Indiana Senate Bill SB0468 Latest Draft

                            First Regular Session of the 123rd General Assembly (2023)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
  Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in  this  style  type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
  Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2022 Regular Session of the General Assembly.
SENATE ENROLLED ACT No. 468
AN ACT to amend the Indiana Code concerning commercial law.
Be it enacted by the General Assembly of the State of Indiana:
SECTION 1. IC 26-1-1-201, AS AMENDED BY P.L.54-2011,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 201. Subject to additional definitions contained
in IC 26-1-2 through IC 26-1-10 which are applicable to specific
provisions, and unless the context otherwise requires, in IC 26-1:
(1) "Action" in the sense of a judicial proceeding includes
recoupment, counterclaim, setoff, suit in equity, and any other
proceedings in which rights are determined.
(2) "Aggrieved party" means a party entitled to resort to a remedy.
(3) "Agreement" means the bargain of the parties in fact as found
in their language or by implication from other circumstances
including course of dealing or usage of trade or course of
performance as provided in IC 26-1-1-205. Whether an agreement
has legal consequences is determined by the provisions of
IC 26-1, if applicable; otherwise by the law of contracts
(IC 26-1-1-103). (Compare "Contract".)
(4) "Bank" means a person engaged in the business of banking
and includes a savings bank, savings and loan association, credit
union, and trust company.
(5) "Bearer" means the person:
(A) in control of a negotiable electronic document of title; or
(B) in possession of a negotiable instrument, a negotiable
tangible document of title, or a certificated security payable to
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bearer or endorsed in blank.
(6) "Bill of lading" means a document of title evidencing the
receipt of goods for shipment issued by a person engaged in the
business of directly or indirectly transporting or forwarding
goods. The term does not include a warehouse receipt. The term
includes an airbill. "Airbill" means a document serving for air
transportation as a bill of lading does for marine or rail
transportation, and includes an air consignment note or air
waybill.
(7) "Branch" includes a separately incorporated foreign branch of
a bank.
(8) "Burden of establishing" a fact means the burden of
persuading the triers of fact that the existence of the fact is more
probable than its nonexistence.
(9) "Buyer in ordinary course of business" means a person that
buys goods in good faith without knowledge that the sale violates
the rights of another person in the goods, and in the ordinary
course from a person, other than a pawnbroker, in the business of
selling goods of that kind. A person buys goods in the ordinary
course of business if the sale to the person comports with the
usual or customary practices in the kind of business in which the
seller is engaged or with the seller's own usual or customary
practices. A person that sells oil, gas, or other minerals at the
wellhead or minehead is a person in the business of selling goods
of that kind. A buyer in ordinary course of business may buy for
cash, by exchange of other property, or on secured or unsecured
credit, and may require goods or documents of title under a
preexisting contract for sale. Only a buyer that takes possession
of the goods or has a right to recover the goods from that seller
under IC 26-1-2 may be a buyer in ordinary course of business. A
person that acquires goods in a transfer in bulk or as security for
or total or partial satisfaction of a money debt is not a buyer in
ordinary course of business.
(10) "Conspicuous", A with reference to a term, or clause is
conspicuous when it is means so written, displayed, or
presented that, based on the totality of the circumstances, a
reasonable person against whom which it is to operate ought to
have noticed it. A printed heading in capitals (as:
NONNEGOTIABLE BILL OF LADING) is conspicuous.
Language in the body of a form is conspicuous if it is in larger or
other contrasting type or color. But in a telegram any stated term
is conspicuous. Whether a term or clause is "conspicuous" or not
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is for a decision by for the court.
(11) "Contract" means the total legal obligation which results
from the parties' agreement as affected by this Act and any other
applicable rules of law. (Compare "Agreement".)
(12) "Creditor" includes a general creditor, a secured creditor, a
lien creditor and any representative of creditors, including an
assignee for the benefit of creditors, a trustee in bankruptcy, a
receiver in equity, and an executor or administrator of an
insolvent debtor's or assignor's estate.
(13) "Defendant" includes a person in the position of defendant
in a cross-action or counterclaim.
(14) "Delivery", means the following: with respect to:
(A) With respect to an electronic document of title, means
voluntary transfer of control; and
(B) With respect to instruments, an instrument, a tangible
documents document of title, or an authoritative tangible
copy of a record evidencing chattel paper, or certificated
securities, means voluntary transfer of possession.
(15) "Document of title" means a record that:
(A) in the regular course of business or financing, is treated as
adequately evidencing that the person in possession or control
of the record is entitled to receive, control, hold, and dispose
of the record and the goods it covers; and
(B) purports to be issued by or addressed to a bailee and
purports to cover goods in the bailee's possession which are
either identified or are fungible portions of an identified mass.
The term includes a bill of lading, transport document, dock
warrant, dock receipt, warehouse receipt, or order for delivery of
goods. An electronic document of title means a document of title
evidenced by a record consisting of information stored in an
electronic medium. A tangible document of title means a
document of title evidenced by a record consisting of information
that is inscribed on a tangible medium.
(16) The following terms have the following meanings:
(A) "Electronic" means relating to technology having
electrical, digital, magnetic, wireless, optical,
electromagnetic, or similar capabilities.
(B) "Fault" means wrongful act, omission, or breach.
(17) "Fungible" with respect to goods or securities means goods
or securities of which any unit is, by nature or usage of trade, the
equivalent of any other like unit. Goods which are not fungible
shall be deemed fungible for the purposes of IC 26-1 to the extent
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that under a particular agreement or document unlike units are
treated as equivalents.
(18) "Genuine" means free of forgery or counterfeiting.
(19) "Good faith", except as otherwise provided by IC 26-1-4 or
IC 26-1-5.1, means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(20) "Holder" means:
(A) the person in possession of a negotiable instrument that is
payable either to bearer or to an identified person if the
identified person is in possession of the instrument;
(B) the person in possession of a negotiable tangible document
of title if the goods are deliverable either to bearer or to the
order of the person in possession; or
(C) the person in control, other than under IC 26-1-7-106(g),
of a negotiable electronic document of title.
(21) To "honor" is to pay or to accept and pay or where a credit so
engages to purchase or discount a draft complying with the terms
of the credit.
(22) "Insolvency proceedings" includes any assignment for the
benefit of creditors or other proceedings intended to liquidate or
rehabilitate the estate of the person involved.
(23) A person is "insolvent" who either has ceased to pay the
person's debts in the ordinary course of business or cannot pay the
person's debts as they become due or is insolvent within the
meaning of the federal bankruptcy law.
(24) "Money" means a medium of exchange that is currently
authorized or adopted by a domestic or foreign government and
is not in an electronic form. The term includes a monetary unit
of account established by an intergovernmental organization or by
agreement between two (2) or more nations. The term does not
include a central bank digital currency that is currently
adopted, or that may be adopted, by the United States
government, a foreign government, a foreign reserve, or a
foreign sanctioned central bank.
(25) A person has "notice" of a fact when:
(a) the person has actual knowledge of it;
(b) the person has received a notice or notification of it; or
(c) from all the facts and circumstances known to the person
at the time in question, the person has reason to know that it
exists.
A person "knows" or has "knowledge" of a fact when the person
has actual knowledge of it. "Discover" or "learn" or a word or
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phrase of similar import refers to knowledge rather than to reason
to know. The time and circumstances under which a notice or
notification may cease to be effective are not determined by
IC 26-1.
(26) A person "notifies" or "gives" a notice or notification to
another by taking such steps as may be reasonably required to
inform the other in ordinary course whether or not such other
actually comes to know of it. A person "receives" a notice or
notification when:
(a) it comes to the person's attention; or
(b) it is duly delivered at the place of business through which
the contract was made or at any other place held out by the
person as the place for receipt of such communications.
(27) Notice, knowledge, or a notice of notification received by an
organization is effective for a particular transaction from the time
when it is brought to the attention of the individual conducting
that transaction and, in any event, from the time when it would
have been brought to the person's attention if the organization had
exercised due diligence. An organization exercises due diligence
if it maintains reasonable routines for communicating significant
information to the person conducting the transaction and there is
reasonable compliance with the routines. Due diligence does not
require an individual acting for the organization to communicate
information unless such communication is part of the person's
regular duties or unless the person has reason to know of the
transaction and that the transaction would be materially affected
by the information.
(28) "Organization" includes a corporation, government or
governmental subdivision or agency, business trust, estate, trust,
partnership or association, two (2) or more persons having a joint
or common interest, or any other legal or commercial entity.
(29) "Party", as distinct from "third party", means a person who
has engaged in a transaction or made an agreement within
IC 26-1.
(30) "Person" includes means an individual, or an organization.
(See IC 26-1-1-102.) corporation, business trust, estate, trust,
partnership, limited liability company, association, joint
venture, government, governmental subdivision, agency, or
instrumentality, or any other legal or commercial entity. The
term includes a protected series, however denominated, of an
entity if the protected series is established under law other
than IC 26-1 that limits, or limits if conditions specified under
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the law are satisfied, the ability of a creditor of the entity or
of any other protected series of the entity to satisfy a claim
from assets of the protected series.
(31) "Presumption" or "presumed" means that the trier of fact
must find the existence of the fact presumed unless and until
evidence is introduced which would support a finding of its
nonexistence.
(32) "Purchase" includes taking by sale, discount, negotiation,
mortgage, pledge, lien, security interest, issue or reissue, gift, or
any other voluntary transaction creating an interest in property.
(33) "Purchaser" means a person who takes by purchase.
(33a) "Registered mail" includes certified mail.
(33b) "Record", except as used in IC 26-1-2.1-309, means
information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in
perceivable form.
(34) "Remedy" means any remedial right to which an aggrieved
party is entitled with or without resort to a tribunal.
(35) "Representative" includes an agent, an officer of a
corporation or association, and a trustee, executor, or
administrator of an estate, or any other person empowered to act
for another.
(36) "Rights" includes remedies.
(37) "Security interest" means an interest in personal property or
fixtures which secures payment or performance of an obligation.
The term also includes any interest of a consignor and a buyer of
accounts, chattel paper, a payment intangible, or a promissory
note in a transaction that is subject to IC 26-1-9.1. The special
property interest of a buyer of goods on identification of such
goods to a contract for sale under IC 26-1-2-401 is not a security
interest, but a buyer may also acquire a security interest by
complying with IC 26-1-9.1. Except as otherwise provided in
IC 26-1-2-505, the right of a seller or lessor of goods under
IC 26-1-2 or IC 26-1-2.1 to retain or acquire possession of the
goods is not a "security interest", but a seller or lessor may also
acquire a "security interest" by complying with IC 26-1-9.1. The
retention or reservation of title by a seller of goods
notwithstanding shipment or delivery to the buyer
(IC 26-1-2-401) is limited in effect to a reservation of a "security
interest". Whether a transaction creates a lease or security interest
is determined by the facts of each case. However, a transaction
creates a security interest if the consideration the lessee is to pay
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the lessor for the right to possession and use of the goods is an
obligation for the term of the lease not subject to termination by
the lessee and:
(a) the original term of the lease is equal to or greater than the
remaining economic life of the goods;
(b) the lessee is bound to renew the lease for the remaining
economic life of the goods or is bound to become the owner of
the goods;
(c) the lessee has an option to renew the lease for the
remaining economic life of the goods for no additional
consideration or nominal additional consideration upon
compliance with the lease agreement; or
(d) the lessee has an option to become the owner of the goods
for no additional consideration or nominal additional
consideration upon compliance with the lease agreement.
A transaction does not create a security interest merely because
it provides that:
(a) the present value of the consideration the lessee is
obligated to pay the lessor for the right to possession and use
of the goods is substantially equal to or is greater than the fair
market value of the goods at the time the lease is entered into;
(b) the lessee assumes risk of loss of the goods, or agrees to
pay taxes, insurance, filing, recording, or registration fees, or
service or maintenance costs with respect to the goods;
(c) the lessee has an option to renew the lease or to become the
owner of the goods;
(d) the lessee has an option to renew the lease for a fixed rent
that is equal to or greater than the reasonably predictable fair
market rent for the use of the goods for the term of the renewal
at the time the option is to be performed; or
(e) the lessee has an option to become the owner of the goods
for a fixed price that is equal to or greater than the reasonably
predictable fair market value of the goods at the time the
option is to be performed.
For purposes of this subsection:
(x) Additional consideration is not nominal if:
(i) when the option to renew the lease is granted to the lessee
the rent is stated to be the fair market rent for the use of the
goods for the term of the renewal determined at the time the
option is to be performed; or
(ii) when the option to become the owner of the goods is
granted to the lessee the price is stated to be the fair market
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value of the goods determined at the time the option is to be
performed.
Additional consideration is nominal if it is less than the
lessee's reasonably predictable cost of performing under the
lease agreement if the option is not exercised.
(y) "Reasonably predictable" and "remaining economic life of
the goods" are to be determined with reference to the facts and
circumstances at the time the transaction is entered into.
(z) "Present value" means the amount as of a date certain of
one (1) or more sums payable in the future, discounted to the
date certain. The discount is determined by the interest rate
specified by the parties if the rate is not manifestly
unreasonable at the time the transaction is entered into.
Otherwise, the discount is determined by a commercially
reasonable rate that takes into account the facts and
circumstances of each case at the time the transaction was
entered into.
(38) "Send" in connection with any writing a record or notice
notification means:
(A) to deposit in the mail, or deliver for transmission, or
transmit by any other usual means of communication, with
postage or cost of transmission provided for, and properly
addressed and, in the case of an instrument, to an address
specified thereon or otherwise agreed or, if there be none, to
any address reasonable under the circumstances; or The
receipt of any writing or notice within the time at which it
would have arrived if properly sent has the effect of a proper
sending.
(B) to cause the record or notification to be received within
the time it would have been received if properly sent under
clause (A).
(39) "Signed" includes any symbol executed or adopted by a party
"Sign" means, with present intention intent to authenticate a
writing. or adopt a record, to:
(A) execute or adopt a tangible symbol; or
(B) attach to or logically associate with the record an
electronic symbol, sound, or process.
"Signed", "signing", and "signature" have corresponding
meanings.
(40) "Surety" includes guarantor.
(41) "Telegram" includes a message transmitted by radio,
teletype, cable, any mechanical method of transmission, or the
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like.
(42) "Term" means that portion of an agreement which relates to
a particular matter.
(43) "Unauthorized" signature means one made without actual,
implied, or apparent authority and includes a forgery.
(44) "Value". Except as otherwise provided with respect to
negotiable instruments and bank collections (IC 26-1-3.1-303,
IC 26-1-4-208, and IC 26-1-4-209) in IC 26-1-3.1, IC 26-1-4,
IC 26-1-5.1, IC 26-1-6.2, and IC 26-1-12, a person gives value
for rights if the person acquires them:
(a) in return for a binding commitment to extend credit or for
the extension of immediately available credit whether or not
drawn upon and whether or not a chargeback is provided for
in the event of difficulties in collection;
(b) as security for or in total or partial satisfaction of a
preexisting claim;
(c) by accepting delivery pursuant to a preexisting contract for
purchase; or
(d) generally, in return for any consideration sufficient to
support a simple contract.
(45) "Warehouse receipt" means a document of title issued by a
person engaged in the business of storing goods for hire.
(46) "Written" or "writing" includes printing, typewriting, or any
other intentional reduction to tangible form.
SECTION 2. IC 26-1-1-301, AS ADDED BY P.L.143-2007,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 301. (1) Except as otherwise provided in this
section, if a transaction bears a reasonable relation to Indiana and also
to another state or nation, the parties may agree that the law either of
Indiana or of the other state or nation shall govern their rights and
duties.
(2) In the absence of an agreement under subsection (1), and except
as provided in subsection (3), IC 26-1 applies to transactions bearing
an appropriate relation to Indiana.
(3) If any of the following provisions specifies the applicable law,
that provision governs, and a contrary agreement is effective only to the
extent permitted by the law so specified:
(a) IC 26-1-2-402.
(b) IC 26-1-2.1-105 and IC 26-1-2.1-106.
(c) IC 26-1-4-102.
(d) IC 26-1-4.1-507.
(e) IC 26-1-5.1-116.
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(f) IC 26-1-8.1-110.
(g) IC 26-1-9.1-301 through IC 26-1-9.1-307.
(h) IC 26-1-12-107.
SECTION 3. IC 26-1-2-102 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 102. (1) Unless the
context otherwise requires, IC 26-1-2 applies to transactions in goods.
It does not apply to any transaction which although in the form of an
unconditional contract to sell or present sale is intended to operate only
as a security transaction, nor does IC 26-1-2 impair or repeal any
statute regulating sales to consumers, farmers, or other specified
classes of buyers. IC 26-1-2 does not impair or repeal IC 9-14, IC 9-17,
or IC 9-22-5. and except as provided in subsection (3), this chapter
applies to transactions in goods and, in the case of a hybrid
transaction, this chapter applies to the extent provided in
subsection (2).
(2) In a hybrid transaction, the following apply:
(a) If the sale of goods aspects do not predominate, only the
provisions of this chapter which relate primarily to the sales
of goods aspects of the transaction apply, and the provisions
that relate to the transaction as a whole do not apply.
(b) If the sale of goods aspects predominate, this chapter
applies to the transaction but does not preclude the
application in appropriate circumstances of other law to
aspects of the transaction that do not relate to the sale of
goods.
(3) This chapter does not:
(a) apply to a transaction that, even though in the form of an
unconditional contract to sell or present sale, operates to
create a security interest; or
(b) impair or repeal a statute regulating sales to consumers,
farmers, or other specified classes of buyers.
SECTION 4. IC 26-1-2-106 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 106. (1) In IC 26-1-2,
unless the context otherwise requires, "contract" and "agreement" are
limited to those relating to the present or future sale of goods. "Contract
for sale" includes both a present sale of goods and a contract to sell
goods at a future time. A "sale" consists in the passing of title from the
seller to the buyer for a price (IC 26-1-2-401). A "present sale" means
a sale which is accomplished by the making of the contract.
(2) Goods or conduct including any part of a performance are
"conforming" or conform to the contract when they are in accordance
with the obligations under the contract.
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(3) "Termination" occurs when either party pursuant to a power
created by agreement or law puts an end to the contract otherwise than
for its breach. On "termination" all obligations which are still executory
on both sides are discharged but any right based on prior breach or
performance survives.
(4) "Cancellation" occurs when either party puts an end to the
contract for breach by the other, and its effect is the same as that of
"termination" except that the cancelling party also retains any remedy
for breach of the whole contract or of any unperformed balance.
(5) "Hybrid transaction" means a single transaction involving
a sale of goods and:
(a) the provision of services;
(b) a lease of other goods; or
(c) a sale, lease, or license of property other than goods.
SECTION 5. IC 26-1-2-201 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 201. (1) Except as
otherwise provided in this section, a contract for the sale of goods for
the price of five hundred dollars ($500) or more is not enforceable by
way of action or defense unless there is some writing a record
sufficient to indicate that a contract for sale has been made between the
parties and signed by the party against whom enforcement is sought or
by his the party's authorized agent or broker. A writing record is not
insufficient because it omits or incorrectly states a term agreed upon,
but the contract is not enforceable under this paragraph section beyond
the quantity of goods shown in such writing. the record.
(2) Between merchants, if within a reasonable time a writing record
in confirmation of the contract and sufficiently against the sender is
received and the party receiving it has reason to know its contents, it
satisfies the requirements of subsection (1) against such the party
unless written notice in a record of objection to its contents is given
within ten (10) days after it is received.
(3) A contract which does not satisfy the requirements of subsection
(1) but which is valid in other respects is enforceable:
(a) if the goods are to be specially manufactured for the buyer and
are not suitable for sale to others in the ordinary course of the
seller's business and the seller, before notice of repudiation is
received and under circumstances which reasonably indicate that
the goods are for the buyer, has made either a substantial
beginning of their manufacture or commitments for their
procurement; or
(b) if the party against whom enforcement is sought admits in his
pleading, testimony, or otherwise in court that a contract for sale
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was made, but the contract is not enforceable under this provision
beyond the quantity of goods admitted; or
(c) with respect to goods for which payment has been made and
accepted or which have been received and accepted
(IC 26-1-2-606).
SECTION 6. IC 26-1-2-202, AS AMENDED BY P.L.143-2007,
SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 202. Terms with respect to which the confirmatory
memoranda of the parties agree or which are otherwise set forth in a
writing record intended by the parties as a final expression of their
agreement with respect to such terms as are included therein may not
be contradicted by evidence of any prior agreement or of a
contemporaneous oral agreement but may be explained or
supplemented:
(a) by course of dealing or usage of trade (IC 26-1-1-205) or by
course of performance (IC 26-1-1-205); and
(b) by evidence of consistent additional terms, unless the court
finds the writing record to have been intended also as a complete
and exclusive statement of the terms of the agreement.
SECTION 7. IC 26-1-2-203 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 203. The affixing of a
seal to a writing record evidencing a contract for sale or an offer to buy
or sell goods does not constitute the writing record a sealed instrument
and the law with respect to sealed instruments does not apply to such
a contract or offer.
SECTION 8. IC 26-1-2-205 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 205. An offer by a
merchant to buy or sell goods in a signed writing record which by its
terms gives assurance that it will be held open is not revocable, for lack
of consideration, during the time stated or if no time is stated for a
reasonable time, but in no event may such period of irrevocability
exceed three (3) months; but any such term of assurance on a form
supplied by the offeree must be separately signed by the offeror.
SECTION 9. IC 26-1-2-209 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 209. (1) An agreement
modifying a contract within IC 26-1-2 needs no consideration to be
binding.
(2) A signed agreement which excludes modification or rescission,
except by a signed writing or another signed record, cannot be
otherwise modified or rescinded, but except as between merchants such
a requirement on a form supplied by the merchant must be separately
signed by the other party.
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(3) The requirements of the statute of frauds section (IC 26-1-2-201)
must be satisfied if the contract as modified is within its provisions.
(4) Although an attempt at modification or rescission does not
satisfy the requirements of subsection (2) or (3), it can operate as a
waiver.
(5) A party who has made a waiver affecting an executory portion
of the contract may retract the waiver by reasonable notification
received by the other party that strict performance will be required of
any term waived, unless the retraction would be unjust in view of a
material change of position in reliance on the waiver.
SECTION 10. IC 26-1-2.1-102 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 102. (1) IC 26-1-2.1
applies to any transaction, regardless of form, that creates a lease and,
in the case of a hybrid lease, it applies to the extent provided in
subsection (2).
(2) In a hybrid lease, the following apply:
(a) If the lease of goods aspects do not predominate:
(i) only the provisions of this chapter that relate primarily
to the lease of goods aspects of the transaction apply, and
the provisions that relate primarily to the transaction as a
whole do not apply;
(ii) section 209 of this chapter applies if the lease is a
finance lease; and
(iii) section 407 of this chapter applies to the promises of
the lessee in a finance lease to the extent the promises are
consideration for the right to possession and use of the
leased goods.
(b) If the lease of goods aspects predominate, this chapter
applies to the transaction, but does not preclude the
application in appropriate circumstances of other law to
aspects of the lease that do not relate to the lease of goods.
SECTION 11. IC 26-1-2.1-103, AS AMENDED BY P.L.32-2021,
SECTION 72, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 103. (1) Unless the context otherwise requires, in
IC 26-1-2.1:
(a) "Buyer in ordinary course of business" means a person who in
good faith and without knowledge that the sale to the person is in
violation of the ownership rights or security interest or leasehold
interest of a third party in the goods, buys in ordinary course from
a person in the business of selling goods of that kind but does not
include a pawnbroker. "Buying" may be for cash or by exchange
of other property or on secured or unsecured credit and includes
SEA 468 — Concur 14
acquiring goods or documents of title under a pre-existing
contract for sale but does not include a transfer in bulk or as
security for or in total or partial satisfaction of a money debt.
(b) "Cancellation" occurs when either party puts an end to the
lease contract for default by the other party.
(c) "Commercial unit" means such a unit of goods as by
commercial usage is a single whole for purposes of lease and
division of which materially impairs its character or value on the
market or in use. A commercial unit may be a single article, as a
machine, or a set of articles, as a suite of furniture or a line of
machinery, or a quantity, as a gross or carload, or any other unit
treated in use or in the relevant market as a single whole.
(d) "Conforming" goods or performance under a lease contract
means goods or performance that are in accordance with the
obligations under the lease contract.
(e) "Consumer lease" means a lease that a lessor regularly
engaged in the business of leasing or selling makes to a lessee
who is an individual and who takes under the lease primarily for
a personal, family, or household purpose if the total payments to
be made under the lease contract, excluding payments for options
to renew or buy, do not exceed twenty-five thousand dollars
($25,000).
(f) "Fault" means wrongful act, omission, breach, or default.
(g) "Finance lease" means a lease with respect to which:
(i) the lessor does not select, manufacture, or supply the goods;
(ii) the lessor acquires the goods or the right to possession and
use of the goods in connection with the lease; and
(iii) one (1) of the following occurs:
(A) the lessee receives a copy of the contract by which the
lessor acquired the goods or the right to possession and use
of the goods before signing the lease contract;
(B) the lessee's approval of the contract by which the lessor
acquired the goods or the right to possession and use of the
goods is a condition to effectiveness of the lease contract;
(C) the lessee, before signing the lease contract, receives an
accurate and complete statement designating the promises
and warranties, and any disclaimers of warranties,
limitations, or modifications of remedies, or liquidated
damages, including those of a third party, such as the
manufacturer of the goods, provided to the lessor by the
person supplying the goods in connection with or as part of
the contract by which the lessor acquired the goods or the
SEA 468 — Concur 15
right to possession and use of the goods; or
(D) if the lease is not a consumer lease, the lessor, before the
lessee signs the lease contract, informs the lessee in writing:
(a) of the identity of the person supplying the goods to the
lessor, unless the lessee has selected that person and
directed the lessor to acquire the goods or the right to
possession and use of the goods from that person; (b) that
the lessee is entitled under IC 26-1-2.1 to the promises and
warranties, including those of any third party, provided to
the lessor by the person supplying the goods in connection
with or as part of the contract by which the lessor acquired
the goods or the right to possession and use of the goods;
and (c) that the lessee may communicate with the person
supplying the goods to the lessor and receive an accurate
and complete statement of those promises and warranties,
including any disclaimers and limitations of them or of
remedies.
(h) The following terms have the following meanings:
(i) "Goods" means all things that are movable at the time of
identification to the lease contract, or are fixtures
(IC 26-1-2.1-309), but the term does not include money,
documents, instruments, accounts, chattel paper, general
intangibles, or minerals or the like, including oil and gas,
before extraction. The term also includes the unborn young of
animals.
(ii) "Hybrid lease" means a single transaction involving a
lease of goods and either the provision of services, a sale of
other goods, or a sale, lease, or license of property other
than goods.
(i) "Installment lease contract" means a lease contract that
authorizes or requires the delivery of goods in separate lots to be
separately accepted, even though the lease contract contains a
clause "each delivery is a separate lease" or its equivalent.
(j) "Lease" means a transfer of the right to possession and use of
goods for a term in return for consideration, but a sale, including
a sale on approval or a sale or return, or retention or creation of a
security interest is not a lease. Unless the context clearly indicates
otherwise, the term includes a sublease.
(k) "Lease agreement" means the bargain, with respect to the
lease, of the lessor and the lessee in fact as found in their
language or by implication from other circumstances including
course of dealing or usage of trade or course of performance as
SEA 468 — Concur 16
provided in IC 26-1-2.1. Unless the context clearly indicates
otherwise, the term includes a sublease agreement.
(l) "Lease contract" means the total legal obligation that results
from the lease agreement as affected by IC 26-1-2.1 and any other
applicable rules of law. Unless the context clearly indicates
otherwise, the term includes a sublease contract.
(m) "Leasehold interest" means the interest of the lessor or the
lessee under a lease contract.
(n) "Lessee" means a person who acquires the right to possession
and use of goods under a lease. Unless the context clearly
indicates otherwise, the term includes a sublessee.
(o) "Lessee in ordinary course of business" means a person who
in good faith and without knowledge that the lease to the person
is in violation of the ownership rights or security interest or
leasehold interest of a third party in the goods leases in ordinary
course from a person in the business of selling or leasing goods of
that kind but does not include a pawnbroker. "Leasing" may be for
cash or by exchange of other property or on secured or unsecured
credit and includes acquiring goods or documents of title under a
pre-existing lease contract but does not include a transfer in bulk
or as security for or in total or partial satisfaction of a money debt.
