OFFICE OF SECRETARY OF STATE

(Amendment)

 

      30 KAR 5:060. Search requests and reports.

 

      RELATES TO: KRS 355.9-519, 355.9-523, 355.9-525

      STATUTORY AUTHORITY: KRS 355.9-526(1)

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 355.9-526(1) requires the Secretary of State to promulgate administrative regulations implementing KRS Chapter 355.9. This administrative regulation establishes the requirements governing search requests and reports.

 

      Section 1. General Requirements. The filing officer shall maintain for public inspection a searchable index of active records in the UCC Information Management System. Active records shall be retrievable by the name of the debtor or by the file number of the related initial financing statement. Regardless of the retrieval method, the following shall be retrieved:

      (1) The initial financing statement; and

      (2) Each active record related to the initial financing statement.

 

      Section 2. Search Requests – Required Information. Search requests shall include the following:

      (1) Name searched. A search request shall set forth the name of the debtor to be searched using designated fields for organization or individual surname, first personal name, and additional names or initials. A search request shall be processed using the data and designated fields exactly as submitted, including the submission of no data in a given field, without regard to the nature or character of the debtor that is subject of the search.

      (2) Requesting party. The search request shall include the name and address of the person to whom the search report is to be sent.

      (3) Fee. The five (5) dollar fee shall be tendered if the request is in writing.

      (4) Search Logic. The request shall specify if a search methodology other than that described in Section 4 of this administrative regulation is to be applied in conducting the search. If methodology is not specified, the methodology described in Section 4 of this administrative regulation shall be applied.

 

      Section 3. Search Requests - Optional Information. A search request may include the following:

      (1) Copies. The request may limit the copies of UCC records that would normally be provided with a search report by requesting that no copies be provided or that copies be limited to those UCC records that:

      (a) Include a particular debtor address;

      (b) Include a particular city in the debtor address;

      (c) Were filed on a particular date or within a particular range of dates; or

      (d) Include a particular secured party name.

      (2) Scope of search. A requesting party may ask for a search that reports all active records retrieved by the search, rather than only unlapsed records retrieved by the search.

      (3) Mode of delivery. A search request may specify a mode of delivery for search results. This request shall be honored if the requested mode is made available by the filing office, and all requisite fees are tendered.

 

      Section 4. Search Methodology. (1) Search results shall be produced by the application of search logic to the name presented to the filing officer. Human judgment shall not play a role in determining the results of the search.

      (2) Standard search logic. The requirements established in this subsection shall describe the filing office’s standard search logic and shall apply to all searches unless the search request specifies that a nonstandard search logic be used.

      (a) There shall not be a limit to the number of matches that may be returned in response to the search criteria.

      (b) A distinction shall not be made between upper and lower case letters.

      (c) The character "&" (the ampersand) shall be deleted and replaced with the characters "and" each place it appears in the name.

      (d) Punctuation marks and accents shall be disregarded. For the purposes of this administrative regulation, punctuation and accents include all characters other than the numerals zero through nine (9) and the letters A through Z, in any case, of the English alphabet.

      (e) The word "the" at the beginning of an organization debtor name shall be disregarded.

      (f) All spaces shall be disregarded.

      (g) For first personal name and additional names or initials of individual debtor names, initials shall be treated as the logical equivalent of all names that begin with those initials, and first personal name and no additional names or initials shall be equated with all additional names or initials. For example, a search request for "John A. Smith" shall cause the search to retrieve all filings against all individual debtors with "John" or the initial "J" as the first personal name, "Smith" as the surname, and with the initial "A" or any name beginning with "A" in the additional names or initials field. If the search request is for "John Smith" (first personal name and surnames with no designation in the additional names or initials field), the search shall retrieve all filings against individual debtors with "John" or the initial "J" as the first personal name, "Smith" as the surname, and with any name or initial or no name or initial in the additional names or initials field.

      (h) If the name being searched is the surname of an individual debtor name without any first personal name or additional names or initials provided, the search shall retrieve from the UCC Information Management System all financing statements with individual debtor names that consist of only the surname.

