The Unexpected Challenge of Filing Transmitting Utility Financing Statements Using the New AA9 Forms

By: Melissa Luizzi, COGENCY GLOBAL on Mon, Oct 13, 2014

It’s been a little over a year now and all but two states, New York and Oklahoma, are accepting the Amended Article 9 (AA9) form. This new form offered some improvements that made filers rejoice. One improvement was the relocation of the transmitting utility check box from the UCC1 Addendum form to the face page of the UCC1 Initial Financing Statement. On the previous RA9 form (still in use in New York and Oklahoma), a filer was/is required to add an addendum form in order to check the transmitting utility box. You would then file your documents and hope the addendum did not get detached, because filing officers and/or searchers would never know your lien was a transmitting utility filing with no expiration.

transmitting utility uccWhat is a “Transmitting Utility” Debtor?
First, what is a transmitting utility debtor?  Per 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.”


AA9 Form – No Addendum Needed
Enter the new AA9 form, with the “debtor is a transmitting utility” check box on center stage in section 6a of the UCC1. Finally, no more addendums!  This made much more sense.  Little did we know that by moving this box, we now see a trend of state and local filing offices simply not noticing when the box is checked! As a result, transmitting utility filings are sometimes being recorded with the standard five-year lapse date instead of remaining effective in the filing office’s records until terminated. This indexing error is usually discovered quickly if you happen to be filing in a jurisdiction that provides a coversheet showing the lapse date as part of the filing acknowledgment. In other states, a search to reflect is necessary to ensure the filing office did its job correctly.

If the UCC1 was filed in a jurisdiction with no coversheet noting a lapse date and the filer does not conduct a post-filing search, then the filing office error will go unnoticed. In that case, the filing office would see the UCC as lapsed on the five-year filing anniversary date and it will be removed from the index after the sixth year (5 years in the public record plus one more year as a lapsed lien).


Ensure Lapse Date is Correct in Filing Office’s Records
What should one do to prevent this nightmare?  Once the financing statement is recorded, performing a standard post-filing search is recommended to confirm proper indexing. If you find yourself in the position of having a transmitting utility filing with 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 article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

Topics: Article 9 Filing, Searching and Due Diligence, UCC