Uniform Commercial Code - Revised Article 9 - Administrative Rules
These rules may be referred to as the Revised Article 9 rules. They are promulgated in accordance with the requirements of 9A VSA § 9-101 through § 9-628.
Policy statement. The administration of the UCC has an important impact on the economy and upon the rights of the public, in this state and in the United States. The volume of international, interstate and multi-state transactions pursuant to the UCC requires that the administration of the UCC be conducted in a manner that promotes both local and multi-jurisdictional commerce by striving for uniformity in policies and procedures among the various states.
The duties and responsibilities of the filing officer with respect to the administration of the UCC are ministerial and shall be outlined in these written rules, procedures & practices. In accepting for filing or refusing to file a financing statement pursuant to these rules, the filing officer does not:
(1) Determine the legal sufficiency or insufficiency of a document;
(2) Determine that a security interest in collateral exists or does not exist;
(3) Determine that information in the document is correct or incorrect, in whole or in part.
(4) Create a presumption that information in the document is correct or incorrect, in whole or in part.
The rules set forth are effective with respect to financing statements filed on or after July 1, 2001 and to predecessor filings in effect immediately prior to that date.
The following terms are defined as follows:
Amendment means a UCC document that purports to amend the information contained
in a financing statement.
Assignment is an amendment that purports to reflect an assignment of all or a part of a
secured party’s power to authorize an amendment to a financing statement.
Continuation means an amendment that purports to continue the effectiveness of a
Correction statement means a UCC document that purports to indicate that a financing
statement is inaccurate or wrongfully filed.
Data means the information contained in a financing statement or created by the filing
office in association with a financing statement.
Day means a 24 hour period from the hour and minute of the event described in the
section in which the word day is used.
Electronic transmission means any method accepted by the secretary of state for the transmission by electronic format.
File number means the unique identifying information assigned to an initial financing statement by the secretary of state for the purpose of identifying the financing statement and UCC documents relating to the financing statement.
Filing office and Filing officer means the Office of the Secretary of State.
Financing statement means an initial financing statement and all UCC documents that relate to the initial financing statement, either paper-based or electronically transmitted.
Image means the image of a financing statement as stored in the UCC information management system.
Individual means the human being, or a decedent in the case of a debtor that is such decedent’s estate.
Initial financing statement means a UCC document containing the information required in 9-502.
Organization means a legal person who is not an individual.
Remitter means a person who tenders a UCC document to the filing officer for filing, whether the person is a filer or an agent of a filer responsible for tendering the document for filing, including a service provider who acts as a filer’s representative in the filing process.. "Remitter" does not include a person responsible merely for the delivery of the document to the filing officer, such as the postal service or a courier service.
Secured party of record has the same meaning ascribed to under 9-511.
Termination. Means an amendment intended to indicate that the related financing statement has ceased to be effective with respect to the secured party authorizing the termination.
UCC means the Uniform Commercial Code as adopted in this state and in effect from time to time.
UCC document means an initial financing statement, an amendment, an assignment, a continuation, a termination or a correction statement. The word "document," as used in these rules, refers to paper-based filings, as well as electronically expressed or transmitted media.
Place to file
The filing office is the office for filing UCC documents relating to all types of collateral except as provided under 9-501.
The date and time of filing for a financing statement is determined as set forth in this section, depending upon the method of delivery.
The time of filing for a financing statement delivered to the Secretary of State, by personal delivery, courier delivery, or postal delivery, is the earlier of the time the financing statement is accepted for filing or the next close of business following the time of delivery.
[Electronic mail delivery and method of payment after July 1, 2001.]
Search request delivery. UCC search requests may be delivered to the filing office by any of the usual means by which UCC documents may be delivered to the filing office. Requirements concerning search requests are set forth in 9-523. UCC search requests upon a debtor named on an initial financing statement may be made by an appropriate indication on the search request statement form and the initial relevant search fee is tendered.
National Approved forms. Only forms that conform to the requirements of this rule will be acceptable by the filing officer. Other forms will not be accepted by the filing office. The filing office will provide a list of approved forms and forms suppliers for prospective filers and remitters upon request and will post a list of all approved forms on the filing officer web-site. In addition, forms will be available on the web-site.
(1) UCC1 Financing Statement form.
(2) UCC1 Financing Statement Addendum form.
(3) UCC3 Financing Statement Amendment form.