      (i) The following words will be disregarded as noise words:

      a. "agency"

      b. "association"

      c. "assn"

      d. "associates"

      e. "assoc"

      f. "assc"

      g. "attorneys at law"

      h. "bank"

      i. "national bank"

      j. "na"

      k. "business trust"

      l. "charter"

      m. "chartered"

      n. "company"

      o. "co"

      p. "corporation"

      q. "corp"

      r. "credit union"

      s. "cu"

      t. "federal credit union"

      u. "fcu"

      v. "federal savings bank"

      w. "fsb"

      x. "general partnership"

      y. "gen part"

      z. "gp"

      aa. "incorporated"

      bb. "inc"

      cc. "limited"

      dd. "ltd"

      ee. "ltee"

      ff. "limited liability company"

      gg. "lc"

      hh. "llc"

      ii. "limited liability partnership"

      jj. "llp"

      kk. "lllp"

      ll. "limited partnership"

      mm. "lp"

      nn. "medical doctors professional association"

      oo. "mdpa"

      pp. "medical doctors professional corporation"

      qq. "mdpc"

      rr. "national association"

      ss. "partners"

      tt. "partnership"

      uu. "professional association"

      vv. "prof assn"

      ww. "pa"

      xx. "professional corporation"

      yy. "prof corp"

      zz. "pc"

      aaa. "professional limited liability company"

      bbb. "pllc"

      ccc. "real estate investment trust"

      ddd. "registered limited liability partnership"

      eee. "rllp"

      fff. "savings association"

      ggg. "sa"

      hhh. "sole proprietership"

      iii. "sp"

      jjj. "spa"

      kkk. "trust"

      lll. "trustee"

      mmm. "as trustee"

      (j)[(i)] After using the requirements outlined in paragraphs (a) through (h i ) of this subsection to modify the name being searched, the search shall retrieve from the UCC Information Management System all unlapsed records, or, if requested by the searcher, all active records, that pertain to financing statements with debtor names that, after being modified as provided in Section 5 of this administrative regulation, exactly match the modified name being searched.

 

      Section 5. Changes in Standard Search Logic. If the filing office changes its standard search logic or the implementation of its standard search logic in a manner that will alter search results, the filing office shall provide public notice of the change.

 

      Section 6. Search Responses. Responses to a search shall include the following:

      (1) Copies. Copies of all UCC records retrieved by the search, unless only limited copies are requested by the searcher. Copies shall reflect any redaction of personal identifying information required by law.

      (2) Introductory information. A filing officer shall include the following information with a UCC search response:

      (a) Filing office identification. Identification of the filing office responsible for the search response;

      (b) Unique search report identification number. Unique number which identifies the search report;

      (c) Report date and time. The date and time the report was generated;

      (d) Through date and time. The date and time at or prior to which a UCC record was filed with the filing office in order for it to be reflected on the search;

      (e) Certification date. The certification date and time for which the search is effective;

      (f) Scope of search;

      (g) Search logic used;

      (h) Search logic disclaimer language;

      (i) Name provided. Name as provided by searcher;

      (j) Search string. Normalized name as provided by Section 4 of this administrative regulation;

      (k) Lien type searched. UCC or other type of documents searched; and

      (l) Copies. Copies of all UCC records revealed by the search and requested by the searcher. Copies of UCC records shall not be available for electronic search requests.

      (3) Report. The search report shall contain the following:

      (a) Identification. Identification of the filing office responsible for the search report;

      (b) Search report identification number. Unique number assigned under subsection (2)(b) of this section; and

      (c) Identification of financing statement. Identification of each initial financing statement, including a listing of all related amendments, correction statements, or filing officer notices, filed on or prior to the through date corresponding to the search criteria, regardless of. Financing statement information shall include the following:

      1. The initial financing statement file number;

      2. The date and time the initial financing statement was filed;

      3. The lapse date;

      4. The debtor name that appears of record;

      5. The debtor address that appears of record;

      6. The secured party name that appears of record;

      7. The secured party address that appears of record;

      8. An indication of type of each amendment, if any;

      9. The date and time each amendment, if any, was filed;

      10. The amendment file number of each amendment, if any;

      11. The date and time a correction statement, if any, was filed; and

      12. The date and time a filing officer statement, if any, was filed.

 

LINDSAY HUGHES THURSTON, Assistant Secretary of State

      APPROVED BY AGENCY: May 12, 2017

      FILED WITH LRC: May 15, 2017 at 9 a.m.

