Title 75 — Regulation of Trade, Commerce and Investments

Mississippi Code of 1972 — Title 75. Regulation of Trade, Commerce and Investments

Text as published by FindLaw, current as of 2025-01-01.

Miss. Code Ann. § 1-1-9 asserts that copyright in the Mississippi Code of 1972, including catchlines, section numbering, source lines and annotations, is owned by the State of Mississippi.

Chapter 1 Uniform Commercial Code--General Provisions

§ 75-1-101

(a) Chapters 1 through 10 of Title 75 shall be known and may be cited as the Uniform Commercial Code.

(b) This chapter may be cited as Article 1 when referring to the general provisions of the Uniform Commercial Code or as Uniform Commercial Code--General Provisions.

(c) Chapters 1 through 10 of Title 75 are numbered to correspond to the numbering of the articles of the Uniform Commercial Code and may be referred to as “Articles.”

§ 75-1-102

Article 1 applies to a transaction to the extent that it is governed by another article of the Uniform Commercial Code.

§ 75-1-103

(a) The Uniform Commercial Code must be liberally construed and applied to promote its underlying purposes and policies, which are:

(1) To simplify, clarify, and modernize the law governing commercial transactions;

(2) To permit the continued expansion of commercial practices through custom, usage, and agreement of the parties; and

(3) To make uniform the law among the various jurisdictions.

(b) Unless displaced by the particular provisions of the Uniform Commercial Code, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, and other validating or invalidating cause supplement its provisions.

§ 75-1-104

The Uniform Commercial Code being a general act intended as a unified coverage of its subject matter, no part of it shall be deemed to be impliedly repealed by subsequent legislation if such construction can reasonably be avoided.

§ 75-1-105

If any provision or clause of the Uniform Commercial Code or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Uniform Commercial Code which can be given effect without the invalid provision or application, and to this end the provisions of the Uniform Commercial Code are severable.

§ 75-1-106

In the Uniform Commercial Code, unless the statutory context otherwise requires:

(1) Words in the singular number include the plural, and those in the plural include the singular; and

(2) Words of any gender also refer to any other gender.

§ 75-1-107

Section captions are part of the Uniform Commercial Code.

§ 75-1-108

This article modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 USC Section 7001 et seq., except that nothing in this article modifies, limits, or supersedes Section 7001(c) of that act or authorizes electronic delivery of any of the notices described in Section 7003(b) of that act.

§ 75-1-201

(a) Unless the context otherwise requires, words or phrases defined in this section, or in the additional definitions contained in other articles of the Uniform Commercial Code contained in other chapters of this title that apply to particular chapters or parts thereof, have the meanings stated.

(b) Subject to definitions contained in other articles of the Uniform Commercial Code that apply to particular articles or parts thereof:

(1) “Action,” in the sense of a judicial proceeding, includes recoupment, counterclaim, setoff, suit in equity, and any other proceeding in which rights are determined.

(2) “Aggrieved party” means a party entitled to pursue a remedy.

(3) “Agreement,” as distinguished from “contract,” means the bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade as provided in Section 75-1-303.

(4) “Bank” means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, and trust company.

(5) “Bearer” means a person in possession of a negotiable instrument, document of title, or certificated security that is payable to bearer or indorsed in blank.

(6) “Bill of lading” means a document evidencing the receipt of goods for shipment issued by a person engaged in the business of transporting or forwarding goods.

(7) “Branch” includes a separately incorporated foreign branch of a bank.

(8) “Burden of establishing a fact” means the burden of persuading the trier of fact that the existence of the fact is more probable than its nonexistence.

(9) “Buyer in ordinary course of business” means a person that buys goods in good faith, without knowledge that the sale violates the rights of another person in the goods, and in the ordinary course from a person, other than a pawnbroker, in the business of selling goods of that kind. A person buys goods in the ordinary course if the sale to the person comports with the usual or customary practices in the kind of business in which the seller is engaged or with the seller's own usual or customary practices. A person that sells oil, gas, or other minerals at the wellhead or minehead is a person in the business of selling goods of that kind. A buyer in ordinary course of business may buy for cash, by exchange of other property, or on secured or unsecured credit, and may acquire goods or documents of title under a preexisting contract for sale. Only a buyer that takes possession of the goods or has a right to recover the goods from the seller under Article 2 may be a buyer in ordinary course of business. “Buyer in ordinary course of business” does not include a person that acquires goods in a transfer in bulk or as security for or in total or partial satisfaction of a money debt.

(10) “Conspicuous,” with reference to a term, means so written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it. Whether a term is “conspicuous” or not is a decision for the court. Conspicuous terms include the following:

(A) A heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same or lesser size; and

(B) Language in the body of a record or display in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call attention to the language.

(11) “Consumer” means an individual who enters into a transaction primarily for personal, family, or household purposes.

(12) “Contract,” as distinguished from “agreement,” means the total legal obligation that results from the parties' agreement as determined by the Uniform Commercial Code as supplemented by any other applicable laws.

(13) “Creditor” includes a general creditor, a secured creditor, a lien creditor, and any representative of creditors, including an assignee for the benefit of creditors, a trustee in bankruptcy, a receiver in equity, and an executor or administrator of an insolvent debtor's or assignor's estate.

(14) “Defendant” includes a person in the position of defendant in a counterclaim, cross-claim, or third-party claim.

(15) “Delivery,” with respect to an instrument, document of title, or chattel paper, means voluntary transfer of possession.

(16) “Document of title” includes bill of lading, dock warrant, dock receipt, warehouse receipt or order for the delivery of goods, and also any other document which in the regular course of business or financing is treated as adequately evidencing that the person in possession of it is entitled to receive, hold, and dispose of the document and the goods it covers. To be a document of title, a document must purport to be issued by or addressed to a bailee and purport to cover goods in the bailee's possession which are either identified or are fungible portions of an identified mass.

(17) “Fault” means a default, breach, or wrongful act or omission.

(18) “Fungible goods” means:

(A) Goods of which any unit, by nature or usage of trade, is the equivalent of any other like unit; or

(B) Goods that by agreement are treated as equivalent.

(19) “Genuine” means free of forgery or counterfeiting.

(20) “Good faith,” except as otherwise provided in Article 5, means honesty in fact and the observance of reasonable commercial standards of fair dealing.

(21) “Holder” means:

(A) The person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession; or

(B) The person in possession of a document of title if the goods are deliverable either to bearer or to the order of the person in possession.

(22) “Insolvency proceeding” includes an assignment for the benefit of creditors or other proceeding intended to liquidate or rehabilitate the estate of the person involved.

(23) “Insolvent” means:

(A) Having generally ceased to pay debts in the ordinary course of business other than as a result of bona fide dispute;

(B) Being unable to pay debts as they become due; or

(C) Being insolvent within the meaning of federal bankruptcy law.

(24) “Money” means a medium of exchange currently authorized or adopted by a domestic or foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two (2) or more countries.

(25) “Organization” means a person other than an individual.

(26) “Party,” as distinguished from “third party,” means a person that has engaged in a transaction or made an agreement subject to the Uniform Commercial Code.

(27) “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, public corporation, or any other legal or commercial entity.

(28) “Present value” means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain by use of either an interest rate specified by the parties if that rate is not manifestly unreasonable at the time the transaction is entered into or, if an interest rate is not so specified, a commercially reasonable rate that takes into account the facts and circumstances at the time the transaction is entered into.

(29) “Purchase” means taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property.

(30) “Purchaser” means a person that takes by purchase.

(31) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(32) “Remedy” means any remedial right to which an aggrieved party is entitled with or without resort to a tribunal.

(33) “Representative” means a person empowered to act for another, including an agent, an officer of a corporation or association, and a trustee, executor, or administrator of an estate.

(34) “Right” includes remedy.

(35) “Security interest” means an interest in personal property or fixtures which secures payment or performance of an obligation. “Security interest” includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to Article 9. “Security interest” does not include the special property interest of a buyer of goods on identification of those goods to a contract for sale under Section 75-2-401, but a buyer may also acquire a “security interest” by complying with Article 9. Except as otherwise provided in Section 75-2-505, the right of a seller or lessor of goods under Article 2 or 2A to retain or acquire possession of the goods is not a “security interest,” but a seller or lessor may also acquire a “security interest” by complying with Article 9. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer under Section 75-2-401 is limited in effect to a reservation of a “security interest.” Whether a transaction in the form of a lease creates a “security interest” is determined pursuant to Section 75-1-203.

(36) “Send” in connection with a writing, record, or notice means:

(A) To deposit in the mail or deliver for transmission by any other usual means of communication with postage or cost of transmission provided for and properly addressed and, in the case of an instrument, to an address specified thereon or otherwise agreed, or if there be none to any address reasonable under the circumstances; or

(B) In any other way to cause to be received any record or notice within the time it would have arrived if properly sent.

(37) “Signed” includes using any symbol executed or adopted with present intention to adopt or accept a writing.

(38) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(39) “Surety” includes a guarantor or other secondary obligor.

(40) “Term” means a portion of an agreement that relates to a particular matter.

(41) “Unauthorized signature” means a signature made without actual, implied, or apparent authority. The term includes a forgery.

(42) “Warehouse receipt” means a receipt issued by a person engaged in the business of storing goods for hire.

(43) “Writing” includes printing, typewriting, or any other intentional reduction to tangible form. “Written” has a corresponding meaning.

§ 75-1-202

(a) Subject to subsection (f), a person has “notice” of a fact if the person:

(1) Has actual knowledge of it;

(2) Has received a notice or notification of it; or

(3) From all the facts and circumstances known to the person at the time in question, has reason to know that it exists.

(b) “Knowledge” means actual knowledge. “Knows” has a corresponding meaning.

(c) “Discover,” “learn,” or words of similar import refer to knowledge rather than to reason to know.

(d) A person “notifies” or “gives” a notice or notification to another person by taking such steps as may be reasonably required to inform the other person in ordinary course, whether or not the other person actually comes to know of it.

(e) Subject to subsection (f), a person “receives” a notice or notification when:

(1) It comes to that person's attention; or

(2) It is duly delivered in a form reasonable under the circumstances at the place of business through which the contract was made or at another location held out by that person as the place for receipt of such communications.

(f) Notice, knowledge, or a notice or notification received by an organization is effective for a particular transaction from the time it is brought to the attention of the individual conducting that transaction and, in any event, from the time it would have been brought to the individual's attention if the organization had exercised due diligence. An organization exercises due diligence if it maintains reasonable routines for communicating significant information to the person conducting the transaction and there is reasonable compliance with the routines. Due diligence does not require an individual acting for the organization to communicate information unless the communication is part of the individual's regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information.

§ 75-1-203

(a) Whether a transaction in the form of a lease creates a lease or security interest is determined by the facts of each case.

(b) A transaction in the form of a lease creates a security interest if the consideration that the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease and is not subject to termination by the lessee, and:

(1) The original term of the lease is equal to or greater than the remaining economic life of the goods;

(2) The lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods;

(3) The lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement; or

(4) The lessee has an option to become the owner of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement.

(c) A transaction in the form of a lease does not create a security interest merely because:

(1) The present value of the consideration the lessee is obligated to pay the lessor for the right to possession and use of the goods is substantially equal to or is greater than the fair market value of the goods at the time the lease is entered into;

(2) The lessee assumes risk of loss of the goods;

(3) The lessee agrees to pay, with respect to the goods, taxes, insurance, filing, recording, or registration fees, or service or maintenance costs;

(4) The lessee has an option to renew the lease or to become the owner of the goods;

(5) The lessee has an option to renew the lease for a fixed rent that is equal to or greater than the reasonably predictable fair market rent for the use of the goods for the term of the renewal at the time the option is to be performed; or

(6) The lessee has an option to become the owner of the goods for a fixed price that is equal to or greater than the reasonably predictable fair market value of the goods at the time the option is to be performed.

(d) Additional consideration is nominal if it is less than the lessee's reasonably predictable cost of performing under the lease agreement if the option is not exercised. Additional consideration is not nominal if:

(1) When the option to renew the lease is granted to the lessee, the rent is stated to be the fair market rent for the use of the goods for the term of the renewal determined at the time the option is to be performed; or

(2) When the option to become the owner of the goods is granted to the lessee, the price is stated to be the fair market value of the goods determined at the time the option is to be performed.

(e) The “remaining economic life of the goods” and “reasonably predictable” fair market rent, fair market value, or cost of performing under the lease agreement must be determined with reference to the facts and circumstances at the time the transaction is entered into.

§ 75-1-204

Except as otherwise provided in Articles 3, 4, and 5, a person gives value for rights if the person acquires them:

(1) In return for a binding commitment to extend credit or for the extension of immediately available credit, whether or not drawn upon and whether or not a charge-back is provided for in the event of difficulties in collection;

(2) As security for, or in total or partial satisfaction of, a preexisting claim;

(3) By accepting delivery under a preexisting contract for purchase; or

(4) In return for any consideration sufficient to support a simple contract.

§ 75-1-205

(a) Whether a time for taking an action required by the Uniform Commercial Code is reasonable depends on the nature, purpose, and circumstances of the action.

(b) An action is taken seasonably if it is taken at or within the time agreed or, if no time is agreed, at or within a reasonable time.

§ 75-1-206

Whenever the Uniform Commercial Code creates a “presumption” with respect to a fact, or provides that a fact is “presumed,” the trier of fact must find the existence of the fact unless and until evidence is introduced that supports a finding of its nonexistence.

§ 75-1-301

(a) Except as provided hereafter in this section, when a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties. Failing such agreement, the Uniform Commercial Code applies to transactions bearing an appropriate relation to this state. However, the law of the State of Mississippi shall always govern the rights and duties of the parties in regard to disclaimers of implied warranties of merchantability or fitness, limitations of remedies for breaches of implied warranties of merchantability or fitness, or the necessity for privity of contract to maintain a civil action for breach of implied warranties of merchantability or fitness notwithstanding any agreement by the parties that the laws of some other state or nation shall govern the rights and duties of the parties.

(b) Where one (1) of the following provisions of the Uniform Commercial Code specifies the applicable law, that provision governs and a contrary agreement is effective only to the extent permitted by the law (including the conflict of laws rules) so specified:

Rights of creditors against sold goods (Section 75-2-402).

Applicability of the Article on Leases (Sections 75-2A-105 and 75-2A-106).

Applicability of the Article on Bank Deposits and Collections (Section 75-4-102).

Governing law in the Article on Funds Transfers (Section 75-4A-507).

Letters of credit (Section 75-5-116).

Applicability of the Article on Investment Securities (Section 75-8-110).

Law governing perfection, the effect of perfection or nonperfection, and the priority of security interests and agricultural liens (Sections 75-9-301 through 75-9-307).

§ 75-1-302

(a) Except as otherwise provided in subsection (b) or elsewhere in the Uniform Commercial Code, the effect of provisions of the Uniform Commercial Code may be varied by agreement.

(b) The obligations of good faith, diligence, reasonableness, and care prescribed by the Uniform Commercial Code may not be disclaimed by agreement. The parties, by agreement, may determine the standards by which the performance of those obligations is to be measured if those standards are not manifestly unreasonable. Whenever the Uniform Commercial Code requires an action to be taken within a reasonable time, a time that is not manifestly unreasonable may be fixed by agreement.

(c) The presence in certain provisions of the Uniform Commercial Code of the phrase “unless otherwise agreed,” or words of similar import, does not imply that the effect of other provisions may not be varied by agreement under this section.

§ 75-1-303

(a) A “course of performance” is a sequence of conduct between the parties to a particular transaction that exists if:

(1) The agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and

(2) The other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.

(b) A “course of dealing” is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.

(c) A “usage of trade” is any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage must be proved as facts. If it is established that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law.

(d) A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining the meaning of the parties' agreement, may give particular meaning to specific terms of the agreement, and may supplement or qualify the terms of the agreement. A usage of trade applicable in the place in which part of the performance under the agreement is to occur may be so utilized as to that part of the performance.

(e) Except as otherwise provided in subsection (f), the express terms of an agreement and any applicable course of performance, course of dealing, or usage of trade must be construed whenever reasonable as consistent with each other. If such a construction is unreasonable:

(1) Express terms prevail over course of performance, course of dealing, and usage of trade;

(2) Course of performance prevails over course of dealing and usage of trade; and

(3) Course of dealing prevails over usage of trade.

(f) Subject to Section 75-2-209, a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance.

(g) Evidence of a relevant usage of trade offered by one (1) party is not admissible unless that party has given the other party notice that the court finds sufficient to prevent unfair surprise to the other party.

§ 75-1-304

Every contract or duty within the Uniform Commercial Code imposes an obligation of good faith in its performance and enforcement.

§ 75-1-305

(a) The remedies provided by the Uniform Commercial Code must be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed but neither consequential or special damages nor penal damages may be had except as specifically provided in the Uniform Commercial Code or by other rule of law.

(b) Any right or obligation declared by the Uniform Commercial Code is enforceable by action unless the provision declaring it specifies a different and limited effect.

§ 75-1-306

A claim or right arising out of an alleged breach may be discharged in whole or in part without consideration by agreement of the aggrieved party in an authenticated record.

§ 75-1-307

A document in due form purporting to be a bill of lading, policy or certificate of insurance, official weigher's or inspector's certificate, consular invoice, or any other document authorized or required by the contract to be issued by a third party is prima facie evidence of its own authenticity and genuineness and of the facts stated in the document by the third party.

§ 75-1-308

(a) A party that with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as “without prejudice,” “under protest,” or the like are sufficient.

(b) Subsection (a) does not apply to an accord and satisfaction.

§ 75-1-309

A term providing that one (1) party or that party's successor in interest may accelerate payment or performance or require collateral or additional collateral “at will” or when the party “deems itself insecure,” or words of similar import, means that the party has power to do so only if that party in good faith believes that the prospect of payment or performance is impaired. The burden of establishing lack of good faith is on the party against which the power has been exercised.

§ 75-1-310

An obligation may be issued as subordinated to performance of another obligation of the person obligated, or a creditor may subordinate its right to performance of an obligation by agreement with either the person obligated or another creditor of the person obligated. Subordination does not create a security interest as against either the common debtor or a subordinated creditor.

Chapter 2 Uniform Commercial Code--Sales

§ 75-2-101

This chapter shall be known and may be cited as Uniform Commercial Code--Sales.

§ 75-2-102

Unless the context otherwise requires, this chapter applies to transactions in goods; it does not apply to any transaction which although in the form of an unconditional contract to sell or present sale is intended to operate only as a security transaction nor does this chapter impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers.

§ 75-2-103

(1) In this chapter unless the context otherwise requires:

(a) “Buyer” means a person that buys or contracts to buy goods.

(b) [Reserved]

(c) “Receipt” of goods means taking physical possession of them.

(d) “Seller” means a person who sells or contracts to sell goods.

(2) Other definitions applying to this chapter or to specified parts thereof, and the sections in which they appear are:

| | “Acceptance” | Section 75-2-606 | | --- | --- | --- | | | “Banker's credit” | Section 75-2-325 | | | “Between merchants” | Section 75-2-104 | | | “Cancellation” | Section 75-2-106(4) | | | “Commercial unit” | Section 75-2-105 | | | “Confirmed credit” | Section 75-2-325 | | | “Conforming to contract” | Section 75-2-106 | | | “Contract for sale” | Section 75-2-106 | | | “Cover” | Section 75-2-712 | | | “Entrusting” | Section 75-2-403 | | | “Financing agency” | Section 75-2-104 | | | “Future goods” | Section 75-2-105 | | | “Goods” | Section 75-2-105 | | | “Identification” | Section 75-2-501 | | | “Installment contract” | Section 75-2-612 | | | “Letter of Credit” | Section 75-2-325 | | | “Lot” | Section 75-2-105 | | | “Merchant” | Section 75-2-104 | | | “Overseas” | Section 75-2-323 | | | “Person in position of seller” | Section 75-2-707 | | | “Present sale” | Section 75-2-106 | | | “Sale” | Section 75-2-106 | | | “Sale on approval” | Section 75-2-326 | | | “Sale or return” | Section 75-2-326 | | | “Termination” | Section 75-2-106 |

(3) The following definitions in other chapters apply to this chapter:

| | “Check” | Section 75-3-104 | | --- | --- | --- | | | “Consignee” | Section 75-7-102 | | | “Consignor” | Section 75-7-102 | | | “Consumer goods” | Section 75-9-102 | | | “Control” | Section 75-7-106 | | | “Dishonor” | Section 75-3-502 | | | “Draft” | Section 75-3-104 |

(4) In addition Chapter 1 contains general definitions and principles of construction and interpretation applicable throughout this chapter.

§ 75-2-104

(1) “Merchant” means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.

(2) “Financing agency” means a bank, finance company or other person who in the ordinary course of business makes advances against goods or documents of title or who by arrangement with either the seller or the buyer intervenes in ordinary course to make or collect payment due or claimed under the contract for sale, as by purchasing or paying the seller's draft or making advances against it or by merely taking it for collection whether or not documents of title accompany or are associated with the draft. “Financing agency” includes also a bank or other person who similarly intervenes between persons that are in the position of seller and buyer in respect to the goods (Section 75-2-707).

(3) “Between merchants” means in any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants.

§ 75-2-105

(1) “Goods” means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (Chapter 8) and things in action. “Goods” also includes the unborn young of animals and growing crops and other identified things attached to realty as described in the section on goods to be severed from realty (Section 2-107) [Section 75-2-107].

(2) Goods must be both existing and identified before any interest in them can pass. Goods which are not both existing and identified are “future” goods. A purported present sale of future goods or of any interest therein operates as a contract to sell.

(3) There may be a sale of a part interest in existing identified goods.

(4) An undivided share in an identified bulk of fungible goods is sufficiently identified to be sold although the quantity of the bulk is not determined. Any agreed proportion of such a bulk or any quantity thereof agreed upon by number, weight or other measure may to the extent of the seller's interest in the bulk be sold to the buyer who then becomes an owner in common.

(5) “Lot” means a parcel or a single article which is the subject matter of a separate sale or delivery, whether or not it is sufficient to perform the contract.

(6) “Commercial unit” means such a unit of goods as by commercial usage is a single whole for purposes of sale and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article (as a machine) or a set of articles (as a suite of furniture or an assortment of sizes) or a quantity (as a bale, gross, or carload) or any other unit treated in use or in the relevant market as a single whole.

§ 75-2-106

(1) In this chapter unless the context otherwise requires “contract” and “agreement” are limited to those relating to the present or future sale of goods. “Contract for sale” includes both a present sale of goods and a contract to sell goods at a future time. A “sale” consists in the passing of title from the seller to the buyer for a price (Section 2-401) [Section 75-2-401]. A “present sale” means a sale which is accomplished by the making of the contract.

(2) Goods or conduct including any part of a performance are “conforming” or conform to the contract when they are in accordance with the obligations under the contract.

(3) “Termination” occurs when either party pursuant to a power created by agreement or law puts an end to the contract otherwise than for its breach. On “termination” all obligations which are still executory on both sides are discharged but any right based on prior breach or performance survives.

(4) “Cancellation” occurs when either party puts an end to the contract for breach by the other and its effect is the same as that of “termination” except that the cancelling party also retains any remedy for breach of the whole contract or any unperformed balance.

§ 75-2-107

(1) A contract for the sale of minerals or the like (including oil and gas) or a structure or its materials to be removed from realty is a contract for the sale of goods within this chapter if they are to be severed by the seller but until severance a purported present sale thereof which is not effective as a transfer of an interest in land is effective only as a contract to sell.

(2) A contract for the sale apart from the land of growing crops or other things attached to realty and capable of severance without material harm thereto but not described in subsection (1) or of timber to be cut is a contract for the sale of goods within this chapter whether the subject matter is to be severed by the buyer or by the seller even though it forms part of the realty at the time of contracting, and the parties can by identification effect a present sale before severance.

(3) The provisions of this section are subject to any third-party rights provided by the law relating to realty records, including the priority of previously recorded deeds of trust under Section 89-5-5, and the contract for sale may be executed and recorded as a document transferring an interest in land and shall then constitute notice to third parties of the buyer's rights under the contract for sale.

§ 75-2-201

(1) Except as otherwise provided in this section, a contract for the sale of goods for the price of five hundred dollars ($500.00) or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.

(2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within ten (10) days after it is received.

(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable

(a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or

(b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or

(c) with respect to goods for which payment has been made and accepted or which have been received and accepted (Section 2-606) [§ 75-2-606].

§ 75-2-202

Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented:

(a) By course of performance, course of dealing or usage of trade [Section 75-1-303]; and

(b) By evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement.

§ 75-2-203

The affixing of a seal to a writing evidencing a contract for sale or an offer to buy or to sell goods does not constitute the writing a sealed instrument and the law with respect to sealed instruments does not apply to such a contract or offer.

§ 75-2-204

(1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.

(2) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined.

(3) Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.

§ 75-2-205

An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three (3) months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.

§ 75-2-206

(1) Unless otherwise unambiguously indicated by the language or circumstances

(a) an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances;

(b) an order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or nonconforming goods, but such a shipment of nonconforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer.

(2) Where the beginning of a requested performance is a reasonable mode of acceptance, an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance.

§ 75-2-207

(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.

(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:

(a) the offer expressly limits acceptance to the terms of the offer;

(b) they materially alter it; or

(c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this code.

§ 75-2-209

(1) An agreement modifying a contract within this chapter needs no consideration to be binding.

(2) A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.

(3) The requirements of the statute of frauds section of this chapter (Section 2-201) [Section 75-2-201] must be satisfied if the contract as modified is within its provisions.

(4) Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) it can operate as a waiver.

(5) A party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver.

§ 75-2-210

(1) A party may perform his duty through a delegate unless otherwise agreed or unless the other party has a substantial interest in having his original promisor perform or control the acts required by the contract. No delegation of performance relieves the party delegating of any duty to perform or any liability for breach.

(2) Except as otherwise provided in Section 75-9-406, unless otherwise agreed, all rights of either seller or buyer can be assigned except where the assignment would materially change the duty of the other party, or increase materially the burden or risk imposed on him by his contract, or impair materially his chance of obtaining return performance. A right to damages for breach of the whole contract or a right arising out of the assignor's due performance of his entire obligation can be assigned despite agreement otherwise.

(3) The creation, attachment, perfection, or enforcement of a security interest in the seller's interest under a contract is not a transfer that materially changes the duty of or increases materially the burden or risk imposed on the buyer or impairs materially the buyer's chance of obtaining return performance within the purview of subsection (2) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the seller. Even in that event, the creation, attachment, perfection, and enforcement of the security interest remain effective, but (i) the seller is liable to the buyer for damages caused by the delegation to the extent that the damages could not reasonably be prevented by the buyer, and (ii) a court having jurisdiction may grant other appropriate relief, including cancellation of the contract for sale or an injunction against enforcement of the security interest or consummation of the enforcement.

(4) Unless the circumstances indicate the contrary a prohibition of assignment of “the contract” is to be construed as barring only the delegation to the assignee of the assignor's performance.

(5) An assignment of “the contract” or of “all my rights under the contract” or an assignment in similar general terms is an assignment of rights and unless the language or the circumstances (as in an assignment for security) indicate the contrary, it is a delegation of performance of the duties of the assignor and its acceptance by the assignee constitutes a promise by him to perform those duties. This promise is enforceable by either the assignor or the other party to the original contract.

(6) The other party may treat any assignment which delegates performance as creating reasonable grounds for insecurity and may without prejudice to his rights against the assignor demand assurances from the assignee (Section 75-2-609).

§ 75-2-301

The obligation of the seller is to transfer and deliver and that of the buyer is to accept and pay in accordance with the contract.

§ 75-2-302

(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

(2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

§ 75-2-303

Where this chapter allocates a risk or a burden as between the parties “unless otherwise agreed,” the agreement may not only shift the allocation but may also divide the risk of burden.

§ 75-2-304

(1) The price can be made payable in money or otherwise. If it is payable in whole or in part in goods each party is a seller of the goods which he is to transfer.

(2) Even though all or part of the price is payable in an interest in realty the transfer of the goods and the seller's obligations with reference to them are subject to this chapter, but not the transfer of the interest in realty or the transferor's obligations in connection therewith.

§ 75-2-305

(1) The parties if they so intend can conclude a contract for sale even though the price is not settled. In such a case the price is a reasonable price at the time for delivery if

(a) nothing is said as to price; or

(b) the price is left to be agreed by the parties and they fail to agree; or

(c) the price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and it is not so set or recorded.

(2) A price to be fixed by the seller or by the buyer means a price for him to fix in good faith.

(3) When a price left to be fixed otherwise than by agreement of the parties fails to be fixed through fault of one party the other may at his option treat the contract as cancelled or himself fix a reasonable price.

(4) Where, however, the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no contract. In such a case the buyer must return any goods already received or if unable so to do must pay their reasonable value at the time of delivery and the seller must return any portion of the price paid on account.

§ 75-2-306

(1) A term which measures the quantity by the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any stated estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded.

(2) A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.

§ 75-2-307

Unless otherwise agreed all goods called for by a contract for sale must be tendered in a single delivery and payment is due only on such tender but where the circumstances give either party the right to make or demand delivery in lots the price if it can be apportioned may be demanded for each lot.

§ 75-2-308

Unless otherwise agreed

(a) the place for delivery of goods is the seller's place of business or if he has none his residence; but

(b) in a contract for sale of identified goods which to the knowledge of the parties at the time of contracting are in some other place, that place is the place for their delivery; and

(c) documents of title may be delivered through customary banking channels.

§ 75-2-309

(1) The time for shipment or delivery or any other action under a contract if not provided in this chapter or agreed upon shall be a reasonable time.

(2) Where the contract provides for successive performances but is indefinite in duration it is valid for a reasonable time but unless otherwise agreed may be terminated at any time by either party.

(3) Termination of a contract by one party except on the happening of an agreed event requires that reasonable notification be received by the other party and an agreement dispensing with notification is invalid if its operation would be unconscionable.

§ 75-2-310

Unless otherwise agreed:

(a) Payment is due at the time and place at which the buyer is to receive the goods even though the place of shipment is the place of delivery; and

(b) If the seller is authorized to send the goods he may ship them under reservation, and may tender the documents of title, but the buyer may inspect the goods after their arrival before payment is due unless such inspection is inconsistent with the terms of the contract (Section 75-2-513); and

(c) If delivery is authorized and made by way of documents of title otherwise than by subsection (b) then payment is due regardless of where the goods are to be received (i) at the time and place at which the buyer is to receive delivery of the tangible documents or (ii) at the time the buyer is to receive delivery of the electronic documents and at the seller's place of business or if none, the seller's residence; and

(d) Where the seller is required or authorized to ship the goods on credit the credit period runs from the time of shipment but postdating the invoice or delaying its dispatch will correspondingly delay the starting of the credit period.

§ 75-2-311

(1) An agreement for sale which is otherwise sufficiently definite (subsection (3) of Section 2-204) [Section 75-2-204(3) ] to be a contract is not made invalid by the fact that it leaves particulars of performance to be specified by one of the parties. Any such specification must be made in good faith and within limits set by commercial reasonableness.

(2) Unless otherwise agreed specifications relating to assortment of the goods are at the buyer's option and except as otherwise provided in subsections (1)(c) and (3) of Section 2-319 [Section 75-2-319(1)(c) and (3) ] specifications or arrangements relating to shipment are at the seller's option.

(3) Where such specification would materially affect the other party's performance but is not seasonably made or where one party's cooperation is necessary to the agreed performance of the other but is not seasonably forthcoming, the other party in addition to all other remedies

(a) is excused for any resulting delay in his own performance; and,

(b) may also either proceed to perform in any reasonable manner or after the time for a material part of his own performance treat the failure to specify or to cooperate as a breach by failure to deliver or accept the goods.

§ 75-2-312

(1) Subject to subsection (2) there is in a contract for sale a warranty by the seller that

(a) the title conveyed shall be good, and its transfer rightful; and

(b) the goods shall be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting has no knowledge.

(2) A warranty under subsection (1) will be excluded or modified only by a specific language or by circumstances which give the buyer reason to know that the person selling does not claim title in himself or that he is purporting to sell only such right or title as he or a third person may have.

(3) Unless otherwise agreed a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any third person by way of infringement or the like but a buyer who furnishes specifications to the seller must hold the seller harmless against any such claim which arises out of compliance with the specifications.

§ 75-2-313

(1) Express warranties by the seller are created as follows:

(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.

(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.

(c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.

(2) It is not necessary to the creation of an express warranty that the seller use formal words such as “warrant” or “guarantee” or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty.

§ 75-2-314

(1) Except as otherwise provided in this section or unless excluded or modified (Section 75-2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale.

(2) Goods to be merchantable must be at least such as:

(a) Pass without objection in the trade under the contract description; and

(b) In the case of fungible goods, are of fair average quality within the description; and

(c) Are fit for the ordinary purposes for which such goods are used; and

(d) Run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and

(e) Are adequately contained, packaged and labeled as the agreement may require; and

(f) Conform to the promises or affirmations of fact made on the container or label if any.

(3) Unless excluded or modified (Section 75-2-316), other implied warranties may arise from course of dealing or usage of trade.

(4) With respect to the sale of cattle, hogs and sheep, there shall be no implied warranty that the cattle, hogs and sheep are free from sickness or disease at the time the sale is consummated, conditioned upon reasonable showing by the seller or his agent that all state and federal regulations pertaining to animal health were complied with.

§ 75-2-315

Except as otherwise provided in this section, where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is, unless excluded or modified under Section 75-2-316, an implied warranty that the goods shall be fit for such purpose. Provided, however, with respect to the sale of cattle, hogs and sheep, there shall be no implied warranty that the cattle, hogs and sheep are free from sickness or disease at the time the same is consummated, conditioned upon reasonable showing by the seller or his agent that all state and federal regulations pertaining to animal health were complied with.

§ 75-2-316

(1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to Section 75-2-202, negation or limitation is inoperative to the extent that such construction is unreasonable.

(2) To exclude or modify the implied warranty of merchantability or any part of it in a contract between merchants the language must mention merchantability and in case of a record must be conspicuous. To exclude or modify the implied warranty of fitness in a contract between merchants, the exclusion must be in a record and be conspicuous and the language is sufficient if it states, for example, that “There are no warranties that extend beyond the description on the face hereof.”

(3) Notwithstanding subsection (1) and (2), any oral or written language used by a seller of consumer goods and services, which attempts to exclude or modify any implied warranties of merchantability and fitness for a particular purpose or to exclude or modify the consumer's remedies for breach of those warranties, is unenforceable. However, the seller may recover from the manufacturer any damages resulting from breach of the implied warranty of merchantability or fitness for a particular purpose.

(4) Any oral or written language used by a manufacturer of consumer goods, which attempts to limit or modify a consumer's remedies for breach of the manufacturer's express warranties, is unenforceable.

(5)(a) The provisions of subsections (3) and (4) do not apply to a motor vehicle:

(i) Required to be titled under the state law;

(ii) That is over six (6) model years old or that has been driven more than seventy-five thousand (75,000) miles; and

(iii) If, at the time of the sale of the motor vehicle, the seller gives the purchaser notice of the inapplicability of this section on the form prescribed by the State Attorney General.

(b) With respect to this subsection (5) only:

(i) An exclusion or modification of an implied warranty of merchantability, or any part of a warranty shall be in writing, mention merchantability, and be conspicuous.

(ii) An exclusion or modification of the implied warranty of fitness shall be in writing and conspicuous.

(iii) Any exclusion or modification of either warranty shall be separately acknowledged by the signature of the buyer.

(6) Notwithstanding subsection (2):

(a) Unless the circumstances indicate otherwise, in contracts between merchants all implied warranties are excluded by expressions like “as is,” “with all faults” or other language that in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty; and

(b) For sales between merchants, an implied warranty may also be excluded or modified by course of dealing or course of performance or usage of trade.

(7) Remedies for breach of warranty may be limited in accordance with Sections 75-2-718 and 75-2-719.

§ 75-2-317

Warranties whether express or implied shall be construed as consistent with each other and as cumulative, but if such construction is unreasonable the intention of the parties shall determine which warranty is dominant. In ascertaining that intention the following rules apply:

(a) Exact or technical specifications displace an inconsistent sample or model or general language of description.

(b) A sample from an existing bulk displaces inconsistent general language of description.

(c) Express warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular purpose.

§ 75-2-318

A seller's warranty whether express or implied extends to any natural person who is in the family or household of his buyer or who is a guest in his home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. A seller may not exclude or limit the operation of this section.

§ 75-2-319

(1) Unless otherwise agreed the term F.O.B. (which means “free on board”) at a named place, even though used only in connection with the stated price, is a delivery term under which

(a) when the term is F.O.B. the place of shipment, the seller must at that place ship the goods in the manner provided in this chapter (Section 2-504) [Section 75-2-504] and bear the expense and risk of putting them into the possession of the carrier; or

(b) when the term is F.O.B. the place of destination, the seller must at his own expense and risk transport the goods to that place and there tender delivery of them in the manner provided in this chapter (Section 2-503) [Section 75-2-503];

(c) when under either (a) or (b) the term is also F.O.B. vessel, car or other vehicle, the seller must in addition at his own expense and risk load the goods on board. If the term is F.O.B. vessel the buyer must name the vessel and in an appropriate case the seller must comply with the provisions of this chapter on the form of bill of lading (Section 2-323) [Section 75-2-323].

(2) Unless otherwise agreed the term F.A.S. vessel (which means “free alongside”) at a named port, even though used only in connection with the stated price, is a delivery term under which the seller must

(a) at his own expense and risk deliver the goods alongside the vessel in the manner usual in that port or on a dock designated and provided by the buyer; and

(b) obtain and tender a receipt for the goods in exchange for which the carrier is under a duty to issue a bill of lading.

(3) Unless otherwise agreed in any case falling within subsection (1)(a) or (c) or subsection (2) the buyer must seasonably give any needed instructions for making delivery, including when the term is F.A.S. or F.O.B. the loading berth of the vessel and in an appropriate case its name and sailing date. The seller may treat the failure of needed instructions as a failure of cooperation under this chapter (Section 2-311) [Section 75-2-311]. He may also at his option move the goods in any reasonable manner preparatory to delivery or shipment.

(4) Under the term F.O.B. vessel or F.A.S. unless otherwise agreed the buyer must make payment against tender of the required documents and the seller may not tender nor the buyer demand delivery of the goods in substitution for the documents.

§ 75-2-320

(1) The term C.I.F. means that the price includes in a lump sum the cost of the goods and the insurance and freight to the named destination. The term C. & F. or C.F. means that the price so includes cost and freight to the named destination.

(2) Unless otherwise agreed and even though used only in connection with the stated price and destination, the term C.I.F. destination or its equivalent requires the seller at his own expense and risk to

(a) put the goods into the possession of a carrier at the port for shipment and obtain a negotiable bill or bills of lading covering the entire transportation to the named destination; and

(b) load the goods and obtain a receipt from the carrier (which may be contained in the bill of lading) showing that the freight has been paid or provided for; and

(c) obtain a policy or certificate of insurance, including any war risk insurance, of a kind and on terms then current at the port of shipment in the usual amount, in the currency of the contract, shown to cover the same goods covered by the bill of lading and providing for payment of loss to the order of the buyer or for the account of whom it may concern; but the seller may add to the price the amount of the premium for any such war risk insurance; and

(d) prepare an invoice of the goods and procure any other documents required to effect shipment or to comply with the contract; and

(e) forward and tender with commercial promptness all the documents in due form and with any indorsement necessary to perfect the buyer's rights.

(3) Unless otherwise agreed the term C. & F. or its equivalent has the same effect and imposes upon the seller the same obligations and risks as a C.I.F. term except the obligation as to insurance.

(4) Under the term C.I.F. or C. & F. unless otherwise agreed the buyer must make payment against tender of the required documents and the seller may not tender nor the buyer demand delivery of the goods in substitution for the documents.

§ 75-2-321

Under a contract containing a term C.I.F. or C. & F.

(1) Where the price is based on or is to be adjusted according to “net landed weights,” “delivered weights,” “out turn” quantity or quality or the like, unless otherwise agreed the seller must reasonably estimate the price. The payment due on tender of the documents called for by the contract is the amount so estimated, but after final adjustment of the price a settlement must be made with commercial promptness.

(2) An agreement described in subsection (1) or any warranty of quality or condition of the goods on arrival places upon the seller the risk of ordinary deterioration, shrinkage and the like in transportation but has no effect on the place or time of identification to the contract for sale or delivery or on the passing of the risk of loss.

(3) Unless otherwise agreed where the contract provides for payment on or after arrival of the goods the seller must before payment allow such preliminary inspection as is feasible; but if the goods are lost delivery of the documents and payment are due when the goods should have arrived.

§ 75-2-322

(1) Unless otherwise agreed a term for delivery of goods “ex-ship” (which means from the carrying vessel) or in equivalent language is not restricted to a particular ship and requires delivery from a ship which has reached a place at the named port of destination where goods of the kind are usually discharged.

(2) Under such a term unless otherwise agreed

(a) the seller must discharge all liens arising out of the carriage and furnish the buyer with a direction which puts the carrier under a duty to deliver the goods; and

(b) the risk of loss does not pass to the buyer until the goods leave the ship's tackle or are otherwise properly unloaded.

§ 75-2-323

(1) Where the contract contemplates overseas shipment and contains a term CIF or C&F or FOB vessel, the seller unless otherwise agreed must obtain a negotiable bill of lading stating that the goods have been loaded on board or, in the case of a term CIF or C&F, received for shipment.

(2) Where in a case within subsection (1) a tangible bill of lading has been issued in a set of parts, unless otherwise agreed if the documents are not to be sent from abroad the buyer may demand tender of the full set; otherwise only one (1) part of the bill of lading need be tendered. Even if the agreement expressly requires a full set:

(a) Due tender of a single part is acceptable within the provisions of this chapter on cure of improper delivery (subsection (1) of Section 75-2-508); and

(b) Even though the full set is demanded, if the documents are sent from abroad the person tendering an incomplete set may nevertheless require payment upon furnishing an indemnity which the buyer in good faith deems adequate.

(3) A shipment by water or by air or a contract contemplating such shipment is “overseas” insofar as by usage of trade or agreement it is subject to the commercial, financing or shipping practices characteristic of international deep water commerce.

§ 75-2-324

Under a term “no arrival, no sale” or terms of like meaning, unless otherwise agreed,

(a) the seller must properly ship conforming goods and if they arrive by any means he must tender them on arrival but he assumes no obligation that the goods will arrive unless he has caused the nonarrival; and

(b) where without fault of the seller the goods are in part lost or have so deteriorated as no longer to conform to the contract or arrive after the contract time, the buyer may proceed as if there had been casualty to identified goods (Section 2-613) [Section 75-2-613].

§ 75-2-325

(1) Failure of the buyer seasonably to furnish an agreed letter of credit is a breach of the contract for sale.

(2) The delivery to seller of a proper letter of credit suspends the buyer's obligation to pay. If the letter of credit is dishonored, the seller may on seasonable notification to the buyer require payment directly from him.

(3) Unless otherwise agreed the term “letter of credit” or “banker's credit” in a contract for sale means an irrevocable credit issued by a financing agency of good repute and, where the shipment is overseas, of good international repute. The term “confirmed credit” means that the credit must also carry the direct obligation of such an agency which does business in the seller's financial market.

§ 75-2-326

(1) Unless otherwise agreed, if delivered goods may be returned by the buyer even though they conform to the contract, the transaction is

(a) A “sale on approval” if the goods are delivered primarily for use, and

(b) A “sale or return” if the goods are delivered primarily for resale.

(2) Goods held on approval are not subject to the claims of the buyer's creditors until acceptance; goods held on sale or return are subject to such claims while in the buyer's possession.

(3) Any “or return” term of a contract for sale is to be treated as a separate contract for sale within the statute of frauds section of this chapter (Section 75-2-201) and as contradicting the sale aspect of the contract within the provisions of this chapter on parol or extrinsic evidence (Section 75-2-202).

§ 75-2-327

(1) Under a sale on approval unless otherwise agreed

(a) although the goods are identified to the contract the risk of loss and the title do not pass to the buyer until acceptance; and

(b) use of the goods consistent with the purpose of trial is not acceptance but failure seasonably to notify the seller of election to return the goods is acceptance, and if the goods conform to the contract acceptance of any part is acceptance of the whole; and

(c) after due notification of election to return, the return is at the seller's risk and expense but a merchant buyer must follow any reasonable instructions.

(2) Under a sale or return unless otherwise agreed

(a) the option to return extends to the whole or any commercial unit of the goods while in substantially their original condition, but must be exercised seasonably and

(b) the return is at the buyer's risk and expense.

§ 75-2-328

(1) In a sale by auction if goods are put up in lots each lot is the subject of a separate sale.

(2) A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner. Where a bid is made while the hammer is falling in acceptance of a prior bid the auctioneer may in his discretion reopen the bidding or declare the goods sold under the bid on which the hammer was falling.

(3) Such a sale is with reserve unless the goods are in explicit terms put up without reserve. In an auction with reserve the auctioneer may withdraw the goods at any time until he announces completion of the sale. In an auction without reserve, after the auctioneer calls for bids on an article or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonable time. In either case a bidder may retract his bid until the auctioneer's announcement of completion of the sale, but a bidder's retraction does not revive any previous bid.

(4) If the auctioneer knowingly receives a bid on the seller's behalf or the seller makes or procures such a bid, and notice has not been given that liberty for such bidding is reserved, the buyer may at his option avoid the sale or take the goods at the price of the last good faith bid prior to the completion of the sale. This subsection shall not apply to any bid at a forced sale.

§ 75-2-401

Each provision of this chapter with regard to the rights, obligations and remedies of the seller, the buyer, purchasers or other third parties applies irrespective of title to the goods except where the provision refers to such title. Insofar as situations are not covered by the other provisions of this chapter and matters concerning title become material the following rules apply:

(1) Title to goods cannot pass under a contract for sale prior to their identification to the contract (Section 75-2-501), and unless otherwise explicitly agreed the buyer acquires by their identification a special property as limited by the Uniform Commercial Code. Any retention or reservation by the seller of the title (property) in goods shipped or delivered to the buyer is limited in effect to a reservation of a security interest. Subject to these provisions and to the provisions of the chapter on Secured Transactions (Chapter 9), title to goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed on by the parties.

(2) Unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the goods, despite any reservation of a security interest and even though a document of title is to be delivered at a different time or place; and in particular and despite any reservation of a security interest by the bill of lading:

(a) If the contract requires or authorizes the seller to send the goods to the buyer but does not require him to deliver them at destination, title passes to the buyer at the time and place of shipment; but

(b) If the contract requires delivery at destination, title passes on tender there.

(3) Unless otherwise explicitly agreed where delivery is to be made without moving the goods:

(a) If the seller is to deliver a tangible document of title, title passes at the time, when and the place where he delivers such documents and if the seller is to deliver an electronic document of title, title passes when the seller delivers the document; or

(b) If the goods are at the time of contracting already identified and no documents of title are to be delivered, title passes at the time and place of contracting.

(4) A rejection or other refusal by the buyer to receive or retain the goods, whether or not justified, or a justified revocation of acceptance revests title to the goods in the seller. Such revesting occurs by operation of law and is not a “sale.”

§ 75-2-402

(1) Except as provided in subsections (2) and (3), rights of unsecured creditors of the seller with respect to goods which have been identified to a contract for sale are subject to the buyer's rights to recover the goods under this chapter (Sections 2-502 and 2-716) [Sections 75-2-502 and 75-2-716].

(2) A creditor of the seller may treat a sale or an identification of goods to a contract for sale as void if as against him a retention of possession by the seller is fraudulent under any rule of law of the state where the goods are situated, except that retention of possession in good faith and current course of trade by a merchant-seller for a commercially reasonable time after a sale or identification is not fraudulent.

(3) Nothing in this chapter shall be deemed to impair the rights of creditors of the seller

(a) under the provisions of the chapter on Secured Transactions (Chapter 9); or

(b) where identification to the contract or delivery is made not in current course of trade but in satisfaction of or as security for a preexisting claim for money, security or the like and is made under circumstances which under any rule of law of the state where the goods are situated would apart from this chapter constitute the transaction a fraudulent transfer or voidable preference.

§ 75-2-403

(1) A purchaser of goods acquires all title which his transferor had or had power to transfer except that a purchaser of a limited interest acquires rights only to the extent of the interest purchased. A person with voidable title has power to transfer a good title to a good faith purchaser for value. When goods have been delivered under a transaction of purchase the purchaser has such power even though

(a) the transferor was deceived as to the identity of the purchaser, or

(b) the delivery was in exchange for a check which is later dishonored, or

(c) it was agreed that the transaction was to be a “cash sale,” or

(d) the delivery was procured through fraud punishable as larcenous under the criminal law.

(2) Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in ordinary course of business.

(3) “Entrusting” includes any delivery and any acquiescence in retention of possession regardless of any condition expressed between the parties to the delivery or acquiescence and regardless of whether the procurement of the entrusting or the possessor's disposition of the goods have been such as to be larcenous under the criminal law.

(4) The rights of other purchasers of goods and of lien creditors are governed by the chapters on Secured Transactions (Chapter 9), Bulk Transfers (Chapter 6) and Documents of Title (Chapter 7).

§ 75-2-501

(1) The buyer obtains a special property and an insurable interest in goods by identification of existing goods as goods to which the contract refers even though the goods so identified are nonconforming and he has an option to return or reject them. Such identification can be made at any time and in any manner explicitly agreed to by the parties. In the absence of explicit agreement identification occurs

(a) when the contract is made if it is for the sale of goods already existing and identified;

(b) if the contract is for the sale of future goods other than those described in paragraph (c), when goods are shipped, marked or otherwise designated by the seller as goods to which the contract refers;

(c) when the crops are planted or otherwise become growing crops or the young are conceived if the contract is for the sale of unborn young to be born within twelve (12) months after contracting or for the sale of crops to be harvested within twelve (12) months or the next normal harvest season after contracting whichever is longer.

(2) The seller retains an insurable interest in goods so long as title to or any security interest in the goods remains in him and where the identification is by the seller alone he may until default or insolvency or notification to the buyer that the identification is final substitute other goods for those identified.

(3) Nothing in this section impairs any insurable interest recognized under any other statute or rule of law.

§ 75-2-502

(1) Subject to subsections (2) and (3) and even though the goods have not been shipped a buyer who has paid a part or all of the price of goods in which he has a special property under the provisions of Section 75-2-501 may on making and keeping good a tender of any unpaid portion of their price recover them from the seller if:

(a) In the case of goods bought for personal, family, or household purposes, the seller repudiates or fails to deliver as required by the contract; or

(b) In all cases, the seller becomes insolvent within ten (10) days after receipt of the first installment on their price.

(2) The buyer's right to recover the goods under subsection (1)(a) vests upon acquisition of a special property, even if the seller had not then repudiated or failed to deliver.

(3) If the identification creating his special property has been made by the buyer he acquires the right to recover the goods only if they conform to the contract for sale.

§ 75-2-503

(1) Tender of delivery requires that the seller put and hold conforming goods at the buyer's disposition and give the buyer any notification reasonably necessary to enable him to take delivery. The manner, time and place for tender are determined by the agreement and this chapter, and in particular:

(a) Tender must be at a reasonable hour, and if it is of goods they must be kept available for the period reasonably necessary to enable the buyer to take possession; but

(b) Unless otherwise agreed the buyer must furnish facilities reasonably suited to the receipt of the goods.

(2) Where the case is within the Section 75-2-504 respecting shipment tender requires that seller comply with its provisions.

(3) Where the seller is required to deliver at a particular destination tender requires that he comply with subsection (1) and also in any appropriate case tender documents as described in subsections (4) and (5) of this section.

(4) Where goods are in the possession of a bailee and are to be delivered without being moved:

(a) Tender requires that the seller either tender a negotiable document of title covering such goods or procure acknowledgment by the bailee of the buyer's right to possession of the goods; but

(b) Tender to the buyer of a nonnegotiable document of title or of a record directing the bailee to deliver is sufficient tender unless the buyer seasonably objects, and except as otherwise provided in Article 9 receipt by the bailee of notification of the buyer's rights fixes those rights as against the bailee and all third persons; but risk of loss of the goods and of any failure by the bailee to honor the nonnegotiable document of title or to obey the direction remains on the seller until the buyer has had a reasonable time to present the document or direction, and a refusal by the bailee to honor the document or to obey the direction defeats the tender.

(5) Where the contract requires the seller to deliver documents:

(a) He must tender all such documents in correct form, except as provided in this chapter with respect to bills of lading in a set (Section 75-2-323(2)); and

(b) Tender through customary banking channels is sufficient and dishonor of a draft accompanying or associated with the documents constitutes nonacceptance or rejection.

§ 75-2-504

Where the seller is required or authorized to send the goods to the buyer and the contract does not require him to deliver them at a particular destination, then unless otherwise agreed he must

(a) put the goods in the possession of such a carrier and make such a contract for their transportation as may be reasonable having regard to the nature of the goods and other circumstances of the case; and

(b) obtain and promptly deliver or tender in due form any document necessary to enable the buyer to obtain possession of the goods or otherwise required by the agreement or by usage of trade; and

(c) promptly notify the buyer of the shipment.

Failure to notify the buyer under paragraph (c) or to make a proper contract under paragraph (a) is a ground for rejection only if material delay or loss ensues.

§ 75-2-505

(1) Where the seller has identified goods to the contract by or before shipment:

(a) His procurement of a negotiable bill of lading to his own order or otherwise reserves in him a security interest in the goods. His procurement of the bill to the order of a financing agency or of the buyer indicates in addition only the seller's expectation of transferring that interest to the person named.

(b) A nonnegotiable bill of lading to himself or his nominee reserves possession of the goods as security but except in a case of conditional delivery (Section 75-2-507(2)) a nonnegotiable bill of lading naming the buyer as consignee reserves no security interest even though the seller retains possession or control of the bill of lading.

(2) When shipment by the seller with reservation of a security interest is in violation of the contract for sale it constitutes an improper contract for transportation within Section 75-2-504 but impairs neither the rights given to the buyer by shipment and identification of the goods to the contract nor the seller's powers as a holder of a negotiable document of title.

§ 75-2-506

(1) A financing agency by paying or purchasing for value a draft which relates to a shipment of goods acquires to the extent of the payment or purchase and in addition to its own rights under the draft and any document of title securing it any rights of the shipper in the goods including the right to stop delivery and the shipper's right to have the draft honored by the buyer.

(2) The right to reimbursement of a financing agency which has in good faith honored or purchased the draft under commitment to or authority from the buyer is not impaired by subsequent discovery of defects with reference to any relevant document which was apparently regular.

§ 75-2-507

(1) Tender of delivery is a condition to the buyer's duty to accept the goods and, unless otherwise agreed, to his duty to pay for them. Tender entitles the seller to acceptance of the goods and to payment according to the contract.

(2) Where payment is due and demanded on the delivery to the buyer of goods or documents of title, his right as against the seller to retain or dispose of them is conditional upon his making the payment due.

§ 75-2-508

(1) Where any tender or delivery by the seller is rejected because nonconforming and the time for performance has not yet expired, the seller may seasonably notify the buyer of his intention to cure and may then within the contract time make a conforming delivery.

(2) Where the buyer rejects a nonconforming tender which the seller had reasonable grounds to believe would be acceptable with or without money allowance the seller may if he seasonably notifies the buyer have a further reasonable time to substitute a conforming tender.

§ 75-2-509

(1) Where the contract requires or authorizes the seller to ship the goods by carrier:

(a) If it does not require him to deliver them at a particular destination, the risk of loss passes to the buyer when the goods are duly delivered to the carrier even though the shipment is under reservation (Section 75-2-505); but

(b) If it does require him to deliver them at a particular destination and the goods are there duly tendered while in the possession of the carrier, the risk of loss passes to the buyer when the goods are there duly so tendered as to enable the buyer to take delivery.

(2) Where the goods are held by a bailee to be delivered without being moved, the risk of loss passes to the buyer:

(a) On his receipt of possession or control of a negotiable document of title covering the goods; or

(b) On acknowledgment by the bailee of the buyer's right to possession of the goods; or

(c) After his receipt of possession or control of a nonnegotiable document of title or other direction to deliver in a record, as provided in Section 75-2-503(4)(b).

(3) In any case not within subsection (1) or (2), the risk of loss passes to the buyer on his receipt of the goods if the seller is a merchant; otherwise the risk passes to the buyer on tender of delivery.

(4) The provisions of this section are subject to contrary agreement of the parties and to the provisions of this chapter on sale on approval (Section 75-2-327) and on effect of breach on risk of loss (Section 75-2-510).

§ 75-2-510

(1) Where a tender or delivery of goods so fails to conform to the contract as to give a right of rejection the risk of their loss remains on the seller until cure or acceptance.

(2) Where the buyer rightfully revokes acceptance he may to the extent of any deficiency in his effective insurance coverage treat the risk of loss as having rested on the seller from the beginning.

(3) Where the buyer as to conforming goods already identified to the contract for sale repudiates or is otherwise in breach before risk of their loss has passed to him, the seller may to the extent of any deficiency in his effective insurance coverage treat the risk of loss as resting on the buyer for a commercially reasonable time.

§ 75-2-511

(1) Unless otherwise agreed tender of payment is a condition to the seller's duty to tender and complete any delivery.

(2) Tender of payment is sufficient when made by any means or in any manner current in the ordinary course of business unless the seller demands payment in legal tender and gives any extension of time reasonably necessary to procure it.

(3) Subject to the provisions of this code on the effect of an instrument on an obligation (Section 75-3-310), payment by check is conditional and is defeated as between the parties by dishonor of the check on due presentment.

§ 75-2-512

(1) Where the contract requires payment before inspection nonconformity of the goods does not excuse the buyer from so making payment unless:

(a) The nonconformity appears without inspection; or

(b) Despite tender of the required documents the circumstances would justify injunction against honor under Section 75-5-109(b).

(2) Payment pursuant to subsection (1) does not constitute an acceptance of goods or impair the buyer's right to inspect or any of his remedies.

§ 75-2-513

(1) Unless otherwise agreed and subject to subsection (3), where goods are tendered or delivered or identified to the contract for sale, the buyer has a right before payment or acceptance to inspect them at any reasonable place and time and in any reasonable manner. When the seller is required or authorized to send the goods to the buyer, the inspection may be after their arrival.

(2) Expenses of inspection must be borne by the buyer but may be recovered from the seller if the goods do not conform and are rejected.

(3) Unless otherwise agreed and subject to the provisions of this chapter on C.I.F. contracts (subsection (3) of Section 2-321) [Section 75-2-321(3) ], the buyer is not entitled to inspect the goods before payment of the price when the contract provides

(a) for delivery “C.O.D.” or on other like terms; or

(b) for payment against documents of title, except where such payment is due only after the goods are to become available for inspection.

(4) A place or method of inspection fixed by the parties is presumed to be exclusive but unless otherwise expressly agreed it does not postpone identification or shift the place for delivery or for passing the risk of loss. If compliance becomes impossible, inspection shall be as provided in this section unless the place or method fixed was clearly intended as an indispensable condition failure of which avoids the contract.

§ 75-2-514

Unless otherwise agreed documents against which a draft is drawn are to be delivered to the drawee on acceptance of the draft if it is payable more than three (3) days after presentment; otherwise, only on payment.

§ 75-2-515

In furtherance of the adjustment of any claim or dispute

(a) either party on reasonable notification to the other and for the purpose of ascertaining the facts and preserving evidence has the right to inspect, test and sample the goods including such of them as may be in the possession or control of the other; and

(b) the parties may agree to a third party inspection or survey to determine the conformity or condition of the goods and may agree that the findings shall be binding upon them in any subsequent litigation or adjustment.

§ 75-2-601

Subject to the provisions of this chapter on breach in installment contracts (Section 2-612) [Section 75-2-612] and unless otherwise agreed under the sections on contractual limitations of remedy (Sections 2-718 and 2-719) [Sections 75-2-718 and 75-2-719], if the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may

(a) reject the whole; or

(b) accept the whole; or

(c) accept any commercial unit or units and reject the rest.

§ 75-2-602

(1) Rejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller.

(2) Subject to the provisions of the two (2) following sections on rejected goods (Sections 2-603 and 2-604) [Sections 75-2-603 and 75-2-604],

(a) after rejection any exercise of ownership by the buyer with respect to any commercial unit is wrongful as against the seller; and

(b) if the buyer has before rejection taken physical possession of goods in which he does not have a security interest under the provisions of this chapter (subsection (3) of Section 2-711) [Section 75-2-711(3) ], he is under a duty after rejection to hold them with reasonable care at the seller's disposition for a time sufficient to permit the seller to remove them; but

(c) the buyer has no further obligations with regard to goods rightfully rejected.

(3) The seller's rights with respect to goods wrongfully rejected are governed by the provisions of this chapter on seller's remedies in general (Section 2-703) [Section 75-2-703].

§ 75-2-603

(1) Subject to any security interest in the buyer (subsection (3) of Section 2-711) [Section 75-2-711(3) ], when the seller has no agent or place of business at the market of rejection a merchant buyer is under a duty after rejection of goods in his possession or control to follow any reasonable instructions received from the seller with respect to the goods and in the absence of such instructions to make reasonable efforts to sell them for the seller's account if they are perishable or threaten to decline in value speedily. Instructions are not reasonable if on demand indemnity for expenses is not forthcoming.

(2) When the buyer sells goods under subsection (1), he is entitled to reimbursement from the seller or out of the proceeds for reasonable expenses of caring for and selling them, and if the expenses include no selling commission then to such commission as is usual in the trade or if there is none to a reasonable sum not exceeding ten per cent (10%) on the gross proceeds.

(3) In complying with this section the buyer is held only to good faith and good faith conduct hereunder is neither acceptance nor conversion nor the basis of an action for damages.

§ 75-2-604

Subject to the provisions of Section 75-2-603 on perishables if the seller gives no instructions within a reasonable time after notification of rejection the buyer may store the rejected goods for the seller's account or reship them to him or resell them for the seller's account with reimbursement as provided in Section 75-2-603. Such action is not acceptance or conversion.

§ 75-2-605

(1) The buyer's failure to state in connection with rejection a particular defect which is ascertainable by reasonable inspection precludes him from relying on the unstated defect to justify rejection or to establish breach:

(a) Where the seller could have cured it if stated seasonably; or

(b) Between merchants when the seller has after rejection made a request in writing for a full and final written statement of all defects on which the buyer proposes to rely.

(2) Payment against documents made without reservation of rights precludes recovery of the payment for defects apparent in the documents.

§ 75-2-606

(1) Acceptance of goods occurs when the buyer

(a) after a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their nonconformity; or

(b) fails to make an effective rejection (subsection (1) of Section 2-602) [§ 75-2-602(1) ], but such acceptance does not occur until the buyer has had a reasonable opportunity to inspect them; or

(c) does any act inconsistent with the seller's ownership; but if such act is wrongful as against the seller it is an acceptance only if ratified by him.

(2) Acceptance of a part of any commercial unit is acceptance of that entire unit.

§ 75-2-607

(1) The buyer must pay at the contract rate for any goods accepted.

(2) Acceptance of goods by the buyer precludes rejection of the goods accepted and if made with knowledge of a nonconformity cannot be revoked because of it unless the acceptance was on the reasonable assumption that the nonconformity would be seasonably cured but acceptance does not of itself impair any other remedy provided by this chapter for nonconformity.

(3) Where a tender has been accepted

(a) the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy; and

(b) if the claim is one for infringement or the like (subsection (3) of Section 2-312) [Section 75-2-312(3) ] and the buyer is sued as a result of such a breach he must so notify the seller within a reasonable time after he receives notice of the litigation or be barred from any remedy over for liability established by the litigation.

(4) The burden is on the buyer to establish any breach with respect to the goods accepted.

(5) Where the buyer is sued for breach of a warranty or other obligation for which his seller is answerable over

(a) he may give his seller written notice of the litigation. If the notice states that the seller may come in and defend and that if the seller does not do so he will be bound in any action against him by his buyer by any determination of fact common to the two (2) litigations, then unless the seller after seasonable receipt of the notice does come in and defend he is so bound.

(b) if the claim is one for infringement or the like (subsection (3) of Section 2-312) [Section 75-2-312(3)] the original seller may demand in writing that his buyer turn over to him control of the litigation including settlement or else be barred from any remedy over and if he also agrees to bear all expense and to satisfy any adverse judgment, then unless the buyer after seasonable receipt of the demand does turn over control the buyer is so barred.

(6) the provisions of subsections (3), (4) and (5) apply to any obligation of a buyer to hold the seller harmless against infringement or the like (subsection (3) of Section 2-312) [Section 75-2-312(3)].

§ 75-2-608

(1) The buyer may revoke his acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to him if he has accepted it

(a) on the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or

(b) without discovery of such nonconformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller's assurances.

(2) Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects. It is not effective until the buyer notifies the seller of it.

(3) A buyer who so revokes has the same rights and duties with regard to the goods involved as if he had rejected them.

§ 75-2-609

(1) A contract for sale imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired. When reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand adequate assurance of due performance and until he receives such assurance may if commercially reasonable suspend any performance for which he has not already received the agreed return.

(2) Between merchants the reasonableness of ground for insecurity and the adequacy of any assurance offered shall be determined according to commercial standards.

(3) Acceptance of any improper delivery or payment does not prejudice the aggrieved party's right to demand adequate assurance of future performance.

(4) After receipt of a justified demand failure to provide within a reasonable time not exceeding thirty (30) days such assurance of due performance as is adequate under the circumstances of the particular case is a repudiation of the contract.

§ 75-2-610

When either party repudiates the contract with respect to a performance not yet due the loss of which will substantially impair the value of the contract to the other, the aggrieved party may

(a) for a commercially reasonable time await performance by the repudiating party; or

(b) resort to any remedy for breach (Section 2-703 or Section 2-711) [Section 75-2-703 or 75-2-711], even though he has notified the repudiating party that he would await the latter's performance and has urged retraction; and

(c) in either case suspend his own performance or proceed in accordance with the provisions of this chapter on the seller's right to identify goods to the contract notwithstanding breach or to salvage unfinished goods (Section 2-704) [Section 75-2-704].

§ 75-2-611

(1) Until the repudiating party's next performance is due he can retract his repudiation unless the aggrieved party has since the repudiation cancelled or materially changed his position or otherwise indicated that he considers the repudiation final.

(2) Retraction may be by any method which clearly indicates to the aggrieved party that the repudiating party intends to perform, but must include any assurance justifiably demanded under the provisions of this chapter (Section 2-609) [Section 75-2-609].

(3) Retraction reinstates the repudiating party's rights under the contract with due excuse and allowance to the aggrieved party for any delay occasioned by the repudiation.

§ 75-2-612

(1) An “installment contract” is one which requires or authorizes the delivery of goods in separate lots to be separately accepted, even though the contract contains a clause “each delivery is a separate contract” or its equivalent.

(2) The buyer may reject any installment which is nonconforming if the nonconformity substantially impairs the value of that installment and cannot be cured or if the nonconformity is a defect in the required documents; but if the nonconformity does not fall within subsection (3) and the seller gives adequate assurance of its cure the buyer must accept that installment.

(3) Whenever nonconformity or default with respect to one (1) or more installments substantially impairs the value of the whole contract there is a breach of the whole. But the aggrieved party reinstates the contract if he accepts a nonconforming installment without seasonably notifying of cancellation or if he brings an action with respect only to past installments or demands performance as to future installments.

§ 75-2-613

Where the contract requires for its performance goods identified when the contract is made, and the goods suffer casualty without fault of either party before the risk of loss passes to the buyer, or in a proper case under a “no arrival, no sale” term (Section 2-324) [Section 75-2-324] then

(a) if the loss is total the contract is avoided; and

(b) if the loss is partial or the goods have so deteriorated as no longer to conform to the contract the buyer may nevertheless demand inspection and at his option either treat the contract as avoided or accept the goods with due allowance from the contract price for the deterioration or the deficiency in quantity but without further right against the seller.

§ 75-2-614

(1) Where without fault of either party the agreed berthing, loading, or unloading facilities fail or an agreed type of carrier becomes unavailable or the agreed manner of delivery otherwise becomes commercially impracticable but a commercially reasonable substitute is available, such substitute performance must be tendered and accepted.

(2) If the agreed means or manner of payment fails because of domestic or foreign governmental regulation, the seller may withhold or stop delivery unless the buyer provides a means or manner of payment which is commercially a substantial equivalent. If delivery has already been taken, payment by the means or in the manner provided by the regulation discharges the buyer's obligation unless the regulation is discriminatory, oppressive or predatory.

§ 75-2-615

Except so far as a seller may have assumed a greater obligation and subject to the preceding section on substituted performance:

(a) Delay in delivery or nondelivery in whole or in part by a seller who complies with paragraphs (b) and (c), or failure to take delivery as provided for under the contract on the part of a buyer who complies with paragraph (d), is not a breach of his duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the nonoccurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid.

(b) Where the causes mentioned in paragraph (a) affect only a part of the seller's capacity to perform, he must allocate production and deliveries among his customers but may at his option include regular customers not then under contract as well as his own requirements for further manufacture. He may so allocate in any manner which is fair and reasonable.

(c) The seller must notify the buyer seasonably that there will be delay or nondelivery and, when allocation is required under paragraph (b), of the estimated quota thus made available for the buyer.

(d) The buyer must notify the seller seasonably that there will be a delay or total inability to take delivery, and where practicable, state the contingency which has occurred causing such delay or inability.

§ 75-2-616

(1) Where the buyer received notification of a material or indefinite delay or an allocation justified under Section 75-2-615 he may by written notification to the seller as to any delivery concerned, and where the prospective deficiency substantially impairs the value of the whole contract under the provisions of this chapter relating to breach of installment contracts (Section 2-612) [Section 75-2-612], then also as to the whole.

(a) terminate and thereby discharge any unexecuted portion of the contract; or

(b) modify the contract by agreeing to take his available quota in substitution.

(2) If after receipt of such notification from the seller the buyer fails so to modify the contract within a reasonable time not exceeding thirty (30) days the contract lapses with respect to any deliveries affected.

(3) The provisions of this section may not be negated by agreement except insofar as the seller has assumed a greater obligation under Section 75-2-615.

§ 75-2-617

Deliveries may be suspended by either party in case of Act of God, war, riots, fire, explosion, flood, strike, lockout, injunction, inability to obtain fuel, power, raw materials, labor, containers, or transportation facilities, accident, breakage of machinery or apparatus, national defense requirements, or any cause beyond the control of such party, preventing the manufacture, shipment, acceptance, or consumption of a shipment of the goods or of a material upon which the manufacture of the goods is dependent. If, because of any such circumstance, seller is unable to supply the total demand for the goods, seller may allocate its available supply among itself and all of its customers, including those not under contract, in an equitable manner. Such deliveries so suspended shall be cancelled without liability, but the contract shall otherwise remain unaffected.

§ 75-2-701

Remedies for breach of any obligation or promise collateral or ancillary to a contract for sale are not impaired by the provisions of this chapter.

§ 75-2-702

(1) Where the seller discovers the buyer to be insolvent he may refuse delivery except for cash including payment for all goods theretofore delivered under the contract, and stop delivery under this chapter (Section 2-705) [Section 75-2-705].

(2) Where the seller discovers that the buyer has received goods on credit while insolvent he may reclaim the goods upon demand made within ten (10) days after the receipt, but if misrepresentation of solvency has been made to the particular seller in writing within three (3) months before delivery the ten-day limitation does not apply. Except as provided in this subsection the seller may not base a right to reclaim goods on the buyer's fraudulent or innocent misrepresentation of solvency or of intent to pay.

(3) The seller's right to reclaim under subsection (2) is subject to the rights of a buyer in ordinary course or other good faith purchaser under this chapter (Section 2-403) [Section 75-2-403]. Successful reclamation of goods excludes all other remedies with respect to them.

§ 75-2-703

Where the buyer wrongfully rejects or revokes acceptance of goods or fails to make a payment due on or before delivery or repudiates with respect to a part or the whole, then with respect to any goods directly affected and, if the breach is of the whole contract (Section 2-612) [Section 75-2-612], then also with respect to the whole undelivered balance, the aggrieved seller may

(a) withhold delivery of such goods;

(b) stop delivery by any bailee as hereafter provided (Section 2-705) [Section 75-2-705];

(c) proceed under section 75-2-704 respecting goods still unidentified to the contract;

(d) resell and recover damages as hereafter provided (Section 2-706) [Section 75-2-706];

(e) recover damages for nonacceptance (Section 2-708) [Section 75-2-708] or in a proper case the price (Section 2-709) [Section 75-2-709];

(f) cancel.

§ 75-2-704

(1) An aggrieved seller under the preceding section may

(a) identify to the contract conforming goods not already identified if at the time he learned of the breach they are in his possession or control;

(b) treat as the subject of resale goods which have demonstrably been intended for the particular contract even though those goods are unfinished.

(2) Where the goods are unfinished an aggrieved seller may in the exercise of reasonable commercial judgment for the purposes of avoiding loss and of effective realization either complete the manufacture and wholly identify the goods to the contract or cease manufacture and resell for scrap or salvage value or proceed in any other reasonable manner.

§ 75-2-705

(1) The seller may stop delivery of goods in the possession of a carrier or other bailee when he discovers the buyer to be insolvent (Section 75-2-702) and may stop delivery of carload, truckload, planeload or larger shipments of express or freight when the buyer repudiates or fails to make a payment due before delivery or if for any other reason the seller has a right to withhold or reclaim the goods.

(2) As against such buyer the seller may stop delivery until:

(a) Receipt of the goods by the buyer; or

(b) Acknowledgment to the buyer by any bailee of the goods except a carrier that the bailee holds the goods for the buyer; or

(c) Such acknowledgment to the buyer by a carrier by reshipment or as a warehouse; or

(d) Negotiation to the buyer of any negotiable document of title covering the goods.

(3)(a) To stop delivery the seller must so notify as to enable the bailee by reasonable diligence to prevent delivery of the goods.

(b) After such notification the bailee must hold and deliver the goods according to the directions of the seller but the seller is liable to the bailee for any ensuing charges or damages.

(c) If a negotiable document of title has been issued for goods the bailee is not obliged to obey a notification to stop until surrender of the possession or control of the document.

(d) A carrier who has issued a nonnegotiable bill of lading is not obliged to obey a notification to stop received from a person other than the consignor.

§ 75-2-706

(1) Under the conditions stated in Section 2-703 [Section 75-2-703] on seller's remedies, the seller may resell the goods concerned or the undelivered balance thereof. Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any incidental damages allowed under the provisions of this chapter (Section 2-710) [Section 75-2-710], but less expenses saved in consequence of the buyer's breach.

(2) Except as otherwise provided in subsection (3) or unless otherwise agreed resale may be at public or private sale including sale by way of one (1) or more contracts to sell or of identification to an existing contract of the seller. Sale may be as a unit or in parcels and at any time and place and on any terms but every aspect of the sale including the method, manner, time, place and terms must be commercially reasonable. The resale must be reasonably identified as referring to the broken contract, but it is not necessary that the goods be in existence or that any or all of them have been identified to the contract before the breach.

(3) Where the resale is at private sale the seller must give the buyer reasonable notification of his intention to resell.

(4) Where the resale is at public sale

(a) only identified goods can be sold except where there is a recognized market for a public sale of futures in goods of the kind; and

(b) it must be made at a usual place or market for public sale if one is reasonably available and except in the case of goods which are perishable or threaten to decline in value speedily the seller must give the buyer reasonable notice of the time and place of the resale; and

(c) if the goods are not to be within the view of those attending the sale the notification of sale must state the place where the goods are located and provide for their reasonable inspection by prospective bidders; and

(d) the seller may buy.

(5) A purchaser who buys in good faith at a resale takes the goods free of any rights of the original buyer even though the seller fails to comply with one (1) or more of the requirements of this section.

(6) The seller is not accountable to the buyer for any profit made on any resale. A person in the position of a seller (Section 2-707) [Section 75-2-707] or a buyer who has rightfully rejected or justifiably revoked acceptance must account for any excess over the amount of his security interest, as hereinafter defined (subsection (3) of Section 2-711) [Section 75-2-711(3) ].

§ 75-2-707

(1) A “person in the position of a seller” includes as against a principal an agent who has paid or become responsible for the price of goods on behalf of his principal or anyone who otherwise holds a security interest or other right in goods similar to that of a seller.

(2) A person in the position of a seller may as provided in this chapter withhold or stop delivery (Section 2-705) [Section 75-2-705] and resell (Section 2-706) [Section 75-2-706] and recover incidental damages (Section 2-710) [Section 75-2-710].

§ 75-2-708

(1) Subject to subsection (2) and to the provisions of this chapter with respect to proof of market price (Section 2-723) [Section 75-2-723], the measure of damages for nonacceptance or repudiation by the buyer is the difference between the market price at the time and place for tender and the unpaid contract price together with any incidental damages provided in this chapter (Section 2-710) [Section 75-2-710], but less expenses saved in consequence of the buyer's breach.

(2) If the measure of damages provided in subsection (1) is inadequate to put the seller in as good a position as performance would have done then the measure of damages is the profit (including reasonable overhead) which the seller would have made from full performance by the buyer, together with any incidental damages provided in this chapter (Section 2-710) [Section 75-2-710], due allowance for costs reasonably incurred and due credit for payments or proceeds of resale.

§ 75-2-709

(1) When the buyer fails to pay the price as it becomes due the seller may recover, together with any incidental damages under the next section, the price

(a) of goods accepted or of conforming goods lost or damaged within a commercially reasonable time after risk of their loss has passed to the buyer; and

(b) of goods identified to the contract if the seller is unable after reasonable effort to resell them at a reasonable price or the circumstances reasonably indicate that such effort will be unavailing.

(2) Where the seller sues for the price he must hold for the buyer any goods which have been identified to the contract and are still in his control except that if resale becomes possible he may resell them at any time prior to the collection of the judgment. The net proceeds of any such resale must be credited to the buyer and payment of the judgment entitles him to any goods not resold.

(3) After the buyer has wrongfully rejected or revoked acceptance of the goods or has failed to make a payment due or has repudiated (Section 2-610) [Section 75-2-610], a seller who is held not entitled to the price under this section shall nevertheless be awarded damages for nonacceptance under section 75-2-708.

§ 75-2-710

Incidental damages to an aggrieved seller include any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody of goods after the buyer's breach, in connection with return or resale of the goods or otherwise resulting from the breach.

§ 75-2-711

(1) Where the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance then with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract (Section 2-612) [Section 75-2-612], the buyer may cancel and whether or not he has done so may in addition to recovering so much of the price as has been paid

(a) “cover” and have damages under Section 75-2-712 as to all the goods affected whether or not they have been identified to the contract; or

(b) recover damages for nondelivery as provided in this chapter (Section 2-713) [Section 75-2-713].

(2) Where the seller fails to deliver or repudiates the buyer may also

(a) if the goods have been identified recover them as provided in this chapter (Section 2-502) [Section 75-2-502]; or

(b) in a proper case obtain specific performance or replevy the goods as provided in this chapter (Section 2-716) [Section 75-2-716].

(3) On rightful rejection or justifiable revocation of acceptance a buyer has a security interest in goods in his possession or control for any payments made on their price and any expenses reasonably incurred in their inspection, receipt, transportation, care and custody and may hold such goods and resell them in like manner as an aggrieved seller (Section 2-706) [Section 75-2-706].

§ 75-2-712

(1) After a breach within section 75-2-711 the buyer may “cover” by making in good faith and without unreasonable delay any reasonable purchase of or contract to purchase goods in substitution for those due from the seller.

(2) The buyer may recover from the seller as damages the difference between the cost of cover and the contract price together with any incidental or consequential damages as hereinafter defined (Section 2-715) [Section 75-2-715], but less expenses saved in consequence of the seller's breach.

(3) Failure of the buyer to effect cover within this section does not bar him from any other remedy.

§ 75-2-713

(1) Subject to the provisions of this chapter with respect to proof of market price (Section 2-723) [Section 75-2-723], the measure of damages for nondelivery or repudiation by the seller is the difference between the market price at the time when the buyer learned of the breach and the contract price together with any incidental and consequential damages provided in this chapter (Section 2-715) [Section 75-2-715], but less expenses saved in consequence of the seller's breach.

(2) Market price is to be determined as of the place for tender or, in cases of rejection after arrival or revocation of acceptance, as of the place of arrival.

§ 75-2-714

(1) Where the buyer has accepted goods and given notification (subsection (3) of Section 2-607) [Section 75-2-607] he may recover as damages for any nonconformity of tender the loss resulting in the ordinary course of events from the seller's breach as determined in any manner which is reasonable.

(2) The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.

(3) In a proper case any incidental and consequential damages under Section 75-2-715 may also be recovered.

§ 75-2-715

(1) Incidental damages resulting from the seller's breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach.

(2) Except as otherwise provided in Chapter 302, Laws of 1993,  1 consequential damages resulting from the seller's breach include:

(a) Any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and

(b) Injury to person or property proximately resulting from any breach of warranty.

1

Code sections affected by Laws 1993, Ch. 302 are §§ 11-1-63, 11-1-65, 75-2-715, and 11-7-13.

§ 75-2-716

(1) Specific performance may be decreed where the goods are unique or in other proper circumstances.

(2) The decree for specific performance may include such terms and conditions as to payment of the price, damages, or other relief as the court may deem just.

(3) The buyer has a right of replevin for goods identified to the contract if after reasonable effort he is unable to effect cover for such goods or the circumstances reasonably indicate that such effort will be unavailing or if the goods have been shipped under reservation and satisfaction of the security interest in them has been made or tendered. In the case of goods bought for personal, family, or household purposes, the buyer's right of replevin vests upon acquisition of a special property, even if the seller had not then repudiated or failed to deliver.

§ 75-2-717

The buyer on notifying the seller of his intention to do so may deduct all or any part of the damages resulting from any breach of the contract from any part of the price still due under the same contract.

§ 75-2-718

(1) Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty.

(2) Where the seller justifiably withholds delivery of goods because of the buyer's breach, the buyer is entitled to restitution of any amount by which the sum of his payments exceed

(a) the amount to which the seller entitled by virtue of terms liquidating the seller's damages in accordance with subsection (1), or

(b) in the absence of such terms, twenty per cent (20%) of the value of the total performance for which the buyer is obligated under the contract or five hundred dollars ($500.00), whichever is smaller.

(3) The buyer's right to restitution under subsection (2) is subject to offset to the extent that the seller establishes

(a) a right to recover damages under the provisions of this chapter other than subsection (1), and

(b) the amount of value of any benefits received by the buyer directly or indirectly by reason of the contract.

(4) Where a seller has received payment in goods their reasonable value or the proceeds of their resale shall be treated as payments for the purposes of subsection (2); but if the seller has notice of the buyer's breach before reselling goods received in part performance, his resale is subject to the conditions laid down in this chapter on resale by an aggrieved seller (Section 2-706) [Section 75-2-706].

§ 75-2-719

(1) Subject to the provisions of subsections (2), (3), and (4) of this section and of Section 75-2-718 on liquidation and limitation of damages,

(a) The agreement may provide for remedies in addition to or in substitution for those provided in this chapter and may limit or alter the measure of damages recoverable under this chapter, as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement of nonconforming goods or parts; and

(b) Resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy.

(2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this code.

(3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.

(4) Any limitation of remedies which would deprive the buyer of a remedy to which he may be entitled for breach of an implied warranty of merchantability or fitness for a particular purpose in a sale to a consumer, as defined in Section 75-1-201(b)(11), of consumer goods, as defined in Section 75-9-102(a)(23), shall be prohibited.

§ 75-2-720

Unless the contrary intention clearly appears, expressions of “cancellation” or “rescission” of the contract or the like shall not be construed as a renunciation or discharge of any claim in damages for an antecedent breach.

§ 75-2-721

Remedies for material misrepresentation or fraud include all remedies available under this chapter for nonfraudulent breach. Neither rescission or a claim for rescission of the contract for sale nor rejection or return of the goods shall bar or be deemed inconsistent with a claim for damages or other remedy.

§ 75-2-722

Where a third party so deals with goods which have been identified to a contract for sale as to cause actionable injury to a party to that contract

(a) a right of action against the third party is in either party to the contract for sale who has title to or a security interest or a special property or an insurable interest in the goods; and if the goods have been destroyed or converted a right of action is also in the party who either bore the risk of loss under the contract for sale or has since the injury assumed that risk as against the other;

(b) if at the time of the injury the party plaintiff did not bear the risk of loss as against the other party to the contract for sale and there is no arrangement between them for disposition of the recovery, his suit or settlement is, subject to his own interest, as a fiduciary for the other party to the contract;

(c) either party may with the consent of the other sue for the benefit of whom it may concern.

§ 75-2-723

(1) If an action based on anticipatory repudiation comes to trial before the time for performance with respect to some or all of the goods, any damages based on market price (Section 2-708 or Section 2-713) [Sections 75-2-708 or 75-2-713] shall be determined according to the price of such goods prevailing at the time when the aggrieved party learned of the repudiation.

(2) If evidence of a price prevailing at the times or places described in this chapter is not readily available the price prevailing within any reasonable time before or after the time described or at any other place which in commercial judgment or under usage of trade would serve as a reasonable substitute for the one described may be used, making any proper allowance for the cost of transporting the goods to or from such other place.

(3) Evidence of a relevant price prevailing at a time or place other than the one described in this chapter offered by one party is not admissible unless and until he has given the other party such notice as the court finds sufficient to prevent unfair surprise.

§ 75-2-724

Whenever the prevailing price or value of any goods regularly bought and sold in any established commodity market is in issue, reports in official publications or trade journals or in newspapers or periodicals of general circulation published as the reports of such market shall be admissible in evidence. The circumstances of the preparation of such a report may be shown to affect its weight but not its admissibility.

§ 75-2-725

(1) An action for breach of any contract for sale must be commenced within six (6) years after the cause of action has accrued.

(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.

(3) Where an action commenced within the time limited by subsection (1) is so terminated as to leave available a remedy by another action for the same breach such other action may be commenced after the expiration of the time limited and within six (6) months after the termination of the first action unless the termination resulted from voluntary discontinuance or from dismissal for failure or neglect to prosecute.

(4) This section does not alter the law on tolling of the statute of limitations nor does it apply to causes of action which have accrued before this code becomes effective.

Chapter 2A Uniform Commercial Code--Leases

§ 75-2A-101

This chapter shall be known and may be cited as the Uniform Commercial Code-Leases.

§ 75-2A-102

This chapter applies to any transaction, regardless of form, that creates a lease.

§ 75-2A-103

(1) In this chapter unless the context otherwise requires:

(a) “Buyer in ordinary course of business” means a person who in good faith and without knowledge that the sale to him is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods, buys in ordinary course from a person in the business of selling goods of that kind but does not include a pawnbroker. “Buying” may be for cash or by exchange of other property or on secured or unsecured credit and includes acquiring goods or documents of title under a preexisting contract for sale but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt.

(b) “Cancellation” occurs when either party puts an end to the lease contract for default by the other party.

(c) “Commercial unit” means such a unit of goods as by commercial usage is a single whole for purposes of lease and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article, as a machine, or a set of articles, as a suite of furniture or a line of machinery, or a quantity, as a gross or carload, or any other unit treated in use or in the relevant market as a single whole.

(d) “Conforming” goods or performance under a lease contract means goods or performance that are in accordance with the obligations under the lease contract.

(e) “Consumer lease” means a lease that a lessor regularly engaged in the business of leasing or selling makes to a lessee who is an individual and who takes under the lease primarily for a personal, family or household purpose, if the total payments to be made under the lease contract, excluding payments for options to renew or buy, do not exceed Twenty-five Thousand Dollars ($25,000.00).

(f) “Fault” means wrongful act, omission, breach or default.

(g) “Finance lease” means a lease with respect to which:

(i) The lessor does not select, manufacture, or supply the goods;

(ii) The lessor acquires the goods or the right to possession and use of the goods in connection with the lease; and

(iii) One (1) of the following occurs:

(A) The lessee receives a copy of the contract by which the lessor acquired the goods or the right to possession and use of the goods before signing the lease contract;

(B) The lessee's approval of the contract by which the lessor acquired the goods or the right to possession and use of the goods is a condition to effectiveness of the lease contract;

(C) The lessee, before signing the lease contract, receives an accurate and complete statement designating the promises and warranties, and any disclaimers of warranties, limitations or modifications of remedies, or liquidated damages, including those of a third party, such as the manufacturer of the goods, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods; or

(D) If the lease is not a consumer lease, the lessor, before the lessee signs the lease contract, informs the lessee in writing (a) of the identity of the person supplying the goods to the lessor, unless the lessee has selected that person and directed the lessor to acquire the goods or the right to possession and use of the goods from that person, (b) that the lessee is entitled under this chapter to the promises and warranties, including those of any third party, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods, and (c) that the lessee may communicate with the person supplying the goods to the lessor and receive an accurate and complete statement of those promises and warranties, including any disclaimers and limitations of them or of remedies.

(h) “Goods” means all things that are movable at the time of identification to the lease contract, or are fixtures (Section 75-2A-309), but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles or minerals or the like, including oil and gas, before extraction. The term also includes the unborn young of animals.

(i) “Installment lease contract” means a lease contract that authorizes or requires the delivery of goods in separate lots to be separately accepted, even though the lease contract contains a clause “each delivery is a separate lease” or its equivalent.

(j) “Lease” means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. Unless the context clearly indicates otherwise, the term includes a sublease.

(k) “Lease agreement” means the bargain, with respect to the lease, of the lessor and the lessee in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in this chapter. Unless the context clearly indicates otherwise, the term includes a sublease agreement.

(l) “Lease contract” means the total legal obligation that results from the lease agreement as affected by this chapter and any other applicable rules of law. Unless the context clearly indicates otherwise, the term includes a sublease contract.

(m) “Leasehold interest” means the interest of the lessor or the lessee under a lease contract.

(n) “Lessee” means a person who acquires the right to possession and use of goods under a lease. Unless the context clearly indicates otherwise, the term includes a sublease.

(o) “Lessee in ordinary course of business” means a person who in good faith and without knowledge that the lease to him is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods leases in ordinary course from a person in the business of selling or leasing goods of that kind but does not include a pawnbroker. “Leasing” may be for cash or by exchange of other property or on secured or unsecured credit and includes acquiring goods or documents of title under a preexisting lease contract but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt.

(p) “Lessor” means a person who transfers the right to possession and use of goods under a lease. Unless the context clearly indicates otherwise, the term includes a sublessor.

(q) “Lessor's residual interest” means the lessor's interest in the goods after expiration, termination or cancellation of the lease contract.

(r) “Lien” means a charge against or interest in goods to secure payment of a debt or performance of an obligation, but the term does not include a security interest.

(s) “Lot” means a parcel or a single article that is the subject matter of a separate lease or delivery, whether or not it is sufficient to perform the lease contract.

(t) “Merchant lessee” means a lessee that is a merchant with respect to goods of the kind subject to the lease.

(u) “Present value” means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain. The discount is determined by the interest rate specified by the parties if the rate was not manifestly unreasonable at the time the transaction was entered into; otherwise, the discount is determined by a commercially reasonable rate that takes into account the facts and circumstances of each case at the time the transaction was entered into.

(v) “Purchase” includes taking by sale, lease, mortgage, security interest, pledge, gift or any other voluntary transaction creating an interest in goods.

(w) “Sublease” means a lease of goods the right to possession and use of which was acquired by the lessor as a lessee under an existing lease.

(x) “Supplier” means a person from whom a lessor buys or leases goods to be leased under a finance lease.

(y) “Supply contract” means a contract under which a lessor buys or leases goods to be leased.

(z) “Termination” occurs when either party pursuant to a power created by agreement or law puts an end to the lease contract otherwise than for default.

(2) Other definitions applying to this chapter and the sections in which they appear are:

| | “Accessions” | Section 75-2A-310(1) | | --- | --- | --- | | | “Construction mortgage” | Section 75-2A-309(1)(d) | | | “Encumbrance” | Section 75-2A-309(1)(e) | | | “Fixtures” | Section 75-2A-309(1)(a) | | | “Fixture filing” | Section 75-2A-309(1)(b) | | | “Purchase money lease” | Section 75-2A-309(1)(c) |

(3) The following definitions in other chapters apply to this chapter:

| | “Account” | Section 75-9-102(a)(2) | | --- | --- | --- | | | “Between merchants” | Section 75-2-104(3) | | | “Buyer” | Section 75-2-103(1)(a) | | | “Chattel paper” | Section 75-9-102(a)(11) | | | “Consumer goods” | Section 75-9-102(a)(23) | | | “Document” | Section 75-9-102(a)(30) | | | “Entrusting” | Section 75-2-403(3) | | | “General intangible” | Section 75-9-102(a)(42) | | | “Instrument” | Section 75-9-102(a)(47) | | | “Merchant” | Section 75-2-104(1) | | | “Mortgage” | Section 75-9-102(a)(55) | | | “Pursuant to commitment” | Section 75-9-102(a)(69) | | | “Receipt” | Section 75-2-103(1)(c) | | | “Sale” | Section 75-2-106(1) | | | “Sale on approval” | Section 75-2-326 | | | “Sale or return” | Section 75-2-326 | | | “Seller” | Section 75-2-103(1)(d) |

(4) In addition, Chapter 1 contains general definitions and principles of construction and interpretation applicable throughout this chapter.

§ 75-2A-104

(1) A lease, although subject to this chapter, is also subject to any applicable:

(a) Certificate of title statute of this state, including, but not limited to, those pertaining to motor vehicles in Chapter 21, Title 63, Mississippi Code of 1972;

(b) Certificate of title statute of another jurisdiction (Section 75-2A-105); or

(c) Consumer protection statute of this state, or final consumer protection decision of a court of this state existing on the effective date of this chapter.

(2) In case of conflict between this chapter, other than Sections 75-2A-105, 75-2A-304(3) and 75-2A-305(3), and a statute or decision referred to in subsection (1), the statute or decision controls.

(3) Failure to comply with an applicable law has only the effect specified therein.

§ 75-2A-105

Subject to the provisions of Section 75-2A-304(3) and 75-2A-305(3), with respect to goods covered by a certificate of title issued under a statute of this state or of another jurisdiction, compliance and the effect of compliance or noncompliance with a certificate of title statute are governed by the law (including the conflict of laws rules) of the jurisdiction issuing the certificate until the earlier of (a) surrender of the certificate, or (b) four (4) months after the goods are removed from that jurisdiction and thereafter until a new certificate of title is issued by another jurisdiction.

§ 75-2A-106

(1) If the law chosen by the parties to a consumer lease is that of a jurisdiction other than a jurisdiction in which the lessee resides at the time the lease agreement becomes enforceable or within thirty (30) days thereafter or in which the goods are to be used, the choice is not enforceable.

(2) If the judicial forum chosen by the parties to a consumer lease is a forum that would not otherwise have jurisdiction over the lessee, the choice is not enforceable.

§ 75-2A-107

Any claim or right arising out of an alleged default or breach of warranty may be discharged in whole or in part without consideration by a written waiver or renunciation signed and delivered by the aggrieved party.

§ 75-2A-108

(1) If the court as a matter of law finds a lease contract or any clause of a lease contract to have been unconscionable at the time it was made, the court may refuse to enforce the lease contract, or it may enforce the remainder of the lease contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

(2) With respect to a consumer lease, if the court as a matter of law finds that a lease contract or any clause of a lease contract has been induced by unconscionable conduct or that unconscionable conduct has occurred in the collection of a claim arising from a lease contract, the court may grant appropriate relief.

(3) Before making a finding of unconscionability under subsection (1) or (2), the court, on its own motion or that of a party, shall afford the parties a reasonable opportunity to present evidence as to the setting, purpose and effect of the lease contract or clause thereof, or of the conduct.

(4) In an action in which the lessee claims unconscionability with respect to a consumer lease:

(a) If the court finds unconscionability under subsection (1) or (2), the court shall award reasonable attorney's fees to the lessee.

(b) If the court does not find unconscionability and the lessee claiming unconscionability has brought or maintained an action he knew to be groundless, the court shall award reasonable attorney's fees to the party against whom the claim is made.

(c) In determining attorney's fees, the amount of the recovery on behalf of the claimant under subsections (1) and (2) is not controlling.

§ 75-2A-109

(1) A term providing that one (1) party or his successor in interest may accelerate payment or performance or require collateral or additional collateral “at will” or “when he deems himself insecure” or in words of similar import must be construed to mean that he has power to do so only if he in good faith believes that the prospect of payment or performance is impaired.

(2) With respect to a consumer lease, the burden of establishing good faith under subsection (1) is on the party who exercised the power; otherwise the burden of establishing lack of good faith is on the party against whom the power has been exercised.

§ 75-2A-201

(1) A lease contract is not enforceable by way of action or defense unless:

(a) The total payments to be made under the lease contract, excluding payments for options to renew or buy, are less than One Thousand Dollars ($1,000.00); or

(b) There is a writing, signed by the party against whom enforcement is sought or by that party's authorized agent, sufficient to indicate that a lease contract has been made between the parties and to describe the goods leased and the lease term.

(2) Any description of leased goods or of the lease term is sufficient and satisfies subsection (1)(b), whether or not it is specific, if it reasonably identifies what is described.

(3) A writing is not insufficient because it omits or incorrectly states a term agreed upon, but the lease contract is not enforceable under subsection (1)(b) beyond the lease term and the quantity of goods shown in the writing.

(4) A lease contract that does not satisfy the requirements of subsection (1), but which is valid in other respects, is enforceable:

(a) If the goods are to be specially manufactured or obtained for the lessee and are not suitable for lease or sale to others in the ordinary course of the lessor's business, and the lessor, before notice of repudiation is received and under circumstances that reasonably indicate that the goods are for the lessee, has made either a substantial beginning of their manufacture or commitments for their procurement;

(b) If the party against whom enforcement is sought admits in that party's pleading, testimony or otherwise in court that a lease contract was made, but the lease contract is not enforceable under this provision beyond the quantity of goods admitted; or

(c) With respect to goods that have been received and accepted by the lessee.

(5) The lease term under a lease contract referred to in subsection (4) is:

(a) If there is a writing signed by the party against whom enforcement is sought or by that party's authorized agent specifying the lease term, the term so specified;

(b) If the party against whom enforcement is sought admits in that party's pleading, testimony or otherwise in court a lease term, the term so admitted; or

(c) A reasonable lease term.

§ 75-2A-202

Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented:

(a) By course of dealing or usage of trade or by course of performance; and

(b) By evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement.

§ 75-2A-203

The affixing of a seal to a writing evidencing a lease contract or an offer to enter into a lease contract does not render the writing a sealed instrument and the law with respect to sealed instruments does not apply to the lease contract or offer.

§ 75-2A-204

(1) A lease contract may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of a lease contract.

(2) An agreement sufficient to constitute a lease contract may be found although the moment of its making is undetermined.

(3) Although one or more terms are left open, a lease contract does not fail for indefiniteness if the parties have intended to make a lease contract and there is a reasonable certain basis for giving an appropriate remedy.

§ 75-2A-205

An offer by a merchant to lease goods to or from another person in a signed writing that by its terms gives assurance it will be held open is not revocable, for lack of consideration, during the time stated or, if no time is stated, for a reasonable time, but in no event may the period of irrevocability exceed three (3) months. Any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.

§ 75-2A-206

(1) Unless otherwise unambiguously indicated by the language or circumstances, an offer to make a lease contract must be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances.

(2) If the beginning of a requested performance is a reasonable mode of acceptance, an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance.

§ 75-2A-208

(1) An agreement modifying a lease contract needs no consideration to be binding.

(2) A signed lease agreement that excludes modification or rescission except by a signed writing may not be otherwise modified or rescinded, but, except as between merchants, such a requirement on a form supplied by a merchant must be separately signed by the other party.

(3) Although an attempt at modification or rescission does not satisfy the requirements of subsection (2), it may operate as a waiver.

(4) A party who has made a waiver affecting an executory portion of a lease contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver.

§ 75-2A-209

(1) The benefit of a supplier's promises to the lessor under the supply contract and of all warranties, whether express or implied, including those of any third party provided in connection with or as part of the supply contract, extends to the lessee to the extent of the lessee's leasehold interest under a finance lease related to the supply contract, but is subject to the terms of the warranty and of the supply contract and all defenses or claims arising therefrom.

(2) The extension of the benefit of a supplier's promises and of warranties to the lessee (Section 75-2A-209(1)) does not: (i) modify the rights and obligations of the parties to the supply contract, whether arising therefrom or otherwise, or (ii) impose any duty or liability under the supply contract on the lessee.

(3) Any modification or rescission of the supply contract by the supplier and the lessor is effective between the supplier and the lessee unless, before the modification or rescission, the supplier has received notice that the lessee has entered into a finance lease related to the supply contract. If the modification or rescission is effective between the supplier and the lessee, the lessor is deemed to have assumed, in addition to the obligations of the lessor to the lessee under the lease contract, promises of the supplier to the lessor and warranties that were so modified or rescinded as they existed and were available to the lessee before modification or rescission.

(4) In addition to the extension of the benefit of the supplier's promises and of warranties to the lessee under subsection (1), the lessee retains all rights that the lessee may have against the supplier which arise from an agreement between the lessee and the supplier or under other law.

§ 75-2A-210

(1) Express warranties by the lessor are created as follows:

(a) Any affirmation of fact or promise made by the lessor to the lessee which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods will conform to the affirmation or promise.

(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods will conform to the description.

(c) Any sample or model that is made part of the basis of the bargain creates an express warranty that the whole of the goods will conform to the sample or model.

(2) It is not necessary to the creation of an express warranty that the lessor use formal words, such as “warrant” or “guarantee,” or that the lessor have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the lessor's opinion or commendation of the goods does not create a warranty.

§ 75-2A-211

(1) There is in a lease contract a warranty that for the lease term no person holds a claim to or interest in the goods that arose from an act or omission of the lessor, other than a claim by way of infringement or the like, which will interfere with the lessee's enjoyment of its leasehold interest.

(2) Except in a finance lease there is in a lease contract by a lessor who is a merchant regularly dealing in goods of the kind a warranty that the goods are delivered free of the rightful claim of any person by way of infringement or the like.

(3) A lessee who furnishes specifications to a lessor or a supplier shall hold the lessor and the supplier harmless against any claim by way of infringement or the like that arises out of compliance with the specifications.

§ 75-2A-212

(1) Except in a finance lease, a warranty that the goods will be merchantable is implied in a lease contract if the lessor is a merchant with respect to goods of that kind.

(2) Goods to be merchantable must be at least such as:

(a) Pass without objection in the trade under the description in the lease agreement;

(b) In the case of fungible goods, are of fair average quality within the description;

(c) Are fit for the ordinary purposes for which goods of that type are used;

(d) Run, within the variation permitted by the lease agreement, of even kind, quality and quantity within each unit and among all units involved;

(e) Are adequately contained, packaged and labeled as the lease agreement may require; and

(f) Conform to any promises or affirmations of fact made on the container or label.

(3) Other implied warranties may arise from course of dealing or usage of trade.

§ 75-2A-213

Except in a finance lease, if the lessor at the time the lease contract is made has reason to know of any particular purpose for which the goods are required and that the lessee is relying on the lessor's skill or judgment to select or furnish suitable goods, there is in the lease contract an implied warranty that the goods will be fit for that purpose.

§ 75-2A-215

Warranties, whether express or implied, must be construed as consistent with each other and as cumulative, but if that construction is unreasonable, the intention of the parties determines which warranty is dominant. In ascertaining that intention, the following rules apply:

(a) Exact or technical specifications displace an inconsistent sample or model or general language of description.

(b) A sample from an existing bulk displaces inconsistent general language of description.

(c) Express warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular purpose.

§ 75-2A-216

A warranty to or for the benefit of a lessee under this chapter, whether express or implied, extends to any natural person who is in the family or household of the lessee or who is a guest in the lessee's home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. This section does not displace principles of law and equity that extend a warranty to or for the benefit of a lessee to other persons. The operation of this section may not be excluded, modified or limited, but an exclusion, modification or limitation of the warranty, including any with respect to rights and remedies, effective against the lessee is also effective against any beneficiary designated under this section.

§ 75-2A-217

Identification of goods as goods to which a lease contract refers may be made at any time and in any manner explicitly agreed to by the parties. In the absence of explicit agreement, identification occurs:

(a) When the lease contract is made if the lease contract is for a lease of goods that are existing and identified;

(b) When the goods are shipped, marked or otherwise designated by the lessor as goods to which the lease contract refers, if the lease contract is for a lease of goods that are not existing and identified; or

(c) When the young are conceived, if the lease contract is for a lease of unborn young of animals.

§ 75-2A-218

(1) A lessee obtains an insurable interest when existing goods are identified to the lease contract even though the goods identified are nonconforming and the lessee has an option to reject them.

(2) If a lessee has an insurable interest only by reason of the lessor's identification of the goods, the lessor, until default or insolvency or notification to the lessee that identification is final, may substitute other goods for those identified.

(3) Notwithstanding a lessee's insurable interest under subsections (1) and (2), the lessor retains an insurable interest until an option to buy has been exercised by the lessee and risk of loss has passed to the lessee.

(4) Nothing in this section impairs any insurable interest recognized under any other statute or rule of law.

(5) The parties by agreement may determine that one or more parties have an obligation to obtain and pay for insurance covering the goods and by agreement may determine the beneficiary of the proceeds of the insurance.

§ 75-2A-219

(1) Except in the case of a finance lease, risk of loss is retained by the lessor and does not pass to the lessee. In the case of a finance lease, risk of loss passes to the lessee.

(2) Subject to the provisions of this chapter on the effect of default on risk of loss (Section 75-2A-220), if risk of loss is to pass to the lessee and the time of passage is not stated, the following rules apply:

(a) If the lease contract requires or authorizes the goods to be shipped by carrier

(i) And it does not require delivery at a particular destination, the risk of loss passes to the lessee when the goods are duly delivered to the carrier; but

(ii) If it does require delivery at a particular destination and the goods are there duly tendered while in the possession of the carrier, the risk of loss passes to the lessee when the goods are there duly so tendered as to enable the lessee to take delivery.

(b) If the goods are held by a bailee to be delivered without being moved, the risk of loss passes to the lessee on acknowledgement by the bailee of the lessee's right to possession of the goods.

(c) In any case not within subsection (a) or (b), the risk of loss passes to the lessee on the lessee's receipt of the goods if the lessor, or, in the case of a finance lease, the supplier, is a merchant; otherwise the risk passes to the lessee on tender of delivery.

§ 75-2A-220

(1) Where risk of loss is to pass to the lessee and the time of passage is not stated:

(a) If a tender or delivery of goods so fails to conform to the lease contract as to give a right of rejection, the risk of their loss remains with the lessor, or, in the case of a finance lease, the supplier, until cure or acceptance.

(b) If the lessee rightfully revokes acceptance, he, to the extent of any deficiency in his effective insurance coverage, may treat the risk of loss as having remained with the lessor from the beginning.

(2) Whether or not risk of loss is to pass to the lessee, if the lessee as to conforming goods already identified to a lease contract repudiates or is otherwise in default under the lease contract, the lessor, or, in the case of a finance lease, the supplier, to the extent of any deficiency in his effective insurance coverage may treat the risk of loss as resting on the lessee for a commercially reasonable time.

§ 75-2A-221

If a lease contract requires goods identified when the lease contract is made, and the goods suffer casualty without fault of the lessee, the lessor or the supplier before delivery, or the goods suffer casualty before risk of loss passes to the lessee pursuant to the lease agreement or Section 75-2A-219, then:

(a) If the loss is total, the lease contract is avoided; and

(b) If the loss is partial or the goods have so deteriorated as to no longer conform to the lease contract, the lessee may nevertheless demand inspection and at his option either treat the lease contract as avoided or, except in a finance lease that is not a consumer lease, accept the goods with due allowance from the rent payable for the balance of the lease term for the deterioration or the deficiency in quantity but without further right against the lessor.

§ 75-2A-301

Except as otherwise provided in this chapter, a lease contract is effective and enforceable according to its terms between the parties, against purchasers of the goods and against creditors of the parties.

§ 75-2A-302

Except as otherwise provided in this chapter, each provision of this chapter applies whether the lessor or a third party has title to the goods, and whether the lessor, the lessee or a third party has possession of the goods, notwithstanding any statute or rule of law that possession or the absence of possession is fraudulent.

§ 75-2A-303

(1) As used in this section, “creation of a security interest” includes the sale of a lease contract that is subject to Chapter 9, Secured Transactions, by reason of Section 75-9-109(a)(3).

(2) Except as provided in subsection (3) of Section 75-9-705, a provision in a lease agreement which (i) prohibits the voluntary or involuntary transfer, including a transfer by sale, sublease, creation or enforcement of a security interest, or attachment, levy, or other judicial process, of an interest of a party under the lease contract or of the lessor's residual interest in the goods, or (ii) makes such a transfer an event of default, gives rise to the rights and remedies provided in subsection (4), but a transfer that is prohibited or is an event of default under the lease agreement is otherwise effective.

(3) A provision in a lease agreement which (i) prohibits a transfer of a right to damages for default with respect to the whole lease contract or of a right to payment arising out of the transferor's due performance of the transferor's entire obligation, or (ii) makes such a transfer an event of default, is not enforceable, and such a transfer is not a transfer that materially impairs the prospect of obtaining return performance by, materially changes the duty of, or materially increases the burden or risk imposed on, the other party to the lease contract within the purview of subsection (4).

(4) Subject to subsections (3) and Section 75-9-407:

(a) If a transfer is made which is made an event of default under a lease agreement, the party to the lease contract not making the transfer, unless that party waives the default or otherwise agrees, has the rights and remedies described in Section 75-2A-501(2);

(b) If paragraph (a) is not applicable and if a transfer is made that (i) is prohibited under a lease agreement or (ii) materially impairs the prospect of obtaining return performance by, materially changes the duty of, or materially increases the burden or risk imposed on, the other party to the lease contract, unless the party not making the transfer agrees at any time to the transfer in the lease contract or otherwise, then, except as limited by contract, (i) the transferor is liable to the party not making the transfer for damages caused by the transfer to the extent that the damages could not reasonably be prevented by the party not making the transfer and (ii) a court having jurisdiction may grant other appropriate relief, including cancellation of the lease contract or an injunction against the transfer.

(5) A transfer of “the lease” or of “all my rights under the lease,” or a transfer in similar general terms, is a transfer of rights and, unless the language or the circumstances, as in a transfer for security, indicate the contrary, the transfer is a delegation of duties by the transferor to the transferee. Acceptance by the transferee constitutes a promise by the transferee to perform those duties. The promise is enforceable by either the transferor or the other party to the lease contract.

(6) Unless otherwise agreed by the lessor and the lessee, a delegation of performance does not relieve the transferor as against the other party of any duty to perform or of any liability for default.

(7) In a consumer lease, to prohibit the transfer of an interest of a party under the lease contract or to make a transfer an event of default, the language must be specific, by a writing, and conspicuous.

§ 75-2A-304

(1) Subject to Section 75-2A-303, a subsequent lessee from a lessor of goods under an existing lease contract obtains, to the extent of the leasehold interest transferred, the leasehold interest in the goods that the lessor had or had power to transfer, and except as provided in subsection (2) and Section 75-2A-527(4), takes subject to the existing lease contract. A lessor with voidable title has power to transfer a good leasehold interest to a good faith subsequent lessee for value, but only to the extent set forth in the preceding sentence. If goods have been delivered under a transaction of purchase, the lessor has that power even though:

(a) The lessor's transferor was deceived as to the identity of the lessor;

(b) The delivery was in exchange for a check which is later dishonored;

(c) It was agreed that the transaction was to be a “cash sale”; or

(d) The delivery was procured through fraud punishable as larcenous under the criminal law.

(2) A subsequent lessee in the ordinary course of business from a lessor who is a merchant dealing in goods of that kind to whom the goods were entrusted by the existing lessee of that lessor before the interest of the subsequent lessee became enforceable against that lessor obtains, to the extent of the leasehold interest transferred, all of that lessor's and the existing lessee's rights to the goods, and takes free of the existing lease contract.

(3) A subsequent lessee from the lessor of goods that are subject to an existing lease contract and are covered by a certificate of title issued under a statute of this state or of another jurisdiction takes no greater rights than those provided both by this section and by the certificate of title statute.

§ 75-2A-305

(1) Subject to the provisions of Section 75-2A-303, a buyer or sublessee from the lessee of goods under an existing lease contract obtains, to the extent of the interest transferred, the leasehold interest in the goods that the lessee had or had power to transfer, and except as provided in subsection (2) and Section 75-2A-511(4), takes subject to the existing lease contract. A lessee with a voidable leasehold interest has power to transfer a good leasehold interest to a good faith buyer for value or a good faith sublessee for value, but only to the extent set forth in the preceding sentence. When goods have been delivered under a transaction of lease the lessee has that power even though:

(a) The lessor was deceived as to the identity of the lessee;

(b) The delivery was in exchange for a check which is later dishonored; or

(c) The delivery was procured through fraud punishable as larcenous under the criminal law.

(2) A buyer in the ordinary course of business or a sublessee in the ordinary course of business from a lessee who is a merchant dealing in goods of that kind to whom the goods were entrusted by the lessor obtains, to the extent of the interest transferred, all of the lessor's and lessee's rights to the goods, and takes free of the existing lease contract.

(3) A buyer or sublessee from the lessee of goods that are subject to an existing lease contract and are covered by a certificate of title issued under a statute of this state or of another jurisdiction takes no greater rights than those provided both by this section and by the certificate of title statute.

§ 75-2A-306

If a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a lease contract, a lien upon those goods in the possession of that person given by statute or rule of law for those materials or services takes priority over any interest of the lessor or lessee under the lease contract or this chapter unless the lien is created by statute and the statute provides otherwise or unless the lien is created by rule of law and the rule of law provides otherwise.

§ 75-2A-307

(1) Except as otherwise provided in Section 75-2A-306, a creditor of a lessee takes subject to the lease contract.

(2) Except as otherwise provided in subsection (3), and in Sections 75-2A-306 and 75-2A-308, a creditor of a lessor takes subject to the lease contract unless the creditor holds a lien that attached to the goods before the lease contract became enforceable.

(3) Except as otherwise provided in Sections 75-9-317, 75-9-321 and 75-9-323, a lessee takes a leasehold interest subject to a security interest held by a creditor of the lessor.

§ 75-2A-308

(1) A creditor of a lessor in possession of goods subject to a lease contract may treat the lease contract as void if as against the creditor retention of possession by the lessor is fraudulent under any statute or rule of law, but retention of possession in good faith and current course of trade by the lessor for a commercially reasonable time after the lease contract becomes enforceable is not fraudulent.

(2) Nothing in this chapter impairs the rights of creditors of a lessor if the lease contract (a) becomes enforceable, not in current course of trade but in satisfaction of or as security for a preexisting claim for money, security, or the like, and (b) is made under circumstances which under any statute or rule of law apart from this chapter would constitute the transaction a fraudulent transfer or voidable preference.

(3) A creditor of a seller may treat a sale or an identification of goods to a contract for sale as void if as against the creditor retention of possession by the seller is fraudulent under any statute or rule of law, but retention of possession of the goods pursuant to a lease contract entered into by the seller as lessee and the buyer as lessor in connection with the sale or identification of the goods is not fraudulent if the buyer bought for value and in good faith.

§ 75-2A-309

(1) In this section:

(a) Goods are “fixtures” when they become so related to particular real estate that an interest in them arises under real estate law;

(b) A “fixture filing” is the filing, in the office where a record of a mortgage on the real estate would be filed or recorded, of a financing statement covering goods that are or are to become fixtures and conforming to the requirements of Section 75-9-502(a) and (b);

(c) A lease is a “purchase money lease” unless the lessee has possession or use of the goods or the right to possession or use of the goods before the lease agreement is enforceable;

(d) A mortgage is a “construction mortgage” to the extent it secures an obligation incurred for the construction of an improvement on land including the acquisition cost of the land, if the recorded writing so indicates; and

(e) “Encumbrance” includes real estate mortgages and other liens on real estate and all other rights in real estate that are not ownership interests.

(2) Under this chapter a lease may be of goods that are fixtures or may continue in goods that become fixtures, but no lease exists under this chapter of ordinary building materials incorporated into an improvement on land.

(3) This chapter does not prevent creation of a lease of fixtures pursuant to real estate law.

(4) The perfected interest of a lessor of fixtures has priority over a conflicting interest of an encumbrancer or owner of the real estate if:

(a) The lease is a purchase money lease, the conflicting interest of the encumbrancer or owner arises before the goods become fixtures, the interest of the lessor is perfected by a fixture filing before the goods become fixtures or within ten (10) days thereafter, and the lessee has an interest of record in the real estate or is in possession of the real estate; or

(b) The interest of the lessor is perfected by a fixture filing before the interest of the encumbrancer or owner is of record, the lessor's interest has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner, and the lessee has an interest of record in the real estate or is in possession of the real estate.

(5) The interest of a lessor of fixtures, whether or not perfected, has priority over the conflicting interest of an encumbrancer or owner of the real estate if:

(a) The fixtures are readily removable factory or office machines, readily removable equipment that is not primarily used or leased for use in the operation of the real estate, or readily removable replacements of domestic appliances that are goods subject to a consumer lease, and before the goods become fixtures the lease contract is enforceable; or

(b) The conflicting interest is a lien on the real estate obtained by legal or equitable proceedings after the lease contract is enforceable; or

(c) The encumbrancer or owner has consented in writing to the lease or has disclaimed an interest in the goods as fixtures; or

(d) The lessee has a right to remove the goods as against the encumbrancer or owner. If the lessee's right to remove terminates, the priority of the interest of the lessor continues for a reasonable time.

(6) Notwithstanding subsection (4)(a) but otherwise subject to subsections (4) and (5), the interest of a lessor of fixtures, including the lessor's residual interest, is subordinate to the conflicting interest of an encumbrancer of the real estate under a construction mortgage recorded before the goods become fixtures if the goods become fixtures before the completion of the construction. To the extent given to refinance a construction mortgage, the conflicting interest of an encumbrancer of the real estate under a mortgage has this priority to the same extent as the encumbrancer of the real estate under the construction mortgage.

(7) In cases not within the preceding subsections, priority between the interest of a lessor of fixtures, including the lessor's residual interest, and the conflicting interest of an encumbrancer or owner of the real estate who is not the lessee is determined by the priority rules governing conflicting interests in real estate.

(8) If the interest of a lessor of fixtures, including the lessor's residual interest, has priority over all conflicting interests of all owners and encumbrancers of the real estate, the lessor or the lessee may (i) on default, expiration, termination or cancellation of the lease agreement but subject to the lease agreement and this chapter, or (ii) if necessary to enforce other rights and remedies of the lessor or lessee under this chapter, remove the goods from the real estate, free and clear of all conflicting interests of all owners and encumbrancers of the real estate, but the lessor or lessee must reimburse any encumbrancer or owner of the real estate who is not the lessee and who has not otherwise agreed for the cost of repair of any physical injury, but not for any diminution in value of the real estate caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the party seeking removal gives adequate security for the performance of this obligation.

(9) Even though the lease agreement does not create a security interest, the interest of a lessor of fixtures, including the lessor's residual interest, is perfected by filing a financing statement as a fixture filing for leased goods that are or are to become fixtures in accordance with the relevant provisions of the Chapter on Secured Transactions (Chapter 9).

§ 75-2A-310

(1) Goods are “accessions” when they are installed in or affixed to other goods.

(2) The interest of a lessor or a lessee under a lease contract entered into before the goods became accessions is superior to all interests in the whole except as stated in subsection (4).

(3) The interest of a lessor or a lessee under a lease contract entered into at the time or after the goods became accessions is superior to all subsequently acquired interests in the whole except as stated in subsection (4) but is subordinate to interests in the whole existing at the time the lease contract was made unless the holders of such interests in the whole have in writing consented to the lease or disclaimed an interest in the goods as part of the whole.

(4) The interest of a lessor or a lessee under a lease contract described in subsection (2) or (3) is subordinate to the interest of

(a) A buyer in the ordinary course of business or a lessee in the ordinary course of business of any interest in the whole acquired after the goods became accessions; or

(b) A creditor with a security interest in the whole perfected before the lease contract was made to the extent that the creditor makes subsequent advances without knowledge of the lease contract.

(5) When under subsections (2) or (3) and (4) a lessor or a lessee of accessions holds an interest that is superior to all interests in the whole, the lessor or the lessee may (a) on default, expiration, termination, or cancellation of the lease contract by the other party but subject to the provisions of the lease contract and this chapter, or (b) if necessary to enforce his other rights and remedies under this chapter, remove the goods from the whole, free and clear of all interests in the whole, but he must reimburse any holder of an interest in the whole who is not the lessee and who has not otherwise agreed for the cost of repair of any physical injury but not for any diminution in value of the whole caused by the absence of the goods removed or by any necessity for replacing them. A person entitled to reimbursement may refuse permission to remove until the party seeking removal gives adequate security for the performance of this obligation.

§ 75-2A-311

Nothing in this chapter prevents subordination by agreement by any person entitled to priority.

§ 75-2A-401

(1) A lease contract imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired.

(2) If reasonable grounds for insecurity arise with respect to the performance of either party, the insecure party may demand in writing adequate assurance of due performance. Until the insecure party receives that assurance, if commercially reasonable the insecure party may suspend any performance for which he has not already received the agreed return.

(3) A repudiation of the lease contract occurs if assurance of due performance adequate under the circumstances of the particular case is not provided to the insecure party within a reasonable time, not to exceed thirty (30) days after receipt of a demand by the other party.

(4) Between merchants, the reasonableness of grounds for insecurity and the adequacy of any assurance offered must be determined according to commercial standards.

(5) Acceptance of any nonconforming delivery or payment does not prejudice the aggrieved party's right to demand adequate assurance of future performance.

§ 75-2A-402

If either party repudiates a lease contract with respect to a performance not yet due under the lease contract, the loss of which performance will substantially impair the value of the lease contract to the other, the aggrieved party may:

(a) For a commercially reasonable time, await retraction of repudiation and performance by the repudiating party;

(b) Make demand pursuant to Section 75-2A-401 and await assurance of future performance adequate under the circumstances of the particular case; or

(c) Resort to any right or remedy upon default under the lease contract or this chapter, even though the aggrieved party has notified the repudiating party that the aggrieved party would await the repudiating party's performance and assurance and has urged retraction. In addition, whether or not the aggrieved party is pursuing one of the foregoing remedies, the aggrieved party may suspend performance or, if the aggrieved party is the lessor, proceed in accordance with the provisions of this chapter on the lessor's right to identify goods to the lease contract notwithstanding default or to salvage unfinished goods (Section 75-2A-524).

§ 75-2A-403

(1) Until the repudiating party's next performance is due, the repudiating party can retract the repudiation unless, since the repudiation, the aggrieved party has cancelled the lease contract or materially changed the aggrieved party's position or otherwise indicated that the aggrieved party considers the repudiation final.

(2) Retraction may be by any method that clearly indicates to the aggrieved party that the repudiating party intends to perform under the lease contract and includes any assurance demanded under Section 75-2A-401.

(3) Retraction reinstates a repudiating party's rights under a lease contract with due excuse and allowance to the aggrieved party for any delay occasioned by the repudiation.

§ 75-2A-404

(1) If without fault of the lessee, the lessor and the supplier, the agreed berthing, loading, or unloading facilities fail or the agreed type of carrier becomes unavailable or the agreed manner of delivery otherwise becomes commercially impracticable, but a commercially reasonable substitute is available, the substitute performance must be tendered and accepted.

(2) If the agreed means or manner of payment fails because of domestic or foreign governmental regulation:

(a) The lessor may withhold or stop delivery or cause the supplier to withhold or stop delivery unless the lessee provides a means of payment that is commercially a substantial equivalent; and

(b) If delivery has already been taken, payment by the means or in the manner provided by the regulation discharges the lessee's obligation unless the regulation is discriminatory, oppressive, or predatory.

§ 75-2A-405

Subject to Section 75-2A-404 on substituted performance, the following rules apply:

(a) Delay in delivery or nondelivery in whole or in part by a lessor or a supplier who complies with paragraphs (b) and (c) is not a default under the lease contract if performance as agreed has been made impracticable by the occurrence of a contingency the nonoccurrence of which was a basic assumption on which the lease contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order, whether or not the regulation or order later proves to be invalid.

(b) If the causes mentioned in paragraph (a) affect only part of the lessor's or the supplier's capacity to perform, he shall allocate production and deliveries among his customers but at his option may include regular customers not then under contract for sale or lease as well as his own requirements for further manufacture. He may so allocate in any manner that is fair and reasonable.

(c) The lessor seasonably shall notify the lessee and in the case of a finance lease the supplier seasonably shall notify the lessor and the lessee, if known, that there will be delay or nondelivery and, if allocation is required under paragraph (b), of the estimated quota thus made available for the lessee.

§ 75-2A-406

(1) If the lessee receives notification of a material or indefinite delay or an allocation justified under Section 75-2A-405, the lessee may by written notification to the lessor as to any goods involved, and with respect to all of the goods if under an installment lease contract the value of the whole lease contract is substantially impaired (Section 75-2A-510):

(a) Terminate the lease contract (Section 75-2A-505(2)); or

(b) Except in a finance lease that is not a consumer lease, modify the lease contract by accepting the available quota in substitution, with due allowance from the rent payable for the balance of the lease term for the deficiency but without further right against the lessor.

(2) If, after receipt of a notification from the lessor under Section 75-2A-405, the lessee fails so to modify the lease agreement within a reasonable time not exceeding thirty (30) days, the lease contract lapses with respect to any deliveries affected.

§ 75-2A-407

(1) In the case of a finance lease that is not a consumer lease the lessee's promises under the lease contract become irrevocable and independent upon the lessee's acceptance of the goods.

(2) A promise that has become irrevocable and independent under subsection (1):

(a) Is effective and enforceable between the parties, and by or against third parties including assignees of the parties; and

(b) Is not subject to cancellation, termination, modification, repudiation, excuse or substitution without the consent of the party to whom the promise runs.

(3) This section does not affect the validity under any other law of a covenant in any lease contract making the lessee's promises irrevocable and independent upon the lessee's acceptance of the goods.

§ 75-2A-501

(1) Whether the lessor or the lessee is in default under a lease contract is determined by the lease agreement and this chapter.

(2) If the lessor or the lessee is in default under the lease contract, the party seeking enforcement has rights and remedies as provided in this chapter and, except as limited by this chapter, as provided in the lease agreement.

(3) If the lessor or the lessee is in default under the lease contract, the party seeking enforcement may reduce the party's claim to judgment, or otherwise enforce the lease contract by self-help or any available judicial procedure or nonjudicial procedure, including administrative proceeding, arbitration, or the like, in accordance with this chapter.

(4) Except as otherwise provided in Section 75-1-305(a) or this chapter or the lease agreement, the rights and remedies referred to in subsections (2) and (3) are cumulative.

(5) If the lease agreement covers both real property and goods, the party seeking enforcement may proceed under this part as to the goods, or under other applicable law as to both the real property and the goods in accordance with that party's rights and remedies in respect of the real property, in which case this part does not apply.

§ 75-2A-502

Except as otherwise provided in this chapter or the lease agreement, the lessor or lessee in default under the lease contract is not entitled to notice of default or notice of enforcement from the other party to the lease agreement.

§ 75-2A-503

(1) Except as otherwise provided in this chapter, the lease agreement may include rights and remedies for default in addition to or in substitution for those provided in this chapter and may limit or alter the measure of damages recoverable under this chapter.

(2) Resort to a remedy provided under this chapter or in the lease agreement is optional unless the remedy is expressly agreed to be exclusive. If circumstances cause an exclusive or limited remedy to fail of its essential purpose, or provision for an exclusive remedy is unconscionable, remedy may be had as provided in this chapter.

(3) Consequential damages may be liquidated under Section 75-2A-504, or may otherwise be limited, altered or excluded unless the limitation, alteration or exclusion is unconscionable. Limitation, alteration or exclusion of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation, alteration or exclusion of damages where the loss is commercial is not prima facie unconscionable.

(4) Rights and remedies on default by the lessor or the lessee with respect to any obligation or promise collateral or ancillary to the lease contract are not impaired by this chapter.

§ 75-2A-504

(1) Damages payable by either party for default, or any other act or omission, including indemnity for loss or diminution of anticipated tax benefits or loss or damage to lessor's residual interest, may be liquidated in the lease agreement but only at an amount or by a formula that is reasonable in light of the then anticipated harm caused by the default or other act or omission.

(2) If the lease agreement provides for liquidation of damages, and such provision does not comply with subsection (1), or such provision is an exclusive or limited remedy that circumstances cause to fail of its essential purpose, remedy may be had as provided in this chapter.

(3) If the lessor justifiably withholds or stops delivery of goods because of the lessee's default or insolvency (Section 75-2A-525 or 75-2A-526), the lessee is entitled to restitution of any amount by which the sum of his payments exceeds:

(a) The amount to which the lessor is entitled by virtue of terms liquidating the lessor's damages in accordance with subsection (1); or

(b) In the absence of those terms, twenty percent (20%) of the then present value of the total rent the lessee was obligated to pay for the balance of the lease term, or, in the case of a consumer lease, the lesser of such amount or Five Hundred Dollars ($500.00).

(4) A lessee's right to restitution under subsection (3) is subject to offset to the extent the lessor establishes:

(a) A right to recover damages under the provisions of this chapter other than subsection (1) of this section; and

(b) The amount or value of any benefits received by the lessee directly or indirectly by reason of the lease contract.

§ 75-2A-505

(1) On cancellation of the lease contract, all obligations that are still executory on both sides are discharged, but any right based on prior default or performance survives, and the cancelling party also retains any remedy for default of the whole lease contract or any unperformed balance.

(2) On termination of the lease contract, all obligations that are still executory on both sides are discharged but any right based on prior default or performance survives.

(3) Unless the contrary intention clearly appears, expressions of “cancellation,” “rescission,” or the like of the lease contract may not be construed as a renunciation or discharge of any claim in damages for an antecedent default.

(4) Rights and remedies for material misrepresentation or fraud include all rights and remedies available under this chapter for default.

(5) Neither rescission nor a claim for rescission of the lease contract nor rejection or return of the goods may bar or be deemed inconsistent with a claim for damages or other right or remedy.

§ 75-2A-506

(1) An action for default under a lease contract, including breach of warranty or indemnity, must be commenced within four (4) years after the cause of action accrued. By the original lease contract the parties may reduce the period of limitation to not less than one (1) year.

(2) A cause of action for default accrues when the act or omission on which the default or breach of warranty is based is or should have been discovered by the aggrieved party, or when the default occurs, whichever is later. A cause of action for indemnity accrues when the act or omission on which the claim for indemnity is based is or should have been discovered by the indemnified party, whichever is later.

(3) If an action commenced within the time limited by subsection (1) is so terminated as to leave available a remedy by another action for the same default or breach of warranty or indemnity, the other action may be commenced after the expiration of the time limited and within six (6) months after the termination of the first action unless the termination resulted from voluntary discontinuance or from dismissal for failure or neglect to prosecute.

(4) This section does not alter the law on tolling of the statute of limitations nor does it apply to causes of action that have accrued before this chapter becomes effective.

§ 75-2A-507

(1) Damages based on market rent (Section 75-2A-519 or 75-2A-528) are determined according to the rent for the use of the goods concerned for a lease term identical to the remaining lease term of the original lease agreement and prevailing at the times specified in Sections 75-2A-519 and 75-2A-528.

(2) If evidence of rent for the use of the goods concerned for a lease term identical to the remaining lease term of the original lease agreement and prevailing at the times or places described in this chapter is not readily available, the rent prevailing within any reasonable time before or after the time described or at any other place or for a different lease term which in commercial judgment or under usage of trade would serve as a reasonable substitute for the one described may be used, making any proper allowance for the difference, including the cost of transporting the goods to or from the other place.

(3) Evidence of a relevant rent prevailing at a time or place or for a lease term other than the one described in this chapter offered by one (1) party is not admissible unless and until he has given the other party notice the court finds sufficient to prevent unfair surprise.

(4) If the prevailing rent or value of any goods regularly leased in any established market is in issue, reports in official publications or trade journals or in newspapers or periodicals of general circulation published as the reports of that market are admissible in evidence. The circumstances of the preparation of the report may be shown to affect its weight but not its admissibility.

§ 75-2A-508

(1) If a lessor fails to deliver the goods in conformity to the lease contract (Section 75-2A-509) or repudiates the lease contract (Section 75-2A-402), or a lessee rightfully rejects the goods (Section 75-2A-509) or justifiably revokes acceptance of the goods (Section 75-2A-517), then with respect to any goods involved, and with respect to all of the goods if under an installment lease contract the value of the whole lease contract is substantially impaired (Section 75-2A-510), the lessor is in default under the lease contract and the lessee may:

(a) Cancel the lease contract (Section 75-2A-505(1));

(b) Recover so much of the rent and security as has been paid and is just under the circumstances;

(c) Cover and recover damages as to all goods affected whether or not they have been identified to the lease contract (Sections 75-2A-518 and 75-2A-520), or recover damages for nondelivery (Sections 75-2A-519 and 75-2A-520);

(d) Exercise any other rights or pursue any other remedies provided in the lease contract.

(2) If a lessor fails to deliver the goods in conformity to the lease contract or repudiates the lease contract, the lessee may also:

(a) If the goods have been identified, recover them (Section 75-2A-522); or

(b) In a proper case, obtain specific performance or replevy the goods (Section 75-2A-521).

(3) If a lessor is otherwise in default under a lease contract, the lessee may exercise the rights and pursue the remedies provided in the lease contract, which may include a right to cancel the lease, and in Section 75-2A-519(3).

(4) If a lessor has breached a warranty, whether express or implied, the lessee may recover damages (Section 75-2A-519(4)).

(5) On rightful rejection or justifiable revocation of acceptance, a lessee has a security interest in goods in the lessee's possession or control for any rent and security that has been paid and any expenses reasonably incurred in their inspection, receipt, transportation and care and custody and may hold those goods and dispose of them in good faith and in a commercially reasonable manner, subject to Section 75-2A-527(5).

(6) Subject to the provisions of Section 75-2A-407, a lessee, on notifying the lessor of the lessee's intention to do so, may deduct all or any part of the damages resulting from any default under the lease contract from any part of the rent still due under the same lease contract.

§ 75-2A-509

(1) Subject to the provisions of Section 75-2A-510 on default in installment lease contracts, if the goods or the tender or delivery fail in any respect to conform to the lease contract, the lessee may reject or accept the goods or accept any commercial unit or units and reject the rest of the goods.

(2) Rejection of goods is ineffective unless it is within a reasonable time after tender or delivery of the goods and the lessee seasonably notifies the lessor.

§ 75-2A-510

(1) Under an installment lease contract a lessee may reject any delivery that is nonconforming if the nonconformity substantially impairs the value of that delivery and cannot be cured or the nonconformity is a defect in the required documents; but if the nonconformity does not fall within subsection (2) and the lessor or the supplier gives adequate assurance of its cure, the lessee must accept that delivery.

(2) Whenever nonconformity or default with respect to one or more deliveries substantially impairs the value of the installment lease contract as a whole there is a default with respect to the whole. But, the aggrieved party reinstates the installment lease contract as a whole if the aggrieved party accepts a nonconforming delivery without seasonably notifying of cancellation or brings an action with respect only to past deliveries or demands performance as to future deliveries.

§ 75-2A-511

(1) Subject to any security interest of a lessee (Section 75-2A-508(5)), if a lessor or a supplier has no agent or place of business at the market of rejection, a merchant lessee, after rejection of goods in his possession or control, shall follow any reasonable instructions received from the lessor or the supplier with respect to the goods. In the absence of those instructions, a merchant lessee shall make reasonable efforts to sell, lease, or otherwise dispose of the goods for the lessor's account if they threaten to decline in value speedily. Instructions are not reasonable if on demand indemnity for expenses is not forthcoming.

(2) If a merchant lessee (subsection (1)) or any other lessee (Section 75-2A-512) disposes of goods, he is entitled to reimbursement either from the lessor or the supplier or out of the proceeds for reasonable expenses of caring for and disposing of the goods and, if the expenses include no disposition commission, to such commission as is usual in the trade, or if there is none, to a reasonable sum not exceeding ten percent (10%) of the gross proceeds.

(3) In complying with this section or Section 75-2A-512, the lessee is held only to good faith. Good faith conduct hereunder is neither acceptance or conversion nor the basis of an action for damages.

(4) A purchaser who purchases in good faith from a lessee pursuant to this section or Section 75-2A-512 takes the goods free of any rights of the lessor and the supplier even though the lessee fails to comply with one or more of the requirements of this chapter.

§ 75-2A-512

(1) Except as otherwise provided with respect to goods that threaten to decline in value speedily (Section 75-2A-511) and subject to any security interest of a lessee (Section 75-2A-508(5)):

(a) The lessee, after rejection of goods in the lessee's possession, shall hold them with reasonable care at the lessor's or the supplier's disposition for a reasonable time after the lessee's seasonable notification of rejection;

(b) If the lessor or the supplier gives no instructions within a reasonable time after notification of rejection, the lessee may store the rejected goods for the lessor's or the supplier's account or ship them to the lessor or the supplier or dispose of them for the lessor's or the supplier's account with reimbursement in the manner provided in Section 75-2A-511; but

(c) The lessee has no further obligations with regard to goods rightfully rejected.

(2) Action by the lessee pursuant to subsection (1) is not acceptance or conversion.

§ 75-2A-513

(1) If any tender or delivery by the lessor or the supplier is rejected because nonconforming and the time for performance has not yet expired, the lessor or the supplier may seasonably notify the lessee of the lessor's or the supplier's intention to cure and may then make a conforming delivery within the time provided in the lease contract.

(2) If the lessee rejects a nonconforming tender that the lessor or the supplier had reasonable grounds to believe would be acceptable with or without money allowance, the lessor or the supplier may have a further reasonable time to substitute a conforming tender if he seasonably notifies the lessee.

§ 75-2A-514

(1) In rejecting goods, a lessee's failure to state a particular defect that is ascertainable by reasonable inspection precludes the lessee from relying on the defect to justify rejection or to establish default:

(a) If, stated seasonably, the lessor or the supplier could have cured it (Section 75-2A-513); or

(b) Between merchants if the lessor or the supplier after rejection has made a request in writing for a full and final written statement of all defects on which the lessee proposes to rely.

(2) A lessee's failure to reserve rights when paying rent or other consideration against documents precludes recovery of the payment for defects apparent in the documents.

§ 75-2A-515

(1) Acceptance of goods occurs after the lessee has had a reasonable opportunity to inspect the goods and

(a) The lessee signifies or acts with respect to the goods in a manner that signifies to the lessor or the supplier that the goods are conforming or that the lessee will take or retain them in spite of their nonconformity; or

(b) The lessee fails to make an effective rejection of the goods (Section 75-2A-509 (2)).

(2) Acceptance of a part of any commercial unit is acceptance of that entire unit.

§ 75-2A-516

(1) A lessee must pay rent for any goods accepted in accordance with the lease contract, with due allowance for goods rightfully rejected or not delivered.

(2) A lessee's acceptance of goods precludes rejection of the goods accepted. In the case of a finance lease, if made with knowledge of a nonconformity, acceptance cannot be revoked because of it. In any other case, if made with knowledge of a nonconformity, acceptance cannot be revoked because of it unless the acceptance was on the reasonable assumption that the nonconformity would be seasonably cured. Acceptance does not of itself impair any other remedy provided by this chapter or the lease agreement for nonconformity.

(3) If a tender has been accepted:

(a) Within a reasonable time after the lessee discovers or should have discovered any default, the lessee shall notify the lessor and the supplier, if any, or be barred from any remedy against the party not notified;

(b) Except in the case of a consumer lease, within a reasonable time after the lessee receives notice of litigation for infringement or the like (Section 75-2A-211) the lessee shall notify the lessor or be barred from any remedy over for liability established by the litigation; and

(c) The burden is on the lessee to establish any default.

(4) If a lessee is sued for breach of a warranty or other obligation for which a lessor or a supplier is answerable over the following apply:

(a) The lessee may give the lessor or the supplier, or both, written notice of the litigation. If the notice states that the person notified may come in and defend and that if the person notified does not do so that person will be bound in any action against that person by the lessee by any determination of fact common to the two (2) litigations, then unless the person notified after seasonable receipt of the notice does come in and defend that person is so bound.

(b) The lessor or the supplier may demand in writing that the lessee turn over control of the litigation including settlement if the claim is one for infringement or the like (Section 75-2A-211) or else be barred from any remedy over. If the demand states that the lessor or the supplier agrees to bear all expense and to satisfy any adverse judgment, then unless the lessee after seasonable receipt of the demand does turn over control the lessee is so barred.

(5) Subsections (3) and (4) apply to any obligation of a lessee to hold the lessor or the supplier harmless against infringement or the like (Section 75-2A-211).

§ 75-2A-517

(1) A lessee may revoke acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to the lessee if the lessee has accepted it:

(a) Except in the case of a finance lease, on the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or

(b) Without discovery of the nonconformity if the lessee's acceptance was reasonably induced either by the lessor's assurances or, except in the case of a finance lease, by the difficulty of discovery before acceptance.

(2) Except in the case of a finance lease that is not a consumer lease, a lessee may revoke acceptance of a lot or commercial unit if the lessor defaults under the lease contract and the default substantially impairs the value of that lot or commercial unit to the lessee.

(3) If the lease agreement so provides, the lessee may revoke acceptance of a lot or commercial unit because of other defaults by the lessor.

(4) Revocation of acceptance must occur within a reasonable time after the lessee discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by the nonconformity. Revocation is not effective until the lessee notifies the lessor.

(5) A lessee who so revokes has the same rights and duties with regard to the goods involved as if the lessee had rejected them.

§ 75-2A-518

(1) After a default by a lessor under the lease contract of the type described in Section 75-2A-508(1), or, if agreed, after other default by the lessor, the lessee may cover by making any purchase or lease of or contract to purchase or lease goods in substitution for those due from the lessor.

(2) Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 75-2A-504) or otherwise determined pursuant to agreement of the parties (Sections 75-1-302 and 75-2A-503), if a lessee's cover is by a lease agreement substantially similar to the original lease agreement and the new lease agreement is made in good faith and in a commercially reasonable manner, the lessee may recover from the lessor as damages (i) the present value, as of the date of the commencement of the term of the new lease agreement, of the rent under the new lease agreement applicable to that period of the new lease term which is comparable to the then remaining term of the original lease agreement minus the present value as of the same date of the total rent for the then remaining lease term of the original lease agreement, and (ii) any incidental or consequential damages, less expenses saved in consequence of the lessor's default.

(3) If a lessee's cover is by lease agreement that for any reason does not qualify for treatment under subsection (2), or is by purchase or otherwise, the lessee may recover from the lessor as if the lessee had elected not to cover and Section 75-2A-519 governs.

§ 75-2A-519

(1) Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 75-2A-504) or otherwise determined pursuant to agreement of the parties (Sections 75-1-302 and 75-2A-503), if a lessee elects not to cover or a lessee elects to cover and the cover is by lease agreement that for any reason does not qualify for treatment under Section 75-2A-518(2), or is by purchase or otherwise, the measure of damages for nondelivery or repudiation by the lessor or for rejection or revocation of acceptance by the lessee is the present value, as of the date of the default, of the then market rent minus the present value as of the same date of the original rent, computed for the remaining lease term of the original lease agreement, together with incidental and consequential damages, less expenses saved in consequence of the lessor's default.

(2) Market rent is to be determined as of the place for tender or, in cases of rejection after arrival or revocation of acceptance, as of the place of arrival.

(3) Except as otherwise agreed, if the lessee has accepted goods and given notification (Section 75-2A-516(3)), the measure of damages for nonconforming tender or delivery or other default by a lessor is the loss resulting in the ordinary course of events from the lessor's default as determined in any manner that is reasonable together with incidental and consequential damages, less expenses saved in consequence of the lessor's default.

(4) Except as otherwise agreed, the measure of damages for breach of warranty is the present value at the time and place of acceptance of the difference between the value of the use of the goods accepted and the value if they had been as warranted for the lease term, unless special circumstances show proximate damages of a different amount, together with incidental and consequential damages, less expenses saved in consequence of the lessor's default or breach of warranty.

§ 75-2A-520

(1) Incidental damages resulting from a lessor's default include expenses reasonably incurred in inspection, receipt, transportation, and care and custody of goods rightfully rejected or goods the acceptance of which is justifiably revoked, any commercially reasonable charges, expenses or commissions in connection with effecting cover, and any other reasonable expense incident to the default.

(2) Consequential damages resulting from a lessor's default include:

(a) Any loss resulting from general or particular requirements and needs of which the lessor at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and

(b) Injury to person or property proximately resulting from any breach of warranty.

§ 75-2A-521

(1) Specific performance may be decreed if the goods are unique or in other proper circumstances.

(2) A decree for specific performance may include any terms and conditions as to payment of the rent, damages, or other relief that the court deems just.

(3) A lessee has a right of replevin, detinue, sequestration, claim and delivery, or the like for goods identified to the lease contract if after reasonable effort the lessee is unable to effect cover for those goods or the circumstances reasonably indicate that the effort will be unavailing.

§ 75-2A-522

(1) Subject to subsection (2) and even though the goods have not been shipped, a lessee who has paid a part or all of the rent and security for goods identified to a lease contract (Section 75-2A-217) on making and keeping good a tender of any unpaid portion of the rent and security due under the lease contract may recover the goods identified from the lessor if the lessor becomes insolvent within ten (10) days after receipt of the first installment of rent and security.

(2) A lessee acquires the right to recover goods identified to a lease contract only if they conform to the lease contract.

§ 75-2A-523

(1) If a lessee wrongfully rejects or revokes acceptance of goods or fails to make a payment when due or repudiates with respect to a part or the whole, then, with respect to any goods involved, and with respect to all of the goods if under an installment lease contract the value of the whole lease contract is substantially impaired (Section 75-2A-510), the lessee is in default under the lease contract and the lessor may:

(a) Cancel the lease contract (Section 75-2A-505(1));

(b) Proceed respecting goods not identified to the lease contract (Section 75-2A-524);

(c) Withhold delivery of the goods and take possession of goods previously delivered (Section 75-2A-525);

(d) Stop delivery of the goods by any bailee (Section 75-2A-526);

(e) Dispose of the goods and recover damages (Section 75-2A-527), or retain the goods and recover damages (Section 75-2A-528), or in a proper case recover rent (Section 75-2A-529);

(f) Exercise any other rights or pursue any other remedies provided in the lease contract.

(2) If a lessor does not fully exercise a right or obtain a remedy to which the lessor is entitled under subsection (1), the lessor may recover the loss resulting in the ordinary course of events from the lessee's default as determined in any reasonable manner, together with incidental damages, less expenses saved in consequence of the lessee's default.

(3) If a lessee is otherwise in default under a lease contract, the lessor may exercise the rights and pursue the remedies provided in the lease contract, which may include a right to cancel the lease. In addition, unless otherwise provided in the lease contract:

(a) If the default substantially impairs the value of the lease contract to the lessor, the lessor may exercise the rights and pursue the remedies provided in subsection (1) or (2); or

(b) If the default does not substantially impair the value of the lease contract to the lessor, the lessor may recover as provided in subsection (2).

§ 75-2A-524

(1) A lessor aggrieved under Section 75-2A-523(1) may:

(a) Identify to the lease contract conforming goods not already identified if at the time the lessor learned of the default they were in the lessor's or the supplier's possession or control; and

(b) Dispose of goods (Section 75-2A-527(1)) that demonstrably have been intended for the particular lease contract even though those goods are unfinished.

(2) If the goods are unfinished, in the exercise of reasonable commercial judgment for the purposes of avoiding loss and of effective realization, an aggrieved lessor or the supplier may either complete manufacture and wholly identify the goods to the lease contract or cease manufacture and lease, sell, or otherwise dispose of the goods for scrap or salvage value or proceed in any other reasonable manner.

§ 75-2A-525

(1) If a lessor discovers the lessee to be insolvent, the lessor may refuse to deliver the goods.

(2) After a default by the lessee under the lease contract of the type described in Section 75-2A-523(1) or 75-2A-523(3)(a) or, if agreed, after other default by the lessee, the lessor has the right to take possession of the goods. If the lease contract so provides, the lessor may require the lessee to assemble the goods and make them available to the lessor at a place to be designated by the lessor which is reasonably convenient to both parties. Without removal, the lessor may render unusable any goods employed in trade or business, and may dispose of goods on the lessee's premises (Section 75-2A-527).

(3) The lessor may proceed under subsection (2) without judicial process if it can be done without breach of the peace or the lessor may proceed by action.

§ 75-2A-526

(1) A lessor may stop delivery of goods in the possession of a carrier or other bailee if the lessor discovers the lessee to be insolvent and may stop delivery of carload, truckload, planeload, or larger shipments of express or freight if the lessee repudiates or fails to make a payment due before delivery, whether for rent, security or otherwise under the lease contract, or for any other reason the lessor has a right to withhold or take possession of the goods.

(2) In pursuing its remedies under subsection (1), the lessor may stop delivery until

(a) Receipt of the goods by the lessee;

(b) Acknowledgment to the lessee by any bailee of the goods, except a carrier, that the bailee hold the goods for the lessee; or

(c) Such an acknowledgement to the lessee by a carrier via reshipment or as a warehouse.

(3)(a) To stop delivery, a lessor shall so notify as to enable the bailee by reasonable diligence to prevent delivery of the goods.

(b) After notification, the bailee shall hold and deliver the goods according to the directions of the lessor, but the lessor is liable to the bailee for any ensuing charges or damages.

(c) A carrier who has issued a nonnegotiable bill of lading is not obliged to obey a notification to stop received from a person other than the consignor.

§ 75-2A-527

(1) After a default by a lessee under the lease contract of the type described in Section 75-2A-523(1) or 75-2A-523(3)(a) or after the lessor refuses to deliver or takes possession of goods (Section 75-2A-525 or 75-2A-526), or, if agreed, after other default by a lessee, the lessor may dispose of the goods concerned or the undelivered balance thereof by lease, sale or otherwise.

(2) Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 75-2A-504) or otherwise determined pursuant to agreement of the parties (Sections 75-1-302 and 75-2A-503), if the disposition is by lease agreement substantially similar to the original lease agreement and the new lease agreement is made in good faith and in a commercially reasonable manner, the lessor may recover from the lessee as damages (i) accrued and unpaid rent as of the date of the commencement of the term of the new lease agreement, (ii) the present value, as of the same date, of the total rent for the then remaining lease term of the original lease agreement minus the present value, as of the same date, of the rent under the new lease agreement applicable to that period of the new lease term which is comparable to the then remaining term of the original lease agreement, and (iii) any incidental damages allowed under Section 75-2A-530, less expenses saved in consequence of the lessee's default.

(3) If the lessor's disposition is by lease agreement that for any reason does not qualify for treatment under subsection (2), or is by sale or otherwise, the lessor may recover from the lessee as if the lessor had elected not to dispose of the goods and Section 75-2A-528 governs.

(4) A subsequent buyer or lessee who buys or leases from the lessor in good faith for value as a result of a disposition under this section takes the goods free of the original lease contract and any rights of the original lessee even though the lessor fails to comply with one or more of the requirements of this chapter.

(5) The lessor is not accountable to the lessee for any profit made on any disposition. A lessee who has rightfully rejected or justifiably revoked acceptance shall account to the lessor for any excess over the amount of the lessee's security interest (Section 75-2A-508(5)).

§ 75-2A-528

(1) Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 75-2A-504) or otherwise determined pursuant to agreement of the parties (Sections 75-1-302 and 75-2A-503), if a lessor elects to retain the goods or a lessor elects to dispose of the goods and the disposition is by lease agreement that for any reason does not qualify for treatment under Section 75-2A-527(2), or is by sale or otherwise, the lessor may recover from the lessee as damages for a default of the type described in Section 75-2A-523(1) or 75-2A-523(3)(a), or, if agreed, for other default of the lessee, (i) accrued and unpaid rent as of the date of default if the lessee has never taken possession of the goods, or, if the lessee has taken possession of the goods, as of the date the lessor repossesses the goods or an earlier date on which the lessee makes a tender of the goods to the lessor, (ii) the present value as of the date determined under clause (i) of the total rent for the then remaining lease term of the original lease agreement minus the present value as of the same date of the market rent at the place where the goods are located computed for the same lease term, and (iii) any incidental damages allowed under Section 75-2A-530, less expenses saved in consequence of the lessee's default.

(2) If the measure of damages provided in subsection (1) is inadequate to put a lessor in as good a position as performance would have, the measure of damages is the present value of the profit, including reasonable overhead, the lessor would have made from full performance by the lessee, together with any incidental damages allowed under Section 75-2A-530, due allowance for costs reasonably incurred and due credit for payments or proceeds of disposition.

§ 75-2A-529

(1) After default by the lessee under the lease contract of the type described in Section 75-2A-523(1)or 75-2A-523(3)(a) or, if agreed, after other default by the lessee, if the lessor complies with subsection (2), the lessor may recover from the lessee as damages:

(a) For goods accepted by the lessee and not repossessed by or tendered to the lessor, and for conforming goods lost or damaged within a commercially reasonable time after risk of loss passes to the lessee (Section 75-2A-219), (i) accrued and unpaid rent as of the date of entry of judgment in favor of the lessor, (ii) the present value as of the same date of the rent for the then remaining lease term of the lease agreement, and (iii) any incidental damages allowed under Section 75-2A-530, less expenses saved in consequence of the lessee's default; and

(b) For goods identified to the lease contract if the lessor is unable after reasonable effort to dispose of them at a reasonable price or the circumstances reasonably indicate that effort will be unavailing, (i) accrued and unpaid rent as of the date of entry of judgment in favor of the lessor, (ii) the present value as of the same date of the rent for the then remaining lease term of the lease agreement, and (iii) any incidental damages allowed under Section 75-2A-530, less expenses saved in consequence of the lessee's default.

(2) Except as provided in subsection (3), the lessor shall hold for the lessee for the remaining lease term of the lease agreement any goods that have been identified to the lease contract and are in the lessor's control.

(3) The lessor may dispose of the goods at any time before collection of the judgment for damages obtained pursuant to subsection (1). If the disposition is before the end of the remaining lease term of the lease agreement, the lessor's recovery against the lessee for damages is governed by Section 75-2A-527 or Section 75-2A-528, and the lessor will cause an appropriate credit to be provided against a judgment for damages to the extent that the amount of the judgment exceeds the recovery available pursuant to Section 75-2A-527 or 75-2A-528.

(4) Payment of the judgment for damages obtained pursuant to subsection (1) entitles the lessee to the use and possession of the goods not then disposed of for the remaining lease term of and in accordance with the lease agreement.

(5) After a lessee has wrongfully rejected or revoked acceptance of goods, has failed to pay rent then due, or has repudiated (Section 75-2A-402), a lessor who is held not entitled to rent under this section must nevertheless be awarded damages for nonacceptance under Sections 75-2A-527 and 75-2A-528.

§ 75-2A-530

Incidental damages to an aggrieved lessor include any commercially reasonable charges, expenses, or commissions incurred in stopping delivery, in the transportation, care and custody of goods after the lessee's default, in connection with return or disposition of the goods, or otherwise resulting from the default.

§ 75-2A-531

(1) If a third party so deals with goods that have been identified to a lease contract as to cause actionable injury to a party to the lease contract (a) the lessor has a right of action against the third party, and (b) the lessee also has a right of action against the third party if the lessee:

(i) Has a security interest in the goods;

(ii) Has an insurable interest in the goods; or

(iii) Bears the risk of loss under the lease contract or has since the injury assumed that risk as against the lessor and the goods have been converted or destroyed.

(2) If at the time of the injury the party plaintiff did not bear the risk of loss as against the other party to the lease contract and there is no arrangement between them for disposition of the recovery, his suit or settlement, subject to his own interest, is as a fiduciary for the other party to the lease contract.

(3) Either party with the consent of the other may sue for the benefit of whom it may concern.

§ 75-2A-532

In addition to any other recovery permitted by this chapter or other law, the lessor may recover from the lessee an amount that will fully compensate the lessor for any loss of or damage to the lessor's residual interest in the goods caused by the default of the lessee.

Chapter 3 Uniform Commercial Code--Negotiable Instruments

§ 75-3-101

This chapter may be cited as Uniform Commercial Code -- Negotiable Instruments.

§ 75-3-102

(a) This chapter applies to negotiable instruments. It does not apply to money, to payment orders governed by Chapter 4A, or to securities governed by Chapter 8.

(b) If there is conflict between this chapter and Chapter 4 or 9, Chapters 4 and 9 govern.

(c) Regulations of the Board of Governors of the Federal Reserve System and operating circulars of the Federal Reserve Banks supersede any inconsistent provision of this chapter to the extent of the inconsistency.

§ 75-3-103

(a) In this chapter:

(1) “Acceptor” means a drawee who has accepted a draft.

(2) [Reserved]

(3) [Reserved]

(4) “Drawee” means a person ordered in a draft to make payment.

(5) “Drawer” means a person who signs or is identified in a draft as a person ordering payment.

(6) [Reserved]

(7) “Maker” means a person who signs or is identified in a note as a person undertaking to pay.

(8) “Order” means a written instruction to pay money signed by the person giving the instruction. The instruction may be addressed to any person, including the person giving the instruction, or to one or more persons jointly or in the alternative but not in succession. An authorization to pay is not an order unless the person authorized to pay is also instructed to pay.

(9) “Ordinary care” in the case of a person engaged in business means observance of reasonable commercial standards, prevailing in the area in which the person is located, with respect to the business in which the person is engaged. In the case of a bank that takes an instrument for processing for collection or payment by automated means, reasonable commercial standards do not require the bank to examine the instrument if the failure to examine does not violate the bank's prescribed procedures and the bank's procedures do not vary unreasonably from general banking usage not disapproved by this chapter or Chapter 4.

(10) “Party” means a party to an instrument.

(11) “Principal obligor,” with respect to an instrument, means the accommodated party or any other party to the instrument against whom a secondary obligor has recourse under this article.

(12) “Promise” means a written undertaking to pay money signed by the person undertaking to pay. An acknowledgment of an obligation by the obligor is not a promise unless the obligor also undertakes to pay the obligation.

(13) “Prove” with respect to a fact means to meet the burden of establishing the fact (Section 75-1-201(b)(8), Mississippi Code of 1972).

(14) [Reserved]

(15) “Remitter” means a person who purchases an instrument from its issuer if the instrument is payable to an identified person other than the purchaser.

(16) “Remotely created check” means a check that is not created by the paying bank and that does not bear a signature applied, or purported to be applied, by the person on whose account the check is drawn.

(17) “Secondary obligor,”  1 with respect to an instrument, means (i) an indorser or an accommodation party, (ii) a drawer having the obligation described in Section 75-3-414(d), or (iii) any other party to the instrument that has recourse against another party to the instrument pursuant to Section 75-3-116(b).

(b) Other definitions applying to this chapter and the sections in which they appear are:

| | “Acceptance” | Section 75-3-409 | | --- | --- | --- | | | “Accommodated party” | Section 75-3-419 | | | “Accommodation party” | Section 75-3-419 | | | “Account” | Section 75-4-104 | | | “Alteration” | Section 75-3-407 | | | “Anomalous indorsement” | Section 75-3-205 | | | “Blank indorsement” | Section 75-3-205 | | | “Cashier's check” | Section 75-3-104 | | | “Certificate of deposit” | Section 75-3-104 | | | “Certified check” | Section 75-3-409 | | | “Check” | Section 75-3-104 | | | “Consideration” | Section 75-3-303 | | | “Draft” | Section 75-3-104 | | | “Holder in due course” | Section 75-3-302 | | | “Incomplete instrument” | Section 75-3-115 | | | “Indorsement” | Section 75-3-204 | | | “Indorser” | Section 75-3-204 | | | “Instrument” | Section 75-3-104 | | | “Issue” | Section 75-3-105 | | | “Issuer” | Section 75-3-105 | | | “Negotiable instrument” | Section 75-3-104 | | | “Negotiation” | Section 75-3-201 | | | “Note” | Section 75-3-104 | | | “Payable at a definite time” | Section 75-3-108 | | | “Payable on demand” | Section 75-3-108 | | | “Payable to bearer” | Section 75-3-109 | | | “Payable to order” | Section 75-3-109 | | | “Payment” | Section 75-3-602 | | | “Person entitled to enforce” | Section 75-3-301 | | | “Presentment” | Section 75-3-501 | | | “Reacquisition” | Section 75-3-207 | | | “Special indorsement” | Section 75-3-205 | | | “Teller's check” | Section 75-3-104 | | | “Transfer of instrument” | Section 75-3-203 | | | “Traveler's check” | Section 75-3-104 | | | “Value” | Section 75-3-303 |

(c) The following definitions in other chapters apply to this chapter:

| | “Banking day” | Section 75-4-104 | | --- | --- | --- | | | “Clearinghouse” | Section 75-4-104 | | | “Collecting bank” | Section 75-4-105 | | | “Depositary bank” | Section 75-4-105 | | | “Documentary draft” | Section 75-4-104 | | | “Intermediary bank” | Section 75-4-105 | | | “Item” | Section 75-4-104 | | | “Payor bank” | Section 75-4-105 | | | “Suspends payments” | Section 75-4-104 |

(d) In addition, Chapter 1 contains general definitions and principles of construction and interpretation applicable throughout this chapter.

1

Punctuation so in original

§ 75-3-104

(a) Except as provided in subsections (c) and (d), “negotiable instrument” means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:

(1) Is payable to bearer or to order at the time it is issued or first comes into possession of a holder;

(2) Is payable on demand or at a definite time; and

(3) Does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain (i) an undertaking or power to give, maintain, or protect collateral to secure payment, (ii) an authorization or power to the holder to confess judgment or realize on or dispose of collateral, or (iii) a waiver of the benefit of any law intended for the advantage or protection of an obligor.

(b) “Instrument” means a negotiable instrument.

(c) An order that meets all of the requirements of subsection (a), except paragraph (1), and otherwise falls within the definition of “check” in subsection (f) is a negotiable instrument and a check.

(d) A promise or order other than a check is not an instrument if, at the time it is issued or first comes into possession of a holder, it contains a conspicuous statement, however expressed, to the effect that the promise or order is not negotiable or is not an instrument governed by this chapter.

(e) An instrument is a “note” if it is a promise and is a “draft” if it is an order. If an instrument falls within the definition of both “note” and “draft,” a person entitled to enforce the instrument may treat it as either.

(f) “Check” means (i) a draft, other than a documentary draft, payable on demand and drawn on a bank or (ii) a cashier's check or teller's check. An instrument may be a check even though it is described on its face by another term, such as “money order.”

(g) “Cashier's check” means a draft with respect to which the drawer and drawee are the same bank or branches of the same bank.

(h) “Teller's check” means a draft drawn by a bank (i) on another bank, or (ii) payable at or through a bank.

(i) “Traveler's check” means an instrument that (i) is payable on demand, (ii) is drawn on or payable at or through a bank, (iii) is designated by the term “traveler's check” or by a substantially similar term, and (iv) requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the instrument.

(j) “Certificate of deposit” means an instrument containing an acknowledgment by a bank that a sum of money has been received by the bank and a promise by the bank to repay the sum of money. A certificate of deposit is a note of the bank.

§ 75-3-105

(a) “Issue” means the first delivery of an instrument by the maker or drawer, whether to a holder or nonholder, for the purpose of giving rights on the instrument to any person.

(b) An unissued instrument, or an unissued incomplete instrument that is completed, is binding on the maker or drawer, but nonissuance is a defense. An instrument that is conditionally issued or is issued for a special purpose is binding on the maker or drawer, but failure of the condition or special purpose to be fulfilled is a defense.

(c) “Issuer” applies to issued and unissued instruments and means a maker or drawer of an instrument.

§ 75-3-106

(a) Except as provided in this section, for the purposes of Section 75-3-104(a), a promise or order is unconditional unless it states (i) an express condition to payment, (ii) that the promise or order is subject to or governed by another record, or (iii) that rights or obligations with respect to the promise or order are stated in another record. A reference to another record does not of itself make the promise or order conditional.

(b) A promise or order is not made conditional (i) by a reference to another record for a statement of rights with respect to collateral, prepayment, or acceleration, or (ii) because payment is limited to resort to a particular fund or source.

(c) If a promise or order requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the promise or order, the condition does not make the promise or order conditional for the purposes of Section 75-3-104(a). If the person whose specimen signature appears on an instrument fails to countersign the instrument, the failure to countersign is a defense to the obligation of the issuer, but the failure does not prevent a transferee of the instrument from becoming a holder of the instrument.

(d) If a promise or order at the time it is issued or first comes into possession of a holder contains a statement, required by applicable statutory or administrative law, to the effect that the rights of a holder or transferee are subject to claims or defenses that the issuer could assert against the original payee, the promise or order is not thereby made conditional for the purposes of Section 75-3-104(a); but if the promise or order is an instrument, there cannot be a holder in due course of the instrument.

§ 75-3-107

Unless the instrument otherwise provides, an instrument that states the amount payable in foreign money may be paid in the foreign money or in an equivalent amount in dollars calculated by using the current bank-offered spot rate at the place of payment for the purchase of dollars on the day on which the instrument is paid.

§ 75-3-108

(a) A promise or order is “payable on demand” if it (i) states that it is payable on demand or at sight, or otherwise indicates that it is payable at the will of the holder, or (ii) does not state any time of payment.

(b) A promise or order is “payable at a definite time” if it is payable on elapse of a definite period of time after sight or acceptance or at a fixed date or dates or at a time or times readily ascertainable at the time the promise or order is issued, subject to rights of (i) prepayment, (ii) acceleration, (iii) extension at the option of the holder, or (iv) extension to a further definite time at the option of the maker or acceptor or automatically upon or after a specified act or event.

(c) If an instrument, payable at a fixed date, is also payable upon demand made before the fixed date, the instrument is payable on demand until the fixed date and, if demand for payment is not made before that date, becomes payable at a definite time on the fixed date.

§ 75-3-109

(a) A promise or order is payable to bearer if it:

(1) States that it is payable to bearer or to the order of bearer or otherwise indicates that the person in possession of the promise or order is entitled to payment;

(2) Does not state a payee; or

(3) States that it is payable to or to the order of cash or otherwise indicates that it is not payable to an identified person.

(b) A promise or order that is not payable to bearer is payable to order if it is payable (i) to the order of an identified person or (ii) to an identified person or order. A promise or order that is payable to order is payable to the identified person.

(c) An instrument payable to bearer may become payable to an identified person if it is specially indorsed pursuant to Section 75-3-205(a). An instrument payable to an identified person may become payable to bearer if it is indorsed in blank pursuant to Section 75-3-205(b).

§ 75-3-110

(a) The person to whom an instrument is initially payable is determined by the intent of the person, whether or not authorized, signing as, or in the name or behalf of, the issuer of the instrument. The instrument is payable to the person intended by the signer even if that person is identified in the instrument by a name or other identification that is not that of the intended person. If more than one (1) person signs in the name or behalf of the issuer of an instrument and all the signers do not intend the same person as payee, the instrument is payable to any person intended by one or more of the signers.

(b) If the signature of the issuer of an instrument is made by automated means, such as a check-writing machine, the payee of the instrument is determined by the intent of the person who supplied the name or identification of the payee, whether or not authorized to do so.

(c) A person to whom an instrument is payable may be identified in any way, including by name, identifying number, office, or account number. For the purpose of determining the holder of an instrument, the following rules apply:

(1) If an instrument is payable to an account and the account is identified only by number, the instrument is payable to the person to whom the account is payable. If an instrument is payable to an account identified by number and by the name of a person, the instrument is payable to the named person, whether or not that person is the owner of the account identified by number.

(2) If an instrument is payable to:

(i) A trust, an estate, or a person described as trustee or representative of a trust or estate, the instrument is payable to the trustee, the representative, or a successor of either, whether or not the beneficiary or estate is also named;

(ii) A person described as agent or similar representative of a named or identified person, the instrument is payable to the represented person, the representative, or a successor of the representative;

(iii) A fund or organization that is not a legal entity, the instrument is payable to a representative of the members of the fund or organization; or

(iv) An office or to a person described as holding an office, the instrument is payable to the named person, the incumbent of the office, or a successor to the incumbent.

(d) If an instrument is payable to two (2) or more persons alternatively, it is payable to any of them and may be negotiated, discharged, or enforced by any or all of them in possession of the instrument. If an instrument is payable to two (2) or more persons not alternatively, it is payable to all of them and may be negotiated, discharged, or enforced only by all of them. If an instrument payable to two (2) or more persons is ambiguous as to whether it is payable to the persons alternatively, the instrument is payable to the persons alternatively.

§ 75-3-111

Except as otherwise provided for items in Chapter 4, an instrument is payable at the place of payment stated in the instrument. If no place of payment is stated, an instrument is payable at the address of the drawee or maker stated in the instrument. If no address is stated, the place of payment is the place of business of the drawee or maker. If a drawee or maker has more than one (1) place of business, the place of payment is any place of business of the drawee or maker chosen by the person entitled to enforce the instrument. If the drawee or maker has no place of business, the place of payment is the residence of the drawee or maker.

§ 75-3-112

(a) Unless otherwise provided in the instrument, (i) an instrument is not payable with interest, and (ii) interest on an interest-bearing instrument is payable from the date of the instrument.

(b) Interest may be stated in an instrument as a fixed or variable amount of money or it may be expressed as a fixed or variable rate or rates. The amount or rate of interest may be stated or described in the instrument in any manner and may require reference to information not contained in the instrument. If an instrument provides for interest, but the amount of interest payable cannot be ascertained from the description, interest is payable at the judgment rate in effect at the place of payment of the instrument and at the time interest first accrues.

§ 75-3-113

(a) An instrument may be antedated or postdated. The date stated determines the time of payment if the instrument is payable at a fixed period after date. Except as provided in Section 75-4-401(c), an instrument payable on demand is not payable before the date of the instrument.

(b) If an instrument is undated, its date is the date of its issue or, in the case of an unissued instrument, the date it first comes into possession of a holder.

§ 75-3-114

If an instrument contains contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers.

§ 75-3-115

(a) “Incomplete instrument” means a signed writing, whether or not issued by the signer, the contents of which show at the time of signing that it is incomplete but that the signer intended it to be completed by the addition of words or numbers.

(b) Subject to subsection (c), if an incomplete instrument is an instrument under Section 75-3-104, it may be enforced according to its terms if it is not completed, or according to its terms as augmented by completion. If an incomplete instrument is not an instrument under Section 75-3-104, but, after completion, the requirements of Section 75-3-104 are met, the instrument may be enforced according to its terms as augmented by completion.

(c) If words or numbers are added to an incomplete instrument without authority of the signer, there is an alteration of the incomplete instrument under Section 75-3-407.

(d) The burden of establishing that words or numbers were added to an incomplete instrument without authority of the signer is on the person asserting the lack of authority.

§ 75-3-116

(a) Except as otherwise provided in the instrument, two (2) or more persons who have the same liability on an instrument as makers, drawers, acceptors, indorsers who indorse as joint payees, or anomalous indorsers are jointly and severally liable in the capacity in which they sign.

(b) Except as provided in Section 75-3-419(f) or by agreement of the affected parties, a party having joint and several liability who pays the instrument is entitled to receive from any party having the same joint and several liability contribution in accordance with applicable law.

§ 75-3-117

Subject to applicable law regarding exclusion of proof of contemporaneous or previous agreements, the obligation of a party to an instrument to pay the instrument may be modified, supplemented, or nullified by a separate agreement of the obligor and a person entitled to enforce the instrument, if the instrument is issued or the obligation is incurred in reliance on the agreement or as part of the same transaction giving rise to the agreement. To the extent an obligation is modified, supplemented, or nullified by an agreement under this section, the agreement is a defense to the obligation.

§ 75-3-118

(a) Except as provided in subsection (e), an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six (6) years after the due date or dates stated in the note or, if a due date is accelerated, within six (6) years after the accelerated due date.

(b) Except as provided in subsection (d) or (e), if demand for payment is made to the maker of a note payable on demand, an action to enforce the obligation of a party to pay the note must be commenced within six (6) years after the demand. If no demand for payment is made to the maker, an action to enforce the note is barred if neither principal nor interest on the note has been paid for a continuous period of ten (10) years.

(c) Except as provided in subsection (d), an action to enforce the obligation of a party to an unaccepted draft to pay the draft must be commenced within three (3) years after dishonor of the draft or ten (10) years after the date of the draft, whichever period expires first.

(d) An action to enforce the obligation of the acceptor of a certified check or the issuer of a teller's check, cashier's check, or traveler's check must be commenced within three (3) years after demand for payment is made to the acceptor or issuer, as the case may be.

(e) An action to enforce the obligation of a party to a certificate of deposit to pay the instrument must be commenced within six (6) years after demand for payment is made to the maker, but if the instrument states a due date and the maker is not required to pay before that date, the six-year period begins when a demand for payment is in effect and the due date has passed.

(f) An action to enforce the obligation of a party to pay an accepted draft, other than a certified check, must be commenced (i) within six (6) years after the due date or dates stated in the draft or acceptance if the obligation of the acceptor is payable at a definite time, or (ii) within six (6) years after the date of the acceptance if the obligation of the acceptor is payable on demand.

(g) Unless governed by other law regarding claims for indemnity or contribution, an action (i) for conversion of an instrument, for money had and received, or like action based on conversion, (ii) for breach of warranty, or (iii) to enforce an obligation, duty, or right arising under this chapter and not governed by this section must be commenced within three (3) years after the cause of action accrues.

§ 75-3-119

In an action for breach of an obligation for which a third person is answerable over pursuant to this chapter or Chapter 4, the defendant may give the third person notice of the litigation in a record, and the person notified may then give similar notice to any other person who is answerable over. If the notice states (i) that the person notified may come in and defend and (ii) that failure to do so will bind the person notified in an action later brought by the person giving the notice as to any determination of fact common to the two (2) litigations, the person notified is so bound unless after seasonable receipt of the notice the person notified does come in and defend.

§ 75-3-201

(a) “Negotiation” means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who thereby becomes its holder.

(b) Except for negotiation by a remitter, if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by the holder. If an instrument is payable to bearer, it may be negotiated by transfer of possession alone.

§ 75-3-202

(a) Negotiation is effective even if obtained (i) from an infant, a corporation exceeding its powers, or a person without capacity, (ii) by fraud, duress, or mistake, or (iii) in breach of duty or as part of an illegal transaction.

(b) To the extent permitted by other law, negotiation may be rescinded or may be subject to other remedies, but those remedies may not be asserted against a subsequent holder in due course or a person paying the instrument in good faith and without knowledge of facts that are a basis for rescission or other remedy.

§ 75-3-203

(a) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument.

(b) Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument, including any right as a holder in due course, but the transferee cannot acquire rights of a holder in due course by a transfer, directly or indirectly, from a holder in due course if the transferee engaged in fraud or illegality affecting the instrument.

(c) Unless otherwise agreed, if an instrument is transferred for value and the transferee does not become a holder because of lack of indorsement by the transferor, the transferee has a specifically enforceable right to the unqualified indorsement of the transferor, but negotiation of the instrument does not occur until the indorsement is made.

(d) If a transferor purports to transfer less than the entire instrument, negotiation of the instrument does not occur. The transferee obtains no rights under this chapter and has only the rights of a partial assignee.

§ 75-3-204

(a) “Indorsement” means a signature, other than that of a signer as maker, drawer, or acceptor, that alone or accompanied by other words is made on an instrument for the purpose of (i) negotiating the instrument, (ii) restricting payment of the instrument, or (iii) incurring indorser's liability on the instrument, but regardless of the intent of the signer, a signature and its accompanying words is an indorsement unless the accompanying words, terms of the instrument, place of the signature, or other circumstances unambiguously indicate that the signature was made for a purpose other than indorsement. For the purpose of determining whether a signature is made on an instrument, a paper affixed to the instrument is a part of the instrument; provided, however, that an indorsement of instruments representing student loans, including loans that are insured by the United States Secretary of Education under 20 U.S.C.A. 1071, et seq., as amended, or by a state or nonprofit private institution or organization with which the United States Secretary of Education has an agreement under 20 U.S.C.A. 1078(b) as amended, may be made by signed blanket indorsement, rather than in the manner otherwise provided in this subsection, if a notation to that effect is made in the name of the transferee on the instrument representing the student loan.

(b) “Indorser” means a person who makes an indorsement.

(c) For the purpose of determining whether the transferee of an instrument is a holder, an indorsement that transfers a security interest in the instrument is effective as an unqualified indorsement of the instrument.

(d) If an instrument is payable to a holder under a name that is not the name of the holder, indorsement may be made by the holder in the name stated in the instrument or in the holder's name or both, but signature in both names may be required by a person paying or taking the instrument for value or collection.

§ 75-3-205

(a) If an indorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the indorsement identifies a person to whom it makes the instrument payable, it is a “special indorsement.” When specially indorsed, an instrument becomes payable to the identified person and may be negotiated only by the indorsement of that person. The principles stated in Section 75-3-110 apply to special indorsements.

(b) If an indorsement is made by the holder of an instrument and it is not a special indorsement, it is a “blank indorsement.” When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially indorsed.

(c) The holder may convert a blank indorsement that consists only of a signature into a special indorsement by writing, above the signature of the indorser, words identifying the person to whom the instrument is made payable.

(d) “Anomalous indorsement” means an indorsement made by a person who is not the holder of the instrument. An anomalous indorsement does not affect the manner in which the instrument may be negotiated.

§ 75-3-206

(a) An indorsement limiting payment to a particular person or otherwise prohibiting further transfer or negotiation of the instrument is not effective to prevent further transfer or negotiation of the instrument.

(b) An indorsement stating a condition to the right of the indorsee to receive payment does not affect the right of the indorsee to enforce the instrument. A person paying the instrument or taking it for value or collection may disregard the condition, and the rights and liabilities of that person are not affected by whether the condition has been fulfilled.

(c) If an instrument bears an indorsement (i) described in Section 75-4-201(b), or (ii) in blank or to a particular bank using the words “for deposit,” “for collection,” or other words indicating a purpose of having the instrument collected by a bank for the indorser or for a particular account, the following rules apply:

(1) A person, other than a bank, who purchases the instrument when so indorsed converts the instrument unless the amount paid for the instrument is received by the indorser or applied consistently with the indorsement.

(2) A depositary bank that purchases the instrument or takes it for collection when so indorsed converts the instrument unless the amount paid by the bank with respect to the instrument is received by the indorser or applied consistently with the indorsement.

(3) A payor bank that is also the depositary bank or that takes the instrument for immediate payment over the counter from a person other than a collecting bank converts the instrument unless the proceeds of the instrument are received by the indorser or applied consistently with the indorsement.

(4) Except as otherwise provided in paragraph (3), a payor bank or intermediary bank may disregard the indorsement and is not liable if the proceeds of the instrument are not received by the indorser or applied consistently with the indorsement.

(d) Except for an indorsement covered by subsection (c), if an instrument bears an indorsement using words to the effect that payment is to be made to the indorsee as agent, trustee, or other fiduciary for the benefit of the indorser or another person, the following rules apply:

(1) Unless there is notice of breach of fiduciary duty as provided in Section 75-3-307, a person who purchases the instrument from the indorsee or takes the instrument from the indorsee for collection or payment may pay the proceeds of payment or the value given for the instrument to the indorsee without regard to whether the indorsee violates a fiduciary duty to the indorser.

(2) A subsequent transferee of the instrument or person who pays the instrument is neither given notice nor otherwise affected by the restriction in the indorsement unless the transferee or payor knows that the fiduciary dealt with the instrument or its proceeds in breach of fiduciary duty.

(e) The presence on an instrument of an indorsement to which this section applies does not prevent a purchaser of the instrument from becoming a holder in due course of the instrument unless the purchaser is a converter under subsection (c) or has notice or knowledge of breach of fiduciary duty as stated in subsection (d).

(f) In an action to enforce the obligation of a party to pay the instrument, the obligor has a defense if payment would violate an indorsement to which this section applies and the payment is not permitted by this section.

§ 75-3-207

Reacquisition of an instrument occurs if it is transferred to a former holder, by negotiation or otherwise. A former holder who reacquires the instrument may cancel indorsements made after the reacquirer first became a holder of the instrument. If the cancellation causes the instrument to be payable to the reacquirer or to bearer, the reacquirer may negotiate the instrument. An indorser whose indorsement is canceled is discharged, and the discharge is effective against any subsequent holder.

§ 75-3-301

“Person entitled to enforce” an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 75-3-309 or 75-3-418(d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.

§ 75-3-302

(a) Subject to subsection (c) and Section 75-3-106(d), “holder in due course” means the holder of an instrument if:

(1) The instrument when issued or negotiated to the holder does not bear such apparent evidence of forgery or alteration or is not otherwise so irregular or incomplete as to call into question its authenticity; and

(2) The holder took the instrument (i) for value, (ii) in good faith, (iii) without notice that the instrument is overdue or has been dishonored or that there is an uncured default with respect to payment of another instrument issued as part of the same series, (iv) without notice that the instrument contains an unauthorized signature or has been altered, (v) without notice of any claim to the instrument described in Section 75-3-306, and (vi) without notice that any party has a defense or claim in recoupment described in Section 75-3-305(a).

(b) Notice of discharge of a party, other than discharge in an insolvency proceeding, is not notice of a defense under subsection (a), but discharge is effective against a person who became a holder in due course with notice of the discharge. Public filing or recording of a document does not of itself constitute notice of a defense, claim in recoupment, or claim to the instrument.

(c) Except to the extent a transferor or predecessor in interest has rights as a holder in due course, a person does not acquire rights of a holder in due course of an instrument taken (i) by legal process or by purchase in an execution, bankruptcy, or creditor's sale or similar proceeding, (ii) by purchase as part of a bulk transaction not in ordinary course of business of the transferor, or (iii) as the successor in interest to an estate or other organization.

(d) If, under Section 75-3-303(a)(1), the promise of performance that is the consideration for an instrument has been partially performed, the holder may assert rights as a holder in due course of the instrument only to the fraction of the amount payable under the instrument equal to the value of the partial performance divided by the value of the promised performance.

(e) If (i) the person entitled to enforce an instrument has only a security interest in the instrument and (ii) the person obliged to pay the instrument has a defense, claim in recoupment, or claim to the instrument that may be asserted against the person who granted the security interest, the person entitled to enforce the instrument may assert rights as a holder in due course only to an amount payable under the instrument which, at the time of enforcement of the instrument, does not exceed the amount of the unpaid obligation secured.

(f) To be effective, notice must be received at a time and in a manner that gives a reasonable opportunity to act on it.

(g) This section is subject to any law limiting status as a holder in due course in particular classes of transactions.

§ 75-3-303

(a) An instrument is issued or transferred for value if:

(1) The instrument is issued or transferred for a promise of performance, to the extent the promise has been performed;

(2) The transferee acquires a security interest or other lien in the instrument other than a lien obtained by judicial proceeding;

(3) The instrument is issued or transferred as payment of, or as security for, an antecedent claim against any person, whether or not the claim is due;

(4) The instrument is issued or transferred in exchange for a negotiable instrument; or

(5) The instrument is issued or transferred in exchange for the incurring of an irrevocable obligation to a third party by the person taking the instrument.

(b) “Consideration” means any consideration sufficient to support a simple contract. The drawer or maker of an instrument has a defense if the instrument is issued without consideration. If an instrument is issued for a promise of performance, the issuer has a defense to the extent performance of the promise is due and the promise has not been performed. If an instrument is issued for value as stated in subsection (a), the instrument is also issued for consideration.

§ 75-3-304

(a) An instrument payable on demand becomes overdue at the earliest of the following times:

(1) On the day after the day demand for payment is duly made;

(2) If the instrument is a check, ninety (90) days after its date; or

(3) If the instrument is not a check, when the instrument has been outstanding for a period of time after its date which is unreasonably long under the circumstances of the particular case in light of the nature of the instrument and usage of the trade.

(b) With respect to an instrument payable at a definite time the following rules apply:

(1) If the principal is payable in installments and a due date has not been accelerated, the instrument becomes overdue upon default under the instrument for nonpayment of an installment, and the instrument remains overdue until the default is cured.

(2) If the principal is not payable in installments and the due date has not been accelerated, the instrument becomes overdue on the day after the due date.

(3) If a due date with respect to principal has been accelerated, the instrument becomes overdue on the day after the accelerated due date.

(c) Unless the due date of principal has been accelerated, an instrument does not become overdue if there is default in payment of interest but no default in payment of principal.

§ 75-3-305

(a) Except as otherwise provided in this section, the right to enforce the obligation of a party to pay an instrument is subject to the following:

(1) A defense of the obligor based on (i) infancy of the obligor to the extent it is a defense to a simple contract, (ii) duress, lack of legal capacity, or illegality of the transaction which, under other law, nullifies the obligation of the obligor, (iii) fraud that induced the obligor to sign the instrument with neither knowledge nor reasonable opportunity to learn of its character or its essential terms, or (iv) discharge of the obligor in insolvency proceedings;

(2) A defense of the obligor stated in another section of this chapter or a defense of the obligor that would be available if the person entitled to enforce the instrument were enforcing a right to payment under a simple contract; and

(3) A claim in recoupment of the obligor against the original payee of the instrument if the claim arose from the transaction that gave rise to the instrument; but the claim of the obligor may be asserted against a transferee of the instrument only to reduce the amount owing on the instrument at the time the action is brought.

(b) The right of a holder in due course to enforce the obligation of a party to pay the instrument is subject to defenses of the obligor stated in subsection (a)(1), but is not subject to defenses of the obligor stated in subsection (a)(2) or claims in recoupment stated in subsection (a)(3) against a person other than the holder.

(c) Except as stated in subsection (d), in an action to enforce the obligation of a party to pay the instrument, the obligor may not assert against the person entitled to enforce the instrument a defense, claim in recoupment, or claim to the instrument (Section 75-3-306) of another person, but the other person's claim to the instrument may be asserted by the obligor if the other person is joined in the action and personally asserts the claim against the person entitled to enforce the instrument. An obligor is not obliged to pay the instrument if the person seeking enforcement of the instrument does not have rights of a holder in due course and the obligor proves that the instrument is a lost or stolen instrument.

(d) In an action to enforce the obligation of an accommodation party to pay an instrument, the accommodation party may assert against the person entitled to enforce the instrument any defense or claim in recoupment under subsection (a) that the accommodated party could assert against the person entitled to enforce the instrument, except the defenses of discharge in insolvency proceedings, infancy, and lack of legal capacity.

§ 75-3-306

A person taking an instrument, other than a person having rights of a holder in due course, is subject to a claim of a property or possessory right in the instrument or its proceeds, including a claim to rescind a negotiation and to recover the instrument or its proceeds. A person having rights of a holder in due course takes free of the claim to the instrument.

§ 75-3-307

(a) In this section:

(1) “Fiduciary” means an agent, trustee, partner, corporate officer or director, or other representative owing a fiduciary duty with respect to an instrument.

(2) “Represented person” means the principal, beneficiary, partnership, corporation, or other person to whom the duty stated in paragraph (1) is owed.

(b) If (i) an instrument is taken from a fiduciary for payment or collection or for value, (ii) the taker has knowledge of the fiduciary status of the fiduciary, and (iii) the represented person makes a claim to the instrument or its proceeds on the basis that the transaction of the fiduciary is a breach of fiduciary duty, the following rules apply:

(1) Notice of breach of fiduciary duty by the fiduciary is notice of the claim of the represented person.

(2) In the case of an instrument payable to the represented person or the fiduciary as such, the taker has notice of the breach of fiduciary duty if the instrument is (i) taken in payment of or as security for a debt known by the taker to be the personal debt of the fiduciary, (ii) taken in a transaction known by the taker to be for the personal benefit of the fiduciary, or (iii) deposited to an account other than an account of the fiduciary, as such, or an account of the represented person.

(3) If an instrument is issued by the represented person or the fiduciary as such, and made payable to the fiduciary personally, the taker does not have notice of the breach of fiduciary duty unless the taker knows of the breach of fiduciary duty.

(4) If an instrument is issued by the represented person or the fiduciary as such, to the taker as payee, the taker has notice of the breach of fiduciary duty if the instrument is (i) taken in payment of or as security for a debt known by the taker to be the personal debt of the fiduciary, (ii) taken in a transaction known by the taker to be for the personal benefit of the fiduciary, or (iii) deposited to an account other than an account of the fiduciary, as such, or an account of the represented person.

§ 75-3-308

(a) In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized unless the action is to enforce the liability of the purported signer and the signer is dead or incompetent at the time of trial of the issue of validity of the signature. If an action to enforce the instrument is brought against a person as the undisclosed principal of a person who signed the instrument as a party to the instrument, the plaintiff has the burden of establishing that the defendant is liable on the instrument as a represented person under Section 75-3-402(a).

(b) If the validity of signatures is admitted or proved and there is compliance with subsection (a), a plaintiff producing the instrument is entitled to payment if the plaintiff proves entitlement to enforce the instrument under Section 75-3-301, unless the defendant proves a defense or claim in recoupment. If a defense or claim in recoupment is proved, the right to payment of the plaintiff is subject to the defense or claim, except to the extent the plaintiff proves that the plaintiff has rights of a holder in due course which are not subject to the defense or claim.

§ 75-3-309

(a) A person not in possession of an instrument is entitled to enforce the instrument if:

(1) The person seeking to enforce the instrument:

(i) Was entitled to enforce the instrument when loss of possession occurred; or

(ii) Has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred;

(2) The loss of possession was not the result of a transfer by the person or a lawful seizure; and

(3) The person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.

(b) A person seeking enforcement of an instrument under subsection (a) must prove the terms of the instrument and the person's right to enforce the instrument. If that proof is made, Section 75-3-308 applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.

§ 75-3-310

(a) Unless otherwise agreed, if a certified check, cashier's check, or teller's check is taken for an obligation, the obligation is discharged to the same extent discharge would result if an amount of money equal to the amount of the instrument were taken in payment of the obligation. Discharge of the obligation does not affect any liability that the obligor may have as an indorser of the instrument.

(b) Unless otherwise agreed and except as provided in subsection (a), if a note or an uncertified check is taken for an obligation, the obligation is suspended to the same extent the obligation would be discharged if an amount of money equal to the amount of the instrument were taken, and the following rules apply:

(1) In the case of an uncertified check, suspension of the obligation continues until dishonor of the check or until it is paid or certified. Payment or certification of the check results in discharge of the obligation to the extent of the amount of the check.

(2) In the case of a note, suspension of the obligation continues until dishonor of the note or until it is paid. Payment of the note results in discharge of the obligation to the extent of the payment.

(3) Except as provided in paragraph (4), if the check or note is dishonored and the obligee of the obligation for which the instrument was taken is the person entitled to enforce the instrument, the obligee may enforce either the instrument or the obligation. In the case of an instrument of a third person which is negotiated to the obligee by the obligor, discharge of the obligor on the instrument also discharges the obligation.

(4) If the person entitled to enforce the instrument taken for an obligation is a person other than the obligee, the obligee may not enforce the obligation to the extent the obligation is suspended. If the obligee is the person entitled to enforce the instrument but no longer has possession of it because it was lost, stolen, or destroyed, the obligation may not be enforced to the extent of the amount payable on the instrument, and to that extent the obligee's rights against the obligor are limited to enforcement of the instrument.

(c) If an instrument other than one described in subsection (a) or (b) is taken for an obligation, the effect is (i) that stated in subsection (a) if the instrument is one on which a bank is liable as maker or acceptor, or (ii) that stated in subsection (b) in any other case.

§ 75-3-311

(a) If a person against whom a claim is asserted proves that (i) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (ii) the amount of the claim was unliquidated or subject to a bona fide dispute, and (iii) the claimant obtained payment of the instrument, the following subsections apply.

(b) Unless subsection (c) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

(c) Subject to subsection (d), a claim is not discharged under subsection (b) if either of the following applies:

(1) The claimant, if an organization, proves that (i) within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office, or place, and (ii) the instrument or accompanying communication was not received by that designated person, office, or place.

(2) The claimant, whether or not an organization, proves that within ninety (90) days after payment of the instrument, the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. This paragraph does not apply if the claimant is an organization that sent a statement complying with paragraph (1)(i).

(d) A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim.

§ 75-3-312

(a) In this section:

(1) “Check” means a cashier's check, teller's check, or certified check.

(2) “Claimant” means a person who claims the right to receive the amount of a cashier's check, teller's check, or certified check that was lost, destroyed, or stolen.

(3) “Declaration of loss” means a statement, made in a record under penalty of perjury, to the effect that (i) the declarer lost possession of a check, (ii) the declarer is the drawer or payee of the check, in the case of a certified check, or the remitter or payee of the check, in the case of a cashier's check or teller's check, (iii) the loss of possession was not the result of a transfer by the declarer or a lawful seizure, and (iv) the declarer cannot reasonably obtain possession of the check because the check was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.

(4) “Obligated bank” means the issuer of a cashier's check or teller's check or the acceptor of a certified check.

(b) A claimant may assert a claim to the amount of a check by a communication to the obligated bank describing the check with reasonable certainty and requesting payment of the amount of the check, if (i) the claimant is the drawer or payee of a certified check or the remitter or payee of a cashier's check or teller's check, (ii) the communication contains or is accompanied by a declaration of loss of the claimant with respect to the check, (iii) the communication is received at a time and in a manner affording the bank a reasonable time to act on it before the check is paid, and (iv) the claimant provides reasonable identification if requested by the obligated bank. Delivery of a declaration of loss is a warranty of the truth of the statements made in the declaration. If a claim is asserted in compliance with this subsection, the following rules apply:

(1) The claim becomes enforceable at the later of (i) the time the claim is asserted, or (ii) the ninetieth day following the date of the check, in the case of a cashier's check or teller's check, or the ninetieth day following the date of acceptance, in the case of a certified check.

(2) Until the claim becomes enforceable, it has no legal effect and the obligated bank may pay the check or, in the case of a teller's check, may permit the drawee to pay the check. Payment to a person entitled to enforce the check discharges all liability of the obligated bank with respect to the check.

(3) If the claim becomes enforceable before the check is presented for payment, the obligated bank is not obliged to pay the check.

(4) When the claim becomes enforceable, the obligated bank becomes obliged to pay the amount of the check to the claimant if payment of the check has not been made to a person entitled to enforce the check. Subject to Section 75-4-302(a)(1), payment to the claimant discharges all liability of the obligated bank with respect to the check.

(c) If the obligated bank pays the amount of a check to a claimant under subsection (b)(4) and the check is presented for payment by a person having rights of a holder in due course, the claimant is obliged to (i) refund the payment to the obligated bank if the check is paid, or (ii) pay the amount of the check to the person having rights of a holder in due course if the check is dishonored.

(d) If a claimant has the right to assert a claim under subsection (b) and is also a person entitled to enforce a cashier's check, teller's check, or certified check which is lost, destroyed, or stolen, the claimant may assert rights with respect to the check either under this section or Section 75-3-309.

§ 75-3-401

(a) A person is not liable on an instrument unless (i) the person signed the instrument, or (ii) the person is represented by an agent or representative who signed the instrument and the signature is binding on the represented person under Section 75-3-402.

(b) A signature may be made (i) manually or by means of a device or machine, and (ii) by the use of any name, including a trade or assumed name, or by a word, mark, or symbol executed or adopted by a person with present intention to authenticate a writing.

§ 75-3-402

(a) If a person acting, or purporting to act, as a representative signs an instrument by signing either the name of the represented person or the name of the signer, the represented person is bound by the signature to the same extent the represented person would be bound if the signature were on a simple contract. If the represented person is bound, the signature of the representative is the “authorized signature of the represented person” and the represented person is liable on the instrument, whether or not identified in the instrument.

(b) If a representative signs the name of the representative to an instrument and the signature is an authorized signature of the represented person, the following rules apply:

(1) If the form of the signature shows unambiguously that the signature is made on behalf of the represented person who is identified in the instrument, the representative is not liable on the instrument.

(2) Subject to subsection (c), if (i) the form of the signature does not show unambiguously that the signature is made in a representative capacity or (ii) the represented person is not identified in the instrument, the representative is liable on the instrument to a holder in due course that took the instrument without notice that the representative was not intended to be liable on the instrument. With respect to any other person, the representative is liable on the instrument unless the representative proves that the original parties did not intend the representative to be liable on the instrument.

(c) If a representative signs the name of the representative as drawer of a check without indication of the representative status and the check is payable from an account of the represented person who is identified on the check, the signer is not liable on the check if the signature is an authorized signature of the represented person.

§ 75-3-403

(a) Unless otherwise provided in this chapter or Chapter 4, an unauthorized signature is ineffective except as the signature of the unauthorized signer in favor of a person who in good faith pays the instrument or takes it for value. An unauthorized signature may be ratified for all purposes of this chapter.

(b) If the signature of more than one (1) person is required to constitute the authorized signature of an organization, the signature of the organization is unauthorized if one of the required signatures is lacking.

(c) The civil or criminal liability of a person who makes an unauthorized signature is not affected by any provision of this chapter which makes the unauthorized signature effective for the purposes of this chapter.

§ 75-3-404

(a) If an impostor, by use of the mails or otherwise, induces the issuer of an instrument to issue the instrument to the impostor, or to a person acting in concert with the impostor, by impersonating the payee of the instrument or a person authorized to act for the payee, an indorsement of the instrument by any person in the name of the payee is effective as the indorsement of the payee in favor of a person who, in good faith, pays the instrument or takes it for value or for collection.

(b) If (i) a person whose intent determines to whom an instrument is payable (Section 75-3-110(a) or (b)) does not intend the person identified as payee to have any interest in the instrument, or (ii) the person identified as payee of an instrument is a fictitious person, the following rules apply until the instrument is negotiated by special indorsement:

(1) Any person in possession of the instrument is its holder.

(2) An indorsement by any person in the name of the payee stated in the instrument is effective as the indorsement of the payee in favor of a person who, in good faith, pays the instrument or takes it for value or for collection.

(c) Under subsection (a) or (b), an indorsement is made in the name of a payee if (i) it is made in a name substantially similar to that of the payee or (ii) the instrument, whether or not indorsed, is deposited in a depositary bank to an account in a name substantially similar to that of the payee.

(d) With respect to an instrument to which subsection (a) or (b) applies, if a person paying the instrument or taking it for value or for collection fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss resulting from payment of the instrument, the person bearing the loss may recover from the person failing to exercise ordinary care to the extent the failure to exercise ordinary care contributed to the loss.

§ 75-3-405

(a) In this section:

(1) “Employee” includes an independent contractor and employee of an independent contractor retained by the employer.

(2) “Fraudulent indorsement” means (i) in the case of an instrument payable to the employer, a forged indorsement purporting to be that of the employer, or (ii) in the case of an instrument with respect to which the employer is the issuer, a forged indorsement purporting to be that of the person identified as payee.

(3) “Responsibility” with respect to instruments means authority (i) to sign or indorse instruments on behalf of the employer, (ii) to process instruments received by the employer for bookkeeping purposes, for deposit to an account, or for other disposition, (iii) to prepare or process instruments for issue in the name of the employer, (iv) to supply information determining the names or addresses of payees of instruments to be issued in the name of the employer, (v) to control the disposition of instruments to be issued in the name of the employer, or (vi) to act otherwise with respect to instruments in a responsible capacity. “Responsibility” does not include authority that merely allows an employee to have access to instruments or blank or incomplete instrument forms that are being stored or transported or are part of incoming or outgoing mail, or similar access.

(b) For the purpose of determining the rights and liabilities of a person who, in good faith, pays an instrument or takes it for value or for collection, if an employer entrusted an employee with responsibility with respect to the instrument and the employee or a person acting in concert with the employee makes a fraudulent indorsement of the instrument, the indorsement is effective as the indorsement of the person to whom the instrument is payable if it is made in the name of that person. If the person paying the instrument or taking it for value or for collection fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss resulting from the fraud, the person bearing the loss may recover from the person failing to exercise ordinary care to the extent the failure to exercise ordinary care contributed to the loss.

(c) Under subsection (b), an indorsement is made in the name of the person to whom an instrument is payable if (i) it is made in a name substantially similar to the name of that person or (ii) the instrument, whether or not indorsed, is deposited in a depositary bank to an account in a name substantially similar to the name of that person.

§ 75-3-406

(a) A person whose failure to exercise ordinary care substantially contributes to an alteration of an instrument or to the making of a forged signature on an instrument is precluded from asserting the alteration or the forgery against a person who, in good faith, pays the instrument or takes it for value or for collection.

(b) Under subsection (a), if the person asserting the preclusion fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss, the loss is allocated between the person precluded and the person asserting the preclusion according to the extent to which the failure of each to exercise ordinary care contributed to the loss.

(c) Under subsection (a), the burden of proving failure to exercise ordinary care is on the person asserting the preclusion. Under subsection (b), the burden of proving failure to exercise ordinary care is on the person precluded.

§ 75-3-407

(a) “Alteration” means (i) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party, or (ii) an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party.

(b) Except as provided in subsection (c), an alteration fraudulently made discharges a party whose obligation is affected by the alteration unless that party assents or is precluded from asserting the alteration. No other alteration discharges a party, and the instrument may be enforced according to its original terms.

(c) A payor bank or drawee paying a fraudulently altered instrument or a person taking it for value, in good faith and without notice of the alteration, may enforce rights with respect to the instrument (i) according to its original terms, or (ii) in the case of an incomplete instrument altered by unauthorized completion, according to its terms as completed.

§ 75-3-408

A check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until the drawee accepts it.

§ 75-3-409

(a) “Acceptance” means the drawee's signed agreement to pay a draft as presented. It must be written on the draft and may consist of the drawee's signature alone. Acceptance may be made at any time and becomes effective when notification pursuant to instructions is given or the accepted draft is delivered for the purpose of giving rights on the acceptance to any person.

(b) A draft may be accepted although it has not been signed by the drawer, is otherwise incomplete, is overdue, or has been dishonored.

(c) If a draft is payable at a fixed period after sight and the acceptor fails to date the acceptance, the holder may complete the acceptance by supplying a date in good faith.

(d) “Certified check” means a check accepted by the bank on which it is drawn. Acceptance may be made as stated in subsection (a) or by a writing on the check which indicates that the check is certified. The drawee of a check has no obligation to certify the check, and refusal to certify is not dishonor of the check.

§ 75-3-410

(a) If the terms of a drawee's acceptance vary from the terms of the draft as presented, the holder may refuse the acceptance and treat the draft as dishonored. In that case, the drawee may cancel the acceptance.

(b) The terms of a draft are not varied by an acceptance to pay at a particular bank or place in the United States, unless the acceptance states that the draft is to be paid only at that bank or place.

(c) If the holder assents to an acceptance varying the terms of a draft, the obligation of each drawer and indorser that does not expressly assent to the acceptance is discharged.

§ 75-3-411

(a) In this section, “obligated bank” means the acceptor of a certified check or the issuer of a cashier's check or teller's check bought from the issuer.

(b) If the obligated bank wrongfully (i) refuses to pay a cashier's check or certified check, (ii) stops payment of a teller's check, or (iii) refuses to pay a dishonored teller's check, the person asserting the right to enforce the check is entitled to compensation for expenses and loss of interest resulting from the nonpayment and may recover consequential damages if the obligated bank refuses to pay after receiving notice of particular circumstances giving rise to the damages.

(c) Expenses or consequential damages under subsection (b) are not recoverable if the refusal of the obligated bank to pay occurs because (i) the bank suspends payments, (ii) the obligated bank asserts a claim or defense of the bank that it has reasonable grounds to believe is available against the person entitled to enforce the instrument, (iii) the obligated bank has a reasonable doubt whether the person demanding payment is the person entitled to enforce the instrument, or (iv) payment is prohibited by law.

§ 75-3-412

The issuer of a note or cashier's check or other draft drawn on the drawer is obliged to pay the instrument (i) according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder, or (ii) if the issuer signed an incomplete instrument, according to its terms when completed, to the extent stated in Sections 75-3-115 and 75-3-407. The obligation is owed to a person entitled to enforce the instrument or to an indorser who paid the instrument under Section 75-3-415.

§ 75-3-413

(a) The acceptor of a draft is obliged to pay the draft (i) according to its terms at the time it was accepted, even though the acceptance states that the draft is payable “as originally drawn” or equivalent terms, (ii) if the acceptance varies the terms of the draft, according to the terms of the draft as varied, or (iii) if the acceptance is of a draft that is an incomplete instrument, according to its terms when completed, to the extent stated in Sections 75-3-115 and 75-3-407. The obligation is owed to a person entitled to enforce the draft or to the drawer or an indorser who paid the draft under Section 75-3-414 or 75-3-415.

(b) If the certification of a check or other acceptance of a draft states the amount certified or accepted, the obligation of the acceptor is that amount. If (i) the certification or acceptance does not state an amount, (ii) the amount of the instrument is subsequently raised, and (iii) the instrument is then negotiated to a holder in due course, the obligation of the acceptor is the amount of the instrument at the time it was taken by the holder in due course.

§ 75-3-414

(a) This section does not apply to cashier's checks or other drafts drawn on the drawer.

(b) If an unaccepted draft is dishonored, the drawer is obliged to pay the draft (i) according to its terms at the time it was issued or, if not issued, at the time it first came into possession of a holder, or (ii) if the drawer signed an incomplete instrument, according to its terms when completed, to the extent stated in Sections 75-3-115 and 75-3-407. The obligation is owed to a person entitled to enforce the draft or to an indorser who paid the draft under Section 75-3-415.

(c) If a draft is accepted by a bank, the drawer is discharged, regardless of when or by whom acceptance was obtained.

(d) If a draft is accepted and the acceptor is not a bank, the obligation of the drawer to pay the draft if the draft is dishonored by the acceptor is the same as the obligation of an indorser under Section 75-3-415(a) and (c).

(e) If a draft states that it is drawn “without recourse” or otherwise disclaims liability of the drawer to pay the draft, the drawer is not liable under subsection (b) to pay the draft if the draft is not a check. A disclaimer of the liability stated in subsection (b) is not effective if the draft is a check.

(f) If (i) a check is not presented for payment or given to a depositary bank for collection within thirty (30) days after its date, (ii) the drawee suspends payments after expiration of the 30-day period without paying the check, and (iii) because of the suspension of payments, the drawer is deprived of funds maintained with the drawee to cover payment of the check, the drawer to the extent deprived of funds may discharge its obligation to pay the check by assigning to the person entitled to enforce the check the rights of the drawer against the drawee with respect to the funds.

§ 75-3-415

(a) Subject to subsections (b), (c), and (d) and to Section 75-3-419(d), if an instrument is dishonored, an indorser is obliged to pay the amount due on the instrument (i) according to the terms of the instrument at the time it was indorsed, or (ii) if the indorser indorsed an incomplete instrument, according to its terms when completed, to the extent stated in Sections 75-3-115 and 75-3-407. The obligation of the indorser is owed to a person entitled to enforce the instrument or to a subsequent indorser who paid the instrument under this section.

(b) If an indorsement states that it is made “without recourse” or otherwise disclaims liability of the indorser, the indorser is not liable under subsection (a) to pay the instrument.

(c) If notice of dishonor of an instrument is required by Section 75-3-503 and notice of dishonor complying with that section is not given to an indorser, the liability of the indorser under subsection (a) is discharged.

(d) If a draft is accepted by a bank after an indorsement is made, the liability of the indorser under subsection (a) is discharged.

§ 75-3-416

(a) A person who transfers an instrument for consideration warrants to the transferee and, if the transfer is by indorsement, to any subsequent transferee that:

(1) The warrantor is a person entitled to enforce the instrument;

(2) All signatures on the instrument are authentic and authorized;

(3) The instrument has not been altered;

(4) The instrument is not subject to a defense or claim in recoupment of any party which can be asserted against the warrantor;

(5) The warrantor has no knowledge of any insolvency proceeding commenced with respect to the maker or acceptor or, in the case of an unaccepted draft, the drawer; and

(6) With respect to a remotely created check, that the person on whose account the remotely created check is drawn authorized the issuance of the check in the amount stated on the check and to the payee stated on the check.

(b) A person to whom the warranties under subsection (a) are made and who took the instrument in good faith may recover from the warrantor as damages for breach of warranty an amount equal to the loss suffered as a result of the breach, but not more than the amount of the instrument plus expenses and loss of interest incurred as a result of the breach.

(c) The warranties stated in subsection (a) cannot be disclaimed with respect to checks. Unless notice of a claim for breach of warranty is given to the warrantor within thirty (30) days after the claimant has reason to know of the breach and the identity of the warrantor, the liability of the warrantor under subsection (b) is discharged to the extent of any loss caused by the delay in giving notice of the claim.

(d) A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.

§ 75-3-417

(a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining payment or acceptance, at the time of presentment, and (ii) a previous transferor of the draft, at the time of transfer, warrant to the drawee making payment or accepting the draft in good faith that:

(1) The warrantor is, or was, at the time the warrantor transferred the draft, a person entitled to enforce the draft or authorized to obtain payment or acceptance of the draft on behalf of a person entitled to enforce the draft;

(2) The draft has not been altered;

(3) The warrantor has no knowledge that the signature of the drawer of the draft is unauthorized; and

(4) With respect to a remotely created check, that the person on whose account the remotely created check is drawn authorized the issuance of the check in the amount stated on the check and to the payee stated on the check.

(b) A drawee making payment may recover from any warrantor damages for breach of warranty equal to the amount paid by the drawee less the amount the drawee received or is entitled to receive from the drawer because of the payment. In addition, the drawee is entitled to compensation for expenses and loss of interest resulting from the breach. The right of the drawee to recover damages under this subsection is not affected by any failure of the drawee to exercise ordinary care in making payment. If the drawee accepts the draft, breach of warranty is a defense to the obligation of the acceptor. If the acceptor makes payment with respect to the draft, the acceptor is entitled to recover from any warrantor for breach of warranty the amounts stated in this subsection.

(c) If a drawee asserts a claim for breach of warranty under subsection (a) based on an unauthorized indorsement of the draft or an alteration of the draft, the warrantor may defend by proving that the indorsement is effective under Section 75-3-404 or 75-3-405 or the drawer is precluded under Section 75-3-406 or 75-4-406 from asserting against the drawee the unauthorized indorsement or alteration. If a drawee asserts a claim for breach of warranty under subsection (a)(4), the warrantor may defend by proving that the person on whose account the remotely created check is drawn is precluded under Section 75-4-406, as applicable, from asserting against the drawee the unauthorized issuance of the check.

(d) If (i) a dishonored draft is presented for payment to the drawer or an indorser or (ii) any other instrument is presented for payment to a party obliged to pay the instrument, and (iii) payment is received, the following rules apply:

(1) The person obtaining payment and a prior transferor of the instrument warrant to the person making payment in good faith that the warrantor is, or was, at the time the warrantor transferred the instrument, a person entitled to enforce the instrument or authorized to obtain payment on behalf of a person entitled to enforce the instrument.

(2) The person making payment may recover from any warrantor for breach of warranty an amount equal to the amount paid plus expenses and loss of interest resulting from the breach.

(e) The warranties stated in subsections (a) and (d) cannot be disclaimed with respect to checks. Unless notice of a claim for breach of warranty is given to the warrantor within thirty (30) days after the claimant has reason to know of the breach and the identity of the warrantor, the liability of the warrantor under subsection (b) or (d) is discharged to the extent of any loss caused by the delay in giving notice of the claim.

(f) A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.

§ 75-3-418

(a) Except as provided in subsection (c), if the drawee of a draft pays or accepts the draft and the drawee acted on the mistaken belief that (i) payment of the draft had not been stopped pursuant to Section 75-4-403 or (ii) the signature of the drawer of the draft was authorized, the drawee may recover the amount of the draft from the person to whom or for whose benefit payment was made or, in the case of acceptance, may revoke the acceptance. Rights of the drawee under this subsection are not affected by failure of the drawee to exercise ordinary care in paying or accepting the draft.

(b) Except as provided in subsection (c), if an instrument has been paid or accepted by mistake and the case is not covered by subsection (a), the person paying or accepting may, to the extent permitted by the law governing mistake and restitution, (i) recover the payment from the person to whom or for whose benefit payment was made or (ii) in the case of acceptance, may revoke the acceptance.

(c) The remedies provided by subsection (a) or (b) may not be asserted against a person who took the instrument in good faith and for value or who in good faith changed position in reliance on the payment or acceptance. This subsection does not limit remedies provided by Section 75-3-417 or 75-4-407.

(d) Notwithstanding Section 75-4-215, if an instrument is paid or accepted by mistake and the payor or acceptor recovers payment or revokes acceptance under subsection (a) or (b), the instrument is deemed not to have been paid or accepted and is treated as dishonored, and the person from whom payment is recovered has rights as a person entitled to enforce the dishonored instrument.

§ 75-3-419

(a) If an instrument is issued for value given for the benefit of a party to the instrument (“accommodated party”) and another party to the instrument (“accommodation party”) signs the instrument for the purpose of incurring liability on the instrument without being a direct beneficiary of the value given for the instrument, the instrument is signed by the accommodation party “for accommodation.”

(b) An accommodation party may sign the instrument as maker, drawer, acceptor, or indorser and, subject to subsection (d), is obliged to pay the instrument in the capacity in which the accommodation party signs. The obligation of an accommodation party may be enforced notwithstanding any statute of frauds and whether or not the accommodation party receives consideration for the accommodation.

(c) A person signing an instrument is presumed to be an accommodation party and there is notice that the instrument is signed for accommodation if the signature is an anomalous indorsement or is accompanied by words indicating that the signer is acting as surety or guarantor with respect to the obligation of another party to the instrument. Except as provided in Section 75-3-605, the obligation of an accommodation party to pay the instrument is not affected by the fact that the person enforcing the obligation had notice when the instrument was taken by that person that the accommodation party signed the instrument for accommodation.

(d) If the signature of a party to an instrument is accompanied by words indicating unambiguously that the party is guaranteeing collection rather than payment of the obligation of another party to the instrument, the signer is obliged to pay the amount due on the instrument to a person entitled to enforce the instrument only if (i) execution of judgment against the other party has been returned unsatisfied, (ii) the other party is insolvent or in an insolvency proceeding, (iii) the other party cannot be served with process, or (iv) it is otherwise apparent that payment cannot be obtained from the other party.

(e) If the signature of a party to an instrument is accompanied by words indicating that the party guarantees payment or the signer signs the instrument as an accommodation party in some other manner that does not unambiguously indicate an intention to guarantee collection rather than payment, the signer is obliged to pay the amount due on the instrument to a person entitled to enforce the instrument in the same circumstances as the accommodated party would be obliged, without prior resort to the accommodated party by the person entitled to enforce the instrument.

(f) An accommodation party who pays the instrument is entitled to reimbursement from the accommodated party and is entitled to enforce the instrument against the accommodated party. In proper circumstances, an accommodation party may obtain relief that requires the accommodated party to perform its obligations on the instrument. An accommodated party who pays the instrument has no right of recourse against, and is not entitled to contribution from, an accommodation party.

§ 75-3-420

(a) The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment. An action for conversion of an instrument may not be brought by (i) the issuer or acceptor of the instrument or (ii) a payee or indorsee who did not receive delivery of the instrument either directly or through delivery to an agent or a co-payee.

(b) In an action under subsection (a), the measure of liability is presumed to be the amount payable on the instrument, but recovery may not exceed the amount of the plaintiff's interest in the instrument.

(c) A representative, other than a depositary bank, who has in good faith dealt with an instrument or its proceeds on behalf of one who was not the person entitled to enforce the instrument is not liable in conversion to that person beyond the amount of any proceeds that it has not paid out.

§ 75-3-501

(a) “Presentment” means a demand made by or on behalf of a person entitled to enforce an instrument (i) to pay the instrument made to the drawee or a party obliged to pay the instrument or, in the case of a note or accepted draft payable at a bank, to the bank, or (ii) to accept a draft made to the drawee.

(b) The following rules are subject to Chapter 4, agreement of the parties, and clearinghouse rules and the like:

(1) Presentment may be made at the place of payment of the instrument and must be made at the place of payment if the instrument is payable at a bank in the United States; may be made by any commercially reasonable means, including an oral, written, or electronic communication; is effective when the demand for payment or acceptance is received by the person to whom presentment is made; and is effective if made to any one (1) of two (2) or more makers, acceptors, drawees, or other payors.

(2) Upon demand of the person to whom presentment is made, the person making presentment must (i) exhibit the instrument, (ii) give reasonable identification and, if presentment is made on behalf of another person, reasonable evidence of authority to do so, and (iii) sign a receipt on the instrument for any payment made or surrender the instrument if full payment is made.

(3) Without dishonoring the instrument, the party to whom presentment is made may (i) return the instrument for lack of a necessary indorsement, or (ii) refuse payment or acceptance for failure of the presentment to comply with the terms of the instrument, an agreement of the parties, or other applicable law or rule.

(4) The party to whom presentment is made may treat presentment as occurring on the next business day after the day of presentment if the party to whom presentment is made has established a cut-off hour not earlier than 2 p.m. for the receipt and processing of instruments presented for payment or acceptance and presentment is made after the cut-off hour.

§ 75-3-502

(a) Dishonor of a note is governed by the following rules:

(1) If the note is payable on demand, the note is dishonored if presentment is duly made to the maker and the note is not paid on the day of presentment.

(2) If the note is not payable on demand and is payable at or through a bank or the terms of the note require presentment, the note is dishonored if presentment is duly made and the note is not paid on the day it becomes payable or the day of presentment, whichever is later.

(3) If the note is not payable on demand and paragraph (2) does not apply, the note is dishonored if it is not paid on the day it becomes payable.

(b) Dishonor of an unaccepted draft other than a documentary draft is governed by the following rules:

(1) If a check is duly presented for payment to the payor bank otherwise than for immediate payment over the counter, the check is dishonored if the payor bank makes timely return of the check or sends timely notice of dishonor or nonpayment under Section 75-4-301 or 75-4-302, or becomes accountable for the amount of the check under Section 75-4-302.

(2) If a draft is payable on demand and paragraph (1) does not apply, the draft is dishonored if presentment for payment is duly made to the drawee and the draft is not paid on the day of presentment.

(3) If a draft is payable on a date stated in the draft, the draft is dishonored if (i) presentment for payment is duly made to the drawee and payment is not made on the day the draft becomes payable or the day of presentment, whichever is later, or (ii) presentment for acceptance is duly made before the day the draft becomes payable and the draft is not accepted on the day of presentment.

(4) If a draft is payable on elapse of a period of time after sight or acceptance, the draft is dishonored if presentment for acceptance is duly made and the draft is not accepted on the day of presentment.

(c) Dishonor of an unaccepted documentary draft occurs according to the rules stated in subsections (b)(2), (3), and (4), except that payment or acceptance may be delayed without dishonor until no later than the close of the third business day of the drawee following the day on which payment or acceptance is required by those paragraphs.

(d) Dishonor of an accepted draft is governed by the following rules:

(1) If the draft is payable on demand, the draft is dishonored if presentment for payment is duly made to the acceptor and the draft is not paid on the day of presentment.

(2) If the draft is not payable on demand, the draft is dishonored if presentment for payment is duly made to the acceptor and payment is not made on the day it becomes payable or the day of presentment, whichever is later.

(e) In any case in which presentment is otherwise required for dishonor under this section and presentment is excused under Section 75-3-504, dishonor occurs without presentment if the instrument is not duly accepted or paid.

(f) If a draft is dishonored because timely acceptance of the draft was not made and the person entitled to demand acceptance consents to a late acceptance, from the time of acceptance the draft is treated as never having been dishonored.

§ 75-3-503

(a) The obligation of an indorser stated in Section 75-3-415(a) and the obligation of a drawer stated in Section 75-3-414(d) may not be enforced unless (i) the indorser or drawer is given notice of dishonor of the instrument complying with this section or (ii) notice of dishonor is excused under Section 75-3-504(b).

(b) Notice of dishonor may be given by any person; may be given by any commercially reasonable means, including an oral, written, or electronic communication; and is sufficient if it reasonably identifies the instrument and indicates that the instrument has been dishonored or has not been paid or accepted. Return of an instrument given to a bank for collection is sufficient notice of dishonor.

(c) Subject to Section 75-3-504(c), with respect to an instrument taken for collection by a collecting bank, notice of dishonor must be given (i) by the bank before midnight of the next banking day following the banking day on which the bank receives notice of dishonor of the instrument, or (ii) by any other person within thirty (30) days following the day on which the person receives notice of dishonor. With respect to any other instrument, notice of dishonor must be given within thirty (30) days following the day on which dishonor occurs.

§ 75-3-504

(a) Presentment for payment or acceptance of an instrument is excused if (i) the person entitled to present the instrument cannot with reasonable diligence make presentment, (ii) the maker or acceptor has repudiated an obligation to pay the instrument or is dead or in insolvency proceedings, (iii) by the terms of the instrument presentment is not necessary to enforce the obligation of indorsers or the drawer, (iv) the drawer or indorser whose obligation is being enforced has waived presentment or otherwise has no reason to expect or right to require that the instrument be paid or accepted, or (v) the drawer instructed the drawee not to pay or accept the draft or the drawee was not obligated to the drawer to pay the draft.

(b) Notice of dishonor is excused if (i) by the terms of the instrument notice of dishonor is not necessary to enforce the obligation of a party to pay the instrument, or (ii) the party whose obligation is being enforced waived notice of dishonor. A waiver of presentment is also a waiver of notice of dishonor.

(c) Delay in giving notice of dishonor is excused if the delay was caused by circumstances beyond the control of the person giving the notice and the person giving the notice exercised reasonable diligence after the cause of the delay ceased to operate.

§ 75-3-505

(a) The following are admissible as evidence and create a presumption of dishonor and of any notice of dishonor stated:

(1) A document regular in form as provided in subsection (b) which purports to be a protest;

(2) A purported stamp or writing of the drawee, payor bank, or presenting bank on or accompanying the instrument stating that acceptance or payment has been refused unless reasons for the refusal are stated and the reasons are not consistent with dishonor;

(3) A book or record of the drawee, payor bank, or collecting bank, kept in the usual course of business which shows dishonor, even if there is no evidence of who made the entry.

(b) A protest is a certificate of dishonor made by a United States consul or vice-consul, or a notary public or other person authorized to administer oaths by the law of the place where dishonor occurs. It may be made upon information satisfactory to that person. The protest must identify the instrument and certify either that presentment has been made or, if not made, the reason why it was not made, and that the instrument has been dishonored by nonacceptance or nonpayment. The protest may also certify that notice of dishonor has been given to some or all parties.

§ 75-3-601

(a) The obligation of a party to pay the instrument is discharged as stated in this chapter or by an act or agreement with the party which would discharge an obligation to pay money under a simple contract.

(b) Discharge of the obligation of a party is not effective against a person acquiring rights of a holder in due course of the instrument without notice of the discharge.

§ 75-3-602

(a) Subject to subsection (e), an instrument is paid to the extent payment is made by or on behalf of a party obliged to pay the instrument, and to a person entitled to enforce the instrument.

(b) Subject to subsection (e), a note is paid to the extent payment is made by or on behalf of a party obliged to pay the note to a person that formerly was entitled to enforce the note only if at the time of the payment the party obliged to pay has not received adequate notification that the note has been transferred and that payment is to be made to the transferee. A notification is adequate only if it is signed by the transferor or the transferee; reasonably identifies the transferred note; and provides an address at which payments subsequently are to be made. Upon request made in a record, a transferee shall seasonably furnish reasonable proof that the note has been transferred.

(c) Subject to subsection (e), to the extent of a payment under subsections (a) and (b), the obligation of the party obliged to pay the instrument is discharged even though payment is made with knowledge of a claim to the instrument under Section 75-3-306 by another person.

(d) Subject to subsection (e), a transferee, or any party that has acquired rights in the instrument directly or indirectly from a transferee, including any such party that has rights as a holder in due course, is deemed to have notice of any payment that is made under subsection (b) after the date that the note is transferred to the transferee but before the party obliged to pay the note receives adequate notification of the transfer.

(e) The obligation of a party to pay the instrument is not discharged under subsections (a) through (d) if:

(1) A claim to the instrument under Section 75-3-306 is enforceable against the party receiving payment and (i) payment is made with knowledge by the payor that payment is prohibited by injunction or similar process of a court of competent jurisdiction, or (ii) in the case of an instrument other than a cashier's check, teller's check, or certified check, the party making payment accepted, from the person having a claim to the instrument, indemnity against loss resulting from refusal to pay the person entitled to enforce the instrument; or

(2) The person making payment knows that the instrument is a stolen instrument and pays a person it knows is in wrongful possession of the instrument.

(f) As used in this section, “signed,” with respect to a record that is not a writing, includes the attachment to or logical association with the record of an electronic symbol, sound, or process with the present intent to adopt or accept the record.

§ 75-3-603

(a) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument, the effect of tender is governed by principles of law applicable to tender of payment under a simple contract.

(b) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument and the tender is refused, there is discharge, to the extent of the amount of the tender, of the obligation of an indorser or accommodation party having a right of recourse with respect to the obligation to which the tender relates.

(c) If tender of payment of an amount due on an instrument is made to a person entitled to enforce the instrument, the obligation of the obligor to pay interest after the due date on the amount tendered is discharged. If presentment is required with respect to an instrument and the obligor is able and ready to pay on the due date at every place of payment stated in the instrument, the obligor is deemed to have made tender of payment on the due date to the person entitled to enforce the instrument.

§ 75-3-604

(a) A person entitled to enforce an instrument, with or without consideration, may discharge the obligation of a party to pay the instrument (i) by an intentional voluntary act, such as surrender of the instrument to the party, destruction, mutilation, or cancellation of the instrument, cancellation or striking out of the party's signature, or the addition of words to the instrument indicating discharge, or (ii) by agreeing not to sue or otherwise renouncing rights against the party by a signed record.

(b) Cancellation or striking out of an indorsement pursuant to subsection (a) does not affect the status and rights of a party derived from the indorsement.

(c) In this section, “signed,” with respect to a record that is not a writing, includes the attachment to or logical association with the record of an electronic symbol, sound, or process with the present intent to adopt or accept the record.

§ 75-3-605

(a) If a person entitled to enforce an instrument releases the obligation of a principal obligor in whole or in part, and another party to the instrument is a secondary obligor with respect to the obligation of that principal obligor, the following rules apply:

(1) Any obligations of the principal obligor to the secondary obligor with respect to any previous payment by the secondary obligor are not affected. Unless the terms of the release preserve the secondary obligor's recourse, the principal obligor is discharged, to the extent of the release, from any other duties to the secondary obligor under this article.

(2) Unless the terms of the release provide that the person entitled to enforce the instrument retains the right to enforce the instrument against the secondary obligor, the secondary obligor is discharged to the same extent as the principal obligor from any unperformed portion of its obligation on the instrument. If the instrument is a check and the obligation of the secondary obligor is based on an indorsement of the check, the secondary obligor is discharged without regard to the language or circumstances of the discharge or other release.

(3) If the secondary obligor is not discharged under paragraph (2), the secondary obligor is discharged to the extent of the value of the consideration for the release, and to the extent that the release would otherwise cause the secondary obligor a loss.

(b) If a person entitled to enforce an instrument grants a principal obligor an extension of the time at which one or more payments are due on the instrument and another party to the instrument is a secondary obligor with respect to the obligation of that principal obligor, the following rules apply:

(1) Any obligations of the principal obligor to the secondary obligor with respect to any previous payment by the secondary obligor are not affected. Unless the terms of the extension preserve the secondary obligor's recourse, the extension correspondingly extends the time for performance of any other duties owed to the secondary obligor by the principal obligor under this article.

(2) The secondary obligor is discharged to the extent that the extension would otherwise cause the secondary obligor a loss.

(3) To the extent that the secondary obligor is not discharged under paragraph (2), the secondary obligor may perform its obligations to a person entitled to enforce the instrument as if the time for payment had not been extended or, unless the terms of the extension provide that the person entitled to enforce the instrument retains the right to enforce the instrument against the secondary obligor as if the time for payment had not been extended, treat the time for performance of its obligations as having been extended correspondingly.

(c) If a person entitled to enforce an instrument agrees, with or without consideration, to a modification of the obligation of a principal obligor other than a complete or partial release or an extension of the due date and another party to the instrument is a secondary obligor with respect to the obligation of that principal obligor, the following rules apply:

(1) Any obligations of the principal obligor to the secondary obligor with respect to any previous payment by the secondary obligor are not affected. The modification correspondingly modifies any other duties owed to the secondary obligor by the principal obligor under this article.

(2) The secondary obligor is discharged from any unperformed portion of its obligation to the extent that the modification would otherwise cause the secondary obligor a loss.

(3) To the extent that the secondary obligor is not discharged under paragraph (2), the secondary obligor may satisfy its obligation on the instrument as if the modification had not occurred, or treat its obligation on the instrument as having been modified correspondingly.

(d) If the obligation of a principal obligor is secured by an interest in collateral, another party to the instrument is a secondary obligor with respect to that obligation, and a person entitled to enforce the instrument impairs the value of the interest in collateral, the obligation of the secondary obligor is discharged to the extent of the impairment. The value of an interest in collateral is impaired to the extent the value of the interest is reduced to an amount less than the amount of the recourse of the secondary obligor, or the reduction in value of the interest causes an increase in the amount by which the amount of the recourse exceeds the value of the interest. For purposes of this subsection, impairing the value of an interest in collateral includes failure to obtain or maintain perfection or recordation of the interest in collateral, release of collateral without substitution of collateral of equal value or equivalent reduction of the underlying obligation, failure to perform a duty to preserve the value of collateral owed, under Article 9 or other law, to a debtor or other person secondarily liable, and failure to comply with applicable law in disposing of or otherwise enforcing the interest in collateral.

(e) A secondary obligor is not discharged under subsection (a)(3), (b), (c), or (d) unless the person entitled to enforce the instrument knows that the person is a secondary obligor or has notice under Section 75-3-419(c) that the instrument was signed for accommodation.

(f) A secondary obligor is not discharged under this section if the secondary obligor consents to the event or conduct that is the basis of the discharge, or the instrument or a separate agreement of the party provides for waiver of discharge under this section specifically or by general language indicating that parties waive defenses based on suretyship or impairment of collateral. Unless the circumstances indicate otherwise, consent by the principal obligor to an act that would lead to a discharge under this section constitutes consent to that act by the secondary obligor if the secondary obligor controls the principal obligor or deals with the person entitled to enforce the instrument on behalf of the principal obligor.

(g) A release or extension preserves a secondary obligor's recourse if the terms of the release or extension provide that:

(1) The person entitled to enforce the instrument retains the right to enforce the instrument against the secondary obligor; and

(2) The recourse of the secondary obligor continues as if the release or extension had not been granted.

(h) Except as otherwise provided in subsection (i), a secondary obligor asserting discharge under this section has the burden of persuasion both with respect to the occurrence of the acts alleged to harm the secondary obligor and loss or prejudice caused by those acts.

(i) If the secondary obligor demonstrates prejudice caused by an impairment of its recourse, and the circumstances of the case indicate that the amount of loss is not reasonably susceptible of calculation or requires proof of facts that are not ascertainable, it is presumed that the act impairing recourse caused a loss or impairment equal to the liability of the secondary obligor on the instrument. In that event, the burden of persuasion as to any lesser amount of the loss is on the person entitled to enforce the instrument.

Chapter 4 Uniform Commercial Code--Bank Deposits and Collections

§ 75-4-101

This chapter may be cited as Uniform Commercial Code--Bank Deposits and Collections.

§ 75-4-102

(a) To the extent that items within this chapter are also within Chapters 3 and 8, they are subject to those chapters. If there is conflict, this chapter governs Chapter 3, but Chapter 8 governs this chapter.

(b) The liability of a bank for action or non-action with respect to an item handled by it for purposes of presentment, payment, or collection is governed by the law of the place where the bank is located. In the case of action or non-action by or at a branch or separate office of a bank, its liability is governed by the law of the place where the branch or separate office is located.

§ 75-4-103

(a) The effect of the provisions of this chapter may be varied by agreement, but the parties to the agreement cannot disclaim a bank's responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure. However, the parties may determine by agreement the standards by which the bank's responsibility is to be measured if those standards are not manifestly unreasonable.

(b) Federal Reserve regulations and operating circulars, clearinghouse rules, and the like have the effect of agreements under subsection (a), whether or not specifically assented to by all parties interested in items handled.

(c) Action or non-action approved by this chapter or pursuant to Federal Reserve regulations or operating circulars is the exercise of ordinary care and, in the absence of special instructions, action or non-action consistent with clearinghouse rules and the like or with a general banking usage not disapproved by this chapter, is prima facie the exercise of ordinary care.

(d) The specification or approval of certain procedures by this chapter is not disapproval of other procedures that may be reasonable under the circumstances.

(e) The measure of damages for failure to exercise ordinary care in handling an item is the amount of the item reduced by an amount that could not have been realized by the exercise of ordinary care. If there is also bad faith it includes any other damages the party suffered as a proximate consequence.

§ 75-4-104

(a) In this chapter, unless the context otherwise requires:

(1) “Account” means any deposit or credit account with a bank, including a demand, time, savings, passbook, share draft, or like account, other than an account evidenced by a certificate of deposit.

(2) “Afternoon” means the period of a day between noon and midnight.

(3) “Banking day” means the part of a day on which a bank is open to the public for carrying on substantially all of its banking functions.

(4) “Clearinghouse” means an association of banks or other payors regularly clearing items.

(5) “Customer” means a person having an account with a bank or for whom a bank has agreed to collect items, including a bank that maintains an account at another bank.

(6) “Documentary draft” means a draft to be presented for acceptance or payment if specified documents, certificated securities (Section 75-8-102) or instructions for uncertificated securities (Section 75-8-102), or other certificates, statements, or the like are to be received by the drawee or other payor before acceptance or payment of the draft.

(7) “Draft” means a draft as defined in Section 75-3-104 or an item, other than an instrument, that is an order.

(8) “Drawee” means a person ordered in a draft to make payment.

(9) “Item” means an instrument or a promise or order to pay money handled by a bank for collection or payment. The term does not include a payment order governed by Chapter 4A or a credit or debit card slip.

(10) “Midnight deadline” with respect to a bank is midnight on its next banking day following the banking day on which it receives the relevant item or notice or from which the time for taking action commences to run, whichever is later.

(11) “Settle” means to pay in cash, by clearinghouse settlement, in a charge or credit or by remittance, or otherwise as agreed. A settlement may be either provisional or final.

(12) “Suspends payments” with respect to a bank means that it has been closed by order of the supervisory authorities, that a public officer has been appointed to take it over, or that it ceases or refuses to make payments in the ordinary course of business.

(b) Other definitions applying to this chapter and the sections in which they appear are:

| | “Agreement for electronic presentment” | Section 75-4-110 | | --- | --- | --- |

| | “Collecting bank” | Section 75-4-105 | | --- | --- | --- | | | “Depositary bank” | Section 75-4-105 | | | “Intermediary bank” | Section 75-4-105 | | | “Payor bank” | Section 75-4-105 | | | “Presenting bank” | Section 75-4-105 | | | “Presentment notice” | Section 75-4-110 |

(c) The following definitions in other chapters apply to this chapter:

| | “Acceptance” | Section 75-3-409 | | --- | --- | --- | | | “Alteration” | Section 75-3-407 | | | “Cashier's check” | Section 75-3-104 | | | “Certificate of deposit” | Section 75-3-104 | | | “Certified check” | Section 75-3-409 | | | “Check” | Section 75-3-104 | | | “Control” | Section 75-7-106 |

| | “Holder in due course” | Section 75-3-302 | | --- | --- | --- | | | “Instrument” | Section 75-3-104 | | | “Notice of dishonor” | Section 75-3-503 | | | “Order” | Section 75-3-103 | | | “Ordinary care” | Section 75-3-103 | | | “Person entitled to enforce” | Section 75-3-301 | | | “Presentment” | Section 75-3-501 | | | “Promise” | Section 75-3-103 | | | “Prove” | Section 75-3-103 | | | “Remotely created check” | Section 75-3-103 | | | “Teller's check” | Section 75-3-104 | | | “Unauthorized signature” | Section 75-3-403 |

(d) In addition, Chapter 1 contains general definitions and principles of construction and interpretation applicable throughout this chapter.

§ 75-4-105

In this chapter:

(1) [Reserved]

(2) “Depositary bank” means the first bank to take an item even though it is also the payor bank, unless the item is presented for immediate payment over the counter.

(3) “Payor bank” means a bank that is the drawee of a draft.

(4) “Intermediary bank” means a bank to which an item is transferred in course of collection except the depositary or payor bank.

(5) “Collecting bank” means a bank handling an item for collection except the payor bank.

(6) “Presenting bank” means a bank presenting an item except a payor bank.

§ 75-4-106

(a) If an item states that it is “payable through” a bank identified in the item, (i) the item designates the bank as a collecting bank and does not by itself authorize the bank to pay the item, and (ii) the item may be presented for payment only by or through the bank.

(b) If an item states that it is “payable at” a bank identified in the item, (i) the item designates the bank as a collecting bank and does not by itself authorize the bank to pay the item, and (ii) the item may be presented for payment only by or through the bank.

(c) If a draft names a nonbank drawee and it is unclear whether a bank named in the draft is a co-drawee or a collecting bank, the bank is a collecting bank.

§ 75-4-107

A branch or separate office of a bank is a separate bank for the purpose of computing the time within which and determining the place at or to which action may be taken or notices or orders must be given under this chapter and under Chapter 3.

§ 75-4-108

(a) For the purpose of allowing time to process items, prove balances, and make the necessary entries on its books to determine its position for the day, a bank may fix an afternoon hour of 2 P.M. or later as a cutoff hour for the handling of money and items and the making of entries on its books.

(b) An item or deposit of money received on any day after a cutoff hour so fixed or after the close of the banking day may be treated as being received at the opening of the next banking day.

§ 75-4-109

(a) Unless otherwise instructed, a collecting bank in a good faith effort to secure payment of a specific item drawn on a payor other than a bank, and with or without the approval of any person involved, may waive, modify, or extend time limits imposed or permitted by this code for a period not exceeding two (2) additional banking days without discharge of drawers or indorsers or liability to its transferor or a prior party.

(b) Delay by a collecting bank or payor bank beyond time limits prescribed or permitted by this code or by instructions is excused if (i) the delay is caused by interruption of communication or computer facilities, suspension of payments by another bank, war, emergency conditions, failure of equipment, or other circumstances beyond the control of the bank, and (ii) the bank exercises such diligence as the circumstances require.

§ 75-4-110

(a) “Agreement for electronic presentment” means an agreement, clearinghouse rule, or Federal Reserve regulation or operating circular, providing that presentment of an item may be made by transmission of an image of an item or information describing the item (“presentment notice”) rather than delivery of the item itself. The agreement may provide for procedures governing retention, presentment, payment, dishonor, and other matters concerning items subject to the agreement.

(b) Presentment of an item pursuant to an agreement for presentment is made when the presentment notice is received.

(c) If presentment is made by presentment notice, a reference to “item” or “check” in this chapter means the presentment notice unless the context otherwise indicates.

§ 75-4-111

An action to enforce an obligation, duty, or right arising under this chapter must be commenced within three (3) years after the cause of action accrues.

§ 75-4-201

(a) Unless a contrary intent clearly appears and before the time that a settlement given by a collecting bank for an item is or becomes final, the bank, with respect to the item, is an agent or sub-agent of the owner of the item and any settlement given for the item is provisional. This provision applies regardless of the form of indorsement or lack of indorsement and even though credit given for the item is subject to immediate withdrawal as of right or is in fact withdrawn; but the continuance of ownership of an item by its owner and any rights of the owner to proceeds of the item are subject to rights of a collecting bank, such as those resulting from outstanding advances on the item and rights of recoupment or setoff. If an item is handled by banks for purposes of presentment, payment, collection, or return, the relevant provisions of this chapter apply even though action of the parties clearly establishes that a particular bank has purchased the item and is the owner of it.