(4) UCC3 Financing Statement Amendment Addendum form.
(5) UCC11 Information Request form.
Electronic filings. (Need to post rules here- how and during what hours)
Expedited services. There is no expedited service.
Filing fees. The Secretary of State will charge fees for filing UCC documents, 9-525.
The fee for filing and indexing a record:
(1) $35.00 if the record is communicated in writing and consists of one or two pages.
(2) $35.00 if the record is communicated by another medium authorized by the filing officer.
Number of names:
(3) $2.00 additional to above, for each name more than two, if communicated in writing.
(4) $25.00 for each debtor requested and $ .50 per page for copying.
There is no fee with respect to filing the initial financing statement for a mortgage as described in section 9-502(c) which is filed as a fixture filing or as a financing statement covering as extracted collateral or timber to be cut. However, the recording and satisfaction fees of $6.00 per page, that otherwise would be applicable to the record of the mortgage, apply.
Methods of payment. Unless or until, this part is amended, the methods for payment of UCC filings may be paid by the following methods.
Cash. The filing officer discourages cash payment unless made in person at the filing office.
Checks. Checks, in U.S. funds, made payable to the filing office, including checks in an amount to be filled in by a filing officer but not to exceed a particular amount, will be accepted for payment if they are cashier’s checks or certified checks drawn on a bank acceptable to the filing office or if the payer is acceptable to the filing office.
Prepaid account for use with filings submitted in the paper form and for filings submitted in the electronic form. A remitter may open an account for prepayment of filing fees by submitting an application furnished by the filing officer. Fees may be prepaid in amounts determined by the remitter. The filing officer shall issue a secure account number to be used by a remitter, who chooses to pay filing fees in advance. The filing officer shall deduct filing fees from the remitter’s prepaid account when authorized to do so by the remitter.
Other methods of payment. Postal money order in United States funds.
Overpayment and underpayment policies.
Overpayment. The filing officer shall refund the amount of an overpayment exceeding $10.00 to the remitter. The filing officer shall refund an overpayment of $10.00 or less only upon the written request of the remitter.
Underpayment. Upon receipt of a document with an insufficient fee, the filing officer shall do the following:
The document shall be returned to the remitter as follows: The filing officer shall return the document, if written, to the remitter with refund attached. The filing officer shall send a notice that contains the date and time the document would have been filed had it been accepted for filing, or the UCC document shall be stamped with such date and time, and a brief description of the reason for refusal to accept the document. The notice shall be sent to a secured party or the remitter no later than the second business day after the determination to refuse acceptance of the document.
Information from Filing Officer. UCC search request may be delivered to the filing office by any of the means by which financing statements may be delivered to the filing office. Requirements concerning search requests are set forth in 9-523. The filing officer will charge fees for searching, providing copies, data, or access as provided in the schedule of fees established pursuant to 9-525.
Acceptance and Refusal of Documents
Duty to file. Provided that there are no grounds to refuse acceptance of the document under 9-516(b), a UCC document is filed upon its receipt by the filing officer with the filing fee and the filing officer shall promptly assign a file number to the UCC document and index it in the information management system.
Grounds for refusal of a financing statement. The following grounds are the sole grounds for the filing officer’s refusal to accept a UCC document for filing: As used herein, the term "legible" is not limited to refer only to written expressions on paper, it requires a machine-readable transmission for electronic transmissions and an otherwise readily decipherable transmission in other cases.
(1) The record is not communicated by a method or medium of communication authorized by the filing office.
(2) An amount equal to or greater than the applicable filing fee is not tendered.
(3) The filing office is unable to index the record because (a) in the case of an initial financing statement, the record does not provide a name for the debtor; (b) in the case of an amendment or correction statement, the record does not provide the initial financing statement file number or does not provide the name of the debtor, or identifies an initial financing statement whose effectiveness has lapsed under section 9-515.
(4) In the case of an initial financing statement that provides the name of a debtor identified as an individual or an amendment that provides a name of a debtor identified as an individual which was not previously provided in the financing statement to which the record relates, the record does not identify the debtor’s last name.
(5) In the case of a record recorded in the filing office described in section 9-501(a)(1), the record does not provide a sufficient description of the real property to which it relates.
(6) In the case of an initial financing statement or an amendment that adds a secured party of record, the record does not provide a name and mailing address for the secured party of record.