      PUBLIC HEARING AND PUBLIC COMMENT PERIOD: A public hearing on this administrative regulation shall be held on June 26, 2017, at 1:00 p.m. EST, at Office of the Secretary of State. Individuals interested in being heard at this hearing shall notify this agency in writing by five workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing was received by that date, the hearing may be cancelled. This hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted until June 30, 2017. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person.

      CONTACT PERSON: Lindsay Hughes Thurston, 700 Capital Avenue, State Capitol, Suite 152, Frankfort, Kentucky 40601, phone (502) 782-7417, fax (502) 564-5687, email Lindsay.thurston@ky.gov.

 

REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT

 

Contact Person: Lindsay Hughes Thurston

      (1) Provide a brief summary of:

      (a) What this administrative regulation does: This administrative regulation establishes the requirements governing UCC search requests and reports.

      (b) The necessity of this administrative regulation: This administrative regulation is necessary to establish the procedures for UCC search requests and reports.

      (c) How this administrative regulation conforms to the content of the authorizing statutes: In order for the Secretary of State to fulfill its duties under KRS 335.9-526(1), this administrative regulation is necessary to establish the procedures for UCC search requests and reports.

      (d) How this administrative regulation currently assists or will assist in the effective administration of the statutes: This administrative regulation assists in establishing the procedures for UCC search requests and reports.

      (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:

      (a) How the amendment will change this existing administrative regulation: This amendment brings the administrative regulation into compliance with standard search logic governed by KRS 355.9-506.

      (b) The necessity of the amendment to this administrative regulation: This amendment is necessary to bring the administrative regulation into compliance with the statutory authority (KRS 355.9-506).

      (c) How the amendment conforms to the content of the authorizing statutes: This administrative regulation conforms to the content of the authorizing statute. (KRS 355.9-506)

      (d) How the amendment will assist in the effective administration of the statues: This amendment is necessary to bring the administrative regulation into compliance with the statutory authority (KRS 355.9-506).

      (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation: This amendment will affect countless individuals that request UCC search requests and reports.

      (4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:

      (a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment: Regulated individuals identified in question (3) will have to familiarize themselves with the law.

      (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3): Individuals identified in question (3) will incur no costs in order to comply.

      (c) As a result of compliance, what benefits will accrue to the entities identified in question (3): No benefit will accrue to the entities identified in question (3).

      (5) Provide an estimate of how much it will cost to implement this administrative regulation:

      (a) Initially: There is no cost to implement this administrative regulation.

      (b) On a continuing basis: There is no cost to implement this administrative regulation on a continuing basis.

      (6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation: There is no source funding since there is no cost to implement this administrative regulation.

      (7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change, if it is an amendment: An increase in fees or funding will not be necessary to implement this administrative regulation.

      (8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees: This administrative regulation neither establishes nor increases any fees.

      (9) TIERING: Is tiering applied? Tiering was not appropriate in this administrative regulation because the administrative regulation applies equally to all those individuals or entities regulated by it.

 

FISCAL NOTE ON STATE OR LOCAL GOVERNMENT

 

      1. What units, parts or divisions of state or local government (including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation? This administrative regulation will impact only the Secretary of State.

      2. Identify each state or federal statute or federal regulation that requires or authorizes the action taken by the administrative regulation. This administrative regulation is authorized by KRS 355.9-526(1).

      3. Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation is to be in effect.

      (a) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for the first year? This administrative regulation will not generate any additional revenue for state or local governments during the first year.

      (b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years? This administrative regulation will not generate any additional revenue for state or local governments during subsequent years of implementation.

      (c) How much will it cost to administer this program for the first year? There will be no cost to implement this administrative regulation for the first year.

      (d) How much will it cost to administer this program for subsequent years? There will be no cost to administer this program for subsequent years.

      Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.

      Revenues (+/-):

      Expenditures (+/-):

      Other Explanation: