SB1046 - 512R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 6-352, Arizona Revised Statutes, is amended to read:

START_STATUTE6-352. Limitations of obligations to a bank; exceptions; definitions

A. A bank may lend to a single borrower an amount equal to not more than twenty per cent of its capital, plus an amount equal to an additional ten per cent of its capital if the additional amounts are fully secured by readily marketable collateral which that has a market value, as determined by reliable and continuously available price quotations, at least equal to the amount of the loan. The calculation of the total amount of all loans to a person pursuant to this subsection must include any credit exposure to a person arising from a derivative transaction, repurchase agreement, reverse repurchase agreement, securities lending transaction or securities borrowing transaction between the bank and the person.

B. A bank shall notify the department the first time it makes a loan in an amount in excess of fifteen per cent of its capital. The notification to the department shall be made in writing and submitted to the department within a reasonable period of time.

C. Each bank shall institute adequate procedures to ensure compliance with subsection A of this section.

D. The limitations of subsection A of this section do not apply to:

1. Obligations incurred by the assignment, endorsement or guarantee of the obligation of a third person, including an agreement to purchase the third person's obligation or the collateral therefor, if the bank has evaluated the financial condition and responsibility of the third person and as a result of such evaluation accepts the obligation in reliance primarily upon on the third person for payment. In such case the obligations of the third person to the bank shall be the sole applicable limitation.

2. Obligations, whether general obligations or payable from revenues or special assessment, of the United States or any agency or instrumentality thereof, a federal reserve bank, a state of the United States or a subdivision, instrumentality or public authority organized under the laws of such state.

3. Obligations to the extent they are secured by the guarantee, insurance or other like commitment of the United States, an agency or instrumentality of the United States, a federal reserve bank, a state of the United States or a subdivision, instrumentality or public authority organized under the laws of such state, whether the commitment provides for payment in cash or in obligations described in paragraph 2 of this subsection.

4. Obligations to the extent they are secured by any obligation described in paragraphs 2 and 3 of this subsection at the value thereof, not exceeding face value, at the time the obligation to the bank is created.

5. Obligations to the extent they are secured by deposits in the bank.

6. Obligations which that are outstanding in the regular process of bank collection or clearing transactions.

7. Obligations of a qualified reserve depository of the bank, unless the superintendent has by specific order excluded or limited the obligations of such depository from the exemption of this paragraph.

8. Any obligation created in the sale by the bank of any of its property where the bank retains title, lien or security interest in the property sold to secure the obligation.

9. Any obligation under the lease by the bank of any personal property acquired by the bank in collecting an obligation to it or the lease of any of its real property or banking equipment.

10. That portion of the obligations of a person to the bank which exceed that exceeds the aggregate funds paid and the value of property delivered by the bank in creating the obligation.

11. Any obligation exempt by rule of the superintendent or arising from the sale of any assets of the bank in a transaction which that has been approved by the superintendent.

E. If the bank participates in an obligation with another obligee, the limitations of this section shall be applicable only to the extent of the bank's participation.

F. If the value of collateral for a loan which that is required to be fully secured under subsection A of this section falls below one hundred per cent of the outstanding loan, the loan must be brought into conformance within five business days, except if judicial proceedings, regulatory actions or other extraordinary occurrences prevent the bank from taking action.

G. A renewal of a loan or a modification and extension of original repayment terms are not deemed to be a new loan or an extension of credit except in instances in which interest on the renewed loan or extension of credit is capitalized or additional money is advanced.

H. Financial instruments may be denominated in foreign currencies which that are freely convertible to United States dollars. If denominated and payable in a currency other than that of the loan or extension of credit which that it secures, the bank's procedures adopted pursuant to subsection C of this section shall require that the collateral be revalued at least monthly using appropriate foreign exchange rates in addition to being valued at current market value.

I. For the purposes of this section:

1. "Derivative transaction" includes a transaction that is a contract, agreement, swap, warrant, note or option that is based on, in whole or in part, the value of, any interest in or any quantitative measure or the occurrence of any event relating to one or more commodities, securities, currencies, interest or other rates, indices or other assets.

1. 2. "Financial instruments" includes stocks, bonds and debentures traded on a national securities exchange, over‑the‑counter margin stocks as defined in regulation U of the federal reserve board, commercial paper, notes, negotiable certificates of deposit, banker's acceptance and shares in money market and mutual funds of the type in which banks may perfect a security interest.

2. 3. "Readily marketable collateral" means financial instruments or bullion which that are saleable under ordinary circumstances with reasonable promptness at a fair market value determined by quotations based on actual transactions of an auction or a similarly available daily bid and asked price market. END_STATUTE

Sec. 2. Section 35-323.01, Arizona Revised Statutes, is amended to read:

START_STATUTE35-323.01. Investment of government monies in deposits; conditions; definition

A. If an investing entity invests in deposits pursuant to section 9‑492, subsection C, section 15‑1025, subsection B, paragraph 7, section 35‑313, subsection A, paragraph 14, or section 35‑323, subsection A, paragraph 2 or section 48-2979, subsection D, the investing entity in each case shall invest those monies in accordance with all of the following conditions:

1. The monies are initially invested through an eligible depository in this state selected by the investing entity.

2. The selected eligible depository arranges for the deposit of the monies in one or more federally insured banks or savings and loan associations wherever located, for the account of the investing entity.

3. The full amount of principal and any accrued interest of each such deposit is insured by the federal deposit insurance corporation.

4. The selected eligible depository acts as custodian for the investing entity with respect to such deposits.

5. On the same date that the investing entity's monies are deposited pursuant to paragraph 2 of this subsection, the selected eligible depository receives an amount of federally insured deposits from customers of other financial institutions equal to or greater than the amount of the monies initially invested by the investing entity through the selected eligible depository.

B. Monies invested in accordance with all of the conditions prescribed in this section are not subject to any security or collateral requirements.

C. For the purposes of this section, "investing entity" means this state, a political subdivision, the governing body of a municipality or the governing body of a school district. END_STATUTE

Sec. 3. Section 47-9102, Arizona Revised Statutes, is amended to read:

START_STATUTE47‑9102. Definitions and index of definitions

A. In this chapter, unless the context otherwise requires:

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", means a right to payment of a monetary obligation, whether or not earned by performance, for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, for services rendered or to be rendered, for a policy of insurance issued or to be issued, for a secondary obligation incurred or to be incurred, for energy provided or to be provided, for the use or hire of a vessel under a charter or other contract, arising out of the use of a credit or charge card or information contained on or for use with the card or as winnings in a lottery or other game of chance operated or sponsored by a state, 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. Account includes health‑care‑insurance receivables. Account does not include rights to payment evidenced by chattel paper or an instrument, commercial tort claims, deposit accounts, investment property, letter‑of‑credit rights or letters of credit or 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.

3. "Account debtor" means a person obligated on an account, chattel paper or general intangible but does not include persons obligated to pay a negotiable instrument, even if the instrument constitutes part of chattel paper.

