§ 8-1-8.9-16 — SNG property interest; security interests

Indiana § 8-1-8.9-16

• Jurisdiction: Indiana
• Art. 1: UTILITIES GENERALLY
• Ch. 8.9: Financing of Substitute Natural Gas Costs

Text

(a) An SNG property interest does not
constitute an account or a general intangible under IC 26-1-9.1-102.
The creation, granting, perfection, and enforcement of liens and
security interests in SNG property interests are governed by this
chapter and not by IC 26-1-9.1.
(b) A valid and enforceable lien and security interest in an SNG
property interest may be created only by the execution and delivery of
a security agreement with a financing entity in connection with the
issuance of indebtedness. The security interest attaches automatically
from the time that value is received for the indebtedness secured by the
SNG property interest and, upon perfection through the filing of notice
with the secretary of state:
(1) constitutes a continuously perfected lien and security interest
in the SNG property interest and all proceeds of the SNG property
interest, whether or not accrued;
(2) has priority in the order of its filing; and
(3) takes precedence over any subsequent judicial lien or other
creditor's lien.
If notice is filed with the secretary of state not later than ten (10) days
after value is received for the indebtedness, the security interest is
perfected retroactive to the date the value was received. If notice is not
filed with the secretary of state within ten (10) days after value is
received for the indebtedness, the security interest is perfected as of the
date of filing.
(c) Transfer of an SNG property interest to an assignee is perfected
against all third parties, including subsequent judicial or other lien
creditors, upon:
(1) the delivery of transfer documents to the assignee; and
(2) the filing of notice with the secretary of state in accordance
with subsection (b).
However, if notice of the transfer is not filed with the secretary of state
within ten (10) days after the delivery of the transfer documentation,
the transfer of the SNG property interest is not perfected against third
parties until the notice is filed.
(d) The priority of a lien and security interest under this section is
not impaired by either of the following:
(1) A later modification of the qualified order creating the SNG
property interest being transferred.
(2) The commingling of other funds with funds collected in
connection with a qualified contract. Any other security interest
that may apply to funds collected in connection with a qualified
contract terminates when the funds are transferred to a segregated
account for the benefit of the assignee or a financing entity. If an
SNG property interest has been transferred to an assignee, any
proceeds from the SNG property interest shall be held in trust for
the assignee.
(e) If a default or termination occurs in connection with a financing
secured by an SNG property interest, the financing entity or its
representative may foreclose on or otherwise enforce its lien and
security interest in the SNG property interest as if the financing entity
were a secured party under IC 26-1-9.1. Amounts arising from the
qualified contract that is the basis of the SNG property interest shall be
transferred to a separate account for the financing entity's benefit and
are subject to the financing entity's security interest and lien.

Legislative History

As added by P.L.175-2007, SEC.21.