12 use of a credit or charge card or information contained on or for
2176+13 use with the card, or (iv) writings that evidence chattel paper.
2177+14 (48) "Inventory" means goods, other than farm products, that:
2178+15 (A) are leased by a person as lessor;
2179+16 (B) are held by a person for sale or lease or to be furnished
2180+17 under a contract of service;
2181+18 (C) are furnished by a person under a contract of service; or
2182+19 (D) consist of raw materials, work in process, or materials
2183+20 used or consumed in a business.
2184+21 (49) "Investment property" means a security, whether certificated
2185+22 or uncertificated, security entitlement, securities account,
2186+23 commodity contract, or commodity account.
2187+24 (50) "Jurisdiction of organization", with respect to a registered
2188+25 organization, means the jurisdiction under whose law the
2189+26 organization is formed or organized.
2190+27 (51) "Letter-of-credit right" means a right to payment or
2191+28 performance under a letter of credit, whether or not the
2192+29 beneficiary has demanded or is at the time entitled to demand
2193+30 payment or performance. The term does not include the right of
2194+31 a beneficiary to demand payment or performance under a letter of
2195+32 credit.
2196+33 (52) "Lien creditor" means:
2197+34 (A) a creditor that has acquired a lien on the property involved
2198+35 by attachment, levy, or the like;
2199+36 (B) an assignee for benefit of creditors from the time of
2200+37 assignment;
2201+38 (C) a trustee in bankruptcy from the date of the filing of the
2202+39 petition; or
2203+40 (D) a receiver in equity from the time of appointment.
2204+41 (53) "Manufactured home" means a structure, transportable in one
2205+42 (1) or more sections, which, in the traveling mode, is eight (8)
2206+ES 468—LS 7443/DI 101 51
2207+1 body feet or more in width or forty (40) body feet or more in
2208+2 length, or, when erected on site, is three hundred twenty (320) or
2209+3 more square feet, and which is built on a permanent chassis and
2210+4 designed to be used as a dwelling with or without a permanent
2211+5 foundation when connected to the required utilities, and includes
2212+6 the plumbing, heating, air conditioning, and electrical systems
2213+7 contained therein. The term includes any structure that meets all
2214+8 of the requirements of this subdivision except the size
2215+9 requirements, and with respect to which the manufacturer
2216+10 voluntarily files a certification required by the United States
2217+11 Secretary of Housing and Urban Development and complies with
2218+12 the standards established under Title 42 of the United States
2219+13 Code.
2220+14 (54) The following terms have the following meanings:
2221+15 (A) "Manufactured-home transaction" means a secured
2222+16 transaction:
2223+17 (A) (i) that creates a purchase-money security interest in a
2224+18 manufactured home, other than a manufactured home held
2225+19 as inventory; or
2226+20 (B) (ii) in which a manufactured home, other than a
2227+21 manufactured home held as inventory, is the primary
2228+22 collateral.
2229+23 (B) "Money" has the meaning set forth in
2230+24 IC 26-1-1-201(24), but does not include a deposit account.
2231+25 (55) "Mortgage" means a consensual interest in real property,
2232+26 including fixtures, that secures payment or performance of an
2233+27 obligation.
2234+28 (56) "New debtor" means a person that becomes bound as debtor
2235+29 under IC 26-1-9.1-203(d) by a security agreement previously
2236+30 entered into by another person.
2237+31 (57) "New value" means (i) money, (ii) money's worth in
2238+32 property, services, or new credit, or (iii) release by a transferee of
2239+33 an interest in property previously transferred to the transferee.
2240+34 The term does not include an obligation substituted for another
2241+35 obligation.
2242+36 (58) "Noncash proceeds" means proceeds other than cash
2243+37 proceeds.
2244+38 (59) "Obligor" means a person that, with respect to an obligation
2245+39 secured by a security interest in or an agricultural lien on the
2246+40 collateral, (i) owes payment or other performance of the
2247+41 obligation, (ii) has provided property other than the collateral to
2248+42 secure payment or other performance of the obligation, or (iii) is
2249+ES 468—LS 7443/DI 101 52
2250+1 otherwise accountable in whole or in part for payment or other
2251+2 performance of the obligation. The term does not include issuers
2252+3 or nominated persons under a letter of credit.
2253+4 (60) "Original debtor", except as used in IC 26-1-9.1-310(c),
2254+5 means a person that, as debtor, entered into a security agreement
2255+6 to which a new debtor has become bound under
2256+7 IC 26-1-9.1-203(d).
2257+8 (61) "Payment intangible" means a general intangible under
2258+9 which the account debtor's principal obligation is a monetary
2259+10 obligation. The term includes a controllable payment intangible.
2260+11 (62) "Person related to", with respect to an individual, means:
2261+12 (A) the spouse of the individual;
2262+13 (B) a brother, brother-in-law, sister, or sister-in-law of the
2263+14 individual;
2264+15 (C) an ancestor or lineal descendant of the individual or the
2265+16 individual's spouse; or
2266+17 (D) any other relative, by blood or marriage, of the individual
2267+18 or the individual's spouse who shares the same home with the
2268+19 individual.
2269+20 (63) "Person related to", with respect to an organization, means:
2270+21 (A) a person directly or indirectly controlling, controlled by,
2271+22 or under common control with the organization;
2272+23 (B) an officer or director of, or a person performing similar
2273+24 functions with respect to, the organization;
2274+25 (C) an officer or director of, or a person performing similar
2275+26 functions with respect to, a person described in clause (A);
2276+27 (D) the spouse of an individual described in clause (A), (B), or
2277+28 (C); or
2278+29 (E) an individual who is related by blood or marriage to an
2279+30 individual described in clause (A), (B), (C), or (D) and shares
2280+31 the same home with the individual.
2281+32 (64) "Proceeds", except as used in IC 26-1-9.1-609(b), means the
2282+33 following property:
2283+34 (A) Whatever is acquired upon the sale, lease, license,
2284+35 exchange, or other disposition of collateral.
2285+36 (B) Whatever is collected on, or distributed on account of,
2286+37 collateral.
2287+38 (C) Rights arising out of collateral.
2288+39 (D) To the extent of the value of collateral, claims arising out
2289+40 of the loss, nonconformity, or interference with the use of,
2290+41 defects or infringement of rights in, or damage to, the
2291+42 collateral.
2292+ES 468—LS 7443/DI 101 53
2293+1 (E) To the extent of the value of collateral and to the extent
2294+2 payable to the debtor or the secured party, insurance payable
2295+3 by reason of the loss or nonconformity of, defects or
2296+4 infringement of rights in, or damage to, the collateral.
2297+5 (65) "Promissory note" means an instrument that evidences a
2298+6 promise to pay a monetary obligation, does not evidence an order
2299+7 to pay, and does not contain an acknowledgment by a bank that
2300+8 the bank has received for deposit a sum of money or funds.
2301+9 (66) "Proposal" means a record authenticated signed by a secured
2302+10 party that includes the terms on which the secured party is willing
2303+11 to accept collateral in full or partial satisfaction of the obligation
2304+12 it secures pursuant to IC 26-1-9.1-620, IC 26-1-9.1-621, and
2305+13 IC 26-1-9.1-622.
2306+14 (67) "Public-finance transaction" means a secured transaction in
2307+15 connection with which:
2308+16 (A) debt securities are issued;
2309+17 (B) all or a portion of the securities issued have an initial
2310+18 stated maturity of at least twenty (20) years; and
2311+19 (C) the debtor, obligor, secured party, account debtor, or other
2312+20 person obligated on collateral, assignor or assignee of a
2313+21 secured obligation, or assignor or assignee of a security
2314+22 interest is a state or a governmental unit of a state.
2315+23 (68) "Public organic record" means a record that is available to
2316+24 the public for inspection and is:
2317+25 (A) a record consisting of the record initially filed with or
2318+26 issued by a state or the United States to form or organize an
2319+27 organization and any record filed with or issued by the state or
2320+28 the United States which amends or restates the initial record;
2321+29 (B) an organic record of a business trust consisting of the
2322+30 record initially filed with a state and any record filed with the
2323+31 state which amends or restates the initial record, if a statute of
2324+32 the state governing business trusts requires that the record be
2325+33 filed with the state; or
2326+34 (C) a record consisting of legislation enacted by the legislature
2327+35 of a state or the Congress of the United States which forms or
2328+36 organizes an organization, any record amending the
2329+37 legislation, and any record filed with or issued by the state or
2330+38 the United States which amends or restates the name of the
2331+39 organization.
2332+40 (69) "Pursuant to commitment", with respect to an advance made
2333+41 or other value given by a secured party, means pursuant to the
2334+42 secured party's obligation, whether or not a subsequent event of
2335+ES 468—LS 7443/DI 101 54
2336+1 default or other event not within the secured party's control has
2337+2 relieved or may relieve the secured party from its obligation.
2338+3 (70) "Record", except as used in "for record", "of record", "record
2339+4 or legal title", and "record owner", means information that is
2340+5 inscribed on a tangible medium or that is stored in an electronic
2341+6 or other medium and is retrievable in perceivable form.
2342+7 (71) "Registered organization" means an organization formed or
2343+8 organized solely under the law of a single state or the United
2344+9 States by the filing of a public organic record with, the issuance
2345+10 of a public organic record by, or the enactment of legislation by
2346+11 the state or the United States. The term includes a business trust
2347+12 that is formed or organized under the law of a single state if a
2348+13 statute of the state governing business trusts requires that the
2349+14 business trust's organic record be filed with the state.
2350+15 (72) "Secondary obligor" means an obligor to the extent that:
2351+16 (A) the obligor's obligation is secondary; or
2352+17 (B) the obligor has a right of recourse with respect to an
2353+18 obligation secured by collateral against the debtor, another
2354+19 obligor, or property of either.
2355+20 (73) "Secured party" means:
2356+21 (A) a person in whose favor a security interest is created or
2357+22 provided for under a security agreement, whether or not any
2358+23 obligation to be secured is outstanding;
2359+24 (B) a person that holds an agricultural lien;
2360+25 (C) a consignor;
2361+26 (D) a person to which accounts, chattel paper, payment
2362+27 intangibles, or promissory notes have been sold;
2363+28 (E) a trustee, indenture trustee, agent, collateral agent, or other
2364+29 representative in whose favor a security interest or agricultural
2365+30 lien is created or provided for; or
2366+31 (F) a person that holds a security interest arising under
2367+32 IC 26-1-2-401, IC 26-1-2-505, IC 26-1-2-711(3),
2368+33 IC 26-1-2.1-508(5), IC 26-1-4-210, or IC 26-1-5.1-118.
2369+34 (74) "Security agreement" means an agreement that creates or
2370+35 provides for a security interest.
2371+36 (75) "Send", in connection with a record or notification, means:
2372+37 (A) to deposit in the mail, deliver for transmission, or transmit
2373+38 by any other usual means of communication, with postage or
2374+39 cost of transmission provided for, addressed to any address
2375+40 reasonable under the circumstances; or
2376+41 (B) to cause the record or notification to be received within the
2377+42 time that it would have been received if properly sent under
2378+ES 468—LS 7443/DI 101 55
2379+1 clause (A). [Reserved.]
2380+2 (76) "Software" means a computer program and any supporting
2381+3 information provided in connection with a transaction relating to
2382+4 the program. The term does not include a computer program that
2383+5 is included in the definition of goods.
2384+6 (77) "State" means a state of the United States, the District of
2385+7 Columbia, Puerto Rico, the United States Virgin Islands, or any
2386+8 territory or insular possession subject to the jurisdiction of the
2387+9 United States.
2388+10 (78) "Supporting obligation" means a letter-of-credit right or
2389+11 secondary obligation that supports the payment or performance of
2390+12 an account, chattel paper, a document, a general intangible, an
2391+13 instrument, or investment property.
2392+14 (79) "Tangible chattel paper" means chattel paper evidenced by
2393+15 a record or records consisting of information that is inscribed on
2394+16 a tangible medium. [Reserved.]
2395+17 (80) "Termination statement" means an amendment of a financing
2396+18 statement that:
2397+19 (A) identifies, by its file number, the initial financing
2398+20 statement to which it relates; and
2399+21 (B) indicates either that it is a termination statement or that the
2400+22 identified financing statement is no longer effective.
2401+23 (81) "Transmitting utility" means a person primarily engaged in
2402+24 the business of:
2403+25 (A) operating a railroad, subway, street railway, or trolley bus;
2404+26 (B) transmitting communications electrically,
2405+27 electromagnetically, or by light;
2406+28 (C) transmitting goods by pipeline or sewer; or
2407+29 (D) transmitting or producing and transmitting electricity,
2408+30 steam, gas, or water.
2409+31 (b) "Control" as provided in IC 26-1-7-106 and the following
2410+32 definitions outside IC 26-1-9.1 apply to IC 26-1-9.1:
2411+33 "Applicant" IC 26-1-5.1-102.
2412+34 "Beneficiary" IC 26-1-5.1-102.
2413+35 "Broker" IC 26-1-8.1-102.
2414+36 "Certificated security" IC 26-1-8.1-102.
2415+37 "Check" IC 26-1-3.1-104.
2416+38 "Clearing corporation" IC 26-1-8.1-102.
2417+39 "Contract for sale" IC 26-1-2-106.
2418+40 "Controllable account" IC 26-1-11-103.
2419+41 "Controllable electronic record" IC 26-1-11-104. IC 26-1-12-102.
2420+42 "Controllable payment intangible" IC 26-1-11-105.
2421+ES 468—LS 7443/DI 101 56
2422+1 "Customer" IC 26-1-4-104.
2423+2 "Entitlement holder" IC 26-1-8.1-102.
2424+3 "Financial asset" IC 26-1-8.1-102.
2425+4 "Holder in due course" IC 26-1-3.1-302.
2426+5 "Issuer" (with respect to a letter of credit or letter-of-credit right)
2427+6 IC 26-1-5.1-102.
2428+7 "Issuer" (with respect to a security) IC 26-1-8.1-201.
2429+8 "Issuer" (with respect to documents of title) IC 26-1-7-102.
2430+9 "Lease" IC 26-1-2.1-103.
2431+10 "Lease agreement" IC 26-1-2.1-103.
2432+11 "Lease contract" IC 26-1-2.1-103.
2433+12 "Leasehold interest" IC 26-1-2.1-103.
2434+13 "Lessee" IC 26-1-2.1-103.
2435+14 "Lessee in ordinary course of business" IC 26-1-2.1-103.
2436+15 "Lessor" IC 26-1-2.1-103.
2437+16 "Lessor's residual interest" IC 26-1-2.1-103.
2438+17 "Letter of credit" IC 26-1-5.1-102.
2439+18 "Merchant" IC 26-1-2-104.
2440+19 "Negotiable instrument" IC 26-1-3.1-104.
2441+20 "Nominated person" IC 26-1-5.1-102.
2442+21 "Note" IC 26-1-3.1-104.
2443+22 "Proceeds of a letter of credit" IC 26-1-5.1-114.
2444+23 "Protected purchaser" IC 26-1-8.1-303.
2445+24 "Prove" IC 26-1-3.1-103.
2446+25 "Qualifying purchaser" IC 26-1-11-106. IC 26-1-12-102.
2447+26 "Sale" IC 26-1-2-106.
2448+27 "Securities account" IC 26-1-8.1-501.
2449+28 "Securities intermediary" IC 26-1-8.1-102.
2450+29 "Security" IC 26-1-8.1-102.
2451+30 "Security certificate" IC 26-1-8.1-102.
2452+31 "Security entitlement" IC 26-1-8.1-102.
2453+32 "Uncertificated security" IC 26-1-8.1-102.
2454+33 (c) IC 26-1-1 contains general definitions and principles of
2455+34 construction and interpretation applicable throughout IC 26-1-9.1.
2456+35 SECTION 41. IC 26-1-9.1-104 IS AMENDED TO READ AS
2457+36 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 104. (a) A secured
2458+37 party has control of a deposit account if:
2459+38 (1) the secured party is the bank with which the deposit account
2460+39 is maintained;
2461+40 (2) the debtor, secured party, and bank have agreed in an
2462+41 authenticated a signed record that the bank will comply with
2463+42 instructions originated by the secured party directing disposition
2464+ES 468—LS 7443/DI 101 57
2465+1 of the funds in the account without further consent by the debtor;
2466+2 or
2467+3 (3) the secured party becomes the bank's customer with respect to
2468+4 the deposit account; or
2469+5 (4) another person, other than the debtor:
2470+6 (A) has control of the deposit account and acknowledges
2471+7 that it has control on behalf of the secured party; or
2472+8 (B) obtains control of the deposit account after having
2473+9 acknowledged that it will obtain control of the deposit
2474+10 account on behalf of the secured party.
2475+11 (b) A secured party that has satisfied subsection (a) has control,
2476+12 even if the debtor retains the right to direct the disposition of funds
2477+13 from the deposit account.
2478+14 SECTION 42. IC 26-1-9.1-105, AS AMENDED BY P.L.54-2011,
2479+15 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2480+16 JULY 1, 2023]: Sec. 105. (a) A secured party purchaser has control of
2481+17 an authoritative electronic copy of a record evidencing chattel paper
2482+18 if a system employed for evidencing the transfer assignment of
2483+19 interests in the chattel paper reliably establishes the secured party
2484+20 purchaser as the person to which the chattel paper authoritative
2485+21 electronic copy was assigned.
2486+22 (b) A system satisfies subsection (a) if the record or records
2487+23 comprising evidencing the chattel paper are created, stored, and
2488+24 assigned in such a manner that:
2489+25 (1) a single authoritative copy of the record or records exists
2490+26 which is unique, identifiable and, except as otherwise provided in
2491+27 subdivisions (4), (5), and (6), unalterable;
2492+28 (2) the authoritative copy identifies the secured party purchaser
2493+29 as the assignee of the record or records;
2494+30 (3) the authoritative copy is communicated to and maintained by
2495+31 the secured party purchaser or its designated custodian;
2496+32 (4) copies or amendments that add or change an identified
2497+33 assignee of the authoritative copy can be made only with the
2498+34 consent of the secured party; purchaser;
2499+35 (5) each copy of the authoritative copy and any copy of a copy is
2500+36 readily identifiable as a copy that is not the authoritative copy;
2501+37 and
2502+38 (6) any amendment of the authoritative copy is readily identifiable
2503+39 as authorized or unauthorized.
2504+40 (c) A system satisfies subsection (a), and a purchaser has control
2505+41 of an authoritative electronic copy of a record evidencing chattel
2506+42 paper, if the electronic copy, a record attached to or logically
2507+ES 468—LS 7443/DI 101 58
2508+1 associated with the electronic copy, or a system in which the
2509+2 electronic copy is recorded:
2510+3 (1) enables the purchaser readily to identify each electronic
2511+4 copy as either an authoritative copy or a nonauthoritative
2512+5 copy;
2513+6 (2) enables the purchaser readily to identify itself in any way,
2514+7 including by name, identifying number, cryptographic key,
2515+8 office, or account number, as the assignee of the authoritative
2516+9 electronic copy; and
2517+10 (3) gives the purchaser exclusive power, subject to subsection
2518+11 (d), to:
2519+12 (A) prevent others from adding or changing an identified
2520+13 assignee of the authoritative electronic copy; and
2521+14 (B) transfer control of the authoritative electronic copy.
2522+15 (d) Subject to subsection (e), a power is exclusive under
2523+16 subsection (c)(3)(A) and (c)(3)(B) even if:
2524+17 (1) the authoritative electronic copy, a record attached to or
2525+18 logically associated with the authoritative electronic copy, or
2526+19 a system in which the authoritative electronic copy is
2527+20 recorded limits the use of the authoritative electronic copy or
2528+21 has a protocol programmed to cause a change, including a
2529+22 transfer or loss of control; or
2530+23 (2) the power is shared with another person.
2531+24 (e) A power of a purchaser is not shared with another person
2532+25 under subsection (d)(2), and the purchaser's power is not exclusive
2533+26 if:
2534+27 (1) the purchaser can exercise the power only if the power
2535+28 also is exercised by the other person; and
2536+29 (2) the other person:
2537+30 (A) can exercise the power without exercise of the power
2538+31 by the purchaser; or
2539+32 (B) is the transferor to the purchaser of an interest in the
2540+33 chattel paper.
2541+34 (f) If a purchaser has the powers specified in subsection
2542+35 (c)(3)(A) and (c)(3)(B), the powers are presumed to be exclusive.
2543+36 (g) A purchaser has control of an authoritative electronic copy
2544+37 of a record evidencing chattel paper if another person, other than
2545+38 the transferor to the purchaser of an interest in the chattel paper:
2546+39 (1) has control of the authoritative electronic copy and
2547+40 acknowledges that it has control on behalf of the purchaser;
2548+41 or
2549+42 (2) obtains control of the authoritative electronic copy after
2550+ES 468—LS 7443/DI 101 59
2551+1 having acknowledged that it will obtain control of the
2552+2 authoritative electronic copy on behalf of the purchaser.
2553+3 SECTION 43. IC 26-1-9.1-107.1, AS ADDED BY P.L.110-2022,
2554+4 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2555+5 JULY 1, 2023]: Sec. 107.1. (a) A secured party has control of a
2556+6 controllable electronic record as provided for in IC 26-1-11-108.
2557+7 IC 26-1-12-105.
2558+8 (b) A secured party has control of a controllable account or
2559+9 controllable payment intangible if the secured party has control of the
2560+10 controllable electronic record that evidences the controllable account
2561+11 or controllable payment intangible.
2562+12 SECTION 44. IC 26-1-9.1-107.2 IS ADDED TO THE INDIANA
2563+13 CODE AS A NEW SECTION TO READ AS FOLLOWS
2564+14 [EFFECTIVE JULY 1, 2023]: Sec. 107.2. (a) A person that has
2565+15 control under section 104 or 105 of this chapter is not required to
2566+16 acknowledge that it has control on behalf of another person.
2567+17 (b) If a person acknowledges that it has or will obtain control on
2568+18 behalf of another person, unless the person otherwise agrees or law
2569+19 other than this chapter otherwise provides, the person does not owe
2570+20 any duty to any other person and is not required to confirm the
2571+21 acknowledgment to any other person.
2572+22 SECTION 45. IC 26-1-9.1-203, AS AMENDED BY P.L.143-2007,
2573+23 SECTION 66, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2574+24 JULY 1, 2023]: Sec. 203. (a) A security interest attaches to collateral
2575+25 when it becomes enforceable against the debtor with respect to the
2576+26 collateral, unless an agreement expressly postpones the time of
2577+27 attachment.
2578+28 (b) Except as otherwise provided in subsections (c) through (i), a
2579+29 security interest is enforceable against the debtor and third parties with
2580+30 respect to the collateral only if:
2581+31 (1) value has been given;
2582+32 (2) the debtor has rights in the collateral or the power to transfer
2583+33 rights in the collateral to a secured party; and
2584+34 (3) one (1) of the following conditions is met:
2585+35 (A) The debtor has authenticated signed a security agreement
2586+36 that provides a description of the collateral and, if the security
2587+37 interest covers timber to be cut, a description of the land
2588+38 concerned.
2589+39 (B) The collateral is not a certificated security and is in the
2590+40 possession of the secured party under IC 26-1-9.1-313
2591+41 pursuant to the debtor's security agreement.
2592+42 (C) The collateral is a certificated security in registered form
2593+ES 468—LS 7443/DI 101 60
2594+1 and the security certificate has been delivered to the secured
2595+2 party under IC 26-1-8.1-301 pursuant to the debtor's security
2596+3 agreement.
2597+4 (D) The collateral is controllable accounts, controllable
2598+5 electronic records, controllable payment intangibles,
2599+6 deposit accounts, electronic chattel paper, documents,
2600+7 investment property, or letter-of-credit rights, or electronic
2601+8 documents, and the secured party has control under
2602+9 IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
2603+10 IC 26-1-9.1-106, or IC 26-1-9.1-107, or IC 26-1-9.1-107.1
2604+11 pursuant to the debtor's security agreement.
2605+12 (E) The collateral is chattel paper and the secured party
2606+13 has possession and control under IC 26-1-9.1-314.1
2607+14 pursuant to the debtor's security agreement.
2608+15 (c) Subsection (b) is subject to IC 26-1-4-210 on the security
2609+16 interest of a collecting bank, IC 26-1-5.1-118 on the security interest of
2610+17 a letter-of-credit issuer or nominated person, IC 26-1-9.1-110 on a
2611+18 security interest arising under IC 26-1-2 or IC 26-1-2.1, and
2612+19 IC 26-1-9.1-206 on security interests in investment property.
2613+20 (d) A person becomes bound as debtor by a security agreement
2614+21 entered into by another person if, by operation of law other than
2615+22 IC 26-1-9.1 or by contract:
2616+23 (1) the security agreement becomes effective to create a security
2617+24 interest in the person's property; or
2618+25 (2) the person becomes generally obligated for the obligations of
2619+26 the other person, including the obligation secured under the
2620+27 security agreement, and acquires or succeeds to all or
2621+28 substantially all of the assets of the other person.
2622+29 (e) If a new debtor becomes bound as debtor by a security
2623+30 agreement entered into by another person:
2624+31 (1) the agreement satisfies subsection (b)(3) with respect to
2625+32 existing or after-acquired property of the new debtor to the extent
2626+33 the property is described in the agreement; and
2627+34 (2) another agreement is not necessary to make a security interest
2628+35 in the property enforceable.
2629+36 (f) The attachment of a security interest in collateral gives the
2630+37 secured party the rights to proceeds provided by IC 26-1-9-315
2631+38 IC 26-1-9.1-315 and is also attachment of a security interest in a
2632+39 supporting obligation for the collateral.
2633+40 (g) The attachment of a security interest in a right to payment or
2634+41 performance secured by a security interest or other lien on personal or
2635+42 real property is also attachment of a security interest in the security
2636+ES 468—LS 7443/DI 101 61
2637+1 interest, mortgage, or other lien.
2638+2 (h) The attachment of a security interest in a securities account is
2639+3 also attachment of a security interest in the security entitlements
2640+4 carried in the securities account.
2641+5 (i) The attachment of a security interest in a commodity account is
2642+6 also attachment of a security interest in the commodity contracts
2643+7 carried in the commodity account.
2644+8 SECTION 46. IC 26-1-9.1-204 IS AMENDED TO READ AS
2645+9 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 204. (a) Except as
2646+10 otherwise provided in subsection (b), a security agreement may create
2647+11 or provide for a security interest in after-acquired collateral.
2648+12 (b) Subject to subsection (d), a security interest does not attach
2649+13 under a term constituting an after-acquired property clause to:
2650+14 (1) consumer goods, other than an accession when given as
2651+15 additional security, unless the debtor acquires rights in them
2652+16 within ten (10) days after the secured party gives value; or
2653+17 (2) a commercial tort claim.
2654+18 (c) A security agreement may provide that collateral secures, or that
2655+19 accounts, chattel paper, payment intangibles, or promissory notes are
2656+20 sold in connection with, future advances or other value, whether or not
2657+21 the advances or value are given pursuant to commitment.
2658+22 (d) Subsection (b) does not prevent a security interest from
2659+23 attaching:
2660+24 (1) to consumer goods as proceeds under section 315(a) of this
2661+25 chapter or commingled goods under section 336(c) of this
2662+26 chapter;
2663+27 (2) to a commercial tort claim as proceeds under section
2664+28 315(a) of this chapter; or
2665+29 (3) under an after-acquired property clause to property that
2666+30 is proceeds of consumer goods or a commercial tort claim.
2667+31 SECTION 47. IC 26-1-9.1-207, AS AMENDED BY P.L.143-2007,
2668+32 SECTION 67, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2669+33 JULY 1, 2023]: Sec. 207. (a) Except as otherwise provided in
2670+34 subsection (d), a secured party shall use reasonable care in the custody
2671+35 and preservation of collateral in the secured party's possession. In the
2672+36 case of chattel paper or an instrument, reasonable care includes taking
2673+37 necessary steps to preserve rights against prior parties unless otherwise
2674+38 agreed.
2675+39 (b) Except as otherwise provided in subsection (d), if a secured
2676+40 party has possession of collateral:
2677+41 (1) reasonable expenses, including the cost of insurance and
2678+42 payment of taxes or other charges, incurred in the custody,
2679+ES 468—LS 7443/DI 101 62
2680+1 preservation, use, or operation of the collateral are chargeable to
2681+2 the debtor and are secured by the collateral;
2682+3 (2) the risk of accidental loss or damage is on the debtor to the
2683+4 extent of a deficiency in any effective insurance coverage;
2684+5 (3) the secured party shall keep the collateral identifiable, but
2685+6 fungible collateral may be commingled; and
2686+7 (4) the secured party may use or operate the collateral:
2687+8 (A) for the purpose of preserving the collateral or its value;
2688+9 (B) as permitted by an order of a court having competent
2689+10 jurisdiction; or
2690+11 (C) except in the case of consumer goods, in the manner and
2691+12 to the extent agreed by the debtor.
2692+13 (c) Except as otherwise provided in subsection (d), a secured party
2693+14 having possession of collateral or control of collateral under
2694+15 IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105, IC 26-1-9.1-106, or
2695+16 IC 26-1-9.1-107, or IC 26-1-9.1-107.1:
2696+17 (1) may hold as additional security any proceeds, except money
2697+18 or funds, received from the collateral;
2698+19 (2) shall apply money or funds received from the collateral to
2699+20 reduce the secured obligation, unless remitted to the debtor; and
2700+21 (3) may create a security interest in the collateral.
2701+22 (d) If the secured party is a buyer of accounts, chattel paper,
2702+23 payment intangibles, or promissory notes or a consignor:
2703+24 (1) subsection (a) does not apply unless the secured party is
2704+25 entitled under an agreement:
2705+26 (A) to charge back uncollected collateral; or
2706+27 (B) otherwise to full or limited recourse against the debtor or
2707+28 a secondary obligor based on the nonpayment or other default
2708+29 of an account debtor or other obligor on the collateral; and
2709+30 (2) subsections (b) and (c) do not apply.
2710+31 SECTION 48. IC 26-1-9.1-208, AS AMENDED BY P.L.143-2007,
2711+32 SECTION 68, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2712+33 JULY 1, 2023]: Sec. 208. (a) This section applies to cases in which
2713+34 there is no outstanding secured obligation, and the secured party is not
2714+35 committed to make advances, incur obligations, or otherwise give
2715+36 value.
2716+37 (b) Within ten (10) days after receiving an authenticated a signed
2717+38 demand by the debtor:
2718+39 (1) a secured party having control of a deposit account under
2719+40 IC 26-1-9.1-104(a)(2) shall send to the bank with which the
2720+41 deposit account is maintained an authenticated statement a signed
2721+42 record that releases the bank from any further obligation to
2722+ES 468—LS 7443/DI 101 63
2723+1 comply with instructions originated by the secured party;
2724+2 (2) a secured party having control of a deposit account under
2725+3 IC 26-1-9.1-104(a)(3) shall:
2726+4 (A) pay the debtor the balance on deposit in the deposit
2727+5 account; or
2728+6 (B) transfer the balance on deposit into a deposit account in
2729+7 the debtor's name;
2730+8 (3) a secured party, other than a buyer, having control under
2731+9 section 105 of this chapter of an authoritative electronic copy
2732+10 of a record evidencing chattel paper under IC 26-1-9.1-105 shall
2733+11 transfer control of the electronic copy to the debtor or a
2734+12 person designated by the debtor;
2735+13 (A) communicate the authoritative copy of the electronic
2736+14 chattel paper to the debtor or its designated custodian;
2737+15 (B) if the debtor designates a custodian that is the designated
2738+16 custodian with which the authoritative copy of the electronic
2739+17 chattel paper is maintained for the secured party, communicate
2740+18 to the custodian an authenticated record releasing the
2741+19 designated custodian from any further obligation to comply
2742+20 with instructions originated by the secured party and
2743+21 instructing the custodian to comply with instructions
2744+22 originated by the debtor; and
2745+23 (C) take appropriate action to enable the debtor or its
2746+24 designated custodian to make copies of or revisions to the
2747+25 authoritative copy that add or change an identified assignee of
2748+26 the authoritative copy without the consent of the secured party;
2749+27 (4) a secured party having control of investment property under
2750+28 IC 26-1-8.1-106(d)(2) or IC 26-1-9.1-106(b) shall send to the
2751+29 securities intermediary or commodity intermediary with which the
2752+30 security entitlement or commodity contract is maintained an
2753+31 authenticated a signed record that releases the securities
2754+32 intermediary or commodity intermediary from any further
2755+33 obligation to comply with entitlement orders or directions
2756+34 originated by the secured party;
2757+35 (5) a secured party having control of a letter-of-credit right under
2758+36 IC 26-1-9.1-107 shall send to each person having an unfulfilled
2759+37 obligation to pay or deliver proceeds of the letter of credit to the
2760+38 secured party an authenticated a signed release from any further
2761+39 obligation to pay or deliver proceeds of the letter of credit to the
2762+40 secured party; and
2763+41 (6) a secured party having control under IC 26-1-7-106 of an
2764+42 authoritative electronic copy of an electronic document of title
2765+ES 468—LS 7443/DI 101 64
2766+1 shall transfer control of the electronic copy to the debtor or a
2767+2 person designated by the debtor; and
2768+3 (A) give control of the electronic document to the debtor or its
2769+4 designated custodian;
2770+5 (B) if the debtor designates a custodian that is the designated
2771+6 custodian with which the authoritative copy of the electronic
2772+7 document is maintained for the secured party, communicate to
2773+8 the custodian an authenticated record releasing the designated
2774+9 custodian from any further obligation to comply with
2775+10 instructions originated by the secured party and instructing the
2776+11 custodian to comply with instructions originated by the debtor;
2777+12 and
2778+13 (C) take appropriate action to enable the debtor or its
2779+14 designated custodian to make copies of or revisions to the
2780+15 authoritative copy that add or change an identified assignee of
2781+16 the authoritative copy without the consent of the secured party.