4. "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 thirty‑five days earlier or thirty‑five days later than the date of the record; and

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 its 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 a debtor's farming operation; or

(ii) Leased real property to a debtor in connection with the debtor's farming operation; and

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:

(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.

(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.

8. "Bank" means an organization that is engaged in the business of banking. Bank 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. Certificate of title 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 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. Chattel paper does not include charters or other contracts involving the use or hire of a vessel or 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.

12. "Collateral" means the property subject to a security interest or agricultural lien. Collateral includes:

(a) Proceeds to which a security interest attaches;

(b) Accounts, chattel paper, payment intangibles and promissory notes that have been sold; and

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 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 on 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 or more at the time of delivery;

(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 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 an individual incurs an obligation primarily for personal, family or household purposes, a security interest secures the obligation and the collateral is held or acquired primarily for personal, family or household purposes. Consumer transaction includes consumer goods transactions.

27. "Continuation 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 that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified financing statement.

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

29. "Deposit account" means a demand, time, savings, passbook or similar account maintained with a bank. Deposit account 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 section 47‑7201, subsection B.

31. "Electronic chattel paper" means chattel paper evidenced by a record or records consisting of information stored in an electronic medium.

32. "Encumbrance" means a right, other than an ownership interest, in real property. Encumbrance 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 that 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;

(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 section 47‑9519, subsection A.

37. "Filing office" means an office designated in section 47‑9501 as the place to file a financing statement.

38. "Filing office rule" means a rule adopted pursuant to section 47‑9526.

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 section 47‑9502, subsections A and B. Fixture filing includes the filing of a financing statement covering goods of a transmitting utility that are or are to become fixtures.

41. "Fixtures" means goods that have become so related to 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. General intangible includes 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.

(a) Goods 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.

(b) Goods 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.

(c) Goods does not include a computer program embedded in goods that consist solely of the medium in which the program is embedded.

(d) Goods 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. Governmental unit includes an organization having a separate corporate or legal existence if the organization is eligible to issue or incur obligations the interest on which is excluded from gross income for federal income tax purposes.

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 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 indorsement or assignment. Instrument does not include:

(a) Investment property;

(b) Letters of credit; or

(c) 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.

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;

(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 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. Letter‑of‑credit right 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;

(d) A receiver in equity from the time of appointment.

53. "Manufactured home" means a structure that is transportable in one or more sections and that, in the traveling mode, is eight body feet or more in width or forty body feet or more in length, or, when erected on site, is three hundred twenty or more square feet, and that 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 contained therein. Manufactured home includes any structure that meets all of the requirements of this paragraph 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. "Manufactured home transaction" means a secured transaction:

(a) That creates a purchase money security interest in a manufactured home, other than a manufactured home held as inventory; or

(b) In which a manufactured home, other than a manufactured home held as inventory, is the primary collateral.

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 section 47‑9203, subsection D by a security agreement previously entered into by another person.

57. "New value" means money, money's worth in property, services or new credit or release by a transferee of an interest in property previously transferred to the transferee. New value 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, owes payment or other performance of the obligation, has provided property other than the collateral to secure payment or other performance of the obligation or is otherwise accountable in whole or in part for payment or other performance of the obligation. Obligor does not include issuers or nominated persons under a letter of credit.

60. "Original debtor", except as used in section 47‑9310, subsection C, means a person that, as debtor, entered into a security agreement to which a new debtor has become bound under section 47‑9203, subsection D.

61. "Payment intangible" means a general intangible under which the account debtor's principal obligation is a monetary obligation.

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;

(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 subdivision (a) of this paragraph;

(d) The spouse of an individual described in subdivision (a), (b) or (c) of this paragraph; or

(e) An individual who is related by blood or marriage to an individual described in subdivision (a), (b), (c) or (d) of this paragraph and who shares the same home with the individual.

64. "Proceeds", except as used in section 47‑9609, subsection B, means the following property:

(a) Whatever is acquired on the sale, lease, license, exchange or other disposition of collateral;

(b) Whatever is collected on, or distributed on account 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.

65. "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.

66. "Proposal" means a record authenticated 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 sections 47‑9620, 47‑9621 and 47‑9622.

67. "Public organic record" means a record that is available to the public for inspection and that 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 that 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 that 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 that forms or organizes an organization, any record amending the legislation and any record filed with or issued by the state or the united states that amends or restates the name of the organization.

67. 68. "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.

68. 69. "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.

69. 70. "Registered organization" means an organization formed or organized solely under the law of a single state or the United States and as to which the state or the United States must maintain a public record showing the organization to have been organized 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. Registered organization 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.

70. 71. "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.

71. 72. "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;

(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 section 47‑2401, 47‑2505, 47‑2711, 47‑2A508, 47‑4210 or 47‑5118.

72. 73. "Security agreement" means an agreement that creates or provides for a security interest.

73. 74. "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 subdivision (a) of this paragraph.

74. 75. "Software" means a computer program and any supporting information provided in connection with a transaction relating to the program. Software does not include a computer program that is included in the definition of goods.

75. 76. "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or any territory or insular possession subject to the jurisdiction of the United States.

76. 77. "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.

77. 78. "Tangible chattel paper" means chattel paper evidenced by a record or records consisting of information that is inscribed on a tangible medium.

78. 79. "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.

79. 80. "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;

(d) Transmitting or producing and transmitting electricity, steam, gas or water.

B. "Control" as provided in section 47-7106 and the following definitions in other sections apply to this chapter:

1. "Applicant" Section 47‑5102

2. "Beneficiary" Section 47‑5102

3. "Broker" Section 47‑8102

4. "Certificated security" Section 47‑8102

5. "Check" Section 47‑3104

6. "Clearing corporation" Section 47‑8102

7. "Contract for sale" Section 47‑2106

8. "Customer" Section 47‑4104

9. "Entitlement holder" Section 47‑8102

10. "Financial asset" Section 47‑8102

11. "Holder in due course" Section 47‑3302

12. "Issuer" (with respect to a letter of

credit or letter‑of‑credit right) Section 47‑5102

13. "Issuer" (with respect to a security) Section 47‑8201

14. "Issuer" (with respect to documents

of title) Section 47-7102

15. "Lease" Section 47‑2A103

16. "Lease agreement" Section 47‑2A103

17. "Lease contract" Section 47‑2A103

18. "Leasehold interest" Section 47‑2A103

19. "Lessee" Section 47‑2A103

20. "Lessee in ordinary course

of business" Section 47‑2A103

21. "Lessor" Section 47‑2A103

22. "Lessor's residual interest" Section 47‑2A103

23. "Letter of credit" Section 47‑5102

24. "Merchant" Section 47‑2104

25. "Negotiable instrument" Section 47‑3104

26. "Nominated person" Section 47‑5102

27. "Note" Section 47‑3104

28. "Proceeds of a letter of credit" Section 47‑5114

29. "Prove" Section 47‑3103

30. "Sale" Section 47‑2106

31. "Securities account" Section 47‑8501

32. "Securities intermediary" Section 47‑8102

33. "Security" Section 47‑8102

34. "Security certificate" Section 47‑8102

35. "Security entitlement" Section 47‑8102

36. "Uncertificated security" Section 47‑8102

C. In addition, chapter 1 of this title contains general definitions and principles of construction and interpretation applicable throughout this chapter. END_STATUTE

Sec. 4. Section 47-9105, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9105. Control of electronic chattel paper

A. A secured party has control of electronic chattel paper if a system employed for evidencing the transfer of interests in the chattel paper reliably establishes the secured party as the person to which the chattel paper was assigned.

