ASSEMBLY, No. 291
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblyman ROONEY
An Act concerning secured transactions and amending N.J.S.12A:9-403.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.12A:9-403 is amended to read as follows:
12A:9-403. (1) Presentation for filing of a financing statement, tender of the filing fee and acceptance of the statement by the filing officer constitute filing under this chapter.
(2) Except as provided in subsection (6) a filed financing statement is effective [for a period of five years from the date of filing. The effectiveness of a filed financing statement lapses on the expiration of the five-year period unless a continuation statement is filed prior to the lapse] until its termination. If a security interest perfected by filing exists at the time insolvency proceedings are commenced by or against the debtor, the security interest remains perfected until termination of the insolvency proceedings and thereafter for a period of 60 days or until [expiration of the five-year period] termination of the security interest, whichever occurs later. [Upon lapse the security interest becomes unperfected, unless it is perfected without filing. If the security interest becomes unperfected upon lapse, it is deemed to have been unperfected as against a person who became a purchaser or lien creditor before lapse].
(3) [A continuation statement may be filed by the secured party within six months prior to the expiration of the five-year period specified in subsection (2). Any such continuation statement must be signed by the secured party, identify the original statement by file number and state that the original statement is still effective. A continuation statement signed by a person other than the secured party of record must be accompanied by a separate written statement of assignment signed by the secured party of record and complying with subsection (2) of 12A:9-405, including payment of the required fee.
Upon timely filing of the continuation statement, the effectiveness of the original statement is continued for five years after the last date to which the filing was effective whereupon it lapses in the same manner as provided in subsection (2) unless another continuation statement is filed prior to such lapse. Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the original statement. The filing officer shall so arrange matters by physical annexation of financing statements to continuation statements or other related filings, or by other means, that if he physically destroys the financing statements of a period more than five years past, those which have been continued by a continuation statement or which are still effective under subsection (6) shall be retained.](Deleted by amendment, P.L. , c. )(now pending before the Legislature as this bill)
(4) Except as provided in subsection (7), a filing officer shall mark each statement with a file number and with the date and hour of filing and shall hold the statement or a microfilm or other photographic copy thereof for public inspection. In addition, the filing officer shall index the statements according to the name of the debtor and shall note in the index the file number and the address of the debtor given in the statement. A financing statement covering collateral which is or is to become a fixture or fixtures, or crops growing or to be grown, shall also be indexed in the name of the record owner of the realty.
(5) The uniform fee for filing, indexing and furnishing filing data for [an original or a continuation] a statement or any amendment [of either] thereof shall be $25.00.
(6) A real estate mortgage which is effective as a fixture filing under subsection (6) of 12A:9-402 remains effective as a fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the real estate.
(7) When a financing statement covers timber to be cut or covers minerals or the like (including oil and gas) or accounts subject to subsection (5) of 12A:9-103, or is filed as a fixture filing, it shall be filed for record and the filing officer shall index it under the names of the debtor and any owner of record shown on the financing statement in the same fashion as if they were the mortgagors in a mortgage of the real estate described, and, to the extent that the law of this State provides for indexing of mortgages under the name of the mortgagee, under the name of the secured party as if he were the mortgagee thereunder, or where indexing is by description in the same fashion as if the financing statement were a mortgage of the real estate described.
(cf: P.L.1987, c.435, s.4)
2. This act shall take effect immediately; however, this act shall apply only to those financial statements which were perfected in accordance with this act and which, upon perfection, contained a termination date.
STATEMENT
Under the Uniform Commercial Code, a person holding a security interest in collateral must "perfect" the interest by filing a financing statement with the county clerk, or other appropriate filing officer. In addition, the secured party must re-file the financing statement five years after the initial filing, and then every five years after that (or until the security interest terminates) in order to maintain his status as a secured party.
This bill would eliminate the requirement of re-filing the financing statement every five years, providing that a security interest is perfected upon the initial filing, and remains so until it terminates.
Eliminates requirement that secured party must re-file financing statement every five years.