When the Amended Uniform Commercial Code (UCC) took effect in 2013, the UCC1 form was updated as well. The Amended Article 9 (AA9) form was adopted by all domestic jurisdictions except the State of New York. Unlike the “old” UCC1 form, this form made the preparation of a transmitting utility filing very easy. A simple check box in section 6a allows for the transmitting utility designation and alerts the filing office to not issue a lapse date. The State of Georgia is the one exception to this rule. There, transmitting utility filings receive the standard 5-year lapse date.
On the “old” RA9 form, still in use in New York, a filer is required to add a UCC1 Addendum in order to select the transmitting utility box found at the bottom of the page in section 18. Filers need to be vigilant at the time of submission in New York that their seemingly blank addendum could be ignored or even accidentally detached from the form by the filing office. If this occurs, the lien could be improperly indexed with an incorrect lapse date. The filing could then lapse when it should have remained effective until terminated.
What is a “Transmitting Utility” Debtor?
Section 9-102(a)(81) of Article 9, a “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;
(C) transmitting goods by pipeline or sewer; or
(D) transmitting or producing and transmitting electricity, steam, gas, or water.”
Ensure your Transmitting Utility Filing is Correct
Improving the UCC1 form to allow for transmitting utility filings to be a single page didn’t ensure the indexing of these filings is always done correctly. When filing via paper, sometimes filing officers will simply not notice the box is checked. It is key to review acknowledgment copies of transmitting utility filings upon receipt.
Depending on the jurisdiction, a cover page or the acknowledgment copy itself may indicate that no lapse date was issued and/or the filing is a transmitting utility.
When filing electronically or via XML, the likelihood of human error is removed but nonetheless confirming the correct indexing of the filing is still important. Again, there may be ways to confirm it was properly indexed as a transmitting utility by reviewing the acknowledgment image. Regardless of the filing method, performing a standard post-filing search is a great way to confirm the lien was indexed accurately.
If you find yourself in the position of having a transmitting utility filing incorrectly showing a 5-year lapse, notify your service provider or the filing office immediately. The sooner the indexing error of the statutory period is brought to the attention of the filing office, the easier it is to resolve and ensure that the transmitting utility financing statement remains in the public record until terminated.
Filers beware! Perfecting security interests is rarely as easy as it seems.
This content is provided for informational purposes only and should not be considered, or relied upon, as legal advice.