(b) After an item has been indorsed with the words “pay any bank” or the like, only a bank may acquire the rights of a holder until the item has been:

(1) Returned to the customer initiating collection; or

(2) Specially indorsed by a bank to a person who is not a bank.

§ 75-4-202

(a) A collecting bank must exercise ordinary care in:

(1) Presenting an item or sending it for presentment;

(2) Sending notice of dishonor or nonpayment or returning an item other than a documentary draft to the bank's transferor after learning that the item has not been paid or accepted, as the case may be;

(3) Settling for an item when the bank receives final settlement; and

(4) Notifying its transferor of any loss or delay in transit within a reasonable time after discovery thereof.

(b) A collecting bank exercises ordinary care under subsection (a) by taking proper action before its midnight deadline following receipt of an item, notice, or settlement. Taking proper action within a reasonably longer time may constitute the exercise of ordinary care, but the bank has the burden of establishing timeliness.

(c) Subject to subsection (a)(1), a bank is not liable for the insolvency, neglect, misconduct, mistake, or default of another bank or person or for loss or destruction of an item in the possession of others or in transit.

§ 75-4-203

Subject to Chapter 3 concerning conversion of instruments (Section 75-3-420) and restrictive indorsements (Section 75-3-206), only a collecting bank's transferor can give instructions that affect the bank or constitute notice to it, and a collecting bank is not liable to prior parties for any action taken pursuant to the instructions or in accordance with any agreement with its transferor.

§ 75-4-204

(a) A collecting bank shall send items by a reasonably prompt method, taking into consideration relevant instructions, the nature of the item, the number of those items on hand, the cost of collection involved, and the method generally used by it or others to present those items.

(b) A collecting bank may send:

(1) An item directly to the payor bank;

(2) An item to a nonbank payor if authorized by its transferor; and

(3) An item other than documentary drafts to a nonbank payor, if authorized by Federal Reserve regulation or operating circular, clearinghouse rule, or the like.

(c) Presentment may be made by a presenting bank at a place where the payor bank or other payor has requested that presentment be made.

§ 75-4-205

If a customer delivers an item to a depositary bank for collection:

(1) The depositary bank becomes a holder of the item at the time it receives the item for collection if the customer at the time of delivery was a holder of the item, whether or not the customer indorses the item, and, if the bank satisfies the other requirements of Section 75-3-302, it is a holder in due course; and

(2) The depositary bank warrants to collecting banks, the payor bank or other payor, and the drawer that the amount of the item was paid to the customer or deposited to the customer's account.

§ 75-4-206

Any agreed method that identifies the transferor bank is sufficient for the item's further transfer to another bank.

§ 75-4-207

(a) A customer or collecting bank that transfers an item and receives a settlement or other consideration warrants to the transferee and to any subsequent collecting bank that:

(1) The warrantor is a person entitled to enforce the item;

(2) All signatures on the item are authentic and authorized;

(3) The item has not been altered;

(4) The item is not subject to a defense or claim in recoupment (Section 75-3-305(a)) of any party that can be asserted against the warrantor;

(5) The warrantor has no knowledge of any insolvency proceeding commenced with respect to the maker or acceptor or, in the case of an unaccepted draft, the drawer; and

(6) With respect to a remotely created check, that the person on whose account the remotely created check is drawn authorized the issuance of the check in the amount stated on the check and to the payee stated on the check.

(b) If an item is dishonored, a customer or collecting bank transferring the item and receiving settlement or other consideration is obliged to pay the amount due on the item (i) according to the terms of the item at the time it was transferred, or (ii) if the transfer was of an incomplete item, according to its terms when completed as stated in Sections 75-3-115 and 75-3-407. The obligation of a transferor is owed to the transferee and to any subsequent collecting bank that takes the item in good faith. A transferor cannot disclaim its obligation under this subsection by an indorsement stating that it is made “without recourse” or otherwise disclaiming liability.

(c) A person to whom the warranties under subsection (a) are made and who took the item in good faith may recover from the warrantor as damages for breach of warranty an amount equal to the loss suffered as a result of the breach, but not more than the amount of the item plus expenses and loss of interest incurred as a result of the breach.

(d) The warranties stated in subsection (a) cannot be disclaimed with respect to checks. Unless notice of a claim for breach of warranty is given to the warrantor within thirty (30) days after the claimant has reason to know of the breach and the identity of the warrantor, the warrantor is discharged to the extent of any loss caused by the delay in giving notice of the claim.

(e) A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.

§ 75-4-208

(a) If an unaccepted draft is presented to the drawee for payment or acceptance and the drawee pays or accepts the draft, (i) the person obtaining payment or acceptance, at the time of presentment, and (ii) a previous transferor of the draft, at the time of transfer, warrant to the drawee that pays or accepts the draft in good faith that:

(1) The warrantor is, or was, at the time the warrantor transferred the draft, a person entitled to enforce the draft or authorized to obtain payment or acceptance of the draft on behalf of a person entitled to enforce the draft;

(2) The draft has not been altered;

(3) The warrantor has no knowledge that the signature of the purported drawer of the draft is unauthorized; and

(4) With respect to a remotely created check, that the person on whose account the remotely created check is drawn authorized the issuance of the check in the amount stated on the check and to the payee stated on the check.

(b) A drawee making payment may recover from a warrantor damages for breach of warranty equal to the amount paid by the drawee less the amount the drawee received or is entitled to receive from the drawer because of the payment. In addition, the drawee is entitled to compensation for expenses and loss of interest resulting from the breach. The right of the drawee to recover damages under this subsection is not affected by any failure of the drawee to exercise ordinary care in making payment. If the drawee accepts the draft (i) breach of warranty is a defense to the obligation of the acceptor, and (ii) if the acceptor makes payment with respect to the draft, the acceptor is entitled to recover from a warrantor for breach of warranty the amounts stated in this subsection.

(c) If a drawee asserts a claim for breach of warranty under subsection (a) based on an unauthorized indorsement of the draft or an alteration of the draft, the warrantor may defend by proving that the indorsement is effective under Section 75-3-404 or 75-3-405 or the drawer is precluded under Section 75-3-406 or 75-4-406 from asserting against the drawee the unauthorized indorsement or alteration. If a drawee asserts a claim for breach of warranty under subsection (a)(4), the warrantor may defend by proving that the person on whose account the remotely created check is drawn is precluded under Section 75-4-406, as applicable, from asserting against the drawee the unauthorized issuance of the check.

(d) If (i) a dishonored draft is presented for payment to the drawer or an indorser or (ii) any other item is presented for payment to a party obliged to pay the item, and the item is paid, the person obtaining payment and a prior transferor of the item warrant to the person making payment in good faith that the warrantor is, or was, at the time the warrantor transferred the item, a person entitled to enforce the item or authorized to obtain payment on behalf of a person entitled to enforce the item. The person making payment may recover from any warrantor for breach of warranty an amount equal to the amount paid plus expenses and loss of interest resulting from the breach.

(e) The warranties stated in subsections (a) and (d) cannot be disclaimed with respect to checks. Unless notice of a claim for breach of warranty is given to the warrantor within thirty (30) days after the claimant has reason to know of the breach and the identity of the warrantor, the warrantor is discharged to the extent of any loss caused by the delay in giving notice of the claim.

(f) A cause of action for breach of warranty under this section accrues when the claimant has reason to know of the breach.

§ 75-4-209

(a) A person who encodes information on or with respect to an item after issue warrants to any subsequent collecting bank and to the payor bank or other payor that the information is correctly encoded. If the customer of a depositary bank encodes, that bank also makes the warranty.

(b) A person who undertakes to retain an item pursuant to an agreement for electronic presentment warrants to any subsequent collecting bank and to the payor bank or other payor that retention and presentment of the item comply with the agreement. If a customer of a depositary bank undertakes to retain an item, that bank also makes this warranty.

(c) A person to whom warranties are made under this section and who took the item in good faith may recover from the warrantor as damages for breach of warranty an amount equal to the loss suffered as a result of the breach, plus expenses and loss of interest incurred as a result of the breach.

§ 75-4-210

(a) A collecting bank has a security interest in an item and any accompanying documents or the proceeds of either:

(1) In case of an item deposited in an account, to the extent to which credit given for the item has been withdrawn or applied;

(2) In case of an item for which it has given credit available for withdrawal as of right, to the extent of the credit given, whether or not the credit is drawn upon or there is a right of charge-back; or

(3) If it makes an advance on or against the item.

(b) If credit given for several items received at one time or pursuant to a single agreement is withdrawn or applied in part, the security interest remains upon all the items, any accompanying documents or the proceeds of either. For the purpose of this section, credits first given are first withdrawn.

(c) Receipt by a collecting bank of a final settlement for an item is a realization on its security interest in the item, accompanying documents, and proceeds. So long as the bank does not receive final settlement for the item or give up possession of the item or possession or control of the accompanying documents for purposes other than collection, the security interest continues to that extent and is subject to Title 75, Chapter 9, but:

(1) No security agreement is necessary to make the security interest enforceable (Section 75-9-203(b)(3)(A));

(2) No filing is required to perfect the security interest; and

(3) The security interest has priority over conflicting perfected security interests in the item, accompanying documents, or proceeds.

§ 75-4-211

For purposes of determining its status as a holder in due course, a bank has given value to the extent it has a security interest in an item, if the bank otherwise complies with the requirements of Section 75-3-302 on what constitutes a holder in due course.

§ 75-4-212

(a) Unless otherwise instructed, a collecting bank may present an item not payable by, through, or at a bank by sending to the party to accept or pay a record providing notice that the bank holds the item for acceptance or payment. The notice must be sent in time to be received on or before the day when presentment is due and the bank must meet any requirement of the party to accept or pay under Section 75-3-501 by the close of the bank's next banking day after it knows of the requirement.

(b) If presentment is made by notice and payment, acceptance, or request for compliance with a requirement under Section 75-3-501 is not received by the close of business on the day after maturity or, in the case of demand items, by the close of business on the third banking day after notice was sent, the presenting bank may treat the item as dishonored and charge any drawer or indorser by sending it notice of the facts.

§ 75-4-213

(a) With respect to settlement by a bank, the medium and time of settlement may be prescribed by Federal Reserve regulations or circulars, clearinghouse rules, and the like, or agreement. In the absence of such prescription:

(1) The medium of settlement is cash or credit to an account in a Federal Reserve bank of or specified by the person to receive settlement; and

(2) The time of settlement is:

(i) With respect to tender of settlement by cash, a cashier's check, or teller's check, when the cash or check is sent or delivered;

(ii) With respect to tender of settlement by credit in an account in a Federal Reserve bank, when the credit is made;

(iii) With respect to tender of settlement by a credit or debit to an account in a bank, when the credit or debit is made or, in the case of tender of settlement by authority to charge an account, when the authority is sent or delivered; or

(iv) With respect to tender of settlement by a funds transfer, when payment is made pursuant to Section 75-4A-406(a) to the person receiving settlement.

(b) If the tender of settlement is not by a medium authorized by subsection (a) or the time of settlement is not fixed by subsection (a), no settlement occurs until the tender of settlement is accepted by the person receiving settlement.

(c) If settlement for an item is made by cashier's check or teller's check and the person receiving settlement, before its midnight deadline:

(1) Presents or forwards the check for collection, settlement is final when the check is finally paid; or

(2) Fails to present or forward the check for collection, settlement is final at the midnight deadline of the person receiving settlement.

(d) If settlement for an item is made by giving authority to charge the account of the bank giving settlement in the bank receiving settlement, settlement is final when the charge is made by the bank receiving settlement if there are funds available in the account for the amount of the item.

§ 75-4-214

(a) If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by a bank, or otherwise to receive a settlement for the item which is or becomes final, the bank may revoke the settlement given by it, charge back the amount of any credit given for the item to its customer's account, or obtain refund from its customer, whether or not it is able to return the item, if by its midnight deadline or within a longer reasonable time after it learns the facts it returns the item or sends notification of the facts. If the return or notice is delayed beyond the bank's midnight deadline or a longer reasonable time after it learns the facts, the bank may revoke the settlement, charge back the credit, or obtain refund from its customer, but it is liable for any loss resulting from the delay. These rights to revoke, charge back, and obtain refund terminate if and when a settlement for the item received by the bank is or becomes final.

(b) A collecting bank returns an item when it is sent or delivered to the bank's customer or transferor or pursuant to its instructions.

(c) A depositary bank that is also the payor may charge back the amount of an item to its customer's account or obtain refund in accordance with the section governing return of an item received by a payor bank for credit on its books (Section 75-4-301).

(d) The right to charge back is not affected by:

(1) Previous use of a credit given for the item; or

(2) Failure by any bank to exercise ordinary care with respect to the item, but a bank so failing remains liable.

(e) A failure to charge back or claim refund does not affect other rights of the bank against the customer or any other party.

(f) If credit is given in dollars as the equivalent of the value of an item payable in foreign money, the dollar amount of any charge-back or refund must be calculated on the basis of the bank-offered spot rate for the foreign money prevailing on the day when the person entitled to the charge-back or refund learns that it will not receive payment in ordinary course.

§ 75-4-215

(a) An item is finally paid by a payor bank when the bank has first done any of the following:

(1) Paid the item in cash;

(2) Settled for the item without having a right to revoke the settlement under statute, clearinghouse rule, or agreement; or

(3) Made a provisional settlement for the item and failed to revoke the settlement in the time and manner permitted by statute, clearinghouse rule, or agreement.

(b) If provisional settlement for an item does not become final, the item is not finally paid.

(c) If provisional settlement for an item between the presenting and payor banks is made through a clearinghouse or by debits or credits in an account between them, then to the extent that provisional debits or credits for the item are entered in accounts between the presenting and payor banks or between the presenting and successive prior collecting banks seriatim, they become final upon final payment of the item by the payor bank.

(d) If a collecting bank receives a settlement for an item which is or becomes final, the bank is accountable to its customer for the amount of the item and any provisional credit given for the item in an account with its customer becomes final.

(e) Subject to (i) applicable law stating a time for availability of funds and (ii) any right of the bank to apply the credit to an obligation of the customer, credit given by a bank for an item in a customer's account becomes available for withdrawal as of right:

(1) If the bank has received a provisional settlement for the item, when the settlement becomes final and the bank has had a reasonable time to receive return of the item and the item has not been received within that time;

(2) If the bank is both the depositary bank and the payor bank, and the item is finally paid, at the opening of the bank's second banking day following receipt of the item.

(f) Subject to applicable law stating a time for availability of funds and any right of a bank to apply a deposit to an obligation of the depositor, a deposit of money becomes available for withdrawal as of right at the opening of the bank's next banking day after receipt of the deposit.

§ 75-4-216

(a) If an item is in or comes into the possession of a payor or collecting bank that suspends payment and the item has not been finally paid, the item must be returned by the receiver, trustee, or agent in charge of the closed bank to the presenting bank or the closed bank's customer.

(b) If a payor bank finally pays an item and suspends payments without making a settlement for the item with its customer or the presenting bank which settlement is or becomes final, the owner of the item has a preferred claim against the payor bank.

(c) If a payor bank gives or a collecting bank gives or receives a provisional settlement for an item and thereafter suspends payments, the suspension does not prevent or interfere with the settlement's becoming final if the finality occurs automatically upon the lapse of certain time or the happening of certain events.

(d) If a collecting bank receives from subsequent parties settlement for an item, which settlement is or becomes final and the bank suspends payments without making a settlement for the item with its customer which settlement is or becomes final, the owner of the item has a preferred claim against the collecting bank.

§ 75-4-301

(a) If a payor bank settles for a demand item other than a documentary draft presented otherwise than for immediate payment over the counter before midnight of the banking day of receipt, the payor bank may revoke the settlement and recover the settlement if, before it has made final payment and before its midnight deadline, it:

(1) Returns the item;

(2) Returns an image of the item, if the party to which the return is made has entered into an agreement to accept an image as a return of the item and the image is returned in accordance with that agreement; or

(3) Sends a record providing notice of dishonor or nonpayment if the item is unavailable for return.

(b) If a demand item is received by a payor bank for credit on its books, it may return the item or send notice of dishonor and may revoke any credit given or recover the amount thereof withdrawn by its customer, if it acts within the time limit and in the manner specified in subsection (a).

(c) Unless previous notice of dishonor has been sent, an item is dishonored at the time when for purposes of dishonor it is returned or notice sent in accordance with this section.

(d) An item is returned:

(1) As to an item presented through a clearinghouse, when it is delivered to the presenting or last collecting bank or to the clearinghouse or is sent or delivered in accordance with clearinghouse rules; or

(2) In all other cases, when it is sent or delivered to the bank's customer or transferor or pursuant to instructions.

§ 75-4-302

(a) If an item is presented to and received by a payor bank, the bank is accountable for the amount of:

(1) A demand item, other than a documentary draft, whether properly payable or not, if the bank, in any case in which it is not also the depositary bank, retains the item beyond midnight of the banking day of receipt without settling for it or, whether or not it is also the depositary bank, does not pay or return the item or send notice of dishonor until after its midnight deadline; or

(2) Any other properly payable item unless, within the time allowed for acceptance or payment of that item, the bank either accepts or pays the item or returns it and accompanying documents.

(b) The liability of a payor bank to pay an item pursuant to subsection (a) is subject to defenses based on breach of a presentment warranty (Section 75-4-208) or proof that the person seeking enforcement of the liability presented or transferred the item for the purpose of defrauding the payor bank.

§ 75-4-303

(a) Any knowledge, notice, or stop-payment order received by, legal process served upon, or setoff exercised by a payor bank, comes too late to terminate, suspend, or modify the bank's right or duty to pay an item or to charge its customer's account for the item if the knowledge, notice, stop-payment order, or legal process is received or served and a reasonable time for the bank to act thereon expires or the setoff is exercised after the earliest of the following:

(1) The bank accepts or certifies the item;

(2) The bank pays the item in cash;

(3) The bank settles for the item without having a right to revoke the settlement under statute, clearinghouse rule, or agreement;

(4) The bank becomes accountable for the amount of the item under Section 75-4-302 dealing with the payor bank's responsibility for late return of items; or

(5) With respect to checks, a cutoff hour no earlier than one (1) hour after the opening of the next banking day after the banking day on which the bank received the check and no later than the close of that next banking day or, if no cutoff hour is fixed, the close of the next banking day after the banking day on which the bank received the check.

(b) Subject to subsection (a), items may be accepted, paid, certified, or charged to the indicated account of its customer in any order.

§ 75-4-401

(a) A bank may charge against the account of a customer an item that is properly payable from that account even though the charge creates an overdraft. An item is properly payable if it is authorized by the customer and is in accordance with any agreement between the customer and bank.

(b) A customer is not liable for the amount of an overdraft if the customer neither signed the item nor benefited from the proceeds of the item.

(c) A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in Section 75-4-403(b) for stop-payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in Section 75-4-303. If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under Section 75-4-402.

(d) A bank that in good faith makes payment to a holder may charge the indicated account of its customer according to:

(1) The original terms of the altered item; or

(2) The terms of the completed item, even though the bank knows the item has been completed unless the bank has notice that the completion was improper.

§ 75-4-402

(a) Except as otherwise provided in this chapter, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an item that would create an overdraft unless it has agreed to pay the overdraft.

(b) A payor bank is liable to its customer for damages proximately caused by the wrongful dishonor of an item. Liability is limited to actual damages proved and may include damages for an arrest or prosecution of the customer or other consequential damages. Whether any consequential damages are proximately caused by the wrongful dishonor is a question of fact to be determined in each case.

(c) A payor bank's determination of the customer's account balance on which a decision to dishonor for insufficiency of available funds is based may be made at any time between the time the item is received by the payor bank and the time that the payor bank returns the item or gives notice in lieu of return, and no more than one determination need be made. If, at the election of the payor bank, a subsequent balance determination is made for the purpose of reevaluating the bank's decision to dishonor the item, the account balance at that time is determinative of whether a dishonor for insufficiency of available funds is wrongful.

§ 75-4-403

(a) A customer or any person authorized to draw on the account if there is more than one (1) person may stop payment of any item drawn on the customer's account or close the account by an order to the bank describing the item or account with reasonable certainty received at a time and in a manner that affords the bank a reasonable opportunity to act on it before any action by the bank with respect to the item described in Section 75-4-303. If the signature of more than one (1) person is required to draw on an account, any of these persons may stop payment or close the account.

(b) A stop-payment order is effective for six (6) months, but it lapses after fourteen (14) calendar days if the original order was oral and was not confirmed in writing within that period. A stop-payment order may be renewed for additional six-month periods by a record given to the bank within a period during which the stop-payment order is effective.

(c) The burden of establishing the fact and amount of loss resulting from the payment of an item contrary to a stop-payment order or order to close an account is on the customer. The loss from payment of an item contrary to a stop-payment order may include damages for dishonor of subsequent items under Section 75-4-402.

§ 75-4-404

A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six (6) months after its date, but it may charge its customer's account for payment made thereafter in good faith.

§ 75-4-405

(a) A payor or collecting bank's authority to accept, pay, or collect an item or to account for proceeds of its collection, if otherwise effective, is not rendered ineffective by incompetence of a customer of either bank existing at the time the item is issued or its collection is undertaken if the bank does not know of an adjudication of incompetence. Neither death nor incompetence of a customer revokes the authority to accept, pay, collect, or account until the bank knows of the fact of death or of an adjudication of incompetence and has reasonable opportunity to act on it.

(b) Even with knowledge, a bank may for ten (10) days after the date of death pay or certify checks drawn on or before that date unless ordered to stop payment by a person claiming an interest in the account.

§ 75-4-406

(a) A bank that sends or makes available to a customer a statement of account showing payment of items for the account shall either return or make available to the customer the items paid or provide information in the statement of account sufficient to allow the customer reasonably to identify the items paid. The statement of account provides sufficient information if the item is described by item number, amount, and date of payment.

(b) If the items are not returned to the customer, the person retaining the items shall either retain the items or, if the items are destroyed, maintain the capacity to furnish legible copies of the items until the expiration of seven (7) years after receipt of the items. A customer may request an item from the bank that paid the item, and that bank must provide in a reasonable time either the item or, if the item has been destroyed or is not otherwise obtainable, a legible copy of the item.

(c) If a bank sends or makes available a statement of account or items pursuant to subsection (a), the customer must exercise reasonable promptness in examining the statement or the items to determine whether any payment was not authorized because of an alteration of an item or because of a purported signature by or on behalf of the customer was not authorized. If, based on the statement or items provided, the customer should reasonably have discovered the unauthorized payment, the customer must promptly notify the bank of the relevant facts.

(d) If the bank proves that the customer failed, with respect to an item, to comply with the duties imposed on the customer by subsection (c), the customer is precluded from asserting against the bank:

(1) The customer's unauthorized signature or any alteration on the item, if the bank also proves that it suffered a loss by reason of the failure; and

(2) The customer's unauthorized signature or alteration by the same wrongdoer on any other item paid in good faith by the bank if the payment was made before the bank received notice from the customer of the unauthorized signature or alteration and after the customer had been afforded a reasonable period of time, not exceeding thirty (30) days, in which to examine the item or statement of account and notify the bank.

(e) If subsection (d) applies and the customer proves that the bank failed to exercise ordinary care in paying the item and that the failure substantially contributed to loss, the loss is allocated between the customer precluded and the bank asserting the preclusion according to the extent to which the failure of the customer to comply with subsection (c) and the failure of the bank to exercise ordinary care contributed to the loss. If the customer proves that the bank did not pay the item in good faith, the preclusion under subsection (d) does not apply.

(f) Without regard to care or lack of care of either the customer or the bank, a customer who does not within one (1) year after the statement or items are made available to the customer (subsection (a)) discover and report the customer's unauthorized signature on or any alteration on the item is precluded from asserting against the bank the unauthorized signature or alteration. If there is a preclusion under this subsection, the payor bank may not recover for breach of warranty under Section 75-4-208 with respect to the unauthorized signature or alteration to which the preclusion applies.

§ 75-4-407

If a payor bank has paid an item over the order of the drawer or maker to stop payment, or after an account has been closed, or otherwise under circumstances giving a basis for objection by the drawer or maker, to prevent unjust enrichment and only to the extent necessary to prevent loss to the bank by reason of its payment of the item, the payor bank is subrogated to the rights:

(1) Of any holder in due course on the item against the drawer or maker;

(2) Of the payee or any other holder of the item against the drawer or maker either on the item or under the transaction out of which the item arose; and

(3) Of the drawer or maker against the payee or any other holder of the item with respect to the transaction out of which the item arose.

§ 75-4-501

A bank that takes a documentary draft for collection shall present or send the draft and accompanying documents for presentment and, upon learning that the draft has not been paid or accepted in due course, shall seasonably notify its customer of the fact even though it may have discounted or bought the draft or extended credit available for withdrawal as of right.

§ 75-4-502

If a draft or the relevant instructions require presentment “on arrival,” “when goods arrive” or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of the goods has expired. Refusal to pay or accept because the goods have not arrived is not dishonor; the bank must notify its transferor of the refusal but need not present the draft again until it is instructed to do so or learns of the arrival of the goods.

§ 75-4-503

Unless otherwise instructed and except as provided in Chapter 5, a bank presenting a documentary draft:

(1) Must deliver the documents to the drawee on acceptance of the draft if it is payable more than three (3) days after presentment; otherwise, only on payment; and

(2) Upon dishonor, either in the case of presentment for acceptance or presentment for payment, may seek and follow instructions from any referee in case of need designated in the draft or, if the presenting bank does not choose to utilize the referee's services, it must use diligence and good faith to ascertain the reason for dishonor, must notify its transferor of the dishonor and of the results of its effort to ascertain the reasons therefor, and must request instructions. However, the presenting bank is under no obligation with respect to goods represented by the documents except to follow any reasonable instructions seasonably received; it has a right to reimbursement for any expense incurred in following instructions and to prepayment of or indemnity for those expenses.

§ 75-4-504

(a) A presenting bank that, following the dishonor of a documentary draft, has seasonably requested instructions but does not receive them within a reasonable time may store, sell, or otherwise deal with the goods in any reasonable manner.

(b) For its reasonable expenses incurred by action under subsection (a), the presenting bank has a lien upon the goods or their proceeds, which may be foreclosed in the same manner as an unpaid seller's lien.

Chapter 4A Uniform Commercial Code--Funds Transfers

§ 75-4A-101

This chapter may be cited as Uniform Commercial Code -- Funds Transfers.

§ 75-4A-102

Except as otherwise provided in Section 75-4A-108, this chapter applies to funds transfers defined in Section 75-4A-104.

§ 75-4A-103

(a) In this chapter:

(1) “Payment order” means an instruction of a sender to a receiving bank, transmitted orally, electronically, or in writing, to pay, or to cause another bank to pay, a fixed or determinable amount of money to a beneficiary if:

(i) The instruction does not state a condition to payment to the beneficiary other than time of payment;

(ii) The receiving bank is to be reimbursed by debiting an account of, or otherwise receiving payment from, the sender; and

(iii) The instruction is transmitted by the sender directly to the receiving bank or to an agent, funds-transfer system, or communication system for transmittal to the receiving bank.

(2) “Beneficiary” means the person to be paid by the beneficiary's bank.

(3) “Beneficiary's bank” means the bank identified in a payment order in which an account of the beneficiary is to be credited pursuant to the order or which otherwise is to make payment to the beneficiary if the order does not provide for payment to an account.

(4) “Receiving bank” means the bank to which the sender's instruction is addressed.

(5) “Sender” means the person giving the instruction to the receiving bank.

(b) If an instruction complying with subsection (a)(1) is to make more than one payment to a beneficiary, the instruction is a separate payment order with respect to each payment.

(c) A payment order is issued when it is sent to the receiving bank.

§ 75-4A-104

In this chapter:

(a) “Funds transfer” means the series of transactions, beginning with the originator's payment order, made for the purpose of making payment to the beneficiary of the order. The term includes any payment order issued by the originator's bank or an intermediary bank intended to carry out the originator's payment order. A funds transfer is completed by acceptance by the beneficiary's bank of a payment order for the benefit of the beneficiary of the originator's payment order.

(b) “Intermediary bank” means a receiving bank other than the originator's bank or the beneficiary's bank.

(c) “Originator” means the sender of the first payment order in a funds transfer.

(d) “Originator's bank” means (i) the receiving bank to which the payment order of the originator is issued if the originator is not a bank, or (ii) the originator if the originator is a bank.

§ 75-4A-105

(a) In this chapter:

(1) “Authorized account” means a deposit account of a customer in a bank designated by the customer as a source of payment of payment orders issued by the customer to the bank. If a customer does not so designate an account, any account of the customer is an authorized account if payment of a payment order from that account is not inconsistent with a restriction on the use of that account.

(2) “Bank” means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, and trust company. A branch or separate office of a bank is a separate bank for purposes of this chapter.

(3) “Customer” means a person, including a bank, having an account with a bank or from whom a bank has agreed to receive payment orders.

(4) “Funds-transfer business day” of a receiving bank means the part of a day during which the receiving bank is open for the receipt, processing, and transmittal of payment orders and cancellations and amendments of payment orders.

(5) “Funds-transfer system” means a wire transfer network, automated clearinghouse, or other communication system of a clearinghouse or other association of banks through which a payment order by a bank may be transmitted to the bank to which the order is addressed.

(6) [Reserved]

(7) “Prove” with respect to a fact means to meet the burden of establishing the fact (Section 75-1-201(b)(8)).

(b) Other definitions applying to this chapter and the sections in which they appear are:

| | “Acceptance” | Section 75-4A-209 | | --- | --- | --- | | | “Beneficiary” | Section 75-4A-103 | | | “Beneficiary's bank” | Section 75-4A-103 | | | “Executed” | Section 75-4A-301 | | | “Execution date” | Section 75-4A-301 | | | “Funds transfer” | Section 75-4A-104 | | | “Funds-transfer system rule” | Section 75-4A-501 | | | “Intermediary bank” | Section 75-4A-104 | | | “Originator” | Section 75-4A-104 | | | “Originator's bank” | Section 75-4A-104 | | | “Payment by beneficiary's bank to beneficiary” | Section 75-4A-405 | | | “Payment by originator to beneficiary” | Section 75-4A-406 | | | “Payment by sender to receiving bank” | Section 75-4A-403 | | | “Payment date” | Section 75-4A-401 | | | “Payment order” | Section 75-4A-103 | | | “Receiving bank” | Section 75-4A-103 | | | “Security procedure” | Section 75-4A-201 | | | “Sender” | Section 75-4A-103 |

(c) The following definitions in Title 75, Chapter 4, apply to this chapter:

| | “Clearinghouse” | Section 75-4-104 | | --- | --- | --- | | | “Item” | Section 75-4-104 | | | “Suspends payments” | Section 75-4-104 |

(d) In addition Title 75, Chapter 1, contains general definitions and principles of construction and interpretation applicable throughout this chapter.

§ 75-4A-106

(a) The time of receipt of a payment order or communication cancelling or amending a payment order is determined by the rules applicable to receipt of a notice stated in Section 75-1-202. A receiving bank may fix a cut-off time or times on a funds-transfer business day for the receipt and processing of payment orders and communications cancelling or amending payment orders. Different cut-off times may apply to payment orders, cancellations, or amendments, or to different categories of payment orders, cancellations, or amendments. A cut-off time may apply to senders generally or different cut-off times may apply to different senders or categories of payment orders. If a payment order or communication cancelling or amending a payment order is received after the close of a funds-transfer business day or after the appropriate cut-off time on a funds-transfer business day, the receiving bank may treat the payment order or communication as received at the opening of the next funds-transfer business day.

(b) If this chapter refers to an execution date or payment date or states a day on which a receiving bank is required to take action, and the date or day does not fall on a funds-transfer business day, the next day that is a funds-transfer business day is treated as the date or day stated, unless the contrary is stated in this chapter.

§ 75-4A-107

Regulations of the Board of Governors of the Federal Reserve System and operating circulars of the federal reserve banks supersede any inconsistent provision of this chapter to the extent of the inconsistency.

§ 75-4A-108

(a) Except as set forth in subsection (b), this chapter does not apply to a funds transfer any part of which is governed by the Electronic Fund Transfer Act of 1978 (Title XX, Public Law 95-630, 92 Stat. 3728,15 USCS 1693 et seq.) as amended from time to time.

(b) This chapter applies to a funds transfer that is a “remittance transfer” as defined in Section 919(g)(2) and (3) of the Electronic Fund Transfer Act (15 USCS Section 1693o-1(g)(2) and (3)), unless the remittance transfer is an “electronic fund transfer” as defined in Section 903(7) of the Electronic Fund Transfer Act (15 USCS Section 1693A(7)).

(c) In a funds transfer to which this chapter applies, in the event of an inconsistency between an applicable provision of this chapter and an applicable provision of the Electronic Fund Transfer Act, the provision of the Electronic Fund Transfer Act governs to the extent of the inconsistency.

§ 75-4A-201

“Security procedure” means a procedure established by agreement of a customer and a receiving bank for the purpose of (i) verifying that a payment order or communication amending or cancelling a payment order is that of the customer, or (ii) detecting error in the transmission or the content of the payment order or communication. A security procedure may require the use of algorithms or other codes, identifying words or numbers, encryption, callback procedures, or similar security devices. Comparison of a signature on a payment order or communication with an authorized specimen signature of the customer is not by itself a security procedure.

§ 75-4A-202

(a) A payment order received by the receiving bank is the authorized order of the person identified as sender if that person authorized the order or is otherwise bound by it under the law of agency.

(b) If a bank and its customer have agreed that the authenticity of payment orders issued to the bank in the name of the customer as sender will be verified pursuant to a security procedure, a payment order received by the receiving bank is effective as the order of the customer, whether or not authorized, if (i) the security procedure is a commercially reasonable method of providing security against unauthorized payment orders, and (ii) the bank proves that it accepted the payment order in good faith and in compliance with the security procedure and any written agreement or instruction of the customer restricting acceptance of payment orders issued in the name of the customer. The bank is not required to follow an instruction that violates a written agreement with the customer or notice of which is not received at a time and in a manner affording the bank a reasonable opportunity to act on it before the payment order is accepted.

(c) Commercial reasonableness of a security procedure is a question of law to be determined by considering the wishes of the customer expressed to the bank, the circumstances of the customer known to the bank, including the size, type, and frequency of payment orders normally issued by the customer to the bank, alternative security procedures offered to the customer, and security procedures in general use by customers and receiving banks similarly situated. A security procedure is deemed to be commercially reasonable if (i) the security procedure was chosen by the customer after the bank offered, and the customer refused, a security procedure that was commercially reasonable for that customer, and (ii) the customer expressly agreed in writing to be bound by any payment order, whether or not authorized, issued in its name and accepted by the bank in compliance with the security procedure chosen by the customer.

(d) The term “sender” in this chapter includes the customer in whose name a payment order is issued if the order is the authorized order of the customer under subsection (a), or it is effective as the order of the customer under subsection (b).

(e) This section applies to amendments and cancellations of payment orders to the same extent it applies to payment orders.

(f) Except as provided in this section and in Section 75-4A-203(a)(1), rights and obligations arising under this section or Section 75-4A-203 may not be varied by agreement.

§ 75-4A-203

(a) If an accepted payment order is not, under Section 75-4A-202(a), an authorized order of a customer identified as sender, but is effective as an order of the customer pursuant to Section 75-4A-202(b), the following rules apply:

(1) By express written agreement, the receiving bank may limit the extent to which it is entitled to enforce or retain payment of the payment order.

(2) The receiving bank is not entitled to enforce or retain payment of the payment order if the customer proves that the order was not caused, directly or indirectly, by a person (i) entrusted at any time with duties to act for the customer with respect to payment orders or the security procedure, or (ii) who obtained access to transmitting facilities of the customer or who obtained, from a source controlled by the customer and without authority of the receiving bank, information facilitating breach of the security procedure, regardless of how the information was obtained or whether the customer was at fault. Information includes any access device, computer software, or the like.

(b) This section applies to amendments of payment orders to the same extent it applies to payment orders.

§ 75-4A-204

(a) If a receiving bank accepts a payment order issued in the name of its customer as sender which is (i) not authorized and not effective as the order of the customer under Section 75-4A-202, or (ii) not enforceable, in whole or in part, against the customer under Section 75-4A-203, the bank shall refund any payment of the payment order received from the customer to the extent the bank is not entitled to enforce payment and shall pay interest on the refundable amount calculated from the date the bank received payment to the date of the refund. However, the customer is not entitled to interest from the bank on the amount to be refunded if the customer fails to exercise ordinary care to determine that the order was not authorized by the customer and to notify the bank of the relevant facts within a reasonable time not exceeding ninety (90) days after the date the customer received notification from the bank that the order was accepted or that the customer's account was debited with respect to the order. The bank is not entitled to any recovery from the customer on account of a failure by the customer to give notification as stated in this section.

(b) Reasonable time under subsection (a) may be fixed by agreement as stated in Section 75-1-302(b), but the obligation of a receiving bank to refund payment as stated in subsection (a) may not otherwise be varied by agreement.

§ 75-4A-205

(a) If an accepted payment order was transmitted pursuant to a security procedure for the detection of error and the payment order (i) erroneously instructed payment to a beneficiary not intended by the sender, (ii) erroneously instructed payment in an amount greater than the amount intended by the sender, or (iii) was an erroneously transmitted duplicate of a payment order previously sent by the sender, the following rules apply:

(1) If the sender proves that the sender or a person acting on behalf of the sender pursuant to Section 75-4A-206 complied with the security procedure and that the error would have been detected if the receiving bank had also complied, the sender is not obliged to pay the order to the extent stated in paragraphs (2) and (3).

(2) If the funds transfer is completed on the basis of an erroneous payment order described in clause (i) or (iii) of subsection (a), the sender is not obliged to pay the order and the receiving bank is entitled to recover from the beneficiary any amount paid to the beneficiary to the extent allowed by the law governing mistake and restitution.

(3) If the funds transfer is completed on the basis of a payment order described in clause (ii) of subsection (a), the sender is not obliged to pay the order to the extent the amount received by the beneficiary is greater than the amount intended by the sender. In that case, the receiving bank is entitled to recover from the beneficiary the excess amount received to the extent allowed by the law governing mistake and restitution.

(b) If (i) the sender of an erroneous payment order described in subsection (a) is not obliged to pay all or part of the order, and (ii) the sender receives notification from the receiving bank that the order was accepted by the bank or that the sender's account was debited with respect to the order, the sender has a duty to exercise ordinary care, on the basis of information available to the sender, to discover the error with respect to the order and to advise the bank of the relevant facts within a reasonable time, not exceeding ninety (90) days, after the bank's notification was received by the sender. If the bank proves that the sender failed to perform that duty, the sender is liable to the bank for the loss the bank proves it incurred as a result of the failure, but the liability of the sender may not exceed the amount of the sender's order.

(c) This section applies to amendments to payment orders to the same extent it applies to payment orders.

§ 75-4A-206

(a) If a payment order addressed to a receiving bank is transmitted to a funds-transfer system or other third-party communication system for transmittal to the bank, the system is deemed to be an agent of the sender for the purpose of transmitting the payment order to the bank. If there is a discrepancy between the terms of the payment order transmitted to the system and the terms of the payment order transmitted by the system to the bank, the terms of the payment order of the sender are those transmitted by the system. This section does not apply to a funds-transfer system of the federal reserve banks.

(b) This section applies to cancellations and amendments of payment orders to the same extent it applies to payment orders.

§ 75-4A-207

(a) Subject to subsection (b), if, in a payment order received by the beneficiary's bank, the name, bank account number, or other identification of the beneficiary refers to a nonexistent or unidentifiable person or account, no person has rights as a beneficiary of the order and acceptance of the order cannot occur.

(b) If a payment order received by the beneficiary's bank identifies the beneficiary both by name and by an identifying or bank account number and the name and number identify different persons, the following rules apply:

(1) Except as otherwise provided in subsection (c), if the beneficiary's bank does not know that the name and number refer to different persons, it may rely on the number as the proper identification of the beneficiary of the order. The beneficiary's bank need not determine whether the name and number refer to the same person.

(2) If the beneficiary's bank pays the person identified by name or knows that the name and number identify different persons, no person has rights as beneficiary except the person paid by the beneficiary's bank if that person was entitled to receive payment from the originator of the funds transfer. If no person has rights as beneficiary, acceptance of the order cannot occur.

(c) If (i) a payment order described in subsection (b) is accepted, (ii) the originator's payment order described the beneficiary inconsistently by name and number, and (iii) the beneficiary's bank pays the person identified by number as permitted by subsection (b)(1), the following rules apply:

(1) If the originator is a bank, the originator is obliged to pay its order.

(2) If the originator is not a bank and proves that the person identified by number was not entitled to receive payment from the originator, the originator is not obliged to pay its order unless the originator's bank proves that the originator, before acceptance of the originator's order, had notice that payment of a payment order issued by the originator might be made by the beneficiary's bank on the basis of an identifying or bank account number even if it identifies a person different from the named beneficiary. Proof of notice may be made by any admissible evidence. The originator's bank satisfies the burden of proof if it proves that the originator, before the payment order was accepted, signed a writing stating the information to which the notice relates.

(d) In a case governed by subsection (b)(1), if the beneficiary's bank rightfully pays the person identified by number and that person was not entitled to receive payment from the originator, the amount paid may be recovered from that person to the extent allowed by the law governing mistake and restitution as follows:

(1) If the originator is obliged to pay its payment order as stated in subsection (c), the originator has the right to recover.

(2) If the originator is not a bank and is not obliged to pay its payment order, the originator's bank has the right to recover.

§ 75-4A-208

(a) This subsection applies to a payment order identifying an intermediary bank or the beneficiary's bank only by an identifying number.

(1) The receiving bank may rely on the number as the proper identification of the intermediary or beneficiary's bank and need not determine whether the number identifies a bank.

(2) The sender is obliged to compensate the receiving bank for any loss and expenses incurred by the receiving bank as a result of its reliance on the number in executing or attempting to execute the order.

(b) This subsection applies to a payment order identifying an intermediary bank or the beneficiary's bank both by name and an identifying number if the name and number identify different persons.

(1) If the sender is a bank, the receiving bank may rely on the number as the proper identification of the intermediary or beneficiary's bank if the receiving bank, when it executes the sender's order, does not know that the name and number identify different persons. The receiving bank need not determine whether the name and number refer to the same person or whether the number refers to a bank. The sender is obliged to compensate the receiving bank for any loss and expenses incurred by the receiving bank as a result of its reliance on the number in executing or attempting to execute the order.

(2) If the sender is not a bank and the receiving bank proves that the sender, before the payment order was accepted, had notice that the receiving bank might rely on the number as the proper identification of the intermediary or beneficiary's bank even if it identifies a person different from the bank identified by name, the rights and obligations of the sender and the receiving bank are governed by subsection (b)(1), as though the sender were a bank. Proof of notice may be made by any admissible evidence. The receiving bank satisfies the burden of proof if it proves that the sender, before the payment order was accepted, signed a writing stating the information to which the notice relates.

(3) Regardless of whether the sender is a bank, the receiving bank may rely on the name as the proper identification of the intermediary or beneficiary's bank if the receiving bank, at the time it executes the sender's order, does not know that the name and number identify different persons. The receiving bank need not determine whether the name and number refer to the same person.

(4) If the receiving bank knows that the name and number identify different persons, reliance on either the name or the number in executing the sender's payment order is a breach of the obligation stated in Section 75-4A-302(a)(1).

§ 75-4A-209

(a) Subject to subsection (d), a receiving bank other than the beneficiary's bank accepts a payment order when it executes the order.

(b) Subject to subsections (c) and (d), a beneficiary's bank accepts a payment order at the earliest of the following times:

(1) When the bank (i) pays the beneficiary as stated in Section 75-4A-405(a) or 75-4A-405(b), or (ii) notifies the beneficiary of receipt of the order or that the account of the beneficiary has been credited with respect to the order unless the notice indicates that the bank is rejecting the order or that funds with respect to the order may not be withdrawn or used until receipt of payment from the sender of the order;

(2) When the bank receives payment of the entire amount of the sender's order pursuant to Section 75-4A-403(a)(1) or 75-4A-403(a)(2); or

(3) The opening of the next funds-transfer business day of the bank following the payment date of the order if, at that time, the amount of the sender's order is fully covered by a withdrawable credit balance in an authorized account of the sender or the bank has otherwise received full payment from the sender, unless the order was rejected before that time or is rejected within (i) one (1) hour after that time, or (ii) one (1) hour after the opening of the next business day of the sender following the payment date if that time is later. If notice of rejection is received by the sender after the payment date and the authorized account of the sender does not bear interest, the bank is obliged to pay interest to the sender on the amount of the order for the number of days elapsing after the payment date to the day the sender receives notice or learns that the order was not accepted, counting that day as an elapsed day. If the withdrawable credit balance during that period falls below the amount of the order, the amount of interest payable is reduced accordingly.

(c) Acceptance of a payment order cannot occur before the order is received by the receiving bank. Acceptance does not occur under subsection (b)(2) or (b)(3) if the beneficiary of the payment order does not have an account with the receiving bank, the account has been closed, or the receiving bank is not permitted by law to receive credits for the beneficiary's account.

(d) A payment order issued to the originator's bank cannot be accepted until the payment date if the bank is the beneficiary's bank, or the execution date if the bank is not the beneficiary's bank. If the originator's bank executes the originator's payment order before the execution date or pays the beneficiary of the originator's payment order before the payment date and the payment order is subsequently canceled pursuant to Section 75-4A-211(b), the bank may recover from the beneficiary any payment received to the extent allowed by the law governing mistake and restitution.

§ 75-4A-210

(a) A payment order is rejected by the receiving bank by a notice of rejection transmitted to the sender orally, electronically, or in writing. A notice of rejection need not use any particular words and is sufficient if it indicates that the receiving bank is rejecting the order or will not execute or pay the order. Rejection is effective when the notice is given if transmission is by a means that is reasonable in the circumstances. If notice of rejection is given by a means that is not reasonable, rejection is effective when the notice is received. If an agreement of the sender and receiving bank establishes the means to be used to reject a payment order, (i) any means complying with the agreement is reasonable and (ii) any means not complying is not reasonable unless no significant delay in receipt of the notice resulted from the use of the noncomplying means.

(b) This subsection applies if a receiving bank other than the beneficiary's bank fails to execute a payment order despite the existence on the execution date of a withdrawable credit balance in an authorized account of the sender sufficient to cover the order. If the sender does not receive notice of rejection of the order on the execution date and the authorized account of the sender does not bear interest, the bank is obliged to pay interest to the sender on the amount of the order for the number of days elapsing after the execution date to the earlier of the day the order is canceled pursuant to Section 75-4A-211(d) or the day the sender receives notice or learns that the order was not executed, counting the final day of the period as an elapsed day. If the withdrawable credit balance during that period falls below the amount of the order, the amount of interest is reduced accordingly.

(c) If a receiving bank suspends payments, all unaccepted payment orders issued to it are deemed rejected at the time the bank suspends payments.

(d) Acceptance of a payment order precludes a later rejection of the order. Rejection of a payment order precludes a later acceptance of the order.

§ 75-4A-211

(a) A communication of the sender of a payment order cancelling or amending the order may be transmitted to the receiving bank orally, electronically, or in writing. If a security procedure is in effect between the sender and the receiving bank, the communication is not effective to cancel or amend the order unless the communication is verified pursuant to the security procedure or the bank agrees to the cancellation or amendment.

(b) Subject to subsection (a), a communication by the sender cancelling or amending a payment order is effective to cancel or amend the order if notice of the communication is received at a time and in a manner affording the receiving bank a reasonable opportunity to act on the communication before the bank accepts the payment order.

(c) After a payment order has been accepted, cancellation or amendment of the order is not effective unless the receiving bank agrees or a funds-transfer system rule allows cancellation or amendment without agreement of the bank.

(1) With respect to a payment order accepted by a receiving bank other than the beneficiary's bank, cancellation or amendment is not effective unless a conforming cancellation or amendment of the payment order issued by the receiving bank is also made.

(2) With respect to a payment order accepted by the beneficiary's bank, cancellation or amendment is not effective unless the order was issued in execution of an unauthorized payment order, or because of a mistake by a sender in the funds transfer which resulted in the issuance of a payment order (i) that is a duplicate of a payment order previously issued by the sender, (ii) that orders payment to a beneficiary not entitled to receive payment from the originator, or (iii) that orders payment in an amount greater than the amount the beneficiary was entitled to receive from the originator. If the payment order is canceled or amended, the beneficiary's bank is entitled to recover from the beneficiary any amount paid to the beneficiary to the extent allowed by the law governing mistake and restitution.

(d) An unaccepted payment order is canceled by operation of law at the close of the fifth funds-transfer business day of the receiving bank after the execution date or payment date of the order.

(e) A canceled payment order cannot be accepted. If an accepted payment order is canceled, the acceptance is nullified and no person has any right or obligation based on the acceptance. Amendment of a payment order is deemed to be cancellation of the original order at the time of amendment and issue of a new payment order in the amended form at the same time.

(f) Unless otherwise provided in an agreement of the parties or in a funds-transfer system rule, if the receiving bank, after accepting a payment order, agrees to cancellation or amendment of the order by the sender or is bound by a funds-transfer system rule allowing cancellation or amendment without the bank's agreement, the sender, whether or not cancellation or amendment is effective, is liable to the bank for any loss and expenses, including reasonable attorney's fees, incurred by the bank as a result of the cancellation or amendment or attempted cancellation or amendment.

(g) A payment order is not revoked by the death or legal incapacity of the sender unless the receiving bank knows of the death or of an adjudication of incapacity by a court of competent jurisdiction and has reasonable opportunity to act before acceptance of the order.

(h) A funds-transfer system rule is not effective to the extent it conflicts with subsection (c)(2).

§ 75-4A-212

If a receiving bank fails to accept a payment order that it is obliged by express agreement to accept, the bank is liable for breach of the agreement to the extent provided in the agreement or in this chapter, but does not otherwise have any duty to accept a payment order or, before acceptance, to take any action, or refrain from taking action, with respect to the order except as provided in this chapter or by express agreement. Liability based on acceptance arises only when acceptance occurs as stated in Section 75-4A-209, and liability is limited to that provided in this chapter. A receiving bank is not the agent of the sender or beneficiary of the payment order it accepts, or of any other party to the funds transfer, and the bank owes no duty to any party to the funds transfer except as provided in this chapter or by express agreement.

§ 75-4A-301

(a) A payment order is “executed” by the receiving bank when it issues a payment order intended to carry out the payment order received by the bank. A payment order received by the beneficiary's bank can be accepted but cannot be executed.

(b) “Execution date” of a payment order means the day on which the receiving bank may properly issue a payment order in execution of the sender's order. The execution date may be determined by instruction of the sender but cannot be earlier than the day the order is received and, unless otherwise determined, is the day the order is received. If the sender's instruction states a payment date, the execution date is the payment date or an earlier date on which execution is reasonably necessary to allow payment to the beneficiary on the payment date.

§ 75-4A-302

(a) Except as provided in subsections (b) through (d), if the receiving bank accepts a payment order pursuant to Section 75-4A-209(a), the bank has the following obligations in executing the order:

(1) The receiving bank is obliged to issue, on the execution date, a payment order complying with the sender's order and to follow the sender's instructions concerning (i) any intermediary bank or funds-transfer system to be used in carrying out the funds transfer, or (ii) the means by which payment orders are to be transmitted in the funds transfer. If the originator's bank issues a payment order to an intermediary bank, the originator's bank is obliged to instruct the intermediary bank according to the instruction of the originator. An intermediary bank in the funds transfer is similarly bound by an instruction given to it by the sender of the payment order it accepts.

(2) If the sender's instruction states that the funds transfer is to be carried out telephonically or by wire transfer or otherwise indicates that the funds transfer is to be carried out by the most expeditious means, the receiving bank is obliged to transmit its payment order by the most expeditious available means, and to instruct any intermediary bank accordingly. If a sender's instruction states a payment date, the receiving bank is obliged to transmit its payment order at a time and by means reasonably necessary to allow payment to the beneficiary on the payment date or as soon thereafter as is feasible.

(b) Unless otherwise instructed, a receiving bank executing a payment order may (i) use any funds-transfer system if use of that system is reasonable in the circumstances, and (ii) issue a payment order to the beneficiary's bank or to an intermediary bank through which a payment order conforming to the sender's order can expeditiously be issued to the beneficiary's bank if the receiving bank exercises ordinary care in the selection of the intermediary bank. A receiving bank is not required to follow an instruction of the sender designating a funds-transfer system to be used in carrying out the funds transfer if the receiving bank, in good faith, determines that it is not feasible to follow the instruction or that following the instruction would unduly delay completion of the funds transfer.

(c) Unless subsection (a)(2) applies or the receiving bank is otherwise instructed, the bank may execute a payment order by transmitting its payment order by first class mail or by any means reasonable in the circumstances. If the receiving bank is instructed to execute the sender's order by transmitting its payment order by a particular means, the receiving bank may issue its payment order by the means stated or by any means as expeditious as the means stated.

(d) Unless instructed by the sender, (i) the receiving bank may not obtain payment of its charges for services and expenses in connection with the execution of the sender's order by issuing a payment order in an amount equal to the amount of the sender's order less the amount of the charges, and (ii) may not instruct a subsequent receiving bank to obtain payment of its charges in the same manner.

§ 75-4A-303

(a) A receiving bank that (i) executes the payment order of the sender by issuing a payment order in an amount greater than the amount of the sender's order, or (ii) issues a payment order in execution of the sender's order and then issues a duplicate order, is entitled to payment of the amount of the sender's order under Section 75-4A-402(c) if that subsection is otherwise satisfied. The bank is entitled to recover from the beneficiary of the erroneous order the excess payment received to the extent allowed by the law governing mistake and restitution.

(b) A receiving bank that executes the payment order of the sender by issuing a payment order in an amount less than the amount of the sender's order is entitled to payment of the amount of the sender's order under Section 75-4A-402(c) if (i) that subsection is otherwise satisfied and (ii) the bank corrects its mistake by issuing an additional payment order for the benefit of the beneficiary of the sender's order. If the error is not corrected, the issuer of the erroneous order is entitled to receive or retain payment from the sender of the order it accepted only to the extent of the amount of the erroneous order. This subsection does not apply if the receiving bank executes the sender's payment order by issuing a payment order in an amount less than the amount of the sender's order for the purpose of obtaining payment of its charges for services and expenses pursuant to instruction of the sender.

(c) If a receiving bank executes the payment order of the sender by issuing a payment order to a beneficiary different from the beneficiary of the sender's order and the funds transfer is completed on the basis of that error, the sender of the payment order that was erroneously executed and all previous senders in the funds transfer are not obliged to pay the payment orders they issued. The issuer of the erroneous order is entitled to recover from the beneficiary of the order the payment received to the extent allowed by the law governing mistake and restitution.

§ 75-4A-304

If the sender of a payment order that is erroneously executed as stated in Section 75-4A-303 receives notification from the receiving bank that the order was executed or that the sender's account was debited with respect to the order, the sender has a duty to exercise ordinary care to determine, on the basis of information available to the sender, that the order was erroneously executed and to notify the bank of the relevant facts within a reasonable time not exceeding ninety (90) days after the notification from the bank was received by the sender. If the sender fails to perform that duty, the bank is not obliged to pay interest on any amount refundable to the sender under Section 75-4A-402(d) for the period before the bank learns of the execution error. The bank is not entitled to any recovery from the sender on account of a failure by the sender to perform the duty stated in this section.

§ 75-4A-305

(a) If a funds transfer is completed but execution of a payment order by the receiving bank in breach of Section 75-4A-302 results in delay in payment to the beneficiary, the bank is obliged to pay interest to either the originator or the beneficiary of the funds transfer for the period of delay caused by the improper execution. Except as provided in subsection (c), additional damages are not recoverable.

(b) If execution of a payment order by a receiving bank in breach of Section 75-4A-302 results in (i) noncompletion of the funds transfer, (ii) failure to use an intermediary bank designated by the originator, or (iii) issuance of a payment order that does not comply with the terms of the payment order of the originator, the bank is liable to the originator for its expenses in the funds transfer and for incidental expenses and interest losses, to the extent not covered by subsection (a), resulting from the improper execution. Except as provided in subsection (c), additional damages are not recoverable.

(c) In addition to the amounts payable under subsections (a) and (b), damages, including consequential damages, are recoverable to the extent provided in an express written agreement of the receiving bank.

(d) If a receiving bank fails to execute a payment order it was obliged by express agreement to execute, the receiving bank is liable to the sender for its expenses in the transaction and for incidental expenses and interest losses resulting from the failure to execute. Additional damages, including consequential damages, are recoverable to the extent provided in an express written agreement of the receiving bank, but are not otherwise recoverable.

(e) Reasonable attorney's fees are recoverable if demand for compensation under subsection (a) or (b) is made and refused before an action is brought on the claim. If a claim is made for breach of an agreement under subsection (d) and the agreement does not provide for damages, reasonable attorney's fees are recoverable if demand for compensation under subsection (d) is made and refused before an action is brought on the claim.

(f) Except as stated in this section, the liability of a receiving bank under subsections (a) and (b) may not be varied by agreement.

§ 75-4A-401

“Payment date” of a payment order means the day on which the amount of the order is payable to the beneficiary by the beneficiary's bank. The payment date may be determined by instruction of the sender but cannot be earlier than the day the order is received by the beneficiary's bank and, unless otherwise determined, is the day the order is received by the beneficiary's bank.

§ 75-4A-402

(a) This section is subject to Sections 75-4A-205 and 75-4A-207.

(b) With respect to a payment order issued to the beneficiary's bank, acceptance of the order by the bank obliges the sender to pay the bank the amount of the order, but payment is not due until the payment date of the order.

(c) This subsection is subject to subsection (e) and to Section 75-4A-303. With respect to a payment order issued to a receiving bank other than the beneficiary's bank, acceptance of the order by the receiving bank obliges the sender to pay the bank the amount of the sender's order. Payment by the sender is not due until the execution date of the sender's order. The obligation of that sender to pay its payment order is excused if the funds transfer is not completed by acceptance by the beneficiary's bank of a payment order instructing payment to the beneficiary of that sender's payment order.

(d) If the sender of a payment order pays the order and was not obliged to pay all or part of the amount paid, the bank receiving payment is obliged to refund payment to the extent the sender was not obliged to pay. Except as provided in Sections 75-4A-204 and 75-4A-304, interest is payable on the refundable amount from the date of payment.

(e) If a funds transfer is not completed as stated in subsection (c) and an intermediary bank is obliged to refund payment as stated in subsection (d) but is unable to do so because not permitted by applicable law or because the bank suspends payments, a sender in the funds transfer that executed a payment order in compliance with an instruction, as stated in Section 75-4A-302(a)(1), to route the funds transfer through that intermediary bank is entitled to receive or retain payment from the sender of the payment order that it accepted. The first sender in the funds transfer that issued an instruction requiring routing through that intermediary bank is subrogated to the right of the bank that paid the intermediary bank to refund as stated in subsection (d).

(f) The right of the sender of a payment order to be excused from the obligation to pay the order as stated in subsection (c) or to receive refund under subsection (d) may not be varied by agreement.

§ 75-4A-403

(a) Payment of the sender's obligation under Section 75-4A-402 to pay the receiving bank occurs as follows:

(1) If the sender is a bank, payment occurs when the receiving bank receives final settlement of the obligation through a federal reserve bank or through a funds-transfer system.

(2) If the sender is a bank and the sender (i) credited an account of the receiving bank with the sender, or (ii) caused an account of the receiving bank in another bank to be credited, payment occurs when the credit is withdrawn or, if not withdrawn, at midnight of the day on which the credit is withdrawable and the receiving bank learns of that fact.

(3) If the receiving bank debits an account of the sender with the receiving bank, payment occurs when the debit is made to the extent the debit is covered by a withdrawable credit balance in the account.

(b) If the sender and receiving bank are members of a funds-transfer system that nets obligations multilaterally among participants, the receiving bank receives final settlement when settlement is complete in accordance with the rules of the system. The obligation of the sender to pay the amount of a payment order transmitted through the funds-transfer system may be satisfied, to the extent permitted by the rules of the system, by setting off and applying against the sender's obligation the right of the sender to receive payment from the receiving bank of the amount of any other payment order transmitted to the sender by the receiving bank through the funds-transfer system. The aggregate balance of obligations owed by each sender to each receiving bank in the funds-transfer system may be satisfied, to the extent permitted by the rules of the system, by setting off and applying against that balance the aggregate balance of obligations owed to the sender by other members of the system. The aggregate balance is determined after the right of setoff stated in the second sentence of this subsection has been exercised.

(c) If two banks transmit payment orders to each other under an agreement that settlement of the obligations of each bank to the other under Section 75-4A-402 will be made at the end of the day or other period, the total amount owed with respect to all orders transmitted by one (1) bank shall be set off against the total amount owed with respect to all orders transmitted by the other bank. To the extent of the setoff, each bank has made payment to the other.

(d) In a case not covered by subsection (a), the time when payment of the sender's obligation under Section 75-4A-402(b) or 75-4A-402(c) occurs is governed by applicable principles of law that determine when an obligation is satisfied.

§ 75-4A-404

(a) Subject to Sections 75-4A-211(e), 75-4A-405(d), and 75-4A-405(e), if a beneficiary's bank accepts a payment order, the bank is obliged to pay the amount of the order to the beneficiary of the order. Payment is due on the payment date of the order, but if acceptance occurs on the payment date after the close of the funds-transfer business day of the bank, payment is due on the next funds-transfer business day. If the bank refuses to pay after demand by the beneficiary and receipt of notice of particular circumstances that will give rise to consequential damages as a result of nonpayment, the beneficiary may recover damages resulting from the refusal to pay to the extent the bank had notice of the damages, unless the bank proves that it did not pay because of a reasonable doubt concerning the right of the beneficiary to payment.

(b) If a payment order accepted by the beneficiary's bank instructs payment to an account of the beneficiary, the bank is obliged to notify the beneficiary of receipt of the order before midnight of the next funds-transfer business day following the payment date. If the payment order does not instruct payment to an account of the beneficiary, the bank is required to notify the beneficiary only if notice is required by the order. Notice may be given by first class mail or any other means reasonable in the circumstances. If the bank fails to give the required notice, the bank is obliged to pay interest to the beneficiary on the amount of the payment order from the day notice should have been given until the day the beneficiary learned of receipt of the payment order by the bank. No other damages are recoverable. Reasonable attorney's fees are also recoverable if demand for interest is made and refused before an action is brought on the claim.

(c) The right of a beneficiary to receive payment and damages as stated in subsection (a) may not be varied by agreement or a funds-transfer system rule. The right of a beneficiary to be notified as stated in subsection (b) may be varied by agreement of the beneficiary or by a funds-transfer system rule if the beneficiary is notified of the rule before initiation of the funds transfer.

§ 75-4A-405

(a) If the beneficiary's bank credits an account of the beneficiary of a payment order, payment of the bank's obligation under Section 75-4A-404(a) occurs when and to the extent (i) the beneficiary is notified of the right to withdraw the credit, (ii) the bank lawfully applies the credit to a debt of the beneficiary, or (iii) funds with respect to the order are otherwise made available to the beneficiary by the bank.

(b) If the beneficiary's bank does not credit an account of the beneficiary of a payment order, the time when payment of the bank's obligation under Section 75-4A-404(a) occurs is governed by principles of law that determine when an obligation is satisfied.

(c) Except as stated in subsections (d) and (e), if the beneficiary's bank pays the beneficiary of a payment order under a condition to payment or agreement of the beneficiary giving the bank the right to recover payment from the beneficiary if the bank does not receive payment of the order, the condition to payment or agreement is not enforceable.

(d) A funds-transfer system rule may provide that payments made to beneficiaries of funds transfers made through the system are provisional until receipt of payment by the beneficiary's bank of the payment order it accepted. A beneficiary's bank that makes a payment that is provisional under the rule is entitled to refund from the beneficiary if (i) the rule requires that both the beneficiary and the originator be given notice of the provisional nature of the payment before the funds transfer is initiated, (ii) the beneficiary, the beneficiary's bank and the originator's bank agreed to be bound by the rule, and (iii) the beneficiary's bank did not receive payment of the payment order that it accepted. If the beneficiary is obliged to refund payment to the beneficiary's bank, acceptance of the payment order by the beneficiary's bank is nullified and no payment by the originator of the funds transfer to the beneficiary occurs under Section 75-4A-406.

(e) This subsection applies to a funds transfer that includes a payment order transmitted over a funds-transfer system that (i) nets obligations multilaterally among participants, and (ii) has in effect a loss-sharing agreement among participants for the purpose of providing funds necessary to complete settlement of the obligations of one or more participants that do not meet their settlement obligations. If the beneficiary's bank in the funds transfer accepts a payment order and the system fails to complete settlement pursuant to its rules with respect to any payment order in the funds transfer, (i) the acceptance by the beneficiary's bank is nullified and no person has any right or obligation based on the acceptance, (ii) the beneficiary's bank is entitled to recover payment from the beneficiary, (iii) no payment by the originator to the beneficiary occurs under Section 75-4A-406, and (iv) subject to Section 75-4A-402(e), each sender in the funds transfer is excused from its obligation to pay its payment order under Section 75-4A-402(c) because the funds transfer has not been completed.

§ 75-4A-406

(a) Subject to Sections 75-4A-211(e), 75-4A-405(d), and 75-4A-405(e), the originator of a funds transfer pays the beneficiary of the originator's payment order (i) at the time a payment order for the benefit of the beneficiary is accepted by the beneficiary's bank in the funds transfer and (ii) in an amount equal to the amount of the order accepted by the beneficiary's bank, but not more than the amount of the originator's order.

(b) If payment under subsection (a) is made to satisfy an obligation, the obligation is discharged to the same extent discharge would result from payment to the beneficiary of the same amount in money, unless (i) the payment under subsection (a) was made by a means prohibited by the contract of the beneficiary with respect to the obligation, (ii) the beneficiary, within a reasonable time after receiving notice of receipt of the order by the beneficiary's bank, notified the originator of the beneficiary's refusal of the payment, (iii) funds with respect to the order were not withdrawn by the beneficiary or applied to a debt of the beneficiary, and (iv) the beneficiary would suffer a loss that could reasonably have been avoided if payment had been made by a means complying with the contract. If payment by the originator does not result in discharge under this section, the originator is subrogated to the rights of the beneficiary to receive payment from the beneficiary's bank under Section 75-4A-404(a).

(c) For the purpose of determining whether discharge of an obligation occurs under subsection (b), if the beneficiary's bank accepts a payment order in an amount equal to the amount of the originator's payment order less charges of one or more receiving banks in the funds transfer, payment to the beneficiary is deemed to be in the amount of the originator's order unless upon demand by the beneficiary the originator does not pay the beneficiary the amount of the deducted charges.

(d) Rights of the originator or of the beneficiary of a funds transfer under this section may be varied only by agreement of the originator and the beneficiary.

§ 75-4A-501

(a) Except as otherwise provided in this chapter, the rights and obligations of a party to a funds transfer may be varied by agreement of the affected party.

(b) “Funds-transfer system rule” means a rule of an association of banks (i) governing transmission of payment orders by means of a funds-transfer system of the association or rights and obligations with respect to those orders, or (ii) to the extent the rule governs rights and obligations between banks that are parties to a funds transfer in which a federal reserve bank, acting as an intermediary bank, sends a payment order to the beneficiary's bank. Except as otherwise provided in this chapter, a funds-transfer system rule governing rights and obligations between participating banks using the system may be effective even if the rule conflicts with this chapter and indirectly affects another party to the funds transfer who does not consent to the rule. A funds-transfer system rule may also govern rights and obligations of parties other than participating banks using the system to the extent stated in Sections 75-4A-404(c), 75-4A-405(d), and 75-4A-507(c).

§ 75-4A-502

(a) As used in this section, “creditor process” means levy, attachment, garnishment, notice of lien, sequestration, or similar process issued by or on behalf of a creditor or other claimant with respect to an account.

(b) This subsection applies to creditor process with respect to an authorized account of the sender of a payment order if the creditor process is served on the receiving bank. For the purpose of determining rights with respect to the creditor process, if the receiving bank accepts the payment order the balance in the authorized account is deemed to be reduced by the amount of the payment order to the extent the bank did not otherwise receive payment of the order, unless the creditor process is served at a time and in a manner affording the bank a reasonable opportunity to act on it before the bank accepts the payment order.

(c) If a beneficiary's bank has received a payment order for payment to the beneficiary's account in the bank, the following rules apply:

(1) The bank may credit the beneficiary's account. The amount credited may be set off against an obligation owed by the beneficiary to the bank or may be applied to satisfy creditor process served on the bank with respect to the account.

(2) The bank may credit the beneficiary's account and allow withdrawal of the amount credited unless creditor process with respect to the account is served at a time and in a manner affording the bank a reasonable opportunity to act to prevent withdrawal.

(3) If creditor process with respect to the beneficiary's account has been served and the bank has had a reasonable opportunity to act on it, the bank may not reject the payment order except for a reason unrelated to the service of process.

(d) Creditor process with respect to a payment by the originator to the beneficiary pursuant to a funds transfer may be served only on the beneficiary's bank with respect to the debt owed by that bank to the beneficiary. Any other bank served with the creditor process is not obliged to act with respect to the process.

§ 75-4A-503

For proper cause and in compliance with applicable law, a court may restrain (i) a person from issuing a payment order to initiate a funds transfer, (ii) an originator's bank from executing the payment order of the originator, or (iii) the beneficiary's bank from releasing funds to the beneficiary or the beneficiary from withdrawing the funds. A court may not otherwise restrain a person from issuing a payment order, paying or receiving payment of a payment order, or otherwise acting with respect to a funds transfer.

§ 75-4A-504

(a) If a receiving bank has received more than one (1) payment order of the sender or one or more payment orders and other items that are payable from the sender's account, the bank may charge the sender's account with respect to the various orders and items in any sequence.

(b) In determining whether a credit to an account has been withdrawn by the holder of the account or applied to a debt of the holder of the account, credits first made to the account are first withdrawn or applied.

§ 75-4A-505

If a receiving bank has received payment from its customer with respect to a payment order issued in the name of the customer as sender and accepted by the bank, and the customer received notification reasonably identifying the order, the customer is precluded from asserting that the bank is not entitled to retain the payment unless the customer notifies the bank of the customer's objection to the payment within one (1) year after the notification was received by the customer.

§ 75-4A-506

(a) If, under this chapter, a receiving bank is obliged to pay interest with respect to a payment order issued to the bank, the amount payable may be determined (i) by agreement of the sender and receiving bank, or (ii) by a funds-transfer system rule if the payment order is transmitted through a funds-transfer system.

(b) If the amount of interest is not determined by an agreement or rule as stated in subsection (a), the amount is calculated by multiplying the applicable federal funds rate by the amount on which interest is payable, and then multiplying the product by the number of days for which interest is payable. The applicable federal funds rate is the average of the federal funds rates published by the Federal Reserve Bank of New York for each of the days for which interest is payable divided by three hundred sixty (360). The federal funds rate for any day on which a published rate is not available is the same as the published rate for the next preceding day for which there is a published rate. If a receiving bank that accepted a payment order is required to refund payment to the sender of the order because the funds transfer was not completed, but the failure to complete was not due to any fault by the bank, the interest payable is reduced by a percentage equal to the reserve requirement on deposits of the receiving bank.

§ 75-4A-507

(a) The following rules apply unless the affected parties otherwise agree or subsection (c) applies:

(1) The rights and obligations between the sender of a payment order and the receiving bank are governed by the law of the jurisdiction in which the receiving bank is located.

(2) The rights and obligations between the beneficiary's bank and the beneficiary are governed by the law of the jurisdiction in which the beneficiary's bank is located.

(3) The issue of when payment is made pursuant to a funds transfer by the originator to the beneficiary is governed by the law of the jurisdiction in which the beneficiary's bank is located.

(b) If the parties described in each paragraph of subsection (a) have made an agreement selecting the law of a particular jurisdiction to govern rights and obligations between each other, the law of that jurisdiction governs those rights and obligations, whether or not the payment order or the funds transfer bears a reasonable relation to that jurisdiction.

(c) A funds-transfer system rule may select the law of a particular jurisdiction to govern (i) rights and obligations between participating banks with respect to payment orders transmitted or processed through the system, or (ii) the rights and obligations of some or all parties to a funds transfer any part of which is carried out by means of the system. A choice of law made pursuant to clause (i) is binding on participating banks. A choice of law made pursuant to clause (ii) is binding on the originator, other sender, or a receiving bank having notice that the funds-transfer system might be used in the funds transfer and of the choice of law by the system when the originator, other sender, or receiving bank issued or accepted a payment order. The beneficiary of a funds transfer is bound by the choice of law if, when the funds transfer is initiated, the beneficiary has notice that the funds-transfer system might be used in the funds transfer and of the choice of law by the system. The law of a jurisdiction selected pursuant to this subsection may govern, whether or not that law bears a reasonable relation to the matter in issue.

(d) In the event of inconsistency between an agreement under subsection (b) and a choice-of-law rule under subsection (c), the agreement under subsection (b) prevails.

(e) If a funds transfer is made by use of more than one (1) funds-transfer system and there is inconsistency between choice-of-law rules of the systems, the matter in issue is governed by the law of the selected jurisdiction that has the most significant relationship to the matter in issue.

Chapter 5 Uniform Commercial Code--Revised Article 5. Letters of Credit

§ 75-5-101

This chapter may be cited as Uniform Commercial Code-Revised Article 5. Letters of Credit.

§ 75-5-102

(a) In this chapter:

(1) “Adviser” means a person who, at the request of the issuer, a confirmer, or another adviser, notifies or requests another adviser to notify the beneficiary that a letter of credit has been issued, confirmed or amended.

(2) “Applicant” means a person at whose request or for whose account a letter of credit is issued. The term includes a person who requests an issuer to issue a letter of credit on behalf of another if the person making the request undertakes an obligation to reimburse the issuer.

(3) “Beneficiary” means a person who under the terms of a letter of credit is entitled to have its complying presentation honored. The term includes a person to whom drawing rights have been transferred under a transferable letter of credit.

(4) “Confirmer” means a nominated person who undertakes, at the request or with the consent of the issuer, to honor a presentation under a letter of credit issued by another.

(5) “Dishonor” of a letter of credit means failure timely to honor or to take an interim action, such as acceptance of a draft, that may be required by the letter of credit.

(6) “Document” means a draft or other demand, document of title, investment security, certificate, invoice, or other record, statement, or representation of fact, law, right, or opinion (i) which is presented in a written or other medium permitted by the letter of credit or, unless prohibited by the letter of credit, by the standard practice referred to in Section 75-5-108(e), and (ii) which is capable of being examined for compliance with the terms and conditions of the letter of credit. A document may not be oral.

(7) “Good faith” means honesty in fact in the conduct or transaction concerned.

(8) “Honor” of a letter of credit means performance of the issuer's undertaking in the letter of credit to pay or deliver an item of value. Unless the letter of credit otherwise provides, “honor” occurs:

(i) Upon payment;

(ii) If the letter of credit provides for acceptance, upon acceptance of a draft and, at maturity, its payment; or

(iii) If the letter of credit provides for incurring a deferred obligation, upon incurring the obligation and, at maturity, its performance.

(9) “Issuer” means a bank or other person that issues a letter of credit, but does not include an individual who makes an engagement for personal, family or household purposes.

(10) “Letter of credit” means a definite undertaking that satisfies the requirements of Section 75-5-104 by an issuer to a beneficiary at the request or for the account of an applicant or, in the case of a financial institution, to itself or for its own account, to honor a documentary presentation by payment or delivery of an item of value.

(11) “Nominated person” means a person whom the issuer (i) designates or authorizes to pay, accept, negotiate or otherwise give value under a letter of credit, and (ii) undertakes by agreement or custom and practice to reimburse.

(12) “Presentation” means delivery of a document to an issuer or nominated person for honor or giving of value under a letter of credit.

(13) “Presenter” means a person making a presentation as or on behalf of a beneficiary or nominated person.

(14) “Record” means information that is inscribed on a tangible medium, or that is stored in an electronic or other medium and is retrievable in perceivable form.

(15) “Successor of a beneficiary” means a person who succeeds to substantially all of the rights of a beneficiary by operation of law, including a corporation with or into which the beneficiary has been merged or consolidated, an administrator, executor, personal representative, trustee in bankruptcy, debtor in possession, liquidator and receiver.

(b) Other definitions applying to this chapter and the sections in which they appear are:

“Accept” or “Acceptance” Section 3-409 [Section 75-3-409]

“Value” Sections 3-303, 4-211 [Sections 75-3-303, 75-4-211]

(c) Chapter 1 contains certain additional general definitions and principles of construction and interpretation applicable throughout this chapter.

§ 75-5-103

(a) This chapter applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit.

(b) The statement of a rule in this chapter does not by itself require, imply, or negate application of the same or a different rule to a situation not provided for, or to a person not specified, in this chapter.

(c) With the exception of this subsection, subsections (a) and (d), Sections 75-5-102(a)(9) and (10), 75-5-106(d), and 75-5-114(d), and except to the extent prohibited in Sections 75-1-302 and 75-5-117(d), the effect of this chapter may be varied by agreement or by a provision stated or incorporated by reference in an undertaking. A term in an agreement or undertaking generally excusing liability or generally limiting remedies for failure to perform obligations is not sufficient to vary obligations prescribed by this chapter.

(d) Rights and obligations of an issuer to a beneficiary or a nominated person under a letter of credit are independent of the existence, performance or nonperformance of a contract or arrangement out of which the letter of credit arises or which underlies it, including contracts or arrangements between the issuer and the applicant and between the applicant and the beneficiary.

§ 75-5-104

A letter of credit, confirmation, advice, transfer, amendment or cancellation may be issued in any form that is a record and is authenticated (i) by a signature, or (ii) in accordance with the agreement of the parties or the standard practice referred to in Section 75-5-108(e).

§ 75-5-105

Consideration is not required to issue, amend, transfer or cancel a letter of credit, advice or confirmation.

§ 75-5-106

(a) A letter of credit is issued and becomes enforceable according to its terms against the issuer when the issuer sends or otherwise transmits it to the person requested to advise or to the beneficiary. A letter of credit is revocable only if it so provides.

(b) After a letter of credit is issued, rights and obligations of a beneficiary, applicant, confirmer and issuer are not affected by an amendment or cancellation to which that person has not consented except to the extent the letter of credit provides that it is revocable or that the issuer may amend or cancel the letter of credit without that consent.

(c) If there is no stated expiration date or other provision that determines its duration, a letter of credit expires one (1) year after its stated date of issuance or, if none is stated, after the date on which it is issued.

(d) A letter of credit that states that it is perpetual expires five (5) years after its stated date of issuance, or if none is stated, after the date on which it is issued.

§ 75-5-107

(a) A confirmer is directly obligated on a letter of credit and has the rights and obligations of an issuer to the extent of its confirmation. The confirmer also has rights against and obligations to the issuer as if the issuer were an applicant and the confirmer had issued the letter of credit at the request and for the account of the issuer.

(b) A nominated person who is not a confirmer is not obligated to honor or otherwise give value for a presentation.

(c) A person requested to advise may decline to act as an adviser. An adviser who is not a confirmer is not obligated to honor or give value for a presentation. An adviser undertakes to the issuer and to the beneficiary accurately to advise the terms of the letter of credit, confirmation, amendment or advice received by that person and undertakes to the beneficiary to check the apparent authenticity of the request to advise. Even if the advice is inaccurate, the letter of credit, confirmation or amendment is enforceable as issued.

(d) A person who notifies a transferee beneficiary of the terms of a letter of credit, confirmation, amendment or advice has the rights and obligations of an adviser under subsection (c). The terms in the notice to the transferee beneficiary may differ from the terms in any notice to the transferor beneficiary to the extent permitted by the letter of credit, confirmation, amendment or advice received by the person who so notifies.

§ 75-5-108

(a) Except as otherwise provided in Section 75-5-109, an issuer shall honor a presentation that, as determined by the standard practice referred to in subsection (e), appears on its face strictly to comply with the terms and conditions of the letter of credit. Except as otherwise provided in Section 75-5-113 and unless otherwise agreed with the applicant, an issuer shall dishonor a presentation that does not appear so to comply.

(b) An issuer has a reasonable time after presentation, but not beyond the end of the seventh business day of the issuer after the day of its receipt of documents:

(1) To honor;

(2) If the letter of credit provides for honor to be completed more than seven (7) business days after presentation, to accept a draft or incur a deferred obligation; or

(3) To give notice to the presenter of discrepancies in the presentation.

(c) Except as otherwise provided in subsection (d), an issuer is precluded from asserting as a basis for dishonor any discrepancy if timely notice is not given, or any discrepancy not stated in the notice if timely notice is given.

(d) Failure to give the notice specified in subsection (b) or to mention fraud, forgery or expiration in the notice does not preclude the issuer from asserting as a basis for dishonor fraud or forgery as described in Section 75-5-109(a) or expiration of the letter of credit before presentation.

(e) An issuer shall observe standard practice of financial institutions that regularly issue letters of credit. Determination of the issuer's observance of the standard practice is a matter of interpretation for the court. The court shall offer the parties a reasonable opportunity to present evidence of the standard practice.

(f) An issuer is not responsible for:

(1) The performance or nonperformance of the underlying contract, arrangement or transaction;

(2) An act or omission of others; or

(3) Observance or knowledge of the usage of a particular trade other than the standard practice referred to in subsection (e).

(g) If an undertaking constituting a letter of credit under Section 75-5-102(a)(10) contains nondocumentary conditions, an issuer shall disregard the nondocumentary conditions and treat them as if they were not stated.

(h) An issuer that has dishonored a presentation shall return the documents or hold them at the disposal of, and send advice to that effect to, the presenter.

(i) An issuer that has honored a presentation as permitted or required by this article:

(1) Is entitled to be reimbursed by the applicant in immediately available funds not later than the date of its payment of funds;

(2) Takes the documents free of claims of the beneficiary or presenter;

(3) Is precluded from asserting a right of recourse on a draft under Sections 75-3-414 and 75-3-415;

(4) Except as otherwise provided in Sections 75-5-110 and 75-5-117, is precluded from restitution of money paid or other value given by mistake to the extent the mistake concerns discrepancies in the documents or tender which are apparent on the face of the presentation; and

(5) Is discharged to the extent of its performance under the letter of credit unless the issuer honored a presentation in which a required signature of a beneficiary was forged.

§ 75-5-109

(a) If a presentation is made that appears on its face strictly to comply with the terms and conditions of the letter of credit, but a required document is forged or materially fraudulent, or honor of the presentation would facilitate a material fraud by the beneficiary on the issuer or applicant:

(1) The issuer shall honor the presentation, if honor is demanded by (i) a nominated person who has given value in good faith and without notice of forgery or material fraud, (ii) a confirmer who has honored its confirmation in good faith, (iii) a holder in due course of a draft drawn under the letter of credit which was taken after acceptance by the issuer or nominated person, or (iv) an assignee of the issuer's or nominated person's deferred obligation that was taken for value and without notice of forgery or material fraud after the obligation was incurred by the issuer or nominated person; and

(2) The issuer, acting in good faith, may honor or dishonor the presentation in any other case.

(b) If an applicant claims that a required document is forged or materially fraudulent or that honor of the presentation would facilitate a material fraud by the beneficiary on the issuer or applicant, a court of competent jurisdiction may temporarily or permanently enjoin the issuer from honoring a presentation or grant similar relief against the issuer or other persons only if the court finds that:

(1) The relief is not prohibited under the law applicable to an accepted draft or deferred obligation incurred by the issuer;

(2) A beneficiary, issuer or nominated person who may be adversely affected is adequately protected against loss that it may suffer because the relief is granted;

(3) All of the conditions to entitle a person to the relief under the law of this state have been met; and

(4) On the basis of the information submitted to the court, the applicant is more likely than not to succeed under its claim of forgery or material fraud and the person demanding honor does not qualify for protection under subsection (a)(1).

§ 75-5-110

(a) If its presentation is honored, the beneficiary warrants:

(1) To the issuer, any other person to whom presentation is made, and the applicant that there is no fraud or forgery of the kind described in Section 75-5-109(a); and

(2) To the applicant that the drawing does not violate any agreement between the applicant and beneficiary or any other agreement intended by them to be augmented by the letter of credit.

(b) The warranties in subsection (a) are in addition to warranties arising under Chapters 3, 4, 7 and 8 because of the presentation or transfer of documents covered by any of those articles.

§ 75-5-111

(a) If an issuer wrongfully dishonors or repudiates its obligation to pay money under a letter of credit before presentation, the beneficiary, successor or nominated person presenting on its own behalf may recover from the issuer the amount that is the subject of the dishonor or repudiation. If the issuer's obligation under the letter of credit is not for the payment of money, the claimant may obtain specific performance or, at the claimant's election, recover an amount equal to the value of performance from the issuer. In either case, the claimant may also recover incidental but not consequential damages. The claimant is not obligated to take action to avoid damages that might be due from the issuer under this subsection. If, although not obligated to do so, the claimant avoids damages, the claimant's recovery from the issuer must be reduced by the amount of damages avoided. The issuer has the burden of proving the amount of damages avoided. In the case of repudiation the claimant need not present any document.

(b) If an issuer wrongfully dishonors a draft or demand presented under a letter of credit or honors a draft or demand in breach of its obligation to the applicant, the applicant may recover damages resulting from the breach, including incidental but not consequential damages, less any amount saved as a result of the breach.

(c) If an adviser or nominated person other than a confirmer breaches an obligation under this chapter or an issuer breaches an obligation not covered in subsection (a) or (b), a person to whom the obligation is owed may recover damages resulting from the breach, including incidental but not consequential damages, less any amount saved as a result of the breach. To the extent of the confirmation, a confirmer has the liability of an issuer specified in this subsection and subsections (a) and (b).

(d) An issuer, nominated person, or adviser who is found liable under subsection (a), (b) or (c) shall pay interest on the amount owed thereunder from the date of wrongful dishonor or other appropriate date.

(e) Reasonable attorney's fees and other expenses of litigation must be awarded to the prevailing party in an action in which a remedy is sought under this chapter.

(f) Damages that would otherwise be payable by a party for breach of an obligation under this article may be liquidated by agreement or undertaking, but only in an amount or by a formula that is reasonable in light of the harm anticipated.

§ 75-5-112

(a) Except as otherwise provided in Section 75-5-113, unless a letter of credit provides that it is transferable, the right of a beneficiary to draw or otherwise demand performance under a letter of credit may not be transferred.

(b) Even if a letter of credit provides that it is transferable, the issuer may refuse to recognize or carry out a transfer if:

(1) The transfer would violate applicable law; or

(2) The transferor or transferee has failed to comply with any requirement stated in the letter of credit or any other requirement relating to transfer imposed by the issuer which is within the standard practice referred to in Section 75-5-108(e) or is otherwise reasonable under the circumstances.

§ 75-5-113

(a) A successor of a beneficiary may consent to amendments, sign and present documents, and receive payment or other items of value in the name of the beneficiary without disclosing its status as a successor.

(b) A successor of a beneficiary may consent to amendments, sign and present documents, and receive payment or other items of value in its own name as the disclosed successor of the beneficiary. Except as otherwise provided in subsection (e), an issuer shall recognize a disclosed successor of a beneficiary as beneficiary in full substitution for its predecessor upon compliance with the requirements for recognition by the issuer of a transfer of drawing rights by operation of law under the standard practice referred to in Section 75-5-108(e) or, in the absence of such a practice, compliance with other reasonable procedures sufficient to protect the issuer.

(c) An issuer is not obliged to determine whether a purported successor is a successor of a beneficiary or whether the signature of a purported successor is genuine or authorized.

(d) Honor of a purported successor's apparently complying presentation under subsection (a) or (b) has the consequences specified in Section 75-5-108(i) even if the purported successor is not the successor of a beneficiary. Documents signed in the name of the beneficiary or of a disclosed successor by a person who is neither the beneficiary nor the successor of the beneficiary are forged documents for the purposes of Section 75-5-109.

(e) An issuer whose rights of reimbursement are not covered by subsection (d) or substantially similar law and any confirmer or nominated person may decline to recognize a presentation under subsection (b).

(f) A beneficiary whose name is changed after the issuance of a letter of credit has the same rights and obligations as a successor of a beneficiary under this section.

§ 75-5-114

(a) In this section, “proceeds of a letter of credit” means the cash, check, accepted draft, or other item of value paid or delivered upon honor or giving of value by the issuer or any nominated person under the letter of credit. The term does not include a beneficiary's drawing rights or documents presented by the beneficiary.

(b) A beneficiary may assign its right to part or all of the proceeds of a letter of credit. The beneficiary may do so before presentation as a present assignment of its right to receive proceeds contingent upon its compliance with the terms and conditions of the letter of credit.

(c) An issuer or nominated person need not recognize an assignment of proceeds of a letter of credit until it consents to the assignment.

(d) An issuer or nominated person has no obligation to give or withhold its consent to an assignment of proceeds of a letter of credit, but consent may not be unreasonably withheld if the assignee possesses and exhibits the letter of credit and presentation of the letter of credit is a condition to honor.

(e) Rights of a transferee beneficiary or nominated person are independent of the beneficiary's assignment of the proceeds of a letter of credit and are superior to the assignee's right to the proceeds.

(f) Neither the rights recognized by this section between an assignee and an issuer, transferee beneficiary, or nominated person nor the issuer's or nominated person's payment of proceeds to an assignee or a third person affect the rights between the assignee and any person other than the issuer, transferee beneficiary, or nominated person. The mode of creating and perfecting a security interest in or granting an assignment of a beneficiary's rights to proceeds is governed by Chapter 9 or other law. Against persons other than the issuer, transferee beneficiary, or nominated person, the rights and obligations arising upon the creation of a security interest or other assignment of a beneficiary's right to proceeds and its perfection are governed by Chapter 9 or other law.

§ 75-5-115

An action to enforce a right or obligation arising under this chapter must be commenced within one (1) year after the expiration date of the relevant letter of credit or one (1) year after the cause of action accrues, whichever occurs later. A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach.

§ 75-5-116

(a) The liability of an issuer, nominated person or adviser for action or omission is governed by the law of the jurisdiction chosen by an agreement in the form of a record signed or otherwise authenticated by the affected parties in the manner provided in Section 75-5-104 or by a provision in the person's letter of credit, confirmation or other undertaking. The jurisdiction whose law is chosen need not bear any relation to the transaction.

(b) Unless subsection (a) applies, the liability of an issuer, nominated person or adviser for action or omission is governed by the law of the jurisdiction in which the person is located. The person is considered to be located at the address indicated in the person's undertaking. If more than one address is indicated, the person is considered to be located at the address from which the person's undertaking was issued. For the purpose of jurisdiction, choice of law and recognition of interbranch letters of credit, but not enforcement of a judgment, all branches of a bank are considered separate juridical entities and a bank is considered to be located at the place where its relevant branch is considered to be located under this subsection.

(c) Except as otherwise provided in this subsection, the liability of an issuer, nominated person or adviser is governed by any rules of custom or practice, such as the Uniform Customs and Practice for Documentary Credits, to which the letter of credit, confirmation or other undertaking is expressly made subject. If (i) this chapter would govern the liability of an issuer, nominated person or adviser under subsection (a) or (b), (ii) the relevant undertaking incorporates rules of custom or practice, and (iii) there is conflict between this chapter and those rules as applied to that undertaking, those rules govern except to the extent of any conflict with the nonvariable provisions specified in Section 75-5-103(c).

(d) If there is conflict between this chapter and Chapters 3, 4, 4A or 9, this chapter governs.

(e) The forum for settling disputes arising out of an undertaking within this chapter may be chosen in the manner and with the binding effect that governing law may be chosen in accordance with subsection (a).

§ 75-5-117

(a) An issuer that honors a beneficiary's presentation is subrogated to the rights of the beneficiary to the same extent as if the issuer were a secondary obligor of the underlying obligation owed to the beneficiary and of the applicant to the same extent as if the issuer were the secondary obligor of the underlying obligation owed to the applicant.

(b) An applicant that reimburses an issuer is subrogated to the rights of the issuer against any beneficiary, presenter or nominated person to the same extent as if the applicant were the secondary obligor of the obligations owed to the issuer and has the rights of subrogation of the issuer to the rights of the beneficiary stated in subsection (a).

(c) A nominated person who pays or gives value against a draft or demand presented under a letter of credit is subrogated to the rights of:

(1) The issuer against the applicant to the same extent as if the nominated person were a secondary obligor of the obligation owed to the issuer by the applicant;

(2) The beneficiary to the same extent as if the nominated person were a secondary obligor of the underlying obligation owed to the beneficiary; and

(3) The applicant to the same extent as if the nominated person were a secondary obligor of the underlying obligation owed to the applicant.

(d) Notwithstanding any agreement or term to the contrary, the rights of subrogation stated in subsections (a) and (b) do not arise until the issuer honors the letter of credit or otherwise pays and the rights in subsection (c) do not arise until the nominated person pays or otherwise gives value. Until then, the issuer, nominated person and the applicant do not derive under this section present or prospective rights forming the basis of a claim, defense or excuse.

§ 75-5-118

(a) An issuer or nominated person has a security interest in a document presented under a letter of credit to the extent that the issuer or nominated person honors or gives value for the presentation.

(b) So long as and to the extent that an issuer or nominated person has not been reimbursed or has not otherwise recovered the value given with respect to a security interest in a document under subsection (a), the security interest continues and is subject to Article 9 of the Uniform Commercial Code, but:

(1) A security agreement is not necessary to make the security interest enforceable under Section 75-9-203(b)(3);

(2) If the document is presented in a medium other than a written or other tangible medium, the security interest is perfected; and

(3) If the document is presented in a written or other tangible medium and is not a certificated security, chattel paper, a document of title, an instrument, or a letter of credit, the security interest is perfected and has priority over a conflicting security interest in the document so long as the debtor does not have possession of the document.

Chapter 6 Uniform Commercial Code--Bulk Transfers

§ 75-6-112

Section 75-6-101 through Section 75-6-111, Mississippi Code of 1972, shall stand repealed from and after July 1, 1995.

Chapter 7 Uniform Commercial Code--Documents of Title (2003 Revision)

§ 75-7-101

This chapter shall be known and may be cited as Uniform Commercial Code-Documents of Title.

§ 75-7-102

(a) In this chapter, unless the context otherwise requires:

(1) “Bailee” means a person that by a warehouse receipt, bill of lading, or other document of title acknowledges possession of goods and contracts to deliver them.

(2) “Carrier” means a person that issues a bill of lading.

(3) “Consignee” means a person named in a bill of lading to which or to whose order the bill promises delivery.

(4) “Consignor” means a person named in a bill of lading as the person from which the goods have been received for shipment.

(5) “Delivery order” means a record that contains an order to deliver goods directed to a warehouse, carrier, or other person that in the ordinary course of business issues warehouse receipts or bills of lading.

(6) [Reserved]

(7) “Goods” means all things that are treated as movable for the purposes of a contract for storage or transportation.

(8) “Issuer” means a bailee that issues a document of title or, in the case of an unaccepted delivery order, the person that orders the possessor of goods to deliver. The term includes a person for which an agent or employee purports to act in issuing a document if the agent or employee has real or apparent authority to issue documents, even if the issuer did not receive any goods, the goods were misdescribed, or in any other respect the agent or employee violated the issuer's instructions.

(9) “Person entitled under the document” means the holder, in the case of a negotiable document of title, or the person to which delivery of the goods is to be made by the terms of, or pursuant to instructions in a record under, a nonnegotiable document of title.

(10) [Reserved]

(11) “Sign” means, with present intent to authenticate or adopt a record:

(A) To execute or adopt a tangible symbol; or

(B) To attach to or logically associate with the record an electronic sound, symbol, or process.

(12) “Shipper” means a person that enters into a contract of transportation with a carrier.

(13) “Warehouse” means a person engaged in the business of storing goods for hire.

(b) Definitions in other chapters applying to this chapter and the sections in which they appear are:

(1) “Contract for sale,” Section 75-2-106.

(2) “Lessee in the ordinary course of business,” Section 75-2A-103.

(3) “‘Receipt’ of goods,” Section 75-2-103.

(c) In addition, Chapter 1 of this title contains general definitions and principles of construction and interpretation applicable throughout this chapter.

§ 75-7-103

(a) This chapter is subject to any treaty or statute of the United States or regulatory statute of this state to the extent the treaty, statute, or regulatory statute is applicable.

(b) This chapter does not repeal or modify any law prescribing the form or contents of a document of title or the services or facilities to be afforded by a bailee, or otherwise regulating a bailee's businesses in respects not specifically treated in this chapter. However, violation of these laws does not affect the status of a document of title that otherwise complies with the definition of a document of title.

(c) This chapter modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act (15 USCS Section 7001 et seq.) but does not modify, limit, or supersede Section 101(c) of that act (15 USCS Section 7001(c)) or authorize electronic delivery of any of the notices described in Section 103(b) of that act (15 USCS Section 7003(b)).

(d) To the extent there is a conflict between the Uniform Electronic Transactions Act (Title 75, Chapter 12) and this chapter, this chapter governs.

§ 75-7-104

(a) A document of title is negotiable if by its terms the goods are to be delivered to bearer or to the order of a named person.

(b) A document of title other than one described in subsection (a) is nonnegotiable. A bill of lading that states that the goods are consigned to a named person is not made negotiable by a provision that the goods are to be delivered only against an order in a record signed by the same or another named person.

(c) A document of title is nonnegotiable if, at the time it is issued, the document has a conspicuous legend, however expressed, that it is nonnegotiable.

§ 75-7-105

(a) Upon request of a person entitled under an electronic document of title, the issuer of the electronic document may issue a tangible document of title as a substitute for the electronic document if:

(1) The person entitled under the electronic document surrenders control of the document to the issuer; and

(2) The tangible document when issued contains a statement that it is issued in substitution for the electronic document.

(b) Upon issuance of a tangible document of title in substitution for an electronic document of title in accordance with subsection (a):

(1) The electronic document ceases to have any effect or validity; and

(2) The person that procured issuance of the tangible document warrants to all subsequent persons entitled under the tangible document that the warrantor was a person entitled under the electronic document when the warrantor surrendered control of the electronic document to the issuer.

(c) Upon request of a person entitled under a tangible document of title, the issuer of the tangible document may issue an electronic document of title as a substitute for the tangible document if:

(1) The person entitled under the tangible document surrenders possession of the document to the issuer; and

(2) The electronic document when issued contains a statement that it is issued in substitution for the tangible document.

(d) Upon issuance of an electronic document of title in substitution for a tangible document of title in accordance with subsection (c):

(1) The tangible document ceases to have any effect or validity; and

(2) The person that procured issuance of the electronic document warrants to all subsequent persons entitled under the electronic document that the warrantor was a person entitled under the tangible document when the warrantor surrendered possession of the tangible document to the issuer.

§ 75-7-106

(a) A person has control of an electronic document of title if a system employed for evidencing the transfer of interests in the electronic document reliably establishes that person as the person to which the electronic document was issued or transferred.

(b) A system satisfies subsection (a), and a person is deemed to have control of an electronic document of title, if the document is created, stored, and assigned in such a manner that:

(1) A single authoritative copy of the document exists which is unique, identifiable, and, except as otherwise provided in paragraphs (4), (5), and (6), unalterable;

(2) The authoritative copy identifies the person asserting control as:

(A) The person to which the document was issued; or

(B) If the authoritative copy indicates that the document has been transferred, the person to which the document was most recently transferred;

(3) The authoritative copy is communicated to and maintained by the person asserting control or is designated custodian;

(4) Copies or amendments that add or change an identified assignee of the authoritative copy can be made only with the consent of the person asserting control;

(5) Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and

(6) Any amendment of the authoritative copy is readily identifiable as authorized or unauthorized.

§ 75-7-201

(a) A warehouse receipt may be issued by any warehouse.

(b) If goods, including distilled spirits and agricultural commodities, are stored under a statute requiring a bond against withdrawal or a license for the issuance of receipts in the nature of warehouse receipts, a receipt issued for the goods is deemed to be a warehouse receipt even if issued by a person that is the owner of the goods and is not a warehouse.

§ 75-7-202

(a) A warehouse receipt need not be in any particular form.

(b) Unless a warehouse receipt provides for each of the following, the warehouse is liable for damages caused to a person injured by its omission:

(1) The location of the warehouse facility where the goods are stored;

(2) The date of issue of the receipt;

(3) The unique identification code of the receipt;

(4) A statement whether the goods received will be delivered to the bearer, to a named person, or to a named person or its order;

(5) The rate of storage and handling charges, but if goods are stored under a field warehousing arrangement, a statement of that fact is sufficient on a nonnegotiable receipt;

(6) A description of the goods or the packages containing them;

(7) The signature of the warehouse or its agent;

(8) If the receipt is issued for goods that the warehouse owns, either solely, jointly, or in common with others, the fact of that ownership; and

(9) A statement of the amount of advances made and of liabilities incurred for which the warehouse claims a lien or security interest, but if the precise amount of advances made or of liabilities incurred is, at the time of the issue of the receipt, unknown to the warehouse or to its agent that issued the receipt, a statement of the fact that advances have been made or liabilities incurred and the purpose of the advances or liabilities is sufficient.

(c) A warehouse may insert in its receipt any terms that are not contrary to the provisions of the Uniform Commercial Code and do not impair its obligation of delivery under Section 75-7-403 or its duty of care under Section 75-7-204. Any contrary provisions are ineffective.

§ 75-7-203

A party to or purchaser for value in good faith of a document of title, other than a bill of lading, that relies upon the description of the goods in the document may recover from the issuer damages caused by the nonreceipt or misdescription of the goods, except to the extent that:

(1) The document conspicuously indicates that the issuer does not know whether all or part of the goods in fact were received or conform to the description, such as a case in which the description is in terms of marks or labels or kind, quantity, or condition, or the receipt or description is qualified by “contents, condition, and quality unknown,” “said to contain,” or words of similar import, if the indication is true; or

(2) The party or purchaser otherwise has notice of the nonreceipt or misdescription.

§ 75-7-204

(a) A warehouse is liable for damages for loss of or injury to the goods caused by its failure to exercise care with regard to the goods that a reasonably careful person would exercise under similar circumstances. However, unless otherwise agreed, the warehouse is not liable for damages that could not have been avoided by the exercise of that care.

(b) Damages may be limited by a term in the warehouse receipt or storage agreement limiting the amount of liability in case of loss or damage beyond which the warehouse is not liable. Such a limitation is not effective with respect to the warehouse's liability for conversion to its own use. The warehouse's liability, on request of the bailor in a record at the time of signing such storage agreement or within a reasonable time after receipt of the warehouse receipt, may be increased on part or all of the goods covered by the storage agreement or the warehouse receipt. In this event, increased rates may be charged based on an increased valuation of the goods.

(c) Reasonable provisions as to the time and manner of presenting claims and commencing actions based on the bailment may be included in the warehouse receipt or storage agreement.

(d) This section does not impair or repeal Title 75, Chapter 43, or Title 75, Chapter 44.

§ 75-7-205

A buyer in the ordinary course of business of fungible goods sold and delivered by a warehouse that is also in the business of buying and selling the goods takes free of any claim under a warehouse receipt even if the receipt is negotiable and has been duly negotiated.

§ 75-7-206

(a) A warehouse, by giving notice to the person on whose account the goods are held and any other person known to claim an interest in the goods, may require payment of any charges and removal of the goods from the warehouse at the termination of the period of storage fixed by the document of title or, if a period is not fixed, within a stated period not less than thirty (30) days after the warehouse gives notice. If the goods are not removed before the date specified in the notice, the warehouse may sell them pursuant to Section 75-7-210.

(b) If a warehouse in good faith believes that goods are about to deteriorate or decline in value to less than the amount of its lien within the time provided in subsection (a) and Section 75-7-210, the warehouse may specify in the notice given under subsection (a) any reasonable shorter time for removal of the goods and, if the goods are not removed, may sell them at public sale held not less than one (1) week after a single advertisement or posting.

(c) If, as a result of a quality or condition of the goods of which the warehouse did not have notice at the time of deposit, the goods are a hazard to other property, the warehouse facilities, or other persons, the warehouse may sell the goods at public or private sale without advertisement or posting on reasonable notification to all persons known to claim an interest in the goods. If the warehouse, after a reasonable effort, is unable to sell the goods, it may dispose of them in any lawful manner and does not incur liability by reason of that disposition.

(d) A warehouse shall deliver the goods to any person entitled to them under this chapter upon due demand made at any time before sale or other disposition under this section.

(e) A warehouse may satisfy its lien from the proceeds of any sale or disposition under this section but shall hold the balance for delivery on the demand of any person to which the warehouse would have been bound to deliver the goods.

§ 75-7-207

(a) Unless the warehouse receipt provides otherwise, a warehouse shall keep separate the goods covered by each receipt so as to permit at all times identification and delivery of those goods. However, different lots of fungible goods may be commingled.

(b) If different lots of fungible goods are commingled, the goods are owned in common by the persons entitled thereto and the warehouse is severally liable to each owner for that owner's share. If, because of overissue, a mass of fungible goods is insufficient to meet all the receipts the warehouse has issued against it, the persons entitled include all holders to which overissued receipts have been duly negotiated.

§ 75-7-208

If a blank in a negotiable tangible warehouse receipt has been filled in without authority, a good faith purchaser for value and without notice of the lack of authority may treat the insertion as authorized. Any other unauthorized alteration leaves any tangible or electronic warehouse receipt enforceable against the issuer according to its original tenor.

§ 75-7-209

(a) A warehouse has a lien against the bailor on the goods covered by a warehouse receipt or storage agreement or on the proceeds thereof in its possession for charges for storage or transportation, including demurrage and terminal charges, insurance, labor, or other charges, present or future, in relation to the goods, and for expenses necessary for preservation of the goods or reasonably incurred in their sale pursuant to law. If the person on whose account the goods are held is liable for similar charges or expenses in relation to other goods whenever deposited and it is stated in the warehouse receipt or storage agreement that a lien is claimed for charges and expenses in relation to other goods, the warehouse also has a lien against the goods covered by the warehouse receipt or storage agreement or on the proceeds thereof in its possession for those charges and expenses, whether or not the other goods have been delivered by the warehouse. However, as against a person to which a negotiable warehouse receipt is duly negotiated, a warehouse's lien is limited to charges in an amount or at a rate specified in the warehouse receipt or, if no charges are so specified, to a reasonable charge for storage of the specific goods covered by the receipt subsequent to the date of the receipt.

(b) The warehouse may also reserve a security interest under Title 75, Chapter 9, against the bailor for the maximum amount specified on the receipt for charges other than those specified in subsection (a), such as for money advanced and interest. A security interest is governed by the chapter on Secured Transactions (Title 75, Chapter 9).

(c) A warehouse's lien for charges and expenses under subsection (a) or a security interest under subsection (b) is also effective against any person that so entrusted the bailor with possession of the goods that a pledge of them by the bailor to a good faith purchaser for value would have been valid. However, the lien or security interest is not effective against a person that before issuance of a document of title had a legal interest or a perfected security interest in the goods and that did not:

(1) Deliver or entrust the goods or any document covering the goods to the bailor or the bailor's nominee with actual or apparent authority to ship, store, or sell; or with power to obtain delivery under Section 75-7-403; or with power of disposition under Section 75-2-403, 75-2A-304(2), 75-2A-305(2) or 75-9-320 or other statute or rule of law; or

(2) Acquiesce in the procurement by the bailor or its nominee of any document.

(d) A warehouse's lien on household goods for charges and expenses in relation to the goods under subsection (a) is also effective against all persons if the depositor was the legal possessor of the goods at the time of deposit. In this subsection, “household goods” means furniture, furnishings, or personal effects used by the depositor in a dwelling.

(e) A warehouse loses its lien on any goods that it voluntarily delivers or unjustifiably refuses to deliver.

§ 75-7-210

(a) Except as otherwise provided in subsection (b), a warehouse's lien may be enforced by public or private sale of the goods, in bulk or in packages, at any time or place and on any terms that are commercially reasonable, after notifying all persons known to claim an interest in the goods. The notification must include a statement of the amount due, the nature of the proposed sale, and the time and place of any public sale. The fact that a better price could have been obtained by a sale at a different time or in a different method from that selected by the warehouse is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner. The warehouse has sold in a commercially reasonable manner if the warehouse sells the goods in the usual manner in any recognized market therefor, sells at the price current in that market at the time of the sale, or has otherwise sold in conformity with commercially reasonable practices among dealers in the type of goods sold. A sale of more goods than apparently necessary to be offered to insure satisfaction of the obligation is not commercially reasonable, except in cases covered by the preceding sentence.

(b) A warehouse's lien on goods, other than goods stored by a merchant in the course of its business, may be enforced only if the following requirements are satisfied:

(1) All persons known to claim an interest in the goods must be notified.

(2) The notification must include an itemized statement of the claim, a description of the goods subject to the lien, a demand for payment within a specified time not less than ten (10) days after receipt of the notification, and a conspicuous statement that unless the claim is paid within that time the goods will be advertised for sale and sold by auction at a specified time and place.

(3) The sale must conform to the terms of the notification.

(4) The sale must be held at the nearest suitable place to where the goods are held or stored.

(5) After the expiration of the time given in the notification, an advertisement of the sale must be published once a week for two (2) weeks consecutively in a newspaper of general circulation where the sale is to be held. The advertisement must include a description of the goods, the name of the person on whose account the goods are being held, and the time and place of the sale. The sale must take place at least fifteen (15) days after the first publication. If there is no newspaper of general circulation in the county where the sale is to be held, the advertisement must be posted at least ten (10) days before the sale in not less than six (6) conspicuous places in the neighborhood of the proposed sale.

(c) Before any sale pursuant to this section, any person claiming a right in the goods may pay the amount necessary to satisfy the lien and the reasonable expenses incurred in complying with this section. In that event, the goods may not be sold but must be retained by the warehouse subject to the terms of the receipt and this chapter.

(d) A warehouse may buy at any public sale held pursuant to this section.

(e) A purchaser in good faith of goods sold to enforce a warehouse's lien takes the goods free of any rights of persons against which the lien was valid, despite the warehouse's noncompliance with this section.

(f) A warehouse may satisfy its lien from the proceeds of any sale pursuant to this section but must hold the balance, if any, for delivery on demand to any person to which the warehouse would have been bound to deliver the goods.

(g) The rights provided by this section are in addition to all other rights allowed by law to a creditor against a debtor.

(h) If a lien is on goods stored by a merchant in the course of its business, the lien may be enforced in accordance with subsection (a) or (b).

(i) A warehouse is liable for damages caused by failure to comply with the requirements for sale under this section and, in case of willful violation, is liable for conversion.

§ 75-7-301

(a) A consignee of a nonnegotiable bill of lading which has given value in good faith, or a holder to which a negotiable bill has been duly negotiated, relying upon the description of the goods in the bill or upon the date shown in the bill, may recover from the issuer damages caused by the misdating of the bill or the nonreceipt or misdescription of the goods, except to the extent that the document of title indicates that the issuer does not know whether any part or all of the goods in fact were received or conform to the description, such as in a case in which the description is in terms of marks or labels or kind, quantity, or condition or the receipt or description is qualified by “contents or condition of contents of packages unknown,” “said to contain,” “shipper's weight, load and count,” or words of similar import, if that indication is true.

(b) If goods are loaded by the issuer of the bill of lading, the issuer shall count the packages of goods if shipped in packages and ascertain the kind and quantity if shipped in bulk and words such as “shipper's weight, load and count,” or words of similar import indicating that the description was made by the shipper are ineffective except as to goods concealed by packages.

(c) If bulk goods are loaded by a shipper that makes available to the issuer of the bill of lading adequate facilities for weighing those goods, the issuer shall ascertain the kind and quantity within a reasonable time after receiving the shipper's request in a record to do so. In that case, “shipper's weight” or other words of similar import are ineffective.

(d) The issuer, by including in the bill of lading the words “shipper's weight, load and count,” or words of similar import, may indicate that the goods were loaded by the shipper, and, if that statement is true, the issuer is not liable for damages caused by the improper loading. However, omission of such words does not imply liability for damages caused by improper loading.

(e) A shipper guarantees to the issuer the accuracy at the time of shipment of the description, marks, labels, number, kind, quantity, condition, and weight, as furnished by the shipper, and the shipper shall indemnify the issuer against damage caused by inaccuracies in those particulars. This right of the issuer to that indemnity does not limit its responsibility or liability under the contract of carriage to any person other than the shipper.

§ 75-7-302

(a) The issuer of a through bill of lading or other document of title embodying an undertaking to be performed in part by a person acting as its agent or by a performing carrier is liable to any person entitled to recover on the document for any breach by the other person or the performing carrier of its obligation under the document. However, to the extent that the bill covers an undertaking to be performed overseas or in territory not contiguous to the continental United States or an undertaking including matters other than transportation, this liability for breach by the other person or the performing carrier may be varied by agreement of the parties.

(b) If goods covered by a through bill of lading or other document of title embodying an undertaking to be performed in part by a person other than the issuer are received by that person, the person is subject, with respect to its own performance while the goods are in its possession, to the obligation of the issuer. The person's obligation is discharged by delivery of the goods to another person pursuant to the document and does not include liability for breach by any other person or by the issuer.

(c) The issuer of a through bill of lading or other document of title described in subsection (a) is entitled to recover from the performing carrier, or other person in possession of the goods when the breach of the obligation under the document occurred:

(1) The amount it may be required to pay to any person entitled to recover on the document for the breach, as may be evidenced by any receipt, judgment, or transcript of judgment; and

(2) The amount of any expense reasonably incurred by the issuer in defending any action commenced by any person entitled to recover on the document for the breach.

§ 75-7-303

(a) Unless the bill of lading otherwise provides, a carrier may deliver the goods to a person or destination other than that stated in the bill or may otherwise dispose of the goods, without liability for misdelivery, on instructions from:

(1) The holder of a negotiable bill;

(2) The consignor on a nonnegotiable bill even if the consignee has given contrary instruction;

(3) The consignee on a nonnegotiable bill in the absence of contrary instructions from the consignor, if the goods have arrived at the billed destination or if the consignee is in possession of the tangible bill or in control of the electronic bill; or

(4) The consignee on a nonnegotiable bill, if the consignee is entitled as against the consignor to dispose of the goods.

(b) Unless instructions described in subsection (a) are included in a negotiable bill of lading, a person to which the bill is duly negotiated may hold the bailee according to the original terms.

§ 75-7-304

(a) Except as customary in international transportation, a tangible bill of lading may not be issued in a set of parts. The issuer is liable for damages caused by violation of this subsection.

(b) If a tangible bill of lading is lawfully issued in a set of parts, each of which contains an identification code and is expressed to be valid only if the goods have not been delivered against any other part, the whole of the parts constitute one (1) bill.

(c) If a tangible negotiable bill of lading is lawfully issued in a set of parts and different parts are negotiated to different persons, the title of the holder to which the first due negotiation is made prevails as to both the document of title and the goods even if any later holder may have received the goods from the carrier in good faith and discharged the carrier's obligation by surrender of its part.

(d) A person that negotiates or transfers a single part of a tangible bill of lading issued in a set is liable to holders of that part as if it were the whole set.

(e) The bailee is obliged to deliver in accordance with Part 4 of this chapter against the first presented part of a tangible bill of lading lawfully issued in a set. Delivery in this manner discharges the bailee's obligation on the whole bill.

§ 75-7-305

(a) Instead of issuing a bill of lading to the consignor at the place of shipment, a carrier, at the request of the consignor, may procure the bill to be issued at destination or at any other place designated in the request.

(b) Upon request of any person entitled as against a carrier to control the goods while in transit and on surrender of possession or control of any outstanding bill of lading or other receipt covering the goods, the issuer, subject to Section 75-7-105, may procure a substitute bill to be issued at any place designated in the request.

§ 75-7-306

An unauthorized alteration or filling in of a blank in a bill of lading leaves the bill enforceable according to its original tenor.

§ 75-7-307

(a) A carrier has a lien on the goods covered by a bill of lading or on the proceeds thereof in its possession for charges after the date of the carrier's receipt of the goods for storage or transportation, including demurrage and terminal charges, and for expenses necessary for preservation of the goods incident to their transportation or reasonably incurred in their sale pursuant to law. However, against a purchaser for value of a negotiable bill of lading, a carrier's lien is limited to charges stated in the bill or the applicable tariffs or, if no charges are stated, a reasonable charge.

(b) A lien for charges and expenses under subsection (a) on goods that the carrier was required by law to receive for transportation is effective against the consignor or any person entitled to the goods unless the carrier had notice that the consignor lacked authority to subject the goods to those charges and expenses. Any other lien under subsection (a) is effective against the consignor and any person that permitted the bailor to have control or possession of the goods unless the carrier had notice that the bailor lacked authority.

(c) A carrier loses its lien on any goods that it voluntarily delivers or unjustifiably refuses to deliver.

§ 75-7-308

(a) A carrier's lien on goods may be enforced by public or private sale of the goods, in bulk or in packages, at any time or place and on any terms that are commercially reasonable, after notifying all persons known to claim an interest in the goods. The notification must include a statement of the amount due, the nature of the proposed sale, and the time and place of any public sale. The fact that a better price could have been obtained by a sale at a different time or in a different method from that selected by the carrier is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner. The carrier has sold goods in a commercially reasonable manner if the carrier sells the goods in the usual manner in any recognized market therefor, sells at the price current in that market at the time of the sale, or has otherwise sold in conformity with commercially reasonable practices among dealers in the type of goods sold. A sale of more goods than apparently necessary to be offered to ensure satisfaction of the obligation is not commercially reasonable, except in cases covered by the preceding sentence.

(b) Before any sale pursuant to this section, any person claiming a right in the goods may pay the amount necessary to satisfy the lien and the reasonable expenses incurred in complying with this section. In that event, the goods may not be sold but must be retained by the carrier, subject to the terms of the bill of lading and this chapter.

(c) A carrier may buy at any public sale pursuant to this section.

(d) A purchaser in good faith of goods sold to enforce a carrier's lien takes the goods free of any rights of persons against which the lien was valid, despite the carrier's noncompliance with this section.

(e) A carrier may satisfy its lien from the proceeds of any sale pursuant to this section but shall hold the balance, if any, for delivery on demand to any person to which the carrier would have been bound to deliver the goods.

(f) The rights provided by this section are in addition to all other rights allowed by law to a creditor against a debtor.

(g) A carrier's lien may be enforced pursuant to either subsection (a) or the procedure set forth in Section 75-7-210(b).

(h) A carrier is liable for damages caused by failure to comply with the requirements for sale under this section and, in case of willful violation, is liable for conversion.

§ 75-7-309

(a) A carrier that issues a bill of lading, whether negotiable or nonnegotiable, shall exercise the degree of care in relation to the goods which a reasonably careful person would exercise under similar circumstances. This subsection does not affect any statute, regulation, or rule of law that imposes liability upon a common carrier for damages not caused by its negligence.

(b) Damages may be limited by a term in the bill of lading or in a transportation agreement that the carrier's liability may not exceed a value stated in the bill or transportation agreement if the carrier's rates are dependent upon value and the consignor is afforded an opportunity to declare a higher value and the consignor is advised of the opportunity. However, such a limitation is not effective with respect to the carrier's liability for conversion to its own use.

(c) Reasonable provisions as to the time and manner of presenting claims and commencing actions based on the shipment may be included in a bill of lading or a transportation agreement.

§ 75-7-401

The obligations imposed by this chapter on an issuer apply to a document of title even if:

(1) The document does not comply with the requirements of this chapter or of any other statute, rule, or regulation regarding its issue, form, or content;

(2) The issuer violated laws regulating the conduct of its business;

(3) The goods covered by the document were owned by the bailee when the document was issued; or

(4) The person issuing the document is not a warehouse but the document purports to be a warehouse receipt.

§ 75-7-402

A duplicate or any other document of title purporting to cover goods already represented by an outstanding document of the same issuer does not confer any right in the goods, except as provided in the case of tangible bills of lading in a set of parts, overissue of documents for fungible goods, substitutes for lost, stolen, or destroyed documents, or substitute documents issued pursuant to Section 75-7-105. The issuer is liable for damages caused by its overissue or failure to identify a duplicate document by a conspicuous notation.

§ 75-7-403

(a) A bailee shall deliver the goods to a person entitled under a document of title if the person complies with subsections (b) and (c), unless and to the extent that the bailee establishes any of the following:

(1) Delivery of the goods to a person whose receipt was rightful as against the claimant;

(2) Damage to or delay, loss, or destruction of the goods for which the bailee is not liable;

(3) Previous sale or other disposition of the goods in lawful enforcement of a lien or on warehouse's lawful termination of storage;

(4) The exercise by a seller of its right to stop delivery pursuant to Section 75-2-705 or by a lessor of its right to stop delivery pursuant to Section 75-2A-526;

(5) A diversion, reconsignment, or other disposition pursuant to Section 75-7-303;

(6) Release, satisfaction, or any other fact according a personal defense against the claimant; or

(7) Any other lawful excuse.

(b) A person claiming goods covered by a document of title shall satisfy the bailee's lien if the bailee so requests or the bailee is prohibited by law from delivering the goods until the charges are paid.

(c) Unless a person claiming the goods is one against which the document of title does not confer a right under Section 75-7-503(a):

(1) The person claiming under a document shall surrender possession or control of any outstanding negotiable document covering the goods for cancellation or indication of partial deliveries; and

(2) The bailee shall cancel the document or conspicuously indicate in the document the partial delivery or be liable to any person to which the document is duly negotiated.

§ 75-7-404

A bailee that in good faith has received goods and delivered or otherwise disposed of the goods according to the terms of the document of title or pursuant to this chapter is not liable for the goods even if:

(1) The person from which the bailee received the goods did not have authority to procure the document or to dispose of the goods; or

(2) The person to which the bailee delivered the goods did not have authority to receive the goods.

§ 75-7-501

(a) The following rules apply to a negotiable tangible document of title:

(1) If the document's original terms run to the order of a named person, the document is negotiated by the named person's indorsement and delivery. After the named person's indorsement in blank or to bearer, any person may negotiate the document by delivery alone.

(2) If the document's original terms run to bearer, it is negotiated by delivery alone.

(3) If the document's original terms run to the order of a named person and it is delivered to the named person, the effect is the same as if the document had been negotiated.

(4) Negotiation of the document after it has been indorsed to a named person requires indorsement by the named person as well as delivery.

(5) A document is duly negotiated if it is negotiated in the manner stated in this subsection to a holder that purchases it in good faith, without notice of any defense against or claim to it on the part of any person, and for value, unless it is established that the negotiation is not in the regular course of business or financing or involves receiving the document in settlement or payment of a monetary obligation.

(b) The following rules apply to a negotiable electronic document of title:

(1) If the document's original terms run to the order of a named person or to bearer, the document is negotiated by delivery of the document to another person. Indorsement by the named person is not required to negotiate the document.

(2) If the document's original terms run to the order of a named person and the named person has control of the document, the effect is the same as if the document had been negotiated.

(3) A document is duly negotiated if it is negotiated in the manner stated in this subsection to a holder that purchases it in good faith, without notice of any defense against or claim to it on the part of any person, and for value, unless it is established that the negotiation is not in the regular course of business or financing or involves taking delivery of the document in settlement or payment of a monetary obligation.

(c) Endorsement of a nonnegotiable document of title neither makes it negotiable nor adds to the transferee's rights.

(d) The naming in a negotiable bill of lading of a person to be notified of the arrival of the goods does not limit the negotiability of the bill or constitute notice to a purchaser of the bill of any interest of that person in the goods.

§ 75-7-502

(a) Subject to Sections 75-7-205 and 75-7-503, a holder to which a negotiable document of title has been duly negotiated acquires thereby:

(1) Title to the document;

(2) Title to the goods;

(3) All rights accruing under the law of agency or estoppel, including rights to goods delivered to the bailee after the document was issued; and

(4) The direct obligation of the issuer to hold or deliver the goods according to the terms of the document free of any defense or claim by the issuer except those arising under the terms of the document or under this chapter. In the case of a delivery order, the bailee's obligation accrues only upon the bailee's acceptance of the delivery order and the obligation acquired by the holder is that the issuer and any indorser will procure the acceptance of the bailee.

(b) Subject to Section 75-7-503, title and rights acquired by due negotiation are not defeated by any stoppage of the goods represented by the document of title or by surrender of the goods by the bailee and are not impaired even if:

(1) The due negotiation or any prior negotiation constituted a breach of duty;

(2) Any person has been deprived of possession of a negotiable tangible document or control of a negotiable electronic document by misrepresentation, fraud, accident, mistake, duress, loss, theft, or conversion; or

(3) A previous sale or other transfer of the goods or document has been made to a third person.

§ 75-7-503

(a) A document of title confers no right in goods against a person that before issuance of the document had a legal interest or a perfected security interest in the goods and that did not:

(1) Deliver or entrust the goods or any document covering the goods to the bailor or the bailor's nominee with actual or apparent authority to ship, store, or sell; with power to obtain delivery under Section 75-7-403; or with power of disposition under Sections 75-2-403, 75-2A-304(2), 75-2A-305(2), or 75-9-320 or other statute or rule of law; or

(2) Acquiesce in the procurement by the bailor or its nominee of any document.

(b) Title to goods based upon an unaccepted delivery order is subject to the rights of any person to which a negotiable warehouse receipt or bill of lading covering the goods has been duly negotiated. That title may be defeated under Section 75-7-504 to the same extent as the rights of the issuer or a transferee from the issuer.

(c) Title to goods based upon a bill of lading issued to a freight forwarder is subject to the rights of any person to which a bill issued by the freight forwarder is duly negotiated. However, delivery by the carrier in accordance with Part 4 of this chapter pursuant to its own bill of lading discharges the carrier's obligation to deliver.

§ 75-7-504

(a) A transferee of a document of title, whether negotiable or nonnegotiable, to which the document has been delivered but not duly negotiated, acquires the title and rights that its transferor had or had actual authority to convey.

(b) In the case of a nonnegotiable document of title, until, but not after, the bailee receives notice of the transfer, the rights of the transferee may be defeated:

(1) By those creditors of the transferor that could treat the transfer as void under Section 75-2-402 or 75-2A-308;

(2) By a buyer from the transferor in ordinary course of business if the bailee has delivered the goods to the buyer or received notification of the buyer's rights;

(3) By a lessee from the transferor in ordinary course of business if the bailee has delivered the goods to the lessee or received notification of the lessee's rights; or

(4) As against the bailee, by good faith dealings of the bailee with the transferor.

(c) A diversion or other change of shipping instructions by the consignor in a nonnegotiable bill of lading which causes the bailee not to deliver the goods to the consignee defeats the consignee's title to the goods if the goods have been delivered to a buyer in ordinary course of business or a lessee in ordinary course of business and in any event defeats the consignee's rights against the bailee.

(d) Delivery of the goods pursuant to a nonnegotiable document of title may be stopped by a seller under Section 75-2-705 or a lessor under Section 75-2A-526, subject to the requirements of due notification in those sections. A bailee honoring the seller's or lessor's instructions is entitled to be indemnified by the seller or lessor against any resulting loss or expense.

§ 75-7-505

The indorsement of a tangible document of title issued by a bailee does not make the indorser liable for any default by the bailee or by previous indorsers.

§ 75-7-506

The transferee of a negotiable tangible document of title has a specifically enforceable right to have its transferor supply any necessary indorsement, but the transfer becomes a negotiation only as of the time the indorsement is supplied.

§ 75-7-507

If a person negotiates or delivers a document of title for value, otherwise than as a mere intermediary under Section 75-7-508, unless otherwise agreed, the transferor warrants to its immediate purchaser only in addition to any warranty made in selling or leasing the goods that:

(1) The document is genuine;

(2) The transferor does not have knowledge of any fact that would impair the document's validity or worth; and

(3) The negotiation or delivery is rightful and fully effective with respect to the title to the document and the goods it represents.

§ 75-7-508

A collecting bank or other intermediary known to be entrusted with documents of title on behalf of another or with collection of a draft or other claim against delivery of documents warrants by the delivery of the documents only its own good faith and authority even if the collecting bank or other intermediary has purchased or made advances against the claim or draft to be collected.

§ 75-7-509

Whether a document of title is adequate to fulfill the obligations of a contract for sale, a contract for lease, or the conditions of a letter of credit is determined by Title 75, Chapter 2, 2A, or 5.

§ 75-7-601

(a) If a document of title is lost, stolen, or destroyed, a court may order delivery of the goods or issuance of a substitute document and the bailee may without liability to any person comply with the order. If the document was negotiable, a court may not order delivery of the goods or issuance of a substitute document without the claimant's posting security unless it finds that any person that may suffer loss as a result of nonsurrender of possession or control of the document is adequately protected against the loss. If the document was nonnegotiable, the court may require security. The court may also order payment of the bailee's reasonable costs and attorney's fees in any action under this subsection.

(b) A bailee that without court order delivers goods to a person claiming under a missing negotiable document of title is liable to any person injured thereby. If the delivery is not in good faith, the bailee is liable for conversion. Delivery in good faith is not conversion if the claimant posts security with the bailee in an amount at least double the value of the goods at the time of posting to indemnify any person injured by the delivery which files a notice of claim within one (1) year after the delivery.

§ 75-7-602

Unless a document of title was originally issued upon delivery of the goods by a person that did not have power to dispose of them, a lien does not attach by virtue of any judicial process to goods in the possession of a bailee for which a negotiable document of title is outstanding unless possession or control of the document is first surrendered to the bailee or the document's negotiation is enjoined. The bailee may not be compelled to deliver the goods pursuant to process until possession or control of the document is surrendered to the bailee or to the court. A purchaser of the document for value without notice of the process or injunction takes free of the lien imposed by judicial process.

§ 75-7-603

If more than one (1) person claims title or possession of the goods, the bailee is excused from delivery until the bailee has had a reasonable time to ascertain the validity of the adverse claims or to commence an action for interpleader. The bailee may assert an interpleader either in defending an action for nondelivery of the goods or by original action.

§ 75-7-701

(a) The amendments to this chapter contained in Chapter 527, Laws of 2006, as amended by Chapter 381, Laws of 2007, apply to a document of title that is issued or a bailment that arises on or after July 1, 2006, but do not apply to: (1) a document of title that is issued or a bailment that arises before July 1, 2006, even if the document of title or bailment would be so subject if the document of title had been issued or bailment had arisen after July 1, 2006, or (2) a right of action that has accrued before July 1, 2006.

(b) A document of title issued or a bailment that arises before July 1, 2006, and the rights, obligations, and interests flowing from that document or bailment are governed by any statute amended or repealed by Chapter 527, Laws of 2006, as amended by Chapter 381, Laws of 2007, as if amendment or repeal had not occurred and may be terminated, completed, consummated, or enforced under that statute as it existed on June 30, 2006.

Chapter 8 Uniform Commercial Code--Revised Article 8. Investment Securities

§ 75-8-101

This chapter may be cited as Uniform Commercial Code--Revised Article 8. Investment Securities.

§ 75-8-102

(a) In this chapter:

(1) “Adverse claim” means a claim that a claimant has a property interest in a financial asset and that it is a violation of the rights of the claimant for another person to hold, transfer, or deal with the financial asset.

(2) “Bearer form,” as applied to a certificated security, means a form in which the security is payable to the bearer of the security certificate according to its terms but not by reason of an indorsement.

(3) “Broker” means a person defined as a broker or dealer under the federal securities laws, but without excluding a bank acting in that capacity.

(4) “Certificated security” means a security that is represented by a certificate.

(5) “Clearing corporation” means:

(i) A person that is registered as a “clearing agency” under the federal securities laws;

(ii) A federal reserve bank; or

(iii) Any other person that provides clearance or settlement services with respect to financial assets that would require it to register as a clearing agency under the federal securities laws but for an exclusion or exemption from the registration requirement, if its activities as a clearing corporation, including promulgation of rules, are subject to regulation by a federal or state governmental authority.

(6) “Communicate” means to:

(i) Send a signed writing; or

(ii) Transmit information by any mechanism agreed upon by the persons transmitting and receiving the information.

(7) “Entitlement holder” means a person identified in the records of a securities intermediary as the person having a security entitlement against the securities intermediary. If a person acquires a security entitlement by virtue of Section 75-8-501(b)(2) or (3), that person is the entitlement holder.

(8) “Entitlement order” means a notification communicated to a securities intermediary directing transfer or redemption of a financial asset to which the entitlement holder has a security entitlement.

(9) “Financial asset,” except as otherwise provided in Section 75-8-103, means:

(i) A security;

(ii) An obligation of a person or a share, participation, or other interest in a person or in property or an enterprise of a person, which is, or is of a type, dealt in or traded on financial markets, or which is recognized in any area in which it is issued or dealt in as a medium for investment; or

(iii) Any property that is held by a securities intermediary for another person in a securities account if the securities intermediary has expressly agreed with the other person that the property is to be treated as a financial asset under this chapter. As context requires, the term means either the interest itself or the means by which a person's claim to it is evidenced, including a certificated or uncertificated security, a security certificate, or a security entitlement.

(10) [Reserved]

(11) “Indorsement” means a signature that alone or accompanied by other words is made on a security certificate in registered form or on a separate document for the purpose of assigning, transferring, or redeeming the security or granting a power to assign, transfer, or redeem it.

(12) “Instruction” means a notification communicated to the issuer of an uncertificated security which directs that the transfer of the security be registered or that the security be redeemed.

(13) “Registered form,” as applied to a certificated security, means a form in which:

(i) The security certificate specifies a person entitled to the security; and

(ii) A transfer of the security may be registered upon books maintained for that purpose by or on behalf of the issuer, or the security certificate so states.

(14) “Securities intermediary” means:

(i) A clearing corporation; or

(ii) A person, including a bank or broker, that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity.

(15) “Security,” except as otherwise provided in Section 75-8-103, means an obligation of an issuer or a share, participation, or other interest in an issuer or in property or an enterprise of an issuer:

(i) Which is represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer;

(ii) Which is one of a class or series or by its terms is divisible into a class or series of shares, participations, interests, or obligations; and

(iii) Which:

(A) Is, or is of a type, dealt in or traded on securities exchanges or securities markets; or

(B) Is a medium for investment and by its terms expressly provides that it is a security governed by this chapter.

(16) “Security certificate” means a certificate representing a security.

(17) “Security entitlement” means the rights and property interest of an entitlement holder with respect to a financial asset specified in Part 5 of this chapter.

(18) “Uncertificated security” means a security that is not represented by a certificate.

(b) Other definitions applying to this chapter and the sections in which they appear are:

| | Appropriate person | Section 75-8-107 | | --- | --- | --- | | | Control | Section 75-8-106 | | | Delivery | Section 75-8-301 | | | Investment company security | Section 75-8-103 | | | Issuer | Section 75-8-201 | | | Overissue | Section 75-8-210 | | | Protected purchaser | Section 75-8-303 | | | Securities account | Section 75-8-501 |

(c) In addition, Chapter 1 contains general definitions and principles of construction and interpretation applicable throughout this chapter.

(d) The characterization of a person, business, or transaction for purposes of this chapter does not determine the characterization of the person, business, or transaction for purposes of any other law, regulation, or rule.

§ 75-8-103

(a) A share or similar equity interest issued by a corporation, business trust, joint stock company, or similar entity is a security.

(b) An “investment company security” is a security. “Investment company security” means a share or similar equity interest issued by an entity that is registered as an investment company under the federal investment company laws, an interest in a unit investment trust that is so registered, or a face-amount certificate issued by a face-amount certificate company that is so registered. Investment company security does not include an insurance policy or endowment policy or annuity contract issued by an insurance company.

(c) An interest in a partnership or limited liability company is not a security unless it is dealt in or traded on securities exchanges or in securities markets, its terms expressly provide that it is a security governed by this chapter, or it is an investment company security. However, an interest in a partnership or limited liability company is a financial asset if it is held in a securities account.

(d) A writing that is a security certificate is governed by this chapter and not by Chapter 3, even though it also meets the requirements of that chapter. However, a negotiable instrument governed by Chapter 3 is a financial asset if it is held in a securities account.

(e) An option or similar obligation issued by a clearing corporation to its participants is not a security, but is a financial asset.

(f) A commodity contract, as defined in Section 75-9-102(a)(15), is not a security or a financial asset.

(g) A document of title is not a financial asset unless Section 75-8-102(a)(9)(iii) applies.

§ 75-8-104

(a) A person acquires a security or an interest therein, under this chapter, if:

(1) The person is a purchaser to whom a security is delivered pursuant to Section 75-8-301; or

(2) The person acquires a security entitlement to the security pursuant to Section 75-8-501.

(b) A person acquires a financial asset, other than a security, or an interest therein, under this chapter, if the person acquires a security entitlement to the financial asset.

(c) A person who acquires a security entitlement to a security or other financial asset has the rights specified in Part 5 of this chapter, but is a purchaser of any security, security entitlement, or other financial asset held by the securities intermediary only to the extent provided in Section 75-8-503.

(d) Unless the context shows that a different meaning is intended, a person who is required by other law, regulation, rule, or agreement to transfer, deliver, present, surrender, exchange, or otherwise put in the possession of another person a security or financial asset satisfies that requirement by causing the other person to acquire an interest in the security or financial asset pursuant to subsection (a) or (b).

§ 75-8-105

(a) A person has notice of an adverse claim if:

(1) The person knows of the adverse claim;

(2) The person is aware of facts sufficient to indicate that there is a significant probability that the adverse claim exists and deliberately avoids information that would establish the existence of the adverse claim; or

(3) The person has a duty, imposed by statute or regulation, to investigate whether an adverse claim exists, and the investigation so required would establish the existence of the adverse claim.

(b) Having knowledge that a financial asset or interest therein is or has been transferred by a representative imposes no duty of inquiry into the rightfulness of a transaction and is not notice of an adverse claim. However, a person who knows that a representative has transferred a financial asset or interest therein in a transaction that is, or whose proceeds are being used, for the individual benefit of the representative or otherwise in breach of duty has notice of an adverse claim.

(c) An act or event that creates a right to immediate performance of the principal obligation represented by a security certificate or sets a date on or after which the certificate is to be presented or surrendered for redemption or exchange does not itself constitute notice of an adverse claim except in the case of a transfer more than:

(1) One (1) year after a date set for presentment or surrender for redemption or exchange; or

(2) Six (6) months after a date set for payment of money against presentation or surrender of the certificate, if money was available for payment on that date.

(d) A purchaser of a certificated security has notice of an adverse claim if the security certificate:

(1) Whether in bearer or registered form, has been indorsed “for collection” or “for surrender” or for some other purpose not involving transfer; or

(2) Is in bearer form and has on it an unambiguous statement that it is the property of a person other than the transferor, but the mere writing of a name on the certificate is not such a statement.

(e) Filing of a financing statement under Chapter 9 is not notice of an adverse claim to a financial asset.

§ 75-8-106

(a) A purchaser has “control” of a certificated security in bearer form if the certificated security is delivered to the purchaser.

(b) A purchaser has “control” of a certificated security in registered form if the certificated security is delivered to the purchaser, and:

(1) The certificate is endorsed to the purchaser or in blank by an effective endorsement; or

(2) The certificate is registered in the name of the purchaser, upon original issue or registration of transfer by the issuer.

(c) A purchaser has “control” of an uncertificated security if:

(1) The uncertificated security is delivered to the purchaser; or

(2) The issuer has agreed that it will comply with instructions originated by the purchaser without further consent by the registered owner.

(d) A purchaser has “control” of a security entitlement if:

(1) The purchaser becomes the entitlement holder;

(2) The securities intermediary has agreed that it will comply with entitlement orders originated by the purchaser without further consent by the entitlement holder; or

(3) Another person has control of the security entitlement on behalf of the purchaser or, having previously acquired control of the security entitlement, acknowledges that it has control on behalf of the purchaser.

(e) If an interest in a security entitlement is granted by the entitlement holder to the entitlement holder's own securities intermediary, the securities intermediary has control.

(f) A purchaser who has satisfied the requirements of subsection (c) or (d) has control, even if the registered owner in the case of subsection (c) or the entitlement holder in the case of subsection (d) retains the right to make substitutions for the uncertificated security or security entitlement, to originate instructions or entitlement orders to the issuer or securities intermediary, or otherwise to deal with the uncertificated security or security entitlement.

(g) An issuer or a securities intermediary may not enter into an agreement of the kind described in subsection (c)(2) or (d)(2) without the consent of the registered owner or entitlement holder, but an issuer or a securities intermediary is not required to enter into such an agreement even though the registered owner or entitlement holder so directs. An issuer or securities intermediary that has entered into such an agreement is not required to confirm the existence of the agreement to another party unless requested to do so by the registered owner or entitlement holder.

§ 75-8-107

(a) “Appropriate person” means:

(1) With respect to an indorsement, the person specified by a security certificate or by an effective special indorsement to be entitled to the security;

(2) With respect to an instruction, the registered owner of an uncertificated security;

(3) With respect to an entitlement order, the entitlement holder;

(4) If the person designated in paragraph (1), (2), or (3) is deceased, the designated person's successor taking under other law or the designated person's personal representative acting for the estate of the decedent; or

(5) If the person designated in paragraph (1), (2), or (3) lacks capacity, the designated person's guardian, conservator, or other similar representative who has power under other law to transfer the security or financial asset.

(b) An indorsement, instruction, or entitlement order is effective if:

(1) It is made by the appropriate person;

(2) It is made by a person who has power under the law of agency to transfer the security or financial asset on behalf of the appropriate person, including, in the case of an instruction or entitlement order, a person who has control under Section 75-8-106(c)(2) or (d)(2); or

(3) The appropriate person has ratified it or is otherwise precluded from asserting its ineffectiveness.

(c) An indorsement, instruction, or entitlement order made by a representative is effective even if:

(1) The representative has failed to comply with a controlling instrument or with the law of the state having jurisdiction of the representative relationship, including any law requiring the representative to obtain court approval of the transaction; or

(2) The representative's action in making the indorsement, instruction, or entitlement order or using the proceeds of the transaction is otherwise a breach of duty.

(d) If a security is registered in the name of or specially indorsed to a person described as a representative, or if a securities account is maintained in the name of a person described as a representative, an indorsement, instruction, or entitlement order made by the person is effective even though the person is no longer serving in the described capacity.

(e) Effectiveness of an indorsement, instruction, or entitlement order is determined as of the date the indorsement, instruction, or entitlement order is made, and an indorsement, instruction, or entitlement order does not become ineffective by reason of any later change of circumstances.

§ 75-8-108

(a) A person who transfers a certificated security to a purchaser for value warrants to the purchaser, and an indorser, if the transfer is by indorsement, warrants to any subsequent purchaser, that:

(1) The certificate is genuine and has not been materially altered;

(2) The transferor or indorser does not know of any fact that might impair the validity of the security;

(3) There is no adverse claim to the security;

(4) The transfer does not violate any restriction on transfer;

(5) If the transfer is by indorsement, the indorsement is made by an appropriate person, or if the indorsement is by an agent, the agent has actual authority to act on behalf of the appropriate person; and

(6) The transfer is otherwise effective and rightful.

(b) A person who originates an instruction for registration of transfer of an uncertificated security to a purchaser for value warrants to the purchaser that:

(1) The instruction is made by an appropriate person, or if the instruction is by an agent, the agent has actual authority to act on behalf of the appropriate person;

(2) The security is valid;

(3) There is no adverse claim to the security; and

(4) At the time the instruction is presented to the issuer:

(i) The purchaser will be entitled to the registration of transfer;

(ii) The transfer will be registered by the issuer free from all liens, security interests, restrictions, and claims other than those specified in the instruction;

(iii) The transfer will not violate any restriction on transfer; and

(iv) The requested transfer will otherwise be effective and rightful.

(c) A person who transfers an uncertificated security to a purchaser for value and does not originate an instruction in connection with the transfer warrants that:

(1) The uncertificated security is valid;

(2) There is no adverse claim to the security;

(3) The transfer does not violate any restriction on transfer; and

(4) The transfer is otherwise effective and rightful.

(d) A person who indorses a security certificate warrants to the issuer that:

(1) There is no adverse claim to the security; and

(2) The indorsement is effective.

(e) A person who originates an instruction for registration of transfer of an uncertificated security warrants to the issuer that:

(1) The instruction is effective; and

(2) At the time the instruction is presented to the issuer the purchaser will be entitled to the registration of transfer.

(f) A person who presents a certificated security for registration of transfer or for payment or exchange warrants to the issuer that the person is entitled to the registration, payment, or exchange, but a purchaser for value and without notice of adverse claims to whom transfer is registered warrants only that the person has no knowledge of any unauthorized signature in a necessary indorsement.

(g) If a person acts as agent of another in delivering a certificated security to a purchaser, the identity of the principal was known to the person to whom the certificate was delivered, and the certificate delivered by the agent was received by the agent from the principal or received by the agent from another person at the direction of the principal, the person delivering the security certificate warrants only that the delivering person has authority to act for the principal and does not know of any adverse claim to the certificated security.

(h) A secured party who redelivers a security certificate received, or after payment and on order of the debtor delivers the security certificate to another person, makes only the warranties of an agent under subsection (g).

(i) Except as otherwise provided in subsection (g), a broker acting for a customer makes to the issuer and a purchaser the warranties provided in subsections (a) through (f). A broker that delivers a security certificate to its customer, or causes its customer to be registered as the owner of an uncertificated security, makes to the customer the warranties provided in subsection (a) or (b), and has the rights and privileges of a purchaser under this section. The warranties of and in favor of the broker acting as an agent are in addition to applicable warranties given by and in favor of the customer.

§ 75-8-109

(a) A person who originates an entitlement order to a securities intermediary warrants to the securities intermediary that:

(1) The entitlement order is made by an appropriate person, or if the entitlement order is by an agent, the agent has actual authority to act on behalf of the appropriate person; and

(2) There is no adverse claim to the security entitlement.

(b) A person who delivers a security certificate to a securities intermediary for credit to a securities account or originates an instruction with respect to an uncertificated security directing that the uncertificated security be credited to a securities account makes to the securities intermediary the warranties specified in Section 75-8-108(a) or (b).

(c) If a securities intermediary delivers a security certificate to its entitlement holder or causes its entitlement holder to be registered as the owner of an uncertificated security, the securities intermediary makes to the entitlement holder the warranties specified in Section 75-8-108(a) or (b).

§ 75-8-110

(a) The local law of the issuer's jurisdiction, as specified in subsection (d), governs:

(1) The validity of a security;

(2) The rights and duties of the issuer with respect to registration of transfer;

(3) The effectiveness of registration of transfer by the issuer;

(4) Whether the issuer owes any duties to an adverse claimant to a security; and

(5) Whether an adverse claim can be asserted against a person to whom transfer of a certificated or uncertificated security is registered or a person who obtains control of an uncertificated security.

(b) The local law of the securities intermediary's jurisdiction, as specified in subsection (e), governs:

(1) Acquisition of a security entitlement from the securities intermediary;

(2) The rights and duties of the securities intermediary and entitlement holder arising out of a security entitlement;

(3) Whether the securities intermediary owes any duties to an adverse claimant to a security entitlement; and

(4) Whether an adverse claim can be asserted against a person who acquires a security entitlement from the securities intermediary or a person who purchases a security entitlement or interest therein from an entitlement holder.

(c) The local law of the jurisdiction in which a security certificate is located at the time of delivery governs whether an adverse claim can be asserted against a person to whom the security certificate is delivered.

(d) “Issuer's jurisdiction” means the jurisdiction under which the issuer of the security is organized or, if permitted by the law of that jurisdiction, the law of another jurisdiction specified by the issuer. An issuer organized under the law of this state may specify the law of another jurisdiction as the law governing the matters specified in subsection (a)(2) through (5).

(e) The following rules determine a “securities intermediary's jurisdiction” for purposes of this section:

(1) If an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that a particular jurisdiction is the securities intermediary's jurisdiction for the purposes of this part, this article or the Uniform Commercial Code, that jurisdiction is the securities intermediary's jurisdiction.

(2) If paragraph (1) does not apply and an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction.

(3) If neither paragraph (1) nor paragraph (2) applies and an agreement between the securities intermediary and its entitlement holder expressly provides that the securities account is maintained at an office in a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction.

(4) If none of the preceding paragraphs of this subsection apply, the securities intermediary's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the entitlement holder's account is located.

(5) If none of the preceding paragraphs of this subsection apply, the securities intermediary's jurisdiction is the jurisdiction in which the chief executive office of the securities intermediary is located.

(f) A securities intermediary's jurisdiction is not determined by the physical location of certificates representing financial assets, or by the jurisdiction in which is organized the issuer of the financial asset with respect to which an entitlement holder has a security entitlement, or by the location of facilities for data processing or other record keeping concerning the account.

§ 75-8-111

A rule adopted by a clearing corporation governing rights and obligations among the clearing corporation and its participants in the clearing corporation is effective even if the rule conflicts with this chapter and affects another party who does not consent to the rule.

§ 75-8-112

(a) The interest of a debtor in a certificated security may be reached by a creditor only by actual seizure of the security certificate by the officer making the attachment or levy, except as otherwise provided in subsection (d). However, a certificated security for which the certificate has been surrendered to the issuer may be reached by a creditor by legal process upon the issuer.

(b) The interest of a debtor in an uncertificated security may be reached by a creditor only by legal process upon the issuer at its chief executive office in the United States, except as otherwise provided in subsection (d).

(c) The interest of a debtor in a security entitlement may be reached by a creditor only by legal process upon the securities intermediary with whom the debtor's securities account is maintained, except as otherwise provided in subsection (d).

(d) The interest of a debtor in a certificated security for which the certificate is in the possession of a secured party, or in an uncertificated security registered in the name of a secured party, or a security entitlement maintained in the name of a secured party, may be reached by a creditor by legal process upon the secured party.

(e) A creditor whose debtor is the owner of a certificated security, uncertificated security, or security entitlement is entitled to aid from a court of competent jurisdiction, by injunction or otherwise, in reaching the certificated security, uncertificated security, or security entitlement or in satisfying the claim by means allowed at law or in equity in regard to property that cannot readily be reached by other legal process.

§ 75-8-113

A contract or modification of a contract for the sale or purchase of a security is enforceable whether or not there is a writing signed or record authenticated by a party against whom enforcement is sought, even if the contract or modification is not capable of performance within one (1) year of its making.

§ 75-8-114

The following rules apply in an action on a certificated security against the issuer:

(1) Unless specifically denied in the pleadings, each signature on a security certificate or in a necessary indorsement is admitted.

(2) If the effectiveness of a signature is put in issue, the burden of establishing effectiveness is on the party claiming under the signature, but the signature is presumed to be genuine or authorized.

(3) If signatures on a security certificate are admitted or established, production of the certificate entitles a holder to recover on it unless the defendant establishes a defense or a defect going to the validity of the security.

(4) If it is shown that a defense or defect exists, the plaintiff has the burden of establishing that the plaintiff or some person under whom the plaintiff claims is a person against whom the defense or defect cannot be asserted.

§ 75-8-115

A securities intermediary that has transferred a financial asset pursuant to an effective entitlement order, or a broker or other agent or bailee that has dealt with a financial asset at the direction of its customer or principal, is not liable to a person having an adverse claim to the financial asset, unless the securities intermediary, or broker or other agent or bailee:

(1) Took the action after it had been served with an injunction, restraining order, or other legal process enjoining it from doing so, issued by a court of competent jurisdiction, and had a reasonable opportunity to act on the injunction, restraining order, or other legal process; or

(2) Acted in collusion with the wrongdoer in violating the rights of the adverse claimant; or

(3) In the case of a security certificate that has been stolen, acted with notice of the adverse claim.

§ 75-8-116

A securities intermediary that receives a financial asset and establishes a security entitlement to the financial asset in favor of an entitlement holder is a purchaser for value of the financial asset. A securities intermediary that acquires a security entitlement to a financial asset from another securities intermediary acquires the security entitlement for value if the securities intermediary acquiring the security entitlement establishes a security entitlement to the financial asset in favor of an entitlement holder.

§ 75-8-201

(a) With respect to an obligation on or a defense to a security, an “issuer” includes a person that:

(1) Places or authorizes the placing of its name on a security certificate, other than as authenticating trustee, registrar, transfer agent, or the like, to evidence a share, participation, or other interest in its property or in an enterprise, or to evidence its duty to perform an obligation represented by the certificate;

(2) Creates a share, participation, or other interest in its property or in an enterprise, or undertakes an obligation, that is an uncertificated security;

(3) Directly or indirectly creates a fractional interest in its rights or property, if the fractional interest is represented by a security certificate; or

(4) Becomes responsible for, or in place of, another person described as an issuer in this section.

(b) With respect to an obligation on or defense to a security, a guarantor is an issuer to the extent of its guaranty, whether or not its obligation is noted on a security certificate.

(c) With respect to a registration of a transfer, issuer means a person on whose behalf transfer books are maintained.

§ 75-8-202

(a) Even against a purchaser for value and without notice, the terms of a certificated security include terms stated on the certificate and terms made part of the security by reference on the certificate to another instrument, indenture, or document or to a constitution, statute, ordinance, rule, regulation, order, or the like, to the extent the terms referred to do not conflict with terms stated on the certificate. A reference under this subsection does not of itself charge a purchaser for value with notice of a defect going to the validity of the security, even if the certificate expressly states that a person accepting it admits notice. The terms of an uncertificated security include those stated in any instrument, indenture, or document or in a constitution, statute, ordinance, rule, regulation, order, or the like, pursuant to which the security is issued.

(b) The following rules apply if an issuer asserts that a security is not valid:

(1) A security other than one issued by a government or governmental subdivision, agency, or instrumentality, even though issued with a defect going to its validity, is valid in the hands of a purchaser for value and without notice of the particular defect unless the defect involves a violation of a constitutional provision. In that case, the security is valid in the hands of a purchaser for value and without notice of the defect, other than one who takes by original issue.

(2) Paragraph (1) applies to an issuer that is a government or governmental subdivision, agency, or instrumentality only if there has been substantial compliance with the legal requirements governing the issue or the issuer has received a substantial consideration for the issue as a whole or for the particular security and a stated purpose of the issue is one for which the issuer has power to borrow money or issue the security.

(c) Except as otherwise provided in Section 75-8-205, lack of genuineness of a certificated security is a complete defense, even against a purchaser for value and without notice.

(d) All other defenses of the issuer of a security, including nondelivery and conditional delivery of a certificated security, are ineffective against a purchaser for value who has taken the certificated security without notice of the particular defense.

(e) This section does not affect the right of a party to cancel a contract for a security “when, as and if issued” or “when distributed” in the event of a material change in the character of the security that is the subject of the contract or in the plan or arrangement pursuant to which the security is to be issued or distributed.

(f) If a security is held by a securities intermediary against whom an entitlement holder has a security entitlement with respect to the security, the issuer may not assert any defense that the issuer could not assert if the entitlement holder held the security directly.

§ 75-8-203

After an act or event, other than a call that has been revoked, creating a right to immediate performance of the principal obligation represented by a certificated security or setting a date on or after which the security is to be presented or surrendered for redemption or exchange, a purchaser is charged with notice of any defect in its issue or defense of the issuer, if the act or event:

(1) Requires the payment of money, the delivery of a certificated security, the registration of transfer of an uncertificated security, or any of them on presentation or surrender of the security certificate, the money or security is available on the date set for payment or exchange, and the purchaser takes the security more than one (1) year after that date; or

(2) Is not covered by paragraph (1) and the purchaser takes the security more than two (2) years after the date set for surrender or presentation or the date on which performance became due.

§ 75-8-204

A restriction on transfer of a security imposed by the issuer, even if otherwise lawful, is ineffective against a person without knowledge of the restriction unless:

(1) The security is certificated and the restriction is noted conspicuously on the security certificate; or

(2) The security is uncertificated and the registered owner has been notified of the restriction.

§ 75-8-205

An unauthorized signature placed on a security certificate before or in the course of issue is ineffective, but the signature is effective in favor of a purchaser for value of the certificated security if the purchaser is without notice of the lack of authority and the signing has been done by:

(1) An authenticating trustee, registrar, transfer agent, or other person entrusted by the issuer with the signing of the security certificate or of similar security certificates, or the immediate preparation for signing of any of them; or

(2) An employee of the issuer, or of any of the persons listed in paragraph (1), entrusted with responsible handling of the security certificate.

§ 75-8-206

(a) If a security certificate contains the signatures necessary to its issue or transfer but is incomplete in any other respect:

(1) Any person may complete it by filling in the blanks as authorized; and

(2) Even if the blanks are incorrectly filled in, the security certificate as completed is enforceable by a purchaser who took it for value and without notice of the incorrectness.

(b) A complete security certificate that has been improperly altered, even if fraudulently, remains enforceable, but only according to its original terms.

§ 75-8-207

(a) Before due presentment for registration of transfer of a certificated security in registered form or of an instruction requesting registration of transfer of an uncertificated security, the issuer or indenture trustee may treat the registered owner as the person exclusively entitled to vote, receive notifications, and otherwise exercise all the rights and powers of an owner.

(b) This chapter does not affect the liability of the registered owner of a security for a call, assessment, or the like.

§ 75-8-208

(a) A person signing a security certificate as authenticating trustee, registrar, transfer agent, or the like, warrants to a purchaser for value of the certificated security, if the purchaser is without notice of a particular defect, that:

(1) The certificate is genuine;

(2) The person's own participation in the issue of the security is within the person's capacity and within the scope of the authority received by the person from the issuer; and

(3) The person has reasonable grounds to believe that the certificated security is in the form and within the amount the issuer is authorized to issue.

(b) Unless otherwise agreed, a person signing under subsection (a) does not assume responsibility for the validity of the security in other respects.

§ 75-8-209

A lien in favor of an issuer upon a certificated security is valid against a purchaser only if the right of the issuer to the lien is noted conspicuously on the security certificate.

§ 75-8-210

(a) In this section, “overissue” means the issue of securities in excess of the amount the issuer has corporate power to issue, but an overissue does not occur if appropriate action has cured the overissue.

(b) Except as otherwise provided in subsections (c) and (d), the provisions of this chapter which validate a security or compel its issue or reissue do not apply to the extent that validation, issue, or reissue would result in overissue.

(c) If an identical security not constituting an overissue is reasonably available for purchase, a person entitled to issue or validation may compel the issuer to purchase the security and deliver it if certificated or register its transfer if uncertificated, against surrender of any security certificate the person holds.

(d) If a security is not reasonably available for purchase, a person entitled to issue or validation may recover from the issuer the price the person or the last purchaser for value paid for it with interest from the date of the person's demand.

§ 75-8-301

(a) Delivery of a certificated security to a purchaser occurs when:

(1) The purchaser acquires possession of the security certificate;

(2) Another person, other than a securities intermediary, either acquires possession of the security certificate on behalf of the purchaser or, having previously acquired possession of the certificate, acknowledges that it holds for the purchaser; or

(3) A securities intermediary acting on behalf of the purchaser acquires possession of the security certificate, only if the certificate is in registered form and is (i) registered in the name of the purchaser, (ii) payable to the order of the purchaser, or (iii) specially endorsed to the purchaser by an effective endorsement and has not been endorsed to the securities intermediary or in blank.

(b) Delivery of an uncertificated security to a purchaser occurs when:

(1) The issuer registers the purchaser as the registered owner, upon original issue or registration of transfer; or

(2) Another person, other than a securities intermediary, either becomes the registered owner of the uncertificated security on behalf of the purchaser or, having previously become the registered owner, acknowledges that it holds for the purchaser.

§ 75-8-302

(a) Except as otherwise provided in subsections (b) and (c), a purchaser of a certificated or uncertificated security acquires all rights in the security that the transferor had or had power to transfer.

(b) A purchaser of a limited interest acquires rights only to the extent of the interest purchased.

(c) A purchaser of a certificated security who as a previous holder had notice of an adverse claim does not improve its position by taking from a protected purchaser.

§ 75-8-303

(a) “Protected purchaser” means a purchaser of a certificated or uncertificated security, or of an interest therein, who:

(1) Gives value;

(2) Does not have notice of any adverse claim to the security; and

(3) Obtains control of the certificated or uncertificated security.

(b) In addition to acquiring the rights of a purchaser, a protected purchaser also acquires its interest in the security free of any adverse claim.

§ 75-8-304

(a) An indorsement may be in blank or special. An indorsement in blank includes an indorsement to bearer. A special indorsement specifies to whom a security is to be transferred or who has power to transfer it. A holder may convert a blank indorsement to a special indorsement.

(b) An indorsement purporting to be only of part of a security certificate representing units intended by the issuer to be separately transferable is effective to the extent of the indorsement.

(c) An indorsement, whether special or in blank, does not constitute a transfer until delivery of the certificate on which it appears or, if the indorsement is on a separate document, until delivery of both the document and the certificate.

(d) If a security certificate in registered form has been delivered to a purchaser without a necessary indorsement, the purchaser may become a protected purchaser only when the indorsement is supplied. However, against a transferor, a transfer is complete upon delivery and the purchaser has a specifically enforceable right to have any necessary indorsement supplied.

(e) An indorsement of a security certificate in bearer form may give notice of an adverse claim to the certificate, but it does not otherwise affect a right to registration that the holder possesses.

(f) Unless otherwise agreed, a person making an indorsement assumes only the obligations provided in Section 75-8-108 and not an obligation that the security will be honored by the issuer.

§ 75-8-305

(a) If an instruction has been originated by an appropriate person but is incomplete in any other respect, any person may complete it as authorized and the issuer may rely on it as completed, even though it has been completed incorrectly.

(b) Unless otherwise agreed, a person initiating an instruction assumes only the obligations imposed by Section 75-8-108 and not an obligation that the security will be honored by the issuer.

§ 75-8-306

(a) A person who guarantees a signature of an indorser of a security certificate warrants that at the time of signing:

(1) The signature was genuine;

(2) The signer was an appropriate person to indorse, or if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person; and

(3) The signer had legal capacity to sign.

(b) A person who guarantees a signature of the originator of an instruction warrants that at the time of signing:

(1) The signature was genuine;

(2) The signer was an appropriate person to originate the instruction, or if the signature is by an agent, the agent had actual authority to act on behalf of the appropriate person, if the person specified in the instruction as the registered owner was, in fact, the registered owner, as to which fact the signature guarantor does not make a warranty; and

(3) The signer had legal capacity to sign.

(c) A person who specially guarantees the signature of an originator of an instruction makes the warranties of a signature guarantor under subsection (b) and also warrants that at the time the instruction is presented to the issuer:

(1) The person specified in the instruction as the registered owner of the uncertificated security will be the registered owner; and

(2) The transfer of the uncertificated security requested in the instruction will be registered by the issuer free from all liens, security interests, restrictions, and claims other than those specified in the instruction.

(d) A guarantor under subsections (a) and (b) or a special guarantor under subsection (c) does not otherwise warrant the rightfulness of the transfer.

(e) A person who guarantees an indorsement of a security certificate makes the warranties of a signature guarantor under subsection (a) and also warrants the rightfulness of the transfer in all respects.

(f) A person who guarantees an instruction requesting the transfer of an uncertificated security makes the warranties of a special signature guarantor under subsection (c) and also warrants the rightfulness of the transfer in all respects.

(g) An issuer may not require a special guaranty of signature, a guaranty of indorsement, or a guaranty of instruction as a condition to registration of transfer.

(h) The warranties under this section are made to a person taking or dealing with the security in reliance on the guaranty, and the guarantor is liable to the person for loss resulting from their breach. An indorser or originator of an instruction whose signature, indorsement, or instruction has been guaranteed is liable to a guarantor for any loss suffered by the guarantor as a result of breach of the warranties of the guarantor.

§ 75-8-307

Unless otherwise agreed, the transferor of a security on due demand shall supply the purchaser with proof of authority to transfer or with any other requisite necessary to obtain registration of the transfer of the security, but if the transfer is not for value, a transferor need not comply unless the purchaser pays the necessary expenses. If the transferor fails within a reasonable time to comply with the demand, the purchaser may reject or rescind the transfer.

§ 75-8-401

(a) If a certificated security in registered form is presented to an issuer with a request to register transfer or an instruction is presented to an issuer with a request to register transfer of an uncertificated security, the issuer shall register the transfer as requested if:

(1) Under the terms of the security the person seeking registration of transfer is eligible to have the security registered in its name;

(2) The indorsement or instruction is made by the appropriate person or by an agent who has actual authority to act on behalf of the appropriate person;

(3) Reasonable assurance is given that the indorsement or instruction is genuine and authorized (Section 75-8-402);

(4) Any applicable law relating to the collection of taxes has been complied with;

(5) the transfer does not violate any restriction on transfer imposed by the issuer in accordance with Section 75-8-204;

(6) A demand that the issuer not register transfer has not become effective under Section 75-8-403, or the issuer has complied with Section 75-8-403(b) but no legal process or indemnity bond is obtained as provided in Section 8-403(d); and

(7) The transfer is in fact rightful or is to a protected purchaser.

(b) If an issuer is under a duty to register a transfer of a security, the issuer is liable to a person presenting a certificated security or an instruction for registration or to the person's principal for loss resulting from unreasonable delay in registration or failure or refusal to register the transfer.

§ 75-8-402

(a) An issuer may require the following assurance that each necessary indorsement or each instruction is genuine and authorized:

(1) In all cases, a guaranty of the signature of the person making an indorsement or originating an instruction including, in the case of an instruction, reasonable assurance of identity;

(2) If the indorsement is made or the instruction is originated by an agent, appropriate assurance of actual authority to sign;

(3) If the indorsement is made or the instruction is originated by a fiduciary pursuant to Section 75-8-107(a)(4) or (a)(5), appropriate evidence of appointment or incumbency;

(4) If there is more than one (1) fiduciary, reasonable assurance that all who are required to sign have done so; and

(5) If the indorsement is made or the instruction is originated by a person not covered by another provision of this subsection, assurance appropriate to the case corresponding as nearly as may be to the provisions of this subsection.

(b) An issuer may elect to require reasonable assurance beyond that specified in this section.

(c) In this section:

(1) “Guaranty of the signature” means a guaranty signed by or on behalf of a person reasonably believed by the issuer to be responsible. An issuer may adopt standards with respect to responsibility if they are not manifestly unreasonable.

(2) “Appropriate evidence of appointment or incumbency” means:

(i) In the case of a fiduciary appointed or qualified by a court, a certificate issued by or under the direction or supervision of the court or an officer thereof and dated within sixty (60) days before the date of presentation for transfer; or

(ii) In any other case, a copy of a document showing the appointment or a certificate issued by or on behalf of a person reasonably believed by an issuer to be responsible or, in the absence of that document or certificate, other evidence the issuer reasonably considers appropriate.

§ 75-8-403

(a) A person who is an appropriate person to make an indorsement or originate an instruction may demand that the issuer not register transfer of a security by communicating to the issuer a notification that identifies the registered owner and the issue of which the security is a part and provides an address for communications directed to the person making the demand. The demand is effective only if it is received by the issuer at a time and in a manner affording the issuer reasonable opportunity to act on it.

(b) If a certificated security in registered form is presented to an issuer with a request to register transfer or an instruction is presented to an issuer with a request to register transfer of an uncertificated security after a demand that the issuer not register transfer has become effective, the issuer shall promptly communicate to (i) the person who initiated the demand at the address provided in the demand and (ii) the person who presented the security for registration of transfer or initiated the instruction requesting registration of transfer a notification stating that:

(1) The certificated security has been presented for registration of transfer or the instruction for registration of transfer of the uncertificated security has been received;

(2) A demand that the issuer not register transfer had previously been received; and

(3) The issuer will withhold registration of transfer for a period of time stated in the notification in order to provide the person who initiated the demand an opportunity to obtain legal process or an indemnity bond.

(c) The period described in subsection (b)(3) may not exceed thirty (30) days after the date of communication of the notification. A shorter period may be specified by the issuer if it is not manifestly unreasonable.

(d) An issuer is not liable to a person who initiated a demand that the issuer not register transfer for any loss the person suffers as a result of registration of a transfer pursuant to an effective indorsement or instruction if the person who initiated the demand does not, within the time stated in the issuer's communication, either:

(1) Obtain an appropriate restraining order, injunction, or other process from a court of competent jurisdiction enjoining the issuer from registering the transfer; or

(2) File with the issuer an indemnity bond, sufficient in the issuer's judgment to protect the issuer and any transfer agent, registrar, or other agent of the issuer involved from any loss it or they may suffer by refusing to register the transfer.

(e) This section does not relieve an issuer from liability for registering transfer pursuant to an indorsement or instruction that was not effective.

§ 75-8-404

(a) Except as otherwise provided in Section 75-8-406, an issuer is liable for wrongful registration of transfer if the issuer has registered a transfer of a security to a person not entitled to it, and the transfer was registered:

(1) Pursuant to an ineffective indorsement or instruction;

(2) After a demand that the issuer not register transfer became effective under Section 75-8-403(a) and the issuer did not comply with Section 75-8-403(b);

(3) After the issuer had been served with an injunction, restraining order, or other legal process enjoining it from registering the transfer, issued by a court of competent jurisdiction, and the issuer had a reasonable opportunity to act on the injunction, restraining order, or other legal process; or

(4) By an issuer acting in collusion with the wrongdoer.

(b) An issuer that is liable for wrongful registration of transfer under subsection (a) on demand shall provide the person entitled to the security with a like certificated or uncertificated security, and any payments or distributions that the person did not receive as a result of the wrongful registration. If an overissue would result, the issuer's liability to provide the person with a like security is governed by Section 75-8-210.

(c) Except as otherwise provided in subsection (a) or in a law relating to the collection of taxes, an issuer is not liable to an owner or other person suffering loss as a result of the registration of a transfer of a security if registration was made pursuant to an effective indorsement or instruction.

§ 75-8-405

(a) If an owner of a certificated security, whether in registered or bearer form, claims that the certificate has been lost, destroyed, or wrongfully taken, the issuer shall issue a new certificate if the owner:

(1) So requests before the issuer has notice that the certificate has been acquired by a protected purchaser;

(2) Files with the issuer a sufficient indemnity bond; and

(3) Satisfies other reasonable requirements imposed by the issuer.

(b) If, after the issue of a new security certificate, a protected purchaser of the original certificate presents it for registration of transfer, the issuer shall register the transfer unless an overissue would result. In that case, the issuer's liability is governed by Section 75-8-210. In addition to any rights on the indemnity bond, an issuer may recover the new certificate from a person to whom it was issued or any person taking under that person, except a protected purchaser.

§ 75-8-406

If a security certificate has been lost, apparently destroyed, or wrongfully taken, and the owner fails to notify the issuer of that fact within a reasonable time after the owner has notice of it and the issuer registers a transfer of the security before receiving notification, the owner may not assert against the issuer a claim for registering the transfer under Section 75-8-404 or a claim to a new security certificate under Section 75-8-405.

§ 75-8-407

A person acting as authenticating trustee, transfer agent, registrar, or other agent for an issuer in the registration of a transfer of its securities, in the issue of new security certificates or uncertificated securities, or in the cancellation of surrendered security certificates has the same obligation to the holder or owner of a certificated or uncertificated security with regard to the particular functions performed as the issuer has in regard to those functions.

§ 75-8-501

(a) “Securities account” means an account to which a financial asset is or may be credited in accordance with an agreement under which the person maintaining the account undertakes to treat the person for whom the account is maintained as entitled to exercise the rights that comprise the financial asset.

(b) Except as otherwise provided in subsections (d) and (e), a person acquires a security entitlement if a securities intermediary:

(1) Indicates by book entry that a financial asset has been credited to the person's securities account;

(2) Receives a financial asset from the person or acquires a financial asset for the person and, in either case, accepts it for credit to the person's securities account; or

(3) Becomes obligated under other law, regulation, or rule to credit a financial asset to the person's securities account.

(c) If a condition of subsection (b) has been met, a person has a security entitlement even though the securities intermediary does not itself hold the financial asset.

(d) If a securities intermediary holds a financial asset for another person, and the financial asset is registered in the name of, payable to the order of, or specially indorsed to the other person, and has not been indorsed to the securities intermediary or in blank, the other person is treated as holding the financial asset directly rather than as having a security entitlement with respect to the financial asset.

(e) Issuance of a security is not establishment of a security entitlement.

§ 75-8-502

An action based on an adverse claim to a financial asset, whether framed in conversion, replevin, constructive trust, equitable lien, or other theory, may not be asserted against a person who acquires a security entitlement under Section 75-8-501 for value and without notice of the adverse claim.

§ 75-8-503

(a) To the extent necessary for a securities intermediary to satisfy all security entitlements with respect to a particular financial asset, all interests in that financial asset held by the securities intermediary are held by the securities intermediary for the entitlement holders, are not property of the securities intermediary, and are not subject to claims of creditors of the securities intermediary, except as otherwise provided in Section 75-8-511.

(b) An entitlement holder's property interest with respect to a particular financial asset under subsection (a) is a pro rata property interest in all interests in that financial asset held by the securities intermediary, without regard to the time the entitlement holder acquired the security entitlement or the time the securities intermediary acquired the interest in that financial asset.

(c) An entitlement holder's property interest with respect to a particular financial asset under subsection (a) may be enforced against the securities intermediary only by exercise of the entitlement holder's rights under Sections 75-8-505 through 75-8-508.

(d) An entitlement holder's property interest with respect to a particular financial asset under subsection (a) may be enforced against a purchaser of the financial asset or interest therein only if:

(1) Insolvency proceedings have been initiated by or against the securities intermediary;

(2) The securities intermediary does not have sufficient interests in the financial asset to satisfy the security entitlements of all of its entitlement holders to that financial asset;

(3) The securities intermediary violated its obligations under Section 75-8-504 by transferring the financial asset or interest therein to the purchaser; and

(4) The purchaser is not protected under subsection (e).

The trustee or other liquidator, acting on behalf of all entitlement holders having security entitlements with respect to a particular financial asset, may recover the financial asset, or interest therein, from the purchaser. If the trustee or other liquidator elects not to pursue that right, an entitlement holder whose security entitlement remains unsatisfied has the right to recover its interest in the financial asset from the purchaser.

(e) An action based on the entitlement holder's property interest with respect to a particular financial asset under subsection (a), whether framed in conversion, replevin, constructive trust, equitable lien, or other theory, may not be asserted against any purchaser of a financial asset or interest therein who gives value, obtains control, and does not act in collusion with the securities intermediary in violating the securities intermediary's obligations under Section 75-8-504.

§ 75-8-504

(a) A securities intermediary shall promptly obtain and thereafter maintain a financial asset in a quantity corresponding to the aggregate of all security entitlements it has established in favor of its entitlement holders with respect to that financial asset. The securities intermediary may maintain those financial assets directly or through one or more other securities intermediaries.

(b) Except to the extent otherwise agreed by its entitlement holder, a securities intermediary may not grant any security interests in a financial asset it is obligated to maintain pursuant to subsection (a).

(c) A securities intermediary satisfies the duty in subsection (a) if:

(1) The securities intermediary acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary; or

(2) In the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to obtain and maintain the financial asset.

(d) This section does not apply to a clearing corporation that is itself the obligor of an option or similar obligation to which its entitlement holders have security entitlements.

§ 75-8-505

(a) A securities intermediary shall take action to obtain a payment or distribution made by the issuer of a financial asset. A securities intermediary satisfies the duty if:

(1) The securities intermediary acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary; or

(2) In the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to attempt to obtain the payment or distribution.

(b) A securities intermediary is obligated to its entitlement holder for a payment or distribution made by the issuer of a financial asset if the payment or distribution is received by the securities intermediary.

§ 75-8-506

A securities intermediary shall exercise rights with respect to a financial asset if directed to do so by an entitlement holder. A securities intermediary satisfies the duty if:

(1) The securities intermediary acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary; or

(2) In the absence of agreement, the securities intermediary either places the entitlement holder in a position to exercise the rights directly or exercises due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder.

§ 75-8-507

(a) A securities intermediary shall comply with an entitlement order if the entitlement order is originated by the appropriate person, the securities intermediary has had reasonable opportunity to assure itself that the entitlement order is genuine and authorized, and the securities intermediary has had reasonable opportunity to comply with the entitlement order. A securities intermediary satisfies the duty if:

(1) The securities intermediary acts with respect to the duty as agreed upon by the entitlement holder and the securities intermediary; or

(2) In the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to comply with the entitlement order.

(b) If a securities intermediary transfers a financial asset pursuant to an ineffective entitlement order, the securities intermediary shall reestablish a security entitlement in favor of the person entitled to it, and pay or credit any payments or distributions that the person did not receive as a result of the wrongful transfer. If the securities intermediary does not reestablish a security entitlement, the securities intermediary is liable to the entitlement holder for damages.

§ 75-8-508

A securities intermediary shall act at the direction of an entitlement holder to change a security entitlement into another available form of holding for which the entitlement holder is eligible, or to cause the financial asset to be transferred to a securities account of the entitlement holder with another securities intermediary. A securities intermediary satisfies the duty if:

(1) The securities intermediary acts as agreed upon by the entitlement holder and the securities intermediary; or

(2) In the absence of agreement, the securities intermediary exercises due care in accordance with reasonable commercial standards to follow the direction of the entitlement holder.

§ 75-8-509

(a) If the substance of a duty imposed upon a securities intermediary by Sections 75-8-504 through 75-8-508 is the subject of other statute, regulation, or rule, compliance with that statute, regulation, or rule satisfies the duty.

(b) To the extent that specific standards for the performance of the duties of a securities intermediary or the exercise of the rights of an entitlement holder are not specified by other statute, regulation, or rule or by agreement between the securities intermediary and entitlement holder, the securities intermediary shall perform its duties and the entitlement holder shall exercise its rights in a commercially reasonable manner.

(c) The obligation of a securities intermediary to perform the duties imposed by Sections 75-8-504 through 75-8-508 is subject to:

(1) Rights of the securities intermediary arising out of a security interest under a security agreement with the entitlement holder or otherwise; and

(2) Rights of the securities intermediary under other law, regulation, rule, or agreement to withhold performance of its duties as a result of unfulfilled obligations of the entitlement holder to the securities intermediary.

(d)Sections 75-8-504 through 75-8-508 do not require a securities intermediary to take any action that is prohibited by other statute, regulation, or rule.

§ 75-8-510

(a) In a case not covered by the priority rules in Article 9 or the rules stated in subsection (c), an action based on an adverse claim to a financial asset or security entitlement, whether framed in conversion, replevin, constructive trust, equitable lien, or other theory, may not be asserted against a person who purchases a security entitlement, or an interest therein, from an entitlement holder if the purchaser gives value, does not have notice of the adverse claim, and obtains control.

(b) If an adverse claim could not have been asserted against an entitlement holder under Section 75-8-502, the adverse claim cannot be asserted against a person who purchases a security entitlement, or an interest therein, from the entitlement holder.

(c) In a case not covered by the priority rules in Chapter 9, a purchaser for value of a security entitlement, or an interest therein, who obtains control has priority over a purchaser of a security entitlement, or an interest therein, who does not obtain control. Except as otherwise provided in subsection (d), purchasers who have control rank according to priority in time of:

(1) The purchaser's becoming the person for whom the securities account, in which the security entitlement is carried, is maintained, if the purchaser obtained control under Section 75-8-106(d)(1);

(2) The securities intermediary's agreement to comply with the purchaser's entitlement orders with respect to security entitlements carried or to be carried in the securities account in which the security entitlement is carried, if the purchaser obtained control under Section 75-8-106(d)(2); or

(3) If the purchaser obtained control through another person under Section 75-8-106(d)(3), the time on which priority would be based under this subsection if the other person were the secured party.

(d) A securities intermediary as purchaser has priority over a conflicting purchaser who has control unless otherwise agreed by the securities intermediary.

§ 75-8-511

(a) Except as otherwise provided in subsections (b) and (c), if a securities intermediary does not have sufficient interests in a particular financial asset to satisfy both its obligations to entitlement holders who have security entitlements to that financial asset and its obligation to a creditor of the securities intermediary who has a security interest in that financial asset, the claims of entitlement holders, other than the creditor, have priority over the claim of the creditor.

(b) A claim of a creditor of a securities intermediary who has a security interest in a financial asset held by a securities intermediary has priority over claims of the securities intermediary's entitlement holders who have security entitlements with respect to that financial asset if the creditor has control over the financial asset.

(c) If a clearing corporation does not have sufficient financial assets to satisfy both its obligations to entitlement holders who have security entitlements with respect to a financial asset and its obligation to a creditor of the clearing corporation who has a security interest in that financial asset, the claim of the creditor has priority over the claims of entitlement holders.

Chapter 9 Uniform Commercial Code--Secured Transactions

§ 75-9-101

This chapter shall be known and may be cited as Uniform Commercial Code--Secured Transaction.

§ 75-9-101

This article may be cited as Uniform Commercial Code--Secured Transactions.

§ 75-9-102

(1) Except as otherwise provided in section 75-9-104 on excluded transactions, this chapter applies

(a) to any transaction (regardless of its form) which is intended to create a security interest in personal property or fixtures including goods, documents, instruments, general intangibles, chattel paper or accounts; and also

(b) to any sale of accounts or chattel paper.

(2) This chapter applies to security interests created by contract including pledge, assignment, chattel mortgage, chattel trust, trust deed, factor's lien, equipment trust, conditional sale, trust receipt, other lien or title retention contract and lease or consignment intended as security. This chapter does not apply to statutory liens except as provided in section 75-9-310.

(3) The application of this chapter to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this chapter does not apply.

§ 75-9-102

(a) In this article:

(1) “Accession” means goods that are physically united with other goods in such a manner that the identity of the original goods is not lost.

(2) “Account,” except as used in “account for,” means a right to payment of a monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a state, governmental unit of a state, or person licensed or authorized to operate the game by a state or governmental unit of a state. The term includes health-care-insurance receivables. The term does not include (i) rights to payment evidenced by chattel paper or an instrument, (ii) commercial tort claims, (iii) deposit accounts, (iv) investment property, (v) letter-of-credit rights or letters of credit, or (vi) rights to payment for money or funds advanced or sold, other than rights arising out of the use of a credit or charge card or information contained on or for use with the card.

(3) “Account debtor” means a person obligated on an account, chattel paper, or general intangible. The term does not include persons obligated to pay a negotiable instrument, even if the instrument constitutes part of chattel paper.

(4) “Accounting,” except as used in “accounting for,” means a record:

(A) Authenticated by a secured party;

(B) Indicating the aggregate unpaid secured obligations as of a date not more than thirty-five (35) days earlier or thirty-five (35) days later than the date of the record; and

(C) Identifying the components of the obligations in reasonable detail.

(5) “Agricultural lien” means an interest in farm products:

(A) Which secures payment or performance of an obligation for:

(i) Goods or services furnished in connection with a debtor's farming operation; or

(ii) Rent on real property leased by a debtor in connection with its farming operation;

(B) Which is created by statute in favor of a person that:

(i) In the ordinary course of its business furnished goods or services to a debtor in connection with a debtor's farming operation; or

(ii) Leased real property to a debtor in connection with the debtor's farming operation; and

(C) Whose effectiveness does not depend on the person's possession of the personal property.

(6) “As-extracted collateral” means:

(A) Oil, gas, or other minerals that are subject to a security interest that:

(i) Is created by a debtor having an interest in the minerals before extraction; and

(ii) Attaches to the minerals as extracted; or

(B) Accounts arising out of the sale at the wellhead or minehead of oil, gas, or other minerals in which the debtor had an interest before extraction.

(7) “Authenticate” means:

(A) To sign; or

(B) With present intent to adopt or accept a record, to attach to or logically associate with the record an electronic sound, symbol or process.

(8) “Bank” means an organization that is engaged in the business of banking. The term includes savings banks, savings and loan associations, credit unions, and trust companies.

(9) “Cash proceeds” means proceeds that are money, checks, deposit accounts, or the like.

(10) “Certificate of title” means a certificate of title with respect to which a statute provides for the security interest in question to be indicated on the certificate as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral. The term includes another record maintained as an alternative to a certificate of title by the governmental unit that issues certificates of title if a statute permits the security interest in question to be indicated on the record as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral.

(11) “Chattel paper” means a record or records that evidence both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, a security interest in specific goods and license of software used in the goods, a lease of specific goods, or a lease of specific goods and license of software used in the goods. In this paragraph, “monetary obligation” means a monetary obligation secured by the goods or owed under a lease of the goods and includes a monetary obligation with respect to software used in the goods. The term does not include (i) charters or other contracts involving the use or hire of a vessel or (ii) records that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card. If a transaction is evidenced by records that include an instrument or series of instruments, the group of records taken together constitutes chattel paper.

(12) “Collateral” means the property subject to a security interest or agricultural lien. The term includes:

(A) Proceeds to which a security interest attaches;

(B) Accounts, chattel paper, payment intangibles, and promissory notes that have been sold; and

(C) Goods that are the subject of a consignment.

(13) “Commercial tort claim” means a claim arising in tort with respect to which:

(A) The claimant is an organization; or

(B) The claimant is an individual and the claim:

(i) Arose in the course of the claimant's business or profession; and

(ii) Does not include damages arising out of personal injury to or the death of an individual.

(14) “Commodity account” means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer.

(15) “Commodity contract” means a commodity futures contract, an option on a commodity futures contract, a commodity option, or another contract if the contract or option is:

(A) Traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to federal commodities laws; or

(B) Traded on a foreign commodity board of trade, exchange, or market, and is carried on the books of a commodity intermediary for a commodity customer.

(16) “Commodity customer” means a person for which a commodity intermediary carries a commodity contract on its books.

(17) “Commodity intermediary” means a person that:

(A) Is registered as a futures commission merchant under federal commodities law; or

(B) In the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to federal commodities law.

(18) “Communicate” means:

(A) To send a written or other tangible record;

(B) To transmit a record by any means agreed upon by the persons sending and receiving the record; or

(C) In the case of transmission of a record to or by a filing office, to transmit a record by any means prescribed by filing-office rule.

(19) “Consignee” means a merchant to which goods are delivered in a consignment.

(20) “Consignment” means a transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and:

(A) The merchant:

(i) Deals in goods of that kind under a name other than the name of the person making delivery;

(ii) Is not an auctioneer; and

(iii) Is not generally known by its creditors to be substantially engaged in selling the goods of others;

(B) With respect to each delivery, the aggregate value of the goods is One Thousand Dollars ($1,000.00) or more at the time of delivery;

(C) The goods are not consumer goods immediately before delivery; and

(D) The transaction does not create a security interest that secures an obligation.

(21) “Consignor” means a person that delivers goods to a consignee in a consignment.

(22) “Consumer debtor” means a debtor in a consumer transaction.

(23) “Consumer goods” means goods that are used or bought for use primarily for personal, family, or household purposes.

(24) “Consumer-goods transaction” means a consumer transaction in which:

(A) An individual incurs an obligation primarily for personal, family, or household purposes; and

(B) A security interest in consumer goods secures the obligation.

(25) “Consumer obligor” means an obligor who is an individual and who incurred the obligation as part of a transaction entered into primarily for personal, family, or household purposes.

(26) “Consumer transaction” means a transaction in which (i) an individual incurs an obligation primarily for personal, family, or household purposes, (ii) a security interest secures the obligation, and (iii) the collateral is held or acquired primarily for personal, family, or household purposes. The term includes consumer-goods transactions.

(27) “Continuation statement” means an amendment of a financing statement which:

(A) Identifies, by its file number, the initial financing statement to which it relates; and

(B) Indicates that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified financing statement.

(28) “Debtor” means:

(A) A person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;

(B) A seller of accounts, chattel paper, payment intangibles, or promissory notes; or

(C) A consignee.

(29) “Deposit account” means a demand, time, savings, passbook, or similar account maintained with a bank. The term does not include investment property or accounts evidenced by an instrument.

(30) “Document” means a document of title or a receipt of the type described in Section 75-7-201(b).

(31) “Electronic chattel paper” means chattel paper evidenced by a record or records consisting of information stored in an electronic medium.

(32) “Encumbrance” means a right, other than an ownership interest, in real property. The term includes mortgages and other liens on real property.

(33) “Equipment” means goods other than inventory, farm products, or consumer goods.

(34) “Farm products” means goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and which are:

(A) Crops grown, growing, or to be grown, including:

(i) Crops produced on trees, vines, and bushes; and

(ii) Aquatic goods produced in aquacultural operations;

(B) Livestock, born or unborn, including aquatic goods produced in aquacultural operations;

(C) Supplies used or produced in a farming operation; or

(D) Products of crops or livestock in their unmanufactured states.

(35) “Farming operation” means raising, cultivating, propagating, fattening, grazing, or any other farming, livestock or aquacultural operation.

(36) “File number” means the number assigned to an initial financing statement pursuant to Section 75-9-519(a).

(37) “Filing office” means an office designated in Section 75-9-501 as the place to file a financing statement.

(38) “Filing-office rule” means a rule adopted pursuant to Section 75-9-526.

(39) “Financing statement” means a record or records composed of an initial financing statement and any filed record relating to the initial financing statement.

(40) “Fixture filing” means the filing of a financing statement covering goods that are or are to become fixtures and satisfying Section 75-9-502(a) and (b). The term includes the filing of a financing statement covering goods of a transmitting utility which are or are to become fixtures.

(41) “Fixtures” means goods that have become so related to particular real property that an interest in them arises under real property law.

(42) “General intangible” means any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas, or other minerals before extraction. The term includes payment intangibles and software.

(43) [Reserved]

(44) “Goods” means all things that are movable when a security interest attaches. The term includes (i) fixtures, (ii) standing timber that is to be cut and removed under a conveyance or contract for sale, (iii) the unborn young of animals, (iv) crops grown, growing, or to be grown, even if the crops are produced on trees, vines, or bushes, (v) farm-raised fish produced in fresh water according to the usual and customary techniques of commercial agriculture, (vi) manufactured homes and (vii) marine vessels (herein defined as every type of watercraft used, or capable of being used, as a means of transportation on water) including both marine vessels under construction, including engines and all items of equipment installed or to be installed therein, whether such vessels are being constructed by the shipbuilder for his own use or for sale (said vessels under construction being classified as inventory within the meaning of Section 75-9-102(48)), and marine vessels after completion of construction so long as such vessels have not become “vessels of the United States” within the meaning of the Ship Mortgage Act of 1920, 46 USCS, Section 911(4), as same is now written or may hereafter be amended (said completed vessels being classified as equipment within the meaning of Section 75-9-102(33)). The term also includes a computer program embedded in goods and any supporting information provided in connection with a transaction relating to the program if (i) the program is associated with the goods in such a manner that it customarily is considered part of the goods, or (ii) by becoming the owner of the goods, a person acquires a right to use the program in connection with the goods. The term does not include a computer program embedded in goods that consist solely of the medium in which the program is embedded. The term also does not include accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments, investment property, letter-of-credit rights, letters of credit, money, or oil, gas, or other minerals before extraction.

(45) “Governmental unit” means a subdivision, agency, department, county, parish, municipality or other unit of the government of the United States, a state, or a foreign country. The term includes an organization having a separate corporate existence if the organization is eligible to issue debt on which interest is exempt from income taxation under the laws of the United States.

(46) “Health-care-insurance receivable” means an interest in or claim under a policy of insurance which is a right to payment of a monetary obligation for health-care goods or services provided or to be provided.

(47) “Instrument” means a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in ordinary course of business is transferred by delivery with any necessary endorsement or assignment. The term does not include (i) investment property, (ii) letters of credit, or (iii) writings that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card.

(48) “Inventory” means goods, other than farm products, which:

(A) Are leased by a person as lessor;

(B) Are held by a person for sale or lease or to be furnished under a contract of service;

(C) Are furnished by a person under a contract of service; or

(D) Consist of raw materials, work in process or materials used or consumed in a business.

(49) “Investment property” means a security, whether certificated or uncertificated, security entitlement, securities account, commodity contract, or commodity account.

(50) “Jurisdiction of organization,” with respect to a registered organization, means the jurisdiction under whose law the organization is formed or organized.

(51) “Letter-of-credit right” means a right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance. The term does not include the right of a beneficiary to demand payment or performance under a letter of credit.

(52) “Lien creditor” means:

(A) A creditor that has acquired a lien on the property involved by attachment, levy, or the like;

(B) An assignee for benefit of creditors from the time of assignment;

(C) A trustee in bankruptcy from the date of the filing of the petition; or

(D) A receiver in equity from the time of appointment.

(53) “Manufactured home” means a structure, transportable in one or more sections, which, in the traveling mode, is eight (8) body feet or more in width or forty (40) body feet or more in length, or, when erected on site, is three hundred twenty (320) or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems contained therein. The term includes any structure that meets all of the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the United States Secretary of Housing and Urban Development and complies with the standards established under Title 42 of the United States Code.

(54) “Manufactured-home transaction” means a secured transaction:

(A) That creates a purchase-money security interest in a manufactured home, other than a manufactured home held as inventory; or

(B) In which a manufactured home, other than a manufactured home held as inventory, is the primary collateral.

(55) “Mortgage” means a consensual interest in real property, including fixtures, which secures payment or performance of an obligation. “Mortgage” shall mean and include a deed of trust.

(56) “New debtor” means a person that becomes bound as debtor under Section 75-9-203(d) by a security agreement previously entered into by another person.

(57) “New value” means (i) money, (ii) money's worth in property, services, or new credit, or (iii) release by a transferee of an interest in property previously transferred to the transferee. The term does not include an obligation substituted for another obligation.

(58) “Noncash proceeds” means proceeds other than cash proceeds.

(59) “Obligor” means a person that, with respect to an obligation secured by a security interest in or an agricultural lien on the collateral, (i) owes payment or other performance of the obligation, (ii) has provided property other than the collateral to secure payment or other performance of the obligation, or (iii) is otherwise accountable in whole or in part for payment or other performance of the obligation. The term does not include issuers or nominated persons under a letter of credit.

(60) “Original debtor,” except as used in Section 75-9-310(c), means a person that, as debtor, entered into a security agreement to which a new debtor has become bound under Section 75-9-203(d).

(61) “Payment intangible” means a general intangible under which the account debtor's principal obligation is a monetary obligation.

(62) “Person related to,” with respect to an individual, means:

(A) The spouse of the individual;

(B) A brother, brother-in-law, sister, or sister-in-law of the individual;

(C) An ancestor or lineal descendant of the individual or the individual's spouse; or

(D) Any other relative, by blood or marriage, of the individual or the individual's spouse who shares the same home with the individual.

(63) “Person related to,” with respect to an organization, means:

(A) A person directly or indirectly controlling, controlled by, or under common control with the organization;

(B) An officer or director of, or a person performing similar functions with respect to, the organization;

(C) An officer or director of, or a person performing similar functions with respect to, a person described in subparagraph (A);

(D) The spouse of an individual described in subparagraph (A), (B), or (C); or

(E) An individual who is related by blood or marriage to an individual described in subparagraph (A), (B), (C), or (D) and shares the same home with the individual.

(64) “Proceeds,” except as used in Section 75-9-609(b), means the following property:

(A) Whatever is acquired upon the sale, lease, license, exchange or other disposition of collateral;

(B) Whatever is collected on, or distributed on account of, collateral;

(C) Rights arising out of collateral;

(D) To the extent of the value of collateral, claims arising out of the loss, nonconformity, or interference with the use of, defects or infringement of rights in, or damage to, the collateral; or

(E) To the extent of the value of collateral and to the extent payable to the debtor or the secured party, insurance payable by reason of the loss or nonconformity of, defects or infringement of rights in, or damage to, the collateral.

(64A) 1“Production-money crops” means crops that secure a production-money obligation incurred with respect to the production of those crops.

(64B) “Production-money obligation” means an obligation of an obligor incurred for new value given to enable the debtor to produce crops if the value is in fact used for the production of the crops.

(64C) “Production of crops” includes tilling and otherwise preparing land for growing, planting, cultivating, fertilizing, irrigating, harvesting and gathering crops, and protecting them from damage or disease.

(65) “Promissory note” means an instrument that evidences a promise to pay a monetary obligation, does not evidence an order to pay, and does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds.

(66) “Proposal” means a record authenticated by a secured party which includes the terms on which the secured party is willing to accept collateral in full or partial satisfaction of the obligation it secures pursuant to Sections 75-9-620, 75-9-621, and 75-9-622.

(67) “Public-finance transaction” means a secured transaction in connection with which:

(A) Debt securities are issued;

(B) All or a portion of the securities issued have an initial stated maturity of at least twenty (20) years; and

(C) The debtor, obligor, secured party, account debtor or other person obligated on collateral, assignor or assignee of a secured obligation, or assignor or assignee of a security interest is a state or a governmental unit of a state.

(68) “Public organic record” means a record that is available to the public for inspection and is:

(A) A record consisting of the record initially filed with or issued by a state or the United States to form or organize an organization and any record filed with or issued by the state or the United States which amends or restates the initial record;

(B) An organic record of a business trust consisting of the record initially filed with a state and any record filed with the state which amends or restates the initial record, if a statute of the state governing business trusts requires that the record be filed with the state; or

(C) A record consisting of legislation enacted by the Legislature of a state or the Congress of the United States which forms or organizes an organization, any record amending the legislation, and any record filed with or issued by the state or United States which amends or restates the name of the organization.

(69) “Pursuant to commitment,” with respect to an advance made or other value given by a secured party, means pursuant to the secured party's obligation, whether or not a subsequent event of default or other event not within the secured party's control has relieved or may relieve the secured party from its obligation.

(70) “Record,” except as used in “for record,” “of record,” “record or legal title,” and “record owner,” means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.

(71) “Registered organization” means an organization formed or organized solely under the law of a single state or the United States by the filing of a public organic record with, the issuance of a public organic record by, or the enactment of legislation by the state or the United States. The term includes a business trust that is formed or organized under the law of a single state if a statute of the state governing business trusts requires that the business trust's organic record be filed with the state.

(72) “Secondary obligor” means an obligor to the extent that:

(A) The obligor's obligation is secondary; or

(B) The obligor has a right of recourse with respect to an obligation secured by collateral against the debtor, another obligor, or property of either.

(73) “Secured party” means:

(A) A person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding;

(B) A person that holds an agricultural lien;

(C) A consignor;

(D) A person to which accounts, chattel paper, payment intangibles, or promissory notes have been sold;

(E) A trustee, indenture trustee, agent, collateral agent, or other representative in whose favor a security interest or agricultural lien is created or provided for; or

(F) A person that holds a security interest arising under Section 75-2-401, 75-2-505, 75-2-711(3), 75-2A-508(5), 75-4-210, or 75-5-118.

(74) “Security agreement” means an agreement that creates or provides for a security interest.

(75) “Send,” in connection with a record or notification, means:

(A) To deposit in the mail, deliver for transmission, or transmit by any other usual means of communication, with postage or cost of transmission provided for, addressed to any address reasonable under the circumstances; or

(B) To cause the record or notification to be received within the time that it would have been received if properly sent under subparagraph (A).

(76) “Software” means a computer program and any supporting information provided in connection with a transaction relating to the program. The term does not include a computer program that is included in the definition of goods.

(77) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(78) “Supporting obligation” means a letter-of-credit right or secondary obligation that supports the payment or performance of an account, chattel paper, a document, a general intangible, an instrument, or investment property.

(79) “Tangible chattel paper” means chattel paper evidenced by a record or records consisting of information that is inscribed on a tangible medium.

(80) “Termination statement” means an amendment of a financing statement which:

(A) Identifies, by its file number, the initial financing statement to which it relates; and

(B) Indicates either that it is a termination statement or that the identified financing statement is no longer effective.

(81) “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.

(b) The following definitions in other articles apply to this article:

| | “Applicant” | Section 75-5-102 | | --- | --- | --- | | | “Beneficiary” | Section 75-5-102 | | | “Broker” | Section 75-8-102 | | | “Certificated security” | Section 75-8-102 | | | “Check” | Section 75-3-104 | | | “Clearing corporation” | Section 75-8-102 | | | “Contract for sale” | Section 75-2-106 | | | “Control” | Section 75-7-106 | | | “Customer” | Section 75-4-104 | | | “Entitlement holder” | Section 75-8-102 | | | “Financial asset” | Section 75-8-102 | | | “Holder in due course” | Section 75-3-302 | | | “Issuer” (with respect to a letter of credit or letter-of-credit right) | Section 75-5-102 | | | “Issuer” (with respect to a security) | Section 75-8-201 | | | “Issuer” (with respect to documents of title) | Section 75-7-102 | | | “Lease” | Section 75-2A-103 | | | “Lease agreement” | Section 75-2A-103 | | | “Lease contract” | Section 75-2A-103 | | | “Leasehold interest” | Section 75-2A-103 | | | “Lessee” | Section 75-2A-103 | | | “Lessee in ordinary course of business” | Section 75-2A-103 | | | “Lessor” | Section 75-2A-103 | | | “Lessor's residual interest” | Section 75-2A-103 | | | “Letter of credit” | Section 75-5-102 | | | “Merchant” | Section 75-2-104 | | | “Negotiable instrument” | Section 75-3-104 | | | “Nominated person” | Section 75-5-102 | | | “Note” | Section 75-3-104 | | | “Proceeds of a letter of credit” | Section 75-5-114 | | | “Prove” | Section 75-3-103 | | | “Sale” | Section 75-2-106 | | | “Securities account” | Section 75-8-501 | | | “Securities intermediary” | Section 75-8-102 | | | “Security” | Section 75-8-102 | | | “Security certificate” | Section 75-8-102 | | | “Security entitlement” | Section 75-8-102 | | | “Uncertificated security” | Section 75-8-102 |

(c) Article 1 contains general definitions and principles of construction and interpretation applicable throughout this article.

1

So in original

REVISION OF CHAPTER, EFFECTIVE JANUARY 1, 2002

<This section was enacted in the revision of Chapter 9, “Secured Transactions” containing §§ 75-9-101 to 75-9-710, by Laws 2001, Ch. 495, effective January 1, 2002. The same legislation repealed former Chapter 9. See note preceding § 75-9-101.>

§ 75-9-103

(1) Documents, instruments, letters of credit, and ordinary goods.

(a) This subsection applies to documents, instruments, rights to proceeds of written letters of credit, and goods other than those covered by a certificate of title described in subsection (2), mobile goods described in subsection (3), and minerals described in subsection (5).

(b) Except as otherwise provided in this subsection, perfection and the effect of perfection or nonperfection of a security interest in collateral are governed by the law of the jurisdiction where the collateral is when the last event occurs on which is based the assertion that the security interest is perfected or unperfected.

(c) If the parties to a transaction creating a purchase money security interest in goods in one jurisdiction understand at the time that the security interest attaches that the goods will be kept in another jurisdiction, then the law of the other jurisdiction governs the perfection and the effect of perfection or nonperfection of the security interest from the time it attaches until thirty (30) days after the debtor receives possession of the goods and thereafter if the goods are taken to the other jurisdiction before the end of the thirty-day period.

(d) When collateral is brought into and kept in this state while subject to a security interest perfected under the law of the jurisdiction from which the collateral was removed, the security interest remains perfected, but if action is required by Part 3 of this chapter to perfect the security interest,

(i) if the action is not taken before the expiration of the period of perfection in the other jurisdiction or the end of four (4) months after the collateral is brought into this state, whichever period first expires, the security interest becomes unperfected at the end of that period and is thereafter deemed to have been unperfected as against a person who became a purchaser after removal;

(ii) if the action is taken before the expiration of the period specified in subparagraph (i), the security interest continues perfected thereafter;

(iii) for the purpose of priority over a buyer of consumer goods (Section 75-9-307(2)), the period of the effectiveness of a filing in the jurisdiction from which the collateral is removed is governed by the rules with respect to perfection in subparagraphs (i) and (ii).

(2) Certificate of title.

(a) This subsection applies to goods covered by a certificate of title issued under a statute of this state or of another jurisdiction under the law of which indication of a security interest on the certificate is required as a condition of perfection.

(b) Except as otherwise provided in this subsection, perfection and the effect of perfection or nonperfection of the security interest are governed by the law (including the conflict of laws rules) of the jurisdiction issuing the certificate until four (4) months after the goods are removed from that jurisdiction and thereafter until the goods are registered in another jurisdiction, but in any event not beyond surrender of the certificate. After the expiration of that period, the goods are not covered by the certificate of title within the meaning of this section.

(c) Except with respect to the rights of a buyer described in the next paragraph, a security interest, perfected in another jurisdiction otherwise than by notation on a certificate of title, in goods brought into this state and thereafter covered by a certificate of title issued by this state is subject to the rules stated in paragraph (d) of subsection (1).

(d) If goods are brought into this state while a security interest therein is perfected in any manner under the law of the jurisdiction from which the goods are removed and a certificate of title is issued by this state and the certificate does not show that the goods are subject to the security interest or that they may be subject to security interests not shown on the certificate, the security interest is subordinate to the rights of a buyer of the goods who is not in the business of selling goods of that kind to the extent that he gives value and receives delivery of the goods after issuance of the certificate and without knowledge of the security interest.

(3) Accounts, general intangibles and mobile goods.

(a) This subsection applies to accounts (other than an account described in subsection (5) on minerals) and general intangibles (other than uncertificated securities) and to goods which are mobile and which are of a type normally used in more than one jurisdiction, such as motor vehicles, trailers, rolling stock, airplanes, shipping containers, road building and construction machinery and commercial harvesting machinery and the like, if the goods are equipment or are inventory leased or held for lease by the debtor to others, and are not covered by a certificate of title described in subsection (2).

(b) The law (including the conflict of laws rules) of the jurisdiction in which the debtor is located governs the perfection and the effect of perfection or nonperfection of the security interest.

(c) If, however, the debtor is located in a jurisdiction which is not a part of the United States, and which does not provide for perfection of the security interest by filing or recording in that jurisdiction, the law of the jurisdiction in the United States in which the debtor has its major executive office in the United States governs the perfection and the effect of perfection or nonperfection of the security interest through filing. In the alternative, if the debtor is located in a jurisdiction which is not a part of the United States or Canada and the collateral is accounts or general intangibles for money due or to become due, the security interest may be perfected by notification to the account debtor. As used in this paragraph “United States” includes its territories and possessions and the Commonwealth of Puerto Rico.

(d) A debtor shall be deemed located at his place of business if he has one, at his chief executive office if he has more than one place of business, otherwise at his residence. If, however, the debtor is a foreign air carrier under the Federal Aviation Act of 1958, as amended, it shall be deemed located at the designated office of the agent upon whom service of process may be made on behalf of the foreign air carrier.

(e) A security interest perfected under the law of the jurisdiction of the location of the debtor is perfected until the expiration of four (4) months after a change of the debtor's location to another jurisdiction, or until perfection would have ceased by the law of the first jurisdiction, whichever period first expires. Unless perfected in the new jurisdiction before the end of that period, it becomes unperfected thereafter and is deemed to have been unperfected as against a person who became a purchaser after the change.

(4) Chattel paper.

The rules stated for goods in subsection (1) apply to a possessory security interest in chattel paper. The rules stated for accounts in subsection (3) apply to a non-possessory security interest in chattel paper, but the security interest may not be perfected by notification to the account debtor.

(5) Minerals.

Perfection and the effect of perfection or nonperfection of a security interest which is created by a debtor who has an interest in minerals or the like (including oil and gas) before extraction and which attaches thereto as extracted, or which attaches to an account resulting from the sale thereof at the wellhead or minehead are governed by the law (including the conflict of laws rules) of the jurisdiction wherein the wellhead or minehead is located.

(6) Investment property.

(a) This subsection applies to investment property.

(b) Except as otherwise provided in paragraph (f), during the time that a security certificate is located in a jurisdiction, perfection of a security interest, the effect of perfection or nonperfection, and the priority of a security interest in the certificated security represented thereby are governed by the local law of that jurisdiction.

(c) Except as otherwise provided in paragraph (f), perfection of a security interest, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security are governed by the local law of the issuer's jurisdiction as specified in Section 75-8-110(d).

(d) Except as otherwise provided in paragraph (f), perfection of a security interest, the effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account are governed by the local law of the securities intermediary's jurisdiction as specified in Section 75-8-110(e).

(e) Except as otherwise provided in paragraph (f), perfection of a security interest, the effect of perfection or nonperfection, and the priority of a security interest in a commodity contract or commodity account are governed by the local law of the commodity intermediary's jurisdiction. The following rules determine a “commodity intermediary's jurisdiction” for purposes of this paragraph:

(i) If an agreement between the commodity intermediary and commodity customer specifies that it is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.

(ii) If an agreement between the commodity intermediary and commodity customer does not specify the governing law as provided in subparagraph (i), but expressly specifies that the commodity account is maintained at an office in a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.

(iii) If an agreement between the commodity intermediary and commodity customer does not specify a jurisdiction as provided in subparagraphs (i) or (ii), the commodity intermediary's jurisdiction is the jurisdiction in which is located the office identified in an account statement as the office serving the commodity customer's account.

(iv) If an agreement between the commodity intermediary and commodity customer does not specify a jurisdiction as provided in subparagraphs (i) or (ii) and an account statement does not identify an office serving the commodity customer's account as provided in subparagraph (iii), the commodity intermediary's jurisdiction is the jurisdiction in which is located the chief executive office of the commodity intermediary.

(f) Perfection of a security interest by filing, automatic perfection of a security interest in investment property granted by a broker or securities intermediary, and automatic perfection of a security interest in a commodity contract or commodity account granted by a commodity intermediary are governed by the local law of the jurisdiction in which the debtor is located.

§ 75-9-103

(a) In this section:

(1) “Purchase-money collateral” means goods or software that secures a purchase-money obligation incurred with respect to that collateral; and

(2) “Purchase-money obligation” means an obligation of an obligor incurred as all or part of the price of the collateral or for value given to enable the debtor to acquire rights in or the use of the collateral if the value is in fact so used.

(b) A security interest in goods is a purchase-money security interest:

(1) To the extent that the goods are purchase-money collateral with respect to that security interest;

(2) If the security interest is in inventory that is or was purchase-money collateral, also to the extent that the security interest secures a purchase-money obligation incurred with respect to other inventory in which the secured party holds or held a purchase-money security interest; and

(3) Also to the extent that the security interest secures a purchase-money obligation incurred with respect to software in which the secured party holds or held a purchase-money security interest.

(c) A security interest in software is a purchase-money security interest to the extent that the security interest also secures a purchase-money obligation incurred with respect to goods in which the secured party holds or held a purchase-money security interest if:

(1) The debtor acquired its interest in the software in an integrated transaction in which it acquired an interest in the goods; and

(2) The debtor acquired its interest in the software for the principal purpose of using the software in the goods.

(d) The security interest of a consignor in goods that are the subject of a consignment is a purchase-money security interest in inventory.

(e) In a transaction other than a consumer-goods transaction, if the extent to which a security interest is a purchase-money security interest depends on the application of a payment to a particular obligation, the payment must be applied:

(1) In accordance with any reasonable method of application to which the parties agree;

(2) In the absence of the parties' agreement to a reasonable method, in accordance with any intention of the obligor manifested at or before the time of payment; or

(3) In the absence of an agreement to a reasonable method and a timely manifestation of the obligor's intention, in the following order:

(A) To obligations that are not secured; and

(B) If more than one (1) obligation is secured, to obligations secured by purchase-money security interests in the order in which those obligations were incurred.

(f) In a transaction other than a consumer-goods transaction, a purchase-money security interest does not lose its status as such, even if:

(1) The purchase-money collateral also secures an obligation that is not a purchase-money obligation;

(2) Collateral that is not purchase-money collateral also secures the purchase-money obligation; or

(3) The purchase-money obligation has been renewed, refinanced, consolidated, or restructured.

(g) In a transaction other than a consumer-goods transaction, a secured party claiming a purchase-money security interest has the burden of establishing the extent to which the security interest is a purchase-money security interest.

(h) The limitation of the rules in subsections (e), (f), and (g) to transactions other than consumer-goods transactions is intended to leave to the court the determination of the proper rules in consumer-goods transactions. The court may not infer from that limitation the nature of the proper rule in consumer-goods transactions and may continue to apply established approaches.

§ 75-9-103A

(a) A security interest in crops is a production-money security interest to the extent that the crops are production-money crops.

(b) If the extent to which a security interest is a production-money security interest depends on the application of a payment to a particular obligation, the payment must be applied:

(1) In accordance with any reasonable method of application to which the parties agree;

(2) In the absence of the parties' agreement to a reasonable method, in accordance with any intention of the obligor manifested at or before the time of payment; or

(3) In the absence of an agreement to a reasonable method and a timely manifestation of the obligor's intention, in the following order:

(A) To obligations that are not secured; and

(B) If more than one (1) obligation is secured, to obligations secured by production-money security interests in the order in which those obligations were incurred.

(c) A production-money security interest does not lose its status as such, even if:

(1) The production-money crops also secure an obligation that is not a production-money obligation;

(2) Collateral that is not production-money crops also secures the production-money obligation; or

(3) The production-money obligation has been renewed, refinanced, or restructured.

(d) A secured party claiming a production-money security interest has the burden of establishing the extent to which the security interest is a production-money security interest.

§ 75-9-104

This chapter does not apply:

(a) To a security interest subject to any statute of the United States to the extent that such statute governs the rights of parties to and third parties affected by transactions in particular types of property; or

(b) To a landlord's lien; or

(c) To a lien given by statute or other rule of law for services or materials except as provided in Section 75-9-310 on priority of such liens; or

(d) To a transfer of a claim for wages, salary or other compensation of an employee; or

(e) To a transfer by a government or governmental subdivision or agency; or

(f) To a sale of accounts or chattel paper as part of a sale of the business out of which they arose, or an assignment of accounts or chattel paper which is for the purpose of collection only, or a transfer of a right to payment under a contract to an assignee who is also to do the performance under the contract or a transfer of a single account to an assignee in whole or partial satisfaction of a preexisting indebtedness; or

(g) To a transfer of an interest or claim in or under any policy of insurance, except as provided with respect to proceeds (Section 75-9-306) and priorities in proceeds (Section 75-9-312); or

(h) To a right represented by a judgment (other than a judgment taken on a right to payment which was collateral); or

(i) To any right of setoff; or

(j) Except to the extent that provision is made for fixtures in Section 75-9-313 to the creation or transfer of an interest in or lien on real estate, including a lease or rents thereunder; or

(k) To a transfer in whole or in part of any claim arising out of tort; or

(l) To a transfer of an interest in any deposit account (Section 75-9-105(1)) except as provided with respect to proceeds (Section 75-9-306) and priorities in proceeds (Section 75-9-312); or

(m) To a transfer of an interest in a letter of credit other than the rights to proceeds of a written letter of credit.

§ 75-9-104

(a) A secured party has control of a deposit account if:

(1) The secured party is the bank with which the deposit account is maintained;

(2) The debtor, secured party, and bank have agreed in an authenticated record that the bank will comply with instructions originated by the secured party directing disposition of the funds in the deposit account without further consent by the debtor; or

(3) The secured party becomes the bank's customer with respect to the deposit account.

(b) A secured party that has satisfied subsection (a) has control, even if the debtor retains the right to direct the disposition of funds from the deposit account.

§ 75-9-105

In this chapter unless the context otherwise requires:

(a) “Account debtor” means the person who is obligated on an account, chattel paper or general intangible;

(b) “Chattel paper” means a writing or writings which evidence both a monetary obligation and a security interest in or a lease of specific goods, but a charter or other contract involving the use or hire of a vessel is not chattel paper. When a transaction is evidenced both by such a security agreement or a lease and by an instrument or a series of instruments, the group of writings taken together constitutes chattel paper;

(c) “Collateral” means the property subject to a security interest, and includes accounts and chattel paper which have been sold;

(d) “Debtor” means the person who owes payment or other performance of the obligation secured, whether or not he owns or has rights in the collateral, and includes the seller of accounts or chattel paper. Where the debtor and the owner of the collateral are not the same person, the term “debtor” means the owner of the collateral in any provision of the chapter dealing with the collateral, the obligor in any provision dealing with the obligation, and may include both where the context so requires;

(e) “Deposit account” means a demand, time, savings, passbook or like account maintained with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a certificate of deposit;

(f) “Document” means document of title as defined in the general definitions of Chapter 1 (Section 75-1-201), and a receipt of the kind described in Section 75-7-201(2);

(g) “Encumbrance” includes real estate mortgages and other liens on real estate and all other rights in real estate that are not ownership interests;

(h) “Goods” includes all things which are movable at the time the security interest attaches or which are fixtures (Section 75-9-313), but does not include money, documents, instruments, investment property, accounts, chattel paper, general intangibles, or minerals or the like (including oil and gas) before extraction. “Goods” also includes standing timber which is to be cut and removed under a conveyance or contract for sale, the unborn young of animals, growing crops, and farm-raised fish produced in fresh water according to the usual and customary techniques of commercial agriculture, and marine vessels (herein defined as every type of watercraft used, or capable of being used, as a means of transportation on water) including both marine vessels under construction, including engines and all items of equipment installed or to be installed therein, whether such vessels are being constructed by the shipbuilder for his own use or for sale (said vessels under construction being classified as inventory within the meaning of Section 75-9-109(4)), and marine vessels after completion of construction so long as such vessels have not become “vessels of the United States” within the meaning of the Ship Mortgage Act of 1920, 46 U.S.C., Section 911(4), as same is now written or may hereafter be amended (said completed vessels being classified as equipment within the meaning of Section 75-9-109(2));

(i) “Instrument” means a negotiable instrument (defined in Section 75-3-104) or any other writing which evidences a right to the payment of money and is not itself a security agreement or lease and is of a type which is in ordinary course of business transferred by delivery with any necessary indorsement or assignment. The term does not include investment property;

(j) “Mortgage” means a consensual interest created by a real estate mortgage, a trust deed on real estate, or the like;

(k) An advance is made “pursuant to commitment” if the secured party has bound himself to make it, whether or not a subsequent event of default or other event not within his control has relieved or may relieve him from his obligations;

(l) “Security agreement” means an agreement which creates or provides for a security interest;

(m) “Secured party” means a lender, seller or other person in whose favor there is a security interest, including a person to whom accounts or chattel paper have been sold. When the holders of obligations issued under an indenture of trust, equipment trust agreement or the like are represented by a trustee or other person, the representative is the secured party;

(n) “Transmitting utility” means any person primarily engaged in the railroad, street railway or trolley bus business, the electric or electronics communications transmission business, the transmission of goods by pipeline, or the transmission or the production and transmission of electricity, steam, gas or water, or the provision of sewer service.

(2) Other definitions applying to this chapter and the sections in which they appear are:

| “Account” | (Section 75-9-106) | | --- | --- | | “Attach” | (Section 75-9-203) | | “Commodity contract” | (Section 75-9-115) | | “Commodity customer” | (Section 75-9-115) | | “Commodity intermediary” | (Section 75-9-115) | | “Construction mortgage” | (Section 75-9-313(1)) | | “Consumer goods” | (Section 75-9-109(1)) | | “Control” | (Section 75-9-115) | | “Equipment” | (Section 75-9-109(2)) | | “Farm products” | (Section 75-9-109(3)) | | “Fixture” | (Section 75-9-313) | | “Fixture filing” | (Section 75-9-313) | | “General intangibles” | (Section 75-9-106) | | “Inventory” | (Section 75-9-109(4)) | | “Investment Property” | (Section 75-9-115) | | “Letter of credit” | (Section 75-5-102) | | “Lien creditor” | (Section 75-9-301(3)) | | “Proceeds” | (Section 75-9-306(1)) | | “Proceeds of a letter of credit” | (Section 75-5-114(a)) | | “Purchase money security interest” | (Section 75-9-107) | | “United States” | (Section 75-9-103) |

(3) The following definitions in other chapters apply to this chapter:

| “Broker” | (Section 75-8-102) | | --- | --- | | “Certificated security” | (Section 75-8-102) | | “Check” | (Section 75-3-104) | | “Clearing corporation” | (Section 75-8-102) | | “Contract for sale” | (Section 75-2-106) | | “Control” | (Section 75-8-106) | | “Delivery” | (Section 75-8-301) | | “Entitlement holder” | (Section 75-8-102) | | “Financial asset” | (Section 75-8-102) | | “Holder in due course” | (Section 75-3-302) | | “Note” | (Section 75-3-104) | | “Sale” | (Section 75-2-106) | | “Securities intermediary” | (Section 75-8-102) | | “Security” | (Section 75-8-102) | | “Security certificate” | (Section 75-8-102) | | “Security entitlement” | (Section 75-8-102) | | “Uncertificated security” | (Section 75-8-102) |

(4) In addition, Chapter 1 contains general definitions and principles of construction and interpretation applicable throughout this chapter.

§ 75-9-105

(a) A secured party has control of electronic chattel paper if a system employed for evidencing the transfer of interests in the chattel paper reliably establishes the secured party as the person to which the chattel paper was assigned.

(b) A system satisfies subsection (a) if the record or records comprising the chattel paper are created, stored, and assigned in such a manner that:

(1) A single authoritative copy of the record or records exists which is unique, identifiable and, except as otherwise provided in paragraphs (4), (5), and (6), unalterable;

(2) The authoritative copy identifies the secured party as the assignee of the record or records;

(3) The authoritative copy is communicated to and maintained by the secured party or its designated custodian;

(4) Copies or amendments that add or change an identified assignee of the authoritative copy can be made only with the consent of the secured party;

(5) Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and

(6) Any amendment of the authoritative copy is readily identifiable as authorized or unauthorized.

§ 75-9-106

“Account” means any right to payment for goods sold or leased or for services rendered which is not evidenced by an instrument or chattel paper, whether or not it has been earned by performance. “General intangibles” means any personal property (including things in action) other than goods, accounts, chattel paper, documents, instruments, investment property, rights to proceeds of written letters of credit, and money. All rights to payment earned or unearned under a charter or other contract involving the use or hire of a vessel and all rights incident to the charter or contract are accounts.

§ 75-9-106

(a) A person has control of a certificated security, uncertificated security, or security entitlement as provided in Section 75-8-106.

(b) A secured party has control of a commodity contract if:

(1) The secured party is the commodity intermediary with which the commodity contract is carried; or

(2) The commodity customer, secured party, and commodity intermediary have agreed that the commodity intermediary will apply any value distributed on account of the commodity contract as directed by the secured party without further consent by the commodity customer.

(c) A secured party having control of all security entitlements or commodity contracts carried in a securities account or commodity account has control over the securities account or commodity account.

§ 75-9-107

A security interest is a “purchase money security interest” to the extent that it is

(a) taken or retained by the seller of the collateral to secure all or part of its price; or

(b) taken by a person who by making advances or incurring an obligation gives value to enable the debtor to acquire rights in or the use of collateral if such value is in fact so used.

§ 75-9-107

A secured party has control of a letter-of-credit right to the extent of any right to payment or performance by the issuer or any nominated person if the issuer or nominated person has consented to an assignment of proceeds of the letter of credit under Section 75-5-114(c) or otherwise applicable law or practice.

§ 75-9-108

Where a secured party makes an advance, incurs an obligation, releases a perfected security interest, or otherwise gives new value which is to be secured in whole or in part by after-acquired property his security interest in the after-acquired collateral shall be deemed to be taken for new value and not as security for an antecedent debt if the debtor acquires his rights in such collateral either in the ordinary course of his business or under a contract of purchase made pursuant to the security agreement within a reasonable time after new value is given.

§ 75-9-108

(a) Except as otherwise provided in subsections (c), (d), and (e), a description of personal or real property is sufficient, whether or not it is specific, if it reasonably identifies what is described.

(b) Except as otherwise provided in subsection (d), a description of collateral reasonably identifies the collateral if it identifies the collateral by:

(1) Specific listing;

(2) Category;

(3) Except as otherwise provided in subsection (e), a type of collateral defined in the Uniform Commercial Code;

(4) Quantity;

(5) Computational or allocational formula or procedure; or

(6) Except as otherwise provided in subsection (c), any other method, if the identity of the collateral is objectively determinable.

(c) A description of collateral as “all the debtor's assets” or “all the debtor's personal property” or using words of similar import does not reasonably identify the collateral.

(d) Except as otherwise provided in subsection (e), a description of a security entitlement, securities account, or commodity account is sufficient if it describes:

(1) The collateral by those terms or as investment property; or

(2) The underlying financial asset or commodity contract.

(e) A description only by type of collateral defined in the Uniform Commercial Code is an insufficient description of:

(1) A commercial tort claim; or

(2) In a consumer transaction, consumer goods, a security entitlement, a securities account, or a commodity account.

§ 75-9-109

Goods are

(1) “consumer goods” if they are used or bought for use primarily for personal, family or household purposes;

(2) “equipment” if they are used or bought for use primarily in business (including farming or a profession) or by a debtor who is a nonprofit organization or a governmental subdivision or agency or if the goods are not included in the definitions of inventory, farm products or consumer goods;

(3) “farm products” if they are crops or livestock or supplies used or produced in farming operations or if they are products of crops or livestock in their unmanufactured states (such as ginned cotton, wool clip, maple syrup, milk and eggs), and if they are in the possession of a debtor engaged in raising, fattening, grazing or other farming operations. If goods are farm products they are neither equipment nor inventory;

(4) “inventory” if they are held by a person who holds them for sale or lease or to be furnished under contracts of service or if he has so furnished them, or if they are raw materials, work in process or materials used or consumed in a business. Inventory of a person is not to be classified as his equipment.

§ 75-9-109

(a) Except as otherwise provided in subsections (c) and (d), this article applies to:

(1) A transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract;

(2) An agricultural lien;

(3) A sale of accounts, chattel paper, payment intangibles, or promissory notes;

(4) A consignment;

(5) A security interest arising under Section 75-2-401, 75-2-505, 75-2-711(3), or 75-2A-508(5), as provided in Section 75-9-110; and

(6) A security interest arising under Section 75-4-210 or 75-5-118.

(b) The application of this article to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this article does not apply.

(c) This article does not apply to the extent that:

(1) A statute, regulation, or treaty of the United States preempts this article;

(2) A statute of another state, a foreign country, or a governmental unit of another state or a foreign country, other than a statute generally applicable to security interests, expressly governs creation, perfection, priority, or enforcement of a security interest created by the state, country, or governmental unit; or

(3) The rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under Section 75-5-114.

(d) This article does not apply to:

(1) A landlord's lien, other than an agricultural lien;

(2) A lien, other than an agricultural lien, given by statute or other rule of law for services or materials, but Section 75-9-333 applies with respect to priority of the lien;

(3) An assignment of a claim for wages, salary, or other compensation of an employee;

(4) A sale of accounts, chattel paper, payment intangibles, or promissory notes as part of a sale of the business out of which they arose;

(5) An assignment of accounts, chattel paper, payment intangibles, or promissory notes which is for the purpose of collection only;

(6) An assignment of a right to payment under a contract to an assignee that is also obligated to perform under the contract;

(7) An assignment of a single account, payment intangible, or promissory note to an assignee in full or partial satisfaction of a preexisting indebtedness;

(8) A transfer of an interest in or an assignment of a claim under a policy of insurance, other than an assignment by or to a health-care provider of a health-care-insurance receivable and any subsequent assignment of the right to payment, but Sections 75-9-315 and 75-9-322 apply with respect to proceeds and priorities in proceeds;

(9) An assignment of a right represented by a judgment, other than a judgment taken on a right to payment that was collateral;

(10) A right of recoupment or set-off, but:

(A)Section 75-9-340 applies with respect to the effectiveness of rights of recoupment or set-off against deposit accounts; and

(B)Section 75-9-404 applies with respect to defenses or claims of an account debtor;

(11) The creation or transfer of an interest in or lien on real property, including a lease or rents thereunder, except to the extent that provision is made for:

(A) Liens on real property in Sections 75-9-203 and 75-9-308;

(B) Fixtures in Section 75-9-334;

(C) Fixture filings in Sections 75-9-501, 75-9-502, 75-9-512, 75-9-516, and 75-9-519; and

(D) Security agreements covering personal and real property in Section 75-9-604;

(12) An assignment of a claim arising in tort, other than a commercial tort claim, but Sections 75-9-315 and 75-9-322 apply with respect to proceeds and priorities in proceeds; or

(13) To a transfer by this state or a governmental unit of this state.

§ 75-9-110

For the purposes of this chapter any description of personal property or real estate is sufficient whether or not it is specific if it reasonably identifies what is described, except that a description of real estate in an instrument filed to perfect a security interest in fixtures is sufficient only if the filing or recording of the same constitutes constructive notice under the laws of this state, other than this chapter, which are applicable to the filing or recording of real estate mortgages and deeds of trust.

§ 75-9-110

A security interest arising under Section 75-2-401, 75-2-505, 75-2-711( 3), or 75-2A-508(5) is subject to this article. However, until the debtor obtains possession of the goods:

(1) The security interest is enforceable, even if Section 75-9-203(b)(3) has not been satisfied;

(2) Filing is not required to perfect the security interest;

(3) The rights of the secured party after default by the debtor are governed by Article 2 or 2A; and

(4) The security interest has priority over a conflicting security interest created by the debtor.

§ 75-9-111

The creation of a security interest is not a bulk transfer under Chapter 6 (see Section 6-103) [§ 75-6-103].

§ 75-9-112

Unless otherwise agreed, when a secured party knows that collateral is owned by a person who is not the debtor, the owner of the collateral is entitled to receive from the secured party any surplus under Section 9-502(2) [§ 75-9-502(2) ] or under Section 9-504(1) [§ 75-9-504(1) ], and is not liable for the debt or for any deficiency after resale, and he has the same right as the debtor

(a) to receive statements under Section 9-208 [§ 75-9-208];

(b) to receive notice of and to object to a secured party's proposal to retain the collateral in satisfaction of the indebtedness under Section 9-505 [§ 75-9-505];

(c) to redeem the collateral under Section 9-506 [§ 75-9-506];

(d) to obtain injunctive or other relief under Section 9-507(1) [§ 75-9-507(1) ]; and

(e) to recover losses caused to him under Section 9-208(2) [§ 75-9-208(2) ].

§ 75-9-113

A security interest arising solely under the chapter on Sales (Chapter 2) or the chapter on Leases (Chapter 2A) is subject to the provisions of this chapter except that to the extent that and so long as the debtor does not have or does not lawfully obtain possession of the goods

(a) No security agreement is necessary to make the security interest enforceable; and

(b) No filing is required to perfect the security interest; and

(c) The rights of the secured party on default by the debtor are governed (i) by the chapter on Sales (Chapter 2) in the case of a security interest arising solely under such chapter or (ii) by the chapter on Leases (Chapter 2A) in the case of a security interest arising solely under such chapter.

§ 75-9-114

(1) A person who delivers goods under a consignment which is not a security interest and who would be required to file under this chapter by section 75-2-326(3)(c) has priority over a secured party who is or becomes a creditor of the consignee and who would have a perfected security interest in the goods if they were the property of the consignee, and also has priority with respect to identifiable cash proceeds received on or before delivery of the goods to a buyer, if

(a) the consignor complies with the filing provision of the chapter on Sales with respect to consignments (section 75-2-326(3)(c)) before the consignee receives possession of the goods; and

(b) the consignor gives notification in writing to the holder of the security interest if the holder has filed a financing statement covering the same types of goods before the date of the filing made by the consignor; and

(c) the holder of the security interest receives the notification within five (5) years before the consignee receives possession of the goods; and

(d) the notification states that the consignor expects to deliver goods on consignment to the consignee, describing the goods by item or type.

(2) In the case of a consignment which is not a security interest and in which the requirements of the preceding subsection have not been met, a person who delivers goods to another is subordinate to a person who would have a perfected security interest in the goods if they were the property of the debtor.

§ 75-9-115

(1) In this article:

(a) “Commodity account” means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer.

(b) “Commodity contract” means a commodity futures contract, an option on a commodity futures contract, a commodity option, or other contract that, in each case, is:

(i) Traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to the federal commodities laws; or

(ii) Traded on a foreign commodity board of trade, exchange, or market, and is carried on the books of a commodity intermediary for a commodity customer.

(c) “Commodity customer” means a person for whom a commodity intermediary carries a commodity contract on its books.

(d) “Commodity intermediary” means:

(i) A person who is registered as a futures commission merchant under the federal commodities laws; or

(ii) A person who in the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to the federal commodities laws.

(e) “Control” with respect to a certificated security, uncertificated security, or security entitlement has the meaning specified in Section 75-8-106. A secured party has control over a commodity contract if by agreement among the commodity customer, the commodity intermediary, and the secured party, the commodity intermediary has agreed that it will apply any value distributed on account of the commodity contract as directed by the secured party without further consent by the commodity customer. If a commodity customer grants a security interest in a commodity contract to its own commodity intermediary, the commodity intermediary as secured party has control. A secured party has control over a securities account or commodity account if the secured party has control over all security entitlements or commodity contracts carried in the securities account or commodity account.

(f) “Investment property” means:

(i) A security, whether certificated or uncertificated;

(ii) A security entitlement;

(iii) A securities account;

(iv) A commodity contract; or

(v) A commodity account.

(2) Attachment or perfection of a security interest in a securities account is also attachment or perfection of a security interest in all security entitlements carried in the securities account. Attachment or perfection of a security interest in a commodity account is also attachment or perfection of a security interest in all commodity contracts carried in the commodity account.

(3) A description of collateral in a security agreement or financing statement is sufficient to create or perfect a security interest in a certificated security, uncertificated security, security entitlement, securities account, commodity contract, or commodity account whether it describes the collateral by those terms, or as investment property, or by description of the underlying security, financial asset, or commodity contract. A description of investment property collateral in a security agreement or financing statement is sufficient if it identifies the collateral by specific listing, by category, by quantity, by a computational or allocational formula or procedure, or by any other method, if the identity of the collateral is objectively determinable.

(4) Perfection of a security interest in investment property is governed by the following rules:

(a) A security interest in investment property may be perfected by control.

(b) Except as otherwise provided in paragraphs (c) and (d), a security interest in investment property may be perfected by filing.

(c) If the debtor is a broker or securities intermediary, a security interest in investment property is perfected when it attaches. The filing of a financing statement with respect to a security interest in investment property granted by a broker or securities intermediary has no effect for purposes of perfection or priority with respect to that security interest.

(d) If a debtor is a commodity intermediary, a security interest in a commodity contract or a commodity account is perfected when it attaches. The filing of a financing statement with respect to a security interest in a commodity contract or a commodity account granted by a commodity intermediary has no effect for purposes of perfection or priority with respect to that security interest.

(5) Priority between conflicting security interests in the same investment property is governed by the following rules:

(a) A security interest of a secured party who has control over investment property has priority over a security interest of a secured party who does not have control over the investment property.

(b) Except as otherwise provided in paragraphs (c) and (d), conflicting security interests of secured parties each of whom has control rank equally.

(c) Except as otherwise agreed by the securities intermediary, a security interest in a security entitlement or a securities account granted to the debtor's own securities intermediary has priority over any security interest granted by the debtor to another secured party.

(d) Except as otherwise agreed by the commodity intermediary, a security interest in a commodity contract or a commodity account granted to the debtor's own commodity intermediary has priority over any security interest granted by the debtor to another secured party.

(e) Conflicting security interests granted by a broker, a securities intermediary, or a commodity intermediary which are perfected without control rank equally.

(f) In all other cases, priority between conflicting security interests in investment property is governed by Section 75-9-312(5), (6), and (7).Section 75-9-312(4) does not apply to investment property.

(6) If a security certificate in registered form is delivered to a secured party pursuant to agreement, a written security agreement is not required for attachment or enforceability of the security interest, delivery suffices for perfection of the security interest, and the security interest has priority over a conflicting security interest perfected by means other than control, even if a necessary indorsement is lacking.

§ 75-9-116

(1) If a person buys a financial asset through a securities intermediary in a transaction in which the buyer is obligated to pay the purchase price to the securities intermediary at the time of the purchase, and the securities intermediary credits the financial asset to the buyer's securities account before the buyer pays the securities intermediary, the securities intermediary has a security interest in the buyer's security entitlement securing the buyer's obligation to pay. A security agreement is not required for attachment or enforceability of the security interest, and the security interest is automatically perfected.

(2) If a certificated security, or other financial asset represented by a writing which in the ordinary course of business is transferred by delivery with any necessary indorsement or assignment is delivered pursuant to an agreement between persons in the business of dealing with such securities or financial assets and the agreement calls for delivery versus payment, the person delivering the certificate or other financial asset has a security interest in the certificated security or other financial asset securing the seller's right to receive payment. A security agreement is not required for attachment or enforceability of the security interest, and the security interest is automatically perfected.

§ 75-9-201

Except as otherwise provided by this code a security agreement is effective according to its terms between the parties, against purchasers of the collateral and against creditors. Nothing in this chapter validates any charge or practice illegal under any statute or regulation thereunder governing usury, small loans, retail installment sales, or the like, or extends the application of any such statute or regulation to any transaction not otherwise subject thereto.

§ 75-9-201

(a) Except as otherwise provided in the Uniform Commercial Code, a security agreement is effective according to its terms between the parties, against purchasers of the collateral, and against creditors.

(b) A transaction subject to this article is subject to any applicable rule of law which establishes a different rule for consumers and to Sections 75-67-101 through 75-67-135, Sections 75-67-201 through 75-67-243, Sections 75-67-1 through 75-67-39, Sections 63-19-1 through 63-19-55 and to any other statute or regulation of this state that regulates the rates, charges, agreements, and practices for loans, credit sales, or other extensions of credit, and to any consumer-protection statute or regulation of this state.

(c) In case of conflict between this article and a rule of law, statute, or regulation described in subsection (b), the rule of law, statute, or regulation controls. Failure to comply with a statute or regulation described in subsection (b) has only the effect the statute or regulation specifies.

(d) This article does not:

(1) Validate any rate, charge, agreement, or practice that violates a rule of law, statute or regulation described in subsection (b); or

(2) Extend the application of the rule of law, statute or regulation to a transaction not otherwise subject to it.

§ 75-9-202

Each provision of this chapter with regard to rights, obligations and remedies applies whether title to collateral is in the secured party or in the debtor.

§ 75-9-202

Except as otherwise provided with respect to consignments or sales of accounts, chattel paper, payment intangibles, or promissory notes, the provisions of this article with regard to rights and obligations apply whether title to collateral is in the secured party or the debtor.

§ 75-9-203

(1) Subject to the provisions of Section 75-4-208 on the security interest of a collecting bank, Sections 75-9-115 and 75-9-116 on security interests in investment property, and Section 75-9-113 on a security interest arising under the chapter on Sales, a security interest is not enforceable against the debtor or third parties with respect to the collateral and does not attach unless:

(a) The collateral is in the possession of the secured party pursuant to agreement, the collateral is investment property and the security party has control pursuant to agreement, or the debtor has signed a security agreement which contains a description of the collateral and in addition, when the security interest covers crops growing or to be grown or timber to be cut, a description of the land concerned;

(b) value has been given; and

(c) the debtor has rights in the collateral.

(2) A security interest attaches when it becomes enforceable against the debtor with respect to the collateral. Attachment occurs as soon as all of the events specified in subsection (1) have taken place unless explicit agreement postpones the time of attaching.

(3) Unless otherwise agreed, a security agreement gives the secured party the rights to proceeds provided by Section 75-9-306.

(4) A transaction, although subject to this chapter, is also subject to Sections 75-67-101 through 75-67-135, Sections 75-67-201 through 75-67-243, Sections 75-67-1 through 75-67-39, and Sections 63-19-1 through 63-19-55, and in the case of conflict between the provisions of this chapter and any such statute, the provisions of such statute control. Failure to comply with any applicable statute has only the effect which is specified therein.