B. A system satisfies subsection A of this section if the record or records comprising the chattel paper are created, stored and assigned in such a manner that:

1. A single authoritative copy of the record or records exists that is unique, identifiable and, except as otherwise provided in paragraphs 4, 5 and 6, unalterable;

2. The authoritative copy identifies the secured party as the assignee of the record or records;

3. The authoritative copy is communicated to and maintained by the secured party or its designated custodian;

4. Copies or revisions amendments that add or change an identified assignee of the authoritative copy can be made only with the participation consent of the secured party;

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 revision amendment of the authoritative copy is readily identifiable as an authorized or unauthorized revision. END_STATUTE

Sec. 5. Section 47-9307, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9307. Location of debtor; definition

A. In this section, "place of business" means a place where a debtor conducts its affairs.

B. Except as otherwise provided in this section, the following rules determine a debtor's location:

1. A debtor who is an individual is located at the individual's principal residence.

2. A debtor that is an organization and has only one place of business is located at its place of business.

3. A debtor that is an organization and has more than one place of business is located at its chief executive office.

C. Subsection B applies only if a debtor's residence, place of business or chief executive office, as applicable, is located in a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, recording or registration system as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral. If subsection B does not apply, the debtor is located in the District of Columbia.

D. A person that ceases to exist, have a residence, or have a place of business continues to be located in the jurisdiction specified by subsections B and C.

E. A registered organization that is organized under the law of a state is located in that state.

F. Except as otherwise provided in subsection I, a registered organization that is organized under the law of the United States and a branch or agency of a bank that is not organized under the law of the United States or a state are located:

1. In the state that the law of the United States designates, if the law designates a state of location;

2. In the state that the registered organization, branch or agency designates, if the law of the United States authorizes the registered organization, branch or agency to designate its state of location, including by designating its main office, home office or other comparable office; or

3. In the District of Columbia, if neither paragraph 1 nor paragraph 2 of this subsection applies.

G. A registered organization continues to be located in the jurisdiction specified by subsection E or F notwithstanding:

1. The suspension, revocation, forfeiture or lapse of the registered organization's status as such in its jurisdiction of organization; or

2. The dissolution, winding up or cancellation of the existence of the registered organization.

H. The United States is located in the District of Columbia.

I. A branch or agency of a bank that is not organized under the law of the United States or a state is located in the state in which the branch or agency is licensed, if all branches and agencies of the bank are licensed in only one state.

J. A foreign air carrier under the federal aviation act of 1958, as amended, is located at the designated office of the agent on which service of process may be made on behalf of the carrier.

K. This section applies only for purposes of this article.END_STATUTE

Sec. 6. Section 47-9311, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9311. Perfection of security interests in property subject to certain statutes, regulations and treaties

A. Except as otherwise provided in subsection D of this section, the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to:

1. A statute, regulation or treaty of the United States whose requirements for a security interest's obtaining priority over the rights of a lien creditor with respect to the property preempt section 47‑9310, subsection A;

2. A statute of this state that provides for central filing of or that requires indication on a certificate of title of a security interest in the property, including title 28, chapter 7, article 4, and that requires indication of the security interest on a certificate of title for a vehicle required to be titled and registered under section 28‑2153 and for a mobile home required to be titled under section 28‑2063; or

3. A certificate of title statute of another jurisdiction that provides for a security interest to be indicated on the a certificate of title as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the property.

B. Compliance with the requirements of a statute, regulation or treaty described in subsection A of this section for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under this chapter. Except as otherwise provided in subsection D of this section and section 47‑9313 and section 47‑9316, subsections D and E for goods covered by a certificate of title, a security interest in property subject to a statute, regulation or treaty described in subsection A of this section may be perfected only by compliance with those requirements, and a security interest so perfected remains perfected notwithstanding a change in the use or transfer of possession of the collateral.

C. Except as otherwise provided in subsection D of this section and section 47‑9316, subsections D and E, duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation or treaty described in subsection A of this section are governed by the statute, regulation or treaty. In other respects, the security interest is subject to this chapter.

D. During any period in which collateral subject to a statute specified in subsection A, paragraph 2 of this section is inventory held for sale or lease by a person or leased by that person as lessor and that person is in the business of selling goods of that kind, this section does not apply to a security interest in that collateral created by that person.END_STATUTE

Sec. 7. Section 47-9316, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9316. Continued perfection of security interest following change in governing law

A. A security interest perfected pursuant to the law of the jurisdiction designated in section 47‑9301, paragraph 1 or section 47‑9305, subsection C remains perfected until the earliest of:

1. The time perfection would have ceased under the law of that jurisdiction;

2. The expiration of four months after a change of the debtor's location to another jurisdiction; or

3. The expiration of one 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 of this section 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 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. On 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 of this section, a security interest in goods covered by a certificate of title that 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 of this section 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 section 47‑9311, subsection B or section 47‑9313 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 months after the goods had become so covered.

F. A security interest in deposit accounts, letter-of-credit rights or investment property that is perfected under the law of 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 months after a change of the applicable jurisdiction to another jurisdiction.

G. If a security interest described in subsection F of this section 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 months after the debtor changes its location to another jurisdiction:

1. A financing statement filed before the change pursuant to the law of the jurisdiction designated in section 47-9301, paragraph 1 or section 47‑9305, subsection 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 paragraph 1 of this subsection 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 section 47-9301, paragraph 1 or section 47-9305, subsection C or the expiration of the four-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 pursuant to the law of the jurisdiction designated in section 47-9301, paragraph 1 or section 47-9305, subsection c and the new debtor is located in another jurisdiction, the following rules apply:

1. The financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and within four months after, the new debtor becomes bound under section 47-9203, subsection 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 that is perfected by the financing statement and that 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 section 47-9301, paragraph 1 or section 47-9305, subsection c or the expiration of the four-month period remains perfected thereafter. A security interest that is perfected by the financing statement but that 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. END_STATUTE

Sec. 8. Section 47-9317, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9317. Interests that take priority over or take free of security interest or agricultural lien

A. A security interest or agricultural lien is subordinate to the rights of:

1. A person entitled to priority under section 47‑9322; and

2. Except as otherwise provided in subsection E of this section, 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 of the conditions specified in section 47‑9203, subsection B, paragraph 3 is met and a financing statement covering the collateral is filed.