(p) "Lessor" means a person who transfers the right to possession
and use of goods under a lease. Unless the context clearly
indicates otherwise, the term includes a sublessor.
(q) "Lessor's residual interest" means the lessor's interest in the
goods after expiration, termination, or cancellation of the lease
contract.
(r) "Lien" means a charge against or interest in goods to secure
payment of a debt or performance of an obligation, but the term
does not include a security interest.
(s) "Lot" means a parcel or a single article that is the subject
matter of a separate lease or delivery, whether or not it is
sufficient to perform the lease contract.
(t) "Merchant lessee" means a lessee that is a merchant with
respect to goods of the kind subject to the lease.
(u) "Present value" means the amount as of a date certain of one
(1) or more sums payable in the future, discounted to the date
certain. The discount is determined by the interest rate specified
by the parties if the rate was not manifestly unreasonable at the
time the transaction was entered into; otherwise, the discount is
determined by a commercially reasonable rate that takes into
account the facts and circumstances of each case at the time the
SEA 468 — Concur 17
transaction was entered into.
(v) "Purchase" includes taking by sale, lease, mortgage, security
interest, pledge, gift, or any other voluntary transaction creating
an interest in goods.
(w) "Sublease" means a lease of goods the right to possession and
use of which was acquired by the lessor as a lessee under an
existing lease.
(x) "Supplier" means a person from whom a lessor buys or leases
goods to be leased under a finance lease.
(y) "Supply contract" means a contract under which a lessor buys
or leases goods to be leased.
(z) "Termination" occurs when either party pursuant to a power
created by agreement or law puts an end to the lease contract
otherwise than for default.
(2) Other definitions applying to IC 26-1-2.1 and the sections in
which they appear are:
"Accessions". IC 26-1-2.1-310(1).
"Construction mortgage". IC 26-1-2.1-309(1)(d).
"Encumbrance". IC 26-1-2.1-309(1)(e).
"Fixtures". IC 26-1-2.1-309(1)(a).
"Fixture filing". IC 26-1-2.1-309(1)(b).
"Purchase money lease". IC 26-1-2.1-309(1)(c).
(3) The following definitions in other chapters apply to IC 26-1-2.1:
"Account". IC 26-1-9.1-102(a)(2).
"Between merchants". IC 26-1-2-104(3).
"Buyer". IC 26-1-2-103(1)(a).
"Chattel paper". IC 26-1-9.1-102(a)(11).
"Consumer goods". IC 26-1-9.1-102(a)(23).
"Document". IC 26-1-9.1-102(a)(30).
"Entrusting". IC 26-1-2-403(3).
"General intangibles". IC 26-1-9.1-102(a)(42).
"Good faith". IC 26-1-2-103(1)(b).
"Instrument". IC 26-1-9.1-102(a)(47).
"Merchant". IC 26-1-2-104(1).
"Mortgage". IC 26-1-9.1-102(a)(55).
"Pursuant to commitment". IC 26-1-9.1-102(a)(69).
"Receipt". IC 26-1-2-103(1)(c).
"Sale". IC 26-1-2-106(1).
"Sale on approval". IC 26-1-2-326.
"Sale or return". IC 26-1-2-326.
"Seller". IC 26-1-2-103(1)(d).
(4) In addition, IC 26-1-1 contains general definitions and principles
SEA 468 — Concur 18
of construction and interpretation applicable throughout IC 26-1-2.1.
SECTION 12. IC 26-1-2.1-107 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 107. Any claim or right
arising out of an alleged default or breach of warranty may be
discharged in whole or in part without consideration by a written
waiver or renunciation in a signed and record delivered by the
aggrieved party.
SECTION 13. IC 26-1-2.1-201 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 201. (1) A lease
contract is not enforceable by way of action or defense unless:
(a) the total payments to be made under the lease contract,
excluding payments for options to renew or buy, are less than one
thousand dollars ($1,000); or
(b) there is a writing, record, signed by the party against whom
enforcement is sought or by that party's authorized agent,
sufficient to indicate that a lease contract has been made between
the parties and to describe the goods leased and the lease term.
(2) Any description of leased goods or of the lease term is sufficient
and satisfies subsection (1)(b), whether or not it is specific, if it
reasonably identifies what is described.
(3) A writing record is not insufficient because it omits or
incorrectly states a term agreed upon, but the lease contract is not
enforceable under subsection (1)(b) beyond the lease term and the
quantity of goods shown in the writing. record.
(4) A lease contract that does not satisfy the requirements of
subsection (1), but which is valid in other respects, is enforceable:
(a) if the goods are to be specially manufactured or obtained for
the lessee and are not suitable for lease or sale to others in the
ordinary course of the lessor's business, and the lessor, before
notice of repudiation is received and under circumstances that
reasonably indicate that the goods are for the lessee, has made
either a substantial beginning of their manufacture or
commitments for their procurement;
(b) if the party against whom enforcement is sought admits in that
party's pleading, testimony or otherwise in court that a lease
contract was made, but the lease contract is not enforceable under
this provision beyond the quantity of goods admitted; or
(c) with respect to goods that have been received and accepted by
the lessee.
(5) The lease term under a lease contract referred to in subsection
(4) is:
(a) if there is a writing record signed by the party against whom
SEA 468 — Concur 19
enforcement is sought or by that party's authorized agent
specifying the lease term, the term so specified;
(b) if the party against whom enforcement is sought admits in that
party's pleading, testimony, or otherwise in court a lease term, the
term so admitted; or
(c) a reasonable lease term.
SECTION 14. IC 26-1-2.1-202 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 202. Terms with
respect to which the confirmatory memoranda of the parties agree or
which are otherwise set forth in a writing record intended by the
parties as a final expression of their agreement with respect to such
terms as are included therein may not be contradicted by evidence of
any prior agreement or of a contemporaneous oral agreement but may
be explained or supplemented:
(a) by course of dealing or usage of trade or by course of
performance; and
(b) by evidence of consistent additional terms unless the court
finds the writing record to have been intended also as a complete
and exclusive statement of the terms of the agreement.
SECTION 15. IC 26-1-2.1-203 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 203. The affixing of a
seal to a writing record evidencing a lease contract or an offer to enter
into a lease contract does not render the writing record a sealed
instrument and the law with respect to sealed instruments does not
apply to the lease contract or offer.
SECTION 16. IC 26-1-2.1-205 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 205. An offer by a
merchant to lease goods to or from another person in a signed writing
record that by its terms gives assurance it will be held open is not
revocable, for lack of consideration, during the time stated or, if no
time is stated, for a reasonable time, but in no event may the period of
irrevocability exceed three (3) months. Any such term of assurance on
a form supplied by the offeree must be separately signed by the offeror.
SECTION 17. IC 26-1-2.1-208 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 208. (1) An agreement
modifying a lease contract needs no consideration to be binding.
(2) A signed lease agreement that excludes modification or
rescission except by a signed writing record may not be otherwise
modified or rescinded, but, except as between merchants, such a
requirement on a form supplied by a merchant must be separately
signed by the other party.
(3) Although an attempt at modification or rescission does not
SEA 468 — Concur 20
satisfy the requirements of subsection (2), it may operate as a waiver.
(4) A party who has made a waiver affecting an executory portion
of a lease contract may retract the waiver by reasonable notification
received by the other party that strict performance will be required of
any term waived, unless the retraction would be unjust in view of a
material change of position in reliance on the waiver.
SECTION 18. IC 26-1-3.1-104 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 104. (a) Except as
provided in subsections (c) and (d), "negotiable instrument" means an
unconditional promise or order to pay a fixed amount of money, with
or without interest or other charges described in the promise or order,
if it:
(1) is payable to bearer or to order at the time it is issued or first
comes into possession of a holder;
(2) is payable on demand or at a definite time; and
(3) does not state any other undertaking or instruction by the
person promising or ordering payment to do any act in addition to
the payment of money, but the promise or order may contain:
(A) an undertaking or power to give, maintain, or protect
collateral to secure payment;
(B) an authorization or power to the holder to confess
judgment or realize on or dispose of collateral; or
(C) a waiver of the benefit of any law intended for the
advantage or protection of an obligor;
(D) a term that specifies the law that governs the promise
or order; or
(E) an undertaking to resolve in a specified forum a
dispute concerning the promise or order.
(b) "Instrument" means a negotiable instrument.
(c) An order that meets all of the requirements of subsection (a),
except subdivision (1), and otherwise falls within the definition of
"check" in subsection (f) is a negotiable instrument and a check.
(d) A promise or order other than a check is not an instrument if, at
the time it is issued or first comes into possession of a holder, it
contains a conspicuous statement, however expressed, to the effect that
the promise or order is not negotiable or is not an instrument governed
by IC 26-1-3.1.
(e) An instrument is a "note" if it is a promise and is a "draft" if it is
an order. If an instrument falls within the definition of both "note" and
"draft", a person entitled to enforce the instrument may treat it as either.
(f) "Check" means:
(1) a draft, other than a documentary draft, payable on demand
SEA 468 — Concur 21
and drawn on a bank; or
(2) a cashier's check or teller's check.
An instrument may be a check even though it is described on its face
by another term, such as "money order".
(g) "Cashier's check" means a draft with respect to which the drawer
and drawee are the same bank or branches of the same bank.
(h) "Teller's check" means a draft drawn by a bank:
(1) on another bank; or
(2) payable at or through a bank.
(i) "Traveler's check" means an instrument that:
(1) is payable on demand;
(2) is drawn on or payable at or through a bank;
(3) is designated by the term "traveler's check" or by a
substantially similar term; and
(4) requires, as a condition to payment, a countersignature by a
person whose specimen signature appears on the instrument.
(j) "Certificate of deposit" means an instrument containing an
acknowledgment by a bank that a sum of money has been received by
the bank and a promise by the bank to repay the sum of money. A
certificate of deposit is a note of the bank.
SECTION 19. IC 26-1-3.1-105 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 105. (a) "Issue" means:
(1) the first delivery of an instrument by the maker or drawer,
whether to a holder or nonholder, for the purpose of giving rights
on the instrument to any person; or
(2) if agreed by the payee, the first transmission by the drawer
to the payee of an image of an item and information derived
from the item that enables the depository bank to collect the
item by transferring or presenting under federal law an
electronic check.
(b) An unissued instrument, or an unissued incomplete instrument
that is completed, is binding on the maker or drawer, but nonissuance
is a defense. An instrument that is conditionally issued or is issued for
a special purpose is binding on the maker or drawer, but failure of the
condition or special purpose to be fulfilled is a defense.
(c) "Issuer" applies to issued and unissued instruments and means
a maker or drawer of an instrument.
SECTION 20. IC 26-1-3.1-401 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 401. (a) A person is not
liable on an instrument unless:
(1) the person signed the instrument; or
(2) the person is represented by an agent or representative who
SEA 468 — Concur 22
signed the instrument and the signature is binding on the
represented person under IC 26-1-3.1-402.
(b) A signature may be made:
(1) manually or by means of a device or machine; and
(2) by the use of any name, including a trade or assumed name, or
by a word, mark, or symbol executed or adopted by a person with
present intention to authenticate a writing.
SECTION 21. IC 26-1-3.1-604, AS AMENDED BY P.L.135-2009,
SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 604. (a) A person entitled to enforce an
instrument, with or without consideration, may discharge the obligation
of a party to pay the instrument:
(1) by an intentional voluntary act, such as surrender of the
instrument to the party, destruction, mutilation, or cancellation of
the instrument, cancellation or striking out of the party's signature,
or the addition of words to the instrument indicating discharge; or
(2) by agreeing not to sue or otherwise renouncing rights against
the party by a signed record.
The obligation of a party to pay a check is not discharged solely by
destruction of the check in connection with a process in which
information is extracted from the check and an image of the check
is made and, subsequently, the information and image are
transmitted for payment.
(b) Cancellation or striking out of an endorsement under subsection
(a) does not affect the status and rights of a party derived from the
endorsement.
(c) As used in this section, "signed", with respect to a record that is
not a writing, includes the attachment to or logical association with the
record of an electronic symbol, sound, or process with the present
intent to adopt or accept the record.
SECTION 22. IC 26-1-4.1-103 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 103. (a) In IC 26-1-4.1:
(1) "Payment order" means an instruction of a sender to a
receiving bank, transmitted orally electronically, or in writing, a
record, to pay, or to cause another bank to pay, a fixed or
determinable amount of money to a beneficiary if:
(i) the instruction does not state a condition to payment to the
beneficiary other than time of payment;
(ii) the receiving bank is to be reimbursed by debiting an
account of, or otherwise receiving payment from, the sender;
and
(iii) the instruction is transmitted by the sender directly to the
SEA 468 — Concur 23
receiving bank or to an agent, funds-transfer system, or
communication system for transmittal to the receiving bank.
(2) "Beneficiary" means the person to be paid by the beneficiary's
bank.
(3) "Beneficiary's bank" means the bank identified in a payment
order in which an account of the beneficiary is to be credited
pursuant to the order or which otherwise is to make payment to
the beneficiary if the order does not provide for payment to an
account.
(4) "Receiving bank" means the bank to which the sender's
instruction is addressed.
(5) "Sender" means the person giving the instruction to the
receiving bank.
(b) If an instruction complying with subsection (a)(1) is to make
more than one (1) payment to a beneficiary, the instruction is a separate
payment order with respect to each payment.
(c) A payment order is issued when it is sent to the receiving bank.
SECTION 23. IC 26-1-4.1-201 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 201. "Security
procedure" means a procedure established by agreement of a customer
and a receiving bank for the purpose of (i) verifying that a payment
order or communication amending or canceling a payment order is that
of the customer, or (ii) detecting error in the transmission or the content
of the payment order or communication. A security procedure may
impose an obligation on the receiving bank or the customer and
may require the use of algorithms or other codes, identifying words, or
numbers, symbols, sounds, biometrics, encryption, callback
procedures, or similar security devices. Comparison of a signature on
a payment order or communication with an authorized specimen
signature of the customer or requiring a payment order to be sent
from a known electronic mail address, Internet protocol address,
or telephone number is not by itself a security procedure.
SECTION 24. IC 26-1-4.1-202 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 202. (a) A payment
order received by the receiving bank is the authorized order of the
person identified as sender if that person authorized the order or is
otherwise bound by it under the law of agency.
(b) If a bank and its customer have agreed that the authenticity of
payment orders issued to the bank in the name of the customer as
sender will be verified pursuant to a security procedure, a payment
order received by the receiving bank is effective as the order of the
customer, whether or not authorized, if (i) the security procedure is a
SEA 468 — Concur 24
commercially reasonable method of providing security against
unauthorized payment orders, and (ii) the bank proves that it accepted
the payment order in good faith and in compliance with the bank's
obligations under the security procedure and any written agreement
or instruction of the customer, evidenced by a record, restricting
acceptance of payment orders issued in the name of the customer. The
bank is not required to follow an instruction that violates a written an
agreement with the customer, evidenced by a record, or notice of
which is not received at a time and in a manner affording the bank a
reasonable opportunity to act on it before the payment order is
accepted.
(c) Commercial reasonableness of a security procedure is a question
of law to be determined by considering the wishes of the customer
expressed to the bank, the circumstances of the customer known to the
bank, including the size, type, and frequency of payment orders
normally issued by the customer to the bank, alternative security
procedures offered to the customer, and security procedures in general
use by customers and receiving banks similarly situated. A security
procedure is deemed to be commercially reasonable if (i) the security
procedure was chosen by the customer after the bank offered, and the
customer refused, a security procedure that was commercially
reasonable for that customer, and (ii) the customer expressly agreed in
writing a record to be bound by any payment order, whether or not
authorized, issued in its name and accepted by the bank in compliance
with the bank's obligations under the security procedure chosen by
the customer.
(d) The term "sender" in IC 26-1-4.1 includes the customer in whose
name a payment order is issued if the order is the authorized order of
the customer under subsection (a), or it is effective as the order of the
customer under subsection (b).
(e) This section applies to amendments and cancellations of
payment orders to the same extent it applies to payment orders.
(f) Except as provided in this section and in IC 26-1-4.1-203(a)(1),
rights and obligations arising under this section or IC 26-1-4.1-203 may
not be varied by agreement.
SECTION 25. IC 26-1-4.1-203 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 203. (a) If an accepted
payment order is not, under IC 26-1-4.1-202(a), an authorized order of
a customer identified as sender, but is effective as an order of the
customer pursuant to IC 26-1-4.1-202(b), the following rules apply:
(1) By express written agreement, evidenced by a record, the
receiving bank may limit the extent to which it is entitled to
SEA 468 — Concur 25
enforce or retain payment of the payment order.
(2) The receiving bank is not entitled to enforce or retain payment
of the payment order if the customer proves that the order was not
caused, directly or indirectly, by a person:
(i) entrusted at any time with duties to act for the customer
with respect to payment orders or the security procedure; or
(ii) who obtained access to transmitting facilities of the
customer or who obtained, from a source controlled by the
customer and without authority of the receiving bank,
information facilitating breach of the security procedure,
regardless of how the information was obtained or whether the
customer was at fault. Information includes any access device,
computer software, or the like.
(b) This section applies to amendments of payment orders to the
same extent it applies to payment orders.
SECTION 26. IC 26-1-4.1-207 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 207. (a) Subject to
subsection (b), if, in a payment order received by the beneficiary's
bank, the name, bank account number, or other identification of the
beneficiary refers to a nonexistent or unidentifiable person or account,
no person has rights as a beneficiary of the order and acceptance of the
order cannot occur.
(b) If a payment order received by the beneficiary's bank identifies
the beneficiary both by name and by an identifying or bank account
number and the name and number identify different persons, the
following rules apply:
(1) Except as otherwise provided in subsection (c), if the
beneficiary's bank does not know that the name and number refer
to different persons, it may rely on the number as the proper
identification of the beneficiary of the order. The beneficiary's
bank need not determine whether the name and number refer to
the same person.
(2) If the beneficiary's bank pays the person identified by name or
knows that the name and number identify different persons, no
person has rights as beneficiary except the person paid by the
beneficiary's bank if that person was entitled to receive payment
from the originator of the funds transfer. If no person has rights as
beneficiary, acceptance of the order cannot occur.
(c) If (i) a payment order described in subsection (b) is accepted, (ii)
the originator's payment order described the beneficiary inconsistently
by name and number, and (iii) the beneficiary's bank pays the person
identified by number as permitted by subsection (b)(1), the following
SEA 468 — Concur 26
rules apply:
(1) If the originator is a bank, the originator is obliged to pay its
order.
(2) If the originator is not a bank and proves that the person
identified by number was not entitled to receive payment from the
originator, the originator is not obliged to pay its order unless the
originator's bank proves that the originator, before acceptance of
the originator's order, had notice that payment of a payment order
issued by the originator might be made by the beneficiary's bank
on the basis of an identifying or bank account number even if it
identifies a person different from the named beneficiary. Proof of
notice may be made by any admissible evidence. The originator's
bank satisfies the burden of proof if it proves that the originator,
before the payment order was accepted, signed a writing record
stating the information to which the notice relates.
(d) In a case governed by subsection (b)(1), if the beneficiary's bank
rightfully pays the person identified by number and that person was not
entitled to receive payment from the originator, the amount paid may
be recovered from that person to the extent allowed by the law
governing mistake and restitution as follows:
(1) If the originator is obliged to pay its payment order as stated
in subsection (c), the originator has the right to recover.
(2) If the originator is not a bank and is not obliged to pay its
payment order, the originator's bank has the right to recover.
SECTION 27. IC 26-1-4.1-208 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 208. (a) This
subsection applies to a payment order identifying an intermediary bank
or the beneficiary's bank only by an identifying number.
(1) The receiving bank may rely on the number as the proper
identification of the intermediary or beneficiary's bank and need
not determine whether the number identifies a bank.
(2) The sender is obliged to compensate the receiving bank for
any loss and expenses incurred by the receiving bank as a result
of its reliance on the number in executing or attempting to
execute the order.
(b) This subsection applies to a payment order identifying an
intermediary bank or the beneficiary's bank both by name and an
identifying number if the name and number identify different persons.
(1) If the sender is a bank, the receiving bank may rely on the
number as the proper identification of the intermediary or
beneficiary's bank if the receiving bank, when it executes the
sender's order, does not know that the name and number identify
SEA 468 — Concur 27
different persons. The receiving bank need not determine whether
the name and number refer to the same person or whether the
number refers to a bank. The sender is obliged to compensate the
receiving bank for any loss and expenses incurred by the
receiving bank as a result of its reliance on the number in
executing or attempting to execute the order.
(2) If the sender is not a bank and the receiving bank proves that
the sender, before the payment order was accepted, had notice
that the receiving bank might rely on the number as the proper
identification of the intermediary or beneficiary's bank even if it
identifies a person different from the bank identified by name, the
rights and obligations of the sender and the receiving bank are
governed by subdivision (1), as though the sender were a bank.
Proof of notice may be made by any admissible evidence. The
receiving bank satisfies the burden of proof if it proves that the
sender, before the payment order was accepted, signed a writing
record stating the information to which the notice relates.
(3) Regardless of whether the sender is a bank, the receiving bank
may rely on the name as the proper identification of the
intermediary or beneficiary's bank if the receiving bank, at the
time it executes the sender's order, does not know that the name
and number identify different persons. The receiving bank need
not determine whether the name and number refer to the same
person.
(4) If the receiving bank knows that the name and number identify
different persons, reliance on either the name or the number in
executing the sender's payment order is a breach of the obligation
stated in IC 26-1-4.1-302(a)(1).
SECTION 28. IC 26-1-4.1-210 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 210. (a) A payment
order is rejected by the receiving bank by a notice of rejection
transmitted to the sender orally electronically, or in writing. a record.
A notice of rejection need not use any particular words and is sufficient
if it indicates that the receiving bank is rejecting the order or will not
execute or pay the order. Rejection is effective when the notice is given
if transmission is by a means that is reasonable in the circumstances.
If notice of rejection is given by a means that is not reasonable,
rejection is effective when the notice is received. If an agreement of the
sender and receiving bank establishes the means to be used to reject a
payment order, (i) any means complying with the agreement is
reasonable and (ii) any means not complying is not reasonable unless
no significant delay in receipt of the notice resulted from the use of the
SEA 468 — Concur 28
noncomplying means.
(b) This subsection applies if a receiving bank other than the
beneficiary's bank fails to execute a payment order despite the
existence on the execution date of a withdrawable credit balance in an
authorized account of the sender sufficient to cover the order. If the
sender does not receive notice of rejection of the order on the execution
date and the authorized account of the sender does not bear interest, the
bank is obliged to pay interest to the sender on the amount of the order
for the number of days elapsing after the execution date to the earlier
of the day the order is canceled pursuant to IC 26-1-4.1-211(d) or the
day the sender receives notice or learns that the order was not executed,
counting the final day of the period as an elapsed day. If the
withdrawable credit balance during that period falls below the amount
of the order, the amount of interest is reduced accordingly.
(c) If a receiving bank suspends payments, all unaccepted payment
orders issued to it are deemed rejected at the time the bank suspends
payments.
(d) Acceptance of a payment order precludes a later rejection of the
order. Rejection of a payment order precludes a later acceptance of the
order.
SECTION 29. IC 26-1-4.1-211 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 211. (a) A
communication of the sender of a payment order canceling or
amending the order may be transmitted to the receiving bank orally
electronically, or in writing. a record. If a security procedure is in
effect between the sender and the receiving bank, the communication
is not effective to cancel or amend the order unless the communication
is verified pursuant to the security procedure or the bank agrees to the
cancellation or amendment.
(b) Subject to subsection (a), a communication by the sender
canceling or amending a payment order is effective to cancel or amend
the order if notice of the communication is received at a time and in a
manner affording the receiving bank a reasonable opportunity to act on
the communication before the bank accepts the payment order.
(c) After a payment order has been accepted, cancellation or
amendment of the order is not effective unless the receiving bank
agrees or a funds-transfer system rule allows cancellation or
amendment without agreement of the bank.
(1) With respect to a payment order accepted by a receiving bank
other than the beneficiary's bank, cancellation or amendment is
not effective unless a conforming cancellation or amendment of
the payment order issued by the receiving bank is also made.
SEA 468 — Concur 29
(2) With respect to a payment order accepted by the beneficiary's
bank, cancellation or amendment is not effective unless the order
was issued in execution of an unauthorized payment order, or
because of a mistake by a sender in the funds transfer which
resulted in the issuance of a payment order:
(i) that is a duplicate of a payment order previously issued by
the sender;
(ii) that orders payment to a beneficiary not entitled to receive
payment from the originator; or
(iii) that orders payment in an amount greater than the amount
the beneficiary was entitled to receive from the originator. If
the payment order is canceled or amended, the beneficiary's
bank is entitled to recover from the beneficiary any amount
paid to the beneficiary to the extent allowed by the law
governing mistake and restitution.
(d) An unaccepted payment order is canceled by operation of law at
the close of the fifth funds-transfer business day of the receiving bank
after the execution date or payment date of the order.
(e) A canceled payment order cannot be accepted. If an accepted
payment order is canceled, the acceptance is nullified and no person
has any right or obligation based on the acceptance. Amendment of a
payment order is deemed to be cancellation of the original order at the
time of amendment and issue of a new payment order in the amended
form at the same time.
(f) Unless otherwise provided in an agreement of the parties or in a
funds-transfer system rule, if the receiving bank, after accepting a
payment order, agrees to cancellation or amendment of the order by the
sender or is bound by a funds-transfer system rule allowing
cancellation or amendment without the bank's agreement, the sender,
whether or not cancellation or amendment is effective, is liable to the
bank for any loss and expenses, including reasonable attorney's fees,
incurred by the bank as a result of the cancellation or amendment or
attempted cancellation or amendment.
(g) A payment order is not revoked by the death or legal incapacity
of the sender unless the receiving bank knows of the death or of an
adjudication of incapacity by a court of competent jurisdiction and has
reasonable opportunity to act before acceptance of the order.
(h) A funds-transfer system rule is not effective to the extent it
conflicts with subsection (c)(2).
SECTION 30. IC 26-1-4.1-305 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 305. (a) If a funds
transfer is completed but execution of a payment order by the receiving
SEA 468 — Concur 30
bank in breach of IC 26-1-4.1-302 results in delay in payment to the
beneficiary, the bank is obliged to pay interest to either the originator
or the beneficiary of the funds transfer for the period of delay caused
by the improper execution. Except as provided in subsection (c),
additional damages are not recoverable.
(b) If execution of a payment order by a receiving bank in breach of
IC 26-1-4.1-302 results in (i) noncompletion of the funds transfer, (ii)
failure to use an intermediary bank designated by the originator, or (iii)
issuance of a payment order that does not comply with the terms of the
payment order of the originator, the bank is liable to the originator for
its expenses in the funds transfer and for incidental expenses and
interest losses, to the extent not covered by subsection (a), resulting
from the improper execution. Except as provided in subsection (c),
additional damages are not recoverable.
(c) In addition to the amounts payable under subsections (a) and (b),
damages, including consequential damages, are recoverable to the
extent provided in an express written agreement of the receiving bank,
evidenced by a record.
(d) If a receiving bank fails to execute a payment order it was
obliged by express agreement to execute, the receiving bank is liable
to the sender for its expenses in the transaction and for incidental
expenses and interest losses resulting from the failure to execute.
Additional damages, including consequential damages, are recoverable
to the extent provided in an express written agreement of the receiving
bank, evidenced by a record, but are not otherwise recoverable.
(e) Reasonable attorney's fees are recoverable if demand for
compensation under subsection (a) or (b) is made and refused before
an action is brought on the claim. If a claim is made for breach of an
agreement under subsection (d) and the agreement does not provide for
damages, reasonable attorney's fees are recoverable if demand for
compensation under subsection (d) is made and refused before an
action is brought on the claim.
(f) Except as stated in this section, the liability of a receiving bank
under subsections (a) and (b) may not be varied by agreement.
SECTION 31. IC 26-1-5.1-104 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 104. A letter of credit,
confirmation, advice, transfer, amendment, or cancellation may be
issued in any form that is a signed record. and is authenticated:
(i) by a signature; or
(ii) in accordance with the agreement of the parties or the
standard practice referred to in IC 26-1-5.1-108(e).
SECTION 32. IC 26-1-5.1-116 IS AMENDED TO READ AS
SEA 468 — Concur 31
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 116. (a) The liability of
an issuer, nominated person, or adviser for action or omission is
governed by the law of the jurisdiction chosen by an agreement in the
form of a record signed or otherwise authenticated by the affected
parties in the manner provided in IC 26-1-5.1-104 or by a provision in
the person's letter of credit, confirmation, or other undertaking. The
jurisdiction whose law is chosen need not bear any relation to the
transaction.
