Chapter 32
AN ACT
SB 304
Relating to definitions for secured transactions; amending ORS 79.0102.
Be It Enacted by the People of
the State of
SECTION 1. ORS 79.0102 is amended to read:
79.0102. (1) As used in this chapter:
(a) “Accession” means
goods that are physically united with other goods in such a manner that the
identity of the original goods is not lost.
(b) “Account,” except as
used in “account for,” means a right to payment of a monetary obligation,
whether or not earned by performance, (i) for property that has been or is to
be sold, leased, licensed, assigned, or otherwise disposed of, (ii) for
services rendered or to be rendered, (iii) for a policy of insurance issued or
to be issued, (iv) for a secondary obligation incurred or to be incurred, (v)
for energy provided or to be provided, (vi) for the use or hire of a vessel
under a charter or other contract, (vii) arising out of the use of a credit or
charge card or information contained on or for use with the card, or (viii) as
winnings in a lottery or other game of chance operated or sponsored by a state,
governmental unit of a state, or person licensed or authorized to operate the
game by a state or governmental unit of a state. The term includes
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.
(c) “Account debtor”
means a person obligated on an account, chattel paper or general intangible.
The term does not include persons obligated to pay a negotiable instrument,
even if the instrument constitutes part of chattel paper.
(d) “Accounting,” except
as used in “accounting for,” means a record:
(A) Authenticated by a
secured party;
(B) Indicating the
aggregate unpaid secured obligations as of a date not more than 35 days earlier
or 35 days later than the date of the record; and
(C) Identifying the
components of the obligations in reasonable detail.
(e) “Agricultural lien”
means an interest, other than a security interest or a lien created under ORS
87.226, 87.228, 87.700 to 87.736 or 87.750 to 87.777, in farm products:
(A) Which secures
payment or performance of an obligation for:
(i) Goods or services
furnished in connection with a debtor’s farming operation; or
(ii) Rent on real
property leased by a debtor in connection with its farming operation;
(B) Which is created by
statute in favor of a person that:
(i) In the ordinary
course of its business furnished goods or services to a debtor in connection
with a debtor’s farming operation; or
(ii) Leased real
property to a debtor in connection with the debtor’s farming operation; and
(C) Whose effectiveness
does not depend on the person’s possession of the personal property.
(f) “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.
(g) “Authenticate”
means:
(A) To sign; or
(B) To execute or
otherwise adopt a symbol, or encrypt or similarly process a record in whole or
in part, with the present intent of the authenticating person to identify the
person and adopt or accept a record.
(h) “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.
(i) “Cash proceeds”
means proceeds that are money, checks, deposit accounts or the like.
(j) “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.
(k) “Chattel paper”
means a record or records that evidence both a monetary obligation and a
security interest in specific goods, a security interest in specific goods and
software used in the goods, a security interest in specific goods and license
of software used in the goods, a lease of specific goods, or a lease of
specific goods and license of software used in the goods. In this paragraph, “monetary
obligation” means a monetary obligation secured by the goods or owed under a
lease of the goods and includes a monetary obligation with respect to software
used in the goods. The term does not include (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 constitutes chattel paper.
(L) “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.
(m) “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.
(n) “Commodity account”
means an account maintained by a commodity intermediary in which a commodity
contract is carried for a commodity customer.
(o) “Commodity contract”
means a commodity futures contract, an option on a commodity futures contract,
a commodity option or another contract if the contract or option is:
(A) Traded on or subject
to the rules of a board of trade that has been designated as a contract market
for such a contract pursuant to federal commodities laws; or
(B) Traded on a foreign
commodity board of trade, exchange, or market, and is carried on the books of a
commodity intermediary for a commodity customer.
(p) “Commodity customer”
means a person for which a commodity intermediary carries a commodity contract
on its books.
(q) “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.
(r) “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.
(s) “Consignee” means a
merchant to which goods are delivered in a consignment.
(t) “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 $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.
(u) “Consignor” means a
person that delivers goods to a consignee in a consignment.
(v) “Consumer debtor”
means a debtor in a consumer transaction.
(w) “Consumer goods”
means goods that are used or bought for use primarily for personal, family or
household purposes.
(x) “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.
(y) “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.
(z) “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.
(aa)
“Continuation statement” means an amendment of a financing statement which:
(A) Identifies, by its
file number, the initial financing statement to which it relates; and
(B) Indicates that it is
a continuation statement for, or that it is filed to continue the effectiveness
of, the identified financing statement.
(bb)
“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.
(cc) “Deposit account”
means a demand, time, savings, passbook or similar account maintained with a
bank. The term does not include investment property or accounts evidenced by an
instrument.
(dd)
“Document” means a document of title or a receipt of the type described in ORS
77.2010 (2).
(ee)
“Electronic chattel paper” means chattel paper evidenced by a record or records
consisting of information stored in an electronic medium.
(ff)
“Encumbrance” means a right, other than an ownership interest, in real
property. The term includes mortgages and other liens on real property.
(gg)
“Equipment” means goods other than inventory, farm products or consumer goods.
(hh)
“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.
(ii) “Farming operation”
means raising, cultivating, propagating, fattening, grazing or any other
farming, livestock or aquacultural operation.
(jj)
“File number” means the number assigned to an initial financing statement
pursuant to ORS 79.0519 (1).
(kk)
“Filing office” means an office designated in ORS 79.0501 as the place to file
a financing statement.
(LL) “Filing-office rule”
means a rule adopted pursuant to ORS 79.0526.
(mm)
“Financing statement” means a record or records composed of an initial
financing statement and any filed record relating to the initial financing
statement.
(nn)
“Fixture filing” means the filing of a financing statement covering goods that
are or are to become fixtures and satisfying ORS 79.0502 (1) and (2). The term
includes the filing of a financing statement covering goods of a transmitting
utility which are or are to become fixtures.
(oo)
“Fixtures” means goods that have become so related to particular real property
that an interest in them arises under real property law. The term does not
include portable irrigation equipment including movable pipe, pumps, electrical
pump panels, pump columns, electrical wire, wheel lines, center pivots and
handlines. The term includes domestic pumps, domestic pump wire, domestic pump
panels, domestic pump columns, and buried irrigation equipment including buried
pipe, buried electrical wire and all buried well casings.
(pp) “General intangible”
means any personal property, including things in action, other than accounts,
chattel paper, commercial tort claims, deposit accounts, documents, goods,
instruments, investment property, letter-of-credit rights, letters of credit,
money and oil, gas or other minerals before extraction. The term includes
payment intangibles and software.
(qq)
“Good faith” means honesty in fact and the observance of reasonable commercial
standards of fair dealing.
(rr)
“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 structures. 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.
(ss) “Governmental unit”
means a subdivision, agency, department, county, parish, municipality or other
unit of the government of the
(tt)
“Health-care-insurance receivable” means an interest in or claim under a policy
of insurance which is a right to payment of a monetary obligation for
health-care goods or services provided.
(uu)
“Instrument” means a negotiable instrument or any other writing that evidences
a right to the payment of a monetary obligation, is not itself a security
agreement or lease, and is of a type that in ordinary course of business is
transferred by delivery with any necessary indorsement or assignment. The term
does not include (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.
(vv)
“Inventory” means goods, other than farm products, which:
(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.
(ww)
“Investment property” means a security, whether certificated or uncertificated,
security entitlement, securities account, commodity contract or commodity
account.
(xx) “Jurisdiction of
organization,” with respect to a registered organization, means the
jurisdiction under whose law the organization is organized.
(yy)
“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.
(zz)
“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.
(aaa)
“Manufactured structure” has the meaning given that term in ORS 446.561.
(bbb)
“Manufactured-structure transaction” means a secured transaction:
(A) That creates a
purchase-money security interest in a manufactured structure, other than a
manufactured structure held as inventory; or
(B) In which a
manufactured structure, other than a manufactured structure held as inventory,
is the primary collateral.
(ccc)
“Mortgage” means a consensual interest in real property, including fixtures,
which secures payment or performance of an obligation.
(ddd)
“New debtor” means a person that becomes bound as debtor under ORS 79.0203 (4)
by a security agreement previously entered into by another person.
(eee)
“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.
(fff)
“Noncash proceeds” means proceeds other than cash proceeds.
(ggg)
“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.
(hhh)
“Original debtor,” except as used in ORS 79.0310 (3), means a person that, as
debtor, entered into a security agreement to which a new debtor has become
bound under ORS 79.0203 (4).
(iii) “Payment
intangible” means a general intangible under which the account debtor’s
principal obligation is a monetary obligation.
(jjj)
“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.
(kkk)
“Person related to,” with respect to an organization, means:
(A) A person directly or
indirectly controlling, controlled by, or under common control with the
organization;
(B) An officer or
director of, or a person performing similar functions with respect to, the
organization;
(C) An officer or
director of, or a person performing similar functions with respect to, a person
described in subparagraph (A) of this paragraph;
(D) The spouse of an
individual described in subparagraph (A), (B) or (C) of this paragraph; or
(E) An individual who is
related by blood or marriage to an individual described in subparagraph (A),
(B), (C) or (D) of this paragraph and shares the same home with the individual.
(LLL) “Proceeds,” except
as used in ORS 79.0609 (2), 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; or
(E) To the extent of the
value of collateral and to the extent payable to the debtor or the secured
party, insurance payable by reason of the loss or nonconformity of, defects or
infringement of rights in, or damage to, the collateral.
(mmm) “Promissory note”
means an instrument that evidences a promise to pay a monetary obligation, does
not evidence an order to pay, and does not contain an acknowledgment by a bank
that the bank has received for deposit a sum of money or funds.
(nnn)
“Proposal” means a record authenticated by a secured party which 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 ORS 79.0620,
79.0621 and 79.0622.
(ooo)
“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 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.
(ppp)
“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.
(qqq)
“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
which is stored in an electronic or other medium and is retrievable in
perceivable form.
(rrr)
“Registered organization” means an organization organized solely under the law
of a single state or the
(sss)
“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.
(ttt)
“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 ORS 72.4010, 72.5050, 72.7110 (3), 72A.5080
(5), 74.2100 or 75.1180.
(uuu)
“Security agreement” means an agreement that creates or provides for a security
interest.
(vvv)
“Send,” in connection with a record or notification, means:
(A) To deposit in the
mail, deliver for transmission, or transmit by any other usual means of
communication, with postage or cost of transmission provided for, addressed to
any address reasonable under the circumstances; or
(B) To cause the record
or notification to be received within the time that it would have been received
if properly sent under subparagraph (A) of this paragraph.
(www)
“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.
(xxx) “State” means a
state of the
(yyy)
“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.
(zzz)
“Tangible chattel paper” means chattel paper evidenced by a record or records
consisting of information that is inscribed on a tangible medium.
(aaaa)
“Termination statement” means an amendment of a financing statement which:
(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.
(bbbb)
“Transmitting utility” means an organization 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.
(2) The following
definitions in other sections apply to this chapter:
“Applicant” ORS 75.1020
“Beneficiary” ORS 75.1020
“Broker” ORS
78.1020
“Certificated
security” ORS 78.1020
“Check” ORS
73.0104
“Clearing
corporation” ORS 78.1020
“Contract for
sale” ORS 72.1060
“Customer” ORS 74.1040
“Entitlement
holder” ORS 78.1020
“Financial asset” ORS 78.1020
“Holder in due
course” ORS 73.0302
“Issuer” (with
respect
to a letter of credit or
letter-of-credit
right) ORS 75.1020
“Issuer” (with
respect
to a security) ORS
78.2010
“Lease” ORS
72A.1030
“Lease agreement” ORS 72A.1030
“Lease contract” ORS 72A.1030
“Leasehold
interest” ORS 72A.1030
“Lessee” ORS
72A.1030
“Lessee in
ordinary course
of business” ORS
72A.1030
“Lessor” ORS
72A.1030
“Lessor’s
residual
interest” ORS
72A.1030
“Letter of credit” ORS 75.1020
“Merchant” ORS 72.1040
“Negotiable
instrument” ORS 73.0104
“Nominated person” ORS 75.1020
“Note” ORS
73.0104
“Proceeds of a
letter
of credit” ORS
75.1140
“Prove” ORS
73.0103
“
“Securities
account” ORS
78.5010
“Securities
intermediary” ORS 78.1020
“Security” ORS 78.1020
“Security
certificate” ORS
78.1020
“Security
entitlement” ORS 78.1020
“Uncertificated
security” ORS 78.1020
(3) ORS chapter 71
contains general definitions and principles of construction and interpretation
applicable throughout this chapter.
Approved by the Governor April 10, 2007
Filed in the office of Secretary of State April 11, 2007
Effective date January 1, 2008
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