§ 75-9-203

(a) A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral, unless an agreement expressly postpones the time of attachment.

(b) Except as otherwise provided in subsections (c) through (i), a security interest is enforceable against the debtor and third parties with respect to the collateral only if:

(1) Value has been given;

(2) The debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and

(3) One (1) of the following conditions is met:

(A) The debtor has authenticated a security agreement that provides a description of the collateral and, if the security interest covers timber to be cut, a description of the land concerned;

(B) The collateral is not a certificated security and is in the possession of the secured party under Section 75-9-313 pursuant to the debtor's security agreement;

(C) The collateral is a certificated security in registered form and the security certificate has been delivered to the secured party under Section 75-8-301 pursuant to the debtor's security agreement; or

(D) The collateral is deposit accounts, electronic chattel paper, investment property, letter-of-credit rights, or electronic documents, and the secured party has control under Section 75-7-106, 75-9-104, 75-9-105, 75-9-106, or 75-9-107 pursuant to the debtor's security agreement.

(c) Subsection (b) is subject to Section 75-4-210 on the security interest of a collecting bank, Section 75-5-118 on the security interest of a letter-of-credit issuer or nominated person, Section 75-9-110 on a security interest arising under Article 2 or 2A of Title 75, and Section 75-9-206 on security interests in investment property.

(d) A person becomes bound as debtor by a security agreement entered into by another person if, by operation of law other than this article or by contract:

(1) The security agreement becomes effective to create a security interest in the person's property; or

(2) The person becomes generally obligated for the obligations of the other person, including the obligation secured under the security agreement, and acquires or succeeds to all or substantially all of the assets of the other person.

(e) If a new debtor becomes bound as debtor by a security agreement entered into by another person:

(1) The agreement satisfies subsection (b)(3) with respect to existing or after-acquired property of the new debtor to the extent the property is described in the agreement; and

(2) Another agreement is not necessary to make a security interest in the property enforceable.

(f) The attachment of a security interest in collateral gives the secured party the rights to proceeds provided by Section 75-9-315 and is also attachment of a security interest in a supporting obligation for the collateral.

(g) The attachment of a security interest in a right to payment or performance secured by a security interest or other lien on personal or real property is also attachment of a security interest in the security interest, mortgage, or other lien.

(h) The attachment of a security interest in a securities account is also attachment of a security interest in the security entitlements carried in the securities account.

(i) The attachment of a security interest in a commodity account is also attachment of a security interest in the commodity contracts carried in the commodity account.

§ 75-9-204

(1) Except as provided in subsection (2), a security agreement may provide that any or all obligations covered by the security agreement are to be secured by after-acquired collateral.

(2) No security interest attaches under an after-acquired property clause to consumer goods other than accessions (section 75-9-314) when given as additional security unless the debtor acquires rights in them within ten (10) days after the secured party gives value.

(3) Obligations covered by a security agreement may include future advances or other value whether or not the advances or value are given pursuant to commitment (section 75-9-105(1)).

§ 75-9-204

(a) Except as otherwise provided in subsection (b), a security agreement may create or provide for a security interest in after-acquired collateral.

(b) A security interest does not attach under a term constituting an after-acquired property clause to:

(1) Consumer goods, other than an accession when given as additional security, unless the debtor acquires rights in them within ten (10) days after the secured party gives value; or

(2) A commercial tort claim.

(c) A security agreement may provide that collateral secures, or that accounts, chattel paper, payment intangibles, or promissory notes are sold in connection with, future advances or other value, whether or not the advances or value are given pursuant to commitment.

§ 75-9-205

A security interest is not invalid or fraudulent against creditors by reason of liberty in the debtor to use, commingle or dispose of all or part of the collateral (including returned or repossessed goods) or to collect or compromise accounts or chattel paper, or to accept the return of goods or make repossessions, or to use, commingle or dispose of proceeds, or by reason of the failure of the secured party to require the debtor to account for proceeds or replace collateral. This section does not relax the requirements of possession where perfection of a security interest depends upon possession of the collateral by the secured party or by a bailee.

§ 75-9-205

(a) A security interest is not invalid or fraudulent against creditors solely because:

(1) The debtor has the right or ability to:

(A) Use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;

(B) Collect, compromise, enforce, or otherwise deal with collateral;

(C) Accept the return of collateral or make repossessions; or

(D) Use, commingle, or dispose of proceeds; or

(2) The secured party fails to require the debtor to account for proceeds or replace collateral.

(b) This section does not relax the requirements of possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party.

§ 75-9-206

(1) Subject to any statute or decision which establishes a different rule for buyers or lessees of consumer goods, an agreement by a buyer or lessee that he will not assert against an assignee any claim or defense which he may have against the seller or lessor is enforceable by an assignee who takes his assignment for value, in good faith and without notice of a claim or defense, except as to defenses of a type which may be asserted against a holder in due course of a negotiable instrument under the chapter on Commercial Paper (Chapter 3). A buyer who as part of one (1) transaction signs both a negotiable instrument and a security agreement makes such an agreement.

(2) When a seller retains a purchase money security interest in goods the chapter on Sales (Chapter 2) governs the sale and any disclaimer, limitation or modification of the seller's warranties.

§ 75-9-206

(a) A security interest in favor of a securities intermediary attaches to a person's security entitlement if:

(1) The person buys a financial asset through the securities intermediary in a transaction in which the person is obligated to pay the purchase price to the securities intermediary at the time of the purchase; and

(2) The securities intermediary credits the financial asset to the buyer's securities account before the buyer pays the securities intermediary.

(b) The security interest described in subsection (a) secures the person's obligation to pay for the financial asset.

(c) A security interest in favor of a person that delivers a certificated security or other financial asset represented by a writing attaches to the security or other financial asset if:

(1) The security or other financial asset:

(A) In the ordinary course of business is transferred by delivery with any necessary endorsement or assignment; and

(B) Is delivered under an agreement between persons in the business of dealing with such securities or financial assets; and

(2) The agreement calls for delivery against payment.

(d) The security interest described in subsection (c) secures the obligation to make payment for the delivery.

§ 75-9-207

(1) A secured party must use reasonable care in the custody and preservation of collateral in his possession. In the case of an instrument or chattel paper reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed.

(2) Unless otherwise agreed, when collateral is in the secured party's possession

(a) reasonable expenses (including the cost of any insurance and payment of taxes or other charges) incurred in the custody, preservation, use or operation of the collateral are chargeable to the debtor and are secured by the collateral;

(b) the risk of accidental loss or damage is on the debtor to the extent of any deficiency in any effective insurance coverage;

(c) the secured party may hold as additional security any increase or profits (except money) received from the collateral, but money so received, unless remitted to the debtor, shall be applied in reduction of the secured obligation;

(d) the secured party must keep the collateral identifiable but fungible collateral may be commingled;

(e) the secured party may repledge the collateral upon terms which do not impair the debtor's right to redeem it.

(3) A secured party is liable for any loss caused by his failure to meet any obligation imposed by the preceding subsections but does not lose his security interest.

(4) A secured party may use or operate the collateral for the purpose of preserving the collateral or its value or pursuant to the order of a court of appropriate jurisdiction or, except in the case of consumer goods, in the manner and to the extent provided in the security agreement.

§ 75-9-207

(a) Except as otherwise provided in subsection (d), a secured party shall use reasonable care in the custody and preservation of collateral in the secured party's possession. In the case of chattel paper or an instrument, reasonable care includes taking necessary steps to preserve rights against prior parties unless otherwise agreed.

(b) Except as otherwise provided in subsection (d), if a secured party has possession of collateral:

(1) Reasonable expenses, including the cost of insurance and payment of taxes or other charges, incurred in the custody, preservation, use, or operation of the collateral are chargeable to the debtor and are secured by the collateral;

(2) The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage;

(3) The secured party shall keep the collateral identifiable, but fungible collateral may be commingled; and

(4) The secured party may use or operate the collateral:

(A) For the purpose of preserving the collateral or its value;

(B) As permitted by an order of a court having competent jurisdiction; or

(C) Except in the case of consumer goods, in the manner and to the extent agreed by the debtor.

(c) Except as otherwise provided in subsection (d), a secured party having possession of collateral or control of collateral under Section 75-7-106, 75-9-104, 75-9-105, 75-9-106 or 75-9-107:

(1) May hold as additional security any proceeds, except money or funds, received from the collateral;

(2) Shall apply money or funds received from the collateral to reduce the secured obligation, unless remitted to the debtor; and

(3) May create a security interest in the collateral.

(d) If the secured party is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor:

(1) Subsection (a) does not apply unless the secured party is entitled under an agreement:

(A) To charge back uncollected collateral; or

(B) Otherwise to full or limited recourse against the debtor or a secondary obligor based on the nonpayment or other default of an account debtor or other obligor on the collateral; and

(2) Subsections (b) and (c) do not apply.

§ 75-9-208

(1) A debtor may sign a statement indicating what he believes to be the aggregate amount of unpaid indebtedness as of a specified date and may send it to the secured party with a request that the statement be approved or corrected and returned to the debtor. When the security agreement or any other record kept by the secured party identifies the collateral a debtor may similarly request the secured party to approve or correct a list of the collateral.

(2) The secured party must comply with such a request within two (2) weeks after receipt by sending a written correction or approval. If the secured party claims a security interest in all of a particular type of collateral owned by the debtor he may indicate that fact in his reply and need not approve or correct an itemized list of such collateral. If the secured party without reasonable excuse fails to comply he is liable for any loss caused to the debtor thereby; and if the debtor has properly included in his request a good faith statement of the obligation or a list of the collateral or both the secured party may claim a security interest only as shown in the statement against persons misled by his failure to comply. If he no longer has an interest in the obligation or collateral at the time the request is received he must disclose the name and address of any successor in interest known to him and he is liable for any loss caused to the debtor as a result of failure to disclose. A successor in interest is not subject to this section until a request is received by him.

(3) A debtor is entitled to such a statement once every six (6) months without charge. The secured party may require payment of a charge not exceeding ten dollars ($10.00) for each additional statement furnished.

§ 75-9-208

(a) This section applies to cases in which there is no outstanding secured obligation and the secured party is not committed to make advances, incur obligations, or otherwise give value.

(b) Within ten (10) days after receiving an authenticated demand by the debtor:

(1) A secured party having control of a deposit account under Section 75-9-104(a)(2) shall send to the bank with which the deposit account is maintained an authenticated statement that releases the bank from any further obligation to comply with instructions originated by the secured party;

(2) A secured party having control of a deposit account under Section 75-9-104(a)(3) shall:

(A) Pay the debtor the balance on deposit in the deposit account; or

(B) Transfer the balance on deposit into a deposit account in the debtor's name;

(3) A secured party, other than a buyer, having control of electronic chattel paper under Section 75-9-105 shall:

(A) Communicate the authoritative copy of the electronic chattel paper to the debtor or its designated custodian;

(B) If the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic chattel paper is maintained for the secured party, communicate to the custodian an authenticated record releasing the designated custodian from any further obligation to comply with instructions originated by the secured party and instructing the custodian to comply with instructions originated by the debtor; and

(C) Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party;

(4) A secured party having control of investment property under Section 75-8-106(d)(2) or 75-9-106(b) shall send to the securities intermediary or commodity intermediary with which the security entitlement or commodity contract is maintained an authenticated record that releases the securities intermediary or commodity intermediary from any further obligation to comply with entitlement orders or directions originated by the secured party;

(5) A secured party having control of a letter-of-credit right under Section 75-9-107 shall send to each person having an unfulfilled obligation to pay or deliver proceeds of the letter of credit to the secured party an authenticated release from any further obligation to pay or deliver proceeds of the letter of credit to the secured party; and

(6) A secured party having control of an electronic document shall:

(A) Give control of the electronic document to the debtor or its designated custodian;

(B) If the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic document is maintained for the secured party, communicate to the custodian an authenticated record releasing the designated custodian from any further obligation to comply with instructions originated by the secured party and instructing the custodian to comply with instructions originated by the debtor; and

(C) Take appropriate action to enable the debtor or its designated custodian to make copies of or revisions to the authoritative copy which add or change an identified assignee of the authoritative copy without the consent of the secured party.

§ 75-9-209

(a) Except as otherwise provided in subsection (c), this section applies if:

(1) There is no outstanding secured obligation; and

(2) The secured party is not committed to make advances, incur obligations, or otherwise give value.

(b) Within ten (10) days after receiving an authenticated demand by the debtor, a secured party shall send to an account debtor that has received notification of an assignment to the secured party as assignee under Section 75-9-406(a) an authenticated record that releases the account debtor from any further obligation to the secured party.

(c) This section does not apply to an assignment constituting the sale of an account, chattel paper, or payment intangible.

§ 75-9-210

(a) In this section:

(1) “Request” means a record of a type described in paragraph (2), (3), or (4).

(2) “Request for an accounting” means a record authenticated by a debtor requesting that the recipient provide an accounting of the unpaid obligations secured by collateral and reasonably identifying the transaction or relationship that is the subject of the request.

(3) “Request regarding a list of collateral” means a record authenticated by a debtor requesting that the recipient approve or correct a list of what the debtor believes to be the collateral securing an obligation and reasonably identifying the transaction or relationship that is the subject of the request.

(4) “Request regarding a statement of account” means a record authenticated by a debtor requesting that the recipient approve or correct a statement indicating what the debtor believes to be the aggregate amount of unpaid obligations secured by collateral as of a specified date and reasonably identifying the transaction or relationship that is the subject of the request.

(b) Subject to subsections (c), (d), (e), and (f), a secured party, other than a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor, shall comply with a request within fourteen (14) days after receipt:

(1) In the case of a request for an accounting, by authenticating and sending to the debtor an accounting; and

(2) In the case of a request regarding a list of collateral or a request regarding a statement of account, by authenticating and sending to the debtor an approval or correction.

(c) A secured party that claims a security interest in all of a particular type of collateral owned by the debtor may comply with a request regarding a list of collateral by sending to the debtor an authenticated record including a statement to that effect within fourteen (14) days after receipt.

(d) A person that receives a request regarding a list of collateral, claims no interest in the collateral when it receives the request, and claimed an interest in the collateral at an earlier time shall comply with the request within fourteen (14) days after receipt by sending to the debtor an authenticated record:

(1) Disclaiming any interest in the collateral; and

(2) If known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient's interest in the collateral.

(e) A person that receives a request for an accounting or a request regarding a statement of account, claims no interest in the obligations when it receives the request, and claimed an interest in the obligations at an earlier time shall comply with the request within fourteen (14) days after receipt by sending to the debtor an authenticated record:

(1) Disclaiming any interest in the obligations; and

(2) If known to the recipient, providing the name and mailing address of any assignee of or successor to the recipient's interest in the obligations.

(f) A debtor is entitled without charge to one (1) response to a request under this section during any six-month period. The secured party may require payment of a charge not exceeding Twenty-five Dollars ($25.00) for each additional response.

§ 75-9-301

(1) Except as otherwise provided in subsection (2), an unperfected security interest is subordinate to the rights of:

(a) Persons entitled to priority under Section 75-9-312;

(b) A person who becomes a lien creditor before the security interest is perfected;

(c) In the case of goods, instruments, documents and chattel paper, a person who is not a secured party and who is a transferee in bulk or other buyer not in ordinary course of business, or is a buyer of farm products in ordinary course of business, to the extent that he gives value and receives delivery of the collateral without knowledge of the security interest and before it is perfected;

(d) In the case of accounts, general intangibles, and investment property, a person who is not a secured party and who is a transferee to the extent that he gives value without knowledge of the security interest and before it is perfected.

(2) If the secured party files with respect to a purchase money security interest before or within twenty (20) days after the debtor receives possession of the collateral, he takes priority over the rights of a transferee in bulk or of a lien creditor which arise between the time the security interest attaches and the time of filing.

(3) A “lien creditor” means a creditor who has acquired a lien on the property involved by attachment, levy or the like and includes an assignee for benefit of creditors from the time of assignment, and a trustee in bankruptcy from the date of the filing of the petition or a receiver in equity from the time of appointment.

(4) A person who becomes a lien creditor while a security interest is perfected takes subject to the security interest only to the extent that it secures advances made before he becomes a lien creditor or within forty-five (45) days thereafter or made without knowledge of the lien or pursuant to a commitment entered into without knowledge of the lien.

§ 75-9-301

Except as otherwise provided in Sections 75-9-303 through 75-9-306, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral:

(1) Except as otherwise provided in this section, while a debtor is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral.

(2) While collateral is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a possessory security interest in that collateral.

(3) Except as otherwise provided in paragraph (4), while tangible negotiable documents, goods, instruments, money or tangible chattel paper is located in a jurisdiction, the local law of that jurisdiction governs:

(A) Perfection of a security interest in the goods by filing a fixture filing;

(B) Perfection of a security interest in timber to be cut; and

(C) The effect of perfection or nonperfection and the priority of a nonpossessory security interest in the collateral.

(4) The local law of the jurisdiction in which the wellhead or minehead is located governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in as-extracted collateral.

§ 75-9-302

(1) A financing statement must be filed to perfect all security interests except the following:

(a) A security interest in collateral in possession of the secured party under Section 75-9-305;

(b) A security interest temporarily perfected in instruments, certificated securities, or documents without delivery under Section 75-9-304 or in proceeds for a period of ten (10) days under Section 75-9-306;

(c) A security interest created by an assignment of a beneficial interest in a trust or a decedent's estate;

(d) A purchase money security interest in consumer goods; but filing is required for a motor vehicle required to be registered; and fixture filing is required for priority over conflicting interests in fixtures to the extent provided in Section 75-9-313;

(e) An assignment of accounts which does not alone or in conjunction with other assignments to the same assignee transfer a significant part of the outstanding accounts of the assignor;

(f) A security interest of a collecting bank (Section 75-4-208) or arising under the chapter on Sales (see Section 75-9-113) or covered in subsection (3) of this section;

(g) An assignment for the benefit of all the creditors of the transferor, and subsequent transfers by the assignee thereunder;

(h) A security interest in investment property which is perfected without filing under Section 75-9-115 or Section 75-9-116.

(2) If a secured party assigns a perfected security interest, no filing under this chapter is required in order to continue the perfected status of the security interest against creditors of and transferees from the original debtor.

(3) The filing of a financing statement otherwise required by this chapter is not necessary or effective to perfect a security interest in property subject to

(a) A statute or treaty of the United States which provides for a national or international registration or a national or international certificate of title or which specifies a place of filing different from that specified in this chapter for filing of the security interest; or

(b) The following statutes of this state: Section 63-21-1 et seq., but during any period in which collateral is inventory held for sale by a person who is in the business of selling goods of that kind, the filing provisions of this chapter (Part 4) apply to a security interest in that collateral created by him as debtor; or

(c) A certificate of title statute of another jurisdiction under the law of which indication of a security interest on the certificate is required as a condition of perfection (Section 75-9-103(2)).

(4) Compliance with a statute or treaty described in subsection (3) is equivalent to the filing of a financing statement under this chapter, and a security interest in property subject to the statute or treaty can be perfected only by compliance therewith except as provided in Section 75-9-103 on multiple state transactions. Duration and renewal of perfection of a security interest perfected by compliance with the statute or treaty are governed by the provisions of the statute or treaty; in other respects the security interest is subject to this chapter.

(5) The filing of a financing statement pursuant to this chapter, whether before or after the effective date of this provision, is the exclusive method of perfecting a security interest in instruments evidencing student loans, including loans that are insured by the United States Secretary of Education under 20 U.S.C.A. 1071 et seq., as amended, or by a state or nonprofit private institution or organization with which the United States Secretary of Education has an agreement under 20 U.S.C.A. 1078(b), as amended; in other respects such security interest is subject to this chapter as if such security interest were a security interest in general intangibles. The provisions of this chapter providing for security interests prevail over the possession, negotiation and assignment provisions of Chapter 3 of this title as each provision affects the rights of a secured party in instruments evidencing student loans, and the rights of a secured party in instruments evidencing student loans perfected in accordance with this subsection are prior to the rights of a holder, owner or transferee of any instrument evidencing the right to receive payment under student loans.

§ 75-9-302

While farm products are located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of an agricultural lien on the farm products.

§ 75-9-303

(1) A security interest is perfected when it has attached and when all of the applicable steps required for perfection have been taken. Such steps are specified in Sections 75-9-115, 75-9-302, 75-9-304, 75-9-305 and 75-9-306. If such steps are taken before the security interest attaches, it is perfected at the time when it attaches.

(2) If a security interest is originally perfected in any way permitted under this chapter and is subsequently perfected in some other way under this chapter, without an intermediate period when it was unperfected, the security interest shall be deemed to be perfected continuously for the purposes of this chapter.

§ 75-9-303

(a) This section applies to goods covered by a certificate of title, even if there is no other relationship between the jurisdiction under whose certificate of title the goods are covered and the goods or the debtor.

(b) Goods become covered by a certificate of title when a valid application for the certificate of title and the applicable fee are delivered to the appropriate authority. Goods cease to be covered by a certificate of title at the earlier of the time the certificate of title ceases to be effective under the law of the issuing jurisdiction or the time the goods become covered subsequently by a certificate of title issued by another jurisdiction.

(c) The local law of the jurisdiction under whose certificate of title the goods are covered governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in goods covered by a certificate of title from the time the goods become covered by the certificate of title until the goods cease to be covered by the certificate of title.

§ 75-9-304

(1) A security interest in chattel paper or negotiable documents may be perfected by filing. A security interest in the rights to proceeds of a written letter of credit can be perfected only by the secured party's taking possession of the letter of credit. A security interest in money or instruments (other than instruments which constitute part of chattel paper) can be perfected only by the secured party's taking possession, except as provided in subsections (4) and (5) of this section and Section 75-9-306(2) and (3) on “Proceeds”.

(2) During the period that goods are in the possession of the issuer of a negotiable document therefor, a security interest in the goods is perfected by perfecting a security interest in the document, and any security interest in the goods otherwise perfected during such period is subject thereto.

(3) A security interest in goods in the possession of a bailee other than one who has issued a negotiable document therefor is perfected by issuance of a document in the name of the secured party or by the bailee's receipt of notification of the secured party's interest or by filing as to the goods.

(4) A security interest in instruments, certificated securities, or negotiable documents is perfected without filing or the taking of possession for a period of twenty-one (21) days from the time it attaches to the extent that it arises for new value given under a written security agreement.

(5) A security interest remains perfected for a period of twenty-one (21) days without filing where a secured party having a perfected security interest in an instrument, a certificated security, a negotiable document or goods in possession of a bailee other than one who has issued a negotiable document therefor:

(a) Makes available to the debtor the goods or documents representing the goods for the purpose of ultimate sale or exchange, or for the purpose of loading, unloading, storing, shipping, transshipping, manufacturing, processing, or otherwise dealing with them in a manner preliminary to their sale or exchange, but priority between conflicting security interests in the goods is subject to Section 75-9-312(3); or

(b) Delivers the instrument or certificated security to the debtor for the purpose of ultimate sale or exchange or of presentation, collection, renewal, or registration of transfer.

(6) After the twenty-one-day period in subsections (4) and (5) perfection depends upon compliance with applicable provisions of this chapter.

§ 75-9-304

(a) The local law of a bank's jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a deposit account maintained with that bank.

(b) The following rules determine a bank's jurisdiction for purposes of this part:

(1) If an agreement between the bank and its customer governing the deposit account expressly provides that a particular jurisdiction is the bank's jurisdiction for purposes of this part, this article, or the Uniform Commercial Code, that jurisdiction is the bank's jurisdiction.

(2) If paragraph (1) does not apply and an agreement between the bank and its customer governing the deposit account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank's jurisdiction.

(3) If neither paragraph (1) nor paragraph (2) applies and an agreement between the bank and its customer governing the deposit account expressly provides that the deposit account is maintained at an office in a particular jurisdiction, that jurisdiction is the bank's jurisdiction.

(4) If none of the preceding paragraphs applies, the bank's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the customer's account is located.

(5) If none of the preceding paragraphs applies, the bank's jurisdiction is the jurisdiction in which the chief executive office of the bank is located.

§ 75-9-305

A security interest in goods, instruments, money, negotiable documents, or chattel paper may be perfected by the secured party's taking possession of the collateral. A security interest in the right to proceeds of a written letter of credit may be perfected by the secured party's taking possession of the letter of credit. If such collateral other than goods covered by a negotiable document is held by a bailee, the secured party is deemed to have possession from the time the bailee receives notification of the secured party's interest. A security interest is perfected by possession from the time possession is taken without relation back and continues only so long as possession is retained, unless otherwise specified in this chapter. The security interest may be otherwise perfected as provided in this chapter before or after the period of possession by the secured party.

§ 75-9-305

(a) Except as otherwise provided in subsection (c), the following rules apply:

(1) While a security certificate is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in the certificated security represented thereby.

(2) The local law of the issuer's jurisdiction as specified in Section 75-8-110(d) governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security.

(3) The local law of the securities intermediary's jurisdiction as specified in Section 75-8-110(e) governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account.

(4) The local law of the commodity intermediary's jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a commodity contract or commodity account.

(b) The following rules determine a commodity intermediary's jurisdiction for purposes of this part:

(1) If an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that a particular jurisdiction is the commodity intermediary's jurisdiction for purposes of this part, this article, or the Uniform Commercial Code, that jurisdiction is the commodity intermediary's jurisdiction.

(2) If paragraph (1) does not apply and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.

(3) If neither paragraph (1) nor paragraph (2) applies and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the commodity account is maintained at an office in a particular jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.

(4) If none of the preceding paragraphs applies, the commodity intermediary's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the commodity customer's account is located.

(5) If none of the preceding paragraphs applies, the commodity intermediary's jurisdiction is the jurisdiction in which the chief executive office of the commodity intermediary is located.

(c) The local law of the jurisdiction in which the debtor is located governs:

(1) Perfection of a security interest in investment property by filing;

(2) Automatic perfection of a security interest in investment property created by a broker or securities intermediary; and

(3) Automatic perfection of a security interest in a commodity contract or commodity account created by a commodity intermediary.

§ 75-9-306

(1) “Proceeds” includes whatever is received upon the sale, exchange, collection or other disposition of collateral or proceeds. Insurance payable by reason of loss or damage to the collateral is proceeds, except to the extent that it is payable to a person other than a party to the security agreement. Any payments or distributions made with respect to investment property collateral are proceeds. Money, checks, deposit accounts, and the like are “cash proceeds.” All other proceeds are “noncash proceeds.”

(2) Except where this chapter otherwise provides, a security interest continues in collateral notwithstanding sale, exchange or other disposition thereof unless the disposition was authorized by the secured party in the security agreement or otherwise, and also continues in any identifiable proceeds including collections received by the debtor.

(3) The security interest in proceeds is a continuously perfected security interest if the interest in the original collateral was perfected, but it ceases to be a perfected security interest and becomes unperfected ten (10) days after receipt of the proceeds by the debtor unless:

(a) A filed financing statement covers the original collateral and the proceeds are collateral in which a security interest may be perfected by filing in the office or offices where the financing statement has been filed and, if the proceeds are acquired with cash proceeds, the description of collateral in the financing statement indicates the types of property constituting the proceeds;

(b) A filed financing statement covers the original collateral and the proceeds are identifiable cash proceeds;

(c) The original collateral was investment property and the proceeds are identifiable cash proceeds; or

(d) The security interest in the proceeds is perfected before the expiration of the ten-day period.

Except as provided in this section, a security interest in proceeds can be perfected only by the methods or under the circumstances permitted in this chapter for original collateral of the same type.

(4) In the event of insolvency proceedings instituted by or against a debtor, a secured party with a perfected security interest in proceeds has a perfected security interest only in the following proceeds:

(a) In identifiable noncash proceeds, and in separate deposit accounts containing only proceeds;

(b) In identifiable cash proceeds in the form of money which is neither commingled with other money nor deposited in a deposit account prior to the insolvency proceedings;

(c) In identifiable cash proceeds in the form of checks and the like which are not deposited in a deposit account prior to the insolvency proceedings; and

(d) In all cash and deposit accounts of the debtor in which proceeds have been commingled with other funds, but the perfected security interest under this paragraph (d) is:

(i) Subject to any right to set-off; and

(ii) Limited to an amount not greater than the amount of any cash proceeds received by the debtor within ten (10) days before the institution of the insolvency proceedings less the sum of (I) the payments to the secured party on account of cash proceeds received by the debtor during such period and (II) the cash proceeds received by the debtor during such period to which the secured party is entitled under paragraphs (a) through (c) of this subsection (4).

(5) If a sale of goods results in an account or chattel paper which is transferred by the seller to a secured party, and if the goods are returned to or are repossessed by the seller or the secured party, the following rules determine priorities:

(a) If the goods were collateral at the time of sale, for an indebtedness of the seller which is still unpaid, the original security interest attaches again to the goods and continues as a perfected security interest if it was perfected at the time when the goods were sold. If the security interest was originally perfected by a filing which is still effective, nothing further is required to continue the perfected status; in any other case, the secured party must take possession of the returned or repossessed goods or must file.

(b) An unpaid transferee of the chattel paper has a security interest in the goods against the transferor. Such security interest is prior to a security interest asserted under paragraph (a) to the extent that the transferee of the chattel paper was entitled to priority under Section 75-9-308.

(c) An unpaid transferee of the account has a security interest in the goods against the transferor. Such security interest is subordinate to a security interest asserted under paragraph (a).

(d) A security interest of an unpaid transferee asserted under paragraph (b) or (c) must be perfected for protection against creditors of the transferor and purchasers of the returned or repossessed goods.

§ 75-9-306

(a) Subject to subsection (c), the local law of the issuer's jurisdiction or a nominated person's jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a letter-of-credit right if the issuer's jurisdiction or nominated person's jurisdiction is a state.

(b) For purposes of this part, an issuer's jurisdiction or nominated person's jurisdiction is the jurisdiction whose law governs the liability of the issuer or nominated person with respect to the letter-of-credit right as provided in Section 75-5-116.

(c) This section does not apply to a security interest that is perfected only under Section 75-9-308(d).

§ 75-9-307

(1) A buyer in ordinary course of business (Section 75-1-201(9)), other than a person buying farm products from a person engaged in farming operations, takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence.

(2) In the case of consumer goods, a buyer takes free of a security interest even though perfected if he buys without knowledge of the security interest, for value and for his own personal, family or household purposes unless prior to the purchase the secured party has filed a financing statement covering such goods.

(3) A buyer other than a buyer in ordinary course of business (subsection (1) of this section) takes free of a security interest to the extent that it secures future advances made after the secured party acquires knowledge of the purchase, or more than forty-five (45) days after the purchase, whichever first occurs, unless made pursuant to a commitment entered into without knowledge of the purchase and before the expiration of the 45-day period.

(4) Notwithstanding subsection (1) of this section, a secured party may not enforce a security interest in farm products against a buyer, commission merchant or selling agent who purchases or sells farm products in the ordinary course of business from or for a person engaged in farming operations unless the secured party has complied with the regulations issued by the Secretary of State under Section 75-9-319 or unless the buyer, commission merchant or selling agent has received from the secured party or seller written notice of the security interest which complies with the requirements of Section 1324 of the Food Security Act of 1985, as now enacted or as hereafter may be amended.

§ 75-9-307

(a) In this section, “place of business” means a place where a debtor conducts its affairs.

(b) Except as otherwise provided in this section, the following rules determine a debtor's location:

(1) A debtor who is an individual is located at the individual's principal residence.

(2) A debtor that is an organization and has only one (1) place of business is located at its place of business.

(3) A debtor that is an organization and has more than one (1) place of business is located at its chief executive office.

(c) Subsection (b) applies only if a debtor's residence, place of business, or chief executive office, as applicable, is located in a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, recording, or registration system as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral. If subsection (b) does not apply, the debtor is located in the District of Columbia.

(d) A person that ceases to exist, have a residence, or have a place of business continues to be located in the jurisdiction specified by subsections (b) and (c).

(e) A registered organization that is organized under the law of a state is located in that state.

(f) Except as otherwise provided in subsection (i), a registered organization that is organized under the law of the United States and a branch or agency of a bank that is not organized under the law of the United States or a state are located:

(1) In the state that the law of the United States designates, if the law designates a state of location;

(2) In the state that the registered organization, branch, or agency designates, if the law of the United States authorizes the registered organization, branch, or agency to designate its state of location, including by designating its main office, or other comparable office; or

(3) In the District of Columbia, if neither paragraph (1) nor paragraph (2) applies.

(g) A registered organization continues to be located in the jurisdiction specified by subsection (e) or (f) notwithstanding:

(1) The suspension, revocation, forfeiture, or lapse of the registered organization's status as such in its jurisdiction of organization; or

(2) The dissolution, winding up, or cancellation of the existence of the registered organization.

(h) The United States is located in the District of Columbia.

(i) A branch or agency of a bank that is not organized under the law of the United States or a state is located in the state in which the branch or agency is licensed, if all branches and agencies of the bank are licensed in only one (1) state.

(j) A foreign air carrier under the Federal Aviation Act of 1958, as amended, is located at the designated office of the agent upon which service of process may be made on behalf of the carrier.

(k) This section applies only for purposes of this part.

§ 75-9-308

A purchaser of chattel paper or an instrument who gives new value and takes possession of it in the ordinary course of his business has priority over a security interest in the chattel paper or instrument

(a) which is perfected under section 75-9-304 (permissive filing and temporary perfection) or under section 75-9-306 (perfection as to proceeds) if he acts without knowledge that the specific paper or instrument is subject to a security interest; or

(b) which is claimed merely as proceeds of inventory subject to a security interest (section 75-9-306) even though he knows that the specific paper or instrument is subject to the security interest.

§ 75-9-308

(a) Except as otherwise provided in this section and Section 75-9-309, a security interest is perfected if it has attached and all of the applicable requirements for perfection in Sections 75-9-310 through 75-9-316 have been satisfied. A security interest is perfected when it attaches if the applicable requirements are satisfied before the security interest attaches.

(b) An agricultural lien is perfected if it has become effective and all of the applicable requirements for perfection in Section 75-9-310 have been satisfied. An agricultural lien is perfected when it becomes effective if the applicable requirements are satisfied before the agricultural lien becomes effective.

(c) A security interest or agricultural lien is perfected continuously if it is originally perfected by one method under this article and is later perfected by another method under this article, without an intermediate period when it was unperfected.

(d) Perfection of a security interest in collateral also perfects a security interest in a supporting obligation for the collateral.

(e) Perfection of a security interest in a right to payment or performance also perfects a security interest in a security interest, mortgage, or other lien on personal or real property securing the right.

(f) Perfection of a security interest in a securities account also perfects a security interest in the security entitlements carried in the securities account.

(g) Perfection of a security interest in a commodity account also perfects a security interest in the commodity contracts carried in the commodity account.

§ 75-9-309

Nothing in this chapter limits the rights of a holder in due course of a negotiable instrument (Section 75-3-302) or a holder to whom a negotiable document of title has been duly negotiated (Section 75-7-501) or a protected purchaser of a security (Section 75-8-303) and such holders or purchasers take priority over an earlier security interest even though perfected. Filing under this chapter does not constitute notice of the security interest to such holders or purchasers.

§ 75-9-309

The following security interests are perfected when they attach:

(1) A purchase-money security interest in consumer goods, except as otherwise provided in Section 75-9-311(b) with respect to consumer goods that are subject to a statute or treaty described in Section 75-9-311(a);

(2) An assignment of accounts or payment intangibles which does not by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor's outstanding accounts or payment intangibles;

(3) A sale of a payment intangible;

(4) A sale of a promissory note;

(5) A security interest created by the assignment of a health-care-insurance receivable to the provider of the health-care goods or services;

(6) A security interest arising under Section 75-2-401, 75-2-505, 75-2-711(3), or 75-2A-508(5), until the debtor obtains possession of the collateral;

(7) A security interest of a collecting bank arising under Section 75-4-210;

(8) A security interest of an issuer or nominated person arising under Section 75-5-118;

(9) A security interest arising in the delivery of a financial asset under Section 75-9-206(c);

(10) A security interest in investment property created by a broker or securities intermediary;

(11) A security interest in a commodity contract or a commodity account created by a commodity intermediary;

(12) An assignment for the benefit of all creditors of the transferor and subsequent transfers by the assignee thereunder;

(13) A security interest created by an assignment of a beneficial interest in a decedent's estate; and

(14) A sale by an individual of an account that is a right to payment of winnings in a lottery or other game of chance.

§ 75-9-310

When a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon goods in the possession of such person given by statute or rule of law for such materials or services takes priority over a perfected security interest unless the lien is statutory and the statute expressly provides otherwise.

§ 75-9-310

(a) Except as otherwise provided in subsection (b) and Section 75-9-312(b), a financing statement must be filed to perfect all security interests and agricultural liens.

(b) The filing of a financing statement is not necessary to perfect a security interest:

(1) That is perfected under Section 75-9-308(d), (e), (f), or (g);

(2) That is perfected under Section 75-9-309 when it attaches;

(3) In property subject to a statute, regulation, or treaty described in Section 75-9-311(a);

(4) In goods in possession of a bailee which is perfected under Section 75-9-312(d)(1) or (2);

(5) In certificated securities, documents, goods or instruments which is perfected without filing, control or possession under Section 75-9-312(e), (f), or (g);

(6) In collateral in the secured party's possession under Section 75-9-313;

(7) In a certificated security which is perfected by delivery of the security certificate to the secured party under Section 75-9-313;

(8) In deposit accounts, electronic chattel paper, investment property, or letter-of-credit rights which is perfected by control under Section 75-9-314;

(9) In proceeds which is perfected under Section 75-9-315; or

(10) That is perfected under Section 75-9-316.

(c) If a secured party assigns a perfected security interest or agricultural lien, a filing under this article is not required to continue the perfected status of the security interest against creditors of and transferees from the original debtor.

§ 75-9-311

The debtor's rights in collateral may be voluntarily or involuntarily transferred (by way of sale, creation of a security interest, attachment, levy, garnishment or other judicial process) notwithstanding a provision in the security agreement prohibiting any transfer or making the transfer constitute a default.

§ 75-9-311

(a) Except as otherwise provided in subsection (d), the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to:

(1) A statute, regulation, or treaty of the United States whose requirements for a security interest's obtaining priority over the rights of a lien creditor with respect to the property preempt Section 75-9-310(a);

(2)Sections 63-21-1 through 63-21-77 (the Mississippi Motor Vehicle and Manufactured Housing Title Law) or a certificate of title issued pursuant to Sections 59-25-1 through 59-25-17 (Certificates of Title for Boats and Other Vessels); or

(3) A statute of another jurisdiction which provides for a security interest to be indicated on a certificate of title as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the property.

(b) Compliance with the requirements of a statute, regulation, or treaty described in subsection (a) for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under this article. Except as otherwise provided in subsection (d) and Sections 75-9-313 and 75-9-316(d) and (e) for goods covered by a certificate of title, a security interest in property subject to a statute, regulation, or treaty described in subsection (a) may be perfected only by compliance with those requirements, and a security interest so perfected remains perfected notwithstanding a change in the use or transfer of possession of the collateral.

(c) Except as otherwise provided in subsection (d) and Section 75-9-316(d) and (e), duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation, or treaty described in subsection (a) are governed by the statute, regulation, or treaty. In other respects, the security interest is subject to this article.

(d) During any period in which collateral subject to a statute specified in subsection (a)(2) is inventory held for sale or lease by a person or leased by that person as lessor and that person is in the business of selling goods of that kind, this section does not apply to a security interest in that collateral created by that person.

§ 75-9-312

(1) The rules of priority stated in other sections of this part and in the following sections shall govern when applicable: Section 75-4-210 with respect to the security interests of collecting banks in items being collected, accompanying documents and proceeds; Section 75-9-103 on security interests related to other jurisdictions; Section 75-9-114 on consignments; Section 75-9-115 on security interests in investment property.

(2) A perfected security interest in crops for new value given to enable the debtor to produce the crops during the production season and given not more than three (3) months before the crops become growing crops by planting or otherwise takes priority over an earlier perfected security interest to the extent that such earlier interest secures obligations due more than six (6) months before the crops become growing crops by planting or otherwise, even though the person giving new value had knowledge of the earlier security interest.

(3) A perfected purchase money security interest in inventory has priority over a conflicting security interest in the same inventory and also has priority in identifiable cash proceeds received on or before the delivery of the inventory to a buyer if:

(a) The purchase money security interest is perfected at the time the debtor receives possession of the inventory; and

(b) The purchase money secured party gives notification in writing to the holder of the conflicting security interest if the holder had filed a financing statement covering the same types of inventory

(i) Before the date of the filing made by the purchase money secured party, or

(ii) Before the beginning of the twenty-one-day period where the purchase money security interest is temporarily perfected without filing or possession (Section 75-9-304(5)); and

(c) The holder of the conflicting security interest receives the notification within five (5) years before the debtor receives possession of the inventory; and

(d) The notification states that the person giving the notice has or expects to acquire a purchase money security interest in inventory of the debtor, describing such inventory by item or type.

(4) A purchase money security interest in collateral other than inventory has priority over a conflicting security interest in the same collateral or its proceeds if the purchase money security interest is perfected at the time the debtor receives possession of the collateral or within twenty (20) days thereafter.

(5) In all cases not governed by other rules stated in this section (including cases of purchase money security interest which do not qualify for the special priorities set forth in subsections (3) and (4) of this section), priority between conflicting security interests in the same collateral shall be determined according to the following rules:

(a) Conflicting security interests rank according to priority in time of filing or perfection. Priority dates from the time a filing is first made covering the collateral or the time the security interest is first perfected, whichever is earlier, provided that there is no period thereafter when there is neither filing nor perfection.

(b) So long as conflicting security interests are unperfected, the first to attach has priority.

(6) For the purposes of subsection (5), a date of filing or perfection as to collateral is also a date of filing or perfection as to proceeds.

(7) If future advances are made while a security interest is perfected by filing, the taking of possession, or under Section 75-9-115 or Section 75-9-116 on investment property, the security interest has the same priority for the purposes of subsection (5) or Section 75-9-115(5) with respect to the future advances as it does with respect to the first advance. If a commitment is made before or while the security interest is so perfected, the security interest has the same priority with respect to advances made pursuant thereto. In other cases a perfected security interest has priority from the date the advance is made.

§ 75-9-312

(a) A security interest in chattel paper, negotiable documents, instruments, or investment property may be perfected by filing.

(b) Except as otherwise provided in Section 75-9-315(c) and (d) for proceeds:

(1) A security interest in a deposit account may be perfected only by control under Section 75-9-314;

(2) And except as otherwise provided in Section 75-9-308(d), a security interest in a letter-of-credit right may be perfected only by control under Section 75-9-314; and

(3) A security interest in money may be perfected only by the secured party's taking possession under Section 75-9-313.

(c) While goods are in the possession of a bailee that has issued a negotiable document covering the goods:

(1) A security interest in the goods may be perfected by perfecting a security interest in the document; and

(2) A security interest perfected in the document has priority over any security interest that becomes perfected in the goods by another method during that time.

(d) While goods are in the possession of a bailee that has issued a nonnegotiable document covering the goods, a security interest in the goods may be perfected by:

(1) Issuance of a document in the name of the secured party;

(2) The bailee's receipt of notification of the secured party's interest; or

(3) Filing as to the goods.

(e) A security interest in certificated securities, negotiable documents, or instruments is perfected without filing or the taking of possession or control for a period of twenty (20) days from the time it attaches to the extent that it arises for new value given under an authenticated security agreement.

(f) A perfected security interest in a negotiable document or goods in possession of a bailee, other than one that has issued a negotiable document for the goods, remains perfected for twenty (20) days without filing if the secured party makes available to the debtor the goods or documents representing the goods for the purpose of:

(1) Ultimate sale or exchange; or

(2) Loading, unloading, storing, shipping, transshipping, manufacturing, processing, or otherwise dealing with them in a manner preliminary to their sale or exchange.

(g) A perfected security interest in a certificated security or instrument remains perfected for twenty (20) days without filing if the secured party delivers the security certificate or instrument to the debtor for the purpose of:

(1) Ultimate sale or exchange; or

(2) Presentation, collection, enforcement, renewal or registration of transfer.

(h) After the twenty-day period specified in subsection (e), (f), or (g) expires, perfection depends upon compliance with this article.

§ 75-9-313

(1) In this section and in the provisions of Part 4 of this chapter referring to fixture filing, unless the context otherwise requires:

(a) Goods are “fixtures” when they become so related to particular real estate that an interest in them arises under real estate law;

(b) A “fixture filing” is the filing in the office where a mortgage on the real estate would be filed or recorded of a financing statement covering goods which are or are to become fixtures and conforming to the requirements of subsection (5), Section 9-402 (75-9-402);

(c) A mortgage is a “construction mortgage” to the extent that it secures an obligation incurred for the construction of an improvement on land including the acquisition cost of the land, if the recorded writing so indicates.

(2) A security interest under this chapter may be created in goods which are fixtures or may continue in goods which become fixtures, but no security interest exists under this chapter in ordinary building materials incorporated into an improvement on land.

(3) This chapter does not prevent creation of an encumbrance upon fixtures pursuant to real estate law.

(4) A perfected security interest in fixtures has priority over the conflicting interest of an encumbrancer or owner of the real estate where:

(a) The security interest is a purchase money security interest, the interest of the encumbrancer or owner arises before the goods become fixtures, the security interest is perfected by a fixture filing before the goods become fixtures or within twenty (20) days thereafter, and the debtor has an interest of record in the real estate or is in possession of the real estate; or

(b) The security interest is perfected by a fixture filing before the interest of the encumbrancer or owner is of record, the security interest has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner, and the debtor has an interest of record in the real estate or is in possession of the real estate; or

(c) The fixtures are readily removable factory or office machines or readily removable replacements of domestic appliances which are consumer goods, and before the goods become fixtures the security interest is perfected by any method permitted by this chapter; or

(d) The conflicting interest is a lien on the real estate obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this chapter.

(5) A security interest in fixtures, whether or not perfected, has priority over the conflicting interest of an encumbrancer or owner of the real estate where:

(a) The encumbrancer or owner has consented in writing to the security interest or has disclaimed an interest in the goods as fixtures; or

(b) The debtor has a right to remove the goods as against the encumbrancer or owner. If the debtor's right terminates, the priority of the security interest continues for a reasonable time.

(6) Notwithstanding paragraph (a) of subsection (4) but otherwise subject to subsections (4) and (5) of this section, a security interest in fixtures is subordinate to a construction mortgage recorded before the goods become fixtures if the goods become fixtures before the completion of the construction. To the extent that it is given to refinance a construction mortgage, a mortgage has this priority to the same extent as the construction mortgage.

(7) In cases not within the preceding subsections, a security interest in fixtures is subordinate to the conflicting interest of an encumbrancer or owner of the related real estate who is not the debtor.

(8) When the secured party has priority over all owners and encumbrancers of the real estate, he may, on default, subject to the provisions of Part 5, remove his collateral from the real estate but he must reimburse any encumbrancer or owner of the real estate who is not the debtor and who has not otherwise agreed for the cost of repair of any physical injury, but not for any diminution in value of the real estate caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate security for the performance of this obligation.

(9)(a) Subject to provisions in subsections (4) and (5) of this section, but notwithstanding any contrary provision of the law of this state, a security interest in fixtures or goods that become fixtures shall not have priority over the conflicting interest of an encumbrancer or owner of real estate whose interest has been perfected under real estate law prior to the perfection of a security interest in fixtures against the real estate.

(b) For the purposes of this section, a security interest in fixtures is perfected against the real estate only when the filing or recording of an instrument, with respect to such security interests, constitutes constructive notice of such interest under the laws of this state, other than this chapter, which are applicable to the filing or recording of real estate mortgages and deeds of trust; provided, however, that no provision of this chapter nor of any other law of this state shall be construed to require that an instrument filed to perfect a security interest in fixtures shall have the signatures of the parties acknowledged or proved as required by Section 89-3-1, Mississippi Code of 1972.

(c) Subject to the contrary provisions in subsections (4) and (5) of this section, but notwithstanding any contrary provision of the law of this state, no party having a security interest in fixtures which is subordinate to the interest of an encumbrancer or owner of real estate who is not the debtor, may remove his collateral from the real estate without the written permission of such encumbrancer or owner of the real estate.

§ 75-9-313

(a) Except as otherwise provided in subsection (b), a secured party may perfect a security interest in tangible negotiable documents, goods, instruments, money, or tangible chattel paper by taking possession of the collateral. A secured party may perfect a security interest in certificated securities by taking delivery of the certificated securities under Section 75-8-301.

(b) With respect to goods covered by a certificate of title issued by this state, a secured party may perfect a security interest in the goods by taking possession of the goods only in the circumstances described in Section 75-9-316(d).

(c) With respect to collateral other than certificated securities and goods covered by a document, a secured party takes possession of collateral in the possession of a person other than the debtor, the secured party, or a lessee of the collateral from the debtor in the ordinary course of the debtor's business, when:

(1) The person in possession authenticates a record acknowledging that it holds possession of the collateral for the secured party's benefit; or

(2) The person takes possession of the collateral after having authenticated a record acknowledging that it will hold possession of collateral for the secured party's benefit.

(d) If perfection of a security interest depends upon possession of the collateral by a secured party, perfection occurs no earlier than the time the secured party takes possession and continues only while the secured party retains possession.

(e) A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated security occurs under Section 75-8-301 and remains perfected by delivery until the debtor obtains possession of the security certificate.

(f) A person in possession of collateral is not required to acknowledge that it holds possession for a secured party's benefit.

(g) If a person acknowledges that it holds possession for the secured party's benefit:

(1) The acknowledgment is effective under subsection (c) or Section 75-8-301(a), even if the acknowledgment violates the rights of a debtor; and

(2) Unless the person otherwise agrees or law other than this article otherwise provides, the person does not owe any duty to the secured party and is not required to confirm the acknowledgment to another person.

(h) A secured party having possession of collateral does not relinquish possession by delivering the collateral to a person other than the debtor or a lessee of the collateral from the debtor in the ordinary course of the debtor's business if the person was instructed before the delivery or is instructed contemporaneously with the delivery:

(1) To hold possession of the collateral for the secured party's benefit; or

(2) A secured party does not relinquish possession, even if a delivery under subsection (h) violates the rights of a debtor. A person to which collateral is delivered under subsection (h) does not owe any duty to the secured party and is not required to confirm the delivery to another person unless the person otherwise agrees or law other than this article otherwise provides.

§ 75-9-314

(1) A security interest in goods which attaches before they are installed in or affixed to other goods takes priority as to the goods installed or affixed (called in this section “accessions”) over the claims of all persons to the whole except as stated in subsection (3) and subject to Section 9-315(1) [§ 75-9-315(1) ].

(2) A security interest which attaches to goods after they become part of a whole is valid against all persons subsequently acquiring interests in the whole except as stated in subsection (3) but is invalid against any person with an interest in the whole at the time the security interest attaches to the goods who has not in writing consented to the security interest or disclaimed an interest in the goods as part of the whole.

(3) The security interests described in subsections (1) and (2) do not take priority over

(a) a subsequent purchaser for value of any interest in the whole; or

(b) a creditor with a lien on the whole subsequently obtained by judicial proceedings; or

(c) a creditor with a prior perfected security interest in the whole to the extent that he make subsequent advances if the subsequent purchase is made, the lien by judicial proceedings obtained or the subsequent advance under the prior perfected security interest is made or contracted for without knowledge of the security interest and before it is perfected. A purchaser of the whole at a foreclosure sale other than the holder of a perfected security interest purchasing at his own foreclosure sale is a subsequent purchaser within this section.

(4) When under subsections (1) or (2) and (3) a secured party has an interest in accessions which has priority over the claims of all persons who have interests in the whole, he may on default subject to the provisions of Part 5 remove his collateral from the whole but he must reimburse any encumbrancer or owner of the whole who is not the debtor and who has not otherwise agreed for the cost of repair of any physical injury but not for any diminution in value of the whole caused by the absence of the goods removed or by any necessity for replacing them. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate security for the performance of this obligation.

§ 75-9-314

(a) A security interest in investment property, deposit accounts, letter-of-credit rights, electronic chattel paper, or electronic documents may be perfected by control of the collateral under Section 75-7-106, 75-9-104, 75-9-105, 75-9-106 or 75-9-107.

(b) A security interest in deposit accounts, electronic chattel paper, letter-of-credit rights, or electronic documents is perfected by control under Section 75-7-106, 75-9-104, 75-9-105 or 75-9-107 when the secured party obtains control and remains perfected by control only while the secured party retains control.

(c) A security interest in investment property is perfected by control under Section 75-9-106 from the time the secured party obtains control and remains perfected by control until:

(1) The secured party does not have control; and

(2) One (1) of the following occurs:

(A) If the collateral is a certificated security, the debtor has or acquires possession of the security certificate;

(B) If the collateral is an uncertificated security, the issuer has registered or registers the debtor as the registered owner; or

(C) If the collateral is a security entitlement, the debtor is or becomes the entitlement holder.

§ 75-9-315

(1) If a security interest in goods was perfected and subsequently the goods or a party thereof have become a part of a product or mass, the security interest continues in the product or mass if

(a) the goods are so manufactured, processed, assembled or commingled that their identity is lost in the product or mass; or

(b) a financing statement covering the original goods also covers the product into which the goods have been manufactured, processed or assembled.

In a case to which paragraph (b) applies, no separate security interest in that part of the original goods which has been manufactured, processed or assembled into the product may be claimed under Section 9-314 [§ 75-9-314].

(2) When under subsection (1) more than one (1) security interest attaches to the product or mass, they rank equally according to the ratio that the cost of the goods to which each interest originally attached bears to the cost of the total product or mass.

§ 75-9-315

(a) Except as otherwise provided in this article and in Section 75-2-403(2):

(1) A security interest or agricultural lien continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest or agricultural lien; and

(2) A security interest attaches to any identifiable proceeds of collateral.

(b) Proceeds that are commingled with other property are identifiable proceeds:

(1) If the proceeds are goods, to the extent provided by Section 75-9-336; and

(2) If the proceeds are not goods, to the extent that the secured party identifies the proceeds by a method of tracing, including application of equitable principles, that is permitted under law other than this article with respect to commingled property of the type involved.

(c) A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.

(d) A perfected security interest in proceeds becomes unperfected on the twenty-first day after the security interest attaches to the proceeds unless:

(1) The following conditions are satisfied:

(A) A filed financing statement covers the original collateral;

(B) The proceeds are collateral in which a security interest may be perfected by filing in the office in which the financing statement has been filed; and

(C) The proceeds are not acquired with cash proceeds;

(2) The proceeds are identifiable cash proceeds; or

(3) The security interest in the proceeds is perfected other than under subsection (c) when the security interest attaches to the proceeds or within twenty (20) days thereafter.

(e) If a filed financing statement covers the original collateral, a security interest in proceeds which remains perfected under subsection (d)(1) becomes unperfected at the later of:

(1) When the effectiveness of the filed financing statement lapses under Section 75-9-515 or is terminated under Section 75-9-513; or

(2) The twenty-first day after the security interest attaches to the proceeds.

§ 75-9-316

Nothing in this chapter prevents subordination by agreement by any person entitled to priority.

§ 75-9-316

(a) A security interest perfected pursuant to the law of the jurisdiction designated in Section 75-9-301(1) or 75-9-305(c) remains perfected until the earliest of:

(1) The time perfection would have ceased under the law of that jurisdiction;

(2) The expiration of four (4) months after a change of the debtor's location to another jurisdiction; or

(3) The expiration of one (1) year after a transfer of collateral to a person that thereby becomes a debtor and is located in another jurisdiction.

(b) If a security interest described in subsection (a) becomes perfected under the law of the other jurisdiction before the earliest time or event described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earliest time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.

(c) A possessory security interest in collateral, other than goods covered by a certificate of title and as-extracted collateral consisting of goods, remains continuously perfected if:

(1) The collateral is located in one (1) jurisdiction and subject to a security interest perfected under the law of that jurisdiction;

(2) Thereafter the collateral is brought into another jurisdiction; and

(3) Upon entry into the other jurisdiction, the security interest is perfected under the law of the other jurisdiction.

(d) Except as otherwise provided in subsection (e), a security interest in goods covered by a certificate of title which is perfected by any method under the law of another jurisdiction when the goods become covered by a certificate of title from this state remains perfected until the security interest would have become unperfected under the law of the other jurisdiction had the goods not become so covered.

(e) A security interest described in subsection (d) becomes unperfected as against a purchaser of the goods for value and is deemed never to have been perfected as against a purchaser of the goods for value if the applicable requirements for perfection under Section 75-9-311(b) or 75-9-313 are not satisfied before the earlier of:

(1) The time the security interest would have become unperfected under the law of the other jurisdiction had the goods not become covered by a certificate of title from this state; or

(2) The expiration of four (4) months after the goods had become so covered.

(f) A security interest in deposit accounts, letter-of-credit rights, or investment property which is perfected under the law of the bank's jurisdiction, the issuer's jurisdiction, a nominated person's jurisdiction, the securities intermediary's jurisdiction, or the commodity intermediary's jurisdiction, as applicable, remains perfected until the earlier of:

(1) The time the security interest would have become unperfected under the law of that jurisdiction; or

(2) The expiration of four (4) months after a change of the applicable jurisdiction to another jurisdiction.

(g) If a security interest described in subsection (f) becomes perfected under the law of the other jurisdiction before the earlier of the time or the end of the period described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier of that time or the end of that period, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.

(h) The following rules apply to collateral to which a security interest attaches within four (4) months after the debtor changes its location to another jurisdiction:

(1) A financing statement filed before the change pursuant to the law of the jurisdiction designated in Section 75-9-301(1) or 75-9-305(c) is effective to perfect a security interest in the collateral if the financing statement would have been effective to perfect a security interest in the collateral if the debtor had not changed its location.

(2) If a security interest that is perfected by a financing statement that is effective under paragraph (1) becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in Section 75-9-301(1) or 75-9-305(c) or the expiration of the four-month period, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.

(i) If a financing statement naming an original debtor is filed pursuant to the law of the jurisdiction designated in Section 75-9-301(1) or 75-9-305(c) and the new debtor is located in another jurisdiction, the following rules apply:

(1) The financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and within four (4) months after, the new debtor becomes bound under Section 75-9-203(d), if the financing statement would have been effective to perfect a security interest in the collateral had the collateral been acquired by the original debtor.

(2) A security interest perfected by the financing statement and which becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in Section 75-9-301(1) or 75-9-305(c) or the expiration of the four-month period remains perfected thereafter. A security interest that is perfected by the financing statement but which does not become perfected under the law of the other jurisdiction before the earlier time or event becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.

§ 75-9-317

The mere existence of a security interest or authority given to the debtor to dispose of or use collateral does not impose contract or tort liability upon the secured party for the debtor's acts or omissions.

§ 75-9-317

(a) A security interest or agricultural lien is subordinate to the rights of:

(1) A person entitled to priority under Section 75-9-322; and

(2) Except as otherwise provided in subsection (e), a person that becomes a lien creditor before the earlier of the time:

(A) The security interest or agricultural lien is perfected; or

(B) One (1) of the conditions specified in Section 75-9-203(b)(3) is met and a financing statement covering the collateral is filed.

(b) Except as otherwise provided in subsection (e), a buyer, other than a secured party, of tangible chattel paper, documents, goods, instruments, or a certificated security takes free of a security interest or agricultural lien if the buyer gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected.

(c) Except as otherwise provided in subsection (e), a lessee of goods takes free of a security interest or agricultural lien if the lessee gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected.

(d) A licensee of a general intangible or a buyer, other than a secured party, of collateral other than tangible chattel paper, tangible documents, goods, instruments, or a certificated security takes free of a security interest if the licensee or buyer gives value without knowledge of the security interest and before it is perfected.

(e) Except as otherwise provided in Sections 75-9-320 and 75-9-321, if a person files a financing statement with respect to a purchase-money security interest before or within twenty (20) days after the debtor receives delivery of the collateral, the security interest takes priority over the rights of a buyer, lessee, or lien creditor which arise between the time the security interest attaches and the time of filing.

§ 75-9-318

(1) Unless an account debtor has made an enforceable agreement not to assert defenses or claims arising out of a sale as provided in section 75-9-206, the rights of an assignee are subject to

(a) all the terms of the contract between the account debtor and assignor and any defense or claim arising therefrom; and

(b) any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives notification of the assignment.

(2) So far as the right to payment or a part thereof under an assigned contract has not been fully earned by performance, and notwithstanding notification of the assignment, any modification of or substitution for the contract made in good faith and in accordance with reasonable commercial standards is effective against an assignee unless the account debtor has otherwise agreed but the assignee acquires corresponding rights under the modified or substituted contract. The assignment may provide that such modification or substitution is a breach by the assignor.

(3) The account debtor is authorized to pay the assignor until the account debtor receives notification that the amount due or to become due has been assigned and that payment is to be made to the assignee. A notification which does not reasonably identify the rights assigned is ineffective. If requested by the account debtor, the assignee must seasonably furnish reasonable proof that the assignment has been made and unless he does so the account debtor may pay the assignor.

(4) A term in any contract between the account debtor and an assignor is ineffective if it prohibits assignment of an account or prohibits creation of a security interest in a general intangible for money due or to become due or requires the account debtor's consent to such assignment or security interest.

§ 75-9-318

(a) A debtor that has sold an account, chattel paper, payment intangible, or promissory note does not retain a legal or equitable interest in the collateral sold.

(b) For purposes of determining the rights of creditors of, and purchasers for value of an account or chattel paper from, a debtor that has sold an account or chattel paper, while the buyer's security interest is unperfected, the debtor is deemed to have rights and title to the account or chattel paper identical to those the debtor sold.

§ 75-9-319

The Secretary of State shall issue regulations implementing a central filing system relating to farm products which conforms with the requirements of Section 1324 of the Food Security Act of 1985, as now enacted or as hereafter may be amended. The Secretary of State is authorized to set reasonable fees to defray the costs of the central filing system established pursuant to this section. At least thirty (30) days prior to the promulgation of such regulations or any amendments thereto, the Secretary of State shall give notice of such regulations and/or amendments to all licensed attorneys and chancery clerks in the State of Mississippi.

§ 75-9-319

(a) Except as otherwise provided in subsection (b), for purposes of determining the rights of creditors of, and purchasers for value of goods from, a consignee, while the goods are in the possession of the consignee, the consignee is deemed to have rights and title to the goods identical to those the consignor had or had power to transfer.

(b) For purposes of determining the rights of a creditor of a consignee, law other than this article determines the rights and title of a consignee while goods are in the consignee's possession if, under this part, a perfected security interest held by the consignor would have priority over the rights of the creditor.

§ 75-9-320

(a) 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) 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) 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 75-9-316(a) and (b).

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

(e) Subsections (a) and (b) do not affect a security interest in goods in the possession of the secured party under Section 75-9-313.

(f) Notwithstanding subsection (a), a secured party may not enforce a security interest in farm products against a buyer, commission merchant or selling agent who purchases or sells farm products in the ordinary course of business from or for a person engaged in farming operations unless the secured party has complied with the regulations issued by the Secretary of state under subsection (g) or unless the buyer, commission merchant or selling agent has received from the secured party or seller written notice of the security interest which complies with the requirements of Section 1324 of the Food Security Act of 1985, as now enacted or as hereafter may be amended.

(g) The Secretary of State shall issue regulations implementing a central filing system relating to farm products which conforms with the requirements of Section 1324 of the Food Security Act of 1985, as now enacted or as hereafter may be amended. The Secretary of State is authorized to set reasonable fees to defray the costs of the central filing system established pursuant to this section. At least thirty (30) days prior to the promulgation of such regulations or any amendments thereto, the Secretary of State shall give notice of such regulations and/or amendments to all licensed attorneys in the State of Mississippi.

§ 75-9-321

(a) In this section, “licensee in ordinary course of business” means a person that becomes a licensee of a general intangible in good faith, without knowledge that the license violates the rights of another person in the general intangible, and in the ordinary course from a person in the business of licensing general intangibles of that kind. A person becomes a licensee in the ordinary course if the license to the person comports with the usual or customary practices in the kind of business in which the licensor is engaged or with the licensor's own usual or customary practices.

(b) A licensee in ordinary course of business takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor, even if the security interest is perfected and the licensee knows of its existence.

(c) A lessee in ordinary course of business takes its leasehold interest free of a security interest in the goods created by the lessor, even if the security interest is perfected and the lessee knows of its existence.

§ 75-9-322

(a) Except as otherwise provided in this section, priority among conflicting security interests and agricultural liens in the same collateral is determined according to the following rules:

(1) Conflicting perfected security interests and agricultural liens rank according to priority in time of filing or perfection. Priority dates from the earlier of the time a filing covering the collateral is first made or the security interest or agricultural lien is first perfected, if there is no period thereafter when there is neither filing nor perfection.

(2) A perfected security interest or agricultural lien has priority over a conflicting unperfected security interest or agricultural lien.

(3) The first security interest or agricultural lien to attach or become effective has priority if conflicting security interests and agricultural liens are unperfected.

(b) For the purposes of subsection (a)(1):

(1) The time of filing or perfection as to a security interest in collateral is also the time of filing or perfection as to a security interest in proceeds; and

(2) The time of filing or perfection as to a security interest in collateral supported by a supporting obligation is also the time of filing or perfection as to a security interest in the supporting obligation.

(c) Except as otherwise provided in subsection (f), a security interest in collateral which qualifies for priority over a conflicting security interest under Section 75-9-327, 75-9-328, 75-9-329, 75-9-330, or 75-9-331 also has priority over a conflicting security interest in:

(1) Any supporting obligation for the collateral; and

(2) Proceeds of the collateral if:

(A) The security interest in proceeds is perfected;

(B) The proceeds are cash proceeds or of the same type as the collateral; and

(C) In the case of proceeds that are proceeds of proceeds, all intervening proceeds are cash proceeds, proceeds of the same type as the collateral, or an account relating to the collateral.

(d) Subject to subsection (e) and except as otherwise provided in subsection (f), if a security interest in chattel paper, deposit accounts, negotiable documents, instruments, investment property, or letter-of-credit rights is perfected by a method other than filing, conflicting perfected security interests in proceeds of the collateral rank according to priority in time of filing.

(e) Subsection (d) applies only if the proceeds of the collateral are not cash proceeds, chattel paper, negotiable documents, instruments, investment property, or letter-of-credit rights.

(f) Subsections (a) through (e) are subject to:

(1) Subsection (g) and the other provisions of this part;

(2)Section 75-4-210 with respect to a security interest of a collecting bank;

(3)Section 75-5-118 with respect to a security interest of an issuer or nominated person; and

(4)Section 75-9-110 with respect to a security interest arising under Article 2 or 2A.

(g) A perfected agricultural lien on collateral has priority over a conflicting security interest in or agricultural lien on the same collateral if the statute creating the agricultural lien so provides.

§ 75-9-323

(a) Except as otherwise provided in subsection (c), for purposes of determining the priority of a perfected security interest under Section 75-9-322(a)(1), perfection of the security interest dates from the time an advance is made to the extent that the security interest secures an advance that:

(1) Is made while the security interest is perfected only:

(A) Under Section 75-9-309 when it attaches; or

(B) Temporarily under Section 75-9-312(e), (f), or (g); and

(2) Is not made pursuant to a commitment entered into before or while the security interest is perfected by a method other than under Section 75-9-309 or 75-9-312(e), (f), or (g).

(b) Except as otherwise provided in subsection (c), a security interest is subordinate to the rights of a person that becomes a lien creditor to the extent that the security interest secures an advance made more than forty-five (45) days after the person becomes a lien creditor unless the advance is made:

(1) Without knowledge of the lien; or

(2) Pursuant to a commitment entered into without knowledge of the lien.

(c) Subsections (a) and (b) do not apply to a security interest held by a secured party that is a buyer of accounts, chattel paper, payment intangibles, or promissory notes or a consignor.

(d) Except as otherwise provided in subsection (e), a buyer of goods other than a buyer in ordinary course of business takes free of a security interest to the extent that it secures advances made after the earlier of:

(1) The time the secured party acquires knowledge of the buyer's purchase; or

(2) Forty-five (45) days after the purchase.

(e) Subsection (d) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the buyer's purchase and before the expiration of the forty-five-day period.

(f) Except as otherwise provided in subsection (g), a lessee of goods, other than a lessee in ordinary course of business, takes the leasehold interest free of a security interest to the extent that it secures advances made after the earlier of:

(1) The time the secured party acquires knowledge of the lease; or

(2) Forty-five (45) days after the lease contract becomes enforceable.

(g) Subsection (f) does not apply if the advance is made pursuant to a commitment entered into without knowledge of the lease and before the expiration of the forty-five-day period.

§ 75-9-324

(a) Except as otherwise provided in subsection (g), a perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods, and, except as otherwise provided in Section 75-9-327, a perfected security interest in its identifiable proceeds also has priority, if the purchase-money security interest is perfected when the debtor receives possession of the collateral or within twenty (20) days thereafter.

(b) Subject to subsection (c) and except as otherwise provided in subsection (g), a perfected purchase-money security interest in inventory has priority over a conflicting security interest in the same inventory, has priority over a conflicting security interest in chattel paper or an instrument constituting proceeds of the inventory and in proceeds of the chattel paper, if so provided in Section 75-9-330, and, except as otherwise provided in Section 75-9-327, also has priority in identifiable cash proceeds of the inventory to the extent the identifiable cash proceeds are received on or before the delivery of the inventory to a buyer, if:

(1) The purchase-money security interest is perfected when the debtor receives possession of the inventory;

(2) The purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest;

(3) The holder of the conflicting security interest receives the notification within five (5) years before the debtor receives possession of the inventory; and

(4) The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory.

(c) Subsections (b)(2) through (4) apply only if the holder of the conflicting security interest had filed a financing statement covering the same types of inventory:

(1) If the purchase-money security interest is perfected by filing, before the date of the filing; or

(2) If the purchase-money security interest is temporarily perfected without filing or possession under Section 75-9-312(f), before the beginning of the twenty-day period thereunder.

(d) Subject to subsection (e) and except as otherwise provided in subsection (g), a perfected purchase-money security interest in livestock that are farm products has priority over a conflicting security interest in the same livestock, and, except as otherwise provided in Section 75-9-327, a perfected security interest in their identifiable proceeds and identifiable products in their unmanufactured states also has priority, if:

(1) The purchase-money security interest is perfected when the debtor receives possession of the livestock;

(2) The purchase-money secured party sends an authenticated notification to the holder of the conflicting security interest;

(3) The holder of the conflicting security interest receives the notification within six (6) months before the debtor receives possession of the livestock; and

(4) The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in livestock of the debtor and describes the livestock.

(e) Subsections (d)(2) through (4) apply only if the holder of the conflicting security interest had filed a financing statement covering the same types of livestock:

(1) If the purchase-money security interest is perfected by filing, before the date of the filing; or

(2) If the purchase-money security interest is temporarily perfected without filing or possession under Section 75-9-312(f), before the beginning of the twenty-day period thereunder.

(f) Except as otherwise provided in subsection (g), a perfected purchase-money security interest in software has priority over a conflicting security interest in the same collateral, and, except as otherwise provided in Section 75-9-327, a perfected security interest in its identifiable proceeds also has priority, to the extent that the purchase-money security interest in the goods in which the software was acquired for use has priority in the goods and proceeds of the goods under this section.

(g) If more than one (1) security interest qualifies for priority in the same collateral under subsection (a), (b), (d), or (f):

(1) A security interest securing an obligation incurred as all or part of the price of the collateral has priority over a security interest securing an obligation incurred for value given to enable the debtor to acquire rights in or the use of collateral; and

(2) In all other cases, Section 75-9-322(a) applies to the qualifying security interests.

§ 75-9-324A

(a) Except as otherwise provided in subsections (c), (d), and (e), if the requirements of subsection (b) are satisfied, a perfected production-money security interest in production-money crops has priority over a conflicting security interest in the same crops and, except as otherwise provided in Section 75-9-327, also has priority in their identifiable proceeds.

(b) A production-money security interest has priority under subsection (a) if:

(1) The production-money security interest is perfected by filing when the production-money secured party first gives new value to enable the debtor to produce the crops;

(2) The production-money secured party sends an authenticated notification to the holder of the conflicting security interest not less than ten (10) or more than thirty (30) days before the production-money secured party first gives new value to enable the debtor to produce the crops if the holder had filed a financing statement covering the crops before the date of the filing made by the production-money secured party; and

(3) The notification states that the production-money secured party has or expects to acquire a production-money security interest in the debtor's crops and provides a description of the crops.

(c) Except as otherwise provided in subsection (d) or (e), if more than one (1) security interest qualifies for priority in the same collateral under subsection (a), the security interests rank according to priority in time of filing under Section 75-9-322(a).

(d) To the extent that a person holding a perfected security interest in production-money crops that are the subject of a production-money security interest gives new value to enable the debtor to produce the production-money crops and the value is in fact used for the production of the production-money crops, the security interests rank according to priority in time of filing under Section 75-9-322(a).

(e) To the extent that a person holds both an agricultural lien and a production-money security interest in the same collateral securing the same obligations, the rules of priority applicable to agricultural liens govern priority.

§ 75-9-325

(a) Except as otherwise provided in subsection (b), a security interest created by a debtor is subordinate to a security interest in the same collateral created by another person if:

(1) The debtor acquired the collateral subject to the security interest created by the other person;

(2) The security interest created by the other person was perfected when the debtor acquired the collateral; and

(3) There is no period thereafter when the security interest is unperfected.

(b) Subsection (a) subordinates a security interest only if the security interest:

(1) Otherwise would have priority solely under Section 75-9-322(a) or 75-9-324; or

(2) Arose solely under Section 75-2-711(3) or 75-2A-508(5).

§ 75-9-326

(a) Subject to subsection (b), a security interest that is created by a new debtor in collateral in which the new debtor has or acquires rights and is perfected solely by a filed financing statement that would be ineffective to perfect the security interest but for the application of Section 75-9-316(i)(1) or 75-9-508 is subordinate to a security interest in the same collateral which is perfected other than by such a filed financing statement.

(b) The other provisions of this part determine the priority among conflicting security interests in the same collateral perfected by filed financing statements described in subsection (a). However, if the security agreements to which a new debtor became bound as debtor were not entered into by the same original debtor, the conflicting security interests rank according to priority in time of the new debtor's having become bound.

§ 75-9-327

The following rules govern priority among conflicting security interests in the same deposit account:

(1) A security interest held by a secured party having control of the deposit account under Section 75-9-104 has priority over a conflicting security interest held by a secured party that does not have control.

(2) Except as otherwise provided in paragraphs (3) and (4), security interests perfected by control under Section 75-9-314 rank according to priority in time of obtaining control.

(3) Except as otherwise provided in paragraph (4), a security interest held by the bank with which the deposit account is maintained has priority over a conflicting security interest held by another secured party.

(4) A security interest perfected by control under Section 75-9-104(a)(3) has priority over a security interest held by the bank with which the deposit account is maintained.

§ 75-9-328

The following rules govern priority among conflicting security interests in the same investment property:

(1) A security interest held by a secured party having control of investment property under Section 75-9-106 has priority over a security interest held by a secured party that does not have control of the investment property.

(2) Except as otherwise provided in paragraphs (3) and (4), conflicting security interests held by secured parties each of which has control under Section 75-9-106 rank according to priority in time of:

(A) If the collateral is a security, obtaining control;

(B) If the collateral is a security entitlement carried in a securities account and:

(i) If the secured party obtained control under Section 75-8-106(d)(1), the secured party's becoming the person for which the securities account is maintained;

(ii) If the secured party obtained control under Section 75-8-106(d)(2), the securities intermediary's agreement to comply with the secured party's entitlement orders with respect to security entitlements carried or to be carried in the securities account; or

(iii) If the secured party obtained control through another person under Section 75-8-106(d)(3), the time on which priority would be based under this paragraph if the other person were the secured party; or

(C) If the collateral is a commodity contract carried with a commodity intermediary, the satisfaction of the requirement for control specified in Section 75-9-106(b)(2) with respect to commodity contracts carried or to be carried with the commodity intermediary.

(3) A security interest held by a securities intermediary in a security entitlement or a securities account maintained with the securities intermediary has priority over a conflicting security interest held by another secured party.

(4) A security interest held by a commodity intermediary in a commodity contract or a commodity account maintained with the commodity intermediary has priority over a conflicting security interest held by another secured party.

(5) A security interest in a certificated security in registered form which is perfected by taking delivery under Section 75-9-313(a) and not by control under Section 75-9-314 has priority over a conflicting security interest perfected by a method other than control.

(6) Conflicting security interests created by a broker, securities intermediary, or commodity intermediary which are perfected without control under Section 75-9-106 rank equally.

(7) In all other cases, priority among conflicting security interests in investment property is governed by Sections 75-9-322 and 75-9-323.

§ 75-9-329

The following rules govern priority among conflicting security interests in the same letter-of-credit right:

(1) A security interest held by a secured party having control of the letter-of-credit right under Section 75-9-107 has priority to the extent of its control over a conflicting security interest held by a secured party that does not have control.

(2) Security interests perfected by control under Section 75-9-314 rank according to priority in time of obtaining control.

§ 75-9-330

(a) A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed merely as proceeds of inventory subject to a security interest if:

(1) In good faith and in the ordinary course of the purchaser's business, the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under Section 75-9-105; and

(2) The chattel paper does not indicate that it has been assigned to an identified assignee other than the purchaser.

(b) A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed other than merely as proceeds of inventory subject to a security interest if the purchaser gives new value and takes possession of the chattel paper or obtains control of the chattel paper under Section 75-9-105 in good faith, in the ordinary course of the purchaser's business, and without knowledge that the purchase violates the rights of the secured party.

(c) Except as otherwise provided in Section 75-9-327, a purchaser having priority in chattel paper under subsection (a) or (b) also has priority in proceeds of the chattel paper to the extent that:

(1)Section 75-9-322 provides for priority in the proceeds; or

(2) The proceeds consist of the specific goods covered by the chattel paper or cash proceeds of the specific goods, even if the purchaser's security interest in the proceeds is unperfected.

(d) Except as otherwise provided in Section 75-9-331(a), a purchaser of an instrument has priority over a security interest in the instrument perfected by a method other than possession if the purchaser gives value and takes possession of the instrument in good faith and without knowledge that the purchase violates the rights of the secured party.

(e) For purposes of subsections (a) and (b), the holder of a purchase-money security interest in inventory gives new value for chattel paper constituting proceeds of the inventory.

(f) For purposes of subsections (b) and (d), if chattel paper or an instrument indicates that it has been assigned to an identified secured party other than the purchaser, a purchaser of the chattel paper or instrument has knowledge that the purchase violates the rights of the secured party.

§ 75-9-331

(a) This article does not limit the rights of a holder in due course of a negotiable instrument, a holder to which a negotiable document of title has been duly negotiated, or a protected purchaser of a security. These holders or purchasers take priority over an earlier security interest, even if perfected, to the extent provided in Articles 3, 7 and 8.

(b) This article does not limit the rights of or impose liability on a person to the extent that the person is protected against the assertion of a claim under Article 8.

(c) Filing under this article does not constitute notice of a claim or defense to the holders, or purchasers, or persons described in subsections (a) and (b).

§ 75-9-332

(a) A transferee of money takes the money free of a security interest unless the transferee acts in collusion with the debtor in violating the rights of the secured party.

(b) A transferee of funds from a deposit account takes the funds free of a security interest in the deposit account unless the transferee acts in collusion with the debtor in violating the rights of the secured party.

§ 75-9-333

(a) In this section, “possessory lien” means an interest, other than a security interest or an agricultural lien:

(1) Which secures payment or performance of an obligation for services or materials furnished with respect to goods by a person in the ordinary course of the person's business;

(2) Which is created by statute or rule of law in favor of the person; and

(3) Whose effectiveness depends on the person's possession of the goods.

(b) A possessory lien on goods has priority over a security interest in the goods unless the lien is created by a statute that expressly provides otherwise.

§ 75-9-334

(a) A security interest under this article may be created in goods that are fixtures or may continue in goods that become fixtures. A security interest does not exist under this article in ordinary building materials incorporated into an improvement on land.

(b) This article does not prevent creation of an encumbrance upon fixtures under real property law.

(c) In cases not governed by subsections (d) through (h), a security interest in fixtures is subordinate to a conflicting interest of an encumbrancer or owner of the related real property other than the debtor.

(d) Except as otherwise provided in subsection (h), a perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property and:

(1) The security interest is a purchase-money security interest;

(2) The interest of the encumbrancer or owner arises before the goods become fixtures; and

(3) The security interest is perfected by a fixture filing before the goods become fixtures or within twenty (20) days thereafter.

(e) A perfected security interest in fixtures has priority over a conflicting interest of an encumbrancer or owner of the real property if:

(1) The debtor has an interest of record in the real property or is in possession of the real property and the security interest:

(A) Is perfected by a fixture filing before the interest of the encumbrancer or owner is of record; and

(B) Has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner;

(2) Before the goods become fixtures, the security interest is perfected by any method permitted by this article and the fixtures are readily removable:

(A) Factory or office machines;

(B) Equipment that is not primarily used or leased for use in the operation of the real property; or

(C) Replacements of domestic appliances that are consumer goods;

(3) The conflicting interest is a lien on the real property obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this article; or

(4) The security interest is:

(A) Created in a manufactured home in a manufactured-home transaction; and

(B) Perfected pursuant to a statute described in Section 75-9-311(a)(2).

(f) A security interest in fixtures, whether or not perfected, has priority over a conflicting interest of an encumbrancer or owner of the real property if:

(1) The encumbrancer or owner has, in an authenticated record, consented to the security interest or disclaimed an interest in the goods as fixtures; or

(2) The debtor has a right to remove the goods as against the encumbrancer or owner.

(g) The priority of the security interest under paragraph (f)(2) continues for a reasonable time if the debtor's right to remove the goods as against the encumbrancer or owner terminates.

(h) A mortgage is a construction mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land, including the acquisition cost of the land, if a recorded record of the mortgage so indicates. Except as otherwise provided in subsections (e) and (f), a security interest in fixtures is subordinate to a construction mortgage if a record of the mortgage is recorded before the goods become fixtures and the goods become fixtures before the completion of the construction. A mortgage has this priority to the same extent as a construction mortgage to the extent that it is given to refinance a construction mortgage.

(i) A perfected security interest in crops growing on real property has priority over a conflicting interest of an encumbrancer or owner of the real property if the debtor has an interest of record in or is in possession of the real property.

§ 75-9-335

(a) A security interest may be created in an accession and continues in collateral that becomes an accession.

(b) If a security interest is perfected when the collateral becomes an accession, the security interest remains perfected in the collateral.

(c) Except as otherwise provided in subsection (d), the other provisions of this part determine the priority of a security interest in an accession.

(d) A security interest in an accession is subordinate to a security interest in the whole which is perfected by compliance with the requirements of a certificate-of-title statute under Section 75-9-311(b).

(e) After default, subject to Part 6, a secured party may remove an accession from other goods if the security interest in the accession has priority over the claims of every person having an interest in the whole.

(f) A secured party that removes an accession from other goods under subsection (e) shall promptly reimburse any holder of a security interest or other lien on, or owner of, the whole or of the other goods, other than the debtor, for the cost of repair of any physical injury to the whole or the other goods. The secured party need not reimburse the holder or owner for any diminution in value of the whole or the other goods caused by the absence of the accession removed or by any necessity for replacing it. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.

§ 75-9-336

(a) In this section, “commingled goods” means goods that are physically united with other goods in such a manner that their identity is lost in a product or mass.

(b) A security interest does not exist in commingled goods as such. However, a security interest may attach to a product or mass that results when goods become commingled goods.

(c) If collateral becomes commingled goods, a security interest attaches to the product or mass.

(d) If a security interest in collateral is perfected before the collateral becomes commingled goods, the security interest that attaches to the product or mass under subsection (c) is perfected.

(e) Except as otherwise provided in subsection (f), the other provisions of this part determine the priority of a security interest that attaches to the product or mass under subsection (c).

(f) If more than one (1) security interest attaches to the product or mass under subsection (c), the following rules determine priority:

(1) A security interest that is perfected under subsection (d) has priority over a security interest that is unperfected at the time the collateral becomes commingled goods.

(2) If more than one (1) security interest is perfected under subsection (d), the security interests rank equally in proportion to the value of the collateral at the time it became commingled goods.

§ 75-9-337

If, while a security interest in goods is perfected by any method under the law of another jurisdiction, this state issues a certificate of title that does not show that the goods are subject to the security interest or contain a statement that they may be subject to security interests not shown on the certificate:

(1) A buyer of the goods, other than a person in the business of selling goods of that kind, takes free of the security interest if the buyer gives value and receives delivery of the goods after issuance of the certificate and without knowledge of the security interest; and

(2) The security interest is subordinate to a conflicting security interest in the goods that attaches, and is perfected under Section 75-9-311(b), after issuance of the certificate and without the conflicting secured party's knowledge of the security interest.

§ 75-9-338

If a security interest or agricultural lien is perfected by a filed financing statement providing information described in Section 75-9-516(b)(5) which is incorrect at the time the financing statement is filed:

(1) The security interest or agricultural lien is subordinate to a conflicting perfected security interest in the collateral to the extent that the holder of the conflicting security interest gives value in reasonable reliance upon the incorrect information; and

(2) A purchaser, other than a secured party, of the collateral takes free of the security interest or agricultural lien to the extent that, in reasonable reliance upon the incorrect information, the purchaser gives value and, in the case of tangible chattel paper, tangible documents, goods, instruments, or a security certificate, receives delivery of the collateral.

§ 75-9-339

This article does not preclude subordination by agreement by a person entitled to priority.

§ 75-9-340

(a) Except as otherwise provided in subsection (c), a bank with which a deposit account is maintained may exercise any right of recoupment or set-off against a secured party that holds a security interest in the deposit account.

(b) Except as otherwise provided in subsection (c), the application of this article to a security interest in a deposit account does not affect a right of recoupment or set-off of the secured party as to a deposit account maintained with the secured party.

(c) The exercise by a bank of a set-off against a deposit account is ineffective against a secured party that holds a security interest in the deposit account which is perfected by control under Section 75-9-104(a)(3), if the set-off is based on a claim against the debtor.

§ 75-9-341

Except as otherwise provided in Section 75-9-340(c), and unless the bank otherwise agrees in an authenticated record, a bank's rights and duties with respect to a deposit account maintained with the bank are not terminated, suspended, or modified by:

(1) The creation, attachment, or perfection of a security interest in the deposit account;

(2) The bank's knowledge of the security interest; or

(3) The bank's receipt of instructions from the secured party.

§ 75-9-342

This article does not require a bank to enter into an agreement of the kind described in Section 75-9-104(a)(2), even if its customer so requests or directs. A bank that has entered into such an agreement is not required to confirm the existence of the agreement to another person unless requested to do so by its customer.

§ 75-9-401

(1) The proper place to file in order to perfect a security interest is as follows:

(a)(i) When the collateral is equipment used in farming operations, or accounts or general intangibles arising from or relating to the sale of farm products by a farmer, in the office of the chancery clerk in the county of debtor's residence or, if the debtor is a nonresident of this state, in the office of the chancery clerk in the county where the goods are kept;

(ii) When the collateral is consumer goods other than goods covered by subsection (c), in the office of the chancery clerk in the county of debtor's residence or, if the debtor is a nonresident of this state, in the office of the chancery clerk in the county where the goods are kept;

(iii) When the collateral is farm products, in the office of the chancery clerk in the county of debtor's residence or, if the debtor is a nonresident of this state, in the office of the chancery clerk in the county where the goods are kept; and in the office of the Secretary of State;

(iv) When the collateral is crops growing or to be grown, in the office of the chancery clerk in the county where the land is located; and, if the debtor is a resident of this state, in the office of the chancery clerk in the county of debtor's residence; and in the office of the Secretary of State.

(b) When the collateral is timber to be cut or is minerals or the like (including oil and gas) or accounts subject to Section 75-9-103(5), or when the financing statement is filed as a fixture filing (Section 75-9-313) and the collateral is goods which are or are to become fixtures, then in the office where a mortgage on the real estate would be filed or recorded.

(c) When the collateral is a sailboat or other vessel required to be numbered pursuant to Section 59-21-1 et seq., or an inboard or outboard motor used for the propulsion of vessels required to be so numbered, then in the office of the chancery clerk in the county of the debtor's residence and in the office of the Secretary of State.

(d) In all other cases, in the office of the Secretary of State and in addition, if the debtor has a place of business in only one (1) county of this state, also in the office of the chancery clerk of such county, or, if the debtor has no place of business in this state but resides in the state, also in the office of the chancery clerk of the county in which he resides.

(2) Except as provided in Section 75-9-313, a filing which is made in good faith in an improper place or not in all of the places required by this section is nevertheless effective with regard to any collateral as to which the filing complied with the requirements of this chapter and is also effective with regard to collateral covered by the financing statement against any person who has knowledge of the contents of such financing statement.

(3) Except as provided in Section 75-9-313, a filing which is made in the proper place in this state continues effective even though the debtor's residence or place of business or the location of the collateral or its use, whichever controlled the original filing, is thereafter changed.

(4) The rules stated in Section 75-9-103 determine whether filing is necessary in this state.

(5) Notwithstanding the preceding subsections, and subject to Section 75-9-302(3), the proper place to file in order to perfect a security interest in collateral, including fixtures, of a transmitting utility is the office of the Secretary of State. This filing constitutes a fixture filing (Section 75-9-313) as to the collateral described therein which is or is to become fixtures.

(6) For the purposes of this section, the residence of an organization is its place of business if it has one, or its chief executive office if it has more than one (1) place of business.

(7) For purposes of this section, in those counties having two (2) judicial districts, each such district shall be considered a separate county.

§ 75-9-401

(a) Except as otherwise provided in subsection (b) and Sections 75-9-406, 75-9-407, 75-9-408, and 75-9-409, whether a debtor's rights in collateral may be voluntarily or involuntarily transferred is governed by law other than this article.

(b) An agreement between the debtor and secured party which prohibits a transfer of the debtor's rights in collateral or makes the transfer a default does not prevent the transfer from taking effect.

§ 75-9-402

(1) A financing statement is sufficient if it gives the names of the debtor and the secured party, is signed by the debtor, gives an address of the secured party from which information concerning the security interest may be obtained, gives a mailing address of the debtor, and contains a statement indicating the types, or describing the items, of collateral. A financing statement may be filed before a security agreement is made or a security interest otherwise attaches. When the financing statement covers crops growing or to be grown, the statement must also contain a description of the real estate concerned. When the financing statement covers timber to be cut or covers minerals or the like (including oil and gas) or accounts subject to section 75-9-103(5), or when the financing statement is filed as a fixture filing (section 75-9-313) and the collateral is goods which are or are to become fixtures, the statement must also comply with subsection (5). A copy of the security agreement is sufficient as a financing statement if it contains the above information and is signed by the debtor. A carbon, photographic or other reproduction of a security agreement or a financing statement is sufficient as a financing statement if the security agreement so provides or if the original has been filed in this state.

(2) A financing statement which otherwise complies with subsection (1) is sufficient when it is signed by the secured party instead of the debtor if it is filed to perfect a security interest in:

(a) collateral already subject to a security interest in another jurisdiction when it is brought into this state, or when the debtor's location is changed to this state. Such a financing statement must state that the collateral was brought into this state or that the debtor's location was changed to this state under such circumstances; or

(b) proceeds under section 75-9-306 if the security interest in the original collateral was perfected. Such a financing statement must describe the original collateral; or

(c) collateral as to which the filing has lapsed; or

(d) collateral acquired after a change of name, identity or corporate structure of the debtor (subsection (7)).

(3) A form substantially as follows is sufficient to comply with subsection (1):

Name of debtor (or assignor) __________

Address__________

Name of secured party (or assignee) __________

Address __________

1. This financing statement covers the following types (or items) of property:

(Describe) __________

2. (If collateral is crops) The above described crops are growing or are to be grown on: (Describe real estate) __________

3. (If applicable)

( ) The above goods are to become fixtures on:

( ) The above timber is standing on:

( ) The above minerals or the like (including oil and gas) or accounts will be financed at the wellhead or minehead of the well or mine located on:

(Describe real estate by legal description) __________

and this financing statement is to be filed for record in the real estate records.

(If the debtor does not have an interest of record in real estate) The name of the record owner or record lessee is __________

4. (If products of collateral are claimed) Products of the collateral are also covered.

Signature of debtor (or assignor) __________

Signature of Secured Party (or assignee) __________

(4) A financing statement may be amended by filing a writing signed by both the debtor and the secured party. An amendment does not extend the period of effectiveness of a financing statement. If any amendment adds collateral, it is effective as to the added collateral only from the filing date of the amendment. In this chapter, unless the context otherwise requires, the term “financing statement” means the original financing statement and any amendments.

(5) A financing statement covering timber to be cut or covering minerals or the like (including oil and gas) or accounts subject to section 75-9-103(5), or a financing statement filed as a fixture filing (section 75-9-313) where the debtor is not a transmitting utility, must show that it covers this type of collateral, must recite that it is to be filed for record in the real estate records, and the financing statement must contain a description of the real estate sufficient if it were contained in a mortgage of the real estate to give constructive notice of the mortgage under the law of this state. If the debtor does not have an interest of record in the real estate, the financing statement must show the name of a record owner or record lessee. No provision of this chapter nor of any other law of this state shall be construed to require that an instrument filed to perfect a security interest under this subsection shall have the signatures of the parties acknowledged or proved as required by section 89-3-1, Mississippi Code of 1972.

(6) A mortgage is effective as a financing statement filed as a fixture filing from the date of its recording if:

(a) the goods are described in the mortgage by item or type; and

(b) the goods are or are to become fixtures related to the real estate described in the mortgage; and

(c) the mortgage complies with the requirements for a financing statement in this section other than a recital that it is to be filed in the real estate records; and

(d) the mortgage is duly recorded. No fee with reference to the financing statement is required other than the regular recording and satisfaction fees with respect to the mortgage.

(7) A financing statement sufficiently shows the name of the debtor if it gives the individual, partnership or corporate name of the debtor, whether or not it adds other trade names or the names of partners. Where the debtor so changes his name (or in the case of an organization its name, identity or corporate structure) that a filed financing statement becomes seriously misleading, the filing is not effective to perfect a security interest in collateral acquired by the debtor more than four (4) months after the change, unless a new appropriate financing statement is filed before the expiration of that time. A filed financing statement remains effective with respect to collateral transferred by the debtor even though the secured party knows of or consents to the transfer.

(8) A financing statement substantially complying with the requirements of this section is effective even though it contains minor errors which are not seriously misleading.

§ 75-9-402

The existence of a security interest, agricultural lien, or authority given to a debtor to dispose of or use collateral, without more, does not subject a secured party to liability in contract or tort for the debtor's acts or omissions.

§ 75-9-403

(1) Presentation for filing of a financing statement and tender of the filing fee or acceptance of the statement by the filing officer constitutes filing under this chapter.

(2) Except as provided in subsection (6), a filed financing statement is effective for a period of five (5) years from the date of filing. The effectiveness of a filed financing statement lapses on the expiration of the five-year period unless a continuation statement is filed prior to the lapse. If a security interest perfected by filing exists at the time insolvency proceedings are commenced by or against the debtor, the security interest remains perfected until termination of the insolvency proceedings and thereafter for a period of sixty (60) days or until expiration of the five-year period, whichever occurs later. Upon lapse, the security interest becomes unperfected unless it is perfected without filing. If the security interest becomes unperfected upon lapse, it is deemed to have been unperfected as against a person who became a purchaser or lien creditor before lapse.

(3) A continuation statement may be filed by the secured party within six (6) months prior to the expiration of the five-year period specified in subsection (2). Any such continuation statement must be signed by the secured party, identify the original statement by file number, and state that the original statement is still effective. A continuation statement signed by a person other than the secured party of record must be accompanied by a separate written statement of assignment signed by the secured party of record and complying with Section 75-9-405(2), including payment of the required fee. Upon timely filing of the continuation statement, the effectiveness of the original statement is continued for five (5) years after the last date to which the filing was effective, whereupon it lapses in the same manner as provided in subsection (2) unless another continuation statement is filed prior to such lapse. Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the original statement. Unless a statute on disposition of public records provides otherwise, the filing officer may remove a lapsed statement from the files and destroy it immediately if he has retained a microfilm or other photographic record, or in other cases after one (1) year after the lapse. The filing officer shall so arrange matters by physical annexation of financing statements to continuation statements or other related filings, or by other means, that if he physically destroys the financing statements of a period more than five (5) years past, those which have been continued by a continuation statement or which are still effective under subsection (6) shall be retained.

(4) Except as provided in subsection (7), a filing officer shall mark each statement with a file number and with the date and hour of filing and shall hold the statement or a microfilm or other photographic copy thereof for public inspection. In addition, the filing officer shall index the statements according to the name of the debtor and shall note in the index the file number and the address of the debtor given in the statement. Also, for indexing purposes, a continuation statement shall be treated as a financing statement by the filing officer and indexed in the same manner as financing statements.

(5)(a) Except as provided in (b) of this subsection, upon the filing of an original financing statement or a continuation statement, the filing officer will furnish the secured party a copy thereof showing the file number and the date, hour and place of filing. If the statement is in the standard form prescribed by the Secretary of State, the filing fee shall be Five Dollars ($5.00), and otherwise it shall be Ten Dollars ($10.00). The secured party may, at his option, show a trade name for any person. The uniform fee for each name, including trade name, more than one (1) required to be indexed shall be Two Dollars ($2.00).

(b) If an original financing statement or a continuation statement is filed under the provisions of Section 75-9-402(5), the uniform fee for recording and indexing the first page of the statement shall be Five Dollars ($5.00). If the statement consists of more than one (1) page, the recording fee for such excess shall be determined in accordance with Section 25-7-9(1)(f). The secured party may, at his option, show a trade name for any person. The uniform fee for indexing each name, including trade name, more than one (1) shall be Two Dollars ($2.00), and if more than one (1) entry is required to be made in the sectional index, the provisions of Section 25-7-9(1)(f) shall apply to the excess. When the statement has been recorded and indexed, the filing officer will return the statement, or a copy thereof, to the secured party showing the date, hour, book and page number and place of recording.

(6) If the debtor is a transmitting utility (Section 75-9-401(5)) and a filed financing statement so states, it is effective until a termination statement is filed. A real estate mortgage which is effective as a fixture filing under Section 75-9-402(6) remains effective as a fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the real estate. A financing statement covering a mobile home, other than a mobile home constituting inventory, remains effective, if it so states, until a termination statement is filed.

(7) When a financing statement covers timber to be cut or covers minerals or the like (including oil and gas) or accounts subject to Section 75-9-103(5) or is filed as a fixture filing, it shall be filed for record and the filing officer shall index it under the names of the debtor and any owner of record shown on the financing statement in the same fashion as if they were the mortgagors in a mortgage of the real estate described, and, to the extent that the law of this state provides for indexing of mortgages under the name of the mortgagee, under the name of the secured party as if he were the mortgagee thereunder, or where indexing is by description in the same fashion as if the financing statement were a mortgage of the real estate described.

§ 75-9-403

(a) In this section, “value” has the meaning provided in Section 75-3-303(a).

(b) Except as otherwise provided in this section, an agreement between an account debtor and an assignor not to assert against an assignee any claim or defense that the account debtor may have against the assignor is enforceable by an assignee that takes an assignment:

(1) For value;

(2) In good faith;

(3) Without notice of a claim of a property or possessory right to the property assigned; and

(4) Without notice of a defense or claim in recoupment of the type that may be asserted against a person entitled to enforce a negotiable instrument under Section 75-3-305(a).

(c) Subsection (b) does not apply to defenses of a type that may be asserted against a holder in due course of a negotiable instrument under Section 75-3-305(b).

(d) In a consumer transaction, if a record evidences the account debtor's obligation, law other than this article requires that the record include a statement to the effect that the rights of an assignee are subject to claims or defenses that the account debtor could assert against the original obligee, and the record does not include such a statement:

(1) The record has the same effect as if the record included such a statement; and

(2) The account debtor may assert against an assignee those claims and defenses that would have been available if the record included such a statement.

(e) This section is subject to law other than this article which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.

(f) Except as otherwise provided in subsection (d), this section does not displace law other than this article which gives effect to an agreement by an account debtor not to assert a claim or defense against an assignee.

§ 75-9-404

(1) If a financing statement covering consumer goods is filed on or after April 1, 1978, then within one (1) month or within ten (10) days following written demand by the debtor after there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party must file with each filing officer with whom the financing statement was filed, a termination statement to the effect that he no longer claims a security interest under the financing statement, which shall be identified by file number.

In other cases, whenever there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party must on written demand by the debtor send the debtor, for each filing officer with whom the financing statement was filed, a termination statement to the effect that he no longer claims a security interest under the financing statement, which shall be identified by file number. A termination statement signed by a person other than the secured party of record must be accompanied by a separate written statement of assignment signed by the secured party of record complying with Section 75-9-405(2), including payment of the required fee. If the affected secured party fails to file such a termination statement as required by this subsection, or to send such a termination statement within ten (10) days after proper demand therefor, he shall be liable to the debtor for One Hundred Dollars ($100.00), and in addition for any loss caused to the debtor by such failure.

(2) On presentation to the filing officer of such a termination statement he must note it in the index. If he has received the termination statement in duplicate, he shall return one (1) copy of the termination statement to the secured party stamped to show the time of receipt thereof. If the filing officer has a microfilm or other photographic record of the financing statement, and of any related continuation statement, statement of assignment and statement of release, he may remove the originals from the files at any time after receipt of the termination statement, or if he has no such record, he may remove them from the files at any time after one (1) year after receipt of the termination statement.

(3) If the termination statement is in the standard form prescribed by the Secretary of State, the uniform fee for filing and indexing the termination statement shall be Five Dollars ($5.00), and otherwise shall be Ten Dollars ($10.00), plus in each case an additional fee of Two Dollars ($2.00) for each name more than one (1) against which the termination statement is required to be indexed.

§ 75-9-404

(a) Unless an account debtor has made an enforceable agreement not to assert defenses or claims, and subject to subsections (b) through (e), the rights of an assignee are subject to:

(1) All terms of the agreement between the account debtor and assignor and any defense or claim in recoupment arising from the transaction that gave rise to the contract; and

(2) Any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives a notification of the assignment authenticated by the assignor or the assignee.

(b) Subject to subsection (c) and except as otherwise provided in subsection (d), the claim of an account debtor against an assignor may be asserted against an assignee under subsection (a) only to reduce the amount the account debtor owes.

(c) This section is subject to law other than this article which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.

(d) In a consumer transaction, if a record evidences the account debtor's obligation, law other than this article requires that the record include a statement to the effect that the account debtor's recovery against an assignee with respect to claims and defenses against the assignor may not exceed amounts paid by the account debtor under the record, and the record does not include such a statement, the extent to which a claim of an account debtor against the assignor may be asserted against an assignee is determined as if the record included such a statement.

(e) This section does not apply to an assignment of a health-care-insurance receivable.

§ 75-9-405

(1) A financing statement may disclose an assignment of a security interest in the collateral described in the financing statement by indication in the financing statement of the name and address of the assignee or by an assignment itself or a copy thereof on the face or back of the statement. On presentation to the filing officer of such a financing statement, the filing officer shall mark the same as provided in Section 75-9-403(4). The uniform fee for filing, indexing and furnishing filing data for a financing statement so indicating an assignment shall be Five Dollars ($5.00) if the statement is in the standard form prescribed by the Secretary of State, and otherwise shall be Ten Dollars ($10.00), plus in each case an additional fee of Two Dollars ($2.00) for each name more than one against which the financing statement is required to be indexed.

(2) A secured party may assign of record all or part of his rights under a financing statement by the filing in the place where the original financing statement was filed of a separate written statement of assignment signed by the secured party of record and setting forth the name of the secured party of record, and the debtor, the file number and the date of filing of the financing statement and the name and address of the assignee, and containing a description of the collateral assigned. A copy of the assignment is sufficient as a separate statement if it complies with the preceding sentence. On presentation to the filing officer of such a separate statement, the filing officer shall mark such separate statement with the date and hour of the filing. He shall note the assignment on the index of the financing statement, or in the case of a fixture filing, or a filing covering timber to be cut, or covering minerals or the like (including oil and gas) or accounts subject to Section 75-9-103(5), he shall index the assignment under the name of the assignor as grantor and, to the extent that the law of this state provides for indexing the assignment of a mortgage under the name of the assignee, he shall index the assignment of the financing statement under the name of the assignee. The uniform fee for filing, indexing and furnishing filing data about such a separate statement of assignment shall be Five Dollars ($5.00) if the statement is in the standard form prescribed by the Secretary of State, and otherwise shall be Ten Dollars ($10.00), plus in each case an additional fee of Two Dollars ($2.00) for each name more than one against which the statement of assignment is required to be indexed. Notwithstanding the provisions of this subsection, an assignment of record of a security interest in a fixture contained in a mortgage effective as a fixture filing (Section 75-9-402(6)) may be made only by an assignment of the mortgage in the manner provided by the law of this state other than this act.

(3) After the disclosure or filing of an assignment under this section, the assignee is the secured party of record.

§ 75-9-405

(a) A modification of or substitution for an assigned contract is effective against an assignee if made in good faith. The assignee acquires corresponding rights under the modified or substituted contract. The assignment may provide that the modification or substitution is a breach of contract by the assignor. This subsection is subject to subsections (b) through (d).

(b) Subsection (a) applies to the extent that:

(1) The right to payment or a part thereof under an assigned contract has not been fully earned by performance; or

(2) The right to payment or a part thereof has been fully earned by performance and the account debtor has not received notification of the assignment under Section 75-9-406(a).

(c) This section is subject to law other than this article which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.

(d) This section does not apply to an assignment of a health-care-insurance receivable.

§ 75-9-406

A secured party of record may by his signed statement release all or part of any collateral described in a filed financing statement. The statement of release is sufficient if it contains a description of the collateral being released, the name and address of the debtor, the name and address of the secured party, and the file number of the financing statement. A statement of release signed by a person other than the secured party of record must be accompanied by a separate written statement of assignment signed by the secured party of record and complying with Section 75-9-405(2), including payment of the required fee. Upon presentation of such a statement of release to the filing officer, he shall mark the statement with the hour and date of filing and shall note the same upon the margin of the index of the filing of the financing statement. The uniform fee for filing and noting such a statement of release shall be Five Dollars ($5.00) if the statement is in the standard form prescribed by the Secretary of State, and otherwise shall be Ten Dollars ($10.00), plus in each case an additional fee of Two Dollars ($2.00) for each name more than one against which the statement of release is required to be indexed.

§ 75-9-406

(a) Subject to subsections (b) through (i), an account debtor on an account, chattel paper, or a payment intangible may discharge its obligation by paying the assignor until, but not after, the account debtor receives a notification, authenticated by the assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee. After receipt of the notification, the account debtor may discharge its obligation by paying the assignee and may not discharge the obligation by paying the assignor.

(b) Subject to subsection (h), notification is ineffective under subsection (a):

(1) If it does not reasonably identify the rights assigned;

(2) To the extent that an agreement between an account debtor and a seller of a payment intangible limits the account debtor's duty to pay a person other than the seller and the limitation is effective under law other than this article; or

(3) At the option of an account debtor, if the notification notifies the account debtor to make less than the full amount of any installment or other periodic payment to the assignee, even if:

(A) Only a portion of the account, chattel paper, or payment intangible has been assigned to that assignee;

(B) A portion has been assigned to another assignee; or

(C) The account debtor knows that the assignment to that assignee is limited.

(c) Subject to subsection (h), if requested by the account debtor, an assignee shall seasonably furnish reasonable proof that the assignment has been made. Unless the assignee complies, the account debtor may discharge its obligation by paying the assignor, even if the account debtor has received a notification under subsection (a).

(d) Except as otherwise provided in subsection (e) and Sections 75-2A-303 and 75-9-407, and subject to subsection (h), a term in an agreement between an account debtor and an assignor or in a promissory note is ineffective to the extent that it:

(1) Prohibits, restricts, or requires the consent of the account debtor or person obligated on the promissory note to the assignment or transfer of, or the creation, attachment, perfection or enforcement of a security interest in, the account, chattel paper, payment intangible, or promissory note; or

(2) Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account, chattel paper, payment intangible, or promissory note.

(e) Subsection (d) does not apply to the sale of a payment intangible or promissory note, other than a sale pursuant to a disposition under Section 75-9-610 or an acceptance of collateral under Section 75-9-620.

(f) Except as otherwise provided in Sections 75-2A-303 and 75-9-407 and subject to subsections (h) and (i), a rule of law, statute or regulation that prohibits, restricts, or requires the consent of a government, governmental body or official, or account debtor to the assignment or transfer of, or creation of a security interest in, an account or chattel paper is ineffective to the extent that the rule of law, statute, or regulation:

(1) Prohibits, restricts, or requires the consent of the government, governmental body or official, or account debtor to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in the account or chattel paper; or

(2) Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account or chattel paper.

(g) Subject to subsection (h), an account debtor may not waive or vary its option under subsection (b)(3).

(h) This section is subject to law other than this article which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes.

(i) This section does not apply to an assignment of a health-care-insurance receivable.

(j) This section prevails over any inconsistent provision of an existing or future statute, rule or regulation of this state unless the provision is contained in a statute of this state, refers expressly to this section, and states that the provision prevails over this section.

§ 75-9-407

(1) If the person filing any financing statement, termination statement, statement of assignment, or statement of release, furnishes the filing officer a copy thereof, the filing officer shall upon request note upon the copy the file number and date and hour of the filing of the original, and deliver or send the copy to such person.

(2) Upon request in writing of any person, the filing officer shall issue his certificate showing whether there is on file, on the date and hour stated therein, any presently effective financing statements naming a particular debtor thereof, and if there is, giving the date and hour of filing and file number of each such financing statement and the name and address of each secured party or his assignee therein. Each such request shall be accompanied by a search fee of Five Dollars ($5.00) if the request is made on the standard form prescribed by the Secretary of State, and otherwise it shall be Ten Dollars ($10.00). An additional fee of Two Dollars ($2.00) shall be paid by the requesting party for each financing statement listed on the filing officer's certificate, the aggregate of which shall be billed to the requesting party at the time the filing officer's certificate is issued. Failure to pay the additional fee by any requesting party when due may result in denial of further service to the requesting party until the amount due has been paid.

Upon request, the filing officer shall furnish a copy of any presently effective financing statements on file for a uniform fee of Two Dollars ($2.00) per page naming a particular debtor when the request is made on the form and in the manner hereinbefore provided for listing the same.

§ 75-9-407

(a) Except as otherwise provided in subsection (b), a term in a lease agreement is ineffective to the extent that it:

(1) Prohibits, restricts, or requires the consent of a party to the lease to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, an interest of a party under the lease contract or in the lessor's residual interest in the goods; or

(2) Provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the lease.

(b) Except as otherwise provided in Section 75-2A-303(7), a term described in subsection (a)(2) is effective to the extent that there is:

(1) A transfer by the lessee of the lessee's right of possession or use of the goods in violation of the term; or

(2) A delegation of a material performance of either party to the lease contract in violation of the term.

(c) The creation, attachment, perfection, or enforcement of a security interest in the lessor's interest under the lease contract or the lessor's residual interest in the goods is not a transfer that materially impairs the lessee's prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of Section 75-2A-303(4) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor.

§ 75-9-408

A consignor or lessor of goods may file a financing statement using the terms “consignor”, “consignee”, “lessor”, “lessee” or the like instead of the terms specified in section 75-9-402. The provisions of this Part shall apply as appropriate to such a financing statement, but its filing shall not of itself be a factor in determining whether or not the consignment or lease is intended as security (section 75-1-201(37) ). However, if it is determined for other reasons that the consignment or lease is so intended, a security interest of the consignor or lessor which attaches to the consigned or leased goods is perfected by such filing.

§ 75-9-408

(a) Except as otherwise provided in subsection (b), a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or a general intangible, including a contract, permit, license, or franchise, and which term prohibits, restricts, or requires the consent of the person obligated on the promissory note or the account debtor to, the assignment or transfer of, or creation, attachment, or perfection of a security interest in, the promissory note, health-care-insurance receivable, or general intangible, is ineffective to the extent that the term:

(1) Would impair the creation, attachment, or perfection of a security interest; or

(2) Provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible.

(b) Subsection (a) applies to a security interest in a payment intangible or promissory note only if the security interest arises out of a sale of the payment intangible or promissory note, other than a sale pursuant to a disposition under Section 75-9-610 or an acceptance of collateral under Section 75-9-620.

(c) A rule of law, statute, or regulation that prohibits, restricts, or requires the consent of a government, governmental body or official, person obligated on a promissory note, or account debtor to the assignment or transfer of, or creation of a security interest in, a promissory note, health-care-insurance receivable, or general intangible, including a contract, permit, license, or franchise between an account debtor and a debtor, is ineffective to the extent that the rule of law, statute, or regulation:

(1) Would impair the creation, attachment, or perfection of a security interest; or

(2) Provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible.

(d) To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or general intangible or a rule of law, statute, or regulation described in subsection (c) would be effective under law other than this article but is ineffective under subsection (a) or (c), the creation, attachment, or perfection of a security interest in the promissory note, health-care-insurance receivable, or general intangible:

(1) Is not enforceable against the person obligated on the promissory note or the account debtor;

(2) Does not impose a duty or obligation on the person obligated on the promissory note or the account debtor;

(3) Does not require the person obligated on the promissory note or the account debtor to recognize the security interest, pay or render performance to the secured party, or accept payment or performance from the secured party;

(4) Does not entitle the secured party to use or assign the debtor's rights under the promissory note, health-care-insurance receivable, or general intangible, including any related information or materials furnished to the debtor in the transaction giving rise to the promissory note, health-care-insurance receivable, or general intangible;

(5) Does not entitle the secured party to use, assign, possess, or have access to any trade secrets or confidential information of the person obligated on the promissory note or the account debtor; and

(6) Does not entitle the secured party to enforce the security interest in the promissory note, health-care-insurance receivable, or general intangible.

(e) This section prevails over any inconsistent provision of an existing or future statute, rule or regulation of this state unless the provision is contained in a statute of this state, refers expressly to this section, and states that the provision prevails over this section.

§ 75-9-409

The Secretary of State shall prescribe and adopt the types of forms coming within the framework and meeting the requirements of the Uniform Commercial Code, for all filings to be made in his and other filing offices of this state. The use of nonstandard forms necessitates special handling by the filing officers, and a party submitting a filing on a nonstandard form shall be liable for costs incurred by special handling in the sum of Five Dollars ($5.00), payable to the filing officer concerned, in addition to the regular filing fee for the filing submitted on a nonstandard form.

§ 75-9-409

(a) A term in a letter of credit or a rule of law, statute, regulation, custom, or practice applicable to the letter of credit which prohibits, restricts, or requires the consent of an applicant, issuer, or nominated person to a beneficiary's assignment of or creation of a security interest in a letter-of-credit right is ineffective to the extent that the term or rule of law, statute, regulation, custom, or practice:

(1) Would impair the creation, attachment, or perfection of a security interest in the letter-of-credit right; or

(2) Provides that the assignment or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the letter-of-credit right.

(b) To the extent that a term in a letter of credit is ineffective under subsection (a) but would be effective under law other than this article or a custom or practice applicable to the letter of credit, to the transfer of a right to draw or otherwise demand performance under the letter of credit, or to the assignment of a right to proceeds of the letter of credit, the creation, attachment, or perfection of a security interest in the letter-of-credit right:

(1) Is not enforceable against the applicant, issuer, nominated person, or transferee beneficiary;

(2) Imposes no duties or obligations on the applicant, issuer, nominated person, or transferee beneficiary; and

(3) Does not require the applicant, issuer, nominated person, or transferee beneficiary to recognize the security interest, pay or render performance to the secured party, or accept payment or other performance from the secured party.

§ 75-9-410

The secretary of state may prepare a cumulative list of filings made in his office each day and furnish such list to any person requesting same, with the cost of its preparation and delivery to be charged to the requesting party and payable to the secretary of state at the time and in the manner agreed upon between the parties; provided, however, failure by the requesting party to pay as agreed may result in his suspension from receipt of further lists.

§ 75-9-501

(1) When a debtor is in default under a security agreement, a secured party has the rights and remedies provided in this Part and except as limited by subsection (3) those provided in the security agreement. He may reduce his claim to judgment, foreclose or otherwise enforce the security interest by any available judicial procedure. If the collateral is documents, the secured party may proceed either as to the documents or as to the goods covered thereby. A secured party in possession has the rights, remedies and duties provided in section 75-9-207. The rights and remedies referred to in this subsection are cumulative.

(2) After default, the debtor has the rights and remedies provided in this Part, those provided in the security agreement, and those provided in section 75-9-207.

(3) To the extent that they give rights to the debtor and impose duties on the secured party, the rules stated in the subsections referred to below may not be waived or varied except as provided with respect to compulsory disposition of collateral (section 75-9-504(3) and section 75-9-505(1)) and with respect to redemption of collateral (section 75-9-506); but the parties may by agreement determine the standards by which the fulfillment of these rights and duties is to be measured if such standards are not manifestly unreasonable:

(a)section 75-9-502(2) and section 75-9-504(2) insofar as they require accounting for surplus proceeds of collateral;

(b)section 75-9-504(3) and section 75-9-505(1) which deal with disposition of collateral;

(c)section 75-9-505(2) which deals with acceptance of collateral as discharge of obligation;

(d)section 75-9-506 which deals with redemption of collateral; and

(e)section 75-9-507(1) which deals with the secured party's liability for failure to comply with this Part.

(4) If the security agreement covers both real and personal property, the secured party may proceed under this Part as to the personal property or he may proceed as to both the real and the personal property in accordance with his rights and remedies in respect of the real property in which case the provisions of this Part do not apply.

(5) When a secured party has reduced his claim to judgment, the lien of any levy which may be made upon his collateral by virtue of any execution based upon the judgment shall relate back to the date of the perfection of the security interest in such collateral. A judicial sale, pursuant to such execution, is a foreclosure of the security interest by judicial procedure within the meaning of this section, and the secured party may purchase at the sale and thereafter hold the collateral free of any other requirements of this chapter.

§ 75-9-501

(a) Except as otherwise provided in subsection (b), if the local law of this state governs perfection of a security interest or agricultural lien, the office in which to file a financing statement to perfect the security interest or agricultural lien is:

(1) The office designated for the filing or recording of a record of a mortgage on the related real property, if:

(A) The collateral is as-extracted collateral or timber to be cut; or

(B) The financing statement is filed as a fixture filing and the collateral is goods that are or are to become fixtures; or

(2) The Office of the Secretary of State in all other cases, including a case in which the collateral is goods that are or are to become fixtures and the financing statement is not filed as a fixture filing.

(b) The office in which to file a financing statement to perfect a security interest in collateral, including fixtures, of a transmitting utility is the Office of the Secretary of State. The financing statement also constitutes a fixture filing as to the collateral indicated in the financing statement which is or is to become fixtures.

§ 75-9-501.1

(a) No person shall cause to be communicated to the filing office for filing a false record the person knows or reasonably should know:

(1) Is filed with the intent to harass or defraud the person identified as debtor in the record or any other person;

(2) Is not authorized or permitted under Section 75-9-509, 75-9-708 or 75-9-808 of this article; or

(3) Is not related to a valid existing or potential commercial or financial transaction, an existing agricultural or other lien, or a judgment of a court of competent jurisdiction.

(b) The Secretary of State may initiate a review of a record presented for filing or a filed record if:

(1) The Secretary of State receives an information statement filed by the debtor with the Secretary of State under Section 75-9-518 alleging the record was communicated to the filing office in violation of subsection (a); or

(2) The Secretary of State has reason to believe, from information contained in the record or obtained from the person that communicated the record to the filing office, that the record was communicated to the filing office in violation of subsection (a).

(c) Upon initiating the review, the Secretary of State shall communicate to the secured party of record on the record to which the review relates and to the person that communicated the record to the filing, if different and known to the office, a request for additional documentation supporting the effectiveness of the record. The Secretary of State may terminate the record effective thirty (30) days after the first request for additional documentation is sent if it has a reasonable basis for concluding that the record was communicated to the filing office in violation of subsection (a). The Secretary of State may give heightened scrutiny to a record when:

(1) The record asserts a claim against a current or former employee or officer of a federal, state, county, or other local governmental unit that relates to the performance of the officer's or employee's public duties, and for which the filer does not hold a properly executed security agreement or judgment from a court of competent jurisdiction;

(2) The record indicates that the debtor and the secured party are substantially the same;

(3) The debtor is a transmitting utility; or

(4) The transaction to which the record relates is a public-finance transaction.

(d) The Secretary of State shall not return any fee paid for filing a record refused or terminated under this section.

(e) The Secretary of State shall promptly communicate to the secured party of record a notice of the refusal or termination of a record under subsection (c). A secured party of record that believes in good faith the record was not communicated to the filing office in violation of subsection (a) may commence an action in the Chancery Court of the First Judicial District of Hinds County, Mississippi, to require the Secretary of State to accept or reinstate the record.

(f) A record ordered by the court to be accepted or reinstated is effective as a filed record from the initial filing date except as against a purchaser of the collateral which gives value in reasonable reliance on the absence of the record from the files.

(g) Neither the filing office nor any of its employees shall incur liability for the termination or failure to terminate a record under this section or for the refusal to accept a record for filing in the lawful performance of the duties of the office or employee.

(h) This section does not apply to a record communicated to the filing office by a regulated financial institution or by a representative of a regulated financial institution except that the Secretary of State may request from the secured party of record on the record or from the person that communicated the record to the filing office, if different and known to the office, additional documentation supporting that the record was communicated to the filing office by a regulated financial institution or by a representative of a regulated financial institution. “Regulated financial institution” means a financial institution subject to regulatory oversight or examination by a state or federal agency, including, but not limited to, any bank, commercial finance lender or insurer, consumer loan broker, credit union, debt management service provider, finance company, industrial loan company, insurance premium finance company, investment company, investment fund, mortgage service provider, savings association, small loan company, and trust company.

(i) This section applies to records communicated to the filing office for filing before July 1, 2013, if the communication constitutes a violation of subsection (a).

§ 75-9-502

(1) When so agreed and in any event on default, the secured party is entitled to notify an account debtor of the obligor on an instrument to make payment to him whether or not the assignor was theretofore making collections on the collateral, and also to take control of any proceeds to which he is entitled under section 75-9-306.

(2) A secured party who by agreement is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor, and who undertakes to collect from the account debtors or obligors, must proceed in a commercially reasonable manner and may deduct his reasonable expenses of realization from the collections. If the security agreement secures an indebtedness, the secured party must account to the debtor for any surplus, and unless otherwise agreed, the debtor is liable for any deficiency. But, if the underlying transaction was a sale of accounts or chattel paper, the debtor is entitled to any surplus or is liable for any deficiency only if the security agreement so provides.

§ 75-9-502

(a) Subject to subsection (b), a financing statement is sufficient only if it:

(1) Provides the name of the debtor;

(2) Provides the name of the secured party or a representative of the secured party; and

(3) Indicates the collateral covered by the financing statement.

(b) Except as otherwise provided in Section 75-9-501(b), to be sufficient, a financing statement that covers as-extracted collateral or timber to be cut, or which is filed as a fixture filing and covers goods that are or are to become fixtures, must satisfy subsection (a) and also:

(1) Indicate that it covers this type of collateral;

(2) Indicate that it is to be filed for record in the real property records;

(3) Provide a description of the real property to which the collateral is related sufficient to give constructive notice of a mortgage under the law of this state if the description were contained in a record of the mortgage of the real property; and

(4) If the debtor does not have an interest of record in the real property, provide the name of a record owner.

(c) A record of a mortgage is effective, from the date of recording, as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut only if:

(1) The record indicates the goods or accounts that it covers;

(2) The goods are or are to become fixtures related to the real property described in the record or the collateral is related to the real property described in the record and is as-extracted collateral or timber to be cut;

(3) The record satisfies the requirements for a financing statement in this section, but:

(A) The record need not indicate that it is to be filed in the real property records; and

(B) The record sufficiently provides the name of the debtor who is an individual if it provides the individual name of the debtor or the surname and first personal name of the debtor, even if the debtor is an individual to whom Section 75-9-503(a)(4) applies; and

(4) The record is duly recorded.

(d) A financing statement may be filed before a security agreement is made or a security interest otherwise attaches.

§ 75-9-503

(a) A financing statement sufficiently provides the name of the debtor:

(1) Except as otherwise provided in paragraph (3), if the debtor is a registered organization or the collateral is held in a trust that is a registered organization, only if the financing statement provides the name that is stated to be the registered organization's name on the public organic record most recently filed with or issued or enacted by the registered organization's jurisdiction of organization which purports to state, amend or restate the registered organization's name;

(2) Subject to subsection (f) if the collateral is being administered by the personal representative of a decedent, only if the financing statement provides, as the name of the debtor, the name of the decedent and, in a separate part of the financing statement, indicates that collateral is being administered by a personal representative;

(3) If the collateral is held in a trust that is not a registered organization, only if the financing statement:

(A) Provides, as the name of the debtor:

(i) If the organic record of the trust specifies a name for the trust, the name specified; or

(ii) If the organic record of the trust does not specify a name for the trust, the name of the settlor or testator; and

(B) In a separate part of the financing statement:

(i) If the name is provided in accordance with subparagraph (A)(i), indicates that the collateral is held in a trust; or

(ii) If the name is provided in accordance with subparagraph (A)(ii), provides additional information sufficient to distinguish the trust from other trusts having one or more of the same settlors or the same testator and indicates that the collateral is held in a trust, unless the additional information so indicates;

(4) Subject to subsection (g), if the debtor is an individual to whom this state has issued a driver's license or nondriver's identification card that has not expired, or if the debtor furnishes a valid identification card issued by a federally recognized Indian tribe that contains a color photograph of the card holder and the card holder's legal name, residence address and date of birth that has not expired, only if the financing statement provides the name of the individual which is indicated on the driver's license, nondriver's identification card or tribal identification card;

(5) If the debtor is an individual to whom paragraph (4) does not apply, only if the financing statement provides the individual name of the debtor or the surname and first personal name of the debtor; and

(6) In other cases:

(A) If the debtor has a name, only if the financing statement provides the organizational name of the debtor; and

(B) If the debtor does not have a name, only if it provides the names of the partners, members, associates, or other persons comprising the debtor, in a manner that each name provided would be sufficient if the person named were the debtor.

(b) A financing statement that provides the name of the debtor in accordance with subsection (a) is not rendered ineffective by the absence of:

(1) A trade name or other name of the debtor; or

(2) Unless required under subsection (a)(6)(B), names of partners, members, associates, or other persons comprising the debtor.

(c) A financing statement that provides only the debtor's trade name does not sufficiently provide the name of the debtor.

(d) Failure to indicate the representative capacity of a secured party or representative of a secured party does not affect the sufficiency of a financing statement.

(e) A financing statement may provide the name of more than one (1) debtor and the name of more than one (1) secured party.

(f) The name of the decedent indicated on the order appointing the personal representative of the decedent issued by the court having jurisdiction over the collateral is sufficient as the “name of the decedent” under subsection (a)(2).

(g) If this state has issued to an individual more than one (1) driver's license or nondriver's identification card of a kind described in subsection (a)(4), the one that was issued most recently is the one to which subsection (a)(4) refers.

(h) In this section, the “name of the settlor or testator” means:

(1) If the settlor is a registered organization, the name that is stated to be the settlor's name on the public organic record most recently filed with or issued or enacted by the settlor's jurisdiction of organization which purports to state, amend, or restate the settlor's name; or

(2) In other cases, the name of the settlor or testator indicated in the trust's organic record.

§ 75-9-504

(1) A secured party after default may sell, lease or otherwise dispose of any or all of the collateral in its then condition or following any commercially reasonable preparation or processing. Any sale of goods is subject to the chapter on Sales (Chapter 2). The proceeds of disposition shall be applied in the order following to:

(a) the reasonable expenses of retaking, holding, preparing for sale or lease, selling, leasing and the like and, to the extent provided for in the agreement and not prohibited by law, the reasonable attorneys' fees and legal expenses incurred by the secured party;

(b) the satisfaction of indebtedness secured by the security interest under which the disposition is made;

(c) the satisfaction of indebtedness secured by any subordinate security interest in the collateral if written notification of demand therefor is received before distribution of the proceeds is completed. If requested by the secured party, the holder of a subordinate security interest must seasonably furnish reasonable proof of his interest, and unless he does so, the secured party need not comply with his demand.

(2) If the security interest secures an indebtedness, the secured party must account to the debtor for any surplus, and, unless otherwise agreed, the debtor is liable for any deficiency. But if the underlying transaction was a sale of accounts or chattel paper, the debtor is entitled to any surplus or is liable for any deficiency only if the security agreement so provides.

(3) Disposition of the collateral may be by public or private proceedings and may be made by way of one (1) or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms, but every aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, if he has not signed after default a statement renouncing or modifying his right to notification of sale. In the case of consumer goods, no other notification need be sent. In other cases, notification shall be sent to any other secured party from whom the secured party has received (before sending his notification to the debtor or before the debtor's renunciation of his rights) written notice of a claim of an interest in the collateral. The secured party may buy at any public sale; and if the collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations he may buy at private sale.

(4) When collateral is disposed of by a secured party after default, the disposition transfers to a purchaser for value all of the debtor's rights therein, discharges the security interest under which it is made, and any security interest or lien subordinate thereto. The purchaser takes free of all such rights and interests even though the secured party fails to comply with the requirements of this Part or of any judicial proceedings

(a) in the case of a public sale, if the purchaser has no knowledge of any defects in the sale and if he does not buy in collusion with the secured party, other bidders or the person conducting the sale; or

(b) in any other case, if the purchaser acts in good faith.

(5) A person who is liable to a secured party under a guaranty, indorsement, repurchase agreement or the like, and who receives a transfer of collateral from the secured party or is subrogated to his rights has thereafter the rights and duties of the secured party. Such a transfer of collateral is not a sale or disposition of the collateral under this chapter.

§ 75-9-504

A financing statement sufficiently indicates the collateral that it covers if the financing statement provides:

(1) A description of the collateral pursuant to Section 75-9-108; or

(2) An indication that the financing statement covers all assets or all personal property.

§ 75-9-505

(1) If the debtor has paid sixty percent (60%) of the cash price in the case of a purchase money security interest in consumer goods, or sixty percent (60%) of the loan in the case of another security interest in consumer goods, and has not signed after default a statement renouncing or modifying his rights under this Part, a secured party who has taken possession of collateral must dispose of it under section 75-9-504; and if he fails to do so within ninety (90) days after he takes possession, the debtor at his option may recover in conversion or under section 75-9-507 (1) on secured party's liability.

(2) In any other case involving consumer goods or any other collateral, a secured party in possession may, after default, propose to retain the collateral in satisfaction of the obligation. Written notice of such proposal shall be sent to the debtor if he has not signed after default a statement renouncing or modifying his rights under this subsection. In the case of consumer goods, no other notice need be given. In other cases, notice shall be sent to any other secured party from whom the secured party has received (before sending his notice to the debtor or before the debtor's renunciation of his rights) written notice of a claim of an interest in the collateral. If the secured party receives objection in writing from a person entitled to receive notification within twenty-one (21) days after the notice was sent, the secured party must dispose of the collateral under section 75-9-504. In the absence of such written objection, the secured party may retain the collateral in satisfaction of the debtor's obligation.

§ 75-9-505

(a) A consignor, lessor, or other bailor of goods, a licensor, or a buyer of a payment intangible or promissory note may file a financing statement, or may comply with a statute or treaty described in Section 75-9-311(a), using the terms “consignor,” “consignee,” “lessor,” “lessee,” “bailor,” “bailee,” “licensor,” “licensee,” “owner,” “registered owner,” “buyer,” “seller,” or words of similar import, instead of the terms “secured party” and “debtor.”

(b) This part applies to the filing of a financing statement under subsection (a) and, as appropriate, to compliance that is equivalent to filing a financing statement under Section 75-9-311(b), but the filing or compliance is not of itself a factor in determining whether the collateral secures an obligation. If it is determined for another reason that the collateral secures an obligation, a security interest held by the consignor, lessor, bailor, licensor, owner, or buyer which attaches to the collateral is perfected by the filing or compliance.

§ 75-9-506

At any time before the secured party has disposed of collateral or entered into a contract for its disposition under Section 9-504 [§ 75-9-504] or before the obligation has been discharged under Section 9-505(2) [§ 75-9-505(2) ] the debtor or any other secured party may after default redeem the collateral by tendering fulfillment of all obligations secured by the collateral then due or past due (excluding any sums that would not then be due except for an acceleration provision) as well as the expenses reasonably incurred by the secured party in retaking, holding and preparing the collateral for disposition, in arranging for the sale, and to the extent provided in the agreement and not prohibited by law, his reasonable attorneys' fees and legal expenses.

§ 75-9-506

(a) A financing statement substantially satisfying the requirements of this part is effective, even if it has minor errors or omissions, unless the errors or omissions make the financing statement seriously misleading.

(b) Except as otherwise provided in subsection (c), a financing statement that fails sufficiently to provide the name of the debtor in accordance with Section 75-9-503(a) is seriously misleading.

(c) If a search of the records of the filing office under the debtor's correct name, using the filing office's standard search logic, if any, would disclose a financing statement that fails sufficiently to provide the name of the debtor in accordance with Section 75-9-503(a), the name provided does not make the financing statement seriously misleading.

(d) For purposes of Section 75-9-508(b), the “debtor's correct name” in subsection (c) means the correct name of the new debtor.

§ 75-9-507

(1) If it is established that the secured party is not proceeding in accordance with the provisions of this Part disposition may be ordered or restrained on appropriate terms and conditions. If the disposition has occurred the debtor or any person entitled to notification or whose security interest has been made known to the secured party prior to the disposition has a right to recover from the secured party any loss caused by a failure to comply with the provisions of this Part. If the collateral is consumer goods, the debtor has a right to recover in any event an amount not less than the credit service charge plus ten per cent (10%) of the principal amount of the debt or the time price differential plus ten per cent (10%) of the cash price.

(2) The fact that a better price could have been obtained by a sale at a different time or in a different method from that selected by the secured party is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner. If the secured party either sells the collateral in the usual manner in any recognized market therefor or if he sells at the price current in such market at the time of his sale or if he has otherwise sold in conformity with reasonable commercial practices among dealers in the type of property sold he has sold in a commercially reasonable manner. The principles stated in the two (2) preceding sentences with respect to sales also apply as may be appropriate to other types of disposition. A disposition which has been approved in any judicial proceeding or by any bona fide creditors' committee or representative of creditors shall conclusively be deemed to be commercially reasonable, but this sentence does not indicate that any such approval must be obtained in any case nor does it indicate that any disposition not so approved is not commercially reasonable.

§ 75-9-507

(a) A filed financing statement remains effective with respect to collateral that is sold, exchanged, leased, licensed, or otherwise disposed of and in which a security interest or agricultural lien continues, even if the secured party knows of or consents to the disposition.

(b) Except as otherwise provided in subsection (c) and Section 75-9-508, a financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under Section 75-9-506.

(c) If the name that a filed financing statement provides for a debtor becomes insufficient as the name of the debtor under Section 75-9-503(a) so that the financing statement becomes seriously misleading under Section 75-9-506:

(1) The financing statement is effective to perfect a security interest in collateral acquired by the debtor before, or within four (4) months after, the filed financing statement becomes seriously misleading; and

(2) The financing statement is not effective to perfect a security interest in collateral acquired by the debtor more than four (4) months after the filed financing statement becomes seriously misleading, unless an amendment to the financing statement which renders the financing statement not seriously misleading is filed within four (4) months after the financing statement becomes seriously misleading.

§ 75-9-508

(a) Except as otherwise provided in this section, a filed financing statement naming an original debtor is effective to perfect a security interest in collateral in which a new debtor has or acquires rights to the extent that the financing statement would have been effective had the original debtor acquired rights in the collateral.

(b) If the difference between the name of the original debtor and that of the new debtor causes a filed financing statement that is effective under subsection (a) to be seriously misleading under Section 75-9-506:

(1) The financing statement is effective to perfect a security interest in collateral acquired by the new debtor before, and within four (4) months after, the new debtor becomes bound under Section 75-9-203(d); and

(2) The financing statement is not effective to perfect a security interest in collateral acquired by the new debtor more than four (4) months after the new debtor becomes bound under Section 75-9-203(d) unless an initial financing statement providing the name of the new debtor is filed before the expiration of that time.

(c) This section does not apply to collateral as to which a filed financing statement remains effective against the new debtor under Section 75-9-507(a).

§ 75-9-509

(a) A person may file an initial financing statement, amendment that adds collateral covered by a financing statement, or amendment that adds a debtor to a financing statement only if:

(1) The debtor authorizes the filing in an authenticated record or pursuant to subsection (b) or (c); or

(2) The person holds an agricultural lien that has become effective at the time of filing and the financing statement covers only collateral in which the person holds an agricultural lien.

(b) By authenticating or becoming bound as debtor by a security agreement, a debtor or new debtor authorizes the filing of an initial financing statement, and an amendment, covering:

(1) The collateral described in the security agreement; and

(2) Property that becomes collateral under Section 75-9-315(a)(2), whether or not the security agreement expressly covers proceeds.

(c) By acquiring collateral in which a security interest or agricultural lien continues under Section 75-9-315(a)(1), a debtor authorizes the filing of an initial financing statement, and an amendment, covering the collateral and property that becomes collateral under Section 75-9-315(a)(2).

(d) A person may file an amendment other than an amendment that adds collateral covered by a financing statement or an amendment that adds a debtor to a financing statement only if:

(1) The secured party of record authorizes the filing; or

(2) The amendment is a termination statement for a financing statement as to which the secured party of record has failed to file or send a termination statement as required by Section 75-9-513(a) or (c), the debtor authorizes the filing, and the termination statement indicates that the debtor authorized it to be filed.

(e) If there is more than one (1) secured party of record for a financing statement, each secured party of record may authorize the filing of an amendment under subsection (d).

§ 75-9-510

(a) A filed record is effective only to the extent that it was filed by a person that may file it under Section 75-9-509.

(b) A record authorized by one (1) secured party of record does not affect the financing statement with respect to another secured party of record.

(c) A continuation statement that is not filed within the six-month period prescribed by Section 75-9-515(d) is ineffective.

(d) A filed record ceases to be effective if the Secretary of State terminates the record pursuant to Section 75-9-501.1.

§ 75-9-511

(a) A secured party of record with respect to a financing statement is a person whose name is provided as the name of the secured party or a representative of the secured party in an initial financing statement that has been filed. If an initial financing statement is filed under Section 75-9-514(a), the assignee named in the initial financing statement is the secured party of record with respect to the financing statement.

(b) If an amendment of a financing statement which provides the name of a person as a secured party or a representative of a secured party is filed, the person named in the amendment is a secured party of record. If an amendment is filed under Section 75-9-514(b), the assignee named in the amendment is a secured party of record.

(c) A person remains a secured party of record until the filing of an amendment of the financing statement which deletes the person.

§ 75-9-512

(a) Subject to Section 75-9-509, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or, subject to subsection (e), otherwise amend the information provided in, a financing statement by filing an amendment that:

(1) Identifies, by its file number, the initial financing statement to which the amendment relates; and

(2) If the amendment relates to an initial financing statement filed for record in a filing office described in Section 75-9-501(a)(1), provides the date that the initial financing statement was filed for record and the information specified in Section 75-9-502(b).

(b) Except as otherwise provided in Section 75-9-515, the filing of an amendment does not extend the period of effectiveness of the financing statement.

(c) A financing statement that is amended by an amendment that adds collateral is effective as to the added collateral only from the date of the filing of the amendment.

(d) A financing statement that is amended by an amendment that adds a debtor is effective as to the added debtor only from the date of the filing of the amendment.

(e) An amendment is ineffective to the extent it:

(1) Purports to delete all debtors and fails to provide the name of a debtor to be covered by the financing statement; or

(2) Purports to delete all secured parties of record and fails to provide the name of a new secured party of record.

§ 75-9-513

(a) A secured party shall cause the secured party of record for a financing statement to file a termination statement for the financing statement if the financing statement covers consumer goods and:

(1) There is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value; or

(2) The debtor did not authorize the filing of the initial financing statement.

(b) To comply with subsection (a), a secured party shall cause the secured party of record to file the termination statement:

(1) Within one (1) month after there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value; or

(2) If earlier, within twenty (20) days after the secured party receives an authenticated demand from a debtor.

(c) In cases not governed by subsection (a), within twenty (20) days after a secured party receives an authenticated demand from a debtor, the secured party shall cause the secured party of record for a financing statement to send to the debtor a termination statement for the financing statement or file the termination statement in the filing office if:

(1) Except in the case of a financing statement covering accounts or chattel paper that has been sold or goods that are the subject of a consignment, there is no obligation secured by the collateral covered by the financing statement and no commitment to make an advance, incur an obligation, or otherwise give value;

(2) The financing statement covers accounts or chattel paper that has been sold but as to which the account debtor or other person obligated has discharged its obligation;

(3) The financing statement covers goods that were the subject of a consignment to the debtor but are not in the debtor's possession; or

(4) The debtor did not authorize the filing of the initial financing statement.

(d) Except as otherwise provided in Section 75-9-510, upon the filing of a termination statement with the filing office, the financing statement to which the termination statement relates ceases to be effective. Except as otherwise provided in Section 75-9-510, for purposes of Sections 75-9-519(g), 75-9-522(a) and 75-9-523(c), the filing with the filing office of a termination statement relating to a financing statement that indicates that the debtor is a transmitting utility also causes the effectiveness of the financing statement to lapse.

§ 75-9-514

(a) Except as otherwise provided in subsection (c), an initial financing statement may reflect an assignment of all of the secured party's power to authorize an amendment to the financing statement by providing the name and mailing address of the assignee as the name and address of the secured party.

(b) Except as otherwise provided in subsection (c), a secured party of record may assign of record all or part of its power to authorize an amendment to a financing statement by filing in the filing office an amendment of the financing statement which:

(1) Identifies, by its file number, the initial financing statement to which it relates;

(2) Provides the name of the assignor; and

(3) Provides the name and mailing address of the assignee.

(c) An assignment of record of a security interest in a fixture covered by a record of a mortgage which is effective as a financing statement filed as a fixture filing under Section 75-9-502(c) may be made only by an assignment of record of the mortgage in the manner provided by law of this state other than the Uniform Commercial Code.

§ 75-9-515

(a) Except as otherwise provided in subsections (b), (e), (f), and (g), a filed financing statement is effective for a period of five (5) years after the date of filing.

(b) Except as otherwise provided in subsections (e), (f), and (g), an initial financing statement filed in connection with a public-finance transaction or manufactured-home transaction is effective for a period of thirty (30) years after the date of filing if it indicates that it is filed in connection with a public-finance transaction or manufactured-home transaction.

(c) The effectiveness of a filed financing statement lapses on the expiration of the period of its effectiveness unless before the lapse a continuation statement is filed pursuant to subsection (d). Upon lapse a financing statement ceases to be effective and any security interest or agricultural lien that was perfected by the financing statement becomes unperfected, unless the security interest is perfected otherwise. If the security interest or agricultural lien becomes unperfected upon lapse, it is deemed never to have been perfected as against a purchaser of the collateral for value.

(d) A continuation statement may be filed only within six (6) months before the expiration of the five-year period specified in subsection (a) or the thirty-year period specified in subsection (b), whichever is applicable.

(e) Except as otherwise provided in Section 75-9-510, upon timely filing of a continuation statement, the effectiveness of the initial financing statement continues for a period of five (5) years commencing on the day on which the financing statement would have become ineffective in the absence of the filing. Upon the expiration of the five-year period, the financing statement lapses in the same manner as provided in subsection (c), unless, before the lapse, another continuation statement is filed pursuant to subsection (d). Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the initial financing statement.

(f) If a debtor is a transmitting utility and a filed initial financing statement so indicates, the financing statement is effective until a termination statement is filed.

(g) A record of a mortgage that is effective as a financing statement filed as a fixture filing under Section 75-9-502(c) remains effective as a financing statement filed as a fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the real property.

§ 75-9-516

(a) Except as otherwise provided in subsection (b), communication of a record to a filing office and tender of the filing fee or acceptance of the record by the filing office constitutes filing.

(b) Filing does not occur with respect to a record that a filing office refuses to accept because:

(1) The record is not communicated by a method or medium of communication authorized by the filing office;

(2) An amount equal to or greater than the applicable filing fee is not tendered;

(3) The filing office is unable to index the record because:

(A) In the case of an initial financing statement, the record does not provide a name for the debtor;

(B) In the case of an amendment or information statement, the record:

(i) Does not identify the initial financing statement as required by Section 75-9-512 or 75-9-518, as applicable;

(ii) Identifies an initial financing statement whose effectiveness has lapsed under Section 75-9-515; or

(iii) Identifies an initial financing statement which was terminated pursuant to Section 75-9-501.1;

(C) In the case of an initial financing statement that provides the name of a debtor identified as an individual or an amendment that provides a name of a debtor identified as an individual which was not previously provided in the financing statement to which the record relates, the record does not identify the debtor's surname; or

(D) In the case of a record filed in the filing office described in Section 75-9-501(a)(1), the record does not provide a sufficient description of the real property to which it relates;

(3.5) In the case of an initial financing statement or an amendment, if the Secretary of State believes in good faith that the record was communicated to the filing office in violation of Section 75-9-501.1(a);

(4) In the case of an initial financing statement or an amendment that adds a secured party of record, the record does not provide a name and mailing address for the secured party of record;

(5) In the case of an initial financing statement or an amendment that provides a name of a debtor which was not previously provided in the financing statement to which the amendment relates, the record does not:

(A) Provide a mailing address for the debtor; or

(B) Indicate whether the name provided as the name of the debtor is the name of an individual or an organization;

(6) In the case of an assignment reflected in an initial financing statement under Section 75-9-514(a) or an amendment filed under Section 75-9-514(b), the record does not provide a name and mailing address for the assignee; or

(7) In the case of a continuation statement, the record is not filed within the six-month period prescribed by Section 75-9-515(d).

(c) For purposes of subsection (b):

(1) A record does not provide information if the filing office is unable to read or decipher the information; and

(2) A record that does not indicate that it is an amendment or identify an initial financing statement to which it relates, as required by Section 75-9-512, 75-9-514 or 75-9-518, is an initial financing statement.

(d) A record that is communicated to the filing office with tender of the filing fee, but which the filing office refuses to accept for a reason other than one set forth in subsection (b), is effective as a filed record except as against a purchaser of the collateral which gives value in reasonable reliance upon the absence of the record from the files.

§ 75-9-517

The failure of the filing office to index a record correctly does not affect the effectiveness of the filed record.

§ 75-9-518

(a) A person may file in the filing office an information statement with respect to a record indexed there under the person's name if the person believes that the record is inaccurate or was wrongfully filed.

(b) An information statement under subsection (a) must:

(1) Identify the record to which it relates by:

(A) The file number assigned to the initial financing statement to which the record relates; and

(B) If the information statement relates to a record filed for record in a filing office described in Section 75-9-501(a)(1), the date that the initial financing statement was filed for record and the information specified in Section 75-9-502(b);

(2) Indicate that it is an information statement; and

(3) Provide the basis for the person's belief that the record is inaccurate and indicate the manner in which the person believes the record should be amended to cure any inaccuracy or provide the basis for the person's belief that the record was wrongfully filed.

(c) A person may file in the filing office an information statement with respect to a record filed there if the person is a secured party of record with respect to the financing statement to which the record relates and believes that the person that filed the record was not entitled to do so under Section 75-9-509(d).

(d) An information statement under subsection (c) must:

(1) Identify the record to which it relates by:

(A) The file number assigned to the initial financing statement to which the record relates; and

(B) If the information statement relates to a record filed in a filing office described in Section 75-9-501(a)(1), the date and time that the initial financing statement was filed and the information specified in Section 75-9-502(b);

(2) Indicate that it is an information statement; and

(3) Provide the basis for the person's belief that the person that filed the record was not entitled to do so under Section 75-9-509(d).

(e) The filing of an information statement does not affect the effectiveness of an initial financing statement or other filed record.

§ 75-9-519

(a) For each record filed in a filing office, the filing office shall:

(1) Assign a unique number to the filed record;

(2) Create a record that bears the number assigned to the filed record and the date and time of filing;

(3) Maintain the filed record for public inspection; and

(4) Index the filed record in accordance with subsections (c), (d), and (e).

(b) Except as provided in subsection (i), a file number assigned after January 1, 2002, must include a digit that:

(1) Is mathematically derived from or related to the other digits of the file number; and

(2) Aids the filing office in determining whether a number communicated as the file number includes a single-digit or transpositional error.

(c) Except as otherwise provided in subsections (d) and (e), the filing office shall:

(1) Index an initial financing statement according to the name of the debtor and index all filed records relating to the initial financing statement in a manner that associates with one another an initial financing statement and all filed records relating to the initial financing statement; and

(2) Index a record that provides a name of a debtor which was not previously provided in the financing statement to which the record relates also according to the name that was not previously provided.

(d) If a financing statement is filed as a fixture filing or covers as-extracted collateral or timber to be cut, it must be filed for record and the filing office shall index it:

(1) Under the names of the debtor and of each owner of record shown on the financing statement as if they were the mortgagors under a mortgage of the real property described; and

(2) To the extent that the law of this state provides for indexing of records of mortgages under the name of the mortgagee, under the name of the secured party as if the secured party were the mortgagee thereunder, or, if indexing is by description, as if the financing statement were a record of a mortgage of the real property described.

(e) If a financing statement is filed as a fixture filing or covers as-extracted collateral or timber to be cut, the filing office shall index an assignment filed under Section 75-9-514(a) or an amendment filed under Section 75-9-514(b):

(1) Under the name of the assignor as grantor; and

(2) To the extent that the law of this state provides for indexing a record of the assignment of a mortgage under the name of the assignee, under the name of the assignee.

(f) The filing office shall maintain a capability:

(1) To retrieve a record by the name of the debtor and:

(A) If the filing office is described in Section 75-9-501(a)(1), by the file number assigned to the initial financing statement to which the record relates and the date and time that the record was filed for record; or

(B) If the filing office is described in Section 75-9-501(a)(2), by the file number assigned to the initial financing statement to which the record relates; and

(2) To associate and retrieve with one another an initial financing statement and each filed record relating to the initial financing statement.

(g) The filing office may not remove a debtor's name from the index until one (1) year after the effectiveness of a financing statement naming the debtor lapses under Section 75-9-515 with respect to all secured parties of record.

(h) Except as provided in subsection (i), the filing office shall perform the acts required by subsections (a) through (e) at the time and in the manner prescribed by filing-office rule, but not later than two (2) business days after the filing office receives the record in question.

(i) Subsections (b) and (h) do not apply to a filing office described in Section 75-9-501(a)(1).

§ 75-9-520

(a) A filing office shall refuse to accept a record for filing for a reason set forth in Section 75-9-516(b) and may refuse to accept a record for filing only for a reason set forth in Section 75-9-516(b).

(b) If a filing office refuses to accept a record for filing, it shall communicate to the person that presented the record the fact of and reason for the refusal and the date and time the record would have been filed had the filing office accepted it. The communication must be made at the time and in the manner prescribed by filing-office rule but, in the case of a filing office described in Section 75-9-501(a)(1), in no event more than two (2) business days after the filing office receives the record.

(c) A filed financing statement satisfying Section 75-9-502(a) and (b) is effective, even if the filing office is required to refuse to accept it for filing under subsection (a). However, Section 75-9-338 applies to a filed financing statement providing information described in Section 75-9-516(b)(5) which is incorrect at the time the financing statement is filed.

(d) If a record communicated to a filing office provides information that relates to more than one (1) debtor, this part applies as to each debtor separately.

§ 75-9-521

(a) A filing office that accepts written records may not refuse to accept a written initial financing statement in the form and format set forth in the official text of the 2010 amendments to Article 9 of the Uniform Commercial Code promulgated by The American Law Institute and the National Conference of Commissioners on Uniform State Laws, except for a reason set forth in Section 75-9-516(b).

(b) A filing office that accepts written records may not refuse to accept a written record in the form and format set forth in the official text of the 2010 amendments to Article 9 of the Uniform Commercial Code promulgated by The American Law Institute and the National Conference of Commissioners on Uniform State Laws, except for a reason set forth in Section 75-9-516(b).

§ 75-9-522

(a) The filing office shall maintain a record of the information provided in a filed financing statement for at least one (1) year after the effectiveness of the financing statement has lapsed under Section 75-9-515 with respect to all secured parties of record. The record must be retrievable by using the name of the debtor and:

(1) If the record was filed or recorded in the filing office described in Section 75-9-501(a)(1), by using the file number assigned to the initial financing statement to which the record relates and the date that the record was filed for record; or

(2) If the record was filed in the filing office described in Section 75-9-501(a)(2), by using the file number assigned to the initial financing statement to which the record relates.

(b) Except to the extent that a statute governing disposition of public records provides otherwise, the filing office immediately may destroy any written record evidencing a financing statement. However, if the filing office destroys a written record, it shall maintain another record of the financing statement which complies with subsection (a).

§ 75-9-523

(a) If a person that files a written record requests an acknowledgment of the filing, the filing office shall send to the person an image of the record showing the number assigned to the record pursuant to Section 75-9-519(a)(1) and the date and time of the filing of the record. However, if the person furnishes a copy of the record to the filing office, the filing office may instead:

(1) Note upon the copy the number assigned to the record pursuant to Section 75-9-519(a)(1) and the date and time of the filing of the record; and

(2) Send the copy to the person.

(b) If a person files a record other than a written record, the filing office shall communicate to the person an acknowledgment that provides:

(1) The information in the record;

(2) The number assigned to the record pursuant to Section 75-9-519(a)(1); and

(3) The date and time of the filing of the record.

(c) The filing office shall communicate or otherwise make available in a record the following information to any person that requests it:

(1) Whether there is on file on a date and time specified by the filing office, but not a date earlier than three (3) business days before the filing office receives the request, any financing statement that:

(A) Designates a particular debtor or, if the request so states, designates a particular debtor at the address specified in the request;

(B) Has not lapsed under Section 75-9-515 with respect to all secured parties of record; and

(C) If the request so states, has lapsed under Section 75-9-515 and a record of which is maintained by the filing office under Section 75-9-522(a);

(2) The date and time of filing of each financing statement; and

(3) The information provided in each financing statement.

(d) In complying with its duty under subsection (c), the filing office may communicate information in any medium. However, if requested, the filing office shall communicate information by issuing its written certificate or, if so requested in writing, a record that can be admitted into evidence in the courts of this state without extrinsic evidence of its authenticity.

(e) The filing office shall perform the acts required by subsections (a) through (d) at the time and in the manner prescribed by filing-office rule, but, in the case of a filing office described in Section 75-9-501(a)(2), not later than two (2) business days after the filing office receives the request.

(f) At least weekly, the filing office shall offer to sell or license to the public on a nonexclusive basis, in bulk, copies of all records filed in it under this part, in every medium from time to time available to the filing office. This subsection shall apply only to records filed in a filing office described in Section 75-9-501(a)(2).

§ 75-9-524

Delay by the filing office beyond a time limit prescribed by this part is excused if:

(1) The delay is caused by interruption of communication or computer facilities, war, emergency conditions, failure of equipment, or other circumstances beyond control of the filing office; and

(2) The filing office exercises reasonable diligence under the circumstances.

§ 75-9-525

(a) Except as otherwise provided in subsection (e), the fee for filing and indexing a record under this part, other than an initial financing statement of the kind described in subsection (b) is the amount specified in subsection (c), if applicable, plus:

(1) Ten Dollars ($10.00) if the record is communicated in writing and is in the standard form prescribed by the Secretary of State;

(2) Thirteen Dollars ($13.00) if the record is communicated in writing and is not in the standard form prescribed by the Secretary of State; and

(3) Eight Dollars ($8.00) if the record is communicated by another medium authorized by filing-office rule.

(b) Except as otherwise provided in subsection (e), the fee for filing and indexing an initial financing statement of the following kind is the amount specified in subsection (c), if applicable, plus:

(1) Thirteen Dollars ($13.00) if the financing statement indicates that it is filed in connection with a public-finance transaction;

(2) Ten Dollars ($10.00) if the financing statement indicates that it is filed in connection with a manufactured-home transaction.

(c) Except as otherwise provided in subsection (e), if a record is communicated in writing, the fee for each additional debtor name more than one (1) required to be indexed is Four Dollars ($4.00).

(d) The fee for responding to a request for information from the filing office, including for issuing a certificate showing whether there is on file any financing statement naming a particular debtor, is:

(1) Five Dollars ($5.00) if the request is communicated in writing on the standard form prescribed by the Secretary of State;

(2) Ten Dollars ($10.00) if the request is communicated in writing and is not in the standard form prescribed by the Secretary of State;

(3) Three Dollars ($3.00) if the request is communicated by another medium authorized by filing-office rule; and

(4) An additional fee of Two Dollars ($2.00) shall be paid by the requesting party for each financing statement listed on the filing officer's certificate, the aggregate of which shall be billed to the requesting party at the time the filing officer's certificate is issued.

(e) This section does not require a fee to the chancery clerk with respect to a record of a mortgage which is effective as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut under Section 75-9-502(c). However, the recording and satisfaction fees to the chancery clerk that otherwise would be applicable under Section 25-7-9 to the record of the mortgage apply.

§ 75-9-526

(a) The Secretary of State shall adopt and publish rules to implement this article. The filing-office rules must be:

(1) Consistent with this article; and

(2) Adopted and published in accordance with the Mississippi Administrative Procedures Act.

(b) To keep the filing-office rules and practices of the filing office in harmony with the rules and practices of filing offices in other jurisdictions that enact substantially this part, and to keep the technology used by the filing office compatible with the technology used by filing offices in other jurisdictions that enact substantially this part, the Secretary of State, so far as is consistent with the purposes, policies, and provisions of this article, in adopting, amending, and repealing filing-office rules, shall:

(1) Consult with filing offices in other jurisdictions that enact substantially this part; and

(2) Consult the most recent version of the Model Rules promulgated by the International Association of Corporate Administrators or any successor organization; and

(3) Take into consideration the rules and practices of, and the technology used by, filing offices in other jurisdictions that enact substantially this part.

§ 75-9-527

The Secretary of State shall report annually on or before January 2 to the Legislature on the operation of the filing office. The report must contain a statement of the extent to which:

(1) The filing-office rules are not in harmony with the rules of filing offices in other jurisdictions that enact substantially this part and the reasons for these variations; and

(2) The filing-office rules are not in harmony with the most recent version of the Model Rules promulgated by the International Association of Corporate Administrators, or any successor organization, and the reasons for these variations.

§ 75-9-601

(a) After default, a secured party has the rights provided in this part and, except as otherwise provided in Section 75-9-602, those provided by agreement of the parties. A secured party:

(1) May reduce a claim to judgment, foreclose, or otherwise enforce the claim, security interest, or agricultural lien by any available judicial procedure; and

(2) If the collateral is documents, may proceed either as to the documents or as to the goods they cover.

(b) A secured party in possession of collateral or control of collateral under Section 75-7-106, 75-9-104, 75-9-105, 75-9-106 or 75-9-107 has the rights and duties provided in Section 75-9-207.

(c) The rights under subsections (a) and (b) are cumulative and may be exercised simultaneously.

(d) Except as otherwise provided in subsection (g) and Section 75-9-605, after default, a debtor and an obligor have the rights provided in this part and by agreement of the parties.

(e) If a secured party has reduced its claim to judgment, the lien of any levy that may be made upon the collateral by virtue of an execution based upon the judgment relates back to the earliest of:

(1) The date of perfection of the security interest or agricultural lien in the collateral;

(2) The date of filing a financing statement covering the collateral; or

(3) Any date specified in a statute under which the agricultural lien was created.

(f) A sale pursuant to an execution is a foreclosure of the security interest or agricultural lien by judicial procedure within the meaning of this section. A secured party may purchase at the sale and thereafter hold the collateral free of any other requirements of this chapter.

(g) Except as otherwise provided in Section 75-9-607(c), this part imposes no duties upon a secured party that is a consignor or is a buyer of accounts, chattel paper, payment intangibles, or promissory notes.

§ 75-9-602

Except as otherwise provided in Section 75-9-624, to the extent that they give rights to a debtor or obligor and impose duties on a secured party, the debtor or obligor may not waive or vary the rules stated in the following listed sections:

(1)Section 75-9-207(b)(4)(C), which deals with use and operation of the collateral by the secured party;

(2)Section 75-9-210, which deals with requests for an accounting and requests concerning a list of collateral and statement of account;

(3)Section 75-9-607(c), which deals with collection and enforcement of collateral;

(4)Sections 75-9-608(a) and 75-9-615(c) to the extent that they deal with application or payment of noncash proceeds of collection, enforcement, or disposition;

(5)Sections 75-9-608(a) and 75-9-615(d) to the extent that they require accounting for or payment of surplus proceeds of collateral;

(6)Section 75-9-609 to the extent that it imposes upon a secured party that takes possession of collateral without judicial process the duty to do so without breach of the peace;

(7)Sections 75-9-610(b), 75-9-611, 75-9-613, and 75-9-614, which deal with disposition of collateral;

(8)Section 75-9-615(f), which deals with calculation of a deficiency or surplus when a disposition is made to the secured party, a person related to the secured party, or a secondary obligor;

(9)Section 75-9-616, which deals with explanation of the calculation of a surplus or deficiency;

(10)Sections 75-9-620, 75-9-621, and 75-9-622, which deal with acceptance of collateral in satisfaction of obligation;

(11)Section 75-9-623, which deals with redemption of collateral;

(12)Section 75-9-624, which deals with permissible waivers; and

(13)Sections 75-9-625 and 75-9-626, which deal with the secured party's liability for failure to comply with this article.

§ 75-9-603

(a) The parties may determine by agreement the standards measuring the fulfillment of the rights of a debtor or obligor and the duties of a secured party under a rule stated in Section 75-9-602 if the standards are not manifestly unreasonable.

(b) Subsection (a) does not apply to the duty under Section 75-9-609 to refrain from breaching the peace.

§ 75-9-604

(a) If a security agreement covers both personal and real property, a secured party may proceed:

(1) Under this part as to the personal property without prejudicing any rights with respect to the real property; or

(2) As to both the personal property and the real property in accordance with the rights with respect to the real property, in which case the other provisions of this part do not apply.

(b) Subject to subsection (c), if a security agreement covers goods that are or become fixtures, a secured party may proceed:

(1) Under this part; or

(2) In accordance with the rights with respect to real property, in which case the other provisions of this part do not apply.

(c) Subject to the other provisions of this part, if a secured party holding a security interest in fixtures has priority over all owners and encumbrancers of the real property, the secured party, after default, may remove the collateral from the real property.

(d) A secured party that removes collateral shall promptly reimburse any encumbrancer or owner of the real property, other than the debtor, for the cost of repair of any physical injury caused by the removal. The secured party need not reimburse the encumbrancer or owner for any diminution in value of the real property caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.

§ 75-9-605

A secured party does not owe a duty based on its status as secured party:

(1) To a person that is a debtor or obligor, unless the secured party knows:

(A) That the person is a debtor or obligor;

(B) The identity of the person; and

(C) How to communicate with the person; or

(2) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:

(A) That the person is a debtor; and

(B) The identity of the person.

§ 75-9-606

For purposes of this part, a default occurs in connection with an agricultural lien at the time the secured party becomes entitled to enforce the lien in accordance with the statute under which it was created.

§ 75-9-607

(a) If so agreed, and in any event after default, a secured party:

(1) May notify an account debtor or other person obligated on collateral to make payment or otherwise render performance to or for the benefit of the secured party;

(2) May take any proceeds to which the secured party is entitled under Section 75-9-315;

(3) May enforce the obligations of an account debtor or other person obligated on collateral and exercise the rights of the debtor with respect to the obligation of the account debtor or other person obligated on collateral to make payment or otherwise render performance to the debtor, and with respect to any property that secures the obligations of the account debtor or other person obligated on the collateral;

(4) If it holds a security interest in a deposit account perfected by control under Section 75-9-104(a)(1), may apply the balance of the deposit account to the obligation secured by the deposit account; and

(5) If it holds a security interest in a deposit account perfected by control under Section 75-9-104(a)(2) or (3), may instruct the bank to pay the balance of the deposit account to or for the benefit of the secured party.

(b) If necessary to enable a secured party to exercise under subsection (a)(3) the right of a debtor to enforce a mortgage nonjudicially, the secured party may record in the office in which a record of the mortgage is recorded:

(1) A copy of the security agreement that creates or provides for a security interest in the obligation secured by the mortgage; and

(2) The secured party's sworn affidavit in recordable form stating that:

(A) A default has occurred with respect to the obligation secured by the mortgage; and

(B) The secured party is entitled to enforce the mortgage nonjudicially.

(c) A secured party shall proceed in a commercially reasonable manner if the secured party:

(1) Undertakes to collect from or enforce an obligation of an account debtor or other person obligated on collateral; and

(2) Is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor or a secondary obligor.

(d) A secured party may deduct from the collections made pursuant to subsection (c) reasonable expenses of collection and enforcement, including reasonable attorney's fees and legal expenses incurred by the secured party.

(e) This section does not determine whether an account debtor, bank, or other person obligated on collateral owes a duty to a secured party.

§ 75-9-608

(a) If a security interest or agricultural lien secures payment or performance of an obligation, the following rules apply:

(1) A secured party shall apply or pay over for application the cash proceeds of collection or enforcement under Section 75-9-607 in the following order to:

(A) The reasonable expenses of collection and enforcement and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and legal expenses incurred by the secured party;

(B) The satisfaction of obligations secured by the security interest or agricultural lien under which the collection or enforcement is made; and

(C) The satisfaction of obligations secured by any subordinate security interest in or other lien on the collateral subject to the security interest or agricultural lien under which the collection or enforcement is made if the secured party receives an authenticated demand for proceeds before distribution of the proceeds is completed.

(2) If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder complies, the secured party need not comply with the holder's demand under paragraph (1)(C).

(3) A secured party need not apply or pay over for application noncash proceeds of collection and enforcement under Section 75-9-607 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.

(4) A secured party shall account to and pay a debtor for any surplus, and the obligor is liable for any deficiency.

(b) If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes, the debtor is not entitled to any surplus, and the obligor is not liable for any deficiency.

§ 75-9-609

(a) After default, a secured party:

(1) May take possession of the collateral; and

(2) Without removal, may render equipment unusable and dispose of collateral on a debtor's premises under Section 75-9-610.

(b) A secured party may proceed under subsection (a):

(1) Pursuant to judicial process; or

(2) Without judicial process, if it proceeds without breach of the peace.

(c) If so agreed, and in any event after default, a secured party may require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party which is reasonably convenient to both parties.

§ 75-9-610

(a) After default, a secured party may sell, lease, license, or otherwise dispose of any or all of the collateral in its present condition or following any commercially reasonable preparation or processing.

(b) Every aspect of a disposition of collateral, including the method, manner, time, place, and other terms, must be commercially reasonable. If commercially reasonable, a secured party may dispose of collateral by public or private proceedings, by one or more contracts, as a unit or in parcels, and at any time and place and on any terms.

(c) A secured party may purchase collateral:

(1) At a public disposition; or

(2) At a private disposition only if the collateral is of a kind that is customarily sold on a recognized market or the subject of widely distributed standard price quotations.

(d) A contract for sale, lease, license, or other disposition includes the warranties relating to title, possession, quiet enjoyment, and the like which by operation of law accompany a voluntary disposition of property of the kind subject to the contract.

(e) A secured party may disclaim or modify warranties under subsection (d):

(1) In a manner that would be effective to disclaim or modify the warranties in a voluntary disposition of property of the kind subject to the contract of disposition; or

(2) By communicating to the purchaser a record evidencing the contract for disposition and including an express disclaimer or modification of the warranties.

(f) A record is sufficient to disclaim warranties under subsection (e) if it indicates “There is no warranty relating to title, possession, quiet enjoyment or the like in this disposition” or uses words of similar import.

§ 75-9-611

(a) In this section, “notification date” means the earlier of the date on which:

(1) A secured party sends to the debtor and any secondary obligor an authenticated notification of disposition; or

(2) The debtor and any secondary obligor waive the right to notification.

(b) Except as otherwise provided in subsection (d), a secured party that disposes of collateral under Section 75-9-610 shall send to the persons specified in subsection (c) a reasonable authenticated notification of disposition.

(c) To comply with subsection (b), the secured party shall send an authenticated notification of disposition to:

(1) The debtor;

(2) Any secondary obligor; and

(3) If the collateral is other than consumer goods:

(A) Any other person from which the secured party has received, before the notification date, an authenticated notification of a claim of an interest in the collateral;

(B) Any other secured party or lienholder that, ten (10) days before the notification date, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:

(i) Identified the collateral;

(ii) Was indexed under the debtor's name as of that date; and

(iii) Was filed in the office in which to file a financing statement against the debtor covering the collateral as of that date; and

(C) Any other secured party that, ten (10) days before the notification date, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in Section 75-9-311(a).

(d) Subsection (b) does not apply if the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.

(e) A secured party complies with the requirement for notification prescribed by subsection (c)(3)(B) if:

(1) Not later than twenty (20) days or earlier than thirty (30) days before the notification date, the secured party requests, in a commercially reasonable manner, information concerning financing statements indexed under the debtor's name in the office indicated in subsection (c)(3)(B); and

(2) Before the notification date, the secured party:

(A) Did not receive a response to the request for information; or

(B) Received a response to the request for information and sent an authenticated notification of disposition to each secured party or other lienholder named in that response whose financing statement covered the collateral.

§ 75-9-612

(a) Except as otherwise provided in subsection (b), whether a notification is sent within a reasonable time is a question of fact.

(b) A notification of disposition sent after default and ten (10) days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.

§ 75-9-613

Except in a consumer-goods transaction, the following rules apply:

(1) The contents of a notification of disposition are sufficient if the notification:

(A) Describes the debtor and the secured party;

(B) Describes the collateral that is the subject of the intended disposition;

(C) States the method of intended disposition;

(D) States that the debtor is entitled to an accounting of the unpaid indebtedness and states the charge, if any, for an accounting; and

(E) States the time and place of a public disposition or the time after which any other disposition is to be made.

(2) Whether the contents of a notification that lacks any of the information specified in paragraph (1) are nevertheless sufficient is a question of fact.

(3) The contents of a notification providing substantially the information specified in paragraph (1) are sufficient, even if the notification includes:

(A) Information not specified by that paragraph; or

(B) Minor errors that are not seriously misleading.

(4) A particular phrasing of the notification is not required.

(5) The following form of notification and the form appearing in Section 75-9-614(3), when completed, each provides sufficient information:

| NOTIFICATION OF DISPOSITION OF COLLATERAL | | | | --- | --- | --- | | | To: | [Name of debtor, obligor or other person to which the notification is sent] | | | From: | [Name, address and telephone number of secured party] | | | Name of Debtor(s): | [Include only if debtor(s) are not an addressee] |

[For a public disposition:]

We will sell (or lease or license, as applicable) the [describe collateral] to the highest qualified bidder in public as follows:

| Day and Date: | ____________________ | | --- | --- | | Time: | ____________________ | | Place: | ____________________ |

[For a private disposition:]

We will sell (or lease or license, as applicable), the [describe collateral] privately sometime after [day and date].

You are entitled to an accounting of the unpaid indebtedness secured by the property that we intend to sell (or lease or license, as applicable) (for a charge of $__________). You may request an accounting by calling us at [telephone number].

[END OF FORM]

§ 75-9-614

In a consumer-goods transaction, the following rules apply:

(1) A notification of disposition must provide the following information:

(A) The information specified in Section 75-9-613(1);

(B) A description of any liability for a deficiency of the person to which the notification is sent;

(C) A telephone number from which the amount that must be paid to the secured party to redeem the collateral under Section 75-9-623 is available; and

(D) A telephone number or mailing address from which additional information concerning the disposition and the obligation secured is available.

(2) A particular phrasing of the notification is not required.

(3) The following form of notification, when completed, provides sufficient information:

Name and address of secured party:

Date:

NOTICE OF OUR PLAN TO SELL PROPERTY

Name and address of any obligor who is also a debtor:

Subject: [Identification of transaction]

We have your: [describe collateral] because you broke promises in our agreement.

[For a public disposition:]

We will sell [describe collateral] at public sale. A sale could include a lease or license. The sale will be held as follows:

| Date: | ____________________ | | --- | --- | | Time: | ____________________ | | Place: | ____________________ |

You may attend the sale and bring bidders if you want.

[For a private disposition]

We will sell [describe collateral] at private sale sometime after [date]. A sale could include a lease or license. The money that we get from the sale (after paying our costs) will reduce the amount you owe. If we get less money than you owe, you [will or will not, as applicable] still owe us the difference. If we get more money than you owe, you will get the extra money, unless we must pay it to someone else.

You can get the property back at any time before we sell it by paying us the full amount you owe which is then due or past due, (excluding any amount that would not be due except for an acceleration provision), including our expenses. To learn the exact amount you must pay, call us at [telephone number]. If you want us to explain to you in writing how we have figured the amount that you owe us, you may call us at [telephone number], or write us at [secured party's address] and request a written explanation. We will charge you $__________ for the explanation if we sent you another written explanation of the amount you owe us within the last six (6) months.

If you need more information about the sale call us at [telephone number], or write us at [secured party's address].

We are sending this notice to the following other people who have an interest in [describe collateral] or who owe money under your agreement:

Names of all other debtors and obligors, if any:

[END OF FORM]

(4) A notification in the form of paragraph (3) is sufficient, even if additional information appears at the end of the form.

(5) A notification in the form of paragraph (3) is sufficient, even if it includes errors in information not required by paragraph (1), unless the error is misleading with respect to rights arising under this article.

(6) If a notification under this section is not in the form of paragraph (3), law other than this article determines the effect of including information not required by paragraph (1).

§ 75-9-615

(a) A secured party shall apply or pay over for application the cash proceeds of disposition under Section 75-9-610 in the following order to:

(1) The reasonable expenses of retaking, holding, preparing for disposition, processing, and disposing, and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and legal expenses incurred by the secured party;

(2) The satisfaction of obligations secured by the security interest or agricultural lien under which the disposition is made;

(3) The satisfaction of obligations secured by any subordinate security interest in or other subordinate lien on the collateral if:

(A) The secured party receives from the holder of the subordinate security interest or other lien an authenticated demand for proceeds before distribution of the proceeds is completed; and

(B) In a case in which a consignor has an interest in the collateral, the subordinate security interest or other lien is senior to the interest of the consignor; and

(4) A secured party that is a consignor of the collateral if the secured party receives from the consignor an authenticated demand for proceeds before distribution of the proceeds is completed.

(b) If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder does so, the secured party need not comply with the holder's demand under subsection (a)(3).

(c) A secured party need not apply or pay over for application noncash proceeds of disposition under Section 75-9-610 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.

(d) If the security interest under which a disposition is made secures payment or performance of an obligation, after making the payments and applications required by subsection (a) and permitted by subsection (c):

(1) Unless subsection (a)(4) requires the secured party to apply or pay over cash proceeds to a consignor, the secured party shall account to and pay a debtor for any surplus; and

(2) The obligor is liable for any deficiency.

(e) If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes:

(1) The debtor is not entitled to any surplus; and

(2) The obligor is not liable for any deficiency.

(f) The surplus or deficiency following a disposition is calculated based on the amount of proceeds that would have been realized in a disposition complying with this part to a transferee other than the secured party, a person related to the secured party, or a secondary obligor if:

(1) The transferee in the disposition is the secured party, a person related to the secured party, or a secondary obligor; and

(2) The amount of proceeds of the disposition is significantly below the range of proceeds that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.

(g) A secured party that receives cash proceeds of a disposition in good faith and without knowledge that the receipt violates the rights of the holder of a security interest or other lien that is not subordinate to the security interest or agricultural lien under which the disposition is made:

(1) Takes the cash proceeds free of the security interest or other lien;

(2) Is not obligated to apply the proceeds of the disposition to the satisfaction of obligations secured by the security interest or other lien; and

(3) Is not obligated to account to or pay the holder of the security interest or other lien for any surplus.

§ 75-9-616

(a) In this section:

(1) “Explanation” means a writing that:

(A) States the amount of the surplus or deficiency;

(B) Provides an explanation in accordance with subsection (c) of how the secured party calculated the surplus or deficiency;

(C) States, if applicable, that future debits, credits, charges, including additional credit service charges or interest, rebates, and expenses may affect the amount of the surplus or deficiency; and

(D) Provides a telephone number or mailing address from which additional information concerning the transaction is available.

(2) “Request” means a record:

(A) Authenticated by a debtor or consumer obligor;

(B) Requesting that the recipient provide an explanation; and

(C) Sent after disposition of the collateral under Section 75-9-610.

(b) In a consumer-goods transaction in which the debtor is entitled to a surplus or a consumer obligor is liable for a deficiency under Section 75-9-615, the secured party shall:

(1) Send an explanation to the debtor or consumer obligor, as applicable, after the disposition and:

(A) Before or when the secured party accounts to the debtor and pays any surplus or first makes written demand on the consumer obligor after the disposition for payment of the deficiency; and

(B) Within fourteen (14) days after receipt of a request; or

(2) In the case of a consumer obligor who is liable for a deficiency, within fourteen (14) days after receipt of a request, send to the consumer obligor a record waiving the secured party's right to a deficiency.

(c) To comply with subsection (a)(1)(B), a writing must provide the following information in the following order:

(1) The aggregate amount of obligations secured by the security interest under which the disposition was made, and, if the amount reflects a rebate of unearned interest or credit service charge, an indication of that fact, calculated as of a specified date:

(A) If the secured party takes or receives possession of the collateral after default, not more than thirty-five (35) days before the secured party takes or receives possession; or

(B) If the secured party takes or receives possession of the collateral before default or does not take possession of the collateral, not more than thirty-five (35) days before the disposition;

(2) The amount of proceeds of the disposition;

(3) The aggregate amount of the obligations after deducting the amount of proceeds;

(4) The amount, in the aggregate or by type, and types of expenses, including expenses of retaking, holding, preparing for disposition, processing, and disposing of the collateral, and attorney's fees secured by the collateral which are known to the secured party and relate to the current disposition;

(5) The amount, in the aggregate or by type, and types of credits, including rebates of interest or credit service charges, to which the obligor is known to be entitled and which are not reflected in the amount in paragraph (1); and

(6) The amount of the surplus or deficiency.

(d) A particular phrasing of the explanation is not required. An explanation complying substantially with the requirements of subsection (a) is sufficient, even if it includes minor errors that are not seriously misleading.

(e) A debtor or consumer obligor is entitled without charge to one (1) response to a request under this section during any six-month period in which the secured party did not send to the debtor or consumer obligor an explanation pursuant to subsection (b)(1). The secured party may require payment of a charge not exceeding Twenty-five Dollars ($25.00) for each additional response.

§ 75-9-617

(a) A secured party's disposition of collateral after default:

(1) Transfers to a transferee for value all of the debtor's rights in the collateral;

(2) Discharges the security interest under which the disposition is made; and

(3) Discharges any subordinate security interest or other subordinate lien.

(b) A transferee that acts in good faith takes free of the rights and interests described in subsection (a), even if the secured party fails to comply with this article or the requirements of any judicial proceeding.

(c) If a transferee does not take free of the rights and interests described in subsection (a), the transferee takes the collateral subject to:

(1) The debtor's rights in the collateral;

(2) The security interest or agricultural lien under which the disposition is made; and

(3) Any other security interest or other lien.

§ 75-9-618

(a) A secondary obligor acquires the rights and becomes obligated to perform the duties of the secured party after the secondary obligor:

(1) Receives an assignment of a secured obligation from the secured party;

(2) Receives a transfer of collateral from the secured party and agrees to accept the rights and assume the duties of the secured party; or

(3) Is subrogated to the rights of a secured party with respect to collateral.

(b) An assignment, transfer, or subrogation described in subsection (a):

(1) Is not a disposition of collateral under Section 75-9-610; and

(2) Relieves the secured party of further duties under this article.

§ 75-9-619

(a) In this section, “transfer statement” means a record authenticated by a secured party stating:

(1) That the debtor has defaulted in connection with an obligation secured by specified collateral;

(2) That the secured party has exercised its post-default remedies with respect to the collateral;

(3) That, by reason of the exercise, a transferee has acquired the rights of the debtor in the collateral; and

(4) The name and mailing address of the secured party, debtor, and transferee.

(b) A transfer statement entitles the transferee to the transfer of record of all rights of the debtor in the collateral specified in the statement in any official filing, recording, registration, or certificate-of-title system covering the collateral. If a transfer statement is presented with the applicable fee and request form to the official or office responsible for maintaining the system, the official or office shall:

(1) Accept the transfer statement;

(2) Promptly amend its records to reflect the transfer; and

(3) If applicable, issue a new appropriate certificate of title in the name of the transferee.

(c) A transfer of the record or legal title to collateral to a secured party under subsection (b) or otherwise is not of itself a disposition of collateral under this article and does not of itself relieve the secured party of its duties under this article.

§ 75-9-620

(a) Except as otherwise provided in subsection (g), a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:

(1) The debtor consents to the acceptance under subsection (c);

(2) The secured party does not receive, within the time set forth in subsection (d), a notification of objection to the proposal authenticated by:

(A) A person to which the secured party was required to send a proposal under Section 75-9-621; or

(B) Any other person, other than the debtor, holding an interest in the collateral subordinate to the security interest that is the subject of the proposal;

(3) If the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and

(4) Subsection (e) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to Section 75-9-624.

(b) A purported or apparent acceptance of collateral under this section is ineffective unless:

(1) The secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and

(2) The conditions of subsection (a) are met.

(c) For purposes of this section:

(1) A debtor consents to an acceptance of collateral in partial satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record authenticated after default; and

(2) A debtor consents to an acceptance of collateral in full satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record authenticated after default or the secured party:

(A) Sends to the debtor after default a proposal that is unconditional or subject only to a condition that collateral not in the possession of the secured party be preserved or maintained;

(B) In the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and

(C) Does not receive a notification of objection authenticated by the debtor within twenty (20) days after the proposal is sent.

(d) To be effective under subsection (a)(2), a notification of objection must be received by the secured party:

(1) In the case of a person to which the proposal was sent pursuant to Section 75-9-621, within twenty (20) days after notification was sent to that person; and

(2) In other cases:

(A) Within twenty (20) days after the last notification was sent pursuant to Section 75-9-621; or

(B) If a notification was not sent, before the debtor consents to the acceptance under subsection (c).

(e) A secured party that has taken possession of collateral shall dispose of the collateral pursuant to Section 75-9-610 within the time specified in subsection (f) if:

(1) Sixty percent (60%) of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or

(2) Sixty percent (60%) of the principal amount of the obligation secured has been paid in the case of a nonpurchase-money security interest in consumer goods.

(f) To comply with subsection (e), the secured party shall dispose of the collateral:

(1) Within ninety (90) days after taking possession; or

(2) Within any longer period to which the debtor and all secondary obligors have agreed in an agreement to that effect entered into and authenticated after default.

(g) In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.

§ 75-9-621

(a) A secured party that desires to accept collateral in full or partial satisfaction of the obligation it secures shall send its proposal to:

(1) Any person from which the secured party has received, before the debtor consented to the acceptance, an authenticated notification of a claim of an interest in the collateral;

(2) Any other secured party or lienholder that, ten (10) days before the debtor consented to the acceptance, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:

(A) Identified the collateral;

(B) Was indexed under the debtor's name as of that date; and

(C) Was filed in the office or offices in which to file a financing statement against the debtor covering the collateral as of that date; and

(3) Any other secured party that, ten (10) days before the debtor consented to the acceptance, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in Section 75-9-311(a).

(b) A secured party that desires to accept collateral in partial satisfaction of the obligation it secures shall send its proposal to any secondary obligor in addition to the persons described in subsection (a).

§ 75-9-622

(a) A secured party's acceptance of collateral in full or partial satisfaction of the obligation it secures:

(1) Discharges the obligation to the extent consented to by the debtor;

(2) Transfers to the secured party all of a debtor's rights in the collateral;

(3) Discharges the security interest or agricultural lien that is the subject of the debtor's consent and any subordinate security interest or other subordinate lien; and

(4) Terminates any other subordinate interest.

(b) A subordinate interest is discharged or terminated under subsection (a), even if the secured party fails to comply with this article.

§ 75-9-623

(a) A debtor, any secondary obligor, or any other secured party or lienholder may redeem collateral.

(b) To redeem collateral, a person shall tender:

(1) Fulfillment of all obligations secured by the collateral then due or past due (excluding any sums that would not be due except for an acceleration provision); and

(2) The reasonable expenses and attorney's fees described in Section 75-9-615(a)(1).

(c) A redemption may occur at any time before a secured party:

(1) Has collected collateral under Section 75-9-607;

(2) Has disposed of collateral or entered into a contract for its disposition under Section 75-9-610; or

(3) Has accepted collateral in full or partial satisfaction of the obligation it secures under Section 75-9-622.

§ 75-9-624

(a) A debtor or secondary obligor may waive the right to notification of disposition of collateral under Section 75-9-611 only by an agreement to that effect entered into and authenticated after default.

(b) A debtor may waive the right to require disposition of collateral under Section 75-9-620(e) only by an agreement to that effect entered into and authenticated after default.

(c) Except in a consumer-goods transaction, a debtor or secondary obligor may waive the right to redeem collateral under Section 75-9-623 only by an agreement to that effect entered into and authenticated after default.

§ 75-9-625

(a) If it is established that a secured party is not proceeding in accordance with this article, a court may order or restrain collection, enforcement, or disposition of collateral on appropriate terms and conditions.

(b) Subject to subsections (c), (d), and (f), a person is liable for damages in the amount of any loss caused by a failure to comply with this article. Loss caused by a failure to comply may include loss resulting from the debtor's inability to obtain, or increased costs of, alternative financing.

(c) Except as otherwise provided in Section 75-9-628:

(1) A person that, at the time of the failure, was a debtor, was an obligor, or held a security interest in or other lien on the collateral may recover damages under subsection (b) for its loss; and

(2) If the collateral is consumer goods, a person that was a debtor or a secondary obligor at the time a secured party failed to comply with this part may recover for that failure in any event an amount not less than the credit service charge plus ten percent (10%) of the principal amount of the obligation or the time-price differential plus ten percent (10%) of the cash price.

(d) A debtor whose deficiency is eliminated under Section 75-9-626 may recover damages for the loss of any surplus. However, a debtor or secondary obligor whose deficiency is eliminated or reduced under Section 75-9-626 may not otherwise recover under subsection (b) for noncompliance with the provisions of this part relating to collection, enforcement, disposition, or acceptance.

(e) In addition to any damages recoverable under subsection (b), the debtor, consumer obligor, or person named as a debtor in a filed record, as applicable, may recover Five Hundred Dollars ($500.00) in each case from a person that:

(1) Fails to comply with Section 75-9-208;

(2) Fails to comply with Section 75-9-209;

(3) Files a record that the person is not entitled to file under Section 75-9-509(a) and fails to file a termination statement with respect to the filed record within ten (10) days after receiving an authenticated demand by the debtor, consumer obligor, or person named as a debtor in the filed record;

(4) Fails to cause the secured party of record to file or send a termination statement as required by Section 75-9-513(a) or (c);

(5) Fails to comply with Section 75-9-616(b)(1) and whose failure is part of a pattern, or consistent with a practice, of noncompliance; or

(6) Fails to comply with Section 75-9-616(b)(2).

(f) A debtor or consumer obligor may recover damages under subsection (b) and, in addition, Five Hundred Dollars ($500.00) in each case from a person that, without reasonable cause, fails to comply with a request under Section 75-9-210. A recipient of a request under Section 75-9-210 which never claimed an interest in the collateral or obligations that are the subject of a request under that section has a reasonable excuse for failure to comply with the request within the meaning of this subsection.

(g) If a secured party fails to comply with a request regarding a list of collateral or a statement of account under Section 75-9-210, the secured party may claim a security interest only as shown in the list or statement included in the request as against a person that is reasonably misled by the failure.

§ 75-9-626

In an action arising from a transaction in which the amount of a deficiency or surplus is in issue, the following rules apply:

(1) A secured party need not prove compliance with the provisions of this part relating to collection, enforcement, disposition, or acceptance unless the debtor or a secondary obligor places the secured party's compliance in issue.

(2) If the secured party's compliance is placed in issue, the secured party has the burden of establishing that the collection, enforcement, disposition, or acceptance was conducted in accordance with this part.

(3) Except as otherwise provided in Section 75-9-628, if a secured party fails to prove that the collection, enforcement, disposition, or acceptance was conducted in accordance with the provisions of this part relating to collection, enforcement, disposition, or acceptance, the liability of a debtor or a secondary obligor for a deficiency is limited to an amount by which the sum of the secured obligation, expenses, and attorney's fees exceeds the greater of:

(A) The proceeds of the collection, enforcement, disposition, or acceptance; or

(B) The amount of proceeds that would have been realized had the noncomplying secured party proceeded in accordance with the provisions of this part relating to collection, enforcement, disposition, or acceptance.

(4) For purposes of paragraph (3)(B), the amount of proceeds that would have been realized is equal to the sum of the secured obligation, expenses, and attorney's fees unless the secured party proves that the amount is less than that sum.

(5) If a deficiency or surplus is calculated under Section 75-9-615(f), the debtor or obligor has the burden of establishing that the amount of proceeds of the disposition is significantly below the range of prices that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.

§ 75-9-627

(a) The fact that a greater amount could have been obtained by a collection, enforcement, disposition, or acceptance at a different time or in a different method from that selected by the secured party is not of itself sufficient to preclude the secured party from establishing that the collection, enforcement, disposition, or acceptance was made in a commercially reasonable manner.

(b) A disposition of collateral is made in a commercially reasonable manner if the disposition is made:

(1) In the usual manner on any recognized market;

(2) At the price current in any recognized market at the time of the disposition; or

(3) Otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition.

(c) A collection, enforcement, disposition, or acceptance is commercially reasonable if it has been approved:

(1) In a judicial proceeding;

(2) By a bona fide creditors' committee;

(3) By a representative of creditors; or

(4) By an assignee for the benefit of creditors.

(d) Approval under subsection (c) need not be obtained, and lack of approval does not mean that the collection, enforcement, disposition, or acceptance is not commercially reasonable.

§ 75-9-628

(a) Unless a secured party knows that a person is a debtor or obligor, knows the identity of the person, and knows how to communicate with the person:

(1) The secured party is not liable to the person, or to a secured party or lienholder that has filed a financing statement against the person, for failure to comply with this article; and

(2) The secured party's failure to comply with this article does not affect the liability of the person for a deficiency.

(b) A secured party is not liable because of its status as secured party:

(1) To a person that is a debtor or obligor, unless the secured party knows:

(A) That the person is a debtor or obligor;

(B) The identity of the person; and

(C) How to communicate with the person; or

(2) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:

(A) That the person is a debtor; and

(B) The identity of the person.

(c) A secured party is not liable to any person, and a person's liability for a deficiency is not affected, because of any act or omission arising out of the secured party's reasonable belief that a transaction is not a consumer-goods transaction or a consumer transaction or that goods are not consumer goods, if the secured party's belief is based on its reasonable reliance on:

(1) A debtor's representation concerning the purpose for which collateral was to be used, acquired, or held; or

(2) An obligor's representation concerning the purpose for which a secured obligation was incurred.

(d) A secured party is not liable to any person under Section 75-9-625(c)(2) for its failure to comply with Section 75-9-616.

(e) A secured party is not liable under Section 75-9-625(c)(2) more than once with respect to any one (1) secured obligation.

§ 75-9-701

(1) References in Part 7 to “this act” refer to the legislative enactment by which this part is added to Article 9 of the Uniform Commercial Code.

(2) References in this part to “former Article 9” are to Article 9 found in Chapter 9 of Title 75 as in effect on December 31, 2001.

§ 75-9-702

(a) Except as otherwise provided in this part, this act applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before January 1, 2002.

(b) Except as otherwise provided in subsection (c) and Sections 75-9-703 through 75-9-709:

(1) Transactions and liens that were not governed by former Article 9, were validly entered into or created before January 1, 2002, and would be subject to this act if they had been entered into or created after January 1, 2002, and the rights, duties, and interests flowing from those transactions and liens remain valid after January 1, 2002; and

(2) The transactions and liens may be terminated, completed, consummated, and enforced as required or permitted by this act or by the law that otherwise would apply if this act had not taken effect.

(c) This act does not affect an action, case, or proceeding commenced before January 1, 2002.

§ 75-9-703

(a) A security interest that is enforceable immediately before January 1, 2002 and would have priority over the rights of a person that becomes a lien creditor at that time is a perfected security interest under this act if, on January 1, 2002, the applicable requirements for enforceability and perfection under this act are satisfied without further action.

(b) Except as otherwise provided in Section 75-9-705, if, immediately January 1, 2002, a security interest is enforceable and would have priority over the rights of a person that becomes a lien creditor at that time, but the applicable requirements for enforceability or perfection under this act are not satisfied on January 1, 2002, the security interest:

(1) Is a perfected security interest for one (1) year after January 1, 2002;

(2) Remains enforceable thereafter only if the security interest becomes enforceable under Section 75-9-203 before the year expires; and

(3) Remains perfected thereafter only if the applicable requirements for perfection under this act are satisfied before the year expires.

§ 75-9-704

A security interest that is enforceable immediately before January 1, 2002 but which would be subordinate to the rights of a person that becomes a lien creditor at that time:

(1) Remains an enforceable security interest for one (1) year after January 1, 2002;

(2) Remains enforceable thereafter if the security interest becomes enforceable under Section 75-9-203 on January 1, 2002 or within one (1) year thereafter; and

(3) Becomes perfected:

(A) Without further action, on January 1, 2002 if the applicable requirements for perfection under this act are satisfied before or at that time; or

(B) When the applicable requirements for perfection are satisfied if the requirements are satisfied after that time.

§ 75-9-705

(a) If action, other than the filing of a financing statement, is taken before January 1, 2002 and the action would have resulted in priority of a security interest over the rights of a person that becomes a lien creditor had the security interest become enforceable before January 1, 2002, the action is effective to perfect a security interest that attaches under this act within one (1) year after January 1, 2002. An attached security interest becomes unperfected one (1) year after January 1, 2002 unless the security interest becomes a perfected security interest under this act before the expiration of that period.

(b) The filing of a financing statement before this act takes effect is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under this act.

(c) This act does not render ineffective an effective financing statement that, before January 1, 2002, is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in former Section 75-9-103. However, except as otherwise provided in subsections (d) and (e) and Section 75-9-706, the financing statement ceases to be effective at the earlier of:

(1) The time the financing statement would have ceased to be effective under the law of the jurisdiction in which it is filed; or

(2) December 31, 2006.

Provided, however, a financing statement filed before January 1, 2002, covering a manufactured home, other than a manufactured home constituting inventory, remains effective, if it so states, until a termination statement is filed.

(d) The filing of a continuation statement after January 1, 2002 does not continue the effectiveness of the financing statement filed before January 1, 2002. However, upon the timely filing of a continuation statement after January 1, 2002 and in accordance with the law of the jurisdiction governing perfection as provided in Part 3, the effectiveness of a financing statement filed in the same office in that jurisdiction before January 1, 2002 continues for the period provided by the law of that jurisdiction.

(e) Subsection (c)(2) applies to a financing statement that, before January 1, 2002, is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in former Section 75-9-103 only to the extent that Part 3 provides that the law of a jurisdiction other than the jurisdiction in which the financing statement is filed governs perfection of a security interest in collateral covered by the financing statement.

(f) A financing statement that includes a financing statement filed before January 1, 2002 and a continuation statement filed after January 1, 2002 is effective only to the extent that it satisfies the requirements of Part 5 for an initial financing statement.

§ 75-9-706

(a) The filing of an initial financing statement in the office specified in Section 75-9-501 continues the effectiveness of a financing statement filed before January 1, 2002 if:

(1) The filing of an initial financing statement in that office would be effective to perfect a security interest under this act;

(2) The pre-effective-date financing statement was filed in an office in another state or another office in this state; and

(3) The initial financing statement satisfies subsection (c).

(b) The filing of an initial financing statement under subsection (a) continues the effectiveness of the pre-effective-date financing statement:

(1) If the initial financing statement is filed before January 1, 2002, for the period provided in former Section 75-9-403 with respect to a financing statement; and

(2) If the initial financing statement is filed after January 1, 2002, for the period provided in Section 75-9-515 with respect to an initial financing statement.

(c) To be effective for purposes of subsection (a), an initial financing statement must:

(1) Satisfy the requirements of Part 5 for an initial financing statement;

(2) Identify the pre-effective-date financing statement by indicating the office in which the financing statement was filed and providing the dates of filing and file numbers, if any, of the financing statement and of the most recent continuation statement filed with respect to the financing statement; and

(3) Indicate that the pre-effective-date financing statement remains effective.

§ 75-9-707

(a) In this section, “pre-effective-date financing statement” means a financing statement filed before January 1, 2002.

(b) After January 1, 2002, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a pre-effective-date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in Part 3. However, the effectiveness of a pre-effective-date financing statement also may be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.

(c) Except as otherwise provided in subsection (d), if the law of this state governs perfection of a security interest, the information in a pre-effective-date financing statement may be amended after January 1, 2002 only if:

(1) The pre-effective-date financing statement and an amendment are filed in the office specified in Section 75-9-501;

(2) An amendment is filed in the office specified in Section 75-9-501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies Section 75-9-706(c); or

(3) An initial financing statement that provides the information as amended and satisfies Section 75-9-706(c) is filed in the office specified in Section 75-9-501.

(d) If the law of this state governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement may be continued only under Section 75-9-705(d) and (f) or 75-9-706.

(e) Whether or not the law of this state governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement filed in this state may be terminated after January 1, 2002 by filing a termination statement in the office in which the pre-effective-date financing statement is filed, unless an initial financing statement that satisfies Section 75-9-706(c) has been filed in the office specified by the law of the jurisdiction governing perfection as provided in Part 3 as the office in which to file a financing statement.

§ 75-9-708

A person may file an initial financing statement or a continuation statement under this part if:

(1) The secured party of record authorizes the filing; and

(2) The filing is necessary under this part:

(A) To continue the effectiveness of a financing statement filed before January 1, 2002; or

(B) To perfect or continue the perfection of a security interest.

§ 75-9-709

(a) This act determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before January 1, 2002, former Article 9 determines priority.

(b) For purposes of Section 75-9-322(a), the priority of a security interest that becomes enforceable under Section 75-9-203 of this act dates from January 1, 2002 if the security interest is perfected under this act by the filing of a financing statement before January 1, 2002 which would not have been effective to perfect the security interest under former Article 9. This subsection does not apply to conflicting security interests each of which is perfected by the filing of such a financing statement.

§ 75-9-710

(a) In this section:

(1) “Local-filing office” means a filing office, other than the statewide central filing office identified in Section 75-9-401(1) of former Chapter 9, that is designated as the proper place to file a financing statement under Section 75-9-401(1) of former Chapter 9. The term applies only with respect to a record that covers a type of collateral as to which the filing office is designated in that section as the proper place to file.

(2) “Former-Chapter-9 records” means:

(A) Financing statements and other records that have been filed in a local-filing office before January 1, 2002, and that are, or upon processing and indexing will be, reflected in the index maintained, as of December 31, 2001, by the local-filing office for financing statements and other records filed in the local-filing office before January 1, 2002, and

(B) The index as of December 31, 2001.

The term does not include records presented to a local-filing office for filing after December 31, 2001, whether or not the records relate to financing statements filed in the local-filing office before January 1, 2002.

(3) “Mortgage,” “as-extracted collateral,” “fixture filing,” “goods” and “fixtures” have the meanings set forth in Revised Article 9 for those terms.

(b) Except as expressly provided in Part 5 of Chapter 9 as effective on and after January 1, 2002, a local-filing office must not accept for filing a record presented after December 31, 2001, whether or not the record relates to a financing statement filed in the local-filing office before January 1, 2002, other than a termination statement filed in accordance with Section 75-9-707.

(c) Until January 1, 2009, each local-filing office must maintain all former-Chapter-9 records in accordance with former Chapter 9. A former-Chapter-9 record that is not reflected on the index maintained at December 31, 2001, by the local-filing office must be processed and indexed, and reflected on the index as of December 31, 2001, as soon as practicable but in any event no later than January 31, 2002.

(d) Until at least December 31, 2008, each local-filing office must respond to requests for information with respect to former-Chapter-9 records relating to a debtor and issue certificates in accordance with former Chapter 9.

(1) Upon request in writing of any person, the filing officer shall issue his certificate showing whether there is on file, on the date and hour stated therein, any presently effective financing statements naming a particular debtor thereof, and if there is, giving the date and hour of filing and file number of each such financing statement and the name and address of each secured party or his assignee therein. Each such request shall be accompanied by a search fee of Five Dollars ($5.00) if the request is made on the standard form prescribed by the Secretary of State, and otherwise it shall be Ten Dollars ($10.00). An additional fee of Two Dollars ($2.00) shall be paid by the requesting party for each financing statement listed on the filing officer's certificate, the aggregate of which shall be billed to the requesting party at the time the filing officer's certificate is issued. Failure to pay the additional fee by any requesting party when due may result in denial of further service to the requesting party until the amount due has been paid.

(2) Upon request, the filing officer shall furnish a copy of any presently effective financing statements on file for a uniform fee of Two Dollars ($2.00) per page naming a particular debtor when the request is made on the form and in the manner hereinbefore provided for listing the same.

(e) After December 31, 2008, each local-filing office may remove and destroy, in accordance with any then applicable record retention law of this state, all former-Chapter-9 records, including the related index.

(f) This section does not apply, with respect to financing statements and other records, to a filing office in which mortgages or records of mortgages on real property are required to be filed or recorded, if:

(1) The collateral is timber to be cut or as-extracted collateral, or

(2) The record is or relates to a financing statement filed as a fixture filing and the collateral is goods that are or are to become fixtures.

§ 75-9-801

Chapter 451, Laws of 2013, takes effect on July 1, 2013.

§ 75-9-802

(a) Except as otherwise provided in this part, Chapter 451, Laws of 2013, applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before July 1, 2013.

(b) Chapter 451, Laws of 2013, does not affect an action, case, or proceeding commenced before July 1, 2013.

§ 75-9-803

(a) A security interest that is a perfected security interest immediately before July 1, 2013, is a perfected security interest under Article 9 as amended by Chapter 451, Laws of 2013, if, on July 1, 2013, the applicable requirements for attachment and perfection under Article 9 as amended by Chapter 451, Laws of 2013, are satisfied without further action.

(b) Except as otherwise provided in Section 75-9-805, if, immediately before July 1, 2013, a security interest is a perfected security interest, but the applicable requirements for perfection under Article 9 as amended by Chapter 451, Laws of 2013, are not satisfied on July 1, 2013, the security interest remains perfected thereafter only if the applicable requirements for perfection under Article 9 as amended by Chapter 451, Laws of 2013, are satisfied within one (1) year after July 1, 2013.

§ 75-9-804

A security interest that is an unperfected security interest immediately before July 1, 2013, becomes a perfected security interest:

(1) Without further action, on July 1, 2013, if the applicable requirements for perfection under Article 9 as amended by Chapter 451, Laws of 2013, are satisfied before or at that time; or

(2) When the applicable requirements for perfection are satisfied if the requirements are satisfied after that time.

§ 75-9-805

(a) The filing of a financing statement before July 1, 2013, is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under Article 9 as amended by Chapter 451, Laws of 2013.

(b) Chapter 451, Laws of 2013, does not render ineffective an effective financing statement that, before July 1, 2013, is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in Article 9 as it existed before amendment. However, except as otherwise provided in subsections (c) and (d) and Section 75-9-806, the financing statement ceases to be effective:

(1) If the financing statement is filed in this state, at the time the financing statement would have ceased to be effective had Chapter 451, Laws of 2013, not taken effect; or

(2) If the financing statement is filed in another jurisdiction, at the earlier of:

(A) The time the financing statement would have ceased to be effective under the law of that jurisdiction; or

(B) June 30, 2018.

(c) The filing of a continuation statement after July 1, 2013, does not continue the effectiveness of the financing statement filed before July 1, 2013. However, upon the timely filing of a continuation statement after July 1, 2013, and in accordance with the law of the jurisdiction governing perfection as provided in Article 9 as amended by Chapter 451, Laws of 2013, the effectiveness of a financing statement filed in the same office in that jurisdiction before July 1, 2013, continues for the period provided by the law of that jurisdiction.

(d) Subsection (b)(2)(B) applies to a financing statement that, before July 1, 2013, is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in Article 9 as it existed before amendment, only to the extent that Article 9 as amended by Chapter 451, Laws of 2013, provides that the law of a jurisdiction other than the jurisdiction in which the financing statement is filed governs perfection of a security interest in collateral covered by the financing statement.

(e) A financing statement that includes a financing statement filed before July 1, 2013, and a continuation statement filed after July 1, 2013, is effective only to the extent that it satisfies the requirements of Part 5 as amended by Chapter 451, Laws of 2013, for an initial financing statement. A financing statement that indicates that the debtor is a decedent's estate indicates that the collateral is being administered by a personal representative within the meaning of Section 75-9-503(a)(2) as amended by Chapter 451, Laws of 2013. A financing statement that indicates that the debtor is a trust or is a trustee acting with respect to property held in trust indicates that the collateral is held in a trust within the meaning of Section 75-9-503(a)(3) as amended by Chapter 451, Laws of 2013.

§ 75-9-806

(a) The filing of an initial financing statement in the office specified in Section 75-9-501 continues the effectiveness of a financing statement filed before July 1, 2013, if:

(1) The filing of an initial financing statement in that office would be effective to perfect a security interest under Article 9 as amended by Chapter 451, Laws of 2013;

(2) The pre-effective-date financing statement was filed in an office in another state; and

(3) The initial financing statement satisfies subsection (c).

(b) The filing of an initial financing statement under subsection (a) continues the effectiveness of the pre-effective-date financing statement:

(1) If the initial financing statement is filed before July 1, 2013, for the period provided in unamended Section 75-9-515 with respect to an initial financing statement; and

(2) If the initial financing statement is filed after July 1, 2013, for the period provided in Section 75-9-515 as amended by Chapter 451, Laws of 2013, with respect to an initial financing statement.

(c) To be effective for purposes of subsection (a), an initial financing statement must:

(1) Satisfy the requirements of Part 5 as amended by Chapter 451, Laws of 2013, for an initial financing statement;

(2) Identify the pre-effective-date financing statement by indicating the office in which the financing statement was filed and providing the dates of filing and file numbers, if any, of the financing statement and of the most recent continuation statement filed with respect to the financing statement; and

(3) Indicate that the pre-effective-date financing statement remains effective.

§ 75-9-807

(a) In this section, “pre-effective-date financing statement” means a financing statement filed before July 1, 2013.

(b) After July 1, 2013, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a pre-effective-date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in Article 9 as amended by Chapter 451, Laws of 2013. However, the effectiveness of a pre-effective-date financing statement may also be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.

(c) Except as otherwise provided in subsection (d), if the law of this state governs perfection of a security interest, the information in a pre-effective-date financing statement may be amended after July 1, 2013, only if:

(1) The pre-effective-date financing statement and an amendment are filed in the office specified in Section 75-9-501;

(2) An amendment is filed in the office specified in Section 75-9-501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies Section 75-9-806(c); or

(3) An initial financing statement that provides the information as amended and satisfies Section 75-9-806(c) is filed in the office specified in Section 75-9-501.

(d) If the law of this state governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement may be continued only under Section 75-9-805(c) and (e) or 75-9-806.

(e) Whether or not the law of this state governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement filed in this state may be terminated after July 1, 2013, by filing a termination statement in the office in which the pre-effective-date financing statement is filed, unless an initial financing statement that satisfies Section 75-9-806(c) has been filed in the office specified by the law of the jurisdiction governing perfection as provided in Article 9 as amended by Chapter 451, Laws of 2013, as the office in which to file a financing statement.

§ 75-9-808

A person may file an initial financing statement or a continuation statement under this part if:

(1) The secured party of record authorizes the filing; and

(2) The filing is necessary under this part:

(A) To continue the effectiveness of a financing statement filed before July 1, 2013; or

(B) To perfect or continue the perfection of a security interest.

§ 75-9-809

Chapter 451, Laws of 2013, determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before July 1, 2013, Article 9 as it existed before amendment determines priority.

Chapter 10 Uniform Commercial Code--Effective Date and Repealer

§ 75-10-101

This code shall become effective on and after March 31, 1968. It applies to transactions entered into and events occurring after that date.

§ 75-10-102

(1) The following acts and all other acts and parts of acts inconsistent herewith are hereby repealed:

(a) The Uniform Negotiable Instruments Act, being Sections 42 to 237, inclusive, of Chapter 3, Title 2, Mississippi Code of 1942, Recompiled, as amended;

(b) The Uniform Warehouse Receipts Act, being Sections 5012 to 5070, inclusive, of Chapter 16, Title 19, Mississippi Code of 1942, Recompiled;

(c) The Uniform Trust Receipts Act, being Sections 5080-01 to 5080-23, inclusive, of Chapter 17, Title 19, Mississippi Code of 1942, Recompiled, as amended;

(d) The Uniform Stock Transfer Act, being Sections 5359-01 to 5359-26 of Chapter 4, Title 21, Mississippi Code of 1942, Recompiled, as amended;

(e) Sections 243-01 to 243-10, inclusive, of Chapter 3A, Title 2, Mississippi Code of 1942, Recompiled, entitled “Assignment of accounts receivable”;

(f) Section 268 of Chapter 7, Title 2, Mississippi Code of 1942, Recompiled, entitled “Statute of frauds-sales of personal property”;

(g) Section 274 of Chapter 7, Title 2, Mississippi Code of 1942, Recompiled, entitled “To prevent fraudulent sales of merchandise-what presumed to be fraud” (commonly referred to as the “Bulk Sales Law”);

(h) Section 337 of Chapter 5, Title 3, Mississippi Code of 1942, Recompiled, entitled “Purchase-money-lien on personal property”;

(i) The “Factors Lien Act,” being Sections 382-11 to 382-20, inclusive, of Chapter 5, Title 3, Mississippi Code of 1942, Recompiled;

(j) Section 851 of Chapter 2, Title 7, Mississippi Code of 1942, Recompiled, entitled “Chattel mortgages on property owned or to be acquired valid, when”;

(k) Section 863 of Chapter 2, Title 7, Mississippi Code of 1942, Recompiled, entitled “Where conveyance of personal property recorded”;

(l) Section 870 of Chapter 2, Title 7, Mississippi Code of 1942, Recompiled, entitled “Foreign mortgages or (sic) personal property recorded”;

(m) Section 884 of Chapter 2, Title 7, Mississippi Code of 1942, Recompiled, entitled “Chattel record books”;

(n) Section 5218 of Chapter 2, Title 21, Mississippi Code of 1942, Recompiled, entitled “Collections may be forwarded direct”;

(o) Section 5218.5 of Chapter 2, Title 21, Mississippi Code of 1942, Recompiled, entitled “Dishonor or revocation of credit as to demand items”;

(p) Section 5278-02 of Chapter 2, Title 21, Mississippi Code of 1942, Recompiled, entitled “Stop payment of checks or drafts-limitations”;

(q) Section 5278-04 of Chapter 2, Title 21, Mississippi Code of 1942, Recompiled, entitled “Limitation of time for presentation of check”;

(r) Section 5278-11 of Chapter 2, Title 21, Mississippi Code of 1942, Recompiled, entitled “Final adjustment of statements of account by bank with its depositors”;

(s) Section 7880 of Chapter 7, Title 28, Mississippi Code of 1942, Recompiled, entitled “Bill of lading conclusive of receipts of goods”; and

(t) Section 7881 of Chapter 7, Title 28, Mississippi Code of 1942, Recompiled, entitled “Bank to retain money collected on bill of lading.”

(2) Transactions validly entered into before the effective date specified in Section 75-10-101 and the rights, duties and interests flowing from them remain valid thereafter and may be terminated, completed, consummated or enforced as required or permitted by any statute or other law amended or repealed by this code as though such repeal or amendment has not occurred.

§ 75-10-103

Except as provided in Section 75-10-104, all laws and parts of laws inconsistent with this code are hereby repealed.

Chapter 11 Uniform Commercial Code--Effective Date and Transition Provisions (1977 Revision)

§ 75-11-101

The provisions of Chapter 452, Laws of 1977, shall become effective on April 1, 1978. As used in this chapter, the term “old U.C.C.” shall refer to the original Uniform Commercial Code adopted in 1967, and all amendments thereto and the term “revised U.C.C.” shall refer to the old U.C.C. as amended by Chapter 452, Laws of 1977.

§ 75-11-102

The provisions of Section 75-10-102(2) shall continue to apply to the revised U.C.C., and for this purpose the old U.C.C. and the revised U.C.C. shall be considered one continuous statute.

§ 75-11-103

Transactions validly entered into after March 31, 1968 and before April 1, 1978, and which were subject to the provisions of the old U.C.C. and which would be subject to the amendments of Chapter 452, Laws of 1977 if they had been entered into after April 1, 1978 and the rights, duties and interests flowing from such transactions remain valid after April 1, 1978 and may be terminated, completed, consummated or enforced as required or permitted by the revised U.C.C. security interests arising out of such transactions which are perfected on April 1, 1978, shall remain perfected until they lapse as provided in the revised U.C.C., and may be continued as permitted by the revised U.C.C., except as stated in Section 75-11-105.

§ 75-11-104

A security interest for the perfection of which filing or the taking of possession was required under the old U.C.C. and which attached prior to April 1, 1978 but was not perfected shall be deemed perfected on April 1, 1978 if the revised U.C.C. permits perfection without filing or authorizes filing in the office or offices where a prior ineffective filing was made.

§ 75-11-105

(1) A financing statement or continuation statement filed prior to April 1, 1978 which shall not have lapsed prior to that date shall remain effective for the period provided in the old U.C.C., but not less than five (5) years after the filing.

(2) With respect to any collateral acquired by the debtor subsequent to April 1, 1978, any effective financing statement or continuation statement described in this section shall apply only if the filing or filings are in the office or offices that would be appropriate to perfect the security interests in the new collateral under the revised U.C.C.

(3) The effectiveness of any financing statement or continuation statement filed prior to April 1, 1978 may be continued by a continuation statement as permitted by the revised U.C.C., except that if the revised U.C.C. requires a filing in an office where there was no previous financing statement, a new financing statement conforming to Section 75-11-106 shall be filed in that office.

§ 75-11-106

(1) If a security interest is perfected or has priority on April 1, 1978, as to all persons or as to certain persons without any filing or recording, and if the filing of a financing statement would be required for the perfection or priority of the security interest against those persons under the revised Uniform Commercial Code, the perfection and priority rights of the security interest shall continue until three (3) years after April 1, 1978. The perfection will then lapse unless a financing statement is filed as provided in Section 75-11-104 or unless the security interests is perfected otherwise than by filing.

(2) A financing statement may be filed within six (6) months before the perfection of a security interest would otherwise lapse. Any such financing statement may be signed by either the debtor or the secured party. It must identify the security agreement, statement or notice (however denominated in any statute or other law repealed or modified by Chapter 452, Laws of 1977), state the office where and the date when the last filing, refiling or recording, if any, was made with respect thereto, and the filing number, if any, or book and page, if any, of recording and further state that the security agreement, statement or notice, however denominated, in another filing office under the old Uniform Commercial Code or under any statute or other law repealed or modified by Chapter 452, Laws of 1977, is still effective.Section 75-9-501 determines the proper place to file such a financing statement. Except as specified in this subsection, the provisions of Section 75-9-510 for continuation statements apply to such a financing statement.

§ 75-11-107

Except as otherwise provided in this chapter, the old U.C.C. shall apply to any questions of priority if the positions of the parties were fixed prior to April 1, 1978. In other cases, questions of priority shall be determined by the revised U.C.C.

§ 75-11-108

Unless a change in law has clearly been made, the provisions of the revised U.C.C. shall be deemed declaratory of the meaning of the old U.C.C.

Chapter 12 Uniform Electronic Transactions Act

§ 75-12-1

This chapter may be cited as the Uniform Electronic Transactions Act.

§ 75-12-3

In this chapter:

(1) “Agreement” means the bargain of the parties in fact, as found in their language or inferred from other circumstances and from rules, regulations and procedures given the effect of agreements under laws otherwise applicable to a particular transaction.

(2) “Automated transaction” means a transaction conducted or performed, in whole or in part, by electronic means or electronic records, in which the acts or records of one or both parties are not reviewed by an individual in the ordinary course in forming a contract, performing under an existing contract, or fulfilling an obligation required by the transaction.

(3) “Computer program” means a set of statements or instructions to be used directly or indirectly in an information processing system in order to bring about a certain result.

(4) “Contract” means the total legal obligation resulting from the parties' agreement as affected by this chapter and other applicable law.

(5) “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(6) “Electronic agent” means a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual.

(7) “Electronic record” means a record created, generated, sent, communicated, received, or stored by electronic means.

(8) “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.

(9) “Governmental agency” means an executive, legislative, or judicial agency, department, board, commission, authority, institution, or instrumentality of the federal government or of a state or of a county, municipality, or other political subdivision of a state.

(10) “Information” means data, text, images, sounds, codes, computer programs, software, databases, or the like.

(11) “Information processing system” means an electronic system for creating, generating, sending, receiving, storing, displaying, or processing information.

(12) “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, governmental agency, public corporation, or any other legal or commercial entity.

(13) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(14) “Security procedure” means a procedure employed for the purpose of verifying that an electronic signature, record, or performance is that of a specific person or for detecting changes or errors in the information in an electronic record. The term includes a procedure that requires the use of algorithms or other codes, identifying words or numbers, encryption, or callback or other acknowledgment procedures.

(15) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. The term includes an Indian tribe or band, or Alaskan native village, which is recognized by federal law or formally acknowledged by a state.

(16) “Transaction” means an action or set of actions occurring between two (2) or more persons relating to the conduct of business, commercial, or governmental affairs.

§ 75-12-5

(a) Except as otherwise provided in subsection (b), this chapter applies to electronic records and electronic signatures relating to a transaction.

(b) This chapter does not apply to a transaction to the extent it is governed by:

(1) A law governing the creation and execution of wills, codicils, or testamentary trusts;

(2) The Uniform Commercial Code other than Sections 75-1-107 and 75-1-206, Article 2 [(Section 75-2-101 et. seq. (sales))], and Article 2A [(Section 75-2A-101 et. seq. (leases))]; and

(3) Title 75, Chapter 1 General Provisions, other than Section 75-1-107 Waiver or Renunciation of Claim and Section 75-1-206 Statute of Frauds on Miscellaneous Personal Property.

(4) A statute, regulation or other rule of law governing adoption, divorce or other matters of family law. The provisions of this chapter shall not apply to court orders or notices, or official court documents (including briefs, pleadings and other writings) required to be executed in connection with court proceedings; any document required to accompany any transportation or handling of hazardous materials, pesticides or other toxic or dangerous materials; or any notice of (a) the cancellation or termination of utility services (including water, heat and power); (b) default, acceleration, repossession, foreclosure or eviction, or right to cure, under a credit agreement secured by, or a rental agreement for, a primary residence of an individual; (c) the cancellation or termination of health insurance or benefits or life insurance benefits (excluding annuities); or (d) recall of a product, or material failure of a product, that risks endangering health or safety.

(c) This chapter applies to an electronic record or electronic signature otherwise excluded from the application of this chapter under subsection (b) to the extent it is governed by a law other than those specified in subsection (b).

(d) A transaction subject to this chapter is also subject to other applicable substantive law.

§ 75-12-7

This chapter applies to any electronic record or electronic signature created, generated, sent, communicated, received, or stored on or after July 1, 2001.

§ 75-12-9

(a) This chapter does not require a record or signature to be created, generated, sent, communicated, received, stored, or otherwise processed or used by electronic means or in electronic form.

(b) This chapter applies only to transactions between parties each of which has agreed to conduct transactions by electronic means. Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties' conduct.

(c) A party that agrees to conduct a transaction by electronic means may refuse to conduct other transactions by electronic means. The right granted by this subsection may not be waived by agreement.

(d) Except as otherwise provided in this chapter, the effect of any of its provisions may be varied by agreement. The presence in certain provisions of this chapter of the words “unless otherwise agreed”, or words of similar import, does not imply that the effect of other provisions may not be varied by agreement.

(e) Whether an electronic record or electronic signature has legal consequences is determined by this chapter and other applicable law.

§ 75-12-11

This chapter must be construed and applied:

(1) To facilitate electronic transactions consistent with other applicable law;

(2) To be consistent with reasonable practices concerning electronic transactions and with the continued expansion of those practices; and

(3) To effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

§ 75-12-13

(a) A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.

(b) A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.

(c) If a law requires a record to be in writing, an electronic record satisfies the law.

(d) If a law requires a signature, an electronic signature satisfies the law.

§ 75-12-15

(a) If parties have agreed to conduct a transaction by electronic means and a law requires a person to provide, send, or deliver information in writing to another person, the requirement is satisfied if the information is provided, sent, or delivered, as the case may be, in an electronic record capable of retention by the recipient at the time of receipt. An electronic record is not capable of retention by the recipient if the sender or its information processing system inhibits the ability of the recipient to print or store the electronic record.

(b) If a law other than this chapter requires a record (i) to be posted or displayed in a certain manner, (ii) to be sent, communicated, or transmitted by a specified method, or (iii) to contain information that is formatted in a certain manner, the following rules apply:

(1) The record must be posted or displayed in the manner specified in the other law.

(2) Except as otherwise provided in subsection (d)(2), the record must be sent, communicated, or transmitted by the method specified in the other law.

(3) The record must contain the information formatted in the manner specified in the other law.

(c) If a sender inhibits the ability of a recipient to store or print an electronic record, the electronic record is not enforceable against the recipient.

(d) The requirements of this section may not be varied by agreement, but:

(1) To the extent a law other than this chapter requires information to be provided, sent, or delivered in writing but permits that requirement to be varied by agreement, the requirement under subsection (a) that the information be in the form of an electronic record capable of retention may also be varied by agreement; and

(2) A requirement under a law other than this chapter to send, communicate, or transmit a record by first class mail, postage prepaid or regular United States mail, may be varied by agreement to the extent permitted by the other law.

§ 75-12-17

(a) An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.

(b) The effect of an electronic record or electronic signature attributed to a person under subsection (a) is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties' agreement, if any, and otherwise as provided by law.

§ 75-12-19

If a change or error in an electronic record occurs in a transmission between parties to a transaction, the following rules apply:

(1) If the parties have agreed to use a security procedure to detect changes or errors and one party has conformed to the procedure, but the other party has not, and the nonconforming party would have detected the change or error had that party also conformed, the conforming party may avoid the effect of the changed or erroneous electronic record.

(2) In an automated transaction involving an individual, the individual may avoid the effect of an electronic record that resulted from an error made by the individual in dealing with the electronic agent of another person if the electronic agent did not provide an opportunity for the prevention or correction of the error and, at the time the individual learns of the error, the individual:

(A) Promptly notifies the other person of the error and that the individual did not intend to be bound by the electronic record received by the other person;

(B) Takes reasonable steps, including steps that conform to the other person's reasonable instructions, to return to the other person or, if instructed by the other person, to destroy the consideration received, if any, as a result of the erroneous electronic record; and

(C) Has not used or received any benefit or value from the consideration, if any, received from the other person.

(3) If neither paragraph (1) nor paragraph (2) applies, the change or error has the effect provided by other law, including the law of mistake, and the parties' contract, if any.

(4) Paragraphs (2) and (3) may not be varied by agreement.

§ 75-12-21

If a law requires a signature or record to be notarized, acknowledged, verified, or made under oath, the requirement is satisfied if the electronic signature of the person authorized to perform those acts, together with all other information required to be included by other applicable law, is attached to or logically associated with the signature or record.

§ 75-12-23

(a) If a law requires that a record be retained, the requirement is satisfied by retaining an electronic record of the information in the record which:

(1) Accurately reflects the information set forth in the record at the time it was first generated in its final form as an electronic record or otherwise; and

(2) Remains accessible for later reference.

(b) A requirement to retain a record in accordance with subsection (a) does not apply to any information the sole purpose of which is to enable the record to be sent, communicated, or received.

(c) A person may satisfy subsection (a) by using the services of another person if the requirements of that subsection are satisfied.

(d) If a law requires a record to be presented or retained in its original form, or provides consequences if the record is not presented or retained in its original form, that law is satisfied by an electronic record retained in accordance with subsection (a).

(e) If a law requires retention of a check, that requirement is satisfied by retention of an electronic record of the information on the front and back of the check in accordance with subsection (a).

(f) A record retained as an electronic record in accordance with subsection (a) satisfies a law requiring a person to retain a record for evidentiary, audit, or like purposes, unless a law enacted after July 1, 2001, specifically prohibits the use of an electronic record for the specified purpose.

(g) This section does not preclude a governmental agency of this State from specifying additional requirements for the retention of a record subject to the agency's jurisdiction.

§ 75-12-25

In a proceeding, evidence of a record or signature may not be excluded solely because it is in electronic form.

§ 75-12-27

In an automated transaction, the following rules apply:

(1) A contract may be formed by the interaction of electronic agents of the parties, even if no individual was aware of or reviewed the electronic agents' actions or the resulting terms and agreements.

(2) A contract may be formed by the interaction of an electronic agent and an individual, acting on the individual's own behalf or for another person, including by an interaction in which the individual performs actions that the individual is free to refuse to perform and which the individual knows or has reason to know will cause the electronic agent to complete the transaction or performance.

(3) The terms of the contract are determined by the substantive law applicable to it.

§ 75-12-29

(a) Unless otherwise agreed between the sender and the recipient, an electronic record is sent when it:

(1) Is addressed properly or otherwise directed properly to an information processing system that the recipient has designated or uses for the purpose of receiving electronic records or information of the type sent and from which the recipient is able to retrieve the electronic record;

(2) Is in a form capable of being processed by that system; and

(3) Enters an information processing system outside the control of the sender or of a person that sent the electronic record on behalf of the sender or enters a region of the information processing system designated or used by the recipient which is under the control of the recipient.

(b) Unless otherwise agreed between a sender and the recipient, an electronic record is received when:

(1) It enters an information processing system that the recipient has designated or uses for the purpose of receiving electronic records or information of the type sent and from which the recipient is able to retrieve the electronic record; and

(2) It is in a form capable of being processed by that system.

(c) Subsection (b) applies even if the place the information processing system is located is different from the place the electronic record is deemed to be received under subsection (d).

(d) Unless otherwise expressly provided in the electronic record or agreed between the sender and the recipient, an electronic record is deemed to be sent from the sender's place of business and to be received at the recipient's place of business. For purposes of this subsection, the following rules apply:

(1) If the sender or recipient has more than one place of business, the place of business of that person is the place having the closest relationship to the underlying transaction.

(2) If the sender or the recipient does not have a place of business, the place of business is the sender's or recipient's residence, as the case may be.

(e) An electronic record is received under subsection (b) even if no individual is aware of its receipt.

(f) Receipt of an electronic acknowledgment from an information processing system described in subsection (b) establishes that a record was received but, by itself, does not establish that the content sent corresponds to the content received.

(g) If a person is aware that an electronic record purportedly sent under subsection (a), or purportedly received under subsection (b), was not actually sent or received, the legal effect of the sending or receipt is determined by other applicable law. Except to the extent permitted by the other law, the requirements of this subsection may not be varied by agreement.

§ 75-12-31

(a) In this section, “transferable record” means an electronic record that:

(1) Would be a note under Article 3 of the Uniform Commercial Code (Section 75-3-101 et. seq.) or a document under Article 7 of the Uniform Commercial Code (Section 75-7-101 et. seq.) if the electronic record were in writing; and

(2) The issuer of the electronic record expressly has agreed is a transferable record.

(b) A person has control of a transferable record if a system employed for evidencing the transfer of interests in the transferable record reliably establishes that person as the person to which the transferable record was issued or transferred.

(c) A system satisfies subsection (b), and a person is deemed to have control of a transferable record, if the transferable record is created, stored, and assigned in such a manner that:

(1) A single authoritative copy of the transferable record exists which is unique, identifiable, and, except as otherwise provided in paragraphs (4), (5) and (6), unalterable;

(2) The authoritative copy identifies the person asserting control as:

(A) The person to which the transferable record was issued; or

(B) If the authoritative copy indicates that the transferable record has been transferred, the person to which the transferable record was most recently transferred;

(3) The authoritative copy is communicated to and maintained by the person asserting control or its designated custodian;

(4) Copies or revisions that add or change an identified assignee of the authoritative copy can be made only with the consent of the person asserting control;

(5) Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and

(6) Any revision of the authoritative copy is readily identifiable as authorized or unauthorized.

(d) Except as otherwise agreed, a person having control of a transferable record is the holder, as defined in Section 75-1-201(b)(21), of the transferable record and has the same rights and defenses as a holder of an equivalent record or writing under the Uniform Commercial Code, including, if the applicable statutory requirements under Section 75-3-302(a), 75-7-501 or 75-9-308 are satisfied, the rights and defenses of a holder in due course, a holder to which a negotiable document of title has been duly negotiated, or a purchaser, respectively. Delivery, possession and endorsement are not required to obtain or exercise any of the rights under this subsection.

(e) Except as otherwise agreed, an obligor under a transferable record has the same rights and defenses as an equivalent obligor under equivalent records or writings under the Uniform Commercial Code.

(f) If requested by a person against which enforcement is sought, the person seeking to enforce the transferable record shall provide reasonable proof that the person is in control of the transferable record. Proof may include access to the authoritative copy of the transferable record and related business records sufficient to review the terms of the transferable record and to establish the identity of the person having control of the transferable record.

§ 75-12-33

The executive authority of each governmental agency of this state shall determine whether, and the extent to which, it will create and retain electronic records and convert written records to electronic records subject to applicable policies and standards of the Mississippi Department of Information Technology Services and the Mississippi Department of Archives and History as may be adopted pursuant to law.

§ 75-12-35

(a) Except as otherwise provided in Section 75-12-23(f), the executive authority of each governmental agency of this State shall determine whether, and the extent to which, it will send and accept electronic records and electronic signatures to and from other persons and otherwise create, generate, communicate, store, process, use, and rely upon electronic records and electronic signatures.

(b) To the extent that a governmental agency uses electronic records and electronic signatures under subsection (a), the executive authority of the governmental agency, giving due consideration to security, may specify:

(1) The manner and format in which the electronic records must be created, generated, sent, communicated, received, and stored and the systems established for those purposes;

(2) If electronic records must be signed by electronic means, the type of electronic signature required, the manner and format in which the electronic signature must be affixed to the electronic record, and the identity of, or criteria that must be met by, any third party used by a person filing a document to facilitate the process;

(3) Control processes and procedures as appropriate to ensure adequate preservation, disposition, integrity, security, confidentiality, and auditability of electronic records; and

(4) Any other required attributes for electronic records which are specified for corresponding nonelectronic records or reasonably necessary under the circumstances.

(c) Except as otherwise provided in Section 75-12-23(f), this chapter does not require a governmental agency of this state to use or permit the use of electronic records or electronic signatures.

§ 75-12-37

The governmental agency of this state which adopts standards pursuant to Section 75-12-35 may encourage and promote consistency and interoperability with similar requirements adopted by other governmental agencies of this and other states and the federal government and nongovernmental persons interacting with governmental agencies of this state. If appropriate, those standards may specify differing levels of standards from which governmental agencies of this state may choose in implementing the most appropriate standard for a particular application.

§ 75-12-39

If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

Chapter 13 Bills, Notes and Other Writings

§ 75-13-1

Any note, or other writing which may be assigned under any of the provisions of Chapter 3 of the Uniform Commercial Code shall, when so assigned in the manner therein provided, carry with the assignment for the benefit of the assignee all liens and other securities securing the same, and the holder may fully enforce the said benefit in any proper proceeding in law or in equity. A claim for the purchase money of land, or any other claim, secured by a legal or equitable lien in or on realty, may be assigned in writing and thereupon have the full benefit of this section. Provided, however, as to all promissory notes, and other writings for the payment of money or other thing, except such notes or writings that are payable to order or bearer, when assigned, the assignee or indorsee of such promissory notes or other writings not payable to order or bearer, may maintain such action thereon, in his own name, as the assignor or indorser could have maintained. In all actions on such assigned promissory notes not payable to order or bearer, bill of exchange or other writing, for the payment of money or other thing not payable to order or bearer, the defendant shall be allowed the benefit of all want of lawful consideration, failure of consideration, payments, discounts and setoffs made, had or possessed against the same, previous to notice of assignment in the same manner as though the suit had been brought by the payee. The assignee or indorsee of any such instrument not payable to order or bearer may maintain an action against the person, or persons, who may have indorsed the same as in case of inland bills of exchange.

§ 75-13-3

An action shall not be maintained on a bill of exchange or promissory note which has been indorsed against any one secondarily liable thereon, without joining in the action all persons residing in this state who are liable before such person on the bill or note. The action shall be brought in the county where the party, or some one who is at first liable on said bill or note, shall reside. The clerk shall issue duplicate writs to the several counties for the various defendants.

§ 75-13-5

The plaintiff may discontinue his suit, before verdict, against any of the indorsers, or parties secondarily liable, on payment of the costs that have accrued from joining such party in the suit.

§ 75-13-7

The clerk or justice of the peace shall indorse on all executions issued on judgments rendered in suits on promissory notes and bills of exchange the names of the makers, drawers, acceptors, and indorsers, so as to designate the order in which they are liable. The sheriff or other officer shall make the money on such executions out of the property of the maker or makers, acceptor or acceptors. It shall not be lawful to levy on the property of the indorsers unless sufficient property of the makers, drawers, or acceptors cannot be found by the sheriff out of which the plaintiff's money and costs can be made; and, in that case, the sheriff may proceed with the execution against the defendant next liable, and so on, until the execution be satisfied.

§ 75-13-9

A party to such execution, who shall pay it, shall, as against any other party to it who is liable to him for the sum paid or any part of it, be entitled to the benefit of all the provisions for sureties in the chapter entitled “Principal and Surety,” being Chapter 5 of Title 87, Mississippi Code of 1972.

§ 75-13-11

Nothing in any law of the State of Mississippi, shall in any manner whatsoever, affect the validity, or render void or voidable, the payment, certification or acceptance of a check, or other negotiable instrument, or any other transaction by a bank in this state, because done or performed on any legal holiday, except Sunday, provided such payment, certification, acceptance or other transaction would be valid if done or performed on a day other than a legal holiday or Sunday.

Chapter 15 Mississippi Money Transmitters Act

§ 75-15-1

This chapter may be cited as the “Mississippi Money Transmitters Act.”

§ 75-15-3

For the purposes of this chapter:

(a) “Check” means any check, draft, money order, personal money order or other instrument, including but not limited to stored value cards, for the transmission or payment of money. The format of a check may be either paper, electronic, plastic or any combination thereof.

(b) “Commissioner” means the Commissioner of Banking and Consumer Finance of the State of Mississippi.

(c) “Deliver” means to deliver a check to the first person who in payment for same makes or purports to make a remittance of or against the face amount thereof, whether or not the deliverer also charges a fee in addition to the face amount, and whether or not the deliverer signs the check.

(d) “Executive officer” means the licensee's president, chairman of the executive committee, senior officer responsible for the licensee's business, chief financial officer and any other person who performs similar functions.

(e) “Licensee” means a person duly licensed by the commissioner under this chapter.

(f) “Monetary value” means a medium of exchange, whether or not redeemable in money.

(g) “Money transmission” means to engage in the business of the sale or issuance of checks or of receiving money or monetary value for transmission to a location within or outside the United States by any and all means, including but not limited to wire, facsimile or electronic transfer.

(h) “Outstanding check” means any check issued or sold in Mississippi by or for the licensee that has been reported as sold but not yet paid by or for the licensee.

(i) “Person” means any individual, partnership, association, joint-stock association, trust or corporation, but does not include the United States government or the government of this state.

(j) “Personal money order” means any instrument for the transmission or payment of money in relation to which the purchaser or remitter appoints or purports to appoint the seller thereof as his agent for the receipt, transmission or handling of money, whether the instrument is signed by the seller or by the purchaser or remitter or some other person.

(k) “Records” or “documents” means any item in hard copy or produced in a format of storage commonly described as electronic, imaged, magnetic, microphotographic or otherwise, and any reproduction so made shall have the same force and effect as the original thereof and be admitted in evidence equally with the original.

(l) “Sell” means to sell, to issue or to deliver a check.

(m) “Stored value” means monetary value that is evidenced by an electronic record.

§ 75-15-5

No person, except those specified in Section 75-15-7, shall engage in the business of money transmission, as a service or for a fee or other consideration, without having first obtained a license under this chapter.

§ 75-15-7

Nothing in this chapter shall apply to the sale or issuance or delivering of checks by:

(a) Any financial institution whose deposits are insured by any agency of the United States government or any trust company authorized to do business in this state;

(b) The government of the United States or any department or agent thereof;

(c) The State of Mississippi or any municipal corporation, county or other political subdivision of this state;

(d) Agents of a licensee, as provided for in Section 75-15-17, provided that this exemption shall apply only to the agent's acts on behalf of the licensee and this exemption shall not exempt the agent from the provisions of this chapter where he conducts money transmissions for his own account;

(e) Attorneys-at-law, as to checks issued in the regular course of the practice of law;

(f) Persons not carrying on the trade or business of money transmission, this exemption is intended to include persons who conduct money transmissions only as an incidental act to another trade or business regularly carried on by them and persons who only occasionally and infrequently conduct money transmissions for another person; or

(g) The Nationwide Mortgage Licensing System and Registry for mortgage brokers, mortgage lenders and mortgage loan originators.

§ 75-15-9

Each application for a license to engage in the business of money transmission shall be made in writing and under oath to the commissioner in such form as he may prescribe. The application shall state the full name and business address of:

(a) The proprietor, if the applicant is an individual;

(b) Every member, if the applicant is a partnership or association;

(c) The corporation and each executive officer and director thereof, if the applicant is a corporation;

(d) Every trustee and officer if the applicant is a trust;

(e) The applicant shall have a net worth of at least Twenty-five Thousand Dollars ($25,000.00) plus Fifteen Thousand Dollars ($15,000.00) for each location in excess of one (1) at which the applicant proposes to conduct money transmissions in this state, computed according to generally accepted accounting principles, but in no event shall the net worth be required to be in excess of Two Hundred Fifty Thousand Dollars ($250,000.00);

(f) The financial responsibility, financial condition, business experience and character and general fitness of the applicant shall be such as reasonably to warrant the belief that applicant's business will be conducted honestly, carefully and efficiently;

(g) Each application for a license shall be accompanied by an investigation fee of Fifty Dollars ($50.00) and license fee in the amount required by Section 75-15-15. All fees collected by the commissioner under the provisions of this chapter shall be deposited into the Consumer Finance Fund of the Department of Banking and Consumer Finance;

(h) An applicant shall not have been convicted of a felony in any jurisdiction or a misdemeanor of fraud, theft, forgery, bribery, embezzlement, or making a fraudulent or false statement in any jurisdiction.

§ 75-15-11

Each application for a license shall be accompanied by:

(a) Certified financial statements, reasonably satisfactory to the commissioner, showing that the applicant has a net worth of at least Twenty-five Thousand Dollars ($25,000.00) plus Fifteen Thousand Dollars ($15,000.00) for each location in excess of one (1) at which the applicant proposes to conduct money transmissions in this state, computed according to generally accepted accounting principles, but in no event shall the net worth be required to be in excess of Two Hundred Fifty Thousand Dollars ($250,000.00).