(b) Unless subsection (a) applies, the liability of an issuer,
nominated person, or adviser for action or omission is governed by the
law of the jurisdiction in which the person is located. The person is
considered to be located at the address indicated in the person's
undertaking. If more than one (1) address is indicated, the person is
considered to be located at the address from which the person's
undertaking was issued.
(c) For the purpose of jurisdiction, choice of law, and recognition of
interbranch letters of credit, but not enforcement of a judgment, all
branches of a bank are considered separate juridical entities and a bank
is considered to be located at the place where its relevant branch is
considered to be located under this subsection (d).
(d) A branch of a bank is considered to be located at the address
indicated in the branch's undertaking. If more than one (1) address
is indicated, the branch is considered to be located at the address
from which the undertaking was issued.
(c) (e) Except as otherwise provided in this subsection, the liability
of an issuer, nominated person, or adviser is governed by any rules of
custom or practice, such as the Uniform Customs and Practice for
Documentary Credits, to which the letter of credit, confirmation, or
other undertaking is expressly made subject. If:
(i) IC 26-1-5.1 would govern the liability of an issuer, nominated
person, or adviser under subsection (a) or (b);
(ii) the relevant undertaking incorporates rules of custom or
practice; and
(iii) there is conflict between IC 26-1-5.1 and those rules as
applied to that undertaking;
those rules govern except to the extent of any conflict with the
nonvariable provisions specified in IC 26-1-5.1-103(c).
(d) (f) If there is conflict between IC 26-1-5.1 and IC 26-1-3.1,
IC 26-1-4, IC 26-1-4.1, or IC 26-1-9.1, IC 26-1-5.1 governs.
(e) (g) The forum for settling disputes arising out of an undertaking
within IC 26-1-5.1 may be chosen in the manner and with the binding
effect that governing law may be chosen in accordance with subsection
SEA 468 — Concur 32
(a).
SECTION 33. IC 26-1-7-102, AS AMENDED BY P.L.143-2007,
SECTION 25, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 102. (a) In this chapter unless the context
otherwise requires:
(1) "Bailee" means a person that by a warehouse receipt, bill of
lading, or other document of title acknowledges possession of
goods and contracts to deliver them.
(2) "Carrier" means a person that issues a bill of lading.
(3) "Consignee" means a person named in a bill of lading to
which or to whose order the bill promises delivery.
(4) "Consignor" means a person named in a bill of lading as the
person from which the goods have been received for shipment.
(5) "Delivery order" means a record that contains an order to
deliver goods directed to a warehouse, carrier, or other person that
in the ordinary course of business issues warehouse receipts or
bills of lading.
(6) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(7) "Goods" means all things that are treated as movable for the
purposes of a contract for storage or transportation.
(8) "Issuer" means a bailee that issues a document of title or, in
the case of an unaccepted delivery order, the person that orders
the possessor of goods to deliver. The term includes a person for
which an agent or employee purports to act in issuing a document
if the agent or employee has real or apparent authority to issue
documents, even if the issuer did not receive any goods, the goods
were misdescribed, or in any other respect the agent or employee
violated the issuer's instructions.
(9) "Person entitled under the document" means the holder, in the
case of a negotiable document of title, or the person to which
delivery of the goods is to be made by the terms of, or pursuant to
instructions in a record under, a nonnegotiable document of title.
(10) "Record" means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is
retrievable in perceivable form. [Reserved.]
(11) "Shipper" means a person that enters into a contract of
transportation with a carrier.
(12) "Sign" means, with present intent to authenticate or adopt a
record:
(A) to execute or adopt a tangible symbol; or
(B) to attach to or logically associate with the record an
SEA 468 — Concur 33
electronic sound, symbol, or process. [Reserved.]
(13) "Warehouse" means a person engaged in the business of
storing goods for hire.
(b) Other definitions applying to this chapter and the sections in
which they appear are:
"Duly negotiate". IC 26-1-7-501.
"Contract for sale". IC 26-1-2-106.
"Lessee in the ordinary course of business". IC 26-1-2.1-103(o).
"Receipt" of goods. IC 26-1-2-103.
(c) In addition, IC 26-1-1 contains general definitions and principles
of construction and interpretation applicable throughout this chapter.
SECTION 34. IC 26-1-7-106, AS ADDED BY P.L.143-2007,
SECTION 29, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 106. (a) A person has control of an electronic
document of title if a system employed for evidencing the transfer of
interests in the electronic document reliably establishes that person as
the person to which the electronic document was issued or transferred.
(b) A system satisfies subsection (a), and a person is deemed to have
has control of an electronic document of title, if the document is
created, stored, and assigned transferred in such a manner that:
(1) a single authoritative copy of the document exists that is
unique, identifiable, and, except as otherwise provided in
subdivisions (4), (5), and (6), unalterable;
(2) the authoritative copy identifies the person asserting control
as:
(A) the person to which the document was issued; or
(B) if the authoritative copy indicates that the document has
been transferred, the person to which the document was most
recently transferred;
(3) the authoritative copy is communicated to and maintained by
the person asserting control or its designated custodian;
(4) copies or amendments that add or change an identified
assignee transferee of the authoritative copy can be made only
with the consent of the person asserting control;
(5) each copy of the authoritative copy and any copy of a copy is
readily identifiable as a copy that is not the authoritative copy;
and
(6) any amendment of the authoritative copy is readily identifiable
as authorized or unauthorized.
(c) A system satisfies subsection (a), and a person has control of
an electronic document of title, if an authoritative electronic copy
of the document, a record attached to or logically associated with
SEA 468 — Concur 34
the electronic copy, or a system in which the electronic copy is
recorded:
(1) enables the person readily to identify each electronic copy
as either an authoritative copy or a nonauthoritative copy;
(2) enables the person readily to identify itself in any way,
including by name, identifying number, cryptographic key,
office, or account number, as the person to which each
authoritative electronic copy was issued or transferred; and
(3) gives the person exclusive power, subject to subsection (d),
to:
(A) prevent others from adding or changing the person to
which each authoritative electronic copy has been issued or
transferred; and
(B) transfer control of each authoritative electronic copy.
(d) Subject to subsection (e), a power is exclusive under
subsection (c)(3)(A) and (c)(3)(B) even if:
(1) the authoritative electronic copy, a record attached to or
logically associated with the authoritative electronic copy, or
a system in which the authoritative electronic copy is
recorded limits the use of the document of title or has a
protocol programmed to cause a change, including a transfer
or loss of control; or
(2) the power is shared with another person.
(e) A power of a person is not shared with another person under
subsection (d)(2), and the person's power is not exclusive if:
(1) the person can exercise the power only if the power also is
exercised by the other person; and
(2) the other person:
(A) can exercise the power without exercise of the power
by the person; or
(B) is the transferor to the person of an interest in the
document of title.
(f) If a person has the powers specified in subsection (c)(3)(A)
and (c)(3)(B), the powers are presumed to be exclusive.
(g) A person has control of an electronic document of title if
another person, other than the transferor to the person of an
interest in the document:
(1) has control of the document and acknowledges that it has
control on behalf of the person; or
(2) obtains control of the document after having
acknowledged that it will obtain control of the document on
behalf of the person.
SEA 468 — Concur 35
(h) A person that has control under this section is not required
to acknowledge that it has control on behalf of another person.
(i) If a person acknowledges that it has or will obtain control on
behalf of another person, unless the person otherwise agrees, or
law other than this chapter or IC 26-1-9.1 otherwise provides, the
person does not owe any duty to the other person and is not
required to confirm the acknowledgment to any other person.
SECTION 35. IC 26-1-8.1-102 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 102. (a) In IC 26-1-8.1:
(1) "Adverse claim" means a claim that a claimant has a property
interest in a financial asset and that it is a violation of the rights
of the claimant for another person to hold, transfer, or deal with
the financial asset.
(2) "Bearer form", as applied to a certificated security, means a
form in which the security is payable to the bearer of the security
certificate according to its terms but not by reason of an
endorsement.
(3) "Broker" means a person defined as a broker or dealer under
the federal securities laws, but without excluding a bank acting in
that capacity.
(4) "Certificated security" means a security that is represented by
a certificate.
(5) "Clearing corporation" means:
(i) a person that is registered as a "clearing agency" under the
federal securities laws;
(ii) a federal reserve bank; or
(iii) any other person that provides clearance or settlement
services with respect to financial assets that would require it
to register as a clearing agency under the federal securities
laws but for an exclusion or exemption from the registration
requirement, if its activities as a clearing corporation,
including promulgation of rules, are subject to regulation by a
federal or state governmental authority.
(6) "Communicate" means to:
(i) send a signed writing; record; or
(ii) transmit information by any mechanism agreed upon by
the persons transmitting and receiving the information.
(7) "Entitlement holder" means a person identified in the records
of a securities intermediary as the person having a security
entitlement against the securities intermediary. If a person
acquires a security entitlement by virtue of IC 26-1-8.1-501(b)(2)
or IC 26-1-8.1-501(b)(3), that person is the entitlement holder.
SEA 468 — Concur 36
(8) "Entitlement order" means a notification communicated to a
securities intermediary directing transfer or redemption of a
financial asset to which the entitlement holder has a security
entitlement.
(9) "Financial asset", except as otherwise provided in
IC 26-1-8.1-103, means:
(i) a security;
(ii) an obligation of a person or a share, participation, or other
interest in a person or in property or an enterprise of a person,
that is, or is of a type, dealt in or traded on financial markets,
or that is recognized in any area in which it is issued or dealt
in as a medium for investment; or
(iii) any property that is held by a securities intermediary for
another person in a securities account if the securities
intermediary has expressly agreed with the other person that
the property is to be treated as a financial asset under
IC 26-1-8.1.
As context requires, the term means either the interest itself or the
means by which a person's claim to it is evidenced, including a
certificated or an uncertificated security, a security certificate, or
a security entitlement.
(10) "Good faith", for purposes of the obligation of good faith in
the performance or enforcement of contracts or duties within
IC 26-1-8.1, means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(11) "Endorsement" means a signature that alone or accompanied
by other words is made on a security certificate in registered form
or on a separate document for the purpose of assigning,
transferring, or redeeming the security or granting a power to
assign, transfer, or redeem it.
(12) "Instruction" means a notification communicated to the
issuer of an uncertificated security which directs that the transfer
of the security be registered or that the security be redeemed.
(13) "Registered form", as applied to a certificated security,
means a form in which:
(i) the security certificate specifies a person entitled to the
security; and
(ii) a transfer of the security may be registered upon books
maintained for that purpose by or on behalf of the issuer, or the
security certificate so states.
(14) "Securities intermediary" means:
(i) a clearing corporation; or
SEA 468 — Concur 37
(ii) a person, including a bank or broker, that in the ordinary
course of its business maintains securities accounts for others
and is acting in that capacity.
(15) "Security", except as otherwise provided in IC 26-1-8.1-103,
means an obligation of an issuer or a share, participation, or other
interest in an issuer or in property or an enterprise of an issuer:
(i) which is represented by a security certificate in bearer or
registered form, or the transfer of which may be registered
upon books maintained for that purpose by or on behalf of the
issuer;
(ii) which is one (1) of a class or series or by its terms is
divisible into a class or series of shares, participations,
interests, or obligations; and
(iii) which:
(A) is, or is of a type, dealt in or traded on securities
exchanges or securities markets; or
(B) is a medium for investment and by its terms expressly
provides that it is a security governed by IC 26-1-8.1.
(16) "Security certificate" means a certificate representing a
security.
(17) "Security entitlement" means the rights and property interest
of an entitlement holder with respect to a financial asset specified
in IC 26-1-8.1-501 through IC 26-1-8.1-511.
(18) "Uncertificated security" means a security that is not
represented by a certificate.
(b) Other The following definitions applying to in IC 26-1-8.1 and
the sections in which they appear are: in IC 26-1 apply to this article:
"Appropriate person". IC 26-1-8.1-107.
"Control". IC 26-1-8.1-106.
"Controllable account". IC 26-1-9.1-102.
"Controllable electronic record". IC 26-1-12-102.
"Controllable payment intangible". IC 26-1-9.1-102.
"Delivery". IC 26-1-8.1-301.
"Investment company security". IC 26-1-8.1-103.
"Issuer". IC 26-1-8.1-201.
"Overissue". IC 26-1-8.1-210.
"Protected purchaser". IC 26-1-8.1-303.
"Securities account". IC 26-1-8.1-501.
(c) In addition, IC 26-1-1 contains general definitions and principles
of construction and interpretation applicable throughout IC 26-1-8.1.
(d) The characterization of a person, business, or transaction for
purposes of IC 26-1-8.1 does not determine the characterization of the
SEA 468 — Concur 38
person, business, or transaction for purposes of any other law,
regulation, or rule.
SECTION 36. IC 26-1-8.1-103, AS AMENDED BY P.L.143-2007,
SECTION 64, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 103. (a) A share or similar equity interest issued
by a corporation, business trust, joint stock company, or similar entity
is a security.
(b) An "investment company security" is a security. "Investment
company security" means a share or similar equity interest issued by an
entity that is registered as an investment company under the federal
investment company laws, an interest in a unit investment trust that is
so registered, or a face amount certificate issued by a face amount
certificate company that is so registered. Investment company security
does not include an insurance policy or endowment policy or annuity
contract issued by an insurance company.
(c) An interest in a partnership or limited liability company is not a
security unless it is dealt in or traded on securities exchanges or in
securities markets, its terms expressly provide that it is a security
governed by IC 26-1-8.1, or it is an investment company security.
However, an interest in a partnership or limited liability company is a
financial asset if it is held in a securities account.
(d) A writing that is a security certificate is governed by IC 26-1-8.1
and not by IC 26-1-3.1, even though it also meets the requirements of
that article. However, a negotiable instrument governed by IC 26-1-3.1
is a financial asset if it is held in a securities account.
(e) An option or a similar obligation issued by a clearing corporation
to its participants is not a security, but it is a financial asset.
(f) A commodity contract (as defined in IC 26-1-9.1-102(a)(15)) is
not a security or a financial asset.
(g) A document of title is not a financial asset unless section
102(a)(9)(iii) of this chapter applies.
(h) A controllable account, a controllable electronic record, or
a controllable payment intangible is not a financial asset unless
section 102(a)(9)(iii) of this chapter applies.
SECTION 37. IC 26-1-8.1-106 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 106. (a) A purchaser
has "control" of a certificated security in bearer form if the certificated
security is delivered to the purchaser.
(b) A purchaser has "control" of a certificated security in registered
form if the certificated security is delivered to the purchaser, and:
(1) the certificate is endorsed to the purchaser or in blank by an
effective endorsement; or
SEA 468 — Concur 39
(2) the certificate is registered in the name of the purchaser, upon
original issue or registration of transfer by the issuer.
(c) A purchaser has "control" of an uncertificated security if:
(1) the uncertificated security is delivered to the purchaser; or
(2) the issuer has agreed that it will comply with instructions
originated by the purchaser without further consent by the
registered owner.
(d) A purchaser has "control" of a security entitlement if:
(1) the purchaser becomes the entitlement holder;
(2) the securities intermediary has agreed that it will comply with
entitlement orders originated by the purchaser without further
consent by the entitlement holder; or
(3) another person, has control of the security entitlement on
behalf of the purchaser or, having previously acquired control of
the security entitlement, acknowledges that it has control on
behalf of the purchaser. other than the transferor to the
purchaser of an interest in the security entitlement:
(A) has control of the security entitlement and
acknowledges that it has control on behalf of the
purchaser; or
(B) obtains control of the security entitlement after having
acknowledged that it will obtain control of the security
entitlement on behalf of the purchaser.
(e) If an interest in a security entitlement is granted by the
entitlement holder to the entitlement holder's own securities
intermediary, the securities intermediary has control.
(f) A purchaser who has satisfied the requirements of subsection (c)
or (d) has control even if the registered owner in the case of subsection
(c) or the entitlement holder in the case of subsection (d) retains the
right to make substitutions for the uncertificated security or security
entitlement, to originate instructions or entitlement orders to the issuer
or a securities intermediary, or otherwise to deal with the uncertificated
security or security entitlement.
(g) An issuer or a securities intermediary may not enter into an
agreement of the kind described in subsection (c)(2) or (d)(2) without
the consent of the registered owner or entitlement holder, but an issuer
or a securities intermediary is not required to enter into such an
agreement even though the registered owner or entitlement holder so
directs. An issuer or securities intermediary that has entered into such
an agreement is not required to confirm the existence of the agreement
to another party unless requested to do so by the registered owner or
entitlement holder.
SEA 468 — Concur 40
(h) A person that has control under this section is not required
to acknowledge that it has control on behalf of a purchaser.
(i) If a person acknowledges that it has or will obtain control on
behalf of a purchaser, unless the person otherwise agrees, or law
other than this chapter or IC 26-1-9.1 otherwise provides, the
person does not owe any duty to the purchaser and is not required
to confirm the acknowledgment to any other person.
SECTION 38. IC 26-1-8.1-110 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 110. (a) The local law
of the issuer's jurisdiction, as specified in subsection (d), governs:
(1) the validity of a security;
(2) the rights and duties of the issuer with respect to registration
of transfer;
(3) the effectiveness of registration of transfer by the issuer;
(4) whether the issuer owes any duties to an adverse claimant to
a security; and
(5) whether an adverse claim can be asserted against a person to
whom transfer of a certificated or uncertificated security is
registered or a person who obtains control of an uncertificated
security.
(b) The local law of the securities intermediary's jurisdiction, as
specified in subsection (e), governs:
(1) acquisition of a security entitlement from the securities
intermediary;
(2) the rights and duties of the securities intermediary and
entitlement holder arising out of a security entitlement;
(3) whether the securities intermediary owes any duties to an
adverse claimant to a security entitlement; and
(4) whether an adverse claim can be asserted against a person
who acquires a security entitlement from the securities
intermediary or a person who purchases a security entitlement or
interest therein from an entitlement holder.
(c) The local law of the jurisdiction in which a security certificate
is located at the time of delivery governs whether an adverse claim can
be asserted against a person to whom the security certificate is
delivered.
(d) "Issuer's jurisdiction" means the jurisdiction under which the
issuer of the security is organized or, if permitted by the law of that
jurisdiction, the law of another jurisdiction specified by the issuer. An
issuer organized under the law of this state may specify the law of
another jurisdiction as the law governing the matters specified in
subsection (a)(2) through (a)(5).
SEA 468 — Concur 41
(e) The following rules determine a "securities intermediary's
jurisdiction" for purposes of this section:
(1) If an agreement between the securities intermediary and its
entitlement holder governing the securities account expressly
provides that a particular jurisdiction is the securities
intermediary's jurisdiction for purposes of IC 26-1-8.1-101
through IC 26-1-8.1-116, that jurisdiction is the securities
intermediary's jurisdiction.
(2) If subdivision (1) does not apply, and an agreement between
the securities intermediary and its entitlement holder expressly
provides that the agreement is governed by the law of a particular
jurisdiction, that jurisdiction is the securities intermediary's
jurisdiction.
(3) If neither subdivision (1) nor subdivision (2) applies, and an
agreement between the securities intermediary and its entitlement
holder governing the securities account expressly provides that
the securities account is maintained at an office in a particular
jurisdiction, that jurisdiction is the securities intermediary's
jurisdiction.
(4) If none of the preceding subdivisions apply, the securities
intermediary's jurisdiction is the jurisdiction in which the office
identified in an account statement as the office serving the
entitlement holder's account is located.
(5) If none of the preceding subdivisions apply, the securities
intermediary's jurisdiction is the jurisdiction in which the chief
executive office of the securities intermediary is located.
(f) A securities intermediary's jurisdiction is not determined by the
physical location of certificates representing financial assets, or by the
jurisdiction in which is organized the issuer of the financial asset with
respect to which an entitlement holder has a security entitlement, or by
the location of facilities for data processing or other record keeping
concerning the account.
(g) The local law of the issuer's jurisdiction or the securities
intermediary's jurisdiction governs a matter or transaction
specified in subsection (a) or (b) even if the matter or transaction
does not bear any relation to the jurisdiction.
SECTION 39. IC 26-1-8.1-303 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 303. (a) "Protected
purchaser" means a purchaser of a certificated or uncertificated
security, or of an interest therein, who:
(1) gives value;
(2) does not have notice of any adverse claim to the security; and
SEA 468 — Concur 42
(3) obtains control of the certificated or uncertificated security.
(b) In addition to acquiring the rights of a purchaser, A protected
purchaser also acquires its interest in the security free of any adverse
claim.
SECTION 40. IC 26-1-9.1-102, AS AMENDED BY P.L.110-2022,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 102. (a) In IC 26-1-9.1:
(1) "Accession" means goods that are physically united with other
goods in such a manner that the identity of the original goods is
not lost.
(2) "Account", except as used in "account for", "account
statement", "account to", "commodity account" in
subdivision (14), "customer's account", "deposit account" in
subdivision (29), "on account of", and "statement of account",
means a right to payment of a monetary obligation, whether or not
earned by performance:
(A) for property that has been or is to be sold, leased, licensed,
assigned, or otherwise disposed of;
(B) for services rendered or to be rendered;
(C) for a policy of insurance issued or to be issued;
(D) for a secondary obligation incurred or to be incurred;
(E) for energy provided or to be provided;
(F) for the use or hire of a vessel under a charter or other
contract;
(G) arising out of the use of a credit or charge card or
information contained on or for use with the card; or
(H) as winnings in a lottery or other game of chance operated
or sponsored by a state other than Indiana, a governmental unit
of a state, or a person licensed or authorized to operate the
game by a state or governmental unit of a state.
The term does not include a right to a payment of a prize awarded
by the state lottery commission in the Indiana state lottery
established under IC 4-30. The term includes controllable
accounts and health-care-insurance receivables. The term does
not include (i) rights to payment evidenced by chattel paper, or an
instrument, (ii) commercial tort claims, (iii) deposit accounts, (iv)
investment property, (v) letter-of-credit rights or letters of credit,
or (vi) rights to payment for money or funds advanced or sold,
other than rights arising out of the use of a credit or charge card
or information contained on or for use with the card, or (vii)
rights to payment evidenced by an instrument.
(3) "Account debtor" means a person obligated on an account,
SEA 468 — Concur 43
chattel paper, or general intangible. The term does not include
persons obligated to pay a negotiable instrument, even if the
negotiable instrument constitutes part of evidences chattel paper.
(4) "Accounting", except as used in "accounting for", means a
record:
(A) authenticated signed by a secured party;
(B) indicating the aggregate unpaid secured obligations as of
a date not more than thirty-five (35) days earlier or thirty-five
(35) days later than the date of the record; and
(C) identifying the components of the obligations in
reasonable detail.
(5) "Agricultural lien" means an interest, other than a security
interest, in farm products:
(A) that secures payment or performance of an obligation for:
(i) goods or services furnished in connection with a debtor's
farming operation; or
(ii) rent on real property leased by a debtor in connection
with the debtor's farming operation;
(B) that is created by statute in favor of a person that:
(i) in the ordinary course of its business furnished goods or
services to a debtor in connection with the debtor's farming
operation; or
(ii) leased real property to a debtor in connection with the
debtor's farming operation; and
(C) whose effectiveness does not depend on the person's
possession of the personal property.
(6) "As-extracted collateral" means:
(A) oil, gas, or other minerals that are subject to a security
interest that:
(i) is created by a debtor having an interest in the minerals
before extraction; and
(ii) attaches to the minerals as extracted; or
(B) accounts arising out of the sale at the wellhead or
minehead of oil, gas, or other minerals in which the debtor had
an interest before extraction.
(7) "Authenticate" means: The following terms have the
following meanings:
(A) to sign; or "Assignee", except as used in "assignee for
benefit of creditors", means a person (i) in whose favor a
security interest that secures an obligation is created or
provided for under a security agreement, whether or not
the obligation is outstanding or (ii) to which an account,
SEA 468 — Concur 44
chattel paper, payment intangible, or promissory note has
been sold. The term includes a person to which a security
interest has been transferred by a secured party.
(B) with present intent to adopt or accept a record, to attach to
or logically associate with the record an electronic sound,
symbol, or process. "Assignor" means a person that (i)
under a security agreement creates or provides for a
security interest that secures an obligation or (ii) sells an
account, chattel paper, payment intangible, or promissory
note. The term includes a secured party that has
transferred a security interest to another person.
(8) "Bank" means an organization that is engaged in the business
of banking. The term includes savings banks, savings and loan
associations, credit unions, and trust companies.
(9) "Cash proceeds" means proceeds that are money, checks,
deposit accounts, or the like.
(10) "Certificate of title" means a certificate of title with respect
to which a statute provides for the security interest in question to
be indicated on the certificate as a condition or result of the
security interest's obtaining priority over the rights of a lien
creditor with respect to the collateral. The term includes another
record maintained as an alternative to a certificate of title by the
governmental unit that issues certificates of title if a statute
permits the security interest in question to be indicated on the
record as a condition or result of the security interest's obtaining
priority over the rights of a lien creditor with respect to the
collateral.
(11) "Chattel paper" means: a record or records that evidence both
a monetary obligation and a security interest in specific goods, a
security interest in specific goods and software used in the goods,
a security interest in specific goods and license of software used
in the goods, a lease of specific goods, or a lease of specific goods
and license of software used in the goods. In this subdivision,
"monetary obligation" means a monetary obligation secured by
the goods or owed under a lease of the goods and includes a
monetary obligation with respect to software used in the goods.
The term "chattel paper" does not include: (i) charters or other
contracts involving the use or hire of a vessel; or (ii) records that
evidence a right to payment arising out of the use of a credit or
charge card or information contained on or for use with the card.
If a transaction is evidenced by records that include an instrument
or series of instruments, the group of records taken together
SEA 468 — Concur 45
constitutes chattel paper.
(A) a right to payment of a monetary obligation secured by
specific goods, if the right to payment and security interest
are evidenced by a record; or
(B) a right to payment of a monetary obligation owed by a
lessee under a lease agreement with respect to specific
goods and a monetary obligation owed by the lessee in
connection with the transaction giving rise to the lease if:
(i) the right to payment and lease agreement are
evidenced by a record; and
(ii) the predominant purpose of the transaction giving
rise to the lease was to give the lessee the right to
possession and use of the goods.
The term does not include a right to payment arising out of a
charter or other contract involving the use or hire of a vessel,
or a right to payment arising out of the use of a credit or
charge card or information contained on or for use with the
card.
(12) "Collateral" means the property subject to a security interest
or agricultural lien. The term includes:
(A) proceeds to which a security interest attaches;
(B) accounts, chattel paper, payment intangibles, and
promissory notes that have been sold; and
(C) goods that are the subject of a consignment.
(13) "Commercial tort claim" means a claim arising in tort with
respect to which:
(A) the claimant is an organization; or
(B) the claimant is an individual and the claim:
(i) arose in the course of the claimant's business or
profession; and
(ii) does not include damages arising out of personal injury
to or the death of an individual.
(14) "Commodity account" means an account maintained by a
commodity intermediary in which a commodity contract is carried
for a commodity customer.
(15) "Commodity contract" means a commodity futures contract,
an option on a commodity futures contract, a commodity option,
or another contract if the contract or option is:
(A) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract
pursuant to federal commodities laws; or
(B) traded on a foreign commodity board of trade, exchange,
SEA 468 — Concur 46
or market, and is carried on the books of a commodity
intermediary for a commodity customer.
(16) "Commodity customer" means a person for which a
commodity intermediary carries a commodity contract on its
books.
(17) "Commodity intermediary" means a person that:
(A) is registered as a futures commission merchant under
federal commodities law; or
(B) in the ordinary course of its business provides clearance or
settlement services for a board of trade that has been
designated as a contract market pursuant to federal
commodities law.
(18) "Communicate" means:
(A) to send a written or other tangible record;
(B) to transmit a record by any means agreed upon by the
persons sending and receiving the record; or
(C) in the case of transmission of a record to or by a filing
office, to transmit a record by any means prescribed by
filing-office rule.
(19) "Consignee" means a merchant to which goods are delivered
in a consignment.
(20) "Consignment" means a transaction, regardless of its form,
in which a person delivers goods to a merchant for the purpose of
sale and:
(A) the merchant:
(i) deals in goods of that kind under a name other than the
name of the person making delivery;
(ii) is not an auctioneer; and
(iii) is not generally known by its creditors to be
substantially engaged in selling the goods of others;
(B) with respect to each delivery, the aggregate value of the
goods is one thousand dollars ($1,000) or more at the time of
delivery;
(C) the goods are not consumer goods immediately before
delivery; and
(D) the transaction does not create a security interest that
secures an obligation.
