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H0312.........................................................by STATE AFFAIRS
FINANCING STATEMENTS - Adds to existing law to permit the Secretary of State
to refuse to file certain invalid financing statements under the Uniform
Commercial Code; to make specified information unreadable; and to delete
invalid filings if now on file.
02/28 House intro - 1st rdg - to printing
03/03 Rpt prt - to St Aff
03/05 Rpt out - rec d/p - to 2nd rdg
03/06 2nd rdg - to 3rd rdg
03/11 3rd rdg - PASSED - 68-0-2
AYES -- Andersen, Barraclough, Barrett, Bauer, Bedke, Bell, Bieter,
Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins,
Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth, Eskridge,
Field(18), Field(23), Gagner, Garrett, Harwood, Henbest, Jaquet, Jones,
Kellogg, Kulczyk, Lake, Langford, Langhorst(Wallace), Martinez,
McGeachin, McKague, Meyer, Miller, Mitchell, Moyle, Naccarato, Nielsen,
Raybould, Ridinger, Ring, Ringo, Roberts, Robison, Rydalch, Sali,
Sayler, Shepherd, Shirley, Skippen, Smith(30), Smith(24), Smylie,
Snodgrass, Stevenson, Tilman, Trail, Wills, Wood, Mr. Speaker
NAYS -- None
Absent and excused -- Crow, Schaefer
Floor Sponsor - Smylie
Title apvd - to Senate
03/12 Senate intro - 1st rdg - to St Aff
03/19 Rpt out - rec d/p - to 2nd rdg
03/20 2nd rdg - to 3rd rdg
03/24 3rd rdg - PASSED - 32-0-3
AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett, Burtenshaw,
Cameron, Compton, Darrington, Gannon, Geddes, Goedde, Hill, Ingram,
Kennedy, Keough, Little, Lodge, Malepeai, Marley, McKenzie, McWilliams,
Noble, Noh, Pearce, Richardson, Schroeder, Sorensen, Stegner, Stennett,
Sweet, Werk
NAYS -- None
Absent and excused -- Calabretta, Davis, Williams
Floor Sponsor - Stegner
Title apvd - to House
03/25 To enrol
03/26 Rpt enrol - Sp signed
03/27 Pres signed
03/28 To Governor
04/02 Governor signed
Session Law Chapter 206
Effective: 07/01/03
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-seventh Legislature First Regular Session - 2003
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 312
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO DUTIES OF THE SECRETARY OF STATE PURSUANT TO THE UNIFORM COMMER-
3 CIAL CODE; AMENDING PART 5, CHAPTER 9, TITLE 28, IDAHO CODE, BY THE ADDI-
4 TION OF A NEW SECTION 28-9-516A, IDAHO CODE, TO PERMIT THE SECRETARY OF
5 STATE TO REFUSE TO FILE CERTAIN INVALID FINANCING STATEMENTS, TO MAKE
6 SPECIFIED INFORMATION UNREADABLE AND DELETE INVALID FILINGS IF NOW ON
7 FILE.
8 Be It Enacted by the Legislature of the State of Idaho:
9 SECTION 1. That Part 5, Chapter 9, Title 28, Idaho Code, be, and the same
10 is hereby amended by the addition thereto of a NEW SECTION, to be known and
11 designated as Section 28-9-516A, Idaho Code, and to read as follows:
12 28-9-516A. FILING OFFICER DUTIES. (1) The filing officer shall not file
13 an initial financing statement or financing statement amendment:
14 (a) Which contains an assumed business name for either an individual or a
15 business entity other than a general partnership.
16 (b) When an individual debtor and an individual secured party would, as a
17 result of the filing, appear to be the same individual on the financing
18 statement.
19 (2) The filing officer may require, prior to filing, reasonable proof
20 from the secured party that an individual debtor is in fact a "transmitting
21 utility" as defined in section 28-9-102, Idaho Code, if a filing indicates
22 that the debtor is a transmitting utility.
23 (3) The filing officer may, prior to filing, cause to be unreadable any
24 signatures, social security account numbers, taxpayer identification numbers,
25 and employer identification numbers that appear on financing statements or
26 financing statement amendments.
27 (4) The secretary of state may petition the district court in Ada county
28 for an order to show cause why filings not in compliance with subsections (1)
29 and (2) of this section should not be deleted from the files and records of
30 the secretary of state.
AMENDED STATEMENT OF PURPOSE
RS 13033
The intent of this legislation is to allow the Secretary of
State to refuse to file invalid Financing Statements. Since the
enactment of Revised Article Nine to the Uniform Commercial Code, the
Secretary of State s Office has received hundreds of financing
statements that assert the debtor and the secured party are the same
individual. This simply defies logic. It is impossible for anyone to
loan money to himself or herself. In the same way, one cannot secure
repayment of such a loan by taking a security interest in one s own
property. To add to the problem, the pattern among these filers
includes designating the debtor as a "transmitting utility." The
effect of this designation is that the notice of lien never lapses
and remains indefinitely in the Lien database.
It is not apparent what the motives are for these filings.
However, no lawful purpose is served by accepting these filings and
they do take up space in the database.
FISCAL NOTE
None
CONTACT: Chuck Goodenough
Deputy Secretary of State, Commercial Division
334 2301
STATEMENT OF PURPOSE/FISCAL NOTE H 312