(b) A surety bond issued by a bonding company or insurance company authorized to do business in this state, in the principal sum of Twenty-five Thousand Dollars ($25,000.00) or in an amount equal to outstanding money transmissions in Mississippi, whichever is greater, but in no event shall the bond be required to be in excess of Five Hundred Thousand Dollars ($500,000.00). However, the commissioner may increase the required amount of the bond upon the basis of the impaired financial condition of a licensee as evidenced by a reduction in net worth, financial losses or other relevant criteria. The bond shall be in form satisfactory to the commissioner and shall run to the state for the use and benefit of the Department of Banking and Consumer Finance and any claimants against the applicant or his agents to secure the faithful performance of the obligations of the applicant and his agents with respect to the receipt, handling, transmission and payment of money in connection with money transmissions in Mississippi. The aggregate liability of the surety in no event shall exceed the principal sum of the bond. The surety on the bond shall have the right to cancel the bond upon giving sixty (60) days' notice in writing to the commissioner and thereafter shall be relieved of liability for any breach of condition occurring after the effective date of the cancellation. Any claimants against the applicant or his agents may themselves bring suit directly on the bond, or the Attorney General may bring suit thereon in behalf of those claimants, either in one (1) action or successive actions.

(c) In lieu of the corporate surety bond, the applicant may deposit with the State Treasurer bonds or other obligations of the United States or guaranteed by the United States or bonds or other obligations of this state or of any municipal corporation, county, or other political subdivision or agency of this state, or certificates of deposit of national or state banks doing business in Mississippi, having an aggregate market value at least equal to that of the corporate surety bond otherwise required. Those bonds or obligations or certificates of deposit shall be deposited with the State Treasurer to secure the same obligations as would a corporate surety bond, but the depositor shall be entitled to receive all interest and dividends thereon and shall have the right to substitute other bonds or obligations or certificates of deposit for those deposited, with the approval of the commissioner, and shall be required so to do on order of the commissioner made for good cause shown. The State Treasurer shall provide for custody of the bonds or obligations or certificates of deposits by a qualified trust company or bank located in the State of Mississippi or by any Federal Reserve Bank. The compensation, if any, of the custodian for acting as such under this section shall be paid by the depositing licensee.

(d) Proof of registration as a money service business per 31 CFR Section 103.41, if applicable.

(e) A set of fingerprints from any local law enforcement agency for each owner of a sole proprietorship, partners in a partnership or principal owners of a limited liability company that own at least ten percent (10%) of the voting shares of the company, shareholders owning ten percent (10%) or more of the outstanding shares of the corporation, except publically traded corporations and their subsidiaries, and any other executive officer with significant oversight duties of the business. In order to determine the applicant's suitability for license, the commissioner shall forward the fingerprints to the Department of Public Safety for a state criminal history records check, and the fingerprints shall be forwarded by the Department of Public Safety to the FBI for a national criminal history records check. The department shall not issue a license if it finds that the applicant, or any person who is an owner, partner, director or executive officer of the applicant, has been convicted of: (i) a felony in any jurisdiction; or (ii) a crime that, if committed within the state, would constitute a felony under the laws of this state; or (iii) a misdemeanor of fraud, theft, forgery, bribery, embezzlement or making a fraudulent or false statement in any jurisdiction. For the purposes of this chapter, a person shall be deemed to have been convicted of a crime if the person has pleaded guilty to a crime before a court or federal magistrate, or plea of nolo contendere, or has been found guilty of a crime by the decision or judgment of a court or federal magistrate or by the verdict of a jury, irrespective of the pronouncement of sentence or the suspension of a sentence, unless the person convicted of the crime has received a pardon from the President of the United States or the Governor or other pardoning authority in the jurisdiction where the conviction was obtained.

§ 75-15-12

(1) In addition to the bond required in Section 75-15-11, a licensee must possess permissible investments having an aggregate market value, calculated in accordance with generally accepted accounting principles, of not less than the aggregate amount of all outstanding checks issued or sold or money received for transmission by the licensee in the United States. This requirement may be waived by the commissioner if the dollar volume of a licensee's outstanding checks does not exceed the bond or other security devices posted by the licensee in accordance with Section 75-15-11.

(2) Permissible investments, even if commingled with other assets of the licensee, shall be deemed by operation of law to be held in trust for the benefit of the purchasers and holders of the licensee's outstanding checks and money received for transmission and may not be considered an asset or property of the licensee in the event of bankruptcy, receivership or a claim against the licensee unrelated to any of the licensee's obligations under this chapter.

(3) Permissible investments mean:

(a) Cash;

(b) Certificates of deposit or other debt obligations of a financial institution, either domestic or foreign;

(c) Bills of exchange or time drafts drawn on and accepted by federally insured financial depository institutions;

(d) Any investment bearing a rating of one (1) of the three (3) highest grades as defined by a nationally recognized organization that rates such securities;

(e) Investment securities that are obligations of the United States, its agencies or instrumentalities, or obligations that are guaranteed fully as to principal and interest of the United States, or any obligations of any state, municipality or any political subdivision thereof;

(f) Shares in a money market mutual fund, interest-bearing bills or notes or bonds, debentures or stock traded on any national securities exchange or on a national over-the-counter market, or mutual funds primarily composed of those securities or a fund composed of one or more permissible investments as set forth in this section;

(g) Any demand borrowing agreement or agreements made to a corporation or a subsidiary of a corporation whose capital stock is listed on a national exchange;

(h) Receivables that are due to a licensee from its agents, which are not past due or doubtful of collection; or

(i) Any other investments approved by the commissioner.

(4) The commissioner may limit or disallow for purposes of determining compliance with this section an investment, surety bond, letter of credit or other security otherwise permitted by this section if the commissioner determines it to be unsatisfactory for investment purposes or to pose a significant supervisory concern.

§ 75-15-13

Upon the filing of the application, the payment of the investigation fee and license fee, and the approval by the commissioner of the bond or securities delivered under Section 75-15-11, the commissioner shall investigate the financial responsibility, financial and business experience, character and general fitness of the applicant, and, if he deems it advisable, of its officers and directors, and if he finds that the applicant (and its officers and directors, if investigated) has the requisite qualifications to meet the requirements of this chapter and that its (or their) qualifications are such as to warrant the belief that the applicant's business will be conducted honestly, fairly, equitably, carefully and efficiently and in a manner commanding the confidence and trust of the community, he shall issue to the applicant a license to engage in the business of money transmission subject to the provisions of this chapter.

§ 75-15-15

Each licensee shall pay to the commissioner with his initial application a license fee of Seven Hundred Fifty Dollars ($750.00), and annually thereafter on or before April 1 of each year, a renewal fee of Four Hundred Dollars ($400.00), plus Fifty Dollars ($50.00) for each location in excess of one (1) in Mississippi through which the licensee plans to conduct money transmissions during the license year for which the fee is paid, provided that in no event shall the annual renewal fee exceed One Thousand Dollars ($1,000.00).

§ 75-15-17

A licensee may conduct his business at one or more locations within this state and through or by means of such agents as the licensee may from time to time designate or appoint. No license under this chapter shall be required of any agent of a licensee, provided that this exemption shall apply only to the agent's acts on behalf of the licensee and this exemption shall not exempt the agent from the provisions of this chapter where he conducts money transmissions for his own account. The licensee shall require each of his appointed agents to display prominently on the agent's premises, where same may be readily viewed by prospective clients or purchasers, a printed certificate signed by an authorized official of licensee setting forth in bold letters the names of the licensee and agent and stating that the licensee holds a valid and existing license issued by the commissioner under this chapter and that agent is a duly authorized agent of licensee. Neither a licensee nor an agent may appoint a subagent to conduct money transmissions.

§ 75-15-19

(1)(a) Each licensee shall file with the commissioner within fifteen (15) days of the last business day of each month a report of the total amount of outstanding money transmissions in Mississippi. The principal sum of the surety bond or deposit required in Section 75-15-11 shall be adjusted, if appropriate, to reflect any changes in outstanding money transmissions. Licensees who maintain a surety bond in the principal sum of at least Five Hundred Thousand Dollars ($500,000.00) or a securities deposit having an aggregate market value of at least equal to Five Hundred Thousand Dollars ($500,000.00) shall be required to report the total amount of outstanding money transmissions in Mississippi on a quarterly basis.

(b) Each licensee shall file an annual financial statement with the commissioner, audited by an independent certified public accountant or an independent registered accountant, within five (5) months after the close of the licensee's fiscal year. The financial statement shall include a balance sheet, a profit and loss statement, and a statement of retained earnings of the licensee and the licensee's agents resulting from the business of money transmission.

(2) The commissioner may conduct or cause to be conducted an annual examination or audit of the books and records of any licensee at any time or times he deems proper, the cost of the examination or audit to be borne by the licensee. The refusal of access to the books and records shall be cause for the revocation of its license. The commissioner may charge the licensee an examination fee in an amount not less than Three Hundred Dollars ($300.00) nor more than Six Hundred Dollars ($600.00) for each licensed office, plus any actual expenses incurred while examining the licensee's records or books that are located outside the State of Mississippi.

(3) Each licensee shall maintain the following books and records for a period of five (5) years and the books and records shall be available to the commissioner for inspection:

(a) A record of each money transmission sold;

(b) A general ledger, posted at least monthly, containing all assets, liabilities, capital, income and expense accounts;

(c) Bank statements and bank reconciliation records;

(d) Records of outstanding money transmissions;

(e) Records of each money transmission paid within the five-year period;

(f) A list of the names and addresses of all authorized agents; and

(g) Any other records the commissioner may reasonably require by rule or regulation.

The records required under this section may be maintained in photographic, electronic or other similar form.

(4) Each licensee must maintain a written Bank Secrecy Act/Anti-Money Laundering Program that complies with 31 CFR Section 103.125, if applicable.

(5) The commissioner may conduct a joint examination with representatives of other departments or agencies of another state or with the federal government. The commissioner may accept an examination report of another state or of the federal government or a report prepared by a certified public accountant instead of conducting an examination. A joint examination or an acceptance of an examination report does not preclude the commissioner from conducting his own examination. The report of a joint examination or an examination report accepted by the commissioner under this section is an official report of the commissioner for all purposes.

(6) The department may adopt the necessary administrative regulations, not inconsistent with state law, for the enforcement of this chapter.

§ 75-15-21

Nothing in this chapter shall be deemed to require a licensee to list agents which are exempt by the provisions of Section 75-15-7 of this chapter.

§ 75-15-23

Each licensee shall be liable for the payment of all money transmissions and for all checks that the licensee sells, in whatever form and whether directly or through an agent, as the maker or drawer thereof according to the negotiable instrument laws of this state, and shall be responsible only for those acts of the agent done on behalf of the licensee. Every check sold by a licensee directly or through an agent shall bear the name of the licensee clearly imprinted thereon. During the period of time that a person is an appointed agent for a licensee, the agent shall not directly or indirectly conduct his own money transmission business and the agent shall not be, continue to be, or become an officer, director, stockholder, employee, or agent of any other licensee under this chapter. When a person ceases to be an agent of a licensee, he shall immediately cease displaying his agent's appointment certificate, as provided under Section 75-15-17 of this chapter and shall immediately surrender same to the licensee.

§ 75-15-25

Whenever the bond or securities deposit required under Section 75-15-11 is less than Five Hundred Thousand Dollars ($500,000.00), the licensee may not at any time have a total amount in outstanding money transmissions or checks in Mississippi, in excess of the bond or securities deposit required of him under Section 75-15-11, and the licensee shall, in accordance with rules and regulations promulgated by the commissioner under this chapter, submit a written report to the commissioner on the last business day of each month regarding his money transmissions outstanding in Mississippi, whether issued by himself or through agents, provided that this limitation shall be the principal sum of the bond or the market value of the securities deposit required of the licensee under Section 75-15-11, and the sum of this limitation shall not be increased by any bond or securities deposit increase required by the commissioner under Section 75-15-29 or by deposit of any revocation order, suspension bond or securities deposit under Section 75-15-27.

§ 75-15-27

Except where a license is automatically revoked without any act of the commissioner as specially provided in this chapter, no license shall be denied or revoked except on ten (10) days' notice (the first day of the ten-day period to be the date stated on the notice, which shall be the day it is mailed) to the applicant or licensee by the commissioner, sent by letter by United States registered mail, return receipt requested, to the applicant's or licensee's business address set forth in the application. Upon receipt of the notice, as stated in the registered mail receipt, the applicant or licensee may, within five (5) days thereafter (which five-day period may be wholly or partially outside of the ten-day period) make written demand for a hearing by the commissioner, which demand, in the case of a revocation notice, must be accompanied by an additional surety bond or securities deposit, as hereafter provided, the principal sum or the market value thereof to be specified by the commissioner in the revocation notice. The revocation notice shall not become final during the period of time in which the licensee may demand such hearing nor if licensee demands a hearing, until the matter has been finally determined by the commissioner or by the courts, provided as to any revocation order, but not a denial order, that the licensee posts together with his written demand for hearing an additional corporate surety bond, written by the same surety that wrote the bond under subsection (b) of Section 75-15-11, or an additional securities deposit in addition to the securities deposit theretofore made by the licensee under subsection (c) of Section 75-15-11 which additional surety bond or securities deposit shall be in a principal amount or of a market value deemed adequate by the commissioner as specified in the revocation order but not exceeding Two Hundred Fifty Thousand Dollars ($250,000.00), provided that if the licensee originally deposited with his application under Section 75-15-11 a corporate surety bond, the additional deposit provided in this section must be another corporate surety bond or an increase of the first one and may not be a deposit of securities, or if the licensee originally deposited securities, the additional deposit shall also be of securities and not a corporate surety bond. The bond or securities deposit shall secure the same obligations as does the corporate surety bond or securities deposit required by Section 75-15-11, but shall be in addition to the bond or securities deposit required thereby. Upon receipt of the written demand, the commissioner shall thereafter, with reasonable promptness, hear and determine the matter as provided by law. If the applicant or licensee deems himself aggrieved by the determination or order of the commissioner, he may within fifteen (15) days after the determination or order, have the determination or order reviewed by an appeal to the Chancery Court of the First Judicial District of Hinds County, Mississippi, by filing a petition setting out the specific order or action or part thereof by which the person deems himself aggrieved. All those petitions shall be given preferred settings and shall be heard by the court as speedily as possible. Such an appeal shall be perfected upon the posting of a bond for the costs of the appeal accompanied by the petition. Any party to the appeal may appeal to the Supreme Court of Mississippi from the decree or order of the chancery court, within thirty (30) days from the rendition of the decree or order, in the manner provided by law for appeals to the Supreme Court of Mississippi from chancery courts.

Final denial or revocation of the license, whether automatic or by final determination of the commissioner or the courts, shall cancel as of the date of final revocation all bonds or securities deposits theretofore deposited by the applicant or licensee under any provision of this chapter, provided that the licensee (and his corporate surety, if any) shall not be relieved of any accrued liabilities, and provided further, where the licensee deposited securities, that there shall not be returned to the licensee any of the deposited securities until the commissioner determines that all accrued liabilities (including, but not limited to, the principal sums thereof, accrued interest thereon, and court costs, if any, assessed to the licensee) of the licensee under this chapter have been satisfied in full.

The commissioner may at any time revoke a license, on any ground on which he might refuse to grant a license, for failure to pay an annual fee or for violation of any provision of this chapter, subject to the provisions of this chapter.

A license shall be automatically and finally revoked without any act or further act of the commissioner and without any right of the licensee to any hearing or further hearing by the commissioner or the courts and without any right of the licensee or the commissioner to reinstate or have reinstated the license, in the following instances: (a) at expiration of the sixty-day notice period, if the corporate surety gives notice of cancellation of its bond or any of them; (b) upon failure by licensee to pay when due the annual license fee required by Section 75-15-15; (c) upon failure by licensee to file when due any information required by Section 75-15-19; (d) in case of a revocation notice under the first paragraph of this section, failure by the licensee to demand hearing as provided therein or failure to deposit any additional corporate surety bond or securities deposit as required by the commissioner; (e) upon a license revocation order becoming final at any stage; (f) failure by licensee to deposit when due any additional corporate surety bond or securities deposit required by the commissioner under Section 75-15-29; or (g) upon final conviction of licensee as to any offense covered by Section 75-15-31.

If a revocation order becomes final for any reason or in any manner, the license may not be reinstated, except upon new application as if the licensee had never been licensed before. The commissioner may deny the new application on grounds that a previous application was denied or a previous license to applicant was revoked or any ground or grounds on which he may deny an original application.

§ 75-15-29

Any provision in this chapter to the contrary notwithstanding, the commissioner may at any time, if in his sole opinion the protection of the public so requires, increase the principal sum of the bond or the aggregate market value of the deposit required of any applicant or licensee by Section 75-15-11 but in no case shall the principal sum of the bond or the aggregate market value of the deposit required by Section 75-15-11 exceed Five Hundred Thousand Dollars ($500,000.00) and provided further, that in any situation, where a revocation order has been issued and the licensee involved has posted the additional bond required under Section 75-15-27, for suspension thereof, pending final determination, the commissioner may for the same reasons require the principal sum of the additional, suspension bond to be increased but in no case shall the principal sum thereof exceed Two Hundred Fifty Thousand Dollars ($250,000.00), and provided further that if the licensee originally deposited with his application under Section 75-15-11 a corporate surety bond, the additional increase provided in this section must be by another corporate surety bond or an increase of the first one, written by the same corporate surety that wrote the first one and may not be a deposit of securities or if the licensee originally deposited securities, the additional increase shall also be of securities and not a corporate surety bond.

§ 75-15-31

(1) If any person to whom or which this chapter applies or any agent or representative of that person violates any of the provisions of this chapter or attempts to transact the business of conducting money transmissions as a service or for a fee or other consideration, without having first obtained a license from the commissioner under the provisions of this chapter, that person and each such agent or representative shall be deemed guilty of a misdemeanor and, upon conviction, shall be fined not less than One Hundred Dollars ($100. 00) nor more than Five Hundred Dollars ($500.00), and may also be confined to the county jail for not more than twelve (12) months. Each violation shall constitute a separate offense.

(2) If any person engages in business as provided for in this chapter without paying the license fee provided for in this chapter before beginning business or before the expiration of the person's current license, as the case may be, then the person shall be liable for the full amount of the license fee plus a penalty in an amount not to exceed Twenty-five Dollars ($25.00) for each day that the person has engaged in the business without a license or after the expiration of a license.

(3) The commissioner may, after notice and hearing, impose a civil penalty against any licensee if the licensee or employee is adjudged by the commissioner to be in violation of the provisions of this chapter. The civil penalty shall not exceed Five Hundred Dollars ($500.00) per violation and shall be deposited into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

(4) When the commissioner has reasonable cause to believe that a person is violating any provision of this chapter, the commissioner, in addition to and without prejudice to the authority provided elsewhere in this chapter, may enter an order requiring the person to stop and refrain from the violation. The commissioner may sue in any circuit court of the state having jurisdiction and venue to enjoin the person from engaging in or continuing the violation or from doing any act in furtherance of the violation. In such an action, the court may enter an order or judgment awarding a preliminary or permanent injunction.

§ 75-15-32

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this chapter and for the purpose of determining whether persons are subject to the provisions of this chapter, may examine persons licensed under this chapter and persons reasonably suspected by the commissioner of conducting business that requires a license under this chapter, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this chapter, including without limitation the conduct of business without a license as required under this chapter.

§ 75-15-33

The masculine, feminine and neuter genders shall each include the others and the singular shall include the plural.

§ 75-15-35

Each licensee shall comply with state and federal money laundering laws, including, but not limited to, the federal “Bank Secrecy Act,” 12 USC Section 1951 et seq.

Chapter 17 Interest, Finance Charges and Other Charges

§ 75-17-1

(1) The legal rate of interest on all notes, accounts and contracts shall be eight percent (8%) per annum, calculated according to the actuarial method, but contracts may be made, in writing, for payment of a finance charge as otherwise provided by this section or as otherwise authorized by law.

(2) Any borrower or debtor may contract for and agree to pay a finance charge for any loan or other extension of credit made directly or indirectly to a borrower or debtor which will result in a yield not to exceed the greater of ten percent (10%) per annum or five percent (5%) per annum above the discount rate, excluding any surcharge thereon, on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where the lender is located, each calculated according to the actuarial method. The rate of finance charge authorized under this subsection (2) shall be known as the “contract rate.”

(3) Notwithstanding the foregoing and any other provision of law to the contrary, any partnership, joint venture, religious society, unincorporated association, or domestic or foreign corporation, whether organized for profit or nonprofit, may contract for and agree to pay a finance charge which will result in a yield not to exceed the greater of fifteen percent (15%) per annum or five percent (5%) per annum above the discount rate, excluding any surcharge thereon, on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where the lender is located, each calculated according to the actuarial method, on any contract, loan, extension of credit or other obligation under which the principal balance to be repaid shall originally exceed Two Thousand Five Hundred Dollars ($2,500.00), or on any series of advances of money pursuant to a contract if the aggregate of sums advanced or originally proposed to be advanced shall exceed Two Thousand Five Hundred Dollars ($2,500.00); and as to any such agreement, the claim or defense of usury by such partnership, joint venture, religious society, unincorporated association, or corporation, or their successors, guarantors, assigns or anyone on their behalf is prohibited.

(4) Notwithstanding the foregoing and any other provision of law to the contrary, any borrower or debtor may contract for and agree to pay a finance charge which will result in a yield not to exceed the greater of ten percent (10%) per annum or five percent (5%) per annum above the index of market yields of the Monthly Twenty-Year Constant Maturity Index of Long-Term United States Government Bond Yields, as compiled by the United States Treasury Department, each calculated according to the actuarial method, on any loan, mortgage or advance which is secured by a lien on residential real property or by a lien on stock in a residential cooperative housing corporation where the loan, mortgage or advance is used to finance the acquisition of such stock. The term “residential real property,” as used in this subsection, means real estate upon which there is located or to be located a structure or structures designed in whole or in part for residential use, or which comprises or includes one or more apartments, condominium units or other dwelling units.

(5) Notwithstanding the foregoing and any other provision of law to the contrary, any borrower or debtor may contract for and agree to pay and any lender or extender of credit may contract for and receive any finance charge agreed to in writing by the parties, notwithstanding that such charge is in excess of that otherwise allowed on any contract, credit sale, obligation or other extension of credit, regardless of the security taken or the purpose of the extension of credit, under which the principal balance to be repaid originally exceeds Two Thousand Dollars ($2,000.00), or on any series of advances of money pursuant to a contract if the aggregate of sums advanced or originally proposed to be advanced exceeds Two Thousand Dollars ($2,000.00), or on any extension or renewal thereof; and as to any such agreement, the claim or defense of usury or violation of any law prescribing, limiting or regulating the rate of finance charge by any borrower or debtor, or his successors, guarantors, assigns or anyone on his behalf is prohibited.

(6) Notwithstanding the foregoing and any other provisions of law to the contrary, the outstanding balance of a prior loan or lease of a motor vehicle used as a trade-in, as well as other items that are capitalized or amortized during the lease term, may be included in a lease for a motor vehicle, provided that the rate of finance charge associated with the lease contract does not at any time exceed the finance charge limitations specified in Section 63-19-43.

§ 75-17-3

If any person shall lend to another any sum of money and take any note or evidence of debt which shall stipulate a rate of interest not greater than six (6) per centum per annum after the date of the loan or after maturity, but who shall in fact contract for, charge, collect or receive as compensation or consideration for, or as the result of, such loan, directly or indirectly, a sum of money in excess of six (6) per centum per annum from the date of the loan, or a sum of money when taken with the interest contracted for, is in excess of six (6) per centum per annum from the date of the loan, such person shall forfeit all interest, and if the interest shall have been paid, same may be recovered by suit.

§ 75-17-5

The issues, bills, notes, bonds, or certificates of deposit of any bank, corporation, or association of persons formed for banking purposes, or possessing banking privileges, situated within or without the limits of this state, shall not be loaned in this state by any agent, officer or person employed by, or having any interest in or connection with, any such bank, corporation, or association of persons, at a greater rate of discount or interest than is allowed by the laws of this state. All contracts and agreements made in violation of the provisions of this section shall, as to the whole of the discount or interest allowed or paid, or agreed to be allowed or paid, be void, and the discount or interest may be recovered back by the person suffering such discount or paying such interest.

§ 75-17-7

All judgments or decrees founded on any sale or contract shall bear interest at the same rate as the contract evidencing the debt on which the judgment or decree was rendered. All other judgments or decrees shall bear interest at a per annum rate set by the judge hearing the complaint from a date determined by such judge to be fair but in no event prior to the filing of the complaint.

§ 75-17-9

When partial payments are made, the interest that has accrued to the time of payment, if any, shall be first paid, and the residue of such partial payment shall be placed to the payment of the principal, except that the parties may agree in writing that such partial payment, or any portion thereof, shall be applied first to the payment of principal, in which case the residue shall be applied to the payment of interest that has accrued to the time of payment.

§ 75-17-11

When any particular rate of interest per annum or amount of finance charge or rate of finance charge is specified in any contract, note or evidence of indebtedness, it shall not be construed as any increase of said rate of interest or amount of finance charge or rate of finance charge merely that the interest at the specified rate per annum or amount of finance charge or rate of finance charge is stipulated to be paid quarterly, or semiannually, or at any other period less than a year, nor shall the fact that the principal and interest or finance charge is paid at a date earlier than the final maturity date of the contract, note or evidence of indebtedness be taken as any increase of the rate per centum or amount of finance charge or rate of finance charge although paid for the whole period of the contract, note or evidence of indebtedness and regardless of whether or not there is a contractual right of prepayment. Upon prepayment of any contract, note or evidence of indebtedness with the agreement of the lender or holder of such contract, note or evidence of indebtedness before final maturity, whether voluntarily, involuntarily by acceleration or otherwise, and whether by cash, renewal or otherwise, any rebate of interest or finance charge may be computed by the sum of the digits method, commonly referred to as the Rule of 78's method, by the actuarial method, or by the simple interest method. The use of any such method to compute a rebate of interest or finance charge shall not be considered or result in any penalty, prepayment or otherwise, nor be deemed to increase the yield, annual percentage rate, amount of finance charge, rate of finance charge, amount of interest charge, or rate of interest charge. Any such contract, note, or evidence of indebtedness and all provisions thereof shall be valid for the amount of the principal, interest, and finance charges contracted for or received, and such contract, note or evidence of indebtedness shall not be held usurious. However, with respect to a note containing a final balloon payment provision originally payable to a bank and executed after July 1, 1990, the Rule of 78's method may not be used to compute any rebate of finance charges that may be due upon prepayment if the resulting yield would be usurious.

§ 75-17-13

If any credit card is issued to a person who has not requested or accepted by use the issuance of such credit card, the issuer shall be liable to the person whose name appears on the credit card for any damages or expenses, or both, including attorney's fees, which the person incurs due to the use of such credit card without permission of the person to whom it is issued by any person other than the person to whom it is issued or members of his immediate family. Any person who shall willfully collect finance charges under a revolving charge agreement in excess of the maximum permitted under Section 75-17-19 shall be guilty of a misdemeanor, and, upon conviction, may be fined not more than Five Hundred Dollars ($500.00). Each account on which such excess finance charges shall be collected shall constitute a separate offense.

§ 75-17-15

Any licensee under the provisions of the Small Loan Regulatory Law (Section 75-67-101 et seq.), and the Small Loan Privilege Tax Law (Section 75-67-201 et seq.), may contract for and receive a default charge not to exceed five percent (5%) of that portion of an installment which continues unpaid for ten (10) days or more following the date such payment is due, including Sundays and holidays. In no case shall such default charge exceed five dollars ($5.00). Such default charge shall not be collected more than once on the same installment. For the purpose of this section, payments shall be applied first to current installments and then to delinquent installments.

§ 75-17-17

Loans made and credit extended prior to July 1, 1974 shall continue to be governed by the provisions of laws governing such loans and extensions of credit which were in force at the time such loans or extensions of credit were made, including laws repealed hereby except that finance charges contracted for or received prior to July 1, 1974, shall not be unlawful if the finance charge contracted for or received conforms with the provisions of Chapter 564, Laws of 1974 or other law then in effect. Any loan or note renewed, refinanced, deferred or otherwise extended or altered on or after July 1, 1974, shall conform with the provisions of Sections 63-17-13, 75-17-1, 75-17-13 through 75-17-17, 75-67-127 and 75-67-217.

§ 75-17-19

(1) Notwithstanding any provision of law to the contrary, any retail seller and any lender or issuer of credit cards may contract for and receive a finance charge for credit sales of goods, services or merchandise certificates or for cash advanced or other credit extended pursuant to a revolving charge agreement by applying a periodic rate no greater than one and three-fourths percent (1- 3/4 %) per month to:

(a) The average daily balance of the account, exclusive of finance charge, in each billing period;

(b) An amount that shall not exceed the balance of the account, exclusive of finance charge, on the first day of each billing period without adding purchases or miscellaneous debits to the account during the billing period; or

(c) Any balance of the account during each billing period which does not produce an amount of finance charge in excess of that permitted by (a) or (b).

(2) Notwithstanding the foregoing and any other provision of law to the contrary, any bank which is an issuer of credit cards may contract for and receive, in addition to any finance charges authorized by law, an annual fee for membership in a credit card plan pursuant to a revolving charge agreement and such fee shall not be considered a finance charge. Such fee shall not exceed Twelve Dollars ($12.00) per year for an account where the cardholder is a natural person. However, any credit card issuer which does so contract for an annual membership fee may, notwithstanding the provisions of subsection (1) of this section, contract for and receive a finance charge for credit sales of goods, services or merchandise certificates or for cash advanced or other credit extended pursuant to a revolving charge agreement by applying a periodic rate no greater than one and one-half percent (1- 1/2 %) per month to:

(a) The average daily balance of the account, exclusive of finance charge, in each billing period;

(b) An amount that shall not exceed the balance of the account, exclusive of finance charge, on the first day of each billing period without adding purchases or miscellaneous debits to the account during the billing period; or

(c) Any balance of the account during each billing period which does not produce an amount of finance charge in excess of that permitted by (a) or (b).

(3) Notwithstanding the foregoing and any other provision of law to the contrary, any bank, retail seller, lender or other issuer of credit cards may contract for and receive, in addition to any finance charges authorized by law, late payment charges in connection with the credit sales of goods, services or merchandise certificates or for cash advanced pursuant to a revolving charge agreement in such amounts and upon such terms and conditions as may be agreed to in writing by the bank, retail seller, lender or other issuer of credit cards and the borrower or debtor, and such charges and fees shall not be considered a finance charge.

(4) No finance charge may be charged or collected for purchases made by the use of credit cards or credit sales of goods or services or merchandise certificates if the outstanding balance of the account existing on the first day of the billing statement where such purchases initially appear is paid in full within one (1) month after such billing statement date. If a finance charge is otherwise due and the amount of the finance charge so computed shall be less than Fifty Cents (50¢) for any such month, a finance charge of Fifty Cents (50¢) for any such month may be charged, received and collected. Any payment made pursuant to a revolving charge agreement shall be applied first to any finance charge shown to be due on the billing statement, next to repayment of cash advanced or other credit extended, and finally to the chronological repayment of purchases of goods, services or merchandise certificates. The billing statement shall not state that Mississippi law requires the imposition of a finance charge. The term “month” as used in this subsection and in subsections (1) and (2) of this section means either (a) a calendar month or (b) a minimum of thirty (30) consecutive calendar days, or (c) the number of days elapsing between the same numerical calendar day of successive calendar months, or (d) a number of days which does not vary by more than four (4) days from such period nor result in more than twelve (12) billing periods per year. “Revolving charge agreement” means an agreement by the terms of which retail sellers may sell goods, services, merchandise certificates, or by which a lender or issuer finances the purchase of goods or services or by which a lender makes cash advances, by the use of credit cards or otherwise, pursuant to which the amount financed is payable either within a stated period or in installments over a period of time, and the terms of which may provide for finance charges to be assessed on the unpaid balance as it exists from time to time; the term “revolving charge agreement” does not include the lending of money evidenced by a promissory note. The term “cash advances” includes credit extended by a lender to a borrower, or to any other person for the account of a borrower, pursuant to a written agreement, by the use of checks, drafts or other similar instruments.

(5) Notwithstanding the foregoing and any other provision of law to the contrary, any retail seller may contract for and receive a finance charge for closed end credit sales of goods, tangible property or services, other than pursuant to a revolving charge agreement, which will result in a yield not to exceed the following annual percentage rates calculated according to the actuarial method:

(a) Twenty-four percent (24%) per annum on that part of the unpaid balance of the amount financed which is Two Thousand Five Hundred Dollars ($2,500.00) or less; and

(b) Twenty-one percent (21%) per annum on that part of the unpaid balance of the amount financed which is more than Two Thousand Five Hundred Dollars ($2,500.00).

(6) Notwithstanding the foregoing and any other provisions of law to the contrary, any bank, retail seller, lender or other issuer of credit cards may provide in the written credit card agreement for such products, services, charges and fees as the bank, retail seller, lender or other issuer of credit cards and the debtor may agree upon (excluding, however, the finance charges provided for in subsection (1) of this section), and such other terms and conditions as the bank, retail seller, lender or other issuer of credit cards and the debtor may agree upon from time to time, and the costs associated with those products, services, charges and fees shall not be considered a finance charge or an annual fee. If any bank, retail seller, lender or other issuer of credit cards desires to modify in any respect any term of the credit card account, it shall first provide at least thirty (30) days' prior written notice of the modification to the debtor. In providing that notice, the bank, retail seller, lender or other issuer of credit cards shall advise the debtor in writing that the debtor has the option (a) to surrender the credit card, in which case the debtor shall have the right to continue to pay off the credit card account in the same manner and under the same terms and conditions as then in effect; or (b) to hold the credit card after the thirty-day period has elapsed, or to use the credit card during that period, either of which shall constitute the debtor's consent to the modification.

§ 75-17-21

(1) For any consumer installment loan that a licensee under the Small Loan Regulatory Law and the Small Loan Privilege Tax Law makes, the licensee has the option to either lend at the rates and fees indicated under this section or at the rates and charges authorized under Section 75-67-181. Except as provided in Section 75-67-181, but notwithstanding any other provision of law to the contrary, the maximum finance charge which may be contracted for and received for any loan or extension of credit made by a licensee under the Small Loan Regulatory Law (Section 75-67-101 et seq.) and the Small Loan Privilege Tax Law (Section 75-67-201 et seq.) may result in a yield not to exceed the following annual percentage rates calculated according to the actuarial method:

(a) Thirty-six percent (36%) per annum for the portion of the unpaid balance of the amount financed that is not greater than One Thousand Dollars ($1,000.00);

(b) Thirty-three percent (33%) per annum for the portion of the unpaid balance of the amount financed in excess of One Thousand Dollars ($1,000.00) but not greater than Two Thousand Five Hundred Dollars ($2,500.00);

(c) Twenty-four percent (24%) per annum for the portion of the unpaid balance of the amount financed in excess of Two Thousand Five Hundred Dollars ($2,500.00) but not greater than Five Thousand Dollars ($5,000.00);

(d) Fourteen percent (14%) per annum for the portion of the unpaid balance of the amount financed in excess of Five Thousand Dollars ($5,000.00).

(2) As an alternative and in lieu of the rates established in paragraphs (a), (b), (c) and (d) of subsection (1), on loans in an amount of Twenty-five Thousand Dollars ($25,000.00) or more, a licensee may contract for and receive a maximum finance charge which will result in a yield not to exceed an annual percentage rate, calculated according to the actuarial method, of eighteen percent (18%) per annum on the unpaid balance of the amount financed.

(3) A licensee choosing to lend at the rates indicated under this section may contract for and charge a closing fee as follows:

(a) For loans in the amount of Ten Thousand Dollars ($10,000.00) or less, four percent (4%) of the total payments due on the loan or Twenty-five Dollars ($25.00), whichever is greater;

(b) For loans in an amount greater than Ten Thousand Dollars ($10,000.00), a maximum charge of Five Hundred Dollars ($500.00).

Such closing fee shall not be part of the finance charge.

(4) The rates set forth in paragraph (a) of subsection (1) may be increased by the number of percentage points by which the discount rate, excluding any surcharge thereon, on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where the lender is located exceeds eight percent (8%), and the rates set forth in paragraphs (b), (c) and (d) of subsection (1) may be increased by the number of percentage points by which the discount rate, excluding any surcharge thereon, on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where the lender is located exceeds ten percent (10%).

(5) Except as provided in Section 75-67-181, the finance charges authorized in this section are the maximum rates which may be contracted for or received for any loan or extension of credit made by a licensee under the Small Loan Regulatory Law (Section 75-67-101 et seq.), and the Small Loan Privilege Tax Law (Section 75-67-201 et seq.). Nothing in this section shall prohibit lending money or handling, negotiating or arranging loans for a finance charge that is less than that specified herein. This section does not limit or restrict the manner of contracting for the finance charge, whether by way of add-on, discount or otherwise, so long as the annual percentage rate of the finance charge does not exceed that permitted by this section or Section 75-67-181.

§ 75-17-23

Notwithstanding any provision of law to the contrary, the maximum finance charge which may be contracted for or received for any loan or extension of credit made by any lender or by any retail seller in connection with sales of factory manufactured moveable homes may result in a yield not to exceed the following annual percentage rates calculated according to the actuarial method:

(a) Twenty-five percent (25%) per annum on that part of the unpaid balance of the amount financed which does not exceed One Thousand Dollars ($1,000.00);

(b) Eighteen percent (18%) per annum on that part of the unpaid balance of the amount financed which is more than One Thousand Dollars ($1,000.00) but does not exceed Two Thousand Five Hundred Dollars ($2,500.00);

(c) The greater of fifteen percent (15%) per annum or five percent (5%) per annum above the discount rate, excluding any surcharge thereon, on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where the lender or retail seller is located, on that part of the unpaid balance of the amount financed which is more than Two Thousand Five Hundred Dollars ($2,500.00).

§ 75-17-25

The term “finance charge” as used in this section, Sections 63-19-43, 75-17-1, 75-17-11, 75-17-13, 75-17-15, 75-17-17, 75-17-19, 75-17-21, 75-17-23, 75-17-27, 75-17-29, 75-17-33, 75-67-123, 75-67-127, 75-67-181 and 75-67-217 means the amount or rate paid or payable, directly or indirectly, by a debtor for receiving a loan or incident to or as a condition of the extension of credit, including, but not limited to, interest, brokerage fees, finance charges, loan fees, discount, points, service charges, transaction charges, activity charges, carrying charges, time price differential, finder's fees or any other cost or expense to the debtor for services rendered or to be rendered to the debtor in making, arranging or negotiating a loan of money or an extension of credit and for the accounting, guaranteeing, endorsing, collecting and other actual services rendered by the lender; however, recording fees, motor vehicle title fees, attorney's fees, insurance premiums, fees or charges permitted to be charged under the provisions of Section 75-67-121, fees permitted to be charged under the provisions of Section 79-7-7, service charges as provided in Section 81-19-31, and with respect to a debt secured by an interest in land, bona fide closing costs and appraisal fees incidental to the transaction shall not be included in the finance charge. The term “finance charge,” as used in this section and the sections enumerated above, shall not include any fees for the set up, establishment, processing or maintenance of a loan to a plan participant from a retirement plan intending to be tax-qualified (within the meaning of 26 USCS Section 401 et seq.) that are paid or payable directly or indirectly by the plan participant to the plan record keeper or third-party administrator.

Subject to the other provisions of this section, Sections 63-19-43, 75-17-1, 75-17-13, 75-17-15, 75-17-17, 75-17-19, 75-17-21, 75-17-23, 75-17-27, 75-17-29, 75-17-33, 75-67-127 and 75-67-217, the finance charge may be calculated on the assumption that the indebtedness will be discharged as it becomes due, and prepayment penalties and statutory default charges shall not be included in the finance charge. Nothing in Section 75-17-1 or Section 75-17-19, 75-17-21, 75-17-23, 75-17-27, 75-17-29 or 75-17-33 shall limit or restrict the manner of contracting for such finance charge, whether by way of add-on, discount or otherwise, so long as the annual percentage rate does not exceed that permitted by law. If a greater finance charge than that authorized by applicable law shall be stipulated for or received in any case, all interest and finance charges shall be forfeited, and may be recovered back, whether the contract be executed or executory. If a finance charge be contracted for or received that exceeds the maximum authorized by law by more than one hundred percent (100%), the principal and all finance charges shall be forfeited and any amount paid may be recovered by suit. The provisions of this section, Section 75-17-1 and Sections 75-17-19, 75-17-21, 75-17-23, 75-17-27, 75-17-29 and 75-17-33 shall not restrict the extension of credit pursuant to any other applicable law. A licensee under the Small Loan Regulatory Law (Section 75-67-101 et seq.), and the Small Loan Privilege Tax Law (Section 75-67-201 et seq.), may contract for and receive finance charges as authorized by Section 75-17-21 or 75-67-181, and the late payment charge as authorized by Section 75-17-27, regardless of the purpose for which the loan or other extension of credit is made.

§ 75-17-27

A late payment charge, not exceeding Five Dollars ($5.00) or four percent (4%) of the amount of any delinquency, whichever is greater, if contracted for in writing, shall not be considered a finance charge, but no such charge shall be made unless such delinquency is more than fifteen (15) days past due; provided, however, that such late payment charge may be collected only one (1) time on a specific installment and no late payment charge may be collected on a partial payment resulting from the deduction of a late payment charge from a regular scheduled payment. On loans of One Hundred Thousand Dollars ($100,000.00) or less having a stated maturity of five (5) years or less, such late payment charge shall in no event exceed Fifty Dollars ($50.00).

§ 75-17-29

No lender or other person shall use multiple notes, accounts, contracts or agreements with intent to obtain a higher finance charge than permitted by law. If a finance charge be stipulated for or received in any case in violation of this section, all interest and finance charges shall be forfeited.

§ 75-17-31

No lender or other person shall charge a sum or prepayment penalty for the prepayment of any note or evidence of a debt secured in whole or in part by lien on real estate greater than the following:

(a) Five percent (5%) of the unpaid principal balance if prepaid during the first year;

(b) Four percent (4%) of the unpaid principal balance if prepaid during the second year;

(c) Three percent (3%) of the unpaid principal balance if prepaid during the third year;

(d) Two percent (2%) of the unpaid principal balance if prepaid during the fourth year;

(e) One percent (1%) of the unpaid principal balance if prepaid during the fifth year;

(f) No penalty if prepaid more than five (5) years from date of the note creating the debt.

This section shall apply only to loans, the security for which is a lien on real estate comprising a single family dwelling or a single family condominium unit, or on real estate used primarily for agricultural or livestock purposes. This section shall not apply where a greater penalty is required by any law or regulation of the United States of America, or agency thereof. In addition, this section shall not apply to any agricultural loan made by an originator or a certified facility in accordance with 12 USCS Section 2279aa et seq. that is included in a pool for which the Federal Agricultural Mortgage Corporation has provided a guarantee.

§ 75-17-33

The Commissioner of Banking and Consumer Finance, upon any change in the discount rate on ninety-day commercial paper by the Federal Reserve bank of a Federal Reserve district of which this state is a part, shall (a) make an official announcement of the new discount rate on the same day as the change, or as soon thereafter as possible, (b) cause the dissemination of such announcement to the news media in such manner as he deems appropriate, and (c) file the same with the Commissioner of Insurance or his successor. The rate so determined shall be effective from the date of the official announcement of the new discount rate by the Commissioner of Banking and Consumer Finance. The Commissioner of Banking and Consumer Finance shall determine, on or before the twentieth day of each month, the index of market yields of the Monthly Twenty-Year Constant Maturity Index of Long-Term United States Government Bond Yields for the preceding calendar month and shall (a) make an official announcement of the index, (b) cause the dissemination of such announcement to the news media in such manner as he deems appropriate, and (c) file the same with the Commissioner of Insurance or his successor. The index so determined shall be effective on the first day of the next succeeding month.

In contracting for a finance charge pursuant to the provisions of Section 75-17-1 or Sections 75-17-21 and 75-17-23, any person shall be entitled to rely conclusively upon the most recent discount rate or index officially announced by the Commissioner of Banking and Consumer Finance. The Commissioner of Banking and Consumer Finance shall acquire, keep and maintain a separate record in which he shall note or post the maximum permissible rates of finance charges available under Section 75-17-1 and Sections 75-17-21 and 75-17-23. Each rate so determined shall be the maximum permissible rate of finance charge available under each particular section or subsection thereof, and when certified by the Commissioner of Banking and Consumer Finance shall be admissible in evidence or judicially noticed as the maximum permissible rate of finance charge under the provisions of that particular section or subsection.

§ 75-17-35

Notwithstanding any provision of law to the contrary, the lawful rate of interest which shall be paid on a refund of excess rates by any public utility which has put rates into effect under bond, as provided for in Sections 77-3-39, 77-3-69 and 77-3-71, shall be computed from the date of collection until the date refunds are made and shall be equal to a rate which is two percent (2%) above the average discount rate for the total period under bond, excluding any surcharge thereon, on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where the public utility has its principal place of business.

§ 75-17-101

Unless otherwise provided by law, general obligation and limited obligation tax bonds issued by the State of Mississippi or a county, municipality or political subdivision thereof and described in Sections 19-9-19, 21-33-315, 21-41-43, 37-27-65, 37-29-103, 37-29-109, 37-29-113, 37-59-27, 41-13-21, 51-29-63, 51-31-61, 51-33-37, 51-33-39, 57-1-29, 59-3-11, 59-5-45, 59-7-19, 59-7-109, 59-9-37, 59-9-65, 59-13-9, 61-5-17 and 65-19-25, Mississippi Code of 1972, shall not bear a greater overall maximum interest rate to maturity than eleven percent (11%) per annum.

§ 75-17-103

Unless otherwise provided by law, revenue bonds issued by the State of Mississippi or a county, municipality or political subdivision thereof and described in Sections 17-17-115, 19-5-183, 19-29-33, 21-27-45, 21-27-71, 21-27-179, 29-3-169, 37-101-91, 37-101-93, 41-13-21, 43-33-25, 43-33-537, 43-35-21, 49-17-105, 51-35-331, 57-7-3, 57-31-9, 59-7-417, 59-7-505, 59-9-41, 61-3-41, 61-5-17, 65-13-37, 69-5-15, 77-5-27 and 77-5-739, Mississippi Code of 1972, shall not bear a greater overall maximum interest rate to maturity than thirteen percent (13%) per annum.

§ 75-17-105

Unless otherwise provided by law, tax anticipation notes and reappraisal notes issued by the State of Mississippi or a county, municipality or political subdivision thereof and described in Sections 19-9-27, 19-13-17, 21-33-325, 21-33-325.1, 27-39-325, 37-29-101, 37-29-267, 37-29-425, 37-41-93, 37-59-37, 37-59-39, 37-59-41, 51-7-15, 51-7-27, 51-29-5 and 51-31-73, Mississippi Code of 1972, shall bear interest at a rate not to exceed eleven percent (11%) per annum.

§ 75-17-107

Unless otherwise provided by law, interim financing in anticipation of a confirmed grant or loan by the state of Mississippi or a county, municipality or political subdivision thereof and described in Sections 19-9-28 and 21-33-326, Mississippi Code of 1972, shall bear interest at a rate not to exceed nine percent (9%) per annum.

Chapter 19 Seals

§ 75-19-1

The use of private seals is dispensed with, except as to corporations; and all distinction between sealed and unsealed instruments, made by private persons, either as to the rights conferred by them or the remedies on them, is abolished.

§ 75-19-3

Any instrument of writing made and delivered by a private person without a seal or scroll, or other semblance or representation of a seal, shall be operative according to the intent of the maker, as expressed in the writing, in the same manner and as to full extent as if the seal of the maker were thereto affixed.

§ 75-19-5

The use of, or a failure to use, a seal or scroll, or other semblance or representation of a seal, by a private person in making an instrument, shall not in any manner affect it, nor in any way vary the rights of the parties to it.

§ 75-19-7

The bonds of all public officers, and all bonds in any legal proceeding, shall be valid and obligatory on all the signers, without a seal or representation of a seal, in the same manner as if duly sealed.

Chapter 21 Trusts and Combines in Restraint or Hindrance of Trade

§ 75-21-1

A trust or combine is a combination, contract, understanding or agreement, expressed or implied, between two or more persons, corporations or firms or association of persons or between any one or more of either with one or more of the others, when inimical to public welfare and the effect of which would be:

(a) To restrain trade;

(b) To limit, increase or reduce the price of a commodity;

(c) To limit, increase or reduce the production or output of a commodity;

(d) To hinder competition in the production, importation, manufacture, transportation, sale or purchase of a commodity;

(e) To engross or forestall a commodity;

(f) To issue, own or hold the certificate of stock of any trust and combine within the spirit of this chapter knowing it to be such at the time of the issue or the acquisition or holding such certificate; or

(g) To place the control to any extent of business or of the proceeds or earnings thereof, contrary to the spirit and meaning of this chapter, in the power of trustees, by whatever name called; or

(h) To enable or empower any other person than themselves, their proper officers, agents and employees to dictate or control the management of business, contrary to the spirit and meaning of this chapter; or

(i) To unite or pool interest in the importation, manufacture, production, transportation, or price of a commodity, contrary to the spirit and meaning of this chapter.

Any corporation, domestic or foreign, or any partnership, or individual, or other association, or person whatsoever, who are now, or shall hereafter create, enter into, become a member of, or a party to any trust or combine as hereinabove defined shall be deemed and adjudged guilty of a conspiracy to defraud and shall be subject to the penalties hereinafter provided. Any person, association of persons, corporation, or corporations, domestic or foreign, who shall be a party or belong to a trust and combine shall be guilty of crime and upon conviction thereof shall, for a first offense be fined in any sum not less than one hundred dollars ($100.00) nor more than five thousand dollars ($5,000.00) and for a second or subsequent offense not less than two hundred dollars ($200.00) nor more than ten thousand dollars ($10,000.00), and may be enjoined by a final decree of the chancery court, in a suit by the state on the relation of the attorney general, from the further prosecution of or doing of the acts constituting the trust and combine as defined in this chapter.

§ 75-21-3

Any corporation, domestic or foreign, or individual, partnership, or association of persons whatsoever, who, with intent to accomplish the results herein prohibited or without such intent, shall accomplish such results to a degree inimical to public welfare, and shall thus:

(a) Restrain or attempt to restrain the freedom of trade or production;

(b) Or shall monopolize or attempt to monopolize the production, control or sale of any commodity, or the prosecution, management or control of any kind, class or description of business;

(c) Or shall engross forestall or attempt to engross or forestall any commodity;

(d) Or shall destroy or attempt to destroy competition in the manufacture or sale of a commodity, by selling or offering the same for sale at a lower price at one place in the state than another or buying or offering to buy a commodity at a higher price at one place in the state than another, differences of freight and other necessary expenses of sale and delivery considered;

(e) Or shall destroy or attempt to destroy competition by rendering any service or manipulating, handling or storing any commodity for a less price in one locality than in another, the differences in the necessary expenses of carrying on the business considered, shall be deemed and held a trust and combine within the meaning and purpose of this section, and shall be liable to the pains, penalties, fines, forfeitures, judgments, and recoveries denounced against trusts and combines and shall be proceeded against in manner and form herein provided, as in case of other trusts and combines.

It shall be sufficient to make out a prima facie case of a violation of subdivision (e) of this section to show lower charge for the service therein mentioned in one locality than another, or to show a higher price paid for a commodity in one locality than another, differences of freight and other necessary expenses of operating business considered.

§ 75-21-5

Nothing contained in this chapter shall be construed to forbid the existence of agricultural, horticultural, poultry, cattle or dairy organizations, instituted for the purpose of cooperation or mutual help, having no capital stock and not conducted for profit, or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof, nor be held or construed to be illegal combinations or conspiracies in restraint of trade under the antitrust law; nor shall this chapter prevent or penalize agreements entered into between canners or catchers of seafood products or between canners and catchers of such products for the advancement and welfare of the seafood industry in Mississippi, when such agreements so made between canners or catchers of such products, or canners and catchers of such products, shall be approved by an order entered upon the minutes of the Mississippi Seafood Commission.

§ 75-21-7

Any person, corporation, partnership, firm or association of persons and the officers and representatives of the corporation or association violating any of the provisions of this chapter shall forfeit not less than one hundred dollars ($100.00) nor more than two thousand dollars ($2,000.00) for every such violation. Each month in which such person, corporation or association shall violate this chapter shall be a separate violation, the forfeiture and penalty in such case to be recovered alone by suit in the name of the state on the relation of the attorney general and by the consent of the attorney general suits may be brought by any district attorney, such suits to be brought in any court of competent jurisdiction.

§ 75-21-9

Any person, natural or artificial, injured or damaged by a trust and combine as herein defined, or by its effects direct or indirect, may recover all damages of every kind sustained by him or it and in addition a penalty of five hundred dollars ($500.00), by suit in any court of competent jurisdiction. Said suit may be brought against one or more of the parties to the trust or combine and one or more of the officers and representatives of any corporation a party to the same, or one or more of either. Such penalty may be recovered in each instance of injury. All recoveries herein provided for may be sued for in one suit.

§ 75-21-11

Every contract or agreement to enter into or pursue any trust and combine, and every contract or agreement made by another with any trust and combine, or with any member of a trust and combine for any purpose relative to the business of such trust and combine, is void, and cannot be enforced in any court.

§ 75-21-13

(1) No corporation shall acquire directly or indirectly, the whole or any part of the capital stock of any competing corporation doing business in this state, nor directly or indirectly acquire the franchise, plant or equipment of any other competing corporation doing business in this state if such other corporation be engaged in the same kind of business and be a competitor therein, where the effect of such acquisition of stock, franchise, plant or equipment may be to substantially lessen competition or to restrain trade or competition in the state, or any community thereof, or tend to create a monopoly of any line of commerce and will be inimical to public welfare. This section shall not apply to corporations purchasing such stock in payment of an indebtedness, and not using the same by voting, or otherwise, to bring about or attempting to bring about, the substantial lessening of competition. Provided, however, that fire and marine insurance corporations may own stock in other insurance companies and may be licensed to do business in this state, or authorized to continue business in this state, but the state insurance commissioner may refuse permission to any company to be licensed in the first instance or he may subsequently revoke the license of any company if it appears after notice and hearing that to permit one (1) insurance corporation owning stock in a competing corporation to continue to do business in this state would be injurious to, or contrary to the public interest.

(2) The provisions of this chapter shall not apply to:

(a) Any action taken by a board of trustees of a community hospital if acting in accordance with Section 41-13-35(5)(t) through (ff), including, but not limited to, entering into agreements, collaboratives, mergers and other similar arrangements with other public or private health care-related organizations, or with for-profit or nonprofit corporations, or other similar organizations;

(b) Any action taken by the academic medical center and its health care collaboratives if acting in accordance with Sections 37-115-50 through 37-115-50.3, including, but not limited to, entering into agreements, collaboratives, mergers and other similar arrangements with other public or private health care-related organizations, or with for-profit or nonprofit corporations, or other similar organizations; or

(c) Any action taken by a private hospital as defined in Section 41-9-305 if acting in accordance with Sections 41-9-301 through 41-9-311.

§ 75-21-15

If any person, association, firm or corporation shall combine with any other person, association, firm or corporation, or if either of them combine with one or more of the others to prevent, by pooling, any or either of said persons, associations, firms or corporations from separately or individually bidding for the performance of a public work for the state, or any county, municipality, or levee board thereof; or if any person, association, firm or corporation shall prevent, by persuasion or reward, any other person, association, firm or corporation, or any one or more of them, from bidding for the performance of such public work, they, and each of them, shall be guilty of a misdemeanor, and shall be fined not less than Twenty-five Dollars ($25.00) nor more than One Thousand Dollars ($1,000.00).

§ 75-21-17

All sums of money to be paid on any contract on behalf of the state, or any county, municipality or levee board thereof, when the provision of Section 75-21-15 had been violated, shall not be collectible, nor shall the same be paid by any officer or board having the payment thereof.

§ 75-21-19

Proceedings of any and every kind for forfeiture of charter, for forfeiture of right to do business in this state, for recovery of damages and all civil proceedings of any character whatever authorized by law for the execution and enforcement of the antitrust laws of this state may be brought against any corporation in any county where it has a domicile or place of business, or where any of its officers or agents may be found.

§ 75-21-21

Like proceedings against any two or more of any number of corporations or individuals, or of corporations and individuals believed to be parties to any trust and combine, may be brought in the county where the trust and combine was formed, or where it exists or is carried on, promoted, operated, practiced, employed, used or enjoyed; or in any county in which either of the defendants may have a domicile, or where an officer or agent of any defendant corporation may be found. And all such proceedings may be prosecuted to final judgment or decree against any one or more of the defendants thereto, notwithstanding there may be a dismissal, acquittal, verdict, judgment or decree in favor of the local or any other defendant.

§ 75-21-23

Criminal prosecutions, under the antitrust laws of this state, may be instituted and conducted to final judgment against any one or more of any number of corporations or individuals, or both in any county in which a violation of said laws has been committed by them or in any county in which they formed a trust and combine, or in which such trust and combine, though formed elsewhere, is by them, or any of them, carried on, promoted, employed, operated, used or enjoyed.

§ 75-21-25

No person called as a witness in any prosecution or proceeding to enforce the antitrust laws of this state, though himself a defendant therein, or an officer, attorney, agent or employee of a defendant or stockholder in a defendant corporation, shall be excused from testifying upon the ground that his evidence might criminate or tend to criminate himself; but every person, otherwise competent, when called as a witness in such cases, shall be required to testify and to disclose all facts known to him which are pertinent to the issue.

§ 75-21-27

But the testimony so given shall not be used in any prosecution or proceeding, civil or criminal, against the person so testifying. A person so testifying shall not thereafter be liable to indictment or presentment by information, nor to prosecution or punishment for the offense with reference to which his testimony was given, and may plead or prove the giving of testimony accordingly in bar of such indictment, information or prosecution.

§ 75-21-29

Any corporation may be required under a subpoena duces tecum served upon its president, secretary or any of its directors, to produce in court and submit to inspection upon the trial of any proceeding, civil or criminal, under the antitrust laws of this state, any books, minutes, records, papers, documents, vouchers or writings belonging to or in the possession of such corporation.

§ 75-21-31

Any corporation failing or refusing to comply with the order of such subpoena duces tecum, when duly served as herein provided, shall be in contempt of court, and shall be punished by a fine of not less than one hundred dollars ($100.00) nor more than two thousand dollars ($2,000.00).

§ 75-21-33

The state or any person, natural or artificial, in the manner and in such instances as now provided by law shall always have the right to investigate the books, records and accounts of all corporations created by it and of all corporations doing business in this state, but this right shall not be exercised further than to examine books, records and accounts made and kept within three (3) years next preceding the beginning of the examination thereof, unless an examination of books, records and accounts made before that time be necessary to an understanding of the books, records and accounts made within said three (3) years.

§ 75-21-35

Every corporation shall be answerable for any unlawful act, contract, agreement, arrangement, understanding or combination done, made or entered into for and on its behalf by any officer, stockholder, agent or attorney permitted or suffered to manage, direct, regulate or control its business in that particular, and such unlawful act, contract, agreement, arrangement, understanding or combination shall be deemed and held to have been done, made or entered into by the corporation itself as fully as if done, made or entered into by its board of directors by regular vote duly entered upon the minutes.

§ 75-21-37

It shall be the duty of the district attorneys in their several districts, when requested by the attorney general, to enforce the civil features of the antitrust laws of this state by appropriate legal proceedings and suits at law or in equity; and their duty to enforce criminal features of said laws shall be the same as their duty to enforce other criminal statutes. All such suits shall be brought by and in the name of the State of Mississippi upon the relation of the attorney general or an authorized district attorney.

§ 75-21-39

No right, liability, pain, penalty, forfeiture, prosecution or suit under laws existing prior to the adoption of this chapter shall be in any wise affected thereby, but the same may be asserted, prosecuted, declared, inflicted and imposed under the laws in force prior to the adoption of this chapter. This chapter shall be liberally construed in all courts to the end that trusts and combines may be suppressed, and the benefits arising from competition in business preserved to the people of this state.

Chapter 23 Fair Trade Laws

§ 75-23-1

This article shall be known and may be cited as the “Unfair Cigarette Sales Law.”

§ 75-23-3

It is hereby declared to be the legislative intent to encourage fair and honest competition, and to safeguard the public against unfair, dishonest, deceptive, destructive, and fraudulent business practices existing in transactions involving the sale of, offer to sell, or inducement to sell, cigarettes in the wholesale and retail trades in this state. It is further declared that the advertising, offering for sale, or sale of cigarettes below cost in the wholesale or retail trades with the intent of injuring competitors or destroying or substantially lessening competition, is an unfair and deceptive trade practice. The policy of the state is to promote the general welfare through the prohibition of such sales, the purpose of the Unfair Cigarette Sales Law being to carry out that policy in the public interest.

§ 75-23-5

The following words, terms and phrases, when used in the Unfair Cigarette Sales Law, shall have the meaning ascribed to them in this section except where the context clearly indicates a different meaning:

(a) “Person” shall mean and include any individual, firm, association, company, partnership, corporation, joint stock company, club, agency, syndicate, the State of Mississippi, county, municipal corporation or other political subdivision of this state, receiver, trustee, fiduciary, or trade association.

(b) “Commission” or “department” shall mean the Department of Revenue of the State of Mississippi.

(c) “Cigarettes” shall mean and include any roll for smoking made wholly or in part of tobacco, irrespective of size or shape and whether or not such tobacco is flavored, adulterated or mixed with any other ingredient, the wrapper or cover of which is made of paper or any other substance or material, excepting tobacco.

(d) “Wholesaler” shall mean and include any person qualified as a wholesaler with the Department of Revenue of Mississippi and shall also mean and include any person other than a buying pool as defined herein, wherever resident or located, who brings or causes to be brought into this state unstamped cigarettes purchased directly from the manufacturer thereof and who maintains an established place of business where substantially all of the business is the sale of cigarettes and related merchandise at wholesale to cigarette licensees and where at all times a substantial stock of cigarettes and related merchandise is available for resale; provided, that seventy-five percent (75%) thereof are sold to retailers or other wholesalers not connected with the wholesaler by reason of any business connection or otherwise; and also any person retailing cigarettes to consumers, provided, at least seventy-five percent (75%) of his purchases are made directly from the manufacturers thereof; and also any person in this state other than a buying pool as defined herein, who purchases cigarettes, from any other person who purchases from a manufacturer at least seventy-five percent (75%) of which are for purposes of resale to retailers in this state not connected with said wholesaler by reason of any business connection or otherwise and who maintains an established place of business where cigarettes and related merchandise are sold at wholesale to persons licensed under this law, and where at all times a substantial stock of cigarettes and related merchandise is available to all retailers for resale; and also any person in this state who acquires cigarettes solely for the purpose of resale in cigarette vending machines; provided, such person operated thirty (30) or more machines.

(e) “Retailer” shall mean and include any person who is engaged in this state in the business of selling cigarettes at retail and includes any group of persons, cooperative organizations, buying pools, and any other person or group of retailers purchasing cigarettes on a cooperative basis from licensed distributors or wholesalers. Any person placing a cigarette vending machine at, on or in any premises shall be deemed to be a retailer from each such vending machine.

(f) “Buying pool” means and includes any combination, corporation, association, affiliation or group of retail dealers operating jointly in the purchase, sale, exchange, or barter of cigarettes, the profits of which accrue directly or indirectly to such retail dealers.

(g) “Sale” or “sell” shall mean any transfer for a consideration, exchange, barter, gift, offer for sale, advertising for sale, soliciting an order for cigarettes and distribution in any manner or by any means whatsoever.

(h) “Sell at wholesale,” “sale at wholesale” and “wholesale sales” shall mean and include any sale made in the ordinary course of trade or usual conduct of the wholesaler's business to a retailer for the purpose of resale.

(i) “Sell at retail,” “sale at retail” or “retail sales” shall mean and include any sale for consumption or use made in the ordinary course of trade or usual conduct of the seller's business.

(j) “Basic cost of cigarettes” shall mean whichever of the two (2) following amounts is lower, namely, (i) the invoice cost of cigarettes to the wholesaler or retailer, as the case may be, or (ii) the lowest replacement cost of cigarettes to the wholesaler or retailer, as the case may be, within thirty (30) days prior to the date of sale, in the quantity last purchased (whether within or before the thirty-day period), less, in either of the two (2) cases, all trade discounts except customary discounts for cash, plus the full face value of any stamps or any tax which may be required by any cigarette tax act of this state or political subdivision thereof, now in effect or hereafter enacted, if not already included in the invoice cost of the cigarettes to the wholesaler or retailer, as the case may be.

(k)(i) “Cost to wholesaler” shall mean the basic cost of the cigarettes involved to the wholesaler plus the cost of doing business by the wholesaler as evidenced by the standards and methods of accounting regularly employed by him, and must include, without limitation, labor costs (including salaries of executives and officers), rent, depreciation, selling costs, maintenance of equipment, delivery costs, all types of licenses, taxes, insurance and advertising.

(ii) In the absence of proof of a lesser or higher cost of doing business by the wholesale dealer making the sale, the cost of doing business by the wholesale dealer shall be presumed to be two percent (2%) of the basic cost of cigarettes to the wholesale dealer, any fraction of a cent thus computed shall be rounded off to the next highest cent, plus cartage to the retail outlet, if performed or paid for by the wholesale dealer, which cartage cost, in the absence of proof of a lesser or higher cost, shall be presumed to be one-half of one percent ( 1/2 of 1%) of the basic cost of the cigarettes to the wholesale dealer, any fraction of a cent in computing the amount of the cartage shall be rounded off to the next highest cent.

(l)(i) “Cost to the retailer” shall mean the basic cost of the cigarettes involved to the retailer plus the cost of doing business by the retailer as evidenced by the standards and methods of accounting regularly employed by him and must include, without limitation, labor (including salaries of executives and officers), rent, depreciation, selling costs, maintenance of equipment, delivery costs, all types of licenses, taxes, insurance and advertising.

(ii) In the absence of proof of a lesser or higher cost of doing business by the retailer making the sale, the cost of doing business by the retailer shall be presumed to be six percent (6%) of the basic cost of cigarettes to the retailer. Any fraction of a cent thus computed shall be rounded off to the next highest cent.

(iii) In the case of any retail dealer who in connection with the retail dealer's purchase of any cigarettes shall receive not only the discounts ordinarily allowed upon purchases by a retail dealer but also in whole or in part the discounts ordinarily allowed upon purchases by a wholesale dealer, the cost of doing business by the retail dealer with respect to the cigarettes shall be, in the absence of proof of a lesser or higher cost of doing business by the retail dealer, the sum of the cost of doing business by the retail dealer and, to the extent that he shall have received the full discounts ordinarily allowed to a wholesale dealer, the cost of doing business by a wholesale dealer as hereinabove defined in paragraph (j)(ii) of this section.

§ 75-23-7

(a) It shall be unlawful for any wholesaler or retailer, with intent to injure competitors or destroy or substantially lessen competition, to advertise, offer to sell, or sell, at retail or wholesale, cigarettes at less than cost to such wholesaler or retailer, as the case may be. It shall be unlawful for any wholesaler or retailer with intent to injure competitors or destroy or substantially lessen competition to offer a rebate in price, to give a rebate in price, to offer a concession of any kind or to give a concession of any kind or nature whatsoever in connection with the sale of cigarettes. It shall be unlawful for any retail dealer to induce or attempt to induce or to procure or attempt to procure the purchase of cigarettes at a price less than “cost to wholesaler” and it shall be unlawful for any retail dealer to induce or attempt to induce or to procure or attempt to procure any rebate or concession of any kind or nature whatsoever in connection with the purchase of cigarettes. Any wholesaler or retailer who violates the provisions of this section shall by guilty of a misdemeanor and be punishable by a fine of not more than five hundred dollars ($500.00).

(b) Evidence of advertisement, offering to sell or sale of cigarettes by any wholesaler, or retailer, at less than cost to him, or evidence of any offer of a rebate in price or the giving of a rebate in price or an offer of a concession or the giving of a concession of any kind or nature whatsoever in connection with the sale of cigarettes or the inducing or attempt to induce or the procuring or the attempt to procure the purchase of cigarettes at a price less than cost to the wholesaler or the retailer shall be prima facie evidence of intent to injure competitors and to destroy or substantially lessen competition.

§ 75-23-9

In all advertisements, offers for sale or sales involving two (2) or more items, at least one (1) of which items is cigarettes, at a combined price, and in all advertisements, offers for sale, or sales, involving the giving of any gift or concession of any kind whatsoever (whether it be coupons or otherwise), the wholesaler's or retailer's combined selling price shall not be below the cost to the wholesaler or the cost to the retailer, respectively, of the total of all articles, products, commodities, gifts and concessions included in such transactions, except that if any such articles, products, commodities, gifts or concessions, shall not be cigarettes, the basic cost thereof shall be determined in like manner as provided in subdivision (j) of Section 75-23-5.

§ 75-23-11

When one (1) wholesaler sells cigarettes to any other wholesaler, the former shall not be required to include in his selling price to the latter “cost to the wholesaler,” as provided by Section 75-23-5 of the Unfair Cigarette Sales Law, but the latter wholesaler, upon resale to a retailer, shall be subject to the provisions of said section.

§ 75-23-13

The provisions of the Unfair Cigarette Sales Law shall not apply to a sale at wholesale or a sale at retail made (a) in an isolated transaction and not in the usual course of business; (b) where cigarettes are advertised, offered for sale, or sold in a bona fide clearance sale for the purpose of discontinuing trade in such cigarettes, and said advertising, offer to sell, or sale shall state the reason therefor and the quantity of such cigarettes advertised, offered for sale, or to be sold; (c) where cigarettes are advertised, offered for sale, or sold as imperfect or damaged, and said advertising, offer to sell, or sale shall state the reason therefor and the quantity of such cigarettes advertised, offered for sale, or to be sold; (d) where cigarettes are sold upon the final liquidation of a business; or (e) where cigarettes are advertised, offered for sale, or sold by any fiduciary or other officer acting under the order or direction of any court; (f) the resale of any of the cigarettes purchased from sales under provisions (c) and (e) above.

§ 75-23-15

(a) Any wholesaler may advertise, offer to sell, or sell cigarettes at a price made in good faith to meet the price of a competitor who is rendering the same type of service and is selling the same article at cost to the said competing wholesaler as defined in the Unfair Cigarette Sales Law. Any retailer may advertise, offer to sell, or sell cigarettes at a price made in good faith to meet the price of a competitor who is selling the same article at cost to the said competing retailer as defined in the Unfair Cigarette Sales Law. The price of cigarettes advertised, offered for sale, or sold under the exceptions specified in Section 75-23-13 shall not be considered the price of a competitor and shall not be used as a basis for establishing prices below cost, nor shall the price established at a bankrupt sale be considered the price of a competitor within the purview of this section.

(b) In the absence of proof of the actual cost to the said competing wholesaler or the said competing retailer, as the case may be, such cost may be presumed to be the lowest cost to wholesalers or the lowest cost to retailers, as the case may be, within the same trading area as determined by a cost survey made pursuant to in subsection (b) of Section 75-23-19.

§ 75-23-17

Any contract, express or implied, made by any person in violation of any of the provisions of the Unfair Cigarette Sales Law, is illegal and void and no recovery shall be had thereon.

§ 75-23-19

(a) In determining cost to the wholesaler and cost to the retailer the court shall receive and consider as bearing on the bona fides of such cost, evidence tending to show that any person complained against under any of the provisions of the Unfair Cigarette Sales Law purchased the cigarettes involved in the complaint before the court, at a fictitious price, or upon terms, or in such a manner, or under such invoices, as to conceal the true cost, discounts or terms of purchase, and shall also receive and consider as bearing on the bona fides of such costs, evidence of the normal, customary and prevailing terms and discounts in connection with other sales of a similar nature in the trade area or state.

(b) Where a cost survey pursuant to recognized statistical and cost accounting practices has been made for the trading area in which a violation of the Unfair Cigarette Sales Law is committed or charged, to determine and establish on the basis of actual existing conditions the lowest cost to wholesalers or the lowest cost to retailers within the said area, the said cost survey shall be deemed competent evidence in any action or proceeding under this law as tending to prove actual cost to the wholesaler or actual cost to the retailer complained against, but any party against whom any such cost survey may be introduced in evidence shall have the right to offer evidence tending to prove any inaccuracy of such cost survey or any state of facts which would impair its probative value.

§ 75-23-21

In establishing the basic cost of cigarettes to a wholesaler or a retailer, it shall not be permissible to use the invoice cost or the actual cost of any cigarettes purchased at a forced, bankrupt, or closeout sale, or other sale outside of the ordinary channels of trade.

§ 75-23-23

(a) The state tax commission, or any person injured by any violation, or who would suffer injury from any threatened violation of the Unfair Cigarette Sales Law, may maintain an action in any court of equity jurisdiction to prevent, restrain, or enjoin such violation or threatened violation. If in such action a violation or threatened violation of this law shall be established the court shall enjoin and restrain, or otherwise prohibit, such violation or threatened violation, and, in addition thereto, the court shall assess in favor of the plaintiff and against the defendant the costs of suit including reasonable attorney's fees. In such action it shall not be necessary that actual damages to the plaintiff be alleged or proved, but where alleged and proved, the plaintiff in said action, in addition to such injunctive relief and cost of suit, including reasonable attorney's fees shall be entitled to recover from the defendant the actual damages sustained by him.

(b) In the event that no injunctive relief is sought or required, any person injured by a violation of Unfair Cigarette Sales Law may maintain an action for damages and costs of suit in any court of general jurisdiction.

§ 75-23-25

The State Tax Commission shall prescribe, adopt and enforce rules and regulations relating to the administration and enforcement of the Unfair Cigarette Sales Law.

The commission is hereby empowered to and may from time to time undertake and make or cause to be made one or more cost surveys for the state or such trading area or areas as it shall define and when a cost survey shall have been made by or approved by it, it shall be permissible to use the cost survey as provided in Section 75-23-19(b). The commission may revoke or suspend the license issued under the provisions of this law or the tobacco tax law of this state, of any person who refuses or neglects to comply with any provisions of this article or any rule or regulation of the commission prescribed under this article.

Whenever any person fails to comply with any provision of the Unfair Cigarette Sales Law or any rule or regulation of the commission promulgated thereunder, the commission, or a hearing officer or the board of review, as designated by the commissioner, after a show cause hearing, may revoke or suspend the license held by the person.

Any ruling, order or decision of the commission shall be subject to review, as provided by law, in any court of competent jurisdiction in the county in which the person affected resides.

§ 75-23-27

After March 24, 1954, no person shall engage in or conduct the business of purchasing for resale or selling cigarettes without having first obtained the appropriate license for that purpose.

All such licenses shall be issued by the state tax commission or its designated agent, who shall make rules and regulations respecting applications therefor and issuance thereof.

A wholesaler or retailer who sells or intends to sell cigarettes at one, two (2) or more places of business shall be required to obtain a separate license for each place of business.

Any person licensed only as a wholesaler shall not operate as a retailer unless the appropriate license therefor is first secured, and any person licensed only as a retailer shall not operate as a wholesaler unless the appropriate license therefor is first secured.

§ 75-23-31

As used in this article:

(a) “Commission” or “department” means the Mississippi Department of Revenue.

(b) “Cigarette” means any roll for smoking made wholly or in part of tobacco, irrespective of size or shape and whether such tobacco is flavored, adulterated or mixed with any other ingredient, the wrapper or cover of which is made of paper or any other substance or material except tobacco.

(c) “Person” means any individual, firm, association, agency, syndicate, the State of Mississippi, county, municipal corporation or other political subdivision of this state, receiver, trustee, fiduciary or trade association.

§ 75-23-33

It shall be unlawful for any person:

(a) To sell or distribute in this state or to acquire, hold, own, possess or transport, for sale or distribution in this state; or to import, or cause to be imported, into this state for sale or distribution in this state:

(i) Any cigarettes the package of which:

1. Bears any statement, label, stamp, sticker or notice indicating that the manufacturer did not intend the cigarettes to be sold, distributed or used in the United States, including, but not limited to, labels stating “For Export Only,” “U.S. Tax-Exempt,” “For Use Outside U.S.” or similar wording; or

2. Does not comply with:

a. All requirements imposed by or pursuant to federal law regarding warnings and other information on packages of cigarettes manufactured, packaged or imported for sale, distribution or use in the United States, including, but not limited to, the precise warning labels specified in the Federal Cigarette Labeling and Advertising Act, 15 USCS 1333; and

b. All federal trademark and copyright laws;

(ii) Any cigarettes imported into the United States in violation of 26 USCS 5754 or any other federal law, or implementing federal regulations;

(iii) Any cigarettes that such person otherwise knows or has reason to know the manufacturer did not intend to be sold, distributed or used in the United States; or

(iv) Any cigarettes for which there has not been submitted to the Secretary of the United States Department of Health and Human Services the list or lists of the ingredients added to tobacco in the manufacture of such cigarettes required by the Federal Cigarette Labeling and Advertising Act, 15 USCS 1335a;

(b) To alter the package of any cigarettes, prior to sale or distribution to the ultimate consumer, so as to remove, conceal or obscure:

(i) Any statement, label, stamp, sticker or notice described in paragraph (a)(i)1 of this section;

(ii) Any health warning that is not specified in, or does not conform with the requirements of, the Federal Cigarette Labeling and Advertising Act, 15 USCS 1333; or

(c) To affix any stamp required pursuant to Chapter 69, Title 27, Mississippi Code of 1972, to the package of any cigarettes described in paragraph (a) of this section or altered in violation of paragraph (b) of this section.

§ 75-23-35

Any person who commits any of the acts prohibited by Section 75-23-33, either knowing or having reason to know he is doing so, shall be guilty of a felony, and upon conviction thereof shall be punished by a fine of not more than Five Thousand Dollars ($5,000.00) or imprisonment of not more than five (5) years, or both.

§ 75-23-37

(1) Upon finding a violation of this article or a regulation promulgated pursuant to this article, the commission may revoke or suspend the license or licenses of any permittee pursuant to the procedures set forth in Section 27-69-9 and may also impose on the permittee a civil penalty in an amount not to exceed the greater of five hundred percent (500%) of the retail value of the cigarettes involved or Five Thousand Dollars ($5,000.00).

(2) Cigarettes that are acquired, held, owned, possessed, transported in, imported into, or sold or distributed in this state in violation of this article shall be deemed contraband under Sections 27-69-53 through 27-69-57 and shall be subject to seizure and forfeiture as provided therein. Such cigarettes so seized and forfeited shall be destroyed. Such cigarettes shall be deemed contraband whether the violation of this article is knowing or otherwise.

§ 75-23-39

For purposes of this chapter, cigarettes imported or reimported into the United States for sale or distribution under any trade name, trade dress or trademark that is the same as, or is confusingly similar to, any trade name, trade dress or trademark used for cigarettes manufactured in the United States for sale or distribution in the United States shall be presumed to have been purchased outside of the ordinary channels of trade.

§ 75-23-41

(1) This article shall be enforced by the Attorney General, local district attorneys and local county prosecuting attorneys. The authority enforcing this article may request the assistance of local law enforcement agencies, and local law enforcement agencies receiving a request for assistance in the enforcement of this article shall provide the necessary assistance.

(2) The commission may provide assistance to the enforcing authority, including, but not limited to, the providing of information to the enforcing authority. The commission and any enforcing authority may request information from each other and from any other state agency, local or federal agency, or permittee.

(3) In addition to any other remedy provided by law, any person may bring an action for appropriate injunctive or other equitable relief, actual damages, if any, sustained by reason of a violation of this article, interest, reasonable attorney's fees and court costs. For purposes of promoting enforcement of this article, information identifying which permittee affixed the tax stamp to a particular package of cigarettes shall be public information.

(4) If the trier of fact finds that the violation is egregious, it may increase recovery to an amount not in excess of three (3) times the actual damages sustained by reason of the violation.

§ 75-23-43

(1) This article shall not apply to:

(a) Cigarettes allowed to be imported or brought into the United States for personal use; and

(b) Cigarettes sold or intended to be sold as duty-free merchandise by a duty-free sales enterprise in accordance with the provisions of 19 USCS 1555(b) and any implementing regulations; provided, however, that this article shall apply to any such cigarettes that are brought back into the customs territory for resale within the customs territory.

(2) The penalties provided in this article are in addition to any other penalties imposed under other law.

§ 75-23-51

It is hereby declared to be the legislative intent to encourage fair and honest competition; and to provide the retail merchants of this state with a freedom of choice concerning those books, pamphlets, magazines, periodicals, newspapers, picture magazines, comic books, story papers, and/or similar printed or written matters or materials which they might desire to offer for sale within their individual establishments; and to safeguard the public from exposure to printed or written materials or matters which appeal to the prurient interest, and concerning which the retail merchants of this state, or any one or more of them, might not desire to voluntarily offer for sale within their individual establishments.

§ 75-23-53

Any contract or agreement of any nature which would, directly or indirectly, require, or result in requiring, any retail merchant located in this state to obtain or offer for sale within his individual establishment any books, pamphlets, magazines, periodicals, newspapers, picture magazines, comic books, story papers, and/or similar printed or written matters or materials, other than those which he might voluntarily select for such purpose, or as a requirement or condition to obtaining those he might voluntarily select for such purpose, shall be deemed to be a contract or agreement in restraint of the freedom of trade and a violation of the antitrust laws of this state; and the party offering such contract or agreement shall be subject to all the laws of this state pertaining to the operation of trusts and combines. In addition, the said contract or agreement shall be deemed void and cannot be enforced in any court.

Chapter 24 Regulation of Business for Consumer Protection

§ 75-24-1

There is hereby created and established within the office of the attorney general an “Office of Consumer Protection,” which shall be charged with the administration of this chapter. The attorney general is hereby authorized and empowered to employ the necessary personnel to carry out the provisions of this chapter.

§ 75-24-3

As used in this chapter:

(a) “Person” means natural persons, corporations, trusts, partnerships, incorporated and unincorporated associations, and any other legal entity.

(b) “Trade” and “commerce” mean the advertising, offering for sale, or distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value wherever situated, and shall include without limitation, both domestic and foreign persons, irrespective of their having qualified to do business within the state and any trade or commerce directly or indirectly affecting the people of this state.

(c) It is the intent of the Legislature that in construing what constitutes unfair or deceptive trade practices that the courts will be guided by the interpretations given by the Federal Trade Commission and the federal courts to Section 5(a)(1) of the Federal Trade Commission Act (15 USCS 45(a)(1)) as from time to time amended.

§ 75-24-5

(1) Unfair methods of competition affecting commerce and unfair or deceptive trade practices in or affecting commerce are prohibited. Action may be brought under Section 75-24-5(1) only under the provisions of Section 75-24-9.

(2) Without limiting the scope of subsection (1) of this section, the following unfair methods of competition and unfair or deceptive trade practices or acts in the conduct of any trade or commerce are prohibited:

(a) Passing off goods or services as those of another;

(b) Misrepresentation of the source, sponsorship, approval, or certification of goods or services;

(c) Misrepresentation of affiliation, connection, or association with, or certification by another;

(d) Misrepresentation of designations of geographic origin in connection with goods or services;

(e) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that he does not have;

(f) Representing that goods are original or new if they are reconditioned, reclaimed, used, or secondhand;

(g) Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;

(h) Disparaging the goods, services, or business of another by false or misleading representation of fact;

(i) Advertising goods or services with intent not to sell them as advertised;

(j) Advertising goods or services with intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity;

(k) Misrepresentations of fact concerning the reasons for, existence of, or amounts of price reductions;

(l) Advertising by or on behalf of any licensed or regulated health care professional which does not specifically describe the license or qualifications of the licensed or regulated health care professional;

(m) Charging an increased premium for reinstating a motor vehicle insurance policy that was cancelled or suspended by the insured solely for the reason that he was transferred out of this state while serving in the United States Armed Forces or on active duty in the National Guard or United States Armed Forces Reserve. It is also an unfair practice for an insurer to charge an increased premium for a new motor vehicle insurance policy if the applicant for coverage or his covered dependents were previously insured with a different insurer and canceled that policy solely for the reason that he was transferred out of this state while serving in the United States Armed Forces or on active duty in the National Guard or United States Armed Forces Reserve. For purposes of determining premiums, an insurer shall consider such persons as having maintained continuous coverage. The provisions of this paragraph (m) shall apply only to such instances when the insured does not drive the vehicle during the period of cancellation or suspension of his policy;

(n) Violating the provisions of Section 75-24-8;

(o) Violating the provisions of Section 73-3-38;

(p) Violating any of the provisions of Title 41, Chapter 149, Mississippi Code of 1972; and

(q) Violating any of the provisions of Title 45, Chapter 38, Mississippi Code of 1972.

§ 75-24-7

Nothing in this chapter shall apply to acts done by:

(a) The publisher, owner, agent or employee of a newspaper, periodical, printing shop, directory or radio or television station in the publication or dissemination of an advertisement, when the owner, agent or employee did not have knowledge of the false, misleading or deceptive character of the advertisement and did not have a direct financial interest in the sale or distribution of the advertised product or service.

(b) Any officer acting under the orders of any court.

§ 75-24-8

<Text of section effective January 17, 2025. See, also, text of § 75-24-8 effective until January 16, 2025.>

(1) The following words and phrases when used in this section have the meaning respectively ascribed to them, except for instances where the context clearly describes and indicates a different meaning:

(a) “Additional mandatory charge” means any separately stated charges that a renter is required to pay that specifically relate to the operation of a rental vehicle. This term includes, but is not limited to, a customer facility charge, airport concession recovery fee, vehicle license recovery fee, and any government imposed taxes or fees.

(b) “Quote” means an estimated cost of rental provided to a potential customer based on information provided by the customer, including potential dates of rental, location or class of vehicle.

(c) “Vehicle license recovery fee” means a charge to recover costs to license, title, register, plate, or inspect a rental vehicle that are incurred by a person or entity engaged in the business of renting motor vehicles under rental agreements.

(2) If a person or entity engaged in the business of renting motor vehicles under rental agreements imposes additional mandatory charges, the person or entity shall:

(a) Provide a good-faith estimate of the total charges for the entire rental, including all additional mandatory charges, whenever a quote is provided to a potential customer. The good-faith estimate may exclude mileage charges and charges for optional items that cannot be determined prior to completing a rental reservation based on the information provided by the potential customer; and

(b) Disclose in the rental contract provided to the renter the total charges for the entire rental, including all additional mandatory charges. Total charges for the entire rental do not include any charges that cannot be determined at the time the rental commences.

(3) The provisions of this section shall not apply to any person or business entity lawfully engaging in a peer-to-peer car sharing program under the Peer-to-Peer Car Sharing Program Act.

§ 75-24-9

Whenever the Attorney General has reason to believe that any person is using, has used, or is about to use any method, act or practice prohibited by Section 75-24-5, and that proceedings would be in the public interest, he may bring an action in the name of the state against such person to restrain by temporary or permanent injunction the use of such method, act or practice. The action shall be brought in the chancery or county court of the county in which such person resides or has his principal place of business, or, with consent of the parties, may be brought in the chancery or county court of the county in which the State Capitol is located. The said courts are authorized to issue temporary or permanent injunctions to restrain and prevent violations of this chapter, and such injunctions shall be issued without bond.

§ 75-24-11

The court may make such additional orders or judgments, including restitution, as may be necessary to restore to any person in interest any monies or property, real or personal, which may have been acquired by means of any practice prohibited by this chapter, including the appointment of a receiver or the revocation of a license or certificate authorizing that person to engage in business in this state, or both.

§ 75-24-13

When a receiver is appointed by the court pursuant to this chapter, he shall have the power to sue for, collect, receive and take into his possession all the goods and chattels, rights and credits, moneys and effects, lands and tenements, books, records, documents, papers, choses in action, bills, notes and property of every description, derived by means of any practice prohibited by this chapter, including property with which such property has been mingled if it cannot be identified in kind because of such commingling, and collect or to bring suit to collect in the name of the state for and on behalf of the owner of any chose in action, and to sell, convey, and assign the same and hold and dispose of the proceeds thereof under the direction of the court. Any person who has suffered damages as a result of the use of employment of any practices prohibited by this chapter, and submits proof to the satisfaction of the court that he has in fact been damaged, may participate with general creditors in the distribution of the assets to the extent he has sustained out-of-pocket losses. The receiver shall settle the estate and distribute the assets under the direction of the court. The court shall have jurisdiction of all questions arising in such proceedings and may make such orders and judgments therein as may be required.

§ 75-24-15

(1) In addition to all other statutory and common law rights, remedies and defenses, any person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by the seller, lessor, manufacturer or producer of a method, act or practice prohibited by Section 75-24-5 may bring an action at law in the court having jurisdiction in the county in which the seller, lessor, manufacturer or producer resides, or has his principal place of business or, where the act or practice prohibited by Section 75-24-5 allegedly occurred, to recover such loss of money or damages for the loss of such property, or may assert, by way of setoff or counterclaim, the fact of such loss in a proceeding against him for the recovery of the purchase price or rental, or any portion thereof, of the goods or services.

(2) In any private action brought under this chapter, the plaintiff must have first made a reasonable attempt to resolve any claim through an informal dispute settlement program approved by the Attorney General.

(3) In any action or counterclaim under this section of this chapter, a prevailing defendant may recover in addition to any other relief that may be provided in this section costs and a reasonable attorney's fee, if in the opinion of the court, said action or counterclaim was frivolous or filed for the purpose of harassment or delay.

(4) Nothing in this chapter shall be construed to permit any class action or suit, but every private action must be maintained in the name of and for the sole use and benefit of the individual person.

(5) In any claim under this section filed on behalf of a veteran that charges the veteran a fee for the service shall include a form signed by the veteran acknowledging that “THE STATE OF MISSISSIPPI THROUGH THE MISSISSIPPI STATE VETERANS AFFAIRS BOARD OFFERS THE SAME OR SIMILAR SERVICE FREE OF CHARGE.” The veteran must sign this form stating that he/she has read and understands it. The statement signed by the veteran shall be of a BOLD font at least one hundred twenty percent (120%) larger than the font of the claim document filed on behalf of the veteran.

§ 75-24-17

If any person knowingly and willfully fails or refuses to file any statement or report, or fails or refuses to obey any subpoena or investigative demand issued by the Attorney General, the Attorney General may, after notice, apply to the chancery or county court of the county in which such person resides or has his principal place of business, or if the person be absent or a nonresident of the State of Mississippi, of such court of the county in which the state capitol is located, and, after hearing thereon, request an order:

(a) Granting injunctive relief to restrain the person from engaging in any unfair or deceptive trade practice in the advertising or sale of any merchandise or the conduct of any trade or commerce that is involved in the alleged or suspected violation;

(b) Vacating, annulling, or suspending the corporate charter of a corporation created by or under the laws of this state or revoking or suspending the certificate of authority to do business in this state of a foreign corporation or revoking or suspending any other licenses, permits or certificates issued pursuant to law to such person which are used to further the allegedly prohibited practice;

(c) Granting such other relief as may be required, until the person files the statement or report, or obeys the subpoena or investigative demand;

(d) The Attorney General may request that an individual who refuses to comply with a subpoena on the ground that testimony or matter may incriminate him be ordered by the court to provide the testimony or matter. Except in a prosecution for perjury, an individual who complies with a court order to provide testimony or matter directly related to a violation of the Mississippi Consumer Protection Act after asserting a privilege against self-incrimination to which he is entitled by law shall not have the testimony or matter so provided, or evidence derived therefrom, received against him in any criminal investigation or proceeding.

Any disobedience of any final order entered under this section by any said court shall be punished as a contempt thereof.

§ 75-24-19

(1) Civil remedies.

(a) Any person who violated the terms of an injunction issued under Section 75-24-9 shall forfeit and pay to the state a civil penalty in a sum not to exceed Ten Thousand Dollars ($10,000.00) per violation which shall be payable to the General Fund of the State of Mississippi. For the purposes of this section, the chancery or county court issuing an injunction shall retain jurisdiction, and the cause shall be continued, and in such cases the Attorney General acting in the name of the state may petition for recovery of civil penalties.

(b) In any action brought under Section 75-24-9, if the court finds from clear and convincing evidence, that a person knowingly and willfully used any unfair or deceptive trade practice, method or act prohibited by Section 75-24-5, the Attorney General, upon petition to the court, may recover on behalf of the state a civil penalty in a sum not to exceed Ten Thousand Dollars ($10,000.00) per violation. One-half ( 1/2 ) of said penalty shall be payable to the Office of Consumer Protection to be deposited into the Attorney General's special fund. All monies collected under this section shall be used by the Attorney General for consumer fraud education and investigative and enforcement operations of the Office of Consumer Protection. The other one-half ( 1/2 ) shall be payable to the General Fund of the State of Mississippi. The Attorney General may also recover, in addition to any other relief that may be provided in this section, investigative costs and a reasonable attorney's fee.

(2) No penalty authorized by this section shall be deemed to limit the court's powers to insure compliance with its orders, decrees and judgments, or punish for the violations thereof.

(3) For purposes of this section, a knowing and willful violation occurs when the court finds from clear and convincing evidence that the party committing the violation knew or should have known that his conduct was a violation of Section 75-24-5.

§ 75-24-20

Criminal remedies.

(a) Any person who, knowingly and willfully, violates any provision of Section 75-24-5, shall be guilty of a misdemeanor, and upon conviction shall be fined up to One Thousand Dollars ($1,000.00).

(b) Upon a second conviction of any person for a violation of any provision of Section 75-24-5, the offense being committed within a period of five (5) years, such person shall be guilty of a misdemeanor, and upon conviction shall be punished by imprisonment in the county jail for up to one (1) year or fined up to One Thousand Dollars ($1,000.00) or both.

(c) Upon a third or subsequent conviction of any person for a violation of any provision of Section 75-24-5, the offense being committed within a period of five (5) years, such person shall be guilty of a felony, and upon conviction shall be punished by imprisonment of not less than one (1) year nor more than five (5) years or fined not less than One Thousand Dollars ($1,000.00) nor more than Five Thousand Dollars ($5,000.00) or both.

(d) Criminal convictions from other states for violations of substantially similar provisions to those prohibited by this chapter shall be counted for the purposes of determining if a violation of this section is a first, second or third or subsequent offense.

§ 75-24-21

It shall be the duty of the district and county attorneys to lend to the attorney general such assistance as the attorney general may request in the commencement and prosecution of actions pursuant to this chapter. The district attorney and county attorney shall, within their respective jurisdictions, have the same duty and responsibility under this chapter as that of the attorney general statewide in the enforcement thereof, and they shall prosecute actions hereunder in the same manner as provided for the attorney general. When any action is prosecuted by such district or county attorney alone or in concert, he or they shall make a full report thereon to the attorney general, including the final disposition of the matter.

When any action has been prosecuted by a district or county attorney, at the request of the attorney general, the attorney general is authorized to pay the actual cost and expense of such action after same has been submitted to and approved by the court in which the action was taken, subject always to the final approval of the attorney general.

The attorney general may establish programs for the education of the public with respect to this chapter.

§ 75-24-23

The remedies in this chapter are in addition to and not in derogation of remedies otherwise available under federal, state or local law to the attorney general, the district or county attorneys, or to persons injured by violations of this chapter.

§ 75-24-25

(1) For the purposes of this section, the following terms shall have the meanings herein ascribed:

(a) “Person” means a natural person, corporation, trust, partnership, incorporated or unincorporated association, or any other legal entity.

(b) “State of emergency” has the meaning ascribed in Section 33-15-5.

(c) “Local emergency” has the meaning ascribed in Section 33-15-5.

(d) “Emergency impact area” has the meaning ascribed in Section 33-15-5.

(e) “Value received” means the consideration or payment given for the purchase of goods and services.

(2) Whenever, under the Mississippi Emergency Management Law, Sections 33-15-1 through 33-15-49, a state of emergency or a local emergency is declared to exist in this state, then the value received for all goods and services sold within the designated emergency impact area shall not exceed the prices ordinarily charged for comparable goods or services in the same market area at or immediately before the declaration of a state of emergency or local emergency. However, the value received may include: any expenses, the cost of the goods and services which are necessarily incurred in procuring such goods and services during a state of emergency or local emergency. The prices ordinarily charged for comparable goods or services in the same market area do not include temporarily discounted goods or services. The same market area does not necessarily mean a single provider of goods or services.

(3) Any person who knowingly and willfully violates subsection (2) of this section, when the total value received during a twenty-four-hour period is Five Hundred Dollars ($500.00) or more, shall be guilty of a felony and upon conviction shall be punished by confinement for a term of not less than one (1) year nor more than five (5) years or a fine of not more than Five Thousand Dollars ($5,000.00), or both.

(4) Any person who knowingly and willfully violates subsection (2) of this section, when the total value received during a twenty-four-hour period is less than Five Hundred Dollars ($500.00), shall be guilty of a misdemeanor and upon conviction shall be fined not more than One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for a term not to exceed six (6) months, or both.

(5) For the purpose of determining the punishment to be imposed under subsections (3) and (4) of this section, the value received during a twenty-four-hour period shall be aggregated.

(6) In addition to the criminal penalties prescribed in subsections (3) and (4), any knowing and willful violation of subsection (2) of this section shall be considered an unfair or deceptive trade practice subject to and governed by all the procedures and remedies available under the provisions of this chapter for enforcement of prohibited acts and practices contained therein.

§ 75-24-27

(1) To accomplish the objectives and to carry out the duties prescribed in this chapter, the Attorney General, or his designee, in addition to the powers conferred by this chapter, may:

(a) Issue subpoenas and subpoenas duces tecum;

(b) Issue cease and desist orders to persons suspected of violating any provisions of this chapter;

(c) Administer an oath or affirmation to any person;

(d) Conduct hearings in aid of any investigation or inquiry;

(e) Compel the production of books, papers, documents, and other evidence, and call upon other state agencies for information;

(f) Issue any necessary rules and regulations in order to carry out the provisions of this chapter; and

(g) Enter into an assurance of voluntary compliance or an assurance of voluntary discontinuance with any person for settlement purposes.

(2) Unless otherwise ordered by a court for good cause shown, no statement or documentary material produced pursuant to subpoena under this section shall be produced for inspection or copying by, nor shall the contents thereof be disclosed to any person other than the authorized employees of the Attorney General without the consent of the person who produced the material.

(3) The Attorney General may use the documentary material or copies thereof in the enforcement of this chapter by presentation before any court, provided that any such material which contains trade secrets or proprietary information shall not be presented except with the approval of the court in which the action is pending after adequate notice to the person furnishing such material. However, when material containing trade secrets or proprietary information is presented with court approval, the material and the evidence pertaining thereto shall be held in camera and shall not be part of the court record or trial transcript.

§ 75-24-29

(1) This section applies to any person who conducts business in this state and who, in the ordinary course of the person's business functions, owns, licenses or maintains personal information of any resident of this state.

(2) For purposes of this section, the following terms shall have the meanings ascribed unless the context clearly requires otherwise:

(a) “Breach of security” means unauthorized acquisition of electronic files, media, databases or computerized data containing personal information of any resident of this state when access to the personal information has not been secured by encryption or by any other method or technology that renders the personal information unreadable or unusable;

(b) “Personal information” means an individual's first name or first initial and last name in combination with any one or more of the following data elements:

(i) Social security number;

(ii) Driver's license number, state identification card number or tribal identification card number; or

(iii) An account number or credit or debit card number in combination with any required security code, access code or password that would permit access to an individual's financial account; “personal information” does not include publicly available information that is lawfully made available to the general public from federal, state or local government records or widely distributed media;

(iv) “Affected individual” means any individual who is a resident of this state whose personal information was, or is reasonably believed to have been, intentionally acquired by an unauthorized person through a breach of security.

(3) A person who conducts business in this state shall disclose any breach of security to all affected individuals. The disclosure shall be made without unreasonable delay, subject to the provisions of subsections (4) and (5) of this section and the completion of an investigation by the person to determine the nature and scope of the incident, to identify the affected individuals, or to restore the reasonable integrity of the data system. Notification shall not be required if, after an appropriate investigation, the person reasonably determines that the breach will not likely result in harm to the affected individuals.

(4) Any person who conducts business in this state that maintains computerized data which includes personal information that the person does not own or license shall notify the owner or licensee of the information of any breach of the security of the data as soon as practicable following its discovery, if the personal information was, or is reasonably believed to have been, acquired by an unauthorized person for fraudulent purposes.

(5) Any notification required by this section shall be delayed for a reasonable period of time if a law enforcement agency determines that the notification will impede a criminal investigation or national security and the law enforcement agency has made a request that the notification be delayed. Any such delayed notification shall be made after the law enforcement agency determines that notification will not compromise the criminal investigation or national security and so notifies the person of that determination.

(6) Any notice required by the provisions of this section may be provided by one (1) of the following methods: (a) written notice; (b) telephone notice; (c) electronic notice, if the person's primary means of communication with the affected individuals is by electronic means or if the notice is consistent with the provisions regarding electronic records and signatures set forth in 15 USCS 7001; or (d) substitute notice, provided the person demonstrates that the cost of providing notice in accordance with paragraph (a), (b) or (c) of this subsection would exceed Five Thousand Dollars ($5,000.00), that the affected class of subject persons to be notified exceeds five thousand (5,000) individuals or the person does not have sufficient contact information. Substitute notice shall consist of the following: electronic mail notice when the person has an electronic mail address for the affected individuals; conspicuous posting of the notice on the website of the person if the person maintains one; and notification to major statewide media, including newspapers, radio and television.

(7) Any person who conducts business in this state that maintains its own security breach procedures as part of an information security policy for the treatment of personal information, and otherwise complies with the timing requirements of this section, shall be deemed to be in compliance with the security breach notification requirements of this section if the person notifies affected individuals in accordance with the person's policies in the event of a breach of security. Any person that maintains such a security breach procedure pursuant to the rules, regulations, procedures or guidelines established by the primary or federal functional regulator, as defined in 15 USCS 6809(2), shall be deemed to be in compliance with the security breach notification requirements of this section, provided the person notifies affected individuals in accordance with the policies or the rules, regulations, procedures or guidelines established by the primary or federal functional regulator in the event of a breach of security of the system.

(8) Failure to comply with the requirements of this section shall constitute an unfair trade practice and shall be enforced by the Attorney General; however, nothing in this section may be construed to create a private right of action.

§ 75-24-51

As used in Sections 75-24-51 through 75-24-61, the following words and phrases shall have the meanings as defined in this section unless the context clearly indicates otherwise:

(a) The term “goods” includes any personal property, real property, or any combination thereof;

(b) The term “person” includes an individual, corporation, trust, estate, partnership, unincorporated association, or any other legal or commercial entity;

(c) “Franchise” means a written arrangement for a definite or indefinite period, in which a person for a consideration grants to another person a license to use a trade name, trademark, service mark, or related characteristic, and in which there is a community of interest in the marketing of goods or services at wholesale, retail, by lease, agreement or otherwise; except that, the term “franchise” shall not apply to persons engaged in sales from warehouses or like places of storage, leased departments of retail stores, or places of original manufacture; and

(d) “Consideration” as used in Sections 75-24-51 through 75-24-61 does not include payment for sales demonstration equipment and materials furnished at cost for use in making sales and not for resale or payments amounting to less than One Hundred Dollars ($100.00) when computed on an annual basis.

§ 75-24-53

No person who has granted a franchise to another person shall cancel or otherwise terminate any such franchise agreement without notifying such person of the cancellation, termination or failure to renew in writing at least ninety (90) days in advance of the cancellation, termination or failure to renew, except that when criminal misconduct, fraud, abandonment, bankruptcy or insolvency of the franchisee, or the giving of a no account or insufficient funds check is the basis or grounds for cancellation or termination, the ninety-day notice shall not be required.

§ 75-24-55

Franchise companies shall not represent directly or by implication that prospective participants may or will earn any stated gross or net amount, or represent in any manner, the past earnings of participants unless in fact the past earnings or predicted gross or net amount represented are those of a substantial number of participants in the community or geographical area in which the representations are made and accurately reflect the average earnings of those participants under circumstances similar to those of the participant or prospective participant to whom the representation is made.

§ 75-24-57

Any sales contract for a pyramid sales scheme made in violation of Section 75-24-53 is void and any person who, directly or through the use of agents or intermediaries, induces or causes another person to participate in a pyramid sales scheme will be subject to the remedy and proceedings authorized in Section 75-24-15.

A franchisee suffering damage as a result of the failure to give notice as required of the cancellation or termination of a franchise, may institute legal proceedings under the provisions of Sections 75-24-51 through 75-24-61 against the franchisor who canceled or terminated his franchise in the county in which the franchisor or his agent resides or can be located or where the franchisee resides. When the franchisee prevails in any such action he may be awarded a recovery of damages sustained to include loss of goodwill, costs of the suit, and any equitable relief that the court deems proper.

§ 75-24-59

In addition to other penalties and remedies provided in Sections 75-24-51 through 75-24-61, whenever it appears that any person is engaged or is about to engage in any act or practice which is prohibited by Sections 75-24-51 through 75-24-61, the Attorney General may bring an action in the name of the state pursuant to the provisions of Section 75-24-9 in order to enjoin any such act or practice.

§ 75-24-61

Any person willfully violating any of the provisions of Section 75-24-53 is guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not more than Five Hundred Dollars ($500.00) or by imprisonment in the county jail for a term not to exceed six (6) months or by both such fine and imprisonment.

§ 75-24-63

Sections 75-24-51 through 75-24-61, Mississippi Code of 1972, shall not apply to retailers as defined in Section 75-77-1, Mississippi Code of 1972.

§ 75-24-71

As used in Sections 75-24-71 through 75-24-77, the following words and phrases shall have the meanings as described in this section, unless the context clearly indicates otherwise:

(a) “Bona fide inventory repurchase program” means a program by which an entity repurchases from a salesperson current and marketable inventory in the possession of the salesperson, upon request and upon commercially reasonable terms, when the salesperson's business relationship is terminated.

(b) “Commercially reasonable terms” means the repurchase of current and marketable inventory within twelve (12) months after the date of purchase at not less than ninety percent (90%) of the original net cost, less appropriate set-offs and legal claims, if any.

(c) “Compensation” means a payment of any money, thing of value, or financial benefit conferred in return for inducing another person to participate in a pyramid promotional scheme.

(d) “Consideration” as used in Sections 75-24-71 through 75-24-77 means the payment of cash or the purchase of goods, services, or intangible property. The term does not include the purchase of goods or services furnished at cost to be used in making sales and not for resale, or time and effort spent in pursuit of sales or recruiting activities.

(e) “Inventory” includes both goods and services, including company-produced promotional materials, sales aids, and sales kits that an entity requires independent salespersons to purchase.

(f) “Inventory loading” means the requirement or encouragement by a plan or operation that its independent salesperson purchase inventory in an amount that exceeds the amount that the salesperson can expect to resell for ultimate consumption or to use or consume in a reasonable time period, or both.

(g) “Promote” means to contrive, prepare, establish, plan, operate, advertise, or otherwise induce or attempt to induce another person to participate in a pyramid promotional scheme.

(h) “Pyramid promotional scheme” means any plan or operation by which a person gives consideration for the opportunity to receive compensation that is derived primarily from the introduction of other persons into the plan or operation rather than from the sale and consumption of goods, services, or intangible property by a participant or other persons introduced into the plan or operation. The term includes any plan or operation under which the number of people who may participate is limited either expressly or by the application of conditions affecting the eligibility of a person to receive compensation under the plan or operation, or any plan or operation under which a person, on giving any consideration, obtains any goods, services, or intangible property in addition to the right to receive compensation.

§ 75-24-73

(1) A person may not establish, promote, or operate any pyramid promotional scheme. Any limitation regarding the number of persons who may participate or the presence of additional conditions affecting eligibility for the opportunity to receive compensation under the plan does not change the identity of the plan as a pyramid promotional scheme.

(2) The provisions of this section may not be construed to prohibit a plan or operation, or to define a plan or operation as a pyramid promotional scheme, if the participants in the plan or operation give consideration in return for the right to receive compensation based upon purchases of goods, services, or intangible property by participants for personal use, consumption, or resale if both of the following conditions are met: (a) the plan or operation does not cause inventory loading, and (b) the plan or operation implements a bona fide inventory repurchase program.

(3) An entity must clearly describe a bona fide inventory repurchase program in its recruiting literature, sales manual, or contracts with independent salespersons. The recruiting literature, sales manual, or contract must disclose any inventory that is not eligible for repurchase under the program.

(4) A bona fide inventory repurchase program is not required to apply to inventory that is no longer within the inventory's commercially reasonable use or shelf life period or has been used or opened.

(5) Before a salesperson of the entity purchases any inventory, the entity must clearly describe the inventory that is excluded from the entity's bona fide inventory repurchase program as seasonal, discontinued, or special promotion products and the inventory that is not subject to the entity's bona fide inventory repurchase program.

§ 75-24-75

In addition to other penalties and remedies provided in Sections 75-24-71 through 75-24-77, whenever it appears that any person is engaged or is about to engage in any act or practice which constitutes a pyramid sales scheme or which is prohibited by Sections 75-24-71 through 75-24-77, the Attorney General may bring an action in the name of the state pursuant to the provisions of Section 75-24-9 in order to enjoin any such act or practice.

§ 75-24-77

Any person willfully violating any of the provisions of Section 75-24-73 is guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not more than Five Hundred Dollars ($500.00) or by imprisonment in the county jail for a term not to exceed six (6) months or by both such fine and imprisonment.

§ 75-24-91

(1) The term “service contract,” “home warranty” or “home service contract,” as used in this section, means a contract or agreement for a separately stated consideration for a specific duration to perform the repair, replacement or maintenance of property or to reimburse, in whole or in part, the owner of such property for the repair, replacement or maintenance of property if the operational or structural failure is due to a defect in materials or manufacturing or to normal wear and tear. A service contract may contain a provision for incidental payment under such contract where service, repair or replacement is not feasible or economical.

(2) The marketing, sale, offering for sale, issuance, making, proposing to make and administration of a service contract is not a contract of insurance under Mississippi law and is exempt from the provisions of Title 83, Mississippi Code of 1972.

(3) Service contracts shall be subject to the provisions of the Mississippi Consumer Protection Act, Section 75-24-1 et seq.

(4) Nothing contained herein shall repeal or alter the regulation of vehicle service contracts currently defined and regulated under Section 83-65-101 et seq.

§ 75-24-101

(1) No sweepstakes, lodging, certificate, gift, award, premium, discount, drawing, prize or display may be utilized as a promotional device for any interest in real property by membership, agreement, tenancy in common, sale, lease, deed, rental agreement, license, right-to-use agreement, or by any other means, without a disclosure:

(a) That the promotional device is being used for the purposes of soliciting sales of interests in real property;

(b) That the promotional device is being used to obtain the names and addresses of prospective purchasers and that any names and addresses acquired may be used for the purpose of soliciting sales of interests in real property;

(c) Of the name and address of each time-sharing plan or business entity participating in the program;

(d) Of the day and year when all prizes are to be awarded;

(e) Of the method by which all prizes are to be awarded; and

(f) Of the approximate value of each prize or gift that is to be awarded.

(2) Any person, corporation or association that knowingly and willfully violates the provisions of subsection (1) of this section shall be guilty of a misdemeanor and shall upon conviction thereof be punished by a fine of not exceeding One Thousand Dollars ($1,000.00) per violation.

(3) Any violation of subsection (1) of this section shall be considered an unfair or deceptive act in the conduct of trade or commerce and shall be subject to the rights and remedies as provided for by Chapter 24, Title 75, Mississippi Code of 1972.

§ 75-24-131

(1) Any subscription agreement for the purchase of magazines or other periodicals which is made in a telephone solicitation initiated by the seller, or by a person acting on behalf of the seller, and agreed to by the purchaser at his home is subject to cancellation by the purchaser as provided in this section.

(2) In addition to any other right to cancel a subscription (made as described in subsection (1) of this section) which the purchaser may have under the subscription agreement, he has the right to cancel the subscription within six (6) months after the date the first invoice for the cost of the subscription is received. Cancellation occurs when the purchaser gives written notice of cancellation to the seller at the seller's address, or at the address of the subscription department printed in the magazine or periodical or, if no such department is listed, at the general business address of the publication. Notice of cancellation may be given by certified or regular mail, and it is effective on the date it is received by the seller or publisher. Notice of cancellation given by the purchaser need not take a particular form and is sufficient if it indicates by any form of written expression that the purchaser wishes to terminate his subscription.

(3) Within sixty (60) days after notice of cancellation, the seller shall refund to the purchaser any amount which has been paid for the subscription less the amount owed by the purchaser for any magazines or periodicals, and postage thereon, received by the purchaser prior to the notice of cancellation.

§ 75-24-151

Sections 75-24-151 through 75-24-175 shall be known and may be cited as the Mississippi Rental-Purchase Agreement Act.

§ 75-24-153

The following words and phrases shall have the meanings ascribed herein unless the context clearly indicates otherwise:

(a) “Advertisement” means a commercial message in any medium that aids, promotes or assists, directly or indirectly, a rental-purchase agreement.

(b) “Cash price” means the price at which the lessor would have sold the property to the consumer for cash on the date of the rental-purchase agreement.

(c) “Consumer” means a natural person who rents personal property under a rental-purchase agreement to be used primarily for personal, family or household purposes.

(d) “Consummation” means the time a consumer becomes contractually obligated on a rental-purchase agreement.

(e) “Lessor” means a person who regularly provides the use of property through rental-purchase agreements and to whom periodic rental payments are initially payable on the face of the rental-purchase agreement.

(f) “Rental-Purchase Agreement” means an agreement for the use of personal property by a natural person primarily for personal, family or household purposes, for an initial period of four (4) months or less that is automatically renewable with each payment after the initial period, but does not obligate or require the consumer to continue renting or using the property beyond the initial period, and that permits the consumer to become the owner of the property.

§ 75-24-155

(1) Rental-purchase agreements as defined in Sections 75-24-151 through 75-24-175 are not governed by the laws relating to:

(a) A consumer credit sale as defined in Section 75-66-1(2);

(b) Loans, interest, finance charges, credit or installment sales as those terms are used in Mississippi statutes;

(c) A security interest as defined in Section 75-1-201 of the Uniform Commercial Code.

(2)Sections 75-24-151 through 75-24-175 do not apply to the following:

(a) Rental-purchase agreements primarily for business, commercial or agricultural purposes, or those made with governmental agencies or instrumentalities or with organizations;

(b) A lease of a safe deposit box;

(c) A lease or bailment of personal property which is incidental to the lease of real property and which provides that the consumer has no option to purchase the leased property; or

(d) A lease of an automobile.

§ 75-24-157

(1) The lessor shall disclose to the consumer the information required by Sections 75-24-151 through 75-24-175. In a transaction involving more than one lessor, only one (1) lessor need make the disclosures, but all lessors shall be bound by such disclosures.

(2) The disclosures shall be made at or before consummation of the rental-purchase agreement.

(3) The disclosures shall be made clearly and conspicuously in writing and a copy of the rental-purchase agreement provided to the consumer. The disclosures required under Section 75-24-159 shall be made on the face of the contract above the line for the consumer's signature.

(4) If a disclosure becomes inaccurate as the result of any act, occurrence or agreement by the consumer after delivery of the required disclosures, the resulting inaccuracy is not a violation of Sections 75-24-151 through 75-24-175.

§ 75-24-159

For each rental-purchase agreement, the lessor shall disclose in the agreement the following items, as applicable:

(a) Whether the periodic payment is weekly, monthly or otherwise, the dollar amount of each payment, and the total number and dollar amount of all periodic payments necessary to acquire ownership of the property;

(b) A statement that the consumer will not own the property until the consumer has paid the total amount necessary to acquire ownership;

(c) A statement advising the consumer whether the consumer is liable for loss or damage to the property, and, if so, a statement that such liability will not exceed the fair market value of the property as of the time it is lost or damaged;

(d) A brief description of the rental property, sufficient to identify the property to the consumer and the lessor, including an identification number, if applicable, and a statement indicating whether the property is new or used, but a statement that indicates new property is used is not a violation of Sections 75-24-151 through 75-24-175;

(e) A statement of the cash price of the property. Where the agreement involves a rental of two (2) or more items as a set, in one (1) agreement, a statement of the aggregate cash price of all items shall satisfy this requirement;

(f) The total of initial payments paid or required at or before consummation of the agreement or delivery of the property, whichever is later;

(g) A statement that the total of payments does not include other charges, such as delivery, in-home collection, pickup and reinstatement fees, which fees shall be separately disclosed in the contract;

(h) A statement clearly summarizing the terms of the consumer's option to purchase, including a statement that the consumer has the right to exercise an early purchase option and the price, formula or method for determining the price at which the property may be so purchased;

(i) A statement identifying the party responsible for maintaining or servicing the property while it is being rented, together with a description of that responsibility, and a statement that if any part of a manufacturer's express warranty covers the rental property at the time the consumer acquires ownership of the property, it shall be transferred to the consumer, if allowed by the terms of the warranty;

(j) The date of the transaction and the identities of the lessor and consumer;

(k) A statement that the consumer may terminate the agreement without penalty by voluntarily surrendering or returning the property in good repair upon expiration of any rental term along with any past due rental payments; and

(l) Notice of the right to reinstate an agreement as herein provided.

§ 75-24-161

A rental-purchase agreement may not contain:

(a) A confession of judgment;

(b) A negotiable instrument;

(c) A security interest or any other claim of a property interest in any property except that property delivered by the lessor pursuant to the rental-purchase agreement;

(d) A wage assignment;

(e) A waiver by the consumer of claims or defenses;

(f) A provision authorizing the lessor or a person acting on the lessor's behalf to enter upon the consumer's premises without permission or to commit any breach of the peace in the repossession of property;

(g) A provision for a late charge or any other type of charge or penalty for reinstating a rental-purchase agreement in addition to a reinstatement fee; however, a lessor may use the term “late charge” or a similar term to refer to a reinstatement fee; or

(h) A provision for more than one (1) reinstatement fee on any one (1) periodic payment regardless of the period of time for which it remains unpaid.

§ 75-24-163

(1) A consumer who fails to make a timely rental payment may reinstate the agreement, without losing any rights or options which exist under the agreement, by the payment of the following charges within five (5) days of the renewal date of an agreement with monthly periodic payments or within two (2) days of the renewal date of an agreement with periodic payments more frequently than monthly:

(a) All past due rental charges;

(b) If the goods have been picked up, the reasonable costs of pickup and redelivery; and

(c) Any applicable reinstatement fee.

(2) In the case of a consumer who has paid less than two-thirds ( 2/3 ) of the total of payments necessary to acquire ownership and where the consumer has returned or voluntarily surrendered the goods within the applicable reinstatement period, other than through judicial process, the consumer may reinstate the agreement during a period of not less than twenty-one (21) days after the date of the return of the property.

(3) In the case of a consumer who has paid two-thirds ( 2/3 ) or more of the total of payments necessary to acquire ownership, and where the consumer has returned or voluntarily surrendered the goods within the applicable reinstatement period, other than through judicial process, the consumer may reinstate the agreement during a period of not less than forty-five (45) days after the date of the return of the property.

(4) Nothing in this section shall prevent a lessor from attempting to repossess property during the reinstatement period, but such a repossession shall not affect the consumer's right to reinstate. Upon reinstatement, the lessor shall provide the consumer with the same property, if available, or with substitute property of comparable quality and condition.

§ 75-24-165

A lessor shall provide the consumer a written receipt for any payment made.

§ 75-24-167

(1) A renegotiation occurs when any term of rental-purchase agreement that is required to be disclosed by Section 75-24-159 is changed by agreement between the lessor and consumer. A renegotiation is considered to be a new rental-purchase agreement requiring the lessor to give all the disclosures required by Section 75-24-159.

(2) A renegotiation shall not include any of the following:

(a) Reinstatement of a rental-purchase agreement in accordance with Section 75-24-163;

(b) A lessor's waiver or failure to assert any claim against the consumer;

(c) A deferral, extension or waiver of a portion of a periodic payment or of one or more periodic payments; or

(d) A change, made at the consumer's request, of the date of the week or month on which periodic payments are to be made.

§ 75-24-169

(1) If an advertisement for a rental-purchase agreement refers to or states the dollar amount of the periodic payment for a specific item and refers to or states that the consumer has the right to acquire ownership of that item, the advertisement shall also clearly and conspicuously state the following, as applicable:

(a) That the transaction advertised is a rental-purchase agreement;

(b) The total number of payments necessary to acquire ownership of the item; and

(c) That the consumer acquires no ownership rights if the total amount necessary to acquire ownership is not paid.

(2) Any owner or personnel of any medium in which an advertisement appears or through which it is disseminated shall not be liable under this section.

(3) The provisions of subsection (1) of this section shall not apply to an advertisement which does not refer to or state the amount of any payment or which is published in the yellow pages of a telephone directory or in any similar directory of business.

§ 75-24-171

(1) A lessor who fails to comply with the requirements of Sections 75-24-151 through 75-24-175 is liable to the consumer damaged thereby in an amount equal to the greater of:

(a) The actual damages sustained by the consumer as a result of the lessor's failure to comply with Sections 75-24-151 through 75-24-175;

(b) Twenty-five percent (25%) of the total of payments necessary to acquire ownership, but not less than One Hundred Dollars ($100.00) nor more than One Thousand Dollars ($1,000.00); or

(c) Such lessor is also liable to the consumer for the costs of the action and reasonable attorney's fees as determined by the court.

(2) A consumer may not take any action to offset the amount for which a lessor is potentially liable under subsection (1) of this section against any amount owed by the consumer, unless the amount of the lessor's liability has been determined by judgment of a court of competent jurisdiction in an action in which the lessor was a party. This subsection does not bar a consumer then in default on an obligation from asserting a violation of Sections 75-24-151 through 75-24-175 as an original action, or as a defense or counterclaim, to an action brought by a lessor against the consumer.

(3) The provisions of Sections 75-24-151 through 75-24-175 are cumulative with any other rights or remedies available in this state.

(4) No action under this section may be brought in any court of competent jurisdiction more than one (1) year after the date the consumer made his last rental payment or more than one (1) year after the date of the occurrence of the violation that is the subject of the suit, whichever is later.

§ 75-24-173

(1) If a lessor establishes by a preponderance of evidence that a violation of Sections 75-24-151 through 75-24-175 was unintentional or the result of a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such errors, no penalty as specified in Section 75-24-171 may be imposed and validity of the transaction is not affected. Examples of bona fide errors are clerical errors, calculation errors, errors due to unintentionally improper computer programming or data entry and printing errors but do not include an error of legal judgment with respect to a lessor's obligations under Sections 75-24-151 through 75-24-175.

(2) A lessor has no liability under this section for any failure to comply with any requirement imposed under Sections 75-24-151 through 75-24-175 if within sixty (60) days after discovering an error, and prior to the institution of an action under Sections 75-24-151 through 75-24-175 or the receipt of written notice of the error from the consumer, the lessor notifies the consumer of the error and makes whatever adjustments in the appropriate account as are necessary to correct the error.

§ 75-24-175

Each provision of a contract under Sections 75-24-151 through 75-24-175 shall contain a provision to be signed or initialed by the lessee.

§ 75-24-191

Any automobile dealer or salesman who sells a renovated vehicle after it has been submerged without notifying the purchaser in writing, when the dealer or salesman knew or should have known of the submersion, shall be subject to a fine not to exceed the sales price of the vehicle.

§ 75-24-201

(1) On written request sent by certified mail that includes proper identification provided by a consumer and a copy of a valid police report, investigative report or complaint which the consumer has filed with a law enforcement agency regarding the unlawful use of the personal information of the consumer by another person, a consumer reporting agency shall place a security freeze on a consumer's consumer file not later than the fifth business day after the date the agency receives the request. A reporting agency may charge a consumer a reasonable fee not to exceed Ten Dollars ($10.00) to place a security freeze in his file.

(2) On written request for a security freeze provided by a consumer under subsection (1), a consumer reporting agency shall disclose to the consumer the process of placing, removing and temporarily lifting a security freeze and the process for allowing access to information from the consumer's file with the consumer reporting agency for a specific requester or period while the security freeze is in effect.

(3) A consumer reporting agency shall, not later than the tenth business day after the date the agency receives the request for a security freeze:

(a) Send a written confirmation of the security freeze to the consumer; and

(b) Provide the consumer with a unique personal identification number or password to be used by the consumer to authorize a removal or temporary lifting of the security freeze under Section 75-24-207.

(4) A consumer may request in writing a replacement personal identification number or password. The request must comply with the requirements for requesting a security freeze under subsection (1). The consumer reporting agency shall, not later than the third business day after the date the agency receives the request for a replacement personal identification number or password, provide the consumer with a new unique personal identification number or password to be used by the consumer instead of the number or password that was provided under subsection (3).

(5) As used in Sections 75-24-201 through 75-24-217, the term “security freeze” means a notice that (a) prohibits a consumer reporting agency from releasing all or any part of a consumer report or any information derived from a consumer report relating to the extension of credit, and (b) is placed in the file retained by the consumer reporting agency on that consumer at the consumer's request pursuant to subsection (1).

§ 75-24-203

If a security freeze is in place, a consumer reporting agency shall notify the consumer in writing of a change in the consumer's file retained by the consumer reporting agency to the consumer's name, date of birth, social security number, or address not later than thirty (30) calendar days after the date the change is made. The agency shall send notification of a change of address to both the new address and former address of the consumer. This section does not require notice of an immaterial change, including a street abbreviation change or correction of a transposition of letters or misspelling of a word.

§ 75-24-205

A consumer reporting agency shall notify a person who requests a consumer report if a security freeze is in effect for the consumer file involved in that report.

§ 75-24-207

(1) On a request in writing or by telephone and with proper identification provided by a consumer, including the consumer's personal identification number or password provided under Section 75-24-201, a consumer reporting agency shall remove a security freeze within three (3) business days after the agency receives the request.

(2) On a request in writing or by telephone and with proper identification provided by a consumer, including the consumer's personal identification number or password provided under Section 75-24-201, a consumer reporting agency shall, within three (3) business days after the agency receives the request, temporarily lift the security freeze for:

(a) A certain properly designated period; or

(b) A certain properly identified requester.

(3) A consumer reporting agency may develop procedures involving the use of a telephone, a facsimile machine, the Internet or another electronic medium to receive and process a request from a consumer under this section.

(4) A consumer reporting agency shall remove a security freeze placed on a consumer file if the security freeze was placed due to a material misrepresentation of fact by the consumer. The consumer reporting agency shall notify the consumer in writing before removing the security freeze under this subsection.

(5) A consumer reporting agency may not charge a fee for a request under subsection (1) or (2).

§ 75-24-209

A security freeze does not apply to a consumer report provided to:

(a) A state or local governmental entity, including a law enforcement agency or court or private collection agency, if the entity, agency or court is acting under a court order, warrant, subpoena or administrative subpoena;

(b) An agency acting to investigate or collect child support payments or acting under Title IV-D of the Social Security Act (42 USCS Section 651 et seq.);

(c) The State Tax Commission acting to investigate or collect delinquent sales or franchise taxes;

(d) A tax assessor-collector acting to investigate or collect delinquent ad valorem taxes;

(e) A person for the purposes of prescreening as provided by the Fair Credit Reporting Act (15 USCS Section 1681 et seq.), as amended;

(f) A person who intends to use the information for employment purposes;

(g) A person who intends to use the information in connection with adjusting a claim, rating or underwriting of insurance involving the consumer;

(h) A person with whom the consumer has an account or contract or to whom the consumer has issued a negotiable instrument, or the person's subsidiary, affiliate, agent, assignee, prospective assignee or private collection agency, for purposes related to that account, contract or instrument;

(i) A subsidiary, affiliate, agent, assignee or prospective assignee of a person to whom access has been granted under Section 75-24-207(2);

(j) A person who administers a credit file monitoring subscription service to which the consumer has subscribed;

(k) A person for the purpose of providing a consumer with a copy of the consumer's report on the consumer's request;

(l) A check service or fraud prevention service company that issues consumer reports:

(i) To prevent or investigate fraud; or

(ii) For purposes of approving or processing negotiable instruments, electronic funds transfers or similar methods of payment;

(m) A deposit account information service company that issues consumer reports related to account closures caused by fraud, substantial overdrafts, automated teller machine abuses or similar negative information regarding a consumer to an inquiring financial institution for use by the financial institution only in reviewing a consumer request for a deposit account with that institution; or

(n) A consumer reporting agency that:

(i) Acts only to resell credit information by assembling and merging information contained in a database of another consumer reporting agency or multiple consumer reporting agencies; and

(ii) Does not maintain a permanent database of credit information from which new consumer reports are produced.

§ 75-24-211

The requirement under Sections 75-24-201 through 75-24-217 to place a security freeze on a consumer file does not apply to:

(a) A check service or fraud prevention service company that issues consumer reports:

(i) To prevent or investigate fraud; or

(ii) For purposes of approving or processing negotiable instruments, electronic funds transfers or similar methods of payment; or

(b) A deposit account information service company that issues consumer reports related to account closures caused by fraud, substantial overdrafts, automated teller machine abuses or similar negative information regarding a consumer to an inquiring financial institution for use by the financial institution only in reviewing a consumer request for a deposit account with that institution.

§ 75-24-213

A consumer reporting agency shall honor a security freeze placed on a consumer file by another consumer reporting agency.

§ 75-24-215

If a third party requests access to a consumer report on which a security freeze applies, and this request is in connection with an application for credit, insurance or any other use, and the consumer does not immediately request the consumer reporting agency to lift the security freeze and allow his or her credit report to be accessed for that specific party or period of time, the third party may treat the consumer's application as incomplete.

§ 75-24-217

The terms “consumer,” “consumer report” and “consumer reporting agency” as used in Sections 75-24-201 through 75-24-217 shall have the same meanings as given to those respective terms in the Fair Credit Reporting Act (15 USCS Section 1681 et seq.), as amended.

§ 75-24-231

(1) Beginning January 1, 2011, all business entities and their agents providing credit card processing hardware or software to retail merchants for the transaction of business shall provide such hardware or software that meets the requirements of the Fair and Accurate Credit Transactions Act of 2003 and does not print on a receipt provided to the cardholder: (a) more than the last five (5) digits of the credit card or debit card account number, or (b) the expiration date of the credit card or debit card.

(2) The provisions of subsection (1) of this section apply only to receipts that are electronically printed and do not apply to transactions in which the sole means of recording the cardholder's credit card or debit card account number is by handwriting or by an imprint or copy of the credit card or debit card.

(3) Any business entity providing credit card processing hardware or software to retail merchants who willfully violates the provisions of subsection (1) of this section shall be subject to a fine of not more than One Hundred Dollars ($100.00) for a first offense and not more than Five Hundred Dollars ($500.00) for a second offense, and shall be subject to a fine of not more than One Thousand Dollars ($1,000.00) for each subsequent offense.

§ 75-24-301

Sections 75-24-301 through 75-24-311 shall be known as the “Insurance Benefits Roofing Repair Consumer Protection Act.”

§ 75-24-303

Sections 75-24-301 through 75-24-311 apply to a residential roofing repair contract under which a person has contracted with a residential roofing contractor to provide goods or services expected to be paid, in whole or in part, from the benefits of a property and casualty insurance policy.

§ 75-24-305

As used in Sections 75-24-301 through 75-24-311:

(a) “Emergency services” means services performed with the express permission of the insured and that are immediately necessary for:

(i) The preservation of the residential real estate; or

(ii) The health of the insured, owner or possessor.

“Emergency services” does not include inspection of the residential roof system or an estimation of the repair costs.

(b) “Insured” means an insured whose name appears on the face of the property and casualty insurance policy that provides coverage for the residential roof system to be repaired.

(c) “Residential roofing contractor” means a person or entity contracting or offering to contract with an insured, owner or possessor of a residential roof system to repair or replace a roof system on residential real estate, or any portion thereof, where all or part of the cost is expected to be paid as a benefit of a property and casualty insurance policy.

(d) “Residential” means a new or existing dwelling constructed for habitation by one (1) to four (4) families, including a detached garage.

(e) “Insurance benefits residential roof system repair contract” means a written contract with an insured to repair a roof system, or any part thereof, on residential real estate, or provide goods and services in connection with such repair, that is to be paid in whole, or in part, under a property and casualty insurance policy.

(f) “Roof system” means roof coverings, roof sheathing, roof weatherproofing, roof framing, roof ventilation system, and insulation.

§ 75-24-307

(1) Before signing an insurance benefits residential roof system repair contract with an insured, a residential roofing contractor shall furnish to the insured:

(a) The following statement in at least 12-point boldface type that is attached to the contract:

“You may cancel this insurance benefits residential roof system repair contract at any time within three (3) business days after you have received written notice from your insurance company that all or any part of your claim, or all or part of the services and goods to be provided by this contract, is not a covered loss under your insurance policy. A notice of cancellation form is provided to you with this contract. To cancel this contract under these circumstances, sign and date, and then mail or deliver the attached Notice of Cancellation, or another similar written notice of cancellation, to the contractor within three (3) business days after you have received such written notice from your insurance company. If you cancel, any payments made under this residential roofing system repair contract, except for emergency services and repairs subsequently approved for payment by the insurance company and already performed by the contractor, will be returned to you within ten (10) business days following receipt by the contractor of your cancellation notice.”; and

(b) Duplicate copies of a completed form captioned “NOTICE OF CANCELLATION” that is attached to the contract, is easily detachable, and contains the following in at least 12-point boldface type:

“NOTICE OF CANCELLATION

(Name and address of contractor--to be entered by contractor)

(Date of contract--to be entered by contractor)

(Address of residential real estate to be repaired--to be entered by contractor)

I have been notified by my insurance company that all or any part of my claim, or the services and goods to be provided in the residential roofing system repair contract, is not a covered loss under the insurance policy.

I HEREBY CANCEL THIS TRANSACTION

Please return my prior payments within ten (10) days.

| | _____________________________________ | | _____________________________________ | | --- | --- | --- | --- | | | INSURED'S SIGNATURE | | DATE” |

(2)(a) In circumstances in which payment may be made from the proceeds of a property and casualty insurance policy, a residential roofing contractor shall not require any payment from an insured until the three-day cancellation period has expired.

(b) Prior to a contract being executed for repairs made by a residential roofing contractor that are separate or additional to those repairs covered under the policy of insurance, the residential roofing contractor shall include a statement identifying those aspects of the repair or replacement which are separate from or additional to the repair or replacement of the damage to the roof system caused by a covered peril and explaining that payment of those excess or additional items are the insured's responsibility. This subsection does not limit an insured from communicating with the insurer about the estimated replacement cost of the repairs or replacement of the damaged roof system.

(3) Until the claim has been filed by the insured, a residential roofing contractor shall not represent or negotiate, or offer or advertise to represent or negotiate, on behalf of an owner or possessor of residential real estate on any insurance claim in connection with the repair or replacement of a roof system. This subsection does not prohibit an insured from including the residential roofing contractor in the insured's communications with the insurer about the damages to the roof system or the estimated replacement cost of the repairs or replacement of the damaged roof system at any point in the process. This subsection does not apply to a public adjuster licensed under Sections 83-17-501 through 83-17-527.

(4)(a) A residential roofing contractor shall not contract for, agree to, or receive anything of value from an attorney or other person acting in concert with an attorney for referring claims to the attorney or in connection with any claim for which the residential roofing contractor has performed or intends to perform services. A residential roofing contractor may not create a business relationship between an insured and an attorney or obligate an insured to hire a specified attorney.

(b) A residential roofing contractor shall not advertise or otherwise promise or offer to pay, or pay, or rebate all or any portion of an insured's insurance deductible as an inducement to enter into the residential roofing contract.

(5) A post-loss assignment by a named insured of rights or benefits to a residential roofing contractor under a property and casualty insurance policy insuring residential real estate shall authorize a residential roofing contractor only to be named as a co-payee for the payment of benefits under a property and casualty insurance policy covering residential real estate. The assignment shall include all of the following:

(a) An itemized description of the work to be performed;

(b) An itemized description of the materials, labor and fees for the work to be performed;

(c) A total itemized amount to be paid for the work to be performed;

(d) A statement that the residential roofing contractor has made no assurances that the claimed loss will be covered fully by an insurance contract; and

(e) The following notice in capitalized fourteen-point type:

“You are agreeing to give up certain rights you have under your insurance policy. Please read and understand this document before signing. The itemized description of the work to be done shown in this assignment form has not been agreed to by the insurer. The insurer has the right to pay only for the cost to repair or replace damaged property caused by a covered peril.”

(6) A copy of the executed assignment shall be provided to the insurer of the residential real estate no later than five (5) business days after the execution date of the assignment.

(7) The assignment shall not impair the interest of a mortgagee listed on the declarations page of the property and casualty insurance policy that is the subject of the assignment.

(8) An assignment shall not prevent or inhibit an insurer from communication with the named insured or mortgagee listed on the declarations page of the property and casualty insurance policy that is the subject of the assignment.

(9) A residential roofing contractor shall comply with all applicable building codes when replacing, repairing, constructing or reconstructing a roof system.

(10) Pursuant to the terms of the insured's contract, nothing in this section shall be construed to prohibit a residential roofing contractor from:

(a) Providing an insured an estimate for repair, replacement, construction or reconstruction of the insured's property and any such estimate may be submitted to the insured's insurance company;

(b) Conferring with an insurance company's representative about damage to an insured's property; or

(c) Discussing repair or replacement options with an insurance company's representative or the insured about options for the repair or replacement of the damage.

§ 75-24-309

(1) When any residential roofing contractor in an insurance benefits residential roof system repair contract with an insured commences work before the insured's right to cancel under subsection (2) has expired, the contractor is not allowed to receive payment for such work done before the right to cancel has expired in excess of the scope of work and amount of payment approved by the insurer, if any. The contractor undertakes such work at his own risk that the work may not be covered by the insurance policy.

(2) A person who has entered into an insurance benefits residential roof system repair contract may cancel the residential roof system repair contract within three (3) business days after the insured has received written notice from the insurer in response to an insurance claim filed that all or any part of the claim or residential roof system repair contract is not a covered loss under the insurance policy.

(3)(a) The insured cancels the insurance benefits residential roof system repair contract by giving written notice of cancellation to the residential roofing contractor in person or by mailing it to the address stated in the residential roof system repair contract.

(b) If the notice of cancellation is given by mail, it is effective upon deposit of the notice in the United States mail, postage prepaid, and properly addressed to the residential roofing contractor.

(c) The notice of cancellation is not required to be in a particular form and is sufficient if it expresses in writing an intention of the insured not to be bound by the insurance benefits residential roof system repair contract.

(4)(a) Within ten (10) days after cancellation of an insurance benefits residential roof system repair contract, the residential roofing contractor shall tender to the insured any payments, partial payments, or deposits made and any note or other evidence of indebtedness.

(b) If the residential roofing contractor has performed any emergency services, the residential roofing contractor is entitled to the reasonable value of such emergency services.

(c) If the residential roofing contractor has performed repairs authorized by the insured that are subsequently approved as to scope and amount as a covered loss by the insurer such that the insured is reimbursed by the insurer, then the residential roofing contractor is entitled to payment for such repairs.

(5) Any provision in an insurance benefits residential roof system repair contract that requires the payment of a fee for anything except emergency services is not enforceable against the insured that has cancelled an insurance benefits residential roof system repair contract under this section.

§ 75-24-311

(1) Any residential roofing contractor in violation of Sections 75-24-301 through 75-24-311 shall be subject to the civil and criminal penalties and remedies under Sections 75-24-19, 75-24-20 and 75-24-23, and may be liable under a private right of action of the consumer.

(2) A violation of Sections 75-24-301 through 75-24-311 by a residential roofing contractor is an unfair and deceptive act or practice as defined by the Mississippi Consumer Protection Law, Section 75-24-1 et seq.

(3)Sections 75-24-301 through 75-24-311 do not prohibit an insured that is harmed by a deceptive trade practice from commencing a civil action against a residential roofing contractor.

§ 75-24-351

The following words shall have the following meaning, unless the content clearly states otherwise:

(a) “Affiliated person” means a person under common ownership or control of an intended recipient.

(b) “Intended recipient” means a person who purchases, rents, leases or otherwise obtains a product or service in the commercial market that is not for resale in the ordinary business and that is, or later becomes, the subject of a patent infringement allegation.

(c) “Person” means any natural person, partnership, corporation, company, trust, business entity or association, and any agent, employee, partner, officer, director, member, associate, or trustee thereof.

§ 75-24-353

(1) It is a violation of Sections 75-24-351 through 75-24-357 for a person, in connection with the assertion of a United States patent, to send, or cause any person to send, any written or electronic communication that states that the intended recipient or any affiliated person is infringing or has infringed a patent and bears liability or owes compensation to another person if:

(a) The communication threatens litigation if compensation is not paid or the infringement issue is not otherwise resolved and there is a consistent pattern of such threats having been issued and no litigation having been filed;

(b) The communication falsely states that litigation has been filed against the intended recipient or any affiliated person; or

(c) The assertions contained in the communication lack a reasonable basis in fact or law because:

(i) The person asserting the patent is not a person, or does not represent a person, with the current right to license the patent to, or to enforce the patent against, the intended recipient or any affiliated person;

(ii) The communication seeks compensation for a patent that has been held to be invalid or unenforceable in a final, unappealable or unappealed judicial or administrative decision;

(iii) The communication seeks compensation on account of activities undertaken after the patent has expired; or

(iv) The content of the communication fails to include the information necessary to inform an intended recipient or any affiliated person about the patent assertion by failing to include any one of the following:

1. The identity of the person asserting a right to license the patent to or enforce the patent against the intended recipient or any affiliated person;

2. The patent number issued by the United States Patent and Trademark Office alleged to have been infringed; or

3. The factual allegations concerning the specific areas in which the intended recipient or affiliated person's products, services, or technology infringed the patent or are covered by the claims in the patent.

(2) It is not a violation of Sections 75-24-351 through 75-24-357 for any person who owns or has the right to license or enforce a patent to:

(a) Advise others of that ownership or right of license or enforcement;

(b) Communicate to others that a patent is available for license or sale;

(c) Notify another of the infringement of the patent; or

(d) Seek compensation on account of past or present infringement, or for a license to the patent, if the person is not acting in bad faith.

(3) The provisions of Sections 75-24-351 through 75-24-357 shall not apply to any written or electronic communication sent by:

(a) Any owner of a patent who is using the patent in connection with substantial research, development, production, manufacturing, processing or delivery of products or materials;

(b) A state institution of higher learning;

(c) An agency of the State of Mississippi;

(d) A technology transfer organization that is owned by or has a written affiliation agreement with a state institution of higher learning or an agency of the State of Mississippi, or is formed pursuant to Section 37-147-1 et seq.;

(e) Any person that has licensed patent rights from a state institution of higher learning, an agency of the State of Mississippi, or a technology transfer organization that is owned by or has a written affiliation agreement, a state institution of higher learning or an agency of the State of Mississippi, or is formed pursuant to Section 37-147-1 et seq., provided that the ownership of the patent rights remains with the state institution of higher learning, the agency of the State of Mississippi, or the technology transfer organization that is owned by or has a written affiliation agreement with a state institution of higher learning or an agency of the State of Mississippi, or is formed pursuant to Section 37-147-1 et seq.; or

(f) Any person seeking a claim for relief arising under 35 USC Section 271(e)(2) or 42 USC Section 262s.

§ 75-24-355

(1) The Attorney General shall have the authority under Sections 75-24-351 through 75-24-357 to conduct civil investigations and bring civil actions.

(2) In an action brought by the Attorney General under Sections 75-24-351 through 75-24-357, the court may award or impose any relief available under state law.

(3) In addition to the relief provided for in Section 75-24-357, upon a motion by the Attorney General and a finding by the court that there is a reasonable likelihood that a person violated Section 75-24-353, the court may require the person to post a bond in an amount equal to a good faith estimate of the costs to litigate a claim and amounts reasonably likely to be recovered if an action were to be brought under Section 75-24-355. A hearing shall be held if either party requests a hearing.

§ 75-24-357

An intended recipient alleging a violation of Sections 75-24-351 through 75-24-357 may bring an action in any circuit court in this state. A court shall award litigation costs and fees, including reasonable attorney's fees, to a plaintiff who prevails in an action brought pursuant to this section. In addition, the court may award the following remedies to a plaintiff who prevails in an action brought pursuant to Sections 75-24-351 through 75-24-357:

(a) Actual damages; and

(b) Punitive damages in the amount equal to three (3) times the actual damages.

§ 75-24-359

Sections 75-24-351 through 75-24-359, Mississippi Code of 1972, shall stand repealed on July 1, 2025.

Chapter 25 Registration of Trademarks and Labels

§ 75-25-1

As used in this chapter the following terms shall have the meaning indicated:

(a) The term “trademark” as used herein means any word, name, symbol, or device or any combination thereof used by a person to identify and distinguish the goods of such person, including a unique product, from those manufactured or sold by others, and to indicate the source of the goods, even if that source is unknown.

(b) The term “service mark” as used herein means any word, name, symbol or device or any combination thereof used by a person to identify and distinguish the services of one (1) person, including a unique service, from the services of others, and to indicate the source of the services, even if that source is unknown. Titles, character names used by a person and other distinctive features of radio or television programs may be registered as service marks notwithstanding that they, or the programs, may advertise the goods of the sponsor.

(c) The term “mark” as used herein includes any trademark or service mark entitled to registration under this chapter whether registered or not.

(d) The term “trade name” means any name used by a person to identify a business or vocation of such person.

(e) The term “person” and any other word or term used to designate the applicant or other party entitled to a benefit or privilege or rendered liable under the provisions of this chapter includes a juristic person as well as a natural person. The term “juristic person” includes a firm, partnership, corporation, union, association or other organization capable of suing and being sued in a court of law.

(f) The term “applicant” as used herein embraces the person filing an application for registration of a mark under this chapter, and the legal representatives, successors or assigns of such person.

(g) The term “registrant” as used herein embraces the person to whom the registration of a mark under this chapter is issued, and the legal representatives, successors or assigns of such person.

(h) The term “use” means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. For the purposes of this chapter, a mark shall be deemed to be in use:

(1) On goods when it is placed in any manner on the goods or other containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and the goods are sold or transported in commerce in this state, and

(2) On services when it is used or displayed in the sale or advertising of services and the services are rendered in this state.

(i) A mark shall be deemed to be “abandoned” when either of the following occurs:

(1) When its use had been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for two (2) consecutive years shall constitute prima facie evidence of abandonment; or

(2) When any course of conduct of the owner, including acts of omission as well as commission, causes the mark to lose its significance as a mark.

(j) The term “secretary” as used herein means the Secretary of State or the designee of the secretary charged with the administration of this chapter.

(k) The term “dilution” as used herein means dilution by blurring or dilution by tarnishment, regardless of the presence or absence of:

(1) Competition between the owner of the famous mark and other parties, or

(2) Actual or likely confusion, mistake, or deception, or

(3) Actual economic injury.

(l) The term “dilution by blurring” as used herein means association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.

(m) The term “dilution by tarnishment” as used herein means association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.

§ 75-25-3

A mark by which the goods or services of any applicant for registration may be distinguished from the goods or services of others shall not be registered if it:

(a) Consists of or comprises immoral, deceptive or scandalous matter; or

(b) Consists of or comprises matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute; or

(c) Consists of or comprises the flag or coat of arms or other insignia of the United States, or of any state or municipality, or any foreign nation, or any simulation thereof; or

(d) Consists of or comprises the name, signature or portrait identifying a particular living individual, except by the individual's written consent; or

(e) Consists of a mark which, (1) when used on or in connection with the goods or services of the applicant, is merely descriptive or deceptively misdescriptive of them, or (2) when used on or in connection with the goods or services of the applicant is primarily geographically descriptive or deceptively misdescriptive of them, or (3) is primarily merely a surname; however, nothing in this subsection (e) shall prevent the registration of a mark used by the applicant which has become distinctive of the applicant's goods or services. The secretary may accept as evidence that the mark has become distinctive, as used on or in connection with the applicant's goods or services, proof of continuous use thereof as a mark by the applicant in this state for the five (5) years before the date on which the claim of distinctiveness is made; or

(f) Consists of or comprises a mark which so resembles a mark registered in this state or a mark or trade name previously used by another and not abandoned, as to be likely, when used on or in connection with the goods or services of the applicant, to cause confusion or mistake or to deceive.

§ 75-25-5

(a) Subject to the limitations set forth in this chapter, any person who uses a mark may file in the office of the secretary, in a manner complying with the requirements of the secretary, an application for registration of that mark setting forth, but not limited to, the following information:

(1) The name and business address of the person applying for such registration; and, if a corporation, the state of incorporation, or if a partnership or other entity, the state in which the entity is organized and the names of the general partners, owners and/or managers, as specified by the secretary;

(2) The goods or services on or in connection with which the mark is used and the mode or manner in which the mark is used on or in connection with such goods or services and the class in which such goods or services fall;

(3) The date when the mark was first used anywhere and the date when it was first used in this state by the applicant or predecessor in interest; and

(4) A statement that the applicant is the owner of the mark, that the mark is in use, and that, to the knowledge of the person verifying the application, no other person has registered, either federally or in this state, or has the right to use such mark either in the identical form thereof or in such near resemblance thereto as to be likely, when applied to the goods or services of such other person, to cause confusion, or to cause mistake, or to deceive.

(b) The secretary may also require a statement as to whether an application to register the mark, or portions or a composite thereof, has been filed by the applicant or a predecessor in interest in the United States Patent and Trademark Office; and, if so, the applicant shall provide full particulars with respect thereto including the filing date and serial number of each application, the status thereof and, if any application was finally refused registration or has otherwise not resulted in a registration, the reasons therefor.

(c) The secretary may also require that a drawing of the mark, complying with such requirements as the secretary may specify, accompany the application.

(d) The application shall be signed and verified by oath, affirmation or declaration subject to perjury laws by the applicant or by a member of the firm or an officer of the corporation or association applying.

(e) The application shall be accompanied by three (3) specimens showing the mark as actually used.

(f) The application shall be accompanied by the application fee payable to the Secretary of State.

§ 75-25-7

(a) Upon the filing of an application for registration and payment of the application fee, the secretary may cause the application to be examined for conformity with this chapter.

(b) The applicant shall provide any additional pertinent information requested by the secretary including a description of a design mark and may make, or authorize the secretary to make, such amendments to the application as may be reasonably requested by the secretary or deemed by applicant to be advisable to respond to any rejection or objection.

(c) The secretary may require the applicant to disclaim an unregisterable component of a mark otherwise registerable, and an applicant may voluntarily disclaim a component of a mark sought to be registered. No disclaimer shall prejudice or affect the applicant's or registrant's rights then existing or thereafter arising in the disclaimed matter, or the applicant's or registrant's rights of registration on another application if the disclaimed matter be or shall have become distinctive of the applicant's or registrant's goods or services.

(d) Amendments may be made by the secretary upon the application submitted by the applicant upon applicant's agreement; or a fresh application may be required to be submitted.

(e) If the applicant is found not to be entitled to registration, the secretary shall advise the applicant thereof and of the reasons therefor. The applicant shall have a reasonable period of time specified by the secretary in which to reply or to amend the application, in which event the application shall then be reexamined. This procedure may be repeated until:

(1) The secretary finally refuses registration of the mark; or

(2) the applicant fails to reply or amend within the specified period, whereupon the application shall be deemed to have been abandoned.

(f) If the secretary finally refuses registration of the mark, the applicant may appeal such refusal to the First Judicial District of the Hinds County Chancery Court. The secretary's refusal may be reversed, but without costs to the secretary, on proof that all the statements in the application are true and that the mark is otherwise entitled to registration.

(g) In the instance of applications concurrently being processed by the secretary seeking registration of the same or confusingly similar marks for the same or related goods or services, the secretary shall grant priority to the applications in order of filing. If a prior-filed application is granted a registration, the other application or applications shall then be rejected. Any rejected applicant may bring an action for cancellation of the registration upon grounds of prior or superior rights to the mark, in accordance with the provisions of Section 75-25-17.

§ 75-25-9

Upon compliance by the applicant with the requirements of this chapter, the secretary shall cause a certificate of registration to be issued and delivered to the applicant. The certificate of registration shall be issued under the signature of the secretary and the seal of the state, and it shall show the name and business address and, if a corporation, the state of incorporation, or if a partnership or other entity, the state in which the partnership or other entity is organized and the names of the general partners, owners, and/or managers, as specified by the secretary, of the person claiming ownership of the mark, the date claimed for the first use of the mark anywhere and the date claimed for the first use of the mark in this state, the class of goods or services and a description of the goods or services on or in connection with which the mark is used, a reproduction of the mark, the registration date and the term of the registration.

Any certificate of registration issued by the secretary under the provisions hereof or a copy thereof duly certified by the secretary shall be admissible in evidence as competent and sufficient proof of the registration of such mark in any actions or judicial proceedings in any court of this state.

§ 75-25-11

(a) A registration of a mark hereunder shall be effective for a term of five (5) years from the date of registration and, upon application filed within six (6) months prior to the expiration of such term, in a manner complying with the requirements of the secretary, the registration may be renewed for a like term from the end of the expiring term. A renewal fee, payable to the secretary, shall accompany the application for renewal of the registration.

(b) A registration may be renewed for successive periods of five (5) years in like manner.

(c) All applications for renewal, whether of registrations made under this chapter or of registrations effected under any prior act, shall include a verified statement that the mark has been and is still in use and include a specimen showing actual use of the mark on or in connection with the goods or services.

§ 75-25-13

(a) Any mark and its registration hereunder shall be assignable with the good will of the business in which the mark is used, or with that part of the good will of the business connected with the use of and symbolized by the mark. Assignment shall be by instruments in writing duly executed and may be recorded with the secretary upon the payment of the recording fee, payable to the secretary, who, upon recording of the assignment, shall issue in the name of the assignee a new certificate for the remainder of the term of the registration or of the last renewal thereof. An assignment of any registration under this chapter shall be void as against any subsequent purchaser for valuable consideration without notice, unless it is recorded with the secretary within three (3) months after the date thereof or prior to such subsequent purchase.

(b) Any registrant or applicant effecting a change of the name of the person to whom the mark was issued or for whom an application was filed may record a certificate of change of name of the registrant or applicant with the secretary upon the payment of the recording fee. The secretary may issue in the name of the assignee a certificate of registration of an assigned application. The secretary may issue in the name of the assignee, a new certificate or registration for the remainder of the term of the registration or last renewal thereof.

(c) Other instruments which relate to a mark registered or application pending pursuant to this chapter, such as, by way of example, licenses, security interests or mortgages, may be recorded in the discretion of the secretary, provided that such instrument is in writing and duly executed.

(d) Acknowledgment shall be prima facie evidence of the execution of an assignment or other instrument and, when recorded by the secretary, the record shall be prima facie evidence of execution.

(e) A photocopy of any instrument referred to in subsections (a), (b), or (c) above, shall be accepted for recording if it is certified by any of the parties thereto, or their successors, to be a true and correct copy of the original.

§ 75-25-15

The secretary shall keep for public examination a record of all marks registered or renewed under this chapter, as well as a record of all documents recorded pursuant to Section 75-25-13.

§ 75-25-17

The secretary shall cancel from the register, in whole or in part:

(a) Any registration concerning which the secretary shall receive a voluntary request for cancellation thereof from the registrant or the assignee of record;

(b) All registrations granted under this chapter and not renewed in accordance with the provisions hereof;

(c) Any registration concerning which a court of competent jurisdiction shall find:

(1) That the registered mark has been abandoned,

(2) That the registrant is not the owner of the mark,

(3) That the registration was granted improperly,

(4) That the registration was obtained fraudulently,

(5) That the mark is or has become the generic name for the goods or services, or a portion thereof, for which it has been registered,

(6) That the registered mark is so similar, as to be likely to cause confusion or mistake, or to deceive, to a mark registered by another person in the United States Patent and Trademark Office prior to the date of the filing of the application for registration by the registrant hereunder, and not abandoned; provided, however, that, should the registrant prove that the registrant is the owner of a concurrent registration of a mark in the United States Patent and Trademark Office covering an area including this state, the registration hereunder shall not be cancelled for such area of the state; or

(d) When a court of competent jurisdiction shall order cancellation of a registration on any ground.

§ 75-25-19

The secretary shall by regulation establish a classification of goods and services for convenience of administration of this chapter, but not to limit or extend the applicant's or registrant's rights, and a single application for registration of a mark may include any or all goods upon which, or services with which, the mark is actually being used indicating the appropriate class or classes of goods or services. When a single application includes goods or services which fall within multiple classes, the secretary may require payment of a fee for each class. To the extent practical, the classification of goods and services should conform to the classification adopted by the United States Patent and Trademark Office.

§ 75-25-21

Any person who shall for himself or herself, or on behalf of any other persons, procure the filing or registration of any mark in the office of the secretary under the provisions hereof, by knowingly making any false or fraudulent representation or declaration, orally or in writing, or by any other fraudulent means, shall be liable to pay all damages sustained in consequence of such filing or registration, to be recovered by or on behalf of the party injured thereby in any court of competent jurisdiction.

§ 75-25-23

Subject to the provisions of Section 75-25-31 hereof, any person who shall:

(a) Use, without the consent of the registrant, any reproduction, counterfeit, copy, or colorable imitation of a mark registered under this chapter, in connection with the sale, distribution, offering for sale, or advertising of any goods or services on or in connection with which such use is likely to cause confusion or mistake or to deceive as to the source of origin of such goods or services; or

(b) Reproduce, counterfeit, copy or colorably imitate any such mark and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with the sale or other distribution in this state of such goods or services; shall be liable in a civil action by the registrant for any and all of the remedies provided in Section 75-25-27 hereof, except that under paragraph (b) hereof the registrant shall not be entitled to recover profits or damages unless the acts have been committed with the intent to cause confusion or mistake or to deceive.

§ 75-25-25

(a) Subject to the principles of equity, the owner of a mark which is famous and distinctive, inherently or through acquired distinctiveness, in this state shall be entitled to an injunction against another person's commercial use of a mark or trade name, if such use begins after the mark has become famous and is likely to cause dilution of the famous mark, and to obtain such other relief as is provided in this section.

(b) A mark is famous if it is widely recognized by the general consuming public of this state or a geographic area in this state as a designation of source of the goods or services of the mark's owner. In determining whether a mark is famous, a court may consider factors such as, but not limited to:

(1) The duration, extent, and geographic reach of advertising and publicity of the mark in this state, whether advertised or publicized by the owner or third parties;

(2) The amount, volume, and geographic extent of sales of goods or services offered under the mark in this state;

(3) The extent of actual recognition of the mark in this state; and

(4) Whether the mark is the subject of a state registration in this state, or a federal registration under the Act of March 3, 1881, or under the Act of February 20, 1905, or on the principal register under the Trademark Act of 1946, as amended.

(c) In an action brought under this section, the owner of a famous mark shall be entitled to injunctive relief throughout the geographic area in which the mark is found to have become famous prior to commencement of the junior use, but not beyond the borders of this state. If the person against whom the injunctive relief is sought willfully intended to cause dilution of the famous mark, then the owner shall also be entitled to the remedies set forth in this chapter, subject to the discretion of the court and the principles of equity.

(d) The following shall not be actionable under this section:

(1) Any fair use, including a nominative or descriptive fair use, or facilitation of such fair use, of a famous mark by another person other than as a designation of source for the person's own goods or services, including use in connection with:

(A) Advertising or promotion that permits consumers to compare goods or services; or

(B) Identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner;

(2) Noncommercial use of the mark; and

(3) All forms of news reporting and news commentary.

§ 75-25-27

(a) Any owner of a mark registered under this chapter may proceed by suit to enjoin the manufacture, use, display or sale of any counterfeits or imitations thereof and any court of competent jurisdiction may grant injunctions to restrain such manufacture, use, display or sale as may be by the said court deemed just and reasonable, and may require the defendants to pay to such owner all profits derived from and/or all damages suffered by reason of such wrongful manufacture, use, display or sale; and such court may also order that any such counterfeits or imitations in the possession or under the control of any defendant in such case be delivered to an officer of the court, or to the complainant, to be destroyed. The court, in its discretion, may enter judgment for an amount not to exceed three (3) times such profits and damages and/or reasonable attorneys' fees of the prevailing party in such cases where the court finds the other party committed such wrongful acts with knowledge or in bad faith or otherwise as according to the circumstances of the case.

(b) The enumeration of any right or remedy herein shall not affect a registrant's right to prosecute under any penal law of this state.

§ 75-25-29

(a) Actions to require cancellation of a mark registered pursuant to this chapter or to appeal the secretary's refusal to register a mark pursuant to this chapter shall be brought in the First Judicial District of the Hinds County Chancery Court. In an appeal of the secretary's refusal to register a mark, the proceeding shall be based solely upon the record before the secretary. In an action for cancellation, the secretary shall not be made a party to the proceeding but shall be notified of the filing of the complaint by the clerk of the court and shall be given the right to intervene in the action.

(b) In any action brought against a nonresident registrant, service may be effected by any means authorized by the Mississippi Rules of Civil Procedure.

§ 75-25-31

Nothing herein shall adversely affect the rights or the enforcement of rights in marks acquired in good faith at any time at common law.

§ 75-25-33

Fees required by this chapter shall be submitted to the secretary and shall not be refundable. The amount of such fees shall be as follows:

| | Resident Application | $ 50.00 | | --- | --- | --- | | | Nonresident Application | $ 60.00 | | | Resident Renewal | $ 50.00 | | | Nonresident Renewal | $ 60.00 | | | Assignment | $ 50.00 |

§ 75-25-35

If any provision of this chapter, or the application of such provision to any person or circumstances is held invalid, the remainder of this chapter shall not be affected thereby.

§ 75-25-37

The intent of this chapter is to provide a system of state trademark registration and protection substantially consistent with the federal system of trademark registration and protection under the Trademark Act of 1946, as amended. To that end, the construction given the federal act should be examined as persuasive authority for interpreting and construing this chapter.

Chapter 26 Mississippi Uniform Trade Secrets Act

§ 75-26-1

This chapter may be cited as the Mississippi Uniform Trade Secrets Act.

§ 75-26-3

As used in this chapter, unless the context requires otherwise:

(a) “Improper means” includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.

(b) “Misappropriation” means:

(i) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or

(ii) Disclosure or use of a trade secret of another without express or implied consent by a person who:

1. Used improper means to acquire knowledge of the trade secret; or

2. At the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was:

a. Derived from or through a person who had utilized improper means to acquire it;

b. Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or

c. Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limits its use; or

3. Before a material change of his or her position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.

(c) “Person” means a natural person, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision or agency or any other legal or commercial entity.

(d) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique or process, that:

(i) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and

(ii) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

§ 75-26-5

(1) Actual or threatened misappropriation may be enjoined. Upon application to the court, an injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation.

(2) In exceptional circumstances, an injunction may condition future use upon payment of a reasonable royalty for no longer than the period of time for which use could have been prohibited. Exceptional circumstances include, but are not limited to, a material and prejudicial change of position prior to acquiring knowledge or reason to know of misappropriation that renders a prohibitive injunction inequitable.

(3) In appropriate circumstances, affirmative acts to protect a trade secret may be compelled by court order.

§ 75-26-7

(1) Except to the extent that a material and prejudicial change of position prior to acquiring knowledge or reason to know of misappropriation renders a monetary recovery inequitable, a complainant is entitled to recover damages for misappropriation. Damages can include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss. In lieu of damages measured by any other methods, the damages caused by misappropriation may be measured by imposition of liability for a reasonable royalty for a misappropriator's unauthorized disclosure or use of a trade secret.

(2) If willful and malicious misappropriation exists, the court may award exemplary damages.

§ 75-26-9

If (a) a claim of misappropriation is made in bad faith, (b) a motion to terminate an injunction is made or resisted in bad faith or (c) willful and malicious misappropriation exists, the court may award reasonable attorney's fees to the prevailing party.

§ 75-26-11

In an action under this chapter, a court shall preserve the secrecy of an alleged trade secret by reasonable means, which may include granting protective orders in connection with discovery proceedings, holding in-camera hearings, sealing the records of the action and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval.

§ 75-26-13

An action for misappropriation must be brought within three (3) years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered. For the purposes of this section, a continuing misappropriation constitutes a single claim.

§ 75-26-15

(1) Except as provided in subsection (2), this chapter displaces conflicting tort, restitutionary and other law of this state providing civil remedies for misappropriation of a trade secret.

(2) This chapter does not affect:

(a) Contractual remedies, whether or not based upon misappropriation of a trade secret;

(b) Other civil remedies that are not based upon misappropriation of a trade secret; or

(c) Criminal remedies, whether or not based upon misappropriation of a trade secret.

§ 75-26-17

This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

§ 75-26-19

If any provision of this chapter or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of the chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

Chapter 27 Weights and Measures

§ 75-27-1

This article may be cited as the “Weights and Measures Law of 1964.”

§ 75-27-3

When used in this article:

(1) The word “person” means both the plural and singular, as the case demands, and includes individuals, partnerships, corporations, companies, societies, and associations.

(2) The words “weight(s) and (or) measure(s)” means all weights and measures of every kind, all instruments and devices and all electronic systems that employ a laser bar code reader to retrieve product identity, price and other information stored in computer memory, for weighing and measuring, or in the computing of any basic charge or payment for products bought or services rendered on the basis of weight or measure or count and any appliances and accessories associated with such instruments and devices, except that the term does not include meters for the measurement of electricity, gas, or water when the meters are operated in a public utility system, or production from oil and gas wells under the supervision of the State Oil and Gas Board. Such electricity, gas, and water meters are hereby specifically excluded from this article, and none of the provisions of this article shall apply to such meters or to any appliances or accessories associated with them.

(3) The words “sell” and “sale” means barter and exchange.

(4) The term “director” and “deputy director” means, respectively, the State Director of Weights and Measures, who shall be the Commissioner of Agriculture and Commerce, and the Deputy State Director of Weights and Measures, who shall serve as the administrator.

(5) The term “inspector” means a state inspector of weights and measures.

(6) The term “intrastate commerce” means any and all commerce or trade that is begun, carried on, and completed wholly within the limits of the State of Mississippi, and the phrase “introduced into intrastate commerce” shall be construed to define the time and place at which the first sale and delivery of a commodity is made within the state, and delivery being made either directly to the purchaser or to a common carrier for shipment to the purchaser.

(7) The term “commodity in package form” means commodity put up or packaged in any manner in advance of sale in units suitable for either wholesale or retail sale, exclusive, however, of an auxiliary shipping container enclosing packages that individually conform to the requirements of this article. An individual item or lot of any commodity not in package form as defined in this section, but on which there is marked a selling price based on an established price per unit of weight or of measure, shall be construed to be commodity in package form.

(8) The term “Handbook 44” means the National Institute of Standards and Technology Handbook 44, “Specifications, Tolerances, and Other Technical Requirements for Weighing and Measuring Devices.”

§ 75-27-5

The system of weights and measures in customary use in the United States and the metric system of weights and measures are jointly recognized, and one or the other of these systems shall be used for all commercial purposes in the State of Mississippi. The definitions of basic units of weights and measures, the tables of weight and measure, and weights and measures equivalents, as published by the National Bureau of Standards, are recognized and shall govern weighing and measuring equipment and transactions in the state.

§ 75-27-7

The term “barrel” shall mean a unit of thirty-one (31) gallons. However, the term “barrel,” when used in reference to seafood or parts thereof, shall be the measure defined by ordinance of the Mississippi Commission on Marine Resources under authority of Sections 49-15-1 through 49-15-67, Mississippi Code of 1972. The term “ton” shall mean a unit of two thousand (2,000) pounds avoirdupois weight. The term “cord” shall mean the amount that is contained in a space of one hundred twenty-eight (128) cubic feet when such is ranked and well stowed.

§ 75-27-9

Such weights and measures in conformity with the standards of the United States as have been supplied to the state by the federal government or otherwise obtained by the state for use as state standards shall, when the same shall have been certified as being satisfactory for use as such by the National Bureau of Standards, be the state standards of weight and measure. The state standards shall be kept in a safe and suitable place in the office or laboratory of the state division of weights and measures, they shall not be removed from the said office or laboratory except for repairs or for certification, and they shall be submitted at least once in ten (10) years to the National Bureau of Standards for certification. The state standards shall be used only in verifying the office standards and for scientific purposes.

§ 75-27-11

In addition to the state standards provided for in Section 75-27-9, there shall be supplied by the state at least one (1) complete set of copies of these to be kept in the office or laboratory of the state division of weights and measures and to be known as “office standards,” and also such “field standards” and such equipment as may be found necessary to carry out the provisions of this article. The office standards and field standards shall be verified upon their initial receipt and at least once each year thereafter, the office standards by direct comparison with the state standards and the field standards by comparison with the office standards.

§ 75-27-13

The commissioner of the department of agriculture and commerce shall be, ex officio, the director. There shall be a deputy state director of weights and measures and state inspectors of weights and measures, and necessary technical and clerical personnel, who shall be appointed by the director under the rules of said department, and who shall collectively comprise the state division of weights and measures, of which the deputy director shall be the administrator. The director shall be allowed salaries for the deputy director, the inspectors, and the necessary technical and clerical employees, for necessary equipment and supplies, and for traveling and contingent expenses, such sums as shall be appropriated by the legislature.

§ 75-27-15

A bond, with sureties, to be approved by the secretary of state, and conditioned upon the faithful performance of his duties and the safekeeping of any standards or equipment entrusted to his care shall, forthwith, upon his appointment, be given by the deputy director in the penal sum of five thousand dollars ($5,000.00), and by each inspector in the penal sum of one thousand dollars ($1,000.00). The premiums on such bonds shall be paid by the state.

§ 75-27-17

The director shall have the custody of the state standards of weight and measure and of the other standards and equipment provided for by this article, and shall keep accurate records of the same. The director shall enforce the provisions of this article. He shall have and keep a general supervision over the instruments for weighing and measuring offered for sale, sold, or in use in the state. He shall, annually, make to the governor, secretary of the senate and the clerk of the house of representatives, a report on all of the activities of his office.

§ 75-27-19

The director may adopt, amend or repeal regulations for the enforcement of this article, which regulations shall have the force and effect of law. These regulations may include (1) standards of net weight, measure or count, and reasonable standards of fill, for any commodity in package form, (2) rules governing the technical and reporting procedures to be followed and the report and record forms and marks of approval and rejection to be used by inspectors of weights and measures in the discharge of their official duties, and (3) exemptions from the sealing or marking requirements of Section 75-27-31 with respect to weights and measures of such character or size that such sealing or marking would be inappropriate, impracticable, or damaging to the apparatus in question. These regulations shall include specifications, tolerances and regulations for weights and measures of the character of those specified in Section 75-27-23, designed to eliminate from use, without prejudice to apparatus that conforms as closely as practicable to the official standards, those (1) that are not accurate, (2) that are of such construction that they are faulty-that is, that are not reasonably permanent in their adjustment or will not repeat their indications correctly, or (3) that facilitate the perpetration of fraud. The specifications, tolerances and regulations for commercial weighing and measuring devices, together with amendments thereto, as recommended by the National Institute of Standards and Technology and published in Handbook 44 and supplements thereto, or in any publication revising or superseding Handbook 44, shall be the specifications, tolerances, and regulations for commercial weighing and measuring devices of the State of Mississippi, except insofar as specifically modified, amended or rejected by a regulation issued by the director. For the purposes of this article, apparatus shall be deemed to be “correct” when it conforms to all applicable requirements promulgated as specified in this section; other apparatus shall be deemed to be “incorrect.” The division shall levy no charges or fees for the field tests or inspections made under this article; however, the director shall adopt a schedule of fees for calibration and testing services provided by the State Metrology Laboratory. Fees collected for such calibration and testing shall be deposited in the State Treasury in the special fund for the Department of Agriculture and Commerce. The director shall require persons installing scales with a weight capacity of ten thousand (10,000) pounds or more to secure a permit for each such scale installed, establish a fee not to exceed Fifty Dollars ($50.00) for such permit and require such person to supply the director with scale and scale foundation blueprints and specifications for each installation before installation of the scale. Applications for permit shall be made on forms prescribed and furnished by the director. The director shall establish and adopt scale pit and approach specifications for scales with a capacity of ten thousand (10,000) pounds or more. However, weighing devices with a capacity of ten thousand (10,000) pounds or more used to weigh road construction materials shall be exempt from the requirements of this article. Such weighing devices for road construction materials shall have a tolerance of one-half of one percent ( 1/2 of 1%) in lieu of the requirements of Handbook 44 and shall be regulated by the Mississippi Department of Transportation instead of the Department of Agriculture and Commerce. For purposes of this section, the term “road construction materials” shall include, but not be limited to, sand, gravel, asphalt, fill dirt, topsoil and concrete. The term “road construction materials” shall not include timber or timber products.

§ 75-27-21

The director shall from time to time test all weights and measures used in checking the receipt or disbursement of supplies in every institution for the maintenance of which monies are appropriated by the legislature, reporting his findings, in writing, to the supervisory board and to the executive officer of the institution concerned.

§ 75-27-23

When not otherwise provided by law, the director shall have the power to inspect and test, to ascertain if they are correct, all weights and measures kept, offered, or exposed for sale or purchase. It shall be the duty of the director within a twelve-month period, or less frequently if in accordance with a schedule issued by him, and as much oftener as he may deem necessary to inspect and test, to ascertain if they are correct, all weights and measures commercially used (1) in determining the weight, measurement or count of commodities or things sold or purchased, or offered or exposed for sale or purchase, on the basis of weight, measure, or of count, or (2) in computing the basic charge or payment for services rendered on the basis of weight, measure, or of count. Provided, that with respect to single-service devices-that is, devices designed to be used commercially only once and to be then discarded-and with respect to devices uniformly mass-produced, as by means of a mold or die, and not susceptible of individual adjustment, tests may be made on representative samples of such devices; and the lots of which such samples are representative shall be held to be correct or incorrect upon the basis of the results of the inspections and tests on such samples.

The manufacturer or distributor of any weighing device(s) offered for sale, sold, installed for commercial use or used commercially in this state shall subject such device to type evaluation testing by the National Type Evaluation Program (NTEP), National Institute of Standards and Technology (NIST). Any weighing device not covered by a certificate of conformance from such agency shall not be used commercially in this state.

§ 75-27-25

The director shall investigate complaints made to him concerning violations of the provisions of this article, and shall, upon his own initiative, conduct such investigations as he deems appropriate and advisable to develop information on prevailing procedures in commercial quantity determination and on possible violations of the provisions of this article and to promote the general objective of accuracy in the determination and representation of quantity in commercial transactions.

§ 75-27-27

The director shall, from time to time, weigh or measure and inspect packages or amounts of commodities kept, offered, or exposed for sale, sold, or in the process of delivery, to determine whether the same contain the amounts represented and whether they be kept, offered, or exposed for sale, or sold, in accordance with law; and when such packages or amounts of commodities are found not to contain the amounts represented, or are found to be kept, offered, or exposed for sale in violation of law, the director may order them off sale and may so mark or tag them as to show them to be illegal. In carrying out the provisions of this section, the director may employ recognized sampling procedures under which the compliance of a given lot of packages will be determined on the basis of the result obtained on a sample selected from and representative of such lot. No person shall (1) sell or keep, offer, or expose for sale, in intrastate commerce, any package or amount of commodity that has been ordered off sale or marked or tagged as provided in this section unless and until such package or amount of commodity has been brought into full compliance with all legal requirements, or (2) dispose of any package or amount of commodity that has been ordered off sale or marked or tagged as provided in this section and that has not been brought into compliance with legal requirements, in any manner except with the specific approval of the director.

§ 75-27-29

The director shall have the power to issue stop-use orders, stop-removal orders, and removal orders with respect to weights and measures being, or susceptible of being, commercially used, and to issue stop-removal orders and removal orders with respect to packages or amounts of commodities kept, offered, or exposed for sale, sold, or in process of delivery, whenever in the course of his enforcement of the provisions of this article he deems it necessary or expedient to issue such orders, and no person shall use, remove from the premises specified, or fail to remove from the premises specified, any weight, measure, or package or amount of commodity contrary to the terms of a stop-use order, stop-removal order, or removal order issued under the authority of this section. However, the director must give a five-day written notice to the affected person, business or corporation before issuing a stop-use order on any weighing device with a weight capacity of ten thousand (10,000) pounds or greater.

§ 75-27-31

The director shall approve for use and seal or mark with appropriate devices such weights and measures as he finds upon inspection and test to be “correct” as defined in Section 75-27-19, and shall reject and mark or tag as “rejected” such weights and measures as he finds, upon inspection or test, to be “incorrect” as defined in Section 75-27-19, but such sealing or marking shall not be required with respect to such weights and measures as may be exempted therefrom by a regulation of the director issued under the authority of Section 75-27-19.

§ 75-27-33

With respect to the enforcement of this article and any other laws dealing with weights and measures that he is, or may be, empowered to enforce, the director is hereby vested with police powers, such as given to sheriffs and constables, and may seize for use as evidence, with warrant, incorrect or unsealed weights and measures or amounts or packages of commodity found to be used, retained, offered, or exposed for sale, or sold, in violation of law.

§ 75-27-35

The powers and duties given to and imposed upon the director by Sections 75-27-21 through 75-27-33, and 75-27-61, of this article are hereby given to and imposed upon the deputy director and inspectors also, when acting under the instructions and at the direction of the director.

§ 75-27-37

Weights and measures that have been rejected shall not again be used commercially after a thirty-day waiting period or until they have been officially reexamined and found to be correct or until specific written permission for such use is issued by the rejecting authority.

§ 75-27-39

Commodities in liquid form shall be sold only by liquid measure or by weight, and, except as otherwise provided in this article, commodities not in liquid form shall be sold only by weight, by measure of length or area, or by count. Provided, that liquid commodities may be sold by weight, and commodities not in liquid form may be sold by count only if such methods give accurate information as to the quantity of commodity sold. Pulpwood shall be sold either by volume or weight, and measured by the cord or the ton as defined in Section 75-27-7. Purchasers of pulpwood, in determining payment to seller, may convert from weight to volume or volume to weight. Such purchasers shall make the conversion by using the following weights per cord: five thousand two hundred (5,200) pounds for pine, five thousand four hundred (5,400) pounds for soft hardwood, five thousand six hundred (5,600) pounds for mixed hardwood, and five thousand eight hundred (5,800) pounds for hard hardwood.

The provisions of this section shall not apply (1) to insect damaged, dead or otherwise damaged pulpwood, (2) to commodities when sold for immediate consumption on the premises where sold, (3) to vegetables when sold by the head or bunch, (4) to commodities in containers standardized by a law of this state or by federal law, (5) to commodities in package form when there exists a general consumer usage to express the quantity in some other manner, (6) to concrete aggregates, concrete mixtures, and loose solid materials such as earth, soil, gravel, crushed stone, and the like, when sold by cubic measure, (7) to unprocessed vegetable and animal fertilizer when sold by cubic measure, or (8) to timber when sold in bulk on the stump. The director may issue such reasonable regulations as are necessary to assure that amounts of commodity sold are determined in accordance with good commercial practice and are so determined and represented as to be accurate and informative to all parties at interest.

§ 75-27-41

Except as otherwise provided in this article, any commodity in package form introduced or delivered for introduction into or received in intrastate commerce, kept for the purpose of sale, or offered or exposed for sale in intrastate commerce shall bear on the outside of the package a definite, plain, and conspicuous declaration of (1) the identity of the commodity in the package unless the same can easily be identified through the wrapper or container, (2) the net quantity of the contents in terms of weight, measure, or count, and (3) in the case of any package kept, offered, or exposed for sale, or sold any place other than on the premises where packed, the name and place of business of the manufacturer, packer, or distributor. Provided, that in connection with the declaration required under clause (2), neither the qualifying term “when packed” or any words of similar import shall be used. Provided further, that under clause (2) the director shall, by regulation, establish (a) reasonable variations to be allowed, which shall include variations below the declared weight or measure caused by ordinary and customary exposure, only after the commodity is introduced into intrastate commerce, to conditions that normally occur in good distribution practice and that unavoidably result in decreased weight or measure, (b) exemptions as to small packages, and (c) exemptions as to commodities put up in variable weights or sizes for sale intact and either customarily not sold as individual units or customarily weighed or measured at time of sale to the consumer.

§ 75-27-43

In addition to the declarations required by Section 75-27-41, any commodity in package form, the package being one of a lot containing random weights, measures, or counts of the same commodity and bearing the total selling price of the package, shall bear on the outside of the package a plain and conspicuous declaration of the price per single unit of weight, measure, or count.

§ 75-27-45

No commodity in package form shall be so wrapped, nor shall it be in a container so made, formed, or filled, as to mislead the purchaser as to the quantity of the contents of the package, and the contents of a container shall not fall below such reasonable standard of fill as may have been prescribed for the commodity in question by the director.

§ 75-27-47

Whenever a commodity in package form is advertised in any manner and the retail price of the package is stated in the advertisement, there shall be closely and conspicuously associated with such statement of price a declaration of the basic quantity of contents of the package as is required by law or regulation to appear on the package. Provided, that in connection with the declaration required under this section there shall be declared neither the qualifying term “when packed” nor any other words of similar import, nor any term qualifying a unit of weight, measure, or count that tends to exaggerate the amount of commodity in the package.

§ 75-27-49

The word “weight” as used in this article in connection with any commodity shall mean net weight. Whenever any commodity is sold on the basis of weight, the net weight of the commodity shall be employed, and all contracts concerning commodities shall be so construed. Provided, however, this shall not apply to bales of cotton which are customarily sold by gross weight.

§ 75-27-51

Whenever any commodity or service is sold, or is offered, exposed, or advertised for sale, by weight, measure, or count, the price shall not be misrepresented, nor shall the price be represented in any manner calculated or tending to mislead or deceive an actual or prospective purchaser. Whenever an advertised, posted, or labeled price per unit of weight, measure, or count includes a fraction of a cent, all elements of the fraction shall be prominently displayed and the numeral or numerals expressing the fraction shall be immediately adjacent to, of the same general design and style as, and at least one-half ( 1/2 ) the height and width of the numerals representing the whole cent; provided, however, the provisions of this section shall not apply to signs and requirements enumerated in Section 75-55-9, Mississippi Code of 1972. A person who is found guilty of the misrepresentation of the price of a commodity or the representation of a price in any manner calculated or tending to mislead or deceive an actual or prospective purchaser shall be assessed a civil penalty by the director or his designee in the amount of not less than One Hundred Dollars ($100.00) for the first offense and not less than One Hundred Dollars ($100.00) nor more than Five Hundred Dollars ($500.00) for each subsequent offense. Each violation shall constitute a separate offense. The commissioner or his designee shall afford the person an opportunity for a hearing to show cause why the penalty should not be assessed.

§ 75-27-53

Fractional parts of any unit of weight or measure shall mean like fractional parts of the value of such unit as prescribed or defined in Sections 75-27-5 and 75-27-7, and all contracts concerning the sale of commodities and services shall be construed in accordance with this requirement.

§ 75-27-55

Any person who shall wilfully hinder or obstruct in any way the director, the deputy director, or any one of the inspectors, in the performance of his official duties shall be guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not less than fifty dollars ($50.00) nor more than two hundred dollars ($200.00), or by imprisonment for not more than three (3) months, or by both such fine and imprisonment.

§ 75-27-57

Any person who shall impersonate in any way the director, the deputy director, or any one of the inspectors, by the use of his seal or a counterfeit of his seal, or in any other manner, shall be guilty of a misdemeanor, and, upon conviction, may be punished by a fine of not less than Two Hundred Dollars ($200.00) nor more than One Thousand Dollars ($1,000.00), or by imprisonment for not more than one (1) year, or by both such fine and imprisonment.

§ 75-27-59

(1) Any person who by himself, by his agent, or as the agent of another person, commits any one (1) of the acts enumerated in paragraphs (a) through (j) of this subsection is guilty of a misdemeanor and, upon a first conviction thereof, shall be punished by a fine of not less than Fifty Dollars ($50.00) nor more than Two Hundred Dollars ($200.00), or by imprisonment for not more than three (3) months, or by both such fine and imprisonment; and upon a second or subsequent conviction, he shall be punished by a fine of not less than One Hundred Dollars ($100.00) nor more than Five Hundred Dollars ($500.00), or by imprisonment for not more than one (1) year, or by both such fine and imprisonment. It is unlawful for a person to:

(a) Use or have in possession for the purpose of using for any commercial purpose specified in Section 75-27-23, sell, offer, or expose for sale or hire, or have in possession for the purpose of selling or hiring, an incorrect weight or measure of any device or instrument used to or calculated to falsify any weight or measure.

(b) Use or have in possession for the purpose of current use for any commercial purpose specified in Section 75-27-23, a weight or measure that does not bear a seal or mark such as is specified in Section 75-27-31, unless such weight or measure has been exempted from testing by the provisions of Section 75-27-23, or by a regulation of the director issued under the authority of Section 75-27-19.

(c) Dispose of any rejected or condemned weight or measure in a manner contrary to law or regulation.

(d) Remove from any weight or measure, contrary to law or regulation, any tag, seal, or mark placed thereon by the appropriate authority.

(e) Sell, or offer or expose for sale, less than the quantity he represents of any commodity, thing, or service.

(f) Take more than the quantity he represents of any commodity, thing, or service, when, as buyer, he furnishes the weight or measure by means of which the amount of the commodity, thing, or service is determined.

(g) Keep for the purpose of sale, advertise, or offer or expose for sale, or sell, any commodity, thing, or service in a condition or manner contrary to law or regulation.

(h) Use in retail trade, except in the preparation of packages put up in advance of sale and of medical prescriptions, a weight or measure that is not so positioned that its indications may be accurately read and the weighing or measuring operation observed from some position which may reasonably be assumed by a customer.

(i) Buy or sell pulpwood by any means other than those prescribed in Section 75-27-39.

(j) Violate any provision of this article or of the regulations promulgated under the provisions of this article for which a specific penalty has not been prescribed.

(2) Any person who by himself, by his agent, or as the agent of another person, commits any of the acts enumerated in subsection (1) of this section may be assessed by the director, or his designee, an administrative penalty of:

(a) Not less than One Hundred Dollars ($100.00) nor more than One Thousand Dollars ($1,000.00) for a first violation;

(b) Not less than One Hundred Dollars ($100.00) nor more than Two Thousand Dollars ($2,000.00) for a second violation committed within twelve (12) months of the first violation; and

(c) Not less than One Thousand Dollars ($1,000.00) nor more than Three Thousand Dollars ($3,000.00) for a third violation committed within eighteen (18) months from the date of the first violation.

(3) Any person, subject to an administrative penalty, shall have a right to request an administrative hearing within thirty (30) days of receipt of the notice of the penalty. The director, or his designee, is authorized to conduct the hearing after giving appropriate notice to the respondent. The decision of the director, or his designee, shall be subject to appropriate judicial review.

(4)(a) If the respondent has exhausted his administrative appeals and the civil penalty has been upheld, he shall pay the civil penalty within thirty (30) days of the effective date of the final decision. If the respondent fails to pay the penalty, a civil action may be brought by the director in any court of competent jurisdiction.

(b) Any civil penalty collected under this section shall be transmitted to the General Fund.

§ 75-27-61

The director is authorized to apply to any court of competent jurisdiction for, and such court upon hearing and for cause shown may grant, a temporary or permanent injunction restraining any person from violating any provision of this article.

§ 75-27-63

For the purposes of this article, proof of the existence of a weight or measure or a weighing or measuring device in or about any building, enclosure, stand, or vehicle in which or from which it is shown that buying or selling is commonly carried on, shall, in the absence of conclusive evidence to the contrary, be presumptive proof of the regular use of such weight or measure or weighing or measuring device for commercial purposes and of such use by the person in charge of such building, enclosure, stand, or vehicle.

§ 75-27-65

Prosecutions for violation of any provision of this article are declared to be valid and proper notwithstanding the existence of any other valid general or specific law of this state dealing with matters that may be the same as or similar to those covered by this article.

§ 75-27-67

Any person engaging in the business of scale repairing or testing shall obtain a license annually from the State Director of Weights and Measures upon showing that he is qualified to repair or test scales and that he meets all requirements of the National Institute of Standards and Technology Handbook 44 and supplements thereto or in any publication revising or superseding Handbook 44. The annual cost of such license shall be One Hundred Dollars ($100.00) for scale service-repair companies and Fifty Dollars ($50.00) for scale service repairmen, which shall be collected by the director and paid into the State Treasury, and shall expire on the thirtieth day of June next after its issuance. The director is hereby authorized to revoke any such license for a violation of any of the provisions of this article or any rule or regulation promulgated thereunder. Any person so licensed shall, within three (3) days after he adjusts, repairs, services, restores to service or places in service any scale, make a report thereof to the Director of Weights and Measures on a form provided by the Department of Agriculture and Commerce.

All such fees collected shall be paid into the General Fund in the State Treasury.

It shall be unlawful and a misdemeanor: (1) for any person other than the owner, or his regular employees, to repair any weighing or measuring device unless he holds the above-prescribed license; or (2) for any person to retain any remuneration for repairing any weighing or measuring device unless the repairing involved causes such device to meet the requirements of the article for at least ninety (90) days after such repairing; or (3) for any person to violate any of the provisions of this section.

§ 75-27-101

The standards of the weights and measures of this state as given below shall be deposited with the secretary of state and also at the different state institutions of learning, and the secretary of state and the proctors of those institutions are authorized to confirm and seal all weights and measures brought to them, and to receive the fees therefor. And on all sales by weight of the agricultural products hereinafter named the number of pounds per bushel or the number of pounds per gallon as stated in the following schedule shall be the true and legal standard weight, viz.:

| Barley, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․60 pounds | | --- | --- | | Bluegrass seed, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․14 pounds | | Bran, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․20 pounds | | Buckwheat, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․48 pounds | | Castor beans, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․46 pounds | | Clover seed, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․60 pounds | | Corn, in the ear․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․72 pounds | | Corn, shelled, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․56 pounds | | Corn meal, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․48 pounds | | Corn meal, bolted, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․44 pounds | | Corn meal, unbolted, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․48 pounds | | Cottonseed, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․32 pounds | | Dried apples, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․26 pounds | | Dried peaches, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․33 pounds | | Flaxseed, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․56 pounds | | Flour, in barrels, per barrel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․196 pounds net | | Flour, in half barrels․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․98 pounds net | | Flour, in one-fourth barrel sacks․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․48 pounds net | | Flour, in one-eighth barrel sacks․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․24 pounds net | | Ground peas, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․24 pounds | | Hempseed, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․44 pounds | | Hungarian grass seed, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․50 pounds | | Irish potatoes, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․60 pounds | | Lime, unslacked, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․80 pounds | | Louisiana cane molasses, per gallon․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․11 pounds | | Malt, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․38 pounds | | Meal, in barrels․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․200 pounds net | | Millet seed, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․50 pounds | | Oats, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․32 pounds | | Onions, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․57 pounds | | Peas, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․60 pounds | | Rye, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․56 pounds | | Salt, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․50 pounds | | Sorghum, per gallon․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․11 pounds | | Sorghum seed, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․42 pounds | | Stone coal, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․80 pounds | | Sweet potatoes, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․54 pounds | | Timothy seed, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․45 pounds | | Turnips, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․55 pounds | | Wheat, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․60 pounds | | White beans, per bushel․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․60 pounds |

§ 75-27-103

It is hereby made a misdemeanor for any person or corporation to sell or buy any of the foregoing commodities on short weights in violation of the above schedule of rates and any such person or corporation upon conviction shall be punished by a fine of not less than Five Dollars ($5.00) nor more than Fifty Dollars ($50.00).

§ 75-27-105

If any person shall sell, keep, or offer for sale, any barrel of flour, meal, pork, or beef, as a barrel thereof, containing less than the standard weight net, he shall forfeit to the county all of such underweight flour, meal, pork, or beef which he may have in his possession.

§ 75-27-107

(1) It shall be unlawful for any person, partnership, corporation, company, cooperative society, or organization to pack for sale, sell, offer or expose for sale in this state any of the following commodities except in containers of net avoirdupois weights of two (2), five (5), ten (10), twenty-five (25), fifty (50), and one hundred (100) pounds, and multiples of one hundred (100) pounds; wheat flour, self-rising wheat flour, phosphated wheat flour, bromated flour, enriched flour, enriched self-rising flour, enriched bromated flour, corn flour, corn meals, hominy and hominy grits; provided, however, that the provisions of this section shall not apply to (a) the retailing of flours, meals, hominy and hominy grits direct to the consumer from bulk stock, or (b) the sale of flours and meals to commercial bakers or blenders or for export in containers of more than one hundred (100) pounds, or (c) flours, meals, hominy and hominy grits packed in cartons the net contents of which are less than five (5) pounds, or (d) the exchange of wheat for flour by mills grinding for toll. Provided that this section shall not apply to stock on hand at time of enactment.

(2) Any violation of this section shall constitute a misdemeanor and upon conviction, the offender shall be fined not less than twenty-five dollars ($25.00) nor more than five hundred dollars ($500.00) for each offense.

§ 75-27-109

The standard weight of coal shall and is hereby established at two thousand (2,000) pounds to the ton, or two hundred (200) pounds to the box or barrel, and unless otherwise agreed upon, coal shall be sold by the ton of two thousand (2,000) pounds, or the box or barrel of two hundred (200) pounds.

§ 75-27-111

Unless otherwise agreed upon, charcoal shall be sold by measure, and the measure of charcoal shall be a barrel of the capacity of three and one-quarter (3 1/4 ) bushels.

§ 75-27-113

(1) Timber purchased by weight or measured volume shall be purchased by weight on the basis of tonnage or pounds with one (1) ton equaling two thousand (2,000) pounds avoirdupois weight, or by measured volume so long as the measured volume is not calculated by weight but is derived from any of the standards provided in subsection (2).

(2) When timber is purchased by measured volume, the timber shall be measured by either cubic feet, Doyle Log Rule, International 1/4 Inch Rule or Scribner Decimal C Rule.

(3) No person, firm or corporation, shall use any scales or measuring device in the purchase of timber unless the same is true and accurate. All devices used for buying or selling timber shall comply with specifications and tolerances and other requirements of this chapter, and regulations adopted pursuant thereto.

(4) Purchaser specifications shall be made available to the haulers and timber owners and shall be posted in a place easily accessible to the haulers or timber owners at the location where the timber is weighed or measured. Scale tickets shall be made available to the haulers and timber owners for each load before the close of the following business day and shall include the measured volume or weight, the standard of weight or measurement used, and the basis and amount of any deductions.

(5)(a) The State Director of Weights and Measures, the Deputy Director of Weights and Measures and any state inspector of weights and measures are hereby vested with police powers, such as given to sheriff and constables, for the sole purpose of issuing citations, without warrant, to any person who the Director, Deputy Director or inspector has probable cause to believe is violating this section, or who shall impede, hinder or otherwise prevent or attempt to prevent the testing of scales or measuring devices or enforcement of this chapter. The citation shall be returnable to the Deputy Director of Weights and Measures. No citation for a violation of this section shall be issued after one (1) year from the date of the violation.

(b) The Deputy Director of Weights and Measures, or his designee, shall within thirty (30) days of the issuance of the citation, dismiss the citation, issue a written warning or levy a fine of not more than Two Hundred Dollars ($200.00) for the first offense; not more than Five Hundred Dollars ($500.00) for the second offense if the second offense occurs within six (6) months of the first offense; or not more than Two Thousand Dollars ($2,000.00) for the third and subsequent offenses, if the third or subsequent offenses occur within six (6) months of the first offense. If the Deputy Director of Weights and Measures, or his designee, determines the violation was unintentional and due to an act of God or was beyond the reasonable control of the person, firm or corporation committing the violation, no fine shall be levied. A person, firm or corporation operating any scales or measuring devices in the purchase of timber at more than one (1) location in the state shall not be subject to fines for second or subsequent offenses unless the offenses occur at the same location on separate days. A citation shall record each and every violation of this section but for the purposes of determining second and subsequent offenses under this section, all violations of this section committed by one (1) person, firm or corporation at one (1) location during one (1) day shall constitute one (1) offense.

(c) Any person, firm or corporation may appeal a fine to the State Director of Weights and Measures or his designee. The appeal must be filed within thirty (30) days after the levy of the fine. Any party aggrieved by the final order of the State Director of Weights and Measures, or his designee, may appeal to the Chancery Court of the First Judicial District of Hinds County, Mississippi, by filing an appeal within thirty (30) days of a final order of the Director of Weights and Measures. If no appeal is taken and the fine is not paid within sixty (60) days of the order or if the fine is upheld on appeal and no further appeal is taken and the fine is not paid within sixty (60) days of the ruling on the appeal, the Director of Weights and Measures may forward an abstract of the order or judgment to the circuit clerk of any county in the State of Mississippi for enrolling as any other judgment. After enrolling the judgment, the Director of Weights and Measures may institute an action to recover the fines assessed under this section in the name of the State of Mississippi in any court of competent jurisdiction or otherwise proceed as a judgment creditor pursuant to the laws of the State of Mississippi.

(6) This section does not apply to pulpwood as defined in Section 75-79-5 of the Mississippi Uniform Pulpwood Scaling and Practices Act.

§ 75-27-114

Notwithstanding any provision within this chapter to the contrary, natural gas motor fuels shall be sold as follows:

(a) Liquefied natural gas motor fuel shall be sold in diesel gallon equivalents defined as 6.06 pounds of liquefied natural gas; provided, however, that if the National Conference of Weights and Measures establishes a different definition of diesel gallon equivalent, such definition shall be used.

(b) Compressed natural gas motor fuel shall be sold in gasoline gallon equivalents. A gasoline gallon equivalent of CNG shall be defined as 5.660 pounds; provided, however, that if the National Conference on Weights and Measures establishes a different definition of gasoline gallon equivalent, such definition shall be used.

§ 75-27-201

If shall be unlawful for any person, firm or corporation or an agent thereof, or person acting therefor, to be engaged in whole or in part:

(a) In the business of operating a packing house where livestock is purchased by weight, or

(b) In the business of selling livestock by auction, or otherwise, for others by weight, or

(c) In the business of selling livestock by weight on a commission basis, fee or for other compensation, or

(d) To thus sell, buy, dispose of, trade, offer for sale, or cause or permit to be sold, disposed of or offered for sale, any livestock, by weight, unless such animals are first weighed by a licensed and bonded weigher, or a weigher registered under the Federal Packers and Stockyards Act of 1921, as amended, on a scale, or other weighing device, tested and approved by the state commissioner of agriculture and commerce. Each separate location where any of the businesses heretofore described are carried on shall be considered a separate business within the meaning of the provisions of this article even though all of such separate operations are owned by and under the control of the same person, firm or corporation. Provided, however, this article does not apply to bona fide farmers who trade livestock between themselves or who make purchases or sales. Provided, further that this article shall not apply to cold storage plants, pork processing, or local community slaughterers of livestock for retail. It shall be the responsibility of the owner or operator of such business to see that all scales and equipment used are maintained in good and accurate condition.

§ 75-27-203

The commissioner of agriculture and commerce of Mississippi and his duly appointed agents shall administer the provisions of this article. The commissioner shall have authority to promulgate, from time to time, such rules and regulations as are necessary for the enforcement of the provisions of this article. The commissioner shall prescribe by regulations the tolerance which will be recognized in the reweighing of animals.

§ 75-27-205

The weights and measures received from the United States under joint resolutions of Congress approved June 14, 1836, and July 27, 1866, and such new weights and measures as shall be received from the United States as standard weights and measures in addition thereto or in renewal thereof, and such weights and measures in conformity therewith as shall be supplied by the state shall, when the same shall have been certified by the national bureau of standards, be the state standards of weights and measures for the purpose of this article.

§ 75-27-207

Whenever the commissioner of agriculture and commerce finds that a weighing device corresponds with the standards in his possession, he shall seal or mark such weighing device with an appropriate label or tag. He shall mark “condemned-not to be used” on incorrect weighing devices, or devices which do not meet the requirements of this article. The owner or user of such latter named devices shall not again use such devices unless, and until, same have been repaired or changed by such owner or user and have been approved by the commissioner of agriculture and commerce or authorized agent and sealed and marked as provided above. Provided, however, no scales shall be condemned where minor adjustments will bring such scales in conformity.

§ 75-27-209

(1) No person, firm or corporation covered by the provisions of Section 75-27-201 shall engage in the sale or purchase of livestock, by weight, without first having secured a permit, issued by the commissioner of agriculture and commerce, for a fee not to exceed one hundred fifty dollars ($150.00), provided, however, in operating a packing house, only one (1) permit shall be required for any firm, corporation or other such place of business, though a number of persons may be employed in the packing house, whose duties may include or be limited to the weighing of cattle, except that each separate location where any livestock is purchased or processed shall be considered to be a separate business. Permits shall be issued or renewed annually, beginning July 1, 1958, and may be revoked by the issuing office for good cause shown. Initial permits issued after the month of July for any person covered by the provisions of Section 75-27-201, the charge shall be at the rate of one-twelfth ( 1/12 ) of the stipulated fee for each remaining month in the fiscal year. Permits issued under the provisions of this article shall not be transferable and shall apply to only the particular yard, sales barn, meat packer, commission merchant or other particular persons covered by this article; and an additional permit must be obtained for each additional such business. Each person covered by the provisions of Section 75-27-201 shall execute and maintain a surety bond payable to the State of Mississippi with securities to be approved by the Secretary of State for the faithful performance of their functions under this article and said bond may be put in suit by any damaged party. Provided, however, any such person may elect to maintain, in whole or partial substitution for such surety bond, one or more irrevocable letters of credit, surety bonds or trust fund agreements, or combination thereof. The total amount of the letter(s) of credit, surety bond(s) or trust fund agreement(s) or combination thereof, shall not be less than the total required amount of the surety bond. All bonds, letters of credit or trust fund agreements shall in matter of form, content, and calculated coverage meet the requirements of the Code of Federal Regulations Title 9, Part 201, Packers and Stockyards Administration General Bonding Regulations or as such regulations may be amended. In no case shall the amount of bond coverage be less than ten thousand dollars ($10,000.00). In the event of default by persons covered by this article the commissioner of agriculture and commerce may, at his discretion, be named as trustee for the dispersal of moneys calculated to be due and payable to individuals injured by such default as determined by the Packers and Stockyards Administration. In the event a buyer under the terms of this article has more than one (1) employee engaged in the weighing of livestock, a single bond covering all persons weighing livestock shall be deemed sufficient for the purposes of this article. However, the aggregate liability of the surety for all such suits shall, in no event, exceed the sum of said bond. Any person who has met the requirements of federal law by posting a similar bond, letter of credit or trust fund agreement and filing a copy of such instrument with the commissioner of agriculture and commerce shall be exempt from the above bond requirement of making a State of Mississippi bond for the protection of the public. All surety bonds, letters of credit or trust fund agreements shall be filed with the commissioner of agriculture and commerce. Instruments thus filed shall be construed to cover the sale or purchase of livestock at any place of business defined in Section 75-27-201 and it shall be immaterial that the actual purchase or sale was made at some place other than or away from the place of business of seller or purchaser if the purchase or sale was made in the name of such a person as is defined in Section 75-27-201, and the bond shall be construed to cover the issuance of checks in payment for livestock where the maker or payer or endorser, making the same, uses his business name to describe a place of business covered by Section 75-27-201 and the check is not paid for any reason and is due and payable.

(2) Each livestock sales barn, auction sales barn, meat packer, commission merchant, or other similar business, defined in Section 75-27-201, shall make a monthly report at the end of each month to the commissioner of agriculture and commerce showing the number of livestock sold or bought by species.

§ 75-27-211

It shall be the duty of the commissioner of agriculture and commerce, either by himself or his duly authorized agents, to inspect, examine and test any and all equipment used by such livestock sales establishments, and to check the weights of animals sold at such time, and place, and in such manner as he may deem proper and necessary to carry out the intent of this article. The said commissioner shall also issue such permits and collect such fees as are herein provided. All monies collected under this article shall be paid into the general fund in the state treasury.

Provided further, the commissioner is hereby authorized, upon written request, to test the scales, or other weighing devices, of any person in this state desiring such tests, and if the commissioner finds such scales, or other weighing devices to be accurate, within the approved tolerances, he may place his seal of approval thereon. The commissioner shall charge for such services a sum sufficient to defray the expenses thereof, and no part of such cost shall be paid from other funds of said commissioner. A strict accounting of all sums received for such testing and approval shall be made.

§ 75-27-213

The person who is responsible for the weighing and recording of weights of animals sold at such barns shall be known as a weigher. Each weigher, or any person so designated by the owner or weigher, shall be bonded in the penal sum of one thousand dollars ($1,000.00) with sureties to be approved by the secretary of state for the faithful performance of the duties of his office.

§ 75-27-215

All auctioneers shall be licensed by the payment of a fee of twenty-five dollars ($25.00) per year and no auctioneer shall be permitted to buy cattle in his name during the period while actually engaged in auctioneering.

§ 75-27-217

All scales used in the weighing of livestock at public auction shall be so located and operated that they will at all times be conveniently accessible. Provided, further, that scales shall be equipped with weight indicator to provide exact duplicate of weight on each animal weighed.

§ 75-27-219

Each barn shall be required to post in a conspicuous place, printed in large type letters and numbers, not less than 36 point type, a complete schedule of charges to be made on the handling of all types of sales.

This schedule shall remain permanently posted.

§ 75-27-221

Any person, firm, corporation, association, or co-operative violating any of the provisions of this article or any of the rules and regulations promulgated hereunder shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not more than one hundred dollars ($100.00), or by imprisonment of not more than three (3) months, or by both such fine and imprisonment. If the commissioner of agriculture and commerce shall find, upon examination or test, that any person, firm or corporation has violated any of the provisions of this article or rules or regulations hereunder, he or his duly authorized agent or agents may institute proceedings in a court of competent jurisdiction to have such person, firm, corporation, association, or co-operative convicted therefor, or the said commissioner may, in his discretion, report the results of such inspection to the district attorney or county attorney having jurisdiction, together with such other evidence of said violation as he shall deem necessary, and any certificate of such inspection or test, properly certified by affidavit shall be competent evidence in any court of this state. It shall be the duty of said district attorney or county prosecuting attorney to institute proceedings at once against the person, or persons, firms, corporations, associations, or co-operatives charged with such violations.

§ 75-27-223

No prosecutions shall be commenced under this article for violations of Sections 75-27-201 and 75-27-203 hereof until the initial testing of scales has been made or sought to be made by the commissioner of agriculture and commerce or his representatives.

§ 75-27-301

This article shall be cited as the “Bonded Weighmaster's Law.”

§ 75-27-303

For the purposes of this article, the following words shall have the meanings ascribed herein unless the context clearly requires otherwise:

(1) “Bonded weighmaster” shall mean any person engaged in the business of public weighing who shall weigh or measure any property, commodity, produce or article and issue therefor a weight certificate which shall be accepted as the true and accurate weight or measure upon which the property, commodity, produce or article is offered for sale or sold and shall be licensed by the Commissioner of Agriculture and Commerce of the State of Mississippi for such office.

(2) “Public weighing” shall mean the performance of the service of weighing or measuring and the issuing of an official certificate of weight or measure for such service for any person, upon request or otherwise, with or without compensation, of property, commodity, produce or article other than such property, commodity, produce or article being bought or sold by a bonded weigher or his or her employer.

(3) “Person” shall mean any individual, company, cooperative, partnership, corporation, firm or association.

(4) “Weighing or measuring device” shall mean any lawful device used for the weighing or measuring of any property, commodity, produce or article.

(5) “Commissioner” shall mean the Commissioner of Agriculture and Commerce of the State of Mississippi.

§ 75-27-305

(1) A citizen of the United States or a person who has declared his intention of becoming such a citizen, who is a resident of the State of Mississippi, not less than twenty-one (21) years of age, of good moral character, who has the ability to weigh accurately and to make correct weight certificates, and who has received from the commissioner a license as a bonded weighmaster, shall be styled and authorized to act as a bonded weighmaster.

(2) The commissioner may adopt rules and regulations for determining the qualifications of the applicant for license as a bonded weighmaster. The commissioner may pass upon the qualifications of the applicant upon the basis of the information supplied in the application, may examine such applicant orally or in writing, or both, for the purpose of determining his or her qualifications. The commissioner shall grant licenses to such applicants as may be found to possess the qualifications required herein. The commissioner shall keep a record of all such applications and of all licenses issued thereon.

§ 75-27-307

(1) Any person, as defined by Section 75-27-303(3), or business before engaging in business as a public weighmaster shall obtain a license from the commissioner. Applications for such license shall be made on forms prescribed and furnished by the commissioner. Licenses issued hereunder by the commissioner shall expire on June 30 of each year and application for renewal thereof shall be made annually, before the expiration date. The fee for such license and all subsequent renewals for an individual who is not employed by a business shall be Twenty-five Dollars ($25.00). The fee for such license and all subsequent renewals for a business is One Hundred Dollars ($100.00), and such license shall cover all employees of that business. Funds collected from such license fees shall be paid into the State Treasury to the credit of the General Fund.

(2) Licenses issued hereunder shall not be transferable.

(3) Each application for license shall be accompanied by a signed weighmaster's oath, a surety bond as required herein and a statement certifying that the weighing or measuring device used has been tested and declared to be accurate, within tolerances allowed by NBS Handbook 44 for such device, by the state weights and measures jurisdiction.

(4) The issuance of a license as a bonded weighmaster shall not obligate the state to pay to the licensee any compensation for his or her services as a bonded weighmaster.

(5) A bonded weighmaster may not officially weigh or measure any property, commodity, produce or article unless he or she holds a valid license issued by the commissioner.

(6) A bonded weighmaster's license may be revoked by the commissioner for violation of the provisions of this law or regulations promulgated hereunder; provided, however, such bonded weighmaster shall be permitted a hearing prior to the revocation of such license.

(7) The following persons shall not be required, but shall be permitted, to obtain licenses as bonded weighmasters:

(a) A weights and measures officer employed by the Department of Agriculture and Commerce when acting within the scope of his official duties;

(b) A person weighing or measuring property, produce, commodities or articles that he/she or his/her employer, if any, is either buying or selling;

(c) A person weighing or measuring property, produce, commodities or articles in conformity with the requirements of federal statutes or the statutes of this state relative to warehousemen or processors;

(d) Employees of the state or federal government for the performance of their duties under regulations of the Federal Grain Inspection Service (FGIS);

(e) All persons or businesses operating under the jurisdiction of the Interstate Commerce Act.

§ 75-27-309

Each person, at the time application is made for a bonded weighmaster's license, shall execute an official weighmaster's oath in which he agrees to lawfully and faithfully fulfill the duties and responsibilities of a bonded weighmaster. The weighmaster's oath shall be made a part of each annual renewal of such bonded weighmaster's license. The bonded weighmaster's oath shall be supplied to the applicant by the commissioner.

§ 75-27-311

(1) Each bonded weighmaster shall, at his or her own expense, provide himself or herself with an impression seal. The licensee's name and the word “Mississippi” shall be inscribed around the outer margin of the seal and the words “Bonded Weighmaster” shall be inscribed in the center thereof.

(2) Such seal, or licensee's name and number, shall be impressed or inscribed electronically upon each weight certificate issued by such bonded weighmaster, and such seal or licensee's name and number, when applied to weight certificates, shall be recognized authority of accuracy of weight or measure recorded thereon.

(3) The use of such bonded weighmaster's seal by any person not holding a valid weighmaster's license shall be a misdemeanor and such person shall be punished as provided in this article. If a licensed bonded weighmaster shall allow his or her bonded weighmaster's seal to be used by another person, such bonded weighmaster shall be guilty of a misdemeanor and shall be punished as provided herein and his or her license may be revoked.

§ 75-27-313

At the time application is made for a bonded weighmaster's license and before the issuance of such license by the commissioner, applicant shall file with the commissioner a bond in the penal sum of Five Thousand Dollars ($5,000.00) payable to the State of Mississippi with surety to be approved by the Commissioner of Insurance for the faithful performance of the duties of a bonded weighmaster. The bond must be conditioned on the accurate weight or measure of the property, commodity, produce or article recorded on the official weight or measurement certificate issued by the bonded weighmaster and on compliance with all laws and rules governing public weighers. Said bond may be put in suit by any damaged party. However, the aggregate liability of the surety regardless of the number of claims shall not exceed the bond penalty.

Evidence shall be supplied to the commissioner annually, at the time license is renewed, that the bond continues in force and effect. In the event the bond is cancelled or will not be renewed, the bonding company shall notify the commissioner in writing at least thirty (30) days prior to the cancellation of such bond. If a bond is cancelled or fails to be renewed by the bonded weighmaster, the license issued hereunder shall automatically stand void and repealed; provided, however, the license shall not stand void and repealed if a new bond, as required herein, is filed with the commissioner prior to the expiration date of the original bond.

§ 75-27-315

(1) The commissioner shall prescribe the form of weight or measurement certificate to be used by all bonded weighmasters in this state.

(2) Such weight or measurement certificate shall include but shall not be limited to the following:

(a) The name of the property, commodity, produce or article.

(b) The declared owner or agent of the owner or the consignee or the agent of the consignee of the property, commodity, produce or article weighed or measured.

(c) The accurate weight or measurement of the property, commodity, produce or article.

(d) The means (vessel, railroad car, truck, etc.) by which the property, commodity, produce or article was being transported at the time it was weighed or measured.

(e) Any trade or other mark of identification thereon and such other information as may be necessary to distinguish or identify the property, commodity, produce or article from a like kind.

(f) A space designated for the bonded weighmaster seal and the statement “My license expires __________ (Date).”

(g) Signature of the bonded weighmaster who weighed or measured the property, commodity, produce or article recorded on such official weight or measurement certificate.

(h) Such additional information as the commissioner deems necessary for the lawful and accurate recording of weights or measurements.

(3) A licensed bonded weighmaster shall not enter on a weight or measurement certificate issued by him or her any weight or measurement values but such as he or she has personally determined, and shall make no entries on a weight or measurement certificate issued by some other person. A weight or measurement certificate shall be so prepared as to show clearly that weight, weights, measure or measurements were actually determined. If the weight certificate form provides for the entry of gross, tare and net weights, in any case in which only the gross, tare and net weights is determined by the weighmaster, he or she shall strike through or otherwise cancel the printed entries for the weights not determined or computed. If gross and tare weights are shown on a weight certificate and both weights were not determined on the same scale and on the day for which the certificate is dated, the weighmaster shall identify on the certificate the scale used for determining each such weight and the date of each such determination.

(4) Such weight certificate when so made, properly signed and sealed shall be prima facie evidence of the accuracy of such recorded weights or measurements.

(5) Bonded weighmasters shall keep and preserve in an orderly manner, for a period of at least one (1) year, a legible copy of each weight or measurement certificate issued by said licensee, which copies shall be available at all reasonable times for inspection by the commissioner or his representative.

(6) A bonded weighmaster who intentionally or knowingly issues a weight or measurement certificate showing a false weight or measurement for a property, commodity, produce or article shall be guilty of a misdemeanor and shall be punished as provided herein.

§ 75-27-317

(1) When making a weight or measurement determination as provided for by this article, a licensed bonded weighmaster shall use a weighing or measuring device that is of a type suitable for the weighing or measuring of the amount and kind of material to be weighed or measured and that has been tested and approved for use by a weights and measures officer of this state within a period of twelve (12) months immediately preceding the date of the weighing.

(2) A licensed bonded weighmaster shall not use any scale to weigh a load the value of which exceeds the nominal or rated capacity of the scale. When the gross or tare weight of any vehicle or combination of vehicles is to be determined, the weighing shall be performed upon a scale having a platform of sufficient size to accommodate such vehicle or combination of vehicles. Each separate unit shall be entirely disconnected before weighing and a separate weight certificate shall be issued for each such separate unit.

§ 75-27-319

The Commissioner of Agriculture and Commerce of the State of Mississippi is hereby authorized, empowered and directed to administer and enforce this article and may prescribe, adopt and enforce rules and regulations as may be necessary to carry out the stated intent herein. The commissioner may delegate to one or more persons employed by the department of agriculture and commerce the authority to do and perform any and all of the functions required to be done and performed by the commissioner under this article.

§ 75-27-321

(1) No person shall assume the title of licensed weighmaster, or any title of similar import, perform the duties or acts to be performed by a licensed weighmaster under this article, hold himself or herself out as a licensed weighmaster, issue any weight certificate, ticket, memorandum or statement for which a fee is charged, or engage in the full-time or part-time business of public weighing, unless he or she holds a valid license as a bonded weighmaster.

(2) The commissioner is authorized to suspend or revoke the license of any bonded weighmaster (a) when he is satisfied, after a hearing upon ten (10) days' notice to the licensee, said licensee has violated any provision of this regulation, or (b) when a bonded weighmaster has been convicted in any court of competent jurisdiction of violating any provision of this regulation.

(3) Any person who requests a bonded weighmaster to weigh or measure any property, produce, commodity or article falsely or incorrectly, or who requests a false or incorrect weight or measurement certificate, or any person who issues a weight or measurement certificate simulating the weight or measurement certificate prescribed in this article and who is not a bonded weighmaster, shall be guilty of a misdemeanor.

(4) Any bonded weighmaster who falsifies a weight or measurement certificate, or who delegates his authority to any person not licensed as a bonded weighmaster, or who preseals a weight or measurement certificate with his official seal before performing the act of weighing or measuring, shall be guilty of a misdemeanor.

(5) Any person who violates any provision of this article or any rule or regulation promulgated pursuant thereto for which no specific penalty had been provided shall be guilty of a misdemeanor.

§ 75-27-323

(1) Any person convicted of violating any of the provisions of this article or who shall impede, hinder or otherwise prevent or attempt to prevent the commissioner or his duly authorized agent in performance of his duty in connection with the provisions of this article shall be adjudged guilty of a misdemeanor and shall upon conviction be punished by a fine of not less than one hundred dollars ($100.00) nor more than five hundred dollars ($500.00), or by imprisonment for not more than six (6) months, in the discretion of the court.

(2) Nothing in this article shall be construed as requiring the commissioner or his duly appointed agent or representative to report for prosecution or for the institution of legal proceedings as a result of minor violations of this article when he or she believes that the public interest will best be served by a suitable notice of warning in writing.

(3) The commissioner is hereby authorized to apply for and the court to grant a temporary or permanent injunction restraining any person from violating or continuing to violate any of the provisions of this article or any rule or regulation promulgated and adopted hereunder notwithstanding the existence of other remedies at law. Said injunction shall be issued without bond.

§ 75-27-325

The provisions of this article shall be supplemental to the provisions of Sections 75-27-1 through 75-27-223 and any other laws providing for weights and measures of property; however, if any conflict arises between any provision of this article and such other laws, the provisions of this article shall control.

Chapter 29 Sale and Inspection of Food and Drugs

§ 75-29-1

The Legislature finds that there is a need for the equal and uniform regulation of all food and food products and for the provision for the sale of such products. This article is intended to authorize the State Board of Health to provide a regulatory framework for the intrastate and interstate sale of food and food products, and to prevent the sale of adulterated or mislabeled food or food products not otherwise regulated by existing law. In the event any provision of this article conflicts with such law, the existing law will control.

§ 75-29-3

An article of food shall be deemed to be adulterated:

If it is adulterated as defined in Section 402 of the federal Food, Drug and Cosmetic Act, as amended, codified at 21 USC 342.

§ 75-29-5

It shall be unlawful for any person, persons, firm or corporation, within this state, to manufacture for sale, produce for sale, knowingly expose for sale, have in his or their possession for sale, or sell any article of food which is adulterated, misbranded or insufficiently labeled within the meaning of this article; and any person, persons, firm or corporation who shall manufacture for sale, produce for sale, expose for sale, have in his or their possession for sale, or sell any article of food which is adulterated, misbranded or insufficiently labeled within the meaning of this article shall be guilty of a misdemeanor, and upon conviction thereof, shall be fined not less than One Hundred Dollars ($100.00), nor more than Five Hundred Dollars ($500.00), or be imprisoned not to exceed ninety (90) days, or both such fine and imprisonment; provided, however, it shall be lawful to sell any article named herein which complies with all federal statutes regulating or governing the manufacture, sale or labeling of such article.

§ 75-29-7

The term “food” as used in this article shall include every article used for, or entering into the composition of, or used or intended for use in the preparation of food or drink for human consumption, whether simple, mixed or compound.

§ 75-29-9

An article shall be deemed to be misbranded:

First.-If it be an imitation of or offered for sale under the name of another article.

Second.-If it be labeled or branded so as to deceive or mislead the purchaser, or purport to be a foreign product when not so, or if the contents of the package as originally put up shall have been removed, in whole or in part, and other contents shall have been placed in such package.

Third.-If the package containing it or its label shall bear any statement, design or device regarding the ingredients of the substances contained therein, which statement, design or device shall be false in any particular.

§ 75-29-11

An article shall be deemed to be mislabeled or misbranded:

If such article is not in conformity with the requirements for the declaration of net quantity of contents of Section 4 of the Fair Packaging and Labeling Act (15 USCS 1451 et seq.) and the regulations promulgated pursuant thereto, and with the requirements of the Nutrition Labeling and Education Act of 1990.

§ 75-29-19

The State Board of Health is hereby charged with the enforcement of this chapter. The State Board of Health shall have the authority to establish such rules and regulations not inconsistent with this chapter as will best carry its provisions into effect, unless regulation of food as defined in this chapter is otherwise authorized by law. However, the regulatory authority provided to the board under this section shall not apply to the regulation of a vending machine or micro market as defined in Section 69-1-18, or to the food and beverages sold therefrom.

§ 75-29-21

In the discretion of the State Board of Health, samples or specimens for analysis may be taken by duly qualified and sworn inspectors. Whenever practicable, samples shall be taken by representatives of the board. The Office of the State Chemist shall have primary responsibility for providing chemical, physical and microbiological analytical services in support of regulatory programs provided for herein.

§ 75-29-23

Upon showing of identification, representatives of the State Board of Health shall have free access at all reasonable hours to any place where foods are sold, and in calling for and taking a sample of any food, he shall tender the market price asked for it.

§ 75-29-25

Any person or dealer who shall impede, obstruct, hinder, prevent or attempt to prevent a representative of the State Board of Health in the performance of his duties, shall be guilty of a misdemeanor, and upon conviction, shall be fined not less than One Hundred Dollars ($100.00) nor more than Five Hundred Dollars ($500.00) or be imprisoned in the county jail not more than ninety (90) days, at the discretion of the court.

§ 75-29-27

(1) Whenever a duly authorized agent of the State Board of Health finds, or has probable cause to believe, that any food, as defined by this article, is adulterated or so misbranded as to be dangerous or fraudulent, within the meaning of this article, he shall affix to such article a tag or other appropriate marking, giving notice that such article is, or is suspected of being, adulterated or misbranded and has been detained or embargoed and warning all persons not to remove or dispose of such article by sale or otherwise until permission for removal or disposal is given by an authorized agent or the court. It shall be unlawful for any person to remove or dispose of such detained or embargoed article by sale or otherwise without such permission. All costs associated with an embargo or detention of food reasonably believed to be adulterated shall be borne by the owner thereof or his agent.

(2) When an article is adulterated or misbranded, the owner of the article may be proceeded against by petition to the judge of the county or circuit court in whose jurisdiction the article is located, detained or embargoed for a libel for condemnation of such article. When an authorized agent has found that an article which is embargoed or detained is not adulterated or misbranded, he shall remove the tag or other marking.

(3) If the court finds that a sampled, detained or embargoed article is adulterated or misbranded, such article, after entry of the decree, shall be destroyed at the expense of the owner thereof, under the supervision of an agent of the State Board of Health, and all court costs and fees, storage and other proper expenses shall be taxed against the owner of such article or his agent. When the adulteration or misbranding can be corrected by proper labeling or processing of the article, the court, after entry of the decree and after such costs, fees and expenses have been paid and a good and sufficient bond, signifying that such article shall be so labeled or processed, has been executed, may by order direct that such article be delivered to the owner thereof or his agent for such labeling or processing under the supervision of an agent of the State Board of Health. The expense of such supervision shall be paid by owner of the article or his agent. The article shall be returned to the owner or his agent and the bond shall be discharged on the representation to the court by the State Board of Health that the article is no longer in violation of this article and that the expenses of such supervision have been paid.

(4) Whenever any authorized agent of the State Board of Health shall find in any room, building, vehicle of transportation or other structure, any perishable food articles that are unsound or contain any filthy, decomposed or putrid substance or that may be poisonous or deleterious to health or otherwise unsafe, any agent of the State Board of Health shall immediately condemn or destroy the articles, or in any other manner render the articles unsalable as human food.

§ 75-29-29

It shall be the duty of each district attorney, county attorney or city attorney to whom the State Board of Health reports any violation of this article to cause appropriate proceedings to be instituted in the proper courts without delay and to be prosecuted in the manner required by law. Before any violation of this article is reported to any such attorney for the institution of a criminal proceeding, the person against whom such proceeding is contemplated shall be given appropriate notice and an opportunity to present his views before the board, either orally or in writing, in person or by attorney with regard to such contemplated proceeding.

§ 75-29-31

Nothing in this article shall be construed as requiring the State Board of Health to report for prosecution or for the institution of proceedings under this article minor violations of this article, whenever the board believes that the public interest will be adequately served in the circumstances by a suitable written notice or warning.

§ 75-29-101

The board of supervisors of every county, and the governing authority of every city, town, and village, respectively, may appoint and commission a suitable person to be inspector of food, and said boards may direct, from time to time, what kinds of food shall be inspected.

§ 75-29-103

The said boards may respectively make and publish all needful regulations for the government of the inspectors, and of dealers in food, and may enforce such regulations by proper penalties, and they may prescribe and regulate the compensation of the inspector and his fees and perquisites, and define his duties.

§ 75-29-105

Every inspector of food, before he enters on his duties, shall take and subscribe the following oath, to be attached to his commission: “I, A B, do swear [or affirm] that, as inspector of food for the __________, I will not knowingly or wilfully injure any person, or suffer any injury to be done by others, with my knowledge or consent; and I will, at all times and in all things, well and truly perform all the duties of the inspector of food for the __________ according to law, to the best of my ability, without fear, favor, or partiality. So help me God.” He shall give bond, with sufficient sureties, payable to the county, city, town, or village, in the sum of five hundred dollars ($500.00), conditioned for the faithful performance of his duties.

§ 75-29-107

Every inspector of food shall be liable, civilly and criminally, as other officers are, for fraud and any malfeasance or misfeasance in office.

§ 75-29-109

In case it be necessary or proper, the board of supervisors, or the governing authority of every city, town, and village, shall supply the inspector with all the necessary instruments for gauging and ascertaining the contents of vessels of liquids; and such boards may direct and regulate the inspection, gauging, and marking or branding packages of liquids, and enforce such regulation.

§ 75-29-111

Any person who shall oppose or obstruct any inspector of food in the discharge of his official duties, shall, for every such offense, forfeit and pay two hundred dollars ($200.00), and shall, moreover, be liable for any injury or damage that may be sustained by any such opposition or obstruction.

§ 75-29-201

(1) Every container of syrup sold, offered, or exposed for sale, through a retail outlet, by an individual, firm or corporation in the State of Mississippi shall have on the outside of each container a paper label, permanent type stamped imprint, or embossed material on the container itself, plainly printed in the English language, and truly certifying the net contents of the packet, the name, brand, and the name and address of the person, or processor, offering such syrup for sale, and a true statement of the contents contained therein.

(2) It shall be unlawful for any individual, firm, organization or corporation to label, sell, offer for sale or expose for sale at the retail level of trade any product as “pure syrup” that does not meet the minimum requirements established by the Mississippi Department of Agriculture and Commerce. Syrup from the juice of sugar cane or sorghum may be labeled “pure cane” or “pure sorghum” syrup to coincide with the contents therein. Any other type of syrup must show the name of all ingredients with ingredients listed in descending order of predominance of weight.

(3) It shall be unlawful for any manufacturer or distributor of syrup or syrup products to use a fictitious name or address on the container label.

§ 75-29-202

Distributors are required to keep records of the names and addresses of the manufacturers whose syrup they distribute for a period of three (3) years and to provide that information to the commissioner upon request to aid the commissioner in locating the source of adulterated syrup or syrup products.

§ 75-29-203

The Mississippi Department of Agriculture and Commerce is hereby vested with the authority and responsibility for carrying out the provisions of this article, and the Commissioner of Agriculture and Commerce, or his representative, shall be furnished samples of syrup or syrup products from the individual, firm organization or corporation, upon request, and shall have the products analyzed by the state chemist.

§ 75-29-205

The Commissioner of Agriculture and Commerce is authorized, in his discretion, to issue an order to stop the sale or distribution of any syrup or syrup products found to be in violation of this article. Upon written notice by the commissioner to the manufacturer or distributor of the syrup or syrup products sold in violation of this article, the syrup or syrup products shall be picked up by the manufacturer or distributor and the buyer of the syrup or syrup products shall be refunded the purchase price by the manufacturer or distributor. Any order to stop the sale of syrup or syrup products may be appealed to the Chancery Court of the First Judicial District of Hinds County or the chancery court in the county where the violation occurred within thirty (30) days of receipt of the order.

§ 75-29-209

The commissioner of agriculture and commerce of the State of Mississippi is hereby authorized and empowered, in his discretion, to make and promulgate such rules and regulations as may be necessary to carry out the provisions of this article.

§ 75-29-211

(1) Except as otherwise provided in subsection (2) of this section, any person violating the provisions of this article shall be guilty of a misdemeanor and, upon conviction, shall be punished for such violation; and each infraction shall constitute a separate offense.

(2) Any manufacturer or distributor found to be in violation of the labeling requirements of Section 75-29-201, shall, upon conviction therefor, be fined not less than one hundred dollars ($100.00) nor more than five hundred dollars ($500.00) or imprisoned for a period of time not to exceed ninety (90) days, or both.

(3) Any person who by himself, by his agent, or as the agent of another person, commits a violation of this chapter may be assessed by the commissioner, or his designee, an administrative penalty of:

(a) Not less than One Hundred Dollars ($100.00) nor more than One Thousand Dollars ($1,000.00) for a first violation;

(b) Not less than One Hundred Dollars ($100.00) nor more than Two Thousand Dollars ($2,000.00) for a second violation within twelve (12) months of the first violation; and

(c) Not less than One Thousand Dollars ($1,000.00) nor more than Three Thousand Dollars ($3,000.00) for a third violation within eighteen (18) months from the date of the first violation.

(4) Any person subject to an administrative penalty shall have a right to request an administrative hearing within thirty (30) days of receipt of the notice of the penalty. The commissioner, or his designee, shall be authorized to conduct the hearing after giving appropriate notice to the respondent. The commissioner may issue subpoenas to require the attendance of witnesses and the production of documents. The decision of the commissioner or his/her designee shall be subject to appropriate judicial review.

(5) If the respondent has exhausted his administrative appeals and the civil penalty has been upheld, he shall pay the civil penalty within thirty (30) days of the effective date of the final decision. If the respondent fails to pay the penalty, a civil action may be brought by the commissioner in any court of competent jurisdiction. Any civil penalty collected under this article shall be transmitted to the General Fund.

(6) In lieu of, or in addition to, the penalties provided, the commissioner shall have the power to institute and maintain in the name of the state any and all proceedings necessary or appropriate to enforce the provisions of this article and the rules and regulations, in the appropriate circuit, chancery, county or justice court in which venue may lie. The commissioner may obtain mandatory or prohibitory injunctive relief, whether temporary or permanent, and it shall not be necessary for the state to post a bond or prove that no adequate remedy is available at law.

§ 75-29-601

(1) For purposes of this article, “honey” shall mean the sweet, syrupy substance produced by honey bees from the nectar of plants (including honeydew) which the bees collect, transform, deposit, dehydrate and store, ripened and matured in the honeycombs. The consistency can be fluid, viscous, or partly to entirely crystallized. The flavor and aroma vary but are derived from the plant origin. “Honey” may not contain any additional food ingredients, including food additives. Every container of honey or honey products sold, offered or exposed for sale, by an individual, firm, organization or corporation in the State of Mississippi shall have on the outside of each container a paper label, permanent type stamped imprint or embossed material on the container itself, plainly printed in the English language truly certifying the net contents of the container, the name, brand, name and address of the person or processor offering such honey or honey products for sale, and a true statement of the contents contained therein.

(2) Adulterated or artificial honey. Any product consisting of honey and a sweetener cannot be labeled as “honey.” If any sweetener has been added to honey, it shall be deemed adulterated or artificial. For a honey product consisting of honey and a sweetener, the label shall, among other information, include the following: All ingredients in descending order of predominance by weight: for example, “blend of honey and corn syrup,” if the honey product has more honey than corn syrup. (Conversely, “blend of corn syrup and honey,” if the honey product has more corn syrup than honey).

(3) Value added honey products (flavored or infused honey). All substances added to honey or honey products which enhance or alter the flavor shall be included on the label in the same size font as the word “honey.” The label shall include the common or usual name of each ingredient in the ingredient statement in descending order of predominance by weight.

(4) Lab-grown honey. Any product outside the definition of honey shall not be considered honey and shall not be labeled as such.

(5) It shall be unlawful for any individual, firm, organization or corporation to label and/or sell, offer for sale or expose for sale at the retail level of trade any product as “honey” that does not meet the minimum requirements established by subsection (1) of this section and by the Mississippi Department of Agriculture and Commerce.

(6) It shall be unlawful for any manufacturer or distributor of honey or honey products to use a fictitious name or address on the container label required herein.

§ 75-29-603

(1) The Mississippi Department of Agriculture and Commerce is hereby charged with the responsibility of enforcing this article, including the provisions of Section 75-29-601, Mississippi Code of 1972, and the Commissioner of Agriculture and Commerce or his representative shall be furnished samples of honey or honey products from the individual, firm, organization or corporation, upon request, and shall have such products analyzed by the State Chemist.

(2) The Commissioner of Agriculture and Commerce is authorized, in his discretion, to issue an order to stop the sale or distribution of any honey or honey products found to be in violation of this article, including the provisions of Section 75-29-601, Mississippi Code of 1972. Upon written notice by the commissioner to the manufacturer or distributor of the honey or honey products sold in violation of this article, including the provisions of Section 75-29-601, such honey or honey products shall be picked up by the manufacturer or distributor of such products and the buyer of the honey or honey products sold in violation of this article, including the provisions of Section 75-29-601, shall be refunded the purchase price by the manufacturer or distributor.

(3) The Commissioner of Agriculture and Commerce of the State of Mississippi is hereby authorized and empowered, in his discretion, to make and promulgate rules and regulations as may be necessary to carry out the provisions of this article, including the provisions of Section 75-29-601.

§ 75-29-604

(1) When a written complaint is made against a person for violation of this article, or any of the rules or regulations, the commissioner, or his designee, shall conduct a full evidentiary hearing. The complaint shall be in writing and shall be filed in the office of the department. The commissioner shall serve the accused with a copy of the complaint and a summons by any of the methods set forth in Rule 4 of the Mississippi Rules of Civil Procedure or by certified mail. Within thirty (30) days after receipt of the summons and a copy of the complaint, the accused shall file a written answer with the department. Upon receipt of the written answer of the accused, the matter shall be set for hearing before the commissioner within a reasonable time. If the accused fails to file an answer within the thirty (30) days, the commissioner may enter an order by default against the accused. The commissioner may issue subpoenas to require the attendance of witnesses and the production of documents. Compliance with the subpoenas may be enforced by any court of general jurisdiction in this state. The testimony of witnesses shall be upon oath or affirmation, and they shall be subject to cross-examination. The proceedings shall be recorded. If the commissioner determines that the complaint lacks merit, he may dismiss same. If he finds that there is substantial evidence showing that a violation has occurred, he may impose any or all of the following penalties upon the accused: (a) levy a civil penalty in the amount of no more than Five Thousand Dollars ($5,000.00) for each violation; (b) issue a stop sale order; (c) require the accused to relabel the honey or honey products that he is offering or exposing for sale which is not labeled in accordance with this article; or (d) seize any lot of honey or honey products that is not in compliance with this article and destroy, sell or otherwise dispose of the honey and honey products and apply the proceeds of the sale to the costs and civil penalties levied with the balance to be paid to the accused. The decision of the commissioner, or his designee, shall be in writing, and it shall be delivered to the accused by certified mail.

(2) Either the accused or the department may appeal the decision of the commissioner to the circuit court of the county of residence of the accused or, if the accused is a nonresident of the State of Mississippi, to the Circuit Court of the First Judicial District of Hinds County, Mississippi. The appellant shall have the record transcribed and file it with the circuit court. The appeal shall otherwise be governed by all applicable laws and rules affecting appeals to circuit court. If no appeal is perfected within the required time, the decision of the commissioner shall then become final.

(3) The decision of the circuit court may then be appealed by either party to the Mississippi Supreme Court in accordance with the existing law and rules affecting such appeals.

(4) When any violation of this article, or the rules and regulations occurs, or is about to occur, that presents a clear and present danger to the public health, safety or welfare requiring immediate action, any of the department's field inspectors, and any other persons authorized by the commissioner, may issue an order to be effective immediately before notice and a hearing that imposes any or all of the following penalties against the accused: (a) issue a stop sale order; (b) require the accused to relabel any honey or honey products that he is offering or exposing for sale and which is not labeled in accordance with this article; or (c) seize any lot of honey or honey products that is not in compliance with this article and destroy, sell or otherwise dispose of the honey or honey products and apply the proceeds of the sale to the cost and any civil penalties levied with the balance to be paid to the accused. The order shall be served upon the accused in the same manner that the summons and complaint may be served upon him. The accused shall then have thirty (30) days after service of the order upon him within which to request an informal administrative review before the Director of the Bureau of Regulatory Services in the department, or his designee, who shall act as reviewing officer. If the accused makes a timely request, the reviewing officer shall conduct an informal administrative review within ten (10) days after the request is made. If the accused does not request an informal administrative review within the thirty (30) days, then he will be deemed to have waived his right to the review. At the informal administrative review, subpoena power shall not be available, witnesses shall not be sworn nor be subject to cross-examination and there shall be no court reporter or record made of the proceedings. Each party may present its case in the form of documents, oral statements or any other method. The rules of evidence shall not apply. The reviewing officer's decision shall be in writing, and it shall be delivered to the parties by certified mail. If either party is aggrieved by the order of the reviewing officer, he may appeal to the commissioner for a full evidentiary hearing in accordance with the procedures in subsection (1) of this section, except that there shall be no requirement for a written complaint or answer to be filed by the parties. The appeal shall be perfected by filing a notice of appeal with the commissioner within thirty (30) days after the order of the reviewing officer is served on the appealing party. The hearing before the commissioner, or his designee, shall be held within a reasonable time after the appeal has been perfected. Failure to perfect an appeal within the allotted time shall be deemed a waiver of such right.

(5) The Commissioner may publish the names and addresses of anyone who violates this article.

§ 75-29-605

Any person violating the provisions of this article shall be guilty of a misdemeanor and upon conviction shall be punished by a fine not less than one hundred dollars ($100.00) nor more than five hundred dollars ($500.00) or by imprisonment for not more than ninety (90) days, or by both such fine and imprisonment; and each such violation shall constitute a separate offense.

§ 75-29-607

Distributors are required to keep records of the names and addresses of the manufacturers whose honey they distribute for a period of three (3) years and to provide such information to the commissioner upon request in order to aid the commissioner in locating the source of adulterated honey.