(7) In the case of an initial financing statement or an amendment that provides a name of a debtor which was not previously provided in the financing statement to which the amendment relates, the record does not: (1) provide a mailing address for the debtor; (2) indicate whether the debtor is an individual or an organization; (3) if the financing statement indicates that the debtor is an organization, provide; (4) the type of organization of the debtor; (5) a jurisdiction of organization for the debtor; or (5) an organizational identification number for the debtor or indicate that the debtor has none.
(8) In the case of an assignment reflected in an initial financing statement under 5-14(a) or an amendment filed under section 9-514(b), the record does not provide a name and mailing address for the assignee.
(9) In the case of a continuation statement, the record is not filed within the six-month period prescribed by section 9-515(d).
(10) If a record does not provide sufficient information or the filing office is unable to read or decipher the information or type of filing or fails to identify an initial statement to which it relates.
Timeliness of continuation.
A continuation shall be refused if it is not received during the six month period concluding on the day upon which the related financing statement would lapse.
First day permitted. The first day on which a continuation may be filed is the date of the month corresponding to the date upon which the financing would lapse, six months preceding the month
in which the financing statement would lapse. If there is no such corresponding date during the sixth month preceding the month in which the financing statement would lapse, the first day on which a continuation may be filed is the last day of the sixth month preceding the month in which the financing statement would lapse, although filing by certain means may not be possible on such date if the filing office is not open on such date.
Last day permitted. The last day on which a continuation may be filed is the date upon which the financing statement lapses.
Grounds not warranting refusal.
The following are examples of defects that do not constitute grounds for refusal to accept a document. They are not a comprehensive enumeration of defects outside the scope of permitted grounds for refusal to accept a UCC document for filing.
Errors. The document contains or appears to contain a misspelling or other apparently erroneous information.
Incorrect names. The document appears to identify a debtor or a secured party of record incorrectly.
Extraneous information. The document contains additional or extraneous information of any kind.
Insufficient information. The document contains less than the information required by Article 9 of the UCC, provided that the document contains the required information to avoid refusal. (see grounds for refusal)
Collateral description.The document incorrectly identifies collateral, or contains an illegible or unintelligible description of collateral, or appears to contain no such description.
Excessive fee. The document is accompanied by funds in excess of the full filing fee.
Time limit. The filing officer shall determine whether criteria exist to refuse acceptance of a UCC document. If the filing officer finds grounds to refuse acceptance of a financing statement, the filing officer shall communicate to the person that presented the record the fact of and reason for the refusal, and the date and time the record would have been filed had the filing officer accepted it. The communication must be made no more than two business days after the filing office receives the record. A refund may be delivered with the notice or under separate cover.
Acknowledgment. The person filing a written record with the filing office shall submit one original and one duplicate filing to the filing officer. The filing officer shall note upon the original and upon the duplicate the number, the date and the time of the filing and send the duplicate filing to the remitter or filer. If a duplicate copy is not supplied with the original filing, the filing office shall send to the filer an image of the record. For financing statements not filed in written form, the filing officer shall communicate to the filer the information in the filed document, the file number and the date and time of filing.
Other notices. Nothing in these rules prevents the filing officer from communicating to a filer or a remitter that the filing officer noticed apparent potential defects in a UCC document, whether or not it was filed or refused for filing. However, the filing office is under no obligation to do so and may not, in fact, have the resources to do so or to identify such defects. THE RESPONSIBILITY FOR THE LEGAL EFFECTIVENESS OF FILING RESTS WITH FILERS AND REMITTERS AND THE FILING OFFICE BEARS NO RESPONSIBILITY FOR SUCH EFFECTIVENESS.
Refusal errors. If a secured party or a remitter demonstrates to the satisfaction of the filing officer that a UCC document that was refused for filing should not have been refused under these rules, the filing officer will file the UCC document with a filing date and time assigned when such filing occurs. The filing officer will also file a correction statement (and such demonstration of error shall constitute the secured party’s authorization to do so) that states that the effective date and time of filing is the date and time the UCC document was originally tendered for filing, and sets forth such date and time.
UCC Information Management System
Policy statement. The filing officer uses an information management system to store, index, and retrieve information relating to financing statements. The information management system includes an index of the names of debtor's names on financing statements which have not lapsed. The rules in this section describe the UCC information management system. The primary data elements used in the system include the following:
Identification numbers. Each initial financing statement is identified by its file number. Identification of the initial financing statement is stamped on written UCC documents or otherwise permanently associated with the record maintained for UCC documents in the UCC information management system. A record is created in the information management system for each initial financing statement and all information comprising such record is maintained in such system. Such record is identified by the same information assigned to the initial financing statement.
A UCC document other than an initial financing statement is identified by a unique file number including a digit that is mathematically derived from or related to the other digits of the file number, and enables the filing office to detect whether a number communicated as the file number includes a single-digit or a transposed error. In the information management system, records of all UCC documents other than initial financing statements are linked to the record of their related initial financing statement.
Type of document. The type of UCC document from which data is transferred is identified in the information management system from information supplied by the sender.
Filing date and filing time. The filing date and filing time of UCC documents are stored in the information management system. Calculation of the lapse date of an initial financing statement is based upon the filing date.
Identification of partners. The names and addresses of debtors and secured parties are transferred from UCC documents to the UCC information management system using one or more data entry or transmittal techniques.
Status of financing statements. In the information management system, each financing statement has a status of active, renewed, lapsed or inactive.
Names of debtors or secured parties who are individuals. When the name of a debtor or a secured party on a financing statement is that of an individual the name will be stored separately from the names of organizations. For the purpose of electronic media separate fields are established for first, middle and last names (surnames or family names) of individuals. The filing officer assumes no responsibility for the accurate designation of the components of a name, but will enter the data in accordance with the filer’s designations. Titles, such as "doctor," "Mr," Mrs," "M.D.," and "esquire" will not be stored in the management system. However, suffixes, such as "senior," "junior," "II," are stored in a field designated for name suffixes.
Names of organizations. The name of an organization who is a debtor or secured party on a financing statement is stored separately from individuals. A single field is used to store an organization name. The name field is fixed in length. Although filers should continue to provide full names on their financing statements, a name that exceeds the fixed length is stored as presented to the filing officer, up to the maximum length of the field.
Truncation. Names exceeding the fixed length of each field will be truncated. Filers should continue to provide the full names on their UCC documents.
Estates. Although estates are not natural persons, estate names are stored as if the decedent were the debtor.
Trusts. If the trust is named in the document, its full legal name, as set forth in the document is used. For the purpose of this chapter, trusts are treated as organizations. If the trust is not so named, the name of the trustee is used. If a trustee is indicated to be an organization, the name is stored as an organization name. If the trustee is an individual, the name is stored as an individual name. A UCC document that uses a trustee’s name should include other information to distinguish the debtor trust from other trusts having the same trustee and all financing statements filed against trusts or trustees acting with respect to property held in trust should indicate the nature of the debtor.
Status of secured party. Each secured party named on an initial financing statement shall be a secured party of record, except that if the UCC document names an assignee, the secured party/assignee shall be a secured party of record.
Status of debtor. The status of a debtor named on the document shall be active until the status of the financing statement is changed.
Status of financing statement. The status of the financing statement shall be active. A lapse date shall be calculated, 5 years from the file date. Except that an initial financing statement indicating that it is filed in connection with a public - financing transaction or manufactured -home transaction shall be effective for a period of 30 years after the date of filing.
The effectiveness of a filed financing statement lapses 5 years from the file date, unless before the lapse a continuation statement is filed. Upon lapse, a financing statement ceases to be effective and any security interest or agricultural lien that was perfected by the financing statement becomes un-perfected, unless the security interest is perfected without filing. If the security interest or agricultural lien becomes un-perfected upon lapse, it is deemed never to have been perfected as against a purchaser of the collateral for value.
A financing statement remains on file one year after it lapses, or if it is indicated to be filed against a transmitting utility, one year after it is terminated with respect to all secured parties of record.
Transmitting utility. If a debtor is a transmitting utility and a filed financing statement so indicates, the financing statement is effective until a termination statement is filed.
Fixture filing. A record of a mortgage that is effective as a financing statement filed as a fixture filing under section 9-502(c) remains effective as a financing statement filed as a fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the real property.
Amendments. Upon the filing of an amendment the status of the parties and the status of the financing statement shall be as follows:
Collateral amendment or address change. An amendment that amends only the collateral description or one or more addresses has no effect upon the status of any debtor or secured party. If a statement of amendment is authorized by less than all of the secured parties (or, in the case of an amendment that adds collateral, less than all of the debtors), the statement affects only the interests of each authorized secured party (or debtor) and any additional collateral is effective only from the date of the filing of the amendment.