2782+17 (7) a secured party having control under IC 26-1-12-105 of a
2783+18 controllable electronic record, other than a buyer of a
2784+19 controllable account or controllable payment intangible
2785+20 evidenced by the controllable electronic record, shall transfer
2786+21 control of the controllable electronic record to the debtor or
2787+22 a person designated by the debtor.
2788+23 SECTION 49. IC 26-1-9.1-209 IS AMENDED TO READ AS
2789+24 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 209. (a) Except as
2790+25 otherwise provided in subsection (c), this section applies if:
2791+26 (1) there is no outstanding secured obligation; and
2792+27 (2) the secured party is not committed to make advances, incur
2793+28 obligations, or otherwise give value.
2794+29 (b) Within ten (10) days after receiving an authenticated a signed
2795+30 demand by the debtor, a secured party shall send to an account debtor
2796+31 that has received notification under IC 26-1-9.1-406(a) or
2797+32 IC 26-1-12-106(b) of an assignment to the secured party as assignee
2798+33 under IC 26-1-9.1-406(a) an authenticated a signed record that releases
2799+34 the account debtor from any further obligation to the secured party.
2800+35 (c) This section does not apply to an assignment constituting the
2801+36 sale of an account, chattel paper, or payment intangible.
2802+37 SECTION 50. IC 26-1-9.1-210 IS AMENDED TO READ AS
2803+38 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 210. (a) In this section
2804+39 the following definitions apply:
2805+40 (1) "Request" means a record of a type described in subdivision
2806+41 (2), (3), or (4).
2807+42 (2) "Request for an accounting" means a record authenticated
2808+ES 468—LS 7443/DI 101 65
2809+1 signed by a debtor requesting that the recipient provide an
2810+2 accounting of the unpaid obligations secured by collateral and
2811+3 reasonably identifying the transaction or relationship that is the
2812+4 subject of the request.
2813+5 (3) "Request regarding a list of collateral" means a record
2814+6 authenticated signed by a debtor requesting that the recipient
2815+7 approve or correct a list of what the debtor believes to be the
2816+8 collateral securing an obligation and reasonably identifying the
2817+9 transaction or relationship that is the subject of the request.
2818+10 (4) "Request regarding a statement of account" means a record
2819+11 authenticated signed by a debtor requesting that the recipient
2820+12 approve or correct a statement indicating what the debtor believes
2821+13 to be the aggregate amount of unpaid obligations secured by
2822+14 collateral as of a specified date and reasonably identifying the
2823+15 transaction or relationship that is the subject of the request.
2824+16 (b) Subject to subsections (c), (d), (e), and (f), a secured party, other
2825+17 than a buyer of accounts, chattel paper, payment intangibles, or
2826+18 promissory notes or a consignor, shall comply with a request within
2827+19 fourteen (14) days after receipt:
2828+20 (1) in the case of a request for an accounting, by authenticating
2829+21 signing and sending to the debtor an accounting; and
2830+22 (2) in the case of a request regarding a list of collateral or a
2831+23 request regarding a statement of account, by authenticating
2832+24 signing and sending to the debtor an approval or correction.
2833+25 (c) A secured party that claims a security interest in all of a
2834+26 particular type of collateral owned by the debtor may comply with a
2835+27 request regarding a list of collateral by sending to the debtor an
2836+28 authenticated a signed record, including a statement to that effect
2837+29 within fourteen (14) days after receipt.
2838+30 (d) A person that receives a request regarding a list of collateral,
2839+31 claims no interest in the collateral when it receives the request, and
2840+32 claimed an interest in the collateral at an earlier time shall comply with
2841+33 the request within fourteen (14) days after receipt by sending to the
2842+34 debtor an authenticated a signed record:
2843+35 (1) disclaiming any interest in the collateral; and
2844+36 (2) if known to the recipient, providing the name and mailing
2845+37 address of any assignee of or successor to the recipient's interest
2846+38 in the collateral.
2847+39 (e) A person that receives a request for an accounting or a request
2848+40 regarding a statement of account, claims no interest in the obligations
2849+41 when the person receives the request, and claimed an interest in the
2850+42 obligations at an earlier time shall comply with the request within
2851+ES 468—LS 7443/DI 101 66
2852+1 fourteen (14) days after receipt by sending to the debtor an
2853+2 authenticated a signed record:
2854+3 (1) disclaiming any interest in the obligations; and
2855+4 (2) if known to the recipient, providing the name and mailing
2856+5 address of any assignee of or successor to the recipient's interest
2857+6 in the obligations.
2858+7 (f) A debtor is entitled without charge to one (1) response to a
2859+8 request under this section during any six (6) month period. The secured
2860+9 party may require payment of a charge not exceeding twenty-five
2861+10 dollars ($25) for each additional response.
2862+11 SECTION 51. IC 26-1-9.1-301, AS AMENDED BY P.L.143-2007,
2863+12 SECTION 69, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2864+13 JULY 1, 2023]: Sec. 301. Except as otherwise provided in
2865+14 IC 26-1-9.1-303 through IC 26-1-9.1-306, IC 26-1-9.1-306.2, the
2866+15 following rules determine the law governing perfection, the effect of
2867+16 perfection or nonperfection, and the priority of a security interest in
2868+17 collateral:
2869+18 (1) Except as otherwise provided in this section, while a debtor is
2870+19 located in a jurisdiction, the local law of that jurisdiction governs
2871+20 perfection, the effect of perfection or nonperfection, and the
2872+21 priority of a security interest in collateral.
2873+22 (2) While collateral is located in a jurisdiction, the local law of
2874+23 that jurisdiction governs perfection, the effect of perfection or
2875+24 nonperfection, and the priority of a possessory security interest in
2876+25 that collateral.
2877+26 (3) Except as otherwise provided in subdivision (4), while
2878+27 tangible negotiable tangible documents, goods, instruments, or
2879+28 money or tangible chattel paper is located in a jurisdiction, the
2880+29 local law of that jurisdiction governs:
2881+30 (A) perfection of a security interest in the goods by filing a
2882+31 fixture filing;
2883+32 (B) perfection of a security interest in timber to be cut; and
2884+33 (C) the effect of perfection or nonperfection and the priority of
2885+34 a nonpossessory security interest in the collateral.
2886+35 (4) The local law of the jurisdiction in which the wellhead or
2887+36 minehead is located governs perfection, the effect of perfection or
2888+37 nonperfection, and the priority of a security interest in
2889+38 as-extracted collateral.
2890+39 SECTION 52. IC 26-1-9.1-304 IS AMENDED TO READ AS
2891+40 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 304. (a) The local law
2892+41 of a bank's jurisdiction governs perfection, the effect of perfection or
2893+42 nonperfection, and the priority of a security interest in a deposit
2894+ES 468—LS 7443/DI 101 67
2895+1 account maintained with that bank even if the transaction does not
2896+2 bear any relation to the bank's jurisdiction.
2897+3 (b) The following rules determine a bank's jurisdiction for purposes
2898+4 of IC 26-1-9.1-301 through IC 26-1-9.1-342:
2899+5 (1) If an agreement between the bank and the debtor governing
2900+6 the deposit account expressly provides that a particular
2901+7 jurisdiction is the bank's jurisdiction for purposes of IC 26-1, that
2902+8 jurisdiction is the bank's jurisdiction.
2903+9 (2) If subdivision (1) does not apply and an agreement between
2904+10 the bank and its customer governing the deposit account expressly
2905+11 provides that the agreement is governed by the law of a particular
2906+12 jurisdiction, that jurisdiction is the bank's jurisdiction.
2907+13 (3) If neither subdivision (1) nor subdivision (2) applies, and an
2908+14 agreement between the bank and its customer governing the
2909+15 deposit account expressly provides that the deposit account is
2910+16 maintained at an office in a particular jurisdiction, that
2911+17 jurisdiction is the bank's jurisdiction.
2912+18 (4) If none of the preceding subdivisions apply, the bank's
2913+19 jurisdiction is the jurisdiction in which the office identified in an
2914+20 account statement as the office serving the customer's account is
2915+21 located.
2916+22 (5) If none of the preceding subdivisions apply, the bank's
2917+23 jurisdiction is the jurisdiction in which the chief executive office
2918+24 of the bank is located.
2919+25 SECTION 53. IC 26-1-9.1-305 IS AMENDED TO READ AS
2920+26 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 305. (a) Except as
2921+27 otherwise provided in subsection (c), the following rules apply:
2922+28 (1) While a security certificate is located in a jurisdiction, the
2923+29 local law of that jurisdiction governs perfection, the effect of
2924+30 perfection or nonperfection, and the priority of a security interest
2925+31 in the certificated security represented thereby.
2926+32 (2) The local law of the issuer's jurisdiction as specified in
2927+33 IC 26-1-8.1-110(d) governs perfection, the effect of perfection or
2928+34 nonperfection, and the priority of a security interest in an
2929+35 uncertificated security.
2930+36 (3) The local law of the securities intermediary's jurisdiction as
2931+37 specified in IC 26-1-8.1-110(e) governs perfection, the effect of
2932+38 perfection or nonperfection, and the priority of a security interest
2933+39 in a security entitlement or securities account.
2934+40 (4) The local law of the commodity intermediary's jurisdiction
2935+41 governs perfection, the effect of perfection or nonperfection, and
2936+42 the priority of a security interest in a commodity contract or
2937+ES 468—LS 7443/DI 101 68
2938+1 commodity account.
2939+2 (5) Subdivisions (2) through (4) apply even if the transaction
2940+3 does not bear any relation to the jurisdiction.
2941+4 (b) The following rules determine a commodity intermediary's
2942+5 jurisdiction for purposes of IC 26-1-9.1-301 through IC 26-1-9.1-342:
2943+6 (1) If an agreement between the commodity intermediary and
2944+7 commodity customer governing the commodity account expressly
2945+8 provides that a particular jurisdiction is the commodity
2946+9 intermediary's jurisdiction for purposes of IC 26-1, that
2947+10 jurisdiction is the commodity intermediary's jurisdiction.
2948+11 (2) If subdivision (1) does not apply, and an agreement between
2949+12 the commodity intermediary and commodity customer governing
2950+13 the commodity account expressly provides that the agreement is
2951+14 governed by the law of a particular jurisdiction, that jurisdiction
2952+15 is the commodity intermediary's jurisdiction.
2953+16 (3) If neither subdivision (1) nor subdivision (2) applies, and an
2954+17 agreement between the commodity intermediary and commodity
2955+18 customer governing the commodity account expressly provides
2956+19 that the commodity account is maintained at an office in a
2957+20 particular jurisdiction, that jurisdiction is the commodity
2958+21 intermediary's jurisdiction.
2959+22 (4) If none of the preceding subdivisions apply, the commodity
2960+23 intermediary's jurisdiction is the jurisdiction in which the office
2961+24 identified in an account statement as the office serving the
2962+25 commodity customer's account is located.
2963+26 (5) If none of the preceding subdivisions apply, the commodity
2964+27 intermediary's jurisdiction is the jurisdiction in which the chief
2965+28 executive office of the commodity intermediary is located.
2966+29 (c) The local law of the jurisdiction in which the debtor is located
2967+30 governs:
2968+31 (1) perfection of a security interest in investment property by
2969+32 filing;
2970+33 (2) automatic perfection of a security interest in investment
2971+34 property created by a broker or securities intermediary; and
2972+35 (3) automatic perfection of a security interest in a commodity
2973+36 contract or commodity account created by a commodity
2974+37 intermediary.
2975+38 SECTION 54. IC 26-1-9.1-306.1 IS ADDED TO THE INDIANA
2976+39 CODE AS A NEW SECTION TO READ AS FOLLOWS
2977+40 [EFFECTIVE JULY 1, 2023]: Sec. 306.1. (a) Except as provided in
2978+41 subsection (d), if chattel paper is evidenced only by an
2979+42 authoritative electronic copy of the chattel paper or is evidenced by
2980+ES 468—LS 7443/DI 101 69
2981+1 an authoritative electronic copy and an authoritative tangible copy,
2982+2 the local law of the chattel paper's jurisdiction governs perfection,
2983+3 the effect of perfection or nonperfection, and the priority of a
2984+4 security interest in the chattel paper, even if the transaction does
2985+5 not bear any relation to the chattel paper's jurisdiction.
2986+6 (b) The following rules govern the chattel paper's jurisdiction
2987+7 under this section:
2988+8 (1) If the authoritative electronic copy of the record
2989+9 evidencing chattel paper, or a record that is attached to or
2990+10 logically associated with the electronic copy and that is readily
2991+11 available for review, expressly provides that a particular
2992+12 jurisdiction is the chattel paper's jurisdiction for purposes of
2993+13 this section, this chapter, or IC 26-1, that jurisdiction is the
2994+14 chattel paper's jurisdiction.
2995+15 (2) If subdivision (1) does not apply, and the rules of the
2996+16 system in which the authoritative electronic copy is recorded
2997+17 are readily available for review and expressly provide that a
2998+18 particular jurisdiction is the chattel paper's jurisdiction for
2999+19 purposes of this section, this chapter, or IC 26-1, that
3000+20 jurisdiction is the chattel paper's jurisdiction.
3001+21 (3) If subdivisions (1) and (2) do not apply, and the
3002+22 authoritative electronic copy, or a record that is attached to
3003+23 or logically associated with the electronic copy and that is
3004+24 readily available for review, expressly provides that the
3005+25 chattel paper is governed by the law of a particular
3006+26 jurisdiction, that jurisdiction is the chattel paper's
3007+27 jurisdiction.
3008+28 (4) If subdivisions (1) through (3) do not apply, and the rules
3009+29 of the system in which the authoritative electronic copy is
3010+30 recorded are readily available for review and expressly
3011+31 provide that the chattel paper or the system is governed by
3012+32 the law of a particular jurisdiction, that jurisdiction is the
3013+33 chattel paper's jurisdiction.
3014+34 (5) If subdivisions (1) through (4) do not apply, the chattel
3015+35 paper's jurisdiction is the jurisdiction in which the debtor is
3016+36 located.
3017+37 (c) If an authoritative tangible copy of a record evidences
3018+38 chattel paper and the chattel paper is not evidenced by an
3019+39 authoritative electronic copy, while the authoritative tangible copy
3020+40 of the record evidencing the chattel paper is located in a
3021+41 jurisdiction, the local law of that jurisdiction governs:
3022+42 (1) perfection of a security interest in the chattel paper by
3023+ES 468—LS 7443/DI 101 70
3024+1 possession under section 314.1 of this chapter; and
3025+2 (2) the effect of perfection or nonperfection and the priority
3026+3 of a security interest in the chattel paper.
3027+4 (d) The local law of the jurisdiction in which the debtor is
3028+5 located governs perfection of a security interest in chattel paper by
3029+6 filing.
3030+7 SECTION 55. IC 26-1-9.1-306.2 IS ADDED TO THE INDIANA
3031+8 CODE AS A NEW SECTION TO READ AS FOLLOWS
3032+9 [EFFECTIVE JULY 1, 2023]: Sec. 306.2. (a) Except as provided in
3033+10 subsection (b), the local law of the controllable electronic record's
3034+11 jurisdiction under IC 26-1-12-107(c) and IC 26-1-12-107(d)
3035+12 governs perfection, the effect of perfection or nonperfection, and
3036+13 the priority of a security interest in a controllable electronic record
3037+14 and a security interest in a controllable account or controllable
3038+15 payment intangible evidenced by the controllable electronic record.
3039+16 (b) The local law of the jurisdiction in which the debtor is
3040+17 located governs:
3041+18 (1) perfection of a security interest in a controllable account,
3042+19 controllable electronic record, or controllable payment
3043+20 intangible by filing; and
3044+21 (2) automatic perfection of a security interest in a controllable
3045+22 payment intangible created by a sale of the controllable
3046+23 payment intangible.
3047+24 SECTION 56. IC 26-1-9.1-310, AS AMENDED BY P.L.110-2022,
3048+25 SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3049+26 JULY 1, 2023]: Sec. 310. (a) Except as otherwise provided in
3050+27 subsection (b) and IC 26-1-9.1-312(b), a financing statement must be
3051+28 filed to perfect all security interests and agricultural liens.
3052+29 (b) The filing of a financing statement is not necessary to perfect a
3053+30 security interest:
3054+31 (1) that is perfected under IC 26-1-9.1-308(d),
3055+32 IC 26-1-9.1-308(e), IC 26-1-9.1-308(f), or IC 26-1-9.1-308(g);
3056+33 (2) that is perfected under IC 26-1-9.1-309 when it attaches;
3057+34 (3) in property subject to a statute, regulation, or treaty described
3058+35 in IC 26-1-9.1-311(a);
3059+36 (4) in goods in possession of a bailee that are perfected under
3060+37 IC 26-1-9.1-312(d)(1) or IC 26-1-9.1-312(d)(2);
3061+38 (5) in certificated securities, documents, goods, or instruments
3062+39 which is perfected without filing, control, or possession under
3063+40 IC 26-1-9.1-312(e), IC 26-1-9.1-312(f), or IC 26-1-9.1-312(g);
3064+41 (6) in collateral in the secured party's possession under
3065+42 IC 26-1-9.1-313;
3066+ES 468—LS 7443/DI 101 71
3067+1 (7) in a certificated security which is perfected by delivery of the
3068+2 security certificate to the secured party under IC 26-1-9.1-313;
3069+3 (8) in:
3070+4 (A) controllable accounts, controllable electronic records,
3071+5 controllable payment intangibles, deposit accounts, electronic
3072+6 chattel paper, electronic documents, investment property, or
3073+7 letter-of-credit rights that are perfected by control under
3074+8 IC 26-1-9.1-314; or
3075+9 (B) chattel paper which is perfected by possession under
3076+10 section 314.1 of this chapter;
3077+11 (9) in proceeds which is perfected under IC 26-1-9.1-315; or
3078+12 (10) that is perfected under IC 26-1-9.1-316.
3079+13 (c) If a secured party assigns a perfected security interest or
3080+14 agricultural lien, a filing under IC 26-1-9.1 is not required to continue
3081+15 the perfected status of the security interest against creditors of and
3082+16 transferees from the original debtor.
3083+17 SECTION 57. IC 26-1-9.1-312, AS AMENDED BY P.L.110-2022,
3084+18 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3085+19 JULY 1, 2023]: Sec. 312. (a) A security interest in chattel paper,
3086+20 controllable accounts, controllable electronic records, controllable
3087+21 payment intangibles, negotiable documents, instruments, or investment
3088+22 property, or negotiable documents may be perfected by filing.
3089+23 (b) Except as otherwise provided in IC 26-1-9.1-315(c) and
3090+24 IC 26-1-9.1-315(d), for proceeds:
3091+25 (1) a security interest in a deposit account may be perfected only
3092+26 by control under IC 26-1-9.1-314;
3093+27 (2) and except as otherwise provided in IC 26-1-9.1-308(d), a
3094+28 security interest in a letter-of-credit right may be perfected only
3095+29 by control under IC 26-1-9.1-314; and
3096+30 (3) a security interest in money may be perfected only by the
3097+31 secured party's taking possession under IC 26-1-9.1-313.
3098+32 (c) While goods are in the possession of a bailee that has issued a
3099+33 negotiable document covering the goods:
3100+34 (1) a security interest in the goods may be perfected by perfecting
3101+35 a security interest in the document; and
3102+36 (2) a security interest perfected in the document has priority over
3103+37 any security interest that becomes perfected in the goods by
3104+38 another method during that time.
3105+39 (d) While goods are in the possession of a bailee that has issued a
3106+40 nonnegotiable document covering the goods, a security interest in the
3107+41 goods may be perfected by:
3108+42 (1) issuance of a document in the name of the secured party;
3109+ES 468—LS 7443/DI 101 72
3110+1 (2) the bailee's receipt of notification of the secured party's
3111+2 interest; or
3112+3 (3) filing as to the goods.
3113+4 (e) A security interest in certificated securities, negotiable
3114+5 documents, or instruments is perfected without filing or the taking of
3115+6 possession or control for a period of twenty (20) days from the time it
3116+7 attaches to the extent that it arises for new value given under an
3117+8 authenticated a signed security agreement.
3118+9 (f) A perfected security interest in a negotiable document or goods
3119+10 in possession of a bailee, other than one that has issued a negotiable
3120+11 document for the goods, remains perfected for twenty (20) days without
3121+12 filing if the secured party makes available to the debtor the goods or
3122+13 documents representing the goods for the purpose of:
3123+14 (1) ultimate sale or exchange; or
3124+15 (2) loading, unloading, storing, shipping, transshipping,
3125+16 manufacturing, processing, or otherwise dealing with them in a
3126+17 manner preliminary to their sale or exchange.
3127+18 (g) A perfected security interest in a certificated security or
3128+19 instrument remains perfected for twenty (20) days without filing if the
3129+20 secured party delivers the security certificate or instrument to the
3130+21 debtor for the purpose of:
3131+22 (1) ultimate sale or exchange; or
3132+23 (2) presentation, collection, enforcement, renewal, or registration
3133+24 of transfer.
3134+25 (h) After the twenty (20) day period specified in subsection (e), (f),
3135+26 or (g) expires, perfection depends upon compliance with IC 26-1-9.1.
3136+27 SECTION 58. IC 26-1-9.1-313, AS AMENDED BY P.L.143-2007,
3137+28 SECTION 72, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3138+29 JULY 1, 2023]: Sec. 313. (a) Except as otherwise provided in
3139+30 subsection (b), a secured party may perfect a security interest in
3140+31 tangible negotiable documents, goods, instruments, negotiable
3141+32 tangible documents, or money, or tangible chattel paper by taking
3142+33 possession of the collateral. A secured party may perfect a security
3143+34 interest in certificated securities by taking delivery of the certificated
3144+35 securities under IC 26-1-8.1-301.
3145+36 (b) With respect to goods covered by a certificate of title issued by
3146+37 this state, a secured party may perfect a security interest in the goods
3147+38 by taking possession of the goods only in the circumstances described
3148+39 in IC 26-1-9.1-316(e).
3149+40 (c) With respect to collateral other than certificated securities and
3150+41 goods covered by a document, a secured party takes possession of
3151+42 collateral in the possession of a person other than the debtor, the
3152+ES 468—LS 7443/DI 101 73
3153+1 secured party, or a lessee of the collateral from the debtor in the
3154+2 ordinary course of the debtor's business, when:
3155+3 (1) the person in possession authenticates signs a record
3156+4 acknowledging that it holds possession of the collateral for the
3157+5 secured party's benefit; or
3158+6 (2) the person takes possession of the collateral after having
3159+7 authenticated signed a record acknowledging that it will hold
3160+8 possession of the collateral for the secured party's benefit.
3161+9 (d) If perfection of a security interest depends upon possession of
3162+10 the collateral by a secured party, perfection occurs not earlier than the
3163+11 time the secured party takes possession and continues only while the
3164+12 secured party retains possession.
3165+13 (e) A security interest in a certificated security in registered form is
3166+14 perfected by delivery when delivery of the certificated security occurs
3167+15 under IC 26-1-8.1-301 and remains perfected by delivery until the
3168+16 debtor obtains possession of the security certificate.
3169+17 (f) A person in possession of collateral is not required to
3170+18 acknowledge that it holds possession for a secured party's benefit.
3171+19 (g) If a person acknowledges that it holds possession for the secured
3172+20 party's benefit:
3173+21 (1) the acknowledgment is effective under subsection (c) or
3174+22 IC 26-1-8.1-301(a), even if the acknowledgment violates the
3175+23 rights of a debtor; and
3176+24 (2) unless the person otherwise agrees or a law other than
3177+25 IC 26-1-9.1 otherwise provides, the person does not owe any duty
3178+26 to the secured party and is not required to confirm the
3179+27 acknowledgment to another person.
3180+28 (h) A secured party having possession of collateral does not
3181+29 relinquish possession by delivering the collateral to a person other than
3182+30 the debtor or a lessee of the collateral from the debtor in the ordinary
3183+31 course of the debtor's business if the person was instructed before the
3184+32 delivery or is instructed contemporaneously with the delivery:
3185+33 (1) to hold possession of the collateral for the secured party's
3186+34 benefit; or
3187+35 (2) to redeliver the collateral to the secured party.
3188+36 (i) A secured party does not relinquish possession, even if a delivery
3189+37 under subsection (h) violates the rights of a debtor. A person to which
3190+38 collateral is delivered under subsection (h) does not owe any duty to
3191+39 the secured party and is not required to confirm the delivery to another
3192+40 person unless the person otherwise agrees or law other than IC 26-1-9.1
3193+41 otherwise provides.
3194+42 SECTION 59. IC 26-1-9.1-314, AS AMENDED BY P.L.110-2022,
3195+ES 468—LS 7443/DI 101 74
3196+1 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3197+2 JULY 1, 2023]: Sec. 314. (a) A security interest in controllable
3198+3 accounts, controllable electronic records, controllable payment
3199+4 intangibles, investment property, deposit accounts, electronic
3200+5 documents, investment property, or letter-of-credit rights electronic
3201+6 chattel paper, or electronic documents may be perfected by control of
3202+7 the collateral under IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
3203+8 IC 26-1-9.1-106, IC 26-1-9.1-107, or IC 26-1-9.1-107.1, as applicable.
3204+9 (b) A security interest in controllable accounts, controllable
3205+10 electronic records, controllable payment intangibles, deposit accounts,
3206+11 electronic chattel paper, documents, or letter-of-credit rights or
3207+12 electronic documents is perfected by control under IC 26-1-7-106,
3208+13 IC 26-1-9.1-104, IC 26-1-9.1-105, IC 26-1-9.1-107, or
3209+14 IC 26-1-9.1-107.1, as applicable, when not earlier than the time the
3210+15 secured party obtains control and remains perfected by control only
3211+16 while the secured party retains control.
3212+17 (c) A security interest in investment property is perfected by control
3213+18 under IC 26-1-9.1-106 from not earlier than the time the secured party
3214+19 obtains control and remains perfected by control until:
3215+20 (1) the secured party does not have control; and
3216+21 (2) one of the following occurs:
3217+22 (A) if the collateral is a certificated security, the debtor has or
3218+23 acquires possession of the security certificate;
3219+24 (B) if the collateral is an uncertificated security, the issuer has
3220+25 registered or registers the debtor as the registered owner; or
3221+26 (C) if the collateral is a security entitlement, the debtor is or
3222+27 becomes the entitlement holder.
3223+28 SECTION 60. IC 26-1-9.1-314.1 IS ADDED TO THE INDIANA
3224+29 CODE AS A NEW SECTION TO READ AS FOLLOWS
3225+30 [EFFECTIVE JULY 1, 2023]: Sec. 314.1. (a) A secured party may
3226+31 perfect a security interest in chattel paper by taking possession of
3227+32 each authoritative tangible copy of the record evidencing the
3228+33 chattel paper and obtaining control of each authoritative electronic
3229+34 copy of the electronic record evidencing the chattel paper.
3230+35 (b) A security interest is perfected under subsection (a) not
3231+36 earlier than the time the secured party takes possession and
3232+37 obtains control, and remains perfected under subsection (a) only
3233+38 while the secured party retains possession and control.
3234+39 (c) Section 313(c) of this chapter and section 313(f) through
3235+40 313(i) of this chapter apply to perfection by possession by an
3236+41 authoritative tangible copy of a record evidencing chattel paper.
3237+42 SECTION 61. IC 26-1-9.1-316, AS AMENDED BY P.L.54-2011,
3238+ES 468—LS 7443/DI 101 75
3239+1 SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3240+2 JULY 1, 2023]: Sec. 316. (a) A security interest perfected pursuant to
3241+3 the law of the jurisdiction designated in IC 26-1-9.1-301(1), or
3242+4 IC 26-1-9.1-305(c), IC 26-1-9.1-306.1(d), or IC 26-1-9.1-306.2(b)
3243+5 remains perfected until the earliest of:
3244+6 (1) the time perfection would have ceased under the law of that
3245+7 jurisdiction;
3246+8 (2) the expiration of four (4) months after a change of the debtor's
3247+9 location to another jurisdiction; or
3248+10 (3) the expiration of one (1) year after a transfer of collateral to a
3249+11 person that thereby becomes a debtor and is located in another
3250+12 jurisdiction.
3251+13 (b) If a security interest described in subsection (a) becomes
3252+14 perfected under the law of the other jurisdiction before the earliest time
3253+15 or event described in that subsection, it remains perfected thereafter.
3254+16 If the security interest does not become perfected under the law of the
3255+17 other jurisdiction before the earliest time or event, it becomes
3256+18 unperfected and is deemed never to have been perfected as against a
3257+19 purchaser of the collateral for value.
3258+20 (c) A possessory security interest in collateral, other than goods
3259+21 covered by a certificate of title and as-extracted collateral consisting of
3260+22 goods, remains continuously perfected if:
3261+23 (1) the collateral is located in one (1) jurisdiction and subject to
3262+24 a security interest perfected under the law of that jurisdiction;
3263+25 (2) thereafter the collateral is brought into another jurisdiction;
3264+26 and
3265+27 (3) upon entry into the other jurisdiction, the security interest is
3266+28 perfected under the law of the other jurisdiction.
3267+29 (d) Except as otherwise provided in subsection (e), a security
3268+30 interest in goods covered by a certificate of title which is perfected by
3269+31 any method under the law of another jurisdiction when the goods
3270+32 become covered by a certificate of title from this state remains
3271+33 perfected until the security interest would have become unperfected
3272+34 under the law of the other jurisdiction had the goods not become so
3273+35 covered.
3274+36 (e) A security interest described in subsection (d) becomes
3275+37 unperfected as against a purchaser of the goods for value and is deemed
3276+38 never to have been perfected as against a purchaser of the goods for
3277+39 value if the applicable requirements for perfection under
3278+40 IC 26-1-9.1-311(b) or IC 26-1-9.1-313 are not satisfied before the
3279+41 earlier of:
3280+42 (1) the time the security interest would have become unperfected
3281+ES 468—LS 7443/DI 101 76
3282+1 under the law of the other jurisdiction had the goods not become
3283+2 covered by a certificate of title from this state; or
3284+3 (2) the expiration of four (4) months after the goods had become
3285+4 so covered.
3286+5 (f) A security interest in chattel paper, controllable accounts,
3287+6 controllable electronic records, controllable payment intangibles,
3288+7 deposit accounts, letter-of-credit rights, or investment property which
3289+8 is perfected under the law of the chattel paper's jurisdiction, the
3290+9 controllable electronic record's jurisdiction, the bank's jurisdiction,
3291+10 the issuer's jurisdiction, a nominated person's jurisdiction, the securities
3292+11 intermediary's jurisdiction, or the commodity intermediary's
3293+12 jurisdiction, as applicable, remains perfected until the earlier of:
3294+13 (1) the time the security interest would have become unperfected
3295+14 under the law of that jurisdiction; or
3296+15 (2) the expiration of four (4) months after a change of the
3297+16 applicable jurisdiction to another jurisdiction.
3298+17 (g) If a security interest described in subsection (f) becomes
3299+18 perfected under the law of the other jurisdiction before the earlier of the
3300+19 time or the end of the period described in that subsection, it remains
3301+20 perfected thereafter. If the security interest does not become perfected
3302+21 under the law of the other jurisdiction before the earlier of that time or
3303+22 the end of that period, it becomes unperfected and is deemed never to
3304+23 have been perfected as against a purchaser of the collateral for value.