§ 75-29-801

The State Board of Health shall have authority to make such sanitary investigations and prepare such rules and regulations governing the sanitation and labeling of bottled drinking water as it may deem necessary for the protection and improvement of health.

§ 75-29-803

The State Board of Health shall certify each source or supply of bottled drinking water as meeting equivalent health protection standards as prescribed for drinking water under the Mississippi Safe Drinking Water Law, Section 41-26-1 et seq., Mississippi Code of 1972.

§ 75-29-805

The board shall assess a fee in the following amount and for the following purpose:

Annual bottled drinking water certification fee$200.00

Any increase in the fee charged by the board under this section shall be in accordance with the provisions of Section 41-3-65.

§ 75-29-807

(1) The following acts and the causing thereof are prohibited:

Failure by a supplier of bottled drinking water to comply with regulations promulgated pursuant to this article.

(2) Any person who willfully violates or fails or refuses to comply with the provisions of this article or any regulation issued thereunder may, in an action brought in the appropriate court be fined not more that One Hundred Dollars ($100.00) for each day in which such violation occurs or failure to comply continues, and for any subsequent offense a fine of not more than Five Hundred Dollars ($500.00) per day.

§ 75-29-809

The State Department of Health is authorized and empowered to perform any and all acts necessary to carry out the purposes and requirements of this article.

§ 75-29-851

The State Department of Health is authorized to allow restaurants and food establishments which have a current permit issued by the department to dispose of food that has been frozen or properly preserved for human consumption through donation to charitable facilities, charitable organizations and/or individuals providing charitable services. The executive director of the charitable facility or organization receiving such food, or his authorized designee, shall agree to a waiver of liability in favor of the restaurant or food establishment stating that such donations are being provided in the condition used by the restaurant or food establishment, and without warranty of any nature.

§ 75-29-901

(1) As used in this section:

(a) “Food nutrition information” includes, but is not limited to, the caloric, fat, carbohydrate, cholesterol, fiber, sugar, potassium, protein, vitamin, mineral, sodium, and allergen content of food. “Food nutrition information” also includes the designation of food as healthy or unhealthy.

(b) “Political subdivision” means any county, municipality, town, district, instrumentality of the state, public corporation, body corporate, commission, board, agency, authority, public body, politic or other public entity responsible for governmental activities in geographic areas smaller than that of the state.

(c) “Consumer incentive item” means any licensed media character, toy, game, trading card, contest, point accumulation, club membership, admission ticket, token, code or password for digital access, coupon, voucher, incentive, crayons, coloring placemats, or other premium, prize or consumer product that is associated with a meal served by or acquired from a food service operation.

(2) The regulation of consumer incentive items and nutrition labeling for food and nonalcoholic beverages that are menu items in restaurants, retail food establishments, and vending machines is reserved to the Legislature and may be regulated only by legislation of statewide application enacted after March 18, 2013. The regulation of the provision of food nutrition information and consumer incentive items at food service operations and how food service operations are characterized are matters of general statewide interest that require statewide regulation, and rules adopted under this section constitute a comprehensive plan with respect to all aspects of the regulation of the provision of food nutrition information and consumer incentive items at food service operations in this state. Rules adopted under this section shall be applied uniformly throughout this state.

(3) No political subdivision shall do any of the following:

(a) Enact, adopt or continue in effect local legislation relating to the provision or nonprovision of food nutrition information or consumer incentive items at food service operations;

(b) Condition any license, permit or regulatory approval upon the provision or nonprovision of food nutrition information or consumer incentive items at food service operations;

(c) Ban, prohibit, or otherwise restrict food at food service operations based upon the food's nutrition information or upon the provision or nonprovision of consumer incentive items;

(d) Condition any license, permit or regulatory approval for a food service operation upon the existence or nonexistence of food-based health disparities;

(e) Where food service operations are permitted to operate, ban, prohibit, or otherwise restrict a food service operation based upon the existence or nonexistence of food-based health disparities as recognized by the department of health, the institute of health, or the centers for disease control.

(f) Restrict the sale, distribution, growing, raising or serving of foods and nonalcoholic beverages that are approved for sale by the USDA or other federal or state government agencies.

(4) This section shall not be interpreted as being more restrictive than any federal law or affecting in any manner the regulation of the nutrition labeling of food that is a menu item in restaurants, retail food establishments, and vending machines pursuant to the federal Food, Drug and Cosmetic Act, 21 USC 343(q)(5)(H).

§ 75-29-951

(1)(a) A cottage food operation must comply with the applicable requirements of this section but is exempt from the permitting requirements of Section 41-3-18 if the cottage food operation complies with this section and has annual gross sales of cottage food products that do not exceed Thirty-five Thousand Dollars ($35,000.00).

(b) For purposes of this subsection, a cottage food operation's annual gross sales include all sales of cottage food products at any location, regardless of the types of products sold or the number of persons involved in the operation. A cottage food operation must provide the department, upon request, with written documentation to verify the operation's annual gross sales.

(2) A cottage food operation may not sell cottage food products over the Internet, by mail order, or at wholesale or to a retail establishment; however, this does not prohibit the advertising of cottage food products over the Internet, including through social media. Cottage food products are nonpotentially hazardous food products as defined by the department.

(3) A cottage food operation may only sell cottage food products which are prepackaged with a label affixed that contains the following information:

(a) The name and address of the cottage food operation;

(b) The name of the cottage food product;

(c) The ingredients of the cottage food product, in descending order of predominance by weight;

(d) The net weight or net volume of the cottage food product;

(e) Allergen information as specified by federal labeling requirements;

(f) Appropriate nutritional information as specified by federal labeling requirements, if any nutritional claim is made; and

(g) The following statement printed in at least ten-point type in a color that provides a clear contrast to the background of the label: “Made in a cottage food operation that is not subject to Mississippi's food safety regulations.”

(4) This section does not exempt a cottage food operation from any federal tax law, rule, regulation, or certificate that applies to all cottage food operations.

(5)(a) The department may investigate any complaint that alleges that a cottage food operation has violated an applicable provision of this section or rule adopted under this section.

(b) Only upon receipt of a complaint, the department's authorized officer or employee may enter and inspect the premises of a cottage food operation to determine compliance with this section and department rules. A cottage food operation's refusal to permit the department's authorized officer or employee entry to the premises or to conduct the inspection is grounds for disciplinary action pursuant to Section 41-3-59.

(6) This section does not apply to a person operating under a food permit issued pursuant to Section 41-3-18.

Chapter 31 Milk and Milk Products

§ 75-31-65

(1) The State Board of Health shall:

(a) Exercise general supervision over the production, processing and sale of milk and milk products and the processing and sale of frozen desserts.

(b) Adopt, modify, repeal and promulgate rules and regulations, after due notice and hearing, and, where not otherwise prohibited by federal law or state law, make exceptions to, grant exemptions from and enforce rules and regulations implementing or effectuating the duties of the board under this section to protect the public health.

(c) Use the most current edition of the Pasteurized Milk Ordinance, or its successor, as the basis for regulation of Grade “A” milk and milk products. Unless as otherwise provided by law, the board, in its discretion, may amend, modify or make additions to the Pasteurized Milk Ordinance if the board determines that such amendment, modification or addition is in the best interest of public health.

(2) The board shall assess fees in the following amount and for the following purpose:

Milk product processing plant annual permit fee$300.00

Frozen dessert processing plant annual permit fee$300.00

Any increase in the fees charged by the board under this subsection shall be in accordance with the provisions of Section 41-3-65.

The fees authorized under this subsection shall not be assessed for milk or frozen dessert processing plants operated by public schools, by public junior colleges or by state agencies or institutions, including, without limitation, the state institutions of higher learning.

(3) Incidental sales of raw goat milk shall be legal if:

(a) The milk is sold directly to the consumer on the premises where the milk is produced;

(b) No more than nine (9) producing goats are located on the premises where the milk is produced;

(c) The person selling the milk does not advertise the milk for sale; and

(d) The following conditions, which apply to the milking of goats involved in legal incidental sales of raw goat milk, are satisfied:

(i) The milking takes place in a clean environment on a cement or comparable floor;

(ii) The milking place is enclosed by a wall and/or a screen to prevent insects from entering the milking area;

(iii) A fly strap is located in the milking area; and

(iv) Sterile containers are used in the milking process and for storage.

It shall not be unlawful to store raw goat milk in a separate sterile place from pasteurized goat milk. The Cooperative Extension Service at Alcorn State University shall publish and make available literature on the requirements of this subsection, and other related milk-goat maintenance, explaining the recommended care of milk goats and the process of goat milk production and other related subjects. For the purposes of this subsection, the term “incidental sales” means sales from a farm where not more than nine (9) goats are producing milk.

(4) For purposes of this section, the term “person” includes an individual, firm, partnership, association or corporation, foreign or domestic.

(5) All fees collected by the board under this section shall be paid into a special fund within the Department of Health to be used by the department to discharge its duties under this section.

(6) Any person coming within the provisions of this section who fails to comply with or violates any of the provisions of this section or regulations promulgated thereunder, unless otherwise specifically provided in this section, is guilty of a misdemeanor and, upon conviction, shall be fined not more than One Hundred Dollars ($100.00) or confined in jail for not more than sixty (60) days, or both.

(7) Any person who sells or offers for sale adulterated milk or milk products or cream or frozen desserts or any milk or cream having therein any foreign substance or coloring matter or any chemicals or preservatives, whether for the purpose of increasing the quantity of milk or cream or for improving its appearance or for the purpose of preserving the condition of sweetness thereof, or for any other purpose whatsoever, or unpasteurized milk or milk products except as otherwise authorized by law, is guilty of a misdemeanor, and, upon conviction, shall be fined not more than Five Hundred Dollars ($500.00) or confined in jail not more than sixty (60) days, or both; however, nothing in this subsection shall be construed to prevent the addition of vitamins to milk or milk products in accordance with the rules and regulations promulgated by the board or to prohibit the sale of pasteurized milk or cream or frozen desserts except unlawful cream or unlawful milk products or unlawful frozen desserts as defined in the rules and regulations promulgated by the board.

(8)(a) Any person doing business in the State of Mississippi and engaged in the production, manufacture, sale or distribution of any dairy products that, for the purpose of destroying the business of a competitor in any locality or creating a monopoly, discriminates between different sections, localities, communities, cities or towns of the state by selling such commodity at a lower rate or price in one (1) section, locality, community, city or town than such commodity is sold by such person in any other section, locality, community, city or town, after making due allowance for the difference, if any, in the grade or quality and in the actual cost of the transportation from the point of production or purchase, if a raw product, to the place of sale, storage or distribution, is guilty of unfair discrimination, which is prohibited and declared unlawful; however, prices made to meet competition in such section, locality, community, city or town shall not be in violation of this subsection.

(b) Any person doing business in the State of Mississippi and engaged in the business of purchasing for manufacture, storage, sale or distribution of any dairy product, that, for the purpose of destroying the business of a competitor or creating a monopoly, discriminates between different sections, localities, communities, cities or towns in the state by purchasing such commodity at a higher rate or price in one (1) section, locality, community, city or town than is paid for such commodity by such person in any other section, locality, community, city or town, after making due allowance for the difference, if any, in the grade or quality, and in the actual cost of transportation from the point of purchase to the point of manufacture, sale or distribution or storage, is guilty of unfair discrimination, which is prohibited and declared to be unlawful; however, prices made to meet competition in such locality, section, community, city or town shall not be a violation of this subsection.

(c) Any person convicted of a violation of this subsection, shall be fined not less than Five Hundred Dollars ($500.00) nor more than Five Thousand Dollars ($5,000.00) or shall be imprisoned in jail not more than twelve (12) months, or both.

(9) Nothing in this section shall be construed to apply to any person who does not sell his milk, cream, butter or other products mentioned herein to others.

§ 75-31-201

This article shall be known as “The Farm Milk Tank Law of 1958.”

§ 75-31-203

This article applies to farm milk tanks, as defined, only when these are used, or are to be used, under an express contract between the producer and the purchaser and on the premises of the producer, for the commercial measurement of milk or other fluid dairy products. If such measurement is accomplished by the means of a fluid meter, this paragraph does not apply; in such case, the meter shall be subject to approval by the commissioner and to the applicable provisions of the article for liquid measuring device.

§ 75-31-205

“Commissioner” shall mean the commissioner of agriculture and commerce of the State of Mississippi.

“Farm milk transport operator” shall mean one who grades, samples and gauges milk in farm milk tanks and transports milk from farms to milk plants.

“Commissioner's representative” shall mean one who is designated by the commissioner to enforce the provisions of this article.

“Farm milk tank” shall mean a unit for measuring milk or other fluid dairy product, comprising a combination of:

(a) A stationary tank, whether or not equipped for cooling its contents.

(b) Means for reading the level of liquid on the tank, such as a removable gauge rod or surface gauge.

(c) A chart for converting level-of-liquid readings to gallons and pounds.

(d) Chart readings shall also be shown in avoirdupois weight in conjunction with gallon readings on the basis of eight and six-tenths (8.6) pounds milk per gallon.

(e) Each compartment of a subdivided tank shall, for purposes of this article, be construed to be a farm milk tank. (These units are variously known commercially as farm bulk tanks, farm cooling tanks, farm holding tanks, and producers' tanks.)

(f) “Gauge rod” shall mean a graduated, “dip stick” type of measuring rod designed to be partially immersed in the liquid and to be read at the point where the liquid surface crosses the rod.

(g) “Surface gauge” shall mean a combination of a stationary indicator and a moveable, graduated element designed to be brought into contact with the surface of the liquid from above.

(h) “Other measuring device” shall mean any other means of measuring contents of tank, which must be approved by the commissioner.

§ 75-31-207

(1) Design. (a) Level: A farm milk tank shall be in normal operation position when it is in level. The tank shall be equipped with suitable special means by which this level can be determined and established, such as a permanently attached two-way level, or other approved and accurate means of reference for level determinations. (A plumb bob is not considered satisfactory for leveling farm milk tanks and shall not be used.) Where two-way levels are used, the indicating lines shall exactly coincide with the extreme limit of the bubble in each instance and the level shall not be less than one-half ( 1/2 ) inch length each way and on tanks six (6) feet long or longer there shall be two (2) such levels, one (1) on each end. Levels shall not be attached to any pipe or other fixture connected to the tank.

(b) Fraudulent construction: A farm tank and all devices designed to be used with or attached thereto and used in connection therewith, shall be of such design and construction that they do not facilitate the perpetration of fraud. Blueprints or photostats showing details of the design and construction of each brand or model of farm milk tanks, including measuring device, shall be submitted to the commissioner for approval.

(c) Permanence: A farm milk tank shall be of such design, construction and material that it will withstand ordinary usage without impairment of the accuracy of measurements made therein. The shell, bulkheads and supporting framework shall be of such design, material and construction that they will not become distorted, under any conditions of liquid lading. The tanks shall be rigidly installed in level on the floor of the milk house without use of removable blocks or shims under the legs.

(d) Identifications: Each farm milk tank shall bear the name of the manufacturer and his address, together with the model and serial number of the individual tank. Each gauge rod or surface gauge shall bear the serial number of the individual tank for which it is intended to be a part of.

(e) Discharge outlet or valve: A farm milk tank shall be equipped with a discharge outlet or valve through which the tank may be completely emptied when the tank is in level.

(f) Complete drainage: A farm milk tank shall be so designed and constructed and shall be so installed that the tank may be completely emptied through the discharge outlet or valve when the tank is in level.

(g) Calibration: Upon installation and/or reinstallation at any farm, the tank shall be satisfactorily calibrated to “deliver” the indicated capacities within the tolerances allowable.

(h) Capacity: The capacity of a farm milk tank shall be determined as the highest liquid level reading obtainable where agitation of liquid will not overflow the tank.

(i) Testing medium: Water shall be used as the medium in determining the capacity of farm milk tanks. (Litmus paper shall not be used in connection with calibrations.)

(2) Approval seals. When the farm milk tank installation has been officially tested and approved, the gauge rod or surface gauge and the chart, as well as the tank itself, shall be suitably marked to verify such approval by the commissioner or his representative.

(3) Responsibility of installation. It shall be the responsibility of the manufacturer, his agent or dealer, to install the farm milk tank as per specifications and regulations stipulated in this article and in such manner as to give accurate measure and satisfactory service. The manufacturer, his agent or dealer, shall notify the commissioner of the date and location each installation is expected to be completed and have his installation engineer or representative present to assist the state agency in checking the correct setting, gauging and calibration of each farm milk tank. No farm milk tank installed after this article becomes effective shall be put in use on any dairy farm until its setting, gauging and calibration have been approved by the commissioner and purchaser.

(4) Responsibility of calibration. It shall be the responsibility of the farm milk tank manufacturer to calibrate farm milk holding tanks. Such calibration shall be made at the factory of the manufacturer or field calibrated. Beginning with the lowest reading on the calibration chart, factory calibration shall be readily field checkable in five-gallon intervals; or reasonable multiples thereof. All equipment used for tank calibration within the State of Mississippi must be approved by the commissioner.

§ 75-31-209

If a tank is designed for use with a gauge rod, a substantial and rigid gauge rod bracket or other suitable supporting elements for positioning the gauge rod shall be so constructed that whenever the rod is placed in engagement with the bracket or supports and released, the rod will automatically seat itself at a fixed height and in a vertical position. When a gauge rod is properly seated on its bracket or supports, there shall be a clearance of at least three (3) inches between the graduated face of the rod and any tank wall or other surface that it faces.

The arrangements shall be such that it shall be impossible to reverse the reading position. The part of the gauge rod bracket which is designed to hold the gauge rod and which comes in contact with the gauge rod shall be sufficiently hardened that, under continual usage or careless handling, it will not become so worn that it will allow the gauge rod to hang to an improper depth in the tank, thereby causing an error in the measure of the milk in the tank.

§ 75-31-211

If a tank is designed for use with a surface gauge, a substantial or rigid surface gauge bracket or other suitable supporting elements for positioning the surface gauge shall be provided. A surface gauge and its bracket or other supporting elements shall be so constructed that whenever the gauge assembly is placed in engagement with the bracket or supports, the indicator, if not permanently mounted on the tank, will automatically seat itself in correct operating position, and the graduated element will be vertically positioned and will be securely held at any height to which it may be manually set.

§ 75-31-213

(1) Gauge rod. When properly seated in position, a rod shall not touch the bottom of the tank unless this is required by the design of the supporting elements. The rod shall be graduated throughout at intervals corresponding to the gallonage range within which the readings of liquid level to be made. Farm holding tanks shall be so constructed that nothing shall prevent vertical insertion of the gauge rod. That part of the gauge rod designed to hold the gauge rod in the gauge rod bracket and which comes in contact with the gauge and bracket, shall be sufficiently hardened that, under continual usage or careless handling, it will not become so worn that it will permit the gauge rod to hang to an improper depth in the tank, thereby causing an error in the measuring of the milk in the tank.

(2) Surface gauge. When properly engaged with its bracket and set to its lowest position, the surface gauge shall not touch the bottom of the tank. The gauge shall be graduated throughout at intervals corresponding to the gallonage range within which the readings of liquid level are to be made.

§ 75-31-215

(1) Spacing, width and identification of graduations. On a gauge rod or surface gauge, the spacing of the graduations, center to center, shall be 0.03125 ( 1/32 ) inch, if graduations are in inches, or one (1) millimeter, if graduated in centimeters. The width of any graduation mark or line shall not exceed .008 of an inch (0.2mm) and shall not be less than .0055 of an inch (0.1mm).

(2) Graduation identification. The graduation scale shall be in terms of inches and fractions of an inch, or centimeters and fractions of a centimeter. No error shall be greater than 1/32 inch in the entire length of gauge rod or surface gauge, if graduations are in inches, or one (1) millimeter if in centimeters. Main graduation marks or lines shall be successively longer than the minimum graduation marks or lines, and shall be identifiable in spacings not to exceed one-fourth ( 1/4 ) inch, if graduations are in inches, or five (5) millimeters, if graduations are in centimeters. Graduations shall start at the bottom of the gauge rod or surface gauge and shall be regular in sequence.

(3) Graduation. Gauge rod graduations and numerals identifying same shall be milled, etched or otherwise indented, but indentations shall not be so deep as to cause a capillary effect preventing straight line readings across the entire face of the gauge rod. Surface gauge graduations shall be of such material that they will not become obliterated. Graduations shall be parallel and at a ninety (90) degree angle to the perpendicular axis of the gauge rod or surface gauge.

(4) Values of graduations. On a gauge rod or surface gauge, the graduations shall be designated in inches and fractions thereof or centimeters and fractions thereof. In either of these cases there shall be provided by the manufacturer for each such rod or gauge and each tank with which it is associated, a volume chart showing volume in terms of gallons and pounds of liquid in the tank, corresponding to each graduation on the rod or gauge.

(5) Dimensions and material. A gauge rod shall be made of 18-8 stainless steel or of other suitable approved material and design. A gauge rod shall be rectangular in shape and shall be not less than one-fourth ( 1/4 ) inch in thickness and not less than three-fourths ( 3/4 ) inch in width.

(6) Gauge rod. When properly seated in position, a rod shall not touch the bottom of the tank unless this is required by the design of the supporting elements. The rod shall be graduated throughout an interval corresponding to the gallonage range within which readings of liquid level are to be made. The graduated face of the rod shall have a dull finish.

(7) The maximum swing allowable at the bottom of the gauge rod when in reading position shall not exceed one-half ( 1/2 ) inch.

(8) Chart. A chart shall be supplied with each farm milk tank and shall show values at least to the nearest pound for a farm milk tank of all capacities. All letters and figures on a chart shall be distinct and easily readable.

(a) Opposite each increment shall be shown the value of that individual increment in terms of United States avoirdupois weight.

(b) The chart shall bear the name and address of the manufacturer; of the producer; the model and serial number of the farm milk tank for which it is intended; the date of the calibration; the name of the person making calibration and the signature of the commissioner's representative, if any, who witnesses the calibration; a legend stating that the calibration figures are based on 1/32 inch increments, if graduations are in inches, or one (1) millimeter, if graduations are in centimeters.

(c) Four (4) copies of each chart shall be furnished, all four (4) copies to be certified by the commissioner's representative, if there be one, witnessing the calibration; one (1) copy to be kept by the dairy; one (1) copy to be kept by the manufacturer; and one (1) by the commissioner's representative who witnessed the calibration, and in the absence of such an official, one (1) copy shall be mailed to the commissioner's representative, Mississippi Department of Agriculture and Commerce, Jackson, Mississippi. One (1) copy is to be given the processor who picks up the milk.

(d) The dairyman's chart shall be laminated and sealed between transparent sheets of waterproof material, after having had the imprint of the seal of the Dairy Division, Mississippi Department of Agriculture and Commerce, imprinted thereon. Where both sides are utilized, both sides shall be shown, and shall be hung or otherwise placed in a conspicuous place in the dairyman's milk house in which the farm milk tank is located.

(e) All printing and/or typing shall be clear and distinct and all calibration figures shall be placed exactly in line with the increments they are intended to represent.

§ 75-31-217

A portable tank shall be of the center-reading type.

§ 75-31-219

(1) Farm milk tanks and farm milk tank installations shall in every instance meet the State of Mississippi specifications and tolerances, as provided in this article, and conform with the rules and regulations of the commissioner of agriculture and commerce, as provided herein.

(2) Farm milk tanks with adjustable legs. Adjustable legs shall be flat across the bottom and shall have permanently attached thereto a metal plate four (4) inches square by at least 1/4 inch in thickness, or in lieu thereof, a metal flange of comparable dimensions permanently affixed to the bottom of the legs.

(3) Milk house floor. If the concrete floor of the dairyman's milk house is less than four (4) inches thick or is in poor condition, a concrete pier shall be provided for each leg of the farm milk tank.

(4) Concrete piers. Concrete piers shall not be less than six (6) inches by six (6) inches across the top and shall taper to not less than twelve (12) inches by twelve (12) inches across the bottom and shall not be less than eighteen (18) inches in depth. The top of each pier shall extend only to a point approximately two (2) inches below the surface of the milk house floor; in locations where the weather is very cold, all piers must go below the “frost line” for their foundations.

(5) All farm milk tanks shall be filled to capacity during leveling operations and shall be completely filled prior to the calibration thereof, for the purpose of setting the tank to a permanent position.

§ 75-31-221

(1) Minimum tolerance values. On all farm milk tanks, the maintenance and acceptance tolerances applied shall not be smaller than one-half ( 1/2 ) the value of the minimum graduated interval on the gauge rod or surface gauge.

(2) Basic tolerance values. Basic maintenance and acceptance tolerance on underregistration and overregistration shall be as follows: (The error, at any liquid level, of a tank to which the tolerance is applied, is the difference between the gallonage shown for that level on the gallonage chart and the corresponding gallonage determined by test.) Basic maintenance and acceptance tolerances, on underregistration and on overregistration on farm milk tanks are not more than 1/32 of an inch, if graduated in inches, or one (1) millimeter, if graduations are in centimeters.

§ 75-31-223

The commissioner or his duly appointed representative shall have authority to enter, at any daylight hour, dairy farms, dairy barns, or milk houses for the purpose of inspecting farm operations and to correct or have corrected any part of farm milk tank operations found to be incorrect or improperly operated.

No person shall be employed or contracted with as a farm milk transport operator unless he has taken the required examination for milk grader, milk sampler, milk weigher and has secured his licenses from the commissioner.

Sampling for butterfat must conform to requirements of the Dairy and Creamery Law and to regulations promulgated by the commissioner. Samples must be properly refrigerated from dairy farm to plant.

§ 75-31-225

The commissioner of agriculture and commerce is hereby authorized and empowered to adopt, promulgate, change and amend any and all necessary regulations in order to carry out the provisions of this article.

§ 75-31-227

Farm milk transport operators hauling milk from the producer to the dairy plant, processing plant, creamery, or other destination, shall be liable for any and all damage or destruction to said milk en route and shall be required to carry cargo and casualty insurance covering such milk en route in an amount approved by the commissioner of agriculture and commerce with an insurance company authorized to do business in the state. In the event such farm milk transport operator does not obtain and have such insurance at all times, his license to grade, sample and weigh milk shall be subject to cancellation.

§ 75-31-229

This article shall apply to farm milk tanks which have already been installed and such tanks shall be required to meet the standards and specifications provided by this article. The commissioner of agriculture and commerce shall allow a reasonable time within which such farm milk tanks may be brought up to standard.

§ 75-31-501

This article shall be entitled the “Milk Processor's Regulation Act of 1988.”

§ 75-31-503

The following words shall have the following meaning unless context shall indicate otherwise:

(a) “Cooperative association” means any group in which farmers act together in the market preparation, processing, or marketing of farm products or any association organized under Section 79-19-1 et seq., Mississippi Code of 1972.

(b) “Dairy farmer” means a farmer engaged in the business of producing milk for sale to milk processors or to a cooperative association of which the dairy farmer is a member.

(c) “Milk processor” means a person who operates a milk, milk products, or frozen desserts processing plant that is located in the State of Mississippi.

(d) “Purchase price” means an amount of money, based on estimated butterfat content at the time of delivery, that a milk processor agrees to pay a dairy farmer for the purchase of raw milk.

§ 75-31-505

(1) Except as provided by subsection (2) of this section, a milk processor shall hold in trust all payments received from the sale of milk or milk products for the benefit of the dairy farmer from whom the milk was purchased until the dairy farmer has received full payment of the purchase price for the milk.

(2) A milk processor shall not be required to maintain the payments in trust when:

(a) Payment of the purchase price is not received and the dairy farmer does not give written notice to the milk processor by the end of the thirtieth day after the final date for payment of the purchase price as specified by Section 75-31-507; or

(b) A payment instrument received by dairy farmer is dishonored, and the dairy farmer does not give written notice to the milk processor, by the end of the fifteenth business day after the date that the notice of dishonor was received.

§ 75-31-507

A milk processor shall not purchase raw milk from a dairy farmer unless:

(a) Payment of the purchase price is made according to the provisions prescribed by an applicable federal milk marketing order;

(b) Any initial or additional provisions are agreed on by both the dairy farmer or his agent and the milk processor; and

(c) The medium of exchange used is cash, a check for the full amount of the purchase price, or a wire transfer of money in the full amount.

§ 75-31-509

This article does not apply to transactions between a cooperative association, while it is acting as a marketing agent, and its members.

§ 75-31-511

A milk processor who fails to pay for raw milk as provided by this article shall be liable to the dairy farmer for:

(a) The purchase price of the raw milk;

(b) Interest on the purchase price at the highest legal rate from the date possession is transferred until the date the payment is made in accordance with this article; and

(c) A reasonable attorney's fee for the collection of the payment.

Chapter 33 Meat, Meat-Food and Poultry Regulation and Inspection

§ 75-33-1

This article may be cited as “The Meat, Meat-Food and Poultry Regulation and Inspection Law of 1960.”

§ 75-33-3

(1) For the purpose of this article, the words and terms used herein shall have ascribed to them the following meanings:

(a) The word “person” shall include individuals, partnerships, corporations, associations, and any other legal entity recognized by law.

(b) The terms “meat” and “meat-food products,” whenever used in this article, shall include the carcasses or parts thereof, of cattle, sheep, goats, other ruminants, including exotic animals, swine, horses, mules, rabbits, poultry and ratites and the meat and meat-food products of such animals.

(c) The term “food unfit for human consumption” shall be construed to include the meat and meat-food products of horses and mules and all meats or meat-food products which are so affected with disease that it would be dangerous to use the meat or other parts for human food; also all meats or meat-food products which are contaminated, putrid, unsound, unhealthful, or otherwise unfit for food, or which have been derived from any animal which has died as a result of disease or accident, or which was in a dying condition at the time of slaughter.

(d) The word “establishment” as used in this article, shall include: (i) any building or structure in which slaughtering, butchering, meat processing, meat canning, meat packing, meat manufacturing or rendering is carried on; and (ii) the ground upon which such building or structure is erected, and so much ground adjacent thereto as is used in carrying on the business of such establishment, including drains, gutters, waste disposal and cesspools used in connection with the establishment.

(e) The word “equipment,” as used in this article, shall include all machinery, fixtures, containers, vessels, tools, implements and apparatus used in and about an establishment.

(f) The word “commissioner,” as used in this article, shall mean the Commissioner of Agriculture and Commerce, or his duly authorized deputies.

(g) The word “ratite,” means a member of a group of large flightless birds including the ostrich, rhea and emu.

(h) The words “exotic animal,” mean a member of a species of game not indigenous to this state, including axis deer, fallow deer, red deer or other cloven-hooved ruminant animals and ratites.

(2) All persons engaged in business as a meat broker, jobber, dealer, distributor, peddler, transporter, or wholesaler of any carcasses of meat animals or poultry or parts or products thereof, whether fresh, frozen, cured or otherwise and whether canned, wrapped, packaged or prepackaged, but not otherwise handled, whether intended for human food or other purposes, or any person engaged in the business as a public warehouseman storing any such items or products shall register with the commissioner on forms provided and shall operate under the applicable inspection authority provided in this article and by the Mississippi Meat Inspection Act of 1968 [Chapter 35 of Title 75], provided persons operating the aforementioned nonslaughter and nonprocessing businesses are exempt from the license and fee specified in Section 75-33-7.

(3) The slaughtering by any person of animals and poultry of his own raising, and the processing and transportation by him of animals and poultry products exclusively for use by him and members of his household and his nonpaying guests and employees, shall be exempt from the provisions of this article. Any other operations of an unlicensed, unapproved slaughterhouse and/or processing facility to escape the provisions of this article shall be unlawful, and any person found guilty of such violation shall be punished as provided in Section 75-33-37.

(4) The provisions of this article shall not apply to poultry producers with respect to poultry of their own raising on their own farms on the same basis as now provided in the United States Wholesome Poultry Products Act and regulations thereunder, and such exemptions shall be consistent with said act and regulations. However, the adulteration and misbranding provisions of said act, other than the requirement of the inspection legend, shall apply to articles which are exempt from inspection by said act and regulations.

§ 75-33-5

The commissioner may adopt, amend or repeal rules and regulations for the administration and enforcement of this article.

The commissioner shall not promulgate any rules and regulations which are inconsistent with the rules and regulations of the U.S. Department of Agriculture governing the businesses covered by this article.

Every licensee shall be furnished a copy of such rules and regulations when a license is issued. The commissioner shall prescribe and supply the forms to be used to comply with this article.

§ 75-33-7

(1) It shall be the duty of every person operating an establishment as defined in Section 75-33-3, except retail dealers, restaurants or eating places and establishments operating under the U.S. Department of Agriculture system of inspection, to apply to the commissioner for a license to operate such establishment before July 1, 1960, and annually thereafter before July of each succeeding year, and pay to the commissioner at the time said application for registration and license is filed, a fee of ten dollars ($10.00) for each establishment operated, and a like fee of ten dollars ($10.00) for the renewal thereof.

The fees for the issuance of the license and the renewals thereof, together with such other fees and charges authorized by this article, shall be kept by the commissioner in a separate fund to be used to defray the expenses of the enforcement of this article. A strict accounting shall be made of all funds received and disbursed.

(2) The application for a license shall be made on a form to be supplied by the commissioner, and shall show the location of each establishment and the name and address of the owner, and the name and address of the lessor or lessee. The application shall have attached thereto the affidavit of the person applying for the license that the facts set forth are true and correct.

(3) Upon approval of application for license and payment of license fee, and upon approval of sanitary conditions in the establishment, and every place used in connection therewith, the commissioner shall issue to each applicant a license which shall expire on June 30 of each year, and which shall authorize the operation of said establishment for the fiscal year, or portion thereof, for which a license is issued.

(4) Such license shall be posted in a conspicuous place in or at the place of business of such licensee, and exposed for inspection by any person or persons who may be properly authorized to make such examination.

(5) From and after the first day of July 1960, it shall be unlawful for any person to operate an establishment unless said establishment is duly licensed and inspected in accordance with the provisions of this article.

The commissioner of agriculture and commerce shall develop and administer a poultry inspection program which shall require mandatory poultry product inspection that imposes antemortem and postmortem inspection, reinspection and sanitation requirements that are at least equal to those under the federal Poultry Products Inspection Act of 1968 [21 USCS §§ 451 et seq.], and the regulations thereunder with respect to all or certain classes of persons engaged in slaughtering poultry or processing poultry products for use as human food solely for distribution with this state.

Any existing provision of law in regard to fees, mandatory requirements, other options, or inspection administration in conflict herewith, shall not affect the foregoing mandatory inspection provision.

Provided, further, that the commissioner of agriculture and commerce shall be authorized to enter into a cooperative agreement with the U. S. Department of Agriculture for compliance with the Poultry Products Inspection Act of 1968 and amendments thereto [21 USCS §§ 451 et seq.], for the purpose of financing and enforcing a mandatory antemortem and postmortem inspection, reinspection and sanitation requirements that are at least equal to those under the within cited federal act with respect to all or certain persons engaged in slaughtering poultry or processing poultry products in this state for use as human food solely for distribution within this state. The commissioner is further empowered to make inspection of other poultry slaughtering and processing facilities when he deems same necessary to the proper sanitation and distribution of such products solely within this state.

§ 75-33-9

The buildings used in connection with any establishment shall be of sound construction and kept in good repair and shall be of such construction as to prevent the entrance or harboring of vermin.

Floors, side walls and ceilings shall be constructed of impervious material and so constructed that they can be readily kept clean.

Floors shall slope so all waste water will flow to a floor drain.

Floor drains shall be equipped with strainers and traps.

All rooms shall be provided with abundant light, both natural and artificial, and shall be ventilated to eliminate objectionable odors and moisture condensation.

In abattoirs where poultry is processed, the eviscerating, cutting and packaging operation must be separated from the killing, scalding and dressing operations either by the use of separate rooms or by a thorough and complete cleanup prior to the eviscerating, cutting and packaging operations.

Provided, however, any existing buildings now being used in the operation of any establishment covered by this article, which do not meet the requirements set out herein, shall be rigidly inspected and diligently cleaned in an effort to provide a maximum of sanitary conditions and to insure sanitary meat, meat-food products and poultry. The commissioner shall endeavor to improve the quality of all existing buildings until they have been made to conform to the full requirements of this article, but he shall not close down any establishment for the failure for such existing facilities to meet the requirements outlined above.

Provided, however, any alteration, remodeling or additions to any existing facility shall meet the requirements specified by this article and no such new buildings, establishments, and/or repairs, remodeling and/or alterations shall be made until after the commissioner has approved the same and is satisfied that such new construction or such changes in existing facilities do comply with the provisions of this article.

§ 75-33-11

The commissioner is hereby authorized and empowered to designate or assign any employee of the department of agriculture and commerce to perform and carry out the provisions of this article. Also, he is authorized to employ such other personnel as he may consider necessary to assist him in promulgating the rules and regulations authorized hereunder and employ such other personnel as he may consider necessary to assist him in promulgating the rules and regulations authorized hereunder and employ such inspectors as he may consider necessary for the faithful administration and enforcement of this article and the rules and regulations promulgated hereunder.

The commissioner shall endeavor to appoint, designate and employ persons qualified in the respective job assignments for the enforcement of this article. Any employee may be dismissed at any time for failure to perform the duties required of him.

§ 75-33-13

Each employee assigned to serve as agent under this article shall have knowledge of the diseases of meat-producing animals, and shall be versed in the conditions that affect the wholesomeness of animal-food products. An appropriate standard of fitness for such agents shall be maintained by the commissioner.

§ 75-33-15

Any duly authorized agent or employee of the commissioner may at any time enter any establishment and examine the same, to ascertain whether the provisions of this article are being observed.

§ 75-33-17

It is unlawful to hinder, impede, or prevent any duly authorized agent or employee of the department from entering any establishment in the performance of his duty, or from making any examination duly ordered in enforcing this article.

§ 75-33-19

Any agent authorized under this article to examine, may, under the rules and regulations prescribed by the commissioner, mark, stamp, or otherwise designate, any animal or meat or meat-food product found on examination to be wholesome and fit for food.

§ 75-33-21

If, upon examination of any establishment, any diseased animal, or any unwholesome meat, or any unwholesome meat-food product is found, such animal or meat or product shall be condemned, properly marked or designated, and treated in such a way it cannot thereafter be used for food.

§ 75-33-23

If, upon examination, it is found that any establishment, or any part of an establishment, or any equipment, is in an unclean or unsanitary condition or is being conducted or used in such a manner as to make it probable that the meat or meat-food products therein or produced therein may be rendered unwholesome, or is being conducted or used in violation of this article, the agent making such examination shall report the unlawful condition to the commissioner, and shall at the same time notify in writing, the owner, lessee, or manager of the establishment.

Upon receipt of such report, the commissioner shall notify the proper owner, lessee, or manager of the result of the examination, and direct that the unlawful condition be remedied within the time specified in the notice: Provided, that the time so specified shall not be less than five (5) days, unless the unlawful condition mentioned in said notice is of such character and nature as, in the opinion of the commissioner, can be removed immediately, or its continued existence shall be a hazard and a danger to the health of the community.

If, upon the expiration of the time specified in the notice, the condition so reported to exist shall not have remedied, the commissioner may order the license suspended or revoked and the establishment closed. It is unlawful to operate an establishment, or any part thereof, which has been closed and the license suspended or revoked by the commissioner, until the unlawful condition reported to exist has been remedied to the satisfaction of the commissioner.

Any person aggrieved with the order of the commissioner, or any of his lawful and duly authorized agents, shall have immediate recourse by any appeal to the chancery court of the jurisdiction in which the establishment may be located. The chancery court shall have and it is hereby given full jurisdiction to hear and determine the appeal and enter any and all appropriate orders in term time or in vacation.

§ 75-33-25

It is unlawful for any agent of the commissioner, or any meat-hygiene agent:

1. To approve or pass any diseased animal intended to be slaughtered for food, or any unwholesome meat, or any unwholesome meat-food product;

2. To fail to condemn and mark, and cause to be rendered unfit for food, any diseased animal, unwholesome meat, or unwholesome meat-food product, found on examination of any establishment to be unfit for food;

3. To fail to report as required any violation of this article;

4. Directly or indirectly to accept or agree to accept anything of value, monetary or otherwise, given or offered to such agent to influence him in the discharge of his duties.

§ 75-33-27

It is unlawful to give or offer to give, directly or indirectly, to an agent or employee of the commissioner, or to an approved agent, anything of value, monetary or otherwise, with intent to influence such agent or employee in the discharge of his duties under the provisions of this article.

§ 75-33-29

It shall be unlawful and a violation of this article for any person, without specific authority in writing from the commissioner:

(a) To make or duplicate or reproduce or use or possess any stamp, mark, tag, certificate, or emblem in imitation of an official state stamp, mark, tag, certificate, or emblem that is used, or that is authorized to be used, by the commissioner for stamping, marking, or otherwise identifying meats, meat-food products and poultry, as having been inspected and passed or otherwise approved as being wholesome and fit for food.

(b) To affix or attach any stamp, brand, emblem, tag, or other marking to any meat, meat-food product or poultry, or to any container or wrapping or covering of any meat-product, meat or poultry, indicating or suggesting that the meat, meat-food product or poultry, was slaughtered, manufactured, or prepared under inspection, unless the stamp, brand, emblem, tag, or other marking shall have been previously approved and the use thereof authorized by the commissioner.

§ 75-33-31

Any person engaged in any of the businesses covered by this article may obtain from the commissioner a grading service and/or inspection service of the products of his business and the commissioner is hereby authorized and directed to provide such service to any person applying for same. The commissioner is authorized to establish grades and quality of the carcasses, or the parts thereof, of cattle, sheep, goats, other ruminants, rabbits and poultry, but each such grade or quality shall meet the minimum standards for the like grade or quality as required by the United States Department of Agriculture. However, the commissioner may, in his discretion, establish a grade of lower quality or designation than is now recognized by the United States Department of Agriculture, but such grade and quality so established and designated shall be clearly marked and with such identification as to avoid any confusion with grades or qualities as designated by the U. S. Department of Agriculture. However, no grade or quality shall be established or designated which will permit the sale of any meat, meat-food products or poultry unfit for human consumption.

§ 75-33-33

Any person desiring inspection service over and above the inspection service normally provided by the commissioner for sanitary purposes, and any person desiring a grading service as authorized by this article, shall pay the commissioner for such services. The person requesting such services shall pay the commissioner a sum sufficient to cover the salary or wages of the inspector, or the grader, plus necessary travel and other authorized expenses, and a reasonable sum for administration expenses. All expenses to be paid hereunder shall be that sum agreed upon with the commissioner.

The commissioner is hereby authorized and empowered to recognize and accept any bona fide agreements and arrangements now in existence, or that may hereafter be made, between any person carrying on any business covered by this article and the proper officials of any county and/or municipality wherein local inspection service is to be provided by the county or the municipality as a condition or covenant to the establishing or operating of such business. The commissioner may, in his discretion, enter into an agreement with the appropriate agency of the United States Department of Agriculture to receive financial assistance therefrom in helping carry out the purpose of this article, and to pay a reasonable state-matching contribution as may be required.

The commissioner shall inspect for wholesomeness all plants in operation which are not under federal inspection. Except as otherwise provided herein, the state shall pay the full costs for such inspection after September 1, 1968. After July 1, 2001, the state shall pay the full costs for such inspection services of quail and rabbit processing plants. Provided that so long as funds are available which have been appropriated by the Legislature for product inspection, the commissioner may employ and train inspection personnel and assign such personnel to plants for inspection for wholesomeness. No state funds shall be used for payment of overtime or for grading. Except as otherwise provided herein for inspection services of quail and rabbits, plant management shall reimburse the Mississippi Department of Agriculture and Commerce for inspection services of ratites and other exotic animals that are not regulated by mandate under the Federal Meat Inspection Act or the Federal Poultry Products Inspection Act. Plants requesting such services must make application for voluntary inspection services and obtain an establishment “V” number.

§ 75-33-35

Any person desiring and obtaining the grading and inspection service as provided in the preceding sections, is hereby authorized to use such grades and designations of quality in advertising his products and displaying such products for sale.

§ 75-33-37

(1) Any person who violates the provisions of this article shall be fined not more than one thousand dollars ($1,000.00) or imprisoned not more than one (1) year, or both; however, if such violation involves intent to defraud, or any distribution or attempted distribution of an article that is adulterated (except as defined in Section 4(g)(8) of the U. S. Poultry Inspection Act as amended), such person shall be fined not more than ten thousand dollars ($10,000.00) or imprisoned not more than three (3) years, or both. When construing or enforcing the provisions of said sections the act, omission, or failure of any person acting for or employed by any individual, partnership, corporation, or association within the scope of his employment or office shall in every case be deemed the act, omission, or failure of such individual, partnership, corporation, or association, as well as of such person.

(2) No carrier for hire shall be subject to the penalties of this article, other than the penalties for violation of Section 11 of the U. S. Poultry Inspection Act as amended, by reason of his receipt, carriage, holding, or delivery, in the usual course of business, as a carrier, of poultry or poultry products, owned by another person unless the carrier has knowledge, or is in possession of facts which would cause a reasonable person to believe that such poultry or poultry products were not inspected or marked in accordance with the provisions of this article or were otherwise not eligible for transportation under this article or unless the carrier refuses to furnish on request of a representative of the commissioner of agriculture and commerce, the name and address of the person from whom he received such poultry or poultry products, and copies of all documents, if any there be, pertaining to the delivery of the poultry or poultry products to such carrier.

(3) Any person who forcibly assaults, resists, opposes, impedes, intimidates, or interferes with any person while engaged in or on account of the performance of his official duties under this article shall be fined not more than five thousand dollars ($5,000.00) or imprisoned not more than three (3) years, or both. Whoever, in the commission of any such acts, uses a deadly or dangerous weapon, shall be fined not more than ten thousand dollars ($10,000.00) or imprisoned not more than ten (10) years, or both. Whoever kills any person while engaged in or on account of the performance of his official duties under this article shall be punished as provided by the general laws of this state.

§ 75-33-39

(1) The commissioner has the same right of examination, inspection, condemnation and detention of live exotic animals and carcasses, parts of carcasses, meat and meat-food products of exotic animals slaughtered and prepared for shipment in interstate commerce as the commissioner has with respect to exotic animals slaughtered and prepared for shipment in intrastate commerce.

(2) The commissioner has the same right of inspection of establishments in handling exotic animals slaughtered and prepared for shipment in interstate commerce as the commissioner has with respect to establishments handling exotic animals slaughtered and prepared for intrastate commerce.

(3) The record-keeping requirements of Section 75-33-5 that apply to persons slaughtering, preparing, buying, selling, transporting, storing or rendering in intrastate commerce apply to persons performing similar functions with exotic animals in interstate commerce.

(4) The rule-making power of the commissioner relating to animals in intrastate commerce applies to exotic animals in interstate commerce.

Chapter 35 Meat Inspection

§ 75-35-1

This chapter shall be designated as the “Mississippi Meat Inspection Law of 1968.”

§ 75-35-3

As used in this chapter, except as otherwise specified, the following terms shall have the meanings stated below:

(a) The term “commissioner” means the “commissioner of agriculture and commerce of the State of Mississippi”, or his duly authorized deputies.

(b) The term “firm” means any partnership, association, or other unincorporated business organization.

(c) The term “meat broker” means any person, firm, or corporation engaged in the business of buying or selling carcasses, parts of carcasses, meat, or meat food products of cattle, sheep, swine, goats, horses, mules, or other equines on commission, or otherwise negotiating purchases or sales of such item or products other than for his own account or as an employee of another person, firm, or corporation.

(d) The term “renderer” means any person, firm, or corporation engaged in the business of rendering carcasses, or parts or products of the carcasses, of cattle, sheep, swine, goats, horses, mules, or other equines, except rendering conducted under inspection under this article.

(e) The term “animal food manufacturer” means any person, firm, or corporation engaged in the business of manufacturing or processing animal food derived wholly or in part from carcasses or parts or products of the carcasses, of cattle, sheep, swine, goats, horses, mules, or other equines.

(f) The term “unfit for human food” means as defined in the “Meat, Meat-Food and Poultry Regulation and Inspection Law of 1960”, appearing in subsection (c) of Section 75-33-3, Mississippi Code of 1972.

(g) The term “meat food product” means any product capable of use as human food which is made wholly or in part from any meat or other portion of the carcass of any cattle, sheep, swine, or goats, excepting products which contain meat or other portions of such carcasses only in a relatively small proportion or historically have not been considered by consumers as products of the meat food industry, and which are exempted from definition as a meat food product by the commissioner under such conditions as he may prescribe to assure that the meat or other portions of such carcasses contained in such product are not adulterated and that such products are not represented as meat food products. This term as applied to food products of equines shall have a meaning comparable to that provided in this paragraph with respect to cattle, sheep, swine, and goats.

(h) The term “capable of use as human food” shall apply to any carcass, or part or product of a carcass, of any animal, unless it is denatured or otherwise identified as required by regulations prescribed by the commissioner to deter its use as human food, or it is naturally inedible by humans.

(i) The term “prepare” means slaughtered, canned, salted, rendered, boned, cut up, or otherwise manufactured or processed.

(j) The term “adulterated” shall apply to any carcass, part thereof, meat or meat food product under one or more of the following circumstances:

(1) if it bears or contains any poisonous or deleterious substance which may render it injurious to health; but in case the substance is not an added substance, such article shall not be considered adulterated under this clause if the quantity of such substance in or on such item or product does not ordinarily render it injurious to health;

(2)(A) if it bears or contains (by reason of administration of any substance to the live animal or otherwise) any added poisonous or added deleterious substance (other than one which is (i) a pesticide chemical in or on a raw agricultural commodity; (ii) a food additive; or (iii) a color additive) which may, in the judgment of the commissioner, make such item or product unfit for human food;

(B) if it is, in whole or in part, a raw agricultural commodity and such commodity bears or contains a pesticide chemical which is unsafe within the meaning of Section 408 of the Federal Food, Drug, and Cosmetic Act, as amended;

(C) if it bears or contains any food additive which is unsafe within the meaning of Section 409 of the Federal Food, Drug, and Cosmetic Act, as amended;

(D) if it bears or contains any color additive which is unsafe within the meaning of Section 706 of the Federal Food, Drug, and Cosmetic Act: provided, that an article which is not adulterated under clause (B), (C), or (D) shall nevertheless be deemed adulterated if use of the pesticide chemical, food additive, or color additive in or on such item or product is prohibited by regulations of the commissioner in establishments at which inspection is maintained under this article;

(3) if it consists in whole or in part of any filthy, putrid, or decomposed substance or is for any other reason unsound, unhealthful, unwholesome, or otherwise unfit for human food;

(4) if it has been prepared, packed, or held under insanitary conditions whereby it may have become contaminated with filth, or whereby it may have been rendered injurious to health;

(5) if it is, in whole or in part, the product of an animal which has died otherwise than by slaughter; or which was diseased or was in a dying condition at the time of slaughter;

(6) if its container is composed, in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health;

(7) if it has been intentionally subjected to radiation, unless the use of the radiation was in conformity with a regulation or exemption in effect pursuant to Section 409 of the Federal Food, Drug, and Cosmetic Act;

(8) if any valuable constituent has been in whole or in part omitted or abstracted therefrom; or if any substance has been substituted, wholly or in part therefor; or if damage or inferiority has been concealed in any manner; or if any substance has been added thereto or mixed or packed therewith so as to increase its bulk or weight, or reduce its quality or strength, or make it appear better or of greater value than it is; or

(9) if it is margarine containing animal fat and any of the raw material used therein consisted in whole or in part of any filthy, putrid, or decomposed substance.

(k) The term “misbranded” shall apply to any carcass, part thereof, meat or meat food product under one or more of the following circumstances:

(1) if its labeling is false or misleading in any particular;

(2) if it is offered for sale under the name of another food;

(3) if it is an imitation of another food, unless its label bears, in type of uniform size and prominence, the word “imitation” and immediately thereafter, the name of the food imitated;

(4) if its container is so made, formed, or filled as to be misleading;

(5) if in a package or other container unless it bears a label showing (A) the name and place of business of the manufacturer, packer, or distributor; and (B) an accurate statement of the quantity of the contents in terms of weight, measure, or numerical count; provided, that under clause (B) of this subparagraph (5), reasonable variations may be permitted, and exemptions as to small packages may be established, by regulations prescribed by the commissioner.

(6) if any word, statement, or other information required by or under authority of this chapter to appear on the label or other labeling is not prominently placed thereon with such conspicuousness (as compared with other words, statements, designs, or devices, in the labeling) and in such terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use;

(7) if it purports to be or is represented as a food for which a definition standard of identity or composition has been prescribed by regulations of the commissioner under Section 75-35-15 unless (A) it conforms to such definition and standard, and (B) its label bears the name of the food specified in the definition and standard and, insofar as may be required by such regulations, the common names of optional ingredients (other than spices, flavoring, and coloring) present in such food;

(8) if it purports to be or is represented as a food for which a standard or standards of fill of container have been prescribed by regulations of the commissioner under Section 75-35-15, and it falls below the standard of fill of container applicable thereto, unless its label bears, in such manner and form as such regulations specify, a statement that it falls below such standard;

(9) if it is not subject to the provisions of subparagraph (7), unless its label bears (A) the common or usual name of the food, if any there be, and (B) in case it is fabricated from two or more ingredients, the common or usual name of each such ingredient; except that spices, flavorings, and colorings may, when authorized by the commissioner, be designated as spices, flavorings, and colorings without naming each: provided, that to the extent that compliance with the requirements of clause (B) of this subparagraph (9) is impracticable, or results in deception or unfair competition, exemptions shall be established by regulations promulgated by the commissioner;

(10) if it purports to be or is represented for special dietary uses, unless its label bears such information concerning its vitamin, mineral, and other dietary properties as the commissioner, after consultation with the secretary of agriculture of the United States, determines to be, and by regulations prescribes as, necessary in order fully to inform purchasers as to its value for such uses;

(11) if it bears or contains any artificial flavoring, artificial coloring, or chemical preservative, unless it bears labeling stating that fact: provided, that, to the extent that compliance with the requirements of this subparagraph (11) is impracticable, exemptions shall be established by regulations promulgated by the commissioner; or

(12) if it fails to bear, directly thereon or on its container, as the commissioner may by regulations prescribe, the inspection legend and, unrestricted by any of the foregoing, such other information as the commissioner may require in such regulations to assure that it will not have false or misleading labeling and that the public will be informed of the manner of handling required to maintain the item or product in a wholesome condition.

(l) The term “label” means a display of written, printed, or graphic matter upon the immediate container (not including package liners) of any item or product.

(m) The term “labeling” means all labels and other written, printed, or graphic matter (1) upon any item or product or any of its containers or wrappers, or (2) accompanying such item or product.

(n) The term “Federal Meat Inspection Act” means the act so entitled approved March 4, 1907 (34 Stat 1260), as amended by the Wholesome Meat Act (8 Stat 584).

(o) The term “Federal Food, Drug, and Cosmetic Act” means the act so entitled, approved June 25, 1938 (52 Stat 1040), and acts amendatory thereof or supplementary thereto.

(p) The term “pesticide chemical”, “food additive”, “color additive”, and “raw agricultural commodity” shall have the same meanings for purposes of this chapter as under the Federal Food, Drug, and Cosmetic Act.

(q) The term “official mark” means the official inspection legend or any other symbol prescribed by regulations of the commissioner to identify the status of any product or animal under this chapter.

(r) The term “official inspection legend” means any symbol prescribed by regulations of the commissioner showing that an item or product was inspected and passed in accordance with this chapter.

(s) The term “official certificate” means any certificate prescribed by regulations of the commissioner for issuance by an inspector or other person performing official functions under this chapter.

(t) The term “official device” means any device prescribed or authorized by the commissioner for use in applying any official mark.

§ 75-35-5

Meat and meat food products are an important source of the nation's total supply of food. It is essential in the public interest that the health and welfare of consumers be protected by assuring that meat and meat food products distributed to them are wholesome, not adulterated, and properly marked, labeled, and packaged. Unwholesome, adulterated, or misbranded meat or meat food products are injurious to the public welfare, destroy markets for wholesome, not adulterated, and properly labeled and packaged meat and meat food products, and result in sundry losses to livestock producers and processors of meat and meat food products, as well as injury to consumers. The unwholesome, adulterated, mislabeled, or deceptively packaged products can be sold at lower prices and compete unfairly with the wholesome, not adulterated, and properly labeled and packaged products, to the detriment of consumers and the public generally. It is hereby found that regulation by the commissioner and cooperation by this state and the United States as contemplated by this chapter are appropriate to protect the health and welfare of consumers and otherwise effectuate the purposes of this chapter.

§ 75-35-7

(a) For the purpose of preventing the use in intrastate commerce, as hereinafter provided, of meat and meat food products which are adulterated, the commissioner shall cause to be made, by inspectors appointed for that purpose, an examination and inspection of all cattle, sheep, swine, goats, horses, mules, and other equine before they shall be allowed to enter into any slaughtering, packing, meat canning, rendering, or similar establishment in this state in which slaughtering and preparation of meat and meat food products of such animals are conducted; and all cattle, sheep, swine, goats, horses, mules, and other equine found on such inspection to show symptoms of disease shall be set apart and slaughtered separately from all other cattle, sheep, swine, goats, horses, mules, or other equine, and when so slaughtered, the carcasses of said cattle, sheep, swine, goats, horses, mules, or other equine shall be subject to a careful examination and inspection, all as provided by the rules and regulations to be prescribed by the commissioner as herein provided for.

(b) For the purpose of preventing the inhumane slaughtering of livestock, the commissioner shall cause to be made, by inspectors appointed for that purpose, an examination and inspection of the method by which cattle, sheep, swine, ratites, nontraditional livestock, rabbits, goats, horses, mules and other equine are slaughtered and handled in connection with slaughter in the slaughtering establishments inspected under this article. The commissioner may refuse to provide inspection to a new slaughtering establishment or may cause inspection to be suspended temporarily at a slaughtering establishment if the commissioner finds that any cattle, sheep, swine, ratites, nontraditional livestock, rabbits, goats, horses, mules or other equine have been slaughtered or handled in connection with slaughter at such establishment by any method not in accordance with Sections 75-35-21(d) and 75-35-8 until the establishment furnishes assurances satisfactory to the commissioner that all slaughtering and handling in connection with slaughter of livestock shall be in accordance with such a method.

§ 75-35-8

(1) For purposes of this chapter, the following methods of slaughtering and handling are declared to be humane:

(a) In the case of cattle, calves, horses, mules, sheep, swine, ratites, nontraditional livestock, rabbits and other livestock, all animals are to be rendered insensible to pain by a single blow or gunshot or by an electrical, chemical or other means which is rapid and effective before being shackled, hoisted, thrown, cast or cut; or

(b) By slaughtering and handling in connection with such slaughtering in accordance with the ritual requirements of the Jewish faith or any other religious faith that prescribes a method of slaughter whereby the animal suffers loss of consciousness by anemia of the brain caused by the simultaneous and instantaneous severance of the carotid arteries with a sharp instrument.

(2) In addition to the methods prescribed in subsection (1) of this section, the commissioner may designate as humane any methods of slaughtering and handling which have been so designated by the United States Secretary of Agriculture on or before April 7, 1981, pursuant to United States Code Section 7-1904. The commissioner is further authorized to designate as humane other methods of slaughtering and handling which have been demonstrated by research, investigation and experimentation to be humane with reference to the speed and scope of slaughtering operations and with reference to other existing methods and then current scientific knowledge.

§ 75-35-9

For the purposes hereinbefore set forth, the commissioner shall cause to be made by inspectors appointed for that purpose, as hereinafter provided, a post-mortem examination and inspection of the carcasses and parts thereof of all cattle, sheep, swine, goats, horses, mules, and other equines, capable of use as human food, to be prepared at any slaughtering, meat-canning, salting, packing, rendering, or similar establishment in this state in which such products are prepared. The carcasses and parts thereof of all such animals found to be not adulterated shall be marked, stamped, tagged, or labeled, as “Inspected and Passed”, or appropriate stamp or markings. Said inspectors shall label, mark, stamp, or tag as “Inspected and Condemned”, or appropriate stamp or markings, all carcasses and parts thereof of animals found to be adulterated; and all carcasses and parts thereof thus inspected and condemned shall be destroyed for food purposes by the said establishment in the presence of an inspector. The commissioner may remove inspectors from any such establishment which fails to so destroy any such condemned carcass or part thereof. Said inspectors, after said first inspection shall, when they deem it necessary, reinspect said carcasses or parts thereof to determine whether since the first inspection the same have become adulterated, and if any carcass or any part thereof shall, upon examination and inspection subsequent to the first examination and inspection, be found to be adulterated, it shall be destroyed for food purposes by the said establishment in the presence of an inspector; and the commissioner may remove inspectors from any establishment which fails to so destroy any such condemned carcass or part thereof.

§ 75-35-11

The foregoing provisions shall apply to all carcasses or parts of carcasses of cattle, sheep, swine, goats, horses, mules, and other equines or the meat or meat products thereof, capable of use as human food, which may be brought into any slaughtering, meat-canning, salting, packing, rendering, or similar establishment, where inspection under this article is maintained, and such examination and inspection shall be had before the said carcasses or parts thereof shall be allowed to enter into any department wherein the same are to be treated and prepared for meat food products. The foregoing provisions shall also apply to all such products which, after having been issued from any such slaughtering, meat-canning, salting, packing, rendering, or similar establishment, shall be returned to the same or to any similar establishment where such inspection is maintained. The commissioner may limit the entry of carcasses, part of carcasses, meat and meat food products, and other materials into any establishment at which inspection under this article is maintained, under such conditions as he may prescribe to assure that allowing the entry of such items or products into such inspected establishments will be consistent with the purposes of this chapter.

§ 75-35-13

For the purposes hereinbefore set forth, the commissioner shall cause to be made by inspectors appointed for that purpose an examination and inspection of all meat food products prepared in any slaughtering, meat-canning, salting, packing, rendering, or similar establishment, where such products are prepared, and for the purposes of an examination and inspection said inspectors shall have access at all times, by day or night, whether the establishment be operated or not, to every part of said establishment. Said inspectors shall mark, stamp, tag, or label as “Mississippi inspected and passed” or appropriately mark all such products found to be not adulterated; and said inspectors shall label, mark, stamp, or tag as “Mississippi inspected and condemned” or appropriately mark all such products found adulterated. All such condemned meat food products shall be destroyed for food purposes, as hereinbefore provided, and the commissioner may remove inspectors from any establishment which fails to so destroy such condemned meat food products.

§ 75-35-15

(1) When any meat or meat food product has been inspected as hereinbefore provided and marked “Mississippi inspected and passed” or appropriate marking shall be placed or packed in any can, pot, tin, canvas, or other receptacle or covering in any establishment where inspection under the provisions of this chapter is maintained, the person, firm, or corporation preparing said product shall cause a label to be attached to said can, pot, tin, canvas, or other receptacle or covering, under supervision of an inspector, which label shall state that the contents thereof have been “Mississippi inspected and passed” or appropriate marking under the provisions of this chapter, and no inspection and examination of meat or meat food products deposited or enclosed in cans, tins, pots, canvas, or other receptacle or covering in any establishment where inspection under the provisions of this chapter is maintained shall be deemed to be complete until such meat or meat food products have been sealed or enclosed in said can, tin, pot, canvas, or other receptacle or covering under the supervision of an inspector.

(2) All carcasses, parts of carcasses, meat and meat food products inspected at any establishment under the authority of this chapter and found to be not adulterated, shall at the time they leave the establishment bear, in distinctly legible form, directly thereon or on their containers, as the commissioner may require, the information required under paragraph (k) of Section 75-35-3.

(3) The commissioner, whenever he determines such action is necessary for the protection of the public, may prescribe:

(a) The styles and sizes of type to be used with respect to material required to be incorporated in labeling to avoid false or misleading labeling of any products or animals subject to this article or Article 3 of this chapter; and

(b) Definitions and standards of identity or composition for items subject to this article and standards of fill of container for such products not inconsistent with any such standards established under the Federal Food, Drug, and Cosmetic Act, or under the Federal Meat Inspection Act, and there shall be consultation between the commissioner and the Secretary of Agriculture of the United States prior to the issuance of such standards to avoid inconsistency between such standards and the federal standards.

(4) No item or product subject to this article shall be sold or offered for sale by any person, firm, or corporation, under any name or other marking or labeling which is false or misleading, or in any container of a misleading form or size, but established trade names and other marking and labeling and containers which are not false or misleading and which are approved by the commissioner, are permitted. A food product that contains cultured animal tissue produced from animal cell cultures outside of the organism from which it is derived shall not be labeled as meat or a meat food product. A plant-based or insect-based food product shall not be labeled as meat or a meat food product.

(5) If the commissioner has reason to believe that any marking or labeling or the size or form of any container in use or proposed for use with respect to any item subject to this article is false or misleading in any particular, he may direct that such use be withheld unless the marking, labeling, or container is modified in such manner as he may prescribe so that it will not be false or misleading. If the person, firm, or corporation using or proposing to use the marking, labeling or container does not accept the determination of the commissioner, such person, firm, or corporation may request a hearing, but the use of the marking, labeling, or container shall, if the commissioner so directs, be withheld pending hearing and final determination by the commissioner. Any party aggrieved by such final determination may, within thirty (30) days after receipt of notice of such final determination, effect an appeal therefrom to the chancery court of the county in which such party resides or in which the principal place of his business is domiciled; and, on appeal, such chancery court shall affirm, modify, or set aside the commissioner's final determination.

§ 75-35-17

The commissioner shall cause to be made, by experts in sanitation, or by other competent inspectors, such inspection of all slaughtering, meat-canning, salting, packing, rendering, or similar establishments in which cattle, sheep, swine, goats, horses, mules, and other equines are slaughtered and the meat and meat food products thereof are prepared as may be necessary to inform himself concerning the sanitary conditions of the same, and to prescribe the rules and regulations of sanitation under which such establishments shall be maintained. Where the sanitary conditions of any such establishment are such that the meat or meat food products are rendered adulterated, he shall refuse to allow said meat or meat food products to be labeled, marked, stamped, or tagged as “Mississippi inspected and passed” or appropriately marked.

§ 75-35-19

The commissioner shall cause an examination and inspection of all cattle, sheep, swine, goats, horses, mules, and other equines, and the food products thereof, slaughtered and prepared in the establishments hereinbefore described to be made during the nighttime as well as during the daytime when the slaughtering of said cattle, sheep, swine, goats, horses, mules, and other equines, or the preparation of said food products is conducted during the nighttime.

§ 75-35-21

No person, firm, or corporation shall, with respect to any cattle, sheep, swine, goats, horses, mules, or other equine, or any carcasses, parts of carcasses, meat or meat food products of any such animals:

(a) Slaughter any such animals or prepare any such products which are capable of use as human food, at any establishment preparing such articles, except in compliance with the requirements of this chapter;

(b) Sell, transport, offer for sale or transportation, or receive for transportation, in intrastate commerce, (i) any such products which (1. ) are capable of use as human food, and (2.) are adulterated or misbranded at the time of such sale, transportation, offer for sale or transportation, or receipt for transportation; or (ii) any items required to be inspected under this article unless they have been so inspected and passed;

(c) Do, with respect to any such items which are capable of use as human food, any act while they are being transported in intrastate commerce or held for sale after such transportation, which is intended to cause or has the effect of causing such items to be adulterated or misbranded;

(d) Slaughter or handle in connection with such slaughter any such animals in any manner not declared to be humane under Section 75-35-8.

§ 75-35-23

(1) No brand manufacturer, printer, or other person, firm, or corporation shall cast, print, lithograph, or otherwise make any device containing any official mark or simulation thereof, or any label bearing any such mark or simulation, or any form of official certificate or simulation thereof, except as authorized by the commissioner.

(2) No person, firm, or corporation shall

(a) forge any official device, mark, or certificates;

(b) without authorization from the commissioner, use any official device, mark, or certificate, or simulation thereof, or alter, detach, deface, or destroy any official device, mark, or certificate;

(c) contrary to the regulations prescribed by the commissioner, fail to use, or to detach, deface, or destroy any official device, mark, or certificate;

(d) knowingly possess, without promptly notifying the commissioner, or his representative, any official device or any counterfeit, simulated, forged, or improperly altered official certificate or any device or label or any carcass of any animal, or part or product thereof, bearing any counterfeit, simulated, forged, or improperly altered official mark;

(e) knowingly make any false statement in any shipper's certificate or other nonofficial or official certificate provided for in the regulations prescribed by the commissioner; or

(f) knowingly represent that any item or product has been inspected and passed, or exempted, under this chapter when, in fact, it has, respectively, not been so inspected and passed, or exempted.

§ 75-35-25

No person, firm, or corporation shall sell, transport, offer for sale or transportation, or receive for transportation, any carcasses of horses, mules, or other equines or parts of such carcasses, or the meat or meat food products thereof, unless they are plainly and conspicuously marked or labeled or otherwise identified as required by regulations prescribed by the commissioner to show the kinds of animals from which they were derived. When required by the commissioner with respect to establishments at which inspection is maintained under this article, such animals and their carcasses, parts thereof, meat and meat food products shall be prepared in establishments separate from those in which cattle, sheep, swine, or goats are slaughtered or their carcasses, parts thereof, meats or meat food products are prepared.

§ 75-35-27

The commissioner shall appoint from time to time inspectors to make examination and inspection of all cattle, sheep, swine, goats, horses, mules, and other equines the inspection of which is hereby provided for, and of all carcasses and parts thereof, and of all meats and meat food products thereof, and of the sanitary conditions of all establishments in which such meat and meat food products hereinbefore described are prepared. Said inspectors shall refuse to stamp, mark, tag or label any carcass or any part thereof, or meat food product therefrom, prepared in any establishment hereinbefore mentioned, until the same shall have actually been inspected and found to be not adulterated; and shall perform such other duties as are provided by this chapter and by the rules and regulations to be prescribed by said commissioner. Said commissioner shall, from time to time, make such rules and regulations as are necessary for the efficient execution of the provisions of this chapter, and all inspections and examinations made under this chapter shall be such and made in such manner as described in the rules and regulations prescribed by said commissioner not inconsistent with the provisions of this chapter.

§ 75-35-29

Any person, firm, or corporation, or any agent or employee of any person, firm, or corporation, who shall give, pay, or offer, directly or indirectly, to any inspector, deputy inspector, chief inspector, or any other officer or employee of this state authorized to perform any of the duties prescribed by this chapter or by the rules and regulations of the commissioner, any money or other thing of value, with intent to influence said inspector, deputy inspector, chief inspector, or other officer or employee of this state in the discharge of any duty herein provided for, shall be deemed guilty of a felony and, upon conviction thereof, shall be punished by a fine not less than Five Thousand Dollars ($5,000.00), nor more than Ten Thousand Dollars ($10,000.00) and by imprisonment not less than one (1) year nor more than three (3) years. Any inspector, deputy inspector, chief inspector, or other officer or employee of this state authorized to perform any of the duties prescribed by this chapter who shall accept any money, gift, or other thing of value from any person, firm, or corporation, or officers, agents, or employees thereof, given with intent to influence his official action, or who shall receive or accept from any person, firm, or corporation engaged in intrastate commerce any gift, money, or other thing of value given with any purpose or intent whatsoever, shall be deemed guilty of a felony and shall, upon conviction thereof, be summarily discharged from office and shall be punished by a fine not less than One Thousand Dollars ($1,000.00) nor more than Ten Thousand Dollars ($10,000.00) and by imprisonment not less than one (1) year nor more than three (3) years.

§ 75-35-31

(1) The provisions of this article requiring inspection of the slaughter of animals and the preparation of the carcasses, parts thereof, meat and meat food products at establishments conducting such operations shall not (a) apply to the slaughtering by any person of animals of his own raising, and the preparation by him and transportation in intrastate commerce of the carcasses, parts thereof, meat and meat food products of such animals exclusively for use by him and members of his household and his nonpaying guests and employees; nor (b) to the custom slaughter by any person, firm, or corporation of cattle, sheep, swine, or goats, delivered by the owner thereof for such slaughter, and the preparation by such slaughterer and transportation in intrastate commerce of the carcasses, parts thereof, meat and meat food products of such animals, exclusively for use, in the household of such owner, by him, and members of his household and his nonpaying guests and employees: provided, that such custom slaughterer does not engage in the business of buying or selling any carcasses, parts of carcasses, meat or meat food products of any cattle, sheep, swine, goats, or equines, capable of use as human food.

(2) The provisions of this chapter requiring inspection of the slaughter of animals and the preparation of carcasses, parts thereof, meat and meat food products shall not apply to operations of types traditionally and usually conducted at retail stores and restaurants, when conducted at any retail store or restaurant or similar retail-type establishment for sale in normal retail quantities or service of such items or products to consumers at such establishments.

(3) The slaughter of animals and preparation of items or products referred to in subsections (1)(b) and (2) of this section shall be conducted in accordance with such sanitary conditions as the commissioner may by regulations prescribe. Violation of any such regulation is prohibited.

(4) The adulteration and misbranding provisions of this article, other than the requirement of the inspection legend, shall apply to items or products which are not required to be inspected under this section.

§ 75-35-33

The commissioner may by regulations prescribe conditions under which carcasses, parts of carcasses, meat, and meat food products of cattle, sheep, swine, goats, horses, mules, or other equines, capable of use as human food, shall be stored or otherwise handled by any person, firm, or corporation engaged in the business of buying, selling, freezing, storing, or transporting, in or for intrastate commerce, such articles, whenever the commissioner deems such action necessary to assure that such items or products will not be adulterated or misbranded when delivered to the consumer. Violation of any such regulation is prohibited.

§ 75-35-101

Inspection shall not be provided under Article 1 of this chapter at any establishment for the slaughter of cattle, sheep, swine, goats, horses, mules, or other equines, or the preparation of any carcasses or parts or products of such animals, which are not intended for use as human food, but such products shall, prior to their offer for sale or transportation in intrastate commerce, unless naturally inedible by humans, be denatured or otherwise identified as prescribed by regulations of the commissioner to deter their use for human food. No person, firm, or corporation shall buy, sell, transport, or offer for sale or transportation, or receive for transportation, in commerce, any carcasses, parts thereof, meat or meat food products of any such animals, which are not intended for use as human food unless they are denatured or otherwise identified as required by the regulations of the commissioner or are naturally inedible by humans.

§ 75-35-103

(1) The following classes of persons, firms, and corporations shall keep such records as will fully and correctly disclose all transactions involved in their businesses; and all persons, firms, and corporations subject to such requirements shall, at all reasonable times, upon notice by a duly authorized representative of the commissioner afford such representative and any duly authorized representative of the secretary of agriculture of the United States accompanied by such representative of the commissioner access to their places of business and opportunity to examine the facilities, inventory, and records thereof, to copy all such records, and to take reasonable samples of their inventory upon payment when requested of the fair market value thereof:

(a) Any persons, firms, or corporations that engage in the business of slaughtering any cattle, sheep, swine, goats, horses, mules, or other equines, or preparing, freezing, packaging, or labeling any carcasses, or parts or products of carcasses, of any such animals, for use as human food or animal food;

(b) Any persons, firms, or corporations that engage in the business of buying or selling (as meat brokers, wholesalers or otherwise), or transporting, or storing, any carcasses, or parts or products of carcasses, of any such animals;

(c) Any persons, firms, or corporations that engage in business, as renderers, or engage in the business of buying, selling, or transporting, any dead, dying, disabled, or diseased cattle, sheep, swine, goats, horses, mules, or other equines, or parts of the carcasses of any such animals that died otherwise than by slaughter.

(2) Any record required to be maintained by this section shall be maintained for such period of time as the commissioner may by regulations prescribe.

§ 75-35-105

No person, firm, or corporation shall engage in business, as a meat broker, renderer, or animal food manufacturer, or engage in business as a wholesaler of any carcasses, or parts or products of the carcasses, of any cattle, sheep, swine, goats, horses, mules, or other equines, whether intended for human food or other purposes, or engage in business as a public warehouseman storing any such items or products, or engage in the business of buying, selling, or transporting, any dead, dying, disabled, or diseased animals of the specified kinds, or parts of the carcasses of any such animals that died otherwise than by slaughter, unless, when required by regulations of the commissioner, he has registered with the commissioner his name, and the address of each place of business at which, and all trade names under which, he conducts such business.

§ 75-35-107

No person, firm, or corporation engaged in the business of buying, selling, or transporting, dead, dying, disabled, or diseased animals, or any parts of the carcasses of any animals that died otherwise than by slaughter, shall buy, sell, transport, offer for sale or transportation, or receive for transportation, any dead, dying, disabled, or diseased cattle, sheep, swine, goats, horses, mules or other equines, or parts of the carcasses of any such animals that died otherwise than by slaughter, unless such transaction or transportation is made in accordance with such regulations as the commissioner may prescribe to assure that such animals, or the unwholesome parts or products thereof, will be prevented from being used for human food purposes.

§ 75-35-201

(1) The department of agriculture and commerce is hereby designated as the state agency which shall be responsible for cooperating with the secretary of agriculture of the United States under the provisions of Section 301 of the Federal Meat Inspection Act and such agency is directed to cooperate with the secretary of agriculture of the United States in developing and administering the meat inspection program of this state under this chapter to assure that not later than November 15, 1969, its requirements will be at least equal to those imposed under Titles I and IV of the Federal Meat Inspection Act and in developing and administering the program of this state under Article 3 of this chapter in such a manner as will effectuate the purposes of this chapter and said federal act.

(2) In such cooperative efforts, the department of agriculture and commerce is authorized to accept from said secretary advisory assistance in planning and otherwise developing the state program, technical and laboratory assistance and training (including necessary curricular and instructional materials and equipment), and financial and other aid for administration of such a program. The department of agriculture and commerce is further authorized to spend public funds of this state appropriated for administration of this chapter to pay fifty per centum (50%) of the estimated total cost of the cooperative program.

(3) The department of agriculture and commerce is further authorized to recommend to the said secretary of agriculture such officials or employees of this state as the department of agriculture and commerce shall designate, for appointment to the advisory committees provided for in Section 301 of the Federal Meat Inspection Act; and the department of agriculture and commerce shall serve as the representative of the governor for consultation with said secretary under paragraph (c) of this section of said act unless the governor shall select another representative.

§ 75-35-301

The commissioner may (for such period, or indefinitely, as he deems necessary to effectuate the purposes of this chapter) refuse to provide, or withdraw, inspection service under Article 1 of this chapter with respect to any establishment if he determines, after opportunity for a hearing is accorded to the applicant for, or recipient of, such service, that such applicant or recipient is unfit to engage in any business requiring inspection under Article 1 because the applicant or recipient, or anyone responsibly connected with the applicant or recipient, has been convicted, in any federal or state court, of (1) any felony, or (2) more than one violation of any law, other than a felony, based upon the acquiring, handling, or distributing of unwholesome, mislabeled, or deceptively packaged food or upon fraud in connection with transactions in food. This section shall not affect in any way other provisions of this chapter for withdrawal of inspection services under Article 1 from establishments failing to maintain sanitary conditions or to destroy condemned carcasses, parts, meat or meat food products.

For the purpose of this section, a person shall be deemed to be responsibly connected with the business if he was a partner, officer, director, holder, or owner of ten per centum (10%) or more of its voting stock or employee in a managerial or executive capacity. The determination and order of the commissioner with respect thereto under this section shall be final and conclusive unless the affected applicant for, or recipient of, inspection service files application for judicial review within thirty (30) days after the effective date of such order in the appropriate court as provided in Section 75-35-15. Judicial review of any such order shall be upon the record made before the commissioner upon which the determination and order are based.

§ 75-35-303

Whenever any carcass, part of a carcass, meat or meat food product of cattle, sheep, swine, goats, horses, mules, or other equines, or any product exempted from the definition of a meat food product, or any dead, dying, disabled, or diseased cattle, sheep, swine, goat, or equine is found by any authorized representative of the commissioner upon any premises where it is held for purposes of, or during or after distribution, and there is reason to believe that any such item or product is adulterated or misbranded and is capable of use as human food, or that it has not been inspected, in violation of the provisions of Article 1 of this chapter or of the Federal Meat Inspection Act or the Federal Food, Drug and Cosmetic Act, or that such products or animal has been or is intended to be, distributed in violation of any such provisions, it may be detained by such representative for a period not to exceed twenty (20) days, pending action under Section 75-35-305 or notification of any Federal authorities having jurisdiction over such article or animal, and shall not be moved by any person, firm or corporation from the place at which it is located when so detained, until released by such representative. All official marks may be required by such representative to be removed from such products or animal before it is released unless it appears to the satisfaction of the commissioner that the products or animal is eligible to retain such marks.

§ 75-35-305

(1) Any carcass, part of a carcass, meat or meat food product of cattle, sheep, swine, goats, horses, mules or other equines, or any dead, dying, disabled, or diseased cattle, sheep, swine, goat, or equine, that is being transported in intrastate commerce, or is held for sale in this state after such transportation, and that (a) is or has been prepared, sold, transported, or otherwise distributed or offered or received for distribution in violation of this chapter, or (b) is capable of use as human food and is adulterated or misbranded, or (c) in any other way is in violation of this chapter, shall be liable to be proceeded against and seized and condemned, at any time, on a bill of complaint in the chancery court as provided in Section 75-35-307 within the jurisdiction of which the products or animal is found. If the products or animal is condemned it shall, after entry of the decree, be disposed of by destruction or sale as the court may direct and the proceeds, if sold, less the court costs and fees, and storage and other proper expenses, shall be paid into the general fund of the treasury of this state, but the products or animals shall not be sold contrary to the provisions of this chapter, or the Federal Meat Inspection Act or the Federal Food, Drug, and Cosmetic Act: provided, that upon the execution and delivery of a good and sufficient bond conditioned that the products or animal shall not be sold or otherwise disposed of contrary to the provisions of this chapter, or the laws of the United States, the court may direct that such products or animal be delivered to the owner thereof subject to such supervision by authorized representatives of the commissioner as is necessary to insure compliance with the applicable laws. When a decree of condemnation is entered against the products or animal and it is released under bond, or destroyed, court costs and fees, and storage and other proper expenses shall be awarded against the person, if any, intervening as claimant of the product or animal. The proceedings in such chancery court cases shall conform, as nearly as may be, to the usual proceedings in chancery, except that either party may demand trial by jury of any issue of fact joined in any case, and all such proceedings shall be removed at the suit of and in the name of this state in the circuit court.

(2) The provisions of this section shall in no way derogate from authority for condemnation or seizure conferred by other provisions of this chapter, or other laws.

§ 75-35-307

Except as otherwise specifically provided for in this chapter, the chancery courts are vested with jurisdiction specifically to enforce, and to prevent and restrain violations of this chapter, and shall have jurisdiction in all other kinds of cases arising under this chapter.

§ 75-35-309

Any person who forcibly assaults, resists, opposes, impedes, intimidates, or interferes with any person while engaged in or on account of the performance of his official duties under this chapter shall be fined not more than five thousand dollars ($5,000.00) or imprisoned not more than three (3) years, or both. Whoever, in the commission of any such acts, uses a deadly or dangerous weapon, shall be fined not more than ten thousand dollars ($10,000.00) or imprisoned not more than ten (10) years, or both. Whoever kills any person while engaged in or on account of the performance of his official duties under this chapter shall be punished as provided under general laws of this state.

§ 75-35-311

(1) Any person, firm, or corporation who violates any provision of this chapter for which no other criminal penalty is provided by this chapter shall upon conviction be subject to imprisonment for not more than one (1) year, or a fine of not more than one thousand dollars ($1,000.00), or both such imprisonment and fine; but if such violation involves intent to defraud, or any distribution or attempted distribution of an item or product that is adulterated (except as defined in Section 75-35-3(j)(8)), such person, firm, or corporation shall be subject to imprisonment for not more than three (3) years or a fine of not more than ten thousand dollars ($10,000.00) or both: provided, that no person, firm, or corporation shall be subject to penalties under this section for receiving for transportation any product or animal in violation of this chapter if such receipt was made in good faith, unless such person, firm, or corporation refuses to furnish on request of a representative of the commissioner the name and address of the person from whom he received such products or animal, and copies of all documents, if any there be, pertaining to the delivery of the products or animal to him.

(2) Nothing in this chapter shall be construed as requiring the commissioner to report for prosecution or for the institution of a bill of complaint or injunction proceedings, minor violations of this chapter whenever he believes that the public interest will be adequately served by a suitable written notice of warning.

§ 75-35-313

The commissioner shall also have power:

(a) To gather and compile information concerning, and to investigate from time to time the organization, business, conduct, practices, and management of any person, firm, or corporation engaged in intrastate commerce, and the relation thereof to other persons, firms, and corporations;

(b) To require, by general or special orders, persons, firms, and corporations engaged in intrastate commerce, or any class of them, or any of them to file with the commissioner, in such form as the commissioner may prescribe, annual or special, or both annual and special, reports or answers in writing to specific questions, furnishing to the commissioner such information as he may require as to the organization, business, conduct, practices, management, and relation to other persons, firms, and corporations, of the person, firm, or corporation filing such reports or answers in writing. Such reports and answers shall be made under oath, or otherwise, as the commissioner may prescribe, and shall be filed with the commissioner within such reasonable period as the commissioner may prescribe, unless additional time be granted in any case by the commissioner.

§ 75-35-315

(1) For the purposes of this chapter, the commissioner shall at all reasonable times have access to, for the purpose of examination, and the right to copy, any documentary evidence of any person, firm, or corporation being investigated or proceeded against, and may require by subpoena the attendance and testimony of witnesses and the production of all documentary evidence of any person, firm, or corporation relating to any matter under investigation. The commissioner may issue and sign subpoenas and may administer oaths and affirmations, examine witnesses, and receive evidence.

(2) Such attendance of witnesses, and the production of such documentary evidence, may be required at any designated place of hearing. In case of disobedience to a subpoena, the commissioner may invoke the aid of any court designated in Section 75-35-307 in requiring the attendance and testimony of witnesses and the production of documentary evidence.

(3) Any of the courts designated in Section 75-35-307 within the jurisdiction of which such inquiry is carried on may, in case of contumacy or refusal to obey a subpoena issued to any person, firm, or corporation, issue an order requiring such person, firm, or corporation to appear before the commissioner, or to produce documentary evidence if so ordered, or to give evidence touching the matter in question; and any failure to obey such order of the court may be punished by such court as a contempt thereof.

(4) Upon the application of the attorney general of this state at the request of the commissioner, the circuit court shall have jurisdiction to issue writs of mandamus commanding any person, firm, or corporation to comply with the provisions of this chapter or any order of the commissioner made in pursuance thereof.

(5) The commissioner may order testimony to be taken by deposition in any proceeding or investigation pending under this chapter at any stage of such proceeding or investigation. Such depositions may be taken before any person designated by the commissioner and having power to administer oaths. Such testimony shall be reduced to writing by the person taking the deposition, or under his direction and shall then be subscribed by the deponent. Any person may be compelled to appear and depose and to produce documentary evidence in the same manner as witnesses may be compelled to appear and testify and produce documentary evidence before the commissioner as hereinbefore provided.

(6) Witnesses summoned before the commissioner shall be paid the same fees and mileage that are paid witnesses in the courts of this state, and witnesses whose depositions are taken and the persons taking the same shall severally be entitled to the same fees as are paid for like services in such courts.

§ 75-35-317

(1) Any person, firm, or corporation that shall neglect or refuse to attend and testify or to answer any lawful inquiry, or to produce documentary evidence, if in his or its power to do so, in obedience to the subpoena or lawful requirement of the commissioner, shall be guilty of an offense and upon conviction thereof by a court of competent jurisdiction shall be punished by a fine of not less than one hundred dollars ($100.00) nor more than five thousand dollars ($5,000.00), or by imprisonment for not more than one (1) year, or by both such fine and imprisonment.

(2) Any person, firm, or corporation that shall willfully make, or cause to be made any false entry or statement of fact in any report required to be made under this chapter, or that shall willfully make, or cause to be made, any false entry in any account, record, or memorandum kept by any person, firm, or corporation subject to this chapter or that shall willfully neglect or fail to make, or to cause to be made, full, true, and correct entries in such accounts, records, or memoranda, of all facts and transactions appertaining to the business of such person, firm, or corporation, or that shall willfully remove out of the jurisdiction of this state, or willfully mutilate, alter, or by any other means falsify any documentary evidence of any such person, firm, or corporation or that shall willfully refuse to submit to the commissioner or to any of his authorized agents, for the purpose of inspection and taking copies, any documentary evidence of any such person, firm, or corporation in his possession or within his control, shall be deemed guilty of an offense and shall be subject, upon conviction in any court of competent jurisdiction to a fine of not less than one thousand dollars ($1,000.00) nor more than five thousand dollars ($5,000.00), or to imprisonment for a term of not more than three (3) years, or to both such fine and imprisonment.

(3) If any person, firm, or corporation required by this chapter to file any annual or special report shall fail so to do within the time fixed by the commissioner for filing the same, and such failure shall continue for thirty (30) days after notice of such default, unless for good cause shown on extension for filing same shall be granted by the commissioner, such person, firm, or corporation shall forfeit to this state the sum of one hundred dollars ($100.00) for each and every day of the continuance of such failure, which forfeiture shall be payable into the general fund of the treasury of this state, and shall be recoverable in a civil suit in the name of the state brought in the county where the person, firm, or corporation has his or its principal office or in any county in which he or it shall do business. It shall be the duty of the attorney general of this state, the county attorney and the district attorney, under the direction of the attorney general of this state, to prosecute for the recovery of such forfeitures in the name of the State of Mississippi. The costs and expenses of such prosecution shall be paid out of the appropriation for the expenses of the courts of this state.

(4) Any officer or employee of this state who shall make public any information obtained by the commissioner without his authority, unless directed by a court, shall be deemed guilty of a misdemeanor, and, upon conviction thereof, shall be punished by a fine not exceeding five hundred dollars ($500.00), or by imprisonment, not exceeding one (1) year, or by both such fine and imprisonment, in the discretion of the court. This provision does not apply to the governor, members of the legislature, the attorney general, district attorney, county attorney or sheriff.

§ 75-35-319

The requirements of this chapter shall apply to persons, firms, corporation establishments, animals, and products regulated under the Federal Meat Inspection Act only to the extent provided for in Section 408 of said federal act.

§ 75-35-321

There are hereby authorized to be appropriated such sums as may be necessary to carry out the provisions of this chapter.

§ 75-35-323

Nothing in this chapter, except for the purpose of providing for cooperation with the United States Department of Agriculture for the inspection of meat and related purposes, shall repeal or supersede any existing statutes regulating the same matters and subject.

§ 75-35-325

(1) When a written complaint is made against a person for violation of any provision of this chapter or of Section 75-33-1 et seq., or any of the rules or regulations promulgated there under, the Commissioner of Agriculture, or his designee, shall conduct a full evidentiary hearing relative to the charges. The complaint shall be in writing and shall be filed in the office of the Mississippi Department of Agriculture and Commerce. The commissioner shall cause to be delivered to the accused in the manner described herein a copy of the complaint and a summons requiring the accused to file a written answer to the complaint within thirty (30) days after service of the summons and complaint upon the accused. The accused may be notified by serving a copy of the summons and complaint on the accused or any of his officers, agents or employees by personal service or by certified mail. The accused shall file with the department a written response to the complaint within the thirty-day period. If the accused fails to file an answer within such time, the commissioner or his designee may enter an order by default against the accused. If the accused has filed an answer, the matter shall be set for hearing before the commissioner or his designee.

The commissioner may issue subpoenas to require the attendance of witnesses and the production of documents. Compliance with such subpoenas may be enforced by any court of general jurisdiction in this state. The testimony of witnesses shall be upon oath or affirmation, and they shall be subject to cross-examination. The proceedings shall be recorded by a court reporter. If the commissioner or his designee determines that the complaint lacks merit, he may dismiss it. If he finds that there is substantial evidence showing that a violation of any of the statutes or regulations has been committed, he may impose any or all of the following penalties upon the accused:

(a) Levy a civil penalty in the amount of no more than One Thousand Dollars ($1,000.00) for each violation;

(b) Revoke or suspend any license, permit or privilege granted to the accused under the terms of this chapter or Section 75-33-1 et seq.;

(c) Retain product, reject equipment or facilities, slow or stop a line or refuse to allow the processing of a specifically identified product;

(d) Refuse to allow the marks of inspection to be applied to a product; or

(e) Take any other action authorized by law or regulation. The commissioner's decision shall be in writing, and it shall be delivered to the accused by any of the methods described herein for service of the summons and complaint on the accused.

(2) Either the accused or the department may appeal the decision of the commissioner to the circuit court of the county of residence of the accused or, if the accused is a nonresident of the State of Mississippi, to the Circuit Court of the First Judicial District of Hinds County, Mississippi. The appellant shall have the obligation of having the record transcribed and filed with the circuit court. The appeal shall otherwise be governed by all applicable laws and rules affecting appeals to circuit court. If no appeal is perfected within the required time, the decision of the commissioner, or his designee, shall then become final.

(3) The decision of the circuit court may then be appealed by either party to the Mississippi Supreme Court in accordance with the existing laws and rules affecting such appeals.

Chapter 39 Sale of Baby Chicks

§ 75-39-1

The term “baby chick” as used in this chapter means any domestic fowl under the age of six (6) weeks. The term “person” includes also firms and corporations.

§ 75-39-3

Before any baby chicks are offered for sale at any auction or auction sale barn or community sale, except public sales conducted by farmers selling baby chicks raised on their own premises, a permit shall be granted to offer such baby chicks for sale by the livestock sanitary board or the state veterinarian.

§ 75-39-5

Any person who desires to offer baby chicks for sale at any auction or auction sale barn or community sale, shall apply for a permit so to do to the state veterinarian or the livestock sanitary board, on a form which shall be prescribed and furnished by the livestock sanitary board. The application shall be signed by the person who proposes to conduct such sale, together with the person who owns the property in or on which such sale is to be conducted, if the person who proposes to conduct such sales does not own such property. The application shall designate the date of the proposed sale, the number, breed, and variety of the chicks which are to be offered for sale and the person by whom they were produced, and shall be accompanied by a fee in the sum of fifteen dollars ($15.00) for each and every day or fraction thereof during or on which it is proposed to sell such baby chicks. The state livestock sanitary board or the state veterinarian are hereby authorized in its or his discretion to grant or to deny the permit requested in such application, and, if deemed necessary or advisable, to require the applicant to submit a certificate, in such form as the livestock sanitary board or the state veterinarian may prescribe, certifying that the baby chicks which are to be offered for sale are in a healthy condition and free from such diseases as the board or state veterinarian may designate.

§ 75-39-7

Before any such chicks are offered for sale or sold, each box, crate, coop or other container shall be plainly labeled with appropriate statements designating the kind and number of chicks in each such container, the date on which such chicks were hatched and by whom hatched, and any other representations made at or prior to the time of sale relative to the purity of the breed, the freedom of such chicks from disease and such tests as shall have been made on the parent stock for pullorum disease.

§ 75-39-9

Within three (3) days after the sale shall have been held, the person who conducted the sale shall send a statement to the livestock sanitary board giving a complete list of the number and kind of baby chicks sold at such sale, the name and address of each purchaser, together with a copy of the representations and guarantees made in relation thereto, if any were made by the person who conducted such sale, and the person conducting such sale shall be held to have had full knowledge of the representations and guarantees made at the time of such sale and shall be as fully responsible and liable for any such representations and guarantees as is the person who sets forth such representations and guarantees on the containers as provided in Section 75-39-7.

§ 75-39-11

The state livestock sanitary board is hereby authorized to make such rules and regulations as may be necessary to administer the provisions of this chapter and to prevent the spread of disease among poultry.

§ 75-39-13

Any person who shall violate any of the provisions of this chapter shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined in any sum not exceeding one hundred dollars ($100.00).

Chapter 40 Importation and Sale of Animals or Birds

§ 75-40-1

It shall be unlawful for any person to import or cause to be imported into this state any live skunk, or to sell, barter, exchange or otherwise transfer any live skunk; provided, however, that the provisions of this article shall not apply to bona fide zoos or research institutions. This article shall not be construed to prohibit the sale of live skunks to persons outside the state by a resident of Mississippi who is a skunk farmer approved by the United States Department of Agriculture.

§ 75-40-3

Any violation of this article shall be a misdemeanor and shall be punishable by imprisonment in the county jail for not more than ninety (90) days or by a fine not to exceed five hundred dollars ($500.00), or both.

§ 75-40-101

This article may be cited as the “Mississippi Bird Dealers Licensing Act.”

§ 75-40-103

For the purposes of this article, the following words shall have the meanings ascribed herein unless the context clearly requires otherwise:

(a) “Bird dealer” shall mean any person engaged in the business of dealing in, purchasing, breeding or offering for sale, whether at wholesale or retail, any exotic or pet birds or birds customarily kept as pets. For purposes of this article, ratites, including the ostrich, the rhea and the emu, are classified as commercial birds or livestock and not as exotic or pet birds.

(b) “Board” shall mean the Mississippi Board of Animal Health.

(c) “Person” shall mean any individual, firm, partnership, corporation, estate, trust, fiduciary or other group or combination acting as a unit.

(d) “State Veterinarian” shall mean the officer appointed by the Board of Animal Health as provided by Section 69-15-7.

§ 75-40-105

It shall be unlawful for any person to act as a bird dealer unless such person has a valid bird dealer's license. Acting as a bird dealer without a license in violation of this section constitutes a misdemeanor.

§ 75-40-107

Bird dealers' licenses shall be issued by the board for a period of one (1) year and shall be annually renewable. The board may establish separate classes of licenses, including wholesale and retail licenses. The board shall fix fees for licenses so that the revenue derived therefrom shall approximate the total direct and indirect costs of administering this article; provided, however, that the annual cost of a wholesale license shall not exceed Twenty-five Dollars ($25.00) and the annual cost of a retail license shall not exceed Ten Dollars ($10.00).

§ 75-40-109

(1) Every bird dealer shall keep records sufficient to identify:

(a) Each exotic or pet bird in his possession or sold by him by species and description;

(b) The name, address and telephone number of the person from whom each such bird was acquired and, if such person is a licensed bird dealer, his license number, or if such person is not a licensed dealer, his driver's license number or social security number or federal tax identification number, if any, or other such identification as may be available;

(c) The name, address and telephone number of the person to whom each such bird is transferred and, if that person is a licensed bird dealer, his license number, or, if that person is not a licensed bird dealer, his driver's license number or social security number, if any, or other such identification as may be available; and

(d) Any bird which the dealer knows to be or have been sick or diseased or to have died.

(2) The board may require periodic reports of any or all of the records required by subsection (1) of this section and may require the keeping of additional records. All required records shall be made available for inspection by the board. Failure to keep or make available any required records shall be grounds for revocation of a license.

(3) Every bird dealer shall keep all of such records for at least one (1) year.

§ 75-40-111

The State Veterinarian may quarantine, seize and destroy any birds which present a hazard of carrying exotic or untreatable disease as determined by rules and regulations promulgated by the board. The board shall pay an indemnity to the owner of any seized or destroyed birds from any federal funds made available for that purpose or any state funds hereafter appropriated for that purpose.

§ 75-40-113

The board may make any rules and regulations not inconsistent with this article governing the business of dealing in or the transportation of exotic or pet birds.

§ 75-40-115

(1) Whenever it may appear to the Commissioner of Agriculture and Commerce or to his agent, either upon investigation or otherwise, that any person has engaged in, or is engaging in, or is about to engage in any act, practice or transaction which is prohibited by any law or regulation governing activities for which a license from the Board of Animal Health is required by this article, whether or not the person has so registered or obtained such a license or permit, the State Veterinarian may issue an order, if he deems it to be in the public interest or necessary for the protection of the citizens of this state, prohibiting such person from continuing such act, practice or transaction or suspending or revoking any such registration, license or permit held by such person.

(2) In situations where persons otherwise would be entitled to a hearing prior to an order entered pursuant to subsection (1) of this section, the State Veterinarian may issue such an order to be effective upon a later date without hearing unless a person subject to the order requests a hearing within ten (10) days after receipt of the order. Failure to make such request shall constitute a waiver of any provision of law for a hearing. The order shall contain or shall be accompanied by a notice of opportunity for hearing stating that a hearing must be requested within ten (10) days of receipt of the notice and order. The order and notice shall be served in person by the State Veterinarian or his agent or by certified mail, return receipt requested. In the case of an individual registered with or issued a license or permit by the Board of Animal Health, receipt of the order and notice will be conclusively presumed five (5) days after the mailing of the order by certified mail, return receipt requested, to the address provided by such person in his most recent registration or license or permit application.

(3) In situations where persons otherwise would be entitled to a hearing prior to an order, the State Veterinarian may issue an order to be effective immediately if the State Veterinarian or his agent has reasonable cause to believe that an act, practice or transaction is occurring or is about to occur; that the situation constitutes a situation of imminent peril to the public safety or welfare; and that the situation therefore requires emergency action. The emergency order shall contain findings to this effect and reasons for the determination. The order shall contain or be accompanied by a notice of opportunity for hearing which may provide that a hearing will be held if and only if a person subject to the order requests a hearing within ten (10) days of the receipt of the order and notice. The order and notice shall be served by the State Veterinarian, or his agent, by certified mail, return receipt requested. In the case of an individual registered with or issued a license or permit by the Board of Animal Health, receipt of the order and notice will be conclusively presumed five (5) days after the mailing of the order by certified mail, return receipt requested, to the address provided by such person in his most recent registration or license or permit application.

(4) Any request for hearing made pursuant to subsections (2) and (3) of this section shall specify: (a) in what respects such person is aggrieved, (b) any and all defenses such person intends to assert at the hearing, (c) affirmation or denial of all the facts and findings alleged in the order, and (d) an address to which any further correspondence or notices in the proceeding may be mailed. Upon such a request for hearing, the State Veterinarian shall schedule and hold the hearing, unless postponed by mutual consent, within thirty (30) days after receipt by the State Veterinarian of the request therefor. The State Veterinarian shall give the person requesting the hearing notice of the time and place of the hearing by certified mail to the address specified in the request for hearing at least fifteen (15) days prior to the time of the hearing.

§ 75-40-117

(1) The State Veterinarian may institute suits or other legal proceedings in any court of proper venue as may be required for the enforcement of any law or regulation governing activities for which registration with or a license or permit from the board is required by this article.

(2) The State Veterinarian may institute an action in any court of proper venue to enforce any order made by him pursuant to the provisions of Section 75-40-115.

(3) In cases in which the State Veterinarian institutes a suit or other legal proceeding to enforce his order, the court may, among other appropriate relief, issue a temporary restraining order or a preliminary, interlocutory or permanent injunction restraining or enjoining persons, and those in active concert with them, from engaging in any acts, practices or transactions prohibited by orders of the State Veterinarian or any law or regulation governing activities for which registration with or a license or permit from the Board of Animal Health is required.

Chapter 41 Gins

§ 75-41-1

Every public ginner shall plainly mark or stamp upon each bale of cotton packed or baled by him, the number of the bale, his own initials, and the initials of the customer for whom the cotton is ginned and baled, and shall enter in a book or register the name of the customer, the date when each bale was ginned and baled, and a record of the marks placed by him upon each bale as above directed, and shall allow an inspection of such entries at any time by any person interested to make it. Any person violating any of the provisions of this section shall upon conviction, be punished as for a misdemeanor.

§ 75-41-3

Every public cotton weigher, and every person who weighs cotton for any warehouse or gin or cotton buyer, shall keep a book or register, in which he shall enter all marks or stamps provided for in Section 75-41-1 appearing upon each bale of cotton weighed by him, and shall allow an inspection of such entries at any time by any person interested to make it. Any person violating any of the provisions of this section shall be guilty of a misdemeanor.

§ 75-41-11

It shall be unlawful for chain operators of cotton gins, operating gins in two or more places within the State of Mississippi, to discriminate in prices paid for cottonseed or in the prices charged for ginning services; the necessary operating expenses, freight rates, and other proper elements affecting prices being considered, and the effect of which would be to destroy or attempt to destroy competition at either or any of said places in which said gins shall be operated. Provided, however, that a reduction in the charge for the service herein mentioned made in any locality for the purpose of meeting legitimate competition, or a higher price paid for seed in any locality, when such higher price paid for seed is paid in meeting legitimate competition, shall not constitute a violation of this chapter. And it shall be sufficient to make out a prima facie case of a violation to show a lower charge for the service herein mentioned in one locality than another, or to show a higher price paid for said seed in one locality than another, differences of freight and other necessary expenses of operating business considered.

§ 75-41-13

On conviction of violating Section 75-41-11, such operator of chain gins shall be fined in the sum of One Hundred Dollars ($100.00) per bale for the first five (5) bales, and Ten Dollars ($10.00) for each successive bale ginned a day in pursuance of such discriminatory practices; or the said penalty may be recovered by appropriate proceedings in the name of the state, instituted by the attorney general or any district attorney, with the consent of the attorney general, in either the chancery or the circuit courts of the state, and relief may be granted by injunction in the name of the state, as in case of violation of other anti-trust legislation of the state, and each day's operations shall constitute a separate offense.

§ 75-41-15

Any person, natural or artificial, being injured or damaged by a violation of the provisions of Section 75-41-11, whether said damages be direct or indirect, may recover as liquidated damages in any appropriate action or suit in the circuit or chancery courts, the sum of One Hundred Dollars ($100.00) per bale for the first five (5) bales, and the sum of Ten Dollars ($10.00) for each successive bale thereafter ginned a day by the unlawful combination in competition with the plaintiff; and any person, natural or artificial, being injured by said unlawful combination, may have the relief of injunction in any appropriate proceeding in addition to the recovery of said damages, and each day's operations shall constitute a separate offense.

Chapter 43 Farm Warehouses

§ 75-43-1

Any landowner, tenant or manager of any lands in this state may store his own grain in a farm warehouse built and situated on such land and receive a warehouse receipt for the same by complying with the provisions of this chapter. Nothing in this chapter shall require any person who does not desire to receive a warehouse receipt for storage of his grain in his warehouse to obtain a license pursuant to this chapter or otherwise to comply with this chapter.

This chapter shall not apply to public grain warehouses, which shall be governed by Sections 75-44-1 et seq.

The provisions of this chapter shall apply to all farm warehouses, as defined by this chapter, and to the operations of all such warehouses.

§ 75-43-2

When used in this chapter:

(a) “Person” shall mean individuals, corporations, partnerships and all associations of two (2) or more persons having a joint or common interest.

(b) “Commissioner” shall mean the commissioner of the Mississippi Department of Agriculture and Commerce, or his designated representative.

(c) “Grain” shall mean all grains for which standards have been established pursuant to the United States Grain Standards Act, and shall include rice, as defined by the standards of the United States Department of Agriculture.

(d) “Farm warehouse” shall mean any building, structure or other protected enclosure in this state used for the purpose of storing grain, and which has been licensed pursuant to this chapter.

(e) “Farm warehouseman” shall mean any person who operates a farm warehouse as herein defined.

(f) “Warehouse receipt” shall mean a negotiable grain storage receipt given by the commissioner to a farm warehouseman.

§ 75-43-3

(1) Any person coming under the provisions of this chapter and desiring to utilize the provisions thereof shall file with the Mississippi Department of Agriculture and Commerce, an application for a license, stating the legal description of the land, the location of the building or buildings, the material of which they are made, the name or names of the owners thereof, and such further information as the commissioner, by regulation, requires. If it appears from such application that the building or buildings are suitable structures in which to store grain, and upon satisfaction of the provisions of this section, Sections 75-43-29 through 75-43-33, and any applicable regulations, the commissioner shall issue a license to the applicant which designates such building or buildings as farm warehouses, and which authorizes the applicant to operate the farm warehouse under this chapter and receive warehouse receipts for his own grain stored in the warehouse pursuant to this chapter.

This license shall be good for one (1) year, and it is renewable upon compliance with this chapter.

(2) No person shall operate a farm warehouse as defined by this chapter without first having obtained a license pursuant to this chapter.

(3) Applications for licenses under this chapter are to be made on forms prescribed by the commissioner for each separate warehouse or, if an applicant owns more than one (1) warehouse at any one (1) location, which does not exceed eight (8) miles in distance, then all the warehouses at that location may be included in one (1) application.

(4) Prior to the issuance of a license, every applicant shall pay an annual license fee based upon the capacity of the warehouse, such fee to be determined by the commissioner, but not to exceed fifty dollars ($50.00).

(5) If a farm warehouseman desires to renew his license for an additional year, application for such renewal shall be made on a form prescribed by the commissioner. At least sixty (60) days prior to the expiration of each license, the commissioner shall notify each farm warehouseman of the date of such expiration and furnish such farm warehouseman with the renewal form.

(6) Upon satisfactory proof of the loss or destruction of a license issued to a farm warehouseman, a duplicate thereof or a new license may be issued under the same number.

§ 75-43-7

(1) Whoever holds a license to operate a farm warehouse, as provided for by this chapter, shall be entitled to have issued on his own grain stored in his farm warehouse or warehouses, a warehouse receipt or receipts, which shall be issued by the commissioner upon compliance with this section by the license holder.

(2) Any license holder desiring a warehouse receipt on his grain shall file application with the commissioner, on a form supplied by the commissioner, which shall state the location, the type, and the quantity of the grain on which the receipt is to be issued. In or accompanying the application, the applicant shall certify the grade of the grain and he shall agree to maintain the certified grade during the time that the grain is stored in his warehouse, and to deliver the certified grade to the holder of the warehouse receipt, upon demand for redemption of the receipt.

§ 75-43-9

(1) When the application has been received by the commissioner, and the applicant has certified the grade of the grain and agreed to maintain and deliver the certified grade, as required by Section 75-43-7, the commissioner shall immediately issue the applicant a warehouse receipt or receipts which shall be under his signature. The receipt shall conform to the requirements of Section 75-7-202, and in addition shall embody within its written or printed terms the legal description of the land, the location of the warehouse or warehouses, and the quantity and grade of the grain stored in the warehouse.

(2) At the time the warehouse receipt or receipts are issued, the farm warehouseman shall place upon the warehouse or warehouses in a conspicuous place, a notice that the grain in his warehouse is under warehouse receipt, which notice shall contain a statement of the quantity and grade of the grain, the bins or containers which contain the grain covered by the receipt, and the date of the expiration of the warehouse license.

(3) A farm warehouseman shall not insert any language in any warehouse receipt or make any contract with respect to any warehouse receipt which purports to limit the liabilities or responsibilities imposed on him by law.

§ 75-43-11

(1) All warehouse receipts issued are hereby made negotiable, transferable and assignable, provided that when the warehouse receipt is issued to a tenant, it shall be issued only subordinate to the landlord's lien and the name of such landlord shall be given thereon. Provided, however, this chapter shall in no way be construed to impair or affect the landlord's lien or any lien created by written instrument and duly recorded as provided by law.

(2) A farm warehouseman may make a valid sale or pledge of any warehouse receipts issued for his own grain stored in his farm warehouse, and the recital of ownership in the receipt shall constitute notice of the right to sell or pledge the same and of the title or specified lien of the transferee or pledgee upon the warehouseman's grain represented by the receipts.

§ 75-43-13

(1) Every farm warehouseman to whom warehouse receipts are issued shall at all times keep the grain stored in the farm warehouse insured by an insurance company authorized to do business in this state. The grain is to be insured for its full market value against loss by fire, inherent explosion, lightning, tornado and windstorm, and failure to do so shall make the farm warehouseman liable for the same. All such policies shall provide that no cancellations shall be effective unless thirty (30) days' prior notice is given the commissioner.

(2) If fire, inherent explosion, lightning, tornado or windstorm shall destroy or damage all or part of the grain stored in any farm warehouse, the farm warehouseman shall, upon demand by the holder of any warehouse receipt for such grain, and upon being presented with the warehouse receipt, make settlement for the fair market value.

§ 75-43-15

(1) Any person who wilfully makes a false or fraudulent representation in his application for a license or warehouse receipt, or who wilfully removes or permits to be removed from the farm warehouse or warehouses owned or controlled by him, any grain contained in such warehouses while a farm warehouse receipt or receipts issued upon such grain is negotiated, transferred or assigned, without first procuring a release and the consent of the owner of the grain, or who falsely swears as to the true ownership of any such grain, or as to the existence of any security interest, lien or other encumbrance thereon, or who otherwise commits any willful violation of any provision of this chapter, shall be guilty of a felony, and upon conviction thereof, shall be punished by a fine of not more than twenty thousand dollars ($20,000.00) and/or imprisonment for not more than five (5) years.

(2) Any person who negligently commits any of the violations listed in subsection (1) of this section or who otherwise commits any negligent violation of this chapter shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than five thousand dollars ($5,000.00) and/or imprisonment for not more than one (1) year.

§ 75-43-17

In case any one to whom a warehouse receipt is issued, under the provisions of this chapter, shall negotiate, assign, transfer or pledge the same to any person, individual, firm or corporation, as security for any money, credit or other obligation, and shall thereafter pay or tender the full amount due thereon to such assignee or holder for any such money or credit, and shall fulfill and discharge any such other obligation for which such warehouse receipt was negotiated, transferred or assigned, it shall then be the duty of such assignee or holder of such receipt to immediately, upon request of the person to whom the same was issued, surrender to the person to whom said receipt was issued, said warehouse receipt, together with the release of the lien thereon for which it was negotiated, assigned or pledged. Upon the failure of any such assignee or holder to surrender or release the same, he shall be fined in any sum not exceeding one hundred dollars ($100.00) and pay the cost of prosecution; and, moreover, he shall be liable to the party to whom such receipt was issued for any and all damages by him sustained.

§ 75-43-21

The commissioner shall carry out and enforce the provisions of this chapter and is hereby empowered to promulgate rules and regulations to carry out necessary inspections and to appoint and fix the duties of his personnel and provide such equipment as may be necessary to assist him in enforcing the provisions thereof.

§ 75-43-23

If, after proper application, the commissioner denies any person, partnership, association or corporation a license to operate a farm warehouse, the commissioner shall transmit immediately to the applicant by certified mail an order so providing, which shall state the reasons for the denial. In the event the applicant is dissatisfied at the decision of the commissioner, the applicant may request a hearing within ninety (90) days with the commissioner, to appear and defend its compliance with all appropriate regulations and/or give evidence that all deficiencies have been corrected. If, after said hearing, the commissioner denies applicant a license, the commissioner shall transmit immediately to applicant by certified mail an order so providing, which shall state the reasons for the denial. In the event the applicant is dissatisfied at the decision of the commissioner after the hearing, the applicant may appeal to the chancery court of the county where the farm warehouse is located, within thirty (30) days of the date of the order, in accordance with the provisions of subsection (2) of Section 75-43-27.

§ 75-43-25

Immediately upon receipt of his license or of any modification or extension thereof, the farm warehouseman shall post the license in a place designated by the commissioner, and thereafter keep it posted until suspended or terminated.

§ 75-43-27

(1) If a farm warehouseman is convicted of any crime involving fraud or deceit, or if the commissioner determines that any farm warehouseman has violated any of the provisions of this chapter, or any of the rules and regulations adopted by the commissioner pursuant to this chapter, the commissioner may, at his discretion, suspend, cancel or revoke the license of such farm warehouseman.

(2) All proceedings for the suspension, cancellation or revocation of licenses shall be before the commissioner, and the proceedings shall be in accordance with rules and regulations which shall be adopted by the commissioner. No license shall be cancelled or revoked, except after a hearing before the commissioner, upon reasonable notice to the licensee and an opportunity to appear and defend. The commissioner may temporarily suspend the license of a licensee for good and reasonable cause before notice or hearing, and the licensee shall be entitled to a hearing on such temporary suspension without undue delay. Whenever the commissioner shall suspend, cancel or revoke any license, he shall prepare an order so providing which shall state the reason or reasons for such suspension, cancellation or revocation. The order shall be sent, by certified mail, by the commissioner to the licensee at the address of the farm warehouse licensed. Within thirty (30) days after the mailing of the order, the licensee, if dissatisfied with the order of the commissioner, may appeal to the chancery court of the county where the farm warehouse is located by filing a written notice of appeal alleging the pertinent facts upon which such appeal is grounded. At the time of the filing of the appeal, the appellant shall give a bond for costs conditioned upon his prosecution of the appeal without delay and payment of all costs assessed against him. Appeal may be with supersedeas and shall be subject to the provisions of Section 11-51-31.

(3) In case a license issued to a farm warehouseman expires or is suspended, revoked or cancelled by the commissioner or his designated representative, such license shall be immediately returned to the commissioner and the farm warehouseman shall forthwith comply with the provisions of Section 75-43-51.

§ 75-43-29

(1) Before any person is granted a license pursuant to Section 75-43-3, such person shall give a bond to the commissioner executed by the farm warehouseman as principal and by a corporate surety licensed to do business in this state as a surety, such bond to be approved by the commissioner of insurance. The bond shall be in favor of the commissioner for the benefit of all persons interested, their legal representatives, attorneys or assigns, conditioned upon the faithful compliance by the farm warehouseman with the provisions of this chapter and the rules and regulations of the state department of agriculture and commerce applicable thereto. The aggregate liability of the surety to all depositors or storers of grain shall not exceed the sum of such bond. The bond may be cancelled at any time by the surety by giving written notice to the commissioner of agriculture and commerce of its intention to cancel the bond, and all liability thereunder shall terminate thirty-five (35) days after the mailing of such notice, except that such notice shall not affect any claims arising under the bond, whether presented or not, before the effective date of the cancellation notice.

(2) In lieu of the bond required in subsection (1) of this section, an applicant for a license may be a self-insurer by posting with the commissioner cash, federal treasury bills, notes, securities or bonds, provided such notes, securities or bonds are secured by the federal government or the State of Mississippi in an amount equivalent to the bond as provided in Section 75-43-31.

§ 75-43-31

(1) The amount of bond to be furnished for each farm warehouse shall be fixed at a rate of not less than twenty cents (20¢) per bushel for the first one million (1,000,000) bushels of licensed capacity; not less than fifteen cents (15¢) per bushel for the next one million (1,000,000) bushels of licensed capacity; and not less than ten cents (10¢) per bushel for all licensed capacity over two million (2,000,000) bushels; provided that in no case shall the amount of the bond be less than five thousand dollars ($5,000.00) or more than five hundred thousand dollars ($500,000.00), except as prescribed in subsection (3) of this section. The licensed capacity shall be equal to the maximum number of bushels of grain that the farm warehouse can accommodate for storage. In no event shall the liability of the surety accumulate for each successive license period during which this bond is in force, but shall be limited in the aggregate to the bond amount or changed by appropriate rider or endorsement.

(2) A farm warehouseman who is licensed or is applying for licenses to operate two (2) or more farm warehouses may give a single bond meeting the requirements of this chapter to cover all such farm warehouses within the state. In such cases all farm warehouses to be covered by the bond shall be deemed to be one (1) warehouse for purposes of determining the amount of bond required under subsection (1) of this section.

(3) If the commissioner finds that conditions exist which warrant requiring additional bond, there shall be added to the amount of bond such further amount as is determined to be reasonable by the commissioner.

§ 75-43-33

If an application is made for an amendment to a license and no bond previously filed by the farm warehouseman under Sections 75-43-29 and 75-43-31 covers obligations arising during the period covered by such amendment, the farm warehouseman shall file with the commissioner an additional bond in such amount as may be determined by the commissioner.

§ 75-43-35

(1) In the absence of any contrary contractual agreement between the parties, it shall be the duty of the farm warehouseman to redeem a warehouse receipt within ten (10) days of the demand for the redemption of such receipt. Any holder of a warehouse receipt issued to a farm warehouseman by the commissioner, who has made demand for redemption of such receipt, which demand was, without lawful excuse, not satisfied within ten (10) days, shall notify the commissioner in writing and shall have the right to bring action against the farm warehouseman and the surety on the farm warehouseman's bond for payment of the market value of the grain represented by such warehouse receipt, such market value to be determined as of the date of the demand, plus legal interest accrued from the date of the demand. The surety has the responsibility to pay within fifteen (15) days following receipt by the surety of the notice of the demand for redemption. In the event the farm warehouseman is a self-insurer, as provided in Section 75-43-29, the holder of a warehouse receipt shall have the right to bring action against the farm warehouseman to the extent of the amount posted in lieu of the bond. The commissioner shall pay to the holder of the warehouse receipt, to the extent of the bond posted, any judgment obtained by the holder of a warehouse receipt against a self-insurer. The commissioner may also pay to the holder of a warehouse receipt the amount of the market value of the grain, provided that the farm warehouseman agrees to such payment; provided, however, the license of the farm warehouseman shall be suspended upon such payment until such time as the warehouseman posts a bond as provided in this chapter, or posts with the commissioner a sum equivalent to that paid by the commissioner on behalf of such warehouseman.

(2) In all actions in which judgment is rendered against any surety company under the provisions of this section, if it appears from evidence that the surety company has wilfully and without just cause refused to pay the loss upon demand, the court, in rendering judgment, shall allow the plaintiff the amount of the plaintiff's expenses, including court costs and attorney's fees, to be recovered and collected as part of the costs. The amount of any payment of costs and attorney's fees under this subsection will not reduce the surety's remaining liability on its bond.

§ 75-43-37

(1) It shall be the duty of each farm warehouseman to whom a warehouse receipt or receipts have been issued to maintain the grade of the grain which he certified in his application for a warehouse receipt, as required by Section 75-43-7.

(2) If the farm warehouseman does not maintain the grade of the grain which he certified in the application, he shall be liable on his bond, or on the amount posted in lieu of the bond, to the holder of the warehouse receipt who has made demand for the redemption of the receipt for the amount of the damages sustained by the holder of the receipt. The holder of the receipt shall give notice to the commissioner, and payment shall be made, in accordance with the procedure set forth in Section 75-43-35.

(3) The right of the holder of the warehouse receipt to make a claim against the bond or amount posted in lieu of the bond for failure of the warehouseman to maintain the grade of the grain shall exist only while the grain is still in the warehouse or on the premises of the storage facility. Once the holder of the receipt removes the grain from the premises of the storage facility, he relinquishes all right to make a claim against the bond or amount posted in lieu of the bond for damages sustained because of a decrease in the grade of the grain.

§ 75-43-39

Every farm warehouse for which there is a warehouse receipt outstanding shall be examined monthly by the commissioner. The cost of such examination shall be included in the annual license fee. The commissioner, at his discretion, may make additional examinations of any public grain warehouse at any time. If any discrepancy is found as a result of additional examination, the cost of such examination is to be paid by the farm warehouseman. The commissioner shall examine and inspect the grain stored in the farm warehouse, and shall determine the quantity of the grain stored in each container in the warehouse. The commissioner shall maintain a record and file of all inspections made of the warehouses and of the results of such inspections.

§ 75-43-41

At least one (1) actual or skeleton copy of all receipts shall be made and retained by the commissioner, and all copies shall have clearly and conspicuously printed or stamped on them the words “Copy-Not Negotiable.”

§ 75-43-43

The form of all receipts shall be approved by the commissioner. The commissioner shall be authorized to have printed by the state printer all warehouse receipts to be issued by the commissioner.

§ 75-43-45

If a farm warehouseman delivers only a part of a lot of grain for which a warehouse receipt has been issued, the commissioner, upon proper notice, shall take up and cancel such receipt and issue a new receipt for the undelivered portion of grain.

§ 75-43-47

A farm warehouseman shall not deliver grain for which a warehouse receipt has been issued until the receipt has been returned to him and cancelled.

§ 75-43-49

No warehouse receipt shall be issued, unless the grain for which it is to be issued is actually present in storage in the warehouse, nor shall any receipt be issued for a greater quantity of grain than is in storage in the warehouse, nor shall more than one (1) receipt be issued for the same lot of grain, except in cases where a receipt for a part of a lot is desired, and then the aggregate receipts for a particular lot shall cover that lot and no more.

§ 75-43-51

Any person operating a farm warehouse who desires to discontinue such operation at the expiration of his license, or whose license is suspended, revoked or cancelled by the commissioner or his designated representative, shall notify the commissioner and all holders of warehouse receipts, if known, or if not know, by advertising in the newspaper or newspapers of largest general circulation in the community in which the farm warehouse is located once per week for three (3) consecutive weeks, at least thirty (30) days prior to the date of expiration of his license, of his intention to discontinue the farm warehouse business, and the owners of the grain shall remove, or cause to be removed, their grain from such farm warehouse before the expiration of the license.

§ 75-43-53

No inspector or employee of the commissioner's office shall disclose any information obtained by him in the course of his employment related to the affairs or transactions of any farm warehouse without first having obtained the express permission in writing of such farm warehouseman.

§ 75-43-55

The provisions and definitions of the Uniform Commercial Code relating to warehouse receipts, to the extent not inconsistent with this chapter, shall govern warehouse receipts issued by the commissioner under this chapter, and the other provisions of the Uniform Commercial Code shall also be applicable to the provisions of this chapter to the extent not inconsistent with this chapter.

Chapter 44 Grain Warehouses

§ 75-44-1

This chapter shall be known as the “Mississippi Grain Warehouse Law.”

§ 75-44-3

(1) The provisions of this chapter shall apply to all grain warehouses and to the operations of such grain warehouses whether or not any of the grain therein is owned by the warehouseman, unless such grain warehouse is licensed under the provisions of the United States Warehouse Act, as amended.

(2) The provisions and definitions of the Uniform Commercial Code relating to warehouse receipts to the extent not inconsistent with this chapter shall govern warehouse receipts issued by grain warehousemen.

§ 75-44-5

When used in this chapter:

(a) “Person” includes individuals, corporations, partnerships and all associations of two (2) or more persons having a joint or common interest.

(b) The term “commissioner” shall mean the Commissioner of the Mississippi Department of Agriculture and Commerce, or his designated representative.

(c) “Grain” shall mean all grains for which standards have been established pursuant to the United States Grain Standards Act, as amended, and rice as defined by the Agriculture Marketing Act of 1946, as amended.

(d) “Stored grain” shall mean any grain received in any grain warehouse, located in this state, if same is not purchased and beneficially owned by the grain warehouseman.

(e) “Grain warehouse” shall mean any structure or combination of structures operated together, including the machinery and equipment used in connection therewith, in or by means or which grain is unloaded, elevated, stored, loaded for shipment, dried, cleaned, weighed, treated, conditioned or otherwise handled from producers of grain.

(f) “Grain warehouseman” shall mean any person who operates a grain warehouse as herein defined.

(g) “Inspector” shall mean a person authorized by the warehouseman to weigh, inspect, grade and/or certificate the weight and grade of grain stored or to be stored in a grain warehouse.

(h) “Warehouse receipt” shall mean a negotiable grain storage receipt and/or a nonnegotiable scale ticket given by a grain warehouse.

§ 75-44-7

The commissioner shall carry out and enforce the provisions of this chapter and is hereby empowered to promulgate rules and regulations to carry out necessary inspections and to appoint and fix the duties of his personnel and provide such equipment as may be necessary to assist him in enforcing the provisions thereof.

§ 75-44-9

No person shall operate a grain warehouse or issue a warehouse receipt without first having obtained a license pursuant to this chapter unless such grain warehouse is licensed under the provisions of the United States Warehouse Act, as amended.

§ 75-44-11

Applications for licenses under this chapter are to be made on forms prescribed by the commissioner for each separate warehouse or, if an applicant owns more than one (1) warehouse at any one (1) location, which does not exceed eight (8) miles in distance, then all the warehouses at that location may be included in one (1) application. Every application is to be accompanied by an application fee of one hundred fifty dollars ($150.00) and a certified financial statement in a form prescribed by the commissioner and such further information as the commissioner may by regulation require.

§ 75-44-13

Prior to the issuance of a license, every applicant shall pay an annual license fee based upon the capacity of the warehouse, such fee to be determined by the commissioner, but not to exceed one hundred dollars ($100.00).

§ 75-44-15

If a grain warehouseman desires to renew his license for an additional year, application for such renewal shall be made on a form prescribed by the commissioner. At least sixty (60) days prior to the expiration of each license, the commissioner shall notify each grain warehouseman of the date of such expiration and furnish such grain warehouseman with the renewal form.

§ 75-44-17

Before a license to conduct a grain warehouse is granted under Section 75-44-23, the grain warehouseman shall file with the commissioner a copy of his schedule of charges for storage and other services. If the grain warehouseman desires to make any change in the schedule of charges during the license period, he shall file with the commissioner a statement in writing showing the change at least thirty (30) days prior to its effective date. Each grain warehouseman shall keep conspicuously posted the schedule of charges for storage and other services as so filed, and shall strictly adhere to these charges.

§ 75-44-19

Immediately upon receipt of his license or of any modification or extension thereof, the grain warehouseman shall post same and thereafter keep it posted until suspended or terminated in a conspicuous place in the office of the grain warehouse to which such license applies where receipts issued by such grain warehouseman are delivered to depositors.

§ 75-44-21

(1) Each grain warehouseman shall have and maintain above all exemptions and liabilities, total net assets available for the payment of any indebtedness arising from the conduct of the grain warehouse in an amount equal to at least twenty cents (20¢) multiplied by the maximum number of bushels of grain for which the grain warehouse is licensed, provided that no person may be licensed as a grain warehouseman under the regulations in this part unless he has available net assets of at least twenty thousand dollars ($20,000.00); and provided further, that any deficiency in net assets required above the minimum of twenty thousand dollars ($20,000.00) may, at the discretion of the commissioner, be supplied by a commensurate increase in the amount of the grain warehouseman's bond furnished pursuant to Sections 75-44-29, 75-44-31, 75-44-33 and 75-44-35. In determining total available net assets, credit may be given for insurable assets such as buildings, machinery, equipment and merchandise inventory only to the extent of the current market value of such assets and only to the extent that such assets are protected by insurance against loss or damage. Such insurance shall be in the form of lawful policies issued by one or more insurance companies authorized to do business and subject to service of process in suits brought in this state, and which provide that no cancellation shall be effective unless thirty (30) days' advance notice of such cancellation is given to the commissioner.

(2) If a grain warehouseman is licensed or is applying for license to operate two (2) or more grain warehouses, the maximum total number of bushels which all such facilities will accommodate when stored in the manner customary to the warehouses, as determined by the commissioner, shall be considered in determining whether the grain warehouseman meets the available net assets requirement of subsection (1) of this section.

(3) For the purposes of subsections (1) and (2) of this section only, capital stock as such shall not be considered a liability.

§ 75-44-23

(1) Upon satisfaction of Sections 75-44-9 through 75-44-21, and 75-44-29 through 75-44-33, and any applicable regulations by an applicant, the commissioner shall issue a license to operate a grain warehouse.

(2) If after proper application, the commissioner denies any person, partnership, association or corporation a license to operate a grain warehouse, the commissioner shall transmit immediately to said applicant by certified mail an order so providing which shall state the reasons for said denial. In the event the applicant is dissatisfied at the decision of the commissioner, the applicant may request a hearing within ninety (90) days with the commissioner to appear and defend its compliance with all appropriate regulations and/or give evidence that all deficiencies have been corrected. If after said hearing, the commissioner denies applicant a license, the commissioner shall transmit immediately to applicant by certified mail an order so providing which shall state the reasons for said denial. In the event the applicant is dissatisfied at the decision of the commissioner after the hearing, the applicant may appeal to the chancery court of the county where the grain warehouse is located within thirty (30) days of the date of said order in accordance with the provisions of subsection (2) of Section 75-44-25.

§ 75-44-25

(1) If a grain warehouseman is convicted of any crime involving fraud or deceit or if the commissioner determines that any grain warehouseman has violated any of the provisions of this chapter, or any of the rules and regulations adopted by the commissioner pursuant to this chapter, the commissioner may, at his discretion, suspend, cancel or revoke the license of such grain warehouseman.

(2) All proceedings for the suspension, cancellation or revocation of licenses shall be before the commissioner, and the proceedings shall be in accordance with rules and regulations which shall be adopted by the commissioner. No license shall be cancelled or revoked except after a hearing before the commissioner upon reasonable notice to the licensee and an opportunity to appear and defend. The commissioner may temporarily suspend the license of a licensee for good and reasonable cause before notice or hearing and the licensee shall be entitled to a hearing on such temporary suspension without undue delay. Whenever the commissioner shall suspend, cancel or revoke any license he shall prepare an order so providing which shall state the reason or reasons for such suspension, cancellation or revocation. Said order shall be sent, by certified mail, by the commissioner to the licensee at the address of the grain warehouse licensed. Within thirty (30) days after the mailing of said order, the licensee, if dissatisfied with the order of the commissioner, may appeal to the chancery court of the county where the grain warehouse is located by filing a written notice of appeal alleging the pertinent facts upon which such appeal is grounded. At the time of the filing of the appeal, the appellant shall give a bond for costs conditioned upon his prosecution of the appeal without delay and payment of all costs assessed against him. Appeal may be with supersedeas and shall be subject to the provisions of Section 11-51-31.

(3) In case a license issued to a grain warehouseman expires or is suspended, revoked or cancelled by the commissioner or his designated representative, such license shall be immediately returned to the commissioner and the grain warehouseman shall forthwith comply with the provisions of Section 75-44-67.

§ 75-44-27

Upon satisfactory proof of the loss or destruction of a license issued to a grain warehouseman, a duplicate thereof, or a new license, may be issued under the same number.

§ 75-44-29

(1) Before any person is granted a license pursuant to Section 75-44-23 such person shall give a bond to the commissioner executed by the grain warehouseman as principal and by a corporate surety licensed to do business in this state as a surety. The bond shall be in favor of the commissioner for the benefit of all persons interested, their legal representatives, attorneys or assigns, conditioned upon the faithful compliance by the grain warehouseman with the provisions of this chapter and the rules and regulations of the State Department of Agriculture and Commerce applicable thereto. The aggregate liability of the surety to all depositors or storers of grain shall not exceed the sum of such bond. The bond may be cancelled at any time by the surety by giving written notice to the Commissioner of Agriculture and Commerce of its intention to cancel the bond and all liability thereunder shall terminate thirty-five (35) days after the mailing of such notice except that such notice shall not affect any claims arising under the bond, whether presented or not, before the effective date of the cancellation notice.

(2) In lieu of the bond required in subsection (1) of this section an applicant for a license may be a self-insurer by posting with the commissioner any of the following:

(a) Cash;

(b) Certificates of deposit from any bank or banking corporation insured by the Federal Deposit Insurance Corporation;

(c) Irrevocable letters of credit from any bank or banking corporation insured by the Federal Deposit Insurance Corporation;

(d) Federal treasury bills; or

(e) Notes, securities or bonds secured by the federal government or the State of Mississippi.

Self insurers shall post an amount equivalent to the amount of the bond required in Section 75-44-31.

§ 75-44-31

(1) The amount of bond to be furnished for each grain warehouse shall be fixed at a rate of twenty-five cents (25¢) per bushel for the first one million (1,000,000) bushels of licensed capacity; twenty cents (20¢) per bushel for the next one million (1,000,000) bushels of licensed capacity; and fifteen cents (15¢) per bushel for all licensed capacity over two million (2,000,000) bushels; provided that in no case shall the amount of the bond be less than fifteen thousand dollars ($15,000.00) or more than one million dollars ($1,000,000.00), except as prescribed in subsection (3) of this section. The licensed capacity shall be equal to the maximum number of bushels of grain that the grain warehouse can accommodate for storage. In no event shall the liability of the surety accumulate for each successive license period during which this bond is in force, but shall be limited in the aggregate to the bond amount or changed by appropriate rider or endorsement.

(2) A grain warehouseman who is licensed or is applying for licenses to operate two (2) or more grain warehouses may give a single bond meeting the requirements of this chapter to cover all such grain warehouses within the state. In such cases all grain warehouses to be covered by the bond shall be deemed to be one (1) warehouse for purposes of determining the amount of bond required under subsection (1) of this section.

(3) In case of a deficiency in the net assets required by Section 75-44-21, there shall be added to the amount of the bond determined in accordance with subsection (1) of this section an amount equal to such deficiency. In any other case in which the commissioner finds that conditions exist which warrant requiring additional bond, there shall be added to the amount of bond such further amount as is determined to be reasonable by the commissioner.

§ 75-44-33

If an application is made for an amendment to a license and no bond previously filed by the grain warehouseman under Sections 75-44-29 and 75-44-31 covers obligations arising during the period covered by such amendment, the grain warehouseman shall file with the commissioner an additional bond in such amount as may be determined by the commissioner.

§ 75-44-35

(1) It shall be the duty of the grain warehouseman to deliver grain to the holder of a warehouse receipt within ten (10) days of the demand for the redemption of such receipt. In the event the grain warehouseman fails to deliver grain to the holder of a warehouse receipt within ten (10) days of the demand the holder of the warehouse receipt may make demand of the surety for payment under the bond. The surety has the responsibility to pay within fifteen (15) days following receipt by the surety of the notice of the demand for redemption. Any holder of a warehouse receipt issued by a grain warehouseman who has made demand for redemption of such receipt, which demand was, without lawful excuse, not satisfied within ten (10) days, shall notify the commissioner in writing and shall have the right to bring action against the grain warehouseman and the surety on the grain warehouseman's bond for payment of the market value of the grain represented by such warehouse receipt, such market value to be determined as of the date of the demand, plus legal interest accrued from the date of the demand. In the event the grain warehouseman is a self-insurer as provided in Section 75-44-29 the holder of a warehouse receipt shall have the right to bring action against the grain warehouseman to the extent of the amount posted in lieu of the bond. The commissioner shall pay to the holder of the warehouse receipt, to the extent of the bond posted, any judgment obtained by the holder of a warehouse receipt against a self-insurer. The commissioner may also pay to the holder of a warehouse receipt the amount of the market value of the grain provided that the grain warehouseman agrees to such payment; provided, however, the license of the grain warehouseman shall be suspended upon such payment until such time as the warehouseman posts a bond as provided in this chapter or posts with the commissioner a sum equivalent to that paid by the commissioner on behalf of such warehouseman.

(2) In all actions in which judgment is rendered against any surety company under the provisions of this section, if it appears from evidence that the surety company has wilfully and without just cause refused to pay the loss upon demand, the court in rendering judgment shall allow the plaintiff the amount of the plaintiff's expenses including court costs and attorney's fees, to be recovered and collected as part of the costs. The amount of any payment of costs and attorney's fees under this subsection will not reduce the surety's remaining liability on its bond.

§ 75-44-37

(1) Every grain warehouseman shall at all times keep the grain stored in the grain warehouse insured by an insurance company authorized to do business in this state. The grain is to be insured for its full market value against loss by fire, inherent explosion, lightning and windstorm, and failure to do so shall make the grain warehouseman liable for the same. All such policies shall provide that no cancellations shall be effective unless thirty (30) days' prior notice is given the commissioner.

(2) If fire, inherent explosion, lightning or windstorm shall destroy or damage all or part of the grain stored in any grain warehouse, the grain warehouseman shall, upon demand by the holder of any warehouse receipt for such grain, and upon being presented with the warehouse receipt, make settlement for the fair market value after deducting the warehouse charges.

§ 75-44-39

Every grain warehouseman shall receive for storage or shipment, so far as the available capacity for storage of the grain warehouse shall permit, all grain tendered to him in the usual course of business; provided, however, a grain warehouse owned and operated as a cooperative may decline to accept grain tendered by a nonmember if such cooperative reasonably believes that its available capacity will be required to serve the members of the cooperative. All such grain is to be inspected, weighed and graded by an inspector except that:

(a) The depositor and the grain warehouseman may agree upon a sample taken from the lot of grain to be offered for storage as being a true and representative sample.

(b) The depositor and the grain warehouseman may agree upon the grade of the grain offered for storage and a warehouse receipt may be issued on the agreed grade.

§ 75-44-41

Every grain warehouseman shall keep in a place of safety complete, separate and correct records and accounts pertaining to the grain warehouse including, but not limited to, records and accounts of all grain received therein and withdrawn therefrom, all unissued receipts and tickets in its possession, copies of all receipts and tickets issued by it, and the receipts and tickets returned to and cancelled by it. Such records shall be retained by the grain warehouseman for a period of five (5) years.

§ 75-44-43

(1) Every grain warehouse shall be examined by the commissioner each year. The cost of such examination shall be included in the annual license fee. The commissioner, at his discretion, may make additional examinations of any grain warehouse at any time. If any discrepancy is found as a result of additional examination, the cost of such examination is to be paid by the grain warehouseman.

(2) Every grain warehouse shall at least annually send to the commissioner a copy of its financial statement prepared by an accountant licensed by the State of Mississippi and sworn to by the accountant and grain warehouseman.

(3) The commissioner may, in his discretion, require an unqualified audit by an accountant licensed by the State of Mississippi as a requirement for licensing, and inspect the grain warehouse's business, mode of conducting the same, facilities, equipment, inventories, property, books, records, accounts, papers and minutes of proceedings held at such grain warehouse, and any other records deemed relevant to the operation of the grain warehouse by the commissioner.

(4) All scales used for the weighing of property in grain warehouses shall be subject to tests by any scale inspector duly appointed or authorized by the commissioner during regular business hours.

§ 75-44-45

Each grain warehouse shall employ, during all regular business hours, a grain inspector (who may be the grain warehouseman himself if such grain warehouseman is a natural person) who shall be responsible for the accuracy of weights and grades noted on all warehouse receipts.

§ 75-44-47

(1) If the condition of any grain offered for storage is such that it probably will affect the condition of grain in the grain warehouse, the grain warehouseman shall not receive such grain for storage or store such grain, provided, however, that if the grain warehouse has separate bins or is equipped with proper conditioning apparatus, the grain warehouse may receive such grain for storage in such separate bins or may condition it and then store it in such a manner as will not lower the grade of other grain.

(2) It shall be the grain warehouseman's duty and obligation to condition and maintain the quantity and quality of all grain as receipted.

§ 75-44-49

(1) Every receipt issued for grain stored in a grain warehouse shall conform to the requirements of Section 75-7-202 and in addition shall embody within its written or printed terms:

(a) A statement that the holder of the receipt or the depositor of the grain shall demand the delivery of the grain on or before a date not later than one (1) year from the date specified thereon by the grain warehouseman;

(b) The net weight, number of bushels, percentage of dockage and the grading factors and the grade.

(2) A grain warehouseman shall not insert any language in any warehouse receipt or make any contract with respect to any warehouse receipt which purports to limit the liabilities or responsibilities imposed on him by law.

(3) The possession of an indorsed warehouse receipt shall be prima facie evidence of grain in storage and the rightful ownership of such document and grain.

§ 75-44-51

At least one (1) actual or skeleton copy of all receipts shall be made and all copies shall have clearly and conspicuously printed or stamped thereon the words “Copy-Not Negotiable.”

§ 75-44-53

The form of all receipts shall be approved by the commissioner. The commissioner shall be authorized to have printed by the state printer all warehouse receipts issued by grain warehousemen.

§ 75-44-55

If a grain warehouseman delivers only a part of a lot of grain for which he has issued a negotiable receipt under this chapter, he shall take up and cancel such receipt and issue a new receipt in accordance with the provisions of Sections 75-44-49 through 75-44-65 for the undelivered portion of grain.

§ 75-44-57

A grain warehouseman shall not deliver grain for which he has issued a negotiable receipt until the receipt has been returned to him and cancelled, and shall not deliver grain for which he has issued a nonnegotiable receipt until he has received authority from the person lawfully entitled to such delivery, or his authorized agent.

§ 75-44-59

All warehouse receipts issued by a grain warehouse shall be numbered consecutively, and no two (2) receipts bearing the same number shall be issued from the same warehouse during any one (1) year, except in the case of a lost or destroyed receipt.

§ 75-44-61

No warehouse receipt shall be issued except upon actual delivery of grain into storage in the warehouse from which it purports to be issued, nor shall any receipt be issued for a greater quantity of grain than was contained in the lot or parcel o received for storage, nor shall more than one (1) receipt be issued for the same lot of grain, except in cases where a receipt for a part of a lot is desired, and then the aggregate receipts for a particular lot shall cover that lot and no more.

§ 75-44-63

A grain warehouseman may make a valid sale or pledge of any warehouse receipts issued for grain of which the warehouseman is the owner, either solely or jointly or in common with others, and the recital of ownership in the receipt shall constitute notice of the right to sell or pledge the same and of the title or specific lien of the transferee or pledgee upon the warehouseman's grain represented by the receipts.

§ 75-44-65

(1) If grain is offered for storage in any licensed grain warehouse and the grain warehouseman does not have storage space to handle the same, the grain warehouseman with the written consent of the owner may accept grain for shipment to another grain warehouse where storage is available.

(2) The receipt to cover grain to be transported to and stored in another grain warehouse shall embody within its written or printed terms, in addition to the requirements of Section 75-44-49, the name and location of the grain warehouse to which the grain will be shipped for storage.

§ 75-44-67

Any person operating a grain warehouse who desires to discontinue such operation at the expiration of his license or whose license is suspended, revoked or cancelled by the commissioner or his designated representative shall notify the commissioner and all holders of warehouse receipts and all parties storing grain in the grain warehouse, if known, or if not known, by advertising in the newspaper or newspapers of largest general circulation in the community in which the grain warehouse is located once per week for three (3) consecutive weeks, at least thirty (30) days prior to the date of expiration of his license, of his intention to discontinue the grain warehouse business, and the owners of the grain shall remove, or cause to be removed, their grain from such grain warehouse before the expiration of the license.

§ 75-44-69

No inspector or employee of the commissioner's office shall disclose any information obtained by him in the course of his employment related to the affairs or transactions of any grain warehouse without first having obtained the express permission in writing of such grain warehouseman.

§ 75-44-71

(1) Any person who issues a warehouse receipt for grain without holding a valid grain warehouse license or who commits any willful violation of any provision of this chapter, shall be guilty of a felony, and upon conviction thereof, punishable by a fine of not more than twenty thousand dollars ($20,000.00) and/or imprisonment for not more than five (5) years.

(2) Any unintentional or negligent violation of this chapter shall be a misdemeanor, and upon conviction thereof, punishable by a fine of not more than five thousand dollars ($5,000.00) and/or imprisonment for not more than one (1) year.

Chapter 45 Commercial Feeds and Grains

§ 75-45-151

This article shall be known as the “Mississippi Commercial Feed Law of 1972.”

§ 75-45-153

When used in this article the terms:

(a) “Person” includes any individual, partnership, corporation or association.

(b) “Distribute” means to offer for sale, sell, exchange, give away, or barter, commercial feed or to supply, furnish, or otherwise provide commercial feed to a contract feeder.

(c) “Distributor” means any person who distributes commercial feedstuffs as defined herein.

(d) “Commercial feed” means all materials distributed for use as feed or for mixing in feed except unmixed seed, whole or processed, when not adulterated within the meaning of paragraph (a) of Section 75-45-165. The commissioner and State Chemist by regulation may exempt from this definition, or from specific provisions of this article, commodities such as hay, straw, stover, silage, cobs, husks, hulls, and individual chemical compounds or substances when such commodities, compounds or substances are not mixed with other materials, and are not adulterated within the meaning of paragraphs (a) through (d) of Section 75-45-165.

(e) “Feed ingredient” means each of the constituent materials making up a commercial feed.

(f) “Mineral feed” means a commercial feed intended to supply primarily mineral elements or inorganic nutrients.

(g) “Drug” means any article intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in animals other than man and articles other than feed intended to affect the structure or any function of the animal body.

(h) “Customer-formula feed” means commercial feed which consists of a mixture of commercial feeds and/or feed ingredients, each batch of which is manufactured according to the specific instructions of the final purchaser.

(i) “Manufacture” means to grind, mix or blend, or further process a commercial feed for distribution.

(j) “Brand name” means any word, name, symbol, or device, or any combination thereof, identifying the commercial feed of a distributor or registrant and distinguishing it from that of others.

(k) “Product name” means the name of the commercial feed which identifies it as to kind, class or specific use.

(l) “Label” means a display of written, printed, or graphic matter upon or affixed to the container in which a commercial feed is distributed, or on the invoice or delivery slip with which a commercial feed is distributed.

(m) “Labeling” means all labels and other written, printed, or graphic matter (1) upon a commercial feed or any of its containers or wrappers (2) accompanying such commercial feed.

(n) “Ton” means a net weight of two thousand (2,000) pounds avoirdupois.

(o) “Percent” or “percentages” mean percentages by weights.

(p) “Official sample” means a sample of feed taken by the commissioner or his agent in accordance with the provisions of subsections (3), (4) and (5) of Section 75-45-173.

(q) “Contract feeder” means a person who as an independent contractor, feeds commercial feed to animals pursuant to a contract whereby such commercial feed is supplied, furnished, or otherwise provided to such person and whereby such person's remuneration is determined all or in part by feed consumption, mortality, profits, or amount or quality of product.

(r) “Pet food” means any commercial feed prepared and distributed for consumption by pets.

(s) “Pet” means any domesticated animal normally maintained in or near the household(s) of the owner(s) thereof.

(t) “Specialty pet” means any domesticated animal pet normally maintained in a cage or tank, including, but not limited to, gerbils, hamsters, canaries, psittacine, birds, mynahs, finches, tropical fish, goldfish, snakes and turtles.

(u) “Specialty pet food” means any commercial feed prepared and distributed for consumption by specialty pets.

(v) “Quantity statement” means the net weight (mass), net volume (liquid or dry) or count.

§ 75-45-155

This article shall be administered by the commissioner of agriculture and commerce, hereinafter referred to as commissioner, and the state chemist, as specified in the following sections.

§ 75-45-157

(1) The commissioner and State Chemist may promulgate such rules and regulations for commercial feeds and pet foods as are specifically authorized in this article and such other reasonable rules and regulations as may be necessary for the efficient enforcement of this article. In the interest of uniformity the commissioner and State Chemist shall adopt by regulation, unless they determine that they are inconsistent with the provisions of this article or are not appropriate to conditions which exist in this state, the following:

(a) The official definitions of feed ingredients and official feed terms adopted by the Association of American Feed Control officials and published in the official publication of that organization; and

(b) Any regulation promulgated pursuant to the authority of the Federal Food, Drug, and Cosmetic Act (21 USCS Section 301 et seq.); provided, that the commissioner and State Chemist would have the authority under this article to promulgate such regulations.

(2) Before the issuance, amendment, or repeal of any rule or regulation authorized by this article, the commissioner and State Chemist shall publish the proposed rule or regulation, amendment, or notice to repeal an existing rule or regulation in a manner reasonably calculated to give interested parties, including all current registrants, adequate notice and they shall afford all interested persons an opportunity to present their views thereon, orally or in writing, within a reasonable period of time. After consideration of all views presented by interested persons, the commissioner and State Chemist shall take appropriate action to issue the proposed rule or regulation or to amend or repeal an existing rule or regulation. The provisions of this subsection notwithstanding, if the commissioner and State Chemist pursuant to the authority of this article, adopt the official definitions of feed ingredients or official feed terms as adopted by the Association of American Feed Control officials, or regulations promulgated pursuant to the authority of the Federal Food, Drug, and Cosmetic Act, any amendment or modification adopted by said association or by the Secretary of Health and Human Services in the case of regulations promulgated pursuant to the Federal Food, Drug, and Cosmetic Act, shall be adopted automatically under this article without regard to the publications of the notice required by this subsection, unless the commissioner and State Chemist by order specifically determine that said amendment or modification shall not be adopted.

§ 75-45-159

(1) No person shall manufacture or distribute a commercial or customer-formula feed for sale in this state, unless he has filed with the commissioner and State Chemist on forms provided by the commissioner, his name, place of business and location of each manufacturing facility, has paid his registration fee of One Hundred Dollars ($100.00) for each location and has been issued his facility registration permit by the department.

(2) The registration and fee is due on or before January 1 of each year. A late fee of Fifty Dollars ($50.00) shall be charged for any facility registration that is more than thirty (30) days late. The funds shall be deposited monthly in the State Treasury. A registration shall continue in effect unless it is cancelled by the commissioner and State Chemist pursuant to subsection (3) of this section.

(3) The commissioner and the State Chemist may refuse registration of any feed manufacturing facility not in compliance with this article and to cancel any registration subsequently found not to be in compliance with any provision of this article. No registration shall be refused, cancelled or suspended unless the registrant shall have been given an opportunity to be heard before the commissioner and State Chemist and to amend his application in order to comply with the requirements of this article.

§ 75-45-161

A commercial feed shall be labeled as follows:

(1) In case of a commercial feed, except a customer-formula feed, it shall be accompanied by a label bearing the following information:

(a) The quantity statement.

(b) The product name and the brand name, if any, under which the commercial feed is distributed.

(c) The guaranteed analysis, stated in such terms which the commissioner and State Chemist by regulation determine are required to advise the user of the composition of the feed or to support claims made in the labeling. In all cases the substances or elements must be determinable by laboratory methods such as the methods published by the AOAC International.

(d) The common or usual name of each ingredient used in the manufacture of the commercial feed; the commissioner and State Chemist by regulation may permit the use of a collective term for a group of ingredients which perform a similar function, or they may exempt such commercial feeds, or any group thereof, from this requirement of an ingredient statement if they find that such statement is not required in the interest of consumers.

(e) The name and principal mailing address of the manufacturer or the person responsible for distributing the commercial feed.

(f) Adequate directions for use of all commercial feeds containing drugs and for such other feeds as the commissioner and State Chemist may require by regulation as necessary for their safe and effective use.

(g) Such precautionary statements as the commissioner and State Chemist by regulation determine are necessary for the safe and effective use of the commercial feed.

(2) In the case of a customer-formula feed, it shall be accompanied by a label, invoice, delivery slip, or other shipping document, bearing the following information:

(a) Name and address of the manufacturer.

(b) Name and address of the purchaser.

(c) Date of delivery.

(d) The product name and brand name, if any, and the net weight of each registered commercial feed used in the mixture, and the net weight of each other ingredient used.

(e) Adequate directions for use for all customer-formula feeds containing drugs and for such other feeds as the commissioner and State Chemist may require by regulation as necessary for their safe and effective use of the customer-formula feed.

§ 75-45-163

A commercial feed shall be deemed to be misbranded:

(a) If its labeling is false or misleading in any particular.

(b) If it is distributed under the name of another commercial feed.

(c) If it is not labeled as required in Section 75-45-161.

(d) If it purports to be or is represented as a commercial feed, or if it purports to contain or is represented as containing a commercial feed ingredient, unless such commercial feed or feed ingredient conforms to the definition, if any, prescribed by regulation by the commissioner and state chemist.

(e) If any word, statement, or other information required by or under authority of this article to appear on the label or labeling is not prominently placed thereon with such conspicuousness (as compared with other words, statements, designs, or devices in the labeling) and in such terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use.

§ 75-45-165

A commercial feed shall be deemed to be adulterated:

(a) If it bears or contains any poisonous or deleterious substance which may render it injurious to health; however, in case the substance is not an added substance, such commercial feed shall not be considered adulterated under this subsection if the quantity of such substance in such commercial feed does not ordinarily render it injurious to health;

(b) If it bears or contains any added poisonous, added deleterious, or added nonnutritive substance which is unsafe within the meaning of Section 406 of the Federal Food, Drug, and Cosmetic Act, other than one which is a pesticide chemical in or on a raw agricultural commodity, or a food additive;

(c) If it is, or it bears or contains any food additive which is unsafe within the meaning of Section 409 of the Federal Food, Drug, and Cosmetic Act; or

(d) If it is a raw agricultural commodity and it bears or contains a pesticide chemical which is unsafe within the meaning of Section 408(a) of the Federal Food, Drug, and Cosmetic Act. However, where a pesticide chemical has been used in or on a raw agricultural commodity in conformity with an exemption granted or a tolerance prescribed under Section 408 of the Federal Food, Drug, and Cosmetic Act and such raw agricultural commodity has been subjected to processing such as canning, cooking, freezing, dehydrating, or milling, the residue of such pesticide chemical remaining in or on such processed feed shall not be deemed unsafe if such residue in or on the raw agricultural commodity has been removed to the extent possible in good manufacturing practice. In such case the concentration of such residue in the processed feed shall not exceed the tolerance prescribed for the raw agricultural commodity. Feeding of such processed feed shall not result, or be likely to result, in a pesticide residue, unsafe within the meaning of Section 408(a) of the Federal Food, Drug, and Cosmetic Act, in the edible product of the animal.

(e) If it is, or it bears or contains, any color additive which is unsafe within the meaning of Section 706 of the Federal Food, Drug and Cosmetic Act.

(f) If it is, or it bears or contains, any new animal drug which is unsafe within the meaning of Section 512 of the Federal Food, Drug and Cosmetic Act.

(g) If it consist in whole or in part of any filthy, putrid or decomposed substance, or it is otherwise unfit for feed;

(h) If it has been prepared, packed or held under unsanitary conditions whereby it may have become contaminated with filth or whereby it may have been rendered injurious to health;

(i) It is, in whole or in part, the product of a diseased animal or of an animal which has died otherwise than by slaughter which is unsafe within the meaning of Section 402(a)(1) or (2) of the Federal Food, Drug and Cosmetic Act;

(j) If its container is composed, in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health; or

(k) If it has been intentionally subjected to radiation, unless the use of the radiation was in conformity with the regulation or exemption in effect pursuant to Section 409 of the Federal Food, Drug and Cosmetic Act.

(l) If any valuable constituent has been in whole or in part omitted or abstracted therefrom or any less valuable substance substituted therefor.

(m) If its composition or quality falls below or differs from that which it is purported or is represented to possess by its labeling. For the purposes of adjudging adulteration under this paragraph, the commissioner shall be guided by “permitted analytical variations” from the guaranteed value for each feed component or analytically measurable index of the feed quality. Such permitted analytical variations from guaranteed values shall be set forth by regulation by the commissioner and State Chemist.

(n) If it contains a drug and the methods used in or the facilities or controls used for its manufacture, processing, or packaging do not conform to current good manufacturing practice regulations promulgated by the commissioner and State Chemist to assure that the drug meets the requirement of this article as to safety and has the identity and strength and meets the quality and purity characteristics which it purports or is represented to possess. In promulgating such regulations, the commissioner and State Chemist shall adopt the current good manufacturing practice regulations for Type A medicated articles and Type B and Type C medicated feed established under authority of the Federal Food, Drug, and Cosmetic Act, unless they determine that they are not appropriate to the conditions which exist in this state.

(o) If it contains viable weed seeds in amounts exceeding the limits which the commissioner and State Chemist shall establish by rule or regulation.

§ 75-45-167

(1) An inspection fee at the rate of Twenty-five Cents (25¢) per ton shall be paid on commercial feeds distributed in this state by the person whose name appears on the label as the manufacturer, guarantor or distributor, subject to the following:

(a) No fee shall be paid on a commercial feed if the payment has been made by a previous distributor.

(b) No fee shall be paid on customer-formula feeds if the inspection fee is paid on the commercial feeds which are used as ingredients therein.

(c) No fee shall be paid on commercial feeds which are used as ingredients for the manufacture of commercial feeds. If the fee has already been paid, credit shall be given for such payment.

(2) In the case of a commercial feed which is distributed in the state only in packages of ten (10) pounds or less, an annual fee of Twenty-five Dollars ($25.00) per brand shall be paid on or before January 1 of each year in lieu of the inspection fee specified in subsection (1).

(3) The minimum inspection fee shall be Twenty Dollars ($20.00) annually.

(4) Any feed manufactured in the state which is used by a distributor or his contract feeders to feed his own livestock, poultry, or fish, or feed which is distributed in tonnage bulk to any commercial grower of an aquatic species, including, but not limited to, catfish, shall be exempt from the inspection fee on both purchased ingredients and finished feed. To qualify for the above exemption, a permit must be obtained from the commissioner annually and the permit used to obtain exemption on feed ingredients. Any services the Mississippi State Chemical Laboratory or the Mississippi Department of Agriculture and Commerce provide for permit holders will be paid for according to mutually agreeable prices between both parties.

§ 75-45-169

Each person who is liable for the payment of an inspection fee shall:

(a) File, not later than the last day of January of each year, an annual statement, setting forth the number of net tons of commercial feeds distributed in this state during the preceding calendar year, and upon filing such statement shall pay the inspection fee at the rate stated in Section 75-45-167. Inspection fees which are due and owing and have not been remitted to the Department of Agriculture and Commerce within fifteen (15) days following the due date shall have a penalty fee of ten percent (10%) (minimum Ten Dollars ($10.00)) added to the amount due when payment is finally made. The assessment of this penalty fee shall not prevent the department from taking other actions as provided in this article.

(b) Keep such records as may be necessary or required by the commissioner to indicate accurately the tonnage of commercial feed distributed in this state; the commissioner shall have the right to examine such records to verify statements of tonnage. Failure to make an accurate statement of tonnage or to pay the inspection fee or comply as provided herein shall constitute sufficient cause for the cancellation of the facilities' permit to sell commercial feeds in Mississippi.

§ 75-45-171

The commissioner of agriculture and commerce shall deposit with the state treasurer to the credit of the general fund all funds received by him as registration and inspection fees and, by act of the legislature, such funds shall be used for defraying the cost of the inspection and analysis of commercial feeds as provided herein.

All penalties collected, whether from fines or sales of the condemnation of the articles defined above, shall be deposited with the state treasurer to the credit of the general fund. It shall be the duty of the commissioner of agriculture and commerce to include in his annual report an itemized statement of all such funds so collected and deposited.

§ 75-45-173

(1) For the purpose of enforcement of this article, and in order to determine whether its provisions have been complied with, including whether or not any operations may be subject to such provisions, officers or employees duly designated by the commissioner, upon presenting appropriate credentials, and a written or oral notice to the owner, operator, or agent in charge, are authorized: (a) to enter, during normal business hours, any factory, warehouse, or establishment within the state in which commercial feeds are manufactured, processed, packed or held for distribution, or to enter any vehicle being used to transport or hold such feeds; and (b) to inspect during normal business hours and within reasonable limits and in a reasonable manner, such factory, warehouse, establishment or vehicle and all pertinent equipment, finished and unfinished materials, containers, and labeling thereon. The inspection may include the verification of only such records, and production and control procedures as may be necessary to determine compliance with the good manufacturing practice regulations established under paragraph (d) of Section 75-45-165.

(2) A separate notice shall be given for each such inspection, but a notice shall not be required for each entry made during the period covered by the inspection. Each such inspection shall be commenced and completed with reasonable promptness. Upon completion of the inspection, the person in charge of the facility or vehicle shall be so notified.

(3) If the officer or employee making such inspection of a factory, warehouse, vehicle or other establishment has obtained a sample in the course of the inspection, upon completion of the inspection and prior to leaving the premises or vehicle he, upon request, shall give to the owner, operator, or agent in charge, a receipt describing the samples obtained.

(4) If the owner of any factory, warehouse, vehicle or establishment described in subsection (1), or his agent, refuses to admit the commissioner or his agent to inspect in accordance with subsections (1) and (2), the commissioner is authorized to obtain from any state court a warrant directing such owner or his agent to submit the premises described in such warrant to inspection.

(5) For the purpose of the enforcement of this article, the commissioner or his duly designated agent is authorized to enter upon any public or private premises including any vehicle of transport during regular business hours to have access to, and to obtain samples, and to examine records relating to distribution of commercial feeds.

(6) Sampling and analysis shall be conducted in accordance with methods published by the AOAC International, or in accordance with other generally recognized methods.

(7) The results of all analyses of official samples shall be forwarded by the State Chemist to the person named on the label and to the purchaser. When the inspection and analysis of an official sample indicates a commercial feed has been adulterated or misbranded and upon request within thirty (30) days following receipt of the analysis the State Chemist shall furnish to the registrant a portion of the sample concerned.

(8) The commissioner and State Chemist, in determining for administrative purposes whether a commercial feed is deficient in any component, shall be guided by the official sample as defined in paragraph (p) of Section 75-45-153 and obtained and analyzed as provided for in subsections (3), (5), and (6) of this section.

§ 75-45-175

When the commissioner or his authorized agent has reasonable cause to believe any lot of commercial feed is being distributed in violation of any of the provisions of this article or of any of the prescribed regulations under this article, he may, according to his judgment of the gravity of the offense and regulations promulgated by the commissioner and State Chemist issue and enforce a written or printed “withdrawal from distribution” order, warning the distributor not to dispose of the lot of commercial feed in any manner until written permission is given by the commissioner or the court. The commissioner shall release the lot of commercial feed so withdrawn when said provisions and regulations have been complied with. If compliance is not obtained within thirty (30) days, the commissioner may begin, or upon request of the distributor or registrant shall begin, proceedings for condemnation.

§ 75-45-177

Any lot of commercial feed not in compliance with the provisions of this article and regulations issued thereunder shall be subject to seizure on complaint of the commissioner to a court of competent jurisdiction in the area in which said commercial feed is located. In the event the court finds the said commercial feed to be in violation of this article and orders the condemnation of said commercial feed, it shall be disposed of in any manner consistent with the quality of the commercial feed and the laws of the state. Provided, that in no instance shall the disposition of said commercial feed be ordered by the court without first giving the claimant an opportunity to apply to the court for release of said commercial feed or for permission to process or relabel said commercial feed to bring it into compliance with this article.

§ 75-45-179

The following acts and the causing thereof within the State of Mississippi are hereby prohibited:

(a) The manufacture or distribution of any commercial feed that is adulterated or misbranded.

(b) The adulteration or misbranding of any commercial feed.

(c) The distribution of agricultural commodities such as whole seed, hay, straw, stover, silage, cobs, husks and hulls, which are adulterated within the meaning of paragraph (a) of Section 75-45-165.

(d) The removal or disposal of a commercial feed in violation of an order under Section 75-45-175 or 75-45-177.

(e) The failure or refusal to register in accordance with Section 75-45-159.

(f) The violation of Section 75-45-191.

(g) Failure to pay inspection fees and file reports as required by Sections 75-45-167 and 75-45-169.

(h) Failure to pay penalties assessed under Section 75-45-181 or any rules or regulations issued thereunder.

§ 75-45-181

Any person violating any of the provisions of this article or the rules and regulations made by the commissioner and State Chemist pursuant thereto is guilty of a misdemeanor and, upon conviction, shall be punished by a fine not to exceed Five Hundred Dollars ($500.00) or by imprisonment in the county jail for a term not to exceed six (6) months, or both.

§ 75-45-182

(1) When a complaint is made against a person for violating any of the provisions of this article, or any of the rules and regulations promulgated hereunder, the Director of the Commercial Feed Division within the Mississippi Department of Agriculture and Commerce, or his designee, shall act as the reviewing officer. The complaint shall be in writing and shall be filed in the office of the Mississippi Department of Agriculture and Commerce (“department”). The reviewing officer shall deliver to the accused a copy of the complaint along with any supporting documents and a request for the accused to respond to the charges within thirty (30) days after service of the complaint upon the accused. Notification to the accused may be accomplished by certified mail or by an of the methods provided in Rule 4 of the Mississippi Rules of Civil Procedure. The accused shall respond in the form of a written answer along with all supporting documents. Upon expiration of the thirty-day period, the reviewing officer shall examine all pleadings and documents filed in the case for the purpose of determining the merit of the complaint, or the lack thereof. No evidentiary hearing shall be held at this stage.

If the reviewing officer determines that the complaint lacks merit, he may dismiss same. If he finds that there is substantial evidence showing that a violation of this article or the rules and regulations promulgated hereunder has occurred, the reviewing officer may impose any or all of the following penalties upon the accused: (a) levy a civil penalty in an amount of no more than One Thousand Dollars ($1,000.00) for each violation; (b) revoke or suspend any permit, license or registration issued to the accused under the terms of this article and accompanying regulations; (c) issue a stop sale order; (d) issue a “withdrawal from distribution” order; (e) require the accused to relabel any product offered for sale which is not labeled in accordance with the provisions of this article; or (f) seize any product that is not in compliance with this article and destroy, sell or otherwise dispose of the product and apply the proceeds of any such sale to the costs herein and any civil penalties levied hereunder, with the balance to be paid according to the law. If any costs or penalties assessed hereunder have not been paid, they may be collected through a court system. A copy of the reviewing officer's decision shall be sent to the accused by certified mail. Either the accused or the department may appeal the decision of the reviewing officer to the commissioner by filing a notice of appeal with the department within thirty (30) days of receipt of the reviewing officer's decision. If no appeal is taken from the order of the reviewing officer within the allotted time, the order shall then become final.

(2) In the event of an appeal, the commissioner, or his designee, shall conduct a hearing relative to the charges. At the hearing before the commissioner, or his designee, the matter shall be heard de novo; the department shall have subpoena power, the witnesses shall be placed under oath and shall be subject to direct and cross examination and the testimony shall be recorded. Compliance with such subpoenas may be enforced by any court of general jurisdiction in this state. The commissioner, or his designee, shall receive and hear all the evidence and arguments offered by both parties and shall afford the accused a full opportunity to present all his defenses.

Within a reasonable time after the hearing, the commissioner, or his designee, shall render an opinion, which either affirms, reverses or amends the order of the reviewing officer in whole or in part, and the order shall be final. A copy of the commissioner's order shall be sent to the accused by certified mail.

(3) Either the accused or the department may appeal the decision of the commissioner or his designee to the circuit court of the county of the residence of the accused, or if the accused is a nonresident of the State of Mississippi, to the Circuit Court of the First Judicial District of Hinds County, Mississippi. The appellant shall have the obligation of having the record transcribed and filing same with the circuit court. The appeal shall otherwise be governed by all applicable laws and rules affecting appeals to the circuit court. If no appeal is perfected within the required time, the decision of the commissioner, or his designee, shall then become final.

(4) The decision of the circuit court may then be appealed by either party to the Mississippi Supreme Court in accordance with the existing law and rules affecting such appeals.

(5) When any violation of this article or the rules and regulations promulgated hereunder occurs or is about to occur that presents a clear and present danger to the public health, safety or welfare requiring immediate action, the commissioner or any of the department's field inspectors may issue an order to be effective immediately before notice and a hearing that imposes any or all of the following penalties upon the accused: (a) a stop sale order; (b) a “withdrawal from distribution” order; (c) a requirement that the accused relabel a product that he is offering for sale which is not labeled in accordance with this article; or (d) the seizure of any product that is not in compliance with this article and the destruction, sale or disposal of the product and the application of the proceeds of such sale to the costs and civil penalties herein, with the balance to be paid according to law. The order shall be served upon the accused in the same manner that the summons and complaint may be served upon him. The accused shall then have thirty (30) days after service of the order upon him within which to request an informal administrative review before the reviewing officer. If the accused makes such a request within the required time, the reviewing officer shall provide an informal administrative review to the accused within ten (10) days after such request is made. If the accused does not request an informal administrative review within such time, then he will be deemed to have waived his right to same. At the informal administrative review, subpoena power shall not be available, witnesses shall not be sworn nor be subject to cross-examination and there shall be no court reporter or record made of the proceedings. Each party may present its case in the form of documents, oral statements or any other method. The rules of evidence shall not apply. The reviewing officer's decision shall be in writing, and it shall be sent to the accused by certified mail. If either party is aggrieved by the order of the reviewing officer, he may appeal to the commissioner for a full evidentiary hearing in accordance with the procedures described in subsection (2) of this section, except that there shall be no requirement for a written complaint or answer to be filed by the parties. Such appeal shall be perfected by filing a notice of appeal with the commissioner within thirty (30) days after the order of the reviewing officer is served on the appealing party. The hearing before the commissioner, or his designee, shall be held within a reasonable time after the appeal has been perfected. Failure to perfect an appeal within the allotted time shall be deemed a waiver of such right.

§ 75-45-183

Nothing in this article shall be construed as requiring the commissioner or his representative to: (a) report for prosecution; (b) institute seizure proceedings; (c) issue a withdrawal from distribution order; or (d) hold an administrative hearing as a result of minor violations of this article, or when he believes the public interest will best be served by suitable notice of warning in writing.

§ 75-45-185

It shall be the duty of each prosecuting attorney to whom any violation is reported to cause appropriate proceedings to be instituted and prosecuted in a court of competent jurisdiction without delay.

§ 75-45-187

The commissioner is hereby authorized to apply for and the court to grant a temporary or permanent injunction restraining any person from violating or continuing to violate any of the provisions of this article or any rule or regulation promulgated under this article notwithstanding the existence of other remedies at law. Said injunction shall be issued without bond.

§ 75-45-191

Any person who uses to his own advantage, or reveals to other than the commissioner and state chemist, or officers of the Mississippi Department of Agriculture and Commerce and Mississippi State Chemical Laboratory, or to the courts when relevant in any judicial proceeding, any information acquired under the authority of this article, concerning any method, record, formulation or process which as a trade secret is entitled to protection, is guilty of a misdemeanor and shall be punished according to law. In addition to the criminal remedy set forth herein, remedies for misappropriation of a trade secret shall be governed by the Mississippi Uniform Trade Secrets Act, Sections 75-26-1 through 75-26-19. This prohibition shall not be deemed as prohibiting the commissioner and state chemist, or their duly authorized agents, from exchanging information of a regulatory nature with duly appointed officials of the United States Government, or of other states, who are similarly prohibited by law from revealing this information.

§ 75-45-193

The commissioner and state chemist may cooperate with and enter into agreements with governmental agencies of this state, agencies of the federal government, and private associations in order to carry out the purpose and provisions of this article.

§ 75-45-301

This article shall be known as the “Mississippi Grain Dealers Law of 1978.”

§ 75-45-303

The following terms shall have the meaning ascribed herein unless the context shall otherwise require:

(a) “Person” shall mean any person, firm, association or corporation.

(b) “Grain” shall mean all grains for which standards have been established pursuant to the United States Grain Standards Act as amended, and rice as defined by the Agriculture Marketing Act of 1946, as amended.

(c) “Grain dealer” shall mean any person engaged in the business of buying grain from producers thereof for resale or for milling or processing. A producer of grain buying grain for his own use as seed or feed shall not be considered as being engaged in the business of buying grain for resale or for milling or processing.

(d) “Producer” shall mean the owner, tenant or operator of land in this state who has an interest in and receives all or any part of the proceeds from the sale of the grain produced thereon.

(e) “Department” shall mean the Mississippi Department of Agriculture and Commerce.

(f) “Commissioner” shall mean the Commissioner of the Mississippi Department of Agriculture and Commerce, or his designated representative.

§ 75-45-304

No person shall operate as a grain dealer without first having obtained a license pursuant to this article; provided, however, that grain dealers licensed under the provisions of the United States Warehouse Act, as amended, or the Mississippi Grain Warehouse Law shall not be required to have a license issued pursuant to this article.

§ 75-45-305

(1) Every person licensed as a grain dealer shall have filed with the department a surety bond signed by the dealer as principal and by a responsible company authorized to execute surety bonds within the State of Mississippi. A grain dealer may file with the department, in lieu of a surety bond, a certificate of deposit or irrevocable letter of credit from any bank or banking corporation insured by the Federal Deposit Insurance Corporation, payable to the commissioner, as trustee. The principal amount of the certificate of deposit or the amount of the letter of credit shall be the same as that required for a surety bond under this article and the interest thereon shall be made payable to the purchaser thereof. Such bond shall be a principal amount (to the nearest One Thousand Dollars ($1,000.00)) equal to ten percent (10%) of the aggregate dollar amount paid, by the dealer to producers for grain purchased from them during the dealer's last completed fiscal year or in the case of a dealer who has been engaged in business as a grain dealer for less than one (1) year or who has not theretofore engaged in such business, ten percent (10%) of the estimated aggregate dollar amount to be paid by the dealer to producers for grain purchased from them during the next fiscal year. Such bond shall not be less than Twenty-five Thousand Dollars ($25,000.00) nor more than One Hundred Thousand Dollars ($100,000.00), except as otherwise authorized by this article. The commissioner shall determine the sufficiency of any letter of credit.

(2) The commissioner may, when he questions a grain dealer's ability to pay producers for grain purchased, require a grain dealer to post an additional bond in a dollar amount deemed appropriate by the commissioner. Failure to post such additional bond or certificate of deposit or irrevocable letter of credit, constitutes grounds for suspension or revocation of a license issued under this article.

(3) Any required bond or bonds shall be executed by the grain dealer as principal and by a corporate surety licensed to do business in this state as a surety. The bond shall be in favor of the commissioner for the benefit of all persons interested, their legal representatives, attorneys or assigns, conditioned upon the faithful compliance by the grain dealer with the provisions of this article and the rules and regulations of the State Department of Agriculture and Commerce applicable thereto. The aggregate liability of the surety shall not exceed the sum of such bond. The bond may be cancelled at any time by the surety by giving written notice to the commissioner of its intention to cancel the bond and all liability thereunder shall terminate sixty (60) days after the mailing of such notice except that such notice shall not affect any claims arising under the bond, whether presented or not, before the effective date of the cancellation notice.

(4) Any grain dealer who is of the opinion that his net worth and assets are sufficient to guarantee payment to producers for grain purchased by him may request the commissioner to be relieved of the obligation of filing a bond in excess of the minimum bond of Twenty-five Thousand Dollars ($25,000.00). Such request shall be accompanied by a financial statement of the applicant made within six (6) months of the date of such request certified by a certified public accountant. If such financial statement discloses net assets and a net worth of an amount equal to at least three (3) times the amount of the bond required by this article and the commissioner is otherwise satisfied as to the financial ability and resources of the applicant, the commissioner may waive that portion of the required bond in excess of Twenty-five Thousand Dollars ($25,000.00). However, in the case of a grain dealer whose net worth is not equal to three (3) times the amount of bond required, the commissioner may allow such grain dealer to waive in One Thousand Dollar ($1,000.00) increments a portion of the bond required in excess of Twenty-five Thousand Dollars ($ 25,000.00). The percentage factor to be applied to the bond required in excess of Twenty-five Thousand Dollars ($25,000.00) shall be determined by dividing actual net worth by the net worth required to waive all bond in excess of Twenty-five Thousand Dollars ($25,000.00). If the result of this computation provides a percentage factor of eighty percent (80%) or greater, then that same percentage of the bond in excess of Twenty-five Thousand Dollars ($25,000.00) may be waived. The grain dealer shall then provide to the commissioner a surety bond in the amount of Twenty-five Thousand Dollars ($25,000.00) plus any additional bond required in excess thereof.

(5) Any grain dealer who purchases grain from producers only in connection with or as an incident to some other business and whose total purchases of grain from producers during any fiscal year do not exceed an aggregate amount of One Hundred Thousand Dollars ($100,000.00) may satisfy the bonding requirements of this article by filing with the commissioner a bond, or certificate of deposit or irrevocable letter of credit from any bank or banking corporation insured by the Federal Deposit Insurance Corporation, at the rate of One Thousand Dollars ($1,000.00) for each Ten Thousand Dollars ($10,000.00) or fraction thereof of the dollar amount to be purchased, with a minimum bond, certificate of deposit or irrevocable letter of credit of One Thousand Dollars ($1,000.00) and a current financial statement.

(6) Failure of a grain dealer to file a bond, or certificate of deposit, or letter of credit, and to keep such bond, certificate of deposit or line of credit in force, or to maintain assets adequate to assure payment to producers for grain purchased from them shall be grounds for the suspension or revocation of a license issued under this article.

(7) When the commissioner has determined that a grain dealer has defaulted payment to producers for grain which he has purchased from them, the commissioner shall determine through appropriate legal procedures the producers and the amount of defaulted payment and as trustee of the bond shall immediately after such determination call for the dealer's surety bond or bonds, or other pledged financial assets, to be paid to him for distribution to those producers who should receive the benefits. Should the defaulted amount owed the producers be less than the principal amount of the bond or bonds or pledged financial assets, then the surety bank, or banking corporation shall be obligated to pay only the amount of the default.

§ 75-45-307

If the department is satisfied:

(a) that the applicant is of good business reputation,

(b) that the applicant has adequate bonding under Section 75-45-305,

(c) that the applicant maintains a permanent business location in this state, and

(d) that the applicant has sufficient financial resources to guarantee payment to producers for grain purchased from them, the commissioner shall issue a license to the applicant or shall renew the applicant's license. Licenses shall be issued or renewed annually for a period ending ninety (90) days after the last day of the applicant's fiscal year. The license or renewal thereof issued by the department under this section shall be posted in the principal office of the licensee in this state. A certificate shall be posted in each location listed on a licensee's application where he engages in the business of buying grain. In the case of a licensee operating a truck or tractor trailer unit the licensee is required to have a certificate that the license is in effect and that a bond or certificate of deposit has been filed and is carried in each truck or tractor trailer unit used in connection with the purchase of grain from producers. Upon request of a licensee and payment of the fee thereof, the commissioner shall issue to the licensee a certificate that a license has been issued or renewed and a bond filed as required by this article.

§ 75-45-309

(1) Every licensed grain dealer shall be examined by the commissioner each year. The cost of such examination shall be included in the annual license fee. The commissioner, at his discretion, may make additional examinations at any time. If any discrepancy is found as a result of additional examination, the cost of such examination is to be paid by the grain dealer.

(2) The commissioner may inspect the premises used by any grain dealer in the conduct of his business at any time and the books, accounts, records and papers of every such grain dealer shall at all times during business hours be subject to inspection by the commission. Each grain dealer may also be required to make such reports of his activities, obligations and transactions as deemed necessary by the commissioner to protect the producer as set forth in the rules and regulations.

(3) If a grain dealer violates any of the provisions of this article, his license and certificate of license may be removed from his premises by any department employee charged with the enforcement of this article and returned to the department. Such removal shall constitute a suspension of the license.

(4) The commissioner may upon his own motion, and shall upon the verified complaint in writing of any person setting forth facts which if proved would constitute grounds for refusal, suspension or revocation of a license under this article, investigate the actions of any applicant or any person or persons applying for, holding or claiming to hold a license.

(5) The commissioner within ten (10) days after removing and suspending a license as provided in this section or before refusing to issue or renew or before otherwise suspending or revoking a license shall set a date for a hearing thereon and at least ten (10) days prior to the date set for the hearing, shall notify in writing the applicant for or holder of a license, thereinafter called the respondent, that a hearing will be held on the date designated to determine whether the respondent is privileged to hold such license and shall afford the respondent opportunity to be heard in person or by counsel in reference thereto. Such written notice may be served by personal service on the respondent or by mailing the same by registered or certified mail to the place of business last theretofore specified by the respondent in the last application or notification to the department.

(6) At the time and place fixed in the notice, the commissioner shall proceed to hear the matter and any charges made and both the respondent and any complainant shall be accorded opportunity to present in person or by counsel such statements, testimony, evidence and argument as may be pertinent to the matter or charges or to any defenses thereto. The commissioner may continue such hearing from time to time.

§ 75-45-311

If a grain dealer should fail or refuse to make payment to a producer for grain purchased when such payment is requested by the producer and the request is made within one hundred sixty (160) days of the date of sale or the date of delivery of such grain to the dealer, whichever is later, but in case of deferred pricing, delayed pricing, priced-later, or similar contractual arrangements, no more than two hundred seventy (270) days after the date of delivery, the producer may notify the commissioner in writing, by certified mail when possible, of such failure or refusal within the period of one hundred sixty (160) days or ten (10) days thereafter. The commissioner upon receiving such notice shall take whatever action is necessary. The producer furnishing such written notice within the prescribed length of time is entitled to the benefits of the grain dealer's bond. However, if a producer fails to furnish written notice to the commissioner within the prescribed time, then such producer is not entitled to any benefits under the grain dealer's bond. Grain dealer liability under priced-later contracts, open-priced contracts, deferred price contracts, or similar agreements shall accrue under the bond in effect at the date of default as determined by the commissioner.

§ 75-45-313

The commissioner shall carry out and enforce the provisions of this article and is hereby empowered to promulgate rules and regulations to carry out necessary inspections and to appoint and fix the duties of his personnel and provide such equipment as may be necessary to assist him in enforcing the provisions thereof.

§ 75-45-315

(1) Any person who engages in business as a grain dealer without securing a license or who does not have a valid license or is in violation of this article or the rules and regulations promulgated thereunder, or who shall impede, obstruct, hinder or otherwise prevent or attempt to prevent the commissioner or his duly authorized agent in performance of his duty in connection with this article or its rules and regulations, or any grain dealer who refuses to permit inspection of his premises, books, accounts or records as provided in this article shall, upon conviction thereof, be guilty of a misdemeanor and be punished by a fine of not less than one hundred dollars ($100.00) nor more than five hundred dollars ($500.00) for the first violation, and not less than two hundred dollars ($200.00) nor more than one thousand dollars ($1,000.00) for each subsequent violation or imprisoned in a penal institution other than the state penitentiary for not more than six (6) months, or both. In case of a continuing violation or violations, each day and each violation occurring constitutes a separate and distinct offense.

(2) It shall be the duty of the Attorney General to whom any violation is reported to cause appropriate proceedings to be instituted and prosecuted in a court of competent jurisdiction without delay. Before the commissioner reports a violation for prosecution he may give the grain dealer an opportunity to present his views at an informal hearing.

(3) The commissioner may apply for and the circuit court may grant a temporary or permanent injunction restraining any person from violating or continuing to violate any of the provisions of this article or any rules and regulations promulgated under the article notwithstanding the existence of other remedies at law. Any such injunction is to be issued without notice and without bond.

(4) The commissioner may apply for, and the appropriate chancery court may grant, a temporary or permanent injunction restraining a grain dealer from disposing of any grain owned, in whole or in part, or held, or in his possession, whether owned in whole or in part, or from anyone removing any grain in which the grain dealer or producers from which he has purchased grain have an interest, in violation of any of the provisions of this article. Such injunction is to be issued without notice and without bond.

Chapter 47 Commercial Fertilizers

§ 75-47-1

This chapter shall be known as the “Mississippi Fertilizer Law of 1970.”

§ 75-47-3

This chapter shall be administered jointly by the commissioner of agriculture and commerce of the State of Mississippi, hereinafter referred to as the commissioner, and the state chemist of Mississippi, as specified in the following sections.

§ 75-47-5

(a) The term “commercial fertilizer” means any substance containing one or more recognized plant nutrient(s) which is used for its plant nutrient content and which is designed for use or claimed to have value in promoting plant growth, except unmanipulated animal and vegetable manures, marl, lime, limestone, wood ashes and gypsum, and other products exempted by regulation of the commissioner and state chemist.

(1) A “fertilizer material” is a commercial fertilizer which either:

A. Contains important quantities of no more than one (1) of the primary plant nutrients (nitrogen, phosphoric acid and potash), or

B. Has approximately eighty-five (85%) of its plant nutrient content present in the form of a single chemical compound, or

C. Is derived from a plant or animal residue or by-product or a natural material deposit which has been processed in such a way that its content of primary plant nutrients has not been materially changed except by purification and concentration.

(2) A “mixed fertilizer” is a commercial fertilizer containing any combination or mixture of fertilizer materials in which is included at least two (2) primary plant food elements.

(3) A “specialty fertilizer” is a commercial fertilizer distributed primarily for nonfarm use, such as home gardens, lawns, shrubbery, flowers, golf courses, municipal parks, cemeteries, greenhouses and nurseries.

(4) A “bulk fertilizer” is a commercial fertilizer distributed in a nonpackaged form.

(b) The term “brand” means a term, design, or trademark used in connection with one or several grades of commercial fertilizer.

(c) Guaranteed Analysis:

(1) Until the commissioner and state chemist prescribe the alternative form of “guaranteed analysis” in accordance with the provisions of subparagraph (2) hereof, the term “guaranteed analysis” shall mean the minimum percentage of plant nutrients claimed in the following order and form:

| | A. | Total Nitrogen (N)․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․_____ percent | | --- | --- | --- | --- | | | | Available Phosphoric Acid (P₂O₅)․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․_____ percent | | | | Soluble Potash (K₂O)․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․_____ percent |

B. For unacidulated mineral phosphatic materials, total phosphoric acid and degree of fineness must also be guaranteed, for basic slag degree of fineness must also be, and total phosphoric acid may be guaranteed. For bone, tankage and other organic phosphate materials, the total phosphoric acid and/or degree of fineness may also be guaranteed.

C. Guarantees for plant nutrients other than nitrogen, phosphorus and potassium may be permitted or required by regulation of the commissioner and state chemist. The guarantees for such other nutrients shall be expressed in the form of the element. The sources of such other nutrients (oxides, salt, chelates, etc.) may be required to be stated on the application for registration and may be included as a parenthetical statement on the label. Other beneficial substances or compounds, determinable by laboratory methods, also may be guaranteed by permission of the commissioner and state chemist and with the advice of the director of the agricultural and forestry experimental station. When any plant nutrients or other substances or compounds are guaranteed, they shall be subject to inspection and analysis in accord with the methods and regulations prescribed by the state chemist.

D. Potential basicity or acidity expressed in terms of calcium carbonate equivalent in multiples of fifty pounds per ton, when required by regulation.

(2) When the commissioner and state chemist find, after public hearing following due notice, that the requirement for expressing the guaranteed analysis of phosphorus and potassium in elemental form would not impose an economic hardship on distributors and users of fertilizer by reason of conflicting labeling requirements among the states, they may require by regulation thereafter that the “guaranteed analysis” shall be in the following form:

| | Total Nitrogen (N)․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․_____ percent | | --- | --- | --- | | | Available Phosphorus (P)․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․_____ percent | | | Soluble potassium (K)․․․․․․․․․․․․․․․․․․․․․․․․․․․ | ․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․․_____ percent |

Provided, however, that the effective date of said regulation shall be not less than six (6) months following the issuance thereof, and provided, further, that for a period two (2) years following the effective date of said regulation the equivalent of phosphorus and potassium may also be shown in the form of phosphoric acid and potash; provided, however, that after the effective date of a regulation issued under the provisions of this section, requiring that phosphorus and potassium be shown in the elemental form, the guaranteed analysis for nitrogen, phosphorus, and potassium shall constitute the grade.

(d) The term “grade” means the percentage of total nitrogen, available phosphorus or phosphoric acid, and soluble potassium or soluble potash stated in whole numbers in the same terms, order and percentages as in the guaranteed analysis. Provided, however, that fertilizer materials, bone meal, manures, and similar raw materials may be guaranteed in fractional units.

(e) The term “official sample” means any sample of commercial fertilizer taken by the commissioner or his agent and designated as “official” by the state chemist.

(f) The term “ton” means a net weight of two thousand (2,000) pounds avoirdupois.

(g) The term “percent” or “percentage” means the percentage by weight.

(h) The term “person” includes individual, partnership, association, firm and corporation.

(i) The term “distributor” means any person who imports, consigns, manufactures, produces, compounds, mixes, or blends commercial fertilizer, or who offers for sale, sells, barters or otherwise supplies commercial fertilizer in this state.

(j) The term “registrant” or “guarantor” means the person who manufactures, blends, sells or offers fertilizer for sale under his name or brand, and who is registered with the Department of Agriculture and Commerce under the provisions of this chapter or rule or regulation adopted pursuant to this chapter.

(k) The term “label” means the display of all written, printed or graphic matter upon the immediate container or statement accompanying a commercial fertilizer.

( l ) The term “labeling” means all written, printed or graphic matter, upon or accompanying any commercial fertilizer, or advertisements, brochures, posters, television and radio announcements used in promoting the sale of such commercial fertilizers.

(m) The term “unit” means one percent (1%) of the nutrient referred to in a ton of fertilizer.

§ 75-47-7

(1) Each brand and grade of commercial fertilizer shall be registered before being distributed in this state. The application for registration shall be submitted to the commissioner on forms furnished by the commissioner, and shall be accompanied by a fee of Ten Dollars ($10.00) per brand and grade, except that those fertilizers sold in packages of ten (10) pounds or less shall be registered at a fee of Fifty Dollars ($50.00) each. One-half ( 1/2 ) of the fees collected for the registration of fertilizer products or Five Dollars ($5.00) per brand and grade and Twenty-five Dollars ($25.00) for those fertilizers sold in packages of ten (10) pounds or less shall be deposited in a special fund in the State Treasury described under Section 69-23-7(2), and such funds shall be subject to appropriation by the Mississippi Legislature. Such fees shall be used by the Mississippi Department of Agriculture and Commerce and the Department of Environmental Quality to carry out a program of protecting the underground water resources from commercial fertilizers or fertilizer materials. Upon approval by the commissioner and State Chemist a copy of the registration shall be furnished to the applicant. All registrations expire on June 30 of the following year. The application shall include the following information:

(a) The net weight.

(b) The brand and grade.

(c) The guaranteed analysis.

(d) The name and address of the registrant.

(2) A distributor shall not be required to register any commercial fertilizer which is already registered under this chapter by another person, providing the label does not differ in any respect.

(3) A distributor shall not be required to register each grade of commercial fertilizer formulated according to specifications which are furnished by a consumer prior to mixing, but shall be required to register his firm in a manner and at a fee as prescribed in the regulations by the commissioner and State Chemist, and to label such fertilizer as provided in Section 75-47-9(2). All fees collected by the commissioner shall be paid into the State Treasury.

(4) After a public hearing open to all interested parties, the commissioner, State Chemist, and Director of Mississippi Agricultural and Forestry Experimental Station shall have authority to establish minimum amounts of plant nutrients which may be guaranteed and to promulgate ratios and minimum analysis grades of mixed fertilizers adequate to meet the agricultural needs of the state. Such a list shall be published and furnished to fertilizer manufacturers and guarantors on or before June 1 of each year.

(5) Pursuant to a notice from the Department of Environmental Quality under Section 49-17-26 in relation to state underground water quality standards, the Commissioner of Agriculture shall provide for modification of the labeling of any fertilizer, or suspend or cancel the registration of any fertilizer or any use of any fertilizer, or adopt a regulation in accordance with Section 69-23-9 to protect the underground water resources, as defined in the Federal Safe Drinking Water Act, in the shortest reasonable time.

§ 75-47-9

(1) Any commercial fertilizer distributed in this state in containers shall have placed on or affixed to the container a label setting forth in clearly legible and conspicuous form the information required by Section 75-47-7 (1)(a), (b), (c), and (d) of this chapter. In case of bulk shipments, this information in written or printed form shall accompany delivery and be supplied to the purchaser at time of delivery.

(2) A commercial fertilizer formulated according to specifications which are furnished by a consumer prior to mixing shall be labeled to show the net weight, guaranteed analysis, and the name and address of the distributor.

§ 75-47-11

(1) There shall be paid to the commissioner for all commercial fertilizers distributed in this state an inspection fee at the rate of Twenty-five Cents (25¢) per ton, provided that sales to manufacturers or exchanges between them are hereby exempted. Fees so collected shall be used for the payment of the costs, by act of the Legislature, of inspection, sampling and analysis, and other expenses necessary for the administration of this chapter. On individual packages of commercial fertilizer containing ten (10) pounds or less, there shall be paid in lieu of the annual registration fee of Ten Dollars ($10.00) per brand and grade and the Twenty-five Cents (25¢) per ton inspection fee, an annual registration fee and inspection fee of Fifty Dollars ($50.00) for each brand and grade sold or distributed. Where a person sells commercial fertilizer in packages of ten (10) pounds or less and in packages over ten (10) pounds, this annual registration and inspection fee of Fifty Dollars ($50.00) shall apply only to that portion sold in packages of ten (10) pounds or less, and that portion sold in packages over ten (10) pounds shall be subject to the same inspection fee of Twenty-five Cents (25¢) per ton as provided in this chapter.

(2) Every registrant or guarantor who distributes a commercial fertilizer in this state shall file with the commissioner, on forms furnished by the commissioner, an annual statement setting forth the number of net tons of each commercial fertilizer distributed in this state during the previous year. The report shall be due on or before the thirtieth day of the month following the close of the reporting year. Upon such statement the registrant shall pay the inspection fee at the rate stated in subsection (1) of this section.

If the tonnage report is not filed and the payment of inspection fee is not made within thirty (30) days after the end of the reporting year, a collection fee amounting to ten percent (10%) of the amount, but in no case less than Ten Dollars ($10.00), shall be assessed against the registrant, and the amount of fees due shall constitute a debt and become the basis of a judgment against the registrant.

(3) When more than one (1) person is involved in the distribution of a commercial fertilizer, the last person who has the fertilizer registered and who distributes to a nonregistrant, dealer or consumer, is responsible for reporting the tonnage and paying the inspection fee.

§ 75-47-13

All fertilizer registrants transacting, distributing or selling commercial fertilizer to a nonregistrant shall file with the commissioner an annual report showing the county code of the consignee, each grade of commercial fertilizer, the amounts in tons, the Uniform Fertilizer Tonnage Reporting System (UFTRS) code, the form in which the fertilizer was distributed (bag, bulk or liquid) and the use (farm or nonfarm). This report of tonnage sold shall be reported by one (1) of the following methods:

(a) Submitting a summary report on forms furnished by the commissioner; or

(b) Submitting an electronic disk format or text file acceptable to the UFTRS. Each reporting method shall be as set forth in Section 75-47-11(2). No information furnished to the commissioner under this section shall be disclosed in such a way as to divulge the methods of operation of any registrant.

§ 75-47-15

(1) It shall be the duty of the commissioner, who may act through his authorized agent, to sample and inspect, and of the state chemist to make analyses of and test commercial fertilizers distributed within this state at any time and place and to such an extent as they may deem necessary to determine whether such commercial fertilizers are in compliance with the provisions of this chapter. The commissioner, individually or through his agent, is authorized to enter upon any public or private premises or carriers during regular business hours in order to have access to commercial fertilizers subject to the provisions of this chapter and the rules and regulations pertaining thereto, and to the records relating to their distribution.

(2) In drawing any official sample and in making any analysis, the officially adopted methods and terminology of the Association of Official Analytical Chemists shall be used. In cases not covered by such officially adopted methods and terminology, the state chemist shall, as soon as practicable and from other sources deemed proper, adopt and publish appropriate methods and terminology.

(3) The state chemist and commissioner, in determining for administrative purposes whether any commercial fertilizer is deficient in plant food, shall be guided solely by the official sample as defined in paragraph (e) of Section 75-47-5, and obtained and analyzed as provided for in subsection (2) of this section.

(4) The results of official analysis of commercial fertilizers and portions of official samples shall be distributed by the state chemist as provided in the regulations.

§ 75-47-17

(1) Penalty for Nitrogen, Available Phosphoric Acid or Phosphorus and Potash or Potassium.-- If the analysis shall show that commercial fertilizer is deficient in one or more of its guaranteed primary plant foods (NPK) beyond the “investigational allowances” as established by regulation, or if the overall index value of the fertilizer is below the level established by regulation, a penalty of three times the commercial value of such deficiency(ies) shall be assessed on each ton of fertilizer in the lot or shipment represented by the sample analyzed.

(2) Penalties for Other Deficiencies.-- Deficiencies beyond the investigational allowances as established by regulation in any other constituent(s) covered under Section 75-47-5 paragraph (c) (1) B, C, and D, which the registrant is required to or may guarantee, shall be evaluated and penalties prescribed therefor by the commissioner and state chemist.

(3) Nothing contained in this section shall prevent any person from appealing to a court of competent jurisdiction praying for judgment as to the justification of such penalties.

(4) All penalties assessed under this section shall be paid to the commissioner, who shall deposit the same in the state treasury.

§ 75-47-19

For the purpose of determining the commercial values to be applied under the provisions of Section 75-47-17, the state chemist shall determine and publish annually the values per unit of nitrogen, available phosphoric acid, and soluble potash in commercial fertilizers in this state. If guarantees are as provided in Section 75-47-5(c)(2), the value shall be per unit of nitrogen, phosphorus, and potassium. The values so determined and published shall be used in determining and assessing penalties.

§ 75-47-21

No person shall distribute misbranded fertilizer. A commercial fertilizer shall be deemed to be misbranded:

(a) If its labeling is false or misleading in any particular.

(b) If it is distributed under the name of another fertilizer product.

(c) If it is not labeled as required in Section 75-47-9 and in accordance with regulations prescribed under this chapter.

(d) If it purports to be or is represented as a commercial fertilizer, or is represented as containing a plant nutrient or commercial fertilizer unless such plant nutrient or commercial fertilizer conforms to the definition of identity, if any, prescribed by regulation of the commissioner and state chemist. In the adopting of such regulations, the commissioner and state chemist shall give due regard to commonly accepted definitions and official fertilizer terms such as those issued by the Association of American Fertilizer Control Officials.

§ 75-47-23

No person shall distribute an adulterated fertilizer product. A commercial fertilizer shall be deemed to be adulterated:

(a) If it contains any deleterious or harmful ingredient in sufficient amount to render it injurious to beneficial plant life when applied in accordance with directions for use on the label, or if adequate warning statements or directions for use, which may be necessary to protect plant life are not shown upon the label.

(b) If its composition falls below or differs from that which it is purported to possess by its labeling.

(c) If it contains unwanted crop seed or weed seed.

§ 75-47-25

The commissioner shall publish at least annually and in such forms as he may deem proper: (a) Information concerning the distribution of commercial fertilizers, (b) Results of analyses based on official samples of commercial fertilizers distributed within the state as compared with the analyses guaranteed under Section 75-47-7 and Section 75-47-9.

§ 75-47-27

The commissioner and state chemist are authorized to prescribe and, after a public hearing following due public notice, to enforce such rules and regulations relating to investigational allowances, definitions, records, and the distribution of commercial fertilizers, and any other matters not inconsistent with the meaning and intent of this chapter, as may be necessary to carry into effect the full intent and meaning of this chapter.

§ 75-47-29

Sections 75-27-1 through 75-27-67 shall be applicable with respect to the regulation and checking of the measure and weight of commercial fertilizers.

§ 75-47-31

The commissioner and state chemist are authorized and empowered to cancel the registration of any brand of commercial fertilizer or to refuse to register any brand of commercial fertilizer as herein provided, upon satisfactory evidence that the registrant has used fraudulent or deceptive practices in the evasions or attempted evasions of the provisions of this chapter or any rules and regulations promulgated thereunder: Provided, that no registration shall be revoked or refused until the registrant shall have been given the opportunity to appear for a hearing by the commissioner and state chemist.

§ 75-47-33

The commissioner may issue and enforce a written or printed “stop sale, use, or removal” order to the owner or custodian of any lot of commercial fertilizer and to hold at a designated place when the commissioner finds said commercial fertilizer is being offered or exposed for sale in violation of any of the provisions of this chapter until the law has been complied with and said commercial fertilizer is released in writing by the commissioner, or said violation has been otherwise legally disposed of by written authority. The commissioner shall release the commercial fertilizer so withdrawn when the requirements of the provisions of this chapter have been complied with and all costs and expenses incurred in connection with the withdrawal have been paid.

§ 75-47-35

Any lot of commercial fertilizer not in compliance with the provisions of this chapter shall be subject to seizure on complaint of the commissioner to a court of competent jurisdiction in the area in which said commercial fertilizer is located. In the event the court finds the said commercial fertilizer to be in violation of this chapter and orders the condemnation of said commercial fertilizer, it shall be disposed of in any manner consistent with the quality of the commercial fertilizer and the laws of the state: Provided, that in no instance shall the disposition of said commercial fertilizer be ordered by the court without first giving the claimant an opportunity to apply to the court for release of said commercial fertilizer or for permission to process or relabel said commercial fertilizer to bring it into compliance with this chapter.

§ 75-47-37

(1) If it shall appear from the examination of any commercial fertilizer that any of the provisions of this chapter or the rules and regulations issued thereunder have been violated, the commissioner shall cause notice of the violations to be given to the registrant, distributor, or possessor from whom said sample was taken; any person so notified shall be given opportunity to be heard under such rules and regulations as may be prescribed by the commissioner. If it appears after such hearing, either in the presence or absence of the person so notified, that any of the provisions of this chapter or rules and regulations issued thereunder have been violated, the commissioner may certify the facts to the proper prosecuting attorney.

(2) Any person convicted of violating any provision of this chapter or the rules and regulations issued thereunder shall be guilty of a misdemeanor and punished accordingly.

(3) Nothing in this chapter shall be construed as requiring the commissioner or his representative to report for prosecution or for the institution of seizure proceedings as a result of minor violations of the chapter when he believes that the public interests will be best served by a suitable notice of warning in writing.

(4) It shall be the duty of each prosecuting attorney to whom any violation is reported to cause appropriate proceedings to be instituted and prosecuted in a court of competent jurisdiction without delay.

(5) The commissioner is hereby authorized to apply for and the court to grant a temporary or permanent injunction restraining any person from violating or continuing to violate any of the provisions of this chapter or any rule or regulation promulgated under the chapter notwithstanding the existence of other remedies at law. Said injunction shall be issued without bond.

§ 75-47-39

Nothing in this chapter shall be construed to restrict or avoid sales or exchanges of commercial fertilizers to each other by importers, manufacturers, or manipulators who mix fertilizer materials for sale or as preventing the free and unrestricted shipments of commercial fertilizer to manufacturers or manipulators who have registered their brands as required by the provisions of this chapter.

Chapter 49 Factory-Built Homes

§ 75-49-1

This chapter shall be known and may be cited as “The Uniform Standards Code for Factory-Built Homes Law.”

§ 75-49-3

Unless clearly indicated otherwise by the context, the following words when used in this chapter, for the purpose of this chapter, shall have the meanings respectively ascribed to them in this section:

(a) “Manufactured home” means a structure defined by, and constructed in accordance with, the National Manufactured Housing Construction and Safety Standards Act of 1974, as amended (42 USCS 5401 et seq.), and manufactured after June 14, 1976.

(b) “Mobile home” means a structure manufactured before June 15, 1976, that is not constructed in accordance with the National Manufactured Housing Construction and Safety Standards Act of 1974, as amended (42 USCS 5401 et seq.). It is a structure that is transportable in one or more sections, that, in the traveling mode, is eight (8) body feet or more in width and thirty-two (32) body feet or more in length, or, when erected on site, is two hundred fifty-six (256) or more square feet, and that is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes any plumbing, heating, air conditioning and electrical systems contained therein; except that such term shall include any structure which meets all the requirements and with respect to which the manufacturer voluntarily files a certification required by the commissioner and complies with the standards established under this chapter.

(c) “Modular home” means a structure which is: (i) transportable in one or more sections; (ii) designed to be used as a dwelling when connected to the required utilities, and includes plumbing, heating, air conditioning and electrical systems with the home; (iii) certified by its manufacturers as being constructed in accordance with a nationally recognized building code; and (iv) designed to be permanently installed at its final destination on an approved foundation constructed in compliance with a nationally recognized building code. The term “modular home” does not include manufactured housing as defined by the National Manufactured Housing Construction and Safety Standards Act of 1974.

(d) “Modular home contractor” means a licensed residential building contractor or a licensed retailer who buys factory-built modular homes for resale to the general public, whether to be located on the consumer's home site or a land-home package on property owned by the modular home contractor. A Mississippi licensed modular home contractor is authorized to sell new modular homes for installation on a consumer's home site or as part of a land-home package without the necessity of maintaining a separate sales center. A modular home contractor shall be responsible for the installation requirements for modular housing as provided in Section IV of the rules and regulations for Uniform Standards Code for the Factory-built Homes as related to modular homes.

(e) “Factory-built home” means a mobile home, a manufactured home, and a modular home as those terms are defined herein.

(f) “Commissioner” means the Commissioner of Insurance of the State of Mississippi.

(g) “Chief Deputy State Fire Marshal” means the individual appointed by the Commissioner of Insurance, who, along with his employees, is designated by the commissioner to implement and enforce this chapter and to maintain, among other duties, the Factory Built Division of the Insurance Department.

(h) “Division” means the Factory Built Division of the State Fire Marshal's Office.

(i) “Person” means any individual, firm, corporation, partnership, association or other type of business entity.

(j) “Retailer” means any person engaged in the retail sale of new or used manufactured mobile or modular homes to the general public.

(k) “Developer” means any person who buys factory-built homes and real estate and then offers to sell or lease to the general public land-home “package deals” consisting of a home with real estate. Upon renewal of a license, a developer must provide documentation to the Department of Insurance that he or she has at least five (5) available manufactured or modular home sites. A developer shall be responsible for installation requirements for manufactured or modular housing as set forth in Section IV of the rules and regulations for the Uniform Standards Code for Factory-Built Homes Law.

(l) “Independent contractor installer or transporter” means any person who is engaged for hire in the movement or transportation, or both, or the installation, blocking, anchoring and tie-down of a factory-built home. An “independent contractor installer or transporter” shall not include persons who do not hold themselves out for hire to the general public for the purposes described in this definition.

(m) “Manufacturer” means any person engaged in the production (construction) of manufactured homes or modular homes.

(n) “Installation” means the assembly of a manufactured building, components of manufactured building on site and the process of affixing a manufactured building to land, a foundation, footings or an existing building and service connections which are a part thereof.

§ 75-49-5

(1) Factory-built homes, because of the manner of their construction, assembly and use and that of their systems, components and appliances (including heating, plumbing and electrical systems), like other finished products having concealed vital parts, may present hazards to the health, life and safety of persons and to the safety of property unless properly manufactured. In the sale of factory-built homes, there is also the possibility of defects not readily ascertainable when inspected by purchasers. It is the policy and purpose of this state to provide protection to the public against those possible hazards, and for that purpose to forbid the manufacture and sale of new factory-built homes which are not properly constructed and anchored and blocked at the homesite so as to provide reasonable safety and protection to their owners and users. It is also the policy of this state that used factory-built homes be properly anchored and blocked at the homesite.

(2) The commissioner is hereby authorized and directed to investigate and examine into engineering and construction practices and techniques, the properties of construction materials used in the construction and assembly of factory-built homes, their electrical, plumbing, heating and other systems and appliances, their anchoring and blocking systems and techniques, fire prevention and protective techniques and measures to promote safety of persons and property and protect the health of users of such factory-built homes. The commissioner, in the interest of such public safety, is authorized to employ a minimum of three (3) additional employees in the Manufactured Housing Division of the Insurance Department to serve as Fire Marshal I, Deputies in the enforcement of the provisions of this chapter.

(3) All manufactured homes shall meet the requirements set forth in the Federal Manufactured Home Construction and Safety Standards (24 CFR Section 3280), established by the Secretary of the United States Department of Housing and Urban Development in accordance with the National Manufactured Home Construction and Safety Standards Act of 1974, as amended (42 U.S.C.S. 5401 et seq.), or such amendments to the standards as are adopted by the Secretary of the United States Department of Housing and Urban Development after July 1, 1992.

(4) The commissioner is also authorized and empowered to issue, promulgate and enforce all rules and procedures which in his judgment are necessary and desirable to make effective the construction standards so established. The commissioner is also empowered to promulgate and enforce rules and regulations for the safe anchoring and blocking of factory-built homes when they are delivered to the site where they are intended to be used for human habitation. When promulgating and enforcing such rules and regulations the commissioner shall take into consideration the rapidly changing technical advances continually being made by the industry.

§ 75-49-7

(1) No person may manufacture, sell or offer for sale, or transport or install any factory-built home which has been constructed after July 1, 1970, unless such manufactured home, its components, systems and appliances were constructed and assembled in accordance with rules of the commissioner issued to afford reasonable protection to persons and property with respect to the construction, assembly and sale of such factory-built homes, and unless compliance with such rules be evidenced in the manner required by the commissioner's rules.

(2) From and after July 1, 1992, no dealer, transporter or installer shall deliver or cause to be delivered any factory-built home to any person at any site where such home is to be used for human habitation without anchoring and blocking such home in accordance with rules, regulations and procedures promulgated by the commissioner pursuant to Section 75-49-5; provided, however, that a period of thirty (30) days from date of delivery shall be allowed for the anchoring and blocking of such homes.

(3) The requirements of this chapter with regard to any transporter of factory-built housing are in addition to the requirements of any other law currently in effect.

§ 75-49-9

(1) After July 1, 1992, every manufacturer, every transporter or installer, developer and every retailer who sells, manufactures, transports or installs new or used factory-built homes within the State of Mississippi shall apply for and obtain a license from the commissioner.

(2) If a factory-built home is new, the applicant shall certify in the application to the commissioner that the applicant will comply with the construction standards set forth under rules and regulations provided in Section 75-49-5 herein, and that the applicant has obtained a current and valid tax identification number.

(3) Applications shall be obtained from and submitted to the commissioner on forms prescribed by the commissioner.

(4) The original license fee and all annual renewals thereof shall be Two Hundred Fifty Dollars ($250.00) for manufacturing plants that build manufactured homes and Two Hundred Fifty Dollars ($250.00) for manufacturing plants that manufacture modular homes located within or without the State of Mississippi manufacturing or delivering homes for sale within the State of Mississippi and One Hundred Fifty Dollars ($150.00) per manufactured home and/or modular home retailer location and developer location and modular home contractor within the State of Mississippi. The licensing fee for a manufactured home and/or modular home independent contractor transporter or installer is One Hundred Dollars ($100.00) for each company. The fee for modular home plan review shall be Four Hundred Dollars ($400.00) per floor plan; however, this fee shall not apply to any modular home plan reviews completed before July 1, 1998. Except as otherwise provided in subsection (10) of this section, the license shall be valid for a period of one (1) year from the date of issuance, or until revoked as provided herein.

(5) After July 1, 1992, every manufacturer, transporter or installer or seller who first sells, manufactures, transports or installs a new or used factory-built home in this state, before such first construction, sale, transportation or installation shall apply for and obtain a license from the commissioner. The fee shall be paid to the commissioner in such manner as the commissioner may by rule require. All funds received by the commissioner shall be deposited in a special fund account in the State Treasury to the credit of the Department of Insurance.

(6) Every manufacturer of manufactured homes in the state shall pay a monitoring inspection fee to the Secretary of Housing and Urban Development, or the secretary's agent, for each manufactured home produced in the state by the manufacturer. The fee shall be in an amount established by the secretary pursuant to the National Manufactured Home Construction and Safety Standards Act of 1974, 42 USCS 5401 et seq. and as amended by the Manufactured Housing Improvement Act of 2000. The portion of the fee which is returned to the state shall be deposited by the commissioner in a special fund account in the State Treasury to the credit of the Department of Insurance.

(7) The commissioner shall investigate and examine all applicants for all licenses by holding such hearings as he shall deem necessary or conducting investigations or examinations, or any combination thereof, as to the fitness or expertise of the applicant for the type of license for which the applicant applied. A license shall be granted only to a person who bears a good reputation for honesty, trustworthiness, integrity and competency to transact the business in such a manner as to safeguard the interest of the public and only after satisfactory proof of such qualifications has been presented to the commissioner.

(8) The commissioner shall take all applicants under consideration after having examined them through oral or written examinations, or both, before granting any license. If the applicant is an individual, examination may be taken by his personal appearance for examination or by the appearance for examination of one or more of his responsible, full-time managing employees; and if a partnership or corporation or any other type of business or organization, by the examination of one or more of the responsible, full-time managing officers or members of the executive staff of the applicant's firm. Every application by an individual for a license to sell, transport or install new or used mobile, manufactured and modular homes shall be verified by the oath or affirmation of the applicant, and every such application by a partnership or corporation shall be verified by the oath or affirmation of a partner or an officer thereof. The applications for licenses shall be in such form and detail as the commissioner shall prescribe.

(9) The holder of any valid license issued by the commissioner on July 1, 1988, shall be automatically issued an equivalent license in the same category for which his previous license was issued if the licensee is in compliance with this chapter.

(10) Beginning July 1, 1988, every license issued under this chapter shall be issued annually and shall expire on June 30 following the date upon which it was issued. License fees shall not be prorated for the remainder of the year in which the application was made but shall be paid for the entire year regardless of the date of the application. The commissioner shall, on or before April 30, 1989, and on or before April 30 of each succeeding year thereafter, forward a “Notice of Renewal,” by regular United States mail, to each licensee at his or its last known post office address. After depositing the “Notice of Renewal” in the United States mail, the commissioner shall have no other duty or obligation to notify the licensee of the expiration of his or its annual license. The failure of the licensee to obtain a renewal license on or before June 30 of the ensuing license period shall act as an automatic suspension of the license unless the commissioner, for good cause shown in writing and the payment of an amount equal to double the renewal fee for said delinquency, lifts the suspension and issues the renewal license. During the period of suspension any practice by the licensee under the color of such license shall be deemed a violation of this chapter. Annual renewals of a retailer's license shall require, as a condition precedent, that the retailer verify by oath or affirmation that he maintains a retail sales lot in accordance with all rules and regulations promulgated by the commissioner and that the lot has three (3) or more new or used factory-built homes located thereon for retail sale as a residential dwelling or for any other use at the time of application.

(11) The commissioner may enter into an agreement with the Secretary of Housing and Urban Development to establish or implement an installation program that meets the requirements set by the Secretary of Housing and Urban Development, or the secretary's agent, pursuant to the National Manufactured Housing Construction and Safety Standards Act of 1974, 42 USCS 5401 et seq., and as amended by the Manufactured Housing Improvement Act of 2000, may conduct installation inspections under this program, may charge an installation inspection fee in an amount established by the secretary, and may contract with a third party to assist with the implementation and enforcement of this program.

§ 75-49-11

The commissioner, acting through the Chief Deputy State Fire Marshal and the Factory Built Division of the Insurance Department, is hereby charged with the administration of this chapter. The commissioner may make and amend, alter or repeal, general rules and regulations of procedure for carrying into effect all provisions of this chapter, for obtaining statistical data respecting manufactured, mobile and modular homes, for establishing bonding and insurance requirements for the licensure of manufacturers, modular contractors, developer retailers and transporters or installers of factory-built homes, and to prescribe means, methods and practices to make effective such provisions, and he may make such investigations and inspection as in his judgment are necessary to enforce and administer this chapter.

The commissioner is authorized and empowered to require each manufacturer, modular contractor, developer, retailer and transporter or installer of factory-built homes to establish and maintain such records, make such reports and provide such information as he may reasonably require to determine whether the manufacturer, modular contractor, developer, retailer, transporter or installer has acted or is acting in compliance with this chapter and the National Manufactured Housing Construction and Safety Standards Act of 1974, as amended (42 USCS 5401 et seq.) and as amended by the Manufactured Housing Improvement Act of 2000, and other rules and regulations prescribed according to this chapter. The commissioner, or a person duly designated by the commissioner, is authorized to inspect appropriate books, papers, records and documents of any manufacturer, modular contractor, developer, retailer, transporter or installer of factory-built homes which are relevant to determining if the licensee has acted or is acting in compliance with this chapter and the Federal Manufactured Home Construction and Safety Standards (24 CFR Section 3280) and other rules and regulations prescribed according to this chapter.

§ 75-49-13

(1) The commissioner shall not:

(a) Deny an application for a license without first giving the applicant a hearing, or an opportunity to be heard, on the question of whether he is qualified under the provisions of this chapter to receive the license applied for.

(b) Revoke or suspend a license without first giving the licensee a hearing, or an opportunity to be heard, on the question of whether there are sufficient grounds under the provisions of this chapter upon which to base such revocation or suspension.

(2) Any interested party shall have the right to have the commissioner call a hearing for the purpose of taking action in respect to any matter within the commissioner's jurisdiction by filing with the commissioner a verified complaint setting forth the grounds upon which the complaint is based.

(3) The commissioner may on his own motion call a hearing for the purpose of taking action in respect to any matter within his jurisdiction.

(4) When a hearing is to be held before the commissioner, the commissioner shall give written notice thereof to all parties whose rights may be affected thereby. The notice shall set forth the reason for the hearing and the questions or issues to be decided by the commissioner at such hearing and the time when and the place where the hearing will be held. All such notices shall be mailed to all parties, whose rights may be affected by such hearing by registered or certified mail, and addressed to their last known address.

(5) All parties whose rights may be affected at any hearing before the commissioner shall have the right to appear personally and by counsel, to cross-examine witnesses appearing against them, and to produce evidence and witnesses in their own behalf. The commissioner shall make and keep a record of each such hearing and shall provide a transcript thereof to any interested party upon his request and at his expense. Testimony taken at all such hearings shall be taken either stenographically or by machine.

(6) If any party who is notified of a hearing in accordance with the requirements of this chapter fails to appear at such hearing, either in person or by counsel, then and in that event the commissioner may make any decision and take any action he may deem necessary or appropriate with respect to any issue or question scheduled for hearing and decision by him at such hearing which affects or may affect the rights of such defaulting party, and such defaulting party shall have no right of appeal under the provisions of this chapter.

(7) All decisions of the commissioner with respect to the hearings provided for in this section shall be incorporated into orders of the commissioner. All such orders shall be made available during normal office hours for inspection by interested persons.

(8) It shall be the duty of the sheriffs and constables of the counties of this state and of any employee of the commissioner, when so directed by the commissioner, to execute any summons, citation or subpoena which the commissioner may cause to be issued and to make his return thereof to the commissioner. The sheriffs and constables so serving and returning same shall be paid for so doing fees provided for such services in the circuit court. Any person who appears before the commissioner or a duly designated employee of his department in response to a summons, citation or subpoena shall be paid the same witness fee and mileage allowance as witnesses in the circuit court. In case of failure or refusal on the part of any person to comply with any summons, citation or subpoena issued and served as above authorized or in the case of the refusal of any person to testify or answer to any matter regarding which he may be lawfully interrogated or the refusal of any person to produce his record books and accounts relating to any matter regarding which he may be lawfully interrogated, the chancery court of any county of the State of Mississippi, or any chancellor of any such court in vacation, may, on application of the commissioner, issue an attachment for such person and compel him to comply with such summons, citation or subpoena and to attend before the commissioner or his designated employee and to produce the documents specified in any subpoena duces tecum and give his testimony upon such matters as he may be lawfully required. Any such chancery court, or any chancellor of any such court in vacation, shall have the power to punish for contempt as in case of disobedience of like process issued from or by any such chancery court, or by refusal to testify therein in response to such process, and such person shall be taxed with the costs of such proceedings.

(9) The following procedure shall govern in taking and perfecting appeals:

(a) Any person who is a party to any hearing before the commissioner and who is aggrieved by any decision of the commissioner with respect to any hearing before him, unless prevented by the provisions of subsection (6) of this section, shall have the right of appeal to the chancery court of the county of such person's residence or principal place of business within this state, but if any such person is a nonresident of this state he shall have the right of appeal to the chancery court of the First Judicial District of Hinds County, Mississippi. All such appeals shall be taken and perfected within sixty (60) days from the date of the decision of the commissioner which is the subject of the appeal, and the chancery court to which such appeal is taken may affirm such decision or reverse and remand the same to the commissioner for further proceedings as justice may require or dismiss such decision. All such appeals shall be taken and perfected, heard and determined, either in term time or in vacation, on the record, including a transcript of pleadings and evidence, both oral and documentary, heard and filed before the commissioner. In perfecting any appeal provided by this chapter, the provisions of law respecting notice to the reporter and allowance of bills of exceptions, now or hereafter in force, respecting appeals from the chancery court to the supreme court shall be applicable, provided, however, that the reporter shall transcribe his notes, taken stenographically or by machine, and file the record with the commissioner within thirty (30) days after approval of the appeal bond, unless, on application of the reporter, or of the appellant, an additional fifteen (15) days shall have been allowed by the commissioner to the reporter within which to transcribe his notes and file the transcript of the record with the commission.

(b) Upon the filing with the commissioner of a petition of appeal to the proper chancery court, it shall be the duty of the commissioner, as promptly as possible, and in any event within sixty (60) days after approval of the appeal bond, to file with the clerk of said chancery court to which the appeal is taken, a copy of the petition for appeal and of the decision appealed from, and the original and one (1) copy of the transcript of the record of the proceedings and evidence before the commission. After the filing of said petition, the appeal shall be perfected by the filing of a bond in the penal sum of five hundred dollars ($500.00) with two (2) sureties or with a surety company qualified to do business in Mississippi as surety, conditioned to pay the costs of such appeal, said bond to be approved by the commissioner or by the clerk of the chancery court to which such appeal is taken.

(10) No decision of the commissioner made as a result of a hearing under the provisions of this section shall become final with respect to any party affected and aggrieved by such decision until such party shall have exhausted or shall have had an opportunity to exhaust all of his remedies provided for by this section; provided, however, any such decision may be made final if the commissioner finds that failure to do so would be detrimental to the public interest or public welfare, but the finality of any such decision shall not prevent any party or parties affected and aggrieved thereby to appeal the same in accordance with the appellate procedure set forth in this section.

(11) The commissioner shall prescribe his rules of order or procedure in hearings or other proceedings before it under this chapter; provided, however, that such rules of order or procedure shall not be in conflict or contrary to the provisions of this section.

§ 75-49-15

In the issuance of rules and regulations hereon, the commissioner may provide appropriate exemption or exception with respect to factory-built homes produced in other states, upon his determining that the applicable rules and codes of such state of manufacture provide safeguards equally effective to those otherwise applicable under this chapter and rules made under this chapter.

§ 75-49-17

No person may interfere, obstruct or hinder an authorized representative of the commissioner who displays proper department credentials in the performance of his duties as set forth in the provisions of this chapter.

§ 75-49-19

(1) Any person who knowingly and willfully violates any of the provisions of this chapter or any rules and regulations made hereunder shall be liable to the State of Mississippi for a civil penalty of not more than One Thousand Dollars ($1,000.00) for each such violation. Each violation of a provision of this chapter or a rule or regulation made hereunder shall constitute a separate violation with respect to each factory-built home or with respect to each failure or refusal to allow or perform an act required thereby, except that the maximum civil penalty may not exceed one million dollars ($1,000,000.00) for any related series of violations occurring within one (1) year from the date of the first violation.

(2) An individual, or a director, officer or agent of a corporation, who knowingly and willfully violates any of the provisions of this chapter or any rules and regulations made hereunder in a manner which threatens the health and safety of any purchaser of a factory-built home is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than one thousand dollars ($1,000.00) or imprisoned not more than one (1) year, or both.

(3) This chapter shall not apply to any person who establishes that he did not have reason to know in the exercise of due care that such factory-built home is not in conformity with applicable factory-built construction and safety standards, or to any person who, before to such first purchase, holds a certificate issued by the manufacturer or importer of such factory-built home to the effect that such factory-built home conforms to all applicable factory-built home construction and safety standards, unless such person knows that such factory-built home does not so conform.

(4) An individual, or a director, officer or agent of a corporation, who knowingly and willfully fails to obtain the applicable license under this chapter and who is required to obtain such license under this chapter, and who may knowingly and willfully violate any provisions of this chapter or any rules and regulations made hereafter with respect to the manufacture of, selling or distribution of, safe anchoring and blocking of a factory-built home when intended to be used for human habitation is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than One Thousand Dollars ($1,000.00) or imprisoned not more than one (1) year, or both.

§ 75-49-21

The board of supervisors of any county may charge a permit fee not to exceed Fifty Dollars ($50.00) to the owner of any manufactured or mobile home, as defined in this chapter, if the county performs installation inspections; however, the board of supervisors of any county having a population of more than seventy-five thousand (75,000), according, to the most recent federal decennial census, may charge a permit fee not to exceed One Hundred Dollars ($100.00). The county may require the permit fee to be paid before a manufactured or mobile home is set up within the boundaries of the county and the fee shall cover all the costs of the inspection of the manufactured or mobile home relating to installation, blocking, anchoring and tie-down and safety standards of manufactured or mobile homes.

Chapter 51 Water Heaters

§ 75-51-1

All water heaters installed in any dwelling or in any other building within the state shall be provided with an approved self-closing (levered) water pressure relief valve and temperature relief valve or combination thereof.

No individual, firm, corporation or business shall install any new automatic hot water tank or heater of one hundred twenty (120) gallon capacity or less without installing thereon a pressure-temperature relief valve so labeled by the manufacturer's identification stamp or cast upon the valve or upon a plate secured to it.

No individual, firm, corporation or business shall install, re-install or re-locate any existing automatic hot water tank or heater of one hundred twenty (120) gallon capacity or less without installing on such tank or heater an approved type water pressure relief valve and temperature relief valve or combination thereof.

No individual, firm, corporation or business shall install, sell or offer for sale any relief valve, whether it be pressure type, temperature type or pressure-temperature type, which does not carry the stamp of approval of the American Society of Mechanical Engineers or the American Gas Association.

§ 75-51-3

Temperature and pressure relief valves, or combinations thereof shall have thermosetting of not more than two hundred ten (210) degrees fahrenheit and pressure setting not to exceed the tank or heater manufacturer's rated working pressure. The relieving capacity of these two (2) devices shall each equal or exceed the heat input to the water heater or storage tank.

Temperature type or pressure-temperature type valves shall be installed in the shell of the water heater tank or may be installed in the hot water outlet, provided the thermo-bulb extends into the shell of the tank, and in all cases installed at the highest practical point. For installations with separate storage tank, said valves shall all be installed on the tank and there shall not be any type of valve installed between the water heater and the storage tank. Temperature relief valves shall be so located in the tank as to be actuated by the water in the top one-eighth ( 1/8 ) of the tank served.

Pressure relief valves may be located adjacent to the equipment they serve. There shall be no check valve or shut-off valve between a relief valve and the heater or tank for which it is installed.

The outlet of a pressure, temperature, or other relief valve shall not be connected to the drainage system as a direct waste.

§ 75-51-5

No individual, firm, corporation or business shall install, reinstall, relocate, sell or offer for sale any hot water supply storage tanks or heaters of one hundred twenty (120) gallon capacity or less which utilize dip tubes, supply and hot water nipples, supply water baffles or heat traps that have not been tested to withstand a temperature of two hundred twenty-five (225) degrees Fahrenheit without deteriorating in any manner, and such tank or heater shall be so labeled by the manufacturer.

No individual, firm, corporation or business shall install, sell, or offer for sale any water baffles or heat traps, which are not constructed and tested to withstand a temperature of two hundred twenty-five (225) degrees Fahrenheit without deterioration in any manner, and such baffles or heat traps shall be so labeled by the manufacturer.

§ 75-51-7

Any storage tank hereafter installed for domestic hot water shall have clearly and indelibly stamped in the metal, or so marked upon a plate welded thereto, or otherwise permanently attached, the maximum allowable working pressure. Such markings shall be in an accessible position outside of the tank so as to make inspection or reinspection readily possible. All storage tanks for domestic hot water shall meet the applicable American Society of Mechanical Engineers or American Gas Association standards.

§ 75-51-9

The provisions of this chapter shall not apply to water heaters installed prior to October 6, 1968, except with respect to re-installation thereof as provided in Section 75-51-1 hereof.

§ 75-51-11

Any person violating the provisions of this chapter, upon conviction, shall be fined not less than one hundred dollars ($100.00) nor more than three hundred dollars ($300.00), and each such sale, installation, or re-installation shall be a separate violation hereof if not effected in accordance with this chapter.

Chapter 53 Paints, Varnishes and Similar Materials

§ 75-53-1

It shall be unlawful for any person, firm or corporation within this state to manufacture for sale, sell, or exchange, or to offer or to keep for sale or exchange any paint, putty, linseed oil or other paint oils, turpentine or varnish that is not labeled in accordance with the provisions of this chapter, or which is adulterated or misbranded or insufficiently labeled or branded. Any person, firm, or corporation violating any provision hereof shall be guilty of a misdemeanor and, upon conviction, shall be fined not less than twenty-five dollars ($25.00), and not more than one hundred dollars ($100.00) for the first offense, and not less than fifty dollars ($50.00) and not more than two hundred dollars ($200.00) for each subsequent offense.

§ 75-53-3

The term paint as used herein shall include all substances, whether dry or ground in oil, used or intended for use as paint or as components of paint. It shall include paste and semipaste paints, house, carriage, wagon, barn, floor, roof, and implement paints and enamels, and all kinds of liquid and ready mixed paints. It shall not include artists' colors, liquid bronzes, colors intended to be mixed with water for decorative purposes, wood fillers, stove polishes or stove enamels, and shingle and roof stains.

§ 75-53-5

Every container or receptacle of paint, putty, linseed oil, or other paint oils, turpentine, and varnish sold, exchanged, or offered or kept for sale or exchange, shall bear a label printed in legible type in English stating:

(a) The kind of paint or material in the container, and the name and residence of the manufacturer by whom made and the name and residence of the distributor, person or firm for whom made.

(b) The volume, if sold by volume; and the net weight if sold by weight.

(c) In case of putty and also of paints as defined in Section 75-53-3, the name and the percentage of each component or constituent, both solid and liquid, and also on a separate place or places on the label the percentage composition of the color or coloring material, or materials, used.

(d) In the case of varnish and colors in varnish, the percentage of rosin, benzine, naphtha, gasoline, mineral oil, or hydrocarbon oil.

(e) In the case of mixed oils, the percentage by volume of each and every oil in the mixture.

§ 75-53-7

For the purposes of this chapter, paint, putty, linseed oil, or other paint oils, turpentine, and varnish shall be deemed to be misbranded if the container is labeled or marked in any manner that tends to deceive the purchaser as to the nature, composition, volume, or weight of the contents thereof. The same shall be insufficiently branded if the label fails to give fully the information required herein. The same shall be deemed to be adulterated if, for any component or constituent stated on the label, some other component or constituent is substituted in whole or in part.

§ 75-53-9

The state chemist is hereby charged with the enforcement of the provisions of this chapter. He shall also prepare such rules and regulations as are necessary to carry its intent and purpose into effect. The collection, examination, and analysis of specimens of paint, putty, linseed oil and other paint oils, turpentine, and varnish shall be carried out under his direction by duly authorized inspectors and analysis.

§ 75-53-11

Specimens for examination and analysis shall be taken by the state chemist or by duly authorized inspectors. In the execution of their duties, inspectors shall have access during reasonable business hours to places where paint, putty, linseed oil, or other paint oils, turpentine, or varnish is sold, and they shall tender the owner the market price for all specimens taken by them.

§ 75-53-13

Any person who shall hinder or obstruct an inspector in the performance of his duty shall be guilty of a misdemeanor, and upon conviction thereof, shall be fined not less than twenty-five dollars ($25.00) and not more than fifty dollars ($50.00).

§ 75-53-15

When it shall appear from an examination or analysis that a specimen or sample of paint, putty, linseed oil or other paint oils, turpentine, or varnish is misbranded, or insufficiently branded or labeled or adulterated, the state chemist shall give notice thereof to the person or firm from whom such specimen was obtained, and such person or firm shall have an opportunity to be heard. If it should then appear that any of the provisions hereof have been violated, the state chemist shall certify the facts to the proper district attorney, together with a copy of the results of the examination or analysis duly authenticated by the chemist or officer making the examination or analysis, and the certificate of analysis or examination of such chemist or officer, when duly sworn to, shall be prima facie evidence of the facts therein certified.

§ 75-53-17

It shall be the duty of such district attorney to whom the state chemist shall report any violation of this chapter to cause proceedings to be commenced and prosecuted in the proper court without delay for the enforcement of the penalties herein provided in such cases.

Chapter 55 Gasoline and Petroleum Products

§ 75-55-1

This chapter shall be known as the “Petroleum Products Inspection Law of Mississippi.”

§ 75-55-3

(1) The Commissioner of Agriculture and Commerce, hereinafter referred to as the “commissioner,” is vested with power and authority and is charged with the duty of administering and enforcing the provisions of this chapter which pertain to signs; the labeling of pumps, tanks and other packages and containers; to trade names; and to scales, pumps and measuring equipment, and he shall have the authority to establish rules and regulations not inconsistent herewith in connection with its enforcement.

(2) The State Chemist is vested with power and authority and is charged with the duty of administering the provisions of this chapter which authorize the analysis of samples and the operation of the petroleum products laboratory, and he shall have the authority to establish rules and regulations in connection with its enforcement.

(3) The commissioner and the State Chemist shall have joint authority for setting specifications of petroleum products and shall have the authority to establish rules and regulations in connection with the enforcement of this chapter.

§ 75-55-5

The words, terms and phrases as used in this chapter shall have the following meanings, unless the context requires otherwise:

(a) The term “commissioner” means the Commissioner of the Mississippi Department of Agriculture and Commerce, or his agents and employees.

(b) The term “State Chemist” means the Director of the Mississippi State Chemical Laboratory, or his agents and employees.

(c) The term “ASTM” means an international voluntary consensus standards organization formed for the development of standards on characteristics and performance of materials, products, systems, and services, and the promotion of related knowledge.

(d) The term “person” shall include any individual, firm, copartnership, joint venture, association, corporation, estate, trust or any other group or combination acting as a unit, and the plural as well as the singular number, unless the intention to give a more limited meaning is disclosed by the context.

(e) The term “illuminating oil” shall include coal oil, kerosene or other petroleum products used for illuminating purposes.

(f) The term “lubricating oil” means all petroleum-based oils or synthetic lubricants intended for use in the crankcase of an internal combustion engine, either spark ignition or diesel type. The purpose of the lubricating oil is to reduce friction between two (2) solid surfaces moving relative to one another.

(g) The term “gasoline pump” shall include pumps, meters and all measuring devices used for measuring gasoline and all oxygenated blended fuels; the term “diesel fuel pump” shall include pumps, meters and all measuring devices used for measuring diesel fuel; the term “kerosene pump” shall include pumps, meters and all measuring devices used for measuring kerosene; the term “liquefied compressed gas pump” shall include pumps, meters and all measuring devices used for measuring liquefied compressed gas.

(h) The term “gasoline” shall include (i) all products commonly or commercially known or sold as gasoline (excluding casing head and absorption or natural gasoline) regardless of their classification or uses; and (ii) a volatile mixture of liquid hydrocarbons, generally containing small amounts of additives, suitable for use as a fuel in spark ignition, internal combustion engines.

(i) The term “commercial gasoline” shall mean a liquid suitable for use as a fuel in spark ignition combustion engines, and shall be free of undissolved water, suspended matter and of any harmful ingredient or component and which, in addition, meets the following test requirements as set out in ASTM D4814, and it shall be the intent of this chapter that the state specifications may be kept current with ASTM D4814 as illustrated below:

(i) Corrosion ASTM D130. A clean copper strip shall not show more than extremely slight discoloration equivalent to ASTM Strip No. 1, when submerged in the gasoline for three (3) hours at one hundred twenty-two degrees (122°) Fahrenheit, as determined by ASTM D130.

(ii) Distillation range. For each month the distillation range shall be that specified by the vapor pressure class requirement for that month. Distillation temperature limits shall be consistent with the corresponding vapor pressure class during the months affected by federal or state regulation which restrict vapor pressure. If the vapor pressure limit is between two (2) classes, the distillation temperature limits of the least restrictive class shall be acceptable. The method of test shall be ASTM D86.

(iii) Residue. The residue, after evaporation, shall not exceed two percent (2%), as determined by ASTM D86.

(iv) Gum test. The gum shall not exceed five (5) milligrams per one hundred (100) milliliters, after the extraction of the residue with a-heptane, as determined by ASTM D381.

(v) Sulphur. The sulphur content shall not exceed ten one-hundredths percent (0.10%) for unleaded gasoline or fifteen one-hundredths percent (0.15%) for leaded gasoline, as determined by ASTM D2622 or D4045.

(vi) Vapor pressure. The vapor pressure during the months of July and August shall not exceed ten (10) pounds per square inch at one hundred degrees (100°) Fahrenheit, and during the months of November, December, January, February and March shall not exceed thirteen and one-half (13- 1/2 ) pounds per square inch at one hundred degrees (100°) Fahrenheit.

The vapor pressure during the remaining months of the year shall not exceed eleven and five-tenths (11.5) pounds per square inch at one hundred degrees (100°) Fahrenheit. The method of determination shall be ASTM D4953. Federal or state regulation restricting vapor pressure to lower levels shall preempt these standards during the applicable months.

(vii) Vapor liquid equilibrium. A maximum value of twenty (20) for the vapor liquid equilibrium test during the months July and August shall be obtained at a temperature of one hundred thirty-three degrees (133°) Fahrenheit; for the months of November, December, January, February and March it shall be obtained at a temperature of one hundred sixteen degrees (116°) Fahrenheit; for the other months of the year it shall be obtained at one hundred twenty-four degrees (124°) Fahrenheit. The method of determination shall be ASTM D2533 or ASTM D4814, appendix X2.

(viii) Lead specifications. The unleaded gasoline shall contain less than five hundredths (0.05) gram of lead per gallon, and the leaded gasoline shall contain a minimum of five hundredths (0.05) gram of lead and less than four and two-tenths (4.2) grams of lead per gallon. The method of analysis should be ASTM D3237, (Atomic Absorption Spectrometry), ASTM D2599 (X-ray Spectrometry) or ASTM D2547 (Volumetric Chromate).