Debtor name change. An amendment that changes a debtor’s name has no effect on the status of any debtor or secured party, except that the related initial financing statement and all UCC documents that include an identification of each initial financing statement shall be cross-indexed in the UCC information management system so that a search under either the debtor’s old name or the debtor’s new name will reveal such initial financing statement and such related UCC documents. Such a statement of amendment affects only the rights of its authorizing secured party.
Secured party name change. An amendment that changes the name of a secured party has no effect on the status of any debtor or any secured party, but the new name is added to the index as if it were a new secured party of record.
Addition of a debtor. An amendment that adds a new debtor name has no effect upon the status of any party to the financing statement, except the new debtor name shall be added as a new debtor on the financing statement, and is effective, as to the added debtor, only from the date of the filing of the amendment. The addition shall effect only the rights of the secured party authorizing the statement of amendment.
Addition of a secured party. An amendment that adds a new secured party shall not effect the status of any party to the financing statement, except that the new secured party name shall be added as a new secured party on the financing statement.
Deletion of a debtor. An amendment that deletes a debtor has no effect on the status of any party to the financing statement, even if the amendment purports to delete all debtors.
Deletion of a secured party. An amendment that deletes a secured party of record has no effect on the status of any party to the financing statement, even if the amendment purports to delete all secured parties of record.
Status of financing statement. An amendment shall have no effect upon the status of the financing statement, except that a continuation may extend the period of effectiveness of a financing statement.
Assignment of powers of secured party of record. An assignment shall have no effect on the status of the parties to the financing statement, except that each assignee named in the assignment shall become a secured party of record. An assignment shall have no effect upon the status of the financing statement.
Continuation. A continuation statement may be filed within six months before the expiration of the 5 year period or the 30 year period described above, whichever is applicable. Upon the timely filing of one or more continuations by any secured party of record, the lapse date of the financing statement shall be postponed for five years. The filing of a continuation shall have no effect upon the status of any party to the financing statement. Upon the filing of a continuation statement, the status of the financing statement is deemed as renewed.
Termination. The filing of a termination shall have no effect upon the status of any party to the financing statement. A termination shall have no effect upon the status of the financing statement and the financing statement shall remain active in the information management system until one year after it lapses, unless the termination relates to a financing statement that indicates it is filed against a transmitting utility, in which case the financing statement will become inactive one year after it is terminated with respect to all secured parties of record.
Correction statement. A person may file a correction statement with respect to a record indexed under the person’s name if the person believes that the record is inaccurate or was wrongfully filed. The filing of a correction statement shall have no effect upon the status of any party of the financing statement. A correction statement shall have no effect upon the status of the financing statement.
Procedure upon lapse. If there is no timely filing of a continuation with respect to a financing statement, the financing statement lapses on its lapse date, but no action is then taken by the filing officer. On the first anniversary of such lapse date the information management system renders or is caused to render the financing statement inactive and the financing statement will no longer be made available to a searcher.
Electronic Data Interchange documents. EDI means a UCC document transmitted from a remitter to the filing office by electronic data techniques authorized under this rule.
EDI authorized. A remitter may be authorized for EDI upon the written authorization of the filing officer. The filing officer may authorize a remitter to engage in EDI if (a) the remitter holds an account for payment of fees to the filing officer, (b) the remitter has entered into a trading partner agreement, in form and substance satisfactory to the filing officer, with the filing office, and (c) the filing officer determines, after appropriate testing of transmissions in accordance with the filing officer’s specifications, that the remitter is capable of transmitting EDI documents in a manner that permits the filing officer to receive, index, and retrieve the EDI documents. The filing officer may suspend or revoke the authorization when, in the filing officer’s discretion, it is determined that a remitter’s transmissions are incompatible with the filing officer’s EDI system. A request to be authorized to transmit EDI documents shall be in writing and delivered to the filing officer. Upon receipt of a request for authorization, the filing officer shall provide the remitter with necessary information on the record layout of the transmission, including record length, format, network address for transmission, and other necessary specifications.
Considered by LCAR on July 25, 2001.
Adopted form filed on August 2, 2001.
Effective date of this rule is August 20, 2001.