3305+24 (h) The following rules apply to collateral to which a security
3306+25 interest attaches within four (4) months after the debtor changes its
3307+26 location to another jurisdiction:
3308+27 (1) A financing statement filed before the change under the law
3309+28 of the jurisdiction designated in IC 26-1-9.1-301(1) or
3310+29 IC 26-1-9.1-305(c) is effective to perfect a security interest in the
3311+30 collateral if the financing statement would have been effective to
3312+31 perfect a security interest in the collateral had the debtor not
3313+32 changed its location.
3314+33 (2) If a security interest perfected by a financing statement that is
3315+34 effective under subdivision (1) becomes perfected under the law
3316+35 of the other jurisdiction before the earlier of the time the
3317+36 financing statement would have become ineffective under the law
3318+37 of the jurisdiction designated in IC 26-1-9.1-301(1) or
3319+38 IC 26-1-9.1-305(c) or the expiration of the four (4) month period,
3320+39 it remains perfected thereafter. If the security interest does not
3321+40 become perfected under the law of the other jurisdiction before
3322+41 the earlier time or event, it becomes unperfected and is deemed
3323+42 never to have been perfected as against a purchaser of the
3324+ES 468—LS 7443/DI 101 77
3325+1 collateral for value.
3326+2 (i) If a financing statement naming an original debtor is filed under
3327+3 the law of the jurisdiction designated in IC 26-1-9.1-301(1) or
3328+4 IC 26-1-9.1-305(c) and the new debtor is located in another
3329+5 jurisdiction, the following rules apply:
3330+6 (1) The financing statement is effective to perfect a security
3331+7 interest in collateral acquired by the new debtor before, and
3332+8 within four (4) months after, the new debtor becomes bound
3333+9 under IC 26-1-9.1-203(d), if the financing statement would have
3334+10 been effective to perfect a security interest in the collateral had
3335+11 the collateral been acquired by the original debtor.
3336+12 (2) A security interest perfected by the financing statement and
3337+13 which becomes perfected under the law of the other jurisdiction
3338+14 before the earlier of the time the financing statement would have
3339+15 become ineffective under the law of the jurisdiction designated in
3340+16 IC 26-1-9.1-301(1) or IC 26-1-9.1-305(c) or the expiration of the
3341+17 four (4) month period remains perfected thereafter. A security
3342+18 interest that is perfected by the financing statement but which
3343+19 does not become perfected under the law of the other jurisdiction
3344+20 before the earlier time or event becomes unperfected and is
3345+21 deemed never to have been perfected as against a purchaser of the
3346+22 collateral for value.
3347+23 SECTION 62. IC 26-1-9.1-317, AS AMENDED BY P.L.54-2011,
3348+24 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3349+25 JULY 1, 2023]: Sec. 317. (a) A security interest or agricultural lien is
3350+26 subordinate to the rights of:
3351+27 (1) a person entitled to priority under IC 26-1-9.1-322; and
3352+28 (2) except as provided in subsection (e), a person that becomes a
3353+29 lien creditor before the earlier of the time:
3354+30 (A) the security interest or agricultural lien is perfected; or
3355+31 (B) one (1) of the conditions specified in
3356+32 IC 26-1-9.1-203(b)(3) is met;
3357+33 and a financing statement covering the collateral is filed.
3358+34 (b) Except as otherwise provided in subsection (e), a buyer, other
3359+35 than a secured party, of tangible chattel paper, tangible documents,
3360+36 goods, instruments, tangible documents, or a certificated security
3361+37 takes free of a security interest or agricultural lien if the buyer gives
3362+38 value and receives delivery of the collateral without knowledge of the
3363+39 security interest or agricultural lien and before it is perfected.
3364+40 (c) Except as otherwise provided in subsection (e), a lessee of goods
3365+41 takes free of a security interest or agricultural lien if the lessee gives
3366+42 value and receives delivery of the collateral without knowledge of the
3367+ES 468—LS 7443/DI 101 78
3368+1 security interest or agricultural lien and before it is perfected.
3369+2 (d) Subject to subsections (f) through (i), a licensee of a general
3370+3 intangible or a buyer, other than a secured party, of collateral other than
3371+4 tangible chattel paper, tangible documents, goods, instruments,
3372+5 tangible documents, or a certificated security takes free of a security
3373+6 interest if the licensee or buyer gives value without knowledge of the
3374+7 security interest and before it is perfected.
3375+8 (e) Except as otherwise provided in IC 26-1-9.1-320 and
3376+9 IC 26-1-9.1-321, if a person files a financing statement with respect to
3377+10 a purchase-money security interest before or within twenty (20) days
3378+11 after the debtor receives delivery of the collateral, the security interest
3379+12 takes priority over the rights of a buyer, lessee, or lien creditor that
3380+13 arise between the time the security interest attaches and the time of
3381+14 filing.
3382+15 (f) A buyer, other than a secured party, of chattel paper takes
3383+16 free of a security interest if, without knowledge of the security
3384+17 interest and before it is perfected, the buyer gives value and:
3385+18 (1) receives delivery of each authoritative tangible copy of the
3386+19 record evidencing the chattel paper; and
3387+20 (2) if each authoritative electronic copy of the record
3388+21 evidencing the chattel paper can be subjected to control under
3389+22 section 105 of this chapter, obtains control of each
3390+23 authoritative electronic copy.
3391+24 (g) A buyer of an electronic document takes free of a security
3392+25 interest if, without knowledge of the security interest and before it
3393+26 is perfected, the buyer gives value and, if each authoritative
3394+27 electronic copy of the document can be subjected to control under
3395+28 IC 26-1-7-106, obtains control of each authoritative electronic
3396+29 copy.
3397+30 (h) A buyer of a controllable electronic record takes free of a
3398+31 security interest if, without knowledge of the security interest and
3399+32 before it is perfected, the buyer gives value and obtains control of
3400+33 the controllable electronic record.
3401+34 (i) A buyer, other than a secured party, of a controllable
3402+35 account or a controllable payment intangible takes free of a
3403+36 security interest if, without knowledge of the security interest and
3404+37 before it is perfected, the buyer gives value and obtains control of
3405+38 the controllable account or controllable payment intangible.
3406+39 SECTION 63. IC 26-1-9.1-323 IS AMENDED TO READ AS
3407+40 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 323. (a) Except as
3408+41 otherwise provided in subsection (c), for purposes of determining the
3409+42 priority of a perfected security interest under IC 26-1-9.1-322(a)(1),
3410+ES 468—LS 7443/DI 101 79
3411+1 perfection of the security interest dates from the time an advance is
3412+2 made to the extent that the security interest secures an advance that:
3413+3 (1) is made while the security interest is perfected only:
3414+4 (A) under IC 26-1-9.1-309 when it attaches; or
3415+5 (B) temporarily under IC 26-1-9.1-312(e), IC 26-1-9.1-312(f),
3416+6 or IC 26-1-9.1-312(g); and
3417+7 (2) is not made pursuant to a commitment entered into before or
3418+8 while the security interest is perfected by a method other than
3419+9 under IC 26-1-9.1-309, IC 26-1-9.1-312(e), IC 26-1-9.1-312(f), or
3420+10 IC 26-1-9.1-312(g).
3421+11 (b) Except as otherwise provided in subsection (c), a security
3422+12 interest is subordinate to the rights of a person that becomes a lien
3423+13 creditor to the extent that the security interest secures an advance made
3424+14 more than forty-five (45) days after the person becomes a lien creditor
3425+15 unless the advance is made:
3426+16 (1) without knowledge of the lien; or
3427+17 (2) pursuant to a commitment entered into without knowledge of
3428+18 the lien.
3429+19 (c) Subsections (a) and (b) do not apply to a security interest held by
3430+20 a secured party that is a buyer of accounts, chattel paper, payment
3431+21 intangibles, or promissory notes or a consignor.
3432+22 (d) Except as otherwise provided in subsection (e), a buyer of goods
3433+23 other than a buyer in ordinary course of business takes free of a security
3434+24 interest to the extent that it secures advances made after the earlier of:
3435+25 (1) the time the secured party acquires knowledge of the buyer's
3436+26 purchase; or
3437+27 (2) forty-five (45) days after the purchase.
3438+28 (e) Subsection (d) does not apply if the advance is made pursuant to
3439+29 a commitment entered into without knowledge of the buyer's purchase
3440+30 and before the expiration of the forty-five (45) day period.
3441+31 (f) Except as otherwise provided in subsection (g), a lessee of goods
3442+32 other than a lessee in ordinary course of business, takes the leasehold
3443+33 interest free of a security interest to the extent that it secures advances
3444+34 made after the earlier of:
3445+35 (1) the time the secured party acquires knowledge of the lease; or
3446+36 (2) forty-five (45) days after the lease contract becomes
3447+37 enforceable.
3448+38 (g) Subsection (f) does not apply if the advance is made pursuant to
3449+39 a commitment entered into without knowledge of the lease and before
3450+40 the expiration of the forty-five (45) day period.
3451+41 SECTION 64. IC 26-1-9.1-324 IS AMENDED TO READ AS
3452+42 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 324. (a) Except as
3453+ES 468—LS 7443/DI 101 80
3454+1 otherwise provided in subsection (g), a perfected purchase-money
3455+2 security interest in goods other than inventory or livestock has priority
3456+3 over a conflicting security interest in the same goods, and, except as
3457+4 otherwise provided in IC 26-1-9.1-327, a perfected security interest in
3458+5 its identifiable proceeds also has priority, if the purchase-money
3459+6 security interest is perfected when the debtor receives possession of the
3460+7 collateral or within twenty (20) days thereafter.
3461+8 (b) Subject to subsection (c) and except as otherwise provided in
3462+9 subsection (g), a perfected purchase-money security interest in
3463+10 inventory has priority over a conflicting security interest in the same
3464+11 inventory, has priority over a conflicting security interest in chattel
3465+12 paper or an instrument constituting proceeds of the inventory and in
3466+13 proceeds of the chattel paper, if so provided in IC 26-1-9.1-330, and,
3467+14 except as otherwise provided in IC 26-1-9.1-327, also has priority in
3468+15 identifiable cash proceeds of the inventory to the extent the identifiable
3469+16 cash proceeds are received on or before the delivery of the inventory to
3470+17 a buyer, if:
3471+18 (1) the purchase-money security interest is perfected when the
3472+19 debtor receives possession of the inventory;
3473+20 (2) the purchase-money secured party sends an authenticated a
3474+21 signed notification to the holder of the conflicting security
3475+22 interest;
3476+23 (3) the holder of the conflicting security interest receives the
3477+24 notification within five (5) years before the debtor receives
3478+25 possession of the inventory; and
3479+26 (4) the notification states that the person sending the notification
3480+27 has or expects to acquire a purchase-money security interest in
3481+28 inventory of the debtor and describes the inventory.
3482+29 (c) Subsection (b)(2) through (b)(4) apply only if the holder of the
3483+30 conflicting security interest had filed a financing statement covering
3484+31 the same types of inventory:
3485+32 (1) if the purchase-money security interest is perfected by filing,
3486+33 before the date of the filing; or
3487+34 (2) if the purchase-money security interest is temporarily
3488+35 perfected without filing or possession under IC 26-1-9.1-312(f),
3489+36 before the beginning of the twenty (20) day period thereunder.
3490+37 (d) Subject to subsection (e) and except as otherwise provided in
3491+38 subsection (g), a perfected purchase-money security interest in
3492+39 livestock that are farm products has priority over a conflicting security
3493+40 interest in the same livestock, and, except as otherwise provided in
3494+41 IC 26-1-9.1-327, a perfected security interest in their identifiable
3495+42 proceeds and identifiable products in their unmanufactured states also
3496+ES 468—LS 7443/DI 101 81
3497+1 has priority, if:
3498+2 (1) the purchase-money security interest is perfected when the
3499+3 debtor receives possession of the livestock;
3500+4 (2) the purchase-money secured party sends an authenticated a
3501+5 signed notification to the holder of the conflicting security
3502+6 interest;
3503+7 (3) the holder of the conflicting security interest receives the
3504+8 notification within six (6) months before the debtor receives
3505+9 possession of the livestock; and
3506+10 (4) the notification states that the person sending the notification
3507+11 has or expects to acquire a purchase-money security interest in
3508+12 livestock of the debtor and describes the livestock.
3509+13 (e) Subsection (d)(2) through (d)(4) apply only if the holder of the
3510+14 conflicting security interest had filed a financing statement covering
3511+15 the same types of livestock:
3512+16 (1) if the purchase-money security interest is perfected by filing,
3513+17 before the date of the filing; or
3514+18 (2) if the purchase-money security interest is temporarily
3515+19 perfected without filing or possession under IC 26-1-9.1-312(f),
3516+20 before the beginning of the twenty (20) day period thereunder.
3517+21 (f) Except as otherwise provided in subsection (g), a perfected
3518+22 purchase-money security interest in software has priority over a
3519+23 conflicting security interest in the same collateral, and, except as
3520+24 otherwise provided in IC 26-1-9.1-327, a perfected security interest in
3521+25 its identifiable proceeds also has priority, to the extent that the
3522+26 purchase-money security interest in the goods in which the software
3523+27 was acquired for use has priority in the goods and proceeds of the
3524+28 goods under this section.
3525+29 (g) If more than one (1) security interest qualifies for priority in the
3526+30 same collateral under subsection (a), (b), (d), or (f):
3527+31 (1) a security interest securing an obligation incurred as all or part
3528+32 of the price of the collateral has priority over a security interest
3529+33 securing an obligation incurred for value given to enable the
3530+34 debtor to acquire rights in or the use of collateral; and
3531+35 (2) in all other cases, IC 26-1-9.1-322(a) applies to the qualifying
3532+36 security interests.
3533+37 SECTION 65. IC 26-1-9.1-326.1 IS ADDED TO THE INDIANA
3534+38 CODE AS A NEW SECTION TO READ AS FOLLOWS
3535+39 [EFFECTIVE JULY 1, 2023]: Sec. 326.1. A security interest in a
3536+40 controllable account, a controllable electronic record, or a
3537+41 controllable payment intangible held by a secured party having
3538+42 control of the account, electronic record, or payment intangible has
3539+ES 468—LS 7443/DI 101 82
3540+1 priority over a conflicting security interest held by a secured party
3541+2 that does not have control.
3542+3 SECTION 66. IC 26-1-9.1-330 IS AMENDED TO READ AS
3543+4 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 330. (a) A purchaser of
3544+5 chattel paper has priority over a security interest in the chattel paper
3545+6 which is claimed merely as proceeds of inventory subject to a security
3546+7 interest if:
3547+8 (1) in good faith and in the ordinary course of the purchaser's
3548+9 business, the purchaser gives new value, and takes possession of
3549+10 each authoritative tangible copy of the record evidencing the
3550+11 chattel paper, or and obtains control under section 105 of this
3551+12 chapter of each authoritative electronic copy of the record
3552+13 evidencing the chattel paper; under IC 26-1-9.1-105; and
3553+14 (2) the chattel paper does authoritative copies of the record
3554+15 evidencing the chattel paper do not indicate that it the chattel
3555+16 paper has been assigned to an identified assignee other than the
3556+17 purchaser.
3557+18 (b) A purchaser of chattel paper has priority over a security interest
3558+19 in the chattel paper which is claimed other than merely as proceeds of
3559+20 inventory subject to a security interest if the purchaser gives new value,
3560+21 and takes possession of each authoritative tangible copy of the
3561+22 record evidencing the chattel paper, or and obtains control under
3562+23 section 105 of this chapter of each authoritative electronic copy of
3563+24 the record evidencing the chattel paper under IC 26-1-9.1-105 in good
3564+25 faith, in the ordinary course of the purchaser's business, and without
3565+26 knowledge that the purchase violates the rights of the secured party.
3566+27 (c) Except as otherwise provided in IC 26-1-9.1-327, a purchaser
3567+28 having priority in chattel paper under subsection (a) or (b) also has
3568+29 priority in proceeds of the chattel paper to the extent that:
3569+30 (1) IC 26-1-9.1-322 provides for priority in the proceeds; or
3570+31 (2) the proceeds consist of the specific goods covered by the
3571+32 chattel paper or cash proceeds of the specific goods, even if the
3572+33 purchaser's security interest in the proceeds is unperfected.
3573+34 (d) Except as otherwise provided in IC 26-1-9.1-331(a), a purchaser
3574+35 of an instrument has priority over a security interest in the instrument
3575+36 perfected by a method other than possession if the purchaser gives
3576+37 value and takes possession of the instrument in good faith and without
3577+38 knowledge that the purchase violates the rights of the secured party.
3578+39 (e) For purposes of subsections (a) and (b), the holder of a
3579+40 purchase-money security interest in inventory gives new value for
3580+41 chattel paper constituting proceeds of the inventory.
3581+42 (f) For purposes of subsections (b) and (d), if the authoritative
3582+ES 468—LS 7443/DI 101 83
3583+1 copies of the record evidencing chattel paper or an instrument
3584+2 indicates that it the chattel paper or instrument has been assigned to
3585+3 an identified secured party other than the purchaser, a purchaser of the
3586+4 chattel paper or instrument has knowledge that the purchase violates
3587+5 the rights of the secured party.
3588+6 SECTION 67. IC 26-1-9.1-331, AS AMENDED BY P.L.110-2022,
3589+7 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3590+8 JULY 1, 2023]: Sec. 331. (a) This article does not limit the rights of a
3591+9 holder in due course of a negotiable instrument, a holder to which a
3592+10 negotiable document of title has been duly negotiated, a protected
3593+11 purchaser of a security, or a qualifying purchaser (as defined in
3594+12 IC 26-1-11-106) of a controllable account, controllable electronic
3595+13 record, or controllable payment intangible. These holders or purchasers
3596+14 take priority over an earlier security interest, even if perfected, to the
3597+15 extent provided in IC 26-1-3.1, IC 26-1-7, IC 26-1-8.1, and IC 26-1-11.
3598+16 IC 26-1-12.
3599+17 (b) This article does not limit the rights of or impose liability on a
3600+18 person to the extent that the person is protected against the assertion of
3601+19 an adverse claim under IC 26-1-8.1 or IC 26-1-11. IC 26-1-12.
3602+20 (c) Filing under IC 26-1-9.1 does not constitute notice of a claim or
3603+21 defense to the holders, purchasers, or persons described in subsections
3604+22 (a) and (b).
3605+23 SECTION 68. IC 26-1-9.1-332 IS AMENDED TO READ AS
3606+24 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 332. (a) A transferee
3607+25 of money takes the money free of a security interest unless if the
3608+26 transferee acts receives possession of the money without acting in
3609+27 collusion with the debtor in violating the rights of the secured party.
3610+28 (b) A transferee of funds from a deposit account takes the funds free
3611+29 of a security interest in the deposit account unless if the transferee acts
3612+30 receives the funds without acting in collusion with the debtor in
3613+31 violating the rights of the secured party.
3614+32 SECTION 69. IC 26-1-9.1-334 IS AMENDED TO READ AS
3615+33 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 334. (a) A security
3616+34 interest under IC 26-1-9.1 may be created in goods that are fixtures or
3617+35 may continue in goods that become fixtures. A security interest does
3618+36 not exist under IC 26-1-9.1 in ordinary building materials incorporated
3619+37 into an improvement on land.
3620+38 (b) IC 26-1-9.1 does not prevent creation of an encumbrance upon
3621+39 fixtures under real property law.
3622+40 (c) In cases not governed by subsections (d) through (h), a security
3623+41 interest in fixtures is subordinate to a conflicting interest of an
3624+42 encumbrancer or owner of the related real property other than the
3625+ES 468—LS 7443/DI 101 84
3626+1 debtor.
3627+2 (d) Except as otherwise provided in subsection (h), a perfected
3628+3 security interest in fixtures has priority over a conflicting interest of an
3629+4 encumbrancer or owner of the real property if the debtor has an interest
3630+5 of record in or is in possession of the real property and:
3631+6 (1) the security interest is a purchase-money security interest;
3632+7 (2) the interest of the encumbrancer or owner arises before the
3633+8 goods become fixtures; and
3634+9 (3) the security interest is perfected by a fixture filing before the
3635+10 goods become fixtures or within twenty (20) days thereafter.
3636+11 (e) A perfected security interest in fixtures has priority over a
3637+12 conflicting interest of an encumbrancer or owner of the real property
3638+13 if:
3639+14 (1) the debtor has an interest of record in the real property or is in
3640+15 possession of the real property and the security interest:
3641+16 (A) is perfected by a fixture filing before the interest of the
3642+17 encumbrancer or owner is of record; and
3643+18 (B) has priority over any conflicting interest of a predecessor
3644+19 in title of the encumbrancer or owner;
3645+20 (2) before the goods become fixtures, the security interest is
3646+21 perfected by any method permitted by IC 26-1-9.1 and the fixtures
3647+22 are readily removable:
3648+23 (A) factory or office machines;
3649+24 (B) equipment that is not primarily used or leased for use in
3650+25 the operation of the real property; or
3651+26 (C) replacements of domestic appliances that are consumer
3652+27 goods;
3653+28 (3) the conflicting interest is a lien on the real property obtained
3654+29 by legal or equitable proceedings after the security interest was
3655+30 perfected by any method permitted by IC 26-1-9.1; or
3656+31 (4) the security interest is:
3657+32 (A) created in a manufactured home in a manufactured-home
3658+33 transaction; and
3659+34 (B) perfected pursuant to a statute described in
3660+35 IC 26-1-9.1-311(a)(2).
3661+36 (f) A security interest in fixtures, whether or not perfected, has
3662+37 priority over a conflicting interest of an encumbrancer or owner of the
3663+38 real property if:
3664+39 (1) the encumbrancer or owner has, in an authenticated a signed
3665+40 record, consented to the security interest or disclaimed an interest
3666+41 in the goods as fixtures; or
3667+42 (2) the debtor has a right to remove the goods against the
3668+ES 468—LS 7443/DI 101 85
3669+1 encumbrancer or owner.
3670+2 (g) The priority of the security interest under subsection (f)
3671+3 continues for a reasonable time if the debtor's right to remove the goods
3672+4 as against the encumbrancer or owner terminates.
3673+5 (h) A mortgage is a construction mortgage to the extent that it
3674+6 secures an obligation incurred for the construction of an improvement
3675+7 on land, including the acquisition cost of the land, if a recorded record
3676+8 of the mortgage so indicates. Except as otherwise provided in
3677+9 subsections (e) and (f), a security interest in fixtures is subordinate to
3678+10 a construction mortgage if a record of the mortgage is recorded before
3679+11 the goods become fixtures and the goods become fixtures before the
3680+12 completion of the construction. A mortgage has this priority to the
3681+13 same extent as a construction mortgage to the extent that it is given to
3682+14 refinance a construction mortgage.
3683+15 (i) A perfected security interest in crops growing on real property
3684+16 has priority over a conflicting interest of an encumbrancer or owner of
3685+17 the real property if the debtor has an interest of record in or is in
3686+18 possession of the real property.
3687+19 SECTION 70. IC 26-1-9.1-341 IS AMENDED TO READ AS
3688+20 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 341. Except as
3689+21 otherwise provided in IC 26-1-9.1-340(c), and unless the bank
3690+22 otherwise agrees in an authenticated a signed record, a bank's rights
3691+23 and duties with respect to a deposit account maintained with the bank
3692+24 are not terminated, suspended, or modified by:
3693+25 (1) the creation, attachment, or perfection of a security interest in
3694+26 the deposit account;
3695+27 (2) the bank's knowledge of the security interest; or
3696+28 (3) the bank's receipt of instructions from the secured party.
3697+29 SECTION 71. IC 26-1-9.1-404 IS AMENDED TO READ AS
3698+30 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 404. (a) Unless an
3699+31 account debtor has made an enforceable agreement not to assert
3700+32 defenses or claims, and subject to subsections (b) through (e), the rights
3701+33 of an assignee are subject to:
3702+34 (1) all terms of the agreement between the account debtor and
3703+35 assignor and any defense or claim in recoupment arising from the
3704+36 transaction that gave rise to the contract; and
3705+37 (2) any other defense or claim of the account debtor against the
3706+38 assignor which accrues before the account debtor receives a
3707+39 notification of the assignment authenticated signed by the
3708+40 assignor or the assignee.
3709+41 (b) Subject to subsection (c) and except as otherwise provided in
3710+42 subsection (d), the claim of an account debtor against an assignor may
3711+ES 468—LS 7443/DI 101 86
3712+1 be asserted against an assignee under subsection (a) only to reduce the
3713+2 amount the account debtor owes.
3714+3 (c) This section is subject to law other than IC 26-1-9.1 that
3715+4 establishes a different rule for an account debtor who is an individual
3716+5 and who incurred the obligation primarily for personal, family, or
3717+6 household purposes.
3718+7 (d) In a consumer transaction, if a record evidences the account
3719+8 debtor's obligation, law other than IC 26-1-9.1 requires that the record
3720+9 include a statement to the effect that the account debtor's recovery
3721+10 against an assignee with respect to claims and defenses against the
3722+11 assignor may not exceed amounts paid by the account debtor under the
3723+12 record, and the record does not include such a statement, the extent to
3724+13 which a claim of an account debtor against the assignor may be
3725+14 asserted against an assignee is determined as if the record included
3726+15 such a statement.
3727+16 (e) This section does not apply to an assignment of a
3728+17 health-care-insurance receivable.
3729+18 SECTION 72. IC 26-1-9.1-406, AS AMENDED BY P.L.54-2011,
3730+19 SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3731+20 JULY 1, 2023]: Sec. 406. (a) Subject to subsections (b) through (i) and
3732+21 (l), an account debtor on an account, chattel paper, or a payment
3733+22 intangible may discharge its obligation by paying the assignor until, but
3734+23 not after, the account debtor receives a notification, authenticated
3735+24 signed by the assignor or the assignee, that the amount due or to
3736+25 become due has been assigned and that payment is to be made to the
3737+26 assignee. After receipt of the notification, the account debtor may
3738+27 discharge its obligation by paying the assignee and may not discharge
3739+28 the obligation by paying the assignor.
3740+29 (b) Subject to subsection (h), subsections (h) and (l), notification
3741+30 is ineffective under subsection (a):
3742+31 (1) if it does not reasonably identify the rights assigned;
3743+32 (2) to the extent that an agreement between an account debtor and
3744+33 a seller of a payment intangible limits the account debtor's duty to
3745+34 pay a person other than the seller and the limitation is effective
3746+35 under law other than IC 26-1-9.1; or
3747+36 (3) at the option of an account debtor, if the notification notifies
3748+37 the account debtor to make less than the full amount of any
3749+38 installment or other periodic payment to the assignee, even if:
3750+39 (A) only a portion of the account, chattel paper, or payment
3751+40 intangible has been assigned to that assignee;
3752+41 (B) a portion has been assigned to another assignee; or
3753+42 (C) the account debtor knows that the assignment to that
3754+ES 468—LS 7443/DI 101 87
3755+1 assignee is limited.
3756+2 (c) Subject to subsection (h), subsections (h) and (l), if requested
3757+3 by the account debtor, an assignee shall seasonably furnish reasonable
3758+4 proof that the assignment has been made. Unless the assignee
3759+5 complies, the account debtor may discharge its obligation by paying the
3760+6 assignor, even if the account debtor has received a notification under
3761+7 subsection (a).
3762+8 (d) As used in this subsection, "promissory note" includes a
3763+9 negotiable instrument that evidences chattel paper. Except as
3764+10 otherwise provided in subsection subsections (e) and (k) and
3765+11 IC 26-1-2.1-303 and IC 26-1-9.1-407, and subject to subsection (h), a
3766+12 term in an agreement between an account debtor and an assignor or in
3767+13 a promissory note is ineffective to the extent that it:
3768+14 (1) prohibits, restricts, or requires the consent of the account
3769+15 debtor or person obligated on the promissory note to the
3770+16 assignment or transfer of, or the creation, attachment, perfection,
3771+17 or enforcement of a security interest in, the account, chattel paper,
3772+18 payment intangible, or promissory note; or
3773+19 (2) provides that the assignment or transfer or the creation,
3774+20 attachment, perfection, or enforcement of the security interest
3775+21 may give rise to a default, breach, right of recoupment, claim,
3776+22 defense, termination, right of termination, or remedy under the
3777+23 account, chattel paper, payment intangible, or promissory note.
3778+24 (e) Subsection (d) does not apply to the sale of a payment intangible
3779+25 or promissory note other than a sale pursuant to a disposition under
3780+26 IC 26-1-9.1-610 or an acceptance of collateral under IC 26-1-9.1-620.
3781+27 (f) Except as provided in subsection (k) and IC 26-1-2.1-303 and
3782+28 IC 26-1-9.1-407, and subject to subsections (h) and (i), a rule of law,
3783+29 statute, or regulation that prohibits, restricts, or requires the consent of
3784+30 a government, governmental body or official, or account debtor to the
3785+31 assignment or transfer of, or creation of a security interest in, an
3786+32 account or chattel paper is ineffective to the extent that the rule of law,
3787+33 statute, or regulation:
3788+34 (1) prohibits, restricts, or requires the consent of the government,
3789+35 governmental body or official, or account debtor to the
3790+36 assignment or transfer of, or the creation, attachment, perfection,
3791+37 or enforcement of a security interest in the account or chattel
3792+38 paper; or
3793+39 (2) provides that the assignment or transfer or the creation,
3794+40 attachment, perfection, or enforcement of the security interest
3795+41 may give rise to a default, right of recoupment, claim, defense,
3796+42 termination, right of termination, or remedy under the account or
3797+ES 468—LS 7443/DI 101 88
3798+1 chattel paper.
3799+2 (g) Subject to subsection (h), subsections (h) and (l), an account
3800+3 debtor may not waive or vary its option under subsection (b)(3).
3801+4 (h) This section is subject to law other than IC 26-1-9.1 which
3802+5 establishes a different rule for an account debtor who is an individual
3803+6 and who incurred the obligation primarily for personal, family, or
3804+7 household purposes.
3805+8 (i) This section does not apply to an assignment of a
3806+9 health-care-insurance receivable.
3807+10 (j) This section prevails over any inconsistent provision in
3808+11 statute, administrative rule, or regulation.
3809+12 (k) Subsections (d), (f), and (j) do not apply to a security interest
3810+13 in an ownership interest in a general partnership, limited
3811+14 partnership, or limited liability company.
3812+15 (l) Subsections (a), (b), (c), and (g) do not apply to a controllable
3813+16 account or a controllable payment intangible.
3814+17 SECTION 73. IC 26-1-9.1-408, AS AMENDED BY P.L.54-2011,
3815+18 SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3816+19 JULY 1, 2023]: Sec. 408. (a) Except as otherwise provided in
3817+20 subsection (b), subsections (b) and (f), a term in a promissory note or
3818+21 in an agreement between an account debtor and a debtor that relates to
3819+22 a health-care-insurance receivable or a general intangible, including a
3820+23 contract, permit, license, or franchise, and which term prohibits,
3821+24 restricts, or requires the consent of the person obligated on the
3822+25 promissory note or the account debtor to, the assignment or transfer of,
3823+26 or creation, attachment, or perfection of a security interest in, the
3824+27 promissory note, health-care-insurance receivable, or general
3825+28 intangible, is ineffective to the extent that the term:
3826+29 (1) would impair the creation, attachment, or perfection of a
3827+30 security interest; or
3828+31 (2) provides that the assignment, transfer, creation, attachment, or
3829+32 perfection of the security interest may give rise to a default,
3830+33 breach, right of recoupment, claim, defense, termination, right of
3831+34 termination, or remedy under the promissory note,
3832+35 health-care-insurance receivable, or general intangible.
3833+36 (b) Subsection (a) applies to a security interest in a payment
3834+37 intangible or promissory note only if the security interest arises out of
3835+38 a sale of the payment intangible or promissory note other than a sale
3836+39 under a disposition under IC 26-1-9.1-610 or an acceptance of
3837+40 collateral under IC 26-1-9.1-620.
3838+41 (c) Except as provided in subsection (f), a rule of law, statute, or
3839+42 regulation, which prohibits, restricts, or requires the consent of a
3840+ES 468—LS 7443/DI 101 89
3841+1 government, governmental body or official, person obligated on a
3842+2 promissory note, or account debtor to the assignment or transfer of, or
3843+3 creation of a security interest in, a promissory note,
3844+4 health-care-insurance receivable, or general intangible, including a
3845+5 contract, permit, license, or franchise between an account debtor and
3846+6 a debtor, is ineffective to the extent that the rule of law, statute, or
3847+7 regulation:
3848+8 (1) would impair the creation, attachment, or perfection of a
3849+9 security interest; or
3850+10 (2) provides that the assignment, transfer, creation, attachment, or
3851+11 perfection of the security interest may give rise to a default,
3852+12 breach, right of recoupment, claim, defense, termination, right of
3853+13 termination, or remedy under the promissory note,
3854+14 health-care-insurance receivable, or general intangible.
3855+15 (d) To the extent that a term in a promissory note or in an agreement
3856+16 between an account debtor and a debtor which relates to a
3857+17 health-care-insurance receivable or general intangible or a rule of law,
3858+18 statute, or regulation described in subsection (c) would be effective
3859+19 under law other than IC 26-1-9.1 but is ineffective under subsection (a)
3860+20 or (c), the creation, attachment, or perfection of a security interest in
3861+21 the promissory note, health-care-insurance receivable, or general
3862+22 intangible:
3863+23 (1) is not enforceable against the person obligated on the
3864+24 promissory note or the account debtor;
3865+25 (2) does not impose a duty or obligation on the person obligated
3866+26 on the promissory note or the account debtor;
3867+27 (3) does not require the person obligated on the promissory note
3868+28 or the account debtor to recognize the security interest, pay or
3869+29 render performance to the secured party, or accept payment or
3870+30 performance from the secured party;
3871+31 (4) does not entitle the secured party to use or assign the debtor's
3872+32 rights under the promissory note, health-care-insurance
3873+33 receivable, or general intangible, including any related
3874+34 information or materials furnished to the debtor in the transaction
3875+35 giving rise to the promissory note, health-care-insurance
3876+36 receivable, or general intangible;
3877+37 (5) does not entitle the secured party to use, assign, possess, or
3878+38 have access to any trade secrets or confidential information of the
3879+39 person obligated on the promissory note or the account debtor;
3880+40 and
3881+41 (6) does not entitle the secured party to enforce the security
3882+42 interest in the promissory note, health-care-insurance receivable,
3883+ES 468—LS 7443/DI 101 90
3884+1 or general intangible.
3885+2 (e) This section prevails over any inconsistent provision in statute,
3886+3 administrative rule, or regulation.
3887+4 (f) This section does not apply to a security interest in an
3888+5 ownership interest in a general partnership, limited partnership,
3889+6 or limited liability company.
3890+7 (g) As used in this section, "promissory note" includes a
3891+8 negotiable instrument that evidences chattel paper.
3892+9 SECTION 74. IC 26-1-9.1-509, AS AMENDED BY P.L.1-2010,
3893+10 SECTION 108, IS AMENDED TO READ AS FOLLOWS
3894+11 [EFFECTIVE JULY 1, 2023]: Sec. 509. (a) A person may file an initial
3895+12 financing statement, amendment that adds collateral covered by a
3896+13 financing statement, or amendment that adds a debtor to a financing
3897+14 statement only if:
3898+15 (1) the debtor authorizes the filing in an authenticated a signed
3899+16 record or under subsection (b) or (c); or
3900+17 (2) the person holds an agricultural lien that has become effective
3901+18 at the time of filing and the financing statement covers only
3902+19 collateral in which the person holds an agricultural lien.
3903+20 (b) By authenticating signing or becoming bound as debtor by a
3904+21 security agreement, a debtor or new debtor authorizes the filing of an
3905+22 initial financing statement, and an amendment, covering:
3906+23 (1) the collateral described in the security agreement; and
3907+24 (2) property that becomes collateral under IC 26-1-9.1-315(a)(2),
3908+25 whether or not the security agreement expressly covers proceeds.
3909+26 (c) By acquiring collateral in which a security interest or agricultural
3910+27 lien continues under IC 26-1-9.1-315(a)(1), a debtor authorizes the
3911+28 filing of an initial financing statement, and an amendment, covering the
3912+29 collateral and property that becomes collateral under
3913+30 IC 26-1-9.1-315(a)(2).
3914+31 (d) A person may file an amendment other than an amendment that
3915+32 adds collateral covered by a financing statement or an amendment that
3916+33 adds a debtor to a financing statement only if:
3917+34 (1) the secured party of record authorizes the filing; or
3918+35 (2) the amendment is a termination statement for a financing
3919+36 statement as to which the secured party of record has failed to file
3920+37 or send a termination statement as required by IC 26-1-9.1-513(a)
3921+38 or IC 26-1-9.1-513(c), the debtor authorizes the filing, and the
3922+39 termination statement indicates that the debtor authorized it to be
3923+40 filed.
3924+41 (e) If there is more than one (1) secured party of record for a
3925+42 financing statement, each secured party of record may authorize the
3926+ES 468—LS 7443/DI 101 91
3927+1 filing of an amendment under subsection (d).
3928+2 SECTION 75. IC 26-1-9.1-513 IS AMENDED TO READ AS
3929+3 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 513. (a) A secured
3930+4 party shall cause the secured party of record for a financing statement
3931+5 to file a termination statement for the financing statement if the
3932+6 financing statement covers consumer goods and:
3933+7 (1) there is no obligation secured by the collateral covered by the
3934+8 financing statement and no commitment to make an advance,
3935+9 incur an obligation, or otherwise give value; or
3936+10 (2) the debtor did not authorize the filing of the initial financing
3937+11 statement.
3938+12 (b) To comply with subsection (a), a secured party shall cause the
3939+13 secured party of record to file the termination statement:
3940+14 (1) within one (1) month after there is no obligation secured by
3941+15 the collateral covered by the financing statement and no
3942+16 commitment to make an advance, incur an obligation, or
3943+17 otherwise give value; or
3944+18 (2) if earlier, within twenty (20) days after the secured party
3945+19 receives an authenticated a signed demand from a debtor.
3946+20 (c) In cases not governed by subsection (a), within twenty (20) days
3947+21 after a secured party receives an authenticated a signed demand from
3948+22 a debtor, the secured party shall cause the secured party of record for
3949+23 a financing statement to send to the debtor a termination statement for
3950+24 the financing statement or file the termination statement in the filing
3951+25 office if:
3952+26 (1) except in the case of a financing statement covering accounts
3953+27 or chattel paper that has been sold or goods that are the subject of
3954+28 a consignment, there is no obligation secured by the collateral
3955+29 covered by the financing statement and no commitment to make
3956+30 an advance, incur an obligation, or otherwise give value;
3957+31 (2) the financing statement covers accounts or chattel paper that
3958+32 has been sold but as to which the account debtor or other person
3959+33 obligated has discharged its obligation;
3960+34 (3) the financing statement covers goods that were the subject of
3961+35 a consignment to the debtor but are not in the debtor's possession;
3962+36 or
3963+37 (4) the debtor did not authorize the filing of the initial financing
3964+38 statement.
3965+39 (d) Except as otherwise provided in IC 26-1-9.1-510, upon the filing
3966+40 of a termination statement with the filing office, the financing
3967+41 statement to which the termination statement relates ceases to be
3968+42 effective. Except as otherwise provided in IC 26-1-9.1-510, for
3969+ES 468—LS 7443/DI 101 92
3970+1 purposes of IC 26-1-9.1-519(g), IC 26-1-9.1-522(a), and
3971+2 IC 26-1-9.1-523(c), the filing with the filing office of a termination
3972+3 statement relating to a financing statement that indicates that the debtor
3973+4 is a transmitting utility also causes the effectiveness of the financing
3974+5 statement to lapse.
3975+6 SECTION 76. IC 26-1-9.1-601, AS AMENDED BY P.L.143-2007,
3976+7 SECTION 76, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3977+8 JULY 1, 2023]: Sec. 601. (a) After default, a secured party has the
3978+9 rights provided in this section through IC 26-1-9.1-628 and, except as
3979+10 otherwise provided in IC 26-1-9.1-602, those provided by agreement
3980+11 of the parties. A secured party:
3981+12 (1) may reduce a claim to judgment, foreclose, or otherwise
3982+13 enforce the claim, security interest, or agricultural lien by any
3983+14 available judicial procedure; and
3984+15 (2) if the collateral is documents, may proceed either as to the
3985+16 documents or as to the goods they cover.
3986+17 (b) A secured party in possession of collateral or control of
3987+18 collateral under IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
3988+19 IC 26-1-9.1-106, or IC 26-1-9.1-107, or IC 26-1-9.1-107.1 has the
3989+20 rights and duties provided in IC 26-1-9.1-207.
3990+21 (c) The rights under subsections (a) and (b) are cumulative and may
3991+22 be exercised simultaneously.
3992+23 (d) Except as otherwise provided in subsection (g) and
3993+24 IC 26-1-9.1-605, after default, a debtor and an obligor have the rights
3994+25 provided in IC 26-1-9.1-601 through IC 26-1-9.1-628 and by agreement
3995+26 of the parties.
3996+27 (e) If a secured party has reduced its claim to judgment, the lien of
3997+28 any levy that may be made upon the collateral by virtue of an execution
3998+29 based upon the judgment relates back to the earliest of:
3999+30 (1) the date of perfection of the security interest or agricultural
4000+31 lien in the collateral;
4001+32 (2) the date of filing a financing statement covering the collateral;
4002+33 or
4003+34 (3) any date specified in a statute under which the agricultural lien
4004+35 was created.
4005+36 (f) A sale pursuant to an execution is a foreclosure of the security
4006+37 interest or agricultural lien by judicial procedure within the meaning of
4007+38 this section. A secured party may purchase at the sale and thereafter
4008+39 hold the collateral free of any other requirements of IC 26-1-9.1.
4009+40 (g) Except as otherwise provided in IC 26-1-9.1-607(c),
4010+41 IC 26-1-9.1-601 through IC 26-1-9.1-628 impose no duties upon a
4011+42 secured party that is a consignor or is a buyer of accounts, chattel
4012+ES 468—LS 7443/DI 101 93
4013+1 paper, payment intangibles, or promissory notes.
4014+2 SECTION 77. IC 26-1-9.1-605 IS AMENDED TO READ AS
4015+3 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 605. (a) Except as
4016+4 provided in subsection (b), a secured party does not owe a duty based
4017+5 on its status as secured party:
4018+6 (1) to a person that is a debtor or obligor, unless the secured party
4019+7 knows:
4020+8 (A) that the person is a debtor or obligor;
4021+9 (B) the identity of the person; and
4022+10 (C) how to communicate with the person; or
4023+11 (2) to a secured party or lienholder that has filed a financing
4024+12 statement against a person, unless the secured party knows:
4025+13 (A) that the person is a debtor; and
4026+14 (B) the identity of the person.
4027+15 (b) A secured party owes a duty based on its status as secured
4028+16 party to a person if, at the time the secured party obtains control
4029+17 of collateral that is a controllable account, a controllable electronic
4030+18 record, or a controllable payment intangible or at the time the
4031+19 security interest attaches to the collateral, whichever is later:
4032+20 (1) the person is a debtor or obligor; and
4033+21 (2) the secured party knows that the information in subsection
4034+22 (a)(1)(A), (a)(1)(B), or (a)(1)(C) relating to the person is not
4035+23 provided by the collateral, a record attached to or logically
4036+24 associated with the collateral, or the system in which the
4037+25 collateral is recorded.
4038+26 SECTION 78. IC 26-1-9.1-608 IS AMENDED TO READ AS
4039+27 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 608. (a) If a security
4040+28 interest or agricultural lien secures payment or performance of an
4041+29 obligation, the following rules apply:
4042+30 (1) A secured party shall apply or pay over for application the
4043+31 cash proceeds of collection or enforcement under IC 26-1-9.1-607
4044+32 in the following order to:
4045+33 (A) the reasonable expenses of collection and enforcement
4046+34 and, to the extent provided for by agreement and not
4047+35 prohibited by law, reasonable attorney's fees and legal
4048+36 expenses incurred by the secured party;
4049+37 (B) the satisfaction of obligations secured by the security
4050+38 interest or agricultural lien under which the collection or
4051+39 enforcement is made; and
4052+40 (C) the satisfaction of obligations secured by any subordinate
4053+41 security interest in or other lien on the collateral subject to the
4054+42 security interest or agricultural lien under which the collection
4055+ES 468—LS 7443/DI 101 94
4056+1 or enforcement is made if the secured party receives an
4057+2 authenticated a signed demand for proceeds before
4058+3 distribution of the proceeds is completed.
4059+4 (2) If requested by a secured party, a holder of a subordinate
4060+5 security interest or other lien shall furnish reasonable proof of the
4061+6 interest or lien within a reasonable time. Unless the holder
4062+7 complies, the secured party need not comply with the holder's
4063+8 demand under subdivision (1)(C).
4064+9 (3) A secured party need not apply or pay over for application
4065+10 noncash proceeds of collection and enforcement under
4066+11 IC 26-1-9.1-607 unless the failure to do so would be
4067+12 commercially unreasonable. A secured party that applies or pays
4068+13 over for application noncash proceeds shall do so in a
4069+14 commercially reasonable manner.
4070+15 (4) A secured party shall account to and pay a debtor for any
4071+16 surplus, and the obligor is liable for any deficiency.
4072+17 (b) If the underlying transaction is a sale of accounts, chattel paper,
4073+18 payment intangibles, or promissory notes, the debtor is not entitled to
4074+19 any surplus, and the obligor is not liable for any deficiency.
4075+20 SECTION 79. IC 26-1-9.1-611 IS AMENDED TO READ AS
4076+21 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 611. (a) As used in this
4077+22 section, "notification date" means the earlier of the date on which:
4078+23 (1) a secured party sends to the debtor and any secondary obligor
4079+24 an authenticated a signed notification of disposition; or
4080+25 (2) the debtor and any secondary obligor waive the right to
4081+26 notification.
4082+27 (b) Except as otherwise provided in subsection (d), a secured party
4083+28 that disposes of collateral under IC 26-1-9.1-610 shall send to the
4084+29 persons specified in subsection (c) a reasonable authenticated signed
4085+30 notification of disposition.
4086+31 (c) To comply with subsection (b), the secured party shall send an
4087+32 authenticated a signed notification of disposition to:
4088+33 (1) the debtor;
4089+34 (2) any secondary obligor; and
4090+35 (3) if the collateral is other than consumer goods:
4091+36 (A) any other person from which the secured party has
4092+37 received, before the notification date, an authenticated a
4093+38 signed notification of a claim of an interest in the collateral;
4094+39 (B) any other secured party or lienholder that, ten (10) days
4095+40 before the notification date, held a security interest in or other
4096+41 lien on the collateral perfected by the filing of a financing
4097+42 statement that:
4098+ES 468—LS 7443/DI 101 95
4099+1 (i) identified the collateral;
4100+2 (ii) was indexed under the debtor's name as of that date; and
4101+3 (iii) was filed in the office in which to file a financing
4102+4 statement against the debtor covering the collateral as of that
4103+5 date; and
4104+6 (C) any other secured party that, ten (10) days before the
4105+7 notification date, held a security interest in the collateral
4106+8 perfected by compliance with a statute, regulation, or treaty
4107+9 described in IC 26-1-9.1-311(a).
4108+10 (d) Subsection (b) does not apply if the collateral is perishable or
4109+11 threatens to decline speedily in value or is of a type customarily sold on
4110+12 a recognized market.
4111+13 (e) A secured party complies with the requirement for notification
4112+14 prescribed in subsection (c)(3)(B) if:
4113+15 (1) not later than twenty (20) days or earlier than thirty (30) days
4114+16 before the notification date, the secured party requests, in a
4115+17 commercially reasonable manner, information concerning
4116+18 financing statements indexed under the debtor's name in the office
4117+19 indicated in subsection (c)(3)(B); and
4118+20 (2) before the notification date, the secured party:
4119+21 (A) did not receive a response to the request for information;
4120+22 or
4121+23 (B) received a response to the request for information and sent
4122+24 an authenticated a signed notification of disposition to each
4123+25 secured party or other lienholder named in that response
4124+26 whose financing statement covered the collateral.
4125+27 SECTION 80. IC 26-1-9.1-613 IS AMENDED TO READ AS
4126+28 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 613. (a) Except in a
4127+29 consumer-goods transaction, the following rules apply:
4128+30 (1) The contents of a notification of disposition are sufficient if
4129+31 the notification:
4130+32 (A) describes the debtor and the secured party;
4131+33 (B) describes the collateral that is the subject of the intended
4132+34 disposition;
4133+35 (C) states the method of intended disposition;
4134+36 (D) states that the debtor is entitled to an accounting of the
4135+37 unpaid indebtedness and states the charge, if any, for an
4136+38 accounting; and
4137+39 (E) states the time and place of a public disposition or the time
4138+40 after which any other disposition is to be made.
4139+41 (2) Whether the contents of a notification that lacks any of the
4140+42 information specified in subdivision (1) are nevertheless
4141+ES 468—LS 7443/DI 101 96
4142+1 sufficient is a question of fact.
4143+2 (3) The contents of a notification providing substantially the
4144+3 information specified in subdivision (1) are sufficient, even if the
4145+4 notification includes:
4146+5 (A) information not specified by that subdivision; or
4147+6 (B) minor errors that are not seriously misleading.
4148+7 (4) A particular phrasing of the notification is not required.
4149+8 (5) The following form of notification and the form appearing in
4150+9 IC 26-1-9.1-614(3), IC 26-1-9.1-614(a)(3), when completed in
4151+10 accordance with subsection (b) and IC 26-1-9.1-614(b), each
4152+11 provides sufficient information:
4153+12 NOTIFICATION OF DISPOSITION OF COLLATERAL
4154+13 To:Name of debtor, obligor, or other person to which the
4155+14 notification is sent (Name of debtor, obligor, or other
4156+15 person to which the notification is sent)
4157+16 From:Name, address, and telephone number of secured
4158+17 party (Name, address, and telephone number of secured party)
4159+18 {1} Name of Debtor(s): Include only if debtor(s) are not an
4160+19 addressee any debtor that is not an addressee: (Name of each
4161+20 debtor)
4162+21 (For a public disposition:)
4163+22 {2} We will sell (or lease or license, as applicable) the describe
4164+23 collateral to (describe collateral) (to the highest qualified bidder in
4165+24 bidder) at public sale. A sale could include a lease or license. The
4166+25 sale will be held as follows:
4167+26 Day and Date: _____________________ (Date)
4168+27 Time: _________ (Time)
4169+28 Place: ____________________________ (Place)
4170+29 (For a private disposition:)
4171+30 {3} We will sell (or lease or license, as applicable) the describe
4172+31 collateral privately (describe collateral) at private sale sometime
4173+32 after day and date. (date). A sale could include a lease or license.
4174+33 {4} You are entitled to an accounting of the unpaid indebtedness
4175+34 secured by the property that we intend to sell (or lease or license, as
4176+35 applicable) (for a charge of $____). or, as applicable, lease or license.
4177+36 {5} If you request an accounting, you must pay a charge of $
4178+37 (amount). {6} You may request an accounting by calling us at
4179+38 telephone number. (telephone number).
4180+39 (End of Form)
4181+40 (b) The following instructions apply to the form of notification
4182+41 in subsection (a)(5):
4183+42 (1) The instructions in this subsection refer to the numbers in
4184+ES 468—LS 7443/DI 101 97
4185+1 braces before items in the form of notification in subsection
4186+2 (a)(5). The numbers in braces:
4187+3 (A) are used only for the purpose of the instructions under
4188+4 this subsection; and
4189+5 (B) must not be included in the notification.
4190+6 (2) Include and complete item {1} only if there is a debtor that
4191+7 is not an addressee of the notification. List the name of each
4192+8 of those debtors.
4193+9 (3) Include and complete either item {2}, if the notification
4194+10 relates to a public disposition of the collateral, or item {3}, if
4195+11 the notification relates to a private disposition of the
4196+12 collateral. If item {2} is included, include the words "to the
4197+13 highest bidder" only if applicable.
4198+14 (4) Include and complete items {4} and {6}.
4199+15 (5) Include and complete item {5} only if the sender will
4200+16 charge the recipient for an accounting.
4201+17 SECTION 81. IC 26-1-9.1-614 IS AMENDED TO READ AS
4202+18 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 614. (a) In a
4203+19 consumer-goods transaction, the following rules apply:
4204+20 (1) A notification of disposition must provide the following
4205+21 information:
4206+22 (A) The information specified in IC 26-1-9.1-613(1).
4207+23 IC 26-1-9.1-613(a)(1).
4208+24 (B) A description of any liability for a deficiency of the person
4209+25 to which the notification is sent.
4210+26 (C) A telephone number from which the amount that must be
4211+27 paid to the secured party to redeem the collateral under
4212+28 IC 26-1-9.1-623 is available.
4213+29 (D) A telephone number or mailing address from which
4214+30 additional information concerning the disposition and the
4215+31 obligation secured is available.
4216+32 (2) A particular phrasing of the notification is not required.
4217+33 (3) The following form of notification, when completed in
4218+34 accordance with the instructions set forth in subsection (b),
4219+35 provides sufficient information:
4220+36 Name and address of secured party (Name and address of secured
4221+37 party)
4222+38 Date (Date)
4223+39 NOTICE OF OUR PLAN TO SELL PROPERTY
4224+40 Name and address of any obligor who is also a debtor (Name and
4225+41 address of any obligor who is also a debtor)
4226+42 Subject: Identification of Transaction (Identify transaction)
4227+ES 468—LS 7443/DI 101 98
4228+1 We have your describe collateral, (describe collateral), because you
4229+2 broke promises in our agreement.
4230+3 (For a public disposition:)
4231+4 {1} We will sell describe collateral (describe collateral) at public
4232+5 sale. A sale could include a lease or license. The sale will be held as
4233+6 follows:
4234+7 Date: _____________________ (Date)
4235+8 Time: _________ (Time)
4236+9 Place: ____________________ (Place)
4237+10 You may attend the sale and bring bidders if you want.
4238+11 (For a private disposition:)
4239+12 {2} We will sell describe collateral (describe collateral) at private
4240+13 sale sometime after date. (date). A sale could include a lease or license.
4241+14 {3} The money that we get from the sale, (after after paying our
4242+15 costs) costs, will reduce the amount you owe. If we get less money than
4243+16 you owe, you will or will not, as applicable (will or will not, as
4244+17 applicable) still owe us the difference. If we get more money than you
4245+18 owe, you will get the extra money, unless we must pay it to someone
4246+19 else.
4247+20 {4} You can get the property back at any time before we sell it by
4248+21 paying us the full amount you owe, (not not just the past due
4249+22 payments), payments, including our expenses. To learn the exact
4250+23 amount you must pay, call us at telephone number.(telephone
4251+24 number).
4252+25 {5} If you want us to explain to you in writing (writing) (writing or
4253+26 in (description of electronic record)) (description of electronic
4254+27 record) how we have figured the amount that you owe us, you may {6}
4255+28 call us at telephone number (telephone number) or write (or) (write
4256+29 us at secured party's address (secured party's address)) (or
4257+30 (description of electronic communication method)) and {7} request
4258+31 a (a written explanation. explanation) (a written explanation or an
4259+32 explanation in (description of electronic record)) (an explanation
4260+33 in (description of electronic record)). {8} We will charge you $
4261+34 (amount) for the explanation if we sent you another written
4262+35 explanation of the amount you owe us within the last six (6) months.
4263+36 {9} If you need more information about the sale call (call us at
4264+37 telephone number (telephone number)) or write (or) (write us at
4265+38 secured party's address. (secured party's address) (or contact us by
4266+39 (description of electronic communication method)).
4267+40 {10} We are sending this notice to the following other people who
4268+41 have an interest in describe collateral (describe collateral) or who owe
4269+42 money under your agreement:
4270+ES 468—LS 7443/DI 101 99
4271+1 Names of all other debtors and obligors, if any. (Names of all other
4272+2 debtors and obligors, if any)
4273+3 (End of Form)
4274+4 (4) A notification in the form of subdivision (3) is sufficient, even
4275+5 if additional information appears at the end of the form.
4276+6 (5) A notification in the form of subdivision (3) is sufficient, even
4277+7 if it includes errors in information not required by subdivision (1),
4278+8 unless the error is misleading with respect to rights arising under
4279+9 IC 26-1-9.1.
4280+10 (6) If a notification under this section is not in the form of
4281+11 subdivision (3), law other than IC 26-1-9.1 determines the effect
4282+12 of including information not required by subdivision (1).
4283+13 (b) The following instructions apply to the form of notification
4284+14 in subsection (a)(3):
4285+15 (1) The instructions in this subsection refer to the numbers in
4286+16 braces before items in the form of notification in subsection
4287+17 (a)(3). The numbers in braces:
4288+18 (A) are used only for the purpose of the instructions under
4289+19 this subsection; and
4290+20 (B) must not be included in the notification.
4291+21 (2) Include and complete either item {1}, if the notification
4292+22 relates to a public disposition of the collateral, or item {2}, if
4293+23 the notification relates to a private disposition of the
4294+24 collateral.
4295+25 (3) Include and complete items {3}, {4}, {5}, {6}, and {7}.
4296+26 (4) In item {5}, include and complete any one (1) of the three
4297+27 (3) alternative methods for the explanation:
4298+28 (A) writing;
4299+29 (B) writing or electronic record; or
4300+30 (C) electronic record.
4301+31 (5) In item {6}, include the telephone number. In addition, the
4302+32 sender may include and complete either or both of the two (2)
4303+33 additional alternative methods of communication, which are:
4304+34 (A) writing; and
4305+35 (B) electronic communication;
4306+36 by which the recipient of the notification may communicate
4307+37 with the sender. Neither of the two (2) additional methods of
4308+38 communication is required to be included.
4309+39 (6) In item {7}, include and complete each method included in
4310+40 item {5} (writing, writing or electronic record, or electronic
4311+41 record) for the explanation.
4312+42 (7) Include and complete item {8} only if:
4313+ES 468—LS 7443/DI 101 100
4314+1 (A) a written explanation is included in item {5} as a
4315+2 method for communicating the explanation; and
4316+3 (B) the sender will charge the recipient for another written
4317+4 explanation.
4318+5 (8) In item {9}, include either the telephone number or the
4319+6 address or both the telephone number and the address. In
4320+7 addition, the sender may include and complete the additional
4321+8 method of communication (electronic communication) for the
4322+9 recipient of the notification to communicate with the sender.
4323+10 The additional method of electronic communication is not
4324+11 required to be included.
4325+12 (9) If item {10} does not apply, insert "None" after
4326+13 "agreement:".
4327+14 SECTION 82. IC 26-1-9.1-615 IS AMENDED TO READ AS
4328+15 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 615. (a) A secured
4329+16 party shall apply or pay over for application the cash proceeds of
4330+17 disposition under IC 26-1-9.1-610 in the following order to:
4331+18 (1) the reasonable expenses of retaking, holding, preparing for
4332+19 disposition, processing, and disposing, and, to the extent provided
4333+20 for by agreement and not prohibited by law, reasonable attorney's
4334+21 fees and legal expenses incurred by the secured party;
4335+22 (2) the satisfaction of obligations secured by the security interest
4336+23 or agricultural lien under which the disposition is made;
4337+24 (3) the satisfaction of obligations secured by any subordinate
4338+25 security interest in or other subordinate lien on the collateral if:
4339+26 (A) the secured party receives from the holder of the
4340+27 subordinate security interest or other lien an authenticated a
4341+28 signed demand for proceeds before distribution of the
4342+29 proceeds is completed; and
4343+30 (B) in a case in which a consignor has an interest in the
4344+31 collateral, the subordinate security interest or other lien is
4345+32 senior to the interest of the consignor; and
4346+33 (4) a secured party that is a consignor of the collateral if the
4347+34 secured party receives from the consignor an authenticated a
4348+35 signed demand for proceeds before distribution of the proceeds
4349+36 is completed.
4350+37 (b) If requested by a secured party, a holder of a subordinate
4351+38 security interest or other lien shall furnish reasonable proof of the
4352+39 interest or lien within a reasonable time. Unless the holder does so, the
4353+40 secured party need not comply with the holder's demand under
4354+41 subsection (a)(3).
4355+42 (c) A secured party need not apply or pay over for application
4356+ES 468—LS 7443/DI 101 101
4357+1 noncash proceeds of disposition under IC 26-1-9.1-610 unless the
4358+2 failure to do so would be commercially unreasonable. A secured party
4359+3 that applies or pays over for application noncash proceeds shall do so
4360+4 in a commercially reasonable manner.
4361+5 (d) If the security interest under which a disposition is made secures
4362+6 payment or performance of an obligation, after making the payments
4363+7 and applications required by subsection (a) and permitted by subsection
4364+8 (c):
4365+9 (1) unless subsection (a)(4) requires the secured party to apply or
4366+10 pay over cash proceeds to a consignor, the secured party shall
4367+11 account to and pay a debtor for any surplus; and
4368+12 (2) the obligor is liable for any deficiency.
4369+13 (e) If the underlying transaction is a sale of accounts, chattel paper,
4370+14 payment intangibles, or promissory notes:
4371+15 (1) the debtor is not entitled to any surplus; and
4372+16 (2) the obligor is not liable for any deficiency.
4373+17 (f) The surplus or deficiency following a disposition is calculated
4374+18 based on the amount of proceeds that would have been realized in a
4375+19 disposition complying with IC 26-1-9.1-601 through IC 26-1-9.1-628
4376+20 to a transferee other than the secured party, a person related to the
4377+21 secured party, or a secondary obligor if:
4378+22 (1) the transferee in the disposition is the secured party, a person
4379+23 related to the secured party, or a secondary obligor; and
4380+24 (2) the amount of proceeds of the disposition is significantly
4381+25 below the range of proceeds that a complying disposition to a
4382+26 person other than the secured party, a person related to the
4383+27 secured party, or a secondary obligor would have brought.
4384+28 (g) A secured party that receives cash proceeds of a disposition in
4385+29 good faith and without knowledge that the receipt violates the rights of
4386+30 the holder of a security interest or other lien that is not subordinate to
4387+31 the security interest or agricultural lien under which the disposition is
4388+32 made:
4389+33 (1) takes the cash proceeds free of the security interest or other
4390+34 lien;
4391+35 (2) is not obligated to apply the proceeds of the disposition to the
4392+36 satisfaction of obligations secured by the security interest or other
4393+37 lien; and
4394+38 (3) is not obligated to account to or pay the holder of the security
4395+39 interest or other lien for any surplus.
4396+40 SECTION 83. IC 26-1-9.1-616 IS AMENDED TO READ AS
4397+41 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 616. (a) As used in this
4398+42 section:
4399+ES 468—LS 7443/DI 101 102
4400+1 (1) "Explanation" means a writing record that:
4401+2 (A) states the amount of the surplus or deficiency;
4402+3 (B) provides an explanation in accordance with subsection (c)
4403+4 of how the secured party calculated the surplus or deficiency;
4404+5 (C) states, if applicable, that future debits, credits, charges,
4405+6 including additional credit service charges or interest, rebates,
4406+7 and expenses may affect the amount of the surplus or
4407+8 deficiency; and
4408+9 (D) provides a telephone number or mailing address from
4409+10 which additional information concerning the transaction is
4410+11 available.
4411+12 (2) "Request" means a record:
4412+13 (A) authenticated signed by a debtor or consumer obligor;
4413+14 (B) requesting that the recipient provide an explanation; and
4414+15 (C) sent after disposition of the collateral under
4415+16 IC 26-1-9.1-610.
4416+17 (b) In a consumer-goods transaction in which the debtor is entitled
4417+18 to a surplus or a consumer obligor is liable for a deficiency under
4418+19 IC 26-1-9.1-615, the secured party shall:
4419+20 (1) send an explanation to the debtor or consumer obligor, as
4420+21 applicable, after the disposition and:
4421+22 (A) before or when the secured party accounts to the debtor
4422+23 and pays any surplus or first makes written demand in a
4423+24 record on the consumer obligor after the disposition for
4424+25 payment of the deficiency; and
4425+26 (B) within fourteen (14) days after receipt of a request; or
4426+27 (2) in the case of a consumer obligor who is liable for a
4427+28 deficiency, within fourteen (14) days after receipt of a request,
4428+29 send to the consumer obligor a record waiving the secured party's
4429+30 right to a deficiency.
4430+31 (c) To comply with subsection (a)(1)(B), a writing an explanation
4431+32 must provide the following information in the following order:
4432+33 (1) the aggregate amount of obligations secured by the security
4433+34 interest under which the disposition was made, and, if the amount
4434+35 reflects a rebate of unearned interest or credit service charge, an
4435+36 indication of that fact, calculated as of a specified date:
4436+37 (A) if the secured party takes or receives possession of the
4437+38 collateral after default, not more than thirty-five (35) days
4438+39 before the secured party takes or receives possession; or
4439+40 (B) if the secured party takes or receives possession of the
4440+41 collateral before default or does not take possession of the
4441+42 collateral, not more than thirty-five (35) days before the
4442+ES 468—LS 7443/DI 101 103
4443+1 disposition;
4444+2 (2) the amount of proceeds of the disposition;
4445+3 (3) the aggregate amount of the obligations after deducting the
4446+4 amount of proceeds;
4447+5 (4) the amount, in the aggregate or by type, and types of expenses,
4448+6 including expenses of retaking, holding, preparing for disposition,
4449+7 processing, and disposing of the collateral, and attorney's fees
4450+8 secured by the collateral that are known to the secured party and
4451+9 relate to the current disposition;
4452+10 (5) the amount, in the aggregate or by type, and types of credits,
4453+11 including rebates of interest or credit service charges, to which
4454+12 the obligor is known to be entitled and that are not reflected in the
4455+13 amount in paragraph (1); and
4456+14 (6) the amount of the surplus or deficiency.