(ix) Classification.

1. “Leaded premium grade gasoline” shall have an (R + M)/2 octane antiknock index of at least ninety-three (93). The research octane number shall be at least ninety-six (96).

2. “Unleaded premium grade gasoline” shall have an (R + M)/2 octane antiknock index of at least ninety-one (91). The research octane number shall be at least ninety-four (94).

3. “Mid-grade unleaded gasoline” shall have an (R + M)/2 octane antiknock index of at least eighty-nine (89). The research octane number shall be at least ninety-two (92).

4. “Leaded regular grade gasoline” shall have an (R + M)/2 octane antiknock index of at least eighty-nine (89). The research octane number shall be at least ninety (90).

5. “Unleaded regular grade gasoline” shall have an (R + M)/2 octane antiknock index of at least eighty-seven (87). The research octane number shall be at least ninety (90), and the motor octane number shall be at least eighty-two (82).

6. “Third-grade gasoline” shall have an (R + M)/2 octane antiknock of not more than eighty-seven (87).

The methods of octane determination shall be ASTM D2699 for the research octane number (R) and ASTM D2700 for the motor octane number (M), or ASTM D2885 for both the research octane number and the motor octane number. The (R + M)/2 octane antiknock index shall be the average of the research and motor octane numbers. All retail pumps or delivery devices shall be labeled with the appropriate (R + M)/2 octane antiknock index in accordance with the Federal Trade Commission Octane Posting and Certification Regulation 306. No commercial gasoline shall be colored mahogany.

(j) The term “oxygenated fuel” means a liquid fuel which is a homogeneous blend of hydrocarbons and oxygenates. The term “oxygenate” means an oxygen containing ashless organic compound which may be used as a fuel supplement or additive and includes alcohols and ethers. “Gasoline-oxygenate blend” means a blend consisting primarily of gasoline and a substantial amount of one or more oxygenates. This definition includes, but is not limited to, the following designations:

(i) “Gasohol” meaning any motor fuel containing a nominal ten (10) volume percent anhydrous denatured alcohol and ninety (90) volume percent unleaded gasoline, regardless of other name, label or designation.

(ii) “Leaded gasohol” meaning any motor fuel containing a nominal ten (10) volume percent anhydrous, denatured ethanol and ninety (90) volume percent leaded gasoline, regardless of other name, label or designation.

(iii) Any gasoline-oxygenate blend which meets the United States Environmental Protection Agency's “substantially similar” rule, Section 211(f)(1) of the Clean Air Act, 42 USCS 7545(f)(1).

(iv) Any gasoline-oxygenate blend for which there is an existing Clean Air Act waiver issued by the United States Environmental Protection Agency.

(k) “Alcohol blended fuel” means gasohol or leaded gasohol.

(l) “Anhydrous, denatured ethyl alcohol (ethanol)” means normal two hundred (200) proof ethanol to which has been added a maximum of five (5) volumes of approved denaturant(s) to one hundred (100) volumes of ethanol and containing not more than one and twenty-five hundredths percent (1.25%) water by weight as determined by ASTM E203.

(m) “Approved denaturant(s)” means materials used for denaturing ethyl alcohol for use as a motor fuel which have been approved by the United States Department of the Treasury, Bureau of Alcohol, Tobacco and Firearms, and both the State Chemist and the Commissioner of Agriculture and Commerce. Gasoline-oxygenate blends shall meet the specifications set forth in the most recent edition of the Annual Book of ASTM standards and supplements thereto, and revisions thereof, except where amended or modified by the Commissioner and State Chemist.

(n) The term “oil” as used in this chapter shall include diesel fuel, kerosene, fuel oil, distillate, gas oil, tractor fuel or any other product other than gasoline, as defined in this chapter, which is usable as fuel in an internal combustion engine, and any product which, on distillation in accordance with the method of test of the American Society for Testing and Materials shows not more than ten percent (10%) recovered when the thermometer shows two hundred sixty-one degrees (261°) Fahrenheit; and not more than ninety-five percent (95%) recovered when the thermometer shows four hundred sixty-five degrees (465°) Fahrenheit or more; provided that nothing in this paragraph shall be construed to include oils received or sold as lubricants when such oils cannot be used as a fuel in internal combustion engines.

(o) “Diesel fuel” is any petroleum product intended for use or offered for sale as a fuel for engines in which the fuel is injected into the combustion chamber and ignited by pressure without the presence of an electric spark.

Specifications: The fuel oils herein specified shall be hydrocarbon oils free from acids, grit and fibrous or other foreign material. Three (3) grades of such oils are specified and these shall conform to the detailed requirements in the current American Society for Testing and Materials Specifications for Diesel Fuel Oils (ASTM D975), except for the sulphur content of Grade 2-D. All tests shall be in accordance with the applicable American Society for Testing and Materials method as set forth in the current ASTM Designation D975. Diesel fuel requirements are listed below:

| | Grade 1-D | Grade 2-D | Grade 4-D | | | --- | --- | --- | --- | --- | | Flash point, degrees F. D93 | Min. 100 | Min. 125 | Min. 130 | | | Water & sediment, | | | | | | | % by volume, D1796 | Max. 0.05 | Max. 0.05 | Max. 0.5 | | Carbon residue on 10% | | | | | | | residium, % D524 | Max. 0.15 | Max. 0.35 | | | Ash, % by weight, D482 | Max. 0.01 | Max. 0.01 | Max. 0.1 | | | Distillation, 90% point, | | | | | | | degrees F., D86 | | Min. 540 | | | | | Max. 550 | Max. 640 | | | Viscosity @ 100 degrees F. | | | | | | | kinematic-centistokes | | | | | | D445 | Min. 1.3 | Min. 2.0 | Min. 5.5 | | | or | Max. 2.4 | Max. 4.1 | Max. 24.0 | | Viscosity @ 100 degrees F. | | | | | | | Saybolt Universal Sec. | | Min. 32.6 | Min. 45 | | | | Max. 34.4 | Max. 40.1 | Max. 125 | | Sulphur, % by weight, D129 | Max. 0.5 | Max. 1.0 | Max. 2.0 | | | Copper strip corrosion, D130 | Max. No. 3 | Max. No. 3 | | | | Cetane number, D613 or D976 | Min. 40 | Min. 40 | Min. 30 | |

(p) The word “kerosene” shall include lamp oil, illuminating oil and coal oil which shall conform to the detailed requirements set forth in the current American Society for Testing and Materials Specification for Kerosene (ASTM D3699). All tests shall be in accordance with the applicable American Society for Testing and Material Methods as set forth in ASTM D3699. The detailed requirements are listed below:

(i) The oil shall be free of water and suspended matter.

(ii) The color shall not be darker than number plus sixteen (16) on the Saybolt scale, as determined by ASTM D156.

(iii) The flash point shall, by ASTM D56, not be lower than one hundred degrees (100°) Fahrenheit when determined in Tagliabue closed type tester, as determined by ASTM D56.

(iv) The sulphur content shall not exceed four one-hundredths percent (0.04%) for No. 1-K kerosene and thirty one-hundredths percent (0.30%) for No. 2-K kerosene. The method of determination shall be ASTM D1266. No. 1-K kerosene is a special low-sulphur grade kerosene suitable for use in nonflue-connected kerosene burner appliances and in wick-fed illuminating lamps. No. 2-K kerosene is suitable for use in flue-connected burner appliances and in wick-fed illuminating lamps.

(v) The distillation ten percent (10%) point shall not be higher than four hundred one degrees (401°) Fahrenheit, as determined by ASTM D86.

(vi) The distillation end point shall not be higher than five hundred seventy-two degrees (572°) Fahrenheit, as determined by ASTM D86.

(vii) The oil shall not show a cloud point at five degrees (5°) Fahrenheit, as determined by ASTM D2500.

(viii) The oil shall burn freely and steadily for sixteen (16) hours, as determined by ASTM D187.

(ix) The gravity shall not be less than degrees API 41, as determined by ASTM D1298.

(x) The corrosion test results shall be No. 1 Maximum in a three-hour at two hundred twelve degrees (212°) Fahrenheit test, as determined by ASTM D130.

(q) Racing gasoline means any gasoline which is sold for racing purposes. Racing gasoline may be sold from retail dispensing equipment under the following conditions:

(i) The product brand name and octane number shall be registered with the Commissioner of Agriculture and Commerce and the State Chemist.

(ii) The manufacturer shall forward a list of marketers selling these product(s) and the product(s) being sold by each marketer.

(iii) Marketers shall register their retail outlets by location and provide a list of the product(s) sold for each retail outlet.

(iv) The dispensing equipment shall contain a conspicuous sign stating that the fuel is racing gasoline. The dispensing equipment shall not contain any kind of representation indicating that the product is suitable for vehicles other than for racing.

(v) The dispensing equipment shall be dedicated to and isolated from any other motor fuel dispensing equipment in a manner that a vehicle cannot access both the commercial gasoline and the racing gasoline at the same time.

(vi) Any violation shall result in revocation of the approval to market and/or confiscation of the product.

(vii) The Commissioner of Agriculture and Commerce (the “commissioner”) and the State Chemist are hereby given authority to change the specifications set forth in this section to comply with the currently recommended ASTM or federally required specifications.

§ 75-55-6

(1) Products regulated under terms of the Petroleum Products Inspection Law or regulations sold in this state shall have a name and/or brand name and such name shall be registered with the Mississippi Department of Agriculture and Commerce. The octane rating or antiknock index (R + M)/2 of applicable motor fuels, covered by the Federal Trade Commission Octane Posting and Certification Rule, shall be included in the registration. The name of the establishment, address, city, state, zip code, county and telephone number shall also be included in the registration. Registration forms shall be provided by the Mississippi Department of Agriculture and Commerce.

(2) The commissioner or his agent shall refuse the registration of any product under a name that is misleading to the purchaser of such a product.

The commissioner or his agent, in his discretion, may refuse to permit any name or brand of gasoline where a similar name or brand has already been permitted. The sale of any product under any brand name that is not registered with the department or does not meet the standards of the registration form shall not be permitted. Pumps shall be locked down until the product or products have been duly registered or brought up to specifications.

(3) Every pump dispensing motor fuel at retail shall conspicuously display the name and/or brand name being sold therefrom exactly as such name and/or brand name that is registered with the department. Each pump shall conspicuously display the octane number of the product. The octane number designation shall be changed whenever the product is changed. Each diesel pump dispensing those products at retail shall display the words “No. 1 Diesel” or “No. 2 Diesel.” Each kerosene pump or fuel oil pump dispensing those products at retail shall display the words “No. 1-K Kerosene” or “No. 2-K Kerosene” or indicate the proper grade of fuel oil depending on the product dispensed.

(4) The labeling of all petroleum products on pumps shall be on both sides of the dispensing device which faces the vehicle and shall be in a clear and conspicuous place in type of at least one-half ( 1/2 ) inch in height, and one-sixteenth ( 1/16 ) inch stroke (width of type).

(5) Any application for registration that is denied may be appealed to the commissioner within thirty (30) days from the date of denial of such application.

(6) Any person who registered a brand name for a motor fuel and fails or discontinues to sell or deliver a registered product shall notify the commissioner within sixty (60) days after date of registration or date of last invoice or delivery ticket. Failure to notify the commissioner shall automatically terminate and cancel the registration of the brand name and the quality specification.

The commissioner is further authorized and empowered following the terms of the Mississippi Administrative Procedures Act to make such reasonable rules and regulations, particularly in emergency situations, which, in his judgment, will contribute to a more efficient administration of this article. Such rules and regulations, when made, shall have the same binding force and effect as if incorporated in this article; provided further, that such rules and regulations made during the said emergency periods shall be withdrawn following cessation of any such emergencies.

The commissioner is hereby authorized to prohibit the sale of any taxable petroleum product which is not in compliance with the provisions of this chapter.

§ 75-55-7

(1) Provided, however, that gasoline, as defined in Section 75-55-5, shall not be subject to specifications required under such section, when such gasoline is purchased or received in this state for uses other than for sale or distribution to the consuming public. This exemption shall apply to gasoline that will not be used on the road.

(2) The Commissioner of Agriculture and Commerce (the “commissioner”) and the State Chemist shall have authority, but are not compelled, to establish specifications for aviation and other special gasolines when received in this state for any purpose other than for use in propelling motor vehicles on the highways, or for sale or distribution to the consuming public.

(3) It is provided that the specifications adopted for gasoline shall not apply to “gas machine gasoline” prepared or received in this state for use in industrial equipment, when such gasoline is not used or not capable of use in propelling motor vehicles on the highways.

(4) The commissioner and the State Chemist shall have authority but they are not compelled to establish specifications for fuel oils and oil for other engines.

§ 75-55-9

Any person selling at retail gasoline, alcohol blended fuel, diesel fuel or kerosene, as defined in this chapter, shall at all times display signs as herein defined:

(a) All pumps and dispensing equipment for gasoline, alcohol blended fuel, diesel fuel or kerosene shall be marked conspicuously to show the total price per gallon of gasoline, alcohol blended fuel, diesel fuel or kerosene offered for sale, in figures of equal size and where fractional cents or figures are used therein, the combined height and width of the numerator and denominator shall be equal to the height and width of the other figures used. Provided, however, that any sign provided by the manufacturer of the retail pump or dispensing equipment which shows the total price per gallon and is part of the computing mechanism of such pumps and dispensing equipment shall be considered as being in compliance with this subsection.

(b) All signs placed on the premises of any service station and any highway, road, street or alley leading thereto advertising the price per gallon of gasoline, alcohol blended fuel, diesel fuel or kerosene offered for sale, shall show the registered brand name and total price in figures of equal size, and where fractional figures are used therein, the width of the numerator and denominator of the fraction shall be equal to one-third ( 1/3 ) of the width of the other figures, but the combined height of the numerator and denominator shall be the same as that of the other figures. Where a decimal is used, then the fraction shall be at least one-half ( 1/2 ) the height of the other figures used in the sign, and the fraction shall be at least one-third ( 1/3 ) of the width of the other figures used in the sign. All figures and fractional figures shall be painted the same color as the other figures used in the sign. The total price per gallon on signs located on all premises of any service station and on highways, roads, streets or alleys leading to the service station shall be in agreement as to the total price per gallon shown on the retail pump dispensing the same brand of gasoline, alcohol blended fuel, diesel fuel or kerosene as that being so advertised. All signs advertising the price per gallon of gasoline, alcohol blended fuel, diesel fuel or kerosene offered for sale through self-service operated pumps at retail service stations shall clearly indicate that the posted price per gallon and brand is offered for sale through self-service pumps.

(c) Containers of gasoline below fifty (50) gallons capacity, or any product flashing below one hundred (100) degrees Fahrenheit, shall be painted red; provided that containers, not of metal and of a capacity of one (1) gallon or less, may carry a red label designating the product.

(d) All filler pipes for petroleum bulk storage tanks and retail station storage tanks shall be identified by painting a sign on the intake pipe cap or within six (6) inches thereof in lettering not less than two (2) inches in height and not less than one-fourth ( 1/4 ) inch in width the following: for premium gasoline or alcohol blended fuel, the letter “P”; for regular leaded grade gasoline or alcohol blended fuel, the letter “R”; for third grade gasoline, the letters “3G”; for unleaded gasoline or alcohol blended fuel, the letters “UG”; for diesel fuel, the letter “D”; for kerosene, the letter “K”; for lubricating oil, the letters “LO”; for tractor fuel, the letters “TF”; the letter “S” for solvent; the letter “N” for naphtha; and for any other petroleum product classified as an oil not specifically specified in this subsection, the word “oil.” In addition to existing requirements, all filler pipes for bulk and retail station tanks used for the storage of nonleaded gasoline shall be further identified as follows: for nonleaded premium gasoline, the letters “NLP”; and for nonleaded regular grade gasoline, the letters “NLR”. Such lettering shall be painted on the intake pipe cap or within six (6) inches thereof, and shall be not less than two (2) inches in height and not less than one-fourth ( 1/4 ) inch in width. Nothing in this subsection shall apply to bulk storage tanks located at marine or pipeline terminals, nor bulk storage tanks used for the storage of liquefied compressed gas, nor prohibit “color coding” in addition to the lettering, where desired.

§ 75-55-11

No person shall sell as gasoline any product which fails to meet the standard as defined in this chapter, nor sell any gasoline at retail without exhibiting the proper signs as required in this chapter, and provided further, that all gasoline offered for sale shall always be as high octane number as advertised to be.

§ 75-55-13

It shall be unlawful to sell, offer or keep for sale, any lubricating oils, lubricants or mixtures of lubricants which are adulterated or falsely labeled in any particular. Reclaimed, recleaned, rerefined or previously used oils shall be plainly labeled and sold as such. The labeling and advertising appearing on any container used to store a previously used lubricating oil shall be strictly in accord with the kind of product contained therein. On the face of each sealed container containing a previously used motor or lubricating oil, the wording or sign used to indicate that the product has been previously used must be in well-balanced letters.

Labels on containers of reclaimed, recleaned, rerefined or recycled oil which meet the Society of Automotive Engineers (SAE) and American Petroleum Institute (API) classifications for current (one (1) of the previous two (2) chronological API service classifications) model year automotive engines shall be at least one-eighth ( 1/8 ) inch high on containers of one (1) gallon or less, and at least one-fourth ( 1/4 ) inch high on containers larger than one (1) gallon.

Reclaimed, recleaned, rerefined or previously used motor or lubricating oils, lubricants or mixtures of lubricants not meeting the classifications described in the preceding paragraph shall be labeled as follows: On one (1) quart containers the lettering shall not be less than three-eighths ( 3/8 ) inches high; on one-half ( 1/2 ) gallon containers the lettering shall be at least one-half ( 1/2 ) inch high; on one (1) gallon containers the lettering shall be at least three-fourths ( 3/4 ) inch high; and on five (5) gallon containers at least one (1) inch high; and on any storage can larger than five (5) gallons, a well-proportioned sign or lettering must appear with letters not less than two (2) inches high, indicating that the product has been previously used.

All tanks used for the storage of gasoline, alcohol blended fuel, other motor fuel, diesel fuel, kerosene or liquefied compressed gas, for wholesale or retail sales, shall be constructed and equipped in such manner as to allow the Commissioner of Agriculture and Commerce or his agents and employees to safely take an accurate physical inventory of the contents of such tanks at all reasonable hours.

All above ground tanks, drums or other containers used to store previously used motor or lubricating oils, before being rerefined or reprocessed, shall be marked “used oil” on a contrasting background with well-balanced letters not less than two (2) inches high.

Any person guilty of violating any of the provisions of this section shall be subject to a fine of not less than One Hundred Dollars ($100.00) nor more than Five Hundred Dollars ($500.00) for the first offense, and for a second or subsequent such offense, such person shall be enjoined from selling or distributing previously used motor or lubricating oil in any manner in this state for a period of not less than one (1) year nor more than five (5) years, and any judge or chancellor now authorized to grant injunctions, shall grant an injunction without notice, enjoining such person from continuing in the business, as prescribed by this section.

§ 75-55-15

No person shall store, keep, expose for sale, offer for sale, or sell from any tank or container or from any pump or other distributing device or equipment, any gasoline, alcohol blended fuel, diesel fuel, kerosene, illuminating oil, or lubricating oils or other similar products than those indicated by the name, trade name, symbol, or sign of the manufacturer or distributor of the trademark or trade name of the product appearing upon the tank, container, pump, or other distributing equipment from which the same are sold, offered for sale or distributed; provided that the product of any manufacturer may be sold from distributing equipment not bearing the name, trade name, symbol or sign of any manufacturer. Provided further, that no distributor or other person shall deliver any gasoline, alcohol blended fuel, diesel fuel, kerosene, illuminating oils, or other similar products when such products are for resale to the consuming public and place said products in storage tanks, containers, or other devices when such storage tanks, containers, or other devices are labeled contrary to the true nature of the products being delivered or when such storage tanks, containers, or other devices bear any sign, symbol, trademark, or label not reflecting the true sign, symbol, trademark or name of the product being delivered.

All distributors or other persons receiving, storing, selling or distributing gasoline, alcohol blended fuel or oil in the State of Mississippi shall have plainly marked on the tanks, pumps, or other containers in which gasoline, alcohol blended fuel or oil is kept, words designating whether the product is gasoline, alcohol blended fuel or oil. No distributor or other person shall place any gasoline in a container marked oil or alcohol blended fuel, or any oil in a container marked gasoline or alcohol blended fuel, or alcohol blended fuel in any container marked gasoline or oil, nor shall there be any pipe or other connections between oil, gasoline and alcohol blended fuel containers. Provided, however, that nothing in this or any other law shall be construed to prohibit the use at common carrier pipeline terminals, of the same unloading lines to and between gasoline, alcohol blended fuel, and oil bulk storage stations, where adequate precautions have been taken to prevent contamination or adulteration of either oil, gasoline or alcohol blended fuel. No distributor or other person shall receive, store or distribute oil as gasoline or alcohol blended fuel nor gasoline as oil or alcohol blended fuel, nor alcohol blended fuel as oil or gasoline nor shall any distributor or other person make a false statement to the commissioner or his successor or any of his employees with reference to products received, stored, sold or delivered by such distributor or other person.

No distributor or other person shall sell or distribute or offer for sale or distribution gasoline and oil, or either, when such gasoline or oil, or either, is mixed, blended, or adulterated in this state in any manner or with any other product. Provided, however, this section shall not be construed to prevent any purchaser of gasoline and oil, or either, to adulterate such products after purchase to meet requirements of his individual uses and purposes, but in no event shall such purchaser sell or distribute such adulterated products, and it is not intended to levy a tax on crude oil produced in this state. Provided further, that blending pumps from which gasoline and lubricating oil are dispensed at the same time into a fuel tank or other container as marine fuel, may be installed by a distributor upon the prior issuance of a permit so to do by the commissioner or his successor, when said pumps shall have been approved by the Underwriter's Laboratories, Inc. Provided further, that nothing in this paragraph shall be construed to prohibit the manufacture of alcohol blended fuel.

Blending of grades of gasoline, additives, and compounds shall be limited to refineries, terminals, and blending pumps, and no person other than those employed at aforesaid facilities shall be permitted to blend any of the above-named products. Provided, however, that gasoline may be blended with alcohol to form alcohol blended fuel at other locations in the State of Mississippi as may be designated and licensed by the commissioner.

Any person guilty of violating any of the provisions of this section shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not less than Twenty-five Dollars ($25.00) nor more than One Hundred Dollars ($100.00) for the first such offense and not less than One Hundred Dollars ($100.00) nor more than Five Hundred Dollars ($500.00) for each such offense thereafter, and the penalty shall extend to principal and agent alike.

§ 75-55-17

No person or carrier, selling or transporting for hire, any gasoline, benzine, naphtha or other highly inflammable substances made from petroleum, shall fail to plainly mark the packages containing the same in accordance with the regulations of the Interstate Commerce Commission.

§ 75-55-19

No person shall use any scales, measure or measuring device in the handling or sale of petroleum products, unless the same is true and accurate; and the standards of weights and measures shall be those most recently adopted by the Division of Institute of Standards and Technology of the United States Department of Commerce, except that in no event shall gasoline, alcohol blended fuel, diesel fuel, or kerosene be dispensed for sale through visible or bowl pumps with outside indicators, and in no event shall any such bowl be drained by any device except through the regular dispensing hose.

§ 75-55-20

Any calibrating equipment in the possession of the State Tax Commission heretofore used by the tax commission to carry out its responsibilities under this chapter, shall be transferred by the tax commission to the Department of Agriculture and Commerce on July 1, 1988.

§ 75-55-21

(1) It shall be unlawful to entice into a service station, store, expose for sale, or sell petroleum products so as to deceive or tend to deceive the purchaser as to the nature, quality or identity of the same by false representation or by substitution, mixing, blending, or adulteration, or by the use of disguised signs, camouflaged or falsely labeled containers, tanks, pumps, or other dispensing equipment, or by imitating the design, symbol, or trade name under which recognized brands of such products are generally marketed.

It is provided, however, that nothing in this chapter shall prevent a person, firm, association, or corporation, or their agents or servants from storing, exposing for sale, or selling any such petroleum products under the trade name, sign, symbol, or distinguishing mark adopted and used by such person, firm, association, or corporation in good faith, if such trade name, sign, symbol, or distinguishing mark is not deceitfully similar to that already in general use by any manufacturer or seller of such products.

(2) Persons claiming to offer for sale gasoline or other petroleum products of a higher standard than any legal or customary standard shall label the container or dispensing equipment completely with reference to the special standard claimed and such label shall constitute a full guaranty that the product sold will meet the standards claimed in every particular.

(3) Any person guilty of violating any of the provisions of this section shall be subject to a fine of not less than Five Hundred Dollars ($500.00) nor more than One Thousand Dollars ($1,000.00) for such offense, or imprisonment not to exceed twelve (12) months, or both, and such person shall be enjoined from selling or distributing gasoline, alcohol blended fuel, diesel fuel, kerosene, or oil, in any manner in this state for a period of not less than one (1) year nor more than five (5) years, and any judge or chancellor now authorized to grant injunctions shall grant an injunction enjoining such person from continuing in the gasoline, alcohol blended fuel, diesel fuel, kerosene, or oil business, as prescribed by this section.

§ 75-55-22

Any person located in Mississippi, except the holder of a refiner or a processor's permit, who blends or mixes alcohol blended fuel for sale, delivery, exchange or use in Mississippi shall obtain from the commissioner a permit authorizing him to engage in business as a producer of alcohol blended fuel. Each producer of alcohol blended fuel shall have the necessary equipment to insure a complete and homogeneous mixture. The finished product shall meet all of the state's standards and specifications and shall not be transferred, sold, exchanged, delivered, used or disposed of by any other means until approved by the commissioner and the State Chemist.

All alcohol blended fuel transported or imported into the State of Mississippi shall comply with all specifications and standards adopted by this state for such use.

All gasoline, leaded or unleaded, kept, offered, or exposed for sale, or sold, at retail containing one percent (1%) or more by volume of ethanol, methanol or an ethanol/methanol mixture, shall be identified as “with” or “containing” (or similar wording) “ethanol,” “methanol” or “ethanol/methanol” on the upper fifty percent (50%) of the dispenser front panels in a position clear and conspicuous from the driver's position, in a type at least one-half ( 1/2 ) inch in height, and one-sixteenth ( 1/16 ) inch stroke (width of type). All letters shall be black with a contrasting background.

All distributors, processors, refiners, and any other persons receiving, storing, selling, distributing or transporting gasoline that contains one percent (1%) by volume or more of methanol, ethanol or other alcohol shall identify the type or chemical name and percentage of such alcohol on any invoice, bill of lading, shipping paper or on any other type of documentation which is used in normal and customary practice in the petroleum industry.

§ 75-55-23

The Commissioner of Agriculture and Commerce (the “commissioner”) and his agents and employees shall have full access, ingress and egress, at all reasonable hours, to any place or building wherein internal combustion engine fuels, lubricating oils or other like products are stored, transported, sold, offered or exposed for sale. The commissioner and his agents or employees may open for inspection any case, package or other container, tank, pump, tank car, storage tank, stationary engine or tractor, and enter upon any barge, vessel or other vehicle of transportation and, with instruments conforming to the standards of weights and measures most recently adopted by the Division of Institute of Standards and Technology of the United States Department of Commerce, check any measuring device of the volume or weight of contents of any container. Furthermore, the commissioner and his agents or employees may take samples, not exceeding one (1) gallon, for analysis.

Any distributor or other person failing or refusing to permit the commissioner and his agents and employees to exercise any right or authority granted the Mississippi Department of Agriculture and Commerce under the provisions of this section, shall be guilty of a misdemeanor for the first offense, and, upon conviction, shall be punishable by a fine of not less than Two Hundred Dollars ($200.00) nor more than Five Hundred Dollars ($500.00), or by imprisonment in the county jail for sixty (60) days, or by both such fine and imprisonment. Any person guilty of a second violation of this section shall, in addition to the other penalty provided herein, be enjoined from continuing in the gasoline, alcohol blended fuel, diesel fuel, kerosene or oil business in this state for a period of not less than one (1) year nor more than five (5) years, and any judge or chancellor now authorized to grant injunctions shall grant an injunction enjoining said distributor or other person from continuing in the gasoline, alcohol blended fuel, diesel fuel, kerosene or oil business for the period prescribed by this section, provided that no injunction shall be issued unless not less than five (5) days' notice is given in the manner prescribed by law.

Any room, house, building, boat, vehicle, structure or place where any petroleum product is received, stored, manufactured, refined, distilled, blended, compounded, sold or distributed in violation of this chapter, and any such petroleum product and all property kept and used in maintaining the same, is hereby declared to be a common nuisance. If such nuisance be found to exist, any judge or chancellor authorized to issue injunctions may issue an injunction, enjoining and restraining the continuance of such nuisance for a period of not less than three (3) months, nor more than one (1) year.

§ 75-55-27

(1) No retail station pump shall dispense more than one (1) product and station pipelines for gasoline, alcohol blended fuel, diesel fuel, kerosene, fuel oils, or other products shall be entirely separate.

(2) No requirements or provisions of this chapter shall prevent or abridge the use of gasoline, alcohol blended fuel, diesel fuel, kerosene, liquefied compressed gases or other petroleum products for heating or illuminating purposes through the use of special devices approved by the commissioner when not used on a highway.

(3) The provisions of this chapter are not to apply to products unloaded in this state and intended for shipment into another state; provided no portion be offered for sale, and provided further, that all petroleum products so unloaded be reported to the commissioner.

(4) It shall be unlawful for any person to obstruct or hinder in any way the commissioner or his agents in the performance of his duties.

Where self-service pumps and attendant-operated pumps are both operated at the same retail service station, there shall be attached or painted on each such self-service pump or equipment the words “SELF-SERVICE” in letters of not less than one (1) inch in height and not less than seven (7) inches across, on a contrasting background.

§ 75-55-29

The State Chemist at the Mississippi State University or his assistants provided for herein shall analyze all samples of internal combustion engine fuels, lubricating oils and other like products provided by any person desiring an analysis of said product or provided by the Mississippi Department of Agriculture and Commerce after an inspection. Any person desiring an analysis of a sample of internal combustion engine fuel, lubricating oil or similar products shall pay to the State Chemist the actual cost of such analysis. All funds collected by the State Chemist under the provisions of this chapter shall be paid into a special account to the credit of the Industrial and Agricultural Services Division of the Mississippi State Chemical Laboratory. The cost of analysis of those samples taken by the Mississippi Department of Agriculture and Commerce shall be paid for out of the General Fund, upon appropriation by the Legislature. The certification of such analysis properly certified by affidavit of said chemist or his assistants shall be competent evidence in any court of this state.

§ 75-55-31

Any person aggrieved by the reasonableness of the limits of tolerance set up by the State Chemist with respect to specifications, or with respect to the method used in, or the accuracy of, any test made by the State Chemist, of any petroleum product, or any substitute therefor, may, within sixty (60) days after such test was made, appeal to the circuit court of any county of this state. The appeal shall be taken by filing with the clerk of the circuit court a declaration stating the test or ruling with respect to which the plaintiff feels aggrieved. In all such cases, it shall be the duty of the Attorney General to defend such appeals.

§ 75-55-33

The State Chemist is authorized to employ assistant chemists, octane machine operators, and other employees to assist him in the proper performance of duties assigned him under the provisions of this chapter, or under the provisions of any other law or laws assigned to him for administration. The State Chemist is hereby authorized and directed to purchase such chemical apparatus, machines, and other equipment as may be necessary for performing the tests of all products included in this chapter, and to provide suitable housing for the same at the State Chemical Laboratory, and to purchase from time to time such chemicals and general supplies and equipment as may be necessary for the maintenance of the laboratory in which such tests are carried out.

§ 75-55-37

(1) The commissioner or his duly appointed representatives shall have the right to request an inspection of any pump, truck, or other equipment, and if upon such inspection any such pump, truck, or other equipment is found to be inaccurate to the extent that a test thereof shows a deficiency of more than twenty-five (25) cubic inches on a five (5) gallon measurement, or if the right to inspect any such pump, truck, or other equipment is refused or denied the commissioner, or his duly authorized representatives, he or they shall have the right to immediately close and lock said pump and other equipment or to seal same with the commissioner's seal. If such pump, truck, or other equipment is found to be inaccurate but the deficiency is twenty-five (25) cubic inches or less on a five (5) gallon measurement, then the commissioner or his representative shall give the owner or operator thereof forty-eight (48) hours within which to correct such inaccuracy and if such person fails or refuses to correct same within said period then the commissioner or his representative shall have the right to lock and seal such pump or other equipment in the same manner as provided above.

It shall be prima facie presumed upon any refusal to allow the right to inspect that the pump, truck, or other equipment sought to be inspected is inaccurate to the extent set forth above, or is operating in violation of this chapter. When any such pump or other equipment is locked or sealed, it may not be unlocked or the seal thereon broken except in the presence of a mechanic or other person called for the purpose of repairing the inaccuracy in the machinery of such pump or other equipment, and such inaccuracy shall be immediately thereafter repaired, and the pump or other equipment properly regulated. The commissioner may, in his discretion, require an affidavit from the mechanic repairing such pump or other equipment, or any other proof which he may deem advisable to the effect that said pump was unlocked or the seal thereon broken in the presence of such mechanic, and that the inaccuracies therein were thereupon completely repaired or regulated.

When a state or factory seal is broken on the measuring adjustment device on a retail pump, it shall be the duty of the station operator to notify the commissioner by United States mail, within twenty-four (24) hours, after the breaking of said seal. After the commissioner has received written notice as herein provided and he or his agent has resealed the measuring adjustment device on the pump or pumps at this station, it shall be unlawful for the owner or operator of the station or any of his employees to break a state or factory seal on the measuring adjustment device on any pump at the station during the ensuing ninety (90) days without the prior approval of the commissioner or his agent.

The State of Mississippi shall have a lien on all pumps, trucks, and other equipment used by any distributor, or other person, in the operation of his business for any tax or penalty due the State of Mississippi because of any violation of this chapter. Such lien shall be paramount to any and all private liens and all the provisions set out in Chapter 7, Title 85, Mississippi Code of 1972, shall be applicable herein for the purpose of securing the enforcement of said lien, and particularly the right to secure the issuance of a writ of summons and seizure and proceedings had and done after the issuance of said writ shall be applicable. Provided, however, that the commissioner shall not be required to give any bond in any such case.

Any person or officer, agent or employee thereof who shall violate any provision of this chapter shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine not exceeding One Hundred Dollars ($100.00) for the first offense and not less than One Hundred Dollars ($100.00) nor more than Two Hundred Dollars ($200.00) for each subsequent offense or imprisonment in the county jail for a period not to exceed ninety (90) days or both.

(2) If a person who, by himself, by his agent, or as the servant or agent of another person commits a violation of this chapter, the commissioner or his designee may impose any, all or a combination of the following penalties:

(a) A stop sale order for any engine fuel, nonengine fuel, automotive lubricant or any other petroleum product not in compliance with this chapter. A remand of the stop sale order may be issued if the engine fuel, nonengine fuel, automotive lubricant or petroleum product is brought into full compliance with this chapter. The stop sale order may be appealed to the commissioner or his designee within twenty (20) days from the receipt of the order.

(b) A warning letter for violations of this chapter.

(c) A civil penalty of not more than Three Thousand Dollars ($3,000.00) per violation. A person may request an administrative hearing within thirty (30) days of receipt of the notice of the penalty. The commissioner or his designee shall conduct a hearing after giving reasonable notice to the person. The decision may be appealed to the Circuit Court of the First Judicial District of Hinds County.

(3) If the person has exhausted his administrative appeals, he shall pay the civil penalty within thirty (30) days after the effective date of the final decision. If the person fails to pay the penalty, the commissioner may bring a civil action in any court of competent jurisdiction to recover the penalty.

(4) The commissioner is authorized to suspend, revoke and/or permanently deny a registration under the Petroleum Products Inspection Law of Mississippi to any person, firm, corporation or other organization determined to be guilty of two (2) or more violations per location, per year, of the Petroleum Products Inspection Law of Mississippi and the rules and regulations in force pursuant thereto.

(5) In lieu of, or in addition to, the penalties provided above, the commissioner and the State Chemist shall have the power to institute and maintain in the name of the state any and all proceedings necessary or appropriate to enforce the provisions of the Petroleum Products Inspection Law of Mississippi and the rules and regulations in force pursuant thereto, in the appropriate circuit, chancery, county or justice court in which venue may lie. The commissioner and the State Chemist may obtain mandatory or prohibitory injunctive relief, whether temporary or permanent, and it shall not be necessary for the state to post a bond or prove that no adequate remedy is available at law.

(6) All penalties assessed by the commissioner under this section shall be deposited in the State General Fund.

§ 75-55-38

(1) Any person who repairs, adjusts or removes an official seal from a petroleum pump or metering device shall, before engaging in such activity, obtain a license from the commissioner upon showing that he is qualified to repair, adjust and test petroleum pumps and/or metering devices. Application for a petroleum equipment repairman's license shall be made annually on forms prescribed and furnished by the commissioner. A fee of Fifty Dollars ($50.00) shall be paid by the applicant at the time application for such license is made. All licenses issued hereunder shall expire on the thirtieth day of June next after its issuance. Any person so licensed shall, within three (3) days after he repairs or adjusts a petroleum pump, metering or measuring device or removes an official seal therefrom, make a report thereof to the commissioner on a form provided for such purpose by the Department of Agriculture and Commerce.

(2) Upon receipt of a license, the petroleum equipment repairman shall acquire a seal press, one (1) die of which shall be inscribed with his license number. All official pump or meter seals removed by the licensed petroleum equipment repairman shall be replaced and such replaced seals shall clearly show the license number of the petroleum equipment repairman replacing the seal(s).

(3) The commissioner shall have authority to prescribe and adopt regulations establishing additional requirements and/or qualifications for petroleum equipment repairmen.

(4) Any person, company or corporation who violates or causes to be violated any provision of this section or any rule or regulation adopted hereunder shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine not less than Three Hundred Dollars ($300.00) nor more than Five Hundred Dollars ($500.00), or by imprisonment for not more than six (6) months, or by both fine and imprisonment; upon a second or subsequent conviction thereof, violators shall be punished by a fine of not less than Five Hundred Dollars ($500.00) nor more than One Thousand Dollars ($1,000.00), or by imprisonment for not more than one (1) year, or by both fine and imprisonment. In addition to fines and/or imprisonment as provided herein, the commissioner may, in his discretion, suspend or revoke the license of such petroleum equipment repairman. Provided, however, that the commissioner shall afford a licensee an opportunity for a hearing, prior to suspension or revocation of a license, to show cause why his license should not be suspended or revoked.

§ 75-55-40

If any section, subsection, paragraph, sentence, clause or provision of Chapter 450, Laws of 1990,  1 shall become invalid by order of any court of competent jurisdiction, the same shall not affect the validity of any other section, subsection, paragraph, sentence, clause or provision thereof.

1

Sections amended or added by this act include 75-55-3, 75-55-5, 75-55-6, 75-55-7, 75-55-9, 75-55-13, 75-55-15, 75-55-19, 75-55-22, 75-55-23, 75-55-27, 75-55-29, 75-55-33, 75-55-37, 75-55-38, 75-55-40, and 75-55-41.

§ 75-55-41

The testing methods of Chapter 450, Laws of 1990,  1 are meant for referee purposes only and manufacturers shall not be limited by the testing methods provided herein.

1

Sections amended or added by this act include 75-55-3, 75-55-5, 75-55-6, 75-55-7, 75-55-9, 75-55-13, 75-55-15, 75-55-19, 75-55-22, 75-55-23, 75-55-27, 75-55-29, 75-55-33, 75-55-37, 75-55-38, 75-55-40, and 75-55-41.

§ 75-55-43

(1) A refiner, supplier, wholesaler or retailer is not liable for damages caused by the use of incompatible motor fuel dispensed at a retail site if all of the following apply:

(a) The incompatible fuel meets the standards promulgated by the Commissioner of Agriculture and Commerce;

(b) The incompatible fuel is selected by a person other than the retailer, and the retailer includes an employee or agent of the retailer; and

(c) The incompatible fuel is dispensed from a motor fuel dispenser that correctly labels the type of fuel dispensed.

For the purposes of this section, a motor fuel is incompatible with a motor according to the manufacturer of the motor.

(2) For purposes of this section, the following terms shall have the meanings ascribed in this subsection, unless the context clearly indicates otherwise:

(a) “Motor fuel” means gasoline, diesel fuel, substitute fuel, renewable fuel and blended fuel.

(b) “Refiner” means a person who owns, operates or otherwise controls a refinery within the United States.

(c) “Refinery” means a facility used to produce motor fuel from crude oil, unfinished oils, natural gas liquids, or other hydrocarbons and from which motor fuel may be removed by pipeline, by vessel, or at a rack.

(d) “Retailer” means a person who engages in the business of selling or distributing to the end user within this state.

(e) “Supplier” means a person who meets all the following conditions:

(i) Is subject to the general taxing jurisdiction of this state;

(ii) Is registered under Section 4101 of the Internal Revenue Code for transactions in taxable motor fuels in the bulk transfer/terminal distribution system; and

(iii) Is one (1) of the following:

1. Is the “position holder” in a terminal or refinery in this state;

2. Imports motor fuel into this state from a foreign country;

3. Acquires motor fuel from a terminal or refinery in this state from a position holder pursuant to a “two-party exchange”;

4. Is the position holder in a terminal or refinery outside this state with respect to motor fuel which that person imports into this state on his account.

A terminal operator is not considered a supplier merely because the terminal operator handles motor fuel consigned to it within a terminal.

(f) “Terminal operator” is a person who owns, operates or otherwise controls a terminal and does not use a substantial portion of the motor fuel that is transferred through or stored in the terminal for its own use. “For its own use” means for its own consumption or in the manufacture of products other than motor fuel.

(g) “Wholesaler” means a person who acquires motor fuel from a supplier or from another wholesaler for subsequent sale and distribution at wholesale by tank cars, motor vehicles or both.

Chapter 56 Antifreeze and Summer Coolants

§ 75-56-1

This chapter shall be known as the “Mississippi Antifreeze Law of 1978.”

§ 75-56-3

The following words and phrases have the following meanings respectively ascribed to them in this section, unless the context clearly describes and indicates a different meaning:

(a) “Commissioner” means the Commissioner of the Mississippi Department of Agriculture and Commerce, his agents or employees.

(b) “State Chemist” means the Director of the Mississippi State Chemical Laboratory or his agents and employees.

(c) “Antifreeze” or “engine coolant” means any substance or preparation intended to be diluted before use as the cooling medium in the cooling system of an automotive internal combustion engine to provide protection against freezing, overheating and corrosion of the cooling system, or any product intended to be diluted before use which is labeled to indicate or imply that it will prevent freezing or overheating of the cooling system of an automotive internal combustion engine. Unless otherwise stated, these terms include the terms “antifreeze-coolant,” “antifreeze and summer coolant” and “summer coolant.”

(d) “Prediluted antifreeze” or “prediluted engine coolant” means any substance or preparation intended for use full strength as a cooling medium in the cooling system of an automotive internal combustion engine to provide protection against freezing, overheating and corrosion of the cooling system or any substance or preparation intended for use full strength which is labeled to indicate or imply that it will prevent overheating or freezing of the cooling system of an automotive internal combustion engine.

(e) “Person” means any individual, partnership, association, firm, company or corporation.

(f) “Distribute” means to hold with intent to sell, offer for sale, to sell, barter or otherwise supply to the consumer.

(g) “Package” means a sealed retail package, drum or other container designed for the sale of antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant directly to the consumer, or a container from which the antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant may be installed directly by the seller into the cooling system, but does not include shipping containers containing properly labeled inner containers.

(h) “Label” means any display of written, printed or graphic matter on, or attached to, a package, or to the outside individual container or wrapper of the package of any product referred to in this chapter. Any display required on a container by this chapter shall be legible with conspicuous type upon a contrasting background.

(i) “Labeling” means the labels and any other written, printed or graphic matter accompanying a package of any product referred to in this chapter.

§ 75-56-5

This chapter shall be administered by the State Chemist and the commissioner. The State Chemist or his designated employees shall establish specifications for antifreezes and engine coolants and prediluted antifreezes and prediluted engine coolants sold or offered for sale in the state as described in Section 75-56-17 and shall register antifreezes and engine coolants and prediluted antifreezes and prediluted engine coolants sold or offered for sale in the state as described in Section 75-56-9. The commissioner or his designated employees shall inspect and sample antifreezes and engine coolants and prediluted antifreezes and prediluted engine coolants sold or offered for sale in the state and the State Chemist or his designated employees shall analyze antifreezes and engine coolants and prediluted antifreezes and prediluted engine coolants sold or offered for sale in the state as described in Section 75-56-15. The commissioner or his designated employees shall enforce Section 75-56-21 and Section 75-56-23 as described in those sections.

§ 75-56-7

(1) The State Chemist and the commissioner, following the terms of the Mississippi Administrative Procedures Act, may make and adopt such reasonable rules, regulations and standards of antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant strength, properties and nomenclature as may be necessary in order to secure the efficient administration of this chapter.

(2) It is desirable that there should be uniformity between the requirements of the several states. Therefore, the State Chemist and the commissioner are directed, consistent with the purposes of this chapter, to so enforce this chapter as to achieve such uniformity and are also authorized and empowered to cooperate with and enter into agreements with any other agency of this state, or any other state regulating antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant, for the purpose of carrying out the provisions of this chapter and securing uniformity of regulations in conformity to the primary standards established by this chapter.

§ 75-56-9

On or before the first day of July of each year, and before any antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant, may be distributed, for the permit year beginning July 1, the manufacturer, packager or person whose name appears on the label shall make application to the State Chemist on forms provided by the latter for registration for each brand of antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant, which he desires to distribute. The application shall be accompanied by specimens or facsimiles of labeling for all container sizes of each brand to be distributed, and by a properly labeled sample of the product. The State Chemist or his designated employees shall inspect, test or analyze the product and review the labeling. Upon request of the State Chemist or his designated employees, any registrant or his representative shall provide documentation of any claim made upon the label or labeling for any of his products regulated by this chapter and sold or offered for sale in the state. If the product is not adulterated or misbranded, if it meets the standards established by this chapter and if the product is not in violation of this chapter, the State Chemist or his designated employees shall issue a certificate of registration authorizing the distribution of such product in this state for the permit year. If the product is adulterated or misbranded, if it fails to meet the standards established by this chapter or if it is in violation of this chapter, the State Chemist or his designated employees shall refuse to register the product and shall return the application to the applicant stating how the product or labeling is not in conformity. If the State Chemist or his designated employees shall, at a later date, find that a properly registered antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant has been materially altered or adulterated, or a change has been made in the name, brand or trademark under which the product is sold, or that it violates the provisions of this chapter, he shall notify the applicant that the license authorizing sale of the product is canceled. No antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant license shall be canceled unless the registrant shall have been given an opportunity for a hearing before the State Chemist to modify his application in order to comply with the requirements of this chapter.

§ 75-56-11

Antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant shall be deemed to be adulterated:

(a) If, in the form in which it is sold and directed to be used, it would be injurious to the cooling system in which it is installed, or if, when used in such cooling system, it would make the operation of the engine dangerous to the user.

(b) If its strength, quality or purity falls below the standard of strength, quality or purity under which it is sold or offered for sale.

§ 75-56-13

Antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant shall be deemed to be misbranded:

(a) If it does not bear a label which:

(i) Specifies the brand name of the product, the principal ingredient and the intended use of the product;

(ii) States the name and place of business of the registrant or person for whom registered;

(iii) States the net quantity of contents (in terms of liquid measure) separately and accurately in a uniform location upon the principal display panel; and

(iv) Contains a statement warning of any hazard of substantial injury to human beings which may result from the intended use or reasonable foreseeable misuse of the product as provided by applicable federal and state product safety laws.

(b) If the label on an undiluted product in a container of less than five (5) gallons, or the labeling for a container of five (5) gallons or more, does not contain a statement or chart showing the appropriate amount, percentage, proportion or concentration of the product to be used to provide (i) claimed protection from freezing at a specified degree or degrees of temperature, (ii) claimed protection from corrosion, or (iii) claimed increase of boiling point or protection from overheating.

(c) If the principal ingredient is propylene glycol and the container does not bear a statement on the label not to use a conventional coolant hydrometer for propylene glycol coolants.

(d) If its labeling contains any claim that it has been approved or recommended by the State Chemist.

(e) If its labeling is false, deceptive or misleading.

§ 75-56-15

The commissioner or his designated employees shall have access at reasonable hours, and upon reasonable notice, to all places and property where antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant is manufactured, stored, transported, distributed, offered or intended to be offered for sale, including the right to inspect and examine all antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant there found and to take reasonable samples of such antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant for analysis together with specimens of labeling. All samples so taken shall be properly sealed and sent to the State Chemist for examination, together with all labeling appertaining thereto. It shall be the duty of the State Chemist or his designated employees to examine promptly all samples received in connection with the administration and enforcement of this chapter and to report the results of such examination to the commissioner or his designated employees.

§ 75-56-17

Antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant shall not contain visually identifiable suspended matter or sediment after mixing with the proper amount of water for use in an automotive internal combustion engine. The specifications for antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant shall not fall below the minimum specifications, if any, established by the American Society for Testing and Materials as described in the following for the type:

(a) Ethylene glycol base antifreeze or engine coolant for automobiles and light duty service shall meet specifications in the current version of American Society for Testing and Materials D 3306, Standard Specification for Ethylene Glycol Base Engine Coolant for Automobile and Light Duty Service.

(b) Propylene glycol base antifreeze or engine coolant for automobile and light duty service shall meet the specifications in the current version of American Society for Testing and Materials D 5216, Standard Specification for Propylene Glycol Base Engine Coolant for Automobile and Light Duty Service.

(c) Low silicate ethylene glycol base antifreeze or engine coolant for heavy duty automotive engines requiring an initial charge of supplemental coolant additive (SCA) shall meet the specifications in the current version of the American Society for the Testing and Materials D 4985, Low Silicate Ethylene Glycol Base Engine Coolant for Heavy Duty Engines Requiring an Initial Charge of Supplemental Coolant Additive (SCA).

(d) Prediluted antifreeze or prediluted engine coolant shall meet the specifications in the current version of the American Society for Testing and Materials D 4656, “Prediluted Ethylene Glycol Base Engine Coolant for automobiles and Light Duty Service.”

(e) The intent of this chapter is that requirements shall be kept current with subsequent amendments and editions of ASTM D 3306, D 5216, and D 4985 and D 4656.

(f) Other antifreeze or engine coolant including, but not limited to, prediluted antifreeze or engine coolant for automobiles and light duty service, recycled antifreeze or engine coolant for automobiles and light duty service, and recycled antifreeze of engine coolant for heavy duty automotive engines requiring an initial charge of supplemental coolant additive may be approved for registration by the State Chemist or his designated employees following submission of the label or labeling and a sample of the product as described in Section 75-56-9. These products shall meet the specifications in the current version of the applicable ASTM standard specifications, if any.

(g) Materials such as methyl, ethyl or isopropyl alcohols, chemical salts, hydrocarbon-based compounds and sugars shall not be sold or offered for sale as antifreezes or engine coolants or prediluted antifreezes or prediluted engine coolants for automotive engines.

§ 75-56-19

It shall be unlawful to:

(a) Distribute any antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant which has not been registered in accordance with Section 75-56-9 or whose labeling is different from that accepted for registration, provided that registration is not required for the orderly disposal within a reasonable period of stocks of discontinued brands of antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant not adulterated or otherwise misbranded, which were properly registered in the immediately preceding registration period.

(b) Distribute any antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant which is adulterated or misbranded.

(c) Refuse to permit entry, inspection or the acquisition of a sample of the antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant as authorized by Section 75-56-15.

(d) Dispose of any antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant that is under “withdrawal from distribution” order in accordance with Section 75-56-21.

(e) Distribute any antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant unless it is in the registrant's or manufacturer's unbroken package or is installed by the seller in the cooling system of the purchaser's vehicle directly from the registrant's or manufacturer's package, and the label on such package, if less than five (5) gallons, or the labeling of such package if five (5) gallons or more, does not bear the information required by Section 75-56-13; provided, that the Commissioner of Agriculture and Commerce and the State Chemist may by regulation establish labeling and other reasonable requirements for the sale of a properly registered antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant from a bulk container into a container supplied by or for the purchaser.

(f) Refill any container bearing a registered label, other than a customer's container, without first obtaining permission from the registrant.

(g) Refuse, when requested, to permit a purchaser to see the container from which antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant is drawn for installation into the purchaser's vehicle.

(h) Distribute any antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant not in compliance with the Federal Hazardous Substances Act and Poison Prevention Packaging Act and their respective regulations.

§ 75-56-21

(1) When the Commissioner of Agriculture and Commerce finds any antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant being distributed in violation of Section 75-56-19 of this chapter, or of any of the rules and prescribed regulations duly promulgated and adopted under this chapter, he may issue and enforce a written or printed “stop sale” or “withdrawal from distribution” order, warning the distributor not to dispose of any of the lot of antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant in any manner until written permission is given by the commissioner or the court. Copies of such orders shall also be sent by registered mail to the registrant and to the person whose name and address appears on the labeling of the antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant. The commissioner shall release for distribution the lot of antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant so withdrawn when said Section 75-56-19 and applicable rules and regulations have been complied with. If compliance is not obtained within thirty (30) days, the commissioner may begin proceedings for condemnation.

(2) Any lot of antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant not in compliance with such provisions and regulations shall be subject to seizure upon complaint of the commissioner to the district court in the county in which the product is located. In the event the court finds the product to be in violation of this chapter, it may then order the condemnation of the product and the product shall be disposed of in any manner consistent with the rules and regulations of the Department of Agriculture and Commerce and the laws and regulations of the federal and state governments at the expense of the claimants thereof; however, in no instance shall the disposition of the product be ordered by the court without first giving thirty (30) days' notice, by registered mail at his last known address, to the owner of same, if he is known to the commissioner and to the registrant, if the product is registered, at the address shown on the label or on the registration certificate, so that such persons may apply to the court for the release of the product or for permission to process or relabel the product so as to bring it into compliance with this chapter.

(3) A copy of the analysis made by the Mississippi State Chemical Laboratory of any antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant certified by the State Chemist shall be administered as evidence in any court of the state on trial of any issue involving the merits of antifreeze or engine coolant as defined and covered by this chapter.

(4) When the commissioner finds any antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant being distributed in violation of any of the provisions of this chapter, he may request, and the person who is primarily responsible for the product must promptly supply to him, the distribution data for such product in this state, so as to assure that violative products are not further distributed herein and that an orderly withdrawal from distribution may be attained where necessary to protect the public interest.

§ 75-56-23

Nothing in this chapter shall be construed as requiring the commissioner to report for prosecution or for institution of libel proceedings, minor violations of the chapter whenever he believes that the public interest will be best served by a suitable notice of warning in writing to the registrant or the person whose name and address appears on the label.

§ 75-56-25

The State Chemist may, if required for the analysis of antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant for the purposes of registration, require the applicant to furnish a statement of the formula of such product, unless the applicant can furnish other satisfactory evidence that such product is not adulterated or misbranded. Such statement shall state the content of inhibitor ingredients in generic terms if such inhibitor ingredients total less than five percent (5%) by weight of the antifreeze or engine coolant or prediluted antifreeze or prediluted engine coolant. In lieu of a detailed product description, the State Chemist may allow the registrant to furnish other evidence which satisfactorily meets his requirements. All statements pertaining to the formula furnished under this section shall be privileged and confidential and shall not be made public or open to the inspection of any person, firm, association or corporation other than the enforcement agency. No such statement shall be subject to subpoena nor shall the same be exhibited or disclosed before any administrative or judicial tribunal by virtue of any order or subpoena of such tribunal unless with the consent of the applicant furnishing such statement to the State Chemist. The disclosure of any such information, except as provided in this section, shall constitute a misdemeanor.

§ 75-56-27

Any person found by the commissioner or the State Chemist to be in violation of any provision of this chapter may be assessed a penalty as provided in Section 75-55-37. In addition to or in lieu of such penalties, the commissioner may suspend or revoke the permit or license of such person issued under terms of this chapter. The commissioner shall notify such person of such action in writing delivered by first class United States Mail. Such person shall have fifteen (15) days after the notice is mailed within which to request in writing a hearing before the commissioner or his designee for the purpose of deciding whether or not the penalty imposed should be allowed to stand. The commissioner may issue subpoenas to compel the attendance of witnesses or the production of documents or physical evidence, administer oaths and hear testimony.

If such person does not deliver the written request for a hearing within such time to the commissioner, the commissioner's original decision shall be final. An appeal, if taken, must be perfected within thirty (30) days after the decision of the commissioner with the circuit court of the county of the residence of the accused. If such person is a nonresident of the State of Mississippi, the case shall be appealed to the Circuit Court of the First Judicial District of Hinds County, Mississippi. If any penalty imposed by the commissioner is not paid within thirty (30) days of becoming final, the commissioner may take appropriate legal action to collect such penalty and the court shall award the commissioner reasonable attorney's fees and court costs to collect the penalty. The commissioner may adopt such rules and regulations as may be necessary or desirable to carry out the provisions of this chapter.

Chapter 57 Liquefied Petroleum Gases

§ 75-57-1

Sections 75-57-1 through 75-57-63 shall be known as the “Liquefied Compressed Gas Equipment Inspection Law of Mississippi.”

§ 75-57-2

The administration of the Liquefied Compressed Gas Equipment Inspection Law of Mississippi (Sections 75-57-1 through 75-57-63) are transferred from the Chairman of the State Tax Commission to the Commissioner of Insurance. All personnel, records, property and equipment allocated to the Chairman of the State Tax Commission exclusively for the administration of the Liquefied Compressed Gas Equipment Inspection Law of Mississippi are hereby transferred to and placed under the supervision and control of the Commissioner of Insurance.

§ 75-57-3

The Commissioner of Insurance is vested with the sole and exclusive power and authority and is charged with the duty of administering this chapter, and the State Liquefied Compressed Gas Board shall have the authority to establish and enforce reasonable rules and regulations, not inconsistent with the provisions hereof, for the purpose of carrying out the provisions of this chapter. For the purpose of administering the provisions hereof, the Commissioner of Insurance is empowered to employ such field inspectors as are necessary to the proper discharge of his duties under this chapter. The Commissioner of Insurance and his agents and employees shall have full access, ingress and egress, at all reasonable hours, to any of the premises or buildings where liquefied compressed gases may be received, stored, transported, sold, offered or exposed for sale, manufactured, refined, distilled, compounded or blended. The Commissioner of Insurance and his agents and employees shall have the right to check and inspect any liquefied compressed gas container, system, pump, equipment, tank car, storage tank, or vehicle in which any liquefied compressed gas is present, or it has reason to believe it present, and the Commissioner of Insurance and his agents and employees shall have the authority to take therefrom samples not exceeding one (1) gallon for analysis. The Commissioner of Insurance and his agents and employees shall have full authority to inspect any vehicle, equipment or system where it has reason to believe that the vehicle, equipment or system operates by the use of, or is equipped to operate by the use of, liquefied compressed gases.

§ 75-57-5

Unless the context otherwise requires, the definitions which follow govern the construction and meanings of the terms used in this chapter:

(a) “Liquefied compressed gas” means both liquefied petroleum gas and anhydrous ammonia when the latter is used exclusively for commercial fertilizer.

(b) “Liquefied petroleum gas” means any material having a vapor pressure not exceeding that allowed for commercial propane, composed predominantly of the following hydrocarbons, either by themselves or as mixtures: propane, propylene, butane (normal butane or isobutane) and butylene (including isomers).

(c) “Natural gas and compressed natural gas” means any gaseous mixture containing primarily methane.

(d) “Anhydrous ammonia” means the compound formed by the combination of the two (2) gaseous elements, nitrogen and hydrogen, in the proportions of one (1) part of nitrogen to three (3) parts of hydrogen by volume. Anhydrous ammonia is ammonia gas in compressed and liquefied forms. It is not to be confused with aqueous ammonia, which is a solution of ammonia gas in water.

Both liquefied petroleum gas and anhydrous ammonia are gaseous at normal atmospheric temperatures and pressures but are readily liquefiable by the application of moderate pressures.

(e) “Natural gas carburetion system” means any compressed natural gas carburetion system.

(f) “Natural gas fueling system” means an assembly consisting of compressors, containers, piping and other delivery devices for the purpose of compressing natural gas for use as a fuel in a motor vehicle and thereafter storing and/or dispensing the compressed natural gas for such use.

(g) “Installer” means any person who has satisfactorily passed an examination under the supervision of the Commissioner of Insurance testing his knowledge and ability to install or repair properly domestic systems, industrial systems, liquefied petroleum gas carburetion systems, natural gas carburetion systems, bulk plant systems, standby plant systems, anhydrous ammonia systems, or other similar systems and who holds an installer's certificate as provided in this chapter.

(h) “Container” means any vessel, including cylinders, tanks, portable tanks and cargo tanks, used for the transporting or storing of the liquefied compressed gases or compressed natural gas, except containers which are subject to inspection under federal laws or regulations.

(i) “Compressed gas” means any material or mixture having in the container an absolute pressure exceeding forty (40) pounds per square inch absolute at seventy (70) degrees Fahrenheit or, regardless of the pressure, at seventy (70) degrees Fahrenheit, having an absolute pressure exceeding one hundred four (104) pounds per square inch absolute at one hundred thirty (130) degrees Fahrenheit.

(j) “Flammable liquid” means any liquid having a closed cup flash point below one hundred four (104) degrees Fahrenheit and having a vapor pressure not exceeding forty (40) pounds per square inch absolute at one hundred (100) degrees Fahrenheit.

(k) “Gas appliance” means any device which utilizes gas to produce light, heat, power, refrigeration or air conditioning.

(l) “System” means an assembly consisting of one or more containers with a means for conveying liquefied compressed gas or compressed natural gas from the container or containers to dispensing or consuming devices (either continuously or intermittently) and which incorporates components intended to achieve control of quantity, flow, pressure or state (either liquid or vapor). Agricultural implements and commercial installations used in refrigeration plants are excluded where anhydrous ammonia is used.

(m) “Atmospheric pressure container” means any container for the refrigerated storage of liquefied anhydrous ammonia designed for a maximum working pressure of fifteen (15) pounds per square inch gauge or less and having a water capacity in excess of seven hundred thousand (700,000) gallons.

(n) “Distributor” means any person who is engaged in the distribution of liquefied compressed gases, either wholesale or retail. Also included under this definition are “commercial carriers,” as identified by the Interstate Commerce Commission, who transport or haul liquefied compressed gases which are to be distributed or sold within this state.

(o) “Person” means any individual, firm, partnership, joint venture, association, corporation, estate, trust or any other group or combination acting as a unit, and includes the plural as well as the singular in number. “Person” shall include husband or wife or both where joint benefits are derived from the operation of a business or activity covered under this chapter. “Person” shall include any state, county, municipality or other agency engaged in a business or activity covered under this chapter.

§ 75-57-7

After March 16, 1948, all containers and pertinent equipment used, sold, and installed in this state for the storage, dispensing and transportation of liquefied compressed gases for the purposes of providing gas for industrial, commercial, agricultural, and domestic uses shall be designed, constructed, equipped, manufactured, and installed as specified in this chapter.

§ 75-57-9

The codes of the American Society of Mechanical Engineers--Boiler and Pressure Vessel Code--Section II Material Specifications; Section VIII Pressure Vessels; and Section IX Welding and Brazing Qualifications; American Petroleum Institute Standard 620 (American Petroleum Institute Recommended Rules for the Design and Construction of Large Welded Low-pressure Storage Tanks); Standards of the National Fuel Gas Code as published by the National Fire Protection Association, NFPA-54; the Standards for the Storage and Handling of Liquefied Petroleum Gas as published by the National Fire Protection Association, NFPA-58; and other National Fire Protection Association standards applicable to liquefied petroleum gas and compressed gas; and the safety requirements for the storage and handling of anhydrous ammonia as published by the American National Standards Institute, Inc. as the codes and standards referred to herein as revised, and standards referred to above are hereby adopted by reference as specifications for the purpose of material standards, construction, handling, transportation and installation of all liquefied compressed gas systems and inspection and operation of pressure vessels. Copies of all codes and standards referred to in the foregoing are available for public use and inspection at the office of the Commissioner of Insurance. The State Liquefied Compressed Gas Board is fully authorized and empowered in the exercise of its authority granted under this section to change, delete from or amend from time to time the national code and standards adopted by reference in this section. Any changes, deletions or amendments made to the national codes and codes adopted by reference in this section shall be made in strict compliance with the Mississippi Administrative Procedures Law, Chapter 43, Title 25, Mississippi Code of 1972, and with the approval of the Commissioner of Insurance. The State Liquefied Compressed Gas Board is fully authorized and empowered in the exercise of the authority granted under this section to exempt or grant deviations from the national code and standards adopted by reference in this section with respect to reconditioned or remanufactured railroad tank car pressure vessels designed for and used as stationary storage tanks for agricultural fertilizers.

§ 75-57-13

It is expressly provided that, subsequent to the issuance of a permit by the Mississippi State Oil and Gas Board permitting the creation of such spaces, compressed air, liquefied compressed gases, refined hydrocarbons, oil or gas, or both, and those liquefied compressed gases known as butane or propane or mixtures thereof, may be stored in artificially formed underground storage spaces where such cavities are dissolved in salt beds and that the provisions of Section 53-3-155 shall be applicable for the issuance of a permit for the creation and use of such spaces. The Oil and Gas Board shall exercise jurisdiction over safety precautions regarding the storage and transmission of the compressed air, liquefied compressed gases, refined hydrocarbons, oil or gas, or both, only while it is underground and in the associated wellhead facilities as prescribed and set out in Section 53-1-17(3)(p). The State Liquefied Compressed Gas Board shall be responsible for promulgating and enforcing safety standards beyond the associated wellhead facilities, during transmission above ground and while the compressed air, liquefied compressed gases, refined hydrocarbons, oil and gas is stored above ground.

§ 75-57-15

(1) Before any person, firm or corporation shall enter the liquefied petroleum gas business as a distributor of liquefied petroleum gas, who plans to make retail or wholesale tank truck deliveries to consumer, and before a permit may be granted as required by Section 75-57-49, such person, firm or corporation shall locate, within the State of Mississippi, a propane storage container of not less than fourteen thousand (14,000) water gallons capacity and an aggregate total of propane storage containers of not less than thirty thousand (30,000) water gallons capacity for each such permit granted; and provided further, that nothing herein contained shall be construed to apply to a liquefied petroleum gas distributor operating retail service stations who does not operate a delivery tank truck to ultimate consumer. Storage containers used in connection with industrial, agricultural, manufacturing, processing or commercial enterprises will not necessarily meet the requirements of this section.

(2) All storage facilities shall meet the Insurance Commissioner's approval, and he or she is hereby vested with the sole and exclusive power and authority to administer and enforce the provisions of this section.

(3) Nothing in this section shall affect a permit granted to a person, firm or corporation before July 1, 1991.

§ 75-57-17

Unless otherwise specified in this chapter, no container shall have a designed working pressure of less than that required for a 100 type. Any container to be charged with a compressed gas which has a vapor pressure at 100 degrees F. of between 151 and 215 pounds per square inch gauge shall not be less than a 200 type. All above-ground containers supplying gases directly to any appliance shall be of the 200 type except containers used in industrial plants such as gins, sawmills, oil well drilling rigs, etc., but such container shall meet all other requirements of this chapter.

It is expressly provided, however, that on and after July 1, 1960, no container manufactured after July 1, 1960 with a working pressure of less than that required for a 200 type container, except refrigerated storage or storage used at refineries, shall be installed or used in this state as a domestic, commercial or industrial stationary container.

§ 75-57-29

Anhydrous ammonia bulk storage plants shall not be installed within the limits of any municipality unless such anhydrous ammonia bulk storage plant is located within an industrial park or an industrial area serviced by a municipal fire department. The installation of any such bulk storage plant within the limits of a municipality the construction of which is begun after February 1, 1989, must be approved by the governing authorities of the municipality by ordinance duly spread upon the minutes of such municipality. No anhydrous ammonia bulk storage plant the construction of which is begun after July 1, 1995, shall be located within two hundred (200) feet from any residence, office, store or other regularly occupied building, except buildings occupied by the operator of the bulk storage plant. No anhydrous ammonia tank shall be erected within two hundred (200) feet from any residence, office, store or other regularly occupied building, except buildings occupied by the operator of the bulk storage plant. Such tanks shall be vented in accordance with the requirements of the Commissioner of Insurance.

§ 75-57-31

The governing body of any municipality is authorized to require the removal of any anhydrous ammonia storage plant which may be located within its corporate limits, if, after hearing, it is established that such plant is unsafe in any manner. Any aggrieved person may appeal from such decision of the governing body to the circuit court in the county where such municipality is located. The governing authorities of any municipality are also authorized and empowered to regulate and control the operation of vehicles transporting anhydrous ammonia over the streets of such municipality to restrict the operation of such vehicle to such streets as shall be designated by said authorities and to regulate and restrict the parking of such vehicles upon municipal streets.

The State Board of Health is authorized, empowered and directed to investigate any complaints as to anhydrous ammonia storage facilities when such complaints are in the nature of a nuisance, health or property hazard. If, after an investigation and hearing, it is determined that the complaints are well founded, the State Board of Health shall immediately condemn any such storage facility and the owner or operator thereof shall, within ninety (90) days from date of condemnation, remove such storage facility to a place which will meet the approval of the State Board of Health or immediately empty the storage facility and discontinue its use. When any person fails or refuses to comply with the orders of the State Board of Health, the State Liquefied Compressed Gas Board or Commissioner of Insurance may seek an order of any circuit or chancery court to carry out the orders of the State Board of Health, and the violator shall be assessed all legal expenses, costs of court and all other expenses necessary to effectuate the orders of the State Board of Health.

§ 75-57-33

No cylinder installation shall be made unless the cylinders are designed, fabricated, tested and marked in accordance with the regulations of the United States Department of Transportation or the United States Interstate Commerce Commission, and constructed for a designed pressure of not less than two hundred forty (240) pounds per square inch. Cylinders with a water capacity of less than two hundred fifty (250) pounds shall be charged by weight with liquefied petroleum gas only at bulk storage or cylinder filling plants and not from mobile units such as delivery trucks, except cylinders installed as part of a system burning liquefied petroleum gas or compressed natural gas as a motor fuel or for farming purposes such as in flame cultivators or hot air balloon cylinders. Cylinders with a water capacity of two hundred fifty (250) pounds or larger may be charged at the installation from mobile units, provided they are equipped with a fixed liquid level gauging device and a filling valve, which is designed in accordance with the national standards and codes, in addition to other required or acceptable valves and fittings. Cylinders with a water capacity of two hundred fifty (250) pounds or larger, in addition to having all the necessary valves and fittings, must be installed permanently in accordance with the national standard and codes.

§ 75-57-35

Wherein sections of this chapter do not exceed those requirements of the current published regulations of the National Fire Protection Association applicable to liquefied petroleum gas, the laws and regulations of the State Liquefied Compressed Gas Board shall be followed.

When amendments are made to the liquefied petroleum gas regulations of the National Fire Protection Association, such amendments may be adopted, provided they do not conflict with other sections of this chapter. Should a conflict occur between the National Fire Protection Association regulations or any regulations referred to in this chapter and the liquefied petroleum gas regulations of the State Liquefied Compressed Gas Board, then the State Liquefied Compressed Gas Board's regulation shall govern. The inspection and approval of the inspectors in accordance with this chapter shall be in addition to approvals and listings of Underwriters Laboratories, Inc., American Gas Association or other national testing laboratories. Provided further, that all compressed gas containers covered by this chapter shall be approved by the inspectors provided for herein.

§ 75-57-37

All containers and pertinent equipment owned or in use by the government of the United States of America are exempt from the provisions of this chapter. Liquefied petroleum gas containers using liquefied petroleum gas as a fuel to propel recreational vehicles, automobiles, trucks and other vehicles, or used as a source of fuel to produce light, heat, power, refrigeration of air conditioning on mobile homes, recreational vehicles, campers, etc., that are in interstate travel, and designed, fabricated, tested and marked in accordance with the regulations of the United States Department of Transportation (DOT) or the United States Interstate Commerce Commission (ICC) and all cylinders with a water capacity of less than two hundred fifty (250) pounds, when used for other than motor fuel purposes in this state, are exempt from inspection.

§ 75-57-47

(1) From and after March 16, 1948, any installer or other person who shall install, connect, alter, extend, change or repair any liquefied compressed gas or compressed natural gas system, container or appliance whatsoever, or who shall install, connect, change, extend, alter or repair any piping or fitting connected with or attached to any liquefied compressed gas or compressed natural gas container, system or appliance shall, within fifteen (15) days after the completion thereof, give notice to the State Liquefied Compressed Gas Board, in writing, on forms to be provided by the State Liquefied Compressed Gas Board, that such installation, connection, alteration, extension, change or repair has been made, which notice shall give full details with reference thereto, and shall give the name of the person at whose order same was made, and the name of the installer, as provided in this chapter, under whose supervision the installation, alteration, etc., was made and the address of the premises upon which same was made. Any person who shall install, connect, alter, extend, change or repair any liquefied compressed gas or compressed natural gas system, container or appliance, or any piping or fitting connected or attached thereto, without giving notice to the State Liquefied Compressed Gas Board as provided herein shall be subject to the sanctions set out in this chapter.

(2) Upon receiving notice of any installation of a liquefied compressed gas system or natural gas fueling system other than a liquefied petroleum gas carburetion system, it shall be at the discretion of the Commissioner of Insurance to cause same to be inspected, and if he or she approves same after such inspection, he or she shall leave upon such premises a written certificate of approval. Upon receiving notice of any connection, alteration, extension, change or repair to any system required to be inspected at the time of installation under the provisions of this subsection, the Commissioner of Insurance may cause the system to be inspected if he or she believes that sufficient change or repair has been made so as to alter the system from its original installation.

If, after such inspection, the inspector finds that the installation or repair has not been properly made, he or she shall report such fact to the distributor or installer making the installation and request that corrections be made within seventy-two (72) hours after the time of such inspection, if the defects are such that can be corrected without the necessity of condemning the entire system. Any distributor or installer who fails or refuses to make the corrections after requested so to do by the inspector, after a hearing before the State Liquefied Compressed Gas Board, may have his authority or certificate of compliance suspended or revoked.

Installers, as defined in this chapter, are hereby authorized to issue temporary certificates of approval for use before inspection by the Commissioner of Insurance, but no certificate issued by an installer shall be valid for a period longer than one hundred twenty (120) days from date of completion or alteration, repair or installation covered by said certificate. The provisions of this paragraph shall not relieve the dealer, or other person, from the liability of having such installation inspected by the Commissioner of Insurance, as provided in this chapter.

All certificates of approval and permits issued by liquefied gas inspectors under the terms of this section shall be executed in duplicate, and the copy thereof shall be filed and preserved in the office of the State Liquefied Compressed Gas Board for not less than three (3) years from the date thereof.

(3) All liquefied petroleum gas carburetion systems and natural gas carburetion systems shall be installed by an installer, or automobile manufacturer, or be inspected by a representative of the State Liquefied Compressed Gas Board or Commissioner of Insurance when not installed by such qualified installer or manufacturer.

All liquefied petroleum or natural gas carburetion systems installed on vehicles, including school buses, used in public transportation shall be inspected by a field inspector. The State Liquefied Compressed Gas Board may cause to be inspected any installations of liquefied petroleum gas or natural gas carburetion systems on any other type vehicles as they deem necessary. All such installations shall comply with the rules and regulations promulgated by the State Liquefied Compressed Gas Board.

No person may, for a fee, install liquefied petroleum or natural gas carburetion systems unless such person holds a license as an installer issued by the State Liquefied Compressed Gas Board.

Any person who operates a vehicle on which a liquefied petroleum or natural gas carburetion system has been installed by a person other than an installer shall apply to the State Liquefied Compressed Gas Board for inspection of such installation within fifteen (15) days of such installation. No distributor of liquefied petroleum or natural gas, or any other person, shall fill or cause to be filled any such system which has not been inspected as required by this chapter.

Any person who violates any of the provisions of this subsection shall be subject to the penalties provided in this chapter.

(4) No distributor of liquefied compressed gas, or other person, shall fill, cause to be filled, or permit to be filled, any container or system unless the installation, alteration, extension, connection, change and repair thereof, and of all appliances connected and used therewith, and of all pipings and fittings connected or attached thereto, shall have first been inspected and approved by an inspector of the State Liquefied Compressed Gas Board or Commissioner of Insurance or installed or altered by an installer as described in this chapter, and unless there is exhibited to such distributor or other person the approval of the inspector or installer provided for in the foregoing paragraphs; nor shall any person turn on or use such systems, containers, appliances, piping or fittings until same have been so inspected and approved, and such approval is exhibited to him. Any person who shall violate the provisions of this subsection, after a duly called hearing before the State Liquefied Compressed Gas Board, may have his license suspended or revoked.

(5) Any liquefied compressed gas dealer, or other person, may apply to the State Liquefied Compressed Gas Board, for permission to take an examination to qualify as an installer, as defined under the provisions of this chapter. The State Liquefied Compressed Gas Board shall prepare an examination which is sufficient to test the knowledge of the applicant as to his qualifications for installing, repairing, altering, etc., equipment used in the handling of liquefied compressed gases and of his knowledge of the handling and storage of such gases. If, after examination, the applicant is found to be competent and to possess sufficient qualifications, the State Liquefied Compressed Gas Board shall issue to such applicant a license or certificate which shall designate the system or systems which the applicant is qualified to install. The State Liquefied Compressed Gas Board shall have the authority to establish different classes of installers. Should the holder of any such certificate perform his duties in an unworkmanlike manner or be guilty of negligence, carelessness, drunkenness on duty, or other good cause, then the State Liquefied Compressed Gas Board may cancel the certificate, good cause being shown; however, before the State Liquefied Compressed Gas Board shall cancel any such certificate it shall give the holder thereof five (5) days' written notice of its intention so to do, and shall grant to the person holding such certificate an opportunity to be heard before the State Liquefied Compressed Gas Board at such time and place as shall be fixed in such notice, to show cause, if any he or she can, why the license or certificate should not be suspended or revoked. Upon application to the State Liquefied Compressed Gas Board, and upon reexamination of the applicant by the State Liquefied Compressed Gas Board, a new certificate may be issued, but no such renewal certificate shall be issued within sixty (60) days of the cancellation of the original certificate. The State Liquefied Compressed Gas Board shall have authority to conduct any type examination of applicants desiring renewal certificates which will, in its opinion, test applicant's qualifications for the issuance of a renewal certificate. Any installer's certificates heretofore issued and outstanding shall be valid until suspended or revoked.

(6) Any dealer or installer who shall alter or change any system, or bulk storage plant system, or who shall substitute or change any such fitting, after said system has been approved by an inspector of the Commissioner of Insurance, without first obtaining the permission of such an inspector so to do, may be enjoined from continuing in the business of a dealer or installer, as defined in this chapter, in the State of Mississippi for a period of not less than one (1) year, and any judge or chancellor authorized to grant injunctions may grant and issue the injunction herein authorized, but no such injunction shall be issued except upon notice of not less than five (5) days to the dealer or installer sought to be enjoined. It is expressly provided, however, that nothing herein shall prevent a dealer or an installer from making additional installations to any such system, provided that proper notice thereof is given to the Commissioner of Insurance on forms provided by him or her in the same manner as such notice is required to be given in cases of installations, repairs and alterations; nor shall anything herein prevent a dealer or an installer from making emergency repairs to any system or fitting when such repairs are made necessary by a mechanical defect, breakdown or injury to such system or fitting, but in the event of such emergency repairs, the dealer or installer making same shall, within fifteen (15) days after making such repairs, give the Commissioner of Insurance notice of the details and facts thereof in writing.

§ 75-57-49

(1) Before any person shall be granted a permit to, or shall engage in or continue in the business of the distributing, either wholesale or retail, installing, altering, extending, changing or repairing of any liquefied compressed gas system, appliance or container, or in the business of distributing and selling liquefied compressed gas, either at wholesale or retail, whether from trucks or other vessels, in cylinders or in any other manner, such person shall satisfy the State Liquefied Compressed Gas Board that he or she is of good character, is competent to transact business so as to safeguard the interest of the public, and is financially responsible; and this provision as to financial responsibility shall be met by such person by filing with the State Liquefied Compressed Gas Board evidence that he or she has in force such of the hereinafter listed insurance policies on standard contract forms and written by an insurance company, or companies, qualified to do business in the State of Mississippi, as the State Liquefied Compressed Gas Board shall require, based upon those activities listed above in which such person is engaged, to wit:

ANY PERSON THAT ENGAGES IN FILLING CYLINDERS AND MOTOR FUEL TANKS WITH LIQUEFIED COMPRESSED GAS ON THEIR PREMISES OR ANY PERSON WHO IS IN THE BUSINESS OF INSTALLING LC GAS CARBURETION OR APPLIANCES:

| | | Limits of Liability | | | --- | --- | --- | --- | | | | Each | | | | | Occasion | Aggregate | | | Manufacturers and Contractors Public Liability | $100,000 | $300,000 | | | Products Liability | $100,000 | $300,000 | | | Workers' Compensation and Employers' Liability Insurance | State Statute | |

ANY PERSON THAT ENGAGES IN ANY PHASE OF THE LIQUEFIED COMPRESSED GAS BUSINESS OTHER THAN CYLINDER-FILLING LOCATIONS:

| | | Limits of Liability | | | | --- | --- | --- | --- | --- | | | | Bodily Injury | Property | | | | | Each | Each | Damage Each | | | | Person | Accident | Accident | | | Automobile Public Liability | $500,000 | $1,000,000 | $1,000,000 | | | | Each | | | | | | Occasion | Aggregate | | | | Manufacturers and Contractors Public Liability | $1,000,000 | $1,000,000 | | | | Products Liability | $1,000,000 | $1,000,000 | | | | Workers' Compensation and Employers' Liability Insurance | State Statute | | |

(2) The State Liquefied Compressed Gas Board shall not require insurance coverage as specified above unless the hazard of liquefied compressed gases is involved.

(3) No policy issued under the provisions of this chapter may be cancelled before thirty (30) days from the date of receipt by the Commissioner of Insurance of written notice of intention to cancel the policy.

(4) It is expressly provided, however, that in lieu of filing with the State Liquefied Compressed Gas Board evidence that such insurance, as outlined above, is in force, any such person may file with the State Liquefied Compressed Gas Board a good and sufficient surety bond executed by a surety company licensed to do business in this state in the amount of One Million Dollars ($1,000,000.00), which such bond shall be payable to the State of Mississippi and shall be conditioned to guarantee the payment of all damages which proximately result from any act of negligence on the part of such person, or their agents or employees, while engaged in any of the activities herein specified. In lieu of the surety bond, any such person may execute and file a good and sufficient personal bond in the amount and conditioned as specified above, which such personal bond shall be secured by bonds or other obligations of the State of Mississippi or the United States government, of equal value.

(5) Upon compliance with the provisions of this section, where such compliance is required, and upon compliance with all other provisions of this chapter, the State Liquefied Compressed Gas Board shall issue to such dealer a permit to engage in such business, but not before. All such permits shall be valid until voluntarily surrendered, or until suspended, revoked or cancelled by the State Liquefied Compressed Gas Board, the Commissioner of Insurance or the chancery or circuit court. All permits issued under the provisions of Chapter 170, Laws of 1940, as amended, or Chapter 265, Laws of 1946, shall remain in full force and effect until the expiration date thereof at which time they must be renewed under the terms and conditions of this chapter.

§ 75-57-57

Any person, firm or corporation operating or engaging in the business of selling or installing liquefied compressed gas containers or systems, or in the business of selling or distributing liquefied compressed gas or appliances without first having secured a permit from the State Liquefied Compressed Gas Board as provided by this chapter, or any person, firm or corporation who shall be convicted for a second or subsequent offense of willfully violating any of the provisions of this chapter, may be enjoined from engaging in the business as a distributor of liquefied compressed gas or appliances, either wholesale or retail, or in the business of selling or installing liquefied compressed gas containers, appliances or systems in the State of Mississippi for a period of not less than one (1) year, nor more than five (5) years. Any judge or chancellor in this state, authorized to grant injunctions, may grant an injunction as authorized by this section, provided that no such injunction shall be granted unless proper notice as required by law shall have first been given to such person, firm or corporation.

§ 75-57-61

(1) Whenever the existing or future laws, rules or regulations of any other state of the United States shall require minimum storage facilities, of any type, character or kind, whether fixed or permanent, in connection with the distribution of liquefied compressed gas at retail, of a resident of this state, then in every such case where the residents engaging in the distribution of liquefied petroleum gas at retail of such state desire to engage in or continue to do business in this state, under permit as required by Section 75-57-49, the nonresident distributor of liquefied petroleum gas at retail shall be required to establish within the State of Mississippi the same minimum storage requirements and facilities imposed by the laws, rules or regulations of such state upon residents of this state.

(2) This section shall be enforced by the State Liquefied Compressed Gas Board and all such storage facilities required to be established within the State of Mississippi shall meet the approval of the State Liquefied Compressed Gas Board.

§ 75-57-63

Any corporation, domestic or foreign, or any individual, partnership or association of persons whatsoever who with intent to engross or forestall or impede the competitive sale of or monopolize the sale of liquefied petroleum gases or liquefied petroleum gas consumer appliances in the State of Mississippi or in any community in the State of Mississippi, or, without such intent, either directly or indirectly accomplishes such result to a degree inimical to public welfare by purchasing or offering to purchase the equipment or installation of any consumer and obtaining the exclusive right to serve or make sales to said consumer, shall be deemed and held a trust and combine within the meaning and purpose of Section 75-21-3 and shall be liable to the pains, penalties, fines, forfeitures, judgments and recoveries denounced against trusts and combines and shall be proceeded against in the manner and form provided as in the case of other trusts and combines under the terms of Chapter 21 of Title 75.

§ 75-57-101

(1) The State Liquefied Compressed Gas Board is hereby created and is vested with the power to regulate matters pertaining to liquefied compressed gas. All regulations by and actions of the board are subject to the approval of the commissioner. The board shall not exercise administrative and enforcement duties. The Commissioner of Insurance shall retain all administrative and enforcement duties related to liquefied compressed gas. The board is established within the Department of Insurance and shall consist of seven (7) members appointed by the Commissioner of Insurance as follows:

(a) Five (5) members, one (1) from each of the congressional districts, to be selected from a list of at least ten (10) individuals who are in the liquefied compressed gas industry doing business in the State of Mississippi; the list shall be submitted, within ten (10) days of July 1, 1995, by licensed liquefied compressed gas distributors doing business in the state.

(b) Two (2) members from the state at large who have a rational relationship to the liquefied compressed gas industry.

(c) At least three (3) members of the board must be dealers who sell less than two million five hundred thousand (2,500,000) gallons of propane per year.

(d) No two (2) members may be selected from the same company.

(e) The members of the board as constituted on January 1, 2004, whose terms have not expired shall continue to serve until the expiration of their respective terms. As the terms of the members expire, the members shall be appointed as follows: one (1) member from each of the four (4) Mississippi congressional districts and three (3) members from the state at large. The appointments shall be made in the same manner and with the same qualifications and restrictions as provided in this subsection (1).

(2)(a) The initial appointments to the board from the congressional districts shall be made as follows: One (1) member of the board shall be appointed for a term ending on June 30, 1996; one (1) for a term ending on June 30, 1997; one (1) for a term ending on June 30, 1998; one (1) for a term ending on June 30, 1999; and one (1) for a term ending June 30, 2000. After the expiration of such initial terms, all subsequent appointments shall be made in the same manner as the original appointments were made for terms of five (5) years.

(b) The three (3) members from the state at large shall serve for terms concurrent with the term of the Commissioner of Insurance.

(c) An appointment to fill a vacancy, other than by expiration of a term of office, shall be made by the Commissioner of Insurance for the balance of the unexpired term.

(3) There shall be a chairman of the board elected by and from the membership of the board.

(4) Board members shall receive per diem compensation according to Section 25-3-69 and be reimbursed for travel expenses as provided in Section 25-3-41(1). The board members shall not be compensated for more than twelve (12) meetings per year held at a site within the state selected by the board. Any member who fails to attend three (3) consecutive called meetings of the board may be removed by the Commissioner of Insurance.

§ 75-57-103

For the purpose of administering and enforcing the provisions of this chapter, the Commissioner of Insurance is empowered to employ an executive director and staff, within the Department of Insurance, as state service employees under the purview of the State Personnel Board's rules and regulations.

§ 75-57-105

(1) The board shall promulgate and enforce regulations necessary for the administration of this chapter, and also setting forth the minimum general safety standards for the design, construction, location, installation and operation of equipment for storing, handling, transporting by tank truck or tank trailer and utilizing liquefied compressed gas for fuel purposes and for the odorization of liquefied compressed gas.

(2) The board's regulations shall be in substantial conformity with the published Standards of the National Fire Protection Association for the Storage and Handling of Liquefied Petroleum Gases (NFPA 58) and with the National Fuel Gas Code (NFPA 54) as recommended by the National Fire Protection Association, adopted in accordance with the Mississippi Administrative Procedures Law. The board shall consider the adoption of revised versions of these standards as they are adopted by the National Fire Protection Association; the board may consider the adoption of other standards for matters not addressed by the above standards or amend the above standards if deemed to be in the best interest of the State of Mississippi and with the approval of the Commissioner of Insurance.

(3) The board is authorized to hold hearings, call witnesses, administer oaths, take testimony and obtain evidence in the conduct of its business.

§ 75-57-107

The board is authorized to impose monetary penalties and take such other disciplinary actions as authorized by this chapter.

Any person found by the board in violation of this chapter or any regulations promulgated by the board shall be subject to the following civil penalties:

(a) For a first offense, a penalty not to exceed One Thousand Dollars ($1,000.00);

(b) For a second offense, a penalty not to exceed Three Thousand Dollars ($3,000.00); and

(c) For a third or subsequent offense, a penalty not to exceed Five Thousand Dollars ($5,000.00).

Any person who violates or remains in violation of the provisions hereof may be directed by written notice from the board, stating the facts of such violation, to correct the violation. The notice may be served personally or by U.S. Mail with return receipt requested to the principal office or the person or to their residence.

§ 75-57-109

(1) The board may establish by regulation a system of permits for those engaged in the liquefied compressed gas business in the state. If adopted, and approved by the Commissioner of Insurance, no one may engage in the liquefied compressed gas business without first having obtained a permit from the board. No person shall be denied a permit if he or she meets the requirements of state law.

(2) The board may revoke a liquefied compressed gas permit for willful violation of this chapter or the regulations or for failure to comply with the chapter or regulations. The revocation may be made only after written notice to the affected party, an opportunity to respond in writing to the charges and a hearing before the board under the provisions of the Administrative Procedures Act. The revocation shall be subject to the approval of the Commissioner of Insurance.

(3) The board may establish reasonable bonding, insurance limits and personnel training qualifications for permit holders. These requirements are subject to approval of the Commissioner of Insurance.

§ 75-57-111

In order to increase compliance and to reduce the burden of regulation, the board shall seek consistency between its regulations and those regulations adopted by the departments and agencies of the United States Government.

§ 75-57-113

No regulations may be issued affecting the price or allocation of liquefied compressed gas, allocation of markets between liquefied compressed gas suppliers or the terms and conditions of providing liquefied compressed gas service.

§ 75-57-115

The board shall require that metering equipment in delivery vehicles used in dispensing of liquefied compressed gas shall be calibrated to an accuracy of a plus or minus tolerance of two percent (2%) at least once a year. This requirement shall not apply to delivery vehicles used in dispensing anhydrous ammonia. All retail stationary dispensing equipment with dispensing capabilities of less than fifty (50) gallons per minute shall be calibrated to an accuracy of a plus or minus tolerance of two percent (2%) every two (2) years. Certificates showing such calibration shall be kept at the dealer's place of business and shall be presented upon demand of the Commissioner of Insurance for inspection by the board. This section shall not apply to anhydrous ammonia dispensing equipment.

§ 75-57-117

(1) Any individual aggrieved by a final decision of the board shall be entitled to judicial review.

(2) Any appeal from the board's decision shall be filed in the circuit court of the county where the board has its office. The appeal shall be filed within thirty (30) days after notification of the action of the board is mailed or served and the proceedings in circuit court shall be conducted as other matters coming before the court. The appeal shall be perfected upon filing notice of the appeal and by the prepayment of all costs, including the cost of preparation of the record of the proceedings before the board, and the filing of a bond in the sum of Five Hundred Dollars ($500.00) conditioned that if the action of the board be affirmed by the circuit court, the aggrieved party shall pay the costs of the appeal to the circuit court.

(3) The scope of review of the circuit court in such cases shall be limited to a review of the record made before the board to determine if the action of the board is unlawful for the reason that it was:

(a) Not supported by any substantial evidence;

(b) Arbitrary or capricious; or

(c) In violation of some statutory or constitutional right of the individual.

(4) No relief shall be granted based upon the court's finding of harmless error by the board in complying with the procedural requirements of this chapter. If there is a finding of prejudicial error in the proceedings, the cause may be remanded for a rehearing consistent with the findings of the court.

(5) Any party aggrieved by action of the circuit court may appeal in the manner provided by law.

§ 75-57-119

(1) There is established a propane education and research program to be administered by the Department of Insurance through the State Liquefied Compressed Gas Board, created in Section 75-57-101, Mississippi Code of 1972, for the purpose of promoting the growth and development of the propane industry in Mississippi.

(2) There is created in the State Treasury a special fund to be designated as the “Mississippi Propane Education and Research Fund.”

(3)(a) There is imposed and levied an assessment of One-tenth Cent ( 1/10 ¢) per gallon on compressed gas except for compressed natural gas or liquefied natural gas. The assessment may be increased by not more than One-tenth Cent ( 1/10 ¢) per gallon per year and the total assessment shall not exceed One-half Cent ( 1/2 ¢) per gallon.

(b) The assessment shall accrue at the same time and in the same manner as the tax levied on compressed gas under the provisions of Section 27-59-11(1), Mississippi Code of 1972. On or before the fifteenth day of each month the funds collected by the State Tax Commission during the previous month, less three and one-half percent (3- 1/2 %) of the gross amount collected, shall be deposited into the special fund created in subsection (2) of this section. The State Tax Commission may retain three and one-half percent (3- 1/2 %) of the funds collected under this section as administrative fees.

(c) Disbursements from the special fund created in subsection (2) of this section shall be made upon warrants issued by the State Fiscal Officer upon requisitions signed by the Commissioner of Insurance, or his designee, in the manner provided by law. Any interest earned by investing the proceeds in such special fund shall be credited to such special fund and shall not be deposited in the State General Fund. The State Fiscal Officer may issue warrants for the payment of monies from the special fund, upon requisition by the Commissioner of Insurance, or his designee, for refunds to dealers as provided in subsection (4) of this section.

(4) Any propane dealer may request and receive a refund of the amount of assessment remitted from the sale of propane if he makes a written application with the Department of Insurance by the end of each quarter in which the sales were made, supported by bona fide copies of tax reports. The application forms shall be prepared by the Department of Insurance and shall be available to all retailers. All such applications shall be processed and refunds paid by the Department of Insurance within sixty (60) days after the funds have been received by the department.

(5) At the end of each quarter, the Department of Insurance shall make available to the State Liquefied Compressed Gas Board all unencumbered funds collected under the provisions of this section. The Department of Insurance may retain an amount not to exceed three and one-half percent (3- 1/2 %) of the funds collected under the provisions of this section as administrative fees.

(6)(a) Any person liable for the assessment shall be subject to the same requirements and penalties set forth for distributors under the provisions of Section 27-59-1 et seq., Mississippi Code of 1972.

(b) The State Tax Commission is hereby authorized and empowered to promulgate all rules and regulations necessary for the collection of the assessment.

(7) The State Liquefied Compressed Gas Board shall establish, with the approval of the Commissioner of Insurance, rules and regulations necessary to carry out the provisions of this section.

(8) The State Liquefied Compressed Gas Board may expend the proceeds collected under this section only on research and development of more cost effective uses of propane and on educational programs, safety programs and market development of propane.

(9) This section shall not be implemented until such time as the State Liquefied Compressed Gas Board conducts an election by all licensed propane dealers in this state. Each license holder shall have one (1) vote in such election. A ballot shall be sent to each license holder by certified mail. A majority of those ballots returned within thirty (30) days after the ballots are received by the propane dealers must be in the affirmative before this section is effective. An additional election may be held by the State Liquefied Compressed Gas Board at such time as approved by the Commissioner of Insurance.

(10) The State Liquefied Compressed Gas Board shall notify the State Tax Commission in writing of the imposition of the assessment and of any increase of the assessment. The imposition of the assessment and any increase of the assessment shall become effective on the first day of the second month succeeding the month in which the notice to impose or increase the assessment was given.

(11) The State Liquefied Compressed Gas Board shall notify the State Tax Commission in writing of the abatement or reduction of the assessment. The abatement or reduction of the assessment shall become effective on the last day of the month succeeding the month in which such notice was given.

(12) From and after July 1, 2017, none of the monies deposited in the Mississippi Propane Education and Research Fund may be used to reimburse or otherwise defray any costs that the Department of Insurance may incur in administering the fund.

Chapter 58 Mississippi Natural Gas Marketing Act

§ 75-58-1

This chapter shall be known as “The Mississippi Natural Gas Marketing Act.”

§ 75-58-3

It is the intent and purpose of this chapter to protect the rights of all owners of natural gas wells and wells producing casinghead gas; to afford all such owners an opportunity to extract their fair share of gas; to provide that the operator of a well producing natural gas and a well producing casinghead gas shall market the gas of all owners thereof except the gas owned by an owner electing that the operator shall not market his gas; to hold operators acting in compliance with the provisions of this chapter harmless from any suit at law or in equity related hereto, and to provide that an operator shall be entitled to recover marketing expenses and transportation costs associated with the sale or transportation of an owner's gas. It is not the intent or purpose of this chapter to create and this chapter shall not be construed to create a partnership or association for state or federal taxation purposes.

§ 75-58-5

(a) Applicability. This chapter shall apply to all natural gas wells and wells producing casinghead gas in Mississippi which are permitted on and after July 1, 1991. This chapter shall also apply to wells in a pool unitized pursuant to Section 53-3-7 or Section 53-3-101 et seq., Mississippi Code of 1972, after July 1, 1991, and shall not be applicable to natural gas wells or wells producing casinghead gas in a pool unitized prior to July 1, 1991, unless the operator desires to comply with the chapter pursuant to Section 75-58-5(b). Nothing contained in this chapter shall prohibit or inhibit the unitization of a field or pool.

(b) Safe Harbor Provision. The operator of a well permitted prior to July 1, 1991, or the operator of a field or pool unitized prior to July 1, 1991, pursuant to Section 53-3-7 or Section 53-3-101 et seq., Mississippi Code of 1972, who desires to comply with the provisions of this chapter may bring such well or unitized field or pool within the provisions of this chapter by giving all non-operators notice of his intent to comply with the provisions of this chapter. Unless a non-operator so notified delivers to the operator's office a written notification rejecting such an offer to have the provisions of this chapter held applicable to his proportionate interest within thirty (30) days after the operator has placed such notice in the United States mail postage prepaid, the provisions of this chapter and all benefits accruing to an operator hereunder shall be deemed applicable to such non-operator's proportionate interest. Only the operator or successor operator of a well permitted prior to July 1, 1991, or field or pool unitized prior to July 1, 1991, may initiate such action as is necessary to bring such well or unitized field or pool within the provisions of this chapter. In no event shall this provision be deemed to affect any existing contract between the owners of a well or unitized field or pool.

§ 75-58-7

For purposes of this chapter, the following terms shall have the meanings ascribed to them herein:

(a) “Board” shall mean the State Oil and Gas Board as created by Section 53-1-5 et seq., Mississippi Code of 1972.

(b) “Person” shall mean any individual, corporation, partnership, association, or any state, municipality, political subdivision of any state, or any agency department, or instrumentality of the United States, or any other entity, or any officer, agent, or employee of any of the above.

(c) “Oil” shall mean crude petroleum oil and all other hydrocarbons, regardless of gravity, which are produced at the well in liquid form by ordinary production methods and which are not the result of condensation of gas.

(d) “Gas” shall mean all natural gas, whether hydrocarbon or nonhydrocarbon or any combination or mixture thereof, including hydrocarbons, hydrogen sulphide, helium, carbon-dioxide, nitrogen, hydrogen, casinghead gas, occluded natural gas from coal seams, and all other hydrocarbons not defined as oil in Section 75-58-7(c) above. For the purposes of this chapter only, the term gas shall not include gas which is consumed in operations on a well or which is vented or lost.

(e) “Operator” is defined as the party designated by the Board as the operator of the well.

(f) “Non-operator” shall mean an owner, as defined by Section 53-1-3, Mississippi Code of 1972, who is not designated as the operator.

(g) “Consenting non-operator” is defined as a non-operator who has affirmatively elected to have the operator market such non-operator's share of gas or is deemed to have consented to have the operator market such non-operator's share of gas.

(h) “Nonconsenting non-operator” is defined as a non-operator who has affirmatively elected to market his share of gas and not have the operator market his share of gas.

(i) “Net proceeds” is defined as the total amount of money received from the sale of gas, less (i) costs incident to marketing and transportation of gas incurred by the operator to third parties and (ii) severance, privilege, maintenance or other taxes measured on or by production.

(j) “Direct cost” is defined as a cost actually incurred by the operator in the marketing of gas from a well.

(k) “Balancing party” shall include operators and non-operators as defined in this chapter as well as other interest owners who have exercised a right to take production in kind.

(l) “Underproduction” shall mean the volumetric amount by which the volume of gas taken by a balancing party in any month is less than such party's entitlement for such month.

(m) “Overproduction” shall mean the volumetric amount by which the volume of gas taken by a balancing party in any month is greater than such party's entitlement for such month.

(n) “Cumulative underproduction” shall mean the total underproduction attributable to a balancing party, as adjusted so as to reflect any cash balancing as provided by Section 75-58-13(c), and any makeup gas taken for volumetric balancing.

(o) “Cumulative overproduction” shall mean the total overproduction attributable to a balancing party, as adjusted so as to reflect any cash balancing as provided by Section 75-58-13(c), and any makeup gas taken for volumetric balancing.

(p) “Underproduced party” shall mean a balancing party credited with cumulative underproduction.

(q) “Overproduced party” shall mean a balancing party charged with cumulative overproduction.

(r) “Makeup gas” shall mean the volume of gas an underproduced party is entitled to take for volumetric balancing, in addition to its entitlement.

(s) “Entitlement” shall mean a balancing party's percentage interest in the well multiplied by the well's actual production of gas.

(t) “Long-term contract” is a gas purchase agreement which contractually commits gas for a term greater than one year from the date of initial deliveries of gas thereunder;

(u) “Short-term contract” is a gas purchase agreement other than a long-term contract;

(v) “Qualifying long-term contract” is an offer by a buyer of gas to enter into a long-term contract with consenting non-operators which contains the same (i) pricing conditions, (ii) buyer purchase obligations and (iii) expiration date as the long-term contract executed by the operator.

§ 75-58-9

(a) On or before ten (10) days after the filing with the board of the initial test results for a gas well or oil well capable of producing gas in commercial quantities, the operator shall furnish, by United States mail, postage prepaid, a copy of the initial test results for the well filed with the board to all non-operators owning a record title interest in the production unit for such well as of a date not more than ninety (90) days prior to the filing with the board of the application to drill.

Upon furnishing the initial test results to all non-operators, the operator shall file with the board a list of all non-operators. Should the address of any non-operator be unknown to the operator after diligent search and inquiry, the operator shall so notify the board, and any such non-operator shall be deemed for all purposes of this chapter as a consenting non-operator.

(b) The operator shall market the gas of all non-operators in a well subject to this chapter except as follows: (1) any non-operator (a “nonconsenting non-operator”) who delivers a written notification to operator's office within thirty (30) days after the mailing to such non-operator the test results required by subsection (a) of this section that such non-operator will be responsible for and will market its share of gas and (2) as otherwise provided herein. After the thirty (30) day notice period has expired, operator shall send a notice to the board identifying which non-operators have elected to be or have been deemed to be consenting non-operators and which non-operators have elected to be nonconsenting non-operators. The operator shall have no obligation to market the gas attributable to any nonconsenting non-operator.

(c) In fulfilling operator's responsibility to market consenting non-operator's gas pursuant to subsection (b) of this section, operator has the continuing option of marketing consenting non-operator's share of gas pursuant to a short-term contract or submitting a qualifying long-term contract to the consenting non-operators.

Should operator desire to market consenting non-operators' share of gas under a long-term contract in a well which is subject to this chapter on or after the date upon which the application to drill the well is filed with the board, operator shall submit by United States mail, postage prepaid, to the consenting non-operators a qualifying long-term contract. Should a consenting non-operator not accept such offer by executing and delivering to the operator at operator's office the qualifying long-term contract within thirty (30) days after the date that operator placed the qualifying long-term contract in the United States mail, then and in such event, the offer to purchase shall be deemed to have expired and such consenting non-operator shall be deemed to have become a non-consenting non-operator at the expiration of such thirty (30) day period, and operator shall thereafter have no further obligation to market the gas owned by that consenting non-operator. The operator shall furnish to the buyer the qualifying long-term contract executed by the consenting non-operators, and shall furnish to the Board a notice designating those consenting non-operators which have become nonconsenting non-operators. Save and except where the buyer of gas is contractually obligated to operator to offer a qualifying long-term contract to the consenting non-operators, nothing herein contained shall be deemed to constitute an obligation on the part of any buyer of gas to offer a qualifying long-term contract. This chapter shall not be construed to enlarge or alter in any way any purchaser's obligations under any gas purchase contract.

In marketing consenting non-operator's share of gas under a short-term contract, operator shall market the gas of the consenting non-operators upon such terms and conditions as a reasonably prudent operator would market such gas; provided, however, that in fulfilling such obligation, operator shall incur no liability to the consenting non-operator save and except as to acts of willful misconduct or gross negligence. In the event operator intends to market consenting non-operator's share of gas under a short-term contract with an affiliate or subsidiary of operator, operator shall so notify the consenting non-operators.

(d) Any consenting non-operator shall have the right to become a nonconsenting non-operator by delivering to operator a written notice thereof at least sixty (60) days prior to any yearly anniversary of the date that the operator filed the initial test results with the board. Such an election shall become effective on the later to occur of: (i) the next anniversary of the date that the operator filed the initial test results with the board, or (ii) the expiration date of the gas purchase agreement then covering the consenting non-operator's share of gas. Operator shall thereafter have no further obligation to market the Gas owned by any consenting non-operator electing to become a nonconsenting non-operator. Operator shall furnish to the board a notice identifying any consenting non-operator who has elected to become a nonconsenting non-operator.

(e) Should a change of operator occur with respect to a well which is subject to this chapter, the successor operator shall furnish to all consenting non-operators within thirty (30) days after assuming operations of such well a notice of change of operator.

Any consenting non-operator shall have the right to become a nonconsenting non-operator by furnishing to the successor operator a written notice advising the successor operator of same within thirty (30) days after the operator places in the United States mail, postage prepaid, the notice required by this subsection (e), with such consenting non-operator to become a nonconsenting non-operator effective on the later to occur of (i) the expiration date of the gas purchase agreement then covering such consenting non-operator's share of gas, or (ii) the first day of the second month after the date of the consenting non-operator's written notice to the successor operator. Operator shall send a notice to the board identifying any consenting non-operators who have elected to become nonconsenting non-operators.

As to the remaining consenting non-operators, the successor operator shall market the gas of such consenting non-operators in accordance with the terms and provisions of this chapter.

(f) The net proceeds from the sale of the consenting non-operator's share of gas production shall be paid by the buyer to the operator. The operator shall not be responsible for the payment of any taxes or encumbrances with respect to the net proceeds except as specifically provided herein. The operator shall pay, for and on behalf of itself and the consenting non-operators, any severance, privilege and/or maintenance taxes due on the production of gas marketed by the operator. Save and except as otherwise provided in this chapter, or by law, the net proceeds derived from the first sale of the consenting non-operator's share of gas shall be paid by the operator to the consenting non-operators within one hundred twenty (120) days after the date of receipt by the operator of the net proceeds derived for such first sale of production, and thereafter no later than sixty (60) days after the date of receipt by the operator of the net proceeds for subsequent production of the consenting non-operator's share of gas. Save and except as provided by Section 53-3-7, Mississippi Code of 1972, the consenting non-operators shall be and shall remain responsible for the payment of any proceeds due any royalty, overriding royalty and/or production payment which burden and/or encumber the interest of such consenting non-operators, and the operator shall have no liability to any owner of royalty, overriding royalty and/or production payment which burdens and/or encumbers the interest of the non-operators where the operator pays the net proceeds derived from the sale of the consenting non-operator's share of gas as herein provided. The operator and the consenting non-operators shall have no liability to any owner of royalty, overriding royalty and/or production payment which burdens and/or encumbers the interest of the nonconsenting non-operators.

(g) A non-operator's rights under this chapter shall not be affected by his status as a consenting or nonconsenting owner under Section 53-3-7, Mississippi Code of 1972; provided, however, during any period of the recovery of cost or alternate charges, the share of production from the pooled unit well attributable to the nonconsenting owner's nonconsenting interests therein shall be delivered to his purchaser or market, if any, with the proceeds received therefrom to be paid by the purchaser to the operator for the account of the operator and the appropriate consenting owners; if, however, the nonconsenting owner does not have a purchaser or market which is taking the production, then such share of production shall be sold by the operator to the operator's purchaser or market, with the proceeds received therefrom to be paid by the purchaser to the operator for the account of the operator and the appropriate consenting owners.

§ 75-58-11

(a) Each consenting non-operator shall be responsible for and shall pay to the operator that consenting non-operator's share of direct and actual marketing expenses relating to the marketing of consenting non-operator's gas, including, but not limited to, capital expenses, third-party transportation costs, pipeline penalties, fines, refunds, reimbursements, adjustments, direct costs, and contractual liabilities to third parties. Consenting non-operators shall not be liable for damages resulting from operator's gross negligence or willful misconduct in fulfilling operator's obligations under this chapter. Nothing in this chapter shall be construed so as to impose any liability upon consenting non-operators except as provided by this chapter. In addition, each consenting non-operator shall pay to operator a marketing fee in an amount equal to two and one-half percent (2- 1/2 %) of consenting non-operator's monthly net proceeds; provided, however, the sum of all marketing fees received by operator from all consenting non-operators in a well shall not exceed Five Hundred Dollars ($500.00) per month, per well, as adjusted for inflation as herein provided. If the sum of the marketing fee, when based upon the above percentage of net proceeds, would exceed the limitation herein provided, as adjusted for inflation, then each consenting non-operator's marketing fee shall be determined by dividing its percentage ownership in the well by the total percentage ownership of all consenting non-operators in that well, and multiplying the resultant number by the currently effective well limitation. The well limitation of Five Hundred Dollars ($500.00) per month, per well shall be effective through January 31, 1993. On February 1, 1993, and each February 1 thereafter, the well limitation shall be adjusted for inflation by dividing the Consumer Price Index for All Urban Consumers (as published by the United States Department of Labor) for the prior calendar year by the same Consumer Price Index for calendar year 1991, and multiplying the resultant number by Five Hundred Dollars ($500.00). This calculation shall be performed and results published by the Mississippi Oil and Gas Board. At the election of operator, operator may deduct the marketing fees prior to paying the net proceeds to the consenting non-operators, or operator may submit invoices to the consenting non-operators for the marketing fees.

(b) If the operator has obtained a transportation contract with a third party prior to the date on which the application to drill is filed with the board and said contract contains a capacity or volume limitation, then the operator has the option of (1) having the consenting non-operator participate in this preexisting transportation contract (however, if the preexisting transportation contract contains a discount to the operator which is not generally available, then the operator may charge the consenting non-operator the undiscounted transportation tariff applicable to the transaction) or (2) make a good faith effort to secure a separate transportation contract for consenting non-operator's share of gas. If the operator has obtained a transportation contract with a third party prior to the date on which the application to drill is filed and said contract contains a provision which prevents operator from shipping consenting non-operator's gas under that transportation contract, then operator shall make a good faith effort to secure a separate transportation contract for consenting non-operator's share of gas. If the operator secures a separate transportation contract for consenting non-operator's share of gas, then consenting non-operator shall be liable to the operator for the actual cost of securing the separate transportation contract.

(c) This chapter shall not be construed as imposing fiduciary duties upon an operator marketing the gas of a consenting non-operator or creating a fiduciary relationship between the operator and a consenting non-operator.

(d) An operator shall in no event be held liable to any non-operator for any liability, damage, loss, cost or expense relating to the marketing of gas resulting from or arising out of any act or omission of the operator when the operator is acting in compliance with the terms and conditions of this chapter, except in the case of fraud, gross negligence or willful misconduct on the part of operator.

(e) Any sums due under this chapter from consenting non-operators to operator shall be paid to operator within thirty (30) days after receipt of demand from operator. In addition to the rights of the operator to collect all sums due, the operator has the right to deduct from the net proceeds received for any consenting non-operator's share of gas produced from a well, any amount owed with respect to that well by that consenting non-operator by virtue of this chapter.

§ 75-58-13

(a) Gas Imbalances. Notwithstanding anything to the contrary in this Section, if any balancing party takes and disposes of less than its entitlement during any calendar month, then the volume not taken by such party may be taken by any other party or parties as allocated by the operator.

(b) Operator Statements. Not less frequently than quarterly, the operator shall furnish the balancing parties a written statement showing (a) the total volume of gas taken by each party during the month or months being reported; (b) the makeup gas taken by each party during the month or months; (c) the cumulative volume of gas taken by each party as of the end of that month or months; and (d) the cumulative overproduction or cumulative underproduction, if any, of each party for the time period being reported, as adjusted by any cash balancing as provided by Section 75-58-13(c). The operator statement shall be current as of the production month which falls two months prior to the time the operator statement is issued. Makeup gas taken by an underproduced party shall be credited to the account of the underproduced party in the order of accrual of underproduction.

(c) Cash Balancing. Any overproduced party has the right, but not the obligation, exercisable not more frequently than once a year, to cash balance its cumulative overproduction with underproduced parties. After permanent cessation of production, each overproduced party shall be required to cash balance with underproduced parties. In order to cash balance, the overproduced party shall first furnish a statement to the underproduced parties and to the operator showing the volume and value of the cumulative overproduction, based upon the net proceeds actually received by the overproduced party for the cumulative overproduction, less (i) two and one-half percent (2- 1/2 %) of the net proceeds received by the overproduced party for the cumulative overproduction, and (ii) the direct and actual marketing expenses and transportation costs attributable to the cumulative overproduction. Within sixty (60) days after issuance of the statement as described above, the overproduced party shall pay each underproduced party in accordance with the statement and without interest. To the extent any values used to calculate a cash settlement hereunder are subject to a refund by the overproduced party pursuant to law, regulation or governmental order, the underproduced party receiving such cash settlement shall, prior to payment thereof, agree in writing to indemnify the overproduced party against the underproduced party's proportionate part of any refund, including interest which the overproduced party shall be required to make.

(d) Volumetric Balancing. Each underproduced party shall have the right to take makeup gas during a month after first giving the operator and all other non-operators written notice at least fifteen (15) days before the beginning of a calendar month.

The right of all underproduced parties to take makeup gas shall be limited to the lesser of (1) ten percent (10%) of the overproduced party's entitlement of gas or (2) fifty percent (50%) of the underproduced party's interest in the well. If two or more underproduced parties desire to take makeup gas during the same month and the combined volume they desire to take exceeds the volume available as makeup gas, then the underproduced parties shall share the makeup gas in proportion to their cumulative underproduction. In no event shall any overproduced party be allocated less than ninety percent (90%) of that overproduced party's entitlement. Makeup gas taken by an underproduced party shall be credited to the account of the underproduced party in the order of accrual of underproduction.

(e) Oil and Other Minerals. Regardless of the volume of gas actually taken by any balancing party, such party shall share in the production of oil, condensates and other minerals separated in the facilities operated for the production of oil and gas from the well. Operator and non-operators shall share in and own the production of all oil as produced and saved, notwithstanding such party's status as an overproduced party or underproduced party.

(f) Costs and Expenses. Regardless of the volume of gas actually taken by any balancing party, such party shall bear costs and expenses as otherwise provided in agreements between the parties or as provided by law.

(g) Deliverability Tests. At the request of any balancing party, operator shall, subject to operational constraints, produce the entire well stream for a deliverability test not to exceed seventy-two (72) hours in duration if required under such requesting party's gas purchase agreement. The gas produced and delivered during such deliverability test shall be allocated to the balancing parties on the basis of their entitlement, provided, however, that should any purchaser of gas owned by the balancing parties not requesting such deliverability test fail or refuse to accept such gas or any part thereof, then and in such event, the gas not so taken shall be allocated as overproduction to the balancing party requesting the deliverability test.

§ 75-58-15

(a) Interest. Should any person fail to make any payment required under this chapter when the same is due, interest shall accrue at the rate of twelve percent (12%) per annum from the date due until paid, provided, however, should operator fail to remit payment of net proceeds to any consenting non-operator within the time herein provided because the title of such consenting non-operator is not marketable, the rate of interest as to the net proceeds attributable to such consenting non-operator shall be five percent (5%) accruing from the date when due until the title is rendered marketable. Marketability of title shall be determined in accordance with the then current legally recognized real property law governing title to oil and gas interests. Where the title to a balancing party's interest is not marketable, and where all the claimants to such interest are not consenting non-operators, operator may refuse to produce and deliver any gas attributable to such interest until such time as the title is rendered marketable. Gas attributable to such interest shall be allocated as underproduction.

(b) Interpleader. An operator shall have the right to initiate an action of interpleader where the operator may be exposed to double or multiple liability in the payment of net proceeds. Upon deposit with the court of the net proceeds plus accrued interest thereon as of the date of such deposit as provided by this chapter, operator shall thereafter be relieved of all liability relating to the net proceeds and accrued interest so deposited with the court. Operator shall be entitled to deduct and/or receive from the net proceeds and accrued interest all reasonable costs incurred by operator in such action of interpleader. An overproduced party desiring to cash balance shall also have the right to initiate an action of interpleader where such overproduced party may be exposed to double or multiple liability in the payment of proceeds for cash balancing. Upon deposit with the court of the proceeds for cash balancing, such overproduced party shall hereafter be relieved of all liability relating to such proceeds so deposited with the court. The overproduced party shall be entitled to deduct and/or receive from the proceeds for cash balancing all reasonable costs incurred by such overproduced party in such action of interpleader.

(c) Jurisdiction Over Disputes. Jurisdiction and venue for any proceeding brought pursuant to this chapter shall be in the Chancery Court of the First Judicial District for Hinds County, Mississippi, or in the chancery court of any county in which all or part of the unit for the well is situated.

§ 75-58-17

Nothing in this chapter shall be construed to limit the right of operators and non-operators to enter into agreements providing for marketing of gas, marketing fees, balancing or any other matter addressed by this chapter. Any such valid agreement shall supersede the provisions of this chapter to the extent said agreement addresses matters covered in this chapter.

§ 75-58-19

All Non-operators who receive information relating to a gas purchase agreement from an operator in connection with or as required by this chapter shall hold and treat each document as confidential and shall not disclose such documents or the terms thereof to third parties, except those persons required to see said documents in order to decide whether a non-operator should become a consenting non-operator or nonconsenting non-operator. The provisions of this Section 75-58-19 shall have no application to any gas purchase agreement executed by the non-operator.

§ 75-58-21

This chapter does not affect contractual rights and duties existing before July 1, 1991.

Chapter 59 Correspondence Courses

§ 75-59-1

No person, firm or corporation shall contract to furnish correspondence courses to persons within the state unless such person, firm or corporation shall have obtained a permit from the office of the Secretary of State, either (a) the State Department of Education, (b) the Mississippi Community College Board, or (c) the Board of Trustees of State Institutions of Higher Learning, whichever is appropriate, and the Office of the Attorney General. An application for a permit shall be made on forms furnished by the Secretary of State, the State Department of Education, the Mississippi Community College Board or the Board of Trustees of Institutions of Higher Learning, as the case may be, and the Attorney General and such application shall designate an agent for the service of summons within the state; shall contain the name and address of the applicant; the type of courses offered with a brief summary of the course of studies offered; and one (1) copy of all textbooks or other teaching aids and training materials which are incorporated in the course of study shall be filed with said application. The applicant shall pay the Secretary of State a fee of Two Hundred Fifty Dollars ($250.00). The applicant shall file a bond with his application in the sum of Fifty Thousand Dollars ($50,000.00) conditioned to satisfy any judgment rendered by a court of competent jurisdiction, in favor of any person who has sustained damages as a result of the breach of a contract of instruction by the permittee. Such bond shall be executed by the permittee and a resident surety company qualified to transact business within the state. Such permit shall be valid for one (1) year from the date thereof. Suits against the permittee and his surety may be brought in the county where the plaintiff resides, or the county where the defendant has his principal place of business, or where his resident agent resides. This chapter shall not apply to any business school or business college holding a current certificate or license issued under the applicable law of this state. In addition, this chapter shall not apply to religious instructions offered by a recognized church denomination; provided, however, that no fee or charge of any kind whatever may be levied or collected directly or indirectly for such instructions or certificates issued in connection therewith or incidental thereto. No person shall be granted a permit unless he is an individual of good moral character.

§ 75-59-3

The fees collected under the provisions of this chapter shall be used in the processing and filing of said application and in the administration and enforcement of the chapter.

§ 75-59-5

(a) For a violation of a contract with a student, for soliciting or enrolling students through fraud or misrepresentation, or for noncompliance with this chapter or the reasonable rules and regulations promulgated by the Secretary of State pursuant to this chapter, the Secretary of State shall revoke the permit issued under this chapter after serving notice of hearing upon the resident agent for service of summons in the same manner as service of summons upon nonresident corporations qualified to do business in the state. Such notice shall set a time and place for a hearing not less than fifteen (15) days nor more than thirty (30) days from the receipt of said notice. Said permittee shall be allowed to show cause why said permit should not be revoked. At said time and place full opportunity shall be afforded the permittee to be heard on said revocation. The Secretary of State shall have power to issue compulsory process to assure the presence of such persons or such records deemed necessary for the proper determination of any matter before him for consideration, and he may in his discretion require testimony under oath and administer the same.

(b) Any person aggrieved by a decision of the Secretary of State shall have a right to a judicial review of said decision by forwarding notice of his intention to appeal to the Secretary of State within fifteen (15) days from the date of revocation. Upon receipt of said notice, the Secretary of State shall within sixty (60) days after receiving said notice of appeal certify the record to the chancery court of the First Judicial District of Hinds County, Mississippi, for trial de novo. Appeal may be with or without supersedeas at the election of the permittee. The Secretary of State shall not be required to certify the record unless the permittee shall have filed a cost bond sufficient to pay the costs of transcribing and preparing the transcript.

No person, firm or corporation failing to comply with the provisions of this chapter shall have access to any of the courts of this state for the purpose of enforcing any claim or demand against any resident of this state arising out of any contract entered into in violation of the provisions of this chapter.

§ 75-59-7

The state superintendent of education shall consult with the Secretary of State and the Secretary of State is hereby empowered, authorized, and directed to make reasonable rules and regulations to implement the general purposes of this chapter.

§ 75-59-9

Any person violating the provisions of this chapter shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine of five hundred dollars ($500.00) or by imprisonment of not more than six (6) months, or by both such fine and imprisonment.

Chapter 60 Proprietary Schools and Colleges

§ 75-60-1

This chapter shall be known as the “Mississippi Proprietary School and College Registration Law.”

§ 75-60-3

As used in this chapter:

(a) “Course of instruction” means the offering of instruction to individuals for a charge, fee or contribution of any kind, to a person or persons for the purpose of training or preparing such person(s) for a field of endeavor in a business, trade, technical or industrial occupation.

(b) “Program of study” means a series of individual courses in an area of specialization for which a diploma, degree, certificate or other written evidence of proficiency or achievement is offered.

(c) “Agent” means any person employed by an institution licensed by the commission, regardless of job title, job description, full-time or part-time employment status, who either directly or indirectly influences the decision of any prospective student to enroll for a fee in a course of instruction.

(d) “Person” means an individual, corporation, partnership, association or any other type of organization.

(e) “Board” means the Mississippi Community College Board established in Section 37-4-3 et seq., Mississippi Code of 1972.

(f) “Commission” means the Commission on Proprietary School and College Registration established under this chapter.

(g) “Correspondence education” means a formal educational process under which the institution provides instructional materials, by mail or electronic transmission, including examinations on the materials, to students who are separated from the instructor. Interaction between the instructor and the student is limited, is not regular and substantive, and is primarily initiated by the student. Correspondence courses are typically self-paced. Correspondence education shall not be construed to mean or refer to “distance education” as defined in paragraph (h) of this section.

(h) “Distance education” means a formal educational process in which the majority of the instruction in a course occurs when students and instructors are not in the same place. Instruction may be synchronous or asynchronous. Distance education uses the technologies set forth in this paragraph to deliver instructions to students and to support regular, substantive interaction between students and instructors. A distance education course instructor may use any of the following technologies: the Internet; one-way and two-way transmissions through open broadcast, closed-circuit, cable, microwave, broadband lines, fiber optics, satellite or wireless communications devices; audio conferencing; or video cassettes, DVDs and CD-ROMs if used as part of the distance learning course or program.

(i) “General education course” means a unit of learning that is nontechnical in nature and is a fundamental part of a program. The content is drawn from oral and written communications, social studies, mathematics, natural sciences and the humanities.

(j) “Nontechnical course” means a unit of learning that is nontechnical in nature and includes general education courses, basic/college life skills and other related courses.

(k) “Occupational degree” means a credential awarded by a school upon successful completion of an associate degree program and designated as “applied” or “occupational” in the credential title. This program shall contain a minimum of sixty percent (60%) technical course credits/clock hours.

(l) “Institution” means a proprietary school, career college, school person or other organization that offers programs that require registration in accordance with Section 75-60-5.

(m) “Technical course” means a unit of learning that yields skills, knowledge and understanding essential to the specific occupation for which the program is designed.

§ 75-60-4

(1) The Mississippi Community College Board shall appoint a “Commission on Proprietary School and College Registration” to be composed of five (5) qualified members, one (1) appointed from each of the five (5) Mississippi congressional districts existing on January 1, 1992. The membership of said commission shall be composed of persons who have held a teaching, managerial or other similar position with any public, private, trade, technical or other school; provided, however, that one (1) member of the commission shall be actively engaged in, or retired from, teaching, managerial or other similar position with a privately owned trade, technical or other school. The membership of said commission shall be appointed by the board within ninety (90) days of the passage of this chapter. In making the first appointments, two (2) members shall be appointed for three (3) years, two (2) members for four (4) years, and one (1) member for five (5) years. Thereafter, all members shall be appointed for a term of five (5) years. If one (1) of the members appointed by the board resigns or is otherwise unable to serve, a new member shall be appointed by the commission to fill the unexpired term. All five (5) members of the commission have full voting rights. The members shall not be paid for their services, but may be compensated for the expenses necessarily incurred in the attendance at meetings or in performing other services for the commission at a rate prescribed under Section 25-3-69, Mississippi Code of 1972, plus actual expenses and mileage as provided by Section 25-3-41, Mississippi Code of 1972. Members of the commission shall annually elect a chairman from among its members who is not actively engaged with a privately owned trade or technical school.

(2) The Mississippi Community College Board shall appoint such staff as may be required for the performance of the commission's duties and provide necessary facilities.

(3) The Mississippi Community College Board shall levy fees authorized in this chapter only in such amounts as may be required for the performance of the commission's duties.

(4) In addition to the fees authorized in this chapter, the Mississippi Community College Board is authorized to levy and collect fees from proprietary schools and colleges to recover the cost of audits, investigations and hearings relating to such institutions.

(5) It shall be the purpose of the Commission on Proprietary School and College Registration to establish and implement the registration program as provided in this chapter. All controversies involving the registration of such schools shall be initially heard by a duly authorized hearing officer of the commission before whom a complete record shall be made. After the conclusion of the hearing, the duly authorized hearing officer of the commission shall make a recommendation to the commission as to the resolution of the controversies, and the commission, after considering the transcribed record and the recommendation of its hearing officer, shall make its decision which becomes final unless the school or college or other person involved shall appeal to the Mississippi Community College Board, which appeal shall be on the record previously made before the commission's hearing officer except as may be provided by rules and regulations adopted by the Mississippi Community College Board. All appeals from the Mississippi Community College Board shall be on the record and shall be filed in the Chancery Court of the First Judicial District of Hinds County, Mississippi.

§ 75-60-5

The provisions of this chapter do not apply to the following categories of courses, schools or colleges:

(a) Tuition-free courses or schools conducted by employers exclusively for their own employees;

(b) Schools, colleges, technical institutes, community colleges, junior colleges or universities under the jurisdiction of the Board of Trustees of State Institutions of Higher Learning or the Mississippi Community College Board;

(c) Schools or courses of instruction under the jurisdiction of the State Board of Cosmetology, State Board of Barber Examiners, the State Board of Massage Therapy or the State Board of Nursing;

(d) Courses of instruction required by law to be approved or licensed, or given by institutions approved or licensed, by a state board or agency other than the Commission on Proprietary School and College Registration; however, a school so approved or licensed may apply to the Commission on Proprietary School and College Registration for a certificate of registration to be issued in accordance with the provisions of this chapter;

(e) Correspondence education;

(f) Nonprofit private schools offering academic credits at primary or secondary levels, or conducting classes for exceptional education as defined by regulations of the State Department of Education;

(g) Private nonprofit colleges and universities or any private school offering academic credits at primary, secondary or postsecondary levels;

(h) Courses of instruction conducted by a public school district or a combination of public school districts;

(i) Courses of instruction conducted outside the United States;

(j) A school that offers only instruction in subjects that the Commission on Proprietary School and College Registration determines are primarily for a vocational, personal improvement or cultural purposes and that does not represent to the public that its course of study or instruction will or may produce income for those who take that study or instruction;

(k) Courses conducted primarily on an individual tutorial basis, where not more than one (1) student is involved at any one time, except in those instances where the Commission on Proprietary School and College Registration determines that the course is for the purpose of preparing for a vocational objective;

(l) Kindergartens or similar programs for preschool-age children.

§ 75-60-7

All receipts of the Commission on Proprietary School and College Registration under this chapter shall be deposited in the State Treasury to the credit of the Commission on Proprietary School and College Registration, and shall be expended only pursuant to appropriation approved by the Legislature and as provided by law.

§ 75-60-9

Effective sixty (60) days after the Commission on Proprietary School and College Registration has made public its standards for issuing certificates of registration, no course of instruction shall be established, offered or given, no diploma, degree or other written evidence of proficiency or achievement shall be offered or awarded, and no student enrollment in such course of instruction shall be solicited through advertising, agents, mail circulars, or other means, until the person planning to offer or offering such course of instruction, diplomas or degrees has obtained a certificate of registration from the commission. Notwithstanding the prohibition of this section, classes in progress at the time the commission makes public its standards may continue until completed.

§ 75-60-11

(1) The Commission on Proprietary School and College Registration shall issue a certificate of registration to an applicant of good reputation, offering one or more courses of instruction upon determining that the applicant has the facilities, resources and faculty to provide students with the kind of instruction that it proposes to offer. A certificate of registration shall be granted or denied within sixty (60) days of the receipt of the application therefor by the commission. If the commission has not completed its determination with respect to the issuance of the certificate of registration within such sixty-day period, it shall issue a temporary certificate to the applicant, which certificate is sufficient to meet the requirements of Section 75-60-13 until such time as determination is made. Any certificate issued by the commission is valid only for the institution and courses for which it is issued and does not cover other schools or branches operated by the owner. A certificate of registration is valid for two (2) years unless earlier revoked for cause by the commission. The commission shall adopt rules and regulations for administration of the registration process. The commission may cause an investigation to be made into the correctness of the information submitted in any application for registration. If the commission believes that false, misleading or incomplete information has been submitted to it in connection with any application for registration, the commission shall conduct a hearing on the matter and may withhold a certificate of registration upon finding that the applicant has failed to meet the standards for such certificate or has submitted false, misleading or incomplete information to the commission. Application for a certificate of registration shall be made in writing to the commission on forms furnished by the commission. A certificate of registration is not transferable and shall be prominently displayed on the premises of an institution.

(2) The commission shall assign registration numbers to all schools registered with it. Schools shall display their registration numbers on all school publications and on all advertisements bearing the name of the school.

§ 75-60-13

Notwithstanding the requirements of this chapter for issuance of certificates of registration, the Commission on Proprietary School and College Registration may, in accordance with regulations adopted by the commission, grant certificates of registration to schools, colleges, institutes or universities that have been approved by the State Board of Education pursuant to the “Act of March 3, 1966,” 80 Stat. 20, 38 U.S.C.A. 1771.

§ 75-60-15

(1) An initial application fee shall accompany each application for certificate of registration, and a renewal fee shall accompany each application for renewal of registration.

(2) If a renewal fee is not paid at least thirty (30) days prior to the expiration of a school's certificate of registration, in addition to the renewal fee, there shall be a delinquent fee collected. No portion of any license fee shall be subject to refund.

(3) A certificate of registration shall be issued or denied within sixty (60) days after receipt of the application by the commission.

(4) No new program of study shall be offered by any school holding a certificate of registration until it is registered with and approved by the commission in accordance with procedures which shall be established by the commission. After such course is registered in accordance with the approval procedures provided for herein, it shall be included as a part of any renewal of a certificate of registration. Each application for the original registration of a new program registration fee to be determined by the commission.

(5) A certificate of registration shall be valid only for the school and courses for which it is issued and shall not include other schools or additional locations of a school unless each such additional location (a) offers only courses which are identical to courses offered at the registered location and (b) is under the same ownership, management and control as that of the registered location except as may be provided otherwise in this section. Such additional locations meeting such requirements shall be identified as “annexes” on a certificate application. Gross tuition revenues for the registered location and all annexes shall be combined for the purpose of determining fees payable under this section.

(6) The fees submitted with applications for initial or renewal of registration are not returnable to the applicant, even though a certificate of registration is not issued, unless the Commission on Proprietary School and College Registration determines that a financial hardship will result.

(7) The amount of fees authorized in this section and in Section 75-60-27 shall be determined by the Mississippi Community College Board after receiving recommendations from the commission.

§ 75-60-17

The application for a certificate of registration shall be accompanied by a surety bond with conditions and in a form prescribed by the Commission on Proprietary School and College Registration with at least one (1) corporate bonding company approved by the Department of Insurance as surety thereon. The bond shall provide for the indemnification of any person suffering loss as the result of any false certification, school closure, any fraud or misrepresentation used in behalf of the principal in procuring such person's enrollment in a course of instruction, including repayment of tuition paid in advance by any student. The bond shall provide for the reimbursement of the commission of any actual administrative costs associated with an institution ceasing operations. The term of the bond shall be continuous, but it shall be subject to cancellation by the surety in the manner described in this section. The bond shall provide blanket coverage for the acts of all persons engaged as agents of the school without naming them and without regard to the time they are engaged during the term of the bond.

First priority for the use of surety bonds shall be given to students impacted by the closing of the proprietary school.

The surety may terminate the bond upon giving a sixty-day written notice to the principal and to the Commission on Proprietary School and College Registration, but the liability of the surety for acts of the principal and its agents shall continue during the sixty (60) days of cancellation notice. The notice does not absolve the surety from liability which accrues before the cancellation becomes final but which is discovered after that date and which may have arisen at any time during the term of the bond. Unless the bond is replaced by that of another surety before the expiration of the sixty (60) days' notice of cancellation, the certificate of registration shall be suspended. Any person subject to this chapter required to file a bond with an application for a certificate of registration may file, in lieu thereof, cash, a certificate of deposit, or government bonds of the same dollar value as the prescribed bond. Said deposit is subject to the same terms and conditions as are provided for in the surety bond required herein. Any interest or earnings on such deposits are payable to the depositor.

§ 75-60-18

When refunds are due, they shall be made within thirty (30) days of the last day of attendance if written notification of withdrawal has been provided to the institution by the student. All refunds shall be made without requiring a request from the student and within thirty (30) days from the date that the institution terminates the student or determines withdrawal by the student based on last day of attendance. In any event, all refunds shall be made within sixty (60) days of the student's last day of attendance. Any unused portion of fees and other institutional charges shall be refunded as follows:

(a) Refunds for Classes Cancelled by the Institution. If tuition and fees are collected in advance of the starting date of a program and the institution cancels the class, one hundred percent (100%) of the tuition and fees collected shall be refunded. The refund shall be made within thirty (30) days of the planned starting date.

(b) Refunds for Students Who Withdraw on or Before the First Day of Class. If tuition processing fees are collected in advance of the starting date of classes and the student does not begin classes or withdraws on the first day of classes, no more than One Hundred Dollars ($100.00) of the tuition and processing fees may be retained by the institution. Appropriate refunds for a student who does not begin classes shall be made within thirty (30) days of the class starting date.

(c) Refunds for Students Enrolled Prior to Visiting the Institution. Students who have not visited the school facility prior to enrollment will have the opportunity to withdraw without penalties within three (3) days following a documented attendance at a regularly scheduled orientation or a documented tour of the facilities and inspection of the equipment. Institutions are required to keep records of students' initial visits or orientation sessions.

(d) Refunds for Students After Instruction has Begun. Contractual obligations beyond twelve (12) months are prohibited. The refund policy for students attending proprietary institutions who incur financial obligations for a period of twelve (12) months or less shall be as follows:

(i) After the first day of classes and during the first ten percent (10%) of the period of financial obligation, the institution shall refund at least ninety percent (90%) of the tuition;

(ii) After the first ten percent (10%) of the period of financial obligation and until the end of the first twenty-five percent (25%) of the period of obligation, the institution shall refund at least fifty percent (50%) of the tuition;

(iii) After the first twenty-five percent (25%) of the period of financial obligation and until the end of the first fifty percent (50%) of the period of obligation, the institution shall refund at least twenty-five percent (25%) of the tuition; and

(iv) After the first fifty percent (50%) of the period of financial obligation, the institution may retain all of the tuition.

§ 75-60-19

(1) The Commission on Proprietary School and College Registration may suspend, revoke or cancel a certificate of registration for any one (1) or any combination of the following causes:

(a) Violation of any provision of the sections of this chapter or any regulation made by the commission;

(b) The furnishing of false, misleading or incomplete information requested by the commission;

(c) The signing of an application or the holding of a certificate of registration by a person who has pleaded guilty or has been found guilty of a felony or has pleaded guilty or been found guilty of any other indictable offense;

(d) The signing of an application or the holding of a certificate of registration by a person who is addicted to the use of any narcotic drug, or who is found to be mentally incompetent;

(e) Violation of any commitment made in an application for a certificate of registration;

(f) Presentation to prospective students of misleading, false or fraudulent information relating to the course of instruction, employment opportunity, or opportunities for enrollment in accredited institutions of higher education after entering or completing courses offered by the holder of a certificate of registration;

(g) Failure to provide or maintain premises or equipment for offering courses of instruction in a safe and sanitary condition;

(h) Refusal by an agent to display his agent permit upon demand of a prospective student or other interested person;

(i) Failure to maintain financial resources adequate for the satisfactory conduct of courses of study as presented in the plan of operation or to retain a sufficient number and qualified staff of instruction; however nothing in this chapter shall require an instructor to be certificated by the Commission on Proprietary School and College Registration or to hold any type of post-high school degree;

(j) Offering training or courses of instruction other than those presented in the application; however, schools may offer special courses adapted to the needs of individual students where the special courses are in the subject field specified in the application;

(k) Accepting the services of an agent not licensed in accordance with Sections 75-60-23 through 75-60-37, inclusive;

(l) Conviction or a plea of nolo contendere on the part of any owner, operator or director of a registered school of any felony under Mississippi law or the law of another jurisdiction;

(m) Continued employment of a teacher or instructor who has been convicted of or entered a plea of nolo contendere to any felony under Mississippi law or the law of another jurisdiction;

(n) Incompetence of any owner or operator to operate a school.

(2)(a) Any person who believes he has been aggrieved by a violation of this section shall have the right to file a written complaint within two (2) years of the alleged violation. The commission shall maintain a written record of each complaint that is made. The commission shall also send to the complainant a form acknowledging the complaint and requesting further information if necessary and shall advise the director of the school that a complaint has been made and, where appropriate, the nature of the complaint.

(b) The commission shall within twenty (20) days of receipt of such written complaint commence an investigation of the alleged violation and shall, within ninety (90) days of the receipt of such written complaint, issue a written finding. The commission shall furnish such findings to the person who filed the complaint and to the chief operating officer of the school cited in the complaint. If the commission finds that there has been a violation of this section, the commission shall take appropriate action.

(c) Schools shall disclose in writing to all prospective and current students their right to file a complaint with the commission.

(d) The existence of an arbitration clause in no way negates the student's right to file a complaint with the commission.

(e) The commission may initiate an investigation without a complaint.

(3) Hearing procedures .(a) Upon a finding that there is good cause to believe that a school, or an officer, agent, employee, partner or teacher, has committed a violation of subsection (1) of this section, the commission shall initiate proceedings by serving a notice of hearing upon each and every such party subject to the administrative action. The school or such party shall be given reasonable notice of hearing, including the time, place and nature of the hearing and a statement sufficiently particular to give notice of the transactions or occurrences intended to be proved, the material elements of each cause of action and the civil penalties and/or administrative sanctions sought.

(b) Opportunity shall be afforded to the party to respond and present evidence and argument on the issues involved in the hearing including the right of cross-examination. In a hearing, the school or such party shall be accorded the right to have its representative appear in person or by or with counsel or other representative. Disposition may be made in any hearing by stipulation, agreed settlement, consent order, default or other informal method.

(c) The commission shall designate an impartial hearing officer to conduct the hearing, who shall be empowered to:

(i) Administer oaths and affirmations; and

(ii) Regulate the course of the hearings, set the time and place for continued hearings, and fix the time for filing of briefs and other documents; and

(iii) Direct the school or such party to appear and confer to consider the simplification of the issues by consent; and

(iv) Grant a request for an adjournment of the hearing only upon good cause shown.

The strict legal rules of evidence shall not apply, but the decision shall be supported by substantial evidence in the record.

(4) The commission, acting by and through its hearing officer, is hereby authorized and empowered to issue subpoenas for the attendance of witnesses and the production of books and papers at such hearing. Process issued by the commission shall extend to all parts of the state and shall be served by any person designated by the commission for such service. Where, in any proceeding before the hearing officer, any witness fails or refuses to attend upon a subpoena issued by the commission, refuses to testify, or refuses to produce any books and papers the production of which is called for by a subpoena, the attendance of such witness, the giving of his testimony or the production of the books and papers shall be enforced by any court of competent jurisdiction of this state in the manner provided for the enforcement of attendance and testimony of witnesses in civil cases in the courts of this state.

(5) Decision after hearing . The hearing officer shall make written findings of fact and conclusions of law, and shall also recommend in writing to the commission a final decision, including penalties. The hearing officer shall mail a copy of his findings of fact, conclusions of law and recommended penalty to the party and his attorney, or representative. The commission shall make the final decision, which shall be based exclusively on evidence and other materials introduced at the hearing. If it is determined that a party has committed a violation, the commission shall issue a final order and shall impose penalties in accordance with this section. The commission shall send by certified mail, return receipt requested, a copy of the final order to the party and his attorney, or representative. The commission shall, at the request of the school or such party, furnish a copy of the transcript or any part thereof upon payment of the cost thereof.

(6) Civil penalties and administrative sanctions .(a) A hearing officer may recommend, and the commission may impose, a civil penalty not to exceed Two Thousand Five Hundred Dollars ($2,500.00) for any violation of this section. In the case of a second or further violation committed within the previous five (5) years, the liability shall be a civil penalty not to exceed Five Thousand Dollars ($5,000.00) for each such violation.

(b) Notwithstanding the provisions of paragraph (a) of this subsection, a hearing officer may recommend and the commission may impose a civil penalty not to exceed Twenty-five Thousand Dollars ($25,000.00) for any of the following violations: (i) operation of a school without a registration in violation of this chapter; (ii) operation of a school knowing that the school's registration has been suspended or revoked; (iii) use of false, misleading, deceptive or fraudulent advertising; (iv) employment of recruiters on the basis of a commission, bonus or quota, except as authorized by the commission; (v) directing or authorizing recruiters to offer guarantees of jobs upon completion of a course; (vi) failure to make a tuition refund when such failure is part of a pattern of misconduct; or (vii) violation of any other provision of this chapter, or any rule or regulation promulgated pursuant thereto, when such violation constitutes part of a pattern of misconduct which significantly impairs the educational quality of the program or programs being offered by the school. For each enumerated offense, a second or further violation committed within the previous five (5) years shall be subject to a civil penalty not to exceed Fifty Thousand Dollars ($50,000.00) for each such violation.

(c) In addition to the penalties authorized in paragraphs (a) and (b) of this subsection, a hearing officer may recommend and the commission may impose any of the following administrative sanctions: (i) a cease and desist order; (ii) a mandatory direction; (iii) a suspension or revocation of a certificate of registration; (iv) a probation order; or (v) an order of restitution.

(d) The commission may suspend a registration upon the failure of a school to pay any fee, fine or penalty as required by this chapter unless such failure is determined by the commission to be for good cause.

(e) All civil penalties, fines and settlements received shall accrue to the credit of the Commission on Proprietary School and College Registration.

(7) Any penalty or administrative sanction imposed by the commission under this section may be appealed by the school, college or other person affected to the Mississippi Community College Board as provided in Section 75-60-4(3), which appeal shall be on the record previously made before the commission's hearing officer. All appeals from the Mississippi Community College Board shall be on the record and shall be filed in the Chancery Court of the First Judicial District of Hinds County, Mississippi.

§ 75-60-21

The commission shall petition the chancery court of the county in which a person or agent offers one or more courses of instruction subject to the provisions of this chapter or advertises for the offering of such courses without a certificate of registration for an order enjoining such offering or advertising. The court may grant such injunctive relief upon a showing that the respondent named in the petition is offering or advertising one or more courses of instruction without a certificate of registration. The Attorney General or the district attorney of the district including the county in which such action is brought, shall, upon request of the commission, represent the commission in prosecuting any such action.

§ 75-60-23

No person employed by an institution licensed by the commission, regardless of job title, job description, full-time or part-time employment status, shall directly or indirectly influence the decision of any prospective student to enroll for a fee in a course of instruction without first securing a permit as an agent from the Commission on Proprietary School and College Registration. If the person represents more than one (1) institution or campus, a separate permit shall be obtained for each institution or campus represented. Agent permits shall only be issued to agents of institutions that hold a certificate of registration issued by the commission.

§ 75-60-25

The application for an agent permit shall be made on forms to be furnished by the Commission on Proprietary School and College Registration. Any agent permit applied for shall be granted or denied within sixty (60) days of the receipt of the application therefor by the commission. If the commission has not completed its determination with respect to the issuance of an agent permit within such sixty-day period, it shall issue a temporary agent permit to the applicant, which permit is sufficient to meet the requirements of Section 75-60-23 until such time as such determination is made. Upon approval for an agent permit, the commission shall issue a permit to the person, giving his or her name, agent permit number and the name and campus location of his or her employing school, and certifying that the person whose name appears on the permit is an authorized agent of the school. An agent permit is valid for one (1) year from the date on which it was issued.

§ 75-60-27

The application for an agent permit and an application for renewal thereof shall be accompanied by fees determined by the Mississippi Community College Board. All fees collected for the issuance or renewal of agent permits shall be deposited in the State Treasury to the credit of the Commission on Proprietary School and College Registration.

§ 75-60-29

The application for an agent permit shall be accompanied by a surety bond acceptable to the Commission on Proprietary School and College Registration. Such bond may be continuous and shall be conditioned to provide indemnification to any student suffering loss as a result of any fraud or misrepresentation used in procuring his enrollment, and may be supplied by an agent of a school or by the school itself as a blanket bond covering each of its agents. The surety of any such bond may cancel the same upon giving thirty (30) days' notice in writing to the commission and is relieved of liability for any breach of condition occurring after the effective date of said cancellation. An application for renewal shall be accompanied by a surety bond, as provided in this section, if a continuous bond has not been furnished.

§ 75-60-31

No agent permit shall be issued pursuant to Section 75-60-25 to any person found by the Commission on Proprietary School and College Registration not to be of good moral character.

§ 75-60-33

Any agent permit issued may be revoked by the Commission on Proprietary School and College Registration if the holder of the permit solicits or enrolls students through fraud, deception or misrepresentation, or upon a finding that the permit holder is not of good moral character.

The Commission on Proprietary School and College Registration shall hold informal conferences pursuant to Section 75-60-19 with an agent believed to be in violation of one or more of the above conditions. If these conferences fail to eliminate the agent's objectionable practices or procedures, the commission shall hold a public hearing. A record of such proceedings shall be taken and appeals to the commission shall be upon such record, except as may be provided by rules and regulations to be adopted by the commission. Nothing said or done in the informal conferences shall be disclosed by the staff of the commission nor be used as evidence in any subsequent proceedings.

§ 75-60-35

The fact that a bond is in force pursuant to Section 75-60-29 does not limit nor impair any right of recovery otherwise available pursuant to law, nor is the amount of such bond relevant in determining the amount of damages or other relief to which any plaintiff may be entitled.

No recovery shall be had on any contract for or in connection with a course of instruction by any person selling or administering such course if the agent of such person was not the holder of an agent permit as required by Section 75-60-23 at the time he negotiated the contract for or sold such course.

§ 75-60-37

The issuance of an agent permit pursuant to Section 75-60-25 does not constitute approval of any program of instruction or the person or institution offering, conducting or otherwise administering the same, unless licensed by the Commission on Proprietary School and College Registration. Any representation contrary to this section or tending to imply that an agent permit issued pursuant to Section 75-60-25 constitutes such approval is misrepresentation within the meaning of the provisions of this chapter.

§ 75-60-39

Whoever violates Section 75-60-9 or Section 75-60-23 shall be fined not more than Five Hundred Dollars ($500.00) or imprisoned not more than ninety (90) days, or both.

§ 75-60-41

Sections 75-60-9 through 75-60-39, inclusive, of this chapter shall take effect and be in force sixty (60) days following the promulgation and publication of rules, regulations and procedures governing the registration and certification of schools, courses of instruction or institutes and agents thereof as provided hereinabove.

§ 75-60-43

The State Department of Education shall supply to the Mississippi Community College Board all records, regulations and forms relating to proprietary school and college registration. All certificates and permits for proprietary schools and colleges issued by the State Department of Education shall be valid until their normal expiration dates unless suspended or revoked for cause.

§ 75-60-45

The commission shall not appoint instructors, but the commission may review and evaluate whether an instructor is qualified to teach a program of study as follows:

(1) Academic classes. Classroom instructors teaching general education courses shall hold at least a bachelor's degree with appropriate coursework in the teaching discipline from an accredited institution and one (1) of the following:

(a) A minimum of eighteen (18) semester hours of credit from an accredited institution in the subject area being taught; or

(b) A minimum of twelve (12) semester hours in methods and techniques of teaching.

(2) Technical classes. Classroom instructors teaching technical courses shall have at least a high-school diploma or an equivalent diploma and at least one (1) of the following:

(a) A degree, certificate or license in the subject area or a related field;

(b) A minimum of eighteen (18) semester hours of credit in mathematics, science or courses related to the subject area from an accredited institution; or

(c) A minimum of three (3) years' work experience in the technical area or a related field.

(3) Apprenticeship trade classes. Instructors of apprenticeship trades shall have the following qualifications and training:

(a) At least a high-school diploma or an equivalent diploma;

(b) A minimum of three (3) years' work experience above the students' level in the trade to be taught; and

(c) Recognized standing as a tradesman or specialist supported by evidence from previous employers.

Chapter 61 Manufacture and Sale of Jewelry and Optical Equipment

§ 75-61-1

It shall be unlawful for any person, firm or corporation to sell or dispose of, or offer for sale, in the State of Mississippi, at public auction, or to cause or permit to be sold, disposed of or offered for sale in the State of Mississippi, at public auction, any gold, silver or plated ware, precious stones, cut glass, china, watches, clocks or jewelry, whether the same be their own property, or whether in so doing they act as an agent or employee of others; provided, however, that this section shall not apply to sales at public auction of stock on hand for more than ninety (90) days preceding the beginning of said sale, if the person, firm or corporation owning the same shall have been, for a period of one (1) year next preceding said sale, continuously in business in the county wherein such sale is held or to be held, as a retail or wholesale merchant of such goods, wares and merchandise as are being sold or offered for sale at said auction; provided, further, that the stock on hand of said merchant or merchants, whose stocks are to be sold at public auction, shall not be increased, or replenished, in anticipation of such sale, nor within ninety (90) days preceding the beginning of said sale, nor pending said sale; and provided, further, that said auction sale shall be held on successive days, Sunday and legal holidays excepted, but shall not continue for more than thirty (30) days, at any one time; and, provided further, that the same person, firm or corporation shall not hold more than one such auction sale within a period of one (1) year.

§ 75-61-3

No person, firm or corporation shall sell, or offer for sale, in any county of this state at auction, a stock of merchandise consisting of gold, silver, or plated ware, precious stones, watches, clocks, cut glass, china, or jewelry, without first having filed with the clerk of the chancery court of the county in which said sale is to be conducted a full and complete inventory of each article or class of articles to be offered at said auction sale, with an affidavit in support thereof, including (1) the description and acquisition cost of each article or class of articles, together with the name of the manufacturer thereof, where ascertainable; (2) the number of articles in each such class; (3) the serial number of each such article, where numbered; and (4) the aggregate acquisition cost of all the stock of such merchandise to be offered at said public auction. There shall be appended to said inventory an affidavit which shall state (1) that the said inventory is true and correct, together with the aggregate acquisition cost thereof; (2) that said articles of merchandise were acquired in the usual course of trade, and not for the purpose of offering the same for sale at said auction; (3) that none of the listed articles of merchandise was acquired within the ninety (90) day period immediately preceding the beginning of said auction sale; and (4) that no additional merchandise as described above will be acquired or offered for sale during the said auction. True copies of said inventory shall be kept posted in a public place on the premises where the said auction sale is being conducted, which shall be corrected at the close of each day's business so as to accurately show the number of articles remaining to be sold in each such class, together with their aggregate acquisition cost. In case the merchandise to be sold belongs to an individual, the inventory and affidavit shall be made by the owner. In case the merchandise belongs to a firm, the inventory and affidavit shall be made by a member thereof, and in the case of the corporation, the inventory and affidavit shall be made by an officer, or the general manager, or by someone having personal knowledge of the facts. No additions shall thereafter be made to said stock to be offered at said auction sale. The said inventory and affidavit shall be a part of the records of said chancery clerk, and he shall be paid a fee of two and one-half dollars ($2.50) by the person filing said inventory.

§ 75-61-5

At the time of the filing of the inventory provided for in Section 75-61-3, and before any such auction sale is commenced, the person, firm or corporation conducting said sale shall file with the said inventory, with the chancery clerk of the county where said sale is to be conducted, a bond in the penal sum of two thousand five hundred dollars ($2,500.00), to be approved by said chancery clerk, conditioned for the faithful compliance with the provisions of this article, and for the protection of any purchasers at said sale who may suffer loss because of misrepresentation or breach of warranty. Said bond shall be filed by said chancery clerk with said inventory, and shall be and remain a part of the public records of his office.

§ 75-61-7

It shall be unlawful for any person, firm or corporation to sell or offer to sell, at auction, any such gold, silver, plated ware, clocks, watches, cut glass, china ware, or jewelry from the 1st day of April to the 30th day of September, both inclusive, between the hours of seven o'clock in the evening and seven o'clock the following morning, and from the 1st day of October to the 31st day of March, both inclusive, between the hours of five o'clock in the evening and eight o'clock the following morning.

§ 75-61-9

Each separate sale of any article of merchandise above described at public auction without first having complied with all the provisions of this article shall constitute a separate violation or offense, and whoever violates any of the provisions of said article shall be deemed guilty of a misdemeanor, and upon conviction shall be fined not less than Twenty-five Dollars ($25.00) nor more than One Hundred Dollars ($100.00) for each such offense.

§ 75-61-11

Every person, firm or corporation conducting such auctions shall be truthful in marking or describing the quantity, quality, size, grade, or kind, or value, of merchandise being offered at auction, and for the purpose hereof all such statements or representations shall be warranties.

§ 75-61-13

This article shall not apply to judicial sales, nor to sales by executors or administrators, nor to sales by legally and duly appointed trustees of unredeemed pledges, nor to articles that constitute any part of regular household furnishings.

§ 75-61-101

As used in this article, the term “person” shall also include any company, firm, association or corporation as well as an individual.

§ 75-61-103

No person shall fabricate, sell, offer to sell, or have in his possession with intent to sell or offer to sell eyeglasses or sunglasses unless they are fitted with plastic lenses, with laminated lenses, or with glass lenses which are tempered or case hardened. Glass lenses shall have a minimum center thickness of two (2) millimeters, in all cases except those cases where such lenses will not fulfill the visual requirements of the particular patient.

§ 75-61-105

A violation of this article shall constitute a misdemeanor, and a conviction therefor shall result in a fine of not more than one hundred dollars ($100.00) and not less than twenty-five dollars ($25.00) for each separate offense.

Chapter 63 Sales of Cemetery Merchandise and Funeral Services

§ 75-63-5

Nothing contained in this chapter shall be construed to require any cemetery to accept any personal property, or perform any personal services contrary to law or ordinances pertaining to the burial of deceased human beings, or contrary to rules and regulations of a cemetery pertaining to the quality and kind of personal property that may be used in connection with the burial of deceased human beings in any such cemetery.

§ 75-63-25

(1) Any preneed contract which is executed by the decedent for his own arrangements and is fully funded overrules, following the decedent's death, the conflicting wishes of the decedent's next of kin, unless a compelling public interest makes it impossible to comply with a decedent's directions in a preneed contract.

(2) The provisions of this section shall not prevent the decedent's next of kin or surviving heirs at law from, at their own expense, pursuing reasonable services and making reasonable arrangements that do not conflict with the decedent's directions in a preneed contract.

(3) All contract providers shall have the right to rely on the preneed contract and perform obligations in accordance with the preneed contract. There shall be no liability for any contract provider who in good faith performs his obligations pursuant to the preneed contract, provided the preneed contract is in compliance with Section 75-63-51 et seq. and any rules promulgated thereunder.

§ 75-63-51

This article shall be known and may be cited as the “Preneed Cemetery and Funeral Registration Act.”

§ 75-63-53

As used in this article, unless the context requires otherwise:

(a) “Buyer” means the person who purchases the preneed contract.

(b) “Cash advance item” means any item of service or merchandise described to a purchaser as a “cash advance,” “accommodation,” “cash disbursement” or similar term. A cash advance item is also any item obtained from a third party and paid for by the funeral provider on the purchaser's behalf. Cash advance items may include, but are not limited to: cemetery or crematory services; pallbearers; public transportation; clergy honoraria; flowers; musicians or singers; nurses; obituary notices; gratuities and death certificates.

(c) “Cemetery” means an organization as defined in Section 41-43-33.

(d) “Contract insured” or “contract owner” means the person upon whose death will initiate the performance of a preneed contract.

(e) “Contract provider” means the funeral home, cemetery or other providers of merchandise and/or service in a preneed contract that will be responsible for performing a preneed contract.

(f) “Crematory” means an organization as defined in Section 73-11-41.

(g) “Financial institution” means a bank, trust company, savings bank, or savings and loan association chartered or authorized to do business in this state.

(h) “Funeral home” means a business licensed under Section 73-11-55.

(i) “Inflation proof contract” means a preneed contract that establishes a fixed price for funeral services and merchandise without regard to future price increases.

(j) “Insurance” means a life insurance policy, an annuity policy or a Class A or Class B burial insurance policy.

(k) “Merchandise” means personal property associated with the disposal of or memorializing a deceased human being, including, but not limited to, a casket, burial vault, burial clothes, urn or monument.

(l) “Preneed contract” means any contract, agreement or any series or combination of contracts or agreements, whether funded by trust deposits or insurance, or any combination thereof, which has for a purpose the furnishing or performance of funeral services, or the furnishing or delivery of merchandise, of any nature in connection with the final disposition of a dead human body, to be furnished or delivered at a time determinable by the death of the person whose body is to be disposed of but shall not mean the furnishing of a cemetery lot, crypt, niche or mausoleum.

(m) “Preneed contract for caskets” means any contract, agreement or any series or combination of contracts or agreements, whether funded by trust deposits or insurance, or any combination thereof, that is for the purpose of furnishing or delivering a casket or caskets for the final disposition of a dead human body, to be furnished or delivered at a time determinable by the death of the person whose body is to be disposed of.

(n) “Seller” means the person who sells a preneed contract.

(o) “Services” means services of any nature in connection with the final disposition of a dead human body.

(p) “Standard contract” means a preneed contract that applies the trust funds or insurance proceeds to the purchase price of specific funeral services and specific merchandise at the time of death of the contract insured without a guarantee against future price increases.

(q) “Substitute provider” means any funeral home, cemetery, or other provider of merchandise and/or services who furnishes final needs to a beneficiary of a preneed contract sold by another provider regardless of whether the substitute provider honors the terms and conditions of the original preneed contract.

(r) “Trust” means an express trust created by a trust instrument whereby a trustee has the duty to administer a trust asset for the benefit of a named preneed contract insured.

(s) “Trustee” or “trust officer” means an original, added or successor trustee including its successor by merger or consolidation.

(t) “Trust documents” means documents, including, but not limited to, preneed contracts, receipts, contract owner's death certificate, proof of death, the trust agreement, and any and all correspondence between the trustee or trust institution and the contract provider or contract insured.

§ 75-63-55

(1) No person, firm, partnership, association or corporation may directly or indirectly, or through an agent, engage in the sale of preneed contracts or preneed contracts for caskets except as authorized under this article. Any person, establishment or company required to register under Section 73-11-67 that sells preneed contracts for caskets, either directly or indirectly or through an agent, shall be required to meet all of the requirements of this article that are applicable to preneed contracts. All preneed contracts sold shall be evidenced in writing on forms approved by and on file with the Secretary of State. No contract form may be used without prior approval of the Secretary of State. No amendment or modification can be made to any preneed contract without prior approval of the Secretary of State. The use of any oral preneed contract, or any written contract, in a form not approved by the Secretary of State, shall be a violation of the chapter and subject to the penalties provided in Section 75-63-69. The contract shall clearly indicate the names and addresses of the buyer, contract insured, contract provider and seller. The Secretary of State may by rule or regulation prescribe specific contract content or a standard contract form required for use by all contract providers describing the rights and responsibilities of the contract provider and the contract owner. However, no standard form contract or contract language shall be inconsistent in any way with the provisions of this article. The Secretary of State is further authorized to implement a systematic method to identify and track preneed contract sales for the purpose of reconciling sales reported to the Secretary of State on the annual report required by Section 75-63-67 with trust fund activity statements and the provider's business records.

(2) The contract shall clearly indicate all merchandise covered by the contract, a description of the merchandise quality, and the total cost of all merchandise covered by the contract. The contract shall list all services covered by the contract and the total cost for all services covered by the contract. The contract shall list all cash advance items covered by the contract and the total cost for all cash advance items covered by the contract.

(3) All preneed contracts sold shall be funded by trust or insurance as defined in this article or evidenced by a warehouse receipt, as contemplated in Uniform Commercial Code-Documents of Title, Section 75-7-101 et seq. All merchandise placed on a warehouse receipt or placed in storage shall be reported to the Secretary of State in the preneed report as required by Section 75-63-67.

(4) If the preneed contract is funded by a policy of insurance, as defined by Section 83-5-5, a copy of the insurance policy shall be furnished to the insured within fifteen (15) days of issue. Such insurance shall be subject to the insurance laws of the state.

The insured shall be furnished the following:

(a) A list of the merchandise, including a description of the merchandise quality, and services which are applied or contracted for in the preneed contract and all relevant information concerning the price of the funeral services, including an indication that the purchase price is either guaranteed at the time of purchase or to be determined at the time of need;

(b) All relevant information concerning what occurs and whether any entitlements or obligations arise if there is a difference between the proceeds of the life insurance policy and the amount actually needed to fund the preneed contract; and

(c) Any penalties or restrictions, including, but not limited to, geographic restrictions or the inability of the provider to perform, on the delivery of merchandise, services or the preneed guarantees.

If the preneed contract is not funded by a policy of insurance, as defined by Section 83-5-5, a copy of the preneed contract shall be furnished to the contract insured at the time of purchase.

(5) If the preneed contract is funded by trust, the contract shall indicate the name, address and telephone number of the trustee; the trust institution; the amount to be paid; the frequency of payment; and the length of time payments will be paid into the trust. The contract insured must initial on the contract the percentage required to be trusted and the designation of the trust officer. In addition, the contract should clearly indicate any exclusions or limitations of the preneed contract including, but not limited to, any additional payments that may be owed if the contract insured dies before the agreed upon payment period is completed.

(6) The preneed contract shall indicate whether it is a standard contract or an inflation proof contract. The contract shall clearly indicate which merchandise and services are guaranteed as to price.

(7) The preneed contract shall contain the address and phone number of the Secretary of State with instructions that consumer complaints may be filed with the Secretary of State.

(8) If the preneed contract is paid in multiple payments, the contract should indicate the amount, frequency and duration of the payments and the amount of any interest charged. The contract shall also include the impact on the contract if payments are not made.

(9) The use of any oral preneed contract, or any written contract, in a form not approved by the Secretary of State, shall be a violation of this article and subject to the penalties provided in Section 75-63-69.

§ 75-63-56

(1) The Secretary of State may deny, suspend, revoke, cancel or nonrenew any registration on the following grounds:

(a) The applicant or registrant has failed to comply with a provision of this article or any valid rule, regulation or order that the Secretary of State has issued;

(b) The registrant has obtained its registration through misrepresentation or fraud or the applicant has attempted to obtain a registration through misrepresentation or fraud;

(c) An officer, director, manager or owner of the applicant or registrant has improperly withheld, misappropriated or converted any monies or properties received in the course of the prepaid funeral contracts business to the registrant's or applicant's own use;

(d) An officer, director, manager or owner of the registrant or applicant has been found to have committed any unfair trade practice or fraud during the course of prepaid funeral contracts business;

(e) The registrant or applicant failed to provide a written response after receipt of a written inquiry from the Secretary of State or his representative as to transactions under the registration within fourteen (14) days after receipt thereof, unless the Secretary of State or his representative knowingly waives the timely response requirement in writing;

(f) The registrant or applicant has refused to be examined or produce any of his accounts, records or files for examination or has failed to cooperate with the Secretary of State in an investigation when requested by the Secretary of State or his representative;

(g) The registrant or applicant is indebted to the Secretary of State for any unpaid fine, penalties or fees;

(h) The registrant or applicant does not possess an active license for the practice of funeral service or a funeral director's license or licensed funeral establishment, if applicable, in good standing from the Mississippi State Board of Funeral Service; or

(i) The registrant or applicant is in violation of any of the provisions contained in the Mississippi Cemetery Law, Section 41-43-31 et seq.

(2) The Secretary of State may issue a cease and desist order, with or without a prior hearing, against the registrant, applicant, or other person or persons engaged in any prohibited act or practice directing them to cease and desist from further illegal activity, including the sale of preneed contracts, when there appears to be an immediate harm or threat of harm to consumers impacting public safety, health or welfare. If the Secretary of State finds in his order that the public health, safety or welfare imperatively requires emergency action, the Secretary of State may also summarily suspend any registration issued by him, but shall promptly hold an administrative hearing regarding the suspension or any order of cease and desist issued without a prior hearing. In those cases, the Secretary of State must convene a full hearing on the issues within ten (10) calendar days of the order of cease and desist or suspension.

(3) In exceptional circumstances where there appears an immediate harm or threat of harm to consumers due to a prohibited act or practice, the Secretary of State may issue an order to any trust officer or trust institution freezing any disbursements from a trust until the time that the Secretary of State may convene a full hearing on the matter prompting the order. In those cases, the Secretary of State shall convene a full hearing on the issues within ten (10) calendar days of the order, after which the Secretary of State may extend or lift the order.

§ 75-63-57

The contract provider or its successor shall maintain in this state a copy of all preneed contracts and associated accounts, books and records for a period of the lifetime of each contract and for two (2) years after the death of a contract insured. The trustee shall maintain a copy of all trust documents for a period of the lifetime of each contract and for two (2) years after the death of a contract insured.

§ 75-63-59

(1) If the contract is funded by trust, the Secretary of State shall be given a copy of the trust agreement, which the Secretary of State shall review and approve in advance. The Secretary of State may at any time require the submission of the trust agreement for review and approval from any preneed provider. The Secretary of State shall approve in advance any amendments or modifications to the trust agreement. The Secretary of State shall be informed in writing as to how the assets of the trust are held. In the event of any change in the investment composition of the trust assets, or change in the trustee or trust institution, the Secretary of State shall be informed within ten (10) days after the time the change occurs.

(2) Any trustee, other than a financial institution, shall not be the contract provider, the seller, or an officer or director of the contract provider if the contract provider is a corporation.

(3)(a) In no event may trust funds be loaned, directly or indirectly, to any of the following persons: the preneed provider; any entity in which the preneed provider has any financial interest; any employee, director, member, stockholder, partner, full or partial owner, or principal of the preneed provider; or any person related by blood or marriage to any of those persons.

(b) In no event may trust funds, directly or indirectly, be invested in or with any business or business venture in which any of the following persons have an interest: the preneed provider; any entity in which the preneed provider has any financial interest; any employee, director, member, stockholder, partner, full or partial owner, or principal of the preneed provider; or any person related by blood or marriage to any of those persons.

(4) Not later than the fifth day of the following month from when funds are received, the contract seller shall place in a trust account in a financial institution as defined by this article at least eighty-five percent (85%) of the funds received for funeral services and merchandise. The contract shall disclose to the purchaser in boldface type the percentage of funds the seller is required to trust along with the name of the trust officer, the trust institution, the address and phone number of the same. The purchaser shall initial the corresponding paragraph in the contract indicating notice of the trust percentage and acknowledge being provided the name of the trust officer, the trust institution, address and phone number. The contract seller must provide the trustee with documentation containing the contract owner's identity and allocable share for each remittance. Trust accounts shall be carried in the name of the preneed seller, but accounting records shall be established and maintained for each individual preneed funeral contract beneficiary showing the amounts deposited and invested. The Secretary of State may by rule address the recordkeeping required for interest, dividends, increases and accretions earned.

(5) Reasonable annual trust fees including any income taxes owed to the State of Mississippi and/or the United States Treasury may be withheld from the earnings of the trust.

(6) At the time of death, if the contract provider provides the merchandise and services indicated in the contract, the contract provider shall furnish to the trustee a copy of the preneed contract, contract owner's death certificate or proof of death, and a letter of performance indicating that the contracted merchandise and services were provided by the contract provider to the contract insured. Upon receipt of the letter of performance and death certificate, or proof of death, the trustee shall pay to the contract provider all funds, which shall not be less than the amount deposited in trust. In the limited instance only when a preneed provider furnishes a personalized, engraved marker, headstone or monument before death, the trustee may disburse to the preneed provider compensation for the engraved marker, headstone or monument as well as any associated engraving, setting or delivery fees. In those instances, no disbursement from the trust shall be made until the trustee receives from the preneed provider a delivery ticket or invoice, documentation for the engraving of identifying information regarding the purchaser, and a letter of performance indicating that the engraved marker, headstone or monument has been provided.

Any trust officer or trust institution that releases trust funds for funeral services or merchandise in a manner contrary with the provisions of this article shall be liable for the same. Furthermore, any trustee or trust institution that engages in fraud, deceit, misrepresentation, or misappropriation of trust funds to the detriment of a contract provider or a contract insured shall be liable for the same.

(7) If a substitute provider was named by the contract beneficiary, during his life, or by one with the legal authority to act on his behalf at any time, the substitute provider shall provide the trustee with a death certificate or published obituary along with an invoice verifying that the substitute provider serviced the final needs of the beneficiary. Within ten (10) days of receipt of the documentation of death and invoice from the substitute provider, the trustee shall pay the substitute provider or the estate of the contract beneficiary not less than the amount deposited in trust on behalf of the serviced beneficiary. For all trust funded preneed contracts sold on or after July 1, 2012, the trustee shall pay the substitute provider not less than the amount deposited into trust on behalf of the serviced beneficiary in addition to all earnings, interest and income on the beneficiary's principal.

(8) Preneed trust funds are exempt from all claims of creditors of the preneed provider, except as to the claims of the contract purchaser or his representatives, and cannot be used as collateral, pledged or in any way encumbered or placed at risk.

§ 75-63-61

(1) If the preneed contract is funded with insurance, and payment is made to the contract seller rather than directly to the life insurance company, the contract seller shall timely submit to the insurance company all premiums collected from the contract purchaser.

(2) At the time of death, the proceeds of the policy shall be settled in accordance with the policy. If the contract provider furnishes merchandise and services as indicated in the contract, the contract provider is entitled to retain the proceeds of the policy in accordance with the preneed contract. If the contract provider does not furnish merchandise and/or services as provided in the preneed contract, the contract provider shall pay to the estate of the contract insured or the substitute provider of the merchandise and/or services the proceeds of the policy within ten (10) days of receipt of these proceeds.

§ 75-63-63

Preneed contracts entered into in this state shall be portable. The naming of a substitute provider shall be in writing by the contract beneficiary or by one who is authorized by law to act on their behalf. If the preneed contract is funded by trust, the notice of a substitute provider shall be made to the original preneed contract seller and the trustee holding funds for the beneficiary. Upon receipt of the notice of substitute provider, the original provider shall be relieved of all obligations to perform the contract including all obligations of reporting and accounting. If the preneed contract is funded by insurance, the change of beneficiary shall be made in writing to the insurance company. If for any reason insurance proceeds are paid to a preneed seller who did not furnish the final needs of the beneficiary at their time of need, the policy proceeds shall be paid in full to the substitute provider or the estate of the preneed beneficiary within ten (10) days of receipt.

§ 75-63-65

(1) Any establishment or organization that engages in the business of selling preneed merchandise and/or services shall register with the Secretary of State and shall pay a registration fee. A separate registration is required for each separate corporation or business entity. Applicants for registration shall provide the Secretary of State with any information and documents as he may require. The establishment or organization shall pay to the Secretary of State for the initial registration of the main establishment or organization a fee of Two Hundred Fifty Dollars ($250.00). For each year thereafter, the registration fee shall be Fifty Dollars ($50.00) per year due at the time that the annual report is required to be filed with the Secretary of State.

(2) Any person who engages in the business of selling preneed contracts shall register with the Secretary of State and shall be subject to the rules and regulations promulgated by the Secretary of State as provided in this article.

(3) The Secretary of State shall establish regulations to register each establishment or organization selling preneed merchandise or services. No establishment or organization shall be registered to sell preneed merchandise or services that the establishment or organization cannot lawfully provide at the time of a person's death. The Secretary of State shall also maintain a record of all individuals who are registered to sell preneed merchandise or services through the registered establishment.

(4) The Secretary of State shall establish regulations to register each person selling preneed contracts, including the establishment through which the seller will be selling. No person shall be registered to sell preneed contracts without indicating the establishment for which he is selling. Only a registered preneed establishment can sponsor a person for registration. The preneed operator shall inform the Secretary of State of any changes with its sales agents within thirty (30) calendar days of the same.

(5) The Secretary of State shall develop and furnish the forms necessary for the registration of establishments and individuals selling preneed contracts.

§ 75-63-67

(1) Every preneed establishment shall annually submit a written or electronic report to the Secretary of State of its preneed contract sales and performance of those contracts. This report shall be filed on or before March 31 of each year for the calendar year ending the preceding December 31. The Secretary of State shall impose an administrative fine in the amount of One Hundred Dollars ($100.00) per day for each day that the report is late. The administrative fine shall be in addition to any other administrative penalties provided under this article. The Secretary of State shall promulgate rules and regulations to regulate preneed contracts and the duties and responsibilities of preneed establishments; the content and filing procedure of reports; and filings of additional reports if deemed necessary by the Secretary of State to carry out the purposes of this article. The Secretary of State may assess any fines and fees necessary to carry out the provisions of this article.

(2) Every preneed trust officer or trust financial institution shall annually submit to the Secretary of State a statement of all trust fund account activity on or before March 31 of each year for the calendar year ending the preceding December 31. The statement or report shall reflect the trust balance as of December 31 for the preceding calendar year. The Secretary of State is authorized to assess a penalty against the trust institution for each day the statement is late, not to exceed Five Hundred Dollars ($500.00) in any one (1) year.

§ 75-63-68

A registered preneed contract provider may convert trust funded prepaid funeral benefits to insurance funded prepaid funeral benefits or annuity contracts upon appeal to the Secretary of State. If approved, the Secretary of State shall issue an order authorizing the withdrawal of funds for the provider to purchase preneed insurance or annuity contracts. The preneed seller shall disclose in writing to all affected preneed purchasers the terms of the insurance policy or annuity contract. Except as provided in this section, no funds deposited in trust with a trustee shall be withdrawn by the trustee to purchase a preneed insurance policy or annuity contracts.

§ 75-63-69

(1) Whenever it appears to the Secretary of State that any person has engaged, or is about to engage, in any act or practice constituting a violation of any provision of this article or any rule or order under this article, he may, in his discretion, seek any or all of the following remedies:

(a) Issue a cease and desist order with a prior hearing against the person or persons engaged in the prohibited activities directing them to cease and desist from further illegal activity;

(b)(i) Issue an order in the case of any person, partnership or, if a corporation, the officers and directors who sell or offer to sell preneed contracts, or other person who violated this article, imposing an administrative penalty up to a maximum of One Thousand Dollars ($1,000.00) for each offense, and each violation shall be considered as a separate offense in a single proceeding or a series of related proceedings, with total penalties not to exceed Ten Thousand Dollars ($10,000.00) in any of those proceedings, to be paid to the Secretary of State and requiring reimbursement to the Secretary of State for all costs and expenses incurred in the investigation of the violation(s) and in the institution of administrative proceedings, if any, as a result thereof;

(ii) For the purpose of determining the amount or extent of a sanction, if any, to be imposed under paragraph (b)(i) of this subsection, the Secretary of State shall consider, among other factors, the frequency, persistence and willfulness of the conduct constituting a violation of this article or a rule promulgated under this article, or an order of the Secretary of State, the number of persons adversely affected by the conduct and the resources of the person committing the violation;

(c) Bring an action in chancery court to enjoin the acts or practices to enforce compliance with this article or any rule or order under this article. Upon a proper showing, a permanent or temporary injunction, restraining order or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets. In addition, upon a proper showing by the Secretary of State, the court may enter an order of rescission or restitution directed to any person who has engaged in any act constituting a violation of any provision of this article or any rule or order under this article, or the court may impose a civil penalty up to a maximum of One Thousand Dollars ($1,000.00) for each offense, and each violation shall be considered as a separate offense in a single proceeding or a series of related proceedings, with total penalties not to exceed Ten Thousand Dollars ($10,000.00) in any of those proceedings. The court may not require the Secretary of State to post a bond.

(2) The Secretary of State may, with a prior hearing, suspend or revoke any preneed establishment or salesperson registration for violation of statutes, regulations, or an order issued under this article.

(3) Any person, partnership or, if a corporation, the officers and directors who sell or offer to sell a preneed contract with a suspended or revoked registration shall be guilty of a misdemeanor and, upon conviction thereof, shall be punishable by a fine not less than Two Hundred Dollars ($200.00) nor more than Five Hundred Dollars ($500.00) or by imprisonment for a term of not more than one (1) year, or both fine and imprisonment.

(4) Any person, partnership or, if a corporation, the officers and directors who embezzle or fraudulently or knowingly and willfully misapply or convert preneed funds shall, upon conviction, be punished by imprisonment in the custody of the Mississippi Department of Corrections for a term of not less than ten (10) years, or be fined not more than One Thousand Dollars ($1,000.00) and imprisoned in the county jail not more than one (1) year, or both fine and imprisonment. Each such violation shall constitute a separate offense.

(5) Upon reasonable belief that a person or corporation is acting in violation of the portions of this article requiring fines or imprisonment, the Secretary of State shall immediately report this violation accompanied by all relevant records to the Insurance Integrity Enforcement Bureau within the Office of Attorney General created in Section 7-5-301, or to the district attorney, county or municipal attorney having jurisdiction for the same.

(6) No order shall be entered under this section without the following:

(a) An appropriate prior notice to the applicant or registrant;

(b) An opportunity for a hearing; and

(c) Written findings of fact and conclusions of law.

(7) Any person aggrieved by a final order of the Secretary of State may obtain a review of the order in the Chancery Court of the First Judicial District of Hinds County, Mississippi, by filing in the court, within thirty (30) days after the entry of the order, a written petition praying that the order be modified or set aside, in whole or in part. A copy of the petition shall be forthwith served upon the Secretary of State and thereupon the Secretary of State shall certify and file in court a copy of the filing and evidence upon which the order was entered. When these have been filed, the court has exclusive jurisdiction to affirm, modify, enforce or set aside the order, in whole or in part.

§ 75-63-70

Upon a finding by a court of competent jurisdiction of failure to maintain or deposit in the trust account as required by this article, or of fraud, theft or misconduct by the preneed operator's managers, officers, directors or others who are personally responsible for the waste or unlawful depletion of trust funds, the managers, officers, directors or others may be jointly and severally liable for any deficiencies in the trust account as required by this article.

§ 75-63-71

The information contained in or filed with any registration, statement, application or report may be made available to the public under such rules as the Secretary of State prescribes. Information in the possession of, filed with or obtained by the Secretary of State in connection with any investigation or examination under this article shall be confidential and exempt from the requirements of the Mississippi Public Records Act of 1983. No such information may be disclosed by the Secretary of State, or any of his officers or employees, unless necessary or appropriate in connection with a particular investigation or proceeding under this article or for any law enforcement purpose.

§ 75-63-73

The Secretary of State shall, as often as he deems necessary, examine the business of any person or business offering preneed funeral services and merchandise, whether or not registered in compliance with this article. Any person or business so examined shall produce, upon request, all records requested by the Secretary of State's examiners. Any trustee or trust institution for a preneed funeral trust shall disclose to the Secretary of State any information regarding preneed trust accounts maintained by the trustee.

The records in the possession of any insurance company, third-party administrator, burial association, banking or trust institution, investment services company, funeral home establishment, crematory, cemetery, or any vendor, person or entity are open to inspection to any of the Secretary of State's examiners or investigators carrying out the provisions of this article.

For the purpose of any investigation or proceeding under this article, the Secretary of State, or any officer designated by him, may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence and require the production of any books, papers, correspondence, memoranda, agreements or other documents or records in the possession of any insurance company, third-party administrator, burial association, banking or trust institution, investment services company, funeral home establishment, crematory, cemetery, or any vendor, person or entity, whether located within or outside of this state, that the Secretary of State deems relevant or material to the inquiry.

§ 75-63-75

Nothing in this article shall be construed to authorize the sale of life insurance policies by unlicensed insurance producers which is prohibited by Section 83-17-55, Mississippi Code of 1972.

§ 75-63-77

(1) The seller shall apply for change of ownership or control when:

(a) The seller transfers all or a portion of the interest in any contract for prepaid funeral merchandise or services;

(b) The seller transfers one or more of its establishments for providing funeral merchandise or services;

(c) All or a portion of the equity ownership of a seller has been transferred that will result in a change of:

(i) The sale of more than fifty percent (50%) of the interest of a seller when the seller is a corporation;

(ii) Ownership of a seller when the seller is other than a corporation;

(d) The seller transfers all of its business assets relating to providing funeral merchandise or services; or

(e) The seller terminates its business of providing funeral merchandise or services.

(2) At least fifteen (15) days before the proposed occurrence of an event described in subsection (1) of this section, the seller shall file a verified change of ownership application with the Secretary of State, which shall contain the following:

(a) The name and address of the seller;

(b) The name and address of the organization proposing to acquire property of the seller, hereinafter referred to as the “transferee”;

(c) A description of the property and of the proposed transaction, as set forth in subsection (1) of this section;

(d) An accounting of the trust fund and all outstanding contracts, which accounting shall contain all the information required in the annual report, prepared as of a date within thirty (30) days of the required application filing date;

(e) Any required documents or amendments thereto relating to the trust fund;

(f) A copy of any notice proposed to be sent to the contract buyers after the transfer;

(g) A filing fee of One Hundred Dollars ($100.00); and

(h) Any other information that may reasonably be required by the Secretary of State by rule or order.

(3) The Secretary of State must approve the change in ownership or control. The Secretary of State shall approve the seller's application for change of ownership by written authorization if:

(a) The transferee set forth in the application holds a valid, current registration under the provisions of this article;

(b) The accounting required is complete, accurate, and reflects the trust fund whole and intact; and

(c) All required information and documents are filed with and approved by the Secretary of State.

(4) The Secretary of State shall have the authority by rule or order to waive or reduce any of the requirements contained in subsection (2) of this section as not being necessary or appropriate in the public interest or for the protection of the contract purchasers.

(5) The seller, or its interest therein, shall remain liable for all funds and transactions to the effective date of the transfer. The buyer shall be liable for all funds and transactions thereafter.

(6) Any shortages in the trust fund due to the failure to properly capitalize the trust in accordance with Section 75-63-59 shall be funded by the preneed seller or new owner before closing. Nothing provided in this section shall alleviate or excuse the purchaser from exercising due diligence in the transaction before closing.

§ 75-63-79

(1) If a preneed provider ceases to do business or the provider's license issued by the State Board of Funeral Service is revoked or suspended or the registration to sell preneed funeral contracts is revoked or lapsed and application for a replacement registration has not been filed, the provider shall within thirty (30) days submit to the Secretary of State a complete listing of names and addresses of all active contracts. The provider shall also notify all contract purchasers in writing that their contracts are to be transferred to another registered provider of the purchaser's choice. The Secretary of State shall review and approve the form of the notice. The transferor shall then transfer the contracts and notify the Secretary of State of the providers selected within sixty (60) days of the termination of the preneed registration. All contracts funded by burial insurance or trust funds together with interest are to be transferred. The selling provider forfeits its right to any monies it otherwise would be entitled. If the provider fails to provide for the transfer of contracts within sixty (60) days, the purchasers may directly request the trust officer to transfer the account balance to another provider selected by the purchaser. The purchaser may also request that an insurance company assign another provider as beneficiary for the insurance policy.

(2) The Secretary of State has jurisdiction over the provider and the burial insurance policy or trust funds together with interest of all active contracts, and has the authority to accomplish the necessary transfer of preneed funeral contracts and trust funds in all cases in which the terminating provider has failed to effectuate the transfer to a registered provider within four (4) months of the date the provider's license issued by the State Board of Funeral Service was cancelled or the registration to sell preneed funeral contracts was terminated.

§ 75-63-81

(1) There is established a Preneed Contracts Loss Recovery Fund, hereinafter referred to as the “fund,” to be administered by directors of the Preneed Contracts Loss Recovery Association, hereinafter referred to as the “association.” Directors are to be appointed by the Secretary of State. The purpose of the fund is to reimburse the estates, or in the absence of an estate filing, the purchaser or applicant with payment jointly to the funeral home providing services or merchandise, or both, of beneficiaries of preneed funeral contracts who have suffered financial loss as a result of the misfeasance, fraud, default, failure or insolvency of a registered Mississippi preneed provider.

(2) The fund shall be funded from a charge not to exceed Ten Dollars ($10.00) to be added to the cost of every preneed contract sold from and after July 1, 2009; however, if the preneed contract is funded solely with insurance that is protected by the Mississippi Life and Health Insurance Guaranty Association, then that fee shall not be charged. The association may reduce, suspend or resume collection of the fee at any time and for any period to ensure that a sufficient amount is available to meet anticipated disbursements and to maintain an adequate reserve consistent with actuarial guidance.

The per-contract fees shall be remitted quarterly to the association for each quarter of the calendar year with a quarterly fee form as prescribed by the Secretary of State. The per-contract fee is not subject to the trusting requirements of Section 75-63-59. The fees shall be remitted to the association no later than fifteen (15) days after each quarter. Absent the Secretary of State's approval of an extension for good cause shown, preneed providers failing to timely report and remit the per-contract fee to the association may be subject to a penalty of One Hundred Dollars ($100.00) per day for each day of delinquency, payable to the fund.

(3) All sums received by the association shall be held in a separate account maintained by the State Treasurer to be used solely as provided in this article. Warrants to the fund may only be issued by the Department of Finance and Administration upon request by a majority vote of the directors of the Preneed Contracts Loss Recovery Association. All interest or other income earned on the fund shall be retained by the fund.

(4) Reimbursements from the fund must not exceed the total payment made for preneed funeral services or merchandise, cemetery services or merchandise, or both. No current insurance benefits or future graduated insurance benefits may be reimbursed, including any current or future graduated insurance benefits in any insurance company insolvency guaranty fund association. Upon the death of the beneficiary and the applicant's compliance with all applicable rules of the association, reimbursement from the fund may be made to the estate of the beneficiary, the purchaser or applicant with payment jointly to the funeral home or cemetery providing services or merchandise, or both, only to the extent to which losses are not bonded or otherwise covered. If the association makes payments from the fund under this section, the association is subrogated in the reimbursed amount and may bring an action against any person or entity, including a preneed provider. The association may enforce claims it may have for restitution or otherwise and may employ and compensate from the fund consultants, legal counsel, accountants and other persons it considers appropriate to assure compliance with this section.

(5) The association shall investigate all applications made and may reject or allow claims, in whole or in part. Payment may be made only to the extent that monies are available in the fund, and payments may be prorated among claimants. Reimbursements for completed claims must be processed subject to availability of monies in the fund. The association has complete discretion to determine the order and manner of payment of approved applications. The association may approve one (1) application, in whole or in part, that includes more than one (1) reparation claim for the benefit of purchasers of prepaid contracts of an insolvent registrant as part of a plan to arrange for another registrant to assume the obligations of the licensee being liquidated if the association finds that the plan is reasonable and is in the best interests of the contract beneficiaries. All payments are a matter of privilege and not a right, and no person has a right in the fund as a third-party beneficiary or otherwise.

(6) The association shall develop a form of application for reimbursement.

(7) This fund and all interest earned may be used only as prescribed in this section and may not be used for any other purposes to the extent losses are not bonded, insured, or otherwise covered, protected or reimbursed. Further, all monies deposited into the fund shall not be subject to any deduction, tax, judgment lien, levy, or any other type of assessment except as may be provided in this article. The association may expend monies from the fund to:

(a) Make reimbursements on approved applications;

(b) Purchase insurance to cover losses and association liability as considered appropriate by the directors and not inconsistent with the purpose of the fund;

(c) Invest portions of the fund as are not currently needed to reimburse losses and maintain adequate reserves, as are permitted to be made by fiduciaries under state law;

(d) Pay the expenses of the association for administering the fund, including employment of legal counsel, accountants, consultants and other persons the board considers necessary to assure compliance with this section;

(e) Effective upon June 23, 2017, no monies deposited to the fund may be used to reimburse, or otherwise defray any costs that the Office of the Secretary of State may incur in administering this fund, or in support of the association.

(8) No person may make, publish, disseminate, circulate or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter, poster or over any radio station or television station, or in any other way, any advertisement, announcement, or statement that uses the existence of the fund for the purpose of sales, solicitation or inducement to purchase any form of preneed contract covered under this article.

(9) The Secretary of State may establish rules and regulations necessary to implement the purposes of this section including, but not limited to, rules governing the association's operations, claim procedures, determination of solvency or insolvency of a preneed provider, claimant eligibility and determination of appropriate loss payee.

(10) No purchaser or representative of a purchaser is provided in this section with any administrative right or legal or equitable right to any funds collected for this association to satisfy any judgment or economic loss of the purchaser from a prepaid funeral or cemetery organization except for the purposes of this section. This fund is established for the discretionary relief of purchasers and their representatives of prepaid funeral or cemetery contracts from insolvent prepaid funeral or cemetery organizations or prepaid funeral businesses with severe trust fund account shortages as determined by the directors. Coverage is limited to the claimant's actual contract payments made. There shall be no fund coverage for additional economic damages, attorney's fees, recovery costs, interest, other equitable relief or noneconomic damages.

Further, no claimant shall be eligible for compensation from the fund unless the contract purchaser for whom a claim is asserted paid to the preneed provider the loss recovery fee required by subsection (2) of this section. The fund shall have no liability for preneed contracts sold or claims that occurred or accrued before July 1, 2009.

(11) There shall be no liability on the part of and no cause of action of any nature shall arise against any director of the association, the Secretary of State, his representatives, agents or employees for any act or omission by them in the performance of their powers and duties under this article, or in its administration, dispensation, handling or collection of funds for the program.

(12) Directors of the association shall be appointed by the Secretary of State and shall consist of no fewer than five (5), one (1) from each of the Mississippi Supreme Court Districts and two (2) from the state at large. In making director appointments the Secretary of State shall consider, among other things, whether all association members are fairly represented. At least three (3) of the directors must possess five (5) years' or more experience in the preneed funeral service and merchandise business as an owner or manager. All directors shall be appointed for staggered six-year terms, with the exception of the initial terms of service for the original five (5) directors. The Secretary of State may appoint any director to a successive six-year term. The initial term of service for all directors shall begin on October 1, 2009, with the initial term of two (2) directors to be determined by the Secretary of State at appointment expiring on September 30, 2011, and two (2) directors to be determined by the Secretary of State at appointment expiring on September 30, 2013. The initial term for the remaining director to be determined by the Secretary of State at appointment shall expire on September 30, 2015.

(13) [Deleted]

(14) The association and its directors shall assist the Secretary of State and be subject to the applicable provisions of the laws of this state. The association shall be subject to examination and regulation by the Secretary of State. The association by its directors shall prepare and submit to the Secretary of State each year, not later than March 1 of each year, a financial report in a form approved by the Secretary of State and a report of activities during the preceding calendar year.

(15) Appeal rights for claim decisions issued by the association directors exist in the chancery court in this state in which an estate has been open for probate by the representative of the claimant; the chancery court in the county in which the preneed contract was purchased; or the chancery court in this state of the claimant's or decedent's home county. A notice of appeal must be filed within thirty (30) days of the association's written order denying the claim, in whole or in part, and appeal to the chancery court is limited to a review of the record made before the association's directors on a substantial evidence evidentiary standard.

Chapter 65 Going Out of Business Sales; Unsolicited Goods

§ 75-65-1

For the purposes of Sections 75-65-1 through 75-65-17, “closing-out sale” shall mean and include all sales advertised, represented or held forth under the designation of “going out of business,” “discontinuance of business,” “selling out,” “liquidation,” “lost our lease,” “must vacate,” “forced out,” “removal,” or any other designation of like meaning; and “person” shall mean and include individuals, partnerships, voluntary associations and corporations.

§ 75-65-3

(1) No person shall advertise or offer for sale a stock of goods, wares or merchandise under the description of closing-out sale, or a sale of goods, wares or merchandise damaged by fire, smoke, water or otherwise, unless he first shall have obtained a permit to conduct such sale from the chancery clerk of the county in which such sale is to take place; or if such sale is to take place within a municipality, said person shall apply for and procure such permit from the city clerk of the municipality. The applicant for such permit shall make to such clerk an application therefor in writing and under oath at least fourteen (14) days prior to the opening date of sale, showing all the facts relating to the reasons and character of such sale, including the opening and terminating dates of the proposed sale, a complete inventory of the goods, wares, or merchandise actually on hand in the place where such sale is to be conducted, and all details necessary to locate exactly and identify fully the goods, wares or merchandise to be sold; providing, however, that an application for a sale of goods, wares or merchandise damaged by fire, smoke, water or otherwise may be obtained within three (3) days prior to the opening date of the sale. The terminating date of such proposed sale shall be no later than seventy-five (75) days immediately following the date of such permit application.

(2) If such clerk shall be satisfied from said application that the proposed sale is of the character which the applicant desires to advertise and conduct, he shall issue a permit upon the application therefor, together with a bond, payable to the city, village or town in the penal sum of one thousand dollars ($1,000.00), conditioned upon compliance with Sections 75-65-1 through 75-65-17, to the applicant authorizing him to advertise and conduct a sale of the particular kind mentioned in the application. Any merchant who shall have been conducting a business in the same location where the sale is to be held for a period of not less than one (1) year, prior to the date of holding such sale, shall be exempted from the filing of the bond herein provided.

(3) Every city, town or village clerk to whom application is made shall endorse upon such application the date of its filing, and shall preserve the same as a record of his office, and shall make an abstract of the facts set forth in such application, and shall indicate whether the permit was granted or refused.

(4) Any person making a false statement in the application provided for in this section shall, upon conviction, be deemed guilty of perjury.

§ 75-65-5

No person in contemplation of a closing-out sale under a permit as provided for in Section 75-65-3 shall order any goods, wares or merchandise for the purpose of selling and disposing of the same at such sale, and any unusual purchase and additions to the stock of such goods, wares or merchandise within sixty (60) days prior to the filing of application for a permit to conduct such sale shall be presumptive evidence that such purchases and additions to stock were made in contemplation of such sale.

§ 75-65-7

No person carrying on or conducting a closing-out sale or a sale of goods, wares or merchandise damaged by fire, smoke, water or otherwise, under a permit as provided in Section 75-65-3 shall, during the continuance of such sale, add any goods, wares or merchandise to the damaged stock inventoried in his original application for such permit, and no goods, wares or merchandise shall be sold as damaged merchandise at or during such sale, excepting the goods, wares or merchandise described and inventoried in such original application.

§ 75-65-9

No person shall conduct a closing-out sale or a sale of goods, wares or merchandise damaged by fire, smoke, water or otherwise beyond the termination date specified for such sale, except that one (1) extension of thirty (30) days may be authorized upon proper showing of need; nor shall any person, upon conclusion of such sale, continue that business which had been represented as closing out or going out of business under the same name, or under a different name, at the same location, or elsewhere in the same city, town or village where the inventory for such sale was filed; nor shall any person, upon conclusion of such sale, continue business contrary to the designation of such sale.

§ 75-65-11

Any person who shall advertise, hold, conduct or carry on any sale of goods, wares or merchandise under the description of closing-out sale or a sale of goods, wares or merchandise damaged by fire, smoke, water or otherwise, contrary to the provisions of Sections 75-65-1 through 75-65-17, or who shall violate any of the provisions of said sections shall be deemed guilty of a misdemeanor.

§ 75-65-13

The provisions of Sections 75-65-1 through 75-65-17 shall not apply to sheriffs, constables or other public or court officers, or to any other person or persons acting under the permit, direction or authority of any court, state or federal, selling goods, wares or merchandise in the course of their official duties.

§ 75-65-15

Upon complaint of any person, the applicable chancery court shall have jurisdiction in equity to restrain and enjoin any act forbidden or declared illegal by any provisions of Sections 75-65-1 through 75-65-17.

§ 75-65-17

Provided, however, that the governing authorities of any county or municipality as the case may be are authorized herein to waive the entire provisions of Sections 75-65-1 through 75-65-17 in the case of any person upon a showing of facts to the satisfaction of said governing authorities that said person is for any cause actually and legitimately going out of business or conducting a sale of goods, wares or merchandise damaged by fire, smoke or otherwise. The governing authorities may likewise rescind any such waiver granted when in its opinion the applicant is no longer entitled to the privileges of the waiver previously granted.

§ 75-65-101

No person, firm, partnership, association or corporation, or agent or employee thereof, shall in any manner or by any means offer for sale goods, wares or merchandise where the offer includes the voluntary and unsolicited sending of goods, wares or merchandise not actually ordered or requested by the recipient, either orally or in writing. The receipt of any such unsolicited goods, wares or merchandise shall for all purposes be deemed an unconditional gift to the recipient who may use or dispose of the same in any manner he sees fit without any obligation on his part to the sender.

Chapter 66 Home Solicitation Sales

§ 75-66-1

(1) “Home solicitation sale” means a consumer credit sale of goods or services in which the seller or person acting for him engages in a personal solicitation of the sale at a residence of the buyer and the buyer's agreement or offer to purchase is there given to the seller or a person acting for him. It does not include a sale made pursuant to a preexisting revolving charge account, or a preexisting installment account allowing a series of sales, or a sale made pursuant to prior negotiations between the parties at a business establishment at a fixed location where goods or services are offered or exhibited for sale, or where the sale is initiated by the buyer, or where the seller is regulated by the Mississippi Public Service Commission. Where the first contact has been made by the seller or by someone on behalf of the seller, then any home solicitation sale made following such contact shall not be deemed to have been initiated by the buyer.

(2) “Consumer Credit Sale” is a sale of goods or services in which:

(a) credit is granted by a person who regularly engages as a seller in credit transactions of the same kind;

(b) the buyer is a person other than an organization;

(c) the goods or services are purchased primarily for a personal, family or household purpose; and

(d) either the debt is payable in installments or a credit service charge is made.

§ 75-66-3

(1) Except as provided in subsection (5) of this section, in addition to any right otherwise to revoke an offer, cancel a contract or rescind a contract, the buyer has the right to cancel a home solicitation sale until midnight of the third business day after the day at which the buyer signs an agreement or offer to purchase which complies with this chapter.

(2) Cancellation occurs when the buyer gives written notice of cancellation to the seller at the address stated in the agreement or offer to purchase.

(3) Notice of cancellation, if given by certified or registered mail, is given when it is deposited in a mailbox properly addressed and postage prepaid.

(4) Notice of cancellation given by the buyer need not take a particular form and is sufficient if it indicates by any form of written expression the intention of the buyer not to be bound by the home solicitation sale.

(5) The buyer may not cancel a home solicitation sale if the buyer requests the seller to provide goods or services without delay because of an emergency, and

(a) the seller in good faith makes a substantial beginning of performance of the contract before the buyer gives notice of cancellation, and

(b) in the case of goods, the goods cannot be returned to the seller in substantially as good condition as when received by the buyer.

§ 75-66-5

(1) In a home solicitation sale, unless the buyer requests the seller to provide goods or services without delay in an emergency, the seller must present to the buyer and obtain his signature to a written agreement or offer to purchase or his signature to a statement executed simultaneously with and attached to the written agreement or offer to purchase, which written statement, offer to purchase or attached statement, designates as the date of the transaction the date on which the buyer actually signs and contains a statement of the buyer's rights which shall comply with either subsection (2) or subsection (3) of this section.

(2) The statement must:

(a) appear under the conspicuous caption: “BUYER'S RIGHT TO CANCEL,” and

(b) read as follows: “If this agreement was solicited at your residence and you do not want the goods or services, you may cancel this agreement by mailing a notice to the seller by certified or registered mail. The notice must say that you do not want the goods or services and must be mailed before midnight on the third business day after you sign this agreement. The notice must be mailed to: __________ (insert name and mailing address of seller). If you cancel, the seller may keep all or part of your cash down payment, but in no event may the seller retain an amount in excess of five percent (5%) of the cash price or the amount of the cash down payment whichever is the lesser.”

(3) A home solicitation sales contract which contains the notice of cancellation in the form and content required by rule or regulation of the Federal Trade Commission shall comply with the requirements of this section if it contains information to the consumer concerning his right to cancel at least equal to that required by subsection (2).

(4) Until the seller has complied with this section, the buyer may cancel the home solicitation sale by notifying the seller in any manner and by any means of his intention to cancel.

§ 75-66-7

(1) Except as provided in this chapter, within ten (10) days after a home solicitation sale has been cancelled or an offer to purchase revoked, the seller must tender to the buyer any payments made by the buyer and any note or other evidence of indebtedness.

(2) If the down payment includes goods traded in, the goods must be tendered in substantially as good condition as when received by the seller. If the seller fails to tender the goods as provided by this section, the buyer may elect to recover an amount equal to the trade-in allowance stated in the agreement.

(3) The seller may retain as a cancellation fee five percent (5%) of the cash price but not exceeding the amount of the cash down payment. If the seller fails to comply with an obligation imposed by this section, or if the buyer avoids the sale on any ground independent of his right to cancel provided by the provisions on the buyer's right to cancel as provided by Section 75-66-3 (1) of this chapter or revokes his offer to purchase, the seller is not entitled to retain a cancellation fee.

(4) Until the seller has complied with the obligations imposed by this section, the buyer may retain possession of goods delivered to him by the seller and has a lien on the goods in his possession or control for any recovery to which he is entitled.

§ 75-66-9

(1) Except as provided in Section 75-66-7, within a reasonable time after a home solicitation sale has been cancelled or an offer to purchase revoked, the buyer upon demand must tender to the seller any goods delivered by the seller pursuant to the sale, but he is not obligated to tender at any place other than his residence. If the seller fails to demand possession of goods within a reasonable time after cancellation or revocation, the goods become the property of the buyer without obligation to pay for them. For the purpose of this section, forty (40) days is presumed to be a reasonable time.

(2) The buyer has a duty to take reasonable care of the goods in his possession before cancellation or revocation and for a reasonable time thereafter, during which time the goods are otherwise at the seller's risk.

(3) If the seller has performed any services pursuant to a home solicitation sale prior to its cancellation, the seller is entitled to no compensation except the cancellation fee provided in this chapter.

§ 75-66-11

Nothing in this chapter shall be construed as to apply to the sale or solicitation of insurance.

Chapter 67 Loans

§ 75-67-1

The provisions of Sections 75-67-39 and 75-67-41 shall be inapplicable to pawnbrokers as defined and regulated in Sections 75-67-301 through 75-67-343.

§ 75-67-39

Any persons, natural or artificial, including domestic and foreign corporations, lending money in this state, to be paid back in monthly or weekly installments, may charge interest thereon at the rate of seven percent (7%) per annum or less, unless otherwise specifically authorized by law, for the entire period of the loan, and aggregate the principal and interest for the entire period of the loan, and divide the same into monthly or weekly installments, and may take security therefor by mortgage, deed of trust, or title, with waiver of exemption, upon and to real estate or personal property, or both.

§ 75-67-41

In any such loan contract as authorized in Section 75-67-39, provision may be made requiring the borrower, upon exercising any option to repay the loan before maturity, or upon any default in the payment of the monthly installments of principal and interest, or upon the breach of any covenant entitling the lender to declare the whole indebtedness due and payable and to a foreclosure of the security, to repay the loan upon the following basis of settlement: The principal debt, with interest thereon at the rate of ten percent (10%) per annum, and allowing credit for all payments of installments of principal and interest upon loan, with interest thereon at the rate of ten percent (10%) per annum from date of payment to said lender, computed annually in accordance with the laws of the State of Mississippi.

Any such loan contract, and all provisions thereof, shall be valid for the amount of the principal and interest charged, and such contracts shall not be held usurious.

§ 75-67-101

This article is hereby declared to be a public necessity and is remedial in purpose and the same shall be liberally construed to effectuate the purposes thereof and shall be known as the “Small Loan Regulatory Law” of this state.

§ 75-67-103

The following words and phrases, when used in this article, shall, for the purposes of this article, have the meanings respectively ascribed to them in this section, except where the context clearly describes and indicates a different meaning:

(a) “Person” means and includes every natural person, firm, corporation, copartnership, joint-stock or other association or organization, and any other legal entity whatsoever.

(b) “Licensee” means and includes every person holding a valid license issued under the provisions of the Small Loan Privilege Tax Law [Section 75-67-201 et seq.] of this state, except those specifically exempt by the provisions of this article, who, in addition to any other rights and powers he or it might otherwise possess, shall engage in the business of lending money either directly or indirectly, to be paid back in monthly installments or other regular installments for periods of more or less than one (1) month, and whether or not the lender requires security from the borrower as indemnity for the repayment of the loan.

(c) “Occasional lender” means a person making not more than one (1) loan in any month or not more than twelve (12) loans in any twelve-month period.

(d) “Commissioner” means the Commissioner of Banking and Consumer Finance of the State of Mississippi.

(e) “Department” means the Department of Banking and Consumer Finance of the State of Mississippi.

(f) “Records” or “documents” means any item in hard copy or produced in a format of storage commonly described as electronic, imaged, magnetic, microphotographic or otherwise, and any reproduction so made shall have the same force and effect as the original thereof and be admitted in evidence equally with the original.

§ 75-67-105

(1) No person shall engage in the business of lending money except as authorized by this article, and without being the holder of a valid and subsisting license to engage in such business as provided by the Small Loan Privilege Tax Law [Section 75-67-201 et seq.].

(2) Every person engaged in the business of lending money as authorized by this article shall have a physical office located in the State of Mississippi. A separate license is required for each office doing business in the State of Mississippi. Each electronic loan processing machine owned or operated by a licensed office is required to possess a separate license and have a permanent address with loan records to be maintained in a designated licensed office in the state.

§ 75-67-107

The provisions of this article shall be enforced and administered by the state comptroller of banks and his duly authorized agents, representatives and employees.

§ 75-67-109

It shall be a violation of this article for any licensee to advertise, print, display, publish, broadcast or permit to be advertised, printed, displayed, published or broadcast, in any manner whatsoever, any statement or representation with regard to rates, terms or conditions of lending money or for arranging, negotiating, procuring, or guaranteeing any loan or loans for any person which is false, misleading or deceptive. It shall also be a violation of this article for any licensee to offer or give to any borrower or prospective borrower any premium of any sort, whether by cash, check or goods or merchandise as an inducement to the making, brokering or renegotiation of any loan if (a) such premium amount is charged, directly or indirectly, to the borrower or prospective borrower; or (b) such inducement is undertaken without prior notification in such form as recommended by the commissioner.

§ 75-67-111

Each licensee shall keep and use in his business such books, accounts and other records which shall be in accordance with sound and accepted business practices and shall be in such form as will clearly reflect all loan transactions for every borrower and will enable the commissioner to determine whether the licensee is complying with the provisions of this article, or the Small Loan Privilege Tax Law [Section 75-67-201 et seq.]. Such records shall be kept with respect to each loan transaction for a period of at least twenty-four (24) months after the final transaction on such loan. The records shall be kept in accordance with instructions of the commissioner and, in addition to any information which may be required by the commissioner, such records shall be so maintained as to clearly reflect, over the signature of the borrower, the following:

(a) Cash received by the borrower;

(b) Charges for interest;

(c) Charges for recording fees and insurance, if any;

(d) Total amount of note;

(e) Period of time for which loan is extended; and

(f) Federal annual percentage rate and the state contract rate.

All such records shall be open to the inspection of the commissioner or his duly authorized representatives at all times during regular business hours. Any suit brought against a licensee by any person on account of the violation or alleged violation of any of the provisions of this article with reference to any loan transaction shall be brought within twenty-four (24) months after the final maturity date of the loan, and not thereafter.

§ 75-67-113

The comptroller or his duly authorized representatives shall have free access to the records, offices, places of business, safes and vaults of all licensees for the purpose of determining whether such licensee is complying with the provisions of this article and any regulations made hereunder. The comptroller shall have the authority to require the attendance of any and all persons and to examine such persons under oath relative to any loan transactions which are the subject matter of any examination, investigation or hearing held under any of the provisions of this article.

§ 75-67-115

The commissioner may charge the licensee an examination fee in an amount not less than Three Hundred Dollars ($300.00) nor more than Six Hundred Dollars ($600.00) for each office or location within the State of Mississippi, plus any actual expenses incurred while examining the licensee's records or books that are located outside the State of Mississippi. However, in no event shall a licensee be examined more than once in a two-year period unless for cause shown based upon consumer complaint and/or other exigent reasons as determined by the commissioner.

All expense fees paid to the commissioner shall be deposited by the commissioner in the State Treasury in a special and separate fund to be known as the “Consumer Finance Fund.”

§ 75-67-119

If any finance charge in excess of that expressly permitted by Section 75-17-21 or 75-67-181 is contracted for or received, all finance charges and other charges shall be forfeited and may be recovered, whether the contract be executed or executory. If any finance charge is contracted for or received that exceeds the maximum finance charge authorized by law by more than one hundred percent (100%), the principal and all finance charges and other charges shall be forfeited and any amount paid may be recovered by suit; and, in addition, the licensee and the several members, officers, directors, agents, and employees thereof who shall have participated in such violation shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than One Thousand Dollars ($1,000.00) and not less than One Hundred Dollars ($100.00), in the discretion of the court; and, further, the Commissioner of Banking and Consumer Finance shall forthwith cite such licensee to show cause why its license should not be revoked and proceedings thereon shall be as is specifically provided in the Small Loan Privilege Tax Law (Section 75-67-201 et seq.).

§ 75-67-120

(1) With respect to any loan made or handled by a licensee hereunder, the licensee and the borrower may, at any time, agree to a deferral of all or part of one or more unpaid installments, and the licensee may make and collect a charge therefor, subject to the following provisions:

(a) A deferral postpones the scheduled due date of an installment or installments as originally scheduled, or as previously deferred, for the deferment period.

(b) The deferment period is that period of time for which the payment is or the payments are deferred.

(c) The deferral charge shall not exceed an amount equal to the result of applying the annual percentage rate, as defined by the federal Truth in Lending Act and Regulation Z, provided in the original agreement between the licensee and the borrower, to the amount deferred for the deferment period, calculated without regard to differences in the lengths of months, but proportionately for a part of a month, counting each day as one-thirtieth ( 1/30 ) of a month. A deferral charge is earned pro rata during the deferment period and is fully earned on the last day of the deferment period.

(d) If a loan is prepaid in full during a deferment period, then the licensee shall make or credit to the borrower a refund of the unearned deferral charge in addition to any other refund or credit made for prepayment in full.

(e) A deferral charge may be collected at the time it is assessed or at any time thereafter.

(f) Any payment received at the time of the deferment may be applied first to the deferral charge and the remainder, if any, to the unpaid balance of the loan, but if such payment is sufficient to pay, in addition to the appropriate delinquency charge, any installment which is in default, it shall be first so applied, and such installment shall not then be deferred or be subject to the deferral charge.

(g) No installment on which a delinquency charge has been collected shall be deferred or included in the computation of the deferral unless such delinquency charge is refunded to the borrower or credited to the deferral charge.

(h) In addition to the deferral charge, the licensee may make appropriate additional charges as provided in this chapter. The amount of such charges which are not paid in cash may be added to the amount deferred for the purpose of calculating the deferral.

(i) Any such deferral agreement shall be evidenced in writing, which shall include:

(i) The amount of the deferral charge;

(ii) The amount or amounts deferred;

(iii) The date to which, or the time period for which, payment is deferred; and

(iv) The nature and amount of any other charges made at the time.

(j) No deferral charge may be made for a period after the date that the licensee elects to accelerate the maturity of the loan.

(k) No more than two (2) deferrals on which the charge authorized in this section is made, may be made, or agreed to be made, in any twelve-month period.

(2) Whenever the Commissioner of Banking and Consumer Finance deems it necessary to do so, he shall have the authority to promulgate reasonable rules and regulations to prevent abuse of the provisions of this section.

§ 75-67-121

(1) Any licensee under this article may charge any borrower on loans of One Hundred Dollars ($100.00) or more the actual cost of recording any instrument executed as security for a loan; any reasonable fee paid to an attorney for investigating the title to any property given as security for a loan; the actual cost of any premium paid for insurance upon any property given as security for a loan, such insurance to be placed with an insurance company agent of the borrower's selection so long as it is licensed to do business in the State of Mississippi; the actual cost of any premium paid for credit life, health and/or accident insurance and/or involuntary unemployment insurance on any borrower where the amount of insurance required is not in excess of the amount of the loan; and the premium for the insurance is in keeping with that usually and customarily paid for like insurance.

(2) In addition, after the licensee has fully approved the loan to the borrower, the licensee may offer the borrower the opportunity to purchase an auto club membership. The licensee shall inform the borrower in writing that the purchase of an auto club membership is optional and is not required as a condition of receiving the loan, and that failure to purchase an auto club membership will not affect the licensee's approval of the loan or the receipt of the loan by the borrower. The notification shall be initialed by the borrower. If the borrower chooses to purchase an auto club membership, the licensee shall allow the borrower to pay the cost of the auto club membership using funds other than the proceeds of a loan or have the cost deducted from the proceeds of any loan obtained from the licensee. The borrower shall be allowed to cancel the auto club membership for a full refund of the purchase price at any time within thirty (30) days after the date of purchase from the licensee if the borrower has not used any of the services provided through the auto club membership. The commissioner shall monitor the number of loans made by licensees with which the borrower chooses to purchase an auto club membership, and shall report that information to the Chairmen of the House Banking and Financial Services Committee and the Senate Business and Financial Institutions Committee by January 1, 2009.

(3) On loans of One Hundred Dollars ($100.00) or more, any licensee under this article may solicit and collect from any purchasing borrower the actual cost of any insurance premium paid for any one or more noncredit insurance policies, provided that such insurance is optional, is filed with the Department of Insurance, and is underwritten by an insurance company qualified to do business in Mississippi, and provided that the following conditions are met:

(a) The licensee shall not require the purchase of the noncredit insurance as a condition of receiving any loan or other extension of credit from the licensee;

(b) The licensee's employees offering the noncredit insurance are:

(i) Properly licensed with the Department of Insurance as an insurance producer for the type of insurance being offered to the borrower by that employee; and

(ii) Appointed with the insurance company providing the insurance policy to the purchasing borrower;

(c) The licensee shall not make the borrower's ability to obtain any current or future loan or other extension of credit from the licensee contingent upon the borrower's agreement to purchase the noncredit insurance or otherwise transact business with the licensee; and

(d) The licensee shall allow the borrower the option to pay the cost of the noncredit insurance policy using funds other than the proceeds of a loan obtained from the licensee, or to have the cost of the noncredit insurance paid from the proceeds of any loan obtained from the licensee.

The limitations on the amount of insurance contained in subsection (1) of this section shall not apply to insurance sold under this subsection (3).

(4) Whenever he finds it necessary, the Commissioner of Banking and Consumer Finance shall have the power to adopt and enforce reasonable rules and regulations to prevent the abuse of this section and the making of excessive charges under this section.

§ 75-67-122

Any licensee hereunder who receives a check, draft, negotiable order of withdrawal or like instrument drawn on a bank or other depository institution given by any person in full or partial repayment of a loan or other extension of credit may, if such instrument is not paid or is dishonored by such institution, charge and collect from the borrower or person to whom the credit was extended, a bad check charge in an amount not to exceed the sum of Fifteen Dollars ($15.00). This charge may be made only once with respect to the same instrument, and after the nonpayment or dishonor of the instrument, it shall be returned by the licensee to the borrower or person to whom credit was extended. This charge shall not be deemed to be interest, finance charge or other charge made as an incident to or as a condition to the grant of the loan or other extension of credit and shall not be included in determining the limit on charges which may be made in connection with the loan or extension of credit as provided in this chapter or in any other law of this state.

§ 75-67-123

Notwithstanding any other law to the contrary, for purposes of compliance with maximum charges permitted under Section 75-17-21 and Section 75-67-181, any charges, fees or premiums for voluntarily purchased credit insurance or auto club memberships shall not be included in the maximum finance charge allowed by state law.

§ 75-67-127

(1) Every licensee shall:

(a) At the time any loan is made, deliver to the borrower, or if there are two (2) or more borrowers to one (1) of them, a statement in the English language, disclosing (i) the date of the loan, (ii) the amount of the loan, (iii) the schedule of payments or a description thereof, (iv) the type of the security, which may be by mortgage or deed of trust upon real estate or personal property, or both, (v) the name and address of the licensed office and of each person primarily obligated on the note, and (vi) the total amount of finance charges expressed as a dollar amount and as an annual percentage rate.

(b) For each payment made on account of any such loan, give to the person making it at the time the payment is made a receipt specifying in plain, clear and simple terms the amount of the payment and the balance owing on the combined principal and finance charges after credit for each payment. When payment is made by check or money order, the licensee shall not be required to furnish a receipt. Compliance with the Federal Truth in Lending Act shall constitute compliance with this section.

(c) When loans made or handled by a licensee under the provisions of the Small Loan Privilege Tax Law are paid in full prior to maturity, after July 1, 1974, whether by cash, renewal or otherwise, refund to the borrower the finance charge exceeding one dollar ($1.00) calculated on the rule of the sum of the digits, commonly known as the “Rule of 78ths.” The refund shall be based and calculated on the number of days by which the loan is paid in advance, less twenty (20) days.

(d) Upon repayment of the loan in full, release any mortgage or security agreement and restore any pledge unless such mortgage, security agreement or pledge continues to secure an obligation to the licensee, and cancel and return any note and any assignment given to the licensee for the loan which is repaid.

(2) No licensee shall:

(a) Take any confession of judgment or any power of attorney running to himself or to any third person to confess judgment or to appear for the borrower in a judicial proceeding; nor

(b) take any note, promise to pay, or instrument of security that does not disclose the amount of the loan before the addition of precomputed charges, a schedule of payments or a description thereof, the agreed rate of charge, nor any instrument in which blanks are left to be filled in after the loan is made.

(3) Any contract of loan in the making or collection of which any provision of this section shall have been violated, either knowingly or without the exercise of due care to prevent the same, shall be void and the licensee shall have no right to collect or receive any principal, charges or recompense whatsoever.

§ 75-67-129

The commissioner shall have the power and authority to adopt, promulgate and issue such rules and regulations, not inconsistent with the provisions of this article or some other statute, as he shall deem necessary for the purpose of the administration of this article. A copy of every rule and regulation promulgated by the commissioner shall be filed in accordance with the Administrative Procedures Law, Section 25-43-1 et seq.

§ 75-67-131

Whenever the comptroller has reasonable cause to believe that any person is violating any of the provisions of this article, in addition to all other remedies provided hereby, the comptroller may, by, through and on the relation of the attorney general, district attorney or county attorney, apply to a court of competent jurisdiction for an injunction, both temporary and permanent, to restrain such person from engaging in or continuing such violation of the provisions of this article or from doing any act or acts in furtherance thereof.

§ 75-67-133

Nothing herein contained shall be so construed so as to invalidate, impair or affect the obligation of any contract, agreement or loan between any lender or licensee and borrower which was lawfully entered into prior to July 1, 1958, or which shall be lawfully entered into prior to the expiration or cancellation of a license issued to the licensee under the provisions of the Small Loan Privilege Tax Law [Section 75-67-201 et seq.].

§ 75-67-135

This article shall not apply to any person, firm, partnership, corporation or association doing business under any of the laws of this state relating to banks, savings banks, trust companies, building and loan associations, insurance companies, pawnbrokers or credit unions; nor shall this article apply to any person, firm, partnership, corporation or association concerning loans made to the employees or farm tenants of such person, firm, partnership or corporation or association; nor to loans or advances made to be used in or in the furtherance of farming or agricultural operations; nor to loans insured or guaranteed by the United States or any of its agencies; nor to persons, firms, partnerships, associations or corporations making loans only secured by real estate; nor to dealers and sellers or purchasers of conditional sales or retained title contracts on real or personal property; nor an occasional lender not regularly engaged in the business of lending money, but such lender shall be governed by the usury statutes of this state.

§ 75-67-137

(1) A licensee under this article shall have no liability for any act or practice done or omitted in conformity with (a) any rule or regulation of the commissioner, or (b) any rule, regulation, interpretation or approval of any other state or federal agency or any opinion of the Attorney General, notwithstanding that after such act or omission has occurred the rule, regulation, interpretation, approval or opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

(2) A licensee under this article, acting in conformity with a written interpretation or approval by an official or employee of any state or federal agency or department, shall be presumed to have acted in accordance with applicable law, notwithstanding that after such act has occurred, the interpretation or approval is amended, rescinded, or determined by judicial or other authority to be incorrect or invalid for any reason.

§ 75-67-139

Municipalities and counties in this state may enact ordinances that are in compliance with, but not more restrictive than, the provisions of this article. Any order, ordinance or regulation existing on April 28, 2004, of Sections 75-67-115, 75-67-215, 75-67-247 and this section, or any order, ordinance or regulation enacted after April 28, 2004, of Sections 75-67-115, 75-67-215, 75-67-247 and this section, that conflicts with any of the provisions of this article shall be void to the extent of the conflict.

§ 75-67-175

This article shall be known as the “Mississippi Consumer Alternative Installment Loan Act.”

§ 75-67-177

(1) No person, partnership, association, limited liability company or corporation shall engage in the business of making consumer installment loans of money as provided by this article and charge, contract for, or receive on any such loan interest, discount, or consideration therefor without demonstrating to the satisfaction of the Commissioner of Banking and Consumer Finance that they are the holder of a valid and subsisting license under the Small Loan Privilege Tax Law, Section 75-67-201 et seq.

(2) This article shall not apply to persons engaged in the business of extending credit to borrowers primarily for business or commercial purposes.

(3) For any consumer installment loan that a licensee makes, the licensee has the option to either lend at the rates and fees indicated under the Small Loan Regulatory Law (Section 75-17-21), or at the rates and charges under Section 75-67-181.

(4) The provisions of this article shall be administered and enforced by the Commissioner of Banking and Consumer Finance, or his duly authorized agents, representatives and employees.

§ 75-67-179

(1) For the purposes of this article and for loans made at the rates indicated in Section 75-67-181, the following terms shall have the meanings as defined in this subsection:

(a) “Applicable interest,” for a precomputed loan contract, means the amount of interest attributable to each monthly installment period. It is computed as if each installment period were one (1) month and any interest charged for extending the first installment period. The applicable interest for any monthly installment period is that portion of the precomputed interest that bears the same ratio to the total precomputed interest as the balances scheduled to be outstanding during that month bear to the sum of all scheduled monthly outstanding balances in the original contract.

(b) “Commissioner” means the Commissioner of the Mississippi Department of Banking and Consumer Finance.

(c) “Department” means the Mississippi Department of Banking and Consumer Finance.

(d) “Licensee” means any individual, partnership, association or corporation making loans under this article and duly licensed under the provisions of the Small Loan Privilege Tax Law, Section 75-67-201 et seq.

(e) “Person” means a natural person, sole proprietorship, corporation, company, limited liability company, partnership, association or any other legal entity however organized.

(f) “Precomputed loan” means a loan in which the debt is expressed as the sum of the original principal amount plus interest computed actuarially in advance, assuming all payments will be made when scheduled.

(2) To compute time for loans made in accordance with the interest indicated under Section 75-67-181, for the calculation of interest and other purposes, a month shall be a calendar month and a day shall be considered one-thirtieth ( 1/30th ) of a month when calculation is made for a fraction of a month. A month shall be one-twelfth ( 1/12th ) of a year. A calendar month is that period from a given date in one (1) month to the same numbered date in the following month, and if there is no same numbered date, to the last day of the following month. When a period of time includes a month and a fraction of a month, the fraction of the month is considered to follow the whole month. In the alternative, the licensee may charge interest at the rate of one three-hundred sixty-fifth ( 1/365th ) of the agreed annual rate for each day actually elapsed.

(3) With respect to loans made under the interest indicated in Section 75-67-181:

(a) Loans shall be repayable in substantially equal and consecutive monthly installments of principal and interest combined, except that the first installment period may be longer than one (1) month by not more than fifteen (15) days, and the first installment payment amount may be larger than the remaining payments by the amount of interest charged for the extra days.

(b) Payments may be applied to the combined total of principal and precomputed interest until the loan is fully paid.

(c) When any loan contract is paid in full by cash, renewal or refinancing, or a new loan, one (1) month or more before the final installment due date, a licensee shall refund or credit the obligor the applicable interest for all fully unexpired installment periods, as originally scheduled or as deferred, that follow the day of prepayment, and a month shall be earned if the prepayment occurs one (1) or more days after the payment due date. However, if the prepayment occurs before the first installment due date, the licensee shall refund or credit the obligor the applicable interest on a pro rata basis from the date of the loan to the date of prepayment. “Applicable interest” for any installment period means that portion of the precomputed monthly installment interest attributable to the installment period calculated based on a method at least as favorable to the consumer as the actuarial method, as defined by the federal Truth in Lending Act. If the maturity of the loan is accelerated for any reason and judgment is entered, the licensee shall credit the borrower with the same refund as if prepayment in full had been made on the date the lawsuit is filed.

(d) If two (2) or more installments are delinquent one (1) full month or more on any due date, and if the contract so provides, the licensee may reduce the unpaid balance by the refund credit that would be required for prepayment in full on the due date of the most recent maturing installment in default. Thereafter, and in lieu of any other default or deferment charges, the agreed rate of interest or interest at the rate of eighteen percent (18%) per annum may be charged on the unpaid balance until fully paid.

(e) Fifteen (15) days after the final installment as originally scheduled or deferred, the licensee may compute and charge interest on any balance remaining unpaid, including unpaid default or deferment charges, at a default rate of interest as agreed in the contract or at the rate of eighteen percent (18%) per annum, until fully paid.

(f) A late payment charge that complies with Section 75-17-27 shall not be considered a finance charge, if contracted for in writing.

(g) No licensee or other person may condition an extension of credit to a consumer borrower on the consumer's repayment by preauthorized electronic fund transfers or post-dated check. Consumers may choose any method of payment offered by the licensee, including, but not limited to, electronic fund transfers or debit card payments.

(h) The loan shall be fully amortizing and be repayable in its entirety in a minimum of nine (9) substantially equal and consecutive monthly payments with a period of not less than two hundred seventy-two (272) days to maturity.

(i) Each loan agreement entered into between a licensee and a consumer borrower shall include the following language: “This business is licensed and regulated by the Department of Banking and Consumer Finance. If you have any unresolved problem with a transaction at this location, you are entitled to assistance. Please call or write the Mississippi Department of Banking and Consumer Finance.”

(j) A licensee is prohibited from making a loan to a consumer borrower if the payments to be made in any month on the loan exceed twenty-two and five-tenths percent (22.5%) of the consumer's gross monthly income, as demonstrated by documentation of the income, including, but not limited to, the consumer's most recent pay stub, receipt reflecting payment of government benefits, or other official documentation. “Official documentation” includes tax returns and documentation prepared by the source of the income. Notwithstanding anything contained in this section to the contrary, a licensee may rely upon the borrower's written statement or other written information provided by the borrower in those cases where the borrower is self-employed or employed in seasonal work.

(k) At the time a loan is made or within twenty (20) days after a loan is made, a licensee shall not (i) accept a check and agree to hold it for a period of days before deposit or presentment, or (ii) accept a check dated later than the date written.

§ 75-67-181

(1) In lieu of the interest and charges in Section 75-17-21, on loans of Five Thousand One Hundred Dollars ($5,100.00) or less, a licensee may contract and charge a monthly finance charge not to exceed an annual percentage rate, calculated according to the actuarial method, of fifty-nine percent (59%) per annum on the unpaid balance of the amount financed.

(2) Beginning with calendar year 2024 and for each subsequent calendar year, on or before July 1 of the following year, the Mississippi Department of Banking and Consumer Finance will issue a memo authorizing a new maximum loan size permitted under this section. The new amount will be calculated by applying any increase or decrease in the United States Bureau of Labor Statistics Consumer Price Index for All Urban Consumers (CPI-U) for the previous calendar year to the previous maximum loan size and rounding that amount upward to the nearest Ten Dollar ($10.00) increment.

§ 75-67-183

(1) The commissioner shall have the power and authority to adopt, promulgate and issue any rules and regulations, not inconsistent with law, necessary for the enforcement of this article. The commissioner may investigate any business conducted in the licensed office to determine whether any evasion or violation of this article has occurred.

(2) Licensees shall comply with, and all loans made under this article shall be in conformity with, all applicable provisions of the Small Loan Regulatory Law (Section 75-67-101 et seq.), and the Small Loan Privilege Tax Law (Section 75-67-201 et seq.), as determined by the commissioner.

(3) When the commissioner has reasonable cause to believe that a person is violating any provision of this article, or any regulation of the commissioner made under the authority of this article or any other applicable statute of this state, the commissioner, in addition to and without prejudice to the authority provided elsewhere in this article, may enter an order requiring the person to stop and refrain from the violation. The commissioner may sue in any court of the state having jurisdiction and venue to enjoin the person from engaging in or continuing the violation or from doing any act in furtherance of the violation. In such an action, the court may enter an order or judgment awarding a preliminary or permanent injunction.

§ 75-67-185

(1) A licensee shall have no liability for any act or practice done or omitted in conformity with (a) any rule or regulation of the commissioner, or (b) any rule, regulation, interpretation or approval of any other state or federal agency or any opinion of the Attorney General, notwithstanding that after the act or omission has occurred the rule, regulation, interpretation, approval or opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

(2) A licensee, acting in conformity with a written interpretation or approval by an official or employee of any state or federal agency or department, shall be presumed to have acted in accordance with applicable law, notwithstanding that after that act has occurred, the interpretation or approval is amended, rescinded, or determined by judicial or other authority to be incorrect or invalid for any reason.

§ 75-67-201

This article shall be known as and referred to as “The Small Loan Privilege Tax Law” of this state.

§ 75-67-203

The following words and phrases, when used in this article, shall, for the purposes of this article have the meanings respectively ascribed to them in this section, except where the context clearly describes and indicates a different meaning:

(a) The word “person” shall mean and include every natural person, firm, corporation, copartnership, joint stock or other association or organization, and any other legal entity whatsoever;

(b) The term “licensee” shall mean and include every person, except those specifically exempt by the provisions of this article, who, in addition to any other right and powers he or it might otherwise possess, shall engage in the business of lending money, either directly or indirectly, to be paid back in monthly installments, or other regular installments for periods of more or less than one (1) month, and whether or not the lender requires security from the borrower as indemnity for the repayment of the loan;

(c) The word “commissioner” shall mean the Commissioner of Banking and Consumer Finance of the State of Mississippi;

(d) The word “department” shall mean the Department of Banking and Consumer Finance of the State of Mississippi;

(e) “Records” or “documents” means any item in hard copy or produced in a format of storage commonly described as electronic, imaged, magnetic, microphotographic or otherwise, and any reproduction so made shall have the same force and effect as the original thereof and be admitted in evidence equally with the original.

§ 75-67-205

No person shall engage in the business of lending money except as authorized by this article and by the Small Loan Regulatory Law [Section 75-67-101 et seq.], and without being the holder of a valid and subsisting license to engage in such business as provided herein, furnishing the requisite bond as required hereby, and paying the privilege license tax imposed hereby. Every person engaged in the business of lending money as authorized by this article shall have a physical office located in the State of Mississippi. A separate license is required for each office doing business in the State of Mississippi. Any person who shall violate the provisions of this section shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not more than One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for not more than six (6) months, or by both such fine and imprisonment in the discretion of the court.

§ 75-67-207

The provisions of this article shall be enforced and administered by the state comptroller of banks and his duly authorized agents, representatives and employees.

§ 75-67-209

If any person shall desire to engage in the business of lending money in the State of Mississippi, as defined herein, such person shall make a written request to the commissioner for the necessary license application form. The commissioner shall mail or deliver the license application form to the person making the request within ten (10) days after receipt of the request by the commissioner. Such person shall make application in writing to the commissioner for a license therefor prior to engaging in such business, which license application shall be made on the forms prepared and provided by the commissioner and which shall give, in addition to such other information as the commissioner may require, the following:

(a) The full name and address of the applicant;

(b) The municipality, county and street address where the business is to be operated;

(c) Whether or not the applicant is an individual, partnership or corporation;

(d) In the case of an individual, both the business and residence address of the applicant;

(e) In the case of a partnership, the names and business and residence addresses of all partners; and

(f) In the case of a corporation, the domicile thereof and the names and business and residence addresses of each officer and director thereof.

All such applications shall be sworn to by the applicant, or a member of the firm in the case of a partnership, or a duly authorized officer in the case of a corporation, and there shall be presented and filed therewith an affidavit, executed before a notary public or other officer authorized to administer oaths, to the effect that the applicant will conduct his or its business in conformity to and will abide by the provisions of this article, all regulations promulgated hereunder and all other applicable statutes of the State of Mississippi.

For a renewal license, the licensee shall furnish on forms provided by the commissioner information that the business is to be continued for one (1) year; such continuation form shall be signed by the applicant, a member of the firm in the case of a partnership, or a duly authorized officer in the case of a corporation, and shall give such information as the commissioner shall require.

§ 75-67-211

There shall be presented and filed with such application a good and sufficient bond in the principal amount of one thousand dollars($1,000.00) written by some surety company authorized to do business in the State of Mississippi, which shall be subject to the approval of the comptroller. Said bond shall be payable to the State of Mississippi and shall be conditioned that the applicant will well and truly operate its business in conformity to and will abide by the laws of this state regulating the handling of loans or lending money, and all regulations promulgated by the department, and all other applicable statutes of the State of Mississippi, and will pay and discharge any and all indebtedness for which such applicant may become liable under the provisions of this article and any other applicable statutes of the State of Mississippi, to the State of Mississippi, or to any county, municipality or other political subdivision thereof, or any person, firm, or corporation whatsoever. Suits may be brought on said bond and against the surety thereon by any person having a right of action against same in the name of the State of Mississippi for the use and benefit of the person having such right of action.

§ 75-67-213

With each initial application for a license under the provisions of this article, the applicant shall pay to the commissioner at the time of making such application a license fee of Seven Hundred Fifty Dollars ($750.00), and for renewal applications, an annual renewal fee of Four Hundred Seventy-five Dollars ($475.00). The licenses issued under the provisions hereof shall be valid for a period of one (1) year from the date of the issuance thereof. Such fee is in addition to any other privilege tax or fee required by law. Within thirty (30) days prior to the expiration of any valid and subsisting license issued hereunder, the holder thereof, if he desires to continue to engage in business in the State of Mississippi, shall file application for a new license in the same manner and under the same conditions herein provided.

§ 75-67-215

(1) If any person engages in business as provided for in this article without paying the license fee provided for in this article before commencing business or before the expiration of the person's current license, as the case may be, then the person shall be liable for the full amount of the license fee plus a penalty in an amount not to exceed Twenty-five Dollars ($25.00) for each day that the person has engaged in the business without a license or after the expiration of a license.

(2) The commissioner may, after notice and hearing as defined in Section 75-67-237 in cases of revocation of license, impose a civil penalty against any licensee if the licensee is adjudged by the commissioner to be in willful violation of the provisions of this article. The civil penalty shall not exceed Five Hundred Dollars ($500.00) per violation and shall be deposited into the Consumer Finance Fund of the Department of Banking and Consumer Finance. Any licensee who has been imposed a civil penalty by the commissioner may, within twenty (20) days after the fine is imposed, appeal to the circuit court of the county where the business is being conducted, as in cases from an order of a lesser tribunal. The trial on appeal shall be de novo.

(3) When the commissioner has reasonable cause to believe that a person is violating any provision of this article, the commissioner, in addition to and without prejudice to the authority provided elsewhere in this article, may enter an order requiring the person to stop or to refrain from the violation. The commissioner may sue in any circuit court of the state having jurisdiction and venue to enjoin the person from engaging in or continuing the violation or from doing any act in furtherance of the violation. In such an action, the court may enter an order or judgment awarding a preliminary or permanent injunction.

§ 75-67-217

When any application is filed for a license under the provisions of this article and the requisite fee is paid and the necessary bond furnished, the commissioner shall make an investigation for the purpose of determining whether or not the financial responsibility, previous experience, character and general fitness of the applicant (including the members thereof if the applicant is a firm, partnership or association, and the officers and directors thereof, if the applicant is a corporation) are such as to merit the respect and confidence of the community in which the business is to be operated and to warrant the belief that the business will be operated honestly, fairly, efficiently and in compliance with the provisions of the applicable laws of this state, and the regulations promulgated by the department. For applications both for original licenses and for renewal licenses, the commissioner shall make a determination either to approve or to disapprove the issuance of the license, and his determination shall be conveyed in writing to the applicant within sixty (60) days after the date the application is received by the commissioner. If such determination shall be in the affirmative, then the commissioner shall thereupon issue to the applicant a license, in such form as the commissioner may deem proper, for the operation of such business at the location stated in the application, which license shall be valid for a period of one (1) year. If the application is denied, the commissioner shall give written notice of the denial to the applicant, together with the reason or reasons for the denial. If the commissioner does not issue the license or give written disapproval of the issuance of the license within the required sixty-day period, the license shall be deemed approved and issued effective the next calendar day. In all cases where the proper application for a renewal license shall be filed, it shall be lawful for the applicant to operate his business while the application is pending before the commissioner and until the license has been issued or the application has been rejected, as provided in this section. No license under the Small Loan Privilege Tax Law shall be granted to a bank, savings bank, trust company, savings and loan association, building and loan association insurance company, credit union or pawnbroker.

§ 75-67-219

When any application for a license is denied, the commissioner shall return to the applicant the bond furnished by him and shall also return to the applicant one-half ( 1/2 ) of the license fee paid by him, the remaining one-half ( 1/2 ) thereof to be retained by the commissioner, to be disposed of as are all other collections made by the commissioner under the provisions of the Small Loan Regulatory Law (Section 75-67-101 et seq.) of this state.

§ 75-67-221

When any application for a license is denied, the applicant shall have the right to a hearing thereon by and before the comptroller by filing, within thirty (30) days after the date of the receipt of the notification of denial, a written petition with the comptroller requesting such hearing. Upon the filing of any such request, the comptroller shall fix a date for the hearing, which date shall not be later than thirty (30) days from the date of the filing of the request, and notice shall be given to the public of the fact that such hearing will be held by the publication of a notice in some newspaper published in the county where the business is proposed to be conducted not less than ten (10) days before the date of the hearing, which notice shall specify the date, time, place and purpose of the hearing.

§ 75-67-223

All such hearings shall be held and conducted in the office of the comptroller, and the applicant and any and all other interested persons may appear and present such evidence as shall be relevant and material and the comptroller may cause the production and presentation of such evidence as he may deem relevant and material. At all such hearings, the applicant shall have the right to be represented by counsel and to examine and cross-examine any and all witnesses that may testify at such hearing. For the purpose of compelling the attendance of witnesses at such hearing, the comptroller shall have the power to issue subpoenas therefor in the same manner as subpoenas are issued in circuit courts. All witnesses who shall testify at any such hearing shall be sworn in the same manner as witnesses are sworn in the circuit courts and shall be subject to penalties for perjury as is otherwise provided under the laws of this state.

§ 75-67-225

At all such hearings the comptroller shall cause the evidence presented to be taken down and a record made thereof and he shall make a written finding and decision with reference to the question presented and shall cause same to be included in the record. The original of said record shall be kept as a permanent record by the comptroller and a copy thereof shall be furnished to the applicant. If the application for the license shall be denied by the comptroller as a result of such hearing, the applicant may, within ten (10) days from the date of denial, obtain a review of such denial by a writ of certiorari to the circuit court of the county where said business is proposed to be conducted, as by law in such cases made and provided. The review by said court shall be on the record made before the comptroller and copies of all applications, bonds and other papers and documents of every kind filed with the comptroller in connection with the application, and said hearing shall be included in said record along with the transcript of the evidence.

§ 75-67-227

The license shall be in such form as the commissioner may prescribe and, in addition to such other information as the commissioner may deem proper, it shall set forth the name and address of the licensee, and such license shall be kept conspicuously posted in the licensee's place of business. Such licenses shall not be transferable or assignable.

§ 75-67-229

Not more than one (1) place of business shall be operated or maintained under the same license, but the commissioner may issue separate licenses to the same licensee for different and separate places of business upon compliance with all of the provisions of this article governing the issuance of licenses with respect to each separate license. If any licensee shall desire to change his place of business within the same municipality during the period for which the license is valid, he shall make written application therefor to the commissioner who shall issue a new license for the unexpired portion of the year showing the new location of the business. However, nothing herein shall authorize or permit a change in the place of business of a licensee to a location outside of the original municipality.

§ 75-67-231

All applications, bonds, records and other papers and documents filed with the commissioner in connection with applications for an issuance of all licenses shall be preserved by the commissioner as a permanent record in his office, and shall be available to the public in accordance with the Mississippi Public Records Act (Section 25-61-1, et seq., Mississippi Code of 1972); however, all files on licensees, as defined in Section 75-67-103, Mississippi Code of 1972, who have ceased business under the Small Loan Regulatory Law (Section 75-67-101 etseq., Mississippi Code of 1972) and the Small Loan Privilege Tax Law (Section 75-67-201 et seq., Mississippi Code of 1972) shall be maintained in accordance with retention periods established by the State Records Committee.

§ 75-67-233

If the comptroller shall find, at any time, that any bond filed with him by a licensee under the provisions of this article is insecure for any reason, or if same has been exhausted, the comptroller shall require an additional bond in the amount of one thousand dollars ($1,000.00) conditioned as provided by this article. If, after ten (10) days' written notice by the comptroller, any licensee shall fail, neglect or refuse to furnish such additional bond, the license held by such persons shall be forthwith cancelled by the comptroller. Notice of all suits filed against licensee and the surety on his bond shall be given the comptroller at the time of the institution thereof, and notice of the result or outcome of all such suits shall be given the comptroller within ten (10) days after the termination thereof.

§ 75-67-235

Any person holding a license under the provisions of this article may discontinue his business by giving the comptroller written notice thereof and surrendering his license to the comptroller, but such action shall in nowise relieve the licensee or the surety on his bond from any liability which may have accrued or existed at the time of the surrender of such license nor shall impair or affect the obligation of any lawful pre-existing contract between the licensee and any other person, firm or corporation.

§ 75-67-237

The commissioner may, if he be of the opinion that reasonable grounds exist to believe that a licensee has willfully violated any of the provisions of this article, or the Small Loan Regulatory Law [Section 75-67-101 et seq.], or any regulation of the commissioner made under the authority of either, or any other applicable statute of this state, upon written notice to the licensee distinctly specifying the charges against him, cite the licensee to appear before him to show cause why his license should not be revoked. Such notice shall fix the date, time and place of the hearing, which hearing shall not be held less than ten (10) days from the date of such notice. At such hearing the licensee shall have the right to be heard either in person or by counsel, to produce witnesses in his behalf, and to examine and cross-examine all witnesses who may testify.

If, after the hearing, the commissioner finds that the licensee has been guilty of willfully violating any provision of this article, or the Small Loan Regulatory Law [Section 75-67-101 et seq.], or any regulations made by the commissioner under the authority of either, or any other applicable statute of the State of Mississippi, the commissioner shall forthwith revoke the license involved; otherwise, the proceedings shall be dismissed. At all such hearings, the commissioner shall cause the evidence to be taken down and a record made thereof and he shall make a written finding and decision and shall cause same to be included in the record. The original of the record shall be retained by the commissioner and a copy thereof shall be furnished to the licensee. Any licensee whose license is revoked by the commissioner may, within twenty (20) days after such revocation, appeal to the circuit court of the county where the business is being conducted, as in cases of appeal from an order of a lesser tribunal. The trial on appeal shall be de novo.

Any licensee who is exempt from liability for an act or omission under Section 75-67-245 shall not have his license revoked under this section for the same act or omission.

§ 75-67-239

All fees, license tax and penalties provided for in this article which are payable to the commissioner shall, when collected, be deposited in a special and separate fund to be known as the “Consumer Finance Fund” and shall be expended by the commissioner solely and exclusively for the purpose of administering and enforcing the provisions of this article and the Small Loan Regulatory Law (Section 75-67-101 et seq.).

§ 75-67-241

This article shall not apply to any person, firm, partnership, corporation or association doing business under any of the laws of this state relating to banks, savings banks, trust companies, building and loan associations, insurance companies, credit unions or pawnbrokers; nor shall this article apply to any person, firm, partnership, corporation or association concerning loans made to the employees or farm tenants of such person, firm, partnership or corporation or association; nor to loans or advances made to be used in or in the furtherance of farming or agricultural operations; nor to loans insured or guaranteed by the United States or any of its agencies; nor to persons, firms, partnerships, associations or corporations making loans only secured by real estate; nor to dealers and sellers or purchasers of conditional sales or retained title contracts on real or personal property; nor a member of an affiliated group as defined by Section 1504 of the Internal Revenue Code of 1986,  1 as amended, on May 24, 1995, with respect to loans made by one (1) member of the affiliated group to another and who is not otherwise engaged in the business of loaning money secured by tangible personal property; nor an occasional lender not regularly engaged in the business of lending money, but such lender shall be governed by the usury statutes of this state.

1

Classified to 26 USCA § 1504.

§ 75-67-243

The commissioner shall have the power and authority to adopt, promulgate and issue such rules and regulations, not inconsistent with this article, or any other statute of the State of Mississippi, as he shall deem necessary for the purpose of the administration of this article. A copy of every rule and regulation promulgated by the commissioner shall be filed in accordance with the Administrative Procedures Law, Section 25-43-1 et seq.

§ 75-67-244

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this article and for the purpose of determining whether persons are subject to the provisions of this article, may examine persons licensed under this article and persons reasonably suspected by the commissioner of conducting business that requires a license under this article, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this article, including without limitation the conduct of business without a license as required under this article.

§ 75-67-245

(1) A licensee under this article shall have no liability for any act or practice done or omitted in conformity with (a) any rule or regulation of the commissioner, or (b) any rule, regulation, interpretation or approval of any other state or federal agency or any opinion of the Attorney General, notwithstanding that after such act or omission has occurred the rule, regulation, interpretation, approval or opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

(2) A licensee under this article, acting in conformity with a written interpretation or approval by an official or employee of any state or federal agency or department, shall be presumed to have acted in accordance with applicable law, notwithstanding that after such act has occurred, the interpretation or approval is amended, rescinded, or determined by judicial or other authority to be incorrect or invalid for any reason.

§ 75-67-247

Municipalities and counties in this state may enact ordinances that are in compliance with, but not more restrictive than, the provisions of this article. Any order, ordinance or regulation existing on April 28, 2004, of Sections 75-67-115, 75-67-215, 75-67-247 and this section,  1 or any order, ordinance or regulation enacted after April 28, 2004, of Sections 75-67-115, 75-67-215, 75-67-247 and this section,  1 that conflicts with any of the provisions of this article shall be void to the extent of the conflict.

1

Redundancy is as in original.

§ 75-67-301

This article shall be known and may be cited as the “Mississippi Pawnshop Act.”

§ 75-67-303

The following words and phrases used in this article shall have the following meanings unless the context clearly indicates otherwise:

(a) “Pawnbroker” means any person engaged in whole or in part in the business of lending money on the security of pledged goods left in pawn, or in the business of purchasing tangible personal property to be left in pawn on the condition that it may be redeemed or repurchased by the seller for a fixed price within a fixed period of time; provided, however, that the following are exempt from the definition of “pawnbroker” and from the provisions of this article: any bank which is regulated by the State Department of Banking and Consumer Finance, the Comptroller of the Currency of the United States, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System or any other federal or state authority and all affiliates of such bank, and additionally any bank or savings and loan association whose deposits or accounts are eligible for insurance by the Bank Insurance Fund or the Savings Association Insurance Fund or other fund administered by Federal Deposit Insurance Corporation or any successor thereto, and all affiliates of such banks and savings and loan associations, any state or federally chartered credit union and any finance company subject to licensing and regulation by the State Department of Banking and Consumer Finance.

(b) “Pawnshop” means the location at which or premises in which a pawnbroker regularly conducts business.

(c) “Pawn transaction” means any loan on the security of pledged goods or any purchase of pledged goods on the condition that the pledged goods are left with the pawnbroker and may be redeemed or repurchased by the seller for a fixed price within a fixed period of time. A “pawn transaction” does not include the pledge to or the purchase by a pawnbroker of real or personal property from a customer followed by the sale of the leasing of that same property back to the customer in the same or a related transaction and such is not permitted by this article.

(d) “Person” means an individual, partnership, corporation, joint venture, trust, association, or any legal entity however organized.

(e) “Pledged goods” means tangible personal property other than choses in action, securities, or printed evidence of indebtedness, which property is purchased by, deposited with, or otherwise actually delivered into the possession of a pawnbroker in connection with a pawn transaction.

(f) “Commissioner” means the Mississippi Commissioner of Banking and Consumer Finance, or his designee, as the designated official for the purpose of enforcing this article.

(g) “Appropriate law enforcement agency” means the sheriff of each county in which the pawnbroker maintains an office, or the police chief of the municipality or law enforcement officers of the Department of Public Safety in which the pawnbroker maintains an office.

(h) “Attorney General” means the Attorney General of the State of Mississippi.

(i) “Records” or “documents” means any item in hard copy or produced in a format of storage commonly described as electronic, imaged, magnetic, microphotographic or otherwise, and any reproduction so made shall have the same force and effect as the original thereof and be admitted in evidence equally with the original.

§ 75-67-305

(1) At the time of making the pawn or purchase transaction, the pawnbroker shall enter upon the pawn ticket a record of the following information which shall be typed or written in ink and in the English language:

(a) A clear and accurate description of the property, including the following:

(i) Brand name;

(ii) Model number;

(iii) Serial number;

(iv) Size;

(v) Color, as apparent to the untrained eye;

(vi) Precious metal type, weight and content, if known;

(vii) Gemstone description, including the number of stones;

(viii) In the case of firearms, the type of action, caliber or gauge, number of barrels, barrel length and finish; and

(ix) Any other unique identifying marks, numbers, names or letters;

(b) The name, residence address and date of birth of pledgor or seller;

(c) Date of pawn or purchase transaction;

(d) Driver's license number, social security number, Mississippi identification card number, as defined in Section 45-35-1, or tribal identification card number of the pledgor or seller or identification information verified by at least two (2) forms of identification, one (1) of which must be a photographic identification;

(e) Description of the pledgor including approximate height, sex and race;

(f) Amount of cash advanced;

(g) The maturity date of the pawn transaction and the amount due; and

(h) The monthly rate and pawn charge. Such rates and charges shall be disclosed using the requirements prescribed in Regulation Z (Truth in Lending) of the rules and regulations of the Board of Governors of the Federal Reserve.

(2) Each pawn or purchase transaction document shall be consecutively numbered and entered in a corresponding log or record book. Separate logs or record books for pawn and purchase transactions shall be kept.

(3) Records may be in the form of traditional hard copies, computer printouts or magnetic media if readily accessible for viewing on a screen with the capability of being promptly printed upon request.

(4) Every licensee shall maintain a record which indicates the total number of accounts and the total dollar value of all pawn transactions outstanding as of December 31 of each year.

§ 75-67-307

The following shall be printed on all pawn tickets:

(a) The statement that “Any personal property pledged to a pawnbroker within this state is subject to sale or disposal when there has been no payment made on the account for a period of thirty (30) days past maturity date of the original contract; no further notice is necessary”;

(b) The statement that “The pledgor of this item attests that it is not stolen, it has no liens or encumbrances against it, and the pledgor has the right to sell or pawn the item”;

(c) The statement that “The item is redeemable only by the bearer of this ticket or by identification of the person making the pawn”; and

(d) A blank line for the pledgor's signature.

§ 75-67-309

(1) The pledgor or seller shall sign a statement verifying that the pledgor or seller is the rightful owner of the goods or is entitled to sell or pledge the goods and shall receive an exact copy of the pawn ticket which shall be signed or initialed by the pawnbroker or any employee of the pawnbroker.

(2) The pawnbroker shall maintain a record of all transactions of pledged or purchased goods on the premises. A pawnbroker shall upon request provide to the appropriate law enforcement agency a complete record of all transactions. These records shall be a correct copy of the entries made of the pawn or purchase transaction, except as to the amount of cash advanced or paid for the goods and monthly pawnshop charge. If the law enforcement agency supplies the appropriate computer software and the pawnbroker has the appropriate computer hardware, all transactions shall be made available by means of electronic transmission through a modem or similar device or by providing a computer disc to the law enforcement agency within seventy-two (72) hours of the transaction. Any pawnbroker who is recording transactions through the use of computer hardware on March 24, 2001, and is provided such appropriate software shall not cease or alter the use of his computer hardware unless authorized by the law enforcement agency.

(3) All goods purchased across the counter by the pawnbroker shall be maintained on the premises by the pawnbroker for at least fourteen (14) calendar days if the pawnbroker makes available all transactions either electronically or on computer disc to the appropriate law enforcement agency as provided in subsection (2) above. Otherwise, the pawnbroker shall maintain on the premises the purchased goods for twenty-one (21) calendar days.

(4) The commissioner may establish by rule, regulation or order, a process to allow certain purchased goods to be stored off premises, at a secure, nonresidential location.

§ 75-67-311

A pledgor shall have no obligation to redeem pledged goods or make any payment on a pawn transaction. Pledged goods not redeemed within thirty (30) days following the originally fixed maturity date shall automatically be forfeited to the pawnbroker by operation of this section, and absolute right, title and interest in and to such goods shall automatically vest to the pawnbroker.

§ 75-67-313

(1)(a) A pawnbroker may contract for and receive a pawnshop charge in lieu of interest or other charges for all services, expenses, cost and losses of every nature not to exceed twenty-five percent (25%) of the principal amount, per month, advanced in the pawn transaction.

(b) The provisions of paragraph (a) of this subsection shall not include the fee charged by a third-party processing company for the use of a debit or credit card. Pawnbrokers shall be allowed to pass the third-party processing company's fee on to the customer if the pawnbroker provides clear and conspicuous notice to all customers that such fee will be applied to the debit and credit card transactions. Said notice must be posted at the point of entry and point of sale and must include:

(i) The amount of the fee;

(ii) That the fee is for the use of a debit or credit card; and

(iii) The type of payment method to which the fee applies.

(c) The amount of the fee identified in the provisions of paragraph (b) of this subsection shall be limited to the single transaction cost charged by the third-party processor to the pawnbroker for the use of a credit or debit card.

(2) Any interest, charge, or fees contracted for or received, directly or indirectly, in excess of the amount permitted under subsection (1) of this section shall be uncollectible and the pawn transaction shall void. The pawnshop charge allowed under subsection (1) of this section shall be deemed earned, due and owed as of the date of the pawn transaction and a like sum shall be deemed earned, due and owed on the same day of the succeeding month.

§ 75-67-315

(1) A pawnbroker and any clerk, agent or employee of such pawnbroker shall not:

(a) Fail to make an entry of any material matter in his or her record book;

(b) Make any false entry therein;

(c) Falsify, obliterate, destroy or remove from his or her place of business such records, books or accounts relating to the licensee's pawn transaction;

(d) Refuse to allow the commissioner, the appropriate law enforcement agency, the Attorney General or any other duly authorized state or federal law enforcement officer to inspect his or her pawn records or any pawn goods in his or her possession during the ordinary hours of business or other acceptable time to both parties;

(e) Fail to maintain a record of each pawn transaction for four (4) years;

(f) Accept a pledge or purchase property from a person under the age of eighteen (18) years;

(g) Make any agreement requiring the personal liability of a pledgor or seller, or waiving any of the provisions of this article or providing for a maturity date less than thirty (30) days after the date of the pawn transaction;

(h) Fail to return or replace pledged goods to a pledgor or seller upon payment of the full amount due the pawnbroker unless the pledged goods have been taken into custody by a court or a law enforcement officer or agency;

(i) Sell or lease, or agree to sell or lease, pledged or purchased goods back to the pledgor or back to the seller in the same or related transaction;

(j) Sell or otherwise charge for insurance in connection with a pawn transaction;

(k) Remove pledged goods from the premises within thirty (30) days following the originally fixed maturity date;

(l) Accept a pledge or purchase property when such property has manufacturer's serial numbers which have been obviously removed and/or obliterated.

(2) The commissioner may establish by rule, regulation or order, a process to allow certain pledged goods to be stored off premises, at a secure, nonresidential location.

§ 75-67-317

(1) Any person properly identifying himself as pledgor or as authorized representative of the pledgor and presenting a pawn ticket to the pawnbroker shall be entitled to redeem or repurchase the pledged goods described in such ticket. In the event such pledged goods are lost or damaged while in the possession of the pawnbroker, it shall be the responsibility of the pawnbroker to replace the lost or damaged goods with like kinds of merchandise and proof of replacement shall be defense to any prosecution. For the purpose of this subsection, “lost” includes destroyed or having disappeared because of any willful neglect that results in the pledged goods being unavailable for return to the pledgor.

(2) If the pawn ticket is lost, destroyed or stolen, the pledgor shall so notify the pawnbroker in writing, and receipt of such notice shall invalidate such pawn ticket, if the pledged goods have not been previously redeemed. Before delivering the pledged goods or issuing a new pawn ticket, the pawnbroker shall require the pledgor to make a written statement of the loss, destruction or theft of the ticket. The pawnbroker shall record on the written statement the identifying information required by Section 75-67-305, the date the statement is given and the number of the pawn ticket lost, destroyed or stolen. This statement shall be signed by the pawnbroker or pawnshop employee who accepts the statement from the pledgor. A pawnbroker is entitled to a fee not to exceed Five Dollars ($5.00) in connection with each lost, destroyed or stolen pawn ticket and the taking of a properly prepared written statement for the pawn ticket.

§ 75-67-319

(1) A pawnbroker shall have a lien on the pledged goods pawned for the money advanced and the pawnshop charge owed, but not for other debts due to him. He shall retain possession of the pledged goods, except as otherwise herein provided, until his lien is satisfied.

(2) Pledged goods not redeemed on or before the maturity date, if fixed and set out in the pawn ticket issued in connection with any transaction, shall be held by the pawnbroker for thirty (30) days following such date and may be redeemed or repurchased by the pledgor or seller within such period by the payment of the originally agreed redemption price, and the payment of an additional pawnshop charge equal to the original pawnshop charge.

§ 75-67-321

(1) A person may not engage in business as a pawnbroker or otherwise portray himself as a pawnbroker unless the person has a valid license authorizing engagement in the business. A separate license is required for each place of business under this article. The commissioner may issue more than one (1) license to a person if that person complies with this article for each license. A new license or application to transfer an existing license is required upon a change, directly or beneficially, in the ownership of any licensed pawnshop and an application shall be made to the commissioner in accordance with this article.

(2) When a licensee wishes to move a pawnshop to another location, the licensee shall give thirty (30) days’ prior written notice to the commissioner who shall amend the license accordingly.

(3) Each license shall remain in full force and effect until relinquished, suspended, revoked or expired. With each initial application for a license, the applicant shall pay the commissioner a license fee, which includes premiums for examinations, of Five Hundred Dollars ($500.00), and on or before December 1 of each year thereafter, an annual renewal fee, which includes premiums for examinations, of Three Hundred Fifty Dollars ($350.00). However, when more than one (1) license to an applicant is issued, the commissioner, for each subsequent license, may only impose a fee, which includes premiums for examinations, of Three Hundred Fifty Dollars ($350.00) at the time of application, and an annual renewal fee, which includes premiums for examinations, of Three Hundred Fifty Dollars ($350.00) on or before December 1 of each year thereafter. If the annual fee remains unpaid thirty (30) days after December 1, the license shall thereupon expire, but not before December 31 of any year for which the annual fee has been paid. If any person engages in business as provided for in this article without paying the license fee provided for in this article commencing business or before the expiration of the person's current license, as the case may be, then the person shall be liable for the full amount of the license fee, plus a penalty in an amount not to exceed Twenty-five Dollars ($25.00) for each day that the person has engaged in such business without a license or after the expiration of a license. All licensing fees and penalties authorized in this section shall be paid into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

(4) Notwithstanding other provisions of this article, the commissioner may issue a temporary license authorizing the operator of a pawnshop on the receipt of an application to transfer a license from one person to another or on the receipt of an application for a license involving principals and owners that are substantially identical to those of an existing licensed pawnshop. The temporary license is effective until the permanent license is issued or denied.

(5) Notwithstanding other provisions of this article, neither a new license nor an application to transfer an existing license shall be required upon any change, directly or beneficially, in the ownership of any licensed pawnshop incorporated under the laws of this state or any other state so long as the licensee continues to operate as a corporation doing a pawnshop business under the license. The commissioner may, however, require the licensee to provide such information as he deems reasonable and appropriate concerning the officer and directors of the corporation and persons owning in excess of twenty-five percent (25%) of the outstanding shares of the corporation.

§ 75-67-323

(1) To be eligible for a pawnbroker license, an applicant shall:

(a) Operate lawfully and fairly within the purposes of this article;

(b) Not have been convicted of a felony in the last ten (10) years or be active as a beneficial owner for someone who has been convicted of a felony in the last ten (10) years;

(c) File with the commissioner a bond with good security in the penal sum of Ten Thousand Dollars ($10,000.00), payable to the State of Mississippi for the faithful performance by the licensee of the duties and obligations pertaining to the business so licensed and the prompt payment of any judgment which may be recovered against such licensee on account of damages or other claim arising directly or collaterally from any violation of the provisions of this article; such bond shall not be valid until it is approved by the commissioner; such applicant may file, in lieu thereof, cash, a certificate of deposit, or government bonds in the amount of Ten Thousand Dollars ($10,000.00); such deposit shall be filed with the commissioner and is subject to the same terms and conditions as are provided for in the surety bond required herein; any interest or earnings on such deposits are payable to the depositor;

(d) File with the commissioner an application accompanied by the initial license fee required in this article;

(e) Submit a set of fingerprints from any local law enforcement agency. In order to determine the applicant's suitability for license, the commissioner shall forward the fingerprints to the Department of Public Safety; and if no disqualifying record is identified at the state level, the fingerprints shall be forwarded by the Department of Public Safety to the FBI for a national criminal history record check.

(2) Every licensee shall post his license in a conspicuous place at each place of business.

(3) Every licensee shall post and display a sign which measures at least twenty (20) inches by twenty (20) inches in a conspicuous place and in easy view of all persons who enter the place of business. The sign shall display bold, blocked letters, easily readable, with the following information: “This pawnshop is licensed and regulated by the Mississippi Department of Banking and Consumer Finance. If you encounter any unresolved problem with a transaction at this location, you are entitled to assistance. Please call or write: Mississippi Department of Banking and Consumer Finance, Post Office Drawer 23729, Jackson, MS 39225-3729; Phone 1-800-844-2499.”

(4) From and after December 1, 2010, each application for an initial license shall include evidence of the satisfactory completion of at least six (6) hours of approved prelicensing education, and each application for renewal shall include evidence of the satisfactory completion of at least six (6) hours of approved continuing education, by the owners or designated representative in pawnbroker transactions. Two (2) of the six (6) hours shall consist of instruction on the Mississippi Pawnshop Act and shall be approved by the department once the course is approved by the Mississippi Pawnbrokers Association or the National Pawnbrokers Association.

§ 75-67-325

(1) The commissioner may, after notice and hearing, suspend or revoke any license if it finds that:

(a) The licensee, either knowingly, or without the exercise of due care to prevent the same, has violated any provision of this article;

(b) Any fact or condition exists which, if it had existed or had been known to exist at the time of the original application for such license, clearly would have justified the commissioner in refusing such license;

(c) The licensee has aided, abetted or conspired with an individual or person to circumvent or violate the requirement of this article;

(d) The licensee, or a legal or beneficial owner of the license, has been convicted of a crime that the commissioner finds directly relates to the duties and responsibilities of the occupation of pawnbroker.

(2) The commissioner may conditionally license or place on probation a person whose license has been suspended or may reprimand a licensee for a violation of this article.

(3) The manner of giving notice and conducting a hearing as required by subsection (1) of this section shall be performed in accordance with Mississippi Administrative Procedures Law, Section 25-43-1 et seq., Mississippi Code of 1972.

(4) Any licensee may surrender any license by delivering it to the commissioner with written notice of its surrender, but such surrender shall not affect the licensee's civil or criminal liability for acts committed prior thereto.

(5) No revocation, suspension or surrender of any license shall impair or affect the obligation of any pre-existing lawful contract between the licensee and any pledgor. Any pawn transaction made without benefit of license is void.

(6) The commissioner may reinstate suspended licenses or issue new licenses to a person whose license or licenses have been revoked if no fact or condition then exists which clearly would have justified the commissioner in refusing originally to issue a license under this article.

(7) The appropriate local law enforcement agency shall be notified of any licensee who has his license suspended or revoked as provided by this article.

(8) The Commissioner of Banking shall enforce the provisions of this section.

§ 75-67-327

(1) An application for a new pawnshop license, the transfer of an existing pawnshop license or the approval of a change in the ownership of a licensed pawnshop shall be under oath and shall state the full name and place of residence of the applicant, the place where the business is to be conducted and other relevant information required by the commissioner. If the applicant is a partnership, the application shall state the full name of each partner. If the applicant is a corporation, the application shall state the full name and address of each officer, shareholder and director.

(2) Notwithstanding the provision of this article, the application need not state the full name and address of each shareholder, if the applicant is owned directly or beneficially by a person which as an issuer has a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or is an issuer of securities which is required to file reports with the Securities and Exchange Commission pursuant to Section 15(d) of the Securities Exchange Act, provided that such person files with the commissioner such information, documents and reports as are required by the provision of the Securities Exchange Act to be filed by such issuer with the Securities and Exchange Commission.

§ 75-67-329

(1) No pledged or purchased goods can be confiscated without specifically accomplishing the following actions:

(a) A police report being made in a timely manner;

(b) A warrant sworn out for the person who pledged or sold the goods to the pawnbroker; and

(c) A theft report, or a National Crime Information Center (NCIC) report, identifying the merchandise to be confiscated along with a request for restitution, pursuant to law.

(2) Pledged or purchased goods can be put on a one-time seven (7) day hold by the authorized law enforcement authorities.

(3) Confiscated merchandise shall be returned to the pawnbroker by the law enforcement authorities as soon as possible when determined that the merchandise has no rightful owner.

§ 75-67-331

Any person who engages in the business of operating a pawnshop without first securing a license prescribed by this article shall be guilty of a misdemeanor and upon conviction thereof, shall be punishable by a fine not in excess of One Thousand Dollars ($1,000.00) or by confinement in the county jail for not more than one (1) year, or both.

§ 75-67-333

(1) In addition to any other penalty which may be applicable, any licensee or employee who willfully violates any provision of this article, or who willfully makes a false entry in any record specifically required by this article, shall be guilty of a misdemeanor and upon conviction thereof, shall be punishable by a fine not in excess of One Thousand Dollars ($1,000.00) per violation or false entry.

(2)(a) In addition to any other penalty which may be applicable, any licensee or employee who fails to make a record of a pawnshop transaction and subsequently sells or disposes of the pledged goods from such transaction shall be punished as follows:

(i) For a first offense, the licensee or employee shall be guilty of a misdemeanor and upon conviction thereof, shall be punishable by a fine not in excess of One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for not more than one (1) year, or both fine and imprisonment;

(ii) For a second offense, the licensee or employee shall be guilty of a felony and upon conviction thereof, shall be punishable by a fine not in excess of Five Thousand Dollars ($5,000.00) or by imprisonment in the custody of the State Department of Corrections for a term not less than one (1) year nor more than five (5) years, or by both fine and imprisonment.

(b) Any licensee convicted in the manner provided in this subsection (2) shall forfeit the surety bond or deposit required in Section 75-67-323 and the amount of such bond or deposit shall be credited to the budget of the state or local agency, which directly participated in the prosecution of such licensee, for the specific purpose of increasing law enforcement resources for that specific state or local agency. Such bond or deposit shall be used to augment existing state and local law enforcement budgets and not to supplant them.

(3) Compliance with the criminal provisions of this article shall be enforced by the appropriate law enforcement agency who may exercise for such purpose any authority conferred upon such agency by law.

(4) When the commissioner has reasonable cause to believe that a person is violating any provision of this article, the commissioner, in addition to and without prejudice to the authority provided elsewhere in this article, may enter an order requiring the person to stop or to refrain from the violation. The commissioner may sue in any circuit court of the state having jurisdiction and venue to enjoin the person from engaging in or continuing the violation or from doing any act in furtherance of the violation. In such an action, the court may enter an order or judgment awarding a preliminary or permanent injunction.

(5) The commissioner may, after notice and a hearing, impose a civil penalty against any licensee adjudged by the commissioner to be in violation of the provisions of this article. Such civil penalty shall not exceed Five Hundred Dollars ($500.00) per violation and shall be deposited into the State General Fund.

§ 75-67-334

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this article and for the purpose of determining whether persons are subject to the provisions of this article, may examine persons licensed under this article and persons reasonably suspected by the commissioner of conducting business that requires a license under this article, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this article, including without limitation the conduct of business without a license as required under this article.

§ 75-67-335

If any pledged goods from a pawn transaction are found to be stolen goods and are returned to the rightful owner by law enforcement authorities and if the licensee who accepted such pledged goods has complied with all of the duties and responsibilities as specified in this article during such transaction, then the rightful owner of such pledged goods shall be liable to the licensee for the pledged amount if the rightful owner fails to prosecute or cooperate in the criminal prosecution related to such pawn transaction, provided that the rightful owner can prove that the stolen goods are his. It shall also be the responsibility of the licensee to assist or cooperate in the criminal prosecution related to such pawn transaction. Upon successful criminal prosecution, restitution shall be awarded to the pawnbroker and the rightful owner, if applicable, by the criminal court at the time of the defendant's sentencing. If the identity of a person who pawned stolen goods can be determined, the district attorney may prosecute such person for any applicable criminal violations.

§ 75-67-337

The provisions of this article are severable. If any part of this article is declared invalid or unconstitutional, such declaration shall not affect the parts which remain.

§ 75-67-339

Pawnbrokers operating pawnshop locations in business as of July 1, 1993, shall have until January 1, 1994, to apply for a license under this article and to pay the required fee, and upon such application and payment of such required fee, shall be granted a license under this article.

§ 75-67-341

(1) The Commissioner of Banking shall develop and provide any necessary forms to carry out the provisions of this article.

(2) To assure compliance with the provisions of this article, the commissioner may examine the pawn books and records of any licensee without notice during normal business hours.

Any expenses incurred for such examinations are included in the licensee's application fee; however, the commissioner may charge the licensee any actual expenses incurred while examining the licensee's pawn records or books which are located outside of the State of Mississippi.

§ 75-67-343

Municipalities in this state may enact ordinances which are in compliance with, but not more restrictive than, the provisions of this article. Any existing or future order, ordinance or regulation which conflicts with this provision shall be null and void.

§ 75-67-401

This article shall be known and may be cited as the “Mississippi Title Pledge Act.”

§ 75-67-403

The following words and phrases shall have the following meanings:

(a) “Appropriate law enforcement agency” means the sheriff of each county in which the title pledge lender maintains an office, or the police chief of the municipality or law enforcement officers of the Department of Public Safety in which the title pledge lender maintains an office.

(b) “Attorney General” means the Attorney General of the State of Mississippi.

(c) “Commissioner” means the Commissioner of Banking and Consumer Finance of the State of Mississippi, or his designee, as the designated official for the purpose of enforcing this article.

(d) “Identification” means a government issued photographic identification.

(e) “Person” means an individual, partnership, corporation, joint venture, trust, association or other legal entity.

(f) “Pledged property” means any personal property certificate of title that is deposited with a title pledge lender in the course of the title pledge lender's business and is the subject of a title pledge agreement.

(g) “Pledgor” means the person to whom the property is titled.

(h) “Title pledge agreement” means a thirty-day written agreement whereby a title pledge lender agrees to make a loan of money to a pledgor, and the pledgor agrees to give the title pledge lender a security interest in unencumbered titled personal property owned by the pledgor. The pledgor shall agree that the title pledge lender keep possession of the certificate of title. The pledgor shall have the exclusive right to redeem the certificate of title by repaying the loan of money in full and by complying with the title pledge agreement. When the certificate of title is redeemed, the title pledge lender shall release the security interest in the titled personal property and return the personal property certificate of title to the pledgor. The title pledge agreement shall provide that upon failure by the pledgor to redeem the certificate of title at the end of the original thirty-day agreement period, or at the end of any extension(s) thereof, the title pledge lender shall be allowed to take possession of the titled personal property. The title pledge agreement shall contain a power of attorney which authorizes the title pledge lender to transfer title to the pledged property from the pledgor to the title pledge lender upon failure to redeem the pledged property on or before the maturity date of the title pledge agreement, or any extension thereof. The title pledge lender shall take physical possession of the certificate of title for the entire length of the title pledge agreement, but shall not be required to take physical possession of the titled personal property at any time. A title pledge lender may only take unencumbered certificates of title for pledge, but may encumber the title as part of the title pledge transaction by perfecting its security interest in the titled property.

(i) “Title pledge lender” means any person engaged in the business of making title pledge agreements with pledgors; provided, however, that the following are exempt from the definition of “title pledge lender” and from the provisions of this article: any bank which is regulated by the Department of Banking and Consumer Finance, the Comptroller of the Currency of the United States, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System or any other federal or state authority and all affiliates of such bank, and additionally any bank or savings and loan association whose deposits or accounts are eligible for insurance by the Bank Insurance Fund or the Savings Association Insurance Fund or other fund administered by the Federal Deposit Insurance Corporation or any successor thereto, and all affiliates of such banks and savings and loan associations, any state or federally chartered credit union and finance company subject to licensing and regulation by the Department of Banking and Consumer Finance.

(j) “Title pledge office” means the location at which, or premises in which, a title pledge lender regularly conducts business.

(k) “Title pledge service charge” means a charge for investigating the title, appraising the titled personal property to which the pledged property relates, documenting and closing the title pledge agreement transaction, making required reports to appropriate law enforcement officials, and for all of the services provided by the title pledge lender.

(l) “Title pledge transaction form” means the instrument on which a title pledge lender records title pledge agreements pursuant to this article.

(m) “Titled personal property” means any personal property the ownership of which is evidenced and delineated by a state-issued certificate of title.

(n) “Records” or “documents” means any item in hard copy or produced in a format of storage commonly described as electronic, imaged, magnetic, microphotographic or otherwise, and any reproduction so made shall have the same force and effect as the original thereof and be admitted in evidence equally with the original.

§ 75-67-405

At the time the title pledge lender enters into each title pledge agreement, the title pledge lender shall complete a consecutively numbered title pledge transaction form for such transaction, and the pledgor shall sign the completed form. The commissioner shall approve the design and format of the title pledge transaction form, which shall elicit the information required under this section. In completing the title pledge transaction form, the title pledge lender shall record the following information, which shall be typed or written indelibly and legibly in English:

(a) The make, model and year of the titled personal property to which the pledged property relates.

(b) The vehicle identification number, or other comparable identification number, along with the license plate number, if applicable, of the titled personal property to which the pledged property relates.

(c) The name, address, date of birth, physical description, Social Security number of the pledgor and one (1) photo identification.

(d) The date of the transaction.

(e) The identification number and the type of identification (including the issuing agency) accepted from the pledgor.

(f) The amount of money advanced, which shall be designated as the “amount financed.”

(g) The maturity date of the title pledge agreement, which shall be thirty (30) days after the date of the transaction.

(h) The total title pledge service charge payable on the maturity date, designated as the “finance charge.”

(i) The total amount (amount financed plus finance charge) which must be paid to redeem the pledged property on the maturity date, designated as the “total of payments.”

(j) The annual percentage rate, computed in accordance with the regulations adopted by the Federal Reserve Board pursuant to the Federal Truth in Lending Act.

§ 75-67-407

(1) The following information shall also be printed on all title pledge transaction forms:

(a) The name and address of the title pledge office.

(b) The statement that:

(i) The pledgor is not obligated to redeem the pledged certificate of title;

(ii) If the pledgor does not redeem the pledged certificate of title on or before the maturity date of the title pledge agreement, the title pledge lender may take possession of the titled personal property to which the certificate of title relates;

(iii) If the pledgor does not redeem the pledged property within thirty (30) days of the maturity date by paying all outstanding principal, interest and other fees, then the pledgor forfeits all right, title and interest in and to the titled personal property and the pledged property to the title pledge lender, who shall thereby acquire an absolute right of title and ownership to the titled personal property; and

(iv) If this title pledge transaction form is lost, destroyed or stolen, the pledgor shall immediately advise the issuing title pledge lender.

(c) The statement that “The pledgor represents and warrants that the titled personal property to which the pledged property relates is not stolen, it has no liens or encumbrances against it, and the pledgor has the right to enter into this transaction.”

(d) Immediately above the signature of the pledgor or seller, the statement that “I, the pledgor declare under penalty of perjury that I have read the foregoing document and that, to the best of my knowledge and belief, the facts contained in it are true and correct.”

(e) A blank line for the signature of the pledgor.

(2) At the time of the transaction, the title pledge lender shall deliver to the pledgor a copy of the completed title pledge transaction form.

§ 75-67-409

(1) The pledgor shall sign a statement verifying that the pledgor is the rightful owner of the pledged property and is entitled to pledge it. The pledgor shall receive an exact copy of the title pledge agreement which shall be signed by the title pledge lender or any employee of the title pledge lender.

(2) The title pledge lender shall maintain a record of all transactions of pledged property on the premises for a period of two (2) years. A title pledge lender upon request shall provide to the appropriate law enforcement agency a complete record of all transactions. These records shall be a correct copy of the entries made of the title pledge transaction, except as to the amount of cash advanced for the pledged property and the monthly title pledge charge.

(3) The title pledge lender shall maintain records that contain a complete payment history of each customer evidencing all principal payments, service charge and/or other charges. Those records also shall reflect any unpaid principal balance as well as a payoff balance that includes the accrued service charges.

§ 75-67-411

(1) A pledgor shall have no obligation to redeem pledged property or make any payment on a title pledge transaction. Upon the pledgor's failure to redeem the pledged property on or before the maturity date of the title pledge agreement or any extension or continuation thereof, the title pledge lender has the right to take possession of the titled personal property and to exercise a power of attorney to transfer title to the pledged property. In taking possession, the title pledge lender or his agent may proceed without judicial process if this can be done without breach of the peace; or, if necessary, may proceed by action to obtain judicial process.

(2) If, within thirty (30) days after the maturity date, the pledgor redeems the pledged property by paying all outstanding principal, interest and other customary fees, the pledgor shall be given possession of the titled personal property and the pledged property without further charge.

(3) If the pledgor fails to redeem the pledged property during the thirty-day period provided in subsection (2) of this section, then the pledgor shall thereby forfeit all right, title and interest in and to the titled personal property and the pledged property to the title pledge lender who shall thereby acquire an absolute right of title and ownership to the titled personal property. The title pledge lender shall then have the sole right and authority to sell or dispose of the titled personal property.

(4) Notwithstanding anything in the preceding subsections of this section, the pledgor shall have three (3) business days after the title pledge lender has taken possession of the titled personal property to redeem the property by paying the amount of the unpaid principal balance, the delinquent service charge and the actual cost of the repossession. The cost of repossession shall include towing charges, storage charges paid to a third party and repairs made to the property to render it operable.

(5) If the property is sold after the three-business-day period, the title pledge lender shall return to the pledgor eighty-five percent (85%) of the amount received from the sale above the amount of the unpaid principal balance, the delinquent service charge, the actual cost of the repossession and a sales fee of One Hundred Dollars ($100.00). However, any titled personal property that is deemed to be salvage by the title pledge lender may be sold or otherwise disposed of immediately upon repossession.

(6) The title pledge transaction form shall contain a provision written in boldface type of at least fourteen (14) point size that notifies the pledgor that the titled personal property is subject to sale at any time after the three-business-day period has expired, unless the property is deemed to be salvage by the title pledge lender, in which case the property may be sold or otherwise disposed of immediately. The transaction form shall have a space located near that provision that the pledgor must initial.

§ 75-67-413

(1) A title pledge lender may contract for and receive a title pledge service charge in lieu of interest or other charges for all services, expenses, cost and losses of every nature not to exceed twenty-five percent (25%) of the principal amount, per month, advanced in the title pledge transaction.

(2) Any interest, charge or fees contracted for or received, directly or indirectly, in excess of the amount permitted under subsection (1) of this section shall be uncollectible and the title pledge transaction shall be void. The title pledge service charge allowed under subsection (1) of this section shall be deemed earned, due and owing as of the date of the title pledge transaction and a like sum shall be deemed earned, due and owing on the thirty-first day from the date of the transaction and on every thirtieth day thereafter.

(3) By agreement of the parties, the maturity date of the title pledge transaction may be extended or continued for thirty-day periods, provided that the service charges as specified in subsection (1) are not exceeded for any extensions. All extensions or continuations of the title pledge transaction shall be evidenced in writing. No accrued interest or service charge shall be capitalized or added to the original principal of the title pledge transaction during any extension or continuation. Beginning with the first extension or continuation and at each successive extension or continuation thereafter, the pledgor shall be required to reduce the principal amount financed by at least ten percent (10%) of the original principal amount of the title pledge transaction. Notwithstanding any provision in this article to the contrary, if the pledgor fails to pay at least ten percent (10%) of the original principal amount at any such extension or continuation, the title pledge lender may, at its option, either (a) declare the outstanding principal and any service charges to be immediately due and payable, or (b) allow the transaction to be extended or continued, provided that the title pledge lender shall reduce the principal amount of the loan by ten percent (10%) of the original principal amount solely for the purposes of calculating its service charge. This reduction in principal shall continue to be owing by the pledgor in accordance with the title pledge transaction, but that amount shall not be entitled to accrue interest or service charges thereafter.

(4) Any additional payment of funds on the same pledged property must be evidenced by a separate title pledge agreement. A title pledge lender shall not advance funds to a pledgor to pay off an existing title pledge agreement.

§ 75-67-415

A title pledge lender, or any agent or employee of such title pledge lender, shall not:

(a) Falsify or intentionally fail to make an entry of any material matter in a title pledge lender transaction form.

(b) Refuse to allow the commissioner, the appropriate law enforcement official, state attorney, or any of their designated representatives having appropriate jurisdiction, to inspect completed title pledge transaction forms or pledged property during the ordinary hours of the title pledge lender's business or other times acceptable to both parties.

(c) Enter into a title pledge agreement with a person under the age of eighteen (18) years.

(d) Make any agreement requiring or allowing the personal liability of a pledgor or the waiver of any of the provisions of this article.

(e) Knowingly enter into a title pledge agreement with any person who is under the influence of drugs or alcohol when such condition is visible or apparent, or with any person using a name other than his own name or the registered name of his business.

(f) Enter into a title pledge agreement in which the amount of money loaned in consideration of the pledge of any single certificate of title exceeds Two Thousand Five Hundred Dollars ($2,500.00).

(g) Fail to exercise reasonable care in the safekeeping of pledged property or of titled personal property repossessed pursuant to this article.

(h) Fail to return pledged property or repossessed titled personal property to a pledgor, with any and all of the title pledge lender's liens on the property properly released, upon payment of the full amount due the title pledge lender, unless the property has been seized or impounded by an authorized law enforcement agency, taken into custody by a court, or otherwise disposed of by court order.

(i) Sell or otherwise charge for insurance in connection with a title pledge agreement.

§ 75-67-417

(1) Any person presenting identification of himself and presenting the pledgor's copy of the title pledge transaction form to the title pledge lender is presumed to be entitled to redeem the pledged property described in the title pledge lender transaction form; provided, however, that if the title pledge lender determines that the person is not the original pledgor, the title pledge lender is not required to allow the redemption of the pledged property by such person. The person redeeming the pledged property must sign the pledgor's copy of the title pledge transaction form, which the title pledge lender may retain to evidence such person's receipt of the pledged property. If the person redeeming the pledged property is not the original pledgor, that person must show identification to the title pledge lender, and the title pledge lender shall record the person's name and address on the title pledge transaction form retained by the title pledge lender. The title pledge lender shall not be liable to the original pledgor for having allowed the redemption of the pledged property by another person pursuant to this subsection (1).

(2) If the pledgor's copy of the title pledge transaction form is lost, destroyed or stolen, the pledgor must notify the title pledge lender in writing by certified or registered mail, return receipt requested, or in person evidenced by a signed receipt, and receipt of this notice shall invalidate such title pledge transaction form if the pledged property has not previously been redeemed. Before delivering the pledged property or issuing a new title pledge transaction form, the title pledge lender shall require the pledgor to make a written statement of the loss, destruction or theft of the pledgor's copy of the title pledge transaction form. The title pledge lender shall record on the written statement the type of identification and the identification number accepted from the pledgor, the date the statement is given and the number of the title pledge transaction form lost, destroyed or stolen. The statement shall be signed by the title pledge lender or the title pledge office employee who accepts the statement from the pledgor. A title pledge lender is entitled to a fee not to exceed Five Dollars ($5.00) in connection with each such lost, destroyed or stolen title pledge transaction form and the taking of a properly prepared written statement.

(3) No sales tax shall be deemed due or collectible in connection with the redemption of pledged property under this article.

§ 75-67-419

(1) A person may not engage in business as a title pledge lender or otherwise portray himself as a title pledge lender unless the person has a valid license authorizing engagement in the business. A separate license is required for each place of business under this article. The commissioner may issue more than one (1) license to a person if that person complies with this article for each license. A new license or application to transfer an existing license is required upon a change, directly or beneficially, in the ownership of any licensed title pledge office and an application shall be made to the commissioner in accordance with this article.

(2) When a licensee wishes to move a title pledge office to another location, the licensee shall give thirty (30) days prior written notice to the commissioner who shall amend the license accordingly.

(3) Each license shall remain in full force and effect until relinquished, suspended, revoked or expired. With each initial application for a license, the applicant shall pay the commissioner at the time of making the application a license fee of Seven Hundred Fifty Dollars ($750.00), and on or before June 1 of each year thereafter, an annual renewal fee of Four Hundred Seventy-five Dollars ($475.00). If the annual fee remains unpaid thirty (30) days after June 1, the license shall thereupon expire, but not before June 30 of any year for which the annual fee has been paid. If any person engages in business as provided for in this article without paying the license fee provided for in this article before commencing business or before the expiration of such person's current license, as the case may be, then the person shall be liable for the full amount of the license fee, plus a penalty in an amount not to exceed Twenty-five Dollars ($25.00) for each day that the person has engaged in the business without a license or after the expiration of a license. All licensing fees and penalties shall be paid into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

(4) Notwithstanding other provisions of this article, the commissioner may issue a temporary license authorizing the operation of a title pledge office on the receipt of an application to transfer a license from one person to another or on the receipt of an application for a license involving principals and owners that are substantially identical to those of an existing licensed title pledge office. The temporary license is effective until the permanent license is issued or denied.

(5) Notwithstanding other provisions of this article, neither a new license nor an application to transfer an existing license shall be required upon any change, directly or beneficially, in the ownership of any licensed title pledge office incorporated under the laws of this state or any other state so long as the licensee continues to operate as a corporation doing a title pledge business under the license. The commissioner may, however, require the licensee to provide such information as he deems reasonable and appropriate concerning the officer and directors of the corporation and persons owning in excess of twenty-five percent (25%) of the outstanding shares of the corporation.

§ 75-67-421

(1) To be eligible for a title pledge lender license, an applicant shall:

(a) Operate lawfully and fairly within the purposes of this article;

(b) Not have been convicted of a felony in the last ten (10) years or be active as a beneficial owner for someone who has been convicted of a felony in the last ten (10) years;

(c) File with the commissioner a bond with good security in the penal sum of Fifty Thousand Dollars ($50,000.00) for each location at which the applicant proposes to engage in the business of title pledge lending, but in no event shall the aggregate amount of the bond for all locations per applicant exceed Two Hundred Fifty Thousand Dollars ($250,000.00) and no more than Fifty Thousand Dollars ($50,000.00) shall be payable or recoverable on the bond for each location; the bond shall be payable to the State of Mississippi for the faithful performance by the licensee of the duties and obligations pertaining to the business so licensed and the prompt payment of any judgment which may be recovered against the licensee on account of damages or other claim arising directly or collaterally from any violation of the provisions of this article; the bond shall not be valid until it is approved by the commissioner; the applicant may file, in lieu thereof, cash, a certificate of deposit, or government bonds in the amount of Twenty-five Thousand Dollars ($25,000.00) for each location at which the applicant proposes to engage in the business of title pledge lending, but in no event shall the aggregate amount of the cash, certificate of deposit or government bonds for all locations per applicant exceed Two Hundred Fifty Thousand Dollars ($250,000.00) and no more than Twenty-five Thousand Dollars ($25,000.00) shall be payable or recoverable on the cash, certificate of deposit or government bonds for each location; the deposit of the cash, certificate of deposit or government bonds shall be filed with the commissioner and is subject to the same terms and conditions as are provided for in the surety bond required herein; any interest or earnings on such deposits are payable to the depositor.

(d) File with the commissioner an application accompanied by a set of fingerprints from any local law enforcement agency, and the initial license fee required in this article. In order to determine the applicant's suitability for license, the commissioner shall forward the fingerprints to the Department of Public Safety; and if no disqualifying record is identified at the state level, the fingerprints shall be forwarded by the Department of Public Safety to the FBI for a national criminal history record check.

(2) Upon the filing of an application in a form prescribed by the commissioner, accompanied by the fee and documents required in this article, the department shall investigate to ascertain whether the qualifications prescribed by this article have been satisfied. If the commissioner finds that the qualifications have been satisfied and, if he approves the documents so filed by the applicant, he shall issue to the applicant a license to engage in the business of title pledge lending in this state.

(3) Complete and file with the commissioner an annual renewal application accompanied by the renewal fee required in this article.

(4) The license shall be kept conspicuously posted in the place of business of the licensee.

§ 75-67-423

(1) The commissioner may, after notice and hearing, suspend or revoke any license if it finds that:

(a) The licensee, either knowingly, or without the exercise of due care to prevent the same, has violated any provision of this article;

(b) Any fact or condition exists which, if it had existed or had been known to exist at the time of the original application for the license, clearly would have justified the commissioner in refusing the license;

(c) The licensee has aided, abetted or conspired with an individual or person to circumvent or violate the requirements of this article;

(d) The licensee, or a legal or beneficial owner of the license, has been convicted of a crime that the commissioner finds directly relates to the duties and responsibilities of the occupation of title pledge lender.

(2) The commissioner may conditionally license or place on probation a person whose license has been suspended or may reprimand a licensee for a violation of this article.

(3) The manner of giving notice and conducting a hearing as required by subsection (1) of this section shall be performed in accordance with Mississippi Administrative Procedures Law, Section 25-43-1.101 et seq., Mississippi Code of 1972.

(4) Any licensee may surrender any license by delivering it to the commissioner with written notice of its surrender, but such surrender shall not affect the licensee's civil or criminal liability for acts committed prior thereto.

(5) No revocation, suspension or surrender of any license shall impair or affect the obligation of any pre-existing lawful contract between the licensee and any pledgor. Any title pledge transaction made without benefit of license is void.

(6) The commissioner may reinstate suspended licenses or issue new licenses to a person whose license or licenses have been revoked if no fact or condition then exists that clearly would have justified the commissioner in refusing originally to issue a license under this article.

(7) The appropriate local law enforcement agency shall be notified of any licensee who has his license suspended or revoked as provided by this article.

(8) The Commissioner of Banking and Consumer Finance shall enforce the provisions of this section.

§ 75-67-425

(1) An application for a new title pledge office license, the transfer of an existing title pledge office license or the approval of a change in the ownership of a licensed title pledge office shall be under oath and shall state the full name and place of residence of the applicant, the place where the business is to be conducted and other relevant information required by the commissioner. If the applicant is a partnership, the application shall state the full name of each partner. If the applicant is a corporation, the application shall state the full name and address of each officer, shareholder and director.

(2) Notwithstanding the provisions of this section, the application need not state the full name and address of each shareholder, if the applicant is owned directly or beneficially by a person which as an issuer has a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or is an issuer of securities which is required to file reports with the Securities and Exchange Commission pursuant to Section 15(d) of the Securities Exchange Act, provided that such person files with the commissioner such information, documents and reports as are required by the provision of the Securities Exchange Act to be filed by such issuer with the Securities and Exchange Commission.

§ 75-67-427

(1) No pledged property can be confiscated without the following actions having been accomplished:

(a) A police report being made in a timely manner;

(b) A warrant sworn out for the person who pledged the property to the title pledge lender; and

(c) A theft report or a National Crime Information Center (NCIC) report identifying the pledged property to be confiscated along with a request for restitution, pursuant to law.

(2) Pledged property can be put on a one-time seven-day hold by the authorized law enforcement authorities.

(3) Confiscated pledged property shall be returned to the title pledge lender by the law enforcement authorities as soon as possible when determined that the pledged property has no rightful owner.

§ 75-67-429

Any person who engages in the business of operating a title pledge office without first securing a license prescribed by this article shall be guilty of a misdemeanor and, upon conviction thereof, shall be punishable by a fine not in excess of One Thousand Dollars ($1,000.00) or by confinement in the county jail for not more than one (1) year, or both.

§ 75-67-431

(1) In addition to any other penalty which may be applicable, any licensee or employee who willfully violates any provision of this article, or who willfully makes a false entry in any record specifically required by this article, shall be guilty of a misdemeanor and, upon conviction thereof, shall be punishable by a fine not in excess of One Thousand Dollars ($1,000.00) per violation or false entry.

(2)(a) In addition to any other penalty which may be applicable, any licensee or employee who fails to make a record of a title pledge transaction and subsequently sells or disposes of the pledged property from such transaction shall be punished as follows:

(i) For a first offense, the licensee or employee shall be guilty of a misdemeanor and upon conviction thereof, shall be punishable by a fine not in excess of One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for not more than one (1) year, or both fine and imprisonment;

(ii) For a second offense, the licensee or employee shall be guilty of a felony and, upon conviction thereof, shall be punishable by a fine not in excess of Five Thousand Dollars ($5,000.00) or by imprisonment in the custody of the State Department of Corrections for a term not less than one (1) year nor more than five (5) years, or by both fine and imprisonment.

(b) Any licensee convicted in the manner provided in this subsection (2) shall forfeit the surety bond or deposit required in Section 75-67-421 and the amount of the bond or deposit shall be credited to the budget of the state or local agency, which directly participated in the prosecution of the licensee, for the specific purpose of increasing law enforcement resources for that specific state or local agency. Any proceeds of a forfeited bond or deposit shall be used to augment existing state and local law enforcement budgets and not to supplant them.

(3) Compliance with the criminal provisions of this article shall be enforced by the appropriate law enforcement agency who may exercise for that purpose any authority conferred upon the agency by law.

(4) When the commissioner has reasonable cause to believe that a person is violating any provision of this article, the commissioner, in addition to and without prejudice to the authority provided elsewhere in this article, may enter an order requiring the person to stop or to refrain from the violation. The commissioner may sue in any circuit court of the state having jurisdiction and venue to enjoin the person from engaging in or continuing the violation or from doing any act in furtherance of the violation. In such an action, the court may enter an order or judgment awarding a preliminary or permanent injunction.

(5) The commissioner may, after notice and hearing, impose a civil penalty against any licensee if the licensee or employee is adjudged by the commissioner to be in violation of the provisions of this article. Such civil penalty shall not exceed Five Hundred Dollars ($500.00) per violation and shall be deposited into the Department of Banking Special Fund.

§ 75-67-433

If any pledged property from a title pledge transaction is found to be stolen and is returned to the rightful owner by law enforcement authorities and if the licensee who accepted such pledged property has complied with all of the duties and responsibilities as specified in this article during such transaction, then the rightful owner of such pledged property shall be liable to the licensee for the pledged amount if the rightful owner fails to prosecute or cooperate in the criminal prosecution related to such title loan transaction, provided that the rightful owner can prove that the stolen goods are his. It shall also be the responsibility of the licensee to assist or cooperate in the criminal prosecution related to such title pledge transaction. If the identity of a person who pawned stolen goods can be determined, the district attorney may prosecute such person for any applicable criminal violations.

§ 75-67-435

(1) The Commissioner of Banking and Consumer Finance shall develop and provide any necessary forms to carry out the provisions of this article.

(2) The department may adopt reasonable administrative regulations, not inconsistent with law, for the enforcement of this article.

(3) To assure compliance with the provisions of this article, the department may examine the books and records of any licensee without notice during normal business hours. The commissioner may charge the licensee an examination fee in an amount not less than Three Hundred Dollars ($300.00) nor more than Six Hundred Dollars ($600.00) for each office or location within the State of Mississippi, plus any actual expenses incurred while examining the licensee's records or books that are located outside the State of Mississippi. However, in no event shall a licensee be examined more than once in a two-year period unless for cause shown based upon consumer complaint and/or other exigent reasons as determined by the commissioner.

§ 75-67-437

Title pledge lenders in operation as of April 22, 1997, shall have until July 1, 1997, to apply for a license under this article.

§ 75-67-439

Municipalities in this state may enact ordinances which are in compliance with, but not more restrictive than, the provisions of this article. Any existing or future order, ordinance or regulation which conflicts with this provision shall be null and void.

§ 75-67-441

The provisions of this article are severable. If any part of this article is declared invalid or unconstitutional, such declaration shall not affect the parts which remain.

§ 75-67-443

The commissioner may employ additional necessary permanent full-time employees above the number of permanent full-time employees authorized for the department for fiscal year 1997 to carry out and enforce the provisions of this article.

§ 75-67-445

A licensee shall not advertise, display or publish, or permit to be advertised, displayed or published, in any manner whatsoever, any statement or representation that is false, misleading or deceptive.

§ 75-67-447

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this article and for the purpose of determining whether persons are subject to the provisions of this article, may examine persons licensed under this article and persons reasonably suspected by the commissioner of conducting business that requires a license under this article, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this article, including without limitation the conduct of business without a license as required under this article.

§ 75-67-449

(1) A licensee under this article shall have no liability for any act or practice done or omitted in conformity with (a) any rule or regulation of the commissioner, or (b) any rule, regulation, interpretation or approval of any other state or federal agency or any opinion of the Attorney General, notwithstanding that after such act or omission has occurred the rule, regulation, interpretation, approval or opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

(2) A licensee under this article, acting in conformity with a written interpretation or approval by an official or employee of any state or federal agency or department, shall be presumed to have acted in accordance with applicable law, notwithstanding that after such act has occurred, the interpretation or approval is amended, rescinded, or determined by judicial or other authority to be incorrect or invalid for any reason.

§ 75-67-501

This article shall be known and may be cited as the “Mississippi Check Cashers Act.”

§ 75-67-503

The following words and phrases used in this article shall have the following meanings unless the context clearly indicates otherwise:

(a) “Appropriate law enforcement agency” means the sheriff of each county in which the licensee maintains an office, or the police chief of the municipality in which the licensee maintains an office, or law enforcement officers of the Department of Public Safety.

(b) “Attorney General” means the Attorney General of the State of Mississippi.

(c) “Check” means any check, draft, money order, personal money order, pre-authorized customer draft, or other instrument for the transmission or payment of money as determined by the Commissioner of Banking and Consumer Finance, but shall not include travelers checks or foreign drawn payment instruments.

(d) A “check casher” means any individual, partnership, association, joint-stock association, trust or corporation, excluding the United States government and the government of this state, who exchanges cash or other value for any check, draft, money order, personal money order, or other instrument for the transmission or payment of money, except travelers checks and foreign drawn payment instruments, and who charges a fee therefor.

(e) “Commissioner” means the Mississippi Commissioner of Banking and Consumer Finance, or his designee, as the designated official for the purpose of enforcing this article.

(f) “Department” means the Department of Banking and Consumer Finance.

(g) “Licensee” means any individual, partnership, association or corporation duly licensed by the Department of Banking and Consumer Finance to engage in the business of cashing checks under this article.

(h) “Person” means an individual, partnership, corporation, joint venture, trust, association or any legal entity however organized.

(i) “Personal money order” means any instrument for the transmission or payment of money in relation to which the purchaser or remitter appoints or purports to appoint the seller thereof as his agent for the receipt, transmission or handling of money, whether such instrument is signed by the seller or by the purchaser or remitter or some other person.

§ 75-67-505

(1)(a) A person may not engage in business as a check casher or otherwise portray himself as a check casher unless the person has a valid license authorizing engagement in the business. Any transaction that would be subject to this article that is made by a person who does not have a valid license under this article shall be null and void. A separate license is required for each place of business under this article and each business must be independent of, and not a part of, any other business operation. A check cashing business shall not be a part of, or located at the same business address with, a pawnshop, title pledge office and small loan company.

(b) A check cashing business shall (i) have a definitive United States postal address and E911 address; (ii) comply with local zoning requirements; (iii) have a minimum of one hundred (100) square feet with walls from floor to ceiling separating the operation from any other businesses; (iv) have an outside entrance, but may be located in an area that has a common lobby shared by other businesses as long as the customers do not enter the check cashing business through another business; (v) have proper signage; and (vi) maintain separate books and records. Any licensee who does not cash any delayed deposit checks as authorized under Section 75-67-519 shall not be subject to the requirements of subparagraphs (i), (iii) and (iv) of this paragraph.

(c) A licensed check casher may sell, at the same location as his check cashing business, the following items and services: money orders; income tax preparation service; copy service; wire transfer service; notary service; pagers; pager service; prepaid cellular service; debit card; prepaid telephone cards; prepaid telephone service; and operate a processing center where utility bills, credit card payments and other payments are collected from the general public and governmental and private payments are distributed. In the event a licensee accepts wire transfers in the form of a direct deposit of a payroll check or other similar types of deposit, the licensee shall not encumber any transferred funds against a deferred deposit agreement or any delinquent deferred deposit agreement with such customer. The commissioner may authorize additional functions in addition to those provided in this subsection that may be performed as part of a check cashing business, but shall authorize the offering of credit availability transactions as provided in Sections 75-67-601 through 75-67-637.

(d) The commissioner may issue more than one (1) license to a person if that person complies with this article for each license. A new license is required upon a change, directly or beneficially, in the ownership of any licensed check casher business and an application shall be made to the commissioner in accordance with this article.

(2) When a licensee wishes to move a check casher business to another location, the licensee shall give thirty (30) days' prior written notice to the commissioner who shall amend the license accordingly.

(3) Each license shall remain in full force and effect until relinquished, suspended, revoked or expired. With each initial application for a license, the applicant shall pay the commissioner at the time of making the application a license fee of Seven Hundred Fifty Dollars ($750.00), and on or before September 1 of each year thereafter, an annual renewal fee of Four Hundred Seventy-five Dollars ($475.00). If the annual renewal fee remains unpaid twenty-nine (29) days after September 1, the license shall thereupon expire, but not before the thirtieth day of September of any year for which the annual fee has been paid. If any licensee fails to pay the annual renewal fee before the thirtieth day of September of any year for which the renewal fee is due, then the licensee shall be liable for the full amount of the license fee, plus a penalty in an amount not to exceed Twenty-five Dollars ($25.00) for each day that the licensee has engaged in business after September 30. All licensing fees and penalties shall be paid into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

(4) Notwithstanding other provisions of this article, the commissioner may issue a temporary license authorizing the operator of a check casher business on the receipt of an application for a license involving principals and owners that are substantially identical to those of an existing licensed check casher. The temporary license is effective until the permanent license is issued or denied.

§ 75-67-507

The provisions of this article shall not apply to:

(a) Any bank, trust company, savings association, savings and loan association, savings bank or credit union which is chartered under the laws of this state or under federal law and domiciled in this state.

(b) Any person who cashes checks at their face value and does not charge the consumer a fee or otherwise receive any consideration from the consumer.

(c) Any person principally engaged in the retail sale of goods or services who, either as an incident to or independently of a retail sale, may from time to time cash checks for a fee, not exceeding three percent (3%) of the face amount of the check or Ten Dollars ($10.00), whichever is greater. However, the fee shall be conspicuously posted for public view.

§ 75-67-509

To be eligible for a check casher license, an applicant shall:

(a) Operate lawfully and fairly within the purposes of this article.

(b) Not have been convicted of a felony in the last ten (10) years or be active as a beneficial owner for someone who has been convicted of a felony in the last ten (10) years.

(c) File with the commissioner a bond with good security in the penal sum of Ten Thousand Dollars ($10,000.00), payable to the State of Mississippi for the faithful performance by the licensee of the duties and obligations pertaining to the business so licensed and the prompt payment of any judgment which may be recovered against the licensee on account of charges or other claims arising directly or collectively from any violation of the provisions of this article. The bond shall not be valid until it is approved by the commissioner. The applicant may file, in lieu of the bond, cash, a certificate of deposit or government bonds in the amount of Ten Thousand Dollars ($10,000.00). Those deposits shall be filed with the commissioner and are subject to the same terms and conditions as are provided for in the surety bond required in this paragraph. Any interest or earnings on those deposits are payable to the depositor.

(d) File with the commissioner an application for a license and the initial license fee required in this article. If applicant's application is approved, a check casher license will be issued within thirty (30) days.

(e) Submit a set of fingerprints from any local law enforcement agency. In order to determine the applicant's suitability for license, the commissioner shall forward the fingerprints to the Department of Public Safety; and if no disqualifying record is identified at the state level, the fingerprints shall be forwarded by the Department of Public Safety to the FBI for a national criminal history record check.

(f) Complete and file with the commissioner an annual renewal application for a license accompanied by the renewal fee required in this article.

§ 75-67-511

Each application for a license shall be in a form prescribed by the commissioner, signed under oath, and shall include the following:

(a) The legal name, residence and business address of the applicant and, if the applicant is a partnership, association or corporation, of every member, officer and director thereof.

However, the application need not state the full name and address of each shareholder, if the applicant is owned directly or beneficially by a person which as an issuer has a class of securities registered under Section 12 of the Securities and Exchange Act of 1934 or is an issuer of securities which is required to file reports with the Securities and Exchange Commission under Section 15(d) of the Securities and Exchange Act, provided that the person files with the commissioner such information, documents and reports as are required by the provisions of the Securities and Exchange Act to be filed by the issuer with the Securities and Exchange Commission.

(b) The complete address of the location at which the applicant proposes to engage in the business of cashing checks.

(c) Other data and information the department may require with respect to the applicant, its directors, trustees, officers, members or agents.

(d) Sworn financial statements of the applicant showing a net worth of at least Twenty Thousand Dollars ($20,000.00) for the first license. The applicant shall possess and maintain a net worth of at least Twenty Thousand Dollars ($20,000.00) for the first license and at least Five Thousand Dollars ($5,000.00) for each additional license.

§ 75-67-513

(1) Upon filing of an application in a form prescribed by the commissioner, accompanied by the documents required in this article, the department shall investigate to ascertain whether the qualifications prescribed by Sections 75-67-509 and 75-67-511 have been satisfied. If the commissioner finds that the qualifications have been satisfied and, if he approves the documents so filed by the applicant, he shall issue to the applicant a license to engage in the business of check cashing in this state.

(2) The license shall be kept conspicuously posted in the place of business of the licensee.

§ 75-67-515

(1) The department may adopt reasonable administrative regulations, not inconsistent with law, for the enforcement of this article.

(2) To assure compliance with the provisions of this article, the department may examine the books and records of any licensee without notice during normal business hours. The commissioner may charge the licensee an examination fee in an amount not less than Three Hundred Dollars ($300.00) nor more than Six Hundred Dollars ($600.00) for each office or location within the State of Mississippi plus any actual expenses incurred while examining the licensee's records or books that are located outside the State of Mississippi. However, in no event shall a licensee be examined more than once in a two-year period unless for cause shown based upon consumer complaint and/or other exigent reasons as determined by the commissioner.

(3) Each licensee shall keep and use in its business any books, accounts and records the department may require to carry into effect the provisions of this article and the administrative regulations issued under this article. Every licensee shall preserve the books, accounts and records of its business for at least two (2) years.

(4) Any fee charged by a licensee for cashing a check shall be posted conspicuously to the bearer of the check before cashing the check, and the fee shall be a service fee and not interest.

(5) Before a licensee deposits with any bank or other depository institution a check cashed by the licensee, the check shall be endorsed with the actual name under which the licensee is doing business.

(6) All personal checks cashed for a customer by a licensee shall be dated on the actual date the cash is tendered to the customer.

(7) No licensee shall cash a check payable to a payee unless the licensee has previously obtained appropriate identification of the payee clearly indicating the authority of the person cashing the check, draft or money order on behalf of the payee.

(8) No licensee shall indicate through advertising, signs, billboards or otherwise that checks may be cashed without identification of the bearer of the check; and any person seeking to cash a check shall be required to submit reasonable identification as prescribed by the department. The provisions of this subsection shall not prohibit a licensee from cashing a check simultaneously with the verification and establishment of the identity of the presenter by means other than presentation of identification.

(9) Within five (5) business days after being advised by the payor financial institution that a check has been altered, forged, stolen, obtained through fraudulent or illegal means, negotiated without proper legal authority or represents the proceeds of illegal activity, the licensee shall notify the department and the district attorney for the judicial district in which the check was received. If a check is returned to the licensee by the payor financial institution for any of these reasons, the licensee may not release the check without consent of the district attorney or other investigating law enforcement authority.

(10) If a check is returned to a licensee from a payor financial institution because there are insufficient funds in or on deposit with the financial institution to pay the check, the licensee or any other person on behalf of the licensee shall not institute or initiate any criminal prosecution against the maker or drawer of the personal check with the intent and purpose of aiding in the collection of or enforcing the payment of the amount owed to the check casher by the maker or drawer of the check.

(11) Nothing in this article shall prohibit a licensee from issuing coupons to customers or potential customers which are redeemable against a deferred deposit transaction provided the redemption results in a financial benefit to the customer on current or future transactions.

§ 75-67-516

A licensee shall not advertise, display or publish, or permit to be advertised, displayed or published, in any manner whatsoever, any statement or representation that is false, misleading or deceptive.

§ 75-67-517

Notwithstanding any other provision of law, no check cashing business licensed under this article shall directly or indirectly charge or collect fees for check cashing services in excess of the following:

(a) Three percent (3%) of the face amount of the check or Five Dollars ($5.00), whichever is greater, for checks issued by the federal government, state government, or any agency of the state or agency of the state or federal government, or any county or municipality of this state.

(b) Ten percent (10%) of the face amount of the check or Five Dollars ($5.00), whichever is greater, for personal checks.

(c) Five percent (5%) of the face amount of the check or Five Dollars ($5.00), whichever is greater, for all other checks, or for money orders.

A licensee may not advance monies on the security of any personal check unless the presenter attests that the check being presented is drawn on a legitimate, open and active account. Except as provided by Section 75-67-519, any licensee who cashes a check for a fee shall deposit the check not later than three (3) business days from the date the check is cashed.

§ 75-67-519

(1)(a) A licensee may delay the deposit of a personal check cashed for a customer with a face amount of not more than Two Hundred Fifty Dollars ($250.00) for up to thirty (30) days under the provisions of this section.

(b) A licensee shall enter into a written agreement for a delayed deposit transaction of a personal check cashed for a customer with a face amount of more than Two Hundred Fifty Dollars ($250.00) but not more than Five Hundred Dollars ($500.00) for a period of at least twenty-eight (28) days but not more than thirty (30) days, as selected by the customer, under the provisions of this section, with the licensee having the option to deposit or collect the check.

(2) The face amount of delayed deposit checks cashed under the provisions of this section shall not exceed Five Hundred Dollars ($500.00), including the amount of the fees. Each customer is limited to a maximum amount of Five Hundred Dollars ($500.00), including the amount of the fees, at any time.

(3) Each delayed deposit check cashed by a licensee shall be documented by a written agreement that has been signed by the customer and the licensee. The written agreement shall contain a statement of the total amount of any fees charged, expressed as a dollar amount and as an annual percentage rate. The written agreement shall authorize the licensee to delay deposit of the personal check with a face amount of not more than Two Hundred Fifty Dollars ($250.00) until a specific date not later than thirty (30) days from the date of the transaction, and shall authorize the licensee to delay deposit or collection of the personal check with a face amount of more than Two Hundred Fifty Dollars ($250.00) but not more than Five Hundred Dollars ($500. 00) in accordance with the written agreement.

(4)(a) A licensee shall not directly or indirectly charge any fee or other consideration in excess of Twenty Dollars ($20.00) per One Hundred Dollars ($100.00) advanced for cashing a delayed deposit check with a face amount of not more than Two Hundred Fifty Dollars ($250.00).

(b) A licensee shall not directly or indirectly charge any fee or other consideration in excess of Twenty-one Dollars and Ninety-five Cents ($21.95) per One Hundred Dollars ($100.00) advanced for cashing a delayed deposit check with a face amount of more than Two Hundred Fifty Dollars ($250.00) but not more than Five Hundred Dollars ($500.00).

(c) In no event shall the amount of the checks cashed exceed Five Hundred Dollars ($500.00), including the amount of the fee.

(5) No check cashed under the provisions of this section shall be repaid by the proceeds of another check cashed by the same licensee or any affiliate of the licensee. A licensee shall not renew or otherwise extend any delayed deposit check.

(6) A licensee shall not offer discount catalog sales or other similar inducements as part of a delayed deposit transaction.

(7) A licensee shall not charge a late fee or collection fee on any deferred deposit transaction as a result of a returned check or the default by the customer in timely payment to the licensee. Notwithstanding anything to the contrary contained in this section, a licensee may charge a processing fee, not to exceed an amount authorized by the commissioner, for a check returned for any reason, including, without limitation, insufficient funds, closed account or stop payment, if such processing fee is authorized in the written agreement signed by the customer and licensee. In addition, if a licensee takes legal action against a customer to collect the amount of a delayed deposit check for which the licensee has not obtained payment and obtains a judgment against the customer for the amount of that check, the licensee shall also be entitled to any court-awarded fees.

(8) When cashing a delayed deposit check, a licensee may pay the customer in the form of the licensee's business check or a money order; however, no additional fee may then be charged by the licensee for cashing the licensee's business check or money order issued to the customer.

(9) Before entering any transactions under this section, a licensee shall provide to the customer a pamphlet prepared by the commissioner that describes general information about the transaction and about the customer's rights and responsibilities in the transaction, and that includes the consumer hotline phone number to the Mississippi Department of Banking and Consumer Finance and to the Mississippi Attorney General's office. Each agreement executed by a licensee shall include the following statement, which shall be located just above the signature line for the customer:

“In addition to agreeing to the terms of this agreement, I acknowledge, by my signature below, the receipt of a consumer education pamphlet regarding this transaction.”

§ 75-67-521

(1) The commissioner may, after notice and hearing, suspend or revoke a license if he finds that:

(a) The licensee, either knowingly, or without the exercise of due care to prevent the same, has violated any provision of this article;

(b) Any fact or condition exists which, if it had existed or had been known to exist at the time of the original application for the license, clearly would have justified the commissioner in refusing the license;

(c) The licensee has aided, abetted or conspired with an individual or person to circumvent or violate the requirement of this article;

(d) The licensee, or a legal or beneficial owner of the license, has been convicted of a felony, or has been convicted of a misdemeanor that the commissioner finds directly relates to the duties and responsibilities of the business of check cashing.

(2) The commissioner may conditionally license or place on probation a person whose license has been suspended or may reprimand a licensee for a violation of this article.

(3) The manner of giving notice and conducting a hearing as required by subsection (1) of this section shall be performed in accordance with procedures prescribed by the commissioner in rules or regulations adopted under Mississippi Administrative Procedures Law, Section 25-43-1.101 et seq.

(4) Any licensee may surrender any license by delivering it to the commissioner with written notice of its surrender, but that surrender shall not affect the licensee's civil or criminal liability for acts committed prior thereto.

(5) The commissioner may reinstate suspended licenses or issue new licenses to a person whose license or licenses have been revoked if no fact or condition then exists which clearly would have justified the commissioner in refusing originally to issue a license under this article.

(6) The appropriate local law enforcement agency shall be notified of any licensee who has his license suspended or revoked as provided by this article.

(7) The commissioner shall enforce the provisions of this section.

§ 75-67-523

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this article and for the purpose of determining whether persons are subject to the provisions of this article, may examine persons licensed under this article and persons reasonably suspected by the commissioner of conducting business which requires a license under this article, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this article, including without limiting the conduct of business without a license as required under this article.

§ 75-67-525

(1) Any person who engages in the business of check cashing without first securing a license prescribed by this article shall be guilty of a misdemeanor and upon conviction thereof, shall be punishable by a fine not in excess of One Thousand Dollars ($1,000.00) or by confinement in the county jail for not more than one (1) year, or both.

(2) Any person who engages in the business of check cashing without first securing a license prescribed by this article shall be liable for the full amount of the license fee, plus a penalty in an amount not to exceed Twenty-five Dollars ($25.00) for each day that the person has engaged in the business without a license. All licensing fees and penalties shall be paid into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

§ 75-67-527

(1) In addition to any other penalty which may be applicable, any licensee or employee who willfully violates any provision of this article, or who willfully makes a false entry in any record specifically required by this article, shall be guilty of a misdemeanor and upon conviction thereof, shall be punishable by a fine not in excess of One Thousand Dollars ($1,000.00) per violation or false entry.

(2) Compliance with the criminal provisions of this article shall be enforced by the appropriate law enforcement agency, which may exercise for that purpose any authority conferred upon the agency by law.

(3) When the commissioner has reasonable cause to believe that a person is violating any provision of this article, the commissioner, in addition to and without prejudice to the authority provided elsewhere in this article, may enter an order requiring the person to stop or to refrain from the violation. The commissioner may sue in any circuit court of the state having jurisdiction and venue to enjoin the person from engaging in or continuing the violation or from doing any act in furtherance of the violation. In such an action, the court may enter an order or judgment awarding a preliminary or permanent injunction.

(4) The commissioner may impose a civil penalty against any licensee adjudged by the commissioner to be in violation of the provisions of this article. The civil penalty shall not exceed Five Hundred Dollars ($500.00) per violation and shall be deposited into the Department of Banking and Consumer Finance, “Consumer Finance Fund.”

(5) Any licensee convicted in the manner provided in this article shall forfeit the surety bond or deposit required in Section 75-67-509(c) and the amount of the bond or deposit shall be credited to the budget of the state or local agency which directly participated in the prosecution of the licensee, for the specific purpose of increasing law enforcement resources for that specific state or local agency. The bond or deposit shall be used to augment existing state and local law enforcement budgets and not to supplant them.

§ 75-67-529

The provisions of this article are severable. If any part of this article is declared invalid or unconstitutional, that declaration shall not affect the parts which remain.

§ 75-67-531

Check cashers operating check cashing locations in business as of July 1, 1998, shall have until September 30, 1998, to apply for a license under this article, and upon the approval of the application, the commissioner shall grant a license under this article.

§ 75-67-533

The commissioner shall develop and provide any necessary forms to carry out the provisions of this article.

§ 75-67-535

Municipalities in this state may enact ordinances which are in compliance with, but not more restrictive than, the provisions of this article. Any existing or future order, ordinance or regulation which conflicts with this provision shall be null and void.

§ 75-67-537

The commissioner may employ the necessary full-time employees above the number of permanent full-time employees authorized for the department for fiscal year 1999, to carry out and enforce the provisions of this article. The commissioner may also expend the necessary funds to equip and provide necessary travel expenses for those employees.

§ 75-67-601

This article shall be known and may be cited as the “Mississippi Credit Availability Act.”

§ 75-67-603

The following words and phrases used in this article shall have the following meanings unless the context clearly indicates otherwise:

(a) “Appropriate law enforcement agency” means the sheriff of each county in which the licensee maintains an office, or the police chief of the municipality in which the licensee maintains an office, or law enforcement officers of the Department of Public Safety.

(b) “Attorney General” means the Attorney General of the State of Mississippi.

(c) “Commissioner” means the Mississippi Commissioner of Banking and Consumer Finance, or his designee, as the designated official for the purpose of enforcing this article.

(d) “Credit availability account” means all credit availability transactions held in the name of a single person through a single licensee or, if a secured transaction and the property is jointly owned, the names of the persons who jointly own the property that is being used as security for the transaction. That person or those persons shall be the “account holder” or “account holders.”

(e) “Credit availability transaction” means a transaction whereby a credit availability licensee provides a consumer with a fully amortized loan, secured or unsecured, payable in substantially equal payments due monthly, or on any other schedule mutually agreed upon by the licensee and the consumer, over an overall term of four (4) to twelve (12) months, calculated on the amount initially disbursed to the account holder or holders plus any fees that may be charged in an amount and manner provided for under this article.

(f) “Department” means the Department of Banking and Consumer Finance.

(g) “Licensee” means any individual, partnership, association or corporation duly licensed by the Department of Banking and Consumer Finance to engage in the business of providing credit availability transactions under this article.

(h) “Month” means the calendar month beginning on and including the date of the credit availability transaction.

(i) “Person” means an individual, partnership, corporation, joint venture, trust, association or any legal entity, however organized.

(j) “Written” and “writing” includes communication of information in an electronic record consistent with the federal Electronic Signatures in Global and National Commerce (E-SIGN) Act, 15 USC Section 7001 et seq.

§ 75-67-605

(1) A person may not engage in business as a credit availability licensee or otherwise portray himself as a credit availability licensee unless the person has a valid license authorizing him to engage in the business. Any transaction that would be subject to this article that is made by a person who does not have a valid license under this article shall be null and void.

(2) A credit availability licensee shall (a) have a definitive United States postal address and E911 address; and (b) comply with applicable local zoning requirements, except as otherwise provided in this article; and (c) maintain separate books and records for credit availability transactions.

(3)(a) The commissioner may issue more than one (1) license to a person if that person complies with this article for each license. A new license is required upon a change, directly or beneficially, in the ownership of any licensed credit availability business and an application shall be made to the commissioner in accordance with this article.

(b) When a licensee wishes to move a credit availability business to another physical location, the licensee shall give thirty (30) days' prior written notice to the commissioner who shall amend the license accordingly.

(c) Each license shall remain in full force and effect until relinquished, suspended, revoked or expired. With each initial application for a license, the applicant shall pay the commissioner at the time of making the application a license fee of Seven Hundred Fifty Dollars ($750.00), and on or before September 1 of each year thereafter, an annual renewal fee of Four Hundred Seventy-five Dollars ($475.00). If the annual renewal fee remains unpaid twenty-nine (29) days after September 1, the license shall thereupon expire, but not before the thirtieth day of September of any year for which the annual fee has been paid. If any licensee fails to pay the annual renewal fee before the thirtieth day of September of any year for which the renewal fee is due, then the licensee shall be liable for the full amount of the license fee, plus a penalty in an amount not to exceed Twenty-five Dollars ($25.00) for each day that the licensee has engaged in business after September 30. All licensing fees and penalties shall be paid into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

(4) Notwithstanding any other provisions of this article, the commissioner may issue a temporary license authorizing the operation of a credit availability business on the receipt of an application for a license involving principals and owners that are substantially identical to those of an existing licensed credit availability licensee. The temporary license is effective until the permanent license is issued or denied.

(5) Notwithstanding other provisions of this article, neither a new license nor an application to transfer an existing license shall be required upon any change, directly or beneficially, in the ownership of any licensed business incorporated under the laws of this state or any other state so long as the licensee continues to operate as a corporation doing a credit availability business under the license.

(6) Persons licensed under Sections 75-67-401 et seq. and 75-67-501 et seq. on July 1, 2016, shall have until September 30, 2016, to apply for an expedited license approval under this article. The commissioner, in his discretion, may waive certain documentation already on file under those licenses, including fingerprints, and may promulgate an application that expedites the licensing process. Upon the approval of the application, the commissioner shall grant a license under this article.

§ 75-67-607

The provisions of this article shall not apply to any bank, trust company, savings association, savings and loan association, savings bank or credit union that is chartered under the laws of this state or under federal law and domiciled in this state.

§ 75-67-609

To be eligible for a credit availability license, an applicant shall:

(a) Operate lawfully and fairly within the purposes of this article.

(b) Not have been convicted in the last ten (10) years or be active as a beneficial owner for someone who has been convicted in the last ten (10) years of a crime that the commissioner finds directly relates to the duties and responsibilities of the business of offering credit availability transactions.

(c) File with the commissioner a bond with good security in the penal sum of Ten Thousand Dollars ($10,000.00), payable to the State of Mississippi, for the faithful performance by the licensee of the duties and obligations pertaining to the business so licensed and the prompt payment of any judgment which may be recovered against the licensee on account of charges or other claims arising directly or collectively from any violation of the provisions of this article. The bond shall not be valid until the commissioner approves it. The applicant may file, in lieu of the bond, cash, a certificate of deposit or government bonds in the amount of Ten Thousand Dollars ($10,000.00). Those deposits shall be filed with the commissioner and are subject to the same terms and conditions as are provided for in the surety bond required in this paragraph. Any interest or earnings on those deposits are payable to the depositor. Applicants applying for multiple licenses may submit a single bond for all licenses, provided that the total value of the bond is equal to Ten Thousand Dollars ($10,000.00) per license applied for.

(d) File with the commissioner an application for a license and the initial license fee required in this article. If applicant's application is approved, a credit availability license will be issued within thirty (30) days.

(e) File with the commissioner a set of fingerprints from any local law enforcement agency for each owner of a sole proprietorship, partners in a partnership or principal owners of a limited liability company that own at least ten percent (10%) of the voting shares of the company, shareholders owning ten percent (10%) or more of the outstanding shares of the corporation, except publically  1 traded corporations and their subsidiaries, and any other executive officer with significant oversight duties of the business. In order to determine the applicant's suitability for license, the commissioner shall forward the fingerprints to the Department of Public Safety; and if no disqualifying record is identified at the state level, the Department of Public Safety shall forward the fingerprints to the FBI for a national criminal history record check.

(f) Complete and file with the commissioner an annual renewal application for a license accompanied by the renewal fee required in this article.

1

So in original

§ 75-67-611

Each application for a license shall be in a form prescribed by the commissioner, signed under oath or otherwise authenticated in a record, and shall include the following:

(a) The legal name, residence and business address of the applicant and, if the applicant is a partnership, association or corporation, of every member, officer and director thereof. However, the application need not state the full name and address of each shareholder, if the applicant is owned directly or beneficially by a person which as an issuer has a class of securities registered under Section 12 of the Securities and Exchange Act of 1934 or is an issuer of securities which is required to file reports with the Securities and Exchange Commission under Section 15(d) of the Securities and Exchange Act, provided that the person files with the commissioner such information, documents and reports as are required by the provisions of the Securities and Exchange Act to be filed by the issuer with the Securities and Exchange Commission. The commissioner may, however, require the licensee to provide such information as he deems reasonable and appropriate concerning the officers and directors of the corporation and persons owning in excess of twenty-five percent (25%) of the outstanding shares of the corporation.

(b) The complete address of the location at which the applicant proposes to engage in the business of offering credit availability transactions.

(c) Other data and information the department may require with respect to the applicant, its directors, trustees, officers, members or agents.

(d) Sworn financial statements of the applicant showing a net worth of at least Twenty Thousand Dollars ($20,000.00) for the first license. The applicant shall possess and maintain a net worth of at least Twenty Thousand Dollars ($20,000.00) for the first license and at least Five Thousand Dollars ($5,000.00) for each additional license.

§ 75-67-613

(1) Upon filing of an application in a form prescribed by the commissioner, accompanied by the documents required in this article, the department shall investigate to ascertain whether the qualifications prescribed in this article have been satisfied. If the commissioner finds that the qualifications have been satisfied and, if he approves the documents so filed by the applicant, he shall issue to the applicant a license to engage in the credit availability business in this state.

(2) The license shall be kept conspicuously posted in the place of business of the licensee.

§ 75-67-615

(1) The department may adopt reasonable administrative regulations, not inconsistent with law, for the enforcement of this article and shall develop and provide any necessary forms or other documentation to carry out the provisions of this article.

(2) To assure compliance with the provisions of this article, the department may examine the books and records of any licensee without notice during normal business hours. The commissioner may charge the licensee an examination fee in an amount not less than Three Hundred Dollars ($300.00) nor more than Six Hundred Dollars ($600.00) for each office or location within the State of Mississippi plus any actual expenses incurred while examining the licensee's records or books that are located outside the State of Mississippi. However, in no event shall a licensee be examined more than once in a two-year period unless for cause shown based upon a consumer complaint and/or other exigent reasons as determined by the commissioner.

(3) Each licensee shall keep and use in its business any books, accounts and records the department may require to carry into effect the provisions of this article and the administrative regulations issued under this article. Every licensee shall preserve the books, accounts and records of its business for at least two (2) years.

§ 75-67-617

A licensee shall not advertise, display or publish, or permit to be advertised, displayed or published, in any manner whatsoever, any statement or representation that is false, misleading or deceptive.

§ 75-67-619

(1) Notwithstanding any other statutory limitation, a licensee authorized to provide credit availability transactions under this article may charge and collect fees and charges in a manner consistent with this section, and may take as security therefor any personal property that is not exempt or prohibited by state or federal law or regulations.

(2)(a) A licensee may charge and collect a monthly handling fee for services, expenses, and costs not to exceed twenty-five percent (25%) of the outstanding principal balance of any credit availability account per month, or any portion thereof, for transactions of Five Hundred Dollars ($500.00) or less. The handling fee shall not be deemed interest for any purpose of law.

(b) A licensee may charge and collect a monthly handling fee for services, expenses, and costs not to exceed twenty-five percent (25%) of the outstanding principal balance of any credit availability account per month, or portion thereof, for transactions in excess of Five Hundred Dollars ($500.00). The handling fee shall not be deemed interest for any purpose of law.

(c)(i) In addition to the charges authorized under this subsection (2), a licensee may also charge and collect an origination fee in the amount of one percent (1%) of the amount disbursed to the account holder or Five Dollars ($5.00), whichever is greater, for costs associated with providing a credit availability transaction.

(ii) The origination fee shall not be deemed interest for any purpose of law.

(3)(a) No credit availability account created under subsection (2)(a) of this section shall have an outstanding principal balance in excess of Five Hundred Dollars ($500.00) at any time.

(b) No credit availability account created under subsection (2)(b) of this section shall have an outstanding principal balance in excess of Two Thousand Five Hundred Dollars ($2,500.00) at any time.

(4)(a) Any credit availability account created under subsection (2)(a) of this section shall be a fully amortized loan, secured or unsecured, payable in equal payments of four (4) to six (6) months calculated on the amount initially disbursed to the account holder plus any fees that may be charged, in an amount and manner provided for under this article.

(b) Any credit availability account created under subsection (2)(b) of this section shall be a fully amortized loan, secured or unsecured, payable in equal payments of six (6) to twelve (12) months calculated on the amount initially disbursed to the account holder plus any fees that may be charged, in an amount and manner provided for under this article.

(5) In the event an account holder is delinquent in payment of a monthly payment under the terms of a credit availability agreement, the licensee may charge and collect from the account holder a late fee of ten percent (10%) of the past-due amount; provided, however, that no such late fee may be charged unless an account holder has failed to pay the past-due amount within ten (10) business days after the due date and provided that such fees are clearly disclosed in the credit availability agreement.

(6) In the event an account holder is in default under the terms of a credit availability agreement for more than sixty (60) days, the licensee may charge and collect from the account holder the following fees in connection with any such default, provided that such fees are clearly disclosed in the credit availability agreement:

(a) If the licensee is required to employ a third party, including an attorney, to collect on the account the licensee may:

(i) If the credit availability agreement so provides, charge and collect a reasonable collection fee and attorney's fee; and

(ii) If the credit availability agreement so provides, shall be entitled to recover from the account holder all court costs incurred and to recover any court-awarded damages, including those incurred on appeal.

(b) If applicable, the licensee may charge and collect from the account holder any fees and costs relating to the repossession and sale of collateral, including, but not limited to, fees and costs associated with the repossession, storage, preparation for sale and sale of collateral.

§ 75-67-621

(1) A licensee shall provide each prospective account holder, before consummation of a credit availability transaction, a written explanation of the fees, and charges to be charged by the licensee and the due dates for all payments. The style, content, and method of executing the required written explanation shall comply with federal truth-in-lending laws and shall contain a statement that the account holder may prepay the unpaid balance, in whole or in part, at any time. The commissioner may promulgate rules in accordance with this article in order to assure complete and accurate disclosure of the fees and charges to be charged by a licensee under a credit availability agreement. At a minimum, the written explanation must include:

(a) The amount of the transaction;

(b) The date the agreement was entered into;

(c) A schedule or description of the payments;

(d) The name and address of the licensed office;

(e) The name of the person primarily obligated on the agreement;

(f) The amount of the principal;

(g) The agreed rate of charge stated on a percent per year basis and the amount in dollars and cents;

(h) All other disclosures required pursuant to state and federal law.

(2) The contract for any credit availability agreement shall include, along with other state or federal law requirements, the right for an account holder to rescind the transaction within one (1) business day; provided, however, that if the account holder accepts funds from the credit availability licensee prior to the expiration of the one-day rescission period, any origination fee charged shall be nonrefundable.

(3) A licensee with a physical location in this state shall display in its consumer waiting area, and shall provide a copy to any account holder that requests it, a pamphlet prepared by the department that describes general information about the transaction and about the account holder's rights and responsibilities in the transaction, including the rates and fees charged by the licensee, the licensee's rights in event of default by the consumer, the maximum allowable account balance, and the consumer hotline telephone number to the Mississippi Department of Banking and Consumer Finance. The licensee shall add the account information and/or complaint hotline telephone number of the licensee to the pamphlet. A licensee without a physical location in this state shall make the information available on its website.

§ 75-67-623

(1) The commissioner may, after notice and hearing, suspend or revoke a license if he finds that:

(a) The licensee, either knowingly, or without the exercise of due care to prevent the same, has violated any provision of this article;

(b) Any fact or condition exists which, if it had existed or had been known to exist at the time of the original application for the license, clearly would have justified the commissioner in refusing the license;

(c) The licensee has aided, abetted or conspired with an individual or person to circumvent or violate the requirement of this article;

(d) The licensee, or a legal or beneficial owner of the license, has been convicted of a crime that the commissioner finds directly relates to the duties and responsibilities of the business of offering credit availability transactions.

(2) The commissioner may conditionally license or place on probation a person whose license has been suspended or may reprimand a licensee for a violation of this article.

(3) The manner of giving notice and conducting a hearing as required by subsection (1) of this section shall be performed in accordance with procedures prescribed by the commissioner in rules or regulations adopted under the Mississippi Administrative Procedures Law, Section 25-43-1 et seq.

(4) Any licensee may surrender any license by delivering it to the commissioner with written notice of its surrender, but that surrender shall not affect the licensee's civil or criminal liability for acts committed prior thereto.

(5) The commissioner may reinstate suspended licenses or issue new licenses to a person whose licenses have been revoked if no fact or condition then exists which clearly would have justified the commissioner in refusing originally to issue a license under this article.

(6) The appropriate local law enforcement agency shall be notified of any licensee who has his license suspended or revoked as provided by this article.

(7) The commissioner shall enforce the provisions of this section.

(8) No revocation, suspension or surrender of any license shall impair or affect the obligation of any pre-existing lawful contract between the licensee and any debtor.

§ 75-67-625

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this article and for the purpose of determining whether persons are subject to the provisions of this article, may examine persons licensed under this article and persons reasonably suspected by the commissioner of conducting business which requires a license under this article, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this article, including without limitation the conduct of business without a license as required under this article.

§ 75-67-627

(1) Any person who engages in the business of offering credit availability transactions without first securing a license prescribed by this article shall be guilty of a misdemeanor and upon conviction thereof, shall be punishable by a fine not to exceed One Thousand Dollars ($1,000.00) or by confinement in the county jail for not more than one (1) year, or both.

(2) Any person who engages in the business of offering credit availability transactions without first securing a license prescribed by this article shall be liable for the full amount of the license fee, plus a penalty in an amount not to exceed Twenty-five Dollars ($25.00) for each day that the person engaged in the business without a license. All licensing fees and penalties shall be paid into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

§ 75-67-629

(1) In addition to any other penalty which may be applicable, any licensee or employee who willfully violates any provision of this article, or who willfully makes a false entry in any record specifically required by this article, shall be guilty of a misdemeanor and upon conviction thereof, shall be punishable by a fine not to exceed One Thousand Dollars ($1,000.00) per violation or false entry.

(2) Compliance with criminal provisions of this article shall be enforced by the appropriate law enforcement agency, which may exercise for that purpose any authority conferred upon the agency by law.

(3) When the commissioner has reasonable cause to believe that a person is violating any provision of this article, the commissioner, in addition to and without prejudice to the authority provided elsewhere in this article, may enter an order requiring the person to stop or to refrain from the violation. The commissioner may sue in any circuit court of the state having jurisdiction and venue to enjoin the person from engaging in or continuing the violation or from doing any action in furtherance of the violation. In such an action, the court may enter an order or judgment awarding a preliminary or permanent injunction.

(4) The commissioner may impose a civil penalty against any licensee adjudged by the commissioner to be in violation of the provisions of this article. The civil penalty shall not exceed Five Hundred Dollars ($500.00) per violation and shall be deposited into the Department of Banking and Consumer Finance, “Consumer Finance Fund.”

(5) Any licensee convicted in the manner provided in this article shall forfeit the surety bond or deposit required in this article and the amount of the bond or deposit shall be credited to the budget of the state or local agency which directly participated in the prosecution of the licensee, for the specific purpose of increasing law enforcement resources for that specific state or local agency. The bond or deposit shall be used to augment existing state and local law enforcement budgets and not to supplant them.

§ 75-67-631

The provisions of this article are severable. If any part of this article is declared invalid or unconstitutional, that declaration shall not affect the parts that remain.

§ 75-67-633

(1) Municipalities of this state may enact ordinances that are in compliance with, but not more restrictive than, the provisions of this article. Any existing or future order, ordinance or regulation that conflicts with this provision shall be null and void.

(2) Notwithstanding any existing zoning ordinance, any person or entity conducting business under a valid license issued by the department pursuant to Section 75-67-401 et seq. or Section 75-67-501 et seq., as of July 1, 2016, that elects to secure a license under this article may not be restricted from continuing operations under this article in the same location, regardless of whether the licensee elects to continue, if permitted by law, or to terminate its previous license.

§ 75-67-635

The commissioner may employ the necessary full-time employees above the number of permanent full-time employees authorized for the department for fiscal year 2016 to carry out and enforce the provisions of this article. The commissioner may also expend the necessary funds to equip and provide necessary travel expenses for those employees.

§ 75-67-637

(1) A licensee under this article shall have no liability for any act or practice done or omitted in conformity with (a) any rule or regulation of the commissioner, or (b) any rule, regulation, interpretation or approval of any other state or federal agency or any opinion of the Attorney General, notwithstanding that after such act or omission has occurred the rule, regulation, interpretation, approval or opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

(2) A licensee under this article, acting in conformity with a written interpretation or approval by an official or employee of any state or federal agency or department, shall be presumed to have acted in accordance with applicable law, notwithstanding that after such act has occurred, the interpretation or approval is amended, rescinded, or determined by judicial or other authority to be incorrect or invalid for any reason.

§ 75-67-639

Sections 75-67-601 through 75-67-639 shall stand repealed on July 1, 2026.

Chapter 69 Farm Loan Bonds

§ 75-69-1

It is the purpose of this chapter to encourage and to promote agriculture and agricultural production as the basis of the prosperity of all the people by assisting the availability for agricultural purposes, and for those engaged therein, of satisfactory credit facilities at a low rate of interest under the farmers cooperative system, as established in the laws of the United States by the provisions of the Federal Farm Loan Act, the Farm Credit Act of 1933, and acts amendatory of and supplementary to each of said acts.

§ 75-69-3

Federal farm loan bonds issued by the federal land banks, debentures issued by federal intermediate credit banks, and debentures issued by banks for cooperatives pursuant to said acts (all of such bonds and debentures being hereinafter called farm credit securities) are hereby designated as security for every character of public funds, and especially for the purpose of securing deposits made in designated depositories, of funds of the State of Mississippi, and of funds of the various counties, municipalities, levee boards, supervisors districts, school districts, rural electrification associations and authority, or any other public or municipal subdivisions which may now or hereafter exist in the State of Mississippi. Existing laws as to the designation of proper depositories for public funds are in nowise hereby disturbed.

§ 75-69-5

All trustees, executors, guardians and other fiduciaries in this state (unless prohibited by the will, deed or trust instrument, or unless any such trust instrument prescribes other investments exclusively) and administrators may, in addition to investments otherwise authorized by law, invest all funds held in trust or for investment in farm credit securities without the necessity of any precedent order of the chancery court and no liability whatsoever shall be incurred by any such fiduciary in purchasing farm credit securities without a precedent order of court.

§ 75-69-7

Any insurance company, hospital service association or burial association organized under the laws of the State of Mississippi, or properly domesticated within this state, and permitted to do business herein, may purchase farm credit securities with its capital, provided that there shall not be invested at any one time, in said securities, more than twenty-five per cent (25%) of the total assets of any such association or company; but any such company may invest its accumulated funds and its reserves in said securities at its pleasure and without limitation hereby; and a deposit of said securities by any such foreign company, under the provisions of any law of this state, shall be accepted by the State of Mississippi as a compliance with such provision.

§ 75-69-9

All banking corporations (including savings banks and trust companies), building and loan associations, credit unions, and finance companies, organized under the laws of the State of Mississippi, shall have power, each at its discretion, to invest its capital in farm credit securities to an amount not exceeding twenty-five percent (25%) thereof and to invest its surplus and undivided profits in said securities at its pleasure without limitation hereby.

Chapter 71 Mississippi Securities Act of 2010

§ 75-71-101

This chapter may be cited as the Mississippi Securities Act of 2010.

§ 75-71-102

In this chapter, unless the context otherwise requires:

(1) “Administrator” means the Secretary of State.

(2) “Agent” means an individual, other than a broker-dealer, who represents a broker-dealer in effecting or attempting to effect purchases or sales of securities or represents an issuer in effecting or attempting to effect purchases or sales of the issuer's securities. The term does not include an individual excluded by rule adopted or order issued under this chapter. The term does not include an associated person of an issuer who is deemed not to be a broker under Securities and Exchange Commission Rule 3a4-1.

(3) “Bank” means:

(A) A banking institution organized under the laws of the United States;

(B) A member bank of the Federal Reserve System;

(C) Any other banking institution, whether incorporated or not, doing business under the laws of a state or of the United States, a substantial portion of the business of which consists of receiving deposits or exercising fiduciary powers similar to those permitted to be exercised by national banks under the authority of the Comptroller of the Currency pursuant to Section 1 of Public Law 87-722 (12 USC Section 92a), and which is supervised and examined by a state or federal agency having supervision over banks, and which is not operated for the purpose of evading this chapter; and

(D) A receiver, conservator, or other liquidating agent of any institution or firm included in subparagraph (A), (B) or (C).

(4) “Broker-dealer” means a person engaged in the business of effecting transactions in securities for the account of others or for the person's own account. The term does not include:

(A) An agent;

(B) An issuer;

(C) A bank or savings institution if its activities as a broker-dealer are limited to those specified in subsection 3(a)(4)(B)(i) through (vi), (viii) through (x), and (xi) if limited to unsolicited transactions; 3(a)(5)(B); and 3(a)(5)(C) of the Securities Exchange Act of 1934 (15 USC Section 78c(a)(4) and (5)) or a bank that satisfies the conditions described in subsection 3(a)(4)(E) of the Securities Exchange Act of 1934 (15 USC Section 78c(a)(4));

(D) An international banking institution; or

(E) A person excluded by rule adopted or order issued under this chapter.

(5) “Depository institution” means:

(A) A bank; or

(B) A savings institution, trust company, credit union, or similar institution that is organized or chartered under the laws of a state or of the United States, authorized to receive deposits, and supervised and examined by an official or agency of a state or the United States if its deposits or share accounts are insured to the maximum amount authorized by statute by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund, or a successor authorized by federal law. The term does not include:

(i) An insurance company or other organization primarily engaged in the business of insurance;

(ii) A Morris Plan bank; or

(iii) An industrial loan company that is not an “insured depository institution” as defined in Section 3(c)(2) of the Federal Deposit Insurance Act, 12 USC 1813(c)(2), or any successor federal statute.

(6) “Federal covered investment adviser” means a person registered under the Investment Advisers Act of 1940.

(7) “Federal covered security” means a security that is, or upon completion of a transaction will be, a covered security under Section 18(b) of the Securities Act of 1933 (15 USC Section 77r(b)) or rules or regulations adopted pursuant to that provision.

(8) “Filing” means the receipt under this chapter of a record by the administrator or a designee of the administrator.

(9) “Fraud,” “deceit,” and “defraud” are not limited to common law deceit.

(10) “Guaranteed” means guaranteed as to payment of all principal and all interest.

(11) “Institutional investor” means any of the following, whether acting for itself or for others in a fiduciary capacity:

(A) A depository institution or international banking institution;

(B) An insurance company;

(C) A separate account of an insurance company;

(D) An investment company as defined in the Investment Company Act of 1940;

(E) A broker-dealer registered under the Securities Exchange Act of 1934;

(F) An employee pension, profit-sharing, or benefit plan if the plan has total assets in excess of Ten Million Dollars ($10,000,000.00) or its investment decisions are made by a named fiduciary, as defined in the Employee Retirement Income Security Act of 1974, that is a broker-dealer registered under the Securities Exchange Act of 1934, an investment adviser registered or exempt from registration under the Investment Advisers Act of 1940, an investment adviser registered under this chapter, a depository institution, or an insurance company;

(G) A plan established and maintained by a state, a political subdivision of a state, or an agency or instrumentality of a state or a political subdivision of a state for the benefit of its employees, if the plan has total assets in excess of Ten Million Dollars ($10,000,000.00) or its investment decisions are made by a duly designated public official or by a named fiduciary, as defined in the Employee Retirement Income Security Act of 1974, that is a broker-dealer registered under the Securities Exchange Act of 1934, an investment adviser registered or exempt from registration under the Investment Advisers Act of 1940, an investment adviser registered under this chapter, a depository institution, or an insurance company;

(H) A trust, if it has total assets in excess of Ten Million Dollars ($10,000,000.00), its trustee is a depository institution, and its participants are exclusively plans of the types identified in subparagraph (F) or (G), regardless of the size of their assets, except a trust that includes as participants self-directed individual retirement accounts or similar self-directed plans;

(I) An organization described in Section 501(c)(3) of the Internal Revenue Code (26 USC Section 501(c)(3)), corporation, Massachusetts trust or similar business trust, limited liability company, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of Ten Million Dollars ($10,000,000.00);

(J) A small business investment company licensed by the Small Business Administration under Section 301(c) of the Small Business Investment Act of 1958 (15 USC Section 681(c)) with total assets in excess of Ten Million Dollars ($10,000,000.00);

(K) A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940 (15 USC Section 80b-2(a)(22)) with total assets in excess of Ten Million Dollars ($10,000,000.00);

(L) A federal covered investment adviser acting for its own account;

(M) A “qualified institutional buyer” as defined in Rule 144A(a)(1), other than Rule 144A(a)(1)(i)(H), adopted under the Securities Act of 1933 (17 CFR 230.144A);

(N) A “major U.S. institutional investor” as defined in Rule 15a-6(b)(4)(i) adopted under the Securities Exchange Act of 1934 (17 CFR 240. 15a-6);

(O) Any other person, other than an individual, of institutional character with total assets in excess of Ten Million Dollars ($10,000,000.00) not organized for the specific purpose of evading this chapter; or

(P) Any other person specified by rule adopted or order issued under this chapter.

(12) “Insurance company” means a company organized as an insurance company whose primary business is writing insurance or reinsuring risks underwritten by insurance companies and which is subject to supervision by the insurance commissioner or a similar official or agency of a state.

(13) “Insured” means insured as to payment of all principal and all interest.

(14) “International banking institution” means an international financial institution of which the United States is a member and whose securities are exempt from registration under the Securities Act of 1933.

(15) “Investment adviser” means a person that, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or the advisability of investing in, purchasing, or selling securities or that, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities. The term includes a financial planner or other person that, as an integral component of other financially related services, provides investment advice to others for compensation as part of a business or that holds itself out as providing investment advice to others for compensation. The term does not include:

(A) An investment adviser representative;

(B) A lawyer, accountant, engineer, or teacher whose performance of investment advice is solely incidental to the practice of the person's profession;

(C) A broker-dealer or its agents whose performance of investment advice is solely incidental to the conduct of business as a broker-dealer and that does not receive special compensation for the investment advice;

(D) A publisher of a bona fide newspaper, news magazine, or business or financial publication of general and regular circulation;

(E) A federal covered investment adviser;

(F) A bank or savings institution;

(G) Any other person that is excluded by the Investment Advisers Act of 1940 from the definition of investment adviser; or

(H) Any other person excluded by rule adopted or order issued under this chapter.

(16) “Investment adviser representative” means an individual employed by or associated with an investment adviser or federal covered investment adviser and who makes any recommendations or otherwise gives investment advice regarding securities, manages accounts or portfolios of clients, determines which recommendation or advice regarding securities should be given, provides investment advice or holds herself or himself out as providing investment advice, receives compensation to solicit, offer, or negotiate for the sale of or for selling investment advice, or supervises employees who perform any of the foregoing. The term does not include an individual who:

(A) Performs only clerical or ministerial acts;

(B) Is an agent whose performance of investment advice is solely incidental to the individual acting as an agent and who does not receive special compensation for investment advisory services;

(C) Is employed by or associated with a federal covered investment adviser, unless the individual has a “place of business” in this state as that term is defined by rule adopted under Section 203A of the Investment Advisers Act of 1940 (15 USC Section 80b-3a) and is:

(i) An “investment adviser representative” as that term is defined by rule adopted under Section 203A of the Investment Advisers Act of 1940 (15 USC Section 80b-3a); or

(ii) Not a “supervised person” as that term is defined in Section 202(a)(25) of the Investment Advisers Act of 1940 (15 USC Section 80b-2(a)(25)); or

(D) Is excluded by rule adopted or order issued under this chapter.

(17) “Issuer” means a person that issues or proposes to issue a security, subject to the following:

(A) The issuer of a voting trust certificate, collateral trust certificate, certificate of deposit for a security, or share in an investment company without a board of directors or individuals performing similar functions is the person performing the acts and assuming the duties of depositor or manager pursuant to the trust or other agreement or instrument under which the security is issued.

(B) The issuer of an equipment trust certificate or similar security serving the same purpose is the person by which the property is or will be used or to which the property or equipment is or will be leased or conditionally sold or that is otherwise contractually responsible for assuring payment of the certificate.

(C) The issuer of a fractional undivided interest in an oil, gas, or other mineral lease or in payments out of production under a lease, right, or royalty is the owner of an interest in the lease or in payments out of production under a lease, right, or royalty, whether whole or fractional, that creates fractional interests for the purpose of sale.

(18) “Nonissuer transaction” or “nonissuer distribution” means a transaction or distribution not directly or indirectly for the benefit of the issuer.

(19) “Offer to purchase” includes an attempt or offer to obtain, or solicitation of an offer to sell, a security or interest in a security for value. The term does not include a tender offer that is subject to Section 14(d) of the Securities Exchange Act of 1934 (15 USC 78n(d)).

(20) “Person” means an individual; corporation; business trust; estate; trust; partnership; limited liability company; association or organization, whether incorporated or unincorporated; joint venture; government; governmental subdivision, agency, or instrumentality; or any other legal or commercial entity.

(21) “Place of business” of a broker-dealer, an investment adviser, or a federal covered investment adviser means:

(A) An office at which the broker-dealer, investment adviser, or federal covered investment adviser regularly provides brokerage or investment advice or solicits, meets with, or otherwise communicates with customers or clients; or

(B) Any other location that is held out to the general public as a location at which the broker-dealer, investment adviser, or federal covered investment adviser provides brokerage or investment advice or solicits, meets with, or otherwise communicates with customers or clients.

(22) “Predecessor act” means the act repealed by Section 2, Chapter 528, Laws of 2009.

(23) “Price amendment” means the amendment to a registration statement filed under the Securities Act of 1933 or, if an amendment is not filed, the prospectus or prospectus supplement filed under the Securities Act of 1933 that includes a statement of the offering price, underwriting and selling discounts or commissions, amount of proceeds, conversion rates, call prices, and other matters dependent upon the offering price.

(24) “Principal place of business” of a broker-dealer or an investment adviser means the executive office of the broker-dealer or investment adviser from which the officers, partners, or managers of the broker-dealer or investment adviser direct, control, and coordinate the activities of the broker-dealer or investment adviser.

(25) “Record,” except in the phrases “of record,” “official record,” and “public record,” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(26) “Sale” includes every contract of sale, contract to sell, or disposition of, a security or interest in a security for value, and “offer to sell” includes every attempt or offer to dispose of, or solicitation of an offer to purchase, a security or interest in a security for value. Both terms include:

(A) A security given or delivered with, or as a bonus on account of, a purchase of securities or any other thing constituting part of the subject of the purchase and having been offered and sold for value;

(B) A gift of assessable stock involving an offer and sale; and

(C) A sale or offer of a warrant or right to purchase or subscribe to another security of the same or another issuer and a sale or offer of a security that gives the holder a present or future right or privilege to convert the security into another security of the same or another issuer, including an offer of the other security.

(27) “Securities and Exchange Commission” means the United States Securities and Exchange Commission.

(28) “Security” means a note; stock; treasury stock; security future; bond; debenture; evidence of indebtedness; certificate of interest or participation in a profit-sharing agreement; collateral trust certificate; preorganization certificate or subscription; transferable share; investment contract; voting trust certificate; certificate of deposit for a security; fractional undivided interest in oil, gas, or other mineral rights; put, call, straddle, option, or privilege on a security, certificate of deposit, or group or index of securities, including an interest therein or based on the value thereof; put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency; or, in general, an interest or instrument commonly known as a “security”; or a certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. The term includes both a certificated and an uncertificated security. The term does not include an insurance or endowment policy or annuity contract under which an insurance company promises to pay a sum of money either in a lump sum or periodically for life or other specified period; or an interest in a contributory or noncontributory pension or welfare plan subject to the Employee Retirement Income Security Act of 1974. An “investment contract” includes, among other contracts, an investment in a limited partnership, an interest in a limited liability company, an investment in a viatical settlement or similar agreement, and an investment in a common enterprise with the expectation of profits to be derived primarily from the efforts of a person other than the investor and a “common enterprise” means an enterprise in which the fortunes of the investor are interwoven with those of either the person offering the investment, a third party, or other investors.

(29) “Self-regulatory organization” means a national securities exchange registered under the Securities Exchange Act of 1934, a national securities association of broker-dealers registered under the Securities Exchange Act of 1934, a clearing agency registered under the Securities Exchange Act of 1934, or the Municipal Securities Rulemaking Board established under the Securities Exchange Act of 1934.

(30) “Sign” means, with present intent to authenticate or adopt a record:

(A) To execute or adopt a tangible symbol; or

(B) To attach or logically associate with the record an electronic symbol, sound, or process.

(31) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

§ 75-71-103

“Securities Act of 1933” (15 USC Section 77a et seq.), “Securities Exchange Act of 1934” (15 USC Section 78a et seq.), “Public Utility Holding Company Act of 1935” (15 USC Section 79 et seq.), “Investment Company Act of 1940” (15 USC Section 80a-1 et seq.), “Investment Advisers Act of 1940” (15 USC Section 80b-1 et seq.), “Employee Retirement Income Security Act of 1974” (29 USC Section 1001 et seq.), “National Housing Act” (12 USC Section 1701 et seq.), “Commodity Exchange Act” (7 USC Section 1 et seq.), “Internal Revenue Code” (26 USC Section 1 et seq.), “Securities Investor Protection Act of 1970” (15 USC Section 78aaa et seq.), “Securities Litigation Uniform Standards Act of 1998” (112 Stat. 3227), “Small Business Investment Act of 1958” (15 USC Section 661 et seq.), and “Electronic Signatures in Global and National Commerce Act” (15 USC Section 7001 et seq.) mean those statutes and the rules and regulations adopted under those statutes, as in effect on January 1, 2000, or as later amended.

§ 75-71-104

A reference in this chapter to an agency or department of the United States is also a reference to a successor agency or department.

§ 75-71-105

This chapter modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, but does not modify, limit, or supersede Section 101(c) of that act (15 USC Section 7001(c)) or authorize electronic delivery of any of the notices described in Section 103(b) of that act (15 USC Section 7003(b)). This chapter authorizes the filing of records and signatures, when specified by provisions of this chapter or by a rule adopted or order issued under this chapter, in a manner consistent with Section 104(a) of that act (15 USC Section 7004(a)).

§ 75-71-201

The following securities are exempt from the requirements of Sections 75-71-301 through 75-71-306 and 75-71-504:

(1) A security, including a revenue obligation or a separate security as defined in Rule 131 (17 CFR 230.131) adopted under the Securities Act of 1933, issued, insured, or guaranteed by the United States; a state; a political subdivision of a state; a public authority, agency, or instrumentality of one or more states; a political subdivision of one or more states; or a person controlled or supervised by and acting as an instrumentality of the United States under authority granted by the Congress; or a certificate of deposit for any of the foregoing;

(2) A security issued, insured, or guaranteed by a foreign government with which the United States maintains diplomatic relations, or any of its political subdivisions, if the security is recognized as a valid obligation by the issuer, insurer, or guarantor;

(3) A security issued by and representing or that will represent an interest in or a direct obligation of, or be guaranteed by:

(A) An international banking institution;

(B) A banking institution organized under the laws of the United States; a member bank of the Federal Reserve System; or a depository institution a substantial portion of the business of which consists or will consist of receiving deposits or share accounts that are insured to the maximum amount authorized by statute by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund, or a successor authorized by federal law or exercising fiduciary powers that are similar to those permitted for national banks under the authority of the Comptroller of Currency pursuant to Section 1 of Public Law 87-722 (12 USC Section 92a); or

(C) Any other depository institution, unless by rule or order the administrator proceeds under Section 75-71-204;

(4) A security issued by and representing an interest in, or a debt of, or insured or guaranteed by, an insurance company authorized to do business in this state;

(5) A security issued or guaranteed by a railroad, other common carrier, public utility, or public utility holding company that is:

(A) Regulated in respect to its rates and charges by the United States or a state;

(B) Regulated in respect to the issuance or guarantee of the security by the United States, a state, Canada, or a Canadian province or territory; or

(C) A public utility holding company registered under the Public Utility Holding Company Act of 1935 or a subsidiary of such a registered holding company within the meaning of that act;

(6) A federal covered security specified in Section 18(b)(1) of the Securities Act of 1933 (15 USC Section 77r(b)(1)) or by rule adopted under that provision or a security listed or approved for listing on another securities market specified by rule under this chapter; a put or a call option contract; a warrant; a subscription right on or with respect to such securities; or an option or similar derivative security on a security or an index of securities or foreign currencies issued by a clearing agency registered under the Securities Exchange Act of 1934 and listed or designated for trading on a national securities exchange, a facility of a national securities exchange, or a facility of a national securities association registered under the Securities Exchange Act of 1934 or an offer or sale, of the underlying security in connection with the offer, sale, or exercise of an option or other security that was exempt when the option or other security was written or issued; or an option or a derivative security designated by the Securities and Exchange Commission under Section 9(b) of the Securities Exchange Act of 1934 (15 USC Section 78i(b));

(7) A security issued by a person organized and operated exclusively for religious, educational, benevolent, fraternal, charitable, social, athletic, or reformatory purposes, or as a chamber of commerce, and not for pecuniary profit, no part of the net earnings of which inures to the benefit of a private stockholder or other person, or a security of a company that is excluded from the definition of an investment company under Section 3(c)(10)(B) of the Investment Company Act of 1940 (15 USC Section 80a-3(c)(10)(B)); except that with respect to the offer or sale of a note, bond, debenture, or other evidence of indebtedness issued by such a person, a rule may be adopted under this chapter limiting the availability of this exemption by classifying securities, persons, and transactions, imposing different requirements for different classes, specifying with respect to (B) the scope of the exemption and the grounds for denial or suspension, and requiring an issuer:

(A) To file a notice specifying the material terms of the proposed offer or sale and copies of any proposed sales and advertising literature to be used and provide that the exemption becomes effective if the administrator does not disallow the exemption within the period established by the rule;

(B) To file a request for exemption authorization for which a rule under this chapter may specify the scope of the exemption, the requirement of an offering statement, the filing of sales and advertising literature, the filing of consent to service of process complying with Section 75-71-611, and grounds for denial or suspension of the exemption; or

(C) To register under Section 75-71-304;

(8) A member's or owner's interest in, or a retention certificate or like security given in lieu of a cash patronage dividend issued by, a cooperative organized and operated as a nonprofit membership cooperative under the cooperative laws of a state, but not a member's or owner's interest, retention certificate, or like security sold to persons other than bona fide members of the cooperative;

(9) An equipment trust certificate with respect to equipment leased or conditionally sold to a person, if any security issued by the person would be exempt under this section or would be a federal covered security under Section 18(b)(1) of the Securities Act of 1933 (15 USC Section 77r(b)(1)); and

(10) Any oil, gas or mineral lease, working interest, mineral interest or mineral estate, royalty interest or royalty estate, overriding royalty, or an oil payment or net profit interest, regardless of how said interests may be created, provided any vested estate in any working interest shall not be less than one-two-hundredth ( 1/200 ) of the whole working interest, and any mineral lease and royalty sales made in exchange for labor, material and machinery used in drilling an oil or gas well.

§ 75-71-202

The following transactions are exempt from the requirements of Sections 75-71-301 through 75-71-306 and 75-71-504. The transactions listed below are self-actuating, are not conditioned by rule and require no pre-approval of the administrator, unless otherwise indicated below:

(1) An isolated nonissuer transaction, whether effected by or through a broker-dealer or not;

(2) A nonissuer transaction by or through a broker-dealer registered, or exempt from registration under this chapter, and a resale transaction by a sponsor of a unit investment trust registered under the Investment Company Act of 1940, in a security of a class that has been outstanding in the hands of the public for at least ninety (90) days, if, at the date of the transaction:

(A) The issuer of the security is engaged in business, the issuer is not in the organizational stage or in bankruptcy or receivership, and the issuer is not a blank check, blind pool, or shell company that has no specific business plan or purpose or has indicated that its primary business plan is to engage in a merger or combination of the business with, or an acquisition of, an unidentified person;

(B) The security is sold at a price reasonably related to its current market price;

(C) The security does not constitute the whole or part of an unsold allotment to, or a subscription or participation by, the broker-dealer as an underwriter of the security or a redistribution;

(D) A nationally recognized securities manual or its electronic equivalent designated by rule adopted or order issued under this chapter or a record filed with the Securities and Exchange Commission that is publicly available contains:

(i) A description of the business and operations of the issuer;

(ii) The names of the issuer's executive officers and the names of the issuer's directors, if any;

(iii) An audited balance sheet of the issuer as of a date within eighteen (18) months before the date of the transaction or, in the case of a reorganization or merger when the parties to the reorganization or merger each had an audited balance sheet, a pro forma balance sheet for the combined organization; and

(iv) An audited income statement for each of the issuer's two (2) immediately previous fiscal years or for the period of existence of the issuer, whichever is shorter, or, in the case of a reorganization or merger when each party to the reorganization or merger had audited income statements, a pro forma income statement; and

(E) Any one (1) of the following requirements is met:

(i) The issuer of the security has a class of equity securities listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934 or designated for trading on the National Association of Securities Dealers Automated Quotation System;

(ii) The issuer of the security is a unit investment trust registered under the Investment Company Act of 1940;

(iii) The issuer of the security, including its predecessors, has been engaged in continuous business for at least three (3) years; or

(iv) The issuer of the security has total assets of at least Two Million Dollars ($2,000,000.00) based on an audited balance sheet as of a date within eighteen (18) months before the date of the transaction or, in the case of a reorganization or merger when the parties to the reorganization or merger each had such an audited balance sheet, a pro forma balance sheet for the combined organization;

(3) A nonissuer transaction by or through a broker-dealer registered or exempt from registration under this chapter in a security of a foreign issuer that is a margin security defined in regulations or rules adopted by the Board of Governors of the Federal Reserve System;

(4) A nonissuer transaction by or through a broker-dealer registered or exempt from registration under this chapter in an outstanding security if the guarantor of the security files reports with the Securities and Exchange Commission under the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (15 USC 78m or 78o(d));

(5) A nonissuer transaction by or through a broker-dealer registered or exempt from registration under this chapter in a security that:

(A) Is rated at the time of the transaction by a nationally recognized statistical rating organization in one (1) of its four (4) highest rating categories; or

(B) Has a fixed maturity or a fixed interest or dividend, if:

(i) A default has not occurred during the current fiscal year or within the three (3) previous fiscal years or during the existence of the issuer and any predecessor if less than three (3) fiscal years, in the payment of principal, interest, or dividends on the security; and

(ii) The issuer is engaged in business, is not in the organizational stage or in bankruptcy or receivership, and is not and has not been within the previous twelve (12) months a blank check, blind pool, or shell company that has no specific business plan or purpose or has indicated that its primary business plan is to engage in a merger or combination of the business with, or an acquisition of, an unidentified person;

(6) A nonissuer transaction by or through a broker-dealer registered or exempt from registration under this chapter effecting an unsolicited order or offer to purchase;

(7) A nonissuer transaction executed by a bona fide pledgee without the purpose of evading this chapter;

(8) A nonissuer transaction by a federal covered investment adviser with investments under management in excess of One Hundred Million Dollars ($100,000,000.00) acting in the exercise of discretionary authority in a signed record for the account of others;

(9) The following transaction requires approval of the administrator: a transaction in a security, whether or not the security or transaction is otherwise exempt, in exchange for one or more bona fide outstanding securities, claims, or property interests, or partly in such exchange and partly for cash, if the terms and conditions of the issuance and exchange or the delivery and exchange and the fairness of the terms and conditions have been approved by the administrator after a hearing;

(10) A transaction between the issuer or other person on whose behalf the offering is made and an underwriter, or among underwriters;

(11) A transaction in a note, bond, debenture, or other evidence of indebtedness secured by a mortgage or other security agreement if:

(A) The note, bond, debenture, or other evidence of indebtedness is offered and sold with the mortgage or other security agreement as a unit;

(B) A general solicitation or general advertisement of the transaction is not made; and

(C) A commission or other remuneration is not paid or given, directly or indirectly, to a person not registered under this chapter as a broker-dealer or as an agent;

(12) A transaction by an executor, administrator of an estate, sheriff, marshal, receiver, trustee in bankruptcy, guardian, or conservator;

(13) A sale or offer to sell to:

(A) An institutional investor;

(B) A federal covered investment adviser; or

(C) Any other person exempted by rule adopted or order issued under this chapter;

(14) A sale or offer to sell securities by or on behalf of an issuer, if the transaction is part of a single issue in which:

(A) Not more than ten (10) purchasers are present in this state during any twelve (12) consecutive months, other than those designated in paragraph (13);

(B) A general solicitation or general advertising is not made in connection with the offer to sell or sale of the securities;

(C) A commission or other remuneration is not paid or given, directly or indirectly, to a person other than a broker-dealer registered under this chapter or an agent registered under this chapter for soliciting a prospective purchaser in this state; and

(D) The issuer reasonably believes that all the purchasers in this state, other than those designated in paragraph (13), are purchasing for investment;

(15) A transaction under an offer to existing security holders of the issuer, including persons that at the date of the transaction are holders of convertible securities, options, or warrants, if a commission or other remuneration, other than a standby commission, is not paid or given, directly or indirectly, for soliciting a security holder in this state;

(16) An offer to sell, but not a sale, of a security not exempt from registration under the Securities Act of 1933 if:

(A) A registration or offering statement or similar record as required under the Securities Act of 1933 has been filed, but is not effective, or the offer is made in compliance with Rule 165 adopted under the Securities Act of 1933 (17 CFR 230.165); and

(B) A stop order of which the offeror is aware has not been issued against the offeror by the administrator or the Securities and Exchange Commission, and an audit, inspection, or proceeding that is public and that may culminate in a stop order is not known by the offeror to be pending;

(17) An offer to sell, but not a sale, of a security exempt from registration under the Securities Act of 1933 if:

(A) A registration statement has been filed under this chapter, but is not effective;

(B) A solicitation of interest is provided in a record to offerees in compliance with a rule adopted by the administrator under this chapter; and

(C) A stop order of which the offeror is aware has not been issued by the administrator under this chapter and an audit, inspection, or proceeding that may culminate in a stop order is not known by the offeror to be pending;

(18) A transaction involving the distribution of the securities of an issuer to the security holders of another person in connection with a merger, consolidation, exchange of securities, sale of assets, or other reorganization to which the issuer, or its parent or subsidiary and the other person, or its parent or subsidiary, are parties;

(19) A rescission offer, sale, or purchase under Section 75-71-510;

(20) An offer or sale of a security to a person not a resident of this state and not present in this state if the offer or sale does not constitute a violation of the laws of the state or foreign jurisdiction in which the offeree or purchaser is present and is not part of an unlawful plan or scheme to evade this chapter;

(21) Employees' stock purchase, savings, option, profit-sharing, pension, or similar employees' benefit plan, including any securities, plan interests, and guarantees issued under a compensatory benefit plan or compensation contract, contained in a record, established by the issuer, its parents, its majority-owned subsidiaries, or the majority-owned subsidiaries of the issuer's parent for the participation of their employees including offers or sales of such securities to:

(A) Directors; general partners; trustees, if the issuer is a business trust; officers; consultants; and advisors;

(B) Family members who acquire such securities from those persons through gifts or domestic relations orders;

(C) Former employees, directors, general partners, trustees, if the issuer is a business trust, officers, consultants, and advisors if those individuals were employed by or providing services to the issuer when the securities were offered; and

(D) Insurance agents who are exclusive insurance agents of the issuer, or the issuer's subsidiaries or parents, or who derive more than fifty percent (50%) of their annual income from those organizations;

(22) A transaction involving:

(A) A stock dividend or equivalent equity distribution, whether the corporation or other business organization distributing the dividend or equivalent equity distribution is the issuer or not, if nothing of value is given by stockholders or other equity holders for the dividend or equivalent equity distribution other than the surrender of a right to a cash or property dividend if each stockholder or other equity holder may elect to take the dividend or equivalent equity distribution in cash, property, or stock;

(B) An act incident to a judicially approved reorganization in which a security is issued in exchange for one or more outstanding securities, claims, or property interests, or partly in such exchange and partly for cash; or

(C) The solicitation of tenders of securities by an offeror in a tender offer in compliance with Rule 162 adopted under the Securities Act of 1933 (17 CFR 230.162); or

(23) A nonissuer transaction in an outstanding security by or through a broker-dealer registered or exempt from registration under this chapter, if the issuer is a reporting issuer in a foreign jurisdiction designated by this paragraph or by rule adopted or order issued under this chapter; has been subject to continuous reporting requirements in the foreign jurisdiction for not less than one hundred eighty (180) days before the transaction; and the security is listed on the foreign jurisdiction's securities exchange that has been designated by this paragraph or by rule adopted or order issued under this chapter, or is a security of the same issuer that is of senior or substantially equal rank to the listed security or is a warrant or right to purchase or subscribe to any of the foregoing. For purposes of this paragraph, Canada, together with its provinces and territories, is a designated foreign jurisdiction and The Toronto Stock Exchange, Inc., is a designated securities exchange. After an administrative hearing in compliance with Section 75-71-604, the administrator, by rule adopted or order issued under this chapter, may revoke the designation of a securities exchange under this paragraph, if the administrator finds that revocation is necessary or appropriate in the public interest and for the protection of investors.

§ 75-71-203

A rule adopted or order issued under this chapter may exempt a security, transaction, or offer; a rule under this chapter may exempt a class of securities, transactions, or offers from any or all of the requirements of Sections 75-71-301 through 75-71-306 and 75-71-504; and an order under this chapter may waive, in whole or in part, any or all of the conditions for an exemption or offer under Sections 75-71-201 and 75-71-202.

§ 75-71-204

(a) Enforcement related powers. Except with respect to a federal covered security or a transaction involving a federal covered security, an order under this chapter may deny, suspend application of, condition, limit, or revoke an exemption created under Section 75-71-201(3)(C), Section 75-71-201(7) or Section 75-71-201 (8) or Section 75-71-202 or an exemption or waiver created under Section 75-71-203 with respect to a specific security, transaction, or offer. An order under this section may be issued only pursuant to the procedures in Section 75-71-306 or Section 75-71-604 and only prospectively.

(b) Knowledge of order required. A person does not violate Section 75-71-301, Sections 75-71-303 through 75-71-306, Section 75-71-504, or Section 75-71-510 by an offer to sell, offer to purchase, sale, or purchase effected after the entry of an order issued under this section if the person did not know, and in the exercise of reasonable care could not have known, of the order.

§ 75-71-301

It is unlawful for a person to offer or sell a security in this state unless:

(1) The security is a federal covered security;

(2) The security, transaction, or offer is exempted from registration under Sections 75-71-201 through 75-71-203; or

(3) The security is registered under this chapter.

§ 75-71-302

(a) Required filing of records. With respect to a federal covered security, as defined in Section 18(b)(2) of the Securities Act of 1933 (15 USC Section 77r(b)(2)), that is not otherwise exempt under Sections 75-71-201 through 75-71-203, a rule adopted or order issued under this chapter may require the filing of any or all of the following records:

(1) Before the initial offer of a federal covered security in this state, all records that are part of a federal registration statement filed with the Securities and Exchange Commission under the Securities Act of 1933 and a consent to service of process complying with Section 75-71-611 signed by the issuer and the payment of a fee as set forth in Section 75-71-310; and

(2) After the initial offer of the federal covered security in this state, all records that are part of an amendment to a federal registration statement filed with the Securities and Exchange Commission under the Securities Act of 1933.

(b) Notice filing effectiveness and renewal. A notice filing under subsection (a) is effective for one (1) year commencing on the later of the notice filing or the effectiveness of the offering filed with the Securities and Exchange Commission. On or before expiration, the issuer may renew a notice filing by filing a copy of those records filed by the issuer with the Securities and Exchange Commission that are required by rule or order under this chapter to be filed and by paying a renewal fee of the amount set forth at Section 75-71-310. A previously filed consent to service of process complying with Section 75-71-611 may be incorporated by reference in a renewal. A renewed notice filing becomes effective upon the expiration of the filing being renewed.

(c) Notice filings for federal covered securities under Section 18(b)(4)(E). With respect to a security that is a federal covered security under Section 18(b)(4)(E) of the Securities Act of 1933 (15 USC Section 77r(b)(4)(E)), a rule under this chapter may require a notice filing by or on behalf of an issuer to include a copy of Form D, including the Appendix, as promulgated by the Securities and Exchange Commission, and a consent to service of process complying with Section 75-71-611 signed by the issuer not later than fifteen (15) days after the first sale of the federal covered security in this state and the payment of a fee as set forth in Section 75-71-310; and the payment of an additional fee the amount set forth in Section 75-71-310 for any late filing.

(d) Stop orders. Except with respect to a federal security under Section 18(b)(1) of the Securities Act of 1933 (15 USC Section 77r(b)(1)), if the administrator finds that there is a failure to comply with a notice or fee requirement of this section, the administrator may issue a stop order suspending the offer and sale of a federal covered security in this state. If the deficiency is corrected, the stop order is void as of the time of its issuance and no penalty may be imposed by the administrator.

(e) Notice filings for other federal covered securities. Unless the administrator provides otherwise by rule, any other federal covered security may be offered and sold in this state in reliance on its being a federal covered security without the filing of a notice or the payment of a fee. A rule under this chapter may require a notice filing with respect to other federal covered securities by or on behalf of an issuer and the payment of a fee set forth in Section 75-71-310; and the payment of an additional late fee in the amount set forth in Section 75-71-310 for any late filing.

§ 75-71-303

(a) Registration permitted. A security for which a registration statement has been filed under the Securities Act of 1933 in connection with the same offering may be registered by coordination under this section.

(b) Required records. A registration statement and accompanying records under this section must contain or be accompanied by the following records in addition to the information specified in Section 75-71-305 and a consent to service of process complying with Section 75-71-611:

(1) A copy of the latest form of prospectus filed under the Securities Act of 1933;

(2) A copy of the articles of incorporation and bylaws or their substantial equivalents currently in effect; a copy of any agreement with or among underwriters; a copy of any indenture or other instrument governing the issuance of the security to be registered; and a specimen, copy, or description of the security that is required by rule adopted or order issued under this chapter;

(3) Copies of any other information or any other records filed by the issuer under the Securities Act of 1933 requested by the administrator; and

(4) An undertaking to forward each amendment to the federal prospectus, other than an amendment that delays the effective date of the registration statement, promptly after it is filed with the Securities and Exchange Commission.

(c) Conditions for effectiveness of registration statement. A registration statement under this section becomes effective simultaneously with or subsequent to the federal registration statement when all the following conditions are satisfied:

(1) A stop order under subsection (d) or Section 75-71-306 or issued by the Securities and Exchange Commission is not in effect and a proceeding is not pending against the issuer under Section 75-71-306; and

(2) The registration statement has been on file for at least twenty (20) days or a shorter period provided by rule adopted or order issued under this chapter.

(d) Notice of federal registration statement effectiveness. The registrant shall promptly notify the administrator in a record of the date when the federal registration statement becomes effective and the content of any price amendment and shall promptly file a record containing the price amendment. If the notice is not timely received, the administrator may issue a stop order, without prior notice or hearing, retroactively denying effectiveness to the registration statement or suspending its effectiveness until compliance with this section. The administrator shall promptly notify the registrant of an order by telephone, facsimile or electronic means and promptly confirm this notice by a record. If the registrant subsequently complies with the notice requirements of this section, the stop order is void as of the date of its issuance.

(e) Effectiveness of registration statement. If the federal registration statement becomes effective before each of the conditions in this section is satisfied or is waived by the administrator, the registration statement is automatically effective under this chapter when all the conditions are satisfied or waived. If the registrant notifies the administrator of the date when the federal registration statement is expected to become effective, the administrator shall promptly notify the registrant by telephone, facsimile or electronic means and promptly confirm this notice by a record, indicating whether all the conditions are satisfied or waived and whether the administrator intends the institution of a proceeding under Section 75-71-306. The notice by the administrator does not preclude the institution of such a proceeding.

§ 75-71-304

(a) Registration permitted. A security may be registered by qualification under this section.

(b) Required records. A registration statement under this section must contain the information or records specified in Section 75-71-305, a consent to service of process complying with Section 75-71-611, and, if required by rule adopted under this chapter, the following information or records:

(1) With respect to the issuer and any significant subsidiary, its name, address, and form of organization; the state or foreign jurisdiction and date of its organization; the general character and location of its business; a description of its physical properties and equipment; and a statement of the general competitive conditions in the industry or business in which it is or will be engaged;

(2) With respect to each director and officer of the issuer, and other person having a similar status or performing similar functions, the person's name, address, and principal occupation for the previous five (5) years; the amount of securities of the issuer held by the person as of the thirtieth day before the filing of the registration statement; the amount of the securities covered by the registration statement to which the person has indicated an intention to subscribe; and a description of any material interest of the person in any material transaction with the issuer or a significant subsidiary effected within the previous three (3) years or proposed to be effected;

(3) With respect to persons covered by paragraph (2), the aggregate sum of the remuneration paid to those persons during the previous twelve (12) months and estimated to be paid during the next twelve (12) months, directly or indirectly, by the issuer, and all predecessors, parents, subsidiaries, and affiliates of the issuer;

(4) With respect to a person owning of record or owning beneficially, if known, ten percent (10%) or more of the outstanding shares of any class of equity security of the issuer, the information specified in paragraph (2) other than the person's occupation;

(5) With respect to a promoter, if the issuer was organized within the previous three (3) years, the information or records specified in paragraph (2), any amount paid to the promoter within that period or intended to be paid to the promoter, and the consideration for the payment;

(6) With respect to a person on whose behalf any part of the offering is to be made in a nonissuer distribution, the person's name and address; the amount of securities of the issuer held by the person as of the date of the filing of the registration statement; a description of any material interest of the person in any material transaction with the issuer or any significant subsidiary effected within the previous three (3) years or proposed to be effected; and a statement of the reasons for making the offering;

(7) The capitalization and long term debt, on both a current and pro forma basis, of the issuer and any significant subsidiary, including a description of each security outstanding or being registered or otherwise offered, and a statement of the amount and kind of consideration, whether in the form of cash, physical assets, services, patents, goodwill, or anything else of value, for which the issuer or any subsidiary has issued its securities within the previous two (2) years or is obligated to issue its securities;

(8) The kind and amount of securities to be offered; the proposed offering price or the method by which it is to be computed; any variation at which a proportion of the offering is to be made to a person or class of persons other than the underwriters, with a specification of the person or class; the basis on which the offering is to be made if otherwise than for cash; the estimated aggregate underwriting and selling discounts or commissions and finders' fees, including separately cash, securities, contracts, or anything else of value to accrue to the underwriters or finders in connection with the offering or, if the selling discounts or commissions are variable, the basis of determining them and their maximum and minimum amounts; the estimated amounts of other selling expenses, including legal, engineering, and accounting charges; the name and address of each underwriter and each recipient of a finder's fee; a copy of any underwriting or selling group agreement under which the distribution is to be made or the proposed form of any such agreement whose terms have not yet been determined; and a description of the plan of distribution of any securities that are to be offered otherwise than through an underwriter;

(9) The estimated monetary proceeds to be received by the issuer from the offering; the purposes for which the proceeds are to be used by the issuer; the estimated amount to be used for each purpose; the order or priority in which the proceeds will be used for the purposes stated; the amounts of any funds to be raised from other sources to achieve the purposes stated; the sources of the funds; and, if a part of the proceeds is to be used to acquire property, including goodwill, otherwise than in the ordinary course of business, the names and addresses of the vendors, the purchase price, the names of any persons that have received commissions in connection with the acquisition, and the amounts of the commissions and other expenses in connection with the acquisition, including the cost of borrowing money to finance the acquisition;

(10) A description of any stock options or other security options outstanding, or to be created in connection with the offering, and the amount of those options held or to be held by each person required to be named in paragraph (2), (4), (5), (6), or (8) and by any person that holds or will hold ten percent (10%) or more in the aggregate of those options;

(11) The dates of, parties to, and general effect concisely stated of each managerial or other material contract made or to be made otherwise than in the ordinary course of business to be performed in whole or in part at or after the filing of the registration statement or that was made within the previous two (2) years, and a copy of the contract;

(12) A description of any pending litigation, action, or proceeding to which the issuer is a party and that materially affects its business or assets, and any litigation, action, or proceeding known to be contemplated by governmental authorities;

(13) A copy of any prospectus, pamphlet, circular, form letter, advertisement, or other sales literature intended as of the effective date to be used in connection with the offering and any solicitation of interest used in compliance with Section 75-71-202(17)(B);

(14) A specimen or copy of the security being registered, unless the security is uncertificated; a copy of the issuer's articles of incorporation and bylaws or their substantial equivalents, in effect; and a copy of any indenture or other instrument covering the security to be registered;

(15) A signed or conformed copy of an opinion of counsel concerning the legality of the security being registered, with an English translation if it is in a language other than English, which states whether the security when sold will be validly issued, fully paid, and nonassessable and, if a debt security, a binding obligation of the issuer;

(16) A signed or conformed copy of a consent of any accountant, engineer, appraiser, or other person whose profession gives authority for a statement made by the person, if the person is named as having prepared or certified a report or valuation, other than an official record, that is public, which is used in connection with the registration statement;

(17) A balance sheet of the issuer as of a date within four (4) months before the filing of the registration statement; a statement of income and a statement of cash flows for each of the three (3) fiscal years preceding the date of the balance sheet and for any period between the close of the immediately previous fiscal year and the date of the balance sheet, or for the period of the issuer's and any predecessor's existence if less than three (3) years; and, if any part of the proceeds of the offering is to be applied to the purchase of a business, the financial statements that would be required if that business were the registrant; and

(18) Any additional information or records required by rule adopted or order issued under this chapter.

(c) Conditions for effectiveness of registration statement. A registration statement under this section becomes effective thirty (30) days, or any shorter period provided by rule adopted or order issued under this chapter, after the date the registration statement or the last amendment other than a price amendment is filed, if:

(1) A stop order is not in effect and a proceeding is not pending under Section 75-71-306;

(2) The administrator has not issued an order under Section 75-71-306 delaying effectiveness; or

(3) The applicant or registrant has not requested that effectiveness be delayed.

(d) Delay of effectiveness of registration statement. The administrator may delay effectiveness once for not more than ninety (90) days if the administrator determines the registration statement is not complete in all material respects and promptly notifies the applicant or registrant of that determination by telephone, facsimile, or electronic means and promptly confirms this notice by a record. The administrator may also delay effectiveness for a further period of not more than thirty (30) days if the administrator determines that the delay is necessary or appropriate and promptly notifies the applicant or registrant of that determination by telephone, facsimile, or electronic means and promptly confirms this notice by a record.

(e) Prospectus distribution may be required. A rule adopted or order issued under this chapter may require as a condition of registration under this section that a prospectus containing a specified part of the information or record specified in subsection (b) be sent or given to each person to which an offer is made, before or concurrently, with the earliest of:

(1) The first offer made in a record to the person otherwise than by means of a public advertisement, by or for the account of the issuer or another person on whose behalf the offering is being made or by an underwriter or broker-dealer that is offering part of an unsold allotment or subscription taken by the person as a participant in the distribution;

(2) The confirmation of a sale made by or for the account of the person;

(3) Payment pursuant to such a sale; or

(4) Delivery of the security pursuant to such a sale.

§ 75-71-305

Securities registration filings. (a) Who may file. A registration statement may be filed by the issuer, a person on whose behalf the offering is to be made, or a broker-dealer registered under this chapter.

(b) Filing fee. A person filing a registration statement shall pay a filing fee as set forth in Section 75-71-310. This fee shall be nonrefundable.

(c) Status of offering. A registration statement filed under Section 75-71-303 or 75-71-304 must specify:

(1) The amount of securities to be offered in this state;

(2) The states in which a registration statement or similar record in connection with the offering has been or is to be filed; and

(3) Any adverse order, judgment, or decree issued in connection with the offering by a state securities regulator, the Securities and Exchange Commission, or a court.

(d) Incorporation by reference. A record filed under this chapter or the predecessor act within five (5) years preceding the filing of a registration statement may be incorporated by reference in the registration statement to the extent that the record is currently accurate.

(e) Nonissuer distribution. In the case of a nonissuer distribution, information or a record may not be required under subsection (i) or Section 75-71-304, unless it is known to the person filing the registration statement or to the person on whose behalf the distribution is to be made or unless it can be furnished by those persons without unreasonable effort or expense.

(f) Escrow and impoundment. A rule adopted or order issued under this chapter may require as a condition of registration that a security issued within the previous five (5) years or to be issued to a promoter for a consideration substantially less than the public offering price or to a person for a consideration other than cash be deposited in escrow; and that the proceeds from the sale of the registered security in this state be impounded until the issuer receives a specified amount from the sale of the security either in this state or elsewhere. The conditions of any escrow or impoundment required under this subsection may be established by rule adopted or order issued under this chapter, but the administrator may not reject a depository institution solely because of its location in another state.

(g) Form of subscription. A rule adopted or order issued under this chapter may require as a condition of registration that a security registered under this chapter be sold only on a specified form of subscription or sale contract and that a signed or conformed copy of each contract be filed under this chapter or preserved for a period specified by the rule or order, which may not be longer than five (5) years.

(h) Effective period. Except while a stop order is in effect under Section 75-71-306, a registration statement is effective for one (1) year after its effective date, or for any longer period designated in an order under this chapter during which the security is being offered or distributed in a nonexempted transaction by or for the account of the issuer or other person on whose behalf the offering is being made or by an underwriter or broker-dealer that is still offering part of an unsold allotment or subscription taken as a participant in the distribution. For the purposes of a nonissuer transaction, all outstanding securities of the same class identified in the registration statement as a security registered under this chapter are considered to be registered while the registration statement is effective. If any securities of the same class are outstanding, a registration statement may not be withdrawn until one (1) year after its effective date. A registration statement may be withdrawn only with the approval of the administrator.

(i) Periodic reports. While a registration statement is effective, a rule adopted or order issued under this chapter may require the person that filed the registration statement to file reports, not more often than quarterly, to keep the information or other record in the registration statement reasonably current and to disclose the progress of the offering.

(j) Posteffective amendments. A registration statement may be amended after its effective date. The posteffective amendment becomes effective when the administrator so orders. A posteffective amendment relates back to the date of the offering of the additional securities being registered if, within one (1) year after the date of the sale, the amendment is filed and the additional registration fee is paid.

§ 75-71-306

(a) Stop orders. The administrator may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, a registration statement if the administrator finds that the order is in the public interest and that:

(1) The registration statement as of its effective date or before the effective date in the case of an order denying effectiveness, an amendment under Section 75-71-305(j) as of its effective date, or a report under Section 75-71-305(i), is incomplete in a material respect or contains a statement that, in the light of the circumstances under which it was made, was false or misleading with respect to a material fact;

(2) This chapter or a rule adopted or order issued under this chapter or a condition imposed under this chapter has been willfully violated, in connection with the offering, by the person filing the registration statement; by the issuer, a partner, officer, or director of the issuer or a person having a similar status or performing a similar function; a promoter of the issuer; or a person directly or indirectly controlling or controlled by the issuer; but only if the person filing the registration statement is directly or indirectly controlled by or acting for the issuer; or by an underwriter;

(3) The security registered or sought to be registered is the subject of a permanent or temporary injunction of a court of competent jurisdiction or an administrative stop order or similar order issued under any federal, foreign, or state law other than this chapter applicable to the offering, but the administrator may not institute a proceeding against an effective registration statement under this subsection (a) more than one (1) year after the date of the order or injunction on which it is based, and the administrator may not issue an order under this subsection (a) on the basis of an order or injunction issued under the securities act of another state unless the order or injunction was based on conduct that would constitute, as of the date of the order, a ground for a stop order under this section;

(4) The issuer's enterprise or method of business includes or would include activities that are unlawful where performed;

(5) With respect to a security sought to be registered under Section 75-71-303, there has been a failure to comply with the undertaking required by Section 75-71-303(b)(4);

(6) The applicant or registrant has not paid the filing fee, but the administrator shall void the order if the deficiency is corrected; or

(7) The offering:

(A) Will work or tend to work a fraud upon purchasers or would so operate;

(B) Has been or would be made with unreasonable amounts of underwriters' and sellers' discounts, commissions, or other compensation, or promoters' profits or participations, or unreasonable amounts or kinds of options; or

(C) Is being made on terms that are unfair, unjust, or inequitable.

(b) Enforcement of subsection (a)(7). To the extent practicable, the administrator by rule adopted or order issued under this chapter shall publish standards that provide notice of conduct that violates subsection (a)(7).

(c) Institution of stop order. The administrator may not institute a stop order proceeding against an effective registration statement on the basis of conduct or a transaction known to the administrator when the registration statement became effective unless the proceeding is instituted within thirty (30) days after the registration statement became effective.

(d) Summary process. The administrator may summarily revoke, deny, postpone, or suspend the effectiveness of a registration statement pending final determination of an administrative proceeding. Upon the issuance of the order, the administrator, in accordance with Section 75-71-611, shall promptly notify each person specified in subsection (e) that the order has been issued, the reasons for the revocation, denial, postponement, or suspension, and that within fifteen (15) days after the receipt of a request in a record from the person the matter will be scheduled for a hearing. If a hearing is not requested and none is ordered by the administrator, within thirty (30) days after the date of service of the order, the order becomes final. If a hearing is requested or ordered, the administrator, after notice of and opportunity for hearing for each person subject to the order, may modify or vacate the order or extend the order until final determination.

(e) Procedural requirements for stop order. A stop order may not be issued under this section without:

(1) Appropriate notice, in accordance with Section 75-71-611, to the applicant or registrant, the issuer, and the person on whose behalf the securities are to be or have been offered;

(2) An opportunity for hearing; and

(3) Findings of fact and conclusions of law in a record in accordance with the administrative hearing procedures set forth in the rules.

(f) Modification or vacation of stop order. The administrator may modify or vacate a stop order issued under this section if the administrator finds that the conditions that caused its issuance have changed or that it is necessary or appropriate in the public interest or for the protection of investors.

§ 75-71-307

The administrator may waive or modify, in whole or in part, any or all of the requirements of Sections 75-71-302, 75-71-303, and 75-71-304(b) or the requirement of any information or record in a registration statement or in a periodic report filed pursuant to Section 75-71-305(i).

§ 75-71-310

(a) Required fees for notice filing for federal covered securities under Section 18(b)(2). The initial filing fee for a notice filing with respect to a federal covered security described in subsection (a) of Section 75-71-302 is One Thousand Dollars ($1,000.00).

(b) Required fees for notice filings for federal covered securities. The filing fee for a notice filing with respect to a security that is a federal covered security described in Section 75-71-302(c) and (e) is Three Hundred Dollars ($300.00). The fee for a late filing, which is an additional fee, is one percent (1%) of the dollar amount of the offering sold in the state up to a maximum of Five Thousand Dollars ($5,000.00).

(c) Section 75-71-305 The filing fee for a registration statement under Section 75-71-305 is One Thousand Dollars ($1,000.00).

(d) Renewals. The fee for any renewal required under this chapter or rule of the administrator is Three Hundred Dollars ($300.00).

(e) Termination or Withdrawal. The fee for filing a notification of completion, termination, or withdrawal of an offering required under this chapter or rule of the administrator if Fifty Dollars ($50.00).

§ 75-71-401

(a) Registration requirement. It is unlawful for a person to transact business in this state as a broker-dealer unless the person is registered under this chapter as a broker-dealer or is exempt from registration as a broker-dealer under subsection (b) or (d).

(b) Exemptions from registration. The following persons are exempt from the registration requirement of subsection (a):

(1) A broker-dealer without a place of business in this state if its only transactions effected in this state are with:

(A) The issuer of the securities involved in the transactions;

(B) A broker-dealer registered as a broker-dealer under this chapter or not required to be registered as a broker-dealer under this chapter;

(C) An institutional investor;

(D) A nonaffiliated federal covered investment adviser with investments under management in excess of One Hundred Million Dollars ($100,000,000.00) acting for the account of others pursuant to discretionary authority in a signed record;

(E) A bona fide preexisting customer whose principal place of residence is not in this state and the person is registered as a broker-dealer under the Securities Exchange Act of 1934 or not required to be registered under the Securities Exchange Act of 1934 and is registered under the securities act of the state in which the customer maintains a principal place of residence;

(F) A bona fide preexisting customer whose principal place of residence is in this state but was not present in this state when the customer relationship was established, if:

(i) The broker-dealer is registered under the Securities Exchange Act of 1934 or not required to be registered under the Securities Exchange Act of 1934 and is registered under the securities laws of the state in which the customer relationship was established and where the customer had maintained a principal place of residence; and

(ii) Within forty-five (45) days after the customer's first transaction in this state, the person files an application for registration as a broker-dealer in this state and a further transaction is not effected more than seventy-five (75) days after the date on which the application is filed, or, if earlier, the date on which the administrator notifies the person that the administrator has denied the application for registration or has stayed the pendency of the application for good cause;

(G) Not more than three (3) customers in this state during the previous twelve (12) months, in addition to those customers specified in subparagraphs (A) through (F) and under subparagraph (H), if the broker-dealer is registered under the Securities Exchange Act of 1934 or not required to be registered under the Securities Exchange Act of 1934 and is registered under the securities act of the state in which the broker-dealer has its principal place of business; and

(H) Any other person exempted by rule adopted or order issued under this chapter;

(2) A person that deals solely in United States government securities and is supervised as a dealer in government securities by the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or the Office of Thrift Supervision.

(c) Limits on employment or association. It is unlawful for a broker-dealer, or for an issuer engaged in offering, offering to purchase, purchasing, or selling securities in this state, directly or indirectly, to employ or associate with an individual to engage in an activity related to securities transactions in this state if the registration of the individual is suspended or revoked or the individual is barred from employment or association with a broker-dealer, an issuer, an investment adviser, or a federal covered investment adviser by an order of the administrator under this chapter, the Securities and Exchange Commission, or a self-regulatory organization. A broker-dealer or issuer does not violate this subsection if the broker-dealer or issuer did not know and in the exercise of reasonable care could not have known, of the suspension, revocation, or bar. Upon request from a broker-dealer or issuer and for good cause, an order under this chapter may modify or waive, in whole or in part, the application of the prohibitions of this subsection to the broker-dealer.

(d) Foreign transactions. A rule adopted or order issued under this chapter may permit:

(1) A broker-dealer that is registered in Canada or other foreign jurisdiction and that does not have a place of business in this state to effect transactions in securities with or for, or attempt to effect the purchase or sale of any securities by:

(A) An individual from Canada or other foreign jurisdiction who is temporarily present in this state and with whom the broker-dealer had a bona fide customer relationship before the individual entered the United States;

(B) An individual from Canada or other foreign jurisdiction who is present in this state and whose transactions are in a self-directed tax advantaged retirement plan of which the individual is the holder or contributor in that foreign jurisdiction; or

(C) An individual who is present in this state, with whom the broker-dealer customer relationship arose while the individual was temporarily or permanently resident in Canada or the other foreign jurisdiction; and

(2) An agent who represents a broker-dealer that is exempt under this subsection (d) to effect transactions in securities or attempt to effect the purchase or sale of securities in this state as permitted for a broker-dealer described in paragraph (1).

§ 75-71-402

(a) Registration requirement. It is unlawful for an individual to transact business in this state as an agent unless the individual is registered under this chapter as an agent or is exempt from registration as an agent under subsection (b).

(b) Exemptions from registration. The following individuals are exempt from the registration requirement of subsection (a):

(1) An individual who represents a broker-dealer in effecting transactions in this state limited to those described in Section 15(h)(2) of the Securities Exchange Act of 1934 (15 USC Section 78o(h)(2));

(2) An individual who represents a broker-dealer that is exempt under Section 75-71-401(b) or 75-71-401(d);

(3) An individual who represents an issuer with respect to an offer or sale of the issuer's own securities or those of the issuer's parent or any of the issuer's subsidiaries, and who is not compensated in connection with the individual's participation by the payment of commissions or other remuneration based, directly or indirectly, on transactions in those securities;

(4) An individual who represents an issuer and who effects transactions in the issuer's securities exempted by Section 75-71-202, other than Section 75-71-202(11) and (14);

(5) An individual who represents an issuer that effects transactions solely in federal covered securities of the issuer, but an individual who effects transactions in a federal covered security under Section 18(b)(3) or 18(b)(4)(D) of the Securities Act of 1933 (15 USC Section 77r(b)(3) or 77r(b)(4)(D)) is not exempt if the individual is compensated in connection with the agent's participation by the payment of commissions or other remuneration based, directly or indirectly, on transactions in those securities;

(6) An individual who represents a broker-dealer registered in this state under Section 75-71-401(a) or exempt from registration under Section 75-71-401(b) in the offer and sale of securities for an account of a nonaffiliated federal covered investment adviser with investments under management in excess of One Hundred Million Dollars ($100,000,000.00) acting for the account of others pursuant to discretionary authority in a signed record;

(7) An individual who represents an issuer in connection with the purchase of the issuer's own securities;

(8) An individual who represents an issuer and who restricts participation to performing clerical or ministerial acts; or

(9) Any other individual exempted by rule adopted or order issued under this chapter.

(c) Registration effective only while employed or associated. The registration of an agent is effective only while the agent is employed by or associated with a broker-dealer registered under this chapter or an issuer that is offering, selling, or purchasing its securities in this state.

(d) Limit on employment or association. It is unlawful for a broker-dealer, or an issuer engaged in offering, selling, or purchasing securities in this state, to employ or associate with an agent who transacts business in this state on behalf of broker-dealers or issuers unless the agent is registered under subsection (a) or exempt from registration under subsection (b).

(e) Limit on affiliations. An individual may not act as an agent for more than one (1) broker-dealer or one (1) issuer at a time, unless the broker-dealer or the issuer for which the agent acts are affiliated by direct or indirect common control or are authorized by rule or order under this chapter.

§ 75-71-403

(a) Registration requirement. It is unlawful for a person to transact business in this state as an investment adviser unless the person is registered under this chapter as an investment adviser or is exempt from registration as an investment adviser under subsection (b).

(b) Exemptions from registration. The following persons are exempt from the registration requirement of subsection (a):

(1) A person without a place of business in this state that is registered under the securities act of the state in which the person has its principal place of business if its only clients in this state are:

(A) Federal covered investment advisers, investment advisers registered under this chapter, or broker-dealers registered under this chapter;

(B) Institutional investors;

(C) Bona fide preexisting clients whose principal places of residence are not in this state if the investment adviser is registered under the securities act of the state in which the clients maintain principal places of residence; or

(D) Any other client exempted by rule adopted or order issued under this chapter;

(2) A person without a place of business in this state if the person has had, during the preceding twelve (12) months, not more than five (5) clients that are resident in this state in addition to those specified under paragraph (1); or

(3) Any other person exempted by rule adopted or order issued under this chapter.

(c) Limits on employment or association. It is unlawful for an investment adviser, directly or indirectly, to employ or associate with an individual to engage in an activity related to investment advice in this state if the registration of the individual is suspended or revoked or the individual is barred from employment or association with an investment adviser, federal covered investment adviser, or broker-dealer by an order under this chapter, the Securities and Exchange Commission, or a self-regulatory organization, unless the investment adviser did not know, and in the exercise of reasonable care could not have known, of the suspension, revocation, or bar. Upon request from the investment adviser and for good cause, the administrator, by order, may waive, in whole or in part, the application of the prohibitions of this subsection to the investment adviser.

(d) Investment adviser representative registration required. It is unlawful for an investment adviser to employ or associate with an individual required to be registered under this chapter as an investment adviser representative who transacts business in this state on behalf of the investment adviser unless the individual is registered under Section 75-71-404(a) or is exempt from registration under Section 75-71-404(b).

§ 75-71-404

(a) Registration requirement . It is unlawful for an individual to transact business in this state as an investment adviser representative unless the individual is registered under this chapter as an investment adviser representative or is exempt from registration as an investment adviser representative under subsection (b).

(b) Exemptions from registration. The following individuals are exempt from the registration requirement of subsection (a):

(1) An individual who is employed by or associated with an investment adviser that is exempt from registration under Section 75-71-403(b) or a federal covered investment adviser that is excluded from the notice filing requirements of Section 75-71-405; and

(2) Any other individual exempted by rule adopted or order issued under this chapter.

(c) Registration effective only while employed or associated. The registration of an investment adviser representative is not effective while the investment adviser representative is not employed by or associated with an investment adviser registered under this chapter or a federal covered investment adviser that has made or is required to make a notice filing under Section 75-71-405.

(d) Limit on affiliations. An individual may transact business as an investment adviser representative for more than one (1) investment adviser or federal covered investment adviser unless a rule adopted or order issued under this chapter prohibits or limits an individual from acting as an investment adviser representative for more than one (1) investment adviser or federal covered investment adviser.

(e) Limits on employment or association. It is unlawful for an individual acting as an investment adviser representative, directly or indirectly, to conduct business in this state on behalf of an investment adviser or a federal covered investment adviser if the registration of the individual as an investment adviser representative is suspended or revoked or the individual is barred from employment or association with an investment adviser or a federal covered investment adviser by an order under this chapter, the Securities and Exchange Commission, or a self-regulatory organization. Upon request from a federal covered investment adviser and for good cause, the administrator, by order issued, may waive, in whole or in part, the application of the requirements of this subsection to the federal covered investment adviser.

(f) Referral fees. An investment adviser registered under this chapter, a federal covered investment adviser that has filed a notice under Section 75-71-405, or a broker-dealer registered under this chapter is not required to employ or associate with an individual as an investment adviser representative if the only compensation paid to the individual for a referral of investment advisory clients is paid to an investment adviser registered under this chapter, a federal covered investment adviser who has filed a notice under Section 75-71-405, or a broker-dealer registered under this chapter with which the individual is employed or associated as an investment adviser representative.

§ 75-71-405

(a) Notice filing requirement. Except with respect to a federal covered investment adviser described in subsection (b), it is unlawful for a federal covered investment adviser to transact business in this state as a federal covered investment adviser unless the federal covered investment adviser complies with subsection (c).

(b) Notice filing requirement not required. The following federal covered investment advisers are not required to comply with subsection (c):

(1) A federal covered investment adviser without a place of business in this state if its only clients in this state are:

(A) Federal covered investment advisers, investment advisers registered under this chapter, and broker-dealers registered under this chapter;

(B) Institutional investors;

(C) Bona fide preexisting clients whose principal places of residence are not in this state; or

(D) Other clients specified by rule adopted or order issued under this chapter;

(2) A federal covered investment adviser without a place of business in this state if the person has had, during the preceding twelve (12) months, not more than five (5) clients that are resident in this state in addition to those specified under paragraph (1); and

(3) Any other person excluded by rule adopted or order issued under this chapter.

(c) Notice filing procedure. A person acting as a federal covered investment adviser, not excluded under subsection (b), shall file a notice, a consent to service of process complying with Section 75-71-611, and such records as have been filed with the Securities and Exchange Commission under the Investment Advisers Act of 1940 required by rule adopted or order issued under this chapter and pay the fees specified in Section 75-71-410.

(d) Effectiveness of filing. The notice under subsection (c) becomes effective upon its filing.

§ 75-71-406

(a) Application for initial registration. A person shall register as a broker-dealer, agent, investment adviser, or investment adviser representative by filing an application and a consent to service of process complying with Section 75-71-611, and paying the fee specified in Section 75-71-410 and any reasonable fees charged by the designee of the administrator for processing the filing. The application must contain:

(1) The information or record required for the filing of a uniform application; and

(2) Upon request by the administrator, any other financial or other information or record that the administrator determines is appropriate.

(b) Amendment. If the information or record contained in an application filed under subsection (a) is or becomes inaccurate or incomplete in a material respect, the registrant shall promptly file a correcting amendment.

(c) Effectiveness of registration. If an order is not in effect and a proceeding is not pending under Section 75-71-412, registration becomes effective at noon on the forty-fifth day after a completed application is filed, unless the registration is denied. A rule adopted or order issued under this chapter may set an earlier effective date or may defer the effective date until noon on the forty-fifth day after the filing of any amendment completing the application.

(d) Registration renewal. A registration is effective until midnight on December 31 of the year for which the application for registration is filed. Unless an order is in effect under Section 75-71-412, a registration may be automatically renewed each year by filing such records as are required by rule adopted or order issued under this chapter, by paying the fee specified in Section 75-71-410, and by paying costs charged by the designee of the administrator for processing the filings.

(e) Additional conditions or waivers. A rule adopted or order issued under this chapter may impose such other conditions, not inconsistent with the National Securities Markets Improvement Act of 1996. An order issued under this chapter may waive, in whole or in part, specific requirements in connection with registration as are in the public interest and for the protection of investors.

§ 75-71-407

(a) Succession. A broker-dealer or investment adviser may succeed to the current registration of another broker-dealer or investment adviser or a notice filing of a federal covered investment adviser, and a federal covered investment adviser may succeed to the current registration of an investment adviser or notice filing of another federal covered investment adviser, by filing as a successor an application for registration pursuant to Section 75-71-401 or 75-71-403 or a notice pursuant to Section 75-71-405 for the unexpired portion of the current registration or notice filing.

(b) Organizational change. A broker-dealer or investment adviser that changes its form of organization or state of incorporation or organization may continue its registration by filing an amendment to its registration if the change does not involve a material change in its financial condition or management. The amendment becomes effective when filed or on a date designated by the registrant in its filing. The new organization is a successor to the original registrant for the purposes of this chapter. If there is a material change in financial condition or management, the broker-dealer or investment adviser shall file a new application for registration. A predecessor registered under this chapter shall stop conducting its securities business other than winding down transactions and shall file for withdrawal of broker-dealer or investment adviser registration within forty-five (45) days after filing its amendment to effect succession.

(c) Name change. A broker-dealer or investment adviser that changes its name may continue its registration by filing an amendment to its registration. The amendment becomes effective when filed or on a date designated by the registrant.

(d) Change of control. A change of control of a broker-dealer or investment adviser may be made in accordance with a rule adopted or order issued under this chapter.

§ 75-71-408

(a) Notice of termination. If an agent registered under this chapter terminates employment by or association with a broker-dealer or issuer, or if an investment adviser representative registered under this chapter terminates employment by or association with an investment adviser or federal covered investment adviser, or if either registrant terminates activities that require registration as an agent or investment adviser representative, the broker-dealer, issuer, investment adviser, or federal covered investment adviser shall promptly file a notice of termination. If the registrant learns that the broker-dealer, issuer, investment adviser, or federal covered investment adviser has not filed the notice, the registrant may do so.

(b) Transfer of employment or association. If an agent registered under this chapter terminates employment by or association with a broker-dealer registered under this chapter and begins employment by or association with another broker-dealer registered under this chapter; or if an investment adviser representative registered under this chapter terminates employment by or association with an investment adviser registered under this chapter; or a federal covered investment adviser that has filed a notice under Section 75-71-405 and begins employment by or association with another investment adviser registered under this chapter or a federal covered investment adviser that has filed a notice under Section 75-71-405; then upon the filing by or on behalf of the registrant, within thirty (30) days after the termination, of an application for registration that complies with the requirement of Section 75-71-406(a) and payment of the filing fee required under Section 75-71-410, the registration of the agent or investment adviser representative is:

(1) Immediately effective as of the date of the completed filing, if the agent's Central Registration Depository record or successor record or the investment adviser representative's Investment Adviser Registration Depository record or successor record does not contain a new or amended disciplinary disclosure within the previous twelve (12) months; or

(2) Temporarily effective as of the date of the completed filing, if the agent's Central Registration Depository record or successor record or the investment adviser representative's Investment Adviser Registration Depository record or successor record contains a new or amended disciplinary disclosure within the preceding twelve (12) months.

(c) Withdrawal of temporary registration. The administrator may withdraw a temporary registration if there are or were grounds for discipline as specified in Section 75-71-412 and the administrator does so within thirty (30) days after the filing of the application. If the administrator does not withdraw the temporary registration within the thirty-day period, registration becomes automatically effective on the thirty-first day after filing.

(d) Power to prevent registration. The administrator may prevent the effectiveness of a transfer of an agent or investment adviser representative under subsection (b)(1) or (2) based on the public interest and the protection of investors.

(e) Termination of registration or application for registration. If the administrator determines that a registrant or applicant for registration is no longer in existence or has ceased to act as a broker-dealer, agent, investment adviser, or investment adviser representative, or is the subject of an adjudication of incapacity or is subject to the control of a committee, conservator, or guardian, or cannot reasonably be located, a rule adopted or order issued under this chapter may require the registration be canceled or terminated or the application denied. The administrator may reinstate a canceled or terminated registration, with or without hearing, and may make the registration retroactive.

§ 75-71-409

Withdrawal of registration by a broker-dealer, agent, investment adviser, or investment adviser representative becomes effective sixty (60) days after the filing of the application to withdraw or within any shorter period as provided by rule adopted or order issued under this chapter unless a revocation or suspension proceeding is pending when the application is filed. If a proceeding is pending, withdrawal becomes effective when and upon such conditions as required by rule adopted or order issued under this chapter. The administrator may institute a revocation or suspension proceeding under Section 75-71-412 within one (1) year after the withdrawal became effective automatically and issue a revocation or suspension order as of the last date on which registration was effective if a proceeding is not pending.

§ 75-71-410

(a) Fee established by administrator. The administrator shall establish fees by rule pursuant to the Mississippi Administrative Procedures Law for:

(1) An initial filing of an application as a broker-dealer and renewal of an application by a broker-dealer for registration;

(2) An application for registration as an agent and renewal of registration as an agent;

(3) An application for registration as an investment adviser and renewal of registration as an investment adviser.

(4) An application for registration as an investment adviser representative, a renewal of registration as an investment adviser representative, and a change of registration as an investment adviser representative; and

(5) An initial fee and annual notice fee for a federal covered investment adviser required to file a notice under Section 75-71-405.

(b) Payment. A person required to pay a filing or notice fee under this section may transmit the fee through or to a designee as a rule or order provides under this chapter.

§ 75-71-411

(a) Financial requirements. Subject to Section 15(h) of the Securities Exchange Act of 1934 (15 USC Section 78o(h)) or Section 222 of the Investment Advisers Act of 1940 (15 USC Section 80b-22), a rule adopted or order issued under this chapter may establish minimum financial requirements for broker-dealers registered or required to be registered under this chapter and investment advisers registered or required to be registered under this chapter.

(b) Financial reports. Subject to Section 15(h) of the Securities Exchange Act of 1934 (15 USC Section 78o(h)) or Section 222(b) of the Investment Advisers Act of 1940 (15 USC Section 80b-22), a broker-dealer registered or required to be registered under this chapter and an investment adviser registered or required to be registered under this chapter shall file such financial reports as are required by a rule adopted or order issued under this chapter. If the information contained in a record filed under this subsection is or becomes inaccurate or incomplete in a material respect, the registrant shall promptly file a correcting amendment.

(c) Recordkeeping. Subject to Section 15(h) of the Securities Exchange Act of 1934 (15 USC Section 78o(h)) or Section 222 of the Investment Advisers Act of 1940 (15 USC Section 80b-22):

(1) A broker-dealer registered or required to be registered under this chapter and an investment adviser registered or required to be registered under this chapter shall make and maintain the accounts, correspondence, memoranda, papers, books, and other records required by rule adopted or order issued under this chapter;

(2) Broker-dealer records required to be maintained under paragraph (1) may be maintained in any form of data storage acceptable under Section 17(a) of the Securities Exchange Act of 1934 (15 USC Section 78q(a)) if they are readily accessible to the administrator; and

(3) Investment adviser records required to be maintained under paragraph (1) may be maintained in any form of data storage required by rule adopted or order issued under this chapter.

(d) Audits or inspections. The records of a broker-dealer registered or required to be registered under this chapter and of an investment adviser registered or required to be registered under this chapter are subject to such reasonable periodic, special, or other audits or inspections by a representative of the administrator, within or without this state, as the administrator considers necessary or appropriate in the public interest and for the protection of investors. An audit or inspection may be made at any time and without prior notice. The administrator may copy, and remove for audit or inspection copies of, all records the administrator reasonably considers necessary or appropriate to conduct the audit or inspection. The administrator may assess a reasonable charge for conducting an audit or inspection under this subsection.

(e) Custody and discretionary authority bond or insurance. Subject to the limitations of Section 15(h) of the Securities Exchange Act of 1934 (15 USC Section 78o(h)) and Section 222 of the Investment Advisers Act of 1940 (15 USC Section 80b-22), the administrator may by rule require a broker-dealer or investment adviser that has custody of or discretionary authority over funds or securities of a customer or client to obtain insurance or post a bond or other satisfactory form of security in an amount as prescribed by rule. The administrator may determine the requirements of the insurance, bond, or other satisfactory form of security. Insurance or a bond or other satisfactory form of security may not be required of a broker-dealer registered under this chapter whose net capital exceeds, or of an investment adviser registered under this chapter whose minimum financial requirements exceed, the amounts required by rule or order under this chapter. The insurance, bond, or other satisfactory form of security must permit an action by a person to enforce any liability on the insurance, bond, or other satisfactory form of security if instituted within the time limitations in Section 75-71-509(j)(2).

(f) Requirements for custody. Subject to Section 15(h) of the Securities Exchange Act of 1934 (15 USC Section 78o(h)) or Section 222 of the Investment Advisers Act of 1940 (15 USC Section 80b-22), an agent may not have custody of funds or securities of a customer except under the supervision of a broker-dealer and an investment adviser representative may not have custody of funds or securities of a client except under the supervision of an investment adviser or a federal covered investment adviser. A rule adopted or order issued under this chapter may prohibit, limit, or impose conditions on a broker-dealer regarding custody of funds or securities of a customer and on an investment adviser regarding custody of securities or funds of a client.

(g) Investment adviser brochure rule. With respect to an investment adviser registered or required to be registered under this chapter, a rule adopted or order issued under this chapter may require that information or other record be furnished or disseminated to clients or prospective clients in this state as necessary or appropriate in the public interest and for the protection of investors and advisory clients.

(h) Continuing education. A rule adopted or order issued under this chapter may require an individual registered under Section 75-71-402 or Section 75-71-404 to participate in a continuing education program approved by the Securities and Exchange Commission and administered by a self-regulatory organization or, in the absence of such a program, a rule adopted or order issued under this chapter may require continuing education for an individual registered under Section 75-71-404.

§ 75-71-412

(a) Disciplinary conditions-applicants. If the administrator finds that the order is in the public interest and subsection (d) authorizes the action, an order issued under this chapter may deny an application, or may condition or limit registration of an applicant to be a broker-dealer, agent, investment adviser, or investment adviser representative, and, if the applicant is a broker-dealer or investment adviser, of a partner, officer, director, or person having a similar status or performing similar functions, or a person directly or indirectly in control, of the broker-dealer or investment adviser.

(b) Disciplinary conditions-registrants. If the administrator finds that the order is in the public interest and subsection (d) authorizes the action, an order issued under this chapter may revoke, suspend, condition, or limit the registration of a registrant and, if the registrant is a broker-dealer or investment adviser, of a partner, officer, director, or person having a similar status or performing similar functions, or a person directly or indirectly in control, of the broker-dealer or investment adviser. However, the administrator may not:

(1) Institute a revocation or suspension proceeding under this subsection (b) based on an order issued under a law of another state that is reported to the administrator or a designee of the administrator more than one (1) year after the date of the order on which it is based; or

(2) Under subsection (d)(5)(A) or (B), issue an order on the basis of an order issued under the securities act of another state unless the other order was based on conduct for which subsection (d) would authorize the action had the conduct occurred in this state.

(c) Disciplinary penalties-registrants. If the administrator finds that the order is in the public interest and subsection (d)(1) through (6), (8), (9), (10), (12) or (13) authorizes the action, an order under this chapter may censure, impose a bar, or impose a civil penalty in an amount not to exceed a maximum of the amount specified in Section 75-71-613 for each violation on a registrant, and, if the registrant is a broker-dealer or investment adviser, a partner, officer, director, or person having a similar status or performing similar functions, or a person directly or indirectly in control of the broker-dealer or investment adviser.

(d) Grounds for discipline. A person may be disciplined under subsections (a) through (c) if the person:

(1) Has filed an application for registration in this state under this chapter or the predecessor act within the previous ten (10) years, which, as of the effective date of registration or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained a statement that, in light of the circumstances under which it was made, was false or misleading with respect to a material fact;

(2) Willfully violated or willfully failed to comply with this chapter or the predecessor act or a rule adopted or order issued under this chapter or the predecessor act within the previous fifteen (15) years; for purposes of an ongoing failure to supervise, each twelve-month period or less of the conduct is a separate violation of this subsection, and if the person has failed to supervise more than one (1) individual at a time during the twelve (12) consecutive months' time period, then it shall be a separate violation of this subsection for each individual that the person failed to supervise during the applicable time period;

(3) Has been convicted of a felony or within the previous ten (10) years has been convicted of a misdemeanor involving a security, a commodity future or option contract, or an aspect of a business involving securities, commodities, investments, franchises, insurance, banking, or finance;

(4) Is enjoined or restrained by a court of competent jurisdiction in an action instituted by the administrator under this chapter or the predecessor act, a state, the Securities and Exchange Commission, or the United States from engaging in or continuing an act, practice, or course of business involving an aspect of a business involving securities, commodities, investments, franchises, insurance, banking, or finance;

(5) Is the subject of an order, issued after notice and opportunity for hearing by:

(A) The securities or other financial services regulator of a state or the Securities and Exchange Commission or other federal agency denying, revoking, barring, or suspending registration as a broker-dealer, agent, investment adviser, federal covered investment adviser, or investment adviser representative;

(B) The securities regulator of a state or the Securities and Exchange Commission against a broker-dealer, agent, investment adviser, investment adviser representative, or federal covered investment adviser;

(C) The Securities and Exchange Commission or a self-regulatory organization suspending or expelling the registrant from membership in the self-regulatory organization;

(D) A court adjudicating a United States Postal Service fraud order;

(E) The insurance regulator of a state denying, suspending, or revoking registration as an insurance agent; or

(F) A depository institution or financial services regulator suspending or barring the person from the depository institution or other financial services business;

(6) Is the subject of an adjudication or determination, after notice and opportunity for hearing, by the Securities and Exchange Commission, the Commodity Futures Trading Commission; the Federal Trade Commission; a federal depository institution regulator, or a depository institution, insurance, or other financial services regulator of a state that the person willfully violated the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, or the Commodity Exchange Act, the securities or commodities law of a state, or a federal or state law under which a business involving investments, franchises, insurance, banking, or finance is regulated;

(7) Is insolvent, either because the person's liabilities exceed the person's assets or because the person cannot meet the person's obligations as they mature, but the administrator may not enter an order against an applicant or registrant under this subsection (d) without a finding of insolvency as to the applicant or registrant;

(8) Refuses to allow or otherwise impedes the administrator from conducting an audit or inspection under Section 75-71-411(d) or refuses access to a registrant's office to conduct an audit or inspection under Section 75-71-411(d);

(9) Has failed to reasonably supervise an agent, investment adviser representative, or other individual, if the agent, investment adviser representative, or other individual was subject to the person's supervision and committed a violation of this chapter or the predecessor act or a rule adopted or order issued under this chapter or the predecessor act within the previous fifteen (15) years;

(10) Has not paid the proper filing fee within thirty (30) days after having been notified by the administrator of a deficiency, but the administrator shall vacate an order under this subsection (d) when the deficiency is corrected;

(11) After notice and opportunity for a hearing, has been found within the previous ten (10) years:

(A) By a court of competent jurisdiction to have willfully violated the laws of a foreign jurisdiction under which the business of securities, commodities, investment, franchises, insurance, banking, or finance is regulated;

(B) To have been the subject of an order of a securities regulator of a foreign jurisdiction denying, revoking, or suspending the right to engage in the business of securities as a broker-dealer, agent, investment adviser, investment adviser representative, or similar person; or

(C) To have been suspended or expelled from membership by or participation in a securities exchange or securities association operating under the securities laws of a foreign jurisdiction;

(12) Is the subject of a cease and desist order issued by the Securities and Exchange Commission or issued under the securities, commodities, investment, franchise, banking, finance, or insurance laws of a state;

(13) Has engaged in dishonest or unethical practices in the securities, commodities, investment, franchise, banking, finance, or insurance business within the previous ten (10) years; or

(14) Is not qualified on the basis of factors such as training, experience, and knowledge of the securities business. However, in the case of an application by an agent for a broker-dealer that is a member of a self-regulatory organization or by an individual for registration as an investment adviser representative, a denial order may not be based on this subsection if the individual has successfully completed all examinations required by subsection (e). The administrator may require an applicant for registration under Section 75-71-402 or 75-71-404 who has not been registered in a state within the two (2) years preceding the filing of an application in this state to successfully complete an examination.

(e) Examinations. A rule adopted or order issued under this chapter may require that an examination, including an examination developed or approved by an organization of securities regulators, be successfully completed by a class of individuals or all individuals. An order issued under this chapter may waive, in whole or in part, an examination as to an individual and a rule adopted under this chapter may waive, in whole or in part, an examination as to a class of individuals if the administrator determines that the examination is not necessary or appropriate in the public interest and for the protection of investors.

(f) Summary process. The administrator may suspend or deny an application summarily; restrict, condition, limit, or suspend a registration; or censure, bar, or impose a civil penalty on a registrant before final determination of an administrative proceeding. Upon the issuance of an order, the administrator shall promptly notify each person subject to the order that the order has been issued, the reasons for the action, and that within fifteen (15) days after the receipt of a request in a record from the person the matter will be scheduled for a hearing. If a hearing is not requested and none is ordered by the administrator within thirty (30) days after the date of service of the order, the order becomes final by operation of law. If a hearing is requested or ordered, the administrator, after notice of and opportunity for hearing to each person subject to the order, may modify or vacate the order or extend the order until final determination.

(g) Procedural requirements. An order issued may not be issued under this section, except under subsection (f), without:

(1) Appropriate notice to the applicant or registrant;

(2) Opportunity for hearing; and

(3) Findings of fact and conclusions of law in a record in accordance with the administrative hearing procedures set forth in the rules.

(h) Control person liability. A person that controls, directly or indirectly, a person not in compliance with this section may be disciplined by order of the administrator under subsections (a) through (c) to the same extent as the noncomplying person, unless the controlling person did not know, and in the exercise of reasonable care could not have known, of the existence of conduct that is a ground for discipline under this section.

(i) Limit on investigation or proceeding. The administrator may not institute a proceeding under subsection (a), (b), or (c) based solely on material facts actually known by the administrator unless an investigation or the proceeding is instituted within one (1) year after the administrator actually acquires knowledge of the material facts.

§ 75-71-413

(a) A broker-dealer registered or required to be registered under this chapter or an investment adviser registered or required to be registered under this chapter that is required to file a report with the Department of Human Services under the Mississippi Vulnerable Persons Act, Section 43-47-1 et seq., shall immediately forward a copy of the report to the administrator and may notify any third party reasonably associated with the customer of the suspected financial exploitation, or any other party permitted by state or federal laws or regulations, the rules of a self-regulatory organization or by customer agreement.

(b) If the broker-dealer registered or required to be registered under this chapter or the investment adviser registered or required to be registered under this chapter reasonably believes that a requested transaction may result in financial exploitation of its customer, that person may delay a transaction not to exceed fifteen (15) business days. If the transaction is delayed, the person shall, within two (2) business days, notify the administrator and all parties authorized to transact business on or to view the account subject to the delay. The broker-dealer or investment adviser shall immediately initiate an internal review of the suspected or attempted financial exploitation of the customer. The broker-dealer or investment advisor shall provide the administrator and the Department of Human Services with an update on the investigation upon request.

(c) Any delay of a transaction as authorized by this section will expire upon the sooner of:

(1) A determination by the broker-dealer or investment adviser, and the administrator, that the transaction will not result in financial exploitation of the eligible adult; or

(2) Fifteen (15) business days, unless the administrator requests that the broker-dealer or investment adviser extend the delay, in which case the delay shall be extended for an additional ten (10) days unless otherwise extended or terminated in accordance with paragraph (3).

(3) The Administrator or the Department of Human Services may petition a court of competent jurisdiction to enter an order extending or terminating the delay of the transaction.

(d) Disclosures and notifications of transaction delays shall not be made to any third party who is suspected of financial exploitation or other abuse.

(e) A person that makes disclosures or delays transactions under this section shall be immune from any administrative or civil liability that might otherwise arise from compliance with this section or activity authorized by this section.

(f) A person who fails to comply with subsection (a) of this section shall be subject to Section 43-47-7(1)(c) of the Mississippi Vulnerable Persons Act.

§ 75-71-501

It is unlawful for a person, in connection with the offer, sale, or purchase of a security, directly or indirectly:

(1) To employ a device, scheme, or artifice to defraud;

(2) To make an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or

(3) To engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.

§ 75-71-502

(a) Fraud in providing investment advice. It is unlawful for a person that advises others for compensation, either directly or indirectly or through publications or writings, as to the value of securities or the advisability of investing in, purchasing, or selling securities or that, for compensation and as part of a regular business, issues or promulgates analyses or reports relating to securities:

(1) To employ a device, scheme, or artifice to defraud another person; or

(2) To engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.

(b) Rules specifying contents of advisory contract. A rule adopted under this chapter may specify the contents of an investment advisory contract entered into, extended, or renewed by an investment adviser.

§ 75-71-503

(a) Civil. In a civil action or administrative proceeding under this chapter, a person claiming an exemption, exception, preemption, or exclusion has the burden to prove the applicability of the claim.

(b) Criminal. In a criminal proceeding under this chapter, a person claiming an exemption, exception, preemption, or exclusion has the burden of going forward with evidence of the claim.

§ 75-71-504

(a) Filing requirement. Except as otherwise provided in subsection (b), a rule adopted or order issued under this chapter may require the filing of a prospectus, pamphlet, circular, form letter, advertisement, sales literature, or other advertising record relating to a security or investment advice, addressed or intended for distribution to prospective investors, including clients or prospective clients of a person registered or required to be registered as an investment adviser under this chapter.

(b) Excluded communications. This section does not apply to sales and advertising literature specified in subsection (a) which relates to a federal covered security, a federal covered investment adviser, or a security or transaction exempted by Section 75-71-201, Section 75-71-202, or Section 75-71-203 except as required pursuant to Section 75-71-201(7).

§ 75-71-505

It is unlawful for a person to make or cause to be made, in a record that is used in an action or proceeding or filed under this chapter, a statement that, at the time and in the light of the circumstances under which it is made, is false or misleading in a material respect, or, in connection with the statement, to omit to state a material fact necessary to make the statement made, in the light of the circumstances under which it was made, not false or misleading.

§ 75-71-506

The filing of an application for registration, a registration statement, a notice filing under this chapter, the registration of a person, the notice filing by a person, or the registration of a security under this chapter does not constitute a finding by the administrator that a record filed under this chapter is true, complete, and not misleading. The filing or registration or the availability of an exemption, exception, preemption, or exclusion for a security or a transaction does not mean that the administrator has passed upon the merits or qualifications of, or recommended or given approval to, a person, security, or transaction. It is unlawful to make, or cause to be made, to a purchaser, customer, client, or prospective customer or client a representation inconsistent with this section.

§ 75-71-507

A broker-dealer, agent, investment adviser, federal covered investment adviser, or investment adviser representative is not liable to another broker-dealer, agent, investment adviser, federal covered investment adviser, or investment adviser representative for defamation relating to a statement that is contained in a record required by the administrator, or designee of the administrator, the Securities and Exchange Commission, or a self-regulatory organization, unless the person knew, or should have known at the time that the statement was made, that it was false in a material respect or the person acted in reckless disregard of the statement's truth or falsity.

§ 75-71-508

(a) Criminal penalties. A person that willfully violates this chapter except Section 75-71-504 or the notice filing requirements of Section 75-71-302 or Section 75-71-405, or that willfully violates Section 75-71-505 knowing the statement made to be false or misleading in a material respect, upon conviction, shall be fined not more than the amount set forth in Section 75-71-613 or imprisoned not more than five (5) years, or both. An individual convicted of violating a rule or order under this chapter may be fined, but may not be imprisoned, if the individual did not have knowledge of the rule or order. Each violation shall be considered as a separate offense in a single proceeding or a series of related proceedings.

(b) Criminal referral not required. The Attorney General with or without a referral from the administrator, may institute criminal proceedings under this chapter. The attorneys duly employed by the administrator may be appointed by the Attorney General or the proper prosecuting attorney or local district attorney to act as special prosecutors in criminal proceedings.

(c) No limitation on other criminal enforcement. This chapter does not limit the power of this state to punish a person for conduct that constitutes a crime under other laws of this state.

§ 75-71-509

(a) Securities Litigation Uniform Standards Act. Enforcement of civil liability under this section is subject to the Securities Litigation Uniform Standards Act of 1998.

(b) Liability of seller to purchaser. A person is liable to the purchaser if the person sells a security in violation of Section 75-71-301 or, by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statement made, in light of the circumstances under which it is made, not misleading, the purchaser not knowing the untruth or omission and the seller not sustaining the burden of proof that the seller did not know and, in the exercise of reasonable care, could not have known of the untruth or omission. An action under this subsection is governed by the following:

(1) The purchaser may maintain an action to recover the consideration paid for the security, less the amount of any income received on the security, and interest at the legal rate of interest from the date of the purchase, costs, and reasonable attorney's fees determined by the court, upon the tender of the security, or for actual damages as provided in paragraph (3).

(2) The tender referred to in paragraph (1) may be made any time before entry of judgment. Tender requires only notice in a record of ownership of the security and willingness to exchange the security for the amount specified. A purchaser that no longer owns the security may recover actual damages as provided in paragraph (3).

(3) Actual damages in an action arising under this subsection (b) are the amount that would be recoverable upon a tender less the value of the security when the purchaser disposed of it, and interest at the legal rate of interest from the date of the purchase, costs, and reasonable attorney's fees determined by the court.

(c) Liability of purchaser to seller. A person is liable to the seller if the person buys a security by means of an untrue statement of a material fact or omission to state a material fact necessary in order to make the statement made, in light of the circumstances under which it is made, not misleading, the seller not knowing of the untruth or omission, and the purchaser not sustaining the burden of proof that the purchaser did not know, and in the exercise of reasonable care, could not have known of the untruth or omission. An action under this subsection is governed by the following:

(1) The seller may maintain an action to recover the security, and any income received on the security, costs, and reasonable attorney's fees determined by the court, upon the tender of the purchase price, or for actual damages as provided in paragraph (3).

(2) The tender referred to in paragraph (1) may be made any time before entry of judgment. Tender requires only notice in a record of the present ability to pay the amount tendered and willingness to take delivery of the security for the amount specified. If the purchaser no longer owns the security, the seller may recover actual damages as provided in paragraph (3).

(3) Actual damages in an action arising under this subsection (c) are the difference between the price at which the security was sold and the value the security would have had at the time of the sale in the absence of the purchaser's conduct causing liability, and interest at the legal rate of interest from the date of the sale of the security, costs and reasonable attorney's fees determined by the court.

(d) Liability of unregistered broker-dealer and agent. A person acting as a broker-dealer or agent that sells or buys a security in violation of Section 75-71-401(a), 75-71-402(a), or Section 75-71-506 is liable to the customer. The customer, if a purchaser, may maintain an action for recovery of actual damages as specified in subsection (b)(1) through (3), or, if a seller, for a remedy as specified in subsection (c)(1) through (3).

(e) Liability of unregistered investment adviser and investment adviser representative. A person acting as an investment adviser or investment adviser representative that provides investment advice for compensation in violation of Section 75-71-403(a), Section 75-71-404(a), or Section 75-71-506 is liable to the client. The client may maintain an action to recover the consideration paid for the advice, interest at the legal rate of interest from the date of payment, costs, and reasonable attorney's fees determined by the court.

(f) Liability for investment advice. A person that receives directly or indirectly any consideration for providing investment advice to another person and that employs a device, scheme, or artifice to defraud the other person or engages in an act, practice, or course of business that operates or would operate as a fraud or deceit on the other person, is liable to the other person. An action under this subsection is governed by the following:

(1) The person defrauded may maintain an action to recover the consideration paid for the advice and the amount of any actual damages caused by the fraudulent conduct, interest at the legal rate of interest from the date of the fraudulent conduct, costs, and reasonable attorney's fees determined by the court, less the amount of any income received as a result of the fraudulent conduct.

(2) This subsection (f) does not apply to a broker-dealer or its agents if the investment advice provided is solely incidental to transacting business as a broker-dealer and no special compensation is received for the investment advice.

(g) Joint and several liability. The following persons are liable jointly and severally with and to the same extent as persons liable under subsections (b) through (f):

(1) A person that directly or indirectly controls a person liable under subsections (b) through (f), unless the controlling person sustains the burden of proof that the person did not know, and in the exercise of reasonable care could not have known, of the existence of conduct by reason of which the liability is alleged to exist;

(2) An individual who is a managing partner, executive officer, or director of a person liable under subsections (b) through (f), including an individual having a similar status or performing similar functions, unless the individual sustains the burden of proof that the individual did not know and, in the exercise of reasonable care could not have known, of the existence of conduct by reason of which the liability is alleged to exist;

(3) An individual who is an employee of or associated with a person liable under subsections (b) through (f) and who materially aids the conduct giving rise to the liability, unless the individual sustains the burden of proof that the individual did not know and, in the exercise of reasonable care could not have known, of the existence of conduct by reason of which the liability is alleged to exist; and

(4) A person that is a broker-dealer, agent, investment adviser, or investment adviser representative that materially aids the conduct giving rise to the liability under subsections (b) through (f), unless the person sustains the burden of proof that the person did not know and, in the exercise of reasonable care could not have known, of the existence of conduct by reason of which liability is alleged to exist.

(h) Right of contribution. A person liable under this section has a right of contribution as in cases of contract against any other person liable under this section for the same conduct.

(i) Survival of cause of action. A cause of action under this section survives the death of an individual who might have been a plaintiff or defendant.

(j) Statute of limitations. A person may not obtain relief:

(1) Under subsection (b) for violation of Section 75-71-301, or under subsection (d) or (e), unless the action is instituted within one (1) year after the violation occurred; or

(2) Under subsection (b), other than for violation of Section 75-71-301, or under subsection (c) or (f), unless the action is instituted within the earlier of two (2) years after discovery of the facts constituting the violation or five (5) years after the violation.

(k) No enforcement of violative contract. A person that has made, or has engaged in the performance of, a contract in violation of this chapter or a rule adopted or order issued under this chapter, or that has acquired a purported right under the contract with knowledge of conduct by reason of which its making or performance was in violation of this chapter, may not base an action on the contract.

(l) No contractual waiver. A condition, stipulation, or provision binding a person purchasing or selling a security or receiving investment advice to waive compliance with this chapter or a rule adopted or order issued under this chapter is void.

(m) Survival of other rights or remedies. The rights and remedies provided by this chapter are in addition to any other rights or remedies that may exist, but this chapter does not create a cause of action not specified in this section or Section 75-71-411(e).

§ 75-71-510

A purchaser of a security, seller of a security, or recipient of investment advice may not maintain an action under Section 75-71-509 if:

(1) The purchaser of a security, seller of a security, or recipient of investment advice receives in a record, before the action is instituted:

(A) An offer stating the respect in which liability under Section 75-71-509 may have arisen and fairly advising the purchaser of a security, seller of a security, or recipient of investment advice of that person's rights in connection with the offer, and any financial or other information necessary to correct all material misrepresentations or omissions in the information that was required by this chapter to be furnished to that person at the time of the purchase of the security, sale of the security, or receipt of the investment advice;

(B) If the basis for relief under this section may have been a violation of Section 75-71-509(b), an offer to repurchase the security for cash, payable on delivery of the security, equal to the consideration paid, and interest at six percent (6%) from the date of the purchase, less the amount of any income received on the security, or, if the purchaser no longer owns the security, an offer to pay the purchaser upon acceptance of the offer damages in an amount that would be recoverable upon a tender, less the value of the security when the purchaser disposed of it, and interest at eight percent (8%) interest from the date of the purchase in cash equal to the damages computed in the manner provided in this subparagraph;

(C) If the basis for relief under this section may have been a violation of Section 75-71-509(c), an offer to tender the security, on payment by the seller of an amount equal to the purchase price paid, less income received on the security by the purchaser and interest at the legal rate of interest from the date of the sale; or if the purchaser no longer owns the security, an offer to pay the seller upon acceptance of the offer, in cash, damages in the amount of the difference between the price at which the security was purchased and the value the security would have had at the time of the purchase in the absence of the purchaser's conduct that may have caused liability and interest at the legal rate of interest from the date of the sale;

(D) If the basis for relief under this section may have been a violation of Section 75-71-509(d); and if the customer is a purchaser, an offer to pay as specified in subparagraph (B); or, if the customer is a seller, an offer to tender or to pay as specified in subparagraph (C);

(E) If the basis for relief under this section may have been a violation of Section 75-71-509(e), an offer to reimburse in cash the consideration paid for the advice and interest at the legal rate of interest from the date of payment; or

(F) If the basis for relief under this section may have been a violation of Section 75-71-509(f), an offer to reimburse in cash the consideration paid for the advice, the amount of any actual damages that may have been caused by the conduct, and interest at the legal rate of interest from the date of the violation causing the loss;

(2) The offer under paragraph (1) states that it must be accepted by the purchaser, seller, or recipient of investment advice within thirty (30) days after the date of its receipt by the purchaser, seller, or recipient of investment advice or any shorter period, of not less than three (3) days, that the administrator, by order, specifies;

(3) The offeror has the present ability to pay the amount offered or to tender the security under paragraph (1);

(4) The offer under paragraph (1) is delivered to the purchaser, seller, or recipient of investment advice, or sent in a manner that ensures receipt by the purchaser, seller, or recipient of investment advice; and

(5) The purchaser, seller, or recipient of investment advice that accepts the offer under paragraph (1) in a record within the period specified under paragraph (2) is paid in accordance with the terms of the offer.

§ 75-71-601

(a) Administration. The administrator shall administer this chapter.

(b) Unlawful use of records or information. It is unlawful for the administrator or an officer, employee, or designee of the administrator to use for personal benefit or the benefit of others records or other information obtained by or filed with the administrator that are not public under Section 75-71-607(b). This chapter does not authorize the administrator or an officer, employee, or designee of the administrator to disclose the record or information, except in accordance with Section 75-71-602, 75-71-607(c), or 75-71-608.

(c) No privilege or exemption created or diminished. This chapter does not create or diminish a privilege or exemption that exists at common law, by statute or rule, or otherwise.

(d) Investor education. The administrator may develop and implement investor education initiatives to inform the public about investing in securities, with particular emphasis on the prevention and detection of securities fraud. In developing and implementing these initiatives, the administrator may collaborate with public and nonprofit organizations with an interest in investor education. The administrator may accept a grant or donation from a person that is not affiliated with the securities industry or from a nonprofit organization, regardless of whether the organization is affiliated with the securities industry, to develop and implement investor education initiatives. This subsection does not authorize the administrator to require participation or monetary contributions of a registrant in an investor education program.

§ 75-71-602

(a) Authority to investigate. The administrator may:

(1) Conduct public or private investigations within or outside of this state which the administrator considers necessary or appropriate to determine whether a person has violated, is violating, or is about to violate this chapter or a rule adopted or order issued under this chapter, or to aid in the enforcement of this chapter or in the adoption of rules and forms under this chapter;

(2) Require or permit a person to testify, file a statement, or produce a record, under oath or otherwise as the administrator determines, as to all the facts and circumstances concerning a matter to be investigated or about which an action or proceeding is to be instituted; and

(3) Publish a record concerning an action, proceeding, or an investigation under, or a violation of, this chapter or a rule adopted or order issued under this chapter if the administrator determines it is necessary or appropriate in the public interest and for the protection of investors.

(b) Administrator powers to investigate. For the purpose of an investigation under this chapter, the administrator or its designated officer may administer oaths and affirmations, subpoena witnesses, seek compulsion of attendance, take evidence, require the filing of statements, and require the production of any records that the administrator considers relevant or material to the investigation.

(c) Procedure and remedies for noncompliance. If a person does not appear or refuses to testify, file a statement, produce records, or otherwise does not obey a subpoena as required by the administrator under this chapter, the administrator may apply to the Chancery Court of the First Judicial District of Hinds County, Mississippi, or a court of another state to enforce compliance. The court may:

(1) Hold the person in contempt;

(2) Order the person to appear before the administrator;

(3) Order the person to testify about the matter under investigation or in question;

(4) Order the production of records;

(5) Grant injunctive relief, including restricting or prohibiting the offer or sale of securities or the providing of investment advice; and

(6) Grant any other necessary or appropriate relief.

(d) Application for relief. This section does not preclude a person from applying to the Chancery Court of the First Judicial District of Hinds County, Mississippi, or a court of another state for relief from a request to appear, testify, file a statement, produce records, or obey a subpoena.

(e) Use immunity procedure. An individual is not excused from attending, testifying, filing a statement, producing a record or other evidence, or obeying a subpoena of the administrator under this chapter or in an action or proceeding instituted by the administrator under this chapter on the ground that the required testimony, statement, record, or other evidence, directly or indirectly, may tend to incriminate the individual or subject the individual to a criminal fine, penalty, or forfeiture. If the individual refuses to testify, file a statement, or produce a record or other evidence on the basis of the individual's privilege against self-incrimination, the administrator may apply to the Chancery Court of the First Judicial District of Hinds County, Mississippi, to compel the testimony, the filing of the statement, the production of the record, or the giving of other evidence. The testimony, record, or other evidence compelled under such an order may not be used, directly or indirectly, against the individual in a criminal case, except in a prosecution for perjury or contempt or otherwise failing to comply with the order.

(f) Assistance to securities regulator of another jurisdiction. At the request of the securities regulator of another state or a foreign jurisdiction, the administrator may provide assistance if the requesting regulator states that it is conducting an investigation to determine whether a person has violated, is violating, or is about to violate a law or rule of the other state or foreign jurisdiction relating to securities matters that the requesting regulator administers or enforces. The administrator may provide the assistance by using the authority to investigate and the powers conferred by this section as the administrator determines is necessary or appropriate. The assistance may be provided without regard to whether the conduct described in the request would also constitute a violation of this chapter or other law of this state if occurring in this state. In deciding whether to provide the assistance, the administrator may consider whether the requesting regulator is permitted and has agreed to provide assistance reciprocally within its state or foreign jurisdiction to the administrator on securities matters when requested; whether compliance with the request would violate or prejudice the public policy of this state; and the availability of resources and employees of the administrator to carry out the request for assistance.

§ 75-71-603

(a) Civil action instituted by administrator. If the administrator believes that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter or that a person has, is, or is about to engage in an act, practice, or course of business that materially aids a violation of this chapter or a rule adopted or order issued under this chapter, the administrator may maintain an action in chancery court to enjoin the act, practice, or course of business and to enforce compliance with this chapter or a rule adopted or order issued under this chapter.

(b) Relief available. In an action under this section and on a proper showing, the court may:

(1) Issue a permanent or temporary injunction, restraining order, or declaratory judgment;

(2) Order other appropriate or ancillary relief, which may include:

(A) An asset freeze, accounting, writ of attachment, writ of general or specific execution, and appointment of a receiver or conservator, that may be the administrator, for the defendant or the defendant's assets;

(B) Ordering the administrator to take charge and control of a defendant's property, including investment accounts and accounts in a depository institution, rents, and profits; to collect debts; and to acquire and dispose of property;

(C) Imposing a civil penalty of the amount set forth in Section 75-71-613 for each violation; an order of rescission, restitution, or disgorgement directed to a person that has engaged in an act, practice, or course of business constituting a violation of this chapter or the predecessor act or a rule adopted or order issued under this chapter or the predecessor act; and

(D) Ordering the payment of prejudgment and postjudgment interest; or

(3) Order such other relief as the court considers appropriate.

(c) No bond required. The administrator may not be required to post a bond in an action or proceeding under this chapter.

§ 75-71-604

(a) Issuance of an order or notice. If the administrator determines that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter or that a person has materially aided, is materially aiding, or is about to materially aid an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter, the administrator may:

(1) Issue an order directing the person to cease and desist from engaging in the act, practice, or course of business or to take other action necessary or appropriate to comply with this chapter;

(2) Issue an order denying, suspending, revoking, or conditioning the exemptions for a broker-dealer under Section 75-71-401(b)(1)(D) or (F) or an investment adviser under Section 75-71-403(b)(1)(C); or

(3) Issue an order:

(A) Under Section 75-71-204;

(B) Imposing a civil penalty in the case of an issuer of registered securities, broker-dealer, investment advisor, agent, investment adviser representative, or other person who violated this chapter;

(C) Barring or suspending the person from association with a broker-dealer or investment advisor registered in this state; or

(D) Requiring the person to pay restitution for any loss or disgorge any profits arising from the violation, including interest.

(b) Summary process. An order under subsection (a) is effective on the date of issuance. Upon issuance of the order, the administrator shall promptly serve each person subject to the order with a copy of the order and a notice that the order has been entered, in accordance with Section 75-71-611. The order must include a statement of any civil penalty or other administrative remedy to be imposed under subsection (a) or costs of investigation the administrator will seek, a statement of the reasons for the order, and notice that, within fifteen (15) days after receipt of a request in a record from the person, the matter will be scheduled for a hearing. If a person subject to the order does not request a hearing and none is ordered by the administrator within thirty (30) days after the date of service of the order, the order, including the imposition of a civil penalty or other administrative remedy to be imposed under subsection (a) or requirement for payment of the costs of investigation if a civil penalty or costs were sought in the statement accompanying the order, becomes final as to that person by operation of law. If a hearing is requested or ordered, the administrator, after notice of and opportunity for hearing to each person subject to the order, may modify or vacate the order or extend it until final determination.

(c) Procedure for final order. If a hearing is requested or ordered pursuant to subsection (b), a hearing must be held pursuant to the administrative hearing procedures set forth in the rules. A final order may not be issued unless the administrator makes findings of fact and conclusions of law in a record in accordance with the administrative hearing procedures set forth in the rules. The final order may make final, vacate, or modify the order issued under subsection (a).

(d) Civil penalty. In a final order under subsection (c), the administrator may impose a civil penalty in an amount set forth in Section 75-71-613 for each violation and each violation shall be considered a separate offense in a single proceeding or a series of related proceedings.

(e) Costs. In a final order, the administrator may charge the actual cost of an investigation or proceeding for a violation of this chapter or a rule adopted or order issued under this chapter.

(f) Filing of certified final order with court; effect of filing. If a petition for judicial review of a final order is not filed in accordance with Section 75-71-609, or the petition is denied by the court, the administrator may file a certified copy of the final order with the clerk of a court in the jurisdiction where enforcement will be sought. The order so filed has the same effect as a judgment of the court and may be recorded, enforced, or satisfied in the same manner as a judgment of the court.

(g) Enforcement by court; further civil penalty. If a person does not comply with an order under this section, the administrator may petition a court of competent jurisdiction to enforce the order and collect administrative civil penalties and costs imposed under the final order. The court may not require the administrator to post a bond in an action or proceeding under this section. If the court finds, after service and opportunity for hearing, that the person was not in compliance with the order, the court may adjudge the person in civil contempt of the order. The court may impose a further civil penalty against the person for contempt in an amount set forth in Section 75-71-613 for each violation and may grant any other relief the court determines is just and proper in the circumstances.

§ 75-71-605

(a) Issuance and adoption of forms, orders, and rules. The administrator may:

(1) Issue forms and orders and, after notice and comment, may adopt and amend rules necessary or appropriate to carry out this chapter and may repeal rules, including rules and forms governing registration statements, applications, notice filings, reports, and other records;

(2) By rule, define terms, whether or not used in this chapter, but those definitions may not be inconsistent with this chapter; and

(3) By rule, classify securities, persons, and transactions and adopt different requirements for different classes. Offers to other persons as described in Section 75-71-202(13)(C) exempted by rule adopted under this chapter or order issued under this chapter may be conditioned by rule or order and any rule adopted as provided in Section 75-71-203 to provide an additional exemption from registration may include conditions on such exemption.

(b) Findings and cooperation. Under this chapter, a rule or form may not be adopted or amended, or an order issued or amended, unless the administrator finds that the rule, form, order, or amendment is necessary or appropriate in the public interest or for the protection of investors and is consistent with the purposes intended by this chapter. In adopting, amending, and repealing rules and forms, Section 75-71-608 applies in order to achieve uniformity among the states and coordination with federal laws in the form and content of registration statements, applications, reports, and other records, including the adoption of uniform rules, forms, and procedures.

(c) Financial statements. Subject to Section 15(h) of the Securities Exchange Act and Section 222 of the Investment Advisers Act of 1940, the administrator may require that a financial statement filed under this chapter be prepared in accordance with generally accepted accounting principles in the United States and comply with other requirements specified by rule adopted or order issued under this chapter. A rule adopted or order issued under this chapter may establish:

(1) Subject to Section 15(h) of the Securities Exchange Act and Section 222 of the Investment Advisers Act of 1940, the form and content of financial statements required under this chapter;

(2) Whether unconsolidated financial statements must be filed; and

(3) Whether required financial statements must be audited by an independent certified public accountant.

(d) Interpretative opinions. The administrator may provide interpretative opinions or issue determinations that the administrator will not institute a proceeding or an action under this chapter against a specified person for engaging in a specified act, practice, or course of business if the determination is consistent with this chapter. A rule adopted or order issued under this chapter may establish a reasonable charge for interpretative opinions or determinations that the administrator will not institute an action or a proceeding under this chapter.

(e) Effect of compliance. A penalty under this chapter may not be imposed for, and liability does not arise from conduct that is engaged in or omitted in good faith believing it conforms to a rule, form, or order of the administrator under this chapter.

(f) Presumption for public hearings. A hearing in an administrative proceeding under this chapter must be conducted in public unless the administrator for good cause consistent with this chapter determines that the hearing will not be so conducted.

§ 75-71-606

(a) Public register of filings. The administrator shall maintain, or designate a person to maintain, a register of applications for registration of securities; registration statements; notice filings; applications for registration of broker-dealers, agents, investment advisers, and investment adviser representatives; notice filings by federal covered investment advisers that are or have been effective under this chapter or the predecessor act; notices of claims of exemption from registration or notice filing requirements contained in a record; orders issued under this chapter or the predecessor act; and interpretative opinions or no action determinations issued under this chapter.

(b) Public availability. The administrator shall make all rules, forms, interpretative opinions, and orders available to the public.

(c) Copies of public records. The administrator shall furnish a copy of a record that is a public record or a certification that the public record does not exist to a person that so requests. A rule adopted under this chapter may establish a reasonable charge for furnishing the record or certification. A copy of the record certified or a certificate by the administrator of a record's nonexistence is prima facie evidence of a record or its nonexistence.

§ 75-71-607

(a) Presumption of public records. Except as otherwise provided in subsection (b), records obtained by the administrator or filed under this chapter, including a record contained in or filed with a registration statement, application, notice filing, or report, are public records and are available for public examination under such rules as the administrator prescribes.

(b) Nonpublic records. The following records are not public records and are not available for public examination under subsection (a):

(1) A record obtained by the administrator in connection with an audit or inspection under Section 75-71-411(d) or an investigation under Section 75-71-602;

(2) A part of a record filed in connection with a registration statement under Section 75-71-301 and Sections 75-71-303 through 75-71-305 or a record under Section 75-71-411(d) that contains trade secrets or confidential information if the person filing the registration statement or report has asserted a claim of confidentiality or privilege that is authorized by law;

(3) A record that is not required to be provided to the administrator or filed under this chapter and is provided to the administrator only on the condition that the record will not be subject to public examination or disclosure;

(4) A nonpublic record received from a person specified in Section 75-71-608(a);

(5) Any social security number, residential address unless used as a business address, and residential telephone number unless used as a business telephone number, contained in a record that is filed; and

(6) A record obtained by the administrator through a designee of the administrator that a rule or order under this chapter determines has been:

(A) Expunged from the administrator's records by the designee; or

(B) Determined to be nonpublic or nondisclosable by that designee if the administrator finds the determination to be in the public interest and for the protection of investors.

(c) Administrator discretion to disclose. If disclosure is for the purpose of a civil, administrative, or criminal investigation, action, or proceeding or to a person specified in Section 75-71-608(a), the administrator may disclose a record obtained in connection with an audit or inspection under Section 75-71-411(d) or a record obtained in connection with an investigation under Section 75-71-602.

§ 75-71-608

(a) Objective of uniformity. The administrator may, in its discretion, cooperate, coordinate, consult, and, subject to Section 75-71-607, share records and information with the securities regulator of another state, Canada, a Canadian province or territory, a foreign jurisdiction, the Securities and Exchange Commission, the United States Department of Justice, the Commodity Futures Trading Commission, the Federal Trade Commission, the Securities Investor Protection Corporation, a self-regulatory organization, a national or international organization of securities regulators, a federal or state banking or insurance regulator, and a governmental law enforcement or regulatory agency to effectuate greater uniformity in securities matters among the federal government, self-regulatory organizations, states, and foreign governments.

(b) Policies to consider. In cooperating, coordinating, consulting, and sharing records and information under this section and in acting by rule, order, or waiver under this chapter, the administrator shall, in its discretion, take into consideration in carrying out the public interest the following general policies:

(1) Maximizing effectiveness of regulation for the protection of investors;

(2) Maximizing uniformity in federal and state regulatory standards; and

(3) Minimizing burdens on the business of capital formation, without adversely affecting essentials of investor protection.

(c) Subjects for cooperation. The cooperation, coordination, consultation, and sharing of records and information authorized by this section includes:

(1) Establishing or employing one or more designees as a central depository for registration and notice filings under this chapter and for records required or allowed to be maintained under this chapter;

(2) Developing and maintaining uniform forms;

(3) Conducting a joint examination or investigation;

(4) Holding a joint administrative hearing;

(5) Instituting and prosecuting a joint civil or administrative proceeding;

(6) Sharing and exchanging personnel;

(7) Coordinating registrations under Sections 75-71-301 and 75-71-401 through 75-71-404 and exemptions under Section 75-71-203;

(8) Sharing and exchanging records, subject to Section 75-71-607;

(9) Formulating rules, statements of policy, guidelines, forms, and interpretative opinions and releases;

(10) Formulating common systems and procedures;

(11) Notifying the public of proposed rules, forms, statements of policy, and guidelines;

(12) Attending conferences and other meetings among securities regulators, which may include representatives of governmental and private sector organizations involved in capital formation, deemed necessary or appropriate to promote or achieve uniformity; and

(13) Developing and maintaining a uniform exemption from registration for small issuers, and taking other steps to reduce the burden of raising investment capital by small businesses.

§ 75-71-609

(a) Petition for judicial review of order; venue; scope of review. Any person aggrieved by a final order of the administrator may obtain a review of the order in the Chancery Court of the First Judicial District of Hinds County, Mississippi, by filing in court, within sixty (60) days after the entry of the order, a written petition praying that the order be modified or set aside in whole or in part. A copy of the petition shall be forthwith served upon the administrator and thereupon the administrator shall certify and file in court a copy of the filing and evidence upon which the order was entered. When these have been filed, the court has exclusive jurisdiction to affirm, modify, enforce or set aside the order, in whole or in part. The findings of the administrator as to the facts, if supported by competent material and substantial evidence, are conclusive.

(b) Adduction of additional evidence. If either party applies to the court for leave to adduce additional material evidence, and shows to the satisfaction of the court that there were reasonable grounds for failure to adduce the evidence in the hearing before the administrator, the court may order the additional evidence to be taken before the administrator and to be adduced upon the hearing in such manner and upon such conditions as the court considers proper. The administrator may modify his findings and order by reason of the additional evidence and shall file in court the additional evidence together with any modified or new findings or order.

(c) Stay of administrative order under review. The commencement of proceedings under subsection (a) does not, unless specifically ordered by the court, operate as a stay of the administrator's order.

§ 75-71-610

(a) Sales and offers to sell. Sections 75-71-301, 75-71-302, 75-71-401(a), 75-71-402(a), 75-71-403(a), 75-71-404(a), 75-71-501, 75-71-506, 75-71-509, and 75-71-510 do not apply to a person that sells or offers to sell a security unless the offer to sell or the sale is made in this state or the offer to purchase or the purchase is made and accepted in this state.

(b) Purchases and offers to purchase. Sections 75-71-401(a), 75-71-402(a), 75-71-403(a), 75-71-404(a), 75-71-501, 75-71-506, 75-71-509, and 75-71-510 do not apply to a person that purchases or offers to purchase a security unless the offer to purchase or the purchase is made in this state or the offer to sell or the sale is made and accepted in this state.

(c) Offers in this state. For the purpose of this section, an offer to sell or to purchase a security is made in this state, whether or not either party is then present in this state, if the offer:

(1) Originates from within this state; or

(2) Is directed by the offeror to a place in this state and received at the place to which it is directed.

(d) Acceptances in this state. For the purpose of this section, an offer to purchase or to sell is accepted in this state, whether or not either party is then present in this state, if the acceptance:

(1) Is communicated to the offeror in this state and the offeree reasonably believes the offeror to be present in this state and the acceptance is received at the place in this state to which it is directed; and

(2) Has not previously been communicated to the offeror, orally or in a record, outside this state.

(e) Publications, radio, television, or electronic communications. An offer to sell or to purchase is not made in this state when a publisher circulates or there is circulated on the publisher's behalf in this state a bona fide newspaper or other publication of general, regular, and paid circulation that is not published in this state, or that is published in this state but has had more than two-thirds ( 2/3 ) of its circulation outside this state during the previous twelve (12) months or when a radio or television program or other electronic communication originating outside this state is received in this state. A radio or television program, or other electronic communication is considered as having originated in this state if either the broadcast studio or the originating source of transmission is located in this state, unless:

(1) The program or communication is syndicated and distributed from outside this state for redistribution to the general public in this state;

(2) The program or communication is supplied by a radio, television, or other electronic network with the electronic signal originating from outside this state for redistribution to the general public in this state;

(3) The program or communication is an electronic communication that originates outside this state and is captured for redistribution to the general public in this state by a community antenna or cable, radio, cable television, or other electronic system; or

(4) The program or communication consists of an electronic communication that originates in this state, but which is not intended for distribution to the general public in this state.

(f) Investment advice and misrepresentations. Sections 75-71-403(a), 75-71-404(a), 75-71-405(a), 75-71-502, 75-71-505, and 75-71-506 apply to a person if the person engages in an act, practice, or course of business instrumental in effecting prohibited or actionable conduct in this state, whether or not either party is then present in this state.

§ 75-71-611

(a) Signed consent to service of process. A consent to service of process complying with this section required by this chapter must be signed and filed in the form required by a rule or order under this chapter. A consent appointing the administrator the person's agent for service of process in a noncriminal action or proceeding against the person, or the person's successor or personal representative under this chapter or a rule adopted or order issued under this chapter after the consent is filed, has the same force and validity as if the service were made personally on the person filing the consent. A person that has filed a consent complying with this subsection in connection with a previous application for registration or notice filing need not file an additional consent.

(b) Conduct constituting appointment of agent for service. If a person, including a nonresident of this state, engages in an act, practice, or course of business prohibited or made actionable by this chapter or a rule adopted or order issued under this chapter and the person has not filed a consent to service of process under subsection (a), the act, practice, or course of business constitutes the appointment of the administrator as the person's agent for service of process in a noncriminal action or proceeding against the person or the person's successor or personal representative.

(c) Procedure for service of process. Service under subsection (a) or (b) may be made by providing a copy of the process to the office of the administrator, but it is not effective unless:

(1) The plaintiff, which may be the administrator, promptly sends notice of the service and a copy of the process, return receipt requested, to the defendant or respondent at the address set forth in the consent to service of process or, if a consent to service of process has not been filed, at the last known address, or takes other reasonable steps to give notice; and

(2) The plaintiff files an affidavit of compliance with this subsection (c) in the action or proceeding on or before the return day of the process, if any, or within the time that the court, or the administrator in a proceeding before the administrator, allows.

(d) Service in administrative proceedings or civil actions by administrator. Service pursuant to subsection (c) may be used in a proceeding before the administrator or by the administrator in a civil action in which the administrator is the moving party.

(e) Opportunity to defend. If process is served under subsection (c), the court, or the administrator in a proceeding before the administrator, shall order continuances as are necessary or appropriate to afford the defendant or respondent reasonable opportunity to defend.

§ 75-71-612

If any provision of this chapter or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

§ 75-71-613

(a) Amount of civil disciplinary penalties imposed--registrants. The amount of the civil penalty or fine described in Section 75-71-412(c) is a maximum of Twenty-five Thousand Dollars ($25,000.00) for each violation.

(b) Section 75-71-508 The amount of the criminal penalty or fine described in Section 75-71-508 is not more than Twenty-five Thousand Dollars ($25,000.00) for each violation.

(c) Section 75-71-603 The amount of the civil penalty described in Section 75-71-603(b)(2)(C) is a maximum of Twenty-five Thousand Dollars ($25,000.00) for each violation, provided that an additional civil penalty may be imposed up to a maximum of Fifteen Thousand Dollars ($15,000.00) for violations of the chapter committed against elders or disabled persons.

(d) Section 75-71-604

(1) The amount of the civil penalty described in Section 75-71-604(d) is a maximum of Twenty-five Thousand Dollars ($25,000.00) for each violation, provided that an additional civil penalty may be imposed up to a maximum of Fifteen Thousand Dollars ($15,000.00) for violations of the chapter committed against elders or disabled persons.

(2) The amount of the further civil penalty described in Section 75-71-604(g) is a maximum of Twenty-five Thousand Dollars ($25,000.00) for each violation.

§ 75-71-701

(a) Applicability of predecessor chapter to pending proceedings and existing rights. The predecessor chapter exclusively governs all actions or proceedings that are pending on January 1, 2010, or may be instituted on the basis of conduct occurring before January 1, 2010, but a private civil action may not be maintained to enforce any liability under the predecessor chapter unless instituted within any period of limitation that applied when the cause of action accrued or within five (5) years after January 1, 2010, whichever is earlier. This time limitation shall not apply to a civil enforcement action or an administrative enforcement action instituted by the administrator under Section 75-71-603 or Section 75-71-604.

(b) Continued effectiveness under predecessor chapter. All effective registrations under the predecessor chapter, all administrative orders relating to the registrations, rules, statements of policy, interpretative opinions, declaratory rulings, no-action determinations, and conditions imposed on the registrations under the predecessor chapter remain in effect while they would have remained in effect if this chapter had not been enacted. They are considered to have been filed, issued, or imposed under this chapter, but are exclusively governed by the predecessor chapter.

(c) Applicability of predecessor chapter to offers or sales. The predecessor chapter exclusively applies to an offer or sale made within one (1) year after January 1, 2010, pursuant to an offering made in good faith before January 1, 2010, on the basis of an exemption available under the predecessor chapter.

(d) For the purposes of this chapter, “predecessor chapter” means Chapter 71 of Title 75, Mississippi Code of 1972, as it existed on December 31, 2009.

Chapter 72 Business Takeovers

§ 75-72-101

Sections 75-72-101 through 75-72-121 may be cited as the “Mississippi Business Tender Offer Law of 1980.”

§ 75-72-103

The following words and phrases shall have the meanings ascribed herein, unless the context clearly otherwise requires:

(a) “Affiliate” of a person means a person controlling, controlled by, or under common control with that person.

(b) “Associate” of a person means a person acting jointly or in concert with that person for the purpose of acquiring, holding, or disposing of, or exercising any voting rights attached to, the equity securities of a subject company.

(c) “Control,” including the terms “controlling,” “controlled by” and “under common control with,” means the possession of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, by contract or otherwise.

(d) “Equity security” means:

(i) Any stock or similar security carrying, at the time of the tender offer, the right to vote on any matter by virtue of the articles of incorporation, bylaws or governing instrument of the subject company or the right to vote for directors or persons performing substantially similar functions by operation of law.

(ii) Any security convertible into such stock or similar security.

(iii) Any warrant or right to purchase such stock or similar security.

(iv) Any security carrying any warrant or right to purchase such stock or similar security.

(v) Any other security which for the protection of investors is deemed an equity security pursuant to regulation of the Secretary of State.

(e) “Bidder” means a person who makes a tender offer or on whose behalf a tender offer is made, and includes all affiliates and associates of that person. The term does not include a financial institution or broker-dealer lending funds or extending credit in the ordinary course of its business or any accountant, attorney, financial institution, broker-dealer, investment adviser, fiduciary, newspaper or magazine of general circulation, consultant, or other person furnishing information, services, or advice to, or performing ministerial or administrative duties for a person pursuant to the unsolicited request, or a general contract for advice to, such person, and not otherwise participating in the tender offer.

(f) “Offeree” means a record of beneficial owner of equity securities which a bidder acquires or offers to acquire in connection with a tender offer.

(g) “Person” means an individual, corporation, association, partnership, trust or other entity.

(h) “Tender offer” means any offer to acquire or the acquisition of any equity security of a subject company, pursuant to a tender offer or request or invitation for tenders, if after acquisition the bidder would be directly or indirectly a record or beneficial owner of more than five percent (5%) of any class of the outstanding equity securities of the subject company.

(i) “Subject company” means a corporation or other issuer of equity securities which has at least twenty percent (20%) of its equity securities beneficially owned by residents of this state and owns or controls assets located in this state which have a fair market value in excess of One Million Dollars ($1,000,000.00), except that subject company shall not include any state or national bank or any savings and loan association.

(j) “Securities law” refers to the Mississippi Securities Law, Section 75-71-101 et seq.

(k) “Beneficial owner” includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has shares or has the right to acquire:

(i) Voting power which includes the power to vote, or to direct the voting of, an equity security; or

(ii) Investment power which includes the power to dispose, or to direct the disposition of, an equity security.

§ 75-72-104

The following transactions are exempted from the registration requirements of this chapter.

(a) Any offer made by an issuer to purchase its own equity securities or the equity securities of a subsidiary at least two-thirds ( 2/3 ) of the equity securities of which are owned either of record or beneficially by the issuer;

(b) An offer effected by or through a broker-dealer in the ordinary course of his business without solicitation of offers to sell equity securities of the subject company;

(c) An offer made to the owners of equity securities of a subject company with less than fifty (50) owners of record at the time of the offer;

(d) An offer or offers to purchase equity securities which, if accepted, will result in the offeror's purchasing two percent (2%) or less of the outstanding equity securities of the same class during the preceding twelve-month period;

(e) An offer in which the consideration consists, in whole or in part, of securities registered under the United States Securities Act of 1933;

(f) An offer which the Secretary of State by order, after notice to the offeror and to the subject company and opportunity to respond, shall exempt from the provisions of this law as not being made, or to be made, for the purpose of, and not having the effect of, or to have the effect of, changing or influencing the control of the subject company, or otherwise as not comprehended within the purposes of Sections 75-72-101 through 75-72-121; or

(g) An offer which is subject to substantive administrative review of its terms and conditions by a federal or state agency and which the Secretary of State determines by rule, regulation or order has met the purposes of Sections 75-72-101 through 75-72-121.

§ 75-72-105

(1) No person shall make a tender offer involving a subject company unless the tender offer is effective or exempted under Sections 75-72-101 through 75-72-121.

(2) A tender offer shall become effective under Sections 75-72-101 through 75-72-121 on the day upon which the bidder (a) files with the Secretary of State a disclosure statement containing the information prescribed in subsection (3) of this section, a consent by the bidder to service of process, and the filing fee specified in Section 75-72-117; (b) delivers a copy of the disclosure statement or any required amendment thereto to the subject company at its principal office; and (c) publicly discloses the material terms of the proposed offer.

(3) The disclosure statement shall be filed on Schedule 14D-1, as such schedule is described in the United States Securities Exchange Act of 1934, and shall contain all amendments thereto.

If there is any material change in any of the information set forth in any disclosure statement or exhibit filed under this section, the person who filed such disclosure statement shall:

(a) Promptly file an amendment of the disclosure statement or exhibit with the Secretary of State; and

(b) Not later than the date of filing of such amendment, hand deliver a copy of the amendment to the subject company at its principal office.

(4) If the bidder or the subject company is a public utility corporation subject to regulation by the Public Service Commission of the State of Mississippi, the Secretary of State shall forthwith, upon receipt of the filing required under subsection (2) of this section, furnish a copy of such filing to the regulatory body having jurisdiction over the bidder or subject company.

(5) If the bidder or subject company is a domestic insurance company subject to regulation by the Commissioner of Insurance of the State of Mississippi, the said commissioner shall, for all purposes of this section, be substituted for the Secretary of State. This section shall not be construed to limit or modify in any way any responsibility, authority, power or jurisdiction of the Secretary of State or the Commissioner of Insurance pursuant to any other section of the Mississippi Code of 1972.

§ 75-72-107

(1) Copies of all advertisements, circulars, letters or other materials published by the bidder, the subject company or any person who makes a solicitation or recommendation to any offeree in connection with the tender offer (except a person who the term “bidder” does not include in accordance with Section 75-72-103(e)), soliciting or requesting the acceptance or rejection of the tender offer, with the exception of the initial press release by the bidder to the wire services announcing the intention to make a tender offer as contemplated in Section 75-72-105 shall be filed with the secretary of state and hand delivered to the subject company and the bidder no later than the day (or if such day is not a business day, then on the next succeeding business day) on which copies of the materials are first published or sent or given to any offeree. The person filing materials under this section shall, unless said person shall theretofore have filed a disclosure statement under this or any other section of Sections 75-72-101 through 75-72-121, file with said materials a disclosure statement, and consent by said person to service of process and the filing fee specified in Section 75-72-117. Unless the person filing a disclosure statement under this section shall theretofore have filed a disclosure statement under Section 75-72-105, the form of the disclosure statement filed under this section shall be schedule 14D-9, as said schedule is described in the United States Securities Exchange Act of 1934, and shall contain all exhibits thereto. If there is any material change in any of the information set forth in any disclosure statement or exhibit filed under this section, the person who filed said disclosure statement shall promptly file an amendment of the disclosure statement or exhibit with the secretary of state and, not later than the date of said filing of that amendment, hand deliver a copy of the amendment to the subject company and the bidder.

(2) The materials described in subsection (1) of this section shall not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

§ 75-72-109

No person shall engage in any fraudulent, deceptive or manipulative acts or practices in connection with a tender offer. Fraudulent, deceptive and manipulative acts or practices include, without limitation:

(a) Solicitation of any offeree for acceptance or rejection of a tender offer, or acquisition of any equity security of a subject company pursuant to a tender offer, that is not effective or exempt under Sections 75-72-101 through 75-72-121.

(b) Publication or use in connection with the tender offer of any untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, but not including the mailing by a subject company to the record or beneficial owners of its equity securities or solicitation materials published and furnished to the subject company for transmittal to its security holders by the bidder.

(c) The direct or indirect purchase, or the making of any arrangement to purchase, any security that is the subject of a tender offer (or any other security which is immediately convertible into or exchangeable for such security), otherwise than pursuant to such tender offer, from the date such tender offer is first published or sent or given to security holders until the expiration of the period, including any extensions thereof, during which securities tendered pursuant to such tender offer may, by the terms of such offer, be accepted or rejected; provided, however, that if such person is the owner of another security which is immediately convertible into or exchangeable for the security which is the subject of the offer, his subsequent exercise of his right of conversion or exchange with respect to such other security shall not be prohibited and this section shall not prohibit the purchase of any security pursuant to a stock option plan approved by security holders.

(d) Hold such tender offer open for less than twenty (20) business days from the date such tender offer is first published or sent or given to security holders; provided, however, that a tender offer by the issuer of the class of equity securities being sought, or by an affiliate of such issuer, which is not made in anticipation of or in response to another person's tender offer for securities of the same class, shall be held open for not less than fifteen (15) business days from the date such tender offer is first published or sent or given to security holders.

(e) Failure to offer the same or substantially equivalent consideration to all offerees pursuant to a tender offer.

(f) Failure to make the offer available to all holders of the class of equity securities subject to the tender offer, except that a bidder shall not be prohibited from making a tender offer which is not extended to security holders residing in jurisdictions having laws which render such tender offer unlawful or which the bidder in good faith determines may render such tender offer unlawful.

§ 75-72-111

(1) A bidder shall provide that any equity securities of a subject company deposited or tendered pursuant to a tender offer may be withdrawn by or on behalf of any person who has deposited securities pursuant to the tender offer: (a) at any time until the expiration of fifteen (15) business days from the date of such tender offer was first published or sent or given to security holders; and (b) on the date and until the expiration of ten (10) business days following the date of another bidder's tender offer is first published or sent or given to security holders for securities of the same class, provided that the bidder has received notice or otherwise has knowledge of the commencement of such other tender offer and, provided further, that withdrawal may only be effected with respect to securities which have not been accepted for payment in the manner set forth in the bidder's tender offer prior to the date such other tender offer is first published or sent or given to security holders; and (c) at any time after sixty (60) days from the date the original tender offer was first published or sent or given to security holders. The time periods for withdrawal rights pursuant to this section shall be computed on a concurrent, as opposed to a consecutive, basis.

(2) If a bidder makes a tender offer for less than all the outstanding equity securities of any class, and if the number of securities deposited or tendered pursuant thereto, within ten (10) days after the offer is first published or sent or given to security holders, or at the written election of the bidder any period which exceeds such ten (10) days and/or any period which exceeds ten (10) days from the date that notice of an increase in the consideration offered is first published or sent or given to offerees, is greater than the number the offeror has offered to accept and pay for, the securities shall be accepted pro rata, disregarding fractions, according to the number of securities deposited or tendered by each offeree.