(21) "Consignor" means a person that delivers goods to a
consignee in a consignment.
(22) "Consumer debtor" means a debtor in a consumer
transaction.
(23) "Consumer goods" means goods that are used or bought for
SEA 468 — Concur 47
use primarily for personal, family, or household purposes.
(24) "Consumer-goods transaction" means a consumer transaction
in which:
(A) an individual incurs an obligation primarily for personal,
family, or household purposes; and
(B) a security interest in consumer goods secures the
obligation.
(25) "Consumer obligor" means an obligor who is an individual
and who incurred the obligation as part of a transaction entered
into primarily for personal, family, or household purposes.
(26) "Consumer transaction" means a transaction in which (i) an
individual incurs an obligation primarily for personal, family, or
household purposes, (ii) a security interest secures the obligation,
and (iii) the collateral is held or acquired primarily for personal,
family, or household purposes. The term includes
consumer-goods transactions.
(27) The following terms have the following meanings:
(A) "Continuation statement" means an amendment of a
financing statement that:
(A) (i) identifies, by its file number, the initial financing
statement to which it relates; and
(B) (ii) indicates that it is a continuation statement for, or
that it is filed to continue the effectiveness of, the identified
financing statement.
(B) "Controllable account" means an account evidenced by
a controllable electronic record that provides that the
account debtor undertakes to pay the person that has
control under IC 26-1-12-105 of the controllable electronic
record.
(C) "Controllable payment intangible" means a payment
intangible evidenced by a controllable electronic record
that provides that the account debtor undertakes to pay
the person that has control under IC 26-1-12-105 of the
controllable electronic record.
(28) "Debtor" means:
(A) a person having an interest, other than a security interest
or other lien, in the collateral, whether or not the person is an
obligor;
(B) a seller of accounts, chattel paper, payment intangibles, or
promissory notes; or
(C) a consignee.
(29) "Deposit account" means a demand, time, savings, passbook,
SEA 468 — Concur 48
or similar account maintained with a bank. The term does not
include investment property or accounts evidenced by an
instrument.
(30) "Document" means a document of title or a receipt of the
type described in IC 26-1-7-201(b).
(31) "Electronic chattel paper" means chattel paper evidenced by
a record or records consisting of information stored in an
electronic medium. [Reserved.]
(32) "Encumbrance" means a right, other than an ownership
interest, in real property. The term includes mortgages and other
liens on real property.
(33) "Equipment" means goods other than inventory, farm
products, or consumer goods.
(34) "Farm products" means goods, other than standing timber,
with respect to which the debtor is engaged in a farming operation
and which are:
(A) crops grown, growing, or to be grown, including:
(i) crops produced on trees, vines, and bushes; and
(ii) aquatic goods produced in aquacultural operations;
(B) livestock, born or unborn, including aquatic goods
produced in aquacultural operations;
(C) supplies used or produced in a farming operation; or
(D) products of crops or livestock in their unmanufactured
states.
(35) "Farming operation" means raising, cultivating, propagating,
fattening, grazing, or any other farming, livestock, or aquacultural
operation.
(36) "File number" means the number assigned to an initial
financing statement pursuant to IC 26-1-9.1-519(a).
(37) "Filing office" means an office designated in IC 26-1-9.1-501
as the place to file a financing statement.
(38) "Filing-office rule" means a rule adopted pursuant to
IC 26-1-9.1-526.
(39) "Financing statement" means a record or records composed
of an initial financing statement and any filed record relating to
the initial financing statement.
(40) "Fixture filing" means the filing of a financing statement
covering goods that are or are to become fixtures and satisfying
IC 26-1-9.1-502(a) and IC 26-1-9.1-502(b). The term includes the
filing of a financing statement covering goods of a transmitting
utility which are or are to become fixtures.
(41) "Fixtures" means goods that have become so related to
SEA 468 — Concur 49
particular real property that an interest in them arises under real
property law.
(42) "General intangible" means any personal property, including
things in action, other than accounts, chattel paper, commercial
tort claims, deposit accounts, documents, goods, instruments,
investment property, letter-of-credit rights, letters of credit,
money, and oil, gas, or other minerals before extraction. The term
includes controllable electronic records, payment intangibles,
and software.
(43) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(44) "Goods" means all things that are movable when a security
interest attaches. The term includes (i) fixtures, (ii) standing
timber that is to be cut and removed under a conveyance or
contract for sale, (iii) the unborn young of animals, (iv) crops
grown, growing, or to be grown, even if the crops are produced on
trees, vines, or bushes, and (v) manufactured homes. The term
also includes a computer program embedded in goods and any
supporting information provided in connection with a transaction
relating to the program if (i) the program is associated with the
goods in such a manner that it customarily is considered part of
the goods, or (ii) by becoming the owner of the goods, a person
acquires a right to use the program in connection with the goods.
The term does not include a computer program embedded in
goods that consist solely of the medium in which the program is
embedded. The term also does not include accounts, chattel
paper, commercial tort claims, deposit accounts, documents,
general intangibles, instruments, investment property,
letter-of-credit rights, letters of credit, money, or oil, gas, or other
minerals before extraction.
(45) "Governmental unit" means a subdivision, agency,
department, county, parish, municipality, or other unit of the
government of the United States, a state, or a foreign country. The
term includes an organization having a separate corporate
existence if the organization is eligible to issue debt on which
interest is exempt from income taxation under the laws of the
United States.
(46) "Health-care-insurance receivable" means an interest in or
claim under a policy of insurance that is a right to payment of a
monetary obligation for health-care goods or services provided.
(47) "Instrument" means a negotiable instrument or any other
writing that evidences a right to the payment of a monetary
SEA 468 — Concur 50
obligation, is not itself a security agreement or lease, and is of a
type that in the ordinary course of business is transferred by
delivery with any necessary endorsement or assignment. The term
does not include (i) investment property, (ii) letters of credit, or
(iii) writings that evidence a right to payment arising out of the
use of a credit or charge card or information contained on or for
use with the card, or (iv) writings that evidence chattel paper.
(48) "Inventory" means goods, other than farm products, that:
(A) are leased by a person as lessor;
(B) are held by a person for sale or lease or to be furnished
under a contract of service;
(C) are furnished by a person under a contract of service; or
(D) consist of raw materials, work in process, or materials
used or consumed in a business.
(49) "Investment property" means a security, whether certificated
or uncertificated, security entitlement, securities account,
commodity contract, or commodity account.
(50) "Jurisdiction of organization", with respect to a registered
organization, means the jurisdiction under whose law the
organization is formed or organized.
(51) "Letter-of-credit right" means a right to payment or
performance under a letter of credit, whether or not the
beneficiary has demanded or is at the time entitled to demand
payment or performance. The term does not include the right of
a beneficiary to demand payment or performance under a letter of
credit.
(52) "Lien creditor" means:
(A) a creditor that has acquired a lien on the property involved
by attachment, levy, or the like;
(B) an assignee for benefit of creditors from the time of
assignment;
(C) a trustee in bankruptcy from the date of the filing of the
petition; or
(D) a receiver in equity from the time of appointment.
(53) "Manufactured home" means a structure, transportable in one
(1) or more sections, which, in the traveling mode, is eight (8)
body feet or more in width or forty (40) body feet or more in
length, or, when erected on site, is three hundred twenty (320) or
more square feet, and which is built on a permanent chassis and
designed to be used as a dwelling with or without a permanent
foundation when connected to the required utilities, and includes
the plumbing, heating, air conditioning, and electrical systems
SEA 468 — Concur 51
contained therein. The term includes any structure that meets all
of the requirements of this subdivision except the size
requirements, and with respect to which the manufacturer
voluntarily files a certification required by the United States
Secretary of Housing and Urban Development and complies with
the standards established under Title 42 of the United States
Code.
(54) The following terms have the following meanings:
(A) "Manufactured-home transaction" means a secured
transaction:
(A) (i) that creates a purchase-money security interest in a
manufactured home, other than a manufactured home held
as inventory; or
(B) (ii) in which a manufactured home, other than a
manufactured home held as inventory, is the primary
collateral.
(B) "Money" has the meaning set forth in
IC 26-1-1-201(24), but does not include a deposit account.
(55) "Mortgage" means a consensual interest in real property,
including fixtures, that secures payment or performance of an
obligation.
(56) "New debtor" means a person that becomes bound as debtor
under IC 26-1-9.1-203(d) by a security agreement previously
entered into by another person.
(57) "New value" means (i) money, (ii) money's worth in
property, services, or new credit, or (iii) release by a transferee of
an interest in property previously transferred to the transferee.
The term does not include an obligation substituted for another
obligation.
(58) "Noncash proceeds" means proceeds other than cash
proceeds.
(59) "Obligor" means a person that, with respect to an obligation
secured by a security interest in or an agricultural lien on the
collateral, (i) owes payment or other performance of the
obligation, (ii) has provided property other than the collateral to
secure payment or other performance of the obligation, or (iii) is
otherwise accountable in whole or in part for payment or other
performance of the obligation. The term does not include issuers
or nominated persons under a letter of credit.
(60) "Original debtor", except as used in IC 26-1-9.1-310(c),
means a person that, as debtor, entered into a security agreement
to which a new debtor has become bound under
SEA 468 — Concur 52
IC 26-1-9.1-203(d).
(61) "Payment intangible" means a general intangible under
which the account debtor's principal obligation is a monetary
obligation. The term includes a controllable payment intangible.
(62) "Person related to", with respect to an individual, means:
(A) the spouse of the individual;
(B) a brother, brother-in-law, sister, or sister-in-law of the
individual;
(C) an ancestor or lineal descendant of the individual or the
individual's spouse; or
(D) any other relative, by blood or marriage, of the individual
or the individual's spouse who shares the same home with the
individual.
(63) "Person related to", with respect to an organization, means:
(A) a person directly or indirectly controlling, controlled by,
or under common control with the organization;
(B) an officer or director of, or a person performing similar
functions with respect to, the organization;
(C) an officer or director of, or a person performing similar
functions with respect to, a person described in clause (A);
(D) the spouse of an individual described in clause (A), (B), or
(C); or
(E) an individual who is related by blood or marriage to an
individual described in clause (A), (B), (C), or (D) and shares
the same home with the individual.
(64) "Proceeds", except as used in IC 26-1-9.1-609(b), means the
following property:
(A) Whatever is acquired upon the sale, lease, license,
exchange, or other disposition of collateral.
(B) Whatever is collected on, or distributed on account of,
collateral.
(C) Rights arising out of collateral.
(D) To the extent of the value of collateral, claims arising out
of the loss, nonconformity, or interference with the use of,
defects or infringement of rights in, or damage to, the
collateral.
(E) To the extent of the value of collateral and to the extent
payable to the debtor or the secured party, insurance payable
by reason of the loss or nonconformity of, defects or
infringement of rights in, or damage to, the collateral.
(65) "Promissory note" means an instrument that evidences a
promise to pay a monetary obligation, does not evidence an order
SEA 468 — Concur 53
to pay, and does not contain an acknowledgment by a bank that
the bank has received for deposit a sum of money or funds.
(66) "Proposal" means a record authenticated signed by a secured
party that includes the terms on which the secured party is willing
to accept collateral in full or partial satisfaction of the obligation
it secures pursuant to IC 26-1-9.1-620, IC 26-1-9.1-621, and
IC 26-1-9.1-622.
(67) "Public-finance transaction" means a secured transaction in
connection with which:
(A) debt securities are issued;
(B) all or a portion of the securities issued have an initial
stated maturity of at least twenty (20) years; and
(C) the debtor, obligor, secured party, account debtor, or other
person obligated on collateral, assignor or assignee of a
secured obligation, or assignor or assignee of a security
interest is a state or a governmental unit of a state.
(68) "Public organic record" means a record that is available to
the public for inspection and is:
(A) a record consisting of the record initially filed with or
issued by a state or the United States to form or organize an
organization and any record filed with or issued by the state or
the United States which amends or restates the initial record;
(B) an organic record of a business trust consisting of the
record initially filed with a state and any record filed with the
state which amends or restates the initial record, if a statute of
the state governing business trusts requires that the record be
filed with the state; or
(C) a record consisting of legislation enacted by the legislature
of a state or the Congress of the United States which forms or
organizes an organization, any record amending the
legislation, and any record filed with or issued by the state or
the United States which amends or restates the name of the
organization.
(69) "Pursuant to commitment", with respect to an advance made
or other value given by a secured party, means pursuant to the
secured party's obligation, whether or not a subsequent event of
default or other event not within the secured party's control has
relieved or may relieve the secured party from its obligation.
(70) "Record", except as used in "for record", "of record", "record
or legal title", and "record owner", means information that is
inscribed on a tangible medium or that is stored in an electronic
or other medium and is retrievable in perceivable form.
SEA 468 — Concur 54
(71) "Registered organization" means an organization formed or
organized solely under the law of a single state or the United
States by the filing of a public organic record with, the issuance
of a public organic record by, or the enactment of legislation by
the state or the United States. The term includes a business trust
that is formed or organized under the law of a single state if a
statute of the state governing business trusts requires that the
business trust's organic record be filed with the state.
(72) "Secondary obligor" means an obligor to the extent that:
(A) the obligor's obligation is secondary; or
(B) the obligor has a right of recourse with respect to an
obligation secured by collateral against the debtor, another
obligor, or property of either.
(73) "Secured party" means:
(A) a person in whose favor a security interest is created or
provided for under a security agreement, whether or not any
obligation to be secured is outstanding;
(B) a person that holds an agricultural lien;
(C) a consignor;
(D) a person to which accounts, chattel paper, payment
intangibles, or promissory notes have been sold;
(E) a trustee, indenture trustee, agent, collateral agent, or other
representative in whose favor a security interest or agricultural
lien is created or provided for; or
(F) a person that holds a security interest arising under
IC 26-1-2-401, IC 26-1-2-505, IC 26-1-2-711(3),
IC 26-1-2.1-508(5), IC 26-1-4-210, or IC 26-1-5.1-118.
(74) "Security agreement" means an agreement that creates or
provides for a security interest.
(75) "Send", in connection with a record or notification, means:
(A) to deposit in the mail, deliver for transmission, or transmit
by any other usual means of communication, with postage or
cost of transmission provided for, addressed to any address
reasonable under the circumstances; or
(B) to cause the record or notification to be received within the
time that it would have been received if properly sent under
clause (A). [Reserved.]
(76) "Software" means a computer program and any supporting
information provided in connection with a transaction relating to
the program. The term does not include a computer program that
is included in the definition of goods.
(77) "State" means a state of the United States, the District of
SEA 468 — Concur 55
Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the
United States.
(78) "Supporting obligation" means a letter-of-credit right or
secondary obligation that supports the payment or performance of
an account, chattel paper, a document, a general intangible, an
instrument, or investment property.
(79) "Tangible chattel paper" means chattel paper evidenced by
a record or records consisting of information that is inscribed on
a tangible medium. [Reserved.]
(80) "Termination statement" means an amendment of a financing
statement that:
(A) identifies, by its file number, the initial financing
statement to which it relates; and
(B) indicates either that it is a termination statement or that the
identified financing statement is no longer effective.
(81) "Transmitting utility" means a person primarily engaged in
the business of:
(A) operating a railroad, subway, street railway, or trolley bus;
(B) transmitting communications electrically,
electromagnetically, or by light;
(C) transmitting goods by pipeline or sewer; or
(D) transmitting or producing and transmitting electricity,
steam, gas, or water.
(b) "Control" as provided in IC 26-1-7-106 and the following
definitions outside IC 26-1-9.1 apply to IC 26-1-9.1:
"Applicant" IC 26-1-5.1-102.
"Beneficiary" IC 26-1-5.1-102.
"Broker" IC 26-1-8.1-102.
"Certificated security" IC 26-1-8.1-102.
"Check" IC 26-1-3.1-104.
"Clearing corporation" IC 26-1-8.1-102.
"Contract for sale" IC 26-1-2-106.
"Controllable account" IC 26-1-11-103.
"Controllable electronic record" IC 26-1-11-104. IC 26-1-12-102.
"Controllable payment intangible" IC 26-1-11-105.
"Customer" IC 26-1-4-104.
"Entitlement holder" IC 26-1-8.1-102.
"Financial asset" IC 26-1-8.1-102.
"Holder in due course" IC 26-1-3.1-302.
"Issuer" (with respect to a letter of credit or letter-of-credit right)
IC 26-1-5.1-102.
SEA 468 — Concur 56
"Issuer" (with respect to a security) IC 26-1-8.1-201.
"Issuer" (with respect to documents of title) IC 26-1-7-102.
"Lease" IC 26-1-2.1-103.
"Lease agreement" IC 26-1-2.1-103.
"Lease contract" IC 26-1-2.1-103.
"Leasehold interest" IC 26-1-2.1-103.
"Lessee" IC 26-1-2.1-103.
"Lessee in ordinary course of business" IC 26-1-2.1-103.
"Lessor" IC 26-1-2.1-103.
"Lessor's residual interest" IC 26-1-2.1-103.
"Letter of credit" IC 26-1-5.1-102.
"Merchant" IC 26-1-2-104.
"Negotiable instrument" IC 26-1-3.1-104.
"Nominated person" IC 26-1-5.1-102.
"Note" IC 26-1-3.1-104.
"Proceeds of a letter of credit" IC 26-1-5.1-114.
"Protected purchaser" IC 26-1-8.1-303.
"Prove" IC 26-1-3.1-103.
"Qualifying purchaser" IC 26-1-11-106. IC 26-1-12-102.
"Sale" IC 26-1-2-106.
"Securities account" IC 26-1-8.1-501.
"Securities intermediary" IC 26-1-8.1-102.
"Security" IC 26-1-8.1-102.
"Security certificate" IC 26-1-8.1-102.
"Security entitlement" IC 26-1-8.1-102.
"Uncertificated security" IC 26-1-8.1-102.
(c) IC 26-1-1 contains general definitions and principles of
construction and interpretation applicable throughout IC 26-1-9.1.
SECTION 41. IC 26-1-9.1-104 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 104. (a) A secured
party has control of a deposit account if:
(1) the secured party is the bank with which the deposit account
is maintained;
(2) the debtor, secured party, and bank have agreed in an
authenticated a signed record that the bank will comply with
instructions originated by the secured party directing disposition
of the funds in the account without further consent by the debtor;
or
(3) the secured party becomes the bank's customer with respect to
the deposit account; or
(4) another person, other than the debtor:
(A) has control of the deposit account and acknowledges
SEA 468 — Concur 57
that it has control on behalf of the secured party; or
(B) obtains control of the deposit account after having
acknowledged that it will obtain control of the deposit
account on behalf of the secured party.
(b) A secured party that has satisfied subsection (a) has control,
even if the debtor retains the right to direct the disposition of funds
from the deposit account.
SECTION 42. IC 26-1-9.1-105, AS AMENDED BY P.L.54-2011,
SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 105. (a) A secured party purchaser has control of
an authoritative electronic copy of a record evidencing chattel paper
if a system employed for evidencing the transfer assignment of
interests in the chattel paper reliably establishes the secured party
purchaser as the person to which the chattel paper authoritative
electronic copy was assigned.
(b) A system satisfies subsection (a) if the record or records
comprising evidencing the chattel paper are created, stored, and
assigned in such a manner that:
(1) a single authoritative copy of the record or records exists
which is unique, identifiable and, except as otherwise provided in
subdivisions (4), (5), and (6), unalterable;
(2) the authoritative copy identifies the secured party purchaser
as the assignee of the record or records;
(3) the authoritative copy is communicated to and maintained by
the secured party purchaser or its designated custodian;
(4) copies or amendments that add or change an identified
assignee of the authoritative copy can be made only with the
consent of the secured party; purchaser;
(5) each copy of the authoritative copy and any copy of a copy is
readily identifiable as a copy that is not the authoritative copy;
and
(6) any amendment of the authoritative copy is readily identifiable
as authorized or unauthorized.
(c) A system satisfies subsection (a), and a purchaser has control
of an authoritative electronic copy of a record evidencing chattel
paper, if the electronic copy, a record attached to or logically
associated with the electronic copy, or a system in which the
electronic copy is recorded:
(1) enables the purchaser readily to identify each electronic
copy as either an authoritative copy or a nonauthoritative
copy;
(2) enables the purchaser readily to identify itself in any way,
SEA 468 — Concur 58
including by name, identifying number, cryptographic key,
office, or account number, as the assignee of the authoritative
electronic copy; and
(3) gives the purchaser exclusive power, subject to subsection
(d), to:
(A) prevent others from adding or changing an identified
assignee of the authoritative electronic copy; and
(B) transfer control of the authoritative electronic copy.
(d) Subject to subsection (e), a power is exclusive under
subsection (c)(3)(A) and (c)(3)(B) even if:
(1) the authoritative electronic copy, a record attached to or
logically associated with the authoritative electronic copy, or
a system in which the authoritative electronic copy is
recorded limits the use of the authoritative electronic copy or
has a protocol programmed to cause a change, including a
transfer or loss of control; or
(2) the power is shared with another person.
(e) A power of a purchaser is not shared with another person
under subsection (d)(2), and the purchaser's power is not exclusive
if:
(1) the purchaser can exercise the power only if the power
also is exercised by the other person; and
(2) the other person:
(A) can exercise the power without exercise of the power
by the purchaser; or
(B) is the transferor to the purchaser of an interest in the
chattel paper.
(f) If a purchaser has the powers specified in subsection
(c)(3)(A) and (c)(3)(B), the powers are presumed to be exclusive.
(g) A purchaser has control of an authoritative electronic copy
of a record evidencing chattel paper if another person, other than
the transferor to the purchaser of an interest in the chattel paper:
(1) has control of the authoritative electronic copy and
acknowledges that it has control on behalf of the purchaser;
or
(2) obtains control of the authoritative electronic copy after
having acknowledged that it will obtain control of the
authoritative electronic copy on behalf of the purchaser.
SECTION 43. IC 26-1-9.1-107.1, AS ADDED BY P.L.110-2022,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 107.1. (a) A secured party has control of a
controllable electronic record as provided for in IC 26-1-11-108.
SEA 468 — Concur 59
IC 26-1-12-105.
(b) A secured party has control of a controllable account or
controllable payment intangible if the secured party has control of the
controllable electronic record that evidences the controllable account
or controllable payment intangible.
SECTION 44. IC 26-1-9.1-107.2 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2023]: Sec. 107.2. (a) A person that has
control under section 104 or 105 of this chapter is not required to
acknowledge that it has control on behalf of another person.
(b) If a person acknowledges that it has or will obtain control on
behalf of another person, unless the person otherwise agrees or law
other than this chapter otherwise provides, the person does not owe
any duty to any other person and is not required to confirm the
acknowledgment to any other person.
SECTION 45. IC 26-1-9.1-203, AS AMENDED BY P.L.143-2007,
SECTION 66, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 203. (a) A security interest attaches to collateral
when it becomes enforceable against the debtor with respect to the
collateral, unless an agreement expressly postpones the time of
attachment.
(b) Except as otherwise provided in subsections (c) through (i), a
security interest is enforceable against the debtor and third parties with
respect to the collateral only if:
(1) value has been given;
(2) the debtor has rights in the collateral or the power to transfer
rights in the collateral to a secured party; and
(3) one (1) of the following conditions is met:
(A) The debtor has authenticated signed a security agreement
that provides a description of the collateral and, if the security
interest covers timber to be cut, a description of the land
concerned.
(B) The collateral is not a certificated security and is in the
possession of the secured party under IC 26-1-9.1-313
pursuant to the debtor's security agreement.
(C) The collateral is a certificated security in registered form
and the security certificate has been delivered to the secured
party under IC 26-1-8.1-301 pursuant to the debtor's security
agreement.
(D) The collateral is controllable accounts, controllable
electronic records, controllable payment intangibles,
deposit accounts, electronic chattel paper, documents,
SEA 468 — Concur 60
investment property, or letter-of-credit rights, or electronic
documents, and the secured party has control under
IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
IC 26-1-9.1-106, or IC 26-1-9.1-107, or IC 26-1-9.1-107.1
pursuant to the debtor's security agreement.
(E) The collateral is chattel paper and the secured party
has possession and control under IC 26-1-9.1-314.1
pursuant to the debtor's security agreement.
(c) Subsection (b) is subject to IC 26-1-4-210 on the security
interest of a collecting bank, IC 26-1-5.1-118 on the security interest of
a letter-of-credit issuer or nominated person, IC 26-1-9.1-110 on a
security interest arising under IC 26-1-2 or IC 26-1-2.1, and
IC 26-1-9.1-206 on security interests in investment property.
(d) A person becomes bound as debtor by a security agreement
entered into by another person if, by operation of law other than
IC 26-1-9.1 or by contract:
(1) the security agreement becomes effective to create a security
interest in the person's property; or
(2) the person becomes generally obligated for the obligations of
the other person, including the obligation secured under the
security agreement, and acquires or succeeds to all or
substantially all of the assets of the other person.
(e) If a new debtor becomes bound as debtor by a security
agreement entered into by another person:
(1) the agreement satisfies subsection (b)(3) with respect to
existing or after-acquired property of the new debtor to the extent
the property is described in the agreement; and
(2) another agreement is not necessary to make a security interest
in the property enforceable.
(f) The attachment of a security interest in collateral gives the
secured party the rights to proceeds provided by IC 26-1-9-315
IC 26-1-9.1-315 and is also attachment of a security interest in a
supporting obligation for the collateral.
(g) The attachment of a security interest in a right to payment or
performance secured by a security interest or other lien on personal or
real property is also attachment of a security interest in the security
interest, mortgage, or other lien.
(h) The attachment of a security interest in a securities account is
also attachment of a security interest in the security entitlements
carried in the securities account.
(i) The attachment of a security interest in a commodity account is
also attachment of a security interest in the commodity contracts
SEA 468 — Concur 61
carried in the commodity account.
SECTION 46. IC 26-1-9.1-204 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 204. (a) Except as
otherwise provided in subsection (b), a security agreement may create
or provide for a security interest in after-acquired collateral.
(b) Subject to subsection (d), a security interest does not attach
under a term constituting an after-acquired property clause to:
(1) consumer goods, other than an accession when given as
additional security, unless the debtor acquires rights in them
within ten (10) days after the secured party gives value; or
(2) a commercial tort claim.
(c) A security agreement may provide that collateral secures, or that
accounts, chattel paper, payment intangibles, or promissory notes are
sold in connection with, future advances or other value, whether or not
the advances or value are given pursuant to commitment.
(d) Subsection (b) does not prevent a security interest from
attaching:
(1) to consumer goods as proceeds under section 315(a) of this
chapter or commingled goods under section 336(c) of this
chapter;
(2) to a commercial tort claim as proceeds under section
315(a) of this chapter; or
(3) under an after-acquired property clause to property that
is proceeds of consumer goods or a commercial tort claim.
SECTION 47. IC 26-1-9.1-207, AS AMENDED BY P.L.143-2007,
SECTION 67, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 207. (a) Except as otherwise provided in
subsection (d), a secured party shall use reasonable care in the custody
and preservation of collateral in the secured party's possession. In the
case of chattel paper or an instrument, reasonable care includes taking
necessary steps to preserve rights against prior parties unless otherwise
agreed.
(b) Except as otherwise provided in subsection (d), if a secured
party has possession of collateral:
(1) reasonable expenses, including the cost of insurance and
payment of taxes or other charges, incurred in the custody,
preservation, use, or operation of the collateral are chargeable to
the debtor and are secured by the collateral;
(2) the risk of accidental loss or damage is on the debtor to the
extent of a deficiency in any effective insurance coverage;
(3) the secured party shall keep the collateral identifiable, but
fungible collateral may be commingled; and
SEA 468 — Concur 62
(4) the secured party may use or operate the collateral:
(A) for the purpose of preserving the collateral or its value;
(B) as permitted by an order of a court having competent
jurisdiction; or
(C) except in the case of consumer goods, in the manner and
to the extent agreed by the debtor.
(c) Except as otherwise provided in subsection (d), a secured party
having possession of collateral or control of collateral under
IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105, IC 26-1-9.1-106, or
IC 26-1-9.1-107, or IC 26-1-9.1-107.1:
(1) may hold as additional security any proceeds, except money
or funds, received from the collateral;
(2) shall apply money or funds received from the collateral to
reduce the secured obligation, unless remitted to the debtor; and
(3) may create a security interest in the collateral.