4457+15 (d) A particular phrasing of the explanation is not required. An
4458+16 explanation complying substantially with the requirements of
4459+17 subsection (a) is sufficient, even if it includes minor errors that are not
4460+18 seriously misleading.
4461+19 (e) A debtor or consumer obligor is entitled without charge to one
4462+20 (1) response to a request under this section during any six (6) month
4463+21 period in which the secured party did not send to the debtor or
4464+22 consumer obligor an explanation pursuant to subsection (b)(1). The
4465+23 secured party may require payment of a charge not exceeding
4466+24 twenty-five dollars ($25) for each additional response.
4467+25 SECTION 84. IC 26-1-9.1-619 IS AMENDED TO READ AS
4468+26 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 619. (a) In this section,
4469+27 "transfer statement" means a record authenticated signed by a secured
4470+28 party stating:
4471+29 (1) that the debtor has defaulted in connection with an obligation
4472+30 secured by specified collateral;
4473+31 (2) that the secured party has exercised its post-default remedies
4474+32 with respect to the collateral;
4475+33 (3) that, by reason of the exercise, a transferee has acquired the
4476+34 rights of the debtor in the collateral; and
4477+35 (4) the name and mailing address of the secured party, debtor, and
4478+36 transferee.
4479+37 (b) A transfer statement entitles the transferee to the transfer of
4480+38 record of all rights of the debtor in the collateral specified in the
4481+39 statement in any official filing, recording, registration, or
4482+40 certificate-of-title system covering the collateral. If a transfer statement
4483+41 is presented with the applicable fee and request form to the official or
4484+42 office responsible for maintaining the system, the official or office
4485+ES 468—LS 7443/DI 101 104
4486+1 shall:
4487+2 (1) accept the transfer statement;
4488+3 (2) promptly amend its records to reflect the transfer; and
4489+4 (3) if applicable, issue a new appropriate certificate of title in the
4490+5 name of transferee.
4491+6 (c) A transfer of the record or legal title to collateral to a secured
4492+7 party under subsection (b) or otherwise is not of itself a disposition of
4493+8 collateral under IC 26-1-9.1 and does not of itself relieve the secured
4494+9 party of its duties under IC 26-1-9.1.
4495+10 SECTION 85. IC 26-1-9.1-620 IS AMENDED TO READ AS
4496+11 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 620. (a) Except as
4497+12 otherwise provided in subsection (g), a secured party may accept
4498+13 collateral in full or partial satisfaction of the obligation it secures only
4499+14 if:
4500+15 (1) the debtor consents to the acceptance under subsection (c);
4501+16 (2) the secured party does not receive, within the time set forth in
4502+17 subsection (d), a notification of objection to the proposal
4503+18 authenticated signed by:
4504+19 (A) a person to which the secured party was required to send
4505+20 a proposal under IC 26-1-9.1-621; or
4506+21 (B) any other person, other than the debtor, holding an interest
4507+22 in the collateral subordinate to the security interest that is the
4508+23 subject of the proposal;
4509+24 (3) if the collateral is consumer goods, the collateral is not in the
4510+25 possession of the debtor when the debtor consents to the
4511+26 acceptance; and
4512+27 (4) subsection (e) does not require the secured party to dispose of
4513+28 the collateral or the debtor waives the requirement pursuant to
4514+29 IC 26-1-9.1-624.
4515+30 (b) A purported or apparent acceptance of collateral under this
4516+31 section is ineffective unless:
4517+32 (1) the secured party consents to the acceptance in an
4518+33 authenticated a signed record or sends a proposal to the debtor;
4519+34 and
4520+35 (2) the conditions of subsection (a) are met.
4521+36 (c) For purposes of this section:
4522+37 (1) a debtor consents to an acceptance of collateral in partial
4523+38 satisfaction of the obligation it secures only if the debtor agrees
4524+39 to the terms of the acceptance in a record authenticated signed
4525+40 after default; and
4526+41 (2) a debtor consents to an acceptance of collateral in full
4527+42 satisfaction of the obligation it secures only if the debtor agrees
4528+ES 468—LS 7443/DI 101 105
4529+1 to the terms of the acceptance in a record authenticated signed
4530+2 after default or the secured party:
4531+3 (A) sends to the debtor after default a proposal that is
4532+4 unconditional or subject only to a condition that collateral not
4533+5 in the possession of the secured party be preserved or
4534+6 maintained;
4535+7 (B) in the proposal, proposes to accept collateral in full
4536+8 satisfaction of the obligation it secures; and
4537+9 (C) does not receive a notification of objection authenticated
4538+10 signed by the debtor within twenty (20) days after the proposal
4539+11 is sent.
4540+12 (d) To be effective under subsection (a)(2), a notification of
4541+13 objection must be received by the secured party:
4542+14 (1) in the case of a person to which the proposal was sent
4543+15 pursuant to IC 26-1-9.1-621, within twenty (20) days after
4544+16 notification was sent to that person; and
4545+17 (2) in other cases:
4546+18 (A) within twenty (20) days after the last notification was sent
4547+19 pursuant to IC 26-1-9.1-621; or
4548+20 (B) if a notification was not sent, before the debtor consents to
4549+21 the acceptance under subsection (c).
4550+22 (e) A secured party that has taken possession of collateral shall
4551+23 dispose of the collateral pursuant to IC 26-1-9.1-610 within the time
4552+24 specified in subsection (f) if:
4553+25 (1) sixty percent (60%) of the cash price has been paid in the case
4554+26 of a purchase-money security interest in consumer goods; or
4555+27 (2) sixty percent (60%) of the principal amount of the obligation
4556+28 secured has been paid in the case of a non-purchase-money
4557+29 security interest in consumer goods.
4558+30 (f) To comply with subsection (e), the secured party shall dispose of
4559+31 the collateral:
4560+32 (1) within ninety (90) days after taking possession; or
4561+33 (2) within any longer period to which the debtor and all secondary
4562+34 obligors have agreed in an agreement to that effect entered into
4563+35 and authenticated signed after default.
4564+36 (g) In a consumer transaction, a secured party may not accept
4565+37 collateral in partial satisfaction of the obligation it secures.
4566+38 SECTION 86. IC 26-1-9.1-621 IS AMENDED TO READ AS
4567+39 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 621. (a) A secured
4568+40 party that desires to accept collateral in full or partial satisfaction of the
4569+41 obligation it secures shall send its proposal to:
4570+42 (1) any person from which the secured party has received, before
4571+ES 468—LS 7443/DI 101 106
4572+1 the debtor consented to the acceptance, an authenticated a signed
4573+2 notification of a claim of an interest in the collateral;
4574+3 (2) any other secured party or lienholder that, ten (10) days before
4575+4 the debtor consented to the acceptance, held a security interest in
4576+5 or other lien on the collateral perfected by the filing of a financing
4577+6 statement that:
4578+7 (A) identified the collateral;
4579+8 (B) was indexed under the debtor's name as of that date; and
4580+9 (C) was filed in the office or offices in which to file a
4581+10 financing statement against the debtor covering the collateral
4582+11 as of that date; and
4583+12 (3) any other secured party that, ten (10) days before the debtor
4584+13 consented to the acceptance, held a security interest in the
4585+14 collateral perfected by compliance with a statute, regulation, or
4586+15 treaty described in IC 26-1-9.1-311(a).
4587+16 (b) A secured party that desires to accept collateral in partial
4588+17 satisfaction of the obligation it secures shall send its proposal to any
4589+18 secondary obligor in addition to the persons described in subsection
4590+19 (a).
4591+20 SECTION 87. IC 26-1-9.1-624 IS AMENDED TO READ AS
4592+21 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 624. (a) A debtor or
4593+22 secondary obligor may waive the right to notification of disposition of
4594+23 collateral under IC 26-1-9.1-611 only by an agreement to that effect
4595+24 entered into and authenticated signed after default.
4596+25 (b) A debtor may waive the right to require disposition of collateral
4597+26 under IC 26-1-9.1-620(e) only by an agreement to that effect entered
4598+27 into and authenticated signed after default.
4599+28 (c) Except in a consumer-goods transaction, a debtor or secondary
4600+29 obligor may waive the right to redeem collateral under IC 26-1-9.1-623
4601+30 only by an agreement to that effect entered into and authenticated
4602+31 signed after default.
4603+32 SECTION 88. IC 26-1-9.1-628 IS AMENDED TO READ AS
4604+33 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 628. (a) Subject to
4605+34 subsection (f), unless a secured party knows that a person is a debtor
4606+35 or obligor, knows the identity of the person, and knows how to
4607+36 communicate with the person:
4608+37 (1) the secured party is not liable to the person, or to a secured
4609+38 party or lienholder that has filed a financing statement against the
4610+39 person, for failure to comply with IC 26-1-9.1; and
4611+40 (2) the secured party's failure to comply with IC 26-1-9.1 does not
4612+41 affect the liability of the person for a deficiency.
4613+42 (b) Subject to subsection (f), a secured party is not liable because
4614+ES 468—LS 7443/DI 101 107
4615+1 of its status as secured party:
4616+2 (1) to a person that is a debtor or obligor, unless the secured party
4617+3 knows:
4618+4 (A) that the person is a debtor or obligor;
4619+5 (B) the identity of the person; and
4620+6 (C) how to communicate with the person; or
4621+7 (2) to a secured party or lienholder that has filed a financing
4622+8 statement against a person, unless the secured party knows:
4623+9 (A) that the person is a debtor; and
4624+10 (B) the identity of the person.
4625+11 (c) A secured party is not liable to any person, and a person's
4626+12 liability for a deficiency is not affected, because of any act or omission
4627+13 arising out of the secured party's reasonable belief that a transaction is
4628+14 not a consumer-goods transaction or a consumer transaction or that
4629+15 goods are not consumer goods, if the secured party's belief is based on
4630+16 its reasonable reliance on:
4631+17 (1) a debtor's representation concerning the purpose for which
4632+18 collateral was to be used, acquired, or held; or
4633+19 (2) an obligor's representation concerning the purpose for which
4634+20 a secured obligation was incurred.
4635+21 (d) A secured party is not liable to any person under
4636+22 IC 26-1-9.1-625(c)(2) for its failure to comply with IC 26-1-9.1-616.
4637+23 (e) A secured party is not liable under IC 26-1-9.1-625(c)(2) more
4638+24 than once with respect to any one secured obligation.
4639+25 (f) Subsections (a) and (b) do not apply to limit the liability of a
4640+26 secured party to a person if, at the time the secured party obtains
4641+27 control of collateral that is a controllable account, controllable
4642+28 electronic record, or controllable payment intangible or at the time
4643+29 the security interest attaches to the collateral, whichever is later:
4644+30 (1) the person is a debtor or obligor; and
4645+31 (2) the secured party knows that the information in subsection
4646+32 (b)(1)(A), (b)(1)(B), or (b)(1)(C) relating to the person is not
4647+33 provided by the collateral, a record attached to or logically
4648+34 associated with the collateral, or the system in which the
4649+35 collateral is recorded.
4650+36 SECTION 89. IC 26-1-11 IS REPEALED [EFFECTIVE JULY 1,
4651+37 2023]. (Controllable Electronic Records).
4652+38 SECTION 90. IC 26-1-12 IS ADDED TO THE INDIANA CODE
4653+39 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
4654+40 JULY 1, 2023]:
4655+41 Chapter 12. Controllable Electronic Records
4656+42 Sec. 101. This chapter shall be known and may be cited as
4657+ES 468—LS 7443/DI 101 108
4658+1 Uniform Commercial Code - Controllable Electronic Records.
4659+2 Sec. 102. (a) In this chapter the following definitions apply:
4660+3 (1) "Controllable electronic record" means a record stored in
4661+4 an electronic medium that can be subjected to control under
4662+5 section 105 of this chapter. The term does not include a
4663+6 controllable account, a controllable payment intangible, a
4664+7 deposit account, an electronic copy of a record evidencing
4665+8 chattel paper, an electronic document of title, investment
4666+9 property, a transferable record, or an electronic record that
4667+10 is currently authorized or adopted by a domestic or foreign
4668+11 government and is not a medium of exchange that was
4669+12 recorded and transferable in a system that existed and
4670+13 operated for the medium of exchange before the medium of
4671+14 exchange was authorized or adopted by a government.
4672+15 (2) "Qualifying purchaser" means a purchaser:
4673+16 (A) of a controllable electronic record; or
4674+17 (B) of an interest in a controllable electronic record;
4675+18 that obtains control of the controllable electronic record for
4676+19 value, in good faith, and without notice of a claim of a
4677+20 property right in the controllable electronic record.
4678+21 (3) "Transferable record" has the meaning set forth in:
4679+22 (A) Section 201(a)(1) of the Electronic Signatures in Global
4680+23 and National Commerce Act (15 U.S.C. 7021(a)(1)); or
4681+24 (B) IC 26-2-8-115(a).
4682+25 (4) "Value" has the meaning set forth in IC 26-1-3.1-303(a),
4683+26 as if references in IC 26-1-3.1-303(a) to an "instrument" were
4684+27 references to a controllable account, a controllable electronic
4685+28 record, or a controllable payment intangible.
4686+29 (b) The definitions in IC 26-1-9.1 of "account debtor",
4687+30 "controllable account", "controllable payment intangible",
4688+31 "chattel paper", "deposit account", and "investment property"
4689+32 apply throughout this chapter.
4690+33 (c) The general definitions and principles of construction and
4691+34 interpretation set forth in IC 26-1-1 apply throughout this chapter.
4692+35 Sec. 103. (a) If there is a conflict between this chapter and
4693+36 IC 26-1-9.1, IC 26-1-9.1 governs.
4694+37 (b) A transaction subject to this chapter is subject to:
4695+38 (1) any applicable rule of law that establishes a different rule
4696+39 for consumers; and
4697+40 (2) any:
4698+41 (A) other statute or regulation that regulates the rates,
4699+42 charges, agreements, and practices for loans, credit sales,
4700+ES 468—LS 7443/DI 101 109
4701+1 or other extensions of credit, including IC 24-4.5; and
4702+2 (B) consumer protection statute or regulation.
4703+3 Sec. 104. (a) This section applies to the acquisition and purchase
4704+4 rights in a controllable account or a controllable payment
4705+5 intangible, including the rights and benefits under subsections (c),
4706+6 (d), (e), (g), and (h) of a purchaser and a qualifying purchaser, in
4707+7 the same manner that this section applies with respect to a
4708+8 controllable electronic record.
4709+9 (b) For purposes of determining whether a purchaser of a
4710+10 controllable account or a controllable payment intangible is a
4711+11 qualifying purchaser, the purchaser obtains control of the account
4712+12 or the payment intangible if the purchaser obtains control of the
4713+13 controllable electronic record that evidences the account or the
4714+14 payment intangible.
4715+15 (c) Except as provided in this section, law other than this
4716+16 chapter determines:
4717+17 (1) whether a person acquires a right in a controllable
4718+18 electronic record; and
4719+19 (2) the right the person acquires.
4720+20 (d) A purchaser of a controllable electronic record acquires all
4721+21 rights in the controllable electronic record that the transferor had
4722+22 or had the power to transfer. However, a purchaser of a limited
4723+23 interest in a controllable electronic record acquires rights only to
4724+24 the extent of the interest purchased.
4725+25 (e) A qualifying purchaser acquires the qualifying purchaser's
4726+26 rights in a controllable electronic record free of a claim of a
4727+27 property right in the controllable electronic record.
4728+28 (f) Except as provided in subsections (a) and (e) with respect to
4729+29 a controllable account or a controllable payment intangible, or in
4730+30 law other than this chapter, a qualifying purchaser takes:
4731+31 (1) a right to payment;
4732+32 (2) a right to performance; or
4733+33 (3) another interest in property;
4734+34 that is evidenced by a controllable electronic record subject to a
4735+35 claim of a property right in the right to payment, right to
4736+36 performance, or other interest in property.
4737+37 (g) An action may not be asserted against a qualifying purchaser
4738+38 based on both:
4739+39 (1) a purchase by the qualifying purchaser of a controllable
4740+40 electronic record; and
4741+41 (2) a claim of a property right in another controllable
4742+42 electronic record;
4743+ES 468—LS 7443/DI 101 110
4744+1 regardless of whether the action is framed in conversion, replevin,
4745+2 constructive trust, equitable lien, or another theory.
4746+3 (h) The filing of a financing statement under IC 26-1-9.1 is not
4747+4 notice of a claim of property right in a controllable electronic
4748+5 record.
4749+6 Sec. 105. (a) A person has control of a controllable electronic
4750+7 record if the electronic record, a record attached to or logically
4751+8 associated with the electronic record, or a system in which the
4752+9 electronic record is recorded:
4753+10 (1) gives the person:
4754+11 (A) power to avail itself of substantially all the benefit from
4755+12 the electronic record; and
4756+13 (B) exclusive power, subject to subsection (b), to:
4757+14 (i) prevent others from availing themselves of
4758+15 substantially all the benefit from the electronic record;
4759+16 and
4760+17 (ii) transfer control of the electronic record to another
4761+18 person or cause another person to obtain control of
4762+19 another controllable electronic record as a result of the
4763+20 transfer of the electronic record; and
4764+21 (2) enables the person readily to identify itself in any way,
4765+22 including by name, identifying number, cryptographic key,
4766+23 office, or account number, as having powers specified in
4767+24 subdivision (1).
4768+25 (b) Subject to subsection (c), a power is exclusive under
4769+26 subsection (a)(1)(B)(i) and (a)(1)(B)(ii) even if:
4770+27 (1) the controllable electronic record, a record attached to or
4771+28 logically associated with the electronic record, or a system in
4772+29 which the electronic record is recorded limits the use of the
4773+30 electronic record or has a protocol programmed to cause a
4774+31 change, including a transfer or loss of control or a
4775+32 modification of benefits afforded by the electronic record; or
4776+33 (2) the power is shared with another person.
4777+34 (c) A power of a person is not shared with another person under
4778+35 subsection (b)(2) and the person's power is not exclusive if:
4779+36 (1) the person can exercise the power only if the power also is
4780+37 exercised by the other person; and
4781+38 (2) the other person:
4782+39 (A) can exercise the power without exercise of the power
4783+40 by the person; or
4784+41 (B) is the transferor to the person of an interest in the
4785+42 controllable electronic record or in a controllable account
4786+ES 468—LS 7443/DI 101 111
4787+1 or controllable payment intangible evidenced by the
4788+2 controllable electronic record.
4789+3 (d) If a person has the powers specified in subsection (a)(1)(B)(i)
4790+4 and (a)(1)(B)(ii), the powers are presumed to be exclusive.
4791+5 (e) A person has control of a controllable electronic record if
4792+6 another person, other than the transferor to the person of an
4793+7 interest in the controllable electronic record, or in a controllable
4794+8 account or controllable payment intangible evidenced by the
4795+9 controllable electronic record:
4796+10 (1) has control of the electronic record and acknowledges that
4797+11 it has control on behalf of the person; or
4798+12 (2) obtains control of the electronic record after having
4799+13 acknowledged that it will obtain control of the electronic
4800+14 record on behalf of the person.
4801+15 (f) A person that has control under this section is not required
4802+16 to acknowledge that it has control on behalf of another person.
4803+17 (g) If a person acknowledges that it has or will obtain control on
4804+18 behalf of another person, unless the person otherwise agrees or law
4805+19 other than this chapter or IC 26-1-9.1 otherwise provides, the
4806+20 person does not owe any duty to any other person and is not
4807+21 required to confirm the acknowledgment to any other person.
4808+22 Sec. 106. (a) An account debtor on a controllable account or a
4809+23 controllable payment intangible may discharge its obligation by
4810+24 paying:
4811+25 (1) the person having control of the controllable electronic
4812+26 record that evidences the controllable account or the
4813+27 controllable payment intangible; or
4814+28 (2) except as provided in subsection (b), a person that
4815+29 formerly had control of the controllable electronic record.
4816+30 (b) Subject to subsection (d), the account debtor may not
4817+31 discharge its obligation by paying a person that formerly had
4818+32 control of the controllable electronic record if the account debtor
4819+33 receives a notification that:
4820+34 (1) is signed by a person that formerly had control or by the
4821+35 person to which control was transferred;
4822+36 (2) reasonably identifies the controllable account or
4823+37 controllable payment intangible;
4824+38 (3) notifies the account debtor that control of the controllable
4825+39 electronic record that evidences the controllable account or
4826+40 controllable payment intangible was transferred;
4827+41 (4) identifies the transferee, in any reasonable way, including
4828+42 by name, identifying number, cryptographic key, office, or
4829+ES 468—LS 7443/DI 101 112
4830+1 account number; and
4831+2 (5) provides a commercially reasonable method by which the
4832+3 account debtor is to pay the transferee.
4833+4 (c) After receipt of a notification that complies with subsection
4834+5 (b), the account debtor may discharge its obligation by paying in
4835+6 accordance with the notification and may not discharge the
4836+7 obligation by paying a person that formerly had control.
4837+8 (d) Subject to subsection (h), notification is ineffective under
4838+9 subsection (b):
4839+10 (1) unless, before the notification is sent, the account debtor
4840+11 and the person that, at that time, had control of the
4841+12 controllable electronic record that evidences the controllable
4842+13 account or the controllable payment intangible agree in a
4843+14 signed record to a commercially reasonable method by which
4844+15 a person may furnish reasonable proof that control has been
4845+16 transferred;
4846+17 (2) to the extent an agreement between the account debtor and
4847+18 seller of a payment intangible limits the account debtor's duty
4848+19 to pay a person other than the seller and the limitation is
4849+20 effective under law other than this chapter; or
4850+21 (3) at the option of the account debtor, if the notification
4851+22 notifies the account debtor to:
4852+23 (A) divide a payment;
4853+24 (B) make less than the full amount of an installment or
4854+25 other periodic payment; or
4855+26 (C) pay any part of a payment by more than one (1)
4856+27 method or to more than one (1) person.
4857+28 (e) Subject to subsection (h), if requested by the account debtor,
4858+29 the person giving notification under subsection (b) seasonably shall
4859+30 furnish reasonable proof, using the method in the agreement
4860+31 described in subsection (d)(1), that control of the controllable
4861+32 electronic record has been transferred. Unless the person complies
4862+33 with the request, the account debtor may discharge its obligation
4863+34 by paying a person that formerly had control, even if the account
4864+35 debtor has received a notification under subsection (b).
4865+36 (f) A person furnishes reasonable proof under subsection (e)
4866+37 that control has been transferred if the person demonstrates, using
4867+38 the method in the agreement described in subsection (d)(1), that
4868+39 the transferee has the power to:
4869+40 (1) avail itself of substantially all the benefit from the
4870+41 controllable electronic record;
4871+42 (2) prevent others from availing themselves of substantially
4872+ES 468—LS 7443/DI 101 113
4873+1 all the benefit from the controllable electronic record; and
4874+2 (3) transfer the powers specified in subdivisions (1) and (2) to
4875+3 another person.
4876+4 (g) Subject to subsection (h), an account debtor may not waive
4877+5 or vary its rights under subsections (d)(1) and (e) or its option
4878+6 under subsection (d)(3).
4879+7 (h) This section is subject to law other than this chapter that
4880+8 establishes a different rule for an account debtor who is an
4881+9 individual and who incurred the obligation primarily for personal,
4882+10 family, or household purposes.
4883+11 Sec. 107. (a) Except as provided in subsection (b), the local law
4884+12 of an electronic record's jurisdiction governs a matter covered by
4885+13 this chapter.
4886+14 (b) For a controllable electronic record that evidences a
4887+15 controllable account or a controllable payment intangible, the local
4888+16 law of the controllable electronic record's jurisdiction governs a
4889+17 matter covered by section 106 of this chapter unless an effective
4890+18 agreement determines that the local law of another jurisdiction
4891+19 governs.
4892+20 (c) The following rules determine a controllable electronic
4893+21 record's jurisdiction under this section:
4894+22 (1) If the controllable electronic record, or a record that is
4895+23 attached to or logically associated with the controllable
4896+24 electronic record and that is readily available for review,
4897+25 expressly provides that a particular jurisdiction is the
4898+26 controllable electronic record's jurisdiction for purposes of
4899+27 this chapter or IC 26-1, that jurisdiction is the controllable
4900+28 electronic record's jurisdiction.
4901+29 (2) If subdivision (1) does not apply, and the rules of the
4902+30 system in which the controllable electronic record is recorded
4903+31 are readily available for review and expressly provide that a
4904+32 particular jurisdiction is the controllable electronic record's
4905+33 jurisdiction for purposes of this chapter or IC 26-1, that
4906+34 jurisdiction is the controllable electronic record's jurisdiction.
4907+35 (3) If subdivisions (1) and (2) do not apply, and the
4908+36 controllable electronic record, or a record that is attached to
4909+37 or logically associated with the controllable electronic record
4910+38 and that is readily available for review, expressly provides
4911+39 that the controllable electronic record is governed by the law
4912+40 of a particular jurisdiction, that jurisdiction is the
4913+41 controllable electronic record's jurisdiction.
4914+42 (4) If subdivisions (1) through (3) do not apply, and the rules
4915+ES 468—LS 7443/DI 101 114
4916+1 of the system in which the controllable electronic record is
4917+2 recorded are readily available for review and expressly
4918+3 provide that the controllable electronic record or the system
4919+4 is governed by the law of a particular jurisdiction, that
4920+5 jurisdiction is the controllable electronic record's jurisdiction.
4921+6 (5) If subdivisions (1) through (4) do not apply, the
4922+7 controllable electronic record's jurisdiction is the District of
4923+8 Columbia.
4924+9 (d) If subsection (c)(5) applies and this chapter is not in effect in
4925+10 the District of Columbia without material modification, the
4926+11 governing law for a matter covered by this chapter is the law of the
4927+12 District of Columbia as though this chapter were in effect in the
4928+13 District of Columbia without material modification.
4929+14 (e) To the extent that subsections (a) and (b) provide that the
4930+15 local law of the controllable electronic record's jurisdiction
4931+16 governs a matter covered by this chapter, that law governs even if
4932+17 the matter or a transaction to which the matter relates does not
4933+18 bear any relation to the controllable record's jurisdiction.
4934+19 (f) The rights acquired under section 104 of this chapter by a
4935+20 purchaser or a qualifying purchaser are governed by the law
4936+21 applicable under this section at the time of purchase.
4937+22 SECTION 91. IC 26-1-12.5 IS ADDED TO THE INDIANA CODE
4938+23 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
4939+24 JULY 1, 2023]:
4940+25 Chapter 12.5. Transitional Provisions For Uniform Commercial
4941+26 Code Amendments (2022)
4942+27 Sec. 101. This chapter may be cited as Transitional Provisions
4943+28 for Uniform Commercial Code Amendments (2022).
4944+29 Sec. 102. (a) In this chapter, the following terms have the
4945+30 following meanings:
4946+31 (1) The following terms have the following meanings:
4947+32 (A) "Act" refers to the amendments to IC 26-1 that:
4948+33 (i) were made during the 2023 regular session of the
4949+34 general assembly; and
4950+35 (ii) took effect July 1, 2023.
4951+36 (B) "Adjustment date" means July 1, 2025.
4952+37 (2) "Chapter 12" refers to IC 26-1-12.
4953+38 (3) "Chapter 12 property" means a controllable account, a
4954+39 controllable electronic record, or a controllable payment
4955+40 intangible.
4956+41 (b) The following definitions in other chapters of IC 26-1 apply
4957+42 to this chapter:
4958+ES 468—LS 7443/DI 101 115
4959+1 "Controllable account". IC 26-1-9.1-102.
4960+2 "Controllable electronic record". IC 26-1-12-102.
4961+3 "Controllable payment intangible". IC 26-1-9.1-102.
4962+4 "Financing statement". IC 26-1-9.1-102.
4963+5 (c) IC 26-1-1 contains general definitions and principles of
4964+6 construction and interpretation that apply throughout this chapter.
4965+7 Sec. 201. Except as provided in sections 301 through 306 of this
4966+8 chapter, a transaction validly entered into before July 1, 2023, and
4967+9 the rights, duties, and interests flowing from the transaction
4968+10 remain valid after June 30, 2023, and may be terminated,
4969+11 completed, consummated, or enforced as required or permitted by
4970+12 law other than IC 26-1 or, if applicable, by IC 26-1 as though the
4971+13 act had not taken effect.
4972+14 Sec. 301. (a) Except as otherwise provided in this section or in
4973+15 sections 302 through 306 of this chapter:
4974+16 (1) IC 26-1-9.1, as amended by the act; and
4975+17 (2) IC 26-1-12;
4976+18 apply to a transaction, lien, or interest in property, even if the
4977+19 transaction, lien, or interest was entered into, created, or acquired
4978+20 before July 1, 2023.
4979+21 (b) Except as provided in subsection (c) and in sections 302
4980+22 through 306 of this chapter:
4981+23 (1) a transaction, lien, or interest in property that was validly
4982+24 entered into, created, or transferred before July 1, 2023, and
4983+25 was not governed by IC 26-1, but would be subject to:
4984+26 (A) IC 26-1-9.1, as amended by the act; or
4985+27 (B) IC 26-1-12;
4986+28 if it had been entered into, created, or transferred on or after
4987+29 July 1, 2023, including the rights, duties, and interests flowing
4988+30 from the transaction, lien, or interest, remain valid on and
4989+31 after July 1, 2023; and
4990+32 (2) the transaction, lien, or interest may be terminated,
4991+33 completed, consummated, and enforced as required or
4992+34 permitted by:
4993+35 (A) the act; or
4994+36 (B) the law that would apply if the act had not taken effect.
4995+37 (c) The act does not affect an action, case, or proceeding
4996+38 commenced before July 1, 2023.
4997+39 Sec. 302. (a) A security interest that is enforceable and perfected
4998+40 on June 30, 2023, is a perfected security interest under the act if, on
4999+41 July 1, 2023, the requirements for enforceability and perfection
5000+42 under the act are satisfied without further action.
5001+ES 468—LS 7443/DI 101 116
5002+1 (b) If a security interest is enforceable and effective on June 30,
5003+2 2023, but the requirements for enforceability and perfection under
5004+3 the act are not satisfied on July 1, 2023, the security interest:
5005+4 (1) is a perfected security interest until the earlier of:
5006+5 (A) the time perfection would have ceased under IC 26-1 as
5007+6 in effect on June 30, 2023; or
5008+7 (B) the adjustment date;
5009+8 (2) remains enforceable on or after the time specified in
5010+9 subdivision (1) only if the security interest satisfies the
5011+10 requirements for enforceability under IC 26-1-9.1-203, as
5012+11 amended by the act, before the adjustment date; and
5013+12 (3) remains perfected on or after the time specified in
5014+13 subdivision (1) only if the requirements for perfection under
5015+14 the act are satisfied before the time specified in subdivision
5016+15 (1).
5017+16 Sec. 303. A security interest that is enforceable on June 30, 2023,
5018+17 but is unperfected on June 30, 2023:
5019+18 (1) remains an enforceable security interest until the
5020+19 adjustment date;
5021+20 (2) remains enforceable on or after the adjustment date if the
5022+21 security interest becomes enforceable under IC 26-1-9.1-203,
5023+22 as amended by the act, on July 1, 2023, or before the
5024+23 adjustment date; and
5025+24 (3) becomes perfected;
5026+25 (A) without further action on July 1, 2023, if the
5027+26 requirements for perfection under the act are satisfied
5028+27 before or on July 1, 2023; or
5029+28 (B) when the requirements for perfection under the act are
5030+29 satisfied if the requirements are satisfied after July 1, 2023.
5031+30 Sec. 304. (a) If action, other than the filing of a financing
5032+31 statement, is taken before July 1, 2023, and the action would have
5033+32 resulted in perfection of a security interest had the security interest
5034+33 become enforceable before July 1, 2023, the action is effective to
5035+34 perfect a security interest that attaches under the act before the
5036+35 adjustment date. An attached security interest becomes
5037+36 unperfected on the adjustment date unless the security interest
5038+37 becomes a perfected security interest under the act before the
5039+38 adjustment date.
5040+39 (b) The filing of a financing statement before July 1, 2023, is
5041+40 effective to perfect a security interest on July 1, 2023, to the extent
5042+41 the filing would satisfy the requirements for perfection under the
5043+42 act.
5044+ES 468—LS 7443/DI 101 117
5045+1 (c) The taking of an action before July 1, 2023, is sufficient for
5046+2 the enforceability of a security interest on July 1, 2023, if the action
5047+3 would satisfy the requirements for enforceability under the act.
5048+4 Sec. 305. (a) Subject to subsections (b) and (c), the act
5049+5 determines the priority of conflicting claims to collateral.
5050+6 (b) Subject to subsection (c), if the priorities of claims to
5051+7 collateral were established before July 1, 2023, IC 26-1-9.1 as in
5052+8 effect before July 1, 2023, determines priority.
5053+9 (c) On the adjustment date, to the extent the priorities
5054+10 determined by IC 26-1-9.1, as amended by the act, modify the
5055+11 priorities established before July 1, 2023, the priorities of claims to
5056+12 chapter 12 property established before July 1, 2023, cease to apply.
5057+13 Sec. 306. (a) Subject to subsections (b) and (c), chapter 12
5058+14 determines the priority of conflicting claims to chapter 12 property
5059+15 when the priority rules of IC 26-1-9.1, as amended by the act, do
5060+16 not apply.
5061+17 (b) Subject to subsection (c), when the priority rules of
5062+18 IC 26-1-9.1, as amended by the act, do not apply and the priorities
5063+19 of claims to chapter 12 property were established before July 1,
5064+20 2023, law other than chapter 12 determines priority.
5065+21 (c) When the priority rules of IC 26-1-9.1, as amended by the
5066+22 act, do not apply, to the extent the priorities determined by the act
5067+23 modify the priorities established before July 1, 2023, the priorities
5068+24 of claims to chapter 12 property established before July 1, 2023,
5069+25 cease to apply on the adjustment date.
5070+26 SECTION 92. IC 32-34-1.5-3, AS AMENDED BY P.L.110-2022,
5071+27 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
5072+28 JULY 1, 2023]: Sec. 3. The following definitions apply throughout this
5073+29 chapter:
5074+30 (1) "Apparent owner" means a person whose name appears on the
5075+31 records of a holder as the owner of property held, issued, or owing
5076+32 by the holder.
5077+33 (2) "Attorney general's agent" means a person with which the
5078+34 attorney general contracts to conduct an examination under
5079+35 section 53 of this chapter on behalf of the attorney general.
5080+36 (3) "Business association" means a corporation, joint stock
5081+37 company, investment company other than an investment company
5082+38 registered under the Investment Company Act of 1940 (15 U.S.C.
5083+39 80a-1 et seq.), partnership, unincorporated association, joint
5084+40 venture, limited liability company, business trust, trust company,
5085+41 land bank, safe deposit company, safekeeping depository,
5086+42 financial organization, insurance company, federally chartered
5087+ES 468—LS 7443/DI 101 118
5088+1 entity, utility, sole proprietorship, or other business entity,
5089+2 whether or not for profit.
5090+3 (4) "Confidential information" means records, reports, and
5091+4 information that are considered confidential under section 78 of
5092+5 this chapter.
5093+6 (5) "Controllable electronic record" has the meaning set forth in
5094+7 IC 26-1-11-104. IC 26-1-12-102.
5095+8 (6) "Domicile" means the following:
5096+9 (A) For a corporation, the state of its incorporation.
5097+10 (B) For a business association other than a corporation whose
5098+11 formation requires a filing with a state, the state of its filing.
5099+12 (C) For a federally chartered entity or an investment company
5100+13 registered under the Investment Company Act of 1940, as
5101+14 amended (15 U.S.C. 80a-1 et seq.), the state of its home office.
5102+15 (D) For any other holder, the state of its principal place of
5103+16 business.
5104+17 (7) "Electronic" means relating to technology having electrical,
5105+18 digital, magnetic, wireless, optical, electromagnetic, or similar
5106+19 capabilities.
5107+20 (8) "Electronic mail" means a communication by electronic means
5108+21 which is automatically retained and stored and may be readily
5109+22 accessed or retrieved.
5110+23 (9) "Financial organization" means a savings and loan association,
5111+24 building and loan association, savings bank, industrial bank, bank,
5112+25 banking organization, or credit union.
5113+26 (10) "Financial organization loyalty program" means a record
5114+27 given without direct monetary consideration, excluding an annual
5115+28 or periodic fee, under an award, reward, benefit, loyalty,
5116+29 incentive, rebate, or other promotional program established by a
5117+30 financial organization for the purpose of rewarding a relationship
5118+31 with the sponsoring financial organization. The term includes:
5119+32 (A) both a physical card and an electronic record; and
5120+33 (B) a program offering a record that is redeemable for money
5121+34 or cash or is otherwise monetized by the financial
5122+35 organization.
5123+36 (11) "Game related digital content" means digital content that
5124+37 exists only in an electronic game or electronic-game platform.
5125+38 The term includes game-play currency such as a virtual wallet,
5126+39 even if denominated in United States currency and, if for use or
5127+40 redemption only within the game or platform or another electronic
5128+41 game or electronic-game platform, points sometimes referred to
5129+42 as gems, tokens, gold, and similar names and digital codes. The
5130+ES 468—LS 7443/DI 101 119
5131+1 term does not include an item that the issuer:
5132+2 (A) permits to be redeemed for use outside a game or platform
5133+3 for money or goods or services that have more than minimal
5134+4 value; or
5135+5 (B) otherwise monetizes for use outside a game or platform.
5136+6 (12) "Holder" means a person obligated to hold for the account of,
5137+7 or to deliver or pay to, the owner property subject to this chapter.
5138+8 (13) "Insurance company" means an association, corporation, or
5139+9 fraternal or mutual benefit organization, whether or not for profit,
5140+10 engaged in the business of providing life endowments, annuities,
5141+11 or insurance, including accident, burial, casualty, credit life,
5142+12 contract performance, dental, disability, fidelity, fire, health,
5143+13 hospitalization, illness, life, malpractice, marine, mortgage,
5144+14 surety, wage protection, and worker's compensation insurance.
5145+15 (14) "Loyalty card" means a record given without direct monetary
5146+16 consideration under an award, reward, benefit, loyalty, incentive,
5147+17 rebate, or promotional program which may be used or redeemed
5148+18 only to obtain goods or services or a discount on goods or
5149+19 services. The term does not include a record that may be
5150+20 redeemed for money or otherwise monetized by the issuer.
5151+21 (15) "Mineral" means gas, oil, coal, oil shale, other gaseous liquid
5152+22 or solid hydrocarbon, cement material, sand and gravel, road
5153+23 material, building stone, chemical raw material, gemstone,
5154+24 fissionable and nonfissionable ores, colloidal and other clay,
5155+25 steam and other geothermal resources, and any other substance
5156+26 defined as a mineral by a law of this state other than this chapter.
5157+27 (16) "Mineral proceeds" means an amount payable for the
5158+28 extraction, production, or sale of minerals, or, on the
5159+29 abandonment of the amount, an amount that becomes payable
5160+30 after abandonment. The term includes an amount payable:
5161+31 (A) for the acquisition and retention of a mineral lease,
5162+32 including a bonus, royalty, compensatory royalty, shut-in
5163+33 royalty, minimum royalty, and delay rental;
5164+34 (B) for the extraction, production, or sale of minerals,
5165+35 including a net revenue interest, royalty, overriding royalty,
5166+36 extraction payment, and production payment; and
5167+37 (C) under an agreement or option, including a joint-operation
5168+38 agreement, unit agreement, pooling agreement, and farm out
5169+39 agreement.
5170+40 (17) "Money order" means a payment order for a specified
5171+41 amount of money. The term includes an express money order and
5172+42 a personal money order on which the remitter is the purchaser.
5173+ES 468—LS 7443/DI 101 120
5174+1 (18) "Municipal bond" means a bond or evidence of indebtedness
5175+2 issued by a municipality or other political subdivision of a state.
5176+3 (19) "Non-freely transferable security" means a security that
5177+4 cannot be delivered to the attorney general by the Depository
5178+5 Trust & Clearing Corporation or similar custodian of securities
5179+6 providing post-trade clearing and settlement services to financial
5180+7 markets or cannot be delivered because there is no agent to effect
5181+8 transfer. The term includes a worthless security.
5182+9 (20) "Owner" means a person that has a legal, beneficial, or
5183+10 equitable interest in property subject to this chapter or the
5184+11 person's legal representative when acting on behalf of the owner.
5185+12 The term includes:
5186+13 (A) for a deposit, a depositor;
5187+14 (B) for a trust other than a deposit in trust, a beneficiary;
5188+15 (C) for other property, a creditor, claimant, or payee; and
5189+16 (D) the lawful bearer of a record that may be used to obtain
5190+17 money, a reward, or a thing of value.
5191+18 (21) "Payroll card" means a record that evidences a payroll card
5192+19 account as defined in Regulation E (12 CFR Part 1005).
5193+20 (22) "Person" means an individual, estate, business association,
5194+21 public corporation, government or governmental subdivision,
5195+22 agency, or instrumentality, or other legal entity.
5196+23 (23) "Property" means tangible property described in section 8 of
5197+24 this chapter or a fixed and certain interest in intangible property
5198+25 held, issued, or owed in the course of a holder's business or by a
5199+26 government or governmental subdivision, agency, or
5200+27 instrumentality. The term includes:
5201+28 (A) all income from or increments to the property; and
5202+29 (B) property referred to as or evidenced by:
5203+30 (i) money, virtual currency, interest, or a dividend, check,
5204+31 draft, deposit, or payroll card;
5205+32 (ii) a credit balance, customer's overpayment, security
5206+33 deposit, refund, credit memorandum, unpaid wage, unused
5207+34 ticket for which the issuer has an obligation to provide a
5208+35 refund, mineral proceeds, or unidentified remittance;
5209+36 (iii) a security, except for a worthless security or a security
5210+37 that is subject to a lien, legal hold, or restriction evidenced
5211+38 on the records of the holder or imposed by operation of law,
5212+39 if the lien, legal hold, or restriction restricts the holder's or
5213+40 owner's ability to receive, transfer, sell, or otherwise
5214+41 negotiate the security;
5215+42 (iv) a bond, debenture, note, or other evidence of
5216+ES 468—LS 7443/DI 101 121
5217+1 indebtedness;
5218+2 (v) money deposited to redeem a security, make a
5219+3 distribution, or pay a dividend;
5220+4 (vi) an amount due and payable under an annuity contract or
5221+5 insurance policy; and
5222+6 (vii) an amount distributable from a trust or custodial fund
5223+7 established under a plan to provide health, welfare, pension,
5224+8 vacation, severance, retirement, death, stock purchase, profit
5225+9 sharing, employee savings, supplemental unemployment
5226+10 insurance, or a similar benefit.
5227+11 The term does not include property held in a plan described in
5228+12 Section 529A of the Internal Revenue Code, game related digital
5229+13 content, a financial organization loyalty program, a loyalty card,
5230+14 or an in-store credit for returned merchandise.
5231+15 (24) "Putative holder" means a person believed by the attorney
5232+16 general to be a holder, until the person pays or delivers to the
5233+17 attorney general property subject to this chapter or the attorney
5234+18 general or court makes a final determination that the person is or
5235+19 is not a holder.
5236+20 (25) "Record" means information that is inscribed on a tangible
5237+21 medium or that is stored in an electronic or other medium and is
5238+22 retrievable in perceivable form.
5239+23 (26) "Security" means:
5240+24 (A) a security (as defined in IC 26-1-8.1-102);
5241+25 (B) a security entitlement (as defined in IC 26-1-8.1-102),
5242+26 including a customer security account held by a registered
5243+27 broker-dealer, to the extent the financial assets held in the
5244+28 security account are not:
5245+29 (i) registered on the books of the issuer in the name of the
5246+30 person for which the broker-dealer holds the assets;
5247+31 (ii) payable to the order of the person; or
5248+32 (iii) specifically indorsed to the person; or
5249+33 (C) an equity interest in a business association not included in
5250+34 clause (A) or (B).
5251+35 (27) "Sign" means, with present intent to authenticate or adopt a
5252+36 record:
5253+37 (A) to execute or adopt a tangible symbol; or
5254+38 (B) to attach to or logically associate with the record an
5255+39 electronic symbol, sound, or process.
5256+40 (28) "State" means a state of the United States, the District of
5257+41 Columbia, the Commonwealth of Puerto Rico, the United States
5258+42 Virgin Islands, or any territory or insular possession subject to the
5259+ES 468—LS 7443/DI 101 122
5260+1 jurisdiction of the United States.
5261+2 (29) "Utility" means a person that owns or operates for public use
5262+3 a plant, equipment, real property, franchise, or license for the
5263+4 following public services:
5264+5 (A) Transmission of communications or information.
5265+6 (B) Production, storage, transmission, sale, delivery, or
5266+7 furnishing of electricity, water, steam, or gas.
5267+8 (C) Provision of sewage or septic services, or trash, garbage,
5268+9 or recycling disposal.
5269+10 (30) "Virtual currency" means a digital representation of value
5270+11 used as a medium of exchange, unit of account, or store of value,
5271+12 which does not have legal tender status recognized by the United
5272+13 States. The term does not include:
5273+14 (A) the software or protocols governing the transfer of the
5274+15 digital representation of value;
5275+16 (B) game related digital content;
5276+17 (C) a financial organization loyalty program; or
5277+18 (D) a loyalty card.
5278+19 (31) "Worthless security" means a security whose cost of
5279+20 liquidation and delivery to the attorney general would exceed the
5280+21 value of the security on the date a report is due under this chapter.
5281+22 SECTION 93. IC 32-34-1.5-87, AS AMENDED BY P.L.110-2022,
5282+23 SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
5283+24 JULY 1, 2023]: Sec. 87. (a) The attorney general may adopt rules under
5284+25 IC 4-22-2 to carry out the purposes of this chapter.
5285+26 (b) The attorney general may adopt rules under IC 4-22-2 regarding
5286+27 virtual currency, controllable electronic records, and digital assets, to
5287+28 the extent such rules are consistent with, and not otherwise covered by,
5288+29 the following:
5289+30 (1) IC 26-1-9.1.
5290+31 (2) IC 26-1-11. IC 26-1-12.
5291+32 (3) Any other Indiana law concerning virtual currency,
5292+33 controllable electronic records, or digital assets.
5293+ES 468—LS 7443/DI 101 123
5294+COMMITTEE REPORT
5295+Madam President: The Senate Committee on Judiciary, to which
5296+was referred Senate Bill No. 468, has had the same under consideration
5297+and begs leave to report the same back to the Senate with the
5298+recommendation that said bill be AMENDED as follows:
5299+Page 37, line 36, delete "IC 26-1-12-102." and insert "IC
5300+26-1-9.1-102.".
5301+Page 37, line 38, delete "IC 26-1-12-102." and insert "IC
5302+26-1-9.1-102.".
5303+Page 61, line 17, after "documents," insert "electronic money,".
5304+Page 61, line 20, strike "IC 26-1-9.1-105," and insert "IC
5305+26-1-9.1-105.1,".
5306+Page 67, line 29, delete "IC 26-1-9.1-306.1," and insert "IC
5307+26-1-9.1-306.2,".
5308+Page 73, line 3, after "interest in" insert "tangible".
5309+Page 76, line 23, delete "IC 26-1-9.1-306(a)," and insert "IC
5310+26-1-9.1-306.1(d),".
5311+Page 76, line 23, delete "IC 26-1-9.1-306.1(b)" and insert "IC
5312+26-1-9.1-306.2(b)".
5313+Page 88, line 1, reset in roman "(i)".
5314+Page 88, line 1, delete "(j)," and insert "and (l),".
5315+Page 88, line 10, delete "(j)," and insert "(l),".
5316+Page 88, line 25, delete "(j)," and insert "(l),".
5317+Page 88, line 33, strike "subsection" and insert "subsections".
5318+Page 88, line 33, after "(e)" insert "and (k)".
5319+Page 89, line 8, after "in" insert "subsection (k) and".
5320+Page 89, line 25, delete "(j)," and insert "(l),".
5321+Page 89, between lines 32 and 33, begin a new paragraph and insert:
5322+"(j) This section prevails over any inconsistent provision in
37405323 statute, administrative rule, or regulation.
37415324 (k) Subsections (d), (f), and (j) do not apply to a security interest
37425325 in an ownership interest in a general partnership, limited
3743-partnership, or limited liability company.
3744-(l) Subsections (a), (b), (c), and (g) do not apply to a controllable
3745-account or a controllable payment intangible.
3746-SECTION 73. IC 26-1-9.1-408, AS AMENDED BY P.L.54-2011,
3747-SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3748-JULY 1, 2023]: Sec. 408. (a) Except as otherwise provided in
3749-subsection (b), subsections (b) and (f), a term in a promissory note or
3750-in an agreement between an account debtor and a debtor that relates to
3751-a health-care-insurance receivable or a general intangible, including a
3752-contract, permit, license, or franchise, and which term prohibits,
3753-restricts, or requires the consent of the person obligated on the
3754-promissory note or the account debtor to, the assignment or transfer of,
3755-or creation, attachment, or perfection of a security interest in, the
3756-promissory note, health-care-insurance receivable, or general
3757-intangible, is ineffective to the extent that the term:
3758-(1) would impair the creation, attachment, or perfection of a
3759-security interest; or
3760-(2) provides that the assignment, transfer, creation, attachment, or
3761-perfection of the security interest may give rise to a default,
3762-breach, right of recoupment, claim, defense, termination, right of
3763-termination, or remedy under the promissory note,
3764-health-care-insurance receivable, or general intangible.
3765-(b) Subsection (a) applies to a security interest in a payment
3766-intangible or promissory note only if the security interest arises out of
3767-a sale of the payment intangible or promissory note other than a sale
3768-under a disposition under IC 26-1-9.1-610 or an acceptance of
3769-collateral under IC 26-1-9.1-620.
3770-(c) Except as provided in subsection (f), a rule of law, statute, or
3771-regulation, which prohibits, restricts, or requires the consent of a
3772-government, governmental body or official, person obligated on a
3773-promissory note, or account debtor to the assignment or transfer of, or
3774-creation of a security interest in, a promissory note,
3775-health-care-insurance receivable, or general intangible, including a
3776-contract, permit, license, or franchise between an account debtor and
3777-a debtor, is ineffective to the extent that the rule of law, statute, or
3778-SEA 468 — Concur 89
3779-regulation:
3780-(1) would impair the creation, attachment, or perfection of a
3781-security interest; or
3782-(2) provides that the assignment, transfer, creation, attachment, or
3783-perfection of the security interest may give rise to a default,
3784-breach, right of recoupment, claim, defense, termination, right of
3785-termination, or remedy under the promissory note,
3786-health-care-insurance receivable, or general intangible.
3787-(d) To the extent that a term in a promissory note or in an agreement
3788-between an account debtor and a debtor which relates to a
3789-health-care-insurance receivable or general intangible or a rule of law,
3790-statute, or regulation described in subsection (c) would be effective
3791-under law other than IC 26-1-9.1 but is ineffective under subsection (a)
3792-or (c), the creation, attachment, or perfection of a security interest in
3793-the promissory note, health-care-insurance receivable, or general
3794-intangible:
3795-(1) is not enforceable against the person obligated on the
3796-promissory note or the account debtor;
3797-(2) does not impose a duty or obligation on the person obligated
3798-on the promissory note or the account debtor;
3799-(3) does not require the person obligated on the promissory note
3800-or the account debtor to recognize the security interest, pay or
3801-render performance to the secured party, or accept payment or
3802-performance from the secured party;
3803-(4) does not entitle the secured party to use or assign the debtor's
3804-rights under the promissory note, health-care-insurance
3805-receivable, or general intangible, including any related
3806-information or materials furnished to the debtor in the transaction
3807-giving rise to the promissory note, health-care-insurance
3808-receivable, or general intangible;
3809-(5) does not entitle the secured party to use, assign, possess, or
3810-have access to any trade secrets or confidential information of the
3811-person obligated on the promissory note or the account debtor;
3812-and
3813-(6) does not entitle the secured party to enforce the security
3814-interest in the promissory note, health-care-insurance receivable,
3815-or general intangible.
3816-(e) This section prevails over any inconsistent provision in statute,
3817-administrative rule, or regulation.
3818-(f) This section does not apply to a security interest in an
5326+partnership, or limited liability company.".
5327+Page 89, line 33, delete "(j)" and insert "(l)".
5328+Page 89, line 38, strike "subsection (b)," and insert "subsections (b)
5329+and (f),".
5330+Page 90, line 17, delete "A" and insert "Except as provided in
5331+subsection (f), a".
5332+Page 91, between lines 20 and 21, begin a new paragraph and insert:
5333+"(f) This section does not apply to a security interest in an
38195334 ownership interest in a general partnership, limited partnership,
3820-or limited liability company.
3821-SEA 468 — Concur 90
3822-(g) As used in this section, "promissory note" includes a
3823-negotiable instrument that evidences chattel paper.
3824-SECTION 74. IC 26-1-9.1-509, AS AMENDED BY P.L.1-2010,
3825-SECTION 108, IS AMENDED TO READ AS FOLLOWS
3826-[EFFECTIVE JULY 1, 2023]: Sec. 509. (a) A person may file an initial
3827-financing statement, amendment that adds collateral covered by a
3828-financing statement, or amendment that adds a debtor to a financing
3829-statement only if:
3830-(1) the debtor authorizes the filing in an authenticated a signed
3831-record or under subsection (b) or (c); or
3832-(2) the person holds an agricultural lien that has become effective
3833-at the time of filing and the financing statement covers only
3834-collateral in which the person holds an agricultural lien.
3835-(b) By authenticating signing or becoming bound as debtor by a
3836-security agreement, a debtor or new debtor authorizes the filing of an
3837-initial financing statement, and an amendment, covering:
3838-(1) the collateral described in the security agreement; and
3839-(2) property that becomes collateral under IC 26-1-9.1-315(a)(2),
3840-whether or not the security agreement expressly covers proceeds.
3841-(c) By acquiring collateral in which a security interest or agricultural
3842-lien continues under IC 26-1-9.1-315(a)(1), a debtor authorizes the
3843-filing of an initial financing statement, and an amendment, covering the
3844-collateral and property that becomes collateral under
3845-IC 26-1-9.1-315(a)(2).
3846-(d) A person may file an amendment other than an amendment that
3847-adds collateral covered by a financing statement or an amendment that
3848-adds a debtor to a financing statement only if:
3849-(1) the secured party of record authorizes the filing; or
3850-(2) the amendment is a termination statement for a financing
3851-statement as to which the secured party of record has failed to file
3852-or send a termination statement as required by IC 26-1-9.1-513(a)
3853-or IC 26-1-9.1-513(c), the debtor authorizes the filing, and the
3854-termination statement indicates that the debtor authorized it to be
3855-filed.
3856-(e) If there is more than one (1) secured party of record for a
3857-financing statement, each secured party of record may authorize the
3858-filing of an amendment under subsection (d).
3859-SECTION 75. IC 26-1-9.1-513 IS AMENDED TO READ AS
3860-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 513. (a) A secured
3861-party shall cause the secured party of record for a financing statement
3862-to file a termination statement for the financing statement if the
3863-financing statement covers consumer goods and:
3864-SEA 468 — Concur 91
3865-(1) there is no obligation secured by the collateral covered by the
3866-financing statement and no commitment to make an advance,
3867-incur an obligation, or otherwise give value; or
3868-(2) the debtor did not authorize the filing of the initial financing
3869-statement.
3870-(b) To comply with subsection (a), a secured party shall cause the
3871-secured party of record to file the termination statement:
3872-(1) within one (1) month after there is no obligation secured by
3873-the collateral covered by the financing statement and no
3874-commitment to make an advance, incur an obligation, or
3875-otherwise give value; or
3876-(2) if earlier, within twenty (20) days after the secured party
3877-receives an authenticated a signed demand from a debtor.
3878-(c) In cases not governed by subsection (a), within twenty (20) days
3879-after a secured party receives an authenticated a signed demand from
3880-a debtor, the secured party shall cause the secured party of record for
3881-a financing statement to send to the debtor a termination statement for
3882-the financing statement or file the termination statement in the filing
3883-office if:
3884-(1) except in the case of a financing statement covering accounts
3885-or chattel paper that has been sold or goods that are the subject of
3886-a consignment, there is no obligation secured by the collateral
3887-covered by the financing statement and no commitment to make
3888-an advance, incur an obligation, or otherwise give value;
3889-(2) the financing statement covers accounts or chattel paper that
3890-has been sold but as to which the account debtor or other person
3891-obligated has discharged its obligation;
3892-(3) the financing statement covers goods that were the subject of
3893-a consignment to the debtor but are not in the debtor's possession;
3894-or
3895-(4) the debtor did not authorize the filing of the initial financing
3896-statement.
3897-(d) Except as otherwise provided in IC 26-1-9.1-510, upon the filing
3898-of a termination statement with the filing office, the financing
3899-statement to which the termination statement relates ceases to be
3900-effective. Except as otherwise provided in IC 26-1-9.1-510, for
3901-purposes of IC 26-1-9.1-519(g), IC 26-1-9.1-522(a), and
3902-IC 26-1-9.1-523(c), the filing with the filing office of a termination
3903-statement relating to a financing statement that indicates that the debtor
3904-is a transmitting utility also causes the effectiveness of the financing
3905-statement to lapse.
3906-SECTION 76. IC 26-1-9.1-601, AS AMENDED BY P.L.143-2007,
3907-SEA 468 — Concur 92
3908-SECTION 76, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3909-JULY 1, 2023]: Sec. 601. (a) After default, a secured party has the
3910-rights provided in this section through IC 26-1-9.1-628 and, except as
3911-otherwise provided in IC 26-1-9.1-602, those provided by agreement
3912-of the parties. A secured party:
3913-(1) may reduce a claim to judgment, foreclose, or otherwise
3914-enforce the claim, security interest, or agricultural lien by any
3915-available judicial procedure; and
3916-(2) if the collateral is documents, may proceed either as to the
3917-documents or as to the goods they cover.
3918-(b) A secured party in possession of collateral or control of
3919-collateral under IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
3920-IC 26-1-9.1-106, or IC 26-1-9.1-107, or IC 26-1-9.1-107.1 has the
3921-rights and duties provided in IC 26-1-9.1-207.
3922-(c) The rights under subsections (a) and (b) are cumulative and may
3923-be exercised simultaneously.
3924-(d) Except as otherwise provided in subsection (g) and
3925-IC 26-1-9.1-605, after default, a debtor and an obligor have the rights
3926-provided in IC 26-1-9.1-601 through IC 26-1-9.1-628 and by agreement
3927-of the parties.
3928-(e) If a secured party has reduced its claim to judgment, the lien of
3929-any levy that may be made upon the collateral by virtue of an execution
3930-based upon the judgment relates back to the earliest of:
3931-(1) the date of perfection of the security interest or agricultural
3932-lien in the collateral;
3933-(2) the date of filing a financing statement covering the collateral;
3934-or
3935-(3) any date specified in a statute under which the agricultural lien
3936-was created.
3937-(f) A sale pursuant to an execution is a foreclosure of the security
3938-interest or agricultural lien by judicial procedure within the meaning of
3939-this section. A secured party may purchase at the sale and thereafter
3940-hold the collateral free of any other requirements of IC 26-1-9.1.
3941-(g) Except as otherwise provided in IC 26-1-9.1-607(c),
3942-IC 26-1-9.1-601 through IC 26-1-9.1-628 impose no duties upon a
3943-secured party that is a consignor or is a buyer of accounts, chattel
3944-paper, payment intangibles, or promissory notes.
3945-SECTION 77. IC 26-1-9.1-605 IS AMENDED TO READ AS
3946-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 605. (a) Except as
3947-provided in subsection (b), a secured party does not owe a duty based
3948-on its status as secured party:
3949-(1) to a person that is a debtor or obligor, unless the secured party
3950-SEA 468 — Concur 93
3951-knows:
3952-(A) that the person is a debtor or obligor;
3953-(B) the identity of the person; and
3954-(C) how to communicate with the person; or
3955-(2) to a secured party or lienholder that has filed a financing
3956-statement against a person, unless the secured party knows:
3957-(A) that the person is a debtor; and
3958-(B) the identity of the person.
3959-(b) A secured party owes a duty based on its status as secured
3960-party to a person if, at the time the secured party obtains control
3961-of collateral that is a controllable account, a controllable electronic
3962-record, or a controllable payment intangible or at the time the
3963-security interest attaches to the collateral, whichever is later:
3964-(1) the person is a debtor or obligor; and
3965-(2) the secured party knows that the information in subsection
3966-(a)(1)(A), (a)(1)(B), or (a)(1)(C) relating to the person is not
3967-provided by the collateral, a record attached to or logically
3968-associated with the collateral, or the system in which the
3969-collateral is recorded.
3970-SECTION 78. IC 26-1-9.1-608 IS AMENDED TO READ AS
3971-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 608. (a) If a security
3972-interest or agricultural lien secures payment or performance of an
3973-obligation, the following rules apply:
3974-(1) A secured party shall apply or pay over for application the
3975-cash proceeds of collection or enforcement under IC 26-1-9.1-607
3976-in the following order to:
3977-(A) the reasonable expenses of collection and enforcement
3978-and, to the extent provided for by agreement and not
3979-prohibited by law, reasonable attorney's fees and legal
3980-expenses incurred by the secured party;
3981-(B) the satisfaction of obligations secured by the security
3982-interest or agricultural lien under which the collection or
3983-enforcement is made; and
3984-(C) the satisfaction of obligations secured by any subordinate
3985-security interest in or other lien on the collateral subject to the
3986-security interest or agricultural lien under which the collection
3987-or enforcement is made if the secured party receives an
3988-authenticated a signed demand for proceeds before
3989-distribution of the proceeds is completed.
3990-(2) If requested by a secured party, a holder of a subordinate
3991-security interest or other lien shall furnish reasonable proof of the
3992-interest or lien within a reasonable time. Unless the holder
3993-SEA 468 — Concur 94
3994-complies, the secured party need not comply with the holder's
3995-demand under subdivision (1)(C).
3996-(3) A secured party need not apply or pay over for application
3997-noncash proceeds of collection and enforcement under
3998-IC 26-1-9.1-607 unless the failure to do so would be
3999-commercially unreasonable. A secured party that applies or pays
4000-over for application noncash proceeds shall do so in a
4001-commercially reasonable manner.
4002-(4) A secured party shall account to and pay a debtor for any
4003-surplus, and the obligor is liable for any deficiency.
4004-(b) If the underlying transaction is a sale of accounts, chattel paper,
4005-payment intangibles, or promissory notes, the debtor is not entitled to
4006-any surplus, and the obligor is not liable for any deficiency.
4007-SECTION 79. IC 26-1-9.1-611 IS AMENDED TO READ AS
4008-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 611. (a) As used in this
4009-section, "notification date" means the earlier of the date on which:
4010-(1) a secured party sends to the debtor and any secondary obligor
4011-an authenticated a signed notification of disposition; or
4012-(2) the debtor and any secondary obligor waive the right to
4013-notification.
4014-(b) Except as otherwise provided in subsection (d), a secured party
4015-that disposes of collateral under IC 26-1-9.1-610 shall send to the
4016-persons specified in subsection (c) a reasonable authenticated signed
4017-notification of disposition.
4018-(c) To comply with subsection (b), the secured party shall send an
4019-authenticated a signed notification of disposition to:
4020-(1) the debtor;
4021-(2) any secondary obligor; and
4022-(3) if the collateral is other than consumer goods:
4023-(A) any other person from which the secured party has
4024-received, before the notification date, an authenticated a
4025-signed notification of a claim of an interest in the collateral;
4026-(B) any other secured party or lienholder that, ten (10) days
4027-before the notification date, held a security interest in or other
4028-lien on the collateral perfected by the filing of a financing
4029-statement that:
4030-(i) identified the collateral;
4031-(ii) was indexed under the debtor's name as of that date; and
4032-(iii) was filed in the office in which to file a financing
4033-statement against the debtor covering the collateral as of that
4034-date; and
4035-(C) any other secured party that, ten (10) days before the
4036-SEA 468 — Concur 95
4037-notification date, held a security interest in the collateral
4038-perfected by compliance with a statute, regulation, or treaty
4039-described in IC 26-1-9.1-311(a).
4040-(d) Subsection (b) does not apply if the collateral is perishable or
4041-threatens to decline speedily in value or is of a type customarily sold on
4042-a recognized market.
4043-(e) A secured party complies with the requirement for notification
4044-prescribed in subsection (c)(3)(B) if:
4045-(1) not later than twenty (20) days or earlier than thirty (30) days
4046-before the notification date, the secured party requests, in a
4047-commercially reasonable manner, information concerning
4048-financing statements indexed under the debtor's name in the office
4049-indicated in subsection (c)(3)(B); and
4050-(2) before the notification date, the secured party:
4051-(A) did not receive a response to the request for information;
4052-or
4053-(B) received a response to the request for information and sent
4054-an authenticated a signed notification of disposition to each
4055-secured party or other lienholder named in that response
4056-whose financing statement covered the collateral.
4057-SECTION 80. IC 26-1-9.1-613 IS AMENDED TO READ AS
4058-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 613. (a) Except in a
4059-consumer-goods transaction, the following rules apply:
4060-(1) The contents of a notification of disposition are sufficient if
4061-the notification:
4062-(A) describes the debtor and the secured party;
4063-(B) describes the collateral that is the subject of the intended
4064-disposition;
4065-(C) states the method of intended disposition;
4066-(D) states that the debtor is entitled to an accounting of the
4067-unpaid indebtedness and states the charge, if any, for an
4068-accounting; and
4069-(E) states the time and place of a public disposition or the time
4070-after which any other disposition is to be made.
4071-(2) Whether the contents of a notification that lacks any of the
4072-information specified in subdivision (1) are nevertheless
4073-sufficient is a question of fact.
4074-(3) The contents of a notification providing substantially the
4075-information specified in subdivision (1) are sufficient, even if the
4076-notification includes:
4077-(A) information not specified by that subdivision; or
4078-(B) minor errors that are not seriously misleading.
4079-SEA 468 — Concur 96
4080-(4) A particular phrasing of the notification is not required.
4081-(5) The following form of notification and the form appearing in
4082-IC 26-1-9.1-614(3), IC 26-1-9.1-614(a)(3), when completed in
4083-accordance with subsection (b) and IC 26-1-9.1-614(b), each
4084-provides sufficient information:
4085-NOTIFICATION OF DISPOSITION OF COLLATERAL
4086-To:Name of debtor, obligor, or other person to which the
4087-notification is sent (Name of debtor, obligor, or other
4088-person to which the notification is sent)
4089-From:Name, address, and telephone number of secured
4090-party (Name, address, and telephone number of secured party)
4091-{1} Name of Debtor(s): Include only if debtor(s) are not an
4092-addressee any debtor that is not an addressee: (Name of each
4093-debtor)
4094-(For a public disposition:)
4095-{2} We will sell (or lease or license, as applicable) the describe
4096-collateral to (describe collateral) (to the highest qualified bidder in
4097-bidder) at public sale. A sale could include a lease or license. The
4098-sale will be held as follows:
4099-Day and Date: _____________________ (Date)
4100-Time: _________ (Time)
4101-Place: ____________________________ (Place)
4102-(For a private disposition:)
4103-{3} We will sell (or lease or license, as applicable) the describe
4104-collateral privately (describe collateral) at private sale sometime
4105-after day and date. (date). A sale could include a lease or license.
4106-{4} You are entitled to an accounting of the unpaid indebtedness
4107-secured by the property that we intend to sell (or lease or license, as
4108-applicable) (for a charge of $____). or, as applicable, lease or license.
4109-{5} If you request an accounting, you must pay a charge of $
4110-(amount). {6} You may request an accounting by calling us at
4111-telephone number. (telephone number).
4112-(End of Form)
4113-(b) The following instructions apply to the form of notification
4114-in subsection (a)(5):
4115-(1) The instructions in this subsection refer to the numbers in
4116-braces before items in the form of notification in subsection
4117-(a)(5). The numbers in braces:
4118-(A) are used only for the purpose of the instructions under
4119-this subsection; and
4120-(B) must not be included in the notification.
4121-(2) Include and complete item {1} only if there is a debtor that
4122-SEA 468 — Concur 97
4123-is not an addressee of the notification. List the name of each
4124-of those debtors.
4125-(3) Include and complete either item {2}, if the notification
4126-relates to a public disposition of the collateral, or item {3}, if
4127-the notification relates to a private disposition of the
4128-collateral. If item {2} is included, include the words "to the
4129-highest bidder" only if applicable.
4130-(4) Include and complete items {4} and {6}.
4131-(5) Include and complete item {5} only if the sender will
4132-charge the recipient for an accounting.
4133-SECTION 81. IC 26-1-9.1-614 IS AMENDED TO READ AS
4134-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 614. (a) In a
4135-consumer-goods transaction, the following rules apply:
4136-(1) A notification of disposition must provide the following
4137-information:
4138-(A) The information specified in IC 26-1-9.1-613(1).
4139-IC 26-1-9.1-613(a)(1).
4140-(B) A description of any liability for a deficiency of the person
4141-to which the notification is sent.
4142-(C) A telephone number from which the amount that must be
4143-paid to the secured party to redeem the collateral under
4144-IC 26-1-9.1-623 is available.
4145-(D) A telephone number or mailing address from which
4146-additional information concerning the disposition and the
4147-obligation secured is available.
4148-(2) A particular phrasing of the notification is not required.
4149-(3) The following form of notification, when completed in
4150-accordance with the instructions set forth in subsection (b),
4151-provides sufficient information:
4152-Name and address of secured party (Name and address of secured
4153-party)
4154-Date (Date)
4155-NOTICE OF OUR PLAN TO SELL PROPERTY
4156-Name and address of any obligor who is also a debtor (Name and
4157-address of any obligor who is also a debtor)
4158-Subject: Identification of Transaction (Identify transaction)
4159-We have your describe collateral, (describe collateral), because you
4160-broke promises in our agreement.
4161-(For a public disposition:)
4162-{1} We will sell describe collateral (describe collateral) at public
4163-sale. A sale could include a lease or license. The sale will be held as
4164-follows:
4165-SEA 468 — Concur 98
4166-Date: _____________________ (Date)
4167-Time: _________ (Time)
4168-Place: ____________________ (Place)
4169-You may attend the sale and bring bidders if you want.
4170-(For a private disposition:)
4171-{2} We will sell describe collateral (describe collateral) at private
4172-sale sometime after date. (date). A sale could include a lease or license.
4173-{3} The money that we get from the sale, (after after paying our
4174-costs) costs, will reduce the amount you owe. If we get less money than
4175-you owe, you will or will not, as applicable (will or will not, as
4176-applicable) still owe us the difference. If we get more money than you
4177-owe, you will get the extra money, unless we must pay it to someone
4178-else.
4179-{4} You can get the property back at any time before we sell it by
4180-paying us the full amount you owe, (not not just the past due
4181-payments), payments, including our expenses. To learn the exact
4182-amount you must pay, call us at telephone number.(telephone
4183-number).
4184-{5} If you want us to explain to you in writing (writing) (writing or
4185-in (description of electronic record)) (description of electronic
4186-record) how we have figured the amount that you owe us, you may {6}
4187-call us at telephone number (telephone number) or write (or) (write
4188-us at secured party's address (secured party's address)) (or
4189-(description of electronic communication method)) and {7} request
4190-a (a written explanation. explanation) (a written explanation or an
4191-explanation in (description of electronic record)) (an explanation
4192-in (description of electronic record)). {8} We will charge you $
4193-(amount) for the explanation if we sent you another written
4194-explanation of the amount you owe us within the last six (6) months.
4195-{9} If you need more information about the sale call (call us at
4196-telephone number (telephone number)) or write (or) (write us at
4197-secured party's address. (secured party's address) (or contact us by
4198-(description of electronic communication method)).
4199-{10} We are sending this notice to the following other people who
4200-have an interest in describe collateral (describe collateral) or who owe
4201-money under your agreement:
4202-Names of all other debtors and obligors, if any. (Names of all other
4203-debtors and obligors, if any)
4204-(End of Form)
4205-(4) A notification in the form of subdivision (3) is sufficient, even
4206-if additional information appears at the end of the form.
4207-(5) A notification in the form of subdivision (3) is sufficient, even
4208-SEA 468 — Concur 99
4209-if it includes errors in information not required by subdivision (1),
4210-unless the error is misleading with respect to rights arising under
4211-IC 26-1-9.1.
4212-(6) If a notification under this section is not in the form of
4213-subdivision (3), law other than IC 26-1-9.1 determines the effect
4214-of including information not required by subdivision (1).
4215-(b) The following instructions apply to the form of notification
4216-in subsection (a)(3):
4217-(1) The instructions in this subsection refer to the numbers in
4218-braces before items in the form of notification in subsection
4219-(a)(3). The numbers in braces:
4220-(A) are used only for the purpose of the instructions under
4221-this subsection; and
4222-(B) must not be included in the notification.
4223-(2) Include and complete either item {1}, if the notification
4224-relates to a public disposition of the collateral, or item {2}, if
4225-the notification relates to a private disposition of the
4226-collateral.
4227-(3) Include and complete items {3}, {4}, {5}, {6}, and {7}.
4228-(4) In item {5}, include and complete any one (1) of the three
4229-(3) alternative methods for the explanation:
4230-(A) writing;
4231-(B) writing or electronic record; or
4232-(C) electronic record.
4233-(5) In item {6}, include the telephone number. In addition, the
4234-sender may include and complete either or both of the two (2)
4235-additional alternative methods of communication, which are:
4236-(A) writing; and
4237-(B) electronic communication;
4238-by which the recipient of the notification may communicate
4239-with the sender. Neither of the two (2) additional methods of
4240-communication is required to be included.
4241-(6) In item {7}, include and complete each method included in
4242-item {5} (writing, writing or electronic record, or electronic
4243-record) for the explanation.
4244-(7) Include and complete item {8} only if:
4245-(A) a written explanation is included in item {5} as a
4246-method for communicating the explanation; and
4247-(B) the sender will charge the recipient for another written
4248-explanation.
4249-(8) In item {9}, include either the telephone number or the
4250-address or both the telephone number and the address. In
4251-SEA 468 — Concur 100
4252-addition, the sender may include and complete the additional
4253-method of communication (electronic communication) for the
4254-recipient of the notification to communicate with the sender.
4255-The additional method of electronic communication is not
4256-required to be included.
4257-(9) If item {10} does not apply, insert "None" after
4258-"agreement:".
4259-SECTION 82. IC 26-1-9.1-615 IS AMENDED TO READ AS
4260-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 615. (a) A secured
4261-party shall apply or pay over for application the cash proceeds of
4262-disposition under IC 26-1-9.1-610 in the following order to:
4263-(1) the reasonable expenses of retaking, holding, preparing for
4264-disposition, processing, and disposing, and, to the extent provided
4265-for by agreement and not prohibited by law, reasonable attorney's
4266-fees and legal expenses incurred by the secured party;
4267-(2) the satisfaction of obligations secured by the security interest
4268-or agricultural lien under which the disposition is made;
4269-(3) the satisfaction of obligations secured by any subordinate
4270-security interest in or other subordinate lien on the collateral if:
4271-(A) the secured party receives from the holder of the
4272-subordinate security interest or other lien an authenticated a
4273-signed demand for proceeds before distribution of the
4274-proceeds is completed; and
4275-(B) in a case in which a consignor has an interest in the
4276-collateral, the subordinate security interest or other lien is
4277-senior to the interest of the consignor; and
4278-(4) a secured party that is a consignor of the collateral if the
4279-secured party receives from the consignor an authenticated a
4280-signed demand for proceeds before distribution of the proceeds
4281-is completed.
4282-(b) If requested by a secured party, a holder of a subordinate
4283-security interest or other lien shall furnish reasonable proof of the
4284-interest or lien within a reasonable time. Unless the holder does so, the
4285-secured party need not comply with the holder's demand under
4286-subsection (a)(3).
4287-(c) A secured party need not apply or pay over for application
4288-noncash proceeds of disposition under IC 26-1-9.1-610 unless the
4289-failure to do so would be commercially unreasonable. A secured party
4290-that applies or pays over for application noncash proceeds shall do so
4291-in a commercially reasonable manner.
4292-(d) If the security interest under which a disposition is made secures
4293-payment or performance of an obligation, after making the payments
4294-SEA 468 — Concur 101
4295-and applications required by subsection (a) and permitted by subsection
4296-(c):
4297-(1) unless subsection (a)(4) requires the secured party to apply or
4298-pay over cash proceeds to a consignor, the secured party shall
4299-account to and pay a debtor for any surplus; and
4300-(2) the obligor is liable for any deficiency.
4301-(e) If the underlying transaction is a sale of accounts, chattel paper,
4302-payment intangibles, or promissory notes:
4303-(1) the debtor is not entitled to any surplus; and
4304-(2) the obligor is not liable for any deficiency.
4305-(f) The surplus or deficiency following a disposition is calculated
4306-based on the amount of proceeds that would have been realized in a
4307-disposition complying with IC 26-1-9.1-601 through IC 26-1-9.1-628
4308-to a transferee other than the secured party, a person related to the
4309-secured party, or a secondary obligor if:
4310-(1) the transferee in the disposition is the secured party, a person
4311-related to the secured party, or a secondary obligor; and
4312-(2) the amount of proceeds of the disposition is significantly
4313-below the range of proceeds that a complying disposition to a
4314-person other than the secured party, a person related to the
4315-secured party, or a secondary obligor would have brought.
4316-(g) A secured party that receives cash proceeds of a disposition in
4317-good faith and without knowledge that the receipt violates the rights of
4318-the holder of a security interest or other lien that is not subordinate to
4319-the security interest or agricultural lien under which the disposition is
4320-made:
4321-(1) takes the cash proceeds free of the security interest or other
4322-lien;
4323-(2) is not obligated to apply the proceeds of the disposition to the
4324-satisfaction of obligations secured by the security interest or other
4325-lien; and
4326-(3) is not obligated to account to or pay the holder of the security
4327-interest or other lien for any surplus.
4328-SECTION 83. IC 26-1-9.1-616 IS AMENDED TO READ AS
4329-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 616. (a) As used in this
4330-section:
4331-(1) "Explanation" means a writing record that:
4332-(A) states the amount of the surplus or deficiency;
4333-(B) provides an explanation in accordance with subsection (c)
4334-of how the secured party calculated the surplus or deficiency;
4335-(C) states, if applicable, that future debits, credits, charges,
4336-including additional credit service charges or interest, rebates,
4337-SEA 468 — Concur 102
4338-and expenses may affect the amount of the surplus or
4339-deficiency; and
4340-(D) provides a telephone number or mailing address from
4341-which additional information concerning the transaction is
4342-available.
4343-(2) "Request" means a record:
4344-(A) authenticated signed by a debtor or consumer obligor;
4345-(B) requesting that the recipient provide an explanation; and
4346-(C) sent after disposition of the collateral under
4347-IC 26-1-9.1-610.
4348-(b) In a consumer-goods transaction in which the debtor is entitled
4349-to a surplus or a consumer obligor is liable for a deficiency under
4350-IC 26-1-9.1-615, the secured party shall:
4351-(1) send an explanation to the debtor or consumer obligor, as
4352-applicable, after the disposition and:
4353-(A) before or when the secured party accounts to the debtor
4354-and pays any surplus or first makes written demand in a
4355-record on the consumer obligor after the disposition for
4356-payment of the deficiency; and
4357-(B) within fourteen (14) days after receipt of a request; or
4358-(2) in the case of a consumer obligor who is liable for a
4359-deficiency, within fourteen (14) days after receipt of a request,
4360-send to the consumer obligor a record waiving the secured party's
4361-right to a deficiency.
4362-(c) To comply with subsection (a)(1)(B), a writing an explanation
4363-must provide the following information in the following order:
4364-(1) the aggregate amount of obligations secured by the security
4365-interest under which the disposition was made, and, if the amount
4366-reflects a rebate of unearned interest or credit service charge, an
4367-indication of that fact, calculated as of a specified date:
4368-(A) if the secured party takes or receives possession of the
4369-collateral after default, not more than thirty-five (35) days
4370-before the secured party takes or receives possession; or
4371-(B) if the secured party takes or receives possession of the
4372-collateral before default or does not take possession of the
4373-collateral, not more than thirty-five (35) days before the
4374-disposition;
4375-(2) the amount of proceeds of the disposition;
4376-(3) the aggregate amount of the obligations after deducting the
4377-amount of proceeds;
4378-(4) the amount, in the aggregate or by type, and types of expenses,
4379-including expenses of retaking, holding, preparing for disposition,
4380-SEA 468 — Concur 103
4381-processing, and disposing of the collateral, and attorney's fees
4382-secured by the collateral that are known to the secured party and
4383-relate to the current disposition;
4384-(5) the amount, in the aggregate or by type, and types of credits,
4385-including rebates of interest or credit service charges, to which
4386-the obligor is known to be entitled and that are not reflected in the
4387-amount in paragraph (1); and
4388-(6) the amount of the surplus or deficiency.
4389-(d) A particular phrasing of the explanation is not required. An
4390-explanation complying substantially with the requirements of
4391-subsection (a) is sufficient, even if it includes minor errors that are not
4392-seriously misleading.
4393-(e) A debtor or consumer obligor is entitled without charge to one
4394-(1) response to a request under this section during any six (6) month
4395-period in which the secured party did not send to the debtor or
4396-consumer obligor an explanation pursuant to subsection (b)(1). The
4397-secured party may require payment of a charge not exceeding
4398-twenty-five dollars ($25) for each additional response.
4399-SECTION 84. IC 26-1-9.1-619 IS AMENDED TO READ AS
4400-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 619. (a) In this section,
4401-"transfer statement" means a record authenticated signed by a secured
4402-party stating:
4403-(1) that the debtor has defaulted in connection with an obligation
4404-secured by specified collateral;
4405-(2) that the secured party has exercised its post-default remedies
4406-with respect to the collateral;
4407-(3) that, by reason of the exercise, a transferee has acquired the
4408-rights of the debtor in the collateral; and
4409-(4) the name and mailing address of the secured party, debtor, and
4410-transferee.
4411-(b) A transfer statement entitles the transferee to the transfer of
4412-record of all rights of the debtor in the collateral specified in the
4413-statement in any official filing, recording, registration, or
4414-certificate-of-title system covering the collateral. If a transfer statement
4415-is presented with the applicable fee and request form to the official or
4416-office responsible for maintaining the system, the official or office
4417-shall:
4418-(1) accept the transfer statement;
4419-(2) promptly amend its records to reflect the transfer; and
4420-(3) if applicable, issue a new appropriate certificate of title in the
4421-name of transferee.
4422-(c) A transfer of the record or legal title to collateral to a secured
4423-SEA 468 — Concur 104
4424-party under subsection (b) or otherwise is not of itself a disposition of
4425-collateral under IC 26-1-9.1 and does not of itself relieve the secured
4426-party of its duties under IC 26-1-9.1.
4427-SECTION 85. IC 26-1-9.1-620 IS AMENDED TO READ AS
4428-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 620. (a) Except as
4429-otherwise provided in subsection (g), a secured party may accept
4430-collateral in full or partial satisfaction of the obligation it secures only
4431-if:
4432-(1) the debtor consents to the acceptance under subsection (c);
4433-(2) the secured party does not receive, within the time set forth in
4434-subsection (d), a notification of objection to the proposal
4435-authenticated signed by:
4436-(A) a person to which the secured party was required to send
4437-a proposal under IC 26-1-9.1-621; or
4438-(B) any other person, other than the debtor, holding an interest
4439-in the collateral subordinate to the security interest that is the
4440-subject of the proposal;
4441-(3) if the collateral is consumer goods, the collateral is not in the
4442-possession of the debtor when the debtor consents to the
4443-acceptance; and
4444-(4) subsection (e) does not require the secured party to dispose of
4445-the collateral or the debtor waives the requirement pursuant to
4446-IC 26-1-9.1-624.
4447-(b) A purported or apparent acceptance of collateral under this
4448-section is ineffective unless:
4449-(1) the secured party consents to the acceptance in an
4450-authenticated a signed record or sends a proposal to the debtor;
4451-and
4452-(2) the conditions of subsection (a) are met.
4453-(c) For purposes of this section:
4454-(1) a debtor consents to an acceptance of collateral in partial
4455-satisfaction of the obligation it secures only if the debtor agrees
4456-to the terms of the acceptance in a record authenticated signed
4457-after default; and
4458-(2) a debtor consents to an acceptance of collateral in full
4459-satisfaction of the obligation it secures only if the debtor agrees
4460-to the terms of the acceptance in a record authenticated signed
4461-after default or the secured party:
4462-(A) sends to the debtor after default a proposal that is
4463-unconditional or subject only to a condition that collateral not
4464-in the possession of the secured party be preserved or
4465-maintained;
4466-SEA 468 — Concur 105
4467-(B) in the proposal, proposes to accept collateral in full
4468-satisfaction of the obligation it secures; and
4469-(C) does not receive a notification of objection authenticated
4470-signed by the debtor within twenty (20) days after the proposal
4471-is sent.
4472-(d) To be effective under subsection (a)(2), a notification of
4473-objection must be received by the secured party:
4474-(1) in the case of a person to which the proposal was sent
4475-pursuant to IC 26-1-9.1-621, within twenty (20) days after
4476-notification was sent to that person; and
4477-(2) in other cases:
4478-(A) within twenty (20) days after the last notification was sent
4479-pursuant to IC 26-1-9.1-621; or
4480-(B) if a notification was not sent, before the debtor consents to
4481-the acceptance under subsection (c).
4482-(e) A secured party that has taken possession of collateral shall
4483-dispose of the collateral pursuant to IC 26-1-9.1-610 within the time
4484-specified in subsection (f) if:
4485-(1) sixty percent (60%) of the cash price has been paid in the case
4486-of a purchase-money security interest in consumer goods; or
4487-(2) sixty percent (60%) of the principal amount of the obligation
4488-secured has been paid in the case of a non-purchase-money
4489-security interest in consumer goods.
4490-(f) To comply with subsection (e), the secured party shall dispose of
4491-the collateral:
4492-(1) within ninety (90) days after taking possession; or
4493-(2) within any longer period to which the debtor and all secondary
4494-obligors have agreed in an agreement to that effect entered into
4495-and authenticated signed after default.
4496-(g) In a consumer transaction, a secured party may not accept
4497-collateral in partial satisfaction of the obligation it secures.
4498-SECTION 86. IC 26-1-9.1-621 IS AMENDED TO READ AS
4499-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 621. (a) A secured
4500-party that desires to accept collateral in full or partial satisfaction of the
4501-obligation it secures shall send its proposal to:
4502-(1) any person from which the secured party has received, before
4503-the debtor consented to the acceptance, an authenticated a signed
4504-notification of a claim of an interest in the collateral;
4505-(2) any other secured party or lienholder that, ten (10) days before
4506-the debtor consented to the acceptance, held a security interest in
4507-or other lien on the collateral perfected by the filing of a financing
4508-statement that:
4509-SEA 468 — Concur 106
4510-(A) identified the collateral;
4511-(B) was indexed under the debtor's name as of that date; and
4512-(C) was filed in the office or offices in which to file a
4513-financing statement against the debtor covering the collateral
4514-as of that date; and
4515-(3) any other secured party that, ten (10) days before the debtor
4516-consented to the acceptance, held a security interest in the
4517-collateral perfected by compliance with a statute, regulation, or
4518-treaty described in IC 26-1-9.1-311(a).
4519-(b) A secured party that desires to accept collateral in partial
4520-satisfaction of the obligation it secures shall send its proposal to any
4521-secondary obligor in addition to the persons described in subsection
4522-(a).
4523-SECTION 87. IC 26-1-9.1-624 IS AMENDED TO READ AS
4524-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 624. (a) A debtor or
4525-secondary obligor may waive the right to notification of disposition of
4526-collateral under IC 26-1-9.1-611 only by an agreement to that effect
4527-entered into and authenticated signed after default.
4528-(b) A debtor may waive the right to require disposition of collateral
4529-under IC 26-1-9.1-620(e) only by an agreement to that effect entered
4530-into and authenticated signed after default.
4531-(c) Except in a consumer-goods transaction, a debtor or secondary
4532-obligor may waive the right to redeem collateral under IC 26-1-9.1-623
4533-only by an agreement to that effect entered into and authenticated
4534-signed after default.
4535-SECTION 88. IC 26-1-9.1-628 IS AMENDED TO READ AS
4536-FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 628. (a) Subject to
4537-subsection (f), unless a secured party knows that a person is a debtor
4538-or obligor, knows the identity of the person, and knows how to
4539-communicate with the person:
4540-(1) the secured party is not liable to the person, or to a secured
4541-party or lienholder that has filed a financing statement against the
4542-person, for failure to comply with IC 26-1-9.1; and
4543-(2) the secured party's failure to comply with IC 26-1-9.1 does not
4544-affect the liability of the person for a deficiency.
4545-(b) Subject to subsection (f), a secured party is not liable because
4546-of its status as secured party:
4547-(1) to a person that is a debtor or obligor, unless the secured party
4548-knows:
4549-(A) that the person is a debtor or obligor;
4550-(B) the identity of the person; and
4551-(C) how to communicate with the person; or
4552-SEA 468 — Concur 107
4553-(2) to a secured party or lienholder that has filed a financing
4554-statement against a person, unless the secured party knows:
4555-(A) that the person is a debtor; and
4556-(B) the identity of the person.
4557-(c) A secured party is not liable to any person, and a person's
4558-liability for a deficiency is not affected, because of any act or omission
4559-arising out of the secured party's reasonable belief that a transaction is
4560-not a consumer-goods transaction or a consumer transaction or that
4561-goods are not consumer goods, if the secured party's belief is based on
4562-its reasonable reliance on:
4563-(1) a debtor's representation concerning the purpose for which
4564-collateral was to be used, acquired, or held; or
4565-(2) an obligor's representation concerning the purpose for which
4566-a secured obligation was incurred.
4567-(d) A secured party is not liable to any person under
4568-IC 26-1-9.1-625(c)(2) for its failure to comply with IC 26-1-9.1-616.
4569-(e) A secured party is not liable under IC 26-1-9.1-625(c)(2) more
4570-than once with respect to any one secured obligation.
4571-(f) Subsections (a) and (b) do not apply to limit the liability of a
4572-secured party to a person if, at the time the secured party obtains
4573-control of collateral that is a controllable account, controllable
4574-electronic record, or controllable payment intangible or at the time
4575-the security interest attaches to the collateral, whichever is later:
4576-(1) the person is a debtor or obligor; and
4577-(2) the secured party knows that the information in subsection
4578-(b)(1)(A), (b)(1)(B), or (b)(1)(C) relating to the person is not
4579-provided by the collateral, a record attached to or logically
4580-associated with the collateral, or the system in which the
4581-collateral is recorded.
4582-SECTION 89. IC 26-1-11 IS REPEALED [EFFECTIVE JULY 1,
4583-2023]. (Controllable Electronic Records).
4584-SECTION 90. IC 26-1-12 IS ADDED TO THE INDIANA CODE
4585-AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
4586-JULY 1, 2023]:
4587-Chapter 12. Controllable Electronic Records
4588-Sec. 101. This chapter shall be known and may be cited as
4589-Uniform Commercial Code - Controllable Electronic Records.
4590-Sec. 102. (a) In this chapter the following definitions apply:
4591-(1) "Controllable electronic record" means a record stored in
4592-an electronic medium that can be subjected to control under
4593-section 105 of this chapter. The term does not include a
4594-controllable account, a controllable payment intangible, a
4595-SEA 468 — Concur 108
4596-deposit account, an electronic copy of a record evidencing
4597-chattel paper, an electronic document of title, investment
4598-property, a transferable record, or an electronic record that
4599-is currently authorized or adopted by a domestic or foreign
4600-government and is not a medium of exchange that was
4601-recorded and transferable in a system that existed and
4602-operated for the medium of exchange before the medium of
4603-exchange was authorized or adopted by a government.
4604-(2) "Qualifying purchaser" means a purchaser:
4605-(A) of a controllable electronic record; or
4606-(B) of an interest in a controllable electronic record;
4607-that obtains control of the controllable electronic record for
4608-value, in good faith, and without notice of a claim of a
4609-property right in the controllable electronic record.
4610-(3) "Transferable record" has the meaning set forth in:
4611-(A) Section 201(a)(1) of the Electronic Signatures in Global
4612-and National Commerce Act (15 U.S.C. 7021(a)(1)); or
4613-(B) IC 26-2-8-115(a).
4614-(4) "Value" has the meaning set forth in IC 26-1-3.1-303(a),
4615-as if references in IC 26-1-3.1-303(a) to an "instrument" were
4616-references to a controllable account, a controllable electronic
4617-record, or a controllable payment intangible.
4618-(b) The definitions in IC 26-1-9.1 of "account debtor",
4619-"controllable account", "controllable payment intangible",
4620-"chattel paper", "deposit account", and "investment property"
4621-apply throughout this chapter.
4622-(c) The general definitions and principles of construction and
4623-interpretation set forth in IC 26-1-1 apply throughout this chapter.
4624-Sec. 103. (a) If there is a conflict between this chapter and
4625-IC 26-1-9.1, IC 26-1-9.1 governs.
4626-(b) A transaction subject to this chapter is subject to:
4627-(1) any applicable rule of law that establishes a different rule
4628-for consumers; and
4629-(2) any:
4630-(A) other statute or regulation that regulates the rates,
4631-charges, agreements, and practices for loans, credit sales,
4632-or other extensions of credit, including IC 24-4.5; and
4633-(B) consumer protection statute or regulation.
4634-Sec. 104. (a) This section applies to the acquisition and purchase
4635-rights in a controllable account or a controllable payment
4636-intangible, including the rights and benefits under subsections (c),
4637-(d), (e), (g), and (h) of a purchaser and a qualifying purchaser, in
4638-SEA 468 — Concur 109
4639-the same manner that this section applies with respect to a
4640-controllable electronic record.
4641-(b) For purposes of determining whether a purchaser of a
4642-controllable account or a controllable payment intangible is a
4643-qualifying purchaser, the purchaser obtains control of the account
4644-or the payment intangible if the purchaser obtains control of the
4645-controllable electronic record that evidences the account or the
4646-payment intangible.
4647-(c) Except as provided in this section, law other than this
4648-chapter determines:
4649-(1) whether a person acquires a right in a controllable
4650-electronic record; and
4651-(2) the right the person acquires.
4652-(d) A purchaser of a controllable electronic record acquires all
4653-rights in the controllable electronic record that the transferor had
4654-or had the power to transfer. However, a purchaser of a limited
4655-interest in a controllable electronic record acquires rights only to
4656-the extent of the interest purchased.
4657-(e) A qualifying purchaser acquires the qualifying purchaser's
4658-rights in a controllable electronic record free of a claim of a
4659-property right in the controllable electronic record.
4660-(f) Except as provided in subsections (a) and (e) with respect to
4661-a controllable account or a controllable payment intangible, or in
4662-law other than this chapter, a qualifying purchaser takes:
4663-(1) a right to payment;
4664-(2) a right to performance; or
4665-(3) another interest in property;
4666-that is evidenced by a controllable electronic record subject to a
4667-claim of a property right in the right to payment, right to
4668-performance, or other interest in property.
4669-(g) An action may not be asserted against a qualifying purchaser
4670-based on both:
4671-(1) a purchase by the qualifying purchaser of a controllable
4672-electronic record; and
4673-(2) a claim of a property right in another controllable
4674-electronic record;
4675-regardless of whether the action is framed in conversion, replevin,
4676-constructive trust, equitable lien, or another theory.
4677-(h) The filing of a financing statement under IC 26-1-9.1 is not
4678-notice of a claim of property right in a controllable electronic
4679-record.
4680-Sec. 105. (a) A person has control of a controllable electronic
4681-SEA 468 — Concur 110
4682-record if the electronic record, a record attached to or logically
4683-associated with the electronic record, or a system in which the
4684-electronic record is recorded:
4685-(1) gives the person:
4686-(A) power to avail itself of substantially all the benefit from
4687-the electronic record; and
4688-(B) exclusive power, subject to subsection (b), to:
4689-(i) prevent others from availing themselves of
4690-substantially all the benefit from the electronic record;
4691-and
4692-(ii) transfer control of the electronic record to another
4693-person or cause another person to obtain control of
4694-another controllable electronic record as a result of the
4695-transfer of the electronic record; and
4696-(2) enables the person readily to identify itself in any way,
4697-including by name, identifying number, cryptographic key,
4698-office, or account number, as having powers specified in
4699-subdivision (1).
4700-(b) Subject to subsection (c), a power is exclusive under
4701-subsection (a)(1)(B)(i) and (a)(1)(B)(ii) even if:
4702-(1) the controllable electronic record, a record attached to or
4703-logically associated with the electronic record, or a system in
4704-which the electronic record is recorded limits the use of the
4705-electronic record or has a protocol programmed to cause a
4706-change, including a transfer or loss of control or a
4707-modification of benefits afforded by the electronic record; or
4708-(2) the power is shared with another person.
4709-(c) A power of a person is not shared with another person under
4710-subsection (b)(2) and the person's power is not exclusive if:
4711-(1) the person can exercise the power only if the power also is
4712-exercised by the other person; and
4713-(2) the other person:
4714-(A) can exercise the power without exercise of the power
4715-by the person; or
4716-(B) is the transferor to the person of an interest in the
4717-controllable electronic record or in a controllable account
4718-or controllable payment intangible evidenced by the
4719-controllable electronic record.
4720-(d) If a person has the powers specified in subsection (a)(1)(B)(i)
4721-and (a)(1)(B)(ii), the powers are presumed to be exclusive.
4722-(e) A person has control of a controllable electronic record if
4723-another person, other than the transferor to the person of an
4724-SEA 468 — Concur 111
4725-interest in the controllable electronic record, or in a controllable
4726-account or controllable payment intangible evidenced by the
4727-controllable electronic record:
4728-(1) has control of the electronic record and acknowledges that
4729-it has control on behalf of the person; or
4730-(2) obtains control of the electronic record after having
4731-acknowledged that it will obtain control of the electronic
4732-record on behalf of the person.
4733-(f) A person that has control under this section is not required
4734-to acknowledge that it has control on behalf of another person.
4735-(g) If a person acknowledges that it has or will obtain control on
4736-behalf of another person, unless the person otherwise agrees or law
4737-other than this chapter or IC 26-1-9.1 otherwise provides, the
4738-person does not owe any duty to any other person and is not
4739-required to confirm the acknowledgment to any other person.
4740-Sec. 106. (a) An account debtor on a controllable account or a
4741-controllable payment intangible may discharge its obligation by
4742-paying:
4743-(1) the person having control of the controllable electronic
4744-record that evidences the controllable account or the
4745-controllable payment intangible; or
4746-(2) except as provided in subsection (b), a person that
4747-formerly had control of the controllable electronic record.
4748-(b) Subject to subsection (d), the account debtor may not
4749-discharge its obligation by paying a person that formerly had
4750-control of the controllable electronic record if the account debtor
4751-receives a notification that:
4752-(1) is signed by a person that formerly had control or by the
4753-person to which control was transferred;
4754-(2) reasonably identifies the controllable account or
4755-controllable payment intangible;
4756-(3) notifies the account debtor that control of the controllable
4757-electronic record that evidences the controllable account or
4758-controllable payment intangible was transferred;
4759-(4) identifies the transferee, in any reasonable way, including
4760-by name, identifying number, cryptographic key, office, or
4761-account number; and
4762-(5) provides a commercially reasonable method by which the
4763-account debtor is to pay the transferee.
4764-(c) After receipt of a notification that complies with subsection
4765-(b), the account debtor may discharge its obligation by paying in
4766-accordance with the notification and may not discharge the
4767-SEA 468 — Concur 112
4768-obligation by paying a person that formerly had control.
4769-(d) Subject to subsection (h), notification is ineffective under
4770-subsection (b):
4771-(1) unless, before the notification is sent, the account debtor
4772-and the person that, at that time, had control of the
4773-controllable electronic record that evidences the controllable
4774-account or the controllable payment intangible agree in a
4775-signed record to a commercially reasonable method by which
4776-a person may furnish reasonable proof that control has been
4777-transferred;
4778-(2) to the extent an agreement between the account debtor and
4779-seller of a payment intangible limits the account debtor's duty
4780-to pay a person other than the seller and the limitation is
4781-effective under law other than this chapter; or
4782-(3) at the option of the account debtor, if the notification
4783-notifies the account debtor to:
4784-(A) divide a payment;
4785-(B) make less than the full amount of an installment or
4786-other periodic payment; or
4787-(C) pay any part of a payment by more than one (1)
4788-method or to more than one (1) person.
4789-(e) Subject to subsection (h), if requested by the account debtor,
4790-the person giving notification under subsection (b) seasonably shall
4791-furnish reasonable proof, using the method in the agreement
4792-described in subsection (d)(1), that control of the controllable
4793-electronic record has been transferred. Unless the person complies
4794-with the request, the account debtor may discharge its obligation
4795-by paying a person that formerly had control, even if the account
4796-debtor has received a notification under subsection (b).
4797-(f) A person furnishes reasonable proof under subsection (e)
4798-that control has been transferred if the person demonstrates, using
4799-the method in the agreement described in subsection (d)(1), that
4800-the transferee has the power to:
4801-(1) avail itself of substantially all the benefit from the
4802-controllable electronic record;
4803-(2) prevent others from availing themselves of substantially
4804-all the benefit from the controllable electronic record; and
4805-(3) transfer the powers specified in subdivisions (1) and (2) to
4806-another person.
4807-(g) Subject to subsection (h), an account debtor may not waive
4808-or vary its rights under subsections (d)(1) and (e) or its option
4809-under subsection (d)(3).
4810-SEA 468 — Concur 113
4811-(h) This section is subject to law other than this chapter that
4812-establishes a different rule for an account debtor who is an
4813-individual and who incurred the obligation primarily for personal,
4814-family, or household purposes.
4815-Sec. 107. (a) Except as provided in subsection (b), the local law
4816-of an electronic record's jurisdiction governs a matter covered by
4817-this chapter.
4818-(b) For a controllable electronic record that evidences a
4819-controllable account or a controllable payment intangible, the local
4820-law of the controllable electronic record's jurisdiction governs a
4821-matter covered by section 106 of this chapter unless an effective
4822-agreement determines that the local law of another jurisdiction
4823-governs.
4824-(c) The following rules determine a controllable electronic
4825-record's jurisdiction under this section:
4826-(1) If the controllable electronic record, or a record that is
4827-attached to or logically associated with the controllable
4828-electronic record and that is readily available for review,
4829-expressly provides that a particular jurisdiction is the
4830-controllable electronic record's jurisdiction for purposes of
4831-this chapter or IC 26-1, that jurisdiction is the controllable
4832-electronic record's jurisdiction.
4833-(2) If subdivision (1) does not apply, and the rules of the
4834-system in which the controllable electronic record is recorded
4835-are readily available for review and expressly provide that a
4836-particular jurisdiction is the controllable electronic record's
4837-jurisdiction for purposes of this chapter or IC 26-1, that
4838-jurisdiction is the controllable electronic record's jurisdiction.
4839-(3) If subdivisions (1) and (2) do not apply, and the
4840-controllable electronic record, or a record that is attached to
4841-or logically associated with the controllable electronic record
4842-and that is readily available for review, expressly provides
4843-that the controllable electronic record is governed by the law
4844-of a particular jurisdiction, that jurisdiction is the
4845-controllable electronic record's jurisdiction.
4846-(4) If subdivisions (1) through (3) do not apply, and the rules
4847-of the system in which the controllable electronic record is
4848-recorded are readily available for review and expressly
4849-provide that the controllable electronic record or the system
4850-is governed by the law of a particular jurisdiction, that
4851-jurisdiction is the controllable electronic record's jurisdiction.
4852-(5) If subdivisions (1) through (4) do not apply, the
4853-SEA 468 — Concur 114
4854-controllable electronic record's jurisdiction is the District of
4855-Columbia.
4856-(d) If subsection (c)(5) applies and this chapter is not in effect in
4857-the District of Columbia without material modification, the
4858-governing law for a matter covered by this chapter is the law of the
4859-District of Columbia as though this chapter were in effect in the
4860-District of Columbia without material modification.
4861-(e) To the extent that subsections (a) and (b) provide that the
4862-local law of the controllable electronic record's jurisdiction
4863-governs a matter covered by this chapter, that law governs even if
4864-the matter or a transaction to which the matter relates does not
4865-bear any relation to the controllable record's jurisdiction.
4866-(f) The rights acquired under section 104 of this chapter by a
4867-purchaser or a qualifying purchaser are governed by the law
4868-applicable under this section at the time of purchase.
4869-SECTION 91. IC 26-1-12.5 IS ADDED TO THE INDIANA CODE
4870-AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
4871-JULY 1, 2023]:
4872-Chapter 12.5. Transitional Provisions For Uniform Commercial
4873-Code Amendments (2022)
4874-Sec. 101. This chapter may be cited as Transitional Provisions
4875-for Uniform Commercial Code Amendments (2022).
4876-Sec. 102. (a) In this chapter, the following terms have the
4877-following meanings:
4878-(1) The following terms have the following meanings:
4879-(A) "Act" refers to the amendments to IC 26-1 that:
4880-(i) were made during the 2023 regular session of the
4881-general assembly; and
4882-(ii) took effect July 1, 2023.
4883-(B) "Adjustment date" means July 1, 2025.
4884-(2) "Chapter 12" refers to IC 26-1-12.
4885-(3) "Chapter 12 property" means a controllable account, a
4886-controllable electronic record, or a controllable payment
4887-intangible.
4888-(b) The following definitions in other chapters of IC 26-1 apply
4889-to this chapter:
4890-"Controllable account". IC 26-1-9.1-102.
4891-"Controllable electronic record". IC 26-1-12-102.
4892-"Controllable payment intangible". IC 26-1-9.1-102.
4893-"Financing statement". IC 26-1-9.1-102.
4894-(c) IC 26-1-1 contains general definitions and principles of
4895-construction and interpretation that apply throughout this chapter.
4896-SEA 468 — Concur 115
4897-Sec. 201. Except as provided in sections 301 through 306 of this
4898-chapter, a transaction validly entered into before July 1, 2023, and
4899-the rights, duties, and interests flowing from the transaction
4900-remain valid after June 30, 2023, and may be terminated,
4901-completed, consummated, or enforced as required or permitted by
4902-law other than IC 26-1 or, if applicable, by IC 26-1 as though the
4903-act had not taken effect.
4904-Sec. 301. (a) Except as otherwise provided in this section or in
4905-sections 302 through 306 of this chapter:
4906-(1) IC 26-1-9.1, as amended by the act; and
4907-(2) IC 26-1-12;
4908-apply to a transaction, lien, or interest in property, even if the
4909-transaction, lien, or interest was entered into, created, or acquired
4910-before July 1, 2023.
4911-(b) Except as provided in subsection (c) and in sections 302
4912-through 306 of this chapter:
4913-(1) a transaction, lien, or interest in property that was validly
4914-entered into, created, or transferred before July 1, 2023, and
4915-was not governed by IC 26-1, but would be subject to:
4916-(A) IC 26-1-9.1, as amended by the act; or
4917-(B) IC 26-1-12;
4918-if it had been entered into, created, or transferred on or after
4919-July 1, 2023, including the rights, duties, and interests flowing
4920-from the transaction, lien, or interest, remain valid on and
4921-after July 1, 2023; and
4922-(2) the transaction, lien, or interest may be terminated,
4923-completed, consummated, and enforced as required or
4924-permitted by:
4925-(A) the act; or
4926-(B) the law that would apply if the act had not taken effect.
4927-(c) The act does not affect an action, case, or proceeding
4928-commenced before July 1, 2023.
4929-Sec. 302. (a) A security interest that is enforceable and perfected
4930-on June 30, 2023, is a perfected security interest under the act if, on
4931-July 1, 2023, the requirements for enforceability and perfection
4932-under the act are satisfied without further action.
4933-(b) If a security interest is enforceable and effective on June 30,
4934-2023, but the requirements for enforceability and perfection under
4935-the act are not satisfied on July 1, 2023, the security interest:
4936-(1) is a perfected security interest until the earlier of:
4937-(A) the time perfection would have ceased under IC 26-1 as
4938-in effect on June 30, 2023; or
4939-SEA 468 — Concur 116
4940-(B) the adjustment date;
4941-(2) remains enforceable on or after the time specified in
4942-subdivision (1) only if the security interest satisfies the
4943-requirements for enforceability under IC 26-1-9.1-203, as
4944-amended by the act, before the adjustment date; and
4945-(3) remains perfected on or after the time specified in
4946-subdivision (1) only if the requirements for perfection under
4947-the act are satisfied before the time specified in subdivision
4948-(1).
4949-Sec. 303. A security interest that is enforceable on June 30, 2023,
4950-but is unperfected on June 30, 2023:
4951-(1) remains an enforceable security interest until the
4952-adjustment date;
4953-(2) remains enforceable on or after the adjustment date if the
4954-security interest becomes enforceable under IC 26-1-9.1-203,
4955-as amended by the act, on July 1, 2023, or before the
4956-adjustment date; and
4957-(3) becomes perfected;
4958-(A) without further action on July 1, 2023, if the
4959-requirements for perfection under the act are satisfied
4960-before or on July 1, 2023; or
4961-(B) when the requirements for perfection under the act are
4962-satisfied if the requirements are satisfied after July 1, 2023.
4963-Sec. 304. (a) If action, other than the filing of a financing
4964-statement, is taken before July 1, 2023, and the action would have
4965-resulted in perfection of a security interest had the security interest
4966-become enforceable before July 1, 2023, the action is effective to
4967-perfect a security interest that attaches under the act before the
4968-adjustment date. An attached security interest becomes
4969-unperfected on the adjustment date unless the security interest
4970-becomes a perfected security interest under the act before the
4971-adjustment date.
4972-(b) The filing of a financing statement before July 1, 2023, is
4973-effective to perfect a security interest on July 1, 2023, to the extent
4974-the filing would satisfy the requirements for perfection under the
4975-act.
4976-(c) The taking of an action before July 1, 2023, is sufficient for
4977-the enforceability of a security interest on July 1, 2023, if the action
4978-would satisfy the requirements for enforceability under the act.
4979-Sec. 305. (a) Subject to subsections (b) and (c), the act
4980-determines the priority of conflicting claims to collateral.
4981-(b) Subject to subsection (c), if the priorities of claims to
4982-SEA 468 — Concur 117
4983-collateral were established before July 1, 2023, IC 26-1-9.1 as in
4984-effect before July 1, 2023, determines priority.
4985-(c) On the adjustment date, to the extent the priorities
4986-determined by IC 26-1-9.1, as amended by the act, modify the
4987-priorities established before July 1, 2023, the priorities of claims to
4988-chapter 12 property established before July 1, 2023, cease to apply.
4989-Sec. 306. (a) Subject to subsections (b) and (c), chapter 12
4990-determines the priority of conflicting claims to chapter 12 property
4991-when the priority rules of IC 26-1-9.1, as amended by the act, do
4992-not apply.
4993-(b) Subject to subsection (c), when the priority rules of
4994-IC 26-1-9.1, as amended by the act, do not apply and the priorities
4995-of claims to chapter 12 property were established before July 1,
4996-2023, law other than chapter 12 determines priority.
4997-(c) When the priority rules of IC 26-1-9.1, as amended by the
4998-act, do not apply, to the extent the priorities determined by the act
4999-modify the priorities established before July 1, 2023, the priorities
5000-of claims to chapter 12 property established before July 1, 2023,
5001-cease to apply on the adjustment date.
5002-SECTION 92. IC 32-34-1.5-3, AS AMENDED BY P.L.110-2022,
5003-SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
5004-JULY 1, 2023]: Sec. 3. The following definitions apply throughout this
5005-chapter:
5006-(1) "Apparent owner" means a person whose name appears on the
5007-records of a holder as the owner of property held, issued, or owing
5008-by the holder.
5009-(2) "Attorney general's agent" means a person with which the
5010-attorney general contracts to conduct an examination under
5011-section 53 of this chapter on behalf of the attorney general.
5012-(3) "Business association" means a corporation, joint stock
5013-company, investment company other than an investment company
5014-registered under the Investment Company Act of 1940 (15 U.S.C.
5015-80a-1 et seq.), partnership, unincorporated association, joint
5016-venture, limited liability company, business trust, trust company,
5017-land bank, safe deposit company, safekeeping depository,
5018-financial organization, insurance company, federally chartered
5019-entity, utility, sole proprietorship, or other business entity,
5020-whether or not for profit.
5021-(4) "Confidential information" means records, reports, and
5022-information that are considered confidential under section 78 of
5023-this chapter.
5024-(5) "Controllable electronic record" has the meaning set forth in
5025-SEA 468 — Concur 118
5026-IC 26-1-11-104. IC 26-1-12-102.
5027-(6) "Domicile" means the following:
5028-(A) For a corporation, the state of its incorporation.
5029-(B) For a business association other than a corporation whose
5030-formation requires a filing with a state, the state of its filing.
5031-(C) For a federally chartered entity or an investment company
5032-registered under the Investment Company Act of 1940, as
5033-amended (15 U.S.C. 80a-1 et seq.), the state of its home office.
5034-(D) For any other holder, the state of its principal place of
5035-business.
5036-(7) "Electronic" means relating to technology having electrical,
5037-digital, magnetic, wireless, optical, electromagnetic, or similar
5038-capabilities.
5039-(8) "Electronic mail" means a communication by electronic means
5040-which is automatically retained and stored and may be readily
5041-accessed or retrieved.
5042-(9) "Financial organization" means a savings and loan association,
5043-building and loan association, savings bank, industrial bank, bank,
5044-banking organization, or credit union.
5045-(10) "Financial organization loyalty program" means a record
5046-given without direct monetary consideration, excluding an annual
5047-or periodic fee, under an award, reward, benefit, loyalty,
5048-incentive, rebate, or other promotional program established by a
5049-financial organization for the purpose of rewarding a relationship
5050-with the sponsoring financial organization. The term includes:
5051-(A) both a physical card and an electronic record; and
5052-(B) a program offering a record that is redeemable for money
5053-or cash or is otherwise monetized by the financial
5054-organization.
5055-(11) "Game related digital content" means digital content that
5056-exists only in an electronic game or electronic-game platform.
5057-The term includes game-play currency such as a virtual wallet,
5058-even if denominated in United States currency and, if for use or
5059-redemption only within the game or platform or another electronic
5060-game or electronic-game platform, points sometimes referred to
5061-as gems, tokens, gold, and similar names and digital codes. The
5062-term does not include an item that the issuer:
5063-(A) permits to be redeemed for use outside a game or platform
5064-for money or goods or services that have more than minimal
5065-value; or
5066-(B) otherwise monetizes for use outside a game or platform.
5067-(12) "Holder" means a person obligated to hold for the account of,
5068-SEA 468 — Concur 119
5069-or to deliver or pay to, the owner property subject to this chapter.
5070-(13) "Insurance company" means an association, corporation, or
5071-fraternal or mutual benefit organization, whether or not for profit,
5072-engaged in the business of providing life endowments, annuities,
5073-or insurance, including accident, burial, casualty, credit life,
5074-contract performance, dental, disability, fidelity, fire, health,
5075-hospitalization, illness, life, malpractice, marine, mortgage,
5076-surety, wage protection, and worker's compensation insurance.
5077-(14) "Loyalty card" means a record given without direct monetary
5078-consideration under an award, reward, benefit, loyalty, incentive,
5079-rebate, or promotional program which may be used or redeemed
5080-only to obtain goods or services or a discount on goods or
5081-services. The term does not include a record that may be
5082-redeemed for money or otherwise monetized by the issuer.
5083-(15) "Mineral" means gas, oil, coal, oil shale, other gaseous liquid
5084-or solid hydrocarbon, cement material, sand and gravel, road
5085-material, building stone, chemical raw material, gemstone,
5086-fissionable and nonfissionable ores, colloidal and other clay,
5087-steam and other geothermal resources, and any other substance
5088-defined as a mineral by a law of this state other than this chapter.
5089-(16) "Mineral proceeds" means an amount payable for the
5090-extraction, production, or sale of minerals, or, on the
5091-abandonment of the amount, an amount that becomes payable
5092-after abandonment. The term includes an amount payable:
5093-(A) for the acquisition and retention of a mineral lease,
5094-including a bonus, royalty, compensatory royalty, shut-in
5095-royalty, minimum royalty, and delay rental;
5096-(B) for the extraction, production, or sale of minerals,
5097-including a net revenue interest, royalty, overriding royalty,
5098-extraction payment, and production payment; and
5099-(C) under an agreement or option, including a joint-operation
5100-agreement, unit agreement, pooling agreement, and farm out
5101-agreement.
5102-(17) "Money order" means a payment order for a specified
5103-amount of money. The term includes an express money order and
5104-a personal money order on which the remitter is the purchaser.
5105-(18) "Municipal bond" means a bond or evidence of indebtedness
5106-issued by a municipality or other political subdivision of a state.
5107-(19) "Non-freely transferable security" means a security that
5108-cannot be delivered to the attorney general by the Depository
5109-Trust & Clearing Corporation or similar custodian of securities
5110-providing post-trade clearing and settlement services to financial
5111-SEA 468 — Concur 120
5112-markets or cannot be delivered because there is no agent to effect
5113-transfer. The term includes a worthless security.
5114-(20) "Owner" means a person that has a legal, beneficial, or
5115-equitable interest in property subject to this chapter or the
5116-person's legal representative when acting on behalf of the owner.
5117-The term includes:
5118-(A) for a deposit, a depositor;
5119-(B) for a trust other than a deposit in trust, a beneficiary;
5120-(C) for other property, a creditor, claimant, or payee; and
5121-(D) the lawful bearer of a record that may be used to obtain
5122-money, a reward, or a thing of value.
5123-(21) "Payroll card" means a record that evidences a payroll card
5124-account as defined in Regulation E (12 CFR Part 1005).
5125-(22) "Person" means an individual, estate, business association,
5126-public corporation, government or governmental subdivision,
5127-agency, or instrumentality, or other legal entity.
5128-(23) "Property" means tangible property described in section 8 of
5129-this chapter or a fixed and certain interest in intangible property
5130-held, issued, or owed in the course of a holder's business or by a
5131-government or governmental subdivision, agency, or
5132-instrumentality. The term includes:
5133-(A) all income from or increments to the property; and
5134-(B) property referred to as or evidenced by:
5135-(i) money, virtual currency, interest, or a dividend, check,
5136-draft, deposit, or payroll card;
5137-(ii) a credit balance, customer's overpayment, security
5138-deposit, refund, credit memorandum, unpaid wage, unused
5139-ticket for which the issuer has an obligation to provide a
5140-refund, mineral proceeds, or unidentified remittance;
5141-(iii) a security, except for a worthless security or a security
5142-that is subject to a lien, legal hold, or restriction evidenced
5143-on the records of the holder or imposed by operation of law,
5144-if the lien, legal hold, or restriction restricts the holder's or
5145-owner's ability to receive, transfer, sell, or otherwise
5146-negotiate the security;
5147-(iv) a bond, debenture, note, or other evidence of
5148-indebtedness;
5149-(v) money deposited to redeem a security, make a
5150-distribution, or pay a dividend;
5151-(vi) an amount due and payable under an annuity contract or
5152-insurance policy; and
5153-(vii) an amount distributable from a trust or custodial fund
5154-SEA 468 — Concur 121
5155-established under a plan to provide health, welfare, pension,
5156-vacation, severance, retirement, death, stock purchase, profit
5157-sharing, employee savings, supplemental unemployment
5158-insurance, or a similar benefit.
5159-The term does not include property held in a plan described in
5160-Section 529A of the Internal Revenue Code, game related digital
5161-content, a financial organization loyalty program, a loyalty card,
5162-or an in-store credit for returned merchandise.
5163-(24) "Putative holder" means a person believed by the attorney
5164-general to be a holder, until the person pays or delivers to the
5165-attorney general property subject to this chapter or the attorney
5166-general or court makes a final determination that the person is or
5167-is not a holder.
5168-(25) "Record" means information that is inscribed on a tangible
5169-medium or that is stored in an electronic or other medium and is
5170-retrievable in perceivable form.
5171-(26) "Security" means:
5172-(A) a security (as defined in IC 26-1-8.1-102);
5173-(B) a security entitlement (as defined in IC 26-1-8.1-102),
5174-including a customer security account held by a registered
5175-broker-dealer, to the extent the financial assets held in the
5176-security account are not:
5177-(i) registered on the books of the issuer in the name of the
5178-person for which the broker-dealer holds the assets;
5179-(ii) payable to the order of the person; or
5180-(iii) specifically indorsed to the person; or
5181-(C) an equity interest in a business association not included in
5182-clause (A) or (B).
5183-(27) "Sign" means, with present intent to authenticate or adopt a
5184-record:
5185-(A) to execute or adopt a tangible symbol; or
5186-(B) to attach to or logically associate with the record an
5187-electronic symbol, sound, or process.
5188-(28) "State" means a state of the United States, the District of
5189-Columbia, the Commonwealth of Puerto Rico, the United States
5190-Virgin Islands, or any territory or insular possession subject to the
5191-jurisdiction of the United States.
5192-(29) "Utility" means a person that owns or operates for public use
5193-a plant, equipment, real property, franchise, or license for the
5194-following public services:
5195-(A) Transmission of communications or information.
5196-(B) Production, storage, transmission, sale, delivery, or
5197-SEA 468 — Concur 122
5198-furnishing of electricity, water, steam, or gas.
5199-(C) Provision of sewage or septic services, or trash, garbage,
5200-or recycling disposal.
5201-(30) "Virtual currency" means a digital representation of value
5202-used as a medium of exchange, unit of account, or store of value,
5203-which does not have legal tender status recognized by the United
5204-States. The term does not include:
5205-(A) the software or protocols governing the transfer of the
5206-digital representation of value;
5207-(B) game related digital content;
5208-(C) a financial organization loyalty program; or
5209-(D) a loyalty card.
5210-(31) "Worthless security" means a security whose cost of
5211-liquidation and delivery to the attorney general would exceed the
5212-value of the security on the date a report is due under this chapter.
5213-SECTION 93. IC 32-34-1.5-87, AS AMENDED BY P.L.110-2022,
5214-SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
5215-JULY 1, 2023]: Sec. 87. (a) The attorney general may adopt rules under
5216-IC 4-22-2 to carry out the purposes of this chapter.
5217-(b) The attorney general may adopt rules under IC 4-22-2 regarding
5218-virtual currency, controllable electronic records, and digital assets, to
5219-the extent such rules are consistent with, and not otherwise covered by,
5220-the following:
5221-(1) IC 26-1-9.1.
5222-(2) IC 26-1-11. IC 26-1-12.
5223-(3) Any other Indiana law concerning virtual currency,
5224-controllable electronic records, or digital assets.
5225-SEA 468 — Concur President of the Senate
5226-President Pro Tempore
5227-Speaker of the House of Representatives
5228-Governor of the State of Indiana
5229-Date: Time:
5230-SEA 468 — Concur
5335+ES 468—LS 7443/DI 101 124
5336+or limited liability company.".
5337+Page 112, line 11, delete "instrument" and insert "intangible".
5338+Page 115, line 13, delete "a particular jurisdiction is the
5339+controllable" and insert "the controllable electronic record or the
5340+system is governed by the law of a particular jurisdiction,".
5341+Page 115, line 14, delete "electronic record's jurisdiction,".
5342+Page 117, line 9, delete "2022," and insert "2023,".
5343+Page 117, line 13, delete "2022," and insert "2023,".
5344+and when so amended that said bill do pass.
5345+(Reference is to SB 468 as introduced.)
5346+BROWN L, Chairperson
5347+Committee Vote: Yeas 10, Nays 0.
5348+_____
5349+SENATE MOTION
5350+Madam President: I move that Senate Bill 468 be amended to read
5351+as follows:
5352+Page 3, line 6, strike "or not".
5353+Page 51, line 24, delete "IC 26-1-1-201(b)(24)," and insert "IC
5354+26-1-1-201(24),".
5355+(Reference is to SB 468 as printed February 3, 2023.)
5356+YOUNG M
5357+_____
5358+COMMITTEE REPORT
5359+Mr. Speaker: Your Committee on Financial Institutions, to which
5360+was referred Senate Bill 468, has had the same under consideration and
5361+begs leave to report the same back to the House with the
5362+recommendation that said bill be amended as follows:
5363+Page 4, line 33, after "government" delete ".".
5364+Page 4, line 33, reset in roman "and".
5365+Page 4, line 33, after "and" insert "is not in an electronic form.".
5366+Page 4, line 36, delete "The term does not include an electronic".
5367+Page 4, delete lines 37 through 40.
5368+Page 8, line 37, delete "(B)." and insert "(A).".
5369+ES 468—LS 7443/DI 101 125
5370+Page 42, line 18, delete "commodity" and insert ""commodity".
5371+Page 48, line 12, strike ""Electronic".
5372+Page 48, line 12, delete "money"".
5373+Page 48, line 12, strike "means".
5374+Page 48, line 14, delete "money in an electronic form." and insert
5375+"[Reserved.]".
5376+Page 50, line 13, after "or" insert "(iv)".
5377+Page 51, line 24, delete "(i) a deposit" and insert "a deposit
5378+account.".
5379+Page 51, delete lines 25 through 26.
5380+Page 55, line 16, strike ""Tangible".
5381+Page 55, line 16, delete "money"".
5382+Page 55, line 16, strike "means".
5383+Page 55, line 18, delete "money in".
5384+Page 55, line 18, strike "a tangible".
5385+Page 55, line 18, delete "form." and insert "[Reserved.]".
5386+Page 59, delete lines 5 through 42.
5387+Page 60, delete lines 1 through 12.
5388+Page 60, line 25, delete "104, 105, or 105.1" and insert "104 or
5389+105".
5390+Page 60, line 26, delete "is" and insert "it".
5391+Page 61, line 18, delete "electronic money,".
5392+Page 61, line 21, delete "IC 26-1-9.1-105.1,".
5393+Page 62, line 38, delete "or".
5394+Page 63, line 27, delete "IC 26-1-9.1-105.1,".
5395+Page 65, line 11, delete "IC 26-2-7-106" and insert "IC 26-1-7-106".
5396+Page 65, line 14, after "debtor;" insert "and".
5397+Page 65, delete lines 29 through 32.
5398+Page 65, line 33, delete "(8)" and insert "(7)".
5399+Page 65, line 37, delete "electronic copy" and insert "controllable
5400+electronic record".
5401+Page 68, line 2, delete "tangible money," and insert "money".
5402+Page 71, line 17, delete "314.1;" and insert "314.1 of this chapter;".
5403+Page 73, line 1, strike "and".
5404+Page 73, line 3, reset in roman "and".
5405+Page 73, line 4, delete "tangible".
5406+Page 73, line 5, delete "IC 26-1-9.1-313; and" and insert "IC
5407+26-1-9.1-313.".
5408+Page 73, delete lines 6 through 7.
5409+Page 74, line 8, after "documents, or" delete "tangible".
5410+Page 75, line 23, delete "electronic money,".
5411+Page 75, line 26, delete "IC 26-1-9.1-105.1,".
5412+ES 468—LS 7443/DI 101 126
5413+Page 75, line 30, delete "electronic money,".
5414+Page 75, line 33, delete "IC 26-1-9.1-105.1,".
5415+Page 79, line 24, delete "electronic money,".
5416+Page 81, line 9, delete "goods," and insert "goods".
5417+Page 85, line 3, delete "tangible".
5418+Page 85, delete lines 10 through 13.
5419+Page 94, line 1, delete "IC 26-1-9.1-105.1,".
5420+Page 99, line 24, delete "debtor" and insert "debtor)".
5421+Page 99, line 26, after "your describe collateral" strike ",".
5422+Page 99, line 38, after "after date" strike ".".
5423+Page 100, line 6, after "at telephone number" strike ".".
5424+Page 109, line 33, after "title," delete "electronic".
5425+Page 109, line 34, delete "money,".
5426+Page 109, line 34, delete "or a transferrable record." and insert "a
5427+transferable record, or an electronic record that is currently
5428+authorized or adopted by a domestic or foreign government and is
5429+not a medium of exchange that was recorded and transferable in
5430+a system that existed and operated for the medium of exchange
5431+before the medium of exchange was authorized or adopted by a
5432+government.".
5433+Page 109, line 41, delete ""Transferrable" and insert
5434+""Transferable".
5435+Page 110, line 9, delete ""electronic money",".
5436+Page 112, line 12, after "of" insert "a".
5437+Page 112, line 36, delete "is" and insert "it".
5438+Page 116, delete line 24.
5439+Page 118, line 33, delete "and electronic money".
5440+Renumber all SECTIONS consecutively.
5441+and when so amended that said bill do pass.
5442+(Reference is to SB 468 as reprinted February 8, 2023.)
5443+SPEEDY
5444+Committee Vote: yeas 12, nays 0.
5445+ES 468—LS 7443/DI 101 127
5446+HOUSE MOTION
5447+Mr. Speaker: I move that Engrossed Senate Bill 468 be amended to
5448+read as follows:
5449+Page 4, line 36, after "nations." insert "The term does not include
5450+a central bank digital currency that is currently adopted, or that
5451+may be adopted, by the United States government, a foreign
5452+government, a foreign reserve, or a foreign sanctioned central
5453+bank.".
5454+(Reference is to ESB 468 as printed March 30, 2023.)
5455+JUDY
5456+ES 468—LS 7443/DI 101