2006 Alabama Code - Section 7-9A-320 — Buyer of goods; Alabama Farmers Credit Protection Fund.

(a) Buyer in ordinary course of business. Except as otherwise provided in subsection (e), a buyer in ordinary course of business, other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by the buyer's seller, even if the security interest is perfected and the buyer knows of its existence.

(b) Buyer of consumer goods. Except as otherwise provided in subsection (e), a buyer of goods from a person who used or bought the goods for use primarily for personal, family, or household purposes takes free of a security interest, even if perfected, if the buyer buys:

(1) without knowledge of the security interest;

(2) for value;

(3) primarily for the buyer's personal, family, or household purposes; and

(4) before the filing of a financing statement covering the goods.

(c) Effectiveness of filing for subsection (b). To the extent that it affects the priority of a security interest over a buyer of goods under subsection (b), the period of effectiveness of a filing made in the jurisdiction in which the seller is located is governed by Section 7-9A-316(a) and (b).

(d) Buyer in ordinary course of business at wellhead or mine. A buyer in ordinary course of business buying oil, gas, or other minerals at the wellhead or mine or after extraction takes free of an interest arising out of an encumbrance.

(e) Possessory security interest not affected. Subsections (a) and (b) do not affect a security interest in goods in the possession of the secured party under Section 7-9A-313.

(f) A secured party may enforce a security interest in farm products against a buyer who, in the ordinary course of business, purchases farm products from, or a commission merchant or selling agent who, in the ordinary course of business, sells farm products for a person engaged in farming operations only where the secured party has signed and filed with the Secretary of State a form containing the following information:

(1) The name and address of the debtor.

(2) The debtor's signature.

(3) The name and address of the secured party.

(4) The Social Security number of the debtor, or in the case of a debtor doing business other than as an individual, the debtor's Internal Revenue Service taxpayer identification number.

(5) A description of the farm products subject to the security interest including the amount of such products, where applicable.

(6) A reasonable description of the real estate, including county, where the farm products are located.

(g) The fee for filing and indexing and for stamping a copy furnished by the secured party to show the date and place of filing for the form described in subsection (f) or any amendment to such form shall be twenty dollars ($20) for the first one or two pages and two dollars ($2) per page for each additional page if the statement or amendment is in the standard form prescribed by the Secretary of State, fifteen dollars ($15) if the information in the form is communicated by a medium other than the filing of a paper form that is authorized by filing-office rule, and an additional five dollars ($5) for each statement or amendment if not in the standard form. The number of names required to be indexed or the presence of a trade name, or both, does not affect the amount of the fee. The form described in subsection (f) must be amended in writing within three months, and similarly signed and filed, to reflect material changes. The effectiveness and continuation of the form is to be treated as if it were a financing statement.

(h) There is hereby created in the State Treasury a fund to be known and designated as the Alabama Farmers Credit Protection Fund. All funds, fees, charges, costs, and collections accruing to or collected by the office of the Secretary of State pursuant to the provisions of subsection (g) or subsections (g), (h), (i), or (j) of Section 7-9A-523, or any fees collected in relation to filing the form described in subsection (f) shall be deposited into the State Treasury to the credit of the Alabama Farmers Credit Protection Fund.

(i) All funds now or hereafter deposited in the State Treasury to the credit of the Alabama Farmers Credit Protection Fund shall be expended for the purpose of administering the provisions of law authorizing the collection of such funds and shall be payable from the fund on the requisition of the Secretary of State. Such funds shall be exempt from the provisions of subsection (g) of Section 7-9A-525. The fees collected from August 1, 2002 until September 30, 2003, that are deposited into the Alabama Farmers Credit Protection Fund are hereby appropriated for the fiscal year in which the fees are deposited into the Alabama Farmers Credit Protection Fund. Any of the appropriations that are unexpended at the end of the fiscal years beginning on October 1, 2001, or on October 1, 2002, are hereby reappropriated for the following fiscal year. Commencing October 1, 2003, no funds shall be withdrawn nor expended for any purpose whatsoever unless the same shall have been allotted and budgeted in accordance with Article 4 of Chapter 4 of Title 41, and only in the amounts and for the purposes provided by the Legislature in the general appropriations act.

(j) The Secretary of State is authorized to promulgate rules and regulations and set reasonable fees which have not been delineated in this section or Section 7-9A-523 in order to implement a central filing system which conforms with the requirements of the Federal Food Security Act of 1985, P.L. 99-198, 7 U.S.C. §1631, as now enacted or as hereafter amended. Except where prescribing forms to administer this central filing system, such regulations and fees shall be adopted in accordance with the Administrative Procedure Act.

(k) The Secretary of State may contract with one or more public or private parties to perform some or all of its duties under this section and subsections (g), (h), (i), or (j) of Section 7-9A-523; except that the Secretary of State may not delegate the power to make rules or regulations, conduct public hearings, prescribe forms, and establish services and fees therefor.

(Act 2001-481, p. 647, §1; Act 2002-518, p. 1337, §1.)