(d) If the secured party is a buyer of accounts, chattel paper,
payment intangibles, or promissory notes or a consignor:
(1) subsection (a) does not apply unless the secured party is
entitled under an agreement:
(A) to charge back uncollected collateral; or
(B) otherwise to full or limited recourse against the debtor or
a secondary obligor based on the nonpayment or other default
of an account debtor or other obligor on the collateral; and
(2) subsections (b) and (c) do not apply.
SECTION 48. IC 26-1-9.1-208, AS AMENDED BY P.L.143-2007,
SECTION 68, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 208. (a) This section applies to cases in which
there is no outstanding secured obligation, and the secured party is not
committed to make advances, incur obligations, or otherwise give
value.
(b) Within ten (10) days after receiving an authenticated a signed
demand by the debtor:
(1) a secured party having control of a deposit account under
IC 26-1-9.1-104(a)(2) shall send to the bank with which the
deposit account is maintained an authenticated statement a signed
record that releases the bank from any further obligation to
comply with instructions originated by the secured party;
(2) a secured party having control of a deposit account under
IC 26-1-9.1-104(a)(3) shall:
(A) pay the debtor the balance on deposit in the deposit
account; or
(B) transfer the balance on deposit into a deposit account in
SEA 468 — Concur 63
the debtor's name;
(3) a secured party, other than a buyer, having control under
section 105 of this chapter of an authoritative electronic copy
of a record evidencing chattel paper under IC 26-1-9.1-105 shall
transfer control of the electronic copy to the debtor or a
person designated by the debtor;
(A) communicate the authoritative copy of the electronic
chattel paper to the debtor or its designated custodian;
(B) if the debtor designates a custodian that is the designated
custodian with which the authoritative copy of the electronic
chattel paper is maintained for the secured party, communicate
to the custodian an authenticated record releasing the
designated custodian from any further obligation to comply
with instructions originated by the secured party and
instructing the custodian to comply with instructions
originated by the debtor; and
(C) take appropriate action to enable the debtor or its
designated custodian to make copies of or revisions to the
authoritative copy that add or change an identified assignee of
the authoritative copy without the consent of the secured party;
(4) a secured party having control of investment property under
IC 26-1-8.1-106(d)(2) or IC 26-1-9.1-106(b) shall send to the
securities intermediary or commodity intermediary with which the
security entitlement or commodity contract is maintained an
authenticated a signed record that releases the securities
intermediary or commodity intermediary from any further
obligation to comply with entitlement orders or directions
originated by the secured party;
(5) a secured party having control of a letter-of-credit right under
IC 26-1-9.1-107 shall send to each person having an unfulfilled
obligation to pay or deliver proceeds of the letter of credit to the
secured party an authenticated a signed release from any further
obligation to pay or deliver proceeds of the letter of credit to the
secured party; and
(6) a secured party having control under IC 26-1-7-106 of an
authoritative electronic copy of an electronic document of title
shall transfer control of the electronic copy to the debtor or a
person designated by the debtor; and
(A) give control of the electronic document to the debtor or its
designated custodian;
(B) if the debtor designates a custodian that is the designated
custodian with which the authoritative copy of the electronic
SEA 468 — Concur 64
document is maintained for the secured party, communicate to
the custodian an authenticated record releasing the designated
custodian from any further obligation to comply with
instructions originated by the secured party and instructing the
custodian to comply with instructions originated by the debtor;
and
(C) take appropriate action to enable the debtor or its
designated custodian to make copies of or revisions to the
authoritative copy that add or change an identified assignee of
the authoritative copy without the consent of the secured party.
(7) a secured party having control under IC 26-1-12-105 of a
controllable electronic record, other than a buyer of a
controllable account or controllable payment intangible
evidenced by the controllable electronic record, shall transfer
control of the controllable electronic record to the debtor or
a person designated by the debtor.
SECTION 49. IC 26-1-9.1-209 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 209. (a) Except as
otherwise provided in subsection (c), this section applies if:
(1) there is no outstanding secured obligation; and
(2) the secured party is not committed to make advances, incur
obligations, or otherwise give value.
(b) Within ten (10) days after receiving an authenticated a signed
demand by the debtor, a secured party shall send to an account debtor
that has received notification under IC 26-1-9.1-406(a) or
IC 26-1-12-106(b) of an assignment to the secured party as assignee
under IC 26-1-9.1-406(a) an authenticated a signed record that releases
the account debtor from any further obligation to the secured party.
(c) This section does not apply to an assignment constituting the
sale of an account, chattel paper, or payment intangible.
SECTION 50. IC 26-1-9.1-210 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 210. (a) In this section
the following definitions apply:
(1) "Request" means a record of a type described in subdivision
(2), (3), or (4).
(2) "Request for an accounting" means a record authenticated
signed by a debtor requesting that the recipient provide an
accounting of the unpaid obligations secured by collateral and
reasonably identifying the transaction or relationship that is the
subject of the request.
(3) "Request regarding a list of collateral" means a record
authenticated signed by a debtor requesting that the recipient
SEA 468 — Concur 65
approve or correct a list of what the debtor believes to be the
collateral securing an obligation and reasonably identifying the
transaction or relationship that is the subject of the request.
(4) "Request regarding a statement of account" means a record
authenticated signed by a debtor requesting that the recipient
approve or correct a statement indicating what the debtor believes
to be the aggregate amount of unpaid obligations secured by
collateral as of a specified date and reasonably identifying the
transaction or relationship that is the subject of the request.
(b) Subject to subsections (c), (d), (e), and (f), a secured party, other
than a buyer of accounts, chattel paper, payment intangibles, or
promissory notes or a consignor, shall comply with a request within
fourteen (14) days after receipt:
(1) in the case of a request for an accounting, by authenticating
signing and sending to the debtor an accounting; and
(2) in the case of a request regarding a list of collateral or a
request regarding a statement of account, by authenticating
signing and sending to the debtor an approval or correction.
(c) A secured party that claims a security interest in all of a
particular type of collateral owned by the debtor may comply with a
request regarding a list of collateral by sending to the debtor an
authenticated a signed record, including a statement to that effect
within fourteen (14) days after receipt.
(d) A person that receives a request regarding a list of collateral,
claims no interest in the collateral when it receives the request, and
claimed an interest in the collateral at an earlier time shall comply with
the request within fourteen (14) days after receipt by sending to the
debtor an authenticated a signed record:
(1) disclaiming any interest in the collateral; and
(2) if known to the recipient, providing the name and mailing
address of any assignee of or successor to the recipient's interest
in the collateral.
(e) A person that receives a request for an accounting or a request
regarding a statement of account, claims no interest in the obligations
when the person receives the request, and claimed an interest in the
obligations at an earlier time shall comply with the request within
fourteen (14) days after receipt by sending to the debtor an
authenticated a signed record:
(1) disclaiming any interest in the obligations; and
(2) if known to the recipient, providing the name and mailing
address of any assignee of or successor to the recipient's interest
in the obligations.
SEA 468 — Concur 66
(f) A debtor is entitled without charge to one (1) response to a
request under this section during any six (6) month period. The secured
party may require payment of a charge not exceeding twenty-five
dollars ($25) for each additional response.
SECTION 51. IC 26-1-9.1-301, AS AMENDED BY P.L.143-2007,
SECTION 69, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 301. Except as otherwise provided in
IC 26-1-9.1-303 through IC 26-1-9.1-306, IC 26-1-9.1-306.2, the
following rules determine the law governing perfection, the effect of
perfection or nonperfection, and the priority of a security interest in
collateral:
(1) Except as otherwise provided in this section, while a debtor is
located in a jurisdiction, the local law of that jurisdiction governs
perfection, the effect of perfection or nonperfection, and the
priority of a security interest in collateral.
(2) While collateral is located in a jurisdiction, the local law of
that jurisdiction governs perfection, the effect of perfection or
nonperfection, and the priority of a possessory security interest in
that collateral.
(3) Except as otherwise provided in subdivision (4), while
tangible negotiable tangible documents, goods, instruments, or
money or tangible chattel paper is located in a jurisdiction, the
local law of that jurisdiction governs:
(A) perfection of a security interest in the goods by filing a
fixture filing;
(B) perfection of a security interest in timber to be cut; and
(C) the effect of perfection or nonperfection and the priority of
a nonpossessory security interest in the collateral.
(4) The local law of the jurisdiction in which the wellhead or
minehead is located governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in
as-extracted collateral.
SECTION 52. IC 26-1-9.1-304 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 304. (a) The local law
of a bank's jurisdiction governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in a deposit
account maintained with that bank even if the transaction does not
bear any relation to the bank's jurisdiction.
(b) The following rules determine a bank's jurisdiction for purposes
of IC 26-1-9.1-301 through IC 26-1-9.1-342:
(1) If an agreement between the bank and the debtor governing
the deposit account expressly provides that a particular
SEA 468 — Concur 67
jurisdiction is the bank's jurisdiction for purposes of IC 26-1, that
jurisdiction is the bank's jurisdiction.
(2) If subdivision (1) does not apply and an agreement between
the bank and its customer governing the deposit account expressly
provides that the agreement is governed by the law of a particular
jurisdiction, that jurisdiction is the bank's jurisdiction.
(3) If neither subdivision (1) nor subdivision (2) applies, and an
agreement between the bank and its customer governing the
deposit account expressly provides that the deposit account is
maintained at an office in a particular jurisdiction, that
jurisdiction is the bank's jurisdiction.
(4) If none of the preceding subdivisions apply, the bank's
jurisdiction is the jurisdiction in which the office identified in an
account statement as the office serving the customer's account is
located.
(5) If none of the preceding subdivisions apply, the bank's
jurisdiction is the jurisdiction in which the chief executive office
of the bank is located.
SECTION 53. IC 26-1-9.1-305 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 305. (a) Except as
otherwise provided in subsection (c), the following rules apply:
(1) While a security certificate is located in a jurisdiction, the
local law of that jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of a security interest
in the certificated security represented thereby.
(2) The local law of the issuer's jurisdiction as specified in
IC 26-1-8.1-110(d) governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in an
uncertificated security.
(3) The local law of the securities intermediary's jurisdiction as
specified in IC 26-1-8.1-110(e) governs perfection, the effect of
perfection or nonperfection, and the priority of a security interest
in a security entitlement or securities account.
(4) The local law of the commodity intermediary's jurisdiction
governs perfection, the effect of perfection or nonperfection, and
the priority of a security interest in a commodity contract or
commodity account.
(5) Subdivisions (2) through (4) apply even if the transaction
does not bear any relation to the jurisdiction.
(b) The following rules determine a commodity intermediary's
jurisdiction for purposes of IC 26-1-9.1-301 through IC 26-1-9.1-342:
(1) If an agreement between the commodity intermediary and
SEA 468 — Concur 68
commodity customer governing the commodity account expressly
provides that a particular jurisdiction is the commodity
intermediary's jurisdiction for purposes of IC 26-1, that
jurisdiction is the commodity intermediary's jurisdiction.
(2) If subdivision (1) does not apply, and an agreement between
the commodity intermediary and commodity customer governing
the commodity account expressly provides that the agreement is
governed by the law of a particular jurisdiction, that jurisdiction
is the commodity intermediary's jurisdiction.
(3) If neither subdivision (1) nor subdivision (2) applies, and an
agreement between the commodity intermediary and commodity
customer governing the commodity account expressly provides
that the commodity account is maintained at an office in a
particular jurisdiction, that jurisdiction is the commodity
intermediary's jurisdiction.
(4) If none of the preceding subdivisions apply, the commodity
intermediary's jurisdiction is the jurisdiction in which the office
identified in an account statement as the office serving the
commodity customer's account is located.
(5) If none of the preceding subdivisions apply, the commodity
intermediary's jurisdiction is the jurisdiction in which the chief
executive office of the commodity intermediary is located.
(c) The local law of the jurisdiction in which the debtor is located
governs:
(1) perfection of a security interest in investment property by
filing;
(2) automatic perfection of a security interest in investment
property created by a broker or securities intermediary; and
(3) automatic perfection of a security interest in a commodity
contract or commodity account created by a commodity
intermediary.
SECTION 54. IC 26-1-9.1-306.1 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2023]: Sec. 306.1. (a) Except as provided in
subsection (d), if chattel paper is evidenced only by an
authoritative electronic copy of the chattel paper or is evidenced by
an authoritative electronic copy and an authoritative tangible copy,
the local law of the chattel paper's jurisdiction governs perfection,
the effect of perfection or nonperfection, and the priority of a
security interest in the chattel paper, even if the transaction does
not bear any relation to the chattel paper's jurisdiction.
(b) The following rules govern the chattel paper's jurisdiction
SEA 468 — Concur 69
under this section:
(1) If the authoritative electronic copy of the record
evidencing chattel paper, or a record that is attached to or
logically associated with the electronic copy and that is readily
available for review, expressly provides that a particular
jurisdiction is the chattel paper's jurisdiction for purposes of
this section, this chapter, or IC 26-1, that jurisdiction is the
chattel paper's jurisdiction.
(2) If subdivision (1) does not apply, and the rules of the
system in which the authoritative electronic copy is recorded
are readily available for review and expressly provide that a
particular jurisdiction is the chattel paper's jurisdiction for
purposes of this section, this chapter, or IC 26-1, that
jurisdiction is the chattel paper's jurisdiction.
(3) If subdivisions (1) and (2) do not apply, and the
authoritative electronic copy, or a record that is attached to
or logically associated with the electronic copy and that is
readily available for review, expressly provides that the
chattel paper is governed by the law of a particular
jurisdiction, that jurisdiction is the chattel paper's
jurisdiction.
(4) If subdivisions (1) through (3) do not apply, and the rules
of the system in which the authoritative electronic copy is
recorded are readily available for review and expressly
provide that the chattel paper or the system is governed by
the law of a particular jurisdiction, that jurisdiction is the
chattel paper's jurisdiction.
(5) If subdivisions (1) through (4) do not apply, the chattel
paper's jurisdiction is the jurisdiction in which the debtor is
located.
(c) If an authoritative tangible copy of a record evidences
chattel paper and the chattel paper is not evidenced by an
authoritative electronic copy, while the authoritative tangible copy
of the record evidencing the chattel paper is located in a
jurisdiction, the local law of that jurisdiction governs:
(1) perfection of a security interest in the chattel paper by
possession under section 314.1 of this chapter; and
(2) the effect of perfection or nonperfection and the priority
of a security interest in the chattel paper.
(d) The local law of the jurisdiction in which the debtor is
located governs perfection of a security interest in chattel paper by
filing.
SEA 468 — Concur 70
SECTION 55. IC 26-1-9.1-306.2 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2023]: Sec. 306.2. (a) Except as provided in
subsection (b), the local law of the controllable electronic record's
jurisdiction under IC 26-1-12-107(c) and IC 26-1-12-107(d)
governs perfection, the effect of perfection or nonperfection, and
the priority of a security interest in a controllable electronic record
and a security interest in a controllable account or controllable
payment intangible evidenced by the controllable electronic record.
(b) The local law of the jurisdiction in which the debtor is
located governs:
(1) perfection of a security interest in a controllable account,
controllable electronic record, or controllable payment
intangible by filing; and
(2) automatic perfection of a security interest in a controllable
payment intangible created by a sale of the controllable
payment intangible.
SECTION 56. IC 26-1-9.1-310, AS AMENDED BY P.L.110-2022,
SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 310. (a) Except as otherwise provided in
subsection (b) and IC 26-1-9.1-312(b), a financing statement must be
filed to perfect all security interests and agricultural liens.
(b) The filing of a financing statement is not necessary to perfect a
security interest:
(1) that is perfected under IC 26-1-9.1-308(d),
IC 26-1-9.1-308(e), IC 26-1-9.1-308(f), or IC 26-1-9.1-308(g);
(2) that is perfected under IC 26-1-9.1-309 when it attaches;
(3) in property subject to a statute, regulation, or treaty described
in IC 26-1-9.1-311(a);
(4) in goods in possession of a bailee that are perfected under
IC 26-1-9.1-312(d)(1) or IC 26-1-9.1-312(d)(2);
(5) in certificated securities, documents, goods, or instruments
which is perfected without filing, control, or possession under
IC 26-1-9.1-312(e), IC 26-1-9.1-312(f), or IC 26-1-9.1-312(g);
(6) in collateral in the secured party's possession under
IC 26-1-9.1-313;
(7) in a certificated security which is perfected by delivery of the
security certificate to the secured party under IC 26-1-9.1-313;
(8) in:
(A) controllable accounts, controllable electronic records,
controllable payment intangibles, deposit accounts, electronic
chattel paper, electronic documents, investment property, or
SEA 468 — Concur 71
letter-of-credit rights that are perfected by control under
IC 26-1-9.1-314; or
(B) chattel paper which is perfected by possession under
section 314.1 of this chapter;
(9) in proceeds which is perfected under IC 26-1-9.1-315; or
(10) that is perfected under IC 26-1-9.1-316.
(c) If a secured party assigns a perfected security interest or
agricultural lien, a filing under IC 26-1-9.1 is not required to continue
the perfected status of the security interest against creditors of and
transferees from the original debtor.
SECTION 57. IC 26-1-9.1-312, AS AMENDED BY P.L.110-2022,
SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 312. (a) A security interest in chattel paper,
controllable accounts, controllable electronic records, controllable
payment intangibles, negotiable documents, instruments, or investment
property, or negotiable documents may be perfected by filing.
(b) Except as otherwise provided in IC 26-1-9.1-315(c) and
IC 26-1-9.1-315(d), for proceeds:
(1) a security interest in a deposit account may be perfected only
by control under IC 26-1-9.1-314;
(2) and except as otherwise provided in IC 26-1-9.1-308(d), a
security interest in a letter-of-credit right may be perfected only
by control under IC 26-1-9.1-314; and
(3) a security interest in money may be perfected only by the
secured party's taking possession under IC 26-1-9.1-313.
(c) While goods are in the possession of a bailee that has issued a
negotiable document covering the goods:
(1) a security interest in the goods may be perfected by perfecting
a security interest in the document; and
(2) a security interest perfected in the document has priority over
any security interest that becomes perfected in the goods by
another method during that time.
(d) While goods are in the possession of a bailee that has issued a
nonnegotiable document covering the goods, a security interest in the
goods may be perfected by:
(1) issuance of a document in the name of the secured party;
(2) the bailee's receipt of notification of the secured party's
interest; or
(3) filing as to the goods.
(e) A security interest in certificated securities, negotiable
documents, or instruments is perfected without filing or the taking of
possession or control for a period of twenty (20) days from the time it
SEA 468 — Concur 72
attaches to the extent that it arises for new value given under an
authenticated a signed security agreement.
(f) A perfected security interest in a negotiable document or goods
in possession of a bailee, other than one that has issued a negotiable
document for the goods, remains perfected for twenty (20) days without
filing if the secured party makes available to the debtor the goods or
documents representing the goods for the purpose of:
(1) ultimate sale or exchange; or
(2) loading, unloading, storing, shipping, transshipping,
manufacturing, processing, or otherwise dealing with them in a
manner preliminary to their sale or exchange.
(g) A perfected security interest in a certificated security or
instrument remains perfected for twenty (20) days without filing if the
secured party delivers the security certificate or instrument to the
debtor for the purpose of:
(1) ultimate sale or exchange; or
(2) presentation, collection, enforcement, renewal, or registration
of transfer.
(h) After the twenty (20) day period specified in subsection (e), (f),
or (g) expires, perfection depends upon compliance with IC 26-1-9.1.
SECTION 58. IC 26-1-9.1-313, AS AMENDED BY P.L.143-2007,
SECTION 72, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 313. (a) Except as otherwise provided in
subsection (b), a secured party may perfect a security interest in
tangible negotiable documents, goods, instruments, negotiable
tangible documents, or money, or tangible chattel paper by taking
possession of the collateral. A secured party may perfect a security
interest in certificated securities by taking delivery of the certificated
securities under IC 26-1-8.1-301.
(b) With respect to goods covered by a certificate of title issued by
this state, a secured party may perfect a security interest in the goods
by taking possession of the goods only in the circumstances described
in IC 26-1-9.1-316(e).
(c) With respect to collateral other than certificated securities and
goods covered by a document, a secured party takes possession of
collateral in the possession of a person other than the debtor, the
secured party, or a lessee of the collateral from the debtor in the
ordinary course of the debtor's business, when:
(1) the person in possession authenticates signs a record
acknowledging that it holds possession of the collateral for the
secured party's benefit; or
(2) the person takes possession of the collateral after having
SEA 468 — Concur 73
authenticated signed a record acknowledging that it will hold
possession of the collateral for the secured party's benefit.
(d) If perfection of a security interest depends upon possession of
the collateral by a secured party, perfection occurs not earlier than the
time the secured party takes possession and continues only while the
secured party retains possession.
(e) A security interest in a certificated security in registered form is
perfected by delivery when delivery of the certificated security occurs
under IC 26-1-8.1-301 and remains perfected by delivery until the
debtor obtains possession of the security certificate.
(f) A person in possession of collateral is not required to
acknowledge that it holds possession for a secured party's benefit.
(g) If a person acknowledges that it holds possession for the secured
party's benefit:
(1) the acknowledgment is effective under subsection (c) or
IC 26-1-8.1-301(a), even if the acknowledgment violates the
rights of a debtor; and
(2) unless the person otherwise agrees or a law other than
IC 26-1-9.1 otherwise provides, the person does not owe any duty
to the secured party and is not required to confirm the
acknowledgment to another person.
(h) A secured party having possession of collateral does not
relinquish possession by delivering the collateral to a person other than
the debtor or a lessee of the collateral from the debtor in the ordinary
course of the debtor's business if the person was instructed before the
delivery or is instructed contemporaneously with the delivery:
(1) to hold possession of the collateral for the secured party's
benefit; or
(2) to redeliver the collateral to the secured party.
(i) A secured party does not relinquish possession, even if a delivery
under subsection (h) violates the rights of a debtor. A person to which
collateral is delivered under subsection (h) does not owe any duty to
the secured party and is not required to confirm the delivery to another
person unless the person otherwise agrees or law other than IC 26-1-9.1
otherwise provides.
SECTION 59. IC 26-1-9.1-314, AS AMENDED BY P.L.110-2022,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 314. (a) A security interest in controllable
accounts, controllable electronic records, controllable payment
intangibles, investment property, deposit accounts, electronic
documents, investment property, or letter-of-credit rights electronic
chattel paper, or electronic documents may be perfected by control of
SEA 468 — Concur 74
the collateral under IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
IC 26-1-9.1-106, IC 26-1-9.1-107, or IC 26-1-9.1-107.1, as applicable.
(b) A security interest in controllable accounts, controllable
electronic records, controllable payment intangibles, deposit accounts,
electronic chattel paper, documents, or letter-of-credit rights or
electronic documents is perfected by control under IC 26-1-7-106,
IC 26-1-9.1-104, IC 26-1-9.1-105, IC 26-1-9.1-107, or
IC 26-1-9.1-107.1, as applicable, when not earlier than the time the
secured party obtains control and remains perfected by control only
while the secured party retains control.
(c) A security interest in investment property is perfected by control
under IC 26-1-9.1-106 from not earlier than the time the secured party
obtains control and remains perfected by control until:
(1) the secured party does not have control; and
(2) one of the following occurs:
(A) if the collateral is a certificated security, the debtor has or
acquires possession of the security certificate;
(B) if the collateral is an uncertificated security, the issuer has
registered or registers the debtor as the registered owner; or
(C) if the collateral is a security entitlement, the debtor is or
becomes the entitlement holder.
SECTION 60. IC 26-1-9.1-314.1 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2023]: Sec. 314.1. (a) A secured party may
perfect a security interest in chattel paper by taking possession of
each authoritative tangible copy of the record evidencing the
chattel paper and obtaining control of each authoritative electronic
copy of the electronic record evidencing the chattel paper.
(b) A security interest is perfected under subsection (a) not
earlier than the time the secured party takes possession and
obtains control, and remains perfected under subsection (a) only
while the secured party retains possession and control.
(c) Section 313(c) of this chapter and section 313(f) through
313(i) of this chapter apply to perfection by possession by an
authoritative tangible copy of a record evidencing chattel paper.
SECTION 61. IC 26-1-9.1-316, AS AMENDED BY P.L.54-2011,
SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 316. (a) A security interest perfected pursuant to
the law of the jurisdiction designated in IC 26-1-9.1-301(1), or
IC 26-1-9.1-305(c), IC 26-1-9.1-306.1(d), or IC 26-1-9.1-306.2(b)
remains perfected until the earliest of:
(1) the time perfection would have ceased under the law of that
SEA 468 — Concur 75
jurisdiction;
(2) the expiration of four (4) months after a change of the debtor's
location to another jurisdiction; or
(3) the expiration of one (1) year after a transfer of collateral to a
person that thereby becomes a debtor and is located in another
jurisdiction.
(b) If a security interest described in subsection (a) becomes
perfected under the law of the other jurisdiction before the earliest time
or event described in that subsection, it remains perfected thereafter.
If the security interest does not become perfected under the law of the
other jurisdiction before the earliest time or event, it becomes
unperfected and is deemed never to have been perfected as against a
purchaser of the collateral for value.
(c) A possessory security interest in collateral, other than goods
covered by a certificate of title and as-extracted collateral consisting of
goods, remains continuously perfected if:
(1) the collateral is located in one (1) jurisdiction and subject to
a security interest perfected under the law of that jurisdiction;
(2) thereafter the collateral is brought into another jurisdiction;
and
(3) upon entry into the other jurisdiction, the security interest is
perfected under the law of the other jurisdiction.
(d) Except as otherwise provided in subsection (e), a security
interest in goods covered by a certificate of title which is perfected by
any method under the law of another jurisdiction when the goods
become covered by a certificate of title from this state remains
perfected until the security interest would have become unperfected
under the law of the other jurisdiction had the goods not become so
covered.
(e) A security interest described in subsection (d) becomes
unperfected as against a purchaser of the goods for value and is deemed
never to have been perfected as against a purchaser of the goods for
value if the applicable requirements for perfection under
IC 26-1-9.1-311(b) or IC 26-1-9.1-313 are not satisfied before the
earlier of:
(1) the time the security interest would have become unperfected
under the law of the other jurisdiction had the goods not become
covered by a certificate of title from this state; or
(2) the expiration of four (4) months after the goods had become
so covered.
(f) A security interest in chattel paper, controllable accounts,
controllable electronic records, controllable payment intangibles,
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deposit accounts, letter-of-credit rights, or investment property which
is perfected under the law of the chattel paper's jurisdiction, the
controllable electronic record's jurisdiction, the bank's jurisdiction,
the issuer's jurisdiction, a nominated person's jurisdiction, the securities
intermediary's jurisdiction, or the commodity intermediary's
jurisdiction, as applicable, remains perfected until the earlier of:
(1) the time the security interest would have become unperfected
under the law of that jurisdiction; or
(2) the expiration of four (4) months after a change of the
applicable jurisdiction to another jurisdiction.
(g) If a security interest described in subsection (f) becomes
perfected under the law of the other jurisdiction before the earlier of the
time or the end of the period described in that subsection, it remains
perfected thereafter. If the security interest does not become perfected
under the law of the other jurisdiction before the earlier of that time or
the end of that period, it becomes unperfected and is deemed never to
have been perfected as against a purchaser of the collateral for value.
(h) The following rules apply to collateral to which a security
interest attaches within four (4) months after the debtor changes its
location to another jurisdiction:
(1) A financing statement filed before the change under the law
of the jurisdiction designated in IC 26-1-9.1-301(1) or
IC 26-1-9.1-305(c) is effective to perfect a security interest in the
collateral if the financing statement would have been effective to
perfect a security interest in the collateral had the debtor not
changed its location.
(2) If a security interest perfected by a financing statement that is
effective under subdivision (1) becomes perfected under the law
of the other jurisdiction before the earlier of the time the
financing statement would have become ineffective under the law
of the jurisdiction designated in IC 26-1-9.1-301(1) or
IC 26-1-9.1-305(c) or the expiration of the four (4) month period,
it remains perfected thereafter. If the security interest does not
become perfected under the law of the other jurisdiction before
the earlier time or event, it becomes unperfected and is deemed
never to have been perfected as against a purchaser of the
collateral for value.
(i) If a financing statement naming an original debtor is filed under
the law of the jurisdiction designated in IC 26-1-9.1-301(1) or
IC 26-1-9.1-305(c) and the new debtor is located in another
jurisdiction, the following rules apply:
(1) The financing statement is effective to perfect a security
SEA 468 — Concur 77
interest in collateral acquired by the new debtor before, and
within four (4) months after, the new debtor becomes bound
under IC 26-1-9.1-203(d), if the financing statement would have
been effective to perfect a security interest in the collateral had
the collateral been acquired by the original debtor.
(2) A security interest perfected by the financing statement and
which becomes perfected under the law of the other jurisdiction
before the earlier of the time the financing statement would have
become ineffective under the law of the jurisdiction designated in
IC 26-1-9.1-301(1) or IC 26-1-9.1-305(c) or the expiration of the
four (4) month period remains perfected thereafter. A security
interest that is perfected by the financing statement but which
does not become perfected under the law of the other jurisdiction
before the earlier time or event becomes unperfected and is
deemed never to have been perfected as against a purchaser of the
collateral for value.
SECTION 62. IC 26-1-9.1-317, AS AMENDED BY P.L.54-2011,
SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 317. (a) A security interest or agricultural lien is
subordinate to the rights of:
(1) a person entitled to priority under IC 26-1-9.1-322; and
(2) except as provided in subsection (e), a person that becomes a
lien creditor before the earlier of the time:
(A) the security interest or agricultural lien is perfected; or
(B) one (1) of the conditions specified in
IC 26-1-9.1-203(b)(3) is met;
and a financing statement covering the collateral is filed.
(b) Except as otherwise provided in subsection (e), a buyer, other
than a secured party, of tangible chattel paper, tangible documents,
goods, instruments, tangible documents, or a certificated security
takes free of a security interest or agricultural lien if the buyer gives
value and receives delivery of the collateral without knowledge of the
security interest or agricultural lien and before it is perfected.
(c) Except as otherwise provided in subsection (e), a lessee of goods
takes free of a security interest or agricultural lien if the lessee gives
value and receives delivery of the collateral without knowledge of the
security interest or agricultural lien and before it is perfected.
(d) Subject to subsections (f) through (i), a licensee of a general
intangible or a buyer, other than a secured party, of collateral other than
tangible chattel paper, tangible documents, goods, instruments,
tangible documents, or a certificated security takes free of a security
interest if the licensee or buyer gives value without knowledge of the
SEA 468 — Concur 78
security interest and before it is perfected.
(e) Except as otherwise provided in IC 26-1-9.1-320 and
IC 26-1-9.1-321, if a person files a financing statement with respect to
a purchase-money security interest before or within twenty (20) days
after the debtor receives delivery of the collateral, the security interest
takes priority over the rights of a buyer, lessee, or lien creditor that
arise between the time the security interest attaches and the time of
filing.
(f) A buyer, other than a secured party, of chattel paper takes
free of a security interest if, without knowledge of the security
interest and before it is perfected, the buyer gives value and:
(1) receives delivery of each authoritative tangible copy of the
record evidencing the chattel paper; and
(2) if each authoritative electronic copy of the record
evidencing the chattel paper can be subjected to control under
section 105 of this chapter, obtains control of each
authoritative electronic copy.
(g) A buyer of an electronic document takes free of a security
interest if, without knowledge of the security interest and before it
is perfected, the buyer gives value and, if each authoritative
electronic copy of the document can be subjected to control under
IC 26-1-7-106, obtains control of each authoritative electronic
copy.
(h) A buyer of a controllable electronic record takes free of a
security interest if, without knowledge of the security interest and
before it is perfected, the buyer gives value and obtains control of
the controllable electronic record.
(i) A buyer, other than a secured party, of a controllable
account or a controllable payment intangible takes free of a
security interest if, without knowledge of the security interest and
before it is perfected, the buyer gives value and obtains control of
the controllable account or controllable payment intangible.
SECTION 63. IC 26-1-9.1-323 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 323. (a) Except as
otherwise provided in subsection (c), for purposes of determining the
priority of a perfected security interest under IC 26-1-9.1-322(a)(1),
perfection of the security interest dates from the time an advance is
made to the extent that the security interest secures an advance that:
(1) is made while the security interest is perfected only:
(A) under IC 26-1-9.1-309 when it attaches; or
(B) temporarily under IC 26-1-9.1-312(e), IC 26-1-9.1-312(f),
or IC 26-1-9.1-312(g); and
SEA 468 — Concur 79
(2) is not made pursuant to a commitment entered into before or
while the security interest is perfected by a method other than
under IC 26-1-9.1-309, IC 26-1-9.1-312(e), IC 26-1-9.1-312(f), or
IC 26-1-9.1-312(g).
(b) Except as otherwise provided in subsection (c), a security
interest is subordinate to the rights of a person that becomes a lien
creditor to the extent that the security interest secures an advance made
more than forty-five (45) days after the person becomes a lien creditor
unless the advance is made:
(1) without knowledge of the lien; or
(2) pursuant to a commitment entered into without knowledge of
the lien.
(c) Subsections (a) and (b) do not apply to a security interest held by
a secured party that is a buyer of accounts, chattel paper, payment
intangibles, or promissory notes or a consignor.
(d) Except as otherwise provided in subsection (e), a buyer of goods
other than a buyer in ordinary course of business takes free of a security
interest to the extent that it secures advances made after the earlier of:
(1) the time the secured party acquires knowledge of the buyer's
purchase; or
(2) forty-five (45) days after the purchase.
(e) Subsection (d) does not apply if the advance is made pursuant to
a commitment entered into without knowledge of the buyer's purchase
and before the expiration of the forty-five (45) day period.
(f) Except as otherwise provided in subsection (g), a lessee of goods
other than a lessee in ordinary course of business, takes the leasehold
interest free of a security interest to the extent that it secures advances
made after the earlier of:
(1) the time the secured party acquires knowledge of the lease; or
(2) forty-five (45) days after the lease contract becomes
enforceable.
(g) Subsection (f) does not apply if the advance is made pursuant to
a commitment entered into without knowledge of the lease and before
the expiration of the forty-five (45) day period.
SECTION 64. IC 26-1-9.1-324 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 324. (a) Except as
otherwise provided in subsection (g), a perfected purchase-money
security interest in goods other than inventory or livestock has priority
over a conflicting security interest in the same goods, and, except as
otherwise provided in IC 26-1-9.1-327, a perfected security interest in
its identifiable proceeds also has priority, if the purchase-money
security interest is perfected when the debtor receives possession of the
SEA 468 — Concur 80
collateral or within twenty (20) days thereafter.
(b) Subject to subsection (c) and except as otherwise provided in
subsection (g), a perfected purchase-money security interest in
inventory has priority over a conflicting security interest in the same
inventory, has priority over a conflicting security interest in chattel
paper or an instrument constituting proceeds of the inventory and in
proceeds of the chattel paper, if so provided in IC 26-1-9.1-330, and,
except as otherwise provided in IC 26-1-9.1-327, also has priority in
identifiable cash proceeds of the inventory to the extent the identifiable
cash proceeds are received on or before the delivery of the inventory to
a buyer, if:
(1) the purchase-money security interest is perfected when the
debtor receives possession of the inventory;
(2) the purchase-money secured party sends an authenticated a
signed notification to the holder of the conflicting security
interest;
(3) the holder of the conflicting security interest receives the
notification within five (5) years before the debtor receives
possession of the inventory; and
(4) the notification states that the person sending the notification
has or expects to acquire a purchase-money security interest in
inventory of the debtor and describes the inventory.
(c) Subsection (b)(2) through (b)(4) apply only if the holder of the
conflicting security interest had filed a financing statement covering
the same types of inventory:
(1) if the purchase-money security interest is perfected by filing,
before the date of the filing; or
(2) if the purchase-money security interest is temporarily
perfected without filing or possession under IC 26-1-9.1-312(f),
before the beginning of the twenty (20) day period thereunder.
(d) Subject to subsection (e) and except as otherwise provided in
subsection (g), a perfected purchase-money security interest in
livestock that are farm products has priority over a conflicting security
interest in the same livestock, and, except as otherwise provided in
IC 26-1-9.1-327, a perfected security interest in their identifiable
proceeds and identifiable products in their unmanufactured states also
has priority, if:
(1) the purchase-money security interest is perfected when the
debtor receives possession of the livestock;
(2) the purchase-money secured party sends an authenticated a
signed notification to the holder of the conflicting security
interest;
SEA 468 — Concur 81
(3) the holder of the conflicting security interest receives the
notification within six (6) months before the debtor receives
possession of the livestock; and
(4) the notification states that the person sending the notification
has or expects to acquire a purchase-money security interest in
livestock of the debtor and describes the livestock.
(e) Subsection (d)(2) through (d)(4) apply only if the holder of the
conflicting security interest had filed a financing statement covering
the same types of livestock:
(1) if the purchase-money security interest is perfected by filing,
before the date of the filing; or
(2) if the purchase-money security interest is temporarily
perfected without filing or possession under IC 26-1-9.1-312(f),
before the beginning of the twenty (20) day period thereunder.
(f) Except as otherwise provided in subsection (g), a perfected
purchase-money security interest in software has priority over a
conflicting security interest in the same collateral, and, except as
otherwise provided in IC 26-1-9.1-327, a perfected security interest in
its identifiable proceeds also has priority, to the extent that the
purchase-money security interest in the goods in which the software
was acquired for use has priority in the goods and proceeds of the
goods under this section.
(g) If more than one (1) security interest qualifies for priority in the
same collateral under subsection (a), (b), (d), or (f):
(1) a security interest securing an obligation incurred as all or part
of the price of the collateral has priority over a security interest
securing an obligation incurred for value given to enable the
debtor to acquire rights in or the use of collateral; and
(2) in all other cases, IC 26-1-9.1-322(a) applies to the qualifying
security interests.
SECTION 65. IC 26-1-9.1-326.1 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2023]: Sec. 326.1. A security interest in a
controllable account, a controllable electronic record, or a
controllable payment intangible held by a secured party having
control of the account, electronic record, or payment intangible has
priority over a conflicting security interest held by a secured party
that does not have control.
SECTION 66. IC 26-1-9.1-330 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 330. (a) A purchaser of
chattel paper has priority over a security interest in the chattel paper
which is claimed merely as proceeds of inventory subject to a security
SEA 468 — Concur 82
interest if:
(1) in good faith and in the ordinary course of the purchaser's
business, the purchaser gives new value, and takes possession of
each authoritative tangible copy of the record evidencing the
chattel paper, or and obtains control under section 105 of this
chapter of each authoritative electronic copy of the record
evidencing the chattel paper; under IC 26-1-9.1-105; and
(2) the chattel paper does authoritative copies of the record
evidencing the chattel paper do not indicate that it the chattel
paper has been assigned to an identified assignee other than the
purchaser.
(b) A purchaser of chattel paper has priority over a security interest
in the chattel paper which is claimed other than merely as proceeds of
inventory subject to a security interest if the purchaser gives new value,
and takes possession of each authoritative tangible copy of the
record evidencing the chattel paper, or and obtains control under
section 105 of this chapter of each authoritative electronic copy of
the record evidencing the chattel paper under IC 26-1-9.1-105 in good
faith, in the ordinary course of the purchaser's business, and without
knowledge that the purchase violates the rights of the secured party.
(c) Except as otherwise provided in IC 26-1-9.1-327, a purchaser
having priority in chattel paper under subsection (a) or (b) also has
priority in proceeds of the chattel paper to the extent that:
(1) IC 26-1-9.1-322 provides for priority in the proceeds; or
(2) the proceeds consist of the specific goods covered by the
chattel paper or cash proceeds of the specific goods, even if the
purchaser's security interest in the proceeds is unperfected.
(d) Except as otherwise provided in IC 26-1-9.1-331(a), a purchaser
of an instrument has priority over a security interest in the instrument
perfected by a method other than possession if the purchaser gives
value and takes possession of the instrument in good faith and without
knowledge that the purchase violates the rights of the secured party.
(e) For purposes of subsections (a) and (b), the holder of a
purchase-money security interest in inventory gives new value for
chattel paper constituting proceeds of the inventory.
(f) For purposes of subsections (b) and (d), if the authoritative
copies of the record evidencing chattel paper or an instrument
indicates that it the chattel paper or instrument has been assigned to
an identified secured party other than the purchaser, a purchaser of the
chattel paper or instrument has knowledge that the purchase violates
the rights of the secured party.
SECTION 67. IC 26-1-9.1-331, AS AMENDED BY P.L.110-2022,
SEA 468 — Concur 83
SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 331. (a) This article does not limit the rights of a
holder in due course of a negotiable instrument, a holder to which a
negotiable document of title has been duly negotiated, a protected
purchaser of a security, or a qualifying purchaser (as defined in
IC 26-1-11-106) of a controllable account, controllable electronic
record, or controllable payment intangible. These holders or purchasers
take priority over an earlier security interest, even if perfected, to the
extent provided in IC 26-1-3.1, IC 26-1-7, IC 26-1-8.1, and IC 26-1-11.
IC 26-1-12.
(b) This article does not limit the rights of or impose liability on a
person to the extent that the person is protected against the assertion of
an adverse claim under IC 26-1-8.1 or IC 26-1-11. IC 26-1-12.
(c) Filing under IC 26-1-9.1 does not constitute notice of a claim or
defense to the holders, purchasers, or persons described in subsections
(a) and (b).
SECTION 68. IC 26-1-9.1-332 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 332. (a) A transferee
of money takes the money free of a security interest unless if the
transferee acts receives possession of the money without acting in
collusion with the debtor in violating the rights of the secured party.
(b) A transferee of funds from a deposit account takes the funds free
of a security interest in the deposit account unless if the transferee acts
receives the funds without acting in collusion with the debtor in
violating the rights of the secured party.
SECTION 69. IC 26-1-9.1-334 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 334. (a) A security
interest under IC 26-1-9.1 may be created in goods that are fixtures or
may continue in goods that become fixtures. A security interest does
not exist under IC 26-1-9.1 in ordinary building materials incorporated
into an improvement on land.
(b) IC 26-1-9.1 does not prevent creation of an encumbrance upon
fixtures under real property law.
(c) In cases not governed by subsections (d) through (h), a security
interest in fixtures is subordinate to a conflicting interest of an
encumbrancer or owner of the related real property other than the
debtor.
(d) Except as otherwise provided in subsection (h), a perfected
security interest in fixtures has priority over a conflicting interest of an
encumbrancer or owner of the real property if the debtor has an interest
of record in or is in possession of the real property and:
(1) the security interest is a purchase-money security interest;
SEA 468 — Concur 84
(2) the interest of the encumbrancer or owner arises before the
goods become fixtures; and
(3) the security interest is perfected by a fixture filing before the
goods become fixtures or within twenty (20) days thereafter.
(e) A perfected security interest in fixtures has priority over a
conflicting interest of an encumbrancer or owner of the real property
if:
(1) the debtor has an interest of record in the real property or is in
possession of the real property and the security interest:
(A) is perfected by a fixture filing before the interest of the
encumbrancer or owner is of record; and
(B) has priority over any conflicting interest of a predecessor
in title of the encumbrancer or owner;
(2) before the goods become fixtures, the security interest is
perfected by any method permitted by IC 26-1-9.1 and the fixtures
are readily removable:
(A) factory or office machines;
(B) equipment that is not primarily used or leased for use in
the operation of the real property; or
(C) replacements of domestic appliances that are consumer
goods;
(3) the conflicting interest is a lien on the real property obtained
by legal or equitable proceedings after the security interest was
perfected by any method permitted by IC 26-1-9.1; or
(4) the security interest is:
(A) created in a manufactured home in a manufactured-home
transaction; and
(B) perfected pursuant to a statute described in
IC 26-1-9.1-311(a)(2).
(f) A security interest in fixtures, whether or not perfected, has
priority over a conflicting interest of an encumbrancer or owner of the
real property if:
(1) the encumbrancer or owner has, in an authenticated a signed
record, consented to the security interest or disclaimed an interest
in the goods as fixtures; or
(2) the debtor has a right to remove the goods against the
encumbrancer or owner.
(g) The priority of the security interest under subsection (f)
continues for a reasonable time if the debtor's right to remove the goods
as against the encumbrancer or owner terminates.
(h) A mortgage is a construction mortgage to the extent that it
secures an obligation incurred for the construction of an improvement
SEA 468 — Concur 85
on land, including the acquisition cost of the land, if a recorded record
of the mortgage so indicates. Except as otherwise provided in
subsections (e) and (f), a security interest in fixtures is subordinate to
a construction mortgage if a record of the mortgage is recorded before
the goods become fixtures and the goods become fixtures before the
completion of the construction. A mortgage has this priority to the
same extent as a construction mortgage to the extent that it is given to
refinance a construction mortgage.
(i) A perfected security interest in crops growing on real property
has priority over a conflicting interest of an encumbrancer or owner of
the real property if the debtor has an interest of record in or is in
possession of the real property.
SECTION 70. IC 26-1-9.1-341 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 341. Except as
otherwise provided in IC 26-1-9.1-340(c), and unless the bank
otherwise agrees in an authenticated a signed record, a bank's rights
and duties with respect to a deposit account maintained with the bank
are not terminated, suspended, or modified by:
(1) the creation, attachment, or perfection of a security interest in
the deposit account;
(2) the bank's knowledge of the security interest; or
(3) the bank's receipt of instructions from the secured party.
SECTION 71. IC 26-1-9.1-404 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 404. (a) Unless an
account debtor has made an enforceable agreement not to assert
defenses or claims, and subject to subsections (b) through (e), the rights
of an assignee are subject to:
(1) all terms of the agreement between the account debtor and
assignor and any defense or claim in recoupment arising from the
transaction that gave rise to the contract; and
(2) any other defense or claim of the account debtor against the
assignor which accrues before the account debtor receives a
notification of the assignment authenticated signed by the
assignor or the assignee.
(b) Subject to subsection (c) and except as otherwise provided in
subsection (d), the claim of an account debtor against an assignor may
be asserted against an assignee under subsection (a) only to reduce the
amount the account debtor owes.
(c) This section is subject to law other than IC 26-1-9.1 that
establishes a different rule for an account debtor who is an individual
and who incurred the obligation primarily for personal, family, or
household purposes.
SEA 468 — Concur 86
(d) In a consumer transaction, if a record evidences the account
debtor's obligation, law other than IC 26-1-9.1 requires that the record
include a statement to the effect that the account debtor's recovery
against an assignee with respect to claims and defenses against the
assignor may not exceed amounts paid by the account debtor under the
record, and the record does not include such a statement, the extent to
which a claim of an account debtor against the assignor may be
asserted against an assignee is determined as if the record included
such a statement.
(e) This section does not apply to an assignment of a
health-care-insurance receivable.
SECTION 72. IC 26-1-9.1-406, AS AMENDED BY P.L.54-2011,
SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 406. (a) Subject to subsections (b) through (i) and
(l), an account debtor on an account, chattel paper, or a payment
intangible may discharge its obligation by paying the assignor until, but
not after, the account debtor receives a notification, authenticated
signed by the assignor or the assignee, that the amount due or to
become due has been assigned and that payment is to be made to the
assignee. After receipt of the notification, the account debtor may
discharge its obligation by paying the assignee and may not discharge
the obligation by paying the assignor.
(b) Subject to subsection (h), subsections (h) and (l), notification
is ineffective under subsection (a):
(1) if it does not reasonably identify the rights assigned;
(2) to the extent that an agreement between an account debtor and
a seller of a payment intangible limits the account debtor's duty to
pay a person other than the seller and the limitation is effective
under law other than IC 26-1-9.1; or
(3) at the option of an account debtor, if the notification notifies
the account debtor to make less than the full amount of any
installment or other periodic payment to the assignee, even if:
(A) only a portion of the account, chattel paper, or payment
intangible has been assigned to that assignee;
(B) a portion has been assigned to another assignee; or
(C) the account debtor knows that the assignment to that
assignee is limited.
(c) Subject to subsection (h), subsections (h) and (l), if requested
by the account debtor, an assignee shall seasonably furnish reasonable
proof that the assignment has been made. Unless the assignee
complies, the account debtor may discharge its obligation by paying the
assignor, even if the account debtor has received a notification under
SEA 468 — Concur 87
subsection (a).
(d) As used in this subsection, "promissory note" includes a
negotiable instrument that evidences chattel paper. Except as
otherwise provided in subsection subsections (e) and (k) and
IC 26-1-2.1-303 and IC 26-1-9.1-407, and subject to subsection (h), a
term in an agreement between an account debtor and an assignor or in
a promissory note is ineffective to the extent that it:
(1) prohibits, restricts, or requires the consent of the account
debtor or person obligated on the promissory note to the
assignment or transfer of, or the creation, attachment, perfection,
or enforcement of a security interest in, the account, chattel paper,
payment intangible, or promissory note; or
(2) provides that the assignment or transfer or the creation,
attachment, perfection, or enforcement of the security interest
may give rise to a default, breach, right of recoupment, claim,
defense, termination, right of termination, or remedy under the
account, chattel paper, payment intangible, or promissory note.
(e) Subsection (d) does not apply to the sale of a payment intangible
or promissory note other than a sale pursuant to a disposition under
IC 26-1-9.1-610 or an acceptance of collateral under IC 26-1-9.1-620.
(f) Except as provided in subsection (k) and IC 26-1-2.1-303 and
IC 26-1-9.1-407, and subject to subsections (h) and (i), a rule of law,
statute, or regulation that prohibits, restricts, or requires the consent of
a government, governmental body or official, or account debtor to the
assignment or transfer of, or creation of a security interest in, an
account or chattel paper is ineffective to the extent that the rule of law,
statute, or regulation:
(1) prohibits, restricts, or requires the consent of the government,
governmental body or official, or account debtor to the
assignment or transfer of, or the creation, attachment, perfection,
or enforcement of a security interest in the account or chattel
paper; or
(2) provides that the assignment or transfer or the creation,
attachment, perfection, or enforcement of the security interest
may give rise to a default, right of recoupment, claim, defense,
termination, right of termination, or remedy under the account or
chattel paper.
(g) Subject to subsection (h), subsections (h) and (l), an account
debtor may not waive or vary its option under subsection (b)(3).
(h) This section is subject to law other than IC 26-1-9.1 which
establishes a different rule for an account debtor who is an individual
and who incurred the obligation primarily for personal, family, or
SEA 468 — Concur 88
household purposes.
(i) This section does not apply to an assignment of a
health-care-insurance receivable.
(j) This section prevails over any inconsistent provision in
statute, administrative rule, or regulation.
(k) Subsections (d), (f), and (j) do not apply to a security interest
in an ownership interest in a general partnership, limited
partnership, or limited liability company.
(l) Subsections (a), (b), (c), and (g) do not apply to a controllable
account or a controllable payment intangible.
SECTION 73. IC 26-1-9.1-408, AS AMENDED BY P.L.54-2011,
SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 408. (a) Except as otherwise provided in
subsection (b), subsections (b) and (f), a term in a promissory note or
in an agreement between an account debtor and a debtor that relates to
a health-care-insurance receivable or a general intangible, including a
contract, permit, license, or franchise, and which term prohibits,
restricts, or requires the consent of the person obligated on the
promissory note or the account debtor to, the assignment or transfer of,
or creation, attachment, or perfection of a security interest in, the
promissory note, health-care-insurance receivable, or general
intangible, is ineffective to the extent that the term:
(1) would impair the creation, attachment, or perfection of a
security interest; or
(2) provides that the assignment, transfer, creation, attachment, or
perfection of the security interest may give rise to a default,
breach, right of recoupment, claim, defense, termination, right of
termination, or remedy under the promissory note,
health-care-insurance receivable, or general intangible.
(b) Subsection (a) applies to a security interest in a payment
intangible or promissory note only if the security interest arises out of
a sale of the payment intangible or promissory note other than a sale
under a disposition under IC 26-1-9.1-610 or an acceptance of
collateral under IC 26-1-9.1-620.
(c) Except as provided in subsection (f), a rule of law, statute, or
regulation, which prohibits, restricts, or requires the consent of a
government, governmental body or official, person obligated on a
promissory note, or account debtor to the assignment or transfer of, or
creation of a security interest in, a promissory note,
health-care-insurance receivable, or general intangible, including a
contract, permit, license, or franchise between an account debtor and
a debtor, is ineffective to the extent that the rule of law, statute, or
SEA 468 — Concur 89
regulation:
(1) would impair the creation, attachment, or perfection of a
security interest; or
(2) provides that the assignment, transfer, creation, attachment, or
perfection of the security interest may give rise to a default,
breach, right of recoupment, claim, defense, termination, right of
termination, or remedy under the promissory note,
health-care-insurance receivable, or general intangible.
(d) To the extent that a term in a promissory note or in an agreement
between an account debtor and a debtor which relates to a
health-care-insurance receivable or general intangible or a rule of law,
statute, or regulation described in subsection (c) would be effective
under law other than IC 26-1-9.1 but is ineffective under subsection (a)
or (c), the creation, attachment, or perfection of a security interest in
the promissory note, health-care-insurance receivable, or general
intangible:
(1) is not enforceable against the person obligated on the
promissory note or the account debtor;
(2) does not impose a duty or obligation on the person obligated
on the promissory note or the account debtor;
(3) does not require the person obligated on the promissory note
or the account debtor to recognize the security interest, pay or
render performance to the secured party, or accept payment or
performance from the secured party;
(4) does not entitle the secured party to use or assign the debtor's
rights under the promissory note, health-care-insurance
receivable, or general intangible, including any related
information or materials furnished to the debtor in the transaction
giving rise to the promissory note, health-care-insurance
receivable, or general intangible;
(5) does not entitle the secured party to use, assign, possess, or
have access to any trade secrets or confidential information of the
person obligated on the promissory note or the account debtor;
and
(6) does not entitle the secured party to enforce the security
interest in the promissory note, health-care-insurance receivable,
or general intangible.
(e) This section prevails over any inconsistent provision in statute,
administrative rule, or regulation.
(f) This section does not apply to a security interest in an
ownership interest in a general partnership, limited partnership,
or limited liability company.
SEA 468 — Concur 90
(g) As used in this section, "promissory note" includes a
negotiable instrument that evidences chattel paper.
SECTION 74. IC 26-1-9.1-509, AS AMENDED BY P.L.1-2010,
SECTION 108, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2023]: Sec. 509. (a) A person may file an initial
financing statement, amendment that adds collateral covered by a
financing statement, or amendment that adds a debtor to a financing
statement only if:
(1) the debtor authorizes the filing in an authenticated a signed
record or under subsection (b) or (c); or
(2) the person holds an agricultural lien that has become effective
at the time of filing and the financing statement covers only
collateral in which the person holds an agricultural lien.
(b) By authenticating signing or becoming bound as debtor by a
security agreement, a debtor or new debtor authorizes the filing of an
initial financing statement, and an amendment, covering:
(1) the collateral described in the security agreement; and
(2) property that becomes collateral under IC 26-1-9.1-315(a)(2),
whether or not the security agreement expressly covers proceeds.
(c) By acquiring collateral in which a security interest or agricultural
lien continues under IC 26-1-9.1-315(a)(1), a debtor authorizes the
filing of an initial financing statement, and an amendment, covering the
collateral and property that becomes collateral under
IC 26-1-9.1-315(a)(2).
(d) A person may file an amendment other than an amendment that
adds collateral covered by a financing statement or an amendment that
adds a debtor to a financing statement only if:
(1) the secured party of record authorizes the filing; or
(2) the amendment is a termination statement for a financing
statement as to which the secured party of record has failed to file
or send a termination statement as required by IC 26-1-9.1-513(a)
or IC 26-1-9.1-513(c), the debtor authorizes the filing, and the
termination statement indicates that the debtor authorized it to be
filed.
(e) If there is more than one (1) secured party of record for a
financing statement, each secured party of record may authorize the
filing of an amendment under subsection (d).
SECTION 75. IC 26-1-9.1-513 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 513. (a) A secured
party shall cause the secured party of record for a financing statement
to file a termination statement for the financing statement if the
financing statement covers consumer goods and:
SEA 468 — Concur 91
(1) there is no obligation secured by the collateral covered by the
financing statement and no commitment to make an advance,
incur an obligation, or otherwise give value; or
(2) the debtor did not authorize the filing of the initial financing
statement.
(b) To comply with subsection (a), a secured party shall cause the
secured party of record to file the termination statement:
(1) within one (1) month after there is no obligation secured by
the collateral covered by the financing statement and no
commitment to make an advance, incur an obligation, or
otherwise give value; or
(2) if earlier, within twenty (20) days after the secured party
receives an authenticated a signed demand from a debtor.
(c) In cases not governed by subsection (a), within twenty (20) days
after a secured party receives an authenticated a signed demand from
a debtor, the secured party shall cause the secured party of record for
a financing statement to send to the debtor a termination statement for
the financing statement or file the termination statement in the filing
office if:
(1) except in the case of a financing statement covering accounts
or chattel paper that has been sold or goods that are the subject of
a consignment, there is no obligation secured by the collateral
covered by the financing statement and no commitment to make
an advance, incur an obligation, or otherwise give value;
(2) the financing statement covers accounts or chattel paper that
has been sold but as to which the account debtor or other person
obligated has discharged its obligation;
(3) the financing statement covers goods that were the subject of
a consignment to the debtor but are not in the debtor's possession;
or
(4) the debtor did not authorize the filing of the initial financing
statement.
(d) Except as otherwise provided in IC 26-1-9.1-510, upon the filing
of a termination statement with the filing office, the financing
statement to which the termination statement relates ceases to be
effective. Except as otherwise provided in IC 26-1-9.1-510, for
purposes of IC 26-1-9.1-519(g), IC 26-1-9.1-522(a), and
IC 26-1-9.1-523(c), the filing with the filing office of a termination
statement relating to a financing statement that indicates that the debtor
is a transmitting utility also causes the effectiveness of the financing
statement to lapse.
SECTION 76. IC 26-1-9.1-601, AS AMENDED BY P.L.143-2007,
SEA 468 — Concur 92
SECTION 76, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 601. (a) After default, a secured party has the
rights provided in this section through IC 26-1-9.1-628 and, except as
otherwise provided in IC 26-1-9.1-602, those provided by agreement
of the parties. A secured party:
(1) may reduce a claim to judgment, foreclose, or otherwise
enforce the claim, security interest, or agricultural lien by any
available judicial procedure; and
(2) if the collateral is documents, may proceed either as to the
documents or as to the goods they cover.
(b) A secured party in possession of collateral or control of
collateral under IC 26-1-7-106, IC 26-1-9.1-104, IC 26-1-9.1-105,
IC 26-1-9.1-106, or IC 26-1-9.1-107, or IC 26-1-9.1-107.1 has the
rights and duties provided in IC 26-1-9.1-207.
(c) The rights under subsections (a) and (b) are cumulative and may
be exercised simultaneously.
(d) Except as otherwise provided in subsection (g) and
IC 26-1-9.1-605, after default, a debtor and an obligor have the rights
provided in IC 26-1-9.1-601 through IC 26-1-9.1-628 and by agreement
of the parties.
(e) If a secured party has reduced its claim to judgment, the lien of
any levy that may be made upon the collateral by virtue of an execution
based upon the judgment relates back to the earliest of:
(1) the date of perfection of the security interest or agricultural
lien in the collateral;
(2) the date of filing a financing statement covering the collateral;
or
(3) any date specified in a statute under which the agricultural lien
was created.
(f) A sale pursuant to an execution is a foreclosure of the security
interest or agricultural lien by judicial procedure within the meaning of
this section. A secured party may purchase at the sale and thereafter
hold the collateral free of any other requirements of IC 26-1-9.1.
(g) Except as otherwise provided in IC 26-1-9.1-607(c),
IC 26-1-9.1-601 through IC 26-1-9.1-628 impose no duties upon a
secured party that is a consignor or is a buyer of accounts, chattel
paper, payment intangibles, or promissory notes.
SECTION 77. IC 26-1-9.1-605 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 605. (a) Except as
provided in subsection (b), a secured party does not owe a duty based
on its status as secured party:
(1) to a person that is a debtor or obligor, unless the secured party
SEA 468 — Concur 93
knows:
(A) that the person is a debtor or obligor;
(B) the identity of the person; and
(C) how to communicate with the person; or
(2) to a secured party or lienholder that has filed a financing
statement against a person, unless the secured party knows:
(A) that the person is a debtor; and
(B) the identity of the person.
(b) A secured party owes a duty based on its status as secured
party to a person if, at the time the secured party obtains control
of collateral that is a controllable account, a controllable electronic
record, or a controllable payment intangible or at the time the
security interest attaches to the collateral, whichever is later:
(1) the person is a debtor or obligor; and
(2) the secured party knows that the information in subsection
(a)(1)(A), (a)(1)(B), or (a)(1)(C) relating to the person is not
provided by the collateral, a record attached to or logically
associated with the collateral, or the system in which the
collateral is recorded.
SECTION 78. IC 26-1-9.1-608 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 608. (a) If a security
interest or agricultural lien secures payment or performance of an
obligation, the following rules apply:
(1) A secured party shall apply or pay over for application the
cash proceeds of collection or enforcement under IC 26-1-9.1-607
in the following order to:
(A) the reasonable expenses of collection and enforcement
and, to the extent provided for by agreement and not
prohibited by law, reasonable attorney's fees and legal
expenses incurred by the secured party;
(B) the satisfaction of obligations secured by the security
interest or agricultural lien under which the collection or
enforcement is made; and
(C) the satisfaction of obligations secured by any subordinate
security interest in or other lien on the collateral subject to the
security interest or agricultural lien under which the collection
or enforcement is made if the secured party receives an
authenticated a signed demand for proceeds before
distribution of the proceeds is completed.
(2) If requested by a secured party, a holder of a subordinate
security interest or other lien shall furnish reasonable proof of the
interest or lien within a reasonable time. Unless the holder
SEA 468 — Concur 94
complies, the secured party need not comply with the holder's
demand under subdivision (1)(C).
(3) A secured party need not apply or pay over for application
noncash proceeds of collection and enforcement under
IC 26-1-9.1-607 unless the failure to do so would be
commercially unreasonable. A secured party that applies or pays
over for application noncash proceeds shall do so in a
commercially reasonable manner.
(4) A secured party shall account to and pay a debtor for any
surplus, and the obligor is liable for any deficiency.
(b) If the underlying transaction is a sale of accounts, chattel paper,
payment intangibles, or promissory notes, the debtor is not entitled to
any surplus, and the obligor is not liable for any deficiency.
SECTION 79. IC 26-1-9.1-611 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 611. (a) As used in this
section, "notification date" means the earlier of the date on which:
(1) a secured party sends to the debtor and any secondary obligor
an authenticated a signed notification of disposition; or
(2) the debtor and any secondary obligor waive the right to
notification.
(b) Except as otherwise provided in subsection (d), a secured party
that disposes of collateral under IC 26-1-9.1-610 shall send to the
persons specified in subsection (c) a reasonable authenticated signed
notification of disposition.
(c) To comply with subsection (b), the secured party shall send an
authenticated a signed notification of disposition to:
(1) the debtor;
(2) any secondary obligor; and
(3) if the collateral is other than consumer goods:
(A) any other person from which the secured party has
received, before the notification date, an authenticated a
signed notification of a claim of an interest in the collateral;
(B) any other secured party or lienholder that, ten (10) days
before the notification date, held a security interest in or other
lien on the collateral perfected by the filing of a financing
statement that:
(i) identified the collateral;
(ii) was indexed under the debtor's name as of that date; and
(iii) was filed in the office in which to file a financing
statement against the debtor covering the collateral as of that
date; and
(C) any other secured party that, ten (10) days before the
SEA 468 — Concur 95
notification date, held a security interest in the collateral
perfected by compliance with a statute, regulation, or treaty
described in IC 26-1-9.1-311(a).
(d) Subsection (b) does not apply if the collateral is perishable or
threatens to decline speedily in value or is of a type customarily sold on
a recognized market.
(e) A secured party complies with the requirement for notification
prescribed in subsection (c)(3)(B) if:
(1) not later than twenty (20) days or earlier than thirty (30) days
before the notification date, the secured party requests, in a
commercially reasonable manner, information concerning
financing statements indexed under the debtor's name in the office
indicated in subsection (c)(3)(B); and
(2) before the notification date, the secured party:
(A) did not receive a response to the request for information;
or
(B) received a response to the request for information and sent
an authenticated a signed notification of disposition to each
secured party or other lienholder named in that response
whose financing statement covered the collateral.
SECTION 80. IC 26-1-9.1-613 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 613. (a) Except in a
consumer-goods transaction, the following rules apply:
(1) The contents of a notification of disposition are sufficient if
the notification:
(A) describes the debtor and the secured party;
(B) describes the collateral that is the subject of the intended
disposition;
(C) states the method of intended disposition;
(D) states that the debtor is entitled to an accounting of the
unpaid indebtedness and states the charge, if any, for an
accounting; and
(E) states the time and place of a public disposition or the time
after which any other disposition is to be made.
(2) Whether the contents of a notification that lacks any of the
information specified in subdivision (1) are nevertheless
sufficient is a question of fact.
(3) The contents of a notification providing substantially the
information specified in subdivision (1) are sufficient, even if the
notification includes:
(A) information not specified by that subdivision; or
(B) minor errors that are not seriously misleading.
SEA 468 — Concur 96
(4) A particular phrasing of the notification is not required.
(5) The following form of notification and the form appearing in
IC 26-1-9.1-614(3), IC 26-1-9.1-614(a)(3), when completed in
accordance with subsection (b) and IC 26-1-9.1-614(b), each
provides sufficient information:
NOTIFICATION OF DISPOSITION OF COLLATERAL
To:Name of debtor, obligor, or other person to which the
notification is sent (Name of debtor, obligor, or other
person to which the notification is sent)
From:Name, address, and telephone number of secured
party (Name, address, and telephone number of secured party)
{1} Name of Debtor(s): Include only if debtor(s) are not an
addressee any debtor that is not an addressee: (Name of each
debtor)
(For a public disposition:)
{2} We will sell (or lease or license, as applicable) the describe
collateral to (describe collateral) (to the highest qualified bidder in
bidder) at public sale. A sale could include a lease or license. The
sale will be held as follows:
Day and Date: _____________________ (Date)
Time: _________ (Time)
Place: ____________________________ (Place)
(For a private disposition:)
{3} We will sell (or lease or license, as applicable) the describe
collateral privately (describe collateral) at private sale sometime
after day and date. (date). A sale could include a lease or license.
{4} You are entitled to an accounting of the unpaid indebtedness
secured by the property that we intend to sell (or lease or license, as
applicable) (for a charge of $____). or, as applicable, lease or license.
{5} If you request an accounting, you must pay a charge of $
(amount). {6} You may request an accounting by calling us at
telephone number. (telephone number).
(End of Form)
(b) The following instructions apply to the form of notification
in subsection (a)(5):
(1) The instructions in this subsection refer to the numbers in
braces before items in the form of notification in subsection
(a)(5). The numbers in braces:
(A) are used only for the purpose of the instructions under
this subsection; and
(B) must not be included in the notification.
(2) Include and complete item {1} only if there is a debtor that
SEA 468 — Concur 97
is not an addressee of the notification. List the name of each
of those debtors.
(3) Include and complete either item {2}, if the notification
relates to a public disposition of the collateral, or item {3}, if
the notification relates to a private disposition of the
collateral. If item {2} is included, include the words "to the
highest bidder" only if applicable.
(4) Include and complete items {4} and {6}.
(5) Include and complete item {5} only if the sender will
charge the recipient for an accounting.
SECTION 81. IC 26-1-9.1-614 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 614. (a) In a
consumer-goods transaction, the following rules apply:
(1) A notification of disposition must provide the following
information:
(A) The information specified in IC 26-1-9.1-613(1).
IC 26-1-9.1-613(a)(1).
(B) A description of any liability for a deficiency of the person
to which the notification is sent.
(C) A telephone number from which the amount that must be
paid to the secured party to redeem the collateral under
IC 26-1-9.1-623 is available.
(D) A telephone number or mailing address from which
additional information concerning the disposition and the
obligation secured is available.
(2) A particular phrasing of the notification is not required.
(3) The following form of notification, when completed in
accordance with the instructions set forth in subsection (b),
provides sufficient information:
Name and address of secured party (Name and address of secured
party)
Date (Date)
NOTICE OF OUR PLAN TO SELL PROPERTY
Name and address of any obligor who is also a debtor (Name and
address of any obligor who is also a debtor)
Subject: Identification of Transaction (Identify transaction)
We have your describe collateral, (describe collateral), because you
broke promises in our agreement.
(For a public disposition:)
{1} We will sell describe collateral (describe collateral) at public
sale. A sale could include a lease or license. The sale will be held as
follows:
SEA 468 — Concur 98
Date: _____________________ (Date)
Time: _________ (Time)
Place: ____________________ (Place)
You may attend the sale and bring bidders if you want.
(For a private disposition:)
{2} We will sell describe collateral (describe collateral) at private
sale sometime after date. (date). A sale could include a lease or license.
{3} The money that we get from the sale, (after after paying our
costs) costs, will reduce the amount you owe. If we get less money than
you owe, you will or will not, as applicable (will or will not, as
applicable) still owe us the difference. If we get more money than you
owe, you will get the extra money, unless we must pay it to someone
else.
{4} You can get the property back at any time before we sell it by
paying us the full amount you owe, (not not just the past due
payments), payments, including our expenses. To learn the exact
amount you must pay, call us at telephone number.(telephone
number).
{5} If you want us to explain to you in writing (writing) (writing or
in (description of electronic record)) (description of electronic
record) how we have figured the amount that you owe us, you may {6}
call us at telephone number (telephone number) or write (or) (write
us at secured party's address (secured party's address)) (or
(description of electronic communication method)) and {7} request
a (a written explanation. explanation) (a written explanation or an
explanation in (description of electronic record)) (an explanation
in (description of electronic record)). {8} We will charge you $
(amount) for the explanation if we sent you another written
explanation of the amount you owe us within the last six (6) months.
{9} If you need more information about the sale call (call us at
telephone number (telephone number)) or write (or) (write us at
secured party's address. (secured party's address) (or contact us by
(description of electronic communication method)).
{10} We are sending this notice to the following other people who
have an interest in describe collateral (describe collateral) or who owe
money under your agreement:
Names of all other debtors and obligors, if any. (Names of all other
debtors and obligors, if any)
(End of Form)
(4) A notification in the form of subdivision (3) is sufficient, even
if additional information appears at the end of the form.
(5) A notification in the form of subdivision (3) is sufficient, even
SEA 468 — Concur 99
if it includes errors in information not required by subdivision (1),
unless the error is misleading with respect to rights arising under
IC 26-1-9.1.
(6) If a notification under this section is not in the form of
subdivision (3), law other than IC 26-1-9.1 determines the effect
of including information not required by subdivision (1).
(b) The following instructions apply to the form of notification
in subsection (a)(3):
(1) The instructions in this subsection refer to the numbers in
braces before items in the form of notification in subsection
(a)(3). The numbers in braces:
(A) are used only for the purpose of the instructions under
this subsection; and
(B) must not be included in the notification.
(2) Include and complete either item {1}, if the notification
relates to a public disposition of the collateral, or item {2}, if
the notification relates to a private disposition of the
collateral.
(3) Include and complete items {3}, {4}, {5}, {6}, and {7}.
(4) In item {5}, include and complete any one (1) of the three
(3) alternative methods for the explanation:
(A) writing;
(B) writing or electronic record; or
(C) electronic record.
(5) In item {6}, include the telephone number. In addition, the
sender may include and complete either or both of the two (2)
additional alternative methods of communication, which are:
(A) writing; and
(B) electronic communication;
by which the recipient of the notification may communicate
with the sender. Neither of the two (2) additional methods of
communication is required to be included.
(6) In item {7}, include and complete each method included in
item {5} (writing, writing or electronic record, or electronic
record) for the explanation.
(7) Include and complete item {8} only if:
(A) a written explanation is included in item {5} as a
method for communicating the explanation; and
(B) the sender will charge the recipient for another written
explanation.
(8) In item {9}, include either the telephone number or the
address or both the telephone number and the address. In
SEA 468 — Concur 100
addition, the sender may include and complete the additional
method of communication (electronic communication) for the
recipient of the notification to communicate with the sender.
The additional method of electronic communication is not
required to be included.
(9) If item {10} does not apply, insert "None" after
"agreement:".
SECTION 82. IC 26-1-9.1-615 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 615. (a) A secured
party shall apply or pay over for application the cash proceeds of
disposition under IC 26-1-9.1-610 in the following order to:
(1) the reasonable expenses of retaking, holding, preparing for
disposition, processing, and disposing, and, to the extent provided
for by agreement and not prohibited by law, reasonable attorney's
fees and legal expenses incurred by the secured party;
(2) the satisfaction of obligations secured by the security interest
or agricultural lien under which the disposition is made;
(3) the satisfaction of obligations secured by any subordinate
security interest in or other subordinate lien on the collateral if:
(A) the secured party receives from the holder of the
subordinate security interest or other lien an authenticated a
signed demand for proceeds before distribution of the
proceeds is completed; and
(B) in a case in which a consignor has an interest in the
collateral, the subordinate security interest or other lien is
senior to the interest of the consignor; and
(4) a secured party that is a consignor of the collateral if the
secured party receives from the consignor an authenticated a
signed demand for proceeds before distribution of the proceeds
is completed.
(b) If requested by a secured party, a holder of a subordinate
security interest or other lien shall furnish reasonable proof of the
interest or lien within a reasonable time. Unless the holder does so, the
secured party need not comply with the holder's demand under
subsection (a)(3).
(c) A secured party need not apply or pay over for application
noncash proceeds of disposition under IC 26-1-9.1-610 unless the
failure to do so would be commercially unreasonable. A secured party
that applies or pays over for application noncash proceeds shall do so
in a commercially reasonable manner.
(d) If the security interest under which a disposition is made secures
payment or performance of an obligation, after making the payments
SEA 468 — Concur 101
and applications required by subsection (a) and permitted by subsection
(c):
(1) unless subsection (a)(4) requires the secured party to apply or
pay over cash proceeds to a consignor, the secured party shall
account to and pay a debtor for any surplus; and
(2) the obligor is liable for any deficiency.
(e) If the underlying transaction is a sale of accounts, chattel paper,
payment intangibles, or promissory notes:
(1) the debtor is not entitled to any surplus; and
(2) the obligor is not liable for any deficiency.
(f) The surplus or deficiency following a disposition is calculated
based on the amount of proceeds that would have been realized in a
disposition complying with IC 26-1-9.1-601 through IC 26-1-9.1-628
to a transferee other than the secured party, a person related to the
secured party, or a secondary obligor if:
(1) the transferee in the disposition is the secured party, a person
related to the secured party, or a secondary obligor; and
(2) the amount of proceeds of the disposition is significantly
below the range of proceeds that a complying disposition to a
person other than the secured party, a person related to the
secured party, or a secondary obligor would have brought.
(g) A secured party that receives cash proceeds of a disposition in
good faith and without knowledge that the receipt violates the rights of
the holder of a security interest or other lien that is not subordinate to
the security interest or agricultural lien under which the disposition is
made:
(1) takes the cash proceeds free of the security interest or other
lien;
(2) is not obligated to apply the proceeds of the disposition to the
satisfaction of obligations secured by the security interest or other
lien; and
(3) is not obligated to account to or pay the holder of the security
interest or other lien for any surplus.
SECTION 83. IC 26-1-9.1-616 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 616. (a) As used in this
section:
(1) "Explanation" means a writing record that:
(A) states the amount of the surplus or deficiency;
(B) provides an explanation in accordance with subsection (c)
of how the secured party calculated the surplus or deficiency;
(C) states, if applicable, that future debits, credits, charges,
including additional credit service charges or interest, rebates,
SEA 468 — Concur 102
and expenses may affect the amount of the surplus or
deficiency; and
(D) provides a telephone number or mailing address from
which additional information concerning the transaction is
available.
(2) "Request" means a record:
(A) authenticated signed by a debtor or consumer obligor;
(B) requesting that the recipient provide an explanation; and
(C) sent after disposition of the collateral under
IC 26-1-9.1-610.
(b) In a consumer-goods transaction in which the debtor is entitled
to a surplus or a consumer obligor is liable for a deficiency under
IC 26-1-9.1-615, the secured party shall:
(1) send an explanation to the debtor or consumer obligor, as
applicable, after the disposition and:
(A) before or when the secured party accounts to the debtor
and pays any surplus or first makes written demand in a
record on the consumer obligor after the disposition for
payment of the deficiency; and
(B) within fourteen (14) days after receipt of a request; or
(2) in the case of a consumer obligor who is liable for a
deficiency, within fourteen (14) days after receipt of a request,
send to the consumer obligor a record waiving the secured party's
right to a deficiency.
(c) To comply with subsection (a)(1)(B), a writing an explanation
must provide the following information in the following order:
(1) the aggregate amount of obligations secured by the security
interest under which the disposition was made, and, if the amount
reflects a rebate of unearned interest or credit service charge, an
indication of that fact, calculated as of a specified date:
(A) if the secured party takes or receives possession of the
collateral after default, not more than thirty-five (35) days
before the secured party takes or receives possession; or
(B) if the secured party takes or receives possession of the
collateral before default or does not take possession of the
collateral, not more than thirty-five (35) days before the
disposition;
(2) the amount of proceeds of the disposition;
(3) the aggregate amount of the obligations after deducting the
amount of proceeds;
(4) the amount, in the aggregate or by type, and types of expenses,
including expenses of retaking, holding, preparing for disposition,
SEA 468 — Concur 103
processing, and disposing of the collateral, and attorney's fees
secured by the collateral that are known to the secured party and
relate to the current disposition;
(5) the amount, in the aggregate or by type, and types of credits,
including rebates of interest or credit service charges, to which
the obligor is known to be entitled and that are not reflected in the
amount in paragraph (1); and
(6) the amount of the surplus or deficiency.
(d) A particular phrasing of the explanation is not required. An
explanation complying substantially with the requirements of
subsection (a) is sufficient, even if it includes minor errors that are not
seriously misleading.
(e) A debtor or consumer obligor is entitled without charge to one
(1) response to a request under this section during any six (6) month
period in which the secured party did not send to the debtor or
consumer obligor an explanation pursuant to subsection (b)(1). The
secured party may require payment of a charge not exceeding
twenty-five dollars ($25) for each additional response.
SECTION 84. IC 26-1-9.1-619 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 619. (a) In this section,
"transfer statement" means a record authenticated signed by a secured
party stating:
(1) that the debtor has defaulted in connection with an obligation
secured by specified collateral;
(2) that the secured party has exercised its post-default remedies
with respect to the collateral;
(3) that, by reason of the exercise, a transferee has acquired the
rights of the debtor in the collateral; and
(4) the name and mailing address of the secured party, debtor, and
transferee.
(b) A transfer statement entitles the transferee to the transfer of
record of all rights of the debtor in the collateral specified in the
statement in any official filing, recording, registration, or
certificate-of-title system covering the collateral. If a transfer statement
is presented with the applicable fee and request form to the official or
office responsible for maintaining the system, the official or office
shall:
(1) accept the transfer statement;
(2) promptly amend its records to reflect the transfer; and
(3) if applicable, issue a new appropriate certificate of title in the
name of transferee.
(c) A transfer of the record or legal title to collateral to a secured
SEA 468 — Concur 104
party under subsection (b) or otherwise is not of itself a disposition of
collateral under IC 26-1-9.1 and does not of itself relieve the secured
party of its duties under IC 26-1-9.1.
SECTION 85. IC 26-1-9.1-620 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 620. (a) Except as
otherwise provided in subsection (g), a secured party may accept
collateral in full or partial satisfaction of the obligation it secures only
if:
(1) the debtor consents to the acceptance under subsection (c);
(2) the secured party does not receive, within the time set forth in
subsection (d), a notification of objection to the proposal
authenticated signed by:
(A) a person to which the secured party was required to send
a proposal under IC 26-1-9.1-621; or
(B) any other person, other than the debtor, holding an interest
in the collateral subordinate to the security interest that is the
subject of the proposal;
(3) if the collateral is consumer goods, the collateral is not in the
possession of the debtor when the debtor consents to the
acceptance; and
(4) subsection (e) does not require the secured party to dispose of
the collateral or the debtor waives the requirement pursuant to
IC 26-1-9.1-624.
(b) A purported or apparent acceptance of collateral under this
section is ineffective unless:
(1) the secured party consents to the acceptance in an
authenticated a signed record or sends a proposal to the debtor;
and
(2) the conditions of subsection (a) are met.
(c) For purposes of this section:
(1) a debtor consents to an acceptance of collateral in partial
satisfaction of the obligation it secures only if the debtor agrees
to the terms of the acceptance in a record authenticated signed
after default; and
(2) a debtor consents to an acceptance of collateral in full
satisfaction of the obligation it secures only if the debtor agrees
to the terms of the acceptance in a record authenticated signed
after default or the secured party:
(A) sends to the debtor after default a proposal that is
unconditional or subject only to a condition that collateral not
in the possession of the secured party be preserved or
maintained;
SEA 468 — Concur 105
(B) in the proposal, proposes to accept collateral in full
satisfaction of the obligation it secures; and
(C) does not receive a notification of objection authenticated
signed by the debtor within twenty (20) days after the proposal
is sent.
(d) To be effective under subsection (a)(2), a notification of
objection must be received by the secured party:
(1) in the case of a person to which the proposal was sent
pursuant to IC 26-1-9.1-621, within twenty (20) days after
notification was sent to that person; and
(2) in other cases:
(A) within twenty (20) days after the last notification was sent
pursuant to IC 26-1-9.1-621; or
(B) if a notification was not sent, before the debtor consents to
the acceptance under subsection (c).
(e) A secured party that has taken possession of collateral shall
dispose of the collateral pursuant to IC 26-1-9.1-610 within the time
specified in subsection (f) if:
(1) sixty percent (60%) of the cash price has been paid in the case
of a purchase-money security interest in consumer goods; or
(2) sixty percent (60%) of the principal amount of the obligation
secured has been paid in the case of a non-purchase-money
security interest in consumer goods.
(f) To comply with subsection (e), the secured party shall dispose of
the collateral:
(1) within ninety (90) days after taking possession; or
(2) within any longer period to which the debtor and all secondary
obligors have agreed in an agreement to that effect entered into
and authenticated signed after default.
(g) In a consumer transaction, a secured party may not accept
collateral in partial satisfaction of the obligation it secures.
SECTION 86. IC 26-1-9.1-621 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 621. (a) A secured
party that desires to accept collateral in full or partial satisfaction of the
obligation it secures shall send its proposal to:
(1) any person from which the secured party has received, before
the debtor consented to the acceptance, an authenticated a signed
notification of a claim of an interest in the collateral;
(2) any other secured party or lienholder that, ten (10) days before
the debtor consented to the acceptance, held a security interest in
or other lien on the collateral perfected by the filing of a financing
statement that:
SEA 468 — Concur 106
(A) identified the collateral;
(B) was indexed under the debtor's name as of that date; and
(C) was filed in the office or offices in which to file a
financing statement against the debtor covering the collateral
as of that date; and
(3) any other secured party that, ten (10) days before the debtor
consented to the acceptance, held a security interest in the
collateral perfected by compliance with a statute, regulation, or
treaty described in IC 26-1-9.1-311(a).
(b) A secured party that desires to accept collateral in partial
satisfaction of the obligation it secures shall send its proposal to any
secondary obligor in addition to the persons described in subsection
(a).
SECTION 87. IC 26-1-9.1-624 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 624. (a) A debtor or
secondary obligor may waive the right to notification of disposition of
collateral under IC 26-1-9.1-611 only by an agreement to that effect
entered into and authenticated signed after default.
(b) A debtor may waive the right to require disposition of collateral
under IC 26-1-9.1-620(e) only by an agreement to that effect entered
into and authenticated signed after default.
(c) Except in a consumer-goods transaction, a debtor or secondary
obligor may waive the right to redeem collateral under IC 26-1-9.1-623
only by an agreement to that effect entered into and authenticated
signed after default.
SECTION 88. IC 26-1-9.1-628 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 628. (a) Subject to
subsection (f), unless a secured party knows that a person is a debtor
or obligor, knows the identity of the person, and knows how to
communicate with the person:
(1) the secured party is not liable to the person, or to a secured
party or lienholder that has filed a financing statement against the
person, for failure to comply with IC 26-1-9.1; and
(2) the secured party's failure to comply with IC 26-1-9.1 does not
affect the liability of the person for a deficiency.
(b) Subject to subsection (f), a secured party is not liable because
of its status as secured party:
(1) to a person that is a debtor or obligor, unless the secured party
knows:
(A) that the person is a debtor or obligor;
(B) the identity of the person; and
(C) how to communicate with the person; or
SEA 468 — Concur 107
(2) to a secured party or lienholder that has filed a financing
statement against a person, unless the secured party knows:
(A) that the person is a debtor; and
(B) the identity of the person.
(c) A secured party is not liable to any person, and a person's
liability for a deficiency is not affected, because of any act or omission
arising out of the secured party's reasonable belief that a transaction is
not a consumer-goods transaction or a consumer transaction or that
goods are not consumer goods, if the secured party's belief is based on
its reasonable reliance on:
(1) a debtor's representation concerning the purpose for which
collateral was to be used, acquired, or held; or
(2) an obligor's representation concerning the purpose for which
a secured obligation was incurred.
(d) A secured party is not liable to any person under
IC 26-1-9.1-625(c)(2) for its failure to comply with IC 26-1-9.1-616.
(e) A secured party is not liable under IC 26-1-9.1-625(c)(2) more
than once with respect to any one secured obligation.
(f) Subsections (a) and (b) do not apply to limit the liability of a
secured party to a person if, at the time the secured party obtains
control of collateral that is a controllable account, controllable
electronic record, or controllable payment intangible or at the time
the security interest attaches to the collateral, whichever is later:
(1) the person is a debtor or obligor; and
(2) the secured party knows that the information in subsection
(b)(1)(A), (b)(1)(B), or (b)(1)(C) relating to the person is not
provided by the collateral, a record attached to or logically
associated with the collateral, or the system in which the
collateral is recorded.
SECTION 89. IC 26-1-11 IS REPEALED [EFFECTIVE JULY 1,
2023]. (Controllable Electronic Records).
SECTION 90. IC 26-1-12 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]:
Chapter 12. Controllable Electronic Records
Sec. 101. This chapter shall be known and may be cited as
Uniform Commercial Code - Controllable Electronic Records.
Sec. 102. (a) In this chapter the following definitions apply:
(1) "Controllable electronic record" means a record stored in
an electronic medium that can be subjected to control under
section 105 of this chapter. The term does not include a
controllable account, a controllable payment intangible, a
SEA 468 — Concur 108
deposit account, an electronic copy of a record evidencing
chattel paper, an electronic document of title, investment
property, a transferable record, or an electronic record that
is currently authorized or adopted by a domestic or foreign
government and is not a medium of exchange that was
recorded and transferable in a system that existed and
operated for the medium of exchange before the medium of
exchange was authorized or adopted by a government.
(2) "Qualifying purchaser" means a purchaser:
(A) of a controllable electronic record; or
(B) of an interest in a controllable electronic record;
that obtains control of the controllable electronic record for
value, in good faith, and without notice of a claim of a
property right in the controllable electronic record.
(3) "Transferable record" has the meaning set forth in:
(A) Section 201(a)(1) of the Electronic Signatures in Global
and National Commerce Act (15 U.S.C. 7021(a)(1)); or
(B) IC 26-2-8-115(a).
(4) "Value" has the meaning set forth in IC 26-1-3.1-303(a),
as if references in IC 26-1-3.1-303(a) to an "instrument" were
references to a controllable account, a controllable electronic
record, or a controllable payment intangible.
(b) The definitions in IC 26-1-9.1 of "account debtor",
"controllable account", "controllable payment intangible",
"chattel paper", "deposit account", and "investment property"
apply throughout this chapter.
(c) The general definitions and principles of construction and
interpretation set forth in IC 26-1-1 apply throughout this chapter.
Sec. 103. (a) If there is a conflict between this chapter and
IC 26-1-9.1, IC 26-1-9.1 governs.
(b) A transaction subject to this chapter is subject to:
(1) any applicable rule of law that establishes a different rule
for consumers; and
(2) any:
(A) other statute or regulation that regulates the rates,
charges, agreements, and practices for loans, credit sales,
or other extensions of credit, including IC 24-4.5; and
(B) consumer protection statute or regulation.
Sec. 104. (a) This section applies to the acquisition and purchase
rights in a controllable account or a controllable payment
intangible, including the rights and benefits under subsections (c),
(d), (e), (g), and (h) of a purchaser and a qualifying purchaser, in
SEA 468 — Concur 109
the same manner that this section applies with respect to a
controllable electronic record.
(b) For purposes of determining whether a purchaser of a
controllable account or a controllable payment intangible is a
qualifying purchaser, the purchaser obtains control of the account
or the payment intangible if the purchaser obtains control of the
controllable electronic record that evidences the account or the
payment intangible.
(c) Except as provided in this section, law other than this
chapter determines:
(1) whether a person acquires a right in a controllable
electronic record; and
(2) the right the person acquires.
(d) A purchaser of a controllable electronic record acquires all
rights in the controllable electronic record that the transferor had
or had the power to transfer. However, a purchaser of a limited
interest in a controllable electronic record acquires rights only to
the extent of the interest purchased.
(e) A qualifying purchaser acquires the qualifying purchaser's
rights in a controllable electronic record free of a claim of a
property right in the controllable electronic record.
(f) Except as provided in subsections (a) and (e) with respect to
a controllable account or a controllable payment intangible, or in
law other than this chapter, a qualifying purchaser takes:
(1) a right to payment;
(2) a right to performance; or
(3) another interest in property;
that is evidenced by a controllable electronic record subject to a
claim of a property right in the right to payment, right to
performance, or other interest in property.
(g) An action may not be asserted against a qualifying purchaser
based on both:
(1) a purchase by the qualifying purchaser of a controllable
electronic record; and
(2) a claim of a property right in another controllable
electronic record;
regardless of whether the action is framed in conversion, replevin,
constructive trust, equitable lien, or another theory.
(h) The filing of a financing statement under IC 26-1-9.1 is not
notice of a claim of property right in a controllable electronic
record.
Sec. 105. (a) A person has control of a controllable electronic
SEA 468 — Concur 110
record if the electronic record, a record attached to or logically
associated with the electronic record, or a system in which the
electronic record is recorded:
(1) gives the person:
(A) power to avail itself of substantially all the benefit from
the electronic record; and
(B) exclusive power, subject to subsection (b), to:
(i) prevent others from availing themselves of
substantially all the benefit from the electronic record;
and
(ii) transfer control of the electronic record to another
person or cause another person to obtain control of
another controllable electronic record as a result of the
transfer of the electronic record; and
(2) enables the person readily to identify itself in any way,
including by name, identifying number, cryptographic key,
office, or account number, as having powers specified in
subdivision (1).
(b) Subject to subsection (c), a power is exclusive under
subsection (a)(1)(B)(i) and (a)(1)(B)(ii) even if:
(1) the controllable electronic record, a record attached to or
logically associated with the electronic record, or a system in
which the electronic record is recorded limits the use of the
electronic record or has a protocol programmed to cause a
change, including a transfer or loss of control or a
modification of benefits afforded by the electronic record; or
(2) the power is shared with another person.
(c) A power of a person is not shared with another person under
subsection (b)(2) and the person's power is not exclusive if:
(1) the person can exercise the power only if the power also is
exercised by the other person; and
(2) the other person:
(A) can exercise the power without exercise of the power
by the person; or
(B) is the transferor to the person of an interest in the
controllable electronic record or in a controllable account
or controllable payment intangible evidenced by the
controllable electronic record.
(d) If a person has the powers specified in subsection (a)(1)(B)(i)
and (a)(1)(B)(ii), the powers are presumed to be exclusive.
(e) A person has control of a controllable electronic record if
another person, other than the transferor to the person of an
SEA 468 — Concur 111
interest in the controllable electronic record, or in a controllable
account or controllable payment intangible evidenced by the
controllable electronic record:
(1) has control of the electronic record and acknowledges that
it has control on behalf of the person; or
(2) obtains control of the electronic record after having
acknowledged that it will obtain control of the electronic
record on behalf of the person.
(f) A person that has control under this section is not required
to acknowledge that it has control on behalf of another person.
(g) If a person acknowledges that it has or will obtain control on
behalf of another person, unless the person otherwise agrees or law
other than this chapter or IC 26-1-9.1 otherwise provides, the
person does not owe any duty to any other person and is not
required to confirm the acknowledgment to any other person.
Sec. 106. (a) An account debtor on a controllable account or a
controllable payment intangible may discharge its obligation by
paying:
(1) the person having control of the controllable electronic
record that evidences the controllable account or the
controllable payment intangible; or
(2) except as provided in subsection (b), a person that
formerly had control of the controllable electronic record.
(b) Subject to subsection (d), the account debtor may not
discharge its obligation by paying a person that formerly had
control of the controllable electronic record if the account debtor
receives a notification that:
(1) is signed by a person that formerly had control or by the
person to which control was transferred;
(2) reasonably identifies the controllable account or
controllable payment intangible;
(3) notifies the account debtor that control of the controllable
electronic record that evidences the controllable account or
controllable payment intangible was transferred;
(4) identifies the transferee, in any reasonable way, including
by name, identifying number, cryptographic key, office, or
account number; and
(5) provides a commercially reasonable method by which the
account debtor is to pay the transferee.
(c) After receipt of a notification that complies with subsection
(b), the account debtor may discharge its obligation by paying in
accordance with the notification and may not discharge the
SEA 468 — Concur 112
obligation by paying a person that formerly had control.
(d) Subject to subsection (h), notification is ineffective under
subsection (b):
(1) unless, before the notification is sent, the account debtor
and the person that, at that time, had control of the
controllable electronic record that evidences the controllable
account or the controllable payment intangible agree in a
signed record to a commercially reasonable method by which
a person may furnish reasonable proof that control has been
transferred;
(2) to the extent an agreement between the account debtor and
seller of a payment intangible limits the account debtor's duty
to pay a person other than the seller and the limitation is
effective under law other than this chapter; or
(3) at the option of the account debtor, if the notification
notifies the account debtor to:
(A) divide a payment;
(B) make less than the full amount of an installment or
other periodic payment; or
(C) pay any part of a payment by more than one (1)
method or to more than one (1) person.
(e) Subject to subsection (h), if requested by the account debtor,
the person giving notification under subsection (b) seasonably shall
furnish reasonable proof, using the method in the agreement
described in subsection (d)(1), that control of the controllable
electronic record has been transferred. Unless the person complies
with the request, the account debtor may discharge its obligation
by paying a person that formerly had control, even if the account
debtor has received a notification under subsection (b).
(f) A person furnishes reasonable proof under subsection (e)
that control has been transferred if the person demonstrates, using
the method in the agreement described in subsection (d)(1), that
the transferee has the power to:
(1) avail itself of substantially all the benefit from the
controllable electronic record;
(2) prevent others from availing themselves of substantially
all the benefit from the controllable electronic record; and
(3) transfer the powers specified in subdivisions (1) and (2) to
another person.
(g) Subject to subsection (h), an account debtor may not waive
or vary its rights under subsections (d)(1) and (e) or its option
under subsection (d)(3).
SEA 468 — Concur 113
(h) This section is subject to law other than this chapter that
establishes a different rule for an account debtor who is an
individual and who incurred the obligation primarily for personal,
family, or household purposes.
Sec. 107. (a) Except as provided in subsection (b), the local law
of an electronic record's jurisdiction governs a matter covered by
this chapter.
(b) For a controllable electronic record that evidences a
controllable account or a controllable payment intangible, the local
law of the controllable electronic record's jurisdiction governs a
matter covered by section 106 of this chapter unless an effective
agreement determines that the local law of another jurisdiction
governs.
(c) The following rules determine a controllable electronic
record's jurisdiction under this section:
(1) If the controllable electronic record, or a record that is
attached to or logically associated with the controllable
electronic record and that is readily available for review,
expressly provides that a particular jurisdiction is the
controllable electronic record's jurisdiction for purposes of
this chapter or IC 26-1, that jurisdiction is the controllable
electronic record's jurisdiction.
(2) If subdivision (1) does not apply, and the rules of the
system in which the controllable electronic record is recorded
are readily available for review and expressly provide that a
particular jurisdiction is the controllable electronic record's
jurisdiction for purposes of this chapter or IC 26-1, that
jurisdiction is the controllable electronic record's jurisdiction.
(3) If subdivisions (1) and (2) do not apply, and the
controllable electronic record, or a record that is attached to
or logically associated with the controllable electronic record
and that is readily available for review, expressly provides
that the controllable electronic record is governed by the law
of a particular jurisdiction, that jurisdiction is the
controllable electronic record's jurisdiction.
(4) If subdivisions (1) through (3) do not apply, and the rules
of the system in which the controllable electronic record is
recorded are readily available for review and expressly
provide that the controllable electronic record or the system
is governed by the law of a particular jurisdiction, that
jurisdiction is the controllable electronic record's jurisdiction.
(5) If subdivisions (1) through (4) do not apply, the
SEA 468 — Concur 114
controllable electronic record's jurisdiction is the District of
Columbia.
(d) If subsection (c)(5) applies and this chapter is not in effect in
the District of Columbia without material modification, the
governing law for a matter covered by this chapter is the law of the
District of Columbia as though this chapter were in effect in the
District of Columbia without material modification.
(e) To the extent that subsections (a) and (b) provide that the
local law of the controllable electronic record's jurisdiction
governs a matter covered by this chapter, that law governs even if
the matter or a transaction to which the matter relates does not
bear any relation to the controllable record's jurisdiction.
(f) The rights acquired under section 104 of this chapter by a
purchaser or a qualifying purchaser are governed by the law
applicable under this section at the time of purchase.
SECTION 91. IC 26-1-12.5 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]:
Chapter 12.5. Transitional Provisions For Uniform Commercial
Code Amendments (2022)
Sec. 101. This chapter may be cited as Transitional Provisions
for Uniform Commercial Code Amendments (2022).
Sec. 102. (a) In this chapter, the following terms have the
following meanings:
(1) The following terms have the following meanings:
(A) "Act" refers to the amendments to IC 26-1 that:
(i) were made during the 2023 regular session of the
general assembly; and
(ii) took effect July 1, 2023.
(B) "Adjustment date" means July 1, 2025.
(2) "Chapter 12" refers to IC 26-1-12.
(3) "Chapter 12 property" means a controllable account, a
controllable electronic record, or a controllable payment
intangible.
(b) The following definitions in other chapters of IC 26-1 apply
to this chapter:
"Controllable account". IC 26-1-9.1-102.
"Controllable electronic record". IC 26-1-12-102.
"Controllable payment intangible". IC 26-1-9.1-102.
"Financing statement". IC 26-1-9.1-102.
(c) IC 26-1-1 contains general definitions and principles of
construction and interpretation that apply throughout this chapter.
SEA 468 — Concur 115
Sec. 201. Except as provided in sections 301 through 306 of this
chapter, a transaction validly entered into before July 1, 2023, and
the rights, duties, and interests flowing from the transaction
remain valid after June 30, 2023, and may be terminated,
completed, consummated, or enforced as required or permitted by
law other than IC 26-1 or, if applicable, by IC 26-1 as though the
act had not taken effect.
Sec. 301. (a) Except as otherwise provided in this section or in
sections 302 through 306 of this chapter:
(1) IC 26-1-9.1, as amended by the act; and
(2) IC 26-1-12;
apply to a transaction, lien, or interest in property, even if the
transaction, lien, or interest was entered into, created, or acquired
before July 1, 2023.
(b) Except as provided in subsection (c) and in sections 302
through 306 of this chapter:
(1) a transaction, lien, or interest in property that was validly
entered into, created, or transferred before July 1, 2023, and
was not governed by IC 26-1, but would be subject to:
(A) IC 26-1-9.1, as amended by the act; or
(B) IC 26-1-12;
if it had been entered into, created, or transferred on or after
July 1, 2023, including the rights, duties, and interests flowing
from the transaction, lien, or interest, remain valid on and
after July 1, 2023; and
(2) the transaction, lien, or interest may be terminated,
completed, consummated, and enforced as required or
permitted by:
(A) the act; or
(B) the law that would apply if the act had not taken effect.
(c) The act does not affect an action, case, or proceeding
commenced before July 1, 2023.
Sec. 302. (a) A security interest that is enforceable and perfected
on June 30, 2023, is a perfected security interest under the act if, on
July 1, 2023, the requirements for enforceability and perfection
under the act are satisfied without further action.
(b) If a security interest is enforceable and effective on June 30,
2023, but the requirements for enforceability and perfection under
the act are not satisfied on July 1, 2023, the security interest:
(1) is a perfected security interest until the earlier of:
(A) the time perfection would have ceased under IC 26-1 as
in effect on June 30, 2023; or
SEA 468 — Concur 116
(B) the adjustment date;
(2) remains enforceable on or after the time specified in
subdivision (1) only if the security interest satisfies the
requirements for enforceability under IC 26-1-9.1-203, as
amended by the act, before the adjustment date; and
(3) remains perfected on or after the time specified in
subdivision (1) only if the requirements for perfection under
the act are satisfied before the time specified in subdivision
(1).
Sec. 303. A security interest that is enforceable on June 30, 2023,
but is unperfected on June 30, 2023:
(1) remains an enforceable security interest until the
adjustment date;
(2) remains enforceable on or after the adjustment date if the
security interest becomes enforceable under IC 26-1-9.1-203,
as amended by the act, on July 1, 2023, or before the
adjustment date; and
(3) becomes perfected;
(A) without further action on July 1, 2023, if the
requirements for perfection under the act are satisfied
before or on July 1, 2023; or
(B) when the requirements for perfection under the act are
satisfied if the requirements are satisfied after July 1, 2023.
Sec. 304. (a) If action, other than the filing of a financing
statement, is taken before July 1, 2023, and the action would have
resulted in perfection of a security interest had the security interest
become enforceable before July 1, 2023, the action is effective to
perfect a security interest that attaches under the act before the
adjustment date. An attached security interest becomes
unperfected on the adjustment date unless the security interest
becomes a perfected security interest under the act before the
adjustment date.
(b) The filing of a financing statement before July 1, 2023, is
effective to perfect a security interest on July 1, 2023, to the extent
the filing would satisfy the requirements for perfection under the
act.
(c) The taking of an action before July 1, 2023, is sufficient for
the enforceability of a security interest on July 1, 2023, if the action
would satisfy the requirements for enforceability under the act.
Sec. 305. (a) Subject to subsections (b) and (c), the act
determines the priority of conflicting claims to collateral.
(b) Subject to subsection (c), if the priorities of claims to
SEA 468 — Concur 117
collateral were established before July 1, 2023, IC 26-1-9.1 as in
effect before July 1, 2023, determines priority.
(c) On the adjustment date, to the extent the priorities
determined by IC 26-1-9.1, as amended by the act, modify the
priorities established before July 1, 2023, the priorities of claims to
chapter 12 property established before July 1, 2023, cease to apply.
Sec. 306. (a) Subject to subsections (b) and (c), chapter 12
determines the priority of conflicting claims to chapter 12 property
when the priority rules of IC 26-1-9.1, as amended by the act, do
not apply.
(b) Subject to subsection (c), when the priority rules of
IC 26-1-9.1, as amended by the act, do not apply and the priorities
of claims to chapter 12 property were established before July 1,
2023, law other than chapter 12 determines priority.
(c) When the priority rules of IC 26-1-9.1, as amended by the
act, do not apply, to the extent the priorities determined by the act
modify the priorities established before July 1, 2023, the priorities
of claims to chapter 12 property established before July 1, 2023,
cease to apply on the adjustment date.
SECTION 92. IC 32-34-1.5-3, AS AMENDED BY P.L.110-2022,
SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 3. The following definitions apply throughout this
chapter:
(1) "Apparent owner" means a person whose name appears on the
records of a holder as the owner of property held, issued, or owing
by the holder.
(2) "Attorney general's agent" means a person with which the
attorney general contracts to conduct an examination under
section 53 of this chapter on behalf of the attorney general.
(3) "Business association" means a corporation, joint stock
company, investment company other than an investment company
registered under the Investment Company Act of 1940 (15 U.S.C.
80a-1 et seq.), partnership, unincorporated association, joint
venture, limited liability company, business trust, trust company,
land bank, safe deposit company, safekeeping depository,
financial organization, insurance company, federally chartered
entity, utility, sole proprietorship, or other business entity,
whether or not for profit.
(4) "Confidential information" means records, reports, and
information that are considered confidential under section 78 of
this chapter.
(5) "Controllable electronic record" has the meaning set forth in
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IC 26-1-11-104. IC 26-1-12-102.
(6) "Domicile" means the following:
(A) For a corporation, the state of its incorporation.
(B) For a business association other than a corporation whose
formation requires a filing with a state, the state of its filing.
(C) For a federally chartered entity or an investment company
registered under the Investment Company Act of 1940, as
amended (15 U.S.C. 80a-1 et seq.), the state of its home office.
(D) For any other holder, the state of its principal place of
business.
(7) "Electronic" means relating to technology having electrical,
digital, magnetic, wireless, optical, electromagnetic, or similar
capabilities.
(8) "Electronic mail" means a communication by electronic means
which is automatically retained and stored and may be readily
accessed or retrieved.
(9) "Financial organization" means a savings and loan association,
building and loan association, savings bank, industrial bank, bank,
banking organization, or credit union.
(10) "Financial organization loyalty program" means a record
given without direct monetary consideration, excluding an annual
or periodic fee, under an award, reward, benefit, loyalty,
incentive, rebate, or other promotional program established by a
financial organization for the purpose of rewarding a relationship
with the sponsoring financial organization. The term includes:
(A) both a physical card and an electronic record; and
(B) a program offering a record that is redeemable for money
or cash or is otherwise monetized by the financial
organization.
(11) "Game related digital content" means digital content that
exists only in an electronic game or electronic-game platform.
The term includes game-play currency such as a virtual wallet,
even if denominated in United States currency and, if for use or
redemption only within the game or platform or another electronic
game or electronic-game platform, points sometimes referred to
as gems, tokens, gold, and similar names and digital codes. The
term does not include an item that the issuer:
(A) permits to be redeemed for use outside a game or platform
for money or goods or services that have more than minimal
value; or
(B) otherwise monetizes for use outside a game or platform.
(12) "Holder" means a person obligated to hold for the account of,
SEA 468 — Concur 119
or to deliver or pay to, the owner property subject to this chapter.
(13) "Insurance company" means an association, corporation, or
fraternal or mutual benefit organization, whether or not for profit,
engaged in the business of providing life endowments, annuities,
or insurance, including accident, burial, casualty, credit life,
contract performance, dental, disability, fidelity, fire, health,
hospitalization, illness, life, malpractice, marine, mortgage,
surety, wage protection, and worker's compensation insurance.
(14) "Loyalty card" means a record given without direct monetary
consideration under an award, reward, benefit, loyalty, incentive,
rebate, or promotional program which may be used or redeemed
only to obtain goods or services or a discount on goods or
services. The term does not include a record that may be
redeemed for money or otherwise monetized by the issuer.
(15) "Mineral" means gas, oil, coal, oil shale, other gaseous liquid
or solid hydrocarbon, cement material, sand and gravel, road
material, building stone, chemical raw material, gemstone,
fissionable and nonfissionable ores, colloidal and other clay,
steam and other geothermal resources, and any other substance
defined as a mineral by a law of this state other than this chapter.
(16) "Mineral proceeds" means an amount payable for the
extraction, production, or sale of minerals, or, on the
abandonment of the amount, an amount that becomes payable
after abandonment. The term includes an amount payable:
(A) for the acquisition and retention of a mineral lease,
including a bonus, royalty, compensatory royalty, shut-in
royalty, minimum royalty, and delay rental;
(B) for the extraction, production, or sale of minerals,
including a net revenue interest, royalty, overriding royalty,
extraction payment, and production payment; and
(C) under an agreement or option, including a joint-operation
agreement, unit agreement, pooling agreement, and farm out
agreement.
(17) "Money order" means a payment order for a specified
amount of money. The term includes an express money order and
a personal money order on which the remitter is the purchaser.
(18) "Municipal bond" means a bond or evidence of indebtedness
issued by a municipality or other political subdivision of a state.
(19) "Non-freely transferable security" means a security that
cannot be delivered to the attorney general by the Depository
Trust & Clearing Corporation or similar custodian of securities
providing post-trade clearing and settlement services to financial
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markets or cannot be delivered because there is no agent to effect
transfer. The term includes a worthless security.
(20) "Owner" means a person that has a legal, beneficial, or
equitable interest in property subject to this chapter or the
person's legal representative when acting on behalf of the owner.
The term includes:
(A) for a deposit, a depositor;
(B) for a trust other than a deposit in trust, a beneficiary;
(C) for other property, a creditor, claimant, or payee; and
(D) the lawful bearer of a record that may be used to obtain
money, a reward, or a thing of value.
(21) "Payroll card" means a record that evidences a payroll card
account as defined in Regulation E (12 CFR Part 1005).
(22) "Person" means an individual, estate, business association,
public corporation, government or governmental subdivision,
agency, or instrumentality, or other legal entity.
(23) "Property" means tangible property described in section 8 of
this chapter or a fixed and certain interest in intangible property
held, issued, or owed in the course of a holder's business or by a
government or governmental subdivision, agency, or
instrumentality. The term includes:
(A) all income from or increments to the property; and
(B) property referred to as or evidenced by:
(i) money, virtual currency, interest, or a dividend, check,
draft, deposit, or payroll card;
(ii) a credit balance, customer's overpayment, security
deposit, refund, credit memorandum, unpaid wage, unused
ticket for which the issuer has an obligation to provide a
refund, mineral proceeds, or unidentified remittance;
(iii) a security, except for a worthless security or a security
that is subject to a lien, legal hold, or restriction evidenced
on the records of the holder or imposed by operation of law,
if the lien, legal hold, or restriction restricts the holder's or
owner's ability to receive, transfer, sell, or otherwise
negotiate the security;
(iv) a bond, debenture, note, or other evidence of
indebtedness;
(v) money deposited to redeem a security, make a
distribution, or pay a dividend;
(vi) an amount due and payable under an annuity contract or
insurance policy; and
(vii) an amount distributable from a trust or custodial fund
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established under a plan to provide health, welfare, pension,
vacation, severance, retirement, death, stock purchase, profit
sharing, employee savings, supplemental unemployment
insurance, or a similar benefit.
The term does not include property held in a plan described in
Section 529A of the Internal Revenue Code, game related digital
content, a financial organization loyalty program, a loyalty card,
or an in-store credit for returned merchandise.
(24) "Putative holder" means a person believed by the attorney
general to be a holder, until the person pays or delivers to the
attorney general property subject to this chapter or the attorney
general or court makes a final determination that the person is or
is not a holder.
(25) "Record" means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(26) "Security" means:
(A) a security (as defined in IC 26-1-8.1-102);
(B) a security entitlement (as defined in IC 26-1-8.1-102),
including a customer security account held by a registered
broker-dealer, to the extent the financial assets held in the
security account are not:
(i) registered on the books of the issuer in the name of the
person for which the broker-dealer holds the assets;
(ii) payable to the order of the person; or
(iii) specifically indorsed to the person; or
(C) an equity interest in a business association not included in
clause (A) or (B).
(27) "Sign" means, with present intent to authenticate or adopt a
record:
(A) to execute or adopt a tangible symbol; or
(B) to attach to or logically associate with the record an
electronic symbol, sound, or process.
(28) "State" means a state of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, the United States
Virgin Islands, or any territory or insular possession subject to the
jurisdiction of the United States.
(29) "Utility" means a person that owns or operates for public use
a plant, equipment, real property, franchise, or license for the
following public services:
(A) Transmission of communications or information.
(B) Production, storage, transmission, sale, delivery, or
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furnishing of electricity, water, steam, or gas.
(C) Provision of sewage or septic services, or trash, garbage,
or recycling disposal.
(30) "Virtual currency" means a digital representation of value
used as a medium of exchange, unit of account, or store of value,
which does not have legal tender status recognized by the United
States. The term does not include:
(A) the software or protocols governing the transfer of the
digital representation of value;
(B) game related digital content;
(C) a financial organization loyalty program; or
(D) a loyalty card.
(31) "Worthless security" means a security whose cost of
liquidation and delivery to the attorney general would exceed the
value of the security on the date a report is due under this chapter.
SECTION 93. IC 32-34-1.5-87, AS AMENDED BY P.L.110-2022,
SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2023]: Sec. 87. (a) The attorney general may adopt rules under
IC 4-22-2 to carry out the purposes of this chapter.
(b) The attorney general may adopt rules under IC 4-22-2 regarding
virtual currency, controllable electronic records, and digital assets, to
the extent such rules are consistent with, and not otherwise covered by,
the following:
(1) IC 26-1-9.1.
(2) IC 26-1-11. IC 26-1-12.
(3) Any other Indiana law concerning virtual currency,
controllable electronic records, or digital assets.
SEA 468 — Concur President of the Senate
President Pro Tempore
Speaker of the House of Representatives
Governor of the State of Indiana
Date: 	Time: 
SEA 468 — Concur