§ 23-18-907 - Security interests.
23-18-907. Security interests.
(a) The Uniform Commercial Code -- Secured Transactions, 4-9-101 et seq., does not apply to storm recovery property or any right, title, or interest of a utility, assignee, or financing party therein except to the extent specified in this subchapter. In addition, such right, title, or interest pertaining to a financing order including, but not limited to, the associated storm recovery property including any revenues, collections, claims, rights to payment, payments, money, or proceeds of or arising from storm recovery charges pursuant to such order, shall not be deemed proceeds of any right or interest other than of the financing order and the storm recovery property arising from the financing order. All revenues and collections resulting from storm recovery property shall constitute proceeds only of the storm recovery property arising from the financing order.
(b) Except to the extent provided in this subchapter with respect to filings of financing statements or control of deposit accounts or investment property as original collateral, the creation, attachment, granting, perfection, and priority of security interests in storm recovery property to secure storm recovery bonds is governed solely by this subchapter and not by the Uniform Commercial Code -- Secured Transactions, 4-9-101 et seq.
(c) (1) A security interest in storm recovery property is valid and enforceable against the electric utility and its successor or an assignee and third parties and attaches to storm recovery property only after all of the following conditions are met:
(A) The issuance of a financing order;
(B) The execution and delivery of a security agreement, indenture, or other agreement with a financing party relating to the granting of a security interest in connection with the issuance of storm recovery bonds; and
(C) The receipt of value for the storm recovery bonds.
(2) A security interest attaches to storm recovery property when all of the foregoing conditions have been met, unless the security agreement expressly postpones the time of attachment.
(d) A security interest in storm recovery property is perfected when it has attached and when the applicable financing statement describing the storm recovery property as provided in 23-18-905(d) has been filed with the Secretary of State. The interest of a secured party is not perfected unless a financing statement sufficient under this subchapter and otherwise in accordance with the Uniform Commercial Code -- Secured Transactions, 4-9-101 et seq., is filed, and after perfection the secured party's interest continues in the storm recovery property and all proceeds of such storm recovery property, whether or not billed, accrued, or collected, and whether or not deposited into a deposit account and however evidenced; provided however that a security interest granted by the issuer of and securing storm recovery bonds held by a secured party having control of a segregated deposit account or securities account as original collateral into which revenues, collections, or proceeds of storm recovery property are deposited or credited may be perfected by control as provided in subsection (e) of this section. A security interest in proceeds of storm recovery property is a perfected security interest if the security interest in the storm recovery property was perfected under this subchapter. Except as otherwise provided in this subchapter, financing statements required to be filed pursuant to this section shall be filed, indexed, and maintained in the same manner and in the same system of records maintained for the filing of financing statements under the Uniform Commercial Code -- Secured Transactions, 4-9-101 et seq. The filing of such a financing statement shall be the only method of perfecting a lien or security interest on storm recovery property except as provided in this subsection. No continuation statement need be filed to maintain such perfection.
(e) A perfected security interest in storm recovery property and all proceeds of such storm recovery property, whether or not billed, accrued, or collected, and whether or not deposited into a deposit account and however evidenced, shall have priority over a conflicting lien of any nature in the same collateral property, except a security interest is subordinate to the rights of a person that becomes a lien creditor before the perfection of such security interest. A security interest in storm recovery property which qualifies for priority over a conflicting security interest or lien also has priority over the conflicting security interest or lien in proceeds of the storm recovery property. The relative priority of a perfected security interest of a secured party is not adversely affected by any lien or security interest in a deposit account of the electric utility that is a collector and into which the revenues are deposited. The priority of a security interest perfected under this section is not defeated or impaired by any later modification of the financing order or storm recovery property or by the commingling of funds arising from storm recovery property with other funds. Any other security interest, other than a prior security interest perfected under this subchapter, that may apply to those funds shall be terminated as to all funds transferred to a segregated account for the benefit of an assignee or a financing party or to an assignee or financing party directly. The perfection by control, the effect of perfection by control, and the priority of a security interest granted by the issuer of and securing storm recovery bonds held by a secured party having control of a segregated deposit account or securities account as original collateral into which revenues, collections, or proceeds of storm recovery property are deposited or credited shall be governed by the Uniform Commercial Code -- Secured Transactions, 4-9-101 et seq., including the choice of law rules in 4-9-301 -- 4-9-307.
(f) If a default or termination occurs under the terms of the storm recovery bonds, the secured party may foreclose on or otherwise enforce the security interest in any storm recovery property as if it were a secured party under the Uniform Commercial Code -- Secured Transactions, 4-9-101 et seq. A secured party holding a security interest in storm recovery property shall be entitled to exercise all of the same rights and remedies as are available to a secured party under the Uniform Commercial Code -- Secured Transactions, 4-9-101 et seq., to the same extent as if those rights and remedies were set forth in this subchapter. A court may order that amounts arising from storm recovery property be transferred to a separate account of the secured party for the financing parties' benefit, to which their security interest shall apply. On application by or on behalf of a secured party to the court of this state specified in subsection (f) of this section, such court shall order the sequestration and payment to the financing parties of revenues arising from the storm recovery property.
(g) A security interest created under this subchapter may provide for a security interest in after-acquired collateral. A security interest granted under this subchapter is not invalid or fraudulent against creditors solely because the grantor or the electric utility as collector or servicer has the right or ability to commingle the collateral or proceeds, or collect, compromise, enforce, and otherwise deal with collateral.
(h) Any action arising under the provisions of this subchapter to enforce a security interest in any security interest governed by this subchapter or in any storm recovery property, or which otherwise asserts an interest in, or a right in, to, or against any storm recovery property, wherever located or deemed located, shall be brought in the Pulaski County Circuit Court.
(i) The priority of the conflicting interests of secured parties in the same interest or rights in any storm recovery property is determined as follows:
(1) Conflicting perfected interests or rights of secured parties rank according to priority in time of perfection. Priority dates from the time a filing covering the interest or right is made in accordance with this section and the Uniform Commercial Code -- Secured Transactions, 4-9-101 et seq.;
(2) A perfected interest or right of a secured party has priority over a conflicting unperfected interest or right of an assignee; and
(3) A perfected interest or right of a secured party has priority over a person who becomes a lien creditor after the perfection of such secured party's interest or right.
(j) The priority of a lien and security interest in storm recovery property perfected under this section is not impaired by any later modification of the financing order or storm recovery property or by the commingling of funds arising from storm recovery property with other funds. Any other security interest that may apply to the storm recovery property shall be terminated when those funds are transferred to a segregated account for the assignee or a financing party. If storm recovery property has been transferred to an assignee or financing party, any proceeds of that storm recovery property shall be held in trust for the assignee or financing party.