B. Except as otherwise provided in subsection E of this section, a buyer, other than a secured party, of tangible chattel paper, tangible documents, goods, instruments or a certificated security certificate 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 of this section, 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. A licensee of a general intangible or a buyer, other than a secured party, of accounts, electronic chattel paper, electronic documents, general intangibles or investment property collateral other than tangible chattel paper, tangible documents, goods, instruments or a certificated security takes free of a security interest if the licensee or buyer gives value without knowledge of the security interest and before it is perfected.

E. Except as otherwise provided in sections 47‑9320 and 47‑9321, if a person files a financing statement with respect to a purchase money security interest before or within twenty 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.END_STATUTE

Sec. 9. Section 47-9326, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9326. Priority of security interests created by new debtor

A. Subject to subsection B of this section, a security interest that is created by a new debtor in collateral in which the new debtor has or acquires rights and that is perfected solely by a filed financing statement that is effective solely under section 47‑9508 in collateral in which a new debtor has or acquires rights would be ineffective to perfect the security interest but for the application of section 47-9316, subsection I, paragraph 1 or section 47-9508 is subordinate to a security interest in the same collateral that is perfected other than by such a filed financing statement that is effective solely under section 47‑9508.

B. The other provisions of this article determine the priority among conflicting security interests in the same collateral perfected by filed financing statements that are effective solely under section 47‑9508 described in subsection A of this section. However, if the security agreements to which a new debtor became bound as debtor were not entered into by the same original debtor, the conflicting security interests rank according to priority in time of the new debtor's having become bound. END_STATUTE

Sec. 10. Section 47-9406, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9406. Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles and promissory notes ineffective

A. Subject to subsections B through H of this section, 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 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 of this section, notification is ineffective under subsection A of this section:

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 this chapter; 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. Subject to subsection H of this section, 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 subsection A of this section.

D. Except as otherwise provided in subsection E of this section and sections 47‑2A303 and 47‑9407, and subject to subsection H of this section, 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 of this section does not apply to the sale of a payment intangible or promissory note, other than a sale pursuant to a disposition under section 47-9610 or an acceptance of collateral under section 47-9620.

F. Except as otherwise provided in sections 47‑2A303 and 47‑9407 and subject to subsections H and J of this section, 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

G. Subject to subsection H of this section, an account debtor shall not waive or vary its option under subsection B, paragraph 3 of this section.

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.

I. This section does not apply to an assignment of a health‑care‑insurance receivable.

J. This section prevails over any inconsistent provisions in any statutes, rules and regulations.END_STATUTE

Sec. 11. Section 47-9408, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9408. Restrictions on assignment of promissory notes, health‑care‑insurance receivables and certain general intangibles ineffective

A. Except as otherwise provided in subsection B of this section, 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 or transfer or the 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 of this section 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 pursuant to a disposition under section 47-9610 or an acceptance of collateral under section 47-9620.

C. A rule of law, statute or regulation that 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 regulation:

1. Would impair the creation, attachment or perfection of a security interest; or

D. To the extent that 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 general intangible or a rule of law, statute or regulation described in subsection C of this section would be effective under law other than this chapter but is ineffective under subsection A or C of this section, 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 provisions in title 33, chapter 7. END_STATUTE

Sec. 12. Section 47-9502, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9502. Contents of financing statement; record of mortgage as financing statement; time of filing financing statement

A. Subject to subsection B of this section, a financing statement is sufficient only if it:

1. Provides the name of the debtor;

2. Provides the name of the secured party or a representative of the secured party; and

3. Indicates the collateral covered by the financing statement.

B. Except as otherwise provided in section 47‑9501, subsection B, to be sufficient, a financing statement that covers as-extracted collateral or timber to be cut, or that is filed as a fixture filing and covers goods that are or are to become fixtures, must satisfy subsection A of this section and also:

1. Indicate that it covers this type of collateral;

2. Indicate that it is to be filed in the real property records;

3. Provide a description of the real property to which the collateral is related; and

4. If the debtor does not have an interest of record in the real property, provide the name of a record owner.

C. A record of a mortgage is effective, from the date of recording, as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut only if:

1. The record indicates the goods or accounts that it covers;

2. The goods are or are to become fixtures related to the real property described in the record or the collateral is related to the real property described in the record and is as-extracted collateral or timber to be cut;

3. The record satisfies the requirements for a financing statement in this section, other than an indication but:

(a) The record need not indicate that it is to be filed in the real property records; and

(b) The record sufficiently provides the name of a debtor who is an individual if it provides the individual name of the debtor or the surname and first personal name of the debtor, even if the debtor is an individual to whom section 47-9503, subsection A, paragraph 4 applies; and

4. The record is recorded.

D. A financing statement may be filed before a security agreement is made or a security interest otherwise attaches. END_STATUTE

Sec. 13. Section 47-9503, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9503. Name of debtor and secured party; definition

A. A financing statement sufficiently provides the name of the debtor:

1. Except as otherwise provided in paragraph 3 of this subsection, if the debtor is a registered organization or the collateral is held in a trust that is a registered organization, only if the financing statement provides the name of the debtor indicated that is stated to be the registered organization's name on the public organic record of most recently filed with or issued or enacted by the debtor's registered organization's jurisdiction of organization that shows the debtor to have been organized purports to state, amend or restate the registered organization's name;

2. Subject to subsection F of this section, if the debtor is a decedent's estate collateral is being administered by the personal representative of a decedent, only if the financing statement provides as the name of the debtor, the name of the decedent and, in a separate part of the financing statement, indicates that the debtor is an estate collateral is being administered by a personal representative;

3. If the collateral is held in a trust that is not a registered organization, only if the financing statement: debtor is a trust or a trustee acting with respect to property held in trust, only if the financing statement:

(a) Provides the name specified for the trust in its organic documents or, if no name is specified, provides the name of the settlor and additional information sufficient to distinguish the debtor from other trusts having one or more of the same settlors; and

(b) Indicates, in the debtor's name or otherwise, that the debtor is a trust or is a trustee acting with respect to property held in trust; and

(a) Provides, as the name of the debtor:

(i) If the organic record of the trust specifies a name for the trust, the name specified; or

(ii) If the organic record of the trust does not specify a name for the trust, the name of the settlor or testator; and

(b) In a separate part of the financing statement:

(i) If the name is provided in accordance with subdivision (a), item (i) of this paragraph, indicates that the collateral is held in a trust; or

(ii) If the name is provided in accordance with subdivision (a), item (ii) of this paragraph, provides additional information sufficient to distinguish the trust from other trusts having one or more of the same settlors or the same testator and indicates that the collateral is held in a trust, unless the additional information so indicates;

4. Subject to subsection g of this section, If the debtor is an individual to whom this state has issued a driver license that has not expired, only if the financing statement provides the name of the individual that is indicated on the driver license;

5. If the debtor is an individual to whom paragraph 4 of this subsection does not apply, only if the financing statement provides the individual name of the debtor or the surname and first personal name of the debtor; and

4. 6. In other cases:

(a) If the debtor has a name, only if it the financing statement provides the individual or organizational name of the debtor; and

(b) If the debtor does not have a name, only if it provides the names of the partners, members, associates or other persons comprising the debtor, in a manner that each name provided would be sufficient if the person named were the debtor.

B. A financing statement that provides the name of the debtor in accordance with subsection A of this section is not rendered ineffective by the absence of:

1. A trade name or other name of the debtor; or

2. Unless required under subsection A, paragraph 4 6, subdivision (b) of this section, names of partners, members, associates or other persons comprising the debtor.

C. A financing statement that provides only the debtor's trade name does not sufficiently provide the name of the debtor.

D. Failure to indicate the representative capacity of a secured party or representative of a secured party does not affect the sufficiency of a financing statement.

E. A financing statement may provide the name of more than one debtor and the name of more than one secured party.

F. The name of the decedent indicated on the order appointing the personal representative of the decedent issued by the court having jurisdiction over the collateral is sufficient as the "name of the decedent" under subsection A, paragraph 2 of this section.

G. If this state has issued to an individual more than one driver license of a kind described in subsection A, paragraph 4 of this section, the one that was issued most recently is the one to which subsection A, paragraph 4 of this section refers.

H. In this section, "name of the settlor or testator" means:

1. If the settlor is a registered organization, the name that is stated to be the settlor's name on the public organic record most recently filed with or issued or enacted by the settlor's jurisdiction of organization that purports to state, amend or restate the settlor's name; or

2. In other cases, the name of the settlor or testator indicated in the trust's organic record.END_STATUTE

Sec. 14. Section 47-9507, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9507. Effect of certain events on effectiveness of financing statement

A. A filed financing statement remains effective with respect to collateral that is sold, exchanged, leased, licensed or otherwise disposed of and in which a security interest or agricultural lien continues, even if the secured party knows of or consents to the disposition.

B. Except as otherwise provided in subsection C of this section and section 47‑9508, a financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under section 47‑9506.

C. If a debtor so changes its the name that a filed financing statement provides for a debtor becomes insufficient as the name of the debtor under section 47-9503, subsection A so that the financing statement becomes seriously misleading under section 47‑9506:

1. The financing statement is effective to perfect a security interest in collateral acquired by the debtor before, or within four months after, the change filed financing statement becomes seriously misleading; and

2. The financing statement is not effective to perfect a security interest in collateral acquired by the debtor more than four months after the change filed financing statement becomes seriously misleading, unless an amendment to the financing statement that renders the financing statement not seriously misleading is filed within four months after the change financing statement became seriously misleading. END_STATUTE

Sec. 15. Section 47-9515, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9515. Duration and effectiveness of financing statement; effect of lapsed financing statement

A. Except as otherwise provided in subsections B, E, F and G of this section, a filed financing statement is effective for a period of five years after the date of filing.

B. Except as otherwise provided in subsections E, F and G of this section, an initial financing statement filed in connection with a manufactured home transaction is effective for a period of thirty years after the date of filing if it indicates that it is filed in connection with a manufactured home transaction.

C. The effectiveness of a filed financing statement lapses on the expiration of the period of its effectiveness unless before the lapse a continuation statement is filed pursuant to subsection D of this section. Upon lapse, a financing statement ceases to be effective and any security interest or agricultural lien that was perfected by the financing statement becomes unperfected, unless the security interest is perfected otherwise. If the security interest or agricultural lien becomes unperfected upon lapse, it is deemed never to have been perfected as against a purchaser of the collateral for value.

D. A continuation statement may be filed only within six months before the expiration of the five year period specified in subsection A of this section or the thirty year period specified in subsection B of this section, whichever is applicable.

E. Except as otherwise provided in section 47‑9510, on timely filing of a continuation statement, the effectiveness of the initial financing statement continues for a period of five years commencing on the day on which the financing statement would have become ineffective in the absence of the filing. On the expiration of the five year period, the financing statement lapses in the same manner as provided in subsection C of this section, unless, before the lapse, another continuation statement is filed pursuant to subsection D of this section. Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the initial financing statement.

F. If a debtor is a transmitting utility and a filed initial financing statement so indicates, the financing statement is effective until a termination statement is filed.

G. A record of a mortgage that is effective as a financing statement filed as a fixture filing under section 47‑9502, subsection 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.END_STATUTE

Sec. 16. Section 47-9516, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9516. What constitutes filing; effectiveness of filing

A. Except as otherwise provided in subsection B of this section, communication of a record to a filing office and tender of the filing fee or acceptance of the record by the filing office constitutes filing.

B. Filing does not occur with respect to a record that a filing office refuses to accept because:

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 information statement, the record:

(i) Does not identify the initial financing statement as required by section 47‑9512 or 47‑9518, as applicable; or

(ii) Identifies an initial financing statement whose effectiveness has lapsed under section 47‑9515;

(c) 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 that was not previously provided in the financing statement to which the record relates, the record does not identify the debtor's last name surname; or

(d) In the case of a record filed or recorded in the filing office described in section 47‑9501, subsection A, paragraph 1, the record does not provide a sufficient description of the real property to which it relates;

4. 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;

5. In the case of an initial financing statement or an amendment that provides a name of a debtor that was not previously provided in the financing statement to which the amendment relates, the record does not:

(a) Provide a mailing address for the debtor; or

(b) Indicate whether the name provided as the name of the debtor is the name of an individual or an organization; or

(i) A type of organization for the debtor;

(ii) A jurisdiction of organization for the debtor;

(iii) An organizational identification number for the debtor or indicate that the debtor has none;

6. In the case of an assignment reflected in an initial financing statement under section 47‑9514, subsection A or an amendment filed under section 47‑9514, subsection B, the record does not provide a name and mailing address for the assignee; or

7. In the case of a continuation statement, the record is not filed within the six month period prescribed by section 47‑9515, subsection D.

C. For the purposes of subsection B of this section:

1. A record does not provide information if the filing office is unable to read or decipher the information; and

2. A record that does not indicate that it is an amendment or identify an initial financing statement to which it relates, as required by section 47‑9512, 47‑9514 or 47‑9518, is an initial financing statement.

D. A record that is communicated to the filing office with tender of the filing fee, but that the filing office refuses to accept for a reason other than one set forth in subsection B of this section, is effective as a filed record except as against a purchaser of the collateral that gives value in reasonable reliance on the absence of the record from the files. END_STATUTE

Sec. 17. Section 47-9518, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9518. Claim concerning inaccurate or wrongfully filed record

A. A person may file in the filing office a correction an information statement with respect to a record indexed there under the person's name if the person believes that the record is inaccurate or was wrongfully filed.

B. A correction An information statement under subsection A of this section must:

1. Identify the record to which it relates by the file number assigned to the initial financing statement to which the record relates;

2. If the correction statement relates to a record filed or recorded in a filing office described in section 47‑9501, subsection A, paragraph 1, identify the name of the debtor provided in the initial financing statement and the information specified in section 47‑9502, subsection B. ;

3. Indicate that it is a correction an information statement; and

4. Provide the basis for the person's belief that the record is inaccurate and indicate the manner in which the person believes the record should be amended to cure any inaccuracy or provide the basis for the person's belief that the record was wrongfully filed.

C. A person may file in the filing office an information statement with respect to a record filed there if the person is a secured party of record with respect to the financing statement to which the record relates and believes that the person that filed the record was not entitled to do so under section 47-9509, subsection D.

D. An information statement under subsection C of this section must:

1. Identify the record to which it relates by the file number assigned to the initial financing statement to which the record relates;

2. Indicate that it is an information statement; and

3. Provide the basis for the person's belief that the person that filed the record was not entitled to do so under section 47-9509, subsection D.

C. E. The filing of a correction an information statement does not affect the effectiveness of an initial financing statement or other filed record. END_STATUTE

Sec. 18. Repeal

Section 47-9521, Arizona Revised Statutes, is repealed.

Sec. 19. Title 47, chapter 9, article 5, Arizona Revised Statutes, is amended by adding a new section 47-9521, to read:

START_STATUTE47-9521. Uniform form of written financing statement and amendment

A. A filing office that accepts written records may not refuse to accept a written initial financing statement in the form and format set forth in the official text of the 2014 amendments to article 9 of the uniform commercial code promulgated by the American law institute and the national conference of commissioners on uniform state laws except for a reason set forth in section 47-9516, subsection B.

B. A filing office that accepts written records may not refuse to accept a written record in the form and format set forth as Form UCC3 and Form UCC3Ad in the final official text of the 2014 amendments to article 9 of the uniform commercial code promulgated by the American law institute and the national conference of commissioners on uniform state laws except for a reason set forth in section 47-9516, subsection B. END_STATUTE

Sec. 20. Section 47-9607, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9607. Collection and enforcement by secured party

A. If so agreed, and in any event after default, a secured party:

1. May notify an account debtor or other person obligated on collateral to make payment or otherwise render performance to or for the benefit of the secured party;

2. May take any proceeds to which the secured party is entitled under section 47‑9315;

3. May enforce the obligations of an account debtor or other person obligated on collateral and exercise the rights of the debtor with respect to the obligation of the account debtor or other person obligated on collateral to make payment or otherwise render performance to the debtor, and with respect to any property that secures the obligations of the account debtor or other person obligated on the collateral;

4. If it holds a security interest in a deposit account perfected by control under section 47‑9104, subsection A, paragraph 1, may apply the balance of the deposit account to the obligation secured by the deposit account; and

5. If it holds a security interest in a deposit account perfected by control under section 47‑9104, subsection A, paragraph 2 or 3, may instruct the bank to pay the balance of the deposit account to or for the benefit of the secured party.

B. If necessary to enable a secured party to exercise under subsection A, paragraph 3 of this section the right of a debtor to enforce a mortgage nonjudicially, the secured party may record in the office in which a record of the mortgage is recorded:

1. A copy of the security agreement that creates or provides for a security interest in the obligation secured by the mortgage; and

2. The secured party's sworn affidavit in recordable form stating that:

(a) A default has occurred with respect to the obligation secured by the mortgage; and

(b) The secured party is entitled to enforce the mortgage nonjudicially.

C. A secured party shall proceed in a commercially reasonable manner if the secured party:

1. Undertakes to collect from or enforce an obligation of an account debtor or other person obligated on collateral; and

2. Is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor or a secondary obligor.

D. A secured party may deduct from the collections made pursuant to subsection C of this section reasonable expenses of collection and enforcement, including reasonable attorney fees and legal expenses incurred by the secured party.

E. This section does not determine whether an account debtor, bank or other person obligated on collateral owes a duty to a secured party. END_STATUTE

Sec. 21. Heading change

The article heading of title 47, chapter 9, article 7, Arizona Revised Statutes, is changed from "TRANSITION" to "2001 TRANSITION".

Sec. 22. Section 47-9701, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9701. Effective date

This chapter, as added in 1999, takes effect on July 1, 2001. END_STATUTE

Sec. 23. Section 47-9702, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9702. Savings clause

A. Except as otherwise provided in this article, this chapter, as added in 1999, applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before this chapter takes effect July 1, 2001.

B. Except as otherwise provided in subsection C of this section and sections 47‑9703 through 47‑9709:

1. Transactions and liens that were not governed by the former chapter 9 of this title as it existed before July 1, 2001, were validly entered into or created before July 1, 2001 and would be subject to this chapter, as added in 1999, if they had been entered into or created after July 1, 2001, and the rights, duties and interests flowing from those transactions and liens remain valid after July 1, 2001; and

2. The transactions and liens may be terminated, completed, consummated and enforced as required or permitted by this chapter, as added in 1999, or by the law that otherwise would apply if this chapter had not taken effect.

C. This chapter, as added in 1999, does not affect an action, case or proceeding commenced before July 1, 2001.END_STATUTE

Sec. 24. Section 47-9703, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9703. Security interest perfected before effective date

A. A security interest that is enforceable immediately before July 1, 2001 and would have priority over the rights of a person that becomes a lien creditor at that time is a perfected security interest under this chapter, as added in 1999, if, on July 1, 2001, the applicable requirements for enforceability and perfection under this chapter, as added in 1999, are satisfied without further action.

B. Except as otherwise provided in section 47‑9705, if, immediately before July 1, 2001, a security interest is enforceable and would have priority over the rights of a person that becomes a lien creditor at that time, but the applicable requirements for enforceability or perfection under this chapter, as added in 1999, are not satisfied on July 1, 2001, the security interest:

1. Is a perfected security interest for one year after July 1, 2001;

2. Remains enforceable thereafter only if the security interest becomes enforceable under section 47‑9203 before the year expires; and

3. Remains perfected thereafter only if the applicable requirements for perfection under this chapter, as added in 1999, are satisfied before the year expires. END_STATUTE

Sec. 25. Section 47-9704, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9704. Security interest unperfected before effective date

A security interest that is enforceable immediately before July 1, 2001 but that would be subordinate to the rights of a person that becomes a lien creditor at that time:

1. Remains an enforceable security interest for one year after July 1, 2001;

2. Remains enforceable thereafter if the security interest becomes enforceable under section 47‑9203 on July 1, 2001 or within one year thereafter; and

3. Becomes perfected:

(a) Without further action, on July 1, 2001 if the applicable requirements for perfection under this chapter, as added in 1999, are satisfied before or at that time; or

(b) When the applicable requirements for perfection are satisfied if the requirements are satisfied after that time.END_STATUTE

Sec. 26. Section 47-9705, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9705. Effectiveness of action taken before effective date

A. If action, other than the filing of a financing statement, is taken before July 1, 2001 and the action would have resulted in priority of a security interest over the rights of a person that becomes a lien creditor had the security interest become enforceable before July 1, 2001, the action is effective to perfect a security interest that attaches under this chapter, as added in 1999, within one year after July 1, 2001. An attached security interest becomes unperfected one year after July 1, 2001 unless the security interest becomes a perfected security interest under this chapter, as added in 1999, before the expiration of that period.

B. The filing of a financing statement before July 1, 2001 is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under this chapter, as added in 1999.

C. This chapter, as added in 1999, does not render ineffective an effective financing statement that before July 1, 2001 is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in former section 47‑9103. However, except as otherwise provided in subsections D and E of this section and section 47‑9706, the financing statement ceases to be effective at the earlier of:

1. The time the financing statement would have ceased to be effective under the law of the jurisdiction in which it is filed; or

2. June 30, 2007.

D. The filing of a continuation statement after July 1, 2001 does not continue the effectiveness of the financing statement filed before July 1, 2001. However, on the timely filing of a continuation statement after July 1, 2001 and in accordance with the law of the jurisdiction governing perfection as provided in article 3 of this chapter, as added in 1999, the effectiveness of a financing statement filed in the same office in that jurisdiction before July 1, 2001 continues for the period provided by the law of that jurisdiction.

E. Subsection C, paragraph 2 of this section applies to a financing statement that before July 1, 2001 is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in former section 47‑9103 only to the extent that article 3 of this chapter, as added in 1999, provides that the law of a jurisdiction other than the jurisdiction in which the financing statement is filed governs perfection of a security interest in collateral covered by the financing statement.

F. A financing statement that includes a financing statement filed before July 1, 2001 and a continuation statement filed after July 1, 2001 is effective only to the extent that it satisfies the requirements of article 5 of this chapter, as added in 1999, for an initial financing statement. END_STATUTE

Sec. 27. Section 47-9706, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9706. When initial financing statement suffices as continuation statement

A. The filing of an initial financing statement in the office specified in section 47‑9501 continues the effectiveness of a financing statement filed before July 1, 2001 if:

1. The filing of an initial financing statement in that office would be effective to perfect a security interest under this chapter, as added in 1999;

2. The pre-effective date financing statement was filed in an office in another state or another office in this state; and

3. The initial financing statement satisfies subsection B of this section.

B. The filing of an initial financing statement under subsection A of this section continues the effectiveness of the pre-effective date financing statement:

1. If the initial financing statement is filed before July 1, 2001, for the period provided in former section 47-9403 with respect to a financing statement; and

2. If the initial financing statement is filed before July 1, 2001, for the period provided in section 47‑9515 with respect to an initial financing statement.

C. To be effective for purposes of subsection A of this section, an initial financing statement must:

1. Satisfy the requirements of article 5 of this chapter, as added in 1999, for an initial financing statement;

2. Identify the pre-effective date financing statement by indicating the office in which the financing statement was filed and providing the dates of filing and file numbers, if any, of the financing statement and of the most recent continuation statement filed with respect to the financing statement; and

3. Indicate that the pre-effective date financing statement remains effective. END_STATUTE

Sec. 28. Section 47-9707, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9707. Amendment of pre‑effective‑date financing statement; definition

A. In this section, "pre‑effective‑date financing statement" means a financing statement filed before July 1, 2001.

B. After July 1, 2001, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a pre‑effective‑date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in article 3 of this chapter, as added in 1999. However, the effectiveness of a pre‑effective‑date financing statement also may be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.

C. Except as otherwise provided in subsection D of this section, if the law of this state governs perfection of a security interest, the information in a pre‑effective‑date financing statement may be amended after July 1, 2001 only if:

1. The pre‑effective‑date financing statement and an amendment are filed in the office specified in section 47‑9501;

2. An amendment is filed in the office specified in section 47‑9501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies section 47‑9706, subsection C; or

3. An initial financing statement that provides the information as amended and satisfies section 47‑9706, subsection C and that is filed in the office specified in section 47‑9501.

D. If the law of this state governs perfection of a security interest, the effectiveness of a pre‑effective‑date financing statement may be continued only under section 47‑9705, subsections D and F or section 47‑9706.

E. Whether or not the law of this state governs perfection of a security interest, the effectiveness of a pre‑effective‑date financing statement filed in this state may be terminated after July 1, 2001 by filing a termination statement in the office in which the pre‑effective‑date financing statement is filed, unless an initial financing statement that satisfies section 47‑9706, subsection C has been filed in the office specified by the law of the jurisdiction governing perfection as provided in article 3 of this chapter, as added in 1999, as the office in which to file a financing statement. END_STATUTE

Sec. 29. Section 47-9709, Arizona Revised Statutes, is amended to read:

START_STATUTE47-9709. Priority

A. This chapter, as added in 1999, determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before July 1, 2001, former chapter 9 of this title as it existed before July 1, 2001 determines priority.

B. For purposes of section 47-9322, subsection A, the priority of a security interest that becomes enforceable under section 47‑9203 dates from July 1, 2001 if the security interest is perfected under this chapter, as added in 1999, by the filing of a financing statement before July 1, 2001 that would not have been effective to perfect the security interest under former chapter 9 of this title as it existed before July 1, 2001. This subsection does not apply to conflicting security interests each of which is perfected by the filing of such a financing statement.END_STATUTE

Sec. 30. Title 47, chapter 9, Arizona Revised Statutes, is amended by adding article 8, to read:

ARTICLE 8. 2014 TRANSITION

START_STATUTE47-9801. Savings clause

A. Except as otherwise provided in this chapter, as amended in 2014, this chapter, as amended in 2014, applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before the effective date of this section.

B. This chapter, as amended in 2014, does not affect an action, case, or proceeding commenced before the effective date of this section.END_STATUTE

START_STATUTE47-9802. Security interest perfected before effective date

A. A security interest that is a perfected security interest immediately before the effective date of this section is a perfected security interest under this chapter, as amended in 2014, if, on the effective date of this section, the applicable requirements for attachment and perfection under this chapter, as amended in 2014, are satisfied without further action.

B. Except as otherwise provided in Section 47-9804, if, immediately before the effective date of this section, a security interest is a perfected security interest, but the applicable requirements for perfection under this chapter, as amended in 2014, are not satisfied on the effective date of this section, the security interest remains perfected thereafter only if the applicable requirements for perfection under this chapter, as amended in 2014, are satisfied within one year after the effective date of this section. END_STATUTE

START_STATUTE47-9803. Security interest unperfected before effective date

A security interest that is an unperfected security interest immediately before the effective date of this section becomes a perfected security interest:

1. Without further action, on the effective date of this section if the applicable requirements for perfection under this chapter, as amended in 2014, are satisfied before or at that time; or

2. When the applicable requirements for perfection are satisfied if the requirements are satisfied after that time.END_STATUTE

START_STATUTE47-9804. Effectiveness of action taken before effective date

A. The filing of a financing statement before the effective date of this section is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under this chapter, as amended in 2014.

B. This chapter, as amended in 2014, does not render ineffective an effective financing statement that, before the effective date of this section, is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in this chapter, as added in 1999. However, except as otherwise provided in subsections C and D of this section and Section 47-9805, the financing statement ceases to be effective:

1. If the financing statement is filed in this State, at the time the financing statement would have ceased to be effective had the 2014 amendments to this chapter not taken effect; or

2. If the financing statement is filed in another jurisdiction, at the earlier of:

(a) The time the financing statement would have ceased to be effective under the law of that jurisdiction; or

(b) August 31, 2019.

C. The filing of a continuation statement on or after the effective date of this section does not continue the effectiveness of a financing statement filed before the effective date of this section. However, on the timely filing of a continuation statement on or after the effective date of this section and in accordance with the law of the jurisdiction governing perfection as provided in this chapter as amended in 2014, the effectiveness of a financing statement filed in the same office in that jurisdiction before the effective date of this section continues for the period provided by the law of that jurisdiction.

D. Subsection B, paragraph 2, Subdivision (b) of this section applies to a financing statement that, before the effective date of this section, is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in this chapter as added in 1999, only to the extent that this chapter, as amended in 2014, provides that the law of a jurisdiction other than the jurisdiction in which the financing statement is filed governs perfection of a security interest in collateral covered by the financing statement.

E. A financing statement that includes a financing statement filed before the effective date of this section and a continuation statement filed after one month before the effective date of this section is effective only to the extent that it satisfies the requirements of article 5 of this chapter, as amended in 2014, for an initial financing statement. A financing statement that indicates that the debtor is a decedent's estate indicates that the collateral is being administered by a personal representative within the meaning of Section 47-9503, subsection a, paragraph 2, as amended in 2014. A financing statement that indicates that the debtor is a trust or is a trustee acting with respect to property held in trust indicates that the collateral is held in a trust within the meaning of Section 47-9503, subsection a, paragraph 3, as amended in 2014.END_STATUTE

START_STATUTE47-9805. When initial financing statement suffices to continue effectiveness of financing statement

A. The filing of an initial financing statement in the office specified in section 47-9501 continues the effectiveness of a financing statement filed before the effective date of this section if:

1. The filing of an initial financing statement in that office would be effective to perfect a security interest under this chapter, as amended in 2014;

2. The pre-effective date financing statement was filed in an office in another state; and

3. The initial financing statement satisfies subsection c of this section.

B. The filing of an initial financing statement under subsection A of this section continues the effectiveness of the pre-effective date financing statement:

1. If the initial financing statement is filed before the effective date of this section, for the period provided in Section 47-9515, as added in 1999, with respect to an initial financing statement; and

2. If the initial financing statement is filed after the effective date of this section, for the period provided in Section 47-9515, as amended in 2014, with respect to an initial financing statement.

C. To be effective for purposes of subsection a of this section, an initial financing statement must:

1. Satisfy the requirements of article 5 of this chapter, as amended in 2014, for an initial financing statement;

3. Indicate that the pre-effective date financing statement remains effective. END_STATUTE

START_STATUTE47-9806. Amendment of pre-effective date financing statement; definition

A. In this section, "pre-effective date financing statement" means a financing statement filed before the effective date of this section.

B. Beginning on the effective date of this section, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a pre-effective date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in this chapter, as amended in 2014. However, the effectiveness of a pre‑effective date financing statement also may be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.

C. Except as otherwise provided in subsection d of this section, if the law of this state governs perfection of a security interest, the information in a pre-effective date financing statement may be amended after the effective date of this section only if:

1. The pre-effective date financing statement and an amendment are filed in the office specified in section 47-9501;

2. An amendment is filed in the office specified in section 47-9501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies section 47-9805, subsection c; or

3. An initial financing statement that provides the information as amended and satisfies section 47-9805, subsection C is filed in the office specified in section 47-9501.

D. If the law of this State governs perfection of a security interest, the effectiveness of a pre-effective date financing statement may be continued only under Section 47-9804, subsections c and e or section 47-9805.

E. Whether or not the law of this state governs perfection of a security interest, the effectiveness of a pre-effective date financing statement filed in this state may be terminated on or after the effective date of this section by filing a termination statement in the office in which the pre-effective date financing statement is filed, unless an initial financing statement that satisfies section 47-9805, subsection C has been filed in the office specified by the law of the jurisdiction governing perfection as provided in this chapter, as amended in 2014, as the office in which to file a financing statement.END_STATUTE

START_STATUTE47-9807. Person entitled to file initial financing statement or continuation statement

A person may file an initial financing statement or a continuation statement under this article if:

1. The secured party of record authorizes the filing; and

2. The filing is necessary under this article:

(a) To continue the effectiveness of a financing statement filed before the effective date of this section; or

(b) To perfect or continue the perfection of a security interest. END_STATUTE

START_STATUTE47-9808. Priority

This chapter, as amended in 2014, determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before the effective date of this section, this chapter, as added in 1999, determines priority.END_STATUTE

Sec. 31. Section 48-2979, Arizona Revised Statutes, is amended to read:

START_STATUTE48-2979. Investment and reinvestment of sinking fund

A. The board of directors of an irrigation district may invest and reinvest all money belonging or credited to the district as a sinking fund. The investment shall be made for the best interests of the district.

B. The funds may be invested and reinvested under the authority of the federal farm credit act of 1933, or invested and reinvested in any of the following:

1. Bonds or other evidences of indebtedness of the United States of America or any of its agencies or instrumentalities when such obligations are guaranteed as to principal and interest by the United States of America or by any agency or instrumentality thereof.

2. Bonds or other evidences of indebtedness of this state, or of any of the counties or incorporated cities, towns, or duly organized school districts of this state.

3. Bonds, notes or evidences of indebtedness of any county, municipality, or municipal district utility within this state, which that are payable from revenues or earnings specifically pledged for the payment of the principal and interest on such obligations, and for the payment of which a lawful sinking fund or reserve fund has been established and is being maintained, but only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of investment therein, or, if such obligations were issued less than five years prior to before the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased, nor on any other obligations of the issuer within five years of such investment.

4. Bonds, notes or evidences of indebtedness issued by any municipal improvement district in this state to finance local improvements authorized by law, if the principal and interest of such obligations are payable from assessments on real property within such local improvement district. No such investment shall be made if the face value of all such obligations, and similar obligations outstanding, exceed fifty per cent of the market value of the real property and improvements upon on which such bonds or the assessments for the payment of principal and interest thereon are liens inferior only to the liens for general ad valorem property taxes. Such investment shall be made only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of investment therein, or, if such obligations were issued less than five years prior to before the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased, nor on any other obligation of the issuer within five years of such investment.

5. Interest bearing saving accounts or certificates of deposit insured in banks or savings and loan associations doing business in Arizona by the federal deposit insurance corporation, or the federal savings and loan insurance corporation, but only if they are secured by the depository to the same extent and in the same manner as required by the general depository law of the state. Security shall not be required for that portion of any deposit that is insured under any law of the United States.

C. All money earned as interest or otherwise derived by virtue of the provisions of this section shall be credited to the sinking fund.

D. In addition to subsections A, B and C of this section, the board of directors of an irrigation district may invest all money belonging or credited to the district in accordance with the procedures prescribed in section 35‑323.01. END_STATUTE

Sec. 32. Emergency

This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.