(3) If a bidder varies the terms of a tender's offer before its expiration date by increasing the consideration offered to the offerees, the bidder shall pay the increased consideration for all equity securities accepted whether the securities have been accepted by the bidder before or after the variation in the terms of the offer.

(4) No bidder shall make a tender offer at any time when an injunctive proceeding that has not been finally determined has been brought by the secretary of state against the bidder for violation of Sections 75-72-101 through 75-72-121 unless the bidder shall disclose the pendency of that proceeding in the bidder's disclosure statement filed under Section 75-72-101 through 75-72-121 and in the tender offer materials first published or sent or given to offerees.

§ 75-72-115

Sections 75-72-101 through 75-72-121 shall be administered by the secretary of state, who may promulgate regulations necessary to carry out the purposes of Sections 75-72-101 through 75-72-121, and shall promulgate such rules as may be necessary to ensure that the application and administration of Sections 75-72-101 through 75-72-121 is not inconsistent with the regulation of tender offers under the United States Securities Exchange Act of 1934.

§ 75-72-117

The secretary of state shall charge a filing fee of five hundred dollars ($500.00) for each disclosure statement filed under Sections 75-72-101 through 75-72-121.

§ 75-72-119

(1) Whenever it appears to the secretary of state that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of Sections 75-72-101 through 75-72-121 or any regulation adopted under Sections 75-72-101 through 75-72-121, the secretary of state may investigate and, in connection with such investigation, shall have the same powers to compel the production of books, papers and other documents and to administer oaths and conduct examinations as are granted to the secretary of state under the securities law. He may bring an action in any chancery court in the name and on behalf of the state against any person or persons participating in a violation, seeking such relief as the court may grant, including, without limitation, to enjoin those persons from continuing or doing any act in violation of Sections 75-72-101 through 75-72-121, to enforce compliance, to grant a permanent or preliminary injunction or temporary restraining order, or to order rescission of any sales, tenders for sale, purchases or tenders for purchase of equity securities determined to be unlawful under Sections 75-72-101 through 75-72-121 or any regulation of the secretary of state.

(2) Whenever any person has engaged in or is about to engage in any act or practice constituting a violation of Sections 75-72-101 through 75-72-121 or any regulation or order adopted thereunder, the bidder, subject company, or any record or beneficial owner of an equity security of the subject company may bring an action in the county where the subject company has its executive offices or a material portion of its total assets in the state seeking such relief as the court may grant, including, without limitation, to enjoin that person from continuing or doing any act in violation of Sections 75-72-101 through 75-72-121, to enforce compliance, to grant a permanent or preliminary injunction or temporary restraining order, to order rescission of any sales, tenders for sale, purchases, or tenders for purchase of equity securities determined to be unlawful under Sections 75-72-101 through 75-72-121 or any regulation of the secretary of state, or, in the case of record or beneficial owners of equity securities, damages.

(3) Every person who directly or indirectly controls a person liable under subsection (2) of this section is also liable jointly or severally with and to the same extent as that person, unless he did not know of the existence of the facts by reason of which the liability is alleged to exist.

(4) No action may be maintained under this section unless commenced before the expiration of three (3) years after the discovery of the facts constituting the violation.

(5) The rights and remedies under Sections 75-72-101 through 75-72-121 are in addition to any other rights or remedies that may exist at law or in equity.

§ 75-72-121

(1) Any person who makes a tender offer involving a subject company without filing a disclosure statement required under Section 75-72-105 may be imprisoned for a period not to exceed one (1) year, or fined an amount not to exceed five thousand dollars ($5,000.00) per day, while the unlawful tender offer is in effect, or both.

(2) Any person who, in connection with a tender offer, knowingly makes or causes to be made to the secretary of state any representation of a material fact which he knows to be false, or knowingly withholds or causes to be withheld from the secretary of state any information the disclosure of which he knows is necessary, in light of the circumstances, to make not misleading other representations of material facts made or caused to be made by him to the secretary of state, may be imprisoned for a period of not less than one (1) nor more than five (5) years, or fined an amount not to exceed twenty-five thousand dollars ($25,000.00) or both.

(3) Any person who, in connection with a tender offer, knowingly publishes or sends or gives, or causes to be published, or sends or gives any representation of a material fact which he knows to be false, or knowingly omits to publish information which he knows is necessary, in light of the circumstances, to make not misleading other representations of material facts published, or sends or gives or causes to be published, or sends or gives by him, may be imprisoned for a period of not less than one (1) nor more than five (5) years, or fined an amount not to exceed twenty-five thousand dollars ($25,000.00), or both; provided, however, that this subsection shall not apply to the mailing by a subject company to the record or beneficial owners of its equity securities of solicitation material published and furnished to the subject company for transmittal to its security holders by the bidder.

(4) Any person who knowingly violates any provision of Sections 75-72-101 through 75-72-121 for which a specific criminal penalty is not otherwise provided may be imprisoned for a period not to exceed one (1) year, or fined an amount not to exceed five thousand dollars ($5,000.00), or both.

(5) Nothing herein limits the power of the state to punish any person for conduct which constitutes a crime under any other statute.

Chapter 73 Hotels and Innkeepers

§ 75-73-1

A copy of Sections 75-73-3 and 75-73-5 shall be posted and kept posted in a conspicuous place in the general office or lobby, provided for the use of guests and patrons of every public inn and hotel.

§ 75-73-3

Any innkeeper or hotel keeper or manager who shall fail, neglect or refuse to comply with Section 75-73-1 of this chapter shall be guilty of a misdemeanor and on conviction shall be fined not less than twenty-five dollars ($25.00) nor more than one hundred dollars ($100.00). Each day's failure, neglect or refusal shall constitute a separate offense, and may be punished as such.

§ 75-73-5

No innkeeper, whether individual, partnership or corporation, who constantly has in his inn an iron safe or suitable vault in good order and fit for the safe custody of money, bank notes, jewelry, articles of gold and silver manufacture, precious stones, personal ornaments, railroad mileage books or tickets, negotiable or valuable papers, bullion, and who keeps on the doors of the sleeping rooms used by his guests, locks or bolts, and on the transoms and windows of said rooms suitable fastenings, shall be liable for the loss or injury to any such property suffered by any guest, unless such guest has offered to deliver the same to such innkeeper for custody in such iron safe or vault and such innkeeper has refused or omitted to take it and deposit it in such safe or vault for custody and to give such guest a receipt therefor.

Provided, however, that the innkeeper of any inn shall not be obliged to receive from any one guest for deposit in such safe or vault any property hereinbefore described exceeding a total value of five hundred dollars ($500.00), and shall not be liable for any excess of such property, whether received or not; but such innkeeper may, by special agreement with a guest, receive for deposit in such safe or vault any property on such terms as they may agree to in writing. Every innkeeper shall be liable for any loss of the above enumerated articles by a guest in his inn caused by the theft or negligence of the innkeeper or any of his servants.

§ 75-73-7

The liability of the innkeeper of any inn, whether individual, partnership or corporation, for the loss of or injury to personal property placed by his guests under his care other than that described in Section 75-73-5 shall be that of a depository for hire. Provided, however, that in no case shall such liability exceed the sum of one hundred dollars ($100.00) for each trunk and contents; twenty-five dollars ($25.00) for each valise and contents, and five dollars ($5.00) for each box, bundle or package and contents so placed under his care, unless he shall have consented in writing with such guest to assume a greater liability; except that nothing herein shall prevent any guest of any hotel or inn from recovering at common law the actual value of the contents of any trunk, valise, box or package which, after being given into the care or custody of the hotel or innkeeper or placed in the rooms of a hotel or inn, shall be lost by or through theft, or the negligence, carelessness or omission of any hotel or innkeeper or his servant or employee, and not by or through the carelessness, negligence or omission of such guest.

§ 75-73-9

(1) Any person who shall, for himself or as the agent or representative of another or as an officer of a corporation, obtain food, lodging, money, property or other accommodations of a value less than Twenty-five Dollars ($25.00) at any hotel, motel, motor hotel, motor lodge, inn, boarding or eating house with intent to defraud the owner or keeper thereof, shall, upon conviction, be fined not less than Fifty Dollars ($50.00) and not exceeding Five Hundred Dollars ($500.00) or imprisoned in the county jail for a term not exceeding one (1) year, or both; but any person who shall, for himself or as the agent or representative of another or as an officer of a corporation, obtain food, lodging, money, property or other accommodations of a value of Twenty-five Dollars ($25.00) or over at any hotel, motel, motor hotel, motor lodge, inn, boarding or eating house with intent to defraud the owner or keeper thereof shall, upon conviction, be fined not less than One Hundred Dollars ($100.00) and not exceeding One Thousand Dollars ($1,000.00) or imprisoned in the State Penitentiary for a term of one (1) year, or both. In case of a second and subsequent conviction of the offense described, regardless of the value of the food, lodging, money, property or other accommodations obtained, the punishment shall be by imprisonment in the State Penitentiary for a term of not exceeding two (2) years.

(2) No person shall remain in a hotel or motel where his term or stay has expired if the person has been given a separate written notice of his agreed departure date and checkout time at the time he registered in the hotel or motel, the person has signed such notice acknowledging his departure time, and the person has been given written notice at least three (3) hours prior to the time required to leave the hotel or motel room. Willful violations of this subsection shall be a misdemeanor punishable by a fine of not more than One Hundred Dollars ($100.00) and each violation shall be a separate offense. This subsection shall not apply in case of serious medical emergency requiring the room's continued use.

§ 75-73-11

Proof that lodging, food, money, property, or other accommodations were obtained by false pretense or by false or fictitious show or pretense of any baggage or other property, that the person refused or neglected to pay for such food, lodging or other accommodations, or that he absconded without paying or offering to pay for such food, lodging or other accommodations, or that he surreptitiously removed or attempted to move his baggage, or that he made, drew, issued, and delivered to the owner or keeper of any hotel, motel, motor hotel, motor lodge, inn, boarding or eating house, any check, draft or order on any bank or other depository in payment of food, lodging, money, property, or other accommodations, and has no funds or has insufficient funds on deposit to his credit in such bank or depository with which such check, draft, or order may be paid in full, and all other checks, drafts, or orders upon such funds then outstanding, shall be deemed prima facie proof of the fraudulent intent mentioned in Section 75-73-9. Provided, however, that this section shall not apply in cases where there has been an agreement for extension of credit made at the time or before the lodging, food, money, property, or other accommodations have been furnished.

§ 75-73-13

(1) If any person be guilty of disorderly conduct or other conduct prohibited by law, or intoxication or any breach of the peace, or of the use of obscene or profane language on the premises of any hotel, or if any person register at said hotel under an assumed name, then the manager of said hotel or anyone who is at the time acting as said manager or for said manager may eject said person or persons from said hotel premises using only such force as may be necessary to accomplish the same, and may command the assistance of the employees of said hotel to assist in said ejection and may cause any person violating the law to be detained and delivered to the proper authorities.

(2) If a person who has been given written notice of his agreed departure and checkout time at the time he registered in the hotel or motel, who has signed such notice acknowledging his checkout time, and who has been given written notice at least three (3) hours prior to the time required to leave the hotel or motel room remains in a hotel or motel room after his term or stay has expired, the manager of the hotel or motel or anyone who is at the time acting as said manager or for said manager may eject said person and other occupants and their personal belongings from said hotel or motel premises using the assistance of the appropriate lawful authority to accomplish the same. If the registered occupant is not present, the manager of the hotel or motel, or the person acting as or for said manager, shall make and sign a written, itemized inventory of the personal belongings in the room before same shall be removed, which inventory shall also be signed, as witness thereto, by the lawful authority assisting such hotel or motel manager. Such hotel or motel manager shall use reasonable care to preserve and protect such personal belongings for a period not longer than ten (10) days. No action for damages, or otherwise, shall be maintainable against the owners, operators or managers of a hotel or motel, or appropriate lawful authority for reasonable exercise of rights pursuant to Sections 75-73-9 and 75-73-13. This subsection shall not apply in case of serious medical emergency requiring the room's continued use.

§ 75-73-15

Keepers of hotels, inns, boarding houses and restaurants shall have a lien on the goods and personal baggage of their guests and boarders to secure the payment of any money due from them for board and lodging and hotel accommodations; and may enforce the same by a seizure and sale of such goods and baggage, as hereinafter provided.

§ 75-73-17

If the charges when due are not paid within ten (10) days after demand therefor, such hotel, inn, boarding house, or restaurant keeper, may, on giving ten (10) days' notice of the time and place of such sale by posting notice in two public places, one of which shall be in a public place in the hotel, boarding house, inn or restaurant, where such personal baggage or goods are seized, sell such goods and baggage to the highest bidder for cash, and apply the proceeds to the expense of keeping such goods and baggage, and of the sale thereof, and to the satisfaction, in whole or in part, as the case may be, of said lien. The balance of such proceeds, if any there be, shall be paid over to the owner thereof on demand. The demand herein first provided for to be made by the keeper upon the owner for the charges due, may be in person, or by letter, or writing duly stamped, addressed and mailed to such owner to his address if known to such keeper or to the address appearing on the register of such hotel, inn, boarding house or restaurant. The demand on the part of the owner for the residue or remainder shall be made within twelve (12) months from the date of sale of such goods or personal baggage. If not demanded within twelve (12) months after date of such sale, such residue or remainder shall be deposited with the chancery clerk of the county in which said hotel, inn, boarding house, or restaurant is located, together with a statement of the proprietor of such hotel, inn, boarding house or restaurant of the amount of the lien and costs in enforcing the same, together with a copy of the posted notice and the amount received from the sale of said property so sold at said sale. Said residue shall, by said chancery clerk, be credited to the general revenue fund of said county, subject to the right of said guest, or boarder, or their representatives to reclaim the same at any time within two years from and after the deposit of such residue with the said chancery clerk. Such sale shall be a perpetual bar to any action against said hotel, inn, boarding house, or restaurant keeper for the recovery of such goods or baggage, or of the value thereof, or for any damage growing out of the failure of such guest to receive such goods or personal baggage.

Chapter 74 Youth Camps

§ 75-74-1

This chapter may be cited as the “Mississippi Youth Camp Safety and Health Law.”

§ 75-74-3

In this chapter, unless the context requires a different definition:

(a) “Board” shall mean the state board of health.

(b) “Camper” shall mean any child six (6) to eighteen (18) years of age who is attending a youth camp.

(c) “Health officer” shall mean the state health officer, Mississippi State Board of Health.

(d) “Person” shall mean any individual, partnership, corporation, association or organization.

(e) “Youth camp” shall mean any camp operating on a permanent campsite for four (4) or more consecutive periods of twenty-four (24) hours, and accommodating twenty (20) or more children six (6) to eighteen (18) years of age; provided, however, athletic camps and hunting and fishing camps shall not be included in this definition.

(f) “Permanent campsite” shall mean a campground containing within the premises thereof permanent structures and installed facilities which are primarily used for camping purposes by a youth camp operator; provided, however, facilities owned by the State of Mississippi, any political subdivision thereof or any public or private university, college or junior college shall not be included in this definition.

(g) “Youth camp operator” shall mean any person who owns, operates, controls or supervises, whether or not for profit, a youth camp.

§ 75-74-5

Each youth camp operator shall provide each camper with safe and healthful conditions, facilities and equipment, free from recognized hazards which cause or may tend to cause death, serious illness or bodily harm.

§ 75-74-7

The State Board of Health is the principal authority in the state on matters relating to the condition of safety and health at youth camps in Mississippi. The board has the powers and duties set out in this chapter and all other powers necessary and convenient to carry out its responsibilities.

§ 75-74-8

(1) Any nonresident physician who is not licensed to practice medicine in this state and any resident physician who is retired from the active practice of medicine in this state may be issued a temporary license by the state board of medical licensure to practice medicine at a youth camp licensed by the State Board of Health under this chapter while serving as a volunteer at such a camp, provided that any such nonresident physician shall hold a valid license to practice medicine in another state and the medical licensing authority of that state shall certify to the board of medical licensure in writing that such license is in good standing, and that any such retired resident physician shall be in good standing with the board of medical licensure.

(2) Any nonresident registered nurse who is not licensed to practice nursing in this state and any resident registered nurse who is retired from the active practice of nursing in this state may be issued a temporary license by the Mississippi Board of Nursing to practice nursing at a youth camp licensed under this chapter by the State Board of Health while serving as a volunteer at such a camp, provided that any such nonresident nurse shall hold a valid license to practice nursing in another state and the nurse licensing authority of that state shall certify to the board of nursing in writing that such license is in good standing, and that any such retired resident nurse shall be in good standing with the board of nursing. The board of nursing shall be authorized to require any resident registered nurse who has been retired from the active practice of nursing in this state for five (5) or more consecutive years to complete a nursing reorientation program prescribed by the board before the board will issue a temporary license to practice nursing at a youth camp to such nurse.

(3) A temporary license issued under subsection (1) or (2) of this section shall authorize the physician or registered nurse to whom the license is issued to administer treatment and care within the scope of his training to campers and employees of the youth camp, but shall not authorize the physician or registered nurse to otherwise practice in the state. Such temporary license shall be valid only during the time that the physician or registered nurse is in residence at the camp, but in no event shall such license be valid for more than ninety (90) days. A new temporary license shall be obtained by a physician or registered nurse each time that he serves as a volunteer at a youth camp. The fee for each such license shall be twenty-five dollars ($25.00), which shall be payable to the board from which the license is obtained.

§ 75-74-9

(1) The State Board of Health shall have the authority and the duty to make and promulgate rules and regulations consistent with the policy and purpose of this chapter, and to amend any rule or regulation it makes. In developing such rules and regulations, the board shall consult with appropriate public and private officials and organizations and parents and camp operators. It shall be the duty of the board to advise all existing youth camps in this state of this chapter and any rules and regulations promulgated under this chapter.

(2) There is created within the State Board of Health the advisory council on youth camp safety to advise and consult on policy matters relating to youth camp safety. The council consists of the health officer or his representative and a minimum of eight (8) members appointed by the State Health Officer, including the following groups: one (1) member representative each from a private nonsectarian camp, a church-related or sponsored camp, the Girl Scouts of America, the Boy Scouts of America, the Mississippi Camping Association, camps for the handicapped and civic organization camps; and a consumer, a parent or an older youth with prior camping experience. A member is entitled to hold office for two (2) years or until his successor is appointed and qualifies. The State Health Officer or his representative shall fill vacancies for unexpired terms. Council members serve without compensation, but are entitled to be reimbursed for actual expenses incurred in the performance of their duties. The State Health Officer may appoint special advisory or technical experts and consultants as are necessary to assist the council in carrying out its functions.

(3) No rule or regulation promulgated or amended by the board under this chapter shall be effective until a public hearing is held thereon. Notice of a public hearing, including the time, date and location of the hearing and the substance of the proposed rule, regulation or amendment, shall be given by the board to each licensee of a youth camp and the general public not less than ten (10) days nor more than thirty (30) days before the hearing. Any interested person may appear at the hearing to present evidence or testimony concerning the proposed rule, regulation or amendment.

§ 75-74-11

No person or organization may operate or sponsor a youth camp in Mississippi without first holding a valid license under this chapter and without complying with the provisions of this chapter and with any rule, regulation or order of the State Board of Health.

Each application for a license to operate or sponsor a youth camp shall be accompanied by a license fee of One Hundred Fifty Dollars ($150.00), which shall be paid to the board. A license issued under this chapter may be renewed upon payment of a renewal fee of One Hundred Fifty Dollars ($150.00), which shall be paid to the board.

Any increase in the fees charged by the board under this section shall be in accordance with the provisions of Section 41-3-65.

No governmental entity or agency shall be required to pay the fee or fees set forth in this section.

§ 75-74-15

Nothing in this chapter shall authorize any state agency or any official acting under this chapter to restrict, determine or influence the curriculum, program or ministry of any youth camp.

§ 75-74-17

(1) No person may operate a youth camp in Mississippi without complying with all provisions of this chapter, and any rules, regulations and orders of the State Board of Health.

(2) Any person operating a youth camp in Mississippi without a license shall be guilty of a misdemeanor. Each day shall constitute a separate offense.

§ 75-74-19

All fees collected by the State Board of Health under this chapter and any penalties collected by the board for violations of this chapter shall be deposited in a special fund hereby created in the state treasury and shall be used for the implementation and administration of this chapter when appropriated by the legislature for such purpose.

Chapter 75 Amusements, Exhibitions and Athletic Events

§ 75-75-1

The entrance into this state for the purpose of doing business herein by any carnival, circus, fair, or any other like concern or organization, not permanently domiciled within the state, shall be deemed:

(a) An agreement by it that it will be subject to the jurisdiction of the courts in this state over all civil actions and proceedings against it by either a resident or nonresident plaintiff, for damages to person or property, including actions for death, growing or arising out of such use and operation; and

(b) An appointment by the person or persons or corporation operating such firm of the Secretary of State of Mississippi as his lawful attorney and agent upon whom may be served all process in suits pertaining to such actions and proceedings; and

(c) An agreement that any process in any suit so served shall be of the same legal force and validity as if personally served on the defendant of this state.

§ 75-75-3

Service of process under this article shall be made pursuant to the Mississippi Rules of Civil Procedure.

§ 75-75-11

Any suit under the provisions of this article shall be filed in the county in which the cause of action accrues.

§ 75-75-13

The court in which such action is pending shall grant such continuance to a nonresident defendant as may be proper to afford him reasonable opportunity to defend such action.

§ 75-75-15

It shall be the duty of the secretary of state to keep a record of all process served upon him under the provisions of this article, which record will show the day and hour of service of every such process.

The fee of two dollars and fifty cents ($2.50) paid by plaintiff to the secretary of state under the provisions of this article at the time of service of such process shall be taxed as part of plaintiff's cost if he prevails in the action or proceeding.

§ 75-75-17

Any carnival, circus, fair, minstrel, or other like concern or organization not permanently domiciled within the state, which shall enter the state for the purpose of doing business herein, shall, before beginning operations, make a full disclosure under oath to the secretary of state of the State of Mississippi relative to its financial responsibility, and the secretary of state after receiving same, may in his discretion require said concern to deposit with him acceptable evidence that such person, firm or corporation holds a liability or indemnity insurance policy in force and to continue in force during the period of operations in this state, and issued by an insurance company amenable to legal process in this state, conditioned to pay any final judgment against such person, firm or corporation for personal injury or property damages resulting from, growing or arising out of the operation of said concern or organization in this state. Provided that such insurance policy shall be approved by the secretary of state as to its sufficiency and as to the amount so required, the secretary of state in fixing the amount so required shall take into consideration the size of the concern or organization and the attendance and gate receipts thereof. Provided, however, that nothing in this section shall be so construed to include skating rinks that may be moved from one place to another.

Said concern shall likewise disclose under oath the type of ownership, whether sole proprietorship, partnership, corporation, the domicile of said concern, and if owned by more than one entity, the full name, domicile and type of entity.

Upon such concern complying with all of the above provisions the secretary of state shall issue said concern a certificate of compliance valid for twelve (12) months from date of issue.

§ 75-75-19

It shall be the duty of the sheriff of the county to require every such concern or organization doing business in his county to submit to him for inspection a valid certificate of compliance issued by the secretary of state as provided by Section 75-75-17. It shall be unlawful for any such concern or organization to do business in any county of this state until it has submitted to the sheriff of the county for inspection its valid certificate of compliance.

Any person or persons or firm or corporation violating any of the provisions of Section 75-75-17 shall be guilty of a misdemeanor and on conviction thereof shall be fined not more than five hundred dollars ($500.00), or imprisoned in the county jail not exceeding six (6) months, or by both such fine and imprisonment in the discretion of the court.

Whenever any person or persons or firm or corporation operates or attempts to operate in violation of Section 75-75-17, the attorney general of the state, the district attorney of the district, the county attorney, or any person who is a citizen of the county, may bring an action in equity in the name of the State of Mississippi, upon the relation of such attorney general, district attorney, or county attorney, or person to abate such operation and to enjoin any person or persons or firm or corporation operating the same from further operation thereof. Orders and injunctions, both temporary and permanent, may be issued and the same procedure shall be followed therein in the same manner as the law relating to nuisances.

§ 75-75-101

(1) Boxing, sparring and wrestling matches and exhibitions for percentage of gate receipts where an admission fee is charged are hereby allowed. All boxing, sparring and wrestling matches and exhibitions authorized herein shall be held under the supervision of and subject to the rules and regulations of the Mississippi Athletic Commission, and in strict compliance with the provisions of this article. No boxing or sparring match or exhibition shall exceed fifteen (15) rounds of three (3) minutes each, and the charge for each seat or ticket shall be left to the discretion of the commission.

(2) For the purposes of this chapter, “tough-man contest” and kickboxing competition shall be subject to the jurisdiction of the Mississippi Athletic Commission.

§ 75-75-103

There is hereby created the Mississippi Athletic Commission, hereinafter referred to as the commission. The commission shall consist of three (3) members, each of whom shall be a qualified voter and at least thirty (30) years of age. The membership of the commission shall consist of a chairman of the commission and two (2) associate commissioners, appointed by the Governor. The chairman, appointed for a term of six (6) years, and one (1) associate commissioner for four (4) years and one (1) associate commissioner for two (2) years, and hereafter their respective successors shall be appointed for a term of six (6) years. They shall take the same oath of office and may be impeached and shall be commissioned as other state officers. Any commissioner who does not attend two (2) consecutive meetings of the commission shall be subject to removal by the Governor. The chairman shall notify the Governor in writing when any member has failed to attend two (2) consecutive meetings.

§ 75-75-105

The commission shall have a seal and shall have and is hereby vested with the sole direction, management, control and jurisdiction over all boxing, sparring and wrestling matches or exhibitions to be conducted, held or given within the State of Mississippi. The commission has full power and authority and it shall be its duty: (a) to make and publish rules and regulations governing the conduct of boxing, sparring and wrestling matches and exhibitions, the time and place thereof, and the prices charged for admission thereto; (b) to accept application for and, in its discretion, order a license or permit issued to promoters and participants of these events, and to revoke the license or permit; (c) to collect through the recorder of permits and licenses a fee of six percent (6%) of the gross receipts of every boxing, sparring or wrestling match or exhibition, and a reasonable fee not to exceed One Hundred Dollars ($100.00) for each annual license or permit issued to a boxer, wrestler, referee, judge, matchmaker, promoter, manager, trainer, second, director, or timekeeper; and (d) to revoke any license or permit when, in its judgment, the public welfare requires it. The commission is prohibited from issuing regulations which may be construed as granting a franchised or exclusive territory, and from the issuing of any type of monopolistic license or permit.

§ 75-75-107

Each member of the commission shall receive per diem in accordance with Section 25-3-69 and shall be paid traveling expenses while engaged in the performance of his official duties in accordance with Section 25-3-41, including traveling expenses for attending the National Boxing Association Convention. The commissioners may pay all such national affiliation dues as may be existing against the Athletic Commission, as in their discretion, may be necessary, out of the funds collected by the recorder of permits and licenses, and on order and approval of the commission. The chairman of the commission shall be ex officio the recorder of permits and licenses and for his service as such shall receive an annual salary equal to Thirty-two Thousand Five Hundred Dollars ($32,500.00). The chairman shall not be deemed a state employee for purposes of qualifying for state-funded retirement, group insurance, or other fringe benefits.

§ 75-75-109

The commission may appoint and remove at pleasure, such number of inspectors of athletics as in its judgment is necessary to aid in the proper discharge of its duties. Compensation may be paid an inspector as the commission may determine, but he shall be paid, when ordered to attend a match or exhibition, his actual traveling expenses in the same way and manner as expenses of members of the commission are paid. It shall be the duty of the commission, either by one of its members or by a duly appointed inspector, to attend every boxing, wrestling or sparring match or exhibition held in the State of Mississippi. The commission may appoint and remove at pleasure, a secretary to the commission, who shall perform such duties as the commission may prescribe, and who shall keep a full, complete and up-to-date record of all proceedings of said commission, including all licenses and all sums collected, and make a report thereof to the State Auditor annually, on or before the fifteenth day of January in each year.

§ 75-75-111

The commission shall maintain a general office for the transaction of its business at a place to be designated by the chairman. It may fix the salary of its secretary, subject to the approval of the State Personnel Board, which salary shall be paid by the recorder of permits and licenses on order and approval of the commission, out of any funds on hand, for which the recorder of permits and licenses is accountable to the State of Mississippi.

§ 75-75-113

The recorder of permits and licenses shall give a bond in the sum of Five Thousand Dollars ($5,000.00) with a surety company authorized to do business in Mississippi, payable to the State of Mississippi, conditioned that he will faithfully account for and pay over to the State Treasurer all moneys collected by him, less any disbursements or deductions authorized by law, and it shall be his duty to make a report of and pay into the State Treasury on or before the fifteenth day of January and July, in each year, all moneys received after first paying all salaries, office rent, accounts and other expenditures authorized by law and approved by the commission.

§ 75-75-114

All funds received by the Mississippi Athletic Commission, as established by Sections 75-75-103 et seq., from any source authorized by statute shall be paid to the State Treasurer, who shall issue receipts therefor and who shall deposit such funds in the State Treasury in a special fund to the credit of said commission. All such funds shall be expended only pursuant to appropriation approved by the Legislature and as provided by law.

§ 75-75-115

All contracts relating to the holding or staging of any boxing, wrestling, or sparring match or exhibition in Mississippi, or relating to any participation therein, shall contain a provision to the effect that all rules passed or adopted by the commission, either before or after the execution of the contract, shall be considered as a part of the contract, the same as if said rules were fully set out in the body of the instrument.

§ 75-75-117

Any person who shall voluntarily engage in a pugilistic encounter, wrestling match or exhibition, for money or any other things of value, or for which an admission fee is charged, either directly or indirectly, or any person who shall be concerned directly or indirectly in the promotion of any boxing, wrestling, or sparring match or exhibition, or any person who acts or attempts to act as referee, judge, matchmaker, promoter, manager, trainer, director, second or timekeeper in connection with any boxing, wrestling or sparring match or exhibition in this state without first having obtained a license or permit from the commission, on conviction, shall be punished by imprisonment in the penitentiary not less than one (1) year; or by fine not less than One Hundred Dollars ($100.00) nor more than Two Thousand Dollars ($2,000.00); or by imprisonment in the county jail not less than thirty (30) days nor more than six (6) months; or by both such fine and imprisonment.

§ 75-75-119

Any person who shall willfully violate any rule or regulation passed or adopted by the Mississippi Athletic Commission shall be fined by the commission as follows:

(a) For boxer or wrestler, up to Five Hundred Dollars ($500.00) or up to twenty-five percent (25%) of contracted purse;

(b) For trainer, second or manager, up to Five Hundred Dollars ($500.00) or up to ten percent (10%) of contracted amount of the represented fighter;

(c) For promoter or director, up to Five Hundred Dollars ($500.00) or up to twenty-five percent (25%) of contracted amount of the highest two (2) combined bout purses during an event; and

(d) Referee, judge, timekeeper or matchmaker, up to Five Hundred Dollars ($500.00) or twenty-five percent (25%) of the contracted pay for that event.

§ 75-75-121

All licenses and permits issued by the commission shall be on forms prescribed by the commission, which shall be furnished to the commission on its order at the expense of the state. All stamps, books and other incidentals used by the commission shall be paid for on order of the commission, by the recorder of permits and licenses, out of funds on hand, for which he is accountable to the State Treasurer.

§ 75-75-123

Boxing, sparring and wrestling matches in colleges, universities or high schools shall be exempted from the jurisdiction of the commission herein created and shall be permitted and supervised by the governing body of such high school, college or university.

Chapter 76 Mississippi Gaming Control Act

§ 75-76-1

This chapter shall be known and may be cited as the “Mississippi Gaming Control Act.”

§ 75-76-3

(1) The provisions of this chapter shall not be construed to legalize any form of gaming which is prohibited under the Mississippi Constitution or the laws of this state. All legal gaming which is conducted in this state and which is otherwise authorized by law shall be regulated and licensed pursuant to the provisions of this chapter, unless the Legislature specifically provides otherwise. Nothing in this chapter shall be construed as encouraging the legalization of gambling in this state.

(2) The Legislature hereby finds and declares that lotteries and gaming both consist of the material element of chance. The Legislature is prohibited from legislating upon lotteries and permitted by virtue of its inherent powers to legislate upon gaming as the occasion arises. The Legislature derives its power to legislate upon gaming or gambling devices from its inherent authority over the morals and policy of the people and such power shall not be considered to conflict with the constitutional prohibition of lotteries.

(3) The Legislature hereby finds, and declares it to be the public policy of this state, that:

(a) Regulation of licensed gaming is important in order that licensed gaming is conducted honestly and competitively, that the rights of the creditors of licensees are protected and that gaming is free from criminal and corruptive elements.

(b) Public confidence and trust can only be maintained by strict regulation of all persons, locations, practices, associations and activities related to the operation of licensed gaming establishments and the manufacture or distribution of gambling devices and equipment.

(c) All establishments where gaming is conducted and where gambling devices are operated, and manufacturers, sellers and distributors of certain gambling devices and equipment must therefore be licensed, controlled and assisted to protect the public health, safety, morals, good order and general welfare of the inhabitants of the state.

(4) It is the intent of the Legislature that gaming licensees, to the extent practicable, employ residents of Mississippi as gaming employees and other employees in the operation of their gaming establishments located in this state.

(5) No applicant for a license or other affirmative commission approval has any right to a license or the granting of the approval sought. Any license issued or other commission approval granted pursuant to the provisions of this chapter is a revocable privilege, and no holder acquires any vested right therein or thereunder.

(6) The Legislature recognizes that Section 98 of the Mississippi Constitution of 1890 prohibits the conducting of any lottery in this state and that, while not defining the term “lottery,” Section 98 clearly contemplates, as indicated by specific language contained therein, that a lottery involves the sale of tickets and a drawing in order to determine the winner. The Legislature also recognizes that Section 98 of the Mississippi Constitution of 1890 directs the Legislature to provide by law for the enforcement of its provisions. Therefore, in carrying out its duties under the Constitution and effectuating the intent of Section 98, the Legislature hereby finds that a lottery, as prohibited by the Constitution, does not include all forms of gambling but means any activity in which:

(a) The player or players pay or agree to pay something of value for chances, represented and differentiated by tickets, slips of paper or other physical and tangible documentation upon which appear numbers, symbols, characters or other distinctive marks used to identify and designate the winner or winners; and

(b) The winning chance or chances are to be determined by a drawing or similar selection method based predominately upon the element of chance or random selection rather than upon the skill or judgment of the player or players; and

(c) The holder or holders of the winning chance or chances are to receive a prize or something of valuable consideration; and

(d) The activity is conducted and participated in without regard to geographical location, with the player or players not being required to be present upon any particular premises or at any particular location in order to participate or to win.

§ 75-76-5

As used in this chapter, unless the context requires otherwise:

(a) “Applicant” means any person who has applied for or is about to apply for a state gaming license, registration or finding of suitability under the provisions of this chapter or approval of any act or transaction for which approval is required or permitted under the provisions of this chapter.

(b) “Application” means a request for the issuance of a state gaming license, registration or finding of suitability under the provisions of this chapter or for approval of any act or transaction for which approval is required or permitted under the provisions of this chapter but does not include any supplemental forms or information that may be required with the application.

(c) “Associated equipment” means any equipment or mechanical, electromechanical or electronic contrivance, component or machine used remotely or directly in connection with gaming or with any game, race book or sports pool that would not otherwise be classified as a gaming device, including dice, playing cards, links which connect to progressive slot machines, equipment which affects the proper reporting of gross revenue, computerized systems of betting at a race book or sports pool, computerized systems for monitoring slot machines, and devices for weighing or counting money.

(d) “Chairman” means the Chairman of the Mississippi Gaming Commission except when used in the term “Chairman of the State Tax Commission.” “Chairman of the State Tax Commission” or “commissioner” means the Commissioner of Revenue of the Department of Revenue.

(e) “Commission” or “Mississippi Gaming Commission” means the Mississippi Gaming Commission.

(f) “Commission member” means a member of the Mississippi Gaming Commission.

(g) “Credit instrument” means a writing which evidences a gaming debt owed to a person who holds a license at the time the debt is created, and includes any writing taken in consolidation, redemption or payment of a prior credit instrument.

(h) “Enforcement division” means a particular division supervised by the executive director that provides enforcement functions.

(i) “Establishment” means any premises wherein or whereon any gaming is done.

(j) “Executive director” means the Executive Director of the Mississippi Gaming Commission.

(k) Except as otherwise provided by law, “game,” or “gambling game” means any banking or percentage game played with cards, with dice or with any mechanical, electromechanical or electronic device or machine for money, property, checks, credit or any representative of value, including, without limiting, the generality of the foregoing, faro, monte, roulette, keno, fan-tan, twenty-one, blackjack, seven-and-a-half, big injun, klondike, craps, poker, chuck-a-luck (dai shu), wheel of fortune, chemin de fer, baccarat, pai gow, beat the banker, panguingui, slot machine, or any other game or device approved by the commission. However, “game” or “gambling game” shall not include bingo games or raffles which are held pursuant to the provisions of Section 97-33-51, or the illegal gambling activities described in Section 97-33-8.

The commission shall not be required to recognize any game hereunder with respect to which the commission determines it does not have sufficient experience or expertise.

(l) “Gaming” or “gambling” means to deal, operate, carry on, conduct, maintain or expose for play any game as defined in this chapter.

(m) “Gaming device” means any mechanical, electromechanical or electronic contrivance, component or machine used in connection with gaming or any game which affects the result of a wager by determining win or loss. The term includes a system for processing information which can alter the normal criteria of random selection, which affects the operation of any game, or which determines the outcome of a game. The term does not include a system or device which affects a game solely by stopping its operation so that the outcome remains undetermined, and does not include any antique coin machine as defined in Section 27-27-12.

(n) “Gaming employee” means any person connected directly with the operation of a gaming establishment licensed to conduct any game, including:

(i) Boxmen;

(ii) Cashiers;

(iii) Change personnel;

(iv) Counting room personnel;

(v) Dealers;

(vi) Floormen;

(vii) Hosts or other persons empowered to extend credit or complimentary services;

(viii) Keno runners;

(ix) Keno writers;

(x) Machine mechanics;

(xi) Security personnel;

(xii) Shift or pit bosses;

(xiii) Shills;

(xiv) Supervisors or managers; and

(xv) Ticket writers.

The term “gaming employee” also includes employees of manufacturers or distributors of gaming equipment within this state whose duties are directly involved with the manufacture, repair or distribution of gaming equipment.

“Gaming employee” does not include bartenders, cocktail waitresses or other persons engaged in preparing or serving food or beverages unless acting in some other capacity.

(o) “Gaming license” means any license issued by the state which authorizes the person named therein to engage in gaming.

(p) “Gross revenue” means the total of all of the following, less the total of all cash paid out as losses to patrons and those amounts paid to purchase annuities to fund losses paid to patrons over several years by independent financial institutions:

(i) Cash received as winnings;

(ii) Cash received in payment for credit extended by a licensee to a patron for purposes of gaming; and

(iii) Compensation received for conducting any game in which the licensee is not party to a wager.

For the purposes of this definition, cash or the value of noncash prizes awarded to patrons in a contest or tournament are not losses.

The term does not include:

(i) Counterfeit money or tokens;

(ii) Coins of other countries which are received in gaming devices;

(iii) Cash taken in fraudulent acts perpetrated against a licensee for which the licensee is not reimbursed; or

(iv) Cash received as entry fees for contests or tournaments in which the patrons compete for prizes.

(q) “Hearing examiner” means a member of the Mississippi Gaming Commission or other person authorized by the commission to conduct hearings.

(r) “Investigation division” means a particular division supervised by the executive director that provides investigative functions.

(s) “License” means a gaming license or a manufacturer's, seller's or distributor's license.

(t) “Licensee” means any person to whom a valid license has been issued.

(u) “License fees” means monies required by law to be paid to obtain or continue a gaming license or a manufacturer's, seller's or distributor's license.

(v) “Licensed gaming establishment” means any premises licensed pursuant to the provisions of this chapter wherein or whereon gaming is done.

(w) “Manufacturer's,” “seller's” or “distributor's” license means a license issued pursuant to Section 75-76-79.

(x) “Navigable waters” shall have the meaning ascribed to such term under Section 27-109-1.

(y) “Operation” means the conduct of gaming.

(z) “Party” means the Mississippi Gaming Commission and any licensee or other person appearing of record in any proceeding before the commission; or the Mississippi Gaming Commission and any licensee or other person appearing of record in any proceeding for judicial review of any action, decision or order of the commission.

(aa) “Person” includes any association, corporation, firm, partnership, trust or other form of business association as well as a natural person.

(bb) “Premises” means land, together with all buildings, improvements and personal property located thereon, and includes all parts of any vessel or cruise vessel.

(cc) “Race book” means the business of accepting wagers upon the outcome of any event held at a track which uses the pari-mutuel system of wagering.

(dd) “Regulation” means a rule, standard, directive or statement of general applicability which effectuates law or policy or which describes the procedure or requirements for practicing before the commission. The term includes a proposed regulation and the amendment or repeal of a prior regulation but does not include:

(i) A statement concerning only the internal management of the commission and not affecting the rights or procedures available to any licensee or other person;

(ii) A declaratory ruling;

(iii) An interagency memorandum;

(iv) The commission's decision in a contested case or relating to an application for a license; or

(v) Any notice concerning the fees to be charged which are necessary for the administration of this chapter.

(ee) “Respondent” means any licensee or other person against whom a complaint has been filed with the commission.

(ff) “Slot machine” means any mechanical, electrical or other device, contrivance or machine which, upon insertion of a coin, token or similar object, or upon payment of any consideration, is available to play or operate, the play or operation of which, whether by reason of the skill of the operator or application of the element of chance, or both, may deliver or entitle the person playing or operating the machine to receive cash, premiums, merchandise, tokens or anything of value, whether the payoff is made automatically from the machine or in any other manner. The term does not include any antique coin machine as defined in Section 27-27-12.

(gg) “Sports pool” means the business of accepting wagers on collegiate or professional sporting events or athletic events, by any system or method of wagering other than the system known as the “pari-mutuel method of wagering.”

(hh) “State Tax Commission” or “department” means the Department of Revenue of the State of Mississippi.

(ii) “Temporary work permit” means a work permit which is valid only for a period not to exceed ninety (90) days from its date of issue and which is not renewable.

(jj) “Vessel” or “cruise vessel” shall have the meanings ascribed to such terms under Section 27-109-1.

(kk) “Work permit” means any card, certificate or permit issued by the commission, whether denominated as a work permit, registration card or otherwise, authorizing the employment of the holder as a gaming employee. A document issued by any governmental authority for any employment other than gaming is not a valid work permit for the purposes of this chapter.

(ll) “School or training institution” means any school or training institution which is licensed by the commission to teach or train gaming employees pursuant to Section 75-76-34.

(mm) “Cheat” means to alter the selection of criteria that determine:

(i) The rules of a game; or

(ii) The amount or frequency of payment in a game.

(nn) “Promotional activity” means an activity or event conducted or held for the purpose of promoting or marketing the individual licensed gaming establishment that is engaging in the promotional activity. The term includes, but is not limited to, a game of any kind other than as defined in paragraph (k) of this section, a tournament, a contest, a drawing, or a promotion of any kind.

§ 75-76-7

(1) Repealed.

(2) From and after October 1, 1993, the Mississippi Gaming Commission, consisting of three (3) members, is hereby created.

(3)(a) Each member of the commission shall be:

(i) A citizen of the United States; and

(ii) A resident of the State of Mississippi.

(b) One (1) member of the commission shall have been a resident for not less than five (5) years of a county in which gaming is authorized at the time of appointment.

(4) No member of the Legislature, no person holding any elective office, nor any officer or official of any political party shall be eligible to appointment to the commission.

(5) It is the intention of the Legislature that the commission shall be composed of the most qualified persons available, preferably no two (2) of whom shall be of the same profession or major field of industry; but no person actively engaged or having a direct pecuniary interest in gaming activities shall be a member of the commission.

§ 75-76-9

(1) This section shall take effect from and after October 1, 1993.

(2) Initial appointments to the commission made pursuant to this chapter shall be for terms as follows:

(a) One (1) member for two (2) years;

(b) One (1) member for three (3) years; and

(c) One (1) member for four (4) years.

(3) The term of each of the members first appointed pursuant to this chapter shall be designated by the Governor.

(4) After the initial appointments, all members shall be appointed for terms of four (4) years from the expiration date of the previous term; provided, however, that no member shall serve more than two (2) terms of four (4) years each.

(5) Appointments to the commission and designation of the chairman shall be made by the Governor with the advice and consent of the Senate. Prior to the nomination, the PEER Committee shall conduct an inquiry into the nominee's background, with particular regard to the nominee's financial stability, integrity and responsibility and his reputation for good character, honesty and integrity.

(6) The member designated by the Governor to serve as chairman shall serve in such capacity throughout such member's entire term and until his successor shall have been duly appointed and qualified. No such member, however, shall serve in such capacity for more than ten (10) years.

(7) Appointments to fill vacancies on the commission shall be for the unexpired term of the member to be replaced.

(8) Members of the commission shall not have any direct or indirect interest in an undertaking that puts their personal interest in conflict with that of the commission and shall be governed by the provisions of Section 109 of the Mississippi Constitution and Section 25-4-105. In addition, members of the commission shall not receive anything of value from, or on behalf of, any person holding or applying for a gaming license under this chapter.

(9) Each member of the commission shall serve for the duration of his term and until his successor shall be duly appointed and qualified; provided, however, that in the event that a successor is not duly appointed and qualified within one hundred twenty (120) days after the expiration of the member's term, a vacancy shall be deemed to exist.

(10) Each member of the commission is entitled to per diem as provided by Section 25-3-69.

§ 75-76-11

(1) This section shall take effect from and after October 1, 1993.

(2) The executive director and his employees shall furnish to the commission such administrative and clerical services and such furnishings, equipment, supplies, stationery, books and all other things that the commission may deem necessary or desirable in carrying out its functions.

(3) All costs of administration incurred by the executive director on behalf of the commission shall be paid out on claims from the State Treasury.

§ 75-76-13

(1) This section shall take effect from and after October 1, 1993.

(2) Regular and special meetings of the commission may be held, at the discretion of the commission, at such times and places as it may deem convenient, but at least one (1) regular meeting shall be held each month on or after the fifteenth day of the month. All meetings shall be open unless they may be closed pursuant to Section 25-41-7.

(3) A majority of the members is a quorum of the commission.

§ 75-76-15

(1) [Repealed]

(2) From and after October 1, 1993, the position of Executive Director of the Mississippi Gaming Commission is hereby created.

(3) The Gaming Commission shall appoint the executive director, with the advice and consent of the Senate, and the executive director shall serve at the will and pleasure of the commission. The director appointed by the State Tax Commission pursuant to subsection (1) of this section who is serving on September 30, 1993, shall serve as the Executive Director of the Mississippi Gaming Commission until the executive director appointed by the Gaming Commission pursuant to this section is confirmed by the Senate.

(4) No member of the Legislature, no person holding any elective office, nor any officer or official of any political party is eligible for the appointment of executive director.

(5) The executive director must have at least five (5) years of responsible administrative experience in public or business administration or possess broad management skills.

(6) The executive director shall devote his entire time and attention to his duties under this chapter and the business of the commission and shall not pursue any other business or occupation or hold any other office of profit.

(7) The executive director shall not be pecuniarily interested in any business or organization holding a gaming license under this chapter or doing business with any person or organization licensed under this chapter and shall be governed by the provisions of Section 25-4-105. In addition, the executive director shall not receive anything of value from, or on behalf of, any person holding or applying for a gaming license under this chapter.

(8) The executive director is entitled to an annual salary in the amount specified by the commission, subject to the approval of the State Personnel Board, within the limits of legislative appropriations or authorizations.

§ 75-76-17

(1) From and after October 1, 1993, there are hereby created, for supervision by the executive director, two (2) divisions which are entitled the Enforcement Division and the Investigation Division. The executive director shall be authorized to create such other divisions as he deems necessary to implement the provisions of this chapter excluding an audit division.

(2) The executive director shall employ division directors that possess training and experience in the fields of investigation, law enforcement, law or gaming.

§ 75-76-19

(1) The executive director shall maintain a file of all applications for licenses under this chapter, together with a record of all action taken with respect to those applications. The file and record are open to public inspection.

(2) The commission and the executive director may maintain such other files and records as they deem desirable.

(3) All information and data:

(a) Required by the commission or the executive director to be furnished to them under this chapter or which may be otherwise obtained relative to the finances, earnings or revenue of any applicant or licensee;

(b) Pertaining to an applicant's criminal record, antecedents and background which have been furnished to or obtained by the commission or the executive director from any source;

(c) Provided to the members of the commission or the executive director or his employees by a governmental agency or an informer or on the assurance that the information will be held in confidence and treated as confidential; and

(d) Obtained by the executive director or the commission from a manufacturer, distributor or operator relating to the manufacturing of gaming devices; are confidential and may be revealed in whole or in part only in the course of the necessary administration of this chapter or upon the lawful order of a court of competent jurisdiction, except that the executive director or the commission may reveal such information and data to an authorized agent of any agency of the United States Government, any state, or any political subdivision of this state pursuant to regulations adopted by the commission. Notice of the content of any information or data furnished or released pursuant to this subsection (3) may be given to any applicant or licensee in a manner prescribed by regulations adopted by the commission.

(4) Before the beginning of each legislative session, the commission shall submit to the Legislature a report on the gross revenue, net revenue and average depreciation of all licensees, categorized by class of licensee and geographical area, and the assessed valuation of the property of all licensees, by category, as listed on the ad valorem tax assessment rolls.

§ 75-76-21

(1) The executive director in pursuit of the attainment of the objectives and the purposes of this chapter may:

(a) Sue and be sued on behalf of the commission;

(b) Acquire real property in accordance with statutory procedure and make improvements thereon on behalf of the commission;

(c) Make, execute and effectuate any and all agreements or contracts, including contracts for the purchase of goods and services as are necessary;

(d) Employ the services of such persons as he considers necessary for the purposes of consultation or investigation and fix the salaries of or contract for the services of such legal, professional, technical and operational personnel and consultants, subject to applicable provisions of the State Personnel Board. For the purpose of implementing the provisions of this chapter, additional legal assistance may be retained only with the approval of the Attorney General;

(e) Acquire such furnishings, equipment, supplies, stationery, books, and all other things as he may deem necessary or desirable in carrying out his functions; and

(f) Perform such other duties which he may deem necessary to effectuate the purposes of this chapter.

(2) Except as otherwise provided in this chapter, all costs of administration incurred by the executive director and his employees shall be paid out on claims from the State Treasury in the same manner as other claims against the state are paid.

(3) Repealed.

§ 75-76-23

The executive director shall direct and supervise all administrative and technical activities of the commission in accordance with the provisions of this chapter and with the administrative procedures of and regulations adopted by the commission. It shall be the duty of the executive director to:

(a) Establish, and from time to time alter, such plan of organization as he may deem expedient;

(b) By agreement secure information and services as he deems necessary from any department, agency or unit of state government. Such agencies, departments or units of state government shall cooperate with the executive director and provide such information and services as may be required by the executive director to carry out his responsibilities;

(c) Make available for inspection by any member of the commission, upon request, all books, records, files and other information and documents of his office, and advise the commission and recommend such administrative regulations and other matters he deems necessary and advisable to improve the administration of this chapter; and

(d) Attend meetings of the commission or appoint a designee to attend on his behalf.

§ 75-76-25

Except as otherwise authorized in Section 7-5-39, the Attorney General and his assistants shall represent the commission and the executive director in any proceeding to which the commission or the executive director is a party under this chapter and shall also advise the commission and the executive director in all other matters, including representing the commission when the commission sits in a quasi-judicial capacity.

§ 75-76-27

(1) The provisions of this chapter with respect to state gaming licenses and manufacturer's, seller's and distributor's licenses shall be administered by the executive director for the protection of the public and in the public interest in accordance with the policy of this state.

(2) The executive director and his employees may:

(a) Inspect and examine all premises wherein gaming is conducted or gambling devices or equipment are manufactured, sold or distributed;

(b) Inspect all equipment and supplies in, upon or about such premises;

(c) Summarily seize and remove from such premises and impound any equipment or supplies for the purpose of examination and inspection;

(d) Demand access to and inspect, examine, photocopy and audit all papers, books and records of applicants and licensees, on their premises or elsewhere as practicable, in the presence of the licensee or his agent, respecting the gross income produced by any gaming business (and may require verification of income) and respecting all other matters affecting the enforcement of the policy or any of the provisions of this chapter.

(3) For the purpose of conducting audits after the cessation of gaming by a licensee, the former licensee shall furnish, upon demand of the executive director or his employee, books, papers and records as necessary to conduct the audits. The former licensee shall maintain all books, papers and records necessary for audits for a period of three (3) years after the date of the surrender or revocation of his gaming license. If the former licensee seeks judicial review of a deficiency determination or files a petition for a redetermination, he must maintain all books, papers and records until a final order is entered on the determination.

(4) The executive director may investigate, for the purpose of prosecution, any suspected criminal violation of the provisions of this chapter. For the purpose of the administration and enforcement of this chapter, the executive director and enforcement employees have the powers of a peace officer of this state.

(5) The commission or executive director has full power and authority to issue subpoenas and compel the attendance of witnesses at any place within this state, to administer oaths, and to require testimony under oath. Any process or notice may be served in the manner provided for service of process and notices in civil actions. The commission or the executive director may pay such transportation and other expenses of witnesses as they deem reasonable and proper. Any person making false oath in any matter before the commission is guilty of perjury. The commission may appoint hearing examiners who may administer oaths and receive evidence and testimony under oath.

§ 75-76-28

The commission has full power and authority to exercise any of the powers, duties and responsibilities set forth in Sections 97-33-51 through 97-33-81, 97-33-101 through 97-33-109, 97-33-201 and 97-33-203.

§ 75-76-29

(1) The executive director and his employees shall investigate the qualifications of each applicant under this chapter before any license is issued or before any registration, finding of suitability or approval of acts or transactions for which commission approval is required is granted, and the executive director shall continue to observe the conduct of all licensees and other persons having a material involvement directly or indirectly with a licensed gaming operation or registered holding company to ensure that licenses are not issued or held by, nor is there any material involvement directly or indirectly with a licensed gaming operation or registered holding company by, unqualified, disqualified or unsuitable persons or persons whose operations are conducted in an unsuitable manner or in unsuitable or prohibited places or locations.

(2) The executive director has the authority to recommend to the commission the denial of any application, the limitation, conditioning or restriction of any license, registration, finding of suitability or approval or the imposition of a fine upon any person licensed, registered or found suitable or approved for any cause deemed reasonable by the executive director.

(3) The commission has full and absolute power and authority to deny any application or limit, condition, restrict, revoke or suspend any license, registration, finding of suitability or approval, or fine any person licensed, registered, found suitable or approved, for any cause deemed reasonable by the commission.

(4) Any license issued or other commission approval granted pursuant to the provisions of this chapter is a revocable privilege, and no holder acquires any vested right therein or thereunder. The initial decision of the commission to deny, limit, condition or restrict a license shall be final.

§ 75-76-31

The commission and the executive director may refuse to reveal, in any court or administrative proceeding except a proceeding brought by the State of Mississippi, the identity of an informant or the information obtained from the informant, or both the identity and the information.

§ 75-76-33

(1) The commission shall, from time to time, adopt, amend or repeal such regulations, consistent with the policy, objects and purposes of this chapter, as it may deem necessary or desirable in the public interest in carrying out the policy and provisions of this chapter. The commission shall comply with the Mississippi Administrative Procedures Law when adopting, amending or repealing any regulations authorized under this section or under any other provision of this chapter.

(2) These regulations shall, without limiting the general powers herein conferred, include the following:

(a) Prescribing the method and form of application which any applicant for a license or for a manufacturer's, seller's or distributor's license must follow and complete before consideration of his application by the executive director or the commission.

(b) Prescribing the information to be furnished by any applicant or licensee concerning his antecedents, habits, character, associates, criminal record, business activities and financial affairs, past or present.

(c) Prescribing the information to be furnished by a licensee relating to his employees.

(d) Requiring fingerprinting of an applicant or licensee, and gaming employees of a licensee, or other methods of identification and the forwarding of all fingerprints taken pursuant to regulation of the Federal Bureau of Investigation.

(e) Prescribing the manner and procedure of all hearings conducted by the commission or any hearing examiner of the commission, including special rules of evidence applicable thereto and notices thereof.

(f) Requiring any applicant to pay all or any part of the fees and costs of investigation of such applicant as may be determined by the commission under paragraph (g) of this subsection (2).

(g) Prescribing the amounts of investigative fees only as authorized by regulations of the commission under paragraph (f) of this subsection, and collecting those fees. The commission shall adopt regulations setting the amounts of those fees at levels that will provide the commission with sufficient revenue, when combined with any other monies as may be deposited into the Mississippi Gaming Commission Fund created in Section 75-76-325, to carry out the provisions of this chapter without any state general funds. In calculating the amount of such fees, the commission shall:

(i) Attempt to set the fees at levels that will create a balance in the Mississippi Gaming Commission Fund that does not exceed, at the end of any state fiscal year, two percent (2%) of the projected amount of funds that will provide the commission with such sufficient revenue; and

(ii) Demonstrate the reasonableness of the relationship between a fee and the actual costs of the investigative activity for which the fee is being prescribed.

(h) Prescribing the manner and method of collection and payment of fees and issuance of licenses.

(i) Prescribing under what conditions a licensee may be deemed subject to revocation or suspension of his license.

(j) Requiring any applicant or licensee to waive any privilege with respect to any testimony at any hearing or meeting of the commission, except any privilege afforded by the Constitution of the United States or this state.

(k) Defining and limiting the area, games and devices permitted, and the method of operation of such games and devices, for the purposes of this chapter.

(l) Prescribing under what conditions the nonpayment of a gambling debt by a licensee shall be deemed grounds for revocation or suspension of his license.

(m) Governing the use and approval of gambling devices and equipment.

(n) Prescribing the qualifications of, and the conditions under which, attorneys, accountants and others are permitted to practice before the commission.

(o) Restricting access to confidential information obtained under this chapter and ensuring that the confidentiality of such information is maintained and protected.

(p) Prescribing the manner and procedure by which the executive director on behalf of the commission shall notify a county or a municipality wherein an applicant for a license desires to locate.

(q) Prescribing the manner and procedure for an objection to be filed with the commission and the executive director by a county or municipality wherein an applicant for a license desires to locate.

(3) Notwithstanding any other provision of law, each licensee shall be required to comply with the regulation that no wager may be placed by, or on behalf of, any individual or entity or group, not present on a licensed vessel or cruise vessel.

(4) From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.

(5) From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

§ 75-76-34

(1) Except as otherwise provided in this section, the Mississippi Gaming Commission is authorized to regulate all schools or training institutions that teach or train gaming employees. No such school shall be located on publicly owned property, other than property under the jurisdiction of the Board of Trustees of State Institutions of Higher Learning or a public community college. Except as authorized under this section, no public school shall teach or train persons to be gaming employees. The gaming educational activities of schools or training institutions regulated by the commission and of state institutions of higher learning and public community colleges shall be deemed to be legal under the laws of the State of Mississippi. Any person desiring to operate a school or training institution other than a state institution of higher learning or public community college must file a license application with the executive director to be licensed by the commission.

(2) The commission may adopt regulations it deems necessary to regulate schools and training institutions other than state institutions of higher learning and public community colleges. These regulations shall, without limiting the general powers of the commission, include the following:

(a) Prescribing the method and form of application which any applicant for a school or training institution must follow and complete before consideration of his application by the executive director or commission.

(b) Prescribing the information to be furnished by the applicant relating to his employees.

(c) Requiring fingerprinting of the applicant, employees and students of the school or institution or other methods of identification and the forwarding of all fingerprints taken pursuant to regulation of the Federal Bureau of Investigation.

(d) Requiring any applicant to pay all or part of the fees and costs of investigation of the applicant as may be determined by the commission.

(e) Prescribing the manner and method of collection and payment of fees and costs and issuance of licenses to schools or training institutions.

(f) Prescribing under what conditions a licensee authorized by this section may be deemed subject to revocation or suspension of his license.

(g) Defining the curriculum of the school or training institution, the games and devices permitted, the use of tokens only for instruction purposes, and the method of operation of games and devices.

(h) Requiring the applicant to submit its location of the school or training institution, which shall be at least four hundred (400) feet from any church, school, kindergarten or funeral home. However, within an area zoned commercial or business, the minimum distance shall not be less than one hundred (100) feet.

(i) Requiring that all employees and students of the school or training institution be at least twenty-one (21) years of age .

(j) Requiring all employees and students of the school or training institution to wear identification cards issued by the commission while on the premises of the school or training institution.

(k) Requiring the commission to investigate each applicant, employee and student and determine that the individual does not fall within any one (1) of the following categories:

(i) Is under indictment for, or has been convicted in any court of, a felony;

(ii) Is a fugitive from justice;

(iii) Is an unlawful user of any controlled substance, is addicted to any controlled substance or alcoholic beverage, or is an habitual drunkard;

(iv) Is a mental defective, has been committed to a mental institution, or has been voluntarily committed to a mental institution on more than one (1) occasion;

(v) Has been discharged from the Armed Forces under dishonorable conditions; or

(vi) Has been found at any time by the executive director or commission to have falsified any information.

(3) State institutions of higher learning and community colleges may offer credited courses specifically relating to gaming management, including, but not limited to, courses that provide instruction in accounting, hospitality, marketing, auditing, finance, procurement, security and regulatory requirements in fulfillment of a degree in general business management, hotel and motel management, food and beverage management, gaming management, accounting or criminal justice. State institutions of higher learning and community colleges are not subject to regulation by the commission for the purposes of this subsection. The courses authorized by this subsection may be offered only in those counties where gaming is legally being conducted and where the institution is located.

(4) State institutions of higher learning and public community colleges may offer courses related to casino hospitality services, cage and count operations, and slot machine maintenance. Slot machine maintenance training may be performed only on equipment approved by the commission for training purposes only. State institutions of higher learning and public community colleges are not subject to regulation by the commission for the purposes of this subsection. The courses authorized by this subsection may be offered only in those counties where gaming is legally being conducted and where the institution or community college is located.

§ 75-76-35

(1) The Legislature hereby declares that the exclusion or ejection of certain persons from licensed gaming establishments is necessary to effectuate the policies of this chapter and to maintain effectively the strict regulation of licensed gaming.

(2) The commission may by regulation provide for the establishment of a list of persons who are to be excluded or ejected from any licensed gaming establishment. The list may include any person whose presence in the establishment is determined by the commission or the executive director to pose a threat to the interests of this state or to licensed gaming, or both.

(3) In making that determination, the commission and the executive director may consider any:

(a) Prior conviction of a crime which is a felony in this state or under the laws of the United States, a crime involving moral turpitude, or a violation of the gaming laws of any state;

(b) Violation or conspiracy to violate the provisions of this chapter relating to:

(i) The failure to disclose an interest in a gaming establishment for which the person must obtain a license; or

(ii) Willful evasion of fees or taxes;

(c) Notorious or unsavory reputation which would adversely affect public confidence and trust that the gaming industry is free from criminal or corruptive elements; or

(d) Written order of a governmental agency which authorizes the exclusion or ejection of the person from an establishment at which gaming is conducted.

(4) Race, color, creed, national origin or ancestry, or sex shall not be grounds for placing the name of a person upon the list.

§ 75-76-37

(1) Whenever the name and description of any person is placed on a list, the commission shall serve notice of such fact to such person:

(a) By personal service; or

(b) By certified mail to the last known address of such person; or

(c) By publication daily for one (1) week in one of the principal newspapers published in the county where such person resides or Jackson, Mississippi, if notice cannot be served in person or by mail.

(2) Whenever the name and description of any person is placed on a list, the commission may notify all gaming licensees of such fact.

§ 75-76-39

(1) Within thirty (30) days after service by mail or in person or sixty (60) days after the last publication, the person named may demand a hearing before the commission and show cause why he should have his name taken from such a list. Failure to demand a hearing within the time allotted in this section precludes the person from having an administrative hearing but in no way affects his right to petition for judicial review as provided in paragraph (b) of subsection (3) of this section.

(2) Upon receipt of a demand for hearing, the commission shall set a time and place for the hearing. This hearing must not be held later than thirty (30) days after receipt of the demand for the hearing, unless the time of the hearing is changed by agreement of the commission and the person demanding the hearing.

(3) If, upon completion of the hearing, the commission determines that:

(a) The regulation does not or should not apply to the person so listed, the commission shall notify all persons licensed of its determination.

(b) Placing the person on the exclusion or ejection list was proper, the commission shall make and enter in its minutes an order to that effect. This order is subject to review by any court of competent jurisdiction.

§ 75-76-41

The commission may revoke, limit, condition, suspend or fine an individual licensee or licensed gaming establishment in accordance with the laws of this state and the regulations of the commission if that establishment or any individual licensee affiliated therewith knowingly fails to exclude or eject from the premises of the licensed establishment any person placed on the list of persons to be excluded or ejected.

§ 75-76-43

Any person who has been placed on the list of persons to be excluded or ejected from any licensed gaming establishment is guilty of a misdemeanor if he thereafter enters the premises of a licensed gaming establishment without first having obtained a determination by the commission that he should not have been placed on the list of persons to be excluded or ejected.

§ 75-76-45

The commission shall prescribe minimum procedures for adoption by each licensee to exercise effective control over the internal fiscal affairs of the licensee, which shall include but are not limited to provisions for:

(a) The safeguarding of assets and revenues, especially the recording of cash and evidences of indebtedness; and

(b) The provision of reliable records, accounts and reports of transactions, operations and events, including reports to the commission and the executive director.

§ 75-76-47

The commission shall by regulation require periodic financial reports from each licensee, and:

(a) Specify standard forms for reporting financial condition, results of operations and other relevant financial information.

(b) Formulate a uniform code of accounts and accounting classifications to assure consistency, comparability and effective disclosure of financial information.

(c) Prescribe the intervals at which such information shall be furnished. For this purpose the commission may classify licensees by size of operation.

§ 75-76-49

(1) The commission shall by regulation require audits of the financial statements of all licensees whose annual gross revenue is Three Million Dollars ($3,000,000.00) or more.

(2) The commission may require audits, compiled statements or reviews of the financial statements of licensees whose annual gross revenue is less than Three Million Dollars ($3,000,000.00).

(3) The audits, compilations and reviews provided for in subsections (1) and (2) must be made by independent accountants holding permits to practice public accounting in the State of Mississippi.

(4) Except as provided in subsection (5), for every audit required pursuant to this section:

(a) The independent accountants shall submit an audit report which must express an unqualified or qualified opinion or, if appropriate, disclaim an opinion on the statements taken as a whole in accordance with standards for the accounting profession established by rules and regulations of the Mississippi State Board of Public Accountancy, but the preparation of statement without audit does not constitute compliance.

(b) The examination and audit must disclose whether the accounts, records and control procedures maintained by the licensee are as required by the regulations promulgated by the commission.

(5) If the license of a licensee is terminated within three (3) months after the end of a period covered by an audit, the licensee may submit compiled statements in lieu of an additional audited statement for the licensee's final period of business.

(6) The licensee shall be responsible for the payment of costs or fees generated by any audit required by the commission. Failure to pay such costs and fees for such audit may result in the revocation of his license.

§ 75-76-51

The commission shall adopt regulations which prescribe the manner in which winnings, compensation from games and gaming devices, and gross revenue must be computed and reported by the licensee.

§ 75-76-53

(1) The commission may:

(a) Adopt regulations governing the sale or offering for sale of securities, by public or other offerings, or any affiliated company of a corporate licensee.

(b) Pursue any remedy or combination of remedies provided in this chapter for a violation of any regulation adopted pursuant to this section, but any such violation does not affect the validity of the securities issued.

(2) As used in this section, unless the context otherwise requires, “sale” means every contract of sale, contract to sell, disposition or transfer, whether or not for value. The term includes any exchange and any material change in the rights, preferences, privileges or restrictions of or on outstanding securities.

§ 75-76-55

(1) Except as otherwise provided in Section 75-76-34, it is unlawful for any person, either as owner, lessee or employee, whether for hire or not, either solely or in conjunction with others, without having first procured and thereafter maintaining in effect a state gaming license:

(a) To deal, operate, carry on, conduct, maintain or expose for play in the State of Mississippi any gambling game, including, without limitation, any gaming device, slot machine, race book or sports pool;

(b) To provide or maintain any information service the primary purpose of which is to aid the placing or making of wagers on events of any kind; or

(c) To receive, directly or indirectly, any compensation or reward or any percentage or share of the money or property played, for keeping, running or carrying on any gambling game, including, without limitation, any slot machine, gaming device, race book or sports pool.

(2) Except as otherwise provided in Section 75-76-34, it is unlawful for any person knowingly to permit any gambling game, including, without limitation, any slot machine, gaming device, race book or sports pool to be conducted, operated, dealt or carried on in any house or building or other premises owned by him, in whole or in part, by a person who is not licensed pursuant to this chapter or by his employee.

§ 75-76-57

(1) Except as otherwise provided in subsections (2) and (3) of this section, it is unlawful for any person to:

(a) Lend, let, lease or otherwise deliver or furnish any equipment of any gambling game, including any slot machine, for any interest, percentage or share of the money or property played, under guise of any agreement whatever, without having first procured a state gaming license.

(b) Lend, let, lease or otherwise deliver or furnish, except by a bona fide sale or capital lease, any slot machine under guise of any agreement whereby any consideration is paid or is payable for the right to possess or use that slot machine, whether the consideration is measured by a percentage of the revenue derived from the machine or by a fixed fee or otherwise, without having first procured a state gaming license.

(c) Furnish services or property, real or personal, on the basis of a contract, lease or license, pursuant to which that person receives payments based on earnings or profits or otherwise from any gambling game without having first procured a state gaming license.

(2) The provisions of subsection (1) do not apply to any person:

(a) Whose payments are a fixed sum determined in advance on a bona fide basis for the furnishing of services or property.

(b) Who furnishes services or property under a bona fide rental agreement or security agreement for gaming equipment.

(c) That is a wholly owned subsidiary of:

(i) A corporation or limited partnership holding a state gaming license; or

(ii) A holding company or intermediary company, or publicly traded corporation, that has registered pursuant to this chapter and which has fully complied with the laws applicable to it.

(d) Who is licensed as a distributor and who rents or leases any equipment of any gambling game under a bona fide agreement where the payments are a fixed sum determined in advance and not determined as a percentage of the revenue derived from the equipment or slot machine.

Receipts or rentals or charges for real property, personal property or services do not lose their character as payments of a fixed sum or as bona fide because of provisions in a contract, lease or license for adjustments in charges, rentals or fees on account of changes in taxes or assessments, escalations in the cost-of-living index, expansions or improvement of facilities, or changes in services supplied. Receipts of rentals or charges based on percentage between a corporate licensee or a licensee who is a limited partnership and the entities enumerated in paragraph (c) are permitted under this subsection.

(3) The commission may, upon issuance of its approval or a finding of suitability, exempt a holding company from the licensing requirements of subsection (1).

(4) The executive director may require any person exempted by the provisions of subsection (2) or paragraph (b) of subsection (1) to provide such information as he may require to perform his investigative duties.

(5) The executive director may require a finding of suitability, and the commission may require the licensing, of any person who:

(a) Owns any interest in the premises of a licensed establishment or owns any interest in real property used by a licensed establishment whether he leases the property directly to the licensee or through an intermediary.

(b) Repairs, rebuilds or modifies any gaming device.

(c) Manufactures or distributes chips or gaming tokens for use in Mississippi.

(6) If the commission finds a person described in subsection (5) unsuitable, a licensee shall not enter into any contract or agreement with that person without the prior approval of the executive director. Any other agreement between the licensee and that person must be terminated upon receipt of notice of the action by the commission. Any agreement between a licensee and a person described in subsection (5) shall be deemed to include a provision for its termination without liability on the part of the licensee upon a finding by the commission that the person is unsuitable. Failure expressly to include that condition in the agreement is not a defense in any action brought pursuant to this section to terminate the agreement.

§ 75-76-59

(1) Pursuant to Section 2 of that certain Act of the Congress of the United States entitled “An act to prohibit transportation of gambling devices in interstate and foreign commerce,” approved January 2, 1951, being c. 1194, 64 Stat. 1134, and also designated as 15 U.S.C. Sections 1171-1177, the State of Mississippi, acting by and through the duly elected and qualified members of its Legislature, does hereby in this section, and in accordance with and in compliance with the provisions of Section 2 of such Act of Congress, declare and proclaim that it is exempt from the provisions of Section 2 of that certain Act of the Congress of the United States entitled “An act to prohibit transportation of gambling devices in interstate and foreign commerce,” approved January 2, 1951, being c. 1194, 64 Stat. 1134.

(2) All shipments of gambling devices, including slot machines, into this state, the registering, recording and labeling of which has been duly had by the manufacturer or dealer thereof in accordance with Sections 3 and 4 of that certain Act of the Congress of the United States entitled “An act to prohibit transportation of gambling devices in interstate and foreign commerce,” approved January 2, 1951, being c. 1194, 64 Stat. 1134, and also designated as 15 U.S.C. Sections 1171-1177, shall be deemed legal shipments thereof into this state.

§ 75-76-61

(1) Except for persons associated with licensed corporations or limited partnerships and required to be licensed, each employee, agent, guardian, personal representative, lender or holder of indebtedness of a gaming licensee who, in the opinion of the commission, has the power to exercise a significant influence over the licensee's operation of a gaming establishment shall be required to apply for a license.

(2) A person required to be licensed pursuant to subsection (1) of this section shall apply for a license within thirty (30) days after the executive director requests that he do so.

(3) If an employee required to be licensed under subsection (1):

(a) Does not apply for a license within thirty (30) days after being requested to do so by the executive director, and the commission makes a finding of unsuitability for that reason, or

(b) Is denied a license, or

(c) Has a license revoked by the commission, the licensee by whom he is employed shall terminate his employment in any capacity in which he is required to be licensed and shall not permit him to exercise a significant influence over the operation of the gaming establishment upon being notified by registered or certified mail of that action.

(4) A gaming licensee or an affiliate of the licensee shall not pay to a person whose employment has been terminated pursuant to subsection (3) any remuneration for any service performed in any capacity in which he is required to be licensed, except for amounts due for services rendered before the date of receipt of notice of the action by the commission. Any contract or agreement for personal services or for the conduct of any activity at the licensed gaming establishment between a gaming licensee or an affiliate of the licensee and a person terminated pursuant to subsection (3) is subject to termination. Every such agreement shall be deemed to include a provision for its termination without liability on the part of the licensee or registered holding company upon a finding by the commission that the person is unsuitable to be associated with a gaming enterprise. Failure expressly to include that condition in the agreement is not a defense in any action brought pursuant to this section to terminate the agreement.

(5) A gaming licensee or an affiliate of the licensee shall not, without the prior approval of the executive director, enter into any contract or agreement with a person who is found unsuitable or who is denied a license or whose license is revoked by the commission or with any business enterprise under the control of that person after the date of receipt of notice of the action by the commission. Every contract or agreement for personal services to a gaming licensee or an affiliate or for the conduct of any activity at a licensed gaming establishment shall be deemed to include a provision for its termination without liability on the part of the licensee or registered holding company upon a finding by the commission that the person is unsuitable to be associated with a gaming enterprise. Failure expressly to include such a condition in the agreement is not a defense in any action brought pursuant to this section to terminate the agreement.

(6) Without prior approval of the executive director a gaming licensee or an affiliate of the licensee shall not employ any person in a capacity for which he is required to be licensed if he has been found unsuitable, or has been denied a license, or has had his license revoked by the commission, after the date of receipt of notice of the action by the commission.

(7) As used in this section, “affiliate” means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, a licensee.

§ 75-76-63

(1) The executive director may require a finding of suitability, and the commission may require the licensing, of any person who furnishes services or property to a gaming licensee under any arrangement pursuant to which the person receives payments based on earnings, profits or receipts from gaming. The executive director may require any such person to comply with the requirements of this chapter and with the regulations of the commission. If the commission determines that any such person is unsuitable, the executive director may require the arrangement to be terminated.

(2) If the premises of a licensed gaming establishment are directly or indirectly owned or under the control of the licensee therein, or of any person controlling, controlled by, or under common control with the licensee, the executive director may require the application of any person for a determination of suitability to be associated with a gaming enterprise if the person:

(a) Does business on the premises of the licensed gaming establishment;

(b) Does business with the licensed gaming establishment as a junket representative or ticket purveyor; or

(c) Provides any goods or services to the licensed gaming establishment for a compensation which the executive director finds to be grossly disproportionate to the value of the goods or services.

(3) If the commission determines that the person is unsuitable to be associated with a gaming enterprise, the association must be terminated. Any agreement which entitles a business other than gaming to be conducted on the premises, or entitles a person to conduct business with the licensed gaming establishment as set forth in paragraph (b) or (c) of subsection (2) of this section, is subject to termination upon a finding of unsuitability of the person associated therewith. Every such agreement must be deemed to include a provision for its termination without liability on the part of the licensee upon a finding by the commission that the person associated therewith is unsuitable to be associated with a gaming enterprise. Failure expressly to include that condition in the agreement is not a defense in any action brought pursuant to this section to terminate the agreement.

(4) If the application is not presented to the executive director within thirty (30) days following demand or the unsuitable association is not terminated, the executive director may pursue any remedy or combination of remedies provided in this chapter.

§ 75-76-65

(1) A person shall not receive any consideration, direct or indirect, for conducting a tournament or contest in which persons pay a fee for the privilege of participating and in which prizes are awarded to winners, on behalf of or in conjunction with a gaming licensee, unless he has registered with the executive director in the manner prescribed by the commission and supplies such information as the executive director requires or unless he is an officer or employee of the licensee.

(2) Any person who conducts a tournament or contest on behalf of or in conjunction with a gaming licensee may be required by the commission to be licensed by it as well as registered with the executive director. Any person so required must apply for a license within thirty (30) days after the decision of the commission requiring him to obtain a license.

(3) If any person required to be licensed pursuant to subsection (2) of this section:

(a) Does not apply for a license within thirty (30) days after the decision of the commission that he must be licensed, and the commission finds him unsuitable for that reason; or

(b) Is denied a license,

the gaming licensee with whom he is associated shall terminate that association upon notification from the commission by registered or certified mail of its action.

§ 75-76-67

(1) Any person who the commission determines is qualified to receive a license or be found suitable under the provisions of this chapter, having due consideration for the proper protection of the health, safety, morals, good order and general welfare of the inhabitants of the State of Mississippi and the declared policy of this state, may be issued a state gaming license or found suitable. The burden of proving his qualification to receive any license or be found suitable is on the applicant.

(2) An application to receive a license or be found suitable shall not be granted unless the commission is satisfied that the applicant is:

(a) A person of good character, honesty and integrity;

(b) A person whose prior activities, criminal record, if any, reputation, habits and associations do not pose a threat to the public interest of this state or to the effective regulation and control of gaming, or create or enhance the dangers of unsuitable, unfair or illegal practices, methods and activities in the conduct of gaming or the carrying on of the business and financial arrangements incidental thereto; and

(c) In all other respects qualified to be licensed or found suitable consistent with the declared laws of the state.

(3) No person shall be granted a license or found suitable under the provisions of this chapter who has been convicted of a felony in any court of this state, another state, or the United States; and no person shall be granted a license or found suitable hereunder who has been convicted of a crime in any court of another state or the United States which, if committed in this state, would be a felony; and no person shall be granted a license or found suitable under the provisions of this chapter who has been convicted of a misdemeanor in any court of this state or of another state, when such conviction was for gambling, sale of alcoholic beverages to minors, prostitution, or procuring or inducing individuals to engage in prostitution.

(4) A license to operate a gaming establishment shall not be granted unless the applicant has satisfied the commission that:

(a) He has adequate business probity, competence and experience, in gaming or generally; and

(b) The proposed financing of the entire operation is:

(i) Adequate for the nature of the proposed operation; and

(ii) From a suitable source. Any lender or other source of money or credit which the commission finds does not meet the standards set forth in subsection (2) may be deemed unsuitable.

(5) An application to receive a license or be found suitable constitutes a request for a determination of the applicant's general character, integrity and ability to participate or engage in, or be associated with gaming. Any written or oral statement made in the course of an official proceeding of the commission or the executive director or any witness testifying under oath which is relevant to the purpose of the proceeding is absolutely privileged and does not impose liability for defamation or constitute a ground for recovery in any civil action.

(6) The commission may, in its discretion, grant a license to a corporation which has complied with the provisions of this chapter.

(7) The commission may, in its discretion, grant a license to a limited partnership which has complied with the provisions of this chapter.

(8) No limited partnership, except one whose sole limited partner is a publicly traded corporation which has registered with the commission, or business trust or organization or other association of a quasi-corporate character is eligible to receive or hold any license under this chapter unless all persons having any direct or indirect interest therein of any nature whatsoever, whether financial, administrative, policymaking or supervisory, are individually qualified to be licensed under the provisions of this chapter.

(9) The commission may, by regulation, limit the number of persons who may be financially interested and the nature of their interest in any corporation or other organization or association licensed under this chapter, and may establish such other qualifications of licenses as the commission, in its discretion, deems to be in the public interest and consistent with the declared policy of the state.

§ 75-76-69

A person owning an interest in a gaming establishment who is licensed or has been found suitable by the commission does not have to requalify for a license or a finding of suitability whenever he makes his interest the subject matter of a revocable trust in which he retains the entire interest as the sole beneficiary. The settlor of such a trust must file a copy of the trust instrument or any amendment thereof with the executive director before the transfer of the interest becomes effective and before the effective date of any amendment.

§ 75-76-71

(1) A person who has had his application for a gaming license denied or who has been found unsuitable by the commission:

(a) Is not entitled to profit from his investment in a:

(i) Corporation other than a publicly traded corporation as that term is defined in this chapter;

(ii) Partnership;

(iii) Limited partnership; or

(iv) Joint venture which has applied for or been granted a license.

(b) Shall not retain his interest in a corporation, partnership, limited partnership or joint venture beyond that period prescribed by the commission.

(c) Shall not accept more for his interest in a corporation, partnership, limited partnership or joint venture than he paid for it or the market value on the date of the denial of the license or the finding of unsuitability.

(2) The executive director may proceed pursuant to this chapter to enforce the provisions of subsection (1).

§ 75-76-73

(1) Application for a gaming license or other commission action shall be made to the executive director on forms furnished by the executive director and in accordance with the regulations of the commission.

(2) The application for a license shall include:

(a) The name of the proposed licensee.

(b) The location of his place or places of business.

(c) The gambling games, gaming devices or slot machines to be operated.

(d) The names of all persons directly or indirectly interested in the business and the nature of such interest.

(e) Such other information and details as the commission or the executive director may require in order to discharge their duties properly.

(3) The executive director shall furnish to the applicant supplemental forms which the applicant shall complete and file with the application. Such supplemental forms shall require, but shall not be limited to, complete information and details with respect to the applicant's antecedents, habits, character, criminal record, business activities, financial affairs and business associates, covering at least a ten-year period immediately preceding the date of filing of the application.

§ 75-76-75

(1) Provided that it files a complete application pursuant to this chapter and pays all application fees by January 1, 1991, any cruise vessel lawfully operating pursuant to Chapter 109, Title 27, Mississippi Code of 1972, on July 1, 1990, may continue to operate until the commission determines whether to approve or deny the application under the provisions of this chapter or regulations adopted by the commission.

(2) Within a reasonable time after filing of an application and such supplemental information as the commission or the executive director may require, the executive director shall commence the investigation of the applicant and shall conduct such proceedings in accordance with applicable regulations as the commission may deem necessary.

(3) If a person has applied for a position which cannot be held pending licensure or approval by the commission, the executive director shall use his best efforts to make a recommendation to the commission concerning the application not longer than nine (9) months after the application and supporting data are completed and filed with the executive director. If denial of the application is recommended, the executive director shall prepare and file with the commission a written report of reasons upon which the recommendation is based.

(4) A recommendation of denial of an application is without prejudice to a new and different application if made in conformity to regulations applicable to such situations.

§ 75-76-77

(1) The executive director shall present his recommendation upon an application to the commission at the next meeting of the commission.

(2) The commission may, after considering the recommendation of the executive director, issue to the applicant named, as a natural person, and to the licensed gaming establishment, as a business entity, under the name or style therein designated, a state gaming license, or may deny the same. The commission may limit the license or place such conditions thereon as it may deem necessary in the public interest. The commission may, if it considers necessary, issue a probationary license. No state gaming license may be assigned either in whole or in part.

(3) After the issuance of the license, it shall continue in effect upon proper payment of the state license fees and any other fees, taxes and penalties, as required by law and the regulations of the commission, subject to the power of the commission to revoke, suspend, condition or limit licenses.

(4) The commission may further limit or place such conditions as it may deem necessary in the public interest upon any registration, finding of suitability or approval for which application has been made.

(5) After the executive director has made a recommendation for denial of an application, the commission, after considering the recommendation of the executive director, may:

(a) Deny the application;

(b) Remand the matter to the executive director for such further investigation and reconsideration as the commission may order; or

(c) By unanimous vote of the members present, grant the application for a license, registration, finding of suitability or approval.

(6) If the commission is not satisfied that an applicant recommended by the executive director is qualified to be licensed under this chapter, the commission may cause to be made such investigation into and conduct such hearings concerning the qualifications of the applicant in accordance with its regulations as it may deem necessary.

(7) If the commission desires further investigation be made or desires to conduct any hearings, it shall, within thirty (30) days after presentation of the recommendation of the executive director, so notify the applicant and set a date for hearing. Final action by the commission must be taken within one hundred twenty (120) days after the recommendation of the executive director has been presented to the commission. Failure of the commission to take action within one hundred twenty (120) days shall be deemed to constitute approval of the applicant by the commission, and a license must be issued forthwith upon compliance by the applicant.

(8) The commission has full and absolute power and authority to deny any application for any cause it deems reasonable. If an application is denied, the commission shall prepare and file its written decision upon which its order denying the application is based.

§ 75-76-79

(1)(a) Except as otherwise provided in paragraphs (b) and (c) of this subsection, it is unlawful for any person, either as owner, lessee or employee, whether for hire or not, to operate, carry on, conduct or maintain any form of manufacture, selling or distribution of any gaming device for use or play in Mississippi or for distribution outside of Mississippi without first procuring and maintaining all required federal and state licenses.

(b) A lessor who specifically acquires equipment for a capital lease is not required to be licensed under this section.

(c) The holder of a state gaming license or the holding company of a corporate licensee may, within two (2) years after cessation of business or upon specific approval by the executive director, dispose of by sale in a manner approved by the executive director, any or all of its gaming devices, including slot machines, without a distributor's license. In cases of bankruptcy of a state gaming licensee or foreclosure of a lien by a bank or other person holding a security interest for which gaming devices are security in whole or in part for the lien, the executive director may authorize the disposition of the gaming devices without requiring a distributor's license.

(d) Any person whom the commission determines is a suitable person to receive a license under the provisions of this section may be issued a manufacturer's or distributor's license. The burden of proving his qualification to receive or hold a license under this section is at all times on the applicant or licensee.

(e) Every person who must be licensed pursuant to this section is subject to the provisions of Sections 75-76-199 through 75-76-265, unless exempted from those provisions by the commission.

(f) The commission may exempt, for any purpose, a manufacturer, seller or distributor from the provisions of Sections 75-76-199 through 75-76-265, if the commission determines that the exemption is consistent with the purposes of this chapter.

(g) As used in this section, “holding company” has the meaning ascribed to it in Section 75-76-199.

(2) If the commission determines that a manufacturer or distributor is unsuitable to receive or hold a license:

(a) No new gaming device or associated equipment manufactured by the manufacturer or distributed by the distributor may be approved;

(b) Any previously approved device or associated equipment manufactured by the manufacturer or distributed by the distributor is subject to revocation of approval if the reasons for the denial of the license also apply to that device or associated equipment;

(c) No new device or associated equipment manufactured by the manufacturer or distributed by the distributor may be sold, transferred or offered for use or play in Mississippi; and

(d) Any association or agreement between the manufacturer or distributor and a licensee must be terminated, unless otherwise provided by the commission. An agreement between such a manufacturer or distributor of gaming devices or associated equipment and a licensee shall be deemed to include a provision for its termination without liability on the part of the licensee upon a finding by the commission that the manufacturer is unsuitable to be associated with a gaming enterprise. Failure to include that condition in the agreement is not a defense in any action brought pursuant to this section to terminate the agreement.

(3) Failure of a licensee to terminate any association or agreement with a manufacturer or distributor of gaming devices or associated equipment after receiving notice of a determination of unsuitability, the denial of a license or failure to file a timely application for a license, is an unsuitable method of operation.

(4) There is hereby imposed and levied on each applicant for a manufacturer's, seller's or distributor's license under this section an annual license fee in the following amount:

(a) For the issuance or continuation of a manufacturer's license, One Thousand Dollars ($1,000.00).

(b) For the issuance or continuation of a seller's or distributor's license, Five Hundred Dollars ($500.00).

This fee is to be paid by the applicant to the State Tax Commission on or before the filing of the application for a manufacturer's, seller's or distributor's license by the applicant. Upon such payment the Chairman of the State Tax Commission shall certify to the executive director that such fee has been paid by the applicant.

Except for those amounts that a person issued a manufacturer's license under this section may charge for goods supplied or services rendered, the person holding the manufacturer's license may not be directly reimbursed by a holder of a gaming license for the cost of any fee paid by the person for the issuance or continuation of such a license, whether imposed under this section or any other provision of this chapter.

(5) A manufacturer or distributor of associated equipment who sells, transfers or offers the associated equipment for use or play in Mississippi may be required by the executive director to file an application for a finding of suitability to be a manufacturer or distributor of associated equipment.

Any person who directly or indirectly involves himself in the sale, transfer or offering for use or play in Mississippi of associated equipment who is not otherwise required to be licensed as a manufacturer or distributor may be required by the executive director to file an application for a finding of suitability to be a manufacturer or distributor of associated equipment.

If an application for a finding of suitability is not submitted within thirty (30) days after demand by the executive director, he may pursue any remedy or combination of remedies provided in this chapter.

(6) The executive director and his employees may inspect every gaming device which is manufactured, sold or distributed:

(a) For use in this state, before the gaming device is put into play.

(b) In this state for use outside this state, before the gaming device is shipped out of this state.

The executive director may inspect every gaming device which is offered for play within this state by a licensee.

The executive director may inspect all associated equipment which is manufactured, sold or distributed for use in this state before the equipment is installed or used by a gaming licensee.

In addition to all other fees and charges imposed by this chapter, the executive director may determine an inspection fee with regard to each manufacturer, seller or distributor which must not exceed the actual cost of inspection and investigation. Upon such determination, the executive director shall certify to the Chairman of the State Tax Commission the amount of the inspection fee and the name and address of the applicant. Upon such certification the State Tax Commission shall proceed to assess and collect such inspection fee from the applicant.

§ 75-76-81

Except as otherwise provided in this section, the Chairman of the State Tax Commission shall assess and collect all taxes, fees, licenses, interest, penalties, damages and fines imposed by this chapter, and is hereby empowered to promulgate rules and regulations to administer such collections. Any records or other documents submitted by the licensee, or on his behalf, to the Mississippi Gaming Commission or executive director shall be made available to the Chairman of the State Tax Commission or his authorized agent upon written request.

The gross revenue fees levied by this chapter shall be due and payable on or before the twentieth day of the month next succeeding the month in which the fees accrue except as otherwise provided. The licensee shall make a return showing the gross revenue and compute the fee due for the period.

Except for fees imposed under Section 75-76-33(2)(f), all administrative provisions of the sales tax law, and amendments thereto, including those which provide for collection and administrative appeals procedures, fix damages, penalties and interest for failure to comply with the provisions of said sales tax law, and all other requirements and duties imposed upon any licensee or taxpayer, shall apply to all persons liable for taxes, fees and all other monies imposed under the provisions of this chapter. However, fines or other assessments levied by the Mississippi Gaming Commission or the executive director will not be considered due and payable until thirty (30) days after final determination of such fines or assessments. The Chairman of the State Tax Commission shall exercise all power and authority and perform all duties with respect to licensees or taxpayers under this chapter as are provided in said sales tax law, except where there is conflict, then the provisions of this chapter shall control.

The Mississippi Gaming Commission shall assess and collect all fees imposed under Section 75-76-33(2)(f) and shall deposit the funds received from the fees into the Mississippi Gaming Commission Fund created in Section 75-76-325.

The determination and/or assessment of any taxes, fees, licenses, interest, penalties, damages and fines under this chapter by the Chairman of the State Tax Commission, the Executive Director of the Mississippi Gaming Commission or the Mississippi Gaming Commission shall be prima facie correct.

From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.

From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

§ 75-76-83

Any person aggrieved by the final order of the Board of Tax Appeals regarding any action taken by the Commissioner of Revenue and/or the Department of Revenue under the provisions of this chapter, including any person charged with any tax, fee, interest, penalties and damages imposed by this chapter and required to pay same, may appeal from such order as provided in Section 27-77-7.

§ 75-76-85

(1) If satisfied that an applicant is eligible to receive a state gaming, manufacturing, selling or distributing license, and upon tender to the State Tax Commission of:

(a) All license fees and taxes as required by law and regulation of the Mississippi Gaming Commission; and

(b) A bond executed by the applicant as principal, and by a corporation qualified under the laws of this state as surety, payable to the State of Mississippi, and conditioned upon the payment of license fees, taxes, penalties, interest, fines and the faithful performance of all requirements imposed by law or regulation or the conditions of the license, the commission shall issue and deliver to the applicant a license entitling him to engage in the gaming, manufacturing, selling or distributing operation for which he is licensed. The executive director shall prepare and maintain a written record of the specific terms and conditions of any license issued and delivered and of any modification to the license. A duplicate of the record must be delivered to the applicant or licensee.

(2) The Chairman of the State Tax Commission shall fix the amount of the bond to be required under subsection (1). The bond so furnished may be applied to the payment of any unpaid liability of the licensee due to the State of Mississippi.

(3) In lieu of a bond an applicant may deposit with the commission a like amount of lawful money of the United States or any other form of security authorized by the commission. If security is provided in the form of a savings certificate, certificate of deposit or investment certificate, the certificate must state that the amount is unavailable for withdrawal except upon order of the commission.

(4) If the requirement for a bond is satisfied in:

(a) Cash, the commission shall deposit the money in the State Treasury for credit to the fund for bonds of state gaming licensees which is hereby created as a special fund.

(b) Any other authorized manner, the security must be placed without restriction at the disposal of the commission, but any income must inure to the benefit of the licensee.

(5) From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.

(6) From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

§ 75-76-87

(1) Applications, returns and information contained therein filed or furnished under this chapter shall be confidential, and except in accordance with proper judicial order or as otherwise authorized by this chapter, it shall be unlawful for members of the State Tax Commission, the Mississippi Gaming Commission or members of the Central Data Processing Authority, or any former employee thereof to divulge or make known in any manner the amount of income or any particulars set forth or disclosed on any application, report or return required.

The term “proper judicial order” as used in this chapter shall not include subpoenas or subpoenas duces tecum but shall include only those orders entered by a court of record in this state after furnishing notice and a hearing to the taxpayer and the State Tax Commission. The court shall not authorize the furnishing of such information unless it is satisfied that the information is needed to pursue pending litigation wherein the return itself is in issue, or the judge is satisfied that the need for furnishing the information outweighs the rights of the taxpayer to have such information secreted.

(2) Such information contained on the application, returns or reports from the licensee or the Mississippi Gaming Commission may be furnished to: (a) members and employees of the State Tax Commission and the income tax department thereof, for the purpose of auditing, comparing and correcting returns; (b) the Attorney General, or any other attorney representing the state in any action in respect to the amount of tax under the provisions of this chapter; (c) the Mississippi Gaming Commission; or (d) the revenue department of the other states or the federal government when said states of federal government grants a like comity to Mississippi.

(3) The State Auditor and the employees of his office shall have the right to examine only such tax returns as are necessary for auditing the State Tax Commission, or the Mississippi Gaming Commission and the same prohibitions against disclosure which apply to the State Tax Commission shall apply to the State Auditor and his office.

(4) Nothing in this section shall prohibit the Chairman of the State Tax Commission from making available information necessary to recover taxes, fees, fines or damages owing the state pursuant to the authority granted in Section 27-75-16.

§ 75-76-89

(1) Except as otherwise provided in subsection (3) of this section, all licenses issued to the same person, including a wholly owned subsidiary of that person, for the operation of any game, including a sports pool or race book, which authorize gaming at the same establishment must be merged into a single gaming license. A gaming license may not be issued to any person if the issuance would result in more than one licensed operation at a single establishment, whether or not the profits or revenue from gaming are shared between the licensed operations.

(2) A person who has been issued a gaming license may establish a sports pool or race book on the premises of the establishment at which he conducts a gaming operation only after obtaining permission from the executive director.

§ 75-76-91

(1) All licenses issued under the provisions of this chapter must be posted by the licensee and kept posted at all times in a conspicuous place in the establishment for which issued until replaced by a succeeding license.

(2) All licenses may be inspected by authorized state, county and municipal officials.

§ 75-76-93

(1) Subject to the power of the commission to deny, revoke, suspend, condition or limit licenses, any state license in force may be continued by the commission upon proper payment of state license fees and any other fees, taxes and penalties as required by law and the regulations of the commission.

(2) All state license fees and fees required by law must be paid to the State Tax Commission on or before the dates respectively provided by law or regulation for each fee.

(3) Any person failing to pay any state license fee or fees due at the times respectively provided shall pay in addition to such license fee or fees, a penalty of not less than Fifty Dollars ($50.00) or twenty-five percent (25%) of the amount due, whichever is the greater, but not more than One Thousand Dollars ($1,000.00), if the fees are less than ten (10) days late and in no case in excess of Five Thousand Dollars ($5,000.00). The penalty must be collected as are other charges, license fees and penalties under this chapter.

(4) Any person who operates, carries on or exposes for play any gambling game, gaming device or slot machine or who manufactures, sells or distributes any gaming device, equipment, material or machine used in gaming, after his license fee becomes subject to payment, and thereafter fails to pay such fee as provided in this section, is guilty of a misdemeanor and, in addition to the penalties provided by law, is liable to the State of Mississippi for all license fees, taxes and penalties which would have been due for continuation of his license.

(5) If any licensee or other person fails to pay his license fee as provided in this section, the commission may order the immediate closure of all his gaming activity until all necessary fees, interest and penalties have been paid.

§ 75-76-95

(1) Every licensee shall at all times maintain on file with the executive director a current report, verified by the affidavit of the person or an officer of a corporation and every stockholder thereof, to whom the license is issued, which shall set forth such information as may be required by the regulations of the commission.

(2) With respect to each licensee, the commission shall carefully review, not less frequently than once every three (3) years, the information in the current report required under subsection (1) to determine if there has been any substantial change in the information provided in the application for the initial license.

§ 75-76-97

It is unlawful for any person to sell, purchase, lease, hypothecate, borrow or loan money, or create a voting trust agreement or any other agreement of any sort to or with any licensee in connection with any gaming operation licensed under this chapter, or with respect to any portion of such gaming operation, except in accordance with the regulations of the commission.

§ 75-76-99

(1) Any person who operates or maintains in this state any gaming device of a specific model, or which includes a significant modification, which the executive director has not approved for testing or for operation, is subject to disciplinary action by the executive director or the commission.

(2) The executive director shall maintain a list of approved gaming devices.

(3) The commission may adopt regulations relating to gaming devices and their significant modification.

§ 75-76-101

(1) All gaming must be conducted with chips, tokens or other instrumentalities approved by the executive director or with the legal tender of the United States.

(2) No licensee shall permit participation by a person in a game conducted in the licensed gaming establishment if such person is not physically present in the licensed gaming establishment during the period of time when such game is being conducted, and all games and the participation of patrons therein shall be entirely located and conducted on the licensed premises.

§ 75-76-103

(1) The executive director shall make appropriate investigations:

(a) To determine whether there has been any violation of this chapter or of any regulations adopted thereunder.

(b) To determine any facts, conditions, practices or matters which it may deem necessary or proper to aid in the enforcement of any such law or regulation.

(c) To aid in adopting regulations.

(d) To secure information as a basis for recommending legislation relating to this chapter.

(2) If after any investigation the executive director is satisfied that a license, registration, finding of suitability, or prior approval by the commission of any transaction for which approval was required or permitted under the provisions of this chapter should be limited, conditioned, suspended or revoked, he shall initiate a hearing by filing a complaint with the commission and transmit therewith a summary of evidence in his possession bearing on the matter and the transcript of testimony at any investigative hearing conducted by or on behalf of the executive director to the licensee.

(3) Upon receipt of the complaint of the executive director, the commission shall review all matter presented in support thereof and shall appoint a hearing examiner to conduct further proceedings.

(4) After such proceedings as may be required by this chapter the hearing examiner may recommend that the commission take any or all of the following actions:

(a) Limit, condition, suspend or revoke the license of any licensed gaming establishment or the individual license of any licensee without affecting the license of the establishment;

(b) Limit, condition, suspend or revoke any registration, finding of suitability, or prior approval given or granted to any applicant by the commission;

(c) Order a licensed gaming establishment to keep an individual licensee from the premises of the licensed gaming establishment or not to pay the licensee any remuneration for services or any profits, income or accruals on his investment in the licensed gaming establishment; and

(d) Fine each person or entity or both, who was licensed, registered or found suitable or who previously obtained approval for any act or transaction for which commission approval was required or permitted, not more than One Hundred Thousand Dollars ($100,000.00) for each separate violation of the provisions of this chapter or of the regulations of the commission which is the subject of an initial complaint and not more than Two Hundred Fifty Thousand Dollars ($250,000.00) for each separate violation of the provisions of this chapter or of the regulations of the commission which is the subject of any subsequent complaint.

(5) The hearing examiner shall prepare a written decision containing his recommendation to the commission and shall serve it on all parties. Any party that disagrees with the hearing examiner's recommendation may ask the commission to review the recommendation within ten (10) days of service of the recommendation. The commission may hold a hearing to consider the recommendation whether there has been a request to review the recommendation or not.

(6) If the commission decides to review the recommendation, it shall give notice of that fact to all parties within thirty (30) days of the recommendation and shall schedule a hearing to review the recommendation. The commission's review shall be de novo but shall be based upon the evidence presented before the hearing examiner. The commission may remand the case to the hearing examiner for the presentation of additional evidence upon a showing of good cause why the evidence could not have been presented at the previous hearing.

(7) If the commission decides not to review the recommendation within thirty (30) days, the recommendation becomes the final order of the commission.

(8) If the commission limits, conditions, suspends or revokes any license or imposes a fine, or limits, conditions, suspends or revokes any registration, finding of suitability, or prior approval, it shall issue its written order therefor after causing to be prepared and filed the hearing examiner's written decision upon which the order is based.

(9) Any such limitation, condition, revocation, suspension or fine so made is effective until reversed upon judicial review, except that the commission may stay its order pending a rehearing or judicial review upon such terms and conditions as it deems proper.

(10) Judicial review of any such order or decision of the commission may be had in accordance with the provisions of this chapter.

(11) A license or finding of suitability for any individual is automatically revoked if such person is convicted of a felony in any court of this state, another state, or the United States or if such person is convicted of a crime in any court of another state or the United States which, if committed in this state, would be a felony. Any appeal from such conviction shall not act as a supersedeas to the revocation required by this subsection.

§ 75-76-105

The commission may issue an emergency order for suspension, limitation or conditioning of a license, registration, or finding of suitability or may issue an emergency order requiring a licensed gaming establishment to keep an individual licensee from the premises of the licensed gaming establishment or not to pay such licensee any remuneration for services or any profits, income or accruals on his investment in the licensed gaming establishment in the following manner:

(a) An emergency order may be issued only when the commission believes that:

(i) Any person has willfully failed to report, pay or truthfully account for and pay over any license fee or tax imposed by the provisions of this chapter or willfully attempted in any manner to evade or defeat any such license fee, tax or payment thereof;

(ii) Any person has cheated at any gambling game;

(iii) There has been a violation of subsection (1) of Section 75-76-57;

(iv) Such action is necessary for the immediate preservation of the public peace, health, safety, morals, good order or general welfare.

(b) The emergency order must set forth the grounds upon which it is issued, including a statement of facts constituting the alleged emergency necessitating such action.

(c) An emergency order may be issued only with the approval of and upon signature by not less than two (2) members of the commission.

(d) The emergency order is effective immediately upon issuance and service upon the licensee or resident agent of the licensee or, in cases involving registration or findings of suitability, upon issuance and service upon the person or entity involved or resident agent of the entity involved. The emergency order may suspend, limit, condition or take other action in relation to the license of one or more persons in an operation without affecting other individual licensees or the licensed gaming establishment. The emergency order remains effective until further order of the commission or final disposition of the case.

(e) Within five (5) days after issuance of an emergency order, the executive director shall cause a complaint to be filed and served upon the person or entity involved. Thereafter, the person or entity against whom the emergency order has been issued and served is entitled to a hearing before the commission and to judicial review of the decision and order of the commission thereon.

§ 75-76-107

(1) The complaint referred to in this chapter must be a written statement of charges which must set forth in ordinary and concise language the acts or omissions with which the respondent is charged. It must specify the statutes and regulations which the respondent is alleged to have violated but shall not consist merely of charges raised in the language of the statutes or regulations.

(2) Upon the filing of the complaint, the executive director shall serve a copy of the complaint upon the respondent either personally or by registered or certified mail at his address on file with the executive director.

(3) Except as provided in subsection (4) of this section, the respondent must answer within twenty (20) days after the service of the complaint. In his answer the respondent:

(a) Must state in short and plain terms his defenses to each claim asserted.

(b) Must admit or deny the facts alleged in the complaint.

(c) Must state with respect to which allegations he is without such knowledge or information as to form a belief concerning their truth. Such allegations shall be deemed denied.

(d) Must affirmatively set forth any matter which constitutes an avoidance or affirmative defense.

(e) May demand a hearing. Failure to demand a hearing constitutes a waiver of the right to a hearing and to judicial review of any decision or order of the commission, but the commission may order a hearing even if the respondent so waives his right.

(4) Failure to answer or to appear at the hearing constitutes an admission by the respondent of all facts alleged in the complaint. The commission may take action based on such an admission and on other evidence without further notice to the respondent. If the commission takes action based on such an admission, it shall include in the record which evidence was the basis for the action.

(5) The commission shall determine the time and place of the hearing as soon as is reasonably practical after receiving the respondent's answer. The executive director shall deliver or send by registered or certified mail a notice of hearing to all parties at least ten (10) days before the hearing.

§ 75-76-109

(1) Prior to a hearing before a hearing examiner, and during a hearing upon reasonable cause shown, the hearing examiner shall issue subpoenas and subpoenas duces tecum at the request of a party. All witnesses appearing pursuant to subpoena, other than parties, officers or employees of the State of Mississippi or any political subdivision thereof, are entitled to receive fees and mileage in the same amounts and under the same circumstances as provided by law for witnesses in civil actions in the circuit courts. Witnesses entitled to fees or mileage who attend hearings at points so far removed from their residences as to prohibit return thereto from day to day are entitled, in addition to witness fees and mileage, to the expense allowance authorized for state officers and employees for each day of actual attendance and for each day necessarily occupied in traveling to and from the hearings. Fees, subsistence and transportation expenses must be paid by the party at whose request the witness is subpoenaed. The commission may award as costs the amount of all such expenses to the prevailing party.

(2) The testimony of any material witness residing within or without the State of Mississippi who will be unavailable to testify at the hearing may be taken by deposition in the manner provided by the Mississippi Rules of Civil Procedure.

§ 75-76-111

(1) At all hearings before a hearing examiner other than investigative hearings:

(a) Oral evidence may be taken only upon oath or affirmation administered by the hearing examiner.

(b) Every party has the right to:

(i) Call and examine witnesses;

(ii) Introduce exhibits relevant to the issues of the case, including the transcript of testimony at any investigative hearing conducted by or on behalf of the commission or the executive director;

(iii) Cross-examine opposing witnesses on any matters relevant to the issues of the case, even though the matter was not covered in a direct examination;

(iv) Impeach any witness regardless of which party first called him to testify; and

(v) Offer rebuttal evidence.

(c) If the respondent does not testify in his own behalf, he may be called and examined as if under cross-examination.

(d) The hearing need not be conducted according to technical rules relating to evidence and witnesses. Any relevant evidence may be admitted and is sufficient in itself to support a finding if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule which might make improper the admission of such evidence over objection in a civil action.

(e) The parties or their counsel may by written stipulation agree that certain specified evidence may be admitted even though such evidence might otherwise be subject to objection.

(2) The hearing examiner may take official notice of any generally accepted information or technical or scientific matter within the field of gaming and of any other fact which may be judicially noticed by the courts of this state. The parties must be informed of any information, matters or facts so noticed and must be given a reasonable opportunity, on request, to refute such information, matters or facts by evidence or by written or oral presentation of authorities, the manner of such refutation to be determined by the commission.

(3) Affidavits may be received in evidence at any hearing in accordance with the following:

(a) The party wishing to use an affidavit must, not less than ten (10) days before the day set for hearing, serve upon the opposing party or counsel, either personally or by registered or certified mail, a copy of the affidavit which he proposes to introduce in evidence together with a notice as provided in paragraph (c) of this subsection.

(b) Unless the opposing party, within seven (7) days after such service, mails or delivers to the proponent a request to cross-examine the affiant, his right to cross-examine the affiant is waived, and the affidavit, if introduced in evidence, must be given the same effect as if the affiant had testified orally. If an opportunity to cross-examine an affiant is not afforded after request therefor is made in accordance with this paragraph, the affidavit may be introduced in evidence but must be given only the same effect as other hearsay evidence.

(c) The notice referred to in paragraph (a) must be substantially in the following form:

The accompanying affidavit of (here insert name of affiant) will be introduced as evidence at the hearing set for the ___ day of , 20. (Here insert name of affiant) will not be called to testify orally, and you will not be entitled to question him unless you notify the undersigned that you wish to cross-examine him. To be effective your request must be mailed or delivered to the undersigned on or before seven (7) days from the date this notice and the enclosed affidavit are served upon you.

---

(Party or Counsel)

---

(Address)

§ 75-76-113

The proceedings at the hearing must be reported either stenographically or by a phonographic reporter.

§ 75-76-115

The hearing examiner or the commission may permit the filing of amended or supplemental pleadings and shall notify all parties thereof and provide a reasonable opportunity for objections thereto.

§ 75-76-117

If any person in proceedings before the hearing examiner or the commission disobeys or resists any lawful order, or refuses to respond to a subpoena, or refuses to take the oath or affirmation as a witness, or thereafter refuses to be examined, or is guilty of misconduct during the hearing or so near the place thereof as to obstruct the proceeding, the commission may certify the facts to the circuit court in and for the county where the proceedings are held. The court shall thereupon issue an order directing the person to appear before the court and show cause why he should not be punished as for contempt. The court order and a copy of the statement of the commission must be served on the person cited to appear. Thereafter the court has jurisdiction of the matter, and the same proceedings must be had, the same penalties may be imposed and the person charged may purge himself of the contempt in the same way as in the case of a person who has committed a contempt in the trial of a civil action before a circuit court.

§ 75-76-119

(1) After the hearing of a contested matter, the hearing examiner shall render a written decision on the merits which must contain findings of fact, a determination of the issues presented, and recommendation regarding the penalty to be imposed, if any. Copies of the decision and recommendation must be served on the parties personally or sent to them by registered or certified mail.

(2) The commission may, upon motion made within ten (10) days after service of a hearing examiner's decision and recommendation, or upon its own motion within thirty (30) days of the date of the decision and recommendation, order a hearing before the commission upon such terms and conditions as it may deem just and proper to review the decision and recommendation. After hearing, the commission may reverse, modify or affirm the hearing examiner's decision. If the commission decides not to review the hearing examiner's decision and recommendation within thirty (30) days of the hearing examiner's decision, that decision shall become the final order of the commission.

§ 75-76-121

(1) Any person aggrieved by a final decision or order of the commission may obtain a judicial review thereof in the circuit court of the county in which the petitioner resides or has his or its principal place of business.

(2) The judicial review must be instituted by filing a petition within twenty (20) days after the effective date of the final decision or order. A petition may not be filed while a petition for rehearing or a rehearing is pending before the commission. The petition must set forth the order or decision appealed from and the grounds or reasons why petitioner contends a reversal or modification should be ordered.

(3) Copies of the petition must be served upon the executive director and all other parties of record, or their counsel of record, either personally or by certified mail.

(4) The court, upon a proper showing, may permit other interested persons to intervene as parties to the appeal or as friends of the court.

(5) The filing of the petition does not stay enforcement of the decision or order of the commission, but the commission itself may grant a stay upon such terms and conditions as it deems proper.

§ 75-76-123

(1) Upon written request of petitioner and upon payment of such reasonable costs and fees as the commission may prescribe, the complete record on review, or such parts thereof as are designated by the petitioner, must be prepared by the commission.

(2) The complete record on review must include copies of:

(a) All pleadings in the case;

(b) All notices and interim orders issued by the hearing examiner or the commission in connection with the case;

(c) All stipulations;

(d) The decision and order appealed from;

(e) A transcript of all testimony, evidence and proceedings at the hearing;

(f) The exhibits admitted or rejected; and

(g) Any other papers in the case.

The record on review may be shortened by stipulation of all parties to the review proceedings.

(3) The record on review must be filed with the reviewing court within thirty (30) days after service of the petition for review, but the court may allow the commission additional time to prepare and transmit the record on review.

§ 75-76-125

(1) The reviewing court may, upon motion therefor, order that additional evidence in the case be taken by the commission upon such terms and conditions as the court may deem just and proper. The motion must not be granted except upon a showing that the additional evidence is material and necessary and that sufficient reason existed for failure to present the evidence before the hearing examiner or the commission. The motion must be supported by an affidavit of the moving party or his counsel showing with particularity the materiality and necessity of the additional evidence and the reason why it was not introduced in the administrative hearing. Rebuttal evidence to the additional evidence must be permitted. In cases in which additional evidence is presented, the commission may modify its decisions and orders as the additional evidence may warrant and shall file with the reviewing court a transcript of the additional evidence together with any modifications of the decision and order, all of which become a part of the record on review.

(2) The review must be conducted by the court sitting without a jury, and must not be a trial de novo but is confined to the record on review.

(3) The reviewing court may affirm the decision and order of the commission, or it may remand the case for further proceedings or reverse the decision if the substantial rights of the petitioner have been prejudiced because the decision is:

(a) In violation of constitutional provisions;

(b) In excess of the statutory authority or jurisdiction of the commission;

(c) Made upon unlawful procedure;

(d) Unsupported by any evidence; or

(e) Arbitrary or capricious or otherwise not in accordance with law.

§ 75-76-127

(1) Any party aggrieved by the final decision in the circuit court after a review of the decision and order of the commission may appeal to the Supreme Court in the manner and within the time provided by law for appeals in civil cases. The Supreme Court shall follow the same procedure thereafter as in appeals in civil actions and may affirm, reverse or modify the decision as the record and law warrant.

(2) The judicial review by the circuit and Supreme Courts afforded in this chapter is the exclusive method of review of the commission's actions, decisions and orders in disciplinary hearings. Judicial review is not available for actions, decisions and orders of the commission relating to the denial of a license or to limited or conditional licenses. Extraordinary common law writs or equitable proceedings are available except where statutory judicial review is made exclusive or is precluded or where the use of those writs or proceedings is precluded by specific statute.

§ 75-76-129

<Text of section effective through June 30, 2028. See also text of § 75-76-129 effective on July 1, 2028. >

(1) On or before the last day of each month all taxes, fees, interest, penalties, damages, fines or other monies collected by the Department of Revenue during that month under the provisions of this chapter, with the exception of (a) the local government fees imposed under Section 75-76-195, and (b) an amount equal to Three Million Dollars ($3,000,000.00) of the revenue collected pursuant to the fee imposed under Section 75-76-177(1)(c), and (c) the revenue collected pursuant to the fee imposed under Section 75-76-177(1)(c) as a result of wagers on sporting events shall be paid by the Department of Revenue to the State Treasurer to be deposited in the State General Fund. The local government fees shall be distributed by the Department of Revenue pursuant to Section 75-76-197.

(2) An amount equal to Three Million Dollars ($3,000,000.00) of the revenue collected during that month pursuant to the fee imposed under Section 75-76-177(1)(c) shall be deposited by the Department of Revenue into the bond sinking fund created in Section 1(3) of Chapter 479, Laws of 2015.

(3) Revenue collected pursuant to the fee imposed under Section 75-76-177(1)(c) as a result of wagers on sporting events shall be deposited into the State Highway Fund to be used solely for the repair and maintenance of highways and bridges of the State of Mississippi. This revenue shall be used first for matching funds made available to the state for such purposes pursuant to any federal highway infrastructure program implemented after September 1, 2018.

§ 75-76-131

(1) The executive director shall:

(a) Ascertain and keep himself informed of the identity, prior activities and present location of all gaming employees in the State of Mississippi; and

(b) Maintain confidential records of such information.

(2) No person may be employed as a gaming employee unless he is the holder of a work permit issued by the commission.

(3) A work permit issued to a gaming employee must have clearly imprinted thereon a statement that it is valid for gaming purposes only.

(4) Application for a work permit is to be made to the executive director and may be granted or denied for any cause deemed reasonable by the commission. Whenever the executive director denies such an application, he shall include in the notice of the denial a statement of the facts upon which he relied in denying the application.

(5) Any person whose application for a work permit has been denied by the executive director may, not later than sixty (60) days after receiving notice of the denial or objection, apply to the commission for a hearing before a hearing examiner. A failure of a person whose application has been denied to apply for a hearing within sixty (60) days or his failure to appear at a hearing conducted pursuant to this section shall be deemed to be an admission that the denial or objection is well founded and precludes administrative or judicial review. At the hearing, the hearing examiner appointed by the commission shall take any testimony deemed necessary. After the hearing the hearing examiner shall within thirty (30) days after the date of the hearing announce his decision sustaining or reversing the denial of the work permit or the objection to the issuance of a work permit. The executive director may refuse to issue a work permit if the applicant has:

(a) Failed to disclose, misstated or otherwise attempted to mislead the commission with respect to any material fact contained in the application for the issuance or renewal of a work permit;

(b) Knowingly failed to comply with the provisions of this chapter or the regulations of the commission at a place of previous employment;

(c) Committed, attempted or conspired to commit any crime of moral turpitude, embezzlement or larceny or any violation of any law pertaining to gaming, or any crime which is inimical to the declared policy of this state concerning gaming;

(d) Been identified in the published reports of any federal or state legislative or executive body as being a member or associate of organized crime, or as being of notorious and unsavory reputation;

(e) Been placed and remains in the constructive custody of any federal, state or municipal law enforcement authority;

(f) Had a work permit revoked or committed any act which is a ground for the revocation of a work permit or would have been a ground for revoking his work permit if he had then held a work permit; or

(g) For any other reasonable cause.

The executive director shall refuse to issue a work permit if the applicant has committed, attempted or conspired to commit a crime which is a felony in this state or an offense in another state or jurisdiction which would be a felony if committed in this state.

(6) Any applicant aggrieved by the decision of the hearing examiner may, within fifteen (15) days after the announcement of the decision, apply in writing to the commission for review of the decision. Review is limited to the record of the proceedings before the hearing examiner. The commission may sustain or reverse the hearing examiner's decision. The commission may decline to review the hearing examiner's decision, in which case the hearing examiner's decision becomes the final decision of the commission. The decision of the commission is subject to judicial review.

(7) All records acquired or compiled by the commission relating to any application made pursuant to this section and all lists of persons to whom work permits have been issued or denied and all records of the names or identity of persons engaged in the gaming industry in this state are confidential and must not be disclosed except in the proper administration of this chapter or to an authorized law enforcement agency. Any record of the commission which shows that the applicant has been convicted of a crime in another state must show whether the crime was a misdemeanor, gross misdemeanor, felony or other class of crime as classified by the state in which the crime was committed. In a disclosure of the conviction, reference to the classification of the crime must be based on the classification in the state where it was committed.

(8) A work permit expires unless renewed within ten (10) days after a change of place of employment or if the holder thereof is not employed as a gaming employee within the jurisdiction of the issuing authority for more than ninety (90) days.

(9) Notice of any objection to or denial of a work permit by the executive director as provided pursuant to this section is sufficient if it is mailed to the applicant's last known address as indicated on the application for a work permit. The date of mailing may be proven by a certificate signed by the executive director or his designee that specifies the time the notice was mailed. The notice is presumed to have been received by the applicant five (5) days after it is deposited with the United States Postal Service with the postage thereon prepaid.

§ 75-76-133

(1) Any communication or document of an applicant or licensee which is required by:

(a) Law or the regulations of the commission; or

(b) A subpoena issued by the commission to be made or transmitted to the commission or the executive director or his employees,

is absolutely privileged and does not impose liability for defamation or constitute a ground for recovery in any civil action.

(2) If such a document or communication contains any information which is privileged, that privilege is not waived or lost because the document or communication is disclosed to the commission or the executive director or his employees.

(3) Notwithstanding the powers granted to the commission and the executive director by this chapter:

(a) The commission, the executive director and his employees shall not release or disclose any privileged information, documents or communications provided by an applicant without the prior written consent of the applicant or licensee or pursuant to a lawful court order after timely notice of the proceedings has been given to the applicant or licensee.

(b) The commission and the executive director shall maintain all privileged information, documents and communications in a secure place accessible only to members of the commission and the executive director and his employees.

(c) The commission shall adopt procedures and regulations to protect the privileged nature of information, documents and communications provided by an applicant or licensee.

§ 75-76-135

(1) The commission may issue an order summarily suspending a person's work permit upon a finding that the suspension is necessary for the immediate preservation of the public peace, health, safety, morals, good order or general welfare. The order becomes effective when served upon the permit holder.

(2) The order of summary suspension must state the facts upon which the finding of necessity for the suspension is based. For purposes of this section, the order shall be deemed a complaint.

(3) An order of summary suspension must be signed by at least two (2) members of the commission.

(4) The person whose work permit is summarily suspended:

(a) Has a right to a hearing on the order. The commission shall schedule a hearing within five (5) days after receipt of the person's notice of defense.

(b) Must file a notice of defense within thirty (30) days after the effective date of the emergency order. Failure to timely file this notice waives his rights to a hearing before the commission and to judicial review of the final decision.

(5) All affirmative defenses must be specifically stated in the notice of defense, and unless an objection is stated to the form or manner of the order, all objections to the form of the complaint shall be deemed waived.

(6) Except as otherwise provided in this section, the procedures for a disciplinary action in Sections 75-76-103 through 75-76-119, inclusive, must be followed.

§ 75-76-137

(1) If any gaming employee is convicted of any violation of this chapter or if in investigating an alleged violation of this chapter by any licensee the executive director or the commission finds that a gaming employee employed by the licensee has been guilty of cheating, the commission shall, after a hearing as provided in Sections 75-76-103 through 75-76-119, inclusive, revoke the employee's work permit.

(2) The commission may revoke a work permit if it finds after a hearing as provided in Sections 75-76-103 through 75-76-119, inclusive, that the gaming employee has failed to disclose, misstated or otherwise misled the commission with respect to any fact contained within any application for a work permit, or subsequent to being issued a work permit:

(a) Committed, attempted or conspired to do any of the acts prohibited by this chapter;

(b) Knowingly possessed or permitted to remain in or upon any licensed premises any cards, dice, mechanical device or any other cheating device whatever the use of which is prohibited by statute or ordinance;

(c) Concealed or refused to disclose any material fact in any investigation by the executive director or the commission;

(d) Committed, attempted or conspired to commit larceny or embezzlement against a gaming licensee or upon the premises of a licensed gaming establishment;

(e) Been convicted in any jurisdiction other than Mississippi of any offense involving or relating to gambling;

(f) Accepted employment without prior commission approval in a position for which he could be required to be licensed under this chapter after having been denied a license for a reason involving personal unsuitability or after failing to apply for licensing when requested to do so by the commission or the executive director;

(g) Been refused the issuance of any license, permit or approval to engage in or be involved with gaming in any jurisdiction other than Mississippi, or had any such license, permit or approval revoked or suspended;

(h) Been prohibited under color of governmental authority from being present upon the premises of any gaming establishment for any reason relating to improper gambling activities or any illegal act;

(i) Contumaciously defied any legislative investigative committee or other officially constituted bodies acting on behalf of the United States or any state, county or municipality which seeks to investigate crimes relating to gaming, corruption of public officials, or any organized criminal activities; or

(j) Been convicted of any felony or misdemeanor, other than one constituting a violation of this chapter.

(3) A work permit shall not be issued to a person whose work permit has previously been revoked pursuant to this section or to whom the issuance or renewal of a work permit has been denied, except with the unanimous approval of the commission members.

(4) A gaming employee whose work permit has been revoked pursuant to this section is entitled to judicial review of the commission's action in the manner prescribed by Sections 75-76-121 through 75-76-127, inclusive.

§ 75-76-139

An applicant for licensing, registration, finding of suitability, work permit or any approval or consent required by this chapter shall make full and true disclosure of all information to the commission, the executive director and any other relevant governmental authority as necessary or appropriate in the public interest or as required in order to carry out the policies of this state relating to licensing and control of the gaming industry.

§ 75-76-141

Any information obtained by the executive director or the commission from any licensee, his employer or agent relating to the termination of a gaming employee is confidential and must not be disclosed except:

(a) Such information obtained from the former employer of an applicant for a work permit must be disclosed to the applicant to the extent necessary to permit him to respond to any objection made by the executive director to his application for the permit;

(b) In the necessary administration of this chapter; or

(c) Upon the lawful order of a court of competent jurisdiction.

§ 75-76-143

When any person contracts to sell or lease any property or interest in property, real or personal, under circumstances which require the approval or licensing of the purchaser or lessee by the commission, the contract must contain a provision satisfactory to the commission regarding responsibility for the payment of any fees or taxes due pursuant to any subsequent deficiency determinations made under this chapter which encompass any period of time before the closing date of the transaction.

§ 75-76-145

(1) The Attorney General, at the request of the executive director or the commission, may institute a civil action in any court of this state against any person subject to this chapter, to restrain a violation of this chapter.

(2) The court shall give priority over other civil actions to an action brought pursuant to this section.

(3) An action brought against a person pursuant to this section shall not preclude a criminal action or administrative proceeding against that person.

§ 75-76-147

(1) The commission or the executive director shall initiate proceedings or actions appropriate to enforce the provisions of this chapter and may recommend that a district attorney or the Attorney General prosecute any public offense committed in violation of any provision of this chapter, or in violation of Section 97-19-55 when the offense involves the use of a casino marker issued to a licensed gaming establishment.

(2) If an investigation indicates probable cause for belief that a violation of this chapter, or a violation of Section 97-19-55 when the offense involves the use of a casino marker issued to a licensed gaming establishment, has occurred, the commission or the executive director shall refer the matter and the evidence gathered during the investigation to the district attorney having jurisdiction, with a request that such violation be prosecuted (a) by presentation to the grand jury if it appears that a felony violation has occurred, or (b) either by presentation to the grand jury or by filing a criminal affidavit if it appears that a misdemeanor violation has occurred.

(3) If a district attorney declines to prosecute an offense referred to him by the commission or the executive director, he shall respond in writing to the commission or the executive director within sixty (60) days following receipt of the request to prosecute and state the reasons declining to prosecute.

(4) If the commission or the executive director, after reviewing a district attorney's declination to prosecute, disagrees with the decision of such district attorney, the commission or the executive director may then refer the request for criminal prosecution to the Attorney General. In conducting any such prosecution, the Attorney General shall have all powers of a district attorney, including the power to issue or cause to be issued subpoenas or other process, and the right to enter the grand jury room while the grand jury is in session and to perform services with reference to the work of the grand jury.

§ 75-76-149

Any person who possesses any device, equipment or material which has been manufactured, sold or distributed in violation of this chapter shall, upon conviction, be punished by a fine of not more than One Thousand Dollars ($1,000.00) or imprisoned in the county jail not more than six (6) months, or by both such fine and imprisonment.

§ 75-76-151

Every district attorney, sheriff and chief of police shall furnish to the executive director, on forms prepared by the executive director, all information obtained during the course of any substantial investigation or prosecution of any person if it appears that a violation of any law related to gaming has occurred.

§ 75-76-153

An application to a court for an order requiring the commission or the executive director to release any information declared by law to be confidential shall be made only upon motion in writing on ten (10) days' written notice to the commission or the executive director, the Attorney General and all persons who may be affected by the entry of such order. Copies of the motion and all papers filed in support of it shall be served with the notice by delivering a copy in person or by certified mail to the last known address of the person to be served.

§ 75-76-155

(1) A person under the age of twenty-one (21) years shall not:

(a) Play, be allowed to play, place wagers, or collect winnings, whether personally or through an agent, from any gaming authorized under this chapter.

(b) Be employed as a gaming employee.

(2) Any licensee, employee, dealer or other person who violates or permits the violation of any of the provisions of this section, and any person under twenty-one (21) years of age who violates any of the provisions of this section shall, upon conviction, be punished by a fine of not more than One Thousand Dollars ($1,000.00) or imprisoned in the county jail not more than six (6) months, or by both such fine and imprisonment.

(3) In any prosecution or other proceeding for the violation of any of the provisions of this section, it is no excuse for the licensee, employee, dealer or other person to plead that he believed the person to be twenty-one (21) years old or over.

§ 75-76-157

(1) Except as provided in Sections 75-76-159 through 75-76-165, inclusive, gaming debts not evidenced by a credit instrument are void and unenforceable and do not give rise to any administrative or civil cause of action.

(2) A claim by a patron of a licensee for payment of a gaming debt not evidenced by a credit instrument, and a dispute between a licensee and a patron associated with a promotional activity as defined in Section 75-76-5(nn), shall be resolved by the executive director in accordance with Sections 75-76-159 through 75-76-165, inclusive. The resolution of such a claim or dispute by the executive director shall include any claims for alleged winnings or losses, or the award or distribution of cash, prizes, benefits, tickets or any other item of value associated with the promotional activity, or the manner in which the specific event at which the award or distribution from the promotional activity is conducted; however, the authority granted under this subsection (2) regarding a promotional activity does not provide the executive director or the commission with any additional authority, not otherwise granted by law, to regulate the promotional activity with regard to those matters pertaining exclusively to the operational or administrative aspects of the promotional activity that occur in advance of such specific event at which the award or distribution is conducted.

§ 75-76-159

(1) Whenever a licensee refuses payment of alleged winnings to a patron, the licensee and the patron are unable to resolve the dispute to the satisfaction of the patron and the dispute involves:

(a) At least Five Hundred Dollars ($500.00), the licensee shall immediately notify the executive director; or

(b) Less than Five Hundred Dollars ($500.00), the licensee shall inform the patron of his right to request that the executive director conduct an investigation.

The executive director shall conduct whatever investigation is deemed necessary and shall determine whether payment should be made.

(2) The executive director shall mail written notice to the commission, the licensee and the patron of his decision resolving the dispute within thirty (30) days after the date the executive director first receives notification from the licensee or a request to conduct an investigation from the patron.

(3) Failure to notify the executive director or patron as provided in subsection (1) is grounds for disciplinary action pursuant to Sections 75-76-103 through 75-76-119, inclusive.

(4) The decision of the executive director is effective on the date the aggrieved party receives notice of the decision. The date of receipt is presumed to be the date specified on the return receipt.

(5) Notice of the decision of the executive director shall be deemed sufficient if it is mailed to the last known address of the licensee and patron. The date of mailing may be proven by a certificate signed by an employee of the executive director that specifies the time the notice was mailed. The notice is presumed to have been received by the licensee or the patron five (5) days after it is deposited with the United States Postal Service with the postage thereon prepaid.

§ 75-76-161

(1) Within twenty (20) days after the date of receipt of the written decision of the executive director, the aggrieved party may file a petition with the commission requesting a hearing to reconsider the decision.

(2) The petition must set forth the basis of the request for reconsideration.

(3) If no petition for reconsideration is filed within the time prescribed in subsection (1) of this section, the decision shall be deemed final action on the matter and is not subject to reconsideration by the executive director or review by the commission or to review by any court.

(4) The party requesting the hearing must provide a copy of the petition to the other party.

(5) Within fifteen (15) days after service of the petition, the responding party may answer the allegations contained therein by filing a written response with the commission.

(6) The commission shall appoint a hearing examiner who shall schedule a hearing and may conduct the hearing at such times and places, within or without the State of Mississippi as may be convenient, except that notice of the date, time and place of the hearing must be provided to both parties. The commission may review the hearing examiner's decision as provided in Section 75-76-119.

§ 75-76-163

(1) The party seeking reconsideration bears the burden of showing that the executive director's decision should be reversed or modified.

(2) After the hearing, the hearing examiner may sustain, modify or reverse the executive director's decision. The decision by the hearing examiner must be in writing and must include findings of fact. A copy of the hearing examiner's decision must be delivered or mailed forthwith to each party or to his attorney of record.

§ 75-76-165

(1) Except as otherwise provided in subsection (2) of this section, a licensee shall pay a patron's claim within twenty (20) days after the decision of the executive director directing him to do so becomes final. Failure to pay within that time is grounds for disciplinary action pursuant to Sections 75-76-103 through 75-76-119, inclusive.

(2) If a licensee intends to file a petition for judicial review of the commission's decision pursuant to Sections 75-76-167 through 75-76-173, inclusive, the licensee must first deposit in an interest-bearing account in a financial institution an amount equal to the amount in dispute. The licensee shall pay the full amount of the patron's claim, including interest, within twenty (20) days after a final, nonappealable order of a court of competent jurisdiction so directs.

(3) The licensee may withdraw the amount deposited in the financial institution upon:

(a) Payment of the full amount of the patron's claim, plus interest, if the licensee has given notice to the commission of the payment; or

(b) A final determination by the court that the licensee is not required to pay the claim.

§ 75-76-167

(1) Any person aggrieved by a final decision or order of the commission made after hearing by the commission pursuant to Sections 75-76-159 through 75-76-165, inclusive, may obtain a judicial review thereof in the circuit court of the county in which the dispute between the licensee and patron arose.

(2) The judicial review must be instituted by filing a petition within twenty (20) days after the effective date of the final decision or order. The petition must set forth the order or decision appealed from and the grounds or reasons why petitioner contends a reversal or modification should be ordered.

(3) Copies of the petition must be served upon the executive director and all other parties of record, or their counsel of record, either personally or by certified mail.

(4) The court, upon a proper showing, may permit other interested persons to intervene as parties to the appeal or as friends of the court.

(5) The filing of the petition does not stay enforcement of the decision or order of the commission, but the commission itself may grant a stay upon such terms and conditions as it deems proper.

§ 75-76-169

(1) Upon written request of petitioner and upon payment of such reasonable costs and fees as the commission may prescribe, the complete record on review, or such parts thereof as are designated by the petitioner, must be prepared by the commission.

(2) The complete record on review must include copies of:

(a) All pleadings in the case;

(b) All notices and interim orders issued by the hearing examiner or the commission in connection with the case;

(c) All stipulations;

(d) The decision and order appealed from;

(e) A transcript of all testimony, evidence and proceedings at the hearing;

(f) The exhibits admitted or rejected; and

(g) Any other papers in the case.

The original of any document may be used in lieu of a copy thereof. The record on review may be shortened by stipulation of all parties to the review proceedings.

(3) The record on review must be filed with the reviewing court within thirty (30) days after service of the petition for review, but the court may allow the commission additional time to prepare and transmit the record on review.

§ 75-76-171

(1) The reviewing court may, upon motion therefor, order that additional evidence in the case be taken by the commission upon such terms and conditions as the court may deem just and proper. The motion must not be granted except upon a showing that the additional evidence is material and necessary and that sufficient reason existed for failure to present the evidence at the hearing before the hearing examiner or the commission. The motion must be supported by an affidavit of the moving party or his counsel showing with particularity the materiality and necessity of the additional evidence and the reason why it was not introduced in the administrative hearing. Rebuttal evidence to the additional evidence must be permitted. In cases in which additional evidence is presented to the commission, the commission may modify its decisions and orders as the additional evidence may warrant and shall file with the reviewing court a transcript of the additional evidence together with any modifications of the decision and order, all of which become a part of the record on review.

(2) The review must be conducted by the court sitting without a jury and must not be a trial de novo but is confined to the record on review.

(3) The reviewing court may affirm the decision and order of the commission, or it may remand the case for further proceedings or reverse the decision if the substantial rights of the petitioner have been prejudiced because the decision is:

(a) In violation of constitutional provisions;

(b) In excess of the statutory authority or jurisdiction of the commission;

(c) Made upon unlawful procedure;

(d) Unsupported by any evidence; or

(e) Arbitrary or capricious or otherwise not in accordance with law.

§ 75-76-173

(1) Any party aggrieved by the final decision in the circuit court after a review of the decision and order of the commission may appeal to the Supreme Court in the manner and within the time provided by law for appeals in civil cases. The Supreme Court shall follow the same procedure thereafter as in appeals in civil actions and may affirm, reverse or modify the decision as the record and law warrant.

(2) The judicial review by the circuit and Supreme Courts afforded in this chapter is the exclusive method of review of the commission's actions, decisions and orders in hearings held pursuant to Sections 75-76-159 through 75-76-165, inclusive.

(3) The party requesting judicial review shall bear all of the costs of transcribing and of transmitting the record on review.

§ 75-76-175

(1) A credit instrument accepted on or after June 29, 1991, is valid and may be enforced by legal process.

(2) A licensee or a person acting on the licensee's behalf may accept an incomplete credit instrument which:

(a) Is signed by a patron; and

(b) States the amount of the debt in figures.

and may complete the instrument as is necessary for the instrument to be presented for payment.

(3) A licensee or person acting on behalf of a licensee:

(a) May accept a credit instrument that is dated later than the date of its execution if that later date is furnished at the time of the execution of the credit instrument by the patron.

(b) May not accept a credit instrument which is incomplete, except as authorized by subsection (2) of this section.

(c) May accept a credit instrument that is payable to an affiliated company or may complete a credit instrument in the name of an affiliated company as payee if the credit instrument otherwise complies with this subsection and the records of the affiliated company pertaining to the credit instrument are made available to the executive director upon request.

(4) This section does not prohibit the establishment of an account by a deposit of cash, recognized traveler's check, or any other instruments which is equivalent to cash.

(5) Any person who violates the provisions of this section is subject only to the penalties provided in Sections 75-76-103 through 75-76-119, inclusive.

(6) The commission may adopt regulations prescribing the conditions under which a credit instrument may be redeemed or presented to a bank for collection or payment.

§ 75-76-177

(1) From and after August 1, 1990, there is hereby imposed and levied on each gaming licensee a license fee based upon all the gross revenue of the licensee as follows:

(a) Four percent (4%) of all the gross revenue of the licensee which does not exceed Fifty Thousand Dollars ($50,000.00) per calendar month;

(b) Six percent (6%) of all the gross revenue of the licensee which exceeds Fifty Thousand Dollars ($50,000.00) per calendar month and does not exceed One Hundred Thirty-four Thousand Dollars ($134,000.00) per calendar month; and

(c) Eight percent (8%) of all the gross revenue of the licensee which exceeds One Hundred Thirty-four Thousand Dollars ($134,000.00) per calendar month.

(2) All revenue received from any game or gaming device which is leased for operation on the premises of the licensee-owner to a person other than the owner thereof or which is located in an area or space on such premises which is leased by the licensee-owner to any such person, must be attributed to the owner for the purposes of this section and be counted as part of the gross revenue of the owner. The lessee is liable to the owner for his proportionate share of such license fees.

(3) If the amount of license fees required to be reported and paid pursuant to this section is later determined to be greater or less than the amount actually reported and paid by the licensee, the Chairman of the State Tax Commission shall:

(a) Assess and collect the additional license fees determined to be due, with interest thereon until paid; or

(b) Refund any overpayment, with interest thereon, to the licensee.

Interest must be computed, until paid, at the rate of one percent (1%) per month from the first day of the first month following either the due date of the additional license fees or the date of overpayment.

(4) Failure to pay the fees provided for in this section when they are due for continuation of a license shall be deemed a surrender of the license.

§ 75-76-179

License fees paid under Section 75-76-177 in any taxable year shall be allowed as credit against the income tax liability of the licensee for that taxable year.

§ 75-76-181

(1) For the purposes of this chapter, except as otherwise provided in subsection (3) of this section, the computation of gross revenue must include the face value of any credit instrument accepted on or after June 29, 1991, if, within five (5) years after the last day of the month following the month in which the instrument was accepted by the licensee, the executive director determines that:

(a) The instrument was not signed by the patron or otherwise acknowledged by him in a written form satisfactory to the executive director;

(b) The licensee did not have an address for the patron at the time of accepting the instrument, or, in lieu of that address, has not provided the executive director, within a reasonable time after its request, the current address of the patron to whom the credit was extended;

(c) The licensee has not provided the executive director any evidence that the licensee made a reasonable effort to collect the debt;

(d) The licensee has not provided the executive director any evidence that the licensee checked the credit history of the patron before extending the credit to him;

(e) The licensee has not produced the instrument within a reasonable time after a request by the executive director for the instrument unless it:

(i) Is in the possession of a court, governmental agency or financial institution;

(ii) Has been returned to the patron upon his partial payment of the instrument and the licensee has obtained a substitute credit instrument for the remaining balance;

(iii) Has been stolen and the licensee has made a written report of the theft to the appropriate law enforcement agency; or

(iv) Cannot be produced because of any other circumstance which is beyond the licensee's control;

(f) The signature of the patron on the instrument was forged and the licensee has not made a written report of the forgery to the appropriate law enforcement agency; or

(g) Upon an audit by the State Tax Commission, the licensee requested the auditors not to confirm the unpaid balance of the debit with the patron and there is no other satisfactory means of confirmation.

(2) For the purpose of this chapter, the computation of gross revenue must not include cash or its equivalent which is received in full or partial payment of a debt previously included in the computation of gross revenue pursuant to subsection (1).

(3) Subsection (1) does not apply to any credit instrument which is settled for less than its face amount to:

(a) Induce a partial payment;

(b) Compromise a dispute;

(c) Retain a patron's business for the future; or

(d) Obtain a patron's business if:

(i) An agreement is entered into to discount the face amount of a credit instrument before it is issued to induce timely payment of the credit instrument; and

(ii) The percentage of discount of the instrument is reasonable as compared to the prevailing practice in the industry.

§ 75-76-183

(1) Each applicant for a license to conduct gaming aboard a vessel or cruise vessel shall pay an application fee of Five Thousand Dollars ($5,000.00).

(2) Each licensee who is licensed to conduct gaming aboard a vessel or cruise vessel shall pay an annual license fee of Five Thousand Dollars ($5,000.00).

§ 75-76-185

(1) Except as otherwise provided in Section 75-76-187, there is hereby imposed and levied on each licensee who conducts a gaming operation a fee based on the value of any collectible credit instrument received as a result of that gaming operation which is held by the licensee or any affiliate of the licensee and remains unpaid on the last tax day.

(2) The fee must be:

(a) Calculated by using the rates and monetary limits set forth in Section 75-76-177; and

(b) Collected by the State Tax Commission and refunded pursuant to the regulations adopted by the State Tax Commission.

§ 75-76-187

(1) If the commission approves the issuance of a license for gaming operations at the same location, within thirty (30) days following a change described in subsection (2) of this section, for the purpose of Section 75-76-177 and Sections 75-76-181 through 75-76-191, inclusive, the gaming license shall be deemed transferred and the previously licensed operation shall be deemed a continuing operation.

(2) Credit must be granted for prepaid license fees as described in subsection (1) if:

(a) The securities of a corporate gaming licensee are or become publicly held or publicly traded and the gaming operations of that corporation are transferred to a wholly owned subsidiary corporation;

(b) A corporate gaming licensee is merged with another corporation which is the surviving entity and at least eighty percent (80%) of the surviving entity is owned by shareholders of the former licensee;

(c) A corporate gaming licensee is dissolved and the parent corporation of the dissolved corporation or a subsidiary corporation of the parent corporation, at least eighty percent (80%) of which is owned by the parent corporation, becomes the gaming licensee.

§ 75-76-189

Any person who willfully fails to report, pay or truthfully account for and pay over the license fees imposed by this chapter, or willfully attempts in any manner to evade or defeat any such tax or payment thereof, or any licensee who puts additional games into play without authority of the commission to do so or any licensee who fails to remit any license fee provided for by this chapter when due is, in addition to the amount due, liable for a penalty of the amount of the license fee evaded or not paid, collected or paid over. The penalty must be assessed and collected in the same manner as are other charges, license fees and penalties under this chapter.

§ 75-76-191

(1) In addition to any other state gaming license fees provided for in this chapter, from and after August 1, 1990, there is hereby imposed and levied on each applicant for a state gaming license a license fee to be determined on the basis of the following annual rates:

(a) From establishments operating or to operate ten (10) games or less:

Those establishments operating or to operate one (1) game, the sum of Fifty Dollars ($50.00).

Those establishments operating or to operate two (2) games, the sum of One Hundred Dollars ($100.00).

Those establishments operating or to operate three (3) games, the sum of Two Hundred Dollars ($200.00).

Those establishments operating or to operate four (4) games, the sum of Three Hundred Seventy-five Dollars ($375.00).

Those establishments operating or to operate five (5) games, the sum of Eight Hundred Seventy-five Dollars ($875.00).

Those establishments operating or to operate six (6) or seven (7) games, the sum of One Thousand Five Hundred Dollars ($1,500.00).

Those establishments operating or to operate eight (8), nine (9) or ten (10) games, the sum of Three Thousand Dollars ($3,000.00).

(b) From establishments operating or to operate more than ten (10) games:

For each game up to and including sixteen (16) games, the sum of Five Hundred Dollars ($500.00).

For each game from seventeen (17) to twenty-six (26) games, inclusive, the sum of Four Thousand Eight Hundred Dollars ($4,800.00).

For each game from twenty-seven (27) to thirty-five (35) games, inclusive, the sum of Two Thousand Eight Hundred Dollars ($2,800.00).

For each game more than thirty-five (35) games, the sum of One Hundred Dollars ($100.00).

(2) The license fee imposed by this section is to be paid by the applicant to the State Tax Commission on or before the filing of the application for issuance of a gaming license by the applicant, and is to be paid annually thereafter for continuation of the gaming license. Upon such payment, the Chairman of the State Tax Commission shall certify to the executive director that such fee has been paid by the applicant, and the amount of the fee paid.

(3) Card games, that is, stud or draw poker, bridge, whist, solo, low ball, and panguingui for money, and slot machines, when not utilized as an adjunct to or a unit of any banking, percentage or mechanical device or machine, are not gambling games under the provisions of this section.

(4) All games operated or conducted in one (1) room or a group of rooms in the same or a contiguous building or vessel are considered one (1) operation, and the license to be paid must be determined on the aggregate number of games in each room or group of rooms in the same or a contiguous building or vessel.

§ 75-76-193

(1) In calculating gross revenue, any prizes, premiums, drawings, benefits or tickets which are redeemable for money or merchandise or other promotional allowance, except money or tokens paid at face value directly to a patron as the result of a specific wager and the amount the cash paid to purchase an annuity to fund winnings paid to that patron over several years by an independent financial institution, must not be deducted as losses from winnings at any game except a slot machine.

(2) In calculating gross revenue from slot machines, the actual cost to the licensee of any personal property distributed to a patron as the result of a legitimate wager may be deducted as a loss, but not travel expenses, food, refreshments, lodging or services.

§ 75-76-195

(1) In addition to any state gaming license fees or taxes, from and after August 1, 1990, (a) a municipality may impose a fee upon a licensee located within the municipality for conducting, carrying on or operating any gambling game, slot machine or other game of chance based upon all the gross revenue of the licensee derived from his establishment within the municipality, and (b) a county may impose a fee upon a licensee located within the unincorporated area of the county for conducting, carrying on or operating any gambling game, slot machine or other game of chance based upon all the gross revenue of the licensee derived from his establishment within the unincorporated area of the county, as follows:

(i) Four-tenths percent (.4%) of all the gross revenue which does not exceed Fifty Thousand Dollars ($50,000.00) per calendar month;

(ii) Six-tenths percent (.6%) of all the gross revenue which exceeds Fifty Thousand Dollars ($50,000.00) per calendar month and does not exceed One Hundred Thirty-four Thousand Dollars ($134,000.00) per calendar month; and

(iii) Eight-tenths percent (.8%) of all the gross revenue of the licensee which exceeds One Hundred Thirty-four Thousand Dollars ($134,000.00) per calendar month.

(2) Whenever a municipality or county imposes a fee under this section, it shall not become effective until the first day of the month following the month in which the municipality or county adopts the ordinance imposing the fee.

(3) All revenue received from any game or gaming device which is leased for operation on the premises of licensee-owner to a person other than the owner thereof or which is located in an area or space on such premises which is leased by the licensee-owner to any such person must be attributed to the owner for the purposes of this section and be counted as part of the gross revenue of the owner. The lessee is liable to the owner for his proportionate share of such fees.

(4) If the amount of fees required to be reported and paid pursuant to this section is later determined to be greater or less than the amount actually reported and paid by the licensee, the State Tax Commission on behalf of the local government shall:

(a) Assess and collect the additional fees determined to be due, with interest thereon until paid; or

(b) Refund any overpayment, with interest thereon, to the licensee.

Interest must be computed, until paid, at the rate of one percent (1%) per month from the first day of the month following either the due date of the additional fees or the date of overpayment.

(5) Failure to pay the fees provided for in this section when they are due for continuation of a license shall be deemed a surrender of the license.

§ 75-76-197

On or before the fifteenth day of each month, the gross revenue fees collected under the provisions of Section 75-76-195 during the preceding month shall be paid and distributed as follows:

(a) Fees designated as “local government fees” remitted by licensees who are located within an incorporated municipality shall be distributed:

(i) To such municipal corporation in the proportion that the population of the municipal corporation bears to the entire population of the county in which the municipal corporation is located, according to the most recent federal census; and

(ii) To the county in which the municipal corporation is located in the proportion that the population of the county outside of that municipal corporation bears to the entire population of the county, according to the most recent federal census.

(b) Fees designated as “local government fees” remitted by licensees who are not located within an incorporated municipality shall be distributed to the county in which the licensee is located.

§ 75-76-199

For the purpose of Sections 75-76-199 through 75-76-265:

(a) “Affiliated company” means a subsidiary company, holding company, intermediate company or any other form of business organization that:

(i) Controls, is controlled by or is under common control with a corporate licensee; and

(ii) Is involved in gaming activities in this state or involved in the ownership of property in this state upon which gaming is conducted.

(b) “Director” means any director of a corporation or any person performing similar functions with respect to any organization.

(c) “Equity security” means:

(i) Any voting stock of a corporation, or similar security;

(ii) Any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security;

(iii) Any such warrant or right; or

(iv) Any security having a direct or indirect participation in the profits or the issuer.

(d) “General partner” means any general partner of a limited partnership or any person performing similar functions.

(e) “Holding company” means any corporation, firm, partnership, trust or other form of business organization not a natural person which, directly or indirectly:

(i) Owns;

(ii) Has the power or right to control; or

(iii) Holds, with power to vote, all or any part of the limited partnership interests or outstanding voting securities of a corporation which holds or applies for a state gaming license.

For the purposes of this paragraph (e), in addition to other reasonable meaning of the words used, a holding company “indirectly” has, holds or owns any power, right or security mentioned in this paragraph (e) if it does so through any interest in a subsidiary or successive subsidiaries, however many such subsidiaries may intervene between the holding company and the corporate licensee or applicant.

(f) “Intermediary company” means any corporation, firm, partnership, trust or other form of business organization other than a natural person which:

(i) Is a holding company with respect to a corporation or limited partnership which holds or applies for a state gaming license; and

(ii) Is a subsidiary with respect to any holding company.

(g) “Limited partner” means any limited partner of a limited partnership or any other person having similar rights.

(h) “Limited partnership” means a partnership formed by two (2) or more persons pursuant to this chapter, having as members one or more general partners and one or more limited partners.

(i) “Limited partnership interest” means the right of a general or limited partner to receive from a limited partnership:

(i) A share of the profits;

(ii) Any other compensation by way of income; or

(iii) A return of any or all of his contribution to capital of the limited partnership, or the right to exercise any of the rights or powers provided in this chapter, whether directly or indirectly.

(j) “Publicly traded corporation” means:

(i) Any corporation or other legal entity except a natural person which:

1. Has one or more classes of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (15 U.S.C. Section 781); or

2. Is an issuer subject to Section 15(d) of the Securities Exchange Act of 1934, as amended (15 U.S.C. Section 780); or

(ii) Any corporation or other legal entity created under the laws of a foreign country:

1. Which has one or more classes of securities registered on that country's securities exchange or over-the-counter market; and

2. Whose activities have been found by the commission to be regulated in a manner which protects the investors and the State of Mississippi.

(k) “Subsidiary” means:

(i) Any corporation all or any part of whose outstanding equity securities are:

1. Owned;

2. Subject to a power or right of control; or

3. Held, with power to vote, by a holding company or intermediary company; or

(ii) Any firm, partnership, trust or other form of business organization not a natural person, all or any interest in which is:

1. Owned;

2. Subject to a power or right of control; or

3. Held, with power to vote, by a holding company or intermediary company.

§ 75-76-201

(1) The policy of the State of Mississippi with respect to the issuance of state gaming licenses to corporations is:

(a) To maintain effective control over the conduct of gaming by corporate licensees.

(b) To restrain any speculative promotion of the stock or other securities of gaming enterprises.

(2) The commission may waive, either selectively or by general regulation, one or more of the requirements of Sections 75-76-203 through 75-76-217 if it makes a written finding that such waiver is consistent with the state policy.

§ 75-76-203

In order to be eligible to receive a state gaming license, a corporation shall:

(a) Be incorporated:

(i) In the State of Mississippi, although such corporation may be a wholly or partly owned subsidiary of a corporation which is chartered in another state of the United States; or

(ii) In another state of the United States, if all persons having any direct or indirect interest of any nature in such corporation are licensed as required by this chapter and any applicable regulations of the commission;

(b) Maintain an office of the corporation on the licensed premises;

(c) Comply with all of the requirements of the laws of the State of Mississippi pertaining to corporations; and

(d) Maintain a ledger in the principal office of the corporation in Mississippi, which shall:

(i) At all times reflect the ownership of every class of security issued by the corporation; and

(ii) Be available for inspection by the commission or the executive director or his employees at all reasonable times without notice.

§ 75-76-205

No domestic corporation is eligible to receive a gaming license unless it is in good standing in this state. No foreign corporation is eligible to receive a gaming license unless it qualifies to do business in this state.

§ 75-76-207

(1) The purported sale, assignment, transfer, pledge or other disposition of any security issued by a corporation which holds a state gaming license or the granting of an option to purchase such a security is void unless approved in advance by the commission.

(2) If at any time the commission finds that an individual owner of any such security is unsuitable to continue as a gaming licensee in this state, the owner shall immediately offer the security to the issuing corporation for purchase. The corporation shall purchase the security so offered, for cash at fair market value, within ten (10) days after the date of the offer.

(3) Beginning upon the date when the commission serves upon the corporation notice of a determination of unsuitability pursuant to subsection (2), it is unlawful for the unsuitable owner:

(a) To receive any dividend or interest upon any such security;

(b) To exercise, directly or through any trustee or nominee, any voting right conferred by such security; or

(c) To receive any remuneration in any form from the corporation, for services rendered or otherwise.

(4) Every security issued by a corporation which holds a gaming license must bear a statement, on both sides of the certificate evidencing the security, of the restrictions imposed by this section.

§ 75-76-209

A corporation which applies for a state gaming license shall register as a corporation with the commission and shall provide the following information to the executive director:

(a) The organization, financial structure and nature of the business to be operated, including the names, personal history and fingerprints of all officers, directors and key employees, and the names, addresses and number of shares held by all stockholders.

(b) The rights and privileges acquired by the holders of different classes of authorized securities, including debentures.

(c) The terms on which securities are to be offered.

(d) The terms and conditions of all outstanding loans, mortgages, trust deeds, pledges or any other indebtedness or security device.

(e) The extent of the equity security holding in the corporation of all officers, directors and underwriters, and their remuneration as compensation for services, in the form of salary, wages, fees or otherwise.

(f) Remuneration to persons other than directors and officers exceeding Thirty Thousand Dollars ($30,000.00) per annum.

(g) Bonus and profit sharing arrangements.

(h) Management and service contracts.

(i) Options existing or to be created.

(j) Balance sheets for at least three (3) preceding fiscal years, or, if the corporation has not been incorporated for a period of three (3) years, balance sheets from the time of its incorporation. All balance sheets shall be certified by independent public accountants certified or registered in the State of Mississippi.

(k) Profit and loss statements for at least the three (3) preceding fiscal years, or, if the corporation has not been incorporated for a period of three (3) years, profit and loss statements from the time of its incorporation. All profit and loss statements shall be certified by independent public accountants certified or registered in the State of Mississippi.

(l) Any further financial data which the executive director or the commission may deem necessary or appropriate for the protection of the State of Mississippi or licensed gambling, or both.

§ 75-76-211

All officers and directors of the corporation which holds or applies for a state gaming license must be licensed individually, according to the provisions of this chapter; and if, in the judgment of the commission, the public interest will be served by requiring any or all of the corporation's individual stockholders, lenders, holders of evidences of indebtedness, underwriters, key executives, agents or employees to be licensed, the corporation shall require such persons to apply for a license in accordance with the laws and requirements in effect at the time the commission requires such licensing. A person who is required to be licensed by this section shall apply for a license within thirty (30) days after he becomes an officer or director. A person who is required to be licensed pursuant to a decision of the commission shall apply for a license within thirty (30) days after the executive director requests him to do so.

§ 75-76-213

(1) After licensing pursuant to this chapter, but before the corporation may issue or transfer any security to any person, it shall file a report of its proposed action with the commission and the executive director, which report shall request the approval of the commission. The commission shall have ninety (90) days within which to approve or deny the request. If the commission denies the request, the corporation shall not issue or transfer any such security.

(2) After licensing pursuant to this chapter, the corporation shall file a report of each change of the corporate officers and directors with the commission and the executive director. The commission shall have ninety (90) days within which to approve or disapprove such change. During such ninety-day period and thereafter if the commission does not disapprove the change, such officer or director shall be entitled to exercise all powers of the office to which he was so elected or appointed.

§ 75-76-215

(1) After licensing pursuant to this chapter, the corporation shall:

(a) Report to the commission and the executive director in writing any change in corporate personnel who have been designated by the commission or the executive director as key executives.

(b) Furnish the executive director an annual profit and loss statement and an annual balance sheet.

(2) The commission or the executive director may require that any such corporation furnish the commission or the executive director with a copy of its federal income tax return within thirty (30) days after such return is filed with the federal government.

§ 75-76-217

(1) If an employee of a corporate licensee who is required to be licensed individually:

(a) Does not apply for a license within thirty (30) days after the executive director requests him to do so, and the commission makes a finding of unsuitability for that reason; or

(b) Is denied a license; or

(c) Has his license revoked by the commission,

the corporate gaming licensee by whom he is employed shall terminate his employment in any capacity in which he is required to be licensed and shall not permit him to exercise a significant influence over the operation of the gaming establishment upon being notified by registered or certified mail of that action.

(2) If the corporate licensee designates another employee to replace the employee whose employment was terminated, it shall promptly notify the commission or the executive director and shall cause the newly designated employee to apply for a gaming license.

§ 75-76-219

(1) The policy of the State of Mississippi with respect to the issuance of state gaming licenses to limited partnerships is:

(a) To maintain effective control over the conduct of gaming by limited partnership licensees.

(b) To restrain any speculative promotion of limited partnership interests in gaming enterprises.

(2) The commission may waive, either selectively or by general regulation, one or more of the requirements of Sections 75-76-221 through 75-76-231 if it makes a written finding that a waiver is consistent with the state policy set forth in this chapter.

§ 75-76-221

In order to be eligible to receive a state gaming license, a limited partnership shall:

(a) Be formed under the laws of this state;

(b) Maintain an office of the limited partnership on the licensed premises;

(c) Comply with all of the requirements of the laws of this state pertaining to limited partnerships; and

(d) Maintain a ledger in the principal office of the limited partnership in this state which must:

(i) At all times reflect the ownership of all interests in the limited partnership; and

(ii) Be available for inspection by the commission or the executive director or his employees at all reasonable times without notice.

§ 75-76-223

(1) The sale, assignment, transfer, pledge or other disposition of any interest in a limited partnership which holds a state gaming license is ineffective unless approved in advance by the commission.

(2) If at any time the commission finds that an individual owner of any such interest is unsuitable to hold that interest, the commission shall immediately notify the limited partnership of that fact. The limited partnership shall, within ten (10) days from the date that it receives the notice from the commission, return to the unsuitable owner, in cash, the amount of his capital account as reflected on the books of the partnership.

(3) Beginning on the date when the commission serves notice upon the limited partnership of a determination of unsuitability pursuant to subsection (2), it is unlawful for the unsuitable owner:

(a) To receive any share of the profits or interest upon any limited partnership interest;

(b) To exercise, directly or through any trustee or nominee, any voting right conferred by such interest; or

(c) To receive any remuneration in any form from the limited partnership, for services rendered or otherwise.

(4) The certificate of limited partnership of any limited partnership holding a state gaming license must contain a statement of the restrictions imposed by this section.

§ 75-76-225

A limited partnership which applies for a state gaming license shall register as a limited partnership with the commission and shall provide the following information to the executive director:

(a) The organization, financial structure and nature of the business to be operated, including the names, personal history and fingerprints of all general partners and key employees, and the name, address and interest of each limited partner.

(b) The rights, privileges and relative priorities of limited partners as to the return of contributions to capital, and the right to receive income.

(c) The terms on which limited partnership interests are to be offered.

(d) The terms and conditions of all outstanding loans, mortgages, trust deeds, pledges or any other indebtedness or security device.

(e) The extent of the holding in the limited partnership of all underwriters, and their remuneration as compensation for services, in the form of salary, wages, fees or otherwise.

(f) Remuneration to persons other than general partners exceeding Thirty Thousand Dollars ($30,000.00) per annum.

(g) Bonus and profit sharing arrangements.

(h) Management and service contracts.

(i) Options existing, or to be created.

(j) Balance sheets for at least the three (3) preceding fiscal years, or, if the limited partnership has not been in existence for three (3) years, balance sheets from the time of its formation. All balance sheets must be certified by independent public accountants certified or registered in this state.

(k) Profit and loss statements for at least the three (3) preceding fiscal years, or, if the limited partnership has not been in existence for three (3) years, profit and loss statements from the time of its formation. All profit and loss statements must be certified by independent public accountants certified or registered in this state.

(l) Any further financial data which the executive director or the commission may deem necessary or appropriate for the protection of the State of Mississippi or licensed gambling, or both.

§ 75-76-227

Every general partner and limited partner of a limited partnership which holds or applies for a state gaming license must be licensed individually, according to the provisions of this chapter; and if, in the judgment of the commission, the public interest will be served by requiring any or all of the limited partnership's lenders, holders of evidence of indebtedness, underwriters, key executives, agents or employees to be licensed, the limited partnership shall require those persons to apply for a license in accordance with the laws and requirements in effect at the time the commission requires the licensing. Publicly traded corporations which are limited partners of limited partnerships are not required to be licensed but shall comply with this chapter. A person who is required to be licensed as a general or limited partner shall not receive that position until he secures the required approval of the commission. A person who is required to be licensed pursuant to a decision of the commission shall apply for a license within thirty (30) days after the executive director requests him to do so.

§ 75-76-229

(1) After licensing pursuant to this chapter, the limited partnership shall:

(a) Report to the commission and the executive director in writing any change in personnel who have been designated by the commission as key executives.

(b) Furnish the executive director an annual profit and loss statement and an annual balance sheet.

(2) The commission or the executive director may require that any limited partnership furnish the commission or the executive director with a copy of its federal income tax return within thirty (30) days after the return is filed with the federal government.

§ 75-76-231

(1) If an employee of a limited partnership licensee who is required to be licensed individually:

(a) Does not apply for a license within thirty (30) days after the executive director requests him to do so, and the commission makes a finding of unsuitability for that reason; or

(b) Is denied a license; or

(c) Has his license revoked by the commission,

the limited partnership gaming licensee by whom he is employed shall terminate his employment upon notification by registered or certified mail to the limited partnership of that action.

(2) If the limited partnership licensee designates another employee to replace the employee whose employment was terminated, it shall promptly notify the commission or the executive director and cause the newly designated employee to apply for a gaming license.

§ 75-76-233

Sections 75-76-235 through 75-76-241, inclusive, apply to every holding company or intermediary company except a publicly traded corporation which has been exempted from the operation of all or some of the provisions of such sections.

§ 75-76-235

(1) If the corporation applying for or holding a license is or becomes a subsidiary, each holding company and each intermediary company with respect thereto must:

(a) Qualify to do business in the State of Mississippi.

(b) If it is a corporation, register with the commission and furnish the executive director:

(i) A complete list of all stockholders when it first registers, and annually thereafter, within thirty (30) days after the annual meeting of the stockholders of the corporation, showing the number of shares held by each;

(ii) The names of all corporate officers within thirty (30) days of their appointment; and

(iii) The names of all members of the directors within thirty (30) days of their election.

(c) If it is a firm, partnership, trust or other form of business organization, it must register with the commission and furnish the executive director such analogous information as the executive director may prescribe.

(2) The commission or the executive director may, in their discretion, make such investigations concerning the officers, directors, underwriters, security holders, partners, principals, trustees or direct or beneficial owners of any interest in any holding company or intermediary company as it deems necessary, either at the time of initial registration or at any time thereafter.

(3) If at any time the commission finds that any person owning, controlling or holding with power to vote all or any part of any class of security of, or any interest in, any holding company or intermediary company is unsuitable to be connected with a licensed gaming enterprise, it shall so notify such unsuitable person, the holding company or intermediary company, or both. Such unsuitable person shall immediately offer such security to the issuing corporation, or such interest to the firm, partnership, trust or other business organization, for purchase. The corporation shall purchase the security so offered, or the firm, partnership, trust or other business organization shall purchase the interest so offered, for cash at fair market value within ten (10) days after the date of the offer.

(4) Beginning upon the date when the commission serves notice of a determination of unsuitability pursuant to subsection (3), it is unlawful for the unsuitable person:

(a) To receive any dividend or interest upon any such securities, or any dividend, payment or distribution of any kind from any holding company or intermediary company;

(b) To exercise, directly or indirectly or through any proxy, trustee or nominee, any voting right conferred by such securities or interest; or

(c) To receive any remuneration in any form from the corporation gaming licensee, or from any holding company or intermediary company with respect thereto, for services rendered or otherwise.

(5) Every security issued by a holding company or intermediary company which directly or indirectly:

(a) Owns;

(b) Has the power or right to control; or

(c) Holds with power to vote

all or any part of the outstanding equity securities of a corporate gaming licensee shall bear a statement, on both sides of the certificate evidencing such security, of the restrictions imposed by this section.

(6) A holding company or intermediary company subject to subsection (1) shall not make any public offering of any of its securities unless such public offering has been approved by the commission.

(7) The commission may, at any time and from time to time, by general regulation or selectively, impose on any holding company or intermediary company any requirement not inconsistent with law which it may deem necessary in the public interest. Without limiting the generality of the preceding sentence, any such requirement may deal with the same subject matter as, but be more stringent than, the requirements imposed by Sections 75-76-199 through 75-76-265, inclusive.

§ 75-76-237

(1) Each officer, employee, director, partner, principal, trustee or direct or beneficial owner of any interest in any holding company or intermediary company who the commission determines is or is to become engaged in the administration or supervision of, or any other significant involvement with, the activities of a corporate licensee, must be found suitable therefor and may be required to be licensed by the commission.

(2) If any officer, employee, director, partner, principal, trustee or direct or beneficial owner required to be found suitable pursuant to subsection (1) fails to apply for a finding of suitability or a gaming license within thirty (30) days after being requested so to do by the executive director, is not found suitable or is denied a license by the commission, or if his license or the finding of his suitability is revoked after appropriate findings by the commission, the holding company or intermediary company, or both, shall immediately remove that person from any position in the administration or supervision of, or any other significant involvement with, the activities of the corporate licensee. If the commission suspends the suitability or license of any officer, employee, director, partner, principal, trustee or owner, the holding company or intermediary company, or both, shall, immediately and for the duration of the suspension, suspend him from performing any duties in administration or supervision of the activities of the corporate licensee and from any other significant involvement therewith.

§ 75-76-239

If the corporation applying for or holding a license is or becomes a subsidiary, each holding company and intermediary company shall furnish the executive director the following information:

(a) The organization, financial structure and nature of the business it operates.

(b) The terms, position, rights and privileges of the different classes of securities outstanding.

(c) The terms on which its securities are to be, and during the preceding three (3) years have been, offered to the public or otherwise.

(d) The terms and conditions of all outstanding loans, mortgages, trust deeds, pledges, or any other indebtedness or security device pertaining to the corporate gaming licensee.

(e) The extent of the security holding or other interest in the holding company or intermediary company of all officers, employees, directors, underwriters, partners, principals, trustees or any direct or beneficial owner, and any remuneration as compensation for their services, in the form of salary, wages, fees, or by contract, pertaining to the corporate gaming licensee.

(f) Remuneration to others than directors and officers exceeding Forty Thousand Dollars ($40,000.00) per annum.

(g) Bonus and profit sharing arrangements.

(h) Management and service contracts.

(i) Options existing or to be created in respect of their securities or other interests.

(j) Balance sheets, certified by independent certified public accountants, for not more than the three (3) preceding fiscal years or, if the holding company or intermediary company has not been in existence more than three (3) years, balance sheets from the time of its establishment.

(k) Profit and loss statements, certified by independent certified public accountants, for not more than the three (3) preceding fiscal years, or, if the holding company or intermediary company has not been in existence more than three (3) years, profit and loss statements from the time of its establishment.

(l) Any further financial statements which the executive director or the commission may deem necessary or appropriate for the protection of the State of Mississippi, licensed gambling, or both.

(m) An annual profit and loss statement and annual balance sheet, and a copy of its annual federal income tax return within thirty (30) days after such return is filed with the federal government.

§ 75-76-241

If any corporate or limited partnership licensee, or if any holding company or intermediary company with respect thereto, does not comply with the laws of this state and the regulations of the commission, the commission may, in its discretion, do any one, all or a combination of the following:

(a) Revoke, limit, condition or suspend the gaming license of the corporate or limited partnership licensee; or

(b) Fine the persons involved, or the corporate or limited partnership licensee, or such holding company or intermediary company, in accordance with the laws of this state and the regulations of the commission.

§ 75-76-243

The Legislature hereby declares that:

(a) Some corporate acquisitions, repurchases of securities and corporate defense tactics affecting corporate gaming licensees and publicly traded corporations that are affiliated companies can constitute business practices which may be injurious to stable and productive corporate gaming.

(b) A regulatory scheme established to ameliorate the potential adverse effects of these business practices upon the gaming industry must be properly developed to balance the interests of Mississippi gaming, interstate commerce and federal regulation of securities.

(c) A regulatory scheme established to ameliorate the potential adverse effects of these business practices upon the gaming industry may best be accomplished by the adoption and enforcement of regulations by the commission.

§ 75-76-245

The policy of the State of Mississippi with respect to corporate acquisitions, repurchases of securities and corporate recapitalizations affecting corporate licensees and publicly traded corporations that are affiliated companies is to:

(a) Assure the financial stability of corporate licensees and affiliated companies;

(b) Preserve the beneficial aspects of conducting business in the corporate form; and

(c) Promote a neutral environment for the orderly governance of corporate affairs that is consistent with the public policy of this state concerning gaming.

§ 75-76-247

The commission may adopt regulations providing for the review and approval of corporate acquisitions, repurchases of securities and corporate defense tactics affecting corporate gaming licensees and publicly traded corporations that are affiliated companies. The regulations must be consistent with:

(a) The policy of this state as expressed in this chapter;

(b) The provisions of this chapter;

(c) The requirements of the Constitution of the United States; and

(d) Federal regulation of securities.

§ 75-76-249

The commission may exempt a publicly traded corporation from compliance with:

(a) The provisions of Section 75-76-207.

(b) Some or all of the provisions of Sections 75-76-235 through 75-76-241. To the extent of such an exemption, the corporation shall comply instead with the provisions of Sections 75-76-253 through 75-76-265, except as otherwise ordered by the commission.

§ 75-76-251

(1) A corporation or other legal entity which is organized under the laws of another country and seeks to register with the commission as a publicly traded corporation must submit an application to the executive director.

(2) The application must provide the executive director with information showing that the applicant's business activities are regulated by a governmental authority of the foreign country in a manner which will prevent those activities from posing any threat to the control of gaming in this state.

(3) The executive director may conduct an investigation of the applicant and the governmental authority responsible for regulation of the applicant. The executive director shall require the applicant to pay the executive director's anticipated expenses for such an investigation, and may, after completing such an investigation, charge the applicant any amount necessary to cover an underpayment of the actual expenses.

§ 75-76-253

In determining whether to recommend that the commission approve an application submitted pursuant to Section 75-76-251, the executive director may consider, in addition to all other requirements of this chapter:

(a) Whether the governmental authority in the foreign country has an effective system to regulate the applicant and the relations between the investing public and the applicant and other corporations listed on the exchange;

(b) Whether the system includes:

(i) A requirement that the listed corporations make full disclosure of information to the investing public;

(ii) A requirement that the listed corporations file periodic reports with the governmental authority;

(iii) A method to prevent any manipulation of the prices of securities or any employment of deceptive or misleading devices; and

(iv) A restriction on margins to prevent any excessive use of credit for the purchase or carrying of securities listed on the exchange;

(c) The availability of means by which the commission or the executive director may obtain adequate information from the governmental authority in the foreign country concerning the applicant's activities and/or supervision of the gaming activities of the corporate or limited partnership gaming licensee;

(d) Such other matters as the executive director or the commission finds it necessary to consider to protect regulated gaming in Mississippi. The executive director may recommend the rejection of any such application without a hearing.

§ 75-76-255

(1) If a corporation or limited partnership applying for or holding a state gaming license is or becomes owned in whole or in part or controlled by a publicly traded corporation, such publicly traded corporation must:

(a) Maintain a ledger in the principal office of its subsidiary which is licensed to conduct gaming in this state which must:

(i) Reflect the ownership of record of each outstanding share of any class of equity security issued by the publicly traded corporation. The ledger may initially consist of a copy of its latest list of equity security holders and thereafter be maintained by adding a copy of such material it regularly receives from the transfer agent for its equity securities of any class which are outstanding.

(ii) Be available for inspection by the commission or the executive director and his employees at all reasonable times without notice.

(b) Register with the commission and provide the following information to the executive director:

(i) The organization, financial structure and nature of the business of the publicly traded corporation, including the names of all officers, directors and any employees actively and directly engaged in the administration or supervision of the activities of the corporate or limited partnership gaming licensee, and the names, addresses and number of shares held of record by holders of its equity securities.

(ii) The rights and privileges accorded the holders of different classes of its authorized equity securities.

(iii) The terms on which its equity securities are to be, and during the preceding three (3) years have been, offered by the corporation to the public or otherwise initially issued by it.

(iv) The terms and conditions of all its outstanding loans, mortgages, trust deeds, pledges or any other indebtedness or security device, directly relating to the gaming activities of the corporate or limited partnership gaming licensee.

(v) The extent of the equity security holdings of record in the publicly traded corporation of all officers, directors, underwriters and persons owning of record equity securities of any class of the publicly traded corporation, and any payment received by any such person from the publicly traded corporation for each of its three (3) preceding fiscal years for any reason whatsoever.

(vi) Remuneration exceeding Forty Thousand Dollars ($40,000.00) per annum to persons other than directors and officers who are actively and directly engaged in administration or supervision of the gaming activities of the corporate or limited partnership gaming licensee.

(vii) Bonus and profit-sharing arrangements of the publicly traded corporation directly or indirectly relating to the gaming activities of the corporate or limited partnership gaming licensee.

(viii) Management and service contracts of the publicly traded corporation directly or indirectly relating to the gaming activities of the corporate or limited partnership gaming licensee.

(ix) Options existing or from time to time created in respect of its equity securities.

(x) Balance sheets, certified by independent public accountants, for at least the three (3) preceding fiscal years, or if the publicly traded corporation has not been incorporated for a period of three (3) years, balance sheets from the time of its incorporation. These balance sheets may be those filed by it with or furnished by it to the Securities and Exchange Commission.

(xi) Profit and loss statements, certified by independent certified public accountants, for at least three (3) preceding fiscal years, or, if the publicly traded corporation has not been incorporated for a period of three (3) years, profit and loss statements from the time of its incorporation. These profit and loss statements may be those filed by it with or furnished by it to the Securities and Exchange Commission.

(xii) Any further information within the knowledge or control of the publicly traded corporation which either the commission or the executive director may deem necessary or appropriate for the protection of this state or licensed gambling, or both. The commission or the executive director may, in their discretion, make such investigation of the publicly traded corporation or any of its officers, directors, security holders or other persons associated therewith as they deem necessary.

(2) If the publicly traded corporation is a foreign corporation, it must also qualify to do business in this state.

(3) The commission may, at any time and from time to time, by general regulation or selectively, impose on any publicly traded corporation any requirement not inconsistent with law which it may deem necessary in the public interest. Without limiting the generality of the preceding sentence, any such requirement may deal with the same subject matter as, but be more stringent than, the requirements imposed by Sections 75-76-199 through 75-76-265, inclusive.

§ 75-76-257

(1) Each officer and employee of a publicly traded corporation who the commission determines is, or is to become, actively and directly engaged in the administration or supervision of, or any other significant involvement with, the activities of the corporate or limited partnership gaming licensee must be found suitable therefor and may be required to be licensed by the commission. Each director of a publicly traded corporation who the commission determines is, or is to become, actively and directly engaged in the administration or supervision of the gaming activities at a licensed gaming establishment of the corporate or limited partnership licensee must be found suitable therefor and may be required to be licensed by the commission.

(2) If any officer, director or employee of a publicly traded corporation required to be licensed or found suitable pursuant to subsection (1) fails to apply for a gaming license or finding of suitability within thirty (30) days after being requested to do so by the executive director, or is denied a license or not found suitable by the commission, or if his license or the finding of his suitability is revoked after appropriate findings by the commission, the publicly traded corporation shall immediately remove that officer or employee from any office or position wherein he is actively and directly engaged in the administration or supervision of, or any other significant involvement with, the activities of the corporate or limited partnership gaming licensee, or shall immediately remove that director from any office or position wherein he is actively and directly engaged in the administration or supervision of the gaming activities of the corporate or limited partnership gaming licensee. If the commission suspends the finding of suitability of any officer, director or employee, the publicly traded corporation shall, immediately and for the duration of the suspension, suspend that officer or employee from performance of any duties wherein he is actively and directly engaged in administration or supervision of, or any other significant involvement with, the activities of the corporate or limited partnership gaming licensee, or immediately and for the duration of the suspension suspend that director from performance of any duties wherein he is actively and directly engaged in administration or supervision of the activities at a licensed gaming establishment of the corporate or limited partnership licensee.

§ 75-76-259

(1) Except as provided in subsection (2), after the publicly traded corporation has registered pursuant to this chapter, and while the subsidiary holds a gaming license, the publicly traded corporation shall:

(a) Report promptly to the executive director in writing any change in its officers, directors or employees who are actively and directly engaged in the administration or supervision of the gaming activities of the corporate or limited partnership gaming licensee.

(b) Each year furnish to the executive director a profit and loss statement and a balance sheet of the publicly traded corporation as of the end of the year and, upon request of the executive director therefor, a copy of the publicly traded corporation's federal income tax return within thirty (30) days after the return is filed with the federal government. All profit and loss statements and balance sheets must be submitted within one hundred twenty (120) days after the close of the fiscal year to which they relate and may be those filed by the publicly traded corporation with or furnished by it to the Securities and Exchange Commission.

(c) Mail to the executive director a copy of any statement, or amendment thereto, received from a stockholder or group of stockholders pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, within ten (10) days after receiving the statement or amendment thereto, and report promptly to the executive director in writing any changes in ownership of record of its equity securities which indicate that any person has become the owner of record of more than ten percent (10%) of its outstanding equity securities of any class.

(d) Upon request of the executive director, furnish to it a copy of any document filed by the publicly traded corporation with the Securities and Exchange Commission or with any national or regional securities exchange, including documents considered to be confidential in nature, or any document furnished by it to any of its equity security holders of any class.

(2) A publicly traded corporation which was created under the laws of a foreign country shall, instead of complying with subsection (1):

(a) Each year furnish to the executive director a profit and loss statement and a balance sheet of the publicly traded corporation as of the end of the year, and, upon request of the executive director therefor, a copy of the publicly traded corporation's federal income tax return within thirty (30) days after the return is filed with the federal government. All profit and loss statements and balance sheets must be submitted within one hundred twenty (120) days after the close of the fiscal year to which they relate and may be those filed by the publicly traded corporation with or furnished by it to the foreign governmental agency that regulates the sale of its securities.

(b) Mail to the executive director a copy of any statement, or amendment thereto, received from a stockholder or group of stockholders pursuant to law, within ten (10) days after receiving the statement or amendment thereto, and report promptly to the executive director in writing any changes in ownership of record of its equity securities which indicate that any person has become the owner of record of more than ten percent (10%) of its outstanding equity securities of any class.

(c) Upon request of the executive director, furnish to it a copy of any document filed by the publicly traded corporation with the foreign governmental agency that regulates the sale of its securities exchange, including documents considered to be confidential in nature, or any document furnished by it to any of its equity security holders of any class.

§ 75-76-261

If any corporate or limited partnership licensee owned or controlled by a publicly traded corporation subject to the provisions of this chapter, or that publicly traded corporation, does not comply with the laws of this state and the regulations of the commission, the commission may, in its discretion, do any one, all or a combination of the following:

(a) Revoke, limit, condition or suspend the gaming license of the corporate or limited partnership licensee; or

(b) Fine the persons involved, the corporate or limited partnership licensee or the publicly traded corporation in accordance with the laws of this state and the regulations of the commission.

§ 75-76-263

(1) Each person who acquires, directly or indirectly, beneficial ownership of any voting security in a publicly traded corporation which is registered with the commission may be required to be found suitable if the commission has reason to believe that his acquisition of such ownership would otherwise be inconsistent with the declared policy of this state.

(2) Each person who, individually or in association with others, acquires, directly or indirectly, beneficial ownership of more than five percent (5%) of any class of voting securities of publicly traded corporation registered with the commission, and who is required to report such acquisition to the Securities and Exchange Commission pursuant to Section 13(d)(1), 13(g) or 16(a) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m(d)(1), 78m(g) and 78p(a), respectively), shall file a copy of that report, and any amendments thereto, with the commission within ten (10) days after filing that report with the Securities and Exchange Commission.

(3) Each person who, individually or in association with others, acquires, directly or indirectly, the beneficial ownership of more than ten percent (10%) of any class of voting securities of a publicly traded corporation registered with the commission, and who is required to report the acquisition pursuant to Section 13(d)(1), 13(g) or 16(a) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m(d)(1), 78m(g) and 78p(a), respectively), must be found suitable by the commission.

(4) A person who acquires beneficial ownership of any voting security in a publicly traded corporation created under the laws of a foreign country which is registered with the commission shall file such reports and is subject to such a finding of suitability as the commission may prescribe.

(5) Any person required by the commission or by this section to be found suitable shall:

(a) Apply for a finding of suitability within thirty (30) days after the executive director requests that he do so; and

(b) Together with the application, deposit with the State Tax Commission a sum of money which, in the opinion of the executive director, will be adequate to pay the anticipated costs and charges incurred in the investigation and processing of the application, and deposit such additional sums as are required by the executive director to pay final costs and charges.

(6) Any person required by the commission or this section to be found suitable by the commission shall not hold directly or indirectly the beneficial ownership of any voting security of a publicly traded corporation which is registered with the commission beyond that period of time prescribed by the commission.

(7) The violation of subsection (5) or (6) is a misdemeanor.

§ 75-76-265

If any person who is required by or pursuant to this chapter to be licensed or found suitable because of his connection with a corporate licensee, holding company or intermediary company, including a publicly traded corporation, fails to apply for a license or a finding of suitability, or if his license or finding of suitability is revoked, the corporate licensee, holding company, intermediary company or any person who directly or indirectly controls, is controlled by or is under common control with the corporate licensee, holding company or intermediary company shall not, after receipt of written notice from the commission:

(a) Pay him any remuneration for any service relating to the activities of a corporate licensee, except for amounts due for services rendered before the date of receipt of notice of such action by the commission. Any contract or agreement for personal services or the conduct of any activity at a licensed gaming establishment between a former employee whose employment was terminated because of failure to apply for a license or a finding of suitability, denial of a license or finding of suitability, or revocation of a license or a finding of suitability, or any business enterprise under the control of that employee and the corporate licensee, holding or intermediary company or registered publicly traded corporation is subject to termination. Every such agreement shall be deemed to include a provision for its termination without liability on the part of the licensee upon a finding by the commission that the business or any person associated therewith is unsuitable to be associated with a gaming enterprise. Failure expressly to include such a condition in the agreement is not a defense in any action brought pursuant to this section to terminate the agreement.

(b) Enter into any contract or agreement with him or with a business organization under his control which involves the operations of a corporate licensee, without the prior approval of the executive director.

(c) Employ him in any position involving the activities of a corporate licensee without prior approval of the executive director.

§ 75-76-267

(1) Conviction by a court of competent jurisdiction of a person for a violation of, an attempt to violate, or a conspiracy to violate any of the provisions of this chapter shall act as an immediate revocation of all licenses which have been issued to the violator, and, in addition, the court may, upon application of the district attorney of the county or of the commission, order that no new or additional license under this chapter be issued to the violator, or be issued to any person for the room or premises in which the violation occurred, for one (1) year after the date of the revocation.

(2) Any person who willfully fails to report, pay or truthfully account for and pay over any license fee or tax imposed by the provisions of this chapter, or willfully attempts in any manner to evade or defeat any such license fee, tax or payment thereof, shall be punished by commitment to the custody of the Department of Corrections for not less than one (1) year nor more than six (6) years, or by a fine of not more than Five Thousand Dollars ($5,000.00), or by both fine and imprisonment.

(3) Except as provided in subsection (4), any person who willfully violates, attempts to violate, or conspires to violate any of the provisions of subsection (1) of Section 75-76-57, shall be punished by commitment to the custody of the Department of Corrections for not less than one (1) year nor more than twenty (20) years, by a fine of not more than Fifty Thousand Dollars ($50,000.00), or by both fine and imprisonment.

(4) A licensee who puts additional games or slot machines into play or displays additional games or slot machines in a public area without first obtaining all required licenses and approval is subject only to the penalties provided in Sections 75-76-93 and 75-76-103 and in any applicable ordinance of the county or municipality.

(5) The violation of any of the provisions of this chapter, the penalty for which is not specifically fixed in this chapter, is a misdemeanor.

§ 75-76-269

For the purposes of Sections 75-76-271 through 75-76-277:

(a) “Foreign gaming” means any gaming operations outside this state.

(b) “Licensee” means a person who:

(i) Is licensed or required to be licensed pursuant to Section 75-76-57 or 75-76-63; or

(ii) Is or is required to be licensed, registered or found suitable pursuant to Sections 75-76-199 through 75-76-265, inclusive; or

(iii) Directly or through one or more intermediaries controls, is controlled by or is under common control with a person described in subsection (i) or (ii).

§ 75-76-271

(1) Except as provided in subsections (2), (3) and (5), no licensee may be involved in foreign gaming without the prior approval of the commission, acting upon a recommendation of the executive director. Any approval granted under this section is a privilege which may be revoked, suspended, conditioned, limited or restricted by the commission at any time.

(2) The commission may, based on such factors as it deems relevant, grant preliminary approval to a licensee for involvement in foreign gaming. Any preliminary approval granted pursuant to this subsection may be revoked, suspended, conditioned, limited or restricted by the commission at any time.

(3) Approval of the commission is not required if:

(a) The licensee does not own more than five percent (5%) beneficial interest in any class of securities of a corporation incorporated under the laws of any state of the United States which is a publicly traded corporation as defined in Section 75-76-199; and

(b) The licensee is not able to significantly control or influence the corporation.

(4) If it finds that approval is necessary to effectuate the purposes of this chapter, the commission may, by giving notice of its decision to the licensee, require that a licensee who is otherwise exempt under subsection (3) obtain approval as required by subsection (1).

(5) The commission may waive, either selectively or by general regulation, one or more of the requirements of Sections 75-76-269 through 75-76-277, inclusive, if it makes a written finding that the waiver is consistent with the public policy of this state concerning gaming.

§ 75-76-273

(1) A licensee seeking approval to participate in foreign gaming shall apply to the executive director in writing, under oath, supplying any information and supporting data pertaining to himself and to the foreign gaming operations which the executive director and the commission require.

(2) A licensee who applies for approval agrees by his application to conduct his foreign gaming operations in accordance with the standards of honesty and integrity required for gaming activities in this state.

(3) The licensee shall submit data showing that the foreign gaming operations will be lawfully conducted in the foreign jurisdiction, and that the licensee's involvement will pose no unreasonable threat to gaming control in Mississippi.

(4) The executive director may conduct investigations concerning the application and submit recommendations to the commission. The executive director may require the applicant to pay anticipated costs of an investigation in advance, and shall refund overpayments and charge and collect amounts to cover underpayments of actual costs after the completion of the investigation.

§ 75-76-275

(1) The executive director and the commission shall consider without limitation the following factors in deliberating the granting or denial of approval to conduct foreign gaming operations:

(a) The means, including agreements with foreign jurisdictions, for the commission and the executive director to obtain adequate access to information pertaining to the gaming operations in which the licensee seeks to be involved, and pertaining to any associate of the licensee in the foreign gaming operations.

(b) Assurance that the licensee and his associates in the foreign gaming operations will recognize and abide by the conditions and restrictions imposed upon approval of participation.

(c) Assurance that the right of Mississippi to collect license fees will be adequately protected through an effective accounting system designed to prevent the undetected employment of techniques to avoid payment.

(d) Assurance that the relationship of the licensee with any associate will pose no unreasonable threat to the interest of the State of Mississippi in regulating the gaming industry within the state.

(e) Other factors which are found to be relevant to the adequate protection of state-regulated gaming in Mississippi.

(2) The commission may impose conditions upon any approval of participation in foreign gaming operations, including without limitation:

(a) The continuation of any factor listed in subsection (1) or any other factor considered relevant by the commission.

(b) Requirements for internal accounting, administrative and managerial controls, including evidence of those controls to be filed with the commission or maintained in the principal office of the licensee in Mississippi and made available to the commission and the executive director and commission or their agents for examination and copying as requested.

(c) Requirements for reports found necessary by the executive director or the commission.

(d) Requirements for onsite audits to be conducted at the licensee's expense by independent certified public accountants, or their equivalent, who are acceptable to the executive director or the commission.

(e) Requirements for disclosure and reporting of changes in beneficial ownership or control of any interest in a foreign gaming operation, including interest of the licensee and of others.

(f) Requirements for onsite inspections at the expense of the licensee of foreign gaming operations by the executive director or the commission or their representatives.

§ 75-76-277

A licensee who continues participation in foreign gaming operations after an order of the commission terminating approval engages in an unsuitable method of operation and may be disciplined by the commission.

§ 75-76-279

(1) From and after June 29, 1990, any cruise vessel or vessel which is licensed under the provisions of this chapter and which is used for gambling games, as determined by the Tax Commission, shall be exempt from all ad valorem taxes through June 30, 1991.

(2) On or before December 1, 1990, the State Tax Commission shall report to the Legislature its recommendation for an equitable method of imposing a tax upon the cruise vessels and vessels described in subsection (1).

§ 75-76-281

No elected or appointed official shall derive any pecuniary benefit, directly or indirectly, other than compensation and any other benefits authorized by law, as a result of such elected or appointed official's duties under this chapter. Any person convicted of a violation of this section shall be punished pursuant to the provisions of Article 3, Chapter 4, Title 25, Mississippi Code of 1972.

§ 75-76-301

It is unlawful for any person:

(a) To alter or misrepresent the outcome of a game or other event on which wagers have been made after the outcome is made sure but before it is revealed to the players.

(b) To place, increase or decrease a bet or to determine the course of play after acquiring knowledge, not available to all players, of the outcome of the game or any event that affects the outcome of the game or that is the subject of the bet or to aid anyone in acquiring such knowledge for the purpose of placing, increasing or decreasing a bet or determining the course of play contingent upon that event or outcome.

(c) To claim, collect or take, or attempt to claim, collect or take, money or anything of value in or from a gambling game, with intent to defraud, without having made a wager contingent thereon, or to claim, collect or take an amount greater than the amount won.

(d) Knowingly to entice or induce another to go to any place where a gambling game is being conducted or operated in violation of the provisions of this chapter, with the intent that the other person play or participate in the gambling game.

(e) To place or increase a bet after acquiring knowledge of the outcome of the game or other event that is the subject of the bet, including past-posting and pressing bets.

(f) To reduce the amount wagered or cancel the bet after acquiring knowledge of the outcome of the game or other event that is the subject of the bet, including pinching bets.

(g) To manipulate, with the intent to cheat, any component of a gaming device in a manner contrary to the designed and normal operational purpose for the component, including, but not limited to, varying the pull of the handle of a slot machine, with knowledge that the manipulation affects the outcome of the game or with knowledge of any event that affects the outcome of the game.

§ 75-76-303

It is unlawful for any person at a licensed gaming establishment to use, or possess with the intent to use, any device to assist:

(a) In projecting the outcome of the game;

(b) In keeping track of the cards played;

(c) In analyzing the probability of the occurrence of an event relating to the game; or

(d) In analyzing the strategy for playing or betting to be used in the game, except as permitted by the commission.

§ 75-76-305

(1) It is unlawful for any licensee, employee or other person to use counterfeit chips in a gambling game.

(2) It is unlawful for any person, in playing or using any gambling game designed to be played with, receive or be operated by chips or tokens approved by the commission or by lawful coins of the United States of America:

(a) Knowingly to use other than chips or tokens approved by the commission or lawful coins, legal tender of the United States of America, or to use coins not of the same denomination as the coins intended to be used in that gambling game; or

(b) To use any device or means to violate the provisions of this chapter.

(3) It is unlawful for any person, not a duly authorized employee of a licensee acting in furtherance of his employment within an establishment, to have on his person or in his possession on or off the premises of any licensed gaming establishment any device intended to be used to violate the provisions of this chapter.

(4) It is unlawful for any person, not a duly authorized employee of a licensee acting in furtherance of his employment within an establishment, to have on his person or in his possession on or off the premises of any licensed gaming establishment any key or device known to have been designed for the purpose of and suitable for opening, entering or affecting the operation of any gambling game, drop box or any electronic or mechanical device connected thereto, or for removing money or other contents therefrom.

(5) It is unlawful for any person to have on his person or in his possession any paraphernalia for manufacturing slugs. As used in this subsection, “paraphernalia for manufacturing slugs” means the equipment, products and materials that are intended for use or designed for use in manufacturing, producing, fabricating, preparing, testing, analyzing, packaging, storing or concealing a counterfeit facsimile of the chips or tokens approved by the commission or lawful coins of the United States, the use of which is unlawful pursuant to subsection (2) of this section. The term includes, but is not limited to:

(a) Metal or metal alloys;

(b) Molds, forms or similar equipment capable of producing a likeness of a gaming token or United States coin;

(c) Melting pots or other receptacles;

(d) Torches; and

(e) Tongs, trimming tools or other similar equipment.

(6) Possession of more than one (1) of the devices, equipment, products or materials described in this section permits a rebuttable inference that the possessor intended to use them for cheating.

§ 75-76-307

It is unlawful for any person, whether he is an owner or employee of or a player in an establishment, to cheat at any gambling game.

§ 75-76-309

(1) It is unlawful to manufacture, sell or distribute any cards, chips, dice, game or device that is intended to be used to violate any provision of this chapter.

(2) It is unlawful to mark, alter or otherwise modify any associated equipment or gaming device in a manner that:

(a) Affects the result of a wager by determining win or loss; or

(b) Alters the normal criteria of random selection, which affects the operation of a game or which determines the outcome of a game.

(3) It is unlawful for any person to instruct another in cheating or in the use of any device for that purpose, with the knowledge or intent that the information or use so conveyed may be employed to violate any provision of this chapter.

§ 75-76-311

(1) In addition to any other penalty provided in this chapter, any person who violates any provision of Sections 75-76-301 through 75-76-313, shall be punished:

(a) For the first offense, by imprisonment in the State Penitentiary for not more than two (2) years, or by a fine of not more than Ten Thousand Dollars ($10,000.00), or by both such fine and imprisonment.

(b) For a second or subsequent violation of any of these provisions, by imprisonment in the State Penitentiary for not more than ten (10) years, and may be further punished by a fine of not more than Ten Thousand Dollars ($10,000.00).

(2) In addition to any other penalty provided in this chapter, any person who attempts, or two (2) or more persons who conspire, to violate any provision of Sections 75-76-301 through 75-76-313 each shall be punished by imposing the penalty provided in subsection (1) of this section for the completed crime, whether or not he personally played any gambling game or used any prohibited device.

§ 75-76-313

If any person shall commit or attempt to commit a violation of any provision of Sections 75-76-301 through 75-76-313, any officer, employee or agent of a licensee or any law enforcement officer, acting in good faith and upon probable cause based upon reasonable grounds therefor, may question such person in a reasonable manner for the purpose of ascertaining whether or not such person should be charged with a violation of Sections 75-76-301 through 75-76-313. The questioning of a person by an officer, employee or agent of a licensee or by a law enforcement officer shall not render the licensee, its officer, its employee or its agent, or a law enforcement officer, civilly liable for slander, false arrest, false imprisonment, malicious prosecution, unlawful detention or otherwise in any case where the licensee's officer, employee or agent, or the law enforcement officer, is acting in good faith and upon reasonable grounds to believe that the person questioned is committing or attempting to commit a violation of Sections 75-76-301 through 75-76-313.

§ 75-76-325

(1) There is created in the State Treasury a special fund to be designated as the “Mississippi Gaming Commission Fund.” The special fund shall consist of monies deposited therein under Section 75-76-81 and monies from any other source designated for deposit into the fund. Unexpended amounts remaining in the special fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned or investment earnings on amounts in the fund shall be deposited to the credit of the fund.

(2) Monies in the special fund may be used by the commission, upon appropriation by the Legislature, only for the purposes of carrying out the provisions of this chapter. Unexpended amounts remaining in the special fund at the end of a fiscal year shall be used by the commission in calculating the amounts of fees to be imposed under Section 75-76-33(2)(f) during the next succeeding state fiscal year that will be necessary to provide the commission with sufficient revenue, when combined with other monies deposited into the special fund, to carry out the provisions of this chapter without any state general funds.

(3) From and after July 1, 2016, the expenses of this agency shall be defrayed by appropriation from the State General Fund and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law.

(4) From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

Chapter 77 Repurchase of Inventories from Retailers Upon Termination of Contract

§ 75-77-1

For the purposes of this chapter the following words and phrases have the following meanings unless the context otherwise requires:

(a) “Current model” means a model listed in the wholesaler's, manufacturer's or distributor's current sales manual or any supplements thereto;

(b) “Current net price” means the price listed in the supplier's price list or catalogue in effect at the time the contract is cancelled or discontinued, less any applicable trade and cash discounts;

(c) “Retailer” means any person, firm or corporation engaged in the business of selling and retailing farm implements, machinery, utility and industrial equipment, outdoor power equipment, all-terrain vehicles, off-road utility vehicles, attachments or repair parts and shall not include retailers of petroleum products;

(d) “Inventory” means farm implements, machinery, utility and industrial equipment, consumer products, outdoor power equipment, attachments and repair parts;

(e) “Supplier” means any manufacturer, wholesaler, wholesale distributor, or any purchaser of assets or stock of any surviving corporation resulting from a merger or liquidations, any receiver or assignee, or any trustee of the original manufacturer, wholesaler or distributor; and

(f) “Superseded parts” means any part that will provide the same function as a currently available part as of the date of cancellation.

§ 75-77-2

(1) No supplier, directly or through an officer, agent or employee, may terminate, cancel, fail to renew or substantially change the competitive circumstances of a retail agreement without good cause. “Good cause” shall mean failure by a retailer to comply with requirements imposed upon the retailer by the retail agreement if such requirements are not different from those imposed on other retailers similarly situated in this state. In addition, good cause exists whenever:

(a) There has been a closeout on sale of a substantial part of the retailer's assets related to the equipment business, or there has been a commencement of a dissolution or liquidation of the retailer;

(b) The retailer has changed its principal place of business or added additional locations without prior approval of the supplier, which shall not be unreasonably withheld;

(c) The retailer has substantially defaulted under a chattel mortgage or other security agreement between the retailer and the supplier, or there has been a revocation or discontinuance of a guarantee of a present or future obligation of the retailer to the supplier;

(d) The equipment retailer has failed to operate in the normal course of business for seven (7) consecutive days or has otherwise abandoned the business;

(e) The retailer has pleaded guilty to or has been convicted of a felony affecting the relationship between the retailer and the supplier;

(f) The retailer transfers an interest in the dealership, or a person with a substantial interest in the ownership or control of the dealership, including an individual proprietor, partner or major shareholder, withdraws from the dealership or dies, or a substantial reduction occurs in the interest of a partner or major shareholder in the dealership. However, good cause does not exist if the supplier consents to an action described in this subsection.

(2) Except as otherwise provided herein, a supplier shall provide a retailer with at least ninety (90) days written notice of termination, cancellation or nonrenewal of the retail agreement and a sixty (60) day right-to-cure the deficiency. If the deficiency is cured within the allotted time, the notice is void. In the case where cancellation is enacted due to market penetration, a reasonable period of time shall have existed where the supplier has worked with the dealer to gain the desired market share. The notice shall state all reasons constituting good cause for action. The notice is not required if the reason for termination, cancellation or nonrenewal is a violation under the provisions of subsection (1) of this section.

§ 75-77-3

Whenever any retailer enters into an agreement, evidenced by a written or oral contract, with a supplier wherein the retailer agrees to maintain an inventory of parts and to provide service and the contract is terminated, then the supplier shall repurchase the inventory as provided in this chapter. The retailer may keep the inventory if he desires. If the retailer has any outstanding debts to the supplier, then the repurchase amount may be setoff or credited to the retailer's account.

§ 75-77-4

No supplier shall:

(a) Coerce any retailer to accept delivery of equipment, parts or accessories which the retailer has not ordered voluntarily, except as required by any applicable law, or unless parts or accessories are safety parts or accessories required by a supplier;

(b) Condition the sale of additional equipment to a retailer on a requirement that the retailer also purchase other goods or services, except that a supplier may require the retailer to purchase those parts reasonably necessary to maintain the quality of operation in the field of the equipment used in the trade area;

(c) Coerce a retailer into refusing to purchase equipment manufactured by another supplier;

(d) Terminate, cancel or fail to renew or substantially change the competitive circumstances of the retail agreement based on the results of a natural disaster, including a sustained drought or high unemployment in the dealership market area, labor dispute or other similar circumstances beyond the retailer's control.

§ 75-77-5

The supplier shall repurchase that inventory previously purchased from him and held by the retailer on the date of termination of the contract. The supplier shall pay one hundred percent (100%) of the current net price of all new, unsold, undamaged and complete farm implements, machinery, utility and industrial equipment, outdoor power equipment and attachments, and ninety percent (90%) of the current net price on new, unused and undamaged and superseded repair parts. The supplier shall pay the retailer ten percent (10%) of the current net price on all new, unused and undamaged repair parts returned to cover the cost of handling, packing and loading. The supplier shall have the option of performing the handling, packing and loading in lieu of paying the ten percent (10%) for these services. The supplier shall purchase at its amortized value any specific data processing hardware and software and telecommunications equipment that the supplier required the retailer to purchase within the past five (5) years. The supplier shall also repurchase, at seventy-five percent (75%) of the net cost, specialized repair tools purchased in the previous three (3) years and, at fifty percent (50%) of the net cost, specialized repair tools purchased in the previous four (4) through six (6) years pursuant to the requirements of the supplier and held by the retailer on the date of termination. Such specialized repair tools must be unique to the supplier's product line and must be in complete and resalable condition. Farm implements, machinery, utility and industrial equipment and outdoor power equipment used in demonstrations, including equipment leased primarily for demonstration or lease, shall also be subject to repurchase under this law at its agreed depreciated value, provided such equipment is in new condition and has not been abused.

§ 75-77-6

This section applies to a warranty claim submitted by a retailer:

(a) Claims filed for payment under warranty agreements shall either be approved or disapproved within thirty (30) days of receipt by the supplier. All claims for payment shall be paid within thirty (30) days of their approval. When any such claim is disapproved, the supplier shall notify the retailer within thirty (30) days stating the specific grounds upon which the disapproval is based. If a claim is not specifically disapproved within thirty (30) days of receipt, it shall be deemed approved and payment by the supplier shall be within thirty (30) days.

(b) If after termination of a contract the retailer submits a claim to the supplier for warranty work performed prior to the effective date of the termination, the supplier shall accept or reject the claim within thirty (30) days of receipt.

(c) Warranty work performed by the retailer shall be compensated in accordance with the reasonable and customary amount of time required to complete the work, expressed in hours and fractions thereof, multiplied by the retailer's established customer hourly retail labor rate, which shall have previously been made known to the supplier.

(d) Expenses expressly excluded under the supplier's warranty to the customer shall not be included nor required to be paid on requests for compensation from the retailer for warrant work performed.

(e) All parts used by the retailer in performing warranty work shall be paid to the retailer in the amount equal to the retailer's net price for parts used, plus a minimum of fifteen percent (15%). The percentage additive is to reimburse the retailer for reasonable costs of doing business in performing warranty service on the suppliers behalf, including, but not limited to, freight and handling costs incurred.

(f) The supplier has the right to adjust for errors discovered during audit, and if necessary, to adjust claims paid in error.

(g) The retailer shall have the right to accept the manufacturer's reimbursement terms and conditions in lieu of the provisions of this section.

§ 75-77-7

Upon payment of the repurchase amount to the retailer, the title and right of possession to the repurchased inventory shall transfer to the supplier. Annually, at the end of each calendar year, after termination or cancellation, the retailer's reserve account for recourse, retail sale or lease contracts shall not be debited by a supplier or lender for any deficiency unless the retailer or his heirs have been given at least seven (7) business days' notice by registered U.S. mail, return receipt requested, of any proposed sale of the equipment financed and an opportunity to purchase the equipment. The former retailer or his heirs shall be given quarterly status reports on any remaining outstanding recourse contracts. As the recourse contracts are reduced, any reserve account funds shall be returned to the retailer or his heirs in direct proportion to the liabilities outstanding.

§ 75-77-9

The provisions of this chapter shall not require the repurchase from a retailer of:

(a) Any repair part which, because of its condition, is not resalable as a new part;

(b) Any inventory which the retailer desires to keep, provided the retailer has a contractual right to do so;

(c) Any farm implements, machinery, utility and industrial equipment, outdoor power equipment, all-terrain vehicles, off-road utility vehicles and attachments which are not current models or which are not in new, unused, undamaged, complete condition, provided that the equipment used in demonstrations or leased as provided in Section 75-77-5 shall be considered new and unused;

(d) Any repair parts which are not in new, unused, undamaged condition;

(e) Any farm implements, machinery, utility and industrial equipment, outdoor power equipment, all-terrain vehicles, off-road utility vehicles or attachments which were purchased more than thirty-six (36) months prior to notice of termination of the contract;

(f) Any inventory which was ordered by the retailer on or after the date of termination of the contract.

§ 75-77-11

If any supplier shall fail or refuse to repurchase and pay the retailer for any inventory covered under the provisions of this chapter within sixty (60) days after shipment of such inventory, he shall be civilly liable for one hundred percent (100%) of the current net price of the inventory, plus any freight charges paid by the retailer, the retailer's attorney's fees, court costs and interest on the current net price computed at the legal interest rate from the sixty-first day after date of shipment.

§ 75-77-13

(1) In the event of the death of the retailer or the majority stockholder of a corporation operating as a retailer, the supplier shall, at the option of the heir or heirs, repurchase the inventory from the heir or heirs of the retailer or majority stockholder as if the supplier had terminated the contract. The heir or heirs shall have one (1) year from the date of the death of the retailer or majority stockholder to exercise their options under this chapter. Nothing in this chapter shall require the repurchase of any inventory if the heir or heirs and the supplier enter into a new contract retail agreement to operate the retail dealership.

(2) A supplier shall have ninety (90) days in which to consider and make a determination on a request by a family member to enter into a new retail agreement to operate the retail dealership. As used herein “family member” means a spouse, child, son-in-law, daughter-in-law or lineal descendant of the dealer or principal owner of the dealership. In the event the supplier determines that the requesting family member is not acceptable, the supplier shall provide the family member with a written notice of its determination with the stated reasons for non-acceptance. This section does not entitle an heir, personal representative or family member to operate a dealership without the specific written consent of the supplier.

(3) Notwithstanding the foregoing, in the event that a supplier and a dealer have previously executed an agreement concerning succession rights prior to the dealer's death and, if such agreement has not been revoked, such agreement shall be observed even if it designates someone other than the surviving spouse or heirs of the decedent as the successor.

§ 75-77-15

The provisions of this chapter shall not be construed to affect in any way any security interest which the supplier may have in the inventory of the retailer, and any repurchase hereunder shall not be subject to the provisions of the bulk sales law. The retailer and supplier shall furnish representatives to inspect all parts and certify their acceptability when packed for shipment. Failure of the supplier to provide a representative within sixty (60) days shall result in automatic acceptance by the supplier of all returned items.

§ 75-77-16

(1) A retailer may bring an action for civil damages in a court of competent jurisdiction against any supplier found violating any of the provisions of Sections 75-77-1 through 75-77-15, Mississippi Code of 1972, and may recover damages sustained as a consequence of the supplier's violations together with all costs and attorney fees.

(2) The retailer shall be entitled to injunctive relief against unlawful termination, cancellation, nonrenewal or substantial change of competitive circumstances of the retail agreement. The remedies in this section are in addition to any other remedies permitted by law.

§ 75-77-17

The provisions of this chapter shall apply to all contracts and shall apply to all retail agreements in effect which have no expiration date and are a continuing contract, and shall apply to all other contracts entered into, amended, extended, ratified or renewed after March 30, 1977. The provisions of this chapter shall apply to and be binding upon all suppliers, all successors in interest or purchasers of assets or stock of suppliers, and all receivers, trustees or assignees of suppliers. Any contractual term restricting the procedural or substantive rights of a retailer under this chapter, including a choice of law or choice of forum clause, is void.

§ 75-77-19

(1) Except as otherwise provided in Section 75-77-6, the provisions of this chapter shall not be waivable in any contract, and any such attempted waiver shall be null and void.

(2) If any provision or item of this chapter or the application thereof is held invalid, it shall not affect other provisions, items or applications of this chapter which can be given effect without the invalid provisions, items or applications, and to this end the provisions of this chapter are hereby declared severable.

Chapter 79 Pulpwood Scaling and Practices

§ 75-79-1

This chapter shall be known and may be cited as the “Mississippi Uniform Pulpwood Scaling and Practices Act.”

§ 75-79-3

The purpose of this chapter is to insure that acceptable standards are applied uniformly in the scaling of pulpwood throughout the State of Mississippi.

§ 75-79-5

The following words and phrases, as used in this chapter, shall have the meanings respectively ascribed to them in this section, except where the context or subject matter otherwise requires:

(a) “Person” means any individual, firm, copartnership, association, corporation, receiver, trustee, legal representative, organization or any other group or combination acting as a unit.

(b) “Commissioner” means the Mississippi Commissioner of Agriculture and Commerce.

(c) “Pulpwood” means any timber product delivered to a receiving facility in short-length form, eight (8) feet or less, and intended for use as a raw material in the manufacture of pulp and pulp products.

(d) “Pulpwood cutter-hauler” or “cutter-hauler” means any person engaging in or continuing to engage in this state in the business of severing and carrying pulpwood.

(e) “Pulpwood receiving facility” or “facility” means any woodyard, pulpmill or other place of business at which pulpwood is received from pulpwood cutter-haulers as herein defined in the regular course of business.

(f) “Facility operator” means any person who owns, operates or manages a pulpwood receiving facility as herein defined. Provided, however, that any landowner who shall pay employees an hourly wage to both cut and collect pulpwood on his private property shall not be deemed a facility operator under the provisions of this chapter.

§ 75-79-7

It shall be the function and duty of the commissioner to:

(a) Issue licenses to operators of pulpwood receiving facilities determined to qualify under the provisions of this chapter, and revoke or suspend licenses previously issued by the commissioner in any case where the licensee is determined to have violated any of the provisions of this chapter.

(b) Establish standard procedures and promulgate regulations for the measurement of pulpwood offered for sale, both by weight and by volume, in a manner consistent with the Mississippi Weights and Measures Law of 1964, as amended (Section 75-27-1 et seq.). Such standard provisions and regulations shall require that all pulpwood receiving facilities shall give every cutter-hauler a ticket which shall state at the minimum (i) the name of the cutter-hauler; (ii) the name of the landowner from which the wood was severed or the name of the owner of the timber; (iii) the county or county code in which the timber was severed; and (iv) the number of cords or, in the event of weighing, the gross weight on the truck of the cutter-hauler. In the event that neither the cutter-hauler nor the landowner nor the owner of the timber is the person to be paid for such pulpwood, the ticket shall also contain the name of the payee. The ticket shall be prepared upon delivery and acceptance of a load of pulpwood and shall be made available for inspection by the cutter-hauler if the cutter-hauler so desires. All cutter-haulers have the right to inspect the ticket before unloading of the pulpwood. However, where such wood is measured on scales, the ticket shall be issued at the time of the weighing and shall state the gross weight of the wood and truck and the tare weight of the truck after unloading to determine the net weight of the wood; the number of cords is not required on tickets so weighed. The pulpwood facility shall keep a copy of such ticket on file for subsequent inspection by the State Tax Commission and the Department of Agriculture and Commerce for a period not less than three (3) years. The facility operator shall maintain on the facility premises, at a minimum, the following information on the cutter-hauler and the payee for the pulpwood if the payee is someone other than the cutter-hauler: (i) name; (ii) social security number or employer identification number, or both; (iii) address; and (iv) the corresponding identification code used on the scale ticket. The facility operator is required to obtain, in good faith, such information from the cutter-hauler who is liable for the accuracy of this information.

(c) Conduct periodic inspections no less than once every six (6) months, and establish and carry out other procedures designed to insure that licensees will comply with the provisions of this chapter.

(d) Receive, investigate and take appropriate action with respect to any charge or complaint filed with the commissioner to the effect that any pulpwood receiving facility operator has violated any provision of this chapter.

(e) Randomly weigh, at his discretion, any agricultural product being delivered throughout the state to determine the accuracy of the bill of lading. If the weight exceeds or falls below the amount of weight reported on the bill of lading by five percent (5%) or more, then the commissioner shall report the discrepancy, in writing, to the Director of the Agriculture and Livestock Theft Bureau. Such agricultural products shall be weighed on certified scales approved by the Weights and Measures Division of the Department of Agriculture and Commerce.

§ 75-79-9

No person shall engage in the business of operating a pulpwood receiving facility as defined in this chapter without having first obtained a license pursuant to this chapter.

§ 75-79-11

Applications for licenses under this chapter shall be made in writing, under oath, on forms prescribed by the commissioner for each separate pulpwood receiving facility. The application shall contain the name of the applicant, the address of the pulpwood receiving facility for which the license is to be issued, the name or names of the owners thereof and such further information as the commissioner, by regulation, requires. Provided, however, no financial statement shall be required.

§ 75-79-13

The license fee for each calendar year or part thereof shall be Thirty Dollars ($30.00) for each pulpwood receiving facility operated within the state. A renewal of the license may be accomplished by submitting the payment of the annual fee and a certification, on a form provided by the commissioner, that none of the information on the original license application has changed.

§ 75-79-15

Upon the filing of an application and the payment of the required fee, the commissioner shall issue a license to the applicant to operate a pulpwood receiving facility under and in accordance with the provisions of this chapter for a period which shall expire the last day of December next following the date of its issuance.

Each license shall specify the location of the facility for which it is issued and must be conspicuously displayed there.

§ 75-79-17

Upon the loss or destruction of a license issued to a pulpwood receiving facility operator, a duplicate thereof or a new license may be issued under the same number for a fee of two dollars ($2.00).

§ 75-79-19

Any person who operates a pulpwood receiving facility as defined in Section 75-79-5 without a proper license shall upon a first conviction thereof be guilty of a misdemeanor and shall be punished by a fine of not less than three hundred dollars ($300.00) nor more than one thousand dollars ($1,000.00), and upon a second or subsequent conviction thereof, he shall be punished by a fine of not less than one thousand dollars ($1,000.00) nor more than five thousand dollars ($5,000.00).

§ 75-79-21

(1) The commissioner may deny an application for a license, or revoke or suspend a license after it has been granted, for any of the following reasons:

(a) Any material misstatement in the application for a license.

(b) Defrauding any pulpwood cutter-hauler in the measurement of pulpwood to the cutter-hauler's damage.

(c) Failure to maintain accurate weighing and measuring devices used in the measurement of pulpwood.

(d) Requiring a pulpwood cutter-hauler to deliver or transfer any quantity of pulpwood to the facility operator's control as a condition of the purchase or receipt thereof before the facility operator has notified the cutter-hauler of the total number of cords or the volume for which payment will be made. This does not include out-of-specification wood culled when discovered during unloading.

(e) Willful failure to apply standards established by law or by the commissioner in the measurement of pulpwood.

(f) Discriminating against a pulpwood cutter-hauler because the cutter-hauler has filed a complaint, given testimony or otherwise sought relief under this chapter.

(g) Any violation of the rules and regulations of the Mississippi Department of Agriculture and Commerce or violation of any other of the laws governing pulpwood scaling and practices.

(2) If a pulpwood receiving facility operator is convicted of any crime involving fraud under the provisions of this chapter, the commissioner, may, in his discretion, suspend, cancel or revoke the license of such operator.

(3) All proceedings for the suspension, cancellation or revocation of licenses shall be before the commissioner, and the proceedings shall be in accordance with rules and regulations which shall be adopted by the commissioner. No license shall be cancelled or revoked, except after a hearing before the commissioner, upon reasonable notice to the licensee and an opportunity to appear and defend. Whenever the commissioner suspends, cancels or revokes a license, he shall prepare an order so providing which shall state the reason or reasons for such suspension, cancellation or revocation. The order shall be sent by certified mail by the commissioner to the licensee at the address of the pulpwood receiving facility licensed. Within thirty (30) days after the mailing of the order, the licensee, if dissatisfied with the order of the commissioner, may appeal to the chancery court of the county in which the pulpwood receiving facility is located by filing a written notice of appeal alleging the pertinent facts upon which such appeal is grounded. At the time of the filing of the appeal, the appellant shall give a bond for costs conditioned upon his prosecution of the appeal without delay and payment of all costs assessed against him. Appeal may be with supersedeas and shall be subject to the provisions of Section 11-51-31.

(4) In case a license issued to a pulpwood receiving facility operator expires or is suspended, cancelled or revoked by the commissioner or his designated representative, such license shall be immediately returned to the commissioner.

§ 75-79-23

Each licensee shall be responsible for the acts of any or all of his employees while acting as his agent, if such licensee after actual knowledge of such acts retained the benefits, proceeds, profits or advantages accruing from such acts or otherwise ratified such acts.

§ 75-79-25

Nothing in this chapter shall require any person to buy from or sell to any other person in any situation or transaction in which the persons would otherwise be free, in their discretion, to deal or not to deal one with the other.

§ 75-79-27

Every pulpwood receiving facility and all such devices as are used there for the weighing or measuring of pulpwood shall be inspected periodically by the commissioner to insure compliance with this chapter. The commissioner may make such additional investigations and examinations of any licensee or other person as he deems necessary to determine compliance with this chapter. Such investigations and examinations may be made on the basis of a complaint filed with the commissioner or on his own initiative. For such purposes the commissioner may examine all scales tickets involving the buying and selling of pulpwood.

§ 75-79-29

The commissioner shall have power to issue subpoenas to compel the attendance of witnesses and the production of documents, papers, books, records and other evidence before him in any matter over which it has jurisdiction, control or supervision pertaining to this chapter.

The commissioner or any agent designated by him, may administer oaths and affirmations, examine witnesses and receive evidence. Such attendance of witnesses and the production of such evidence may be required from any place in the state at any designated place of hearing.

If any person refuses to obey any such subpoena, or to give testimony, or to produce evidence as required thereby, any judge or the chancellor of the chancery court of the First Judicial District of Hinds County may, upon application and proof of such refusal, make an order awarding process of subpoena, or subpoena duces tecum, out of the court, for the witness to appear before the commissioner and to give testimony, and to produce evidence as required thereby. Upon filing such order in the office of the clerk of the court or the office of the clerk of such chancery court, the clerk shall issue process of subpoena, as directed, under the seal of the court, requiring the person to whom it is directed, to appear at the time and place therein designated.

If any person served with any such subpoena shall refuse to obey the same, and to give testimony, and to produce evidence as required thereby, the commissioner may apply to any judge or the chancellor of the chancery court of the First Judicial District of Hinds County for an attachment against such person, as for a contempt. The judge or chancellor, upon satisfactory proof of such refusal, shall issue an attachment, directed to any sheriff, constable or police officer, for the arrest of such person, and upon his being brought before such judge, proceed to a hearing of the case. The judge or chancellor shall have power to enforce obedience to such subpoena and the answering of any question, and the production of any evidence, that may be proper by imposition of a fine, not exceeding five hundred dollars ($500.00), or by imprisonment in the county jail, or by both imposition of a fine and imprisonment, and to compel such witness to pay the costs of such proceeding.

§ 75-79-31

If an investigation by the commissioner indicates probable cause for belief that a violation of law has occurred, the commissioner shall refer the complaint with any evidence gathered during the investigation to the agency or official charged with the administration of such law and to the district attorney having jurisdiction, with a recommendation that it be considered for presentation to the next grand jury, as well as any further recommendations for seeking civil remedies.

Chapter 81 Dance Studio Lessons

§ 75-81-101

As used in this chapter, the term “contract for dance studio lessons and other services” means a contract for instruction in ballroom or other types of dancing, and includes lessons and other services, whether given to students individually or in groups.

§ 75-81-103

Every contract for dance studio lessons and other services shall be in writing and shall be subject to the provisions of this chapter. A copy of the written contract shall be given to the customer at the time the contract is signed.

§ 75-81-105

(1) No contract or series of contracts for dance studio lessons and other services shall require payment by the person receiving the lessons and other services or the use of the facilities exceeding Two Thousand Dollars ($2,000.00).

(2) No contract for dance studio lessons and other services shall require payments or financing by the buyer over a period in excess of twelve (12) months from the date the contract is entered into, nor shall the term of any such contract be measured by the life of the buyer.

(3) All contracts for dance studio lessons and other services which may be in effect between the same seller and the same buyer, the terms of which overlap for any period, shall be considered as one (1) contract for the purposes of this chapter.

§ 75-81-107

(1) Every contract for dance studio lessons and other services shall provide that performance of the agreed upon lessons will begin within twelve (12) months from the date the contract is entered into.

(2) Every contract for dance studio lessons and other services shall further provide that such contract may be rescinded within five (5) business days after receipt of the contract by the customer by written notice to the other party at the address specified in the contract, and all monies paid pursuant to such contract shall be refunded within ten (10) days of receipt of the notice of rescission, subject to payment by the customer for dance studio lessons or other services received prior to rescission.

(3) Every contract for dance studio lessons and other services shall contain a written statement of the hourly rate charged for each type of lessons for which the student has contracted. If the contract includes dance studio lessons which are sold at different per-hour rates, the contract shall contain separate hourly rates for each different type of lessons sold. All other services for which the student has contracted which are not capable of a per-hour charge shall be set forth in writing in specific terms. Such statement shall be contained in the dance studio contract before the contract is signed by the buyer.

(4) Every dance studio subject to the provisions of this chapter shall include in every contract for dance studio lessons or other services a statement that the studio is bonded and that information concerning the bond may be obtained by writing to the office of the State Treasurer. If the studio has elected to make a cash deposit in lieu of procuring a bond, the contract shall contain a description of the cash deposit.

§ 75-81-109

No contract for dance studio lessons and other services shall require or entail the execution of any note or series of notes by the buyer which, when separately negotiated, will cut off as to third parties any right of action or defense which the buyer may have against the seller. The contract shall not be assigned except with the written consent of the customer.

§ 75-81-111

Any person, corporation, partnership, association or group intending to open or operate a dance studio shall file a registration statement with the Attorney General's Division of Consumer Protection prior to the sale of any contracts for dance studio lessons. Such a registration statement shall contain the name and address of the dance studio; the names and addresses of the officers, directors and stockholders of the dance studio and its parent corporation, if such an entity exists; the types of available facilities; the approximate size of the facility measured in square feet; the types of contracts and lessons to be offered and their cost; and a full and complete disclosure of any completed or pending litigation initiated against the dance studio and any of its officers and directors within the last three (3) years.

§ 75-81-113

(1) Every contract for dance studio lessons and other services shall contain a clause providing that if, by reason of death or disability, the person agreeing to receive lessons and other services is unable to receive all lessons and other services for which he has contracted, he and his estate shall be relieved from the obligation of making payment for lessons and other services other than those received prior to death or the onset of disability, and that if he has prepaid any sum for lessons and other services so much of such sum as is allocable to lessons and other services he has not taken shall be promptly refunded to him or his representative.

(2) Notwithstanding the provisions of any contract to the contrary, whenever the contract price is payable in installments and the buyer is relieved from making further payments or entitled to a refund under this section, the buyer shall be entitled to receive a refund or refund credit of so much of the cash price as is allocable to the lessons or other services not actually received by the buyer. The refund of the finance charge shall be computed according to the “sum of the balances method,” also known as the “Rule of 78.”

§ 75-81-115

The provisions of this chapter are not exclusive and do not relieve the parties or the contracts subject thereto from compliance with all other applicable provisions of law.

§ 75-81-117

(1) Any contract for dance studio lessons and other services which does not comply with the applicable provisions of this chapter shall be void and unenforceable as contrary to public policy.

(2) Any contract for dance studio lessons and other services entered into in reliance upon any willful and false, fraudulent, or misleading information, representation, notice or advertisement of the seller shall be void and unenforceable.

(3) Any waiver of the buyer of the provisions of this chapter shall be deemed contrary to public policy and shall be void and unenforceable.

§ 75-81-119

(1) Any person who suffers any ascertainable loss of money or property, either real or personal, as a result of fraud, dishonesty or the violation of the provisions of this chapter may bring an action in chancery court to recover actual and/or punitive damages. If the court finds that such a violation was committed, the court may award actual and/or punitive damages. In the event that damages are awarded under this section, the court shall award to the person bringing such action reasonable attorney's fees and costs. Upon a finding by the court that an action under this section was groundless and brought in bad faith or for purposes of harassment, the court may award to the defendant reasonable attorney's fees and costs.

(2) Notwithstanding the provisions of this chapter, any failure to comply with any provisions of this chapter may be corrected within thirty (30) days after the execution of the contract by the buyer, and, if so corrected, neither the seller nor the holder shall be subject to any penalty under this chapter, provided that any correction which increases any monthly payment, the number of payments, or the total amount due, must be concurred in, in writing, by the buyer. “Holder” includes the seller who acquires the contract, or, if the contract is purchased by a financing agency or other assignee, the financing agency or other assignee.

(3) This section shall not be deemed to prohibit the enforcement by any person of any right provided by this or any other law.

§ 75-81-121

(1) Every dance studio shall maintain a bond issued by a surety company authorized to do business in this state. The principal sum of the bond shall be Ten Thousand Dollars ($10,000.00).

(2) A copy of such bond shall be filed with the office of the State Treasurer. If the person in whose name the bond is issued severs his relationship with the bonded dance studio, the new owner shall, as a condition of doing business, notify the office of the State Treasurer of the change of ownership and of proof of compliance with this chapter.

(3) The bond required by this section shall be in favor of the State of Mississippi for the benefit of any person who, after entering into a contract for dance studio lessons and other services with the dance studio, is damaged by fraud or dishonesty or failure to provide the services of the studio in performance of the contract. Any person claiming against the bond may maintain an action at law against the dance studio and the surety.

(4) The aggregate liability of the surety to all persons for all breaches of the conditions of the bonds provided herein shall in no event exceed the amount of the bond.

(5) In lieu of furnishing the bond required by this section the dance studio may deposit with the office of the State Treasurer a cash deposit in a like amount. This cash deposit may be satisfied by any of the following:

(a) Certificates of deposit payable to the office of the State Treasurer issued by banks doing business in this state and insured by the Federal Deposit Insurance Corporation.

(b) Investment certificates or share accounts assigned to the office of the State Treasurer and issued by a savings and loan association doing business in this state and insured by the Federal Savings and Loan Insurance Corporation.

(c) Bearer bonds issued by the United States government or by this state.

(d) Cash deposited with the office of the State Treasurer.

§ 75-81-123

Any person who wilfully and knowingly violates the provisions of Section 75-81-103, 75-81-105, 75-81-107, 75-81-111, or 75-81-121,shall be guilty of a misdemeanor and shall be punished by a fine not exceeding Two Thousand Dollars ($2,000.00) or by imprisonment in the county jail for not more than one (1) year, or both.

§ 75-81-125

The provisions of this chapter shall not apply to dance studios that offer lessons solely to persons under the age of eighteen (18) years or to contracts for dance studio lessons that provide for services solely to persons under the age of eighteen (18) years.

Chapter 83 Health Spas

§ 75-83-1

(a) “Health spa” means an establishment that provides for profit as one of its primary purposes, services or facilities which purport to improve the user's physical condition or appearance through weight control, exercise, dieting or a combination of these. The term includes, but is not limited to, establishments referred to by such terms as reducing salon, spa, exercise club, exercise gym, health studio, health club, weight control center or other similar terms.

The term “health spa” shall not include the following:

(i) Bona fide nonprofit organizations, including but not limited to the Young Men's Christian Association, Young Women's Christian Association or similar organizations whose functions as health spas are only incidental to the overall functions and purposes;

(ii) Any organization primarily operated for the purpose of teaching a particular form of self-defense such as judo or karate;

(iii) Any nonprofit public or private school, college or university; or

(iv) Any organization, business, establishment or person which does not offer a contract with a duration in excess of four (4) months.

(b) “Contract” means a written agreement by which one becomes a member of a health spa.

(c) “Member” means a status obtained by any person entitling him to the services or facilities of a health spa.

(d) “Seller” means the person, corporation, partnership, association or group engaged in the operation as defined in this section, and who offers for sale the right to use the facilities or the services of the health spa.

(e) “Facilities” means equipment, physical structures and other tangible property utilized by a health spa to conduct its business. The term includes, but is not limited to, saunas, whirlpool baths, gymnasiums, running tracks, swimming pools, shower areas and exercise equipment.

(f) “Services” means programs, plans, guidance or structures provided by health spas for health spa members. The term includes, but is not limited to, diet planning, exercise instruction, exercise programs and the structure of classes.

(g) “Prepayment” means any payment for services or the use of facilities made before the services or facilities are made available by the health spa. It is not a prepayment if a payment for services or the use of facilities is made on the same day the services or use of the facility is provided. Money or other consideration received by a health spa from a financial institution upon assignment or sale of a contract should be considered a prepayment to the extent the member is required to make prepayments to the finance institution pursuant to the contract.

§ 75-83-3

Any person, corporation, partnership, association or group intending to open or operate a health spa shall:

(a) File a registration statement with the Attorney General's Division of Consumer Protection prior to the sale of any memberships. Such a registration statement shall contain the name and address of the health spa; the names and addresses of the officers, directors and stockholders of the health spa and its parent corporation, if such an entity exists; the types of available facilities; approximate size of the health spa measured in square feet; the type of membership plans to be offered and their cost; and a full and complete disclosure of any completed or pending litigation initiated against the health spa and any of its officers and directors within the last three (3) years.

(b) Every health spa shall maintain a bond issued by a surety company authorized to do business in this state. The principal sum of the bond shall be Twenty-five Thousand Dollars ($25,000.00).

(c) A copy of such bond shall be filed with the Office of the State Treasurer. If the person in whose name the bond is issued severs his relationship with the bonded health spa, the new owner shall, as a condition of doing business, notify the Office of the State Treasurer of the change of ownership and of proof of compliance with this chapter.

(d) The bond required by this section shall be in favor of the State of Mississippi for the benefit of any person who, after entering into contract with a health spa, is damaged by fraud or dishonesty or failure to provide services of the health spa in performance of the contract. Any person claiming against the bondsman maintains an action at law against the health spa and surety.

(e) The aggregate liability of the surety to all persons for all breaches of the conditions of the bonds provided herein shall in no event exceed the amount of the bond.

(f) In lieu of furnishing the bond required by this section, the health spa may deposit with the Office of the State Treasurer a cash deposit in a like amount. This cash deposit may be satisfied by any of the following:

(i) Certificates of deposit payable to the Office of the State Treasurer issued by banks doing business in this state and insured by the Federal Deposit Insurance Corporation.

(ii) Investment certificates or share accounts assigned to the Office of the State Treasurer and issued by a savings and loan association doing business in the state.

(iii) Bearer bonds issued by the United States Government or by this state.

(iv) Cash deposit with the Office of the State Treasurer.

§ 75-83-5

(1) A fully completed copy of each contract shall be delivered to the buyer at the time the contract is signed. Every contract must constitute the entire agreement between the seller and the buyer, must be in writing and must be signed by the member.

(2) Each contract shall state in at least ten-point boldface type the following: NOTICE TO THE BUYER: DO NOT SIGN THIS CONTRACT UNTIL YOU HAVE READ ALL OF IT. ALSO, DO NOT SIGN THIS CONTRACT IF IT CONTAINS ANY BLANK SPACES.

(3) Every purchaser of a membership shall be entitled to cancel his or her contract within five (5) business days by notifying the health spa in writing by midnight of the fifth business day following the date of purchase of the membership contract. Written notification is deemed given if mailed or delivered by midnight of the fifth business day. All money collected pursuant to the contract shall be refunded to the purchaser exercising the right to cancel.

(4) Each contract shall contain the following notice in at least ten-point boldface type: IF WITHIN FIVE (5) BUSINESS DAYS YOU DECIDE YOU DO NOT WISH TO REMAIN A MEMBER OF THIS HEALTH SPA, YOU MAY CANCEL THIS AGREEMENT BY MAILING A NOTICE TO THE HEALTH SPA BY MIDNIGHT OF THE FIFTH BUSINESS DAY FOLLOWING YOUR PURCHASE OF THE CONTRACT STATING YOUR DESIRE TO CANCEL THIS CONTRACT. THE WRITTEN NOTICE SHOULD BE MAILED TO THE FOLLOWING ADDRESS: (Insert address of the health spa).

(5) No health spa contract shall have a duration for a longer period than thirty-six (36) months; provided, however, that no health spa offering any contract for a longer period than twelve (12) months shall be exempt from the provisions of subsection (b) of Section 75-83-3, the provisions of Section 75-83-15 notwithstanding.

(6) Every contract for health spa services shall contain a clause providing that if, by reason of death or disability, the person agreeing to receive health spa services is unable to do so, he and his estate shall be relieved of the obligation of making payments for such services other than those received prior to death or the onset of the disability, and that if he has prepaid any sum for health spa services, the unexpired portion shall be promptly refunded to him or his representative.

(7) Any health spa contract which does not comply with the applicable provisions of this chapter shall be void and unenforceable as contrary to public policy.

(8) Any health spa contract entered into by the buyer upon any false or misleading information, representation, notice or advertisement of the health spa or the health spa's agent shall be void and unenforceable.

(9) Any waiver by the buyer of the provisions of this chapter shall be deemed contrary to public policy and shall be void and unenforceable.

§ 75-83-7

(1) Each health spa doing business shall prepare a comprehensive list of all membership plans offered for sale by the health spa and the respective price of each plan. The list shall be shown to each prospective purchaser of a membership plan.

(2) A health spa is prohibited from selling a membership plan not included in this list and in the registration statement filed with the Attorney General's office; provided, however, that a reduction in the price of a plan shall not constitute a change requiring reregistration of the plan.

§ 75-83-9

(1) Health spas shall be prohibited from making any material misrepresentations to current members, prospective members or purchasers of membership contract regarding:

(a) Qualifications of staff;

(b) Availability, quality, or extent of facilities or services;

(c) Results obtained through exercising, dieting or weight control programs;

(d) Rights of membership; or

(e) Period of time a discount or special offer will be available.

(2) Any person who suffers any ascertainable loss of money or property as a result of fraud, dishonesty or a violation of the provisions of this chapter may bring an action in chancery court to recover actual and/or punitive damages. If the court finds that such a violation was committed, the court may award actual and/or punitive damages. In the event the damages are awarded under this section, the court shall award to the person bringing such action reasonable attorney's fees and costs. Upon a finding by the court that an action under this section is groundless and brought in bad faith or for purposes of harassment, the court may award to the defendant reasonable attorney's fees and costs.

§ 75-83-11

The remedies in this chapter are in addition to and not in derogation of remedies available under any other provisions of law.

The provisions of this chapter are cumulative, supplemental and not exclusive and do not relieve the parties or the contract subjects thereto from compliance with all other applicable provisions of law.

§ 75-83-13

Any person who knowingly and willingly violates the provisions of Section 75-83-3, 75-83-5 or 75-83-9 shall be guilty of a misdemeanor and shall be punished by a fine not exceeding Two Thousand Dollars ($2,000.00) or by imprisonment in the county jail for not more than one (1) year, or both.

§ 75-83-15

All health spas operating in the State of Mississippi prior to July 1, 1985, and which offer no contracts which have a duration for a period of longer than twelve (12) months, shall be exempt from the provisions of subsection (b) of Section 75-83-3.

Chapter 85 Transient Vendor

§ 75-85-1

As used in this chapter, the following terms shall have the following meanings ascribed to them, unless the context clearly indicates otherwise:

(a) “Transient vendor” means any person who transacts transient business in this state either in one locality or by traveling from place to place in this state. The term includes a vendor who for the purposes of carrying on such business hires, leases, uses or occupies any building, structure, motor vehicle, railroad car or real property.

(b) “Transient business” means any business conducted for the sale of merchandise or services that is carried on at a particular location for a period of less than six (6) months in each year, even though the owner of such business may conduct the business at another location for more than six (6) months in each year.

(c) “Person” means an individual, corporation, association, partnership or other entity.

§ 75-85-3

(1) The provisions of this chapter shall not apply to:

(a) Civic and nonprofit organizations or wholesale sales to retail merchants by commercial travelers;

(b) Wholesale trade shows or conventions;

(c) Sales of goods, wares, services or merchandise by sample, catalogue or brochure for future delivery;

(d) Fairs and convention center activities conducted primarily for amusement or entertainment;

(e) Any general sale, fair, circus, auction or bazaar sponsored by a church or religious organization;

(f) Garage sales held on premises devoted to residential use;

(g) Sales or repairs of crafts or sales or repairs of items made by hand by the person making the crafts or items;

(h) Duly licensed flea markets operating from a fixed location;

(i) Sales of agricultural, dairy, poultry, seafood or forest management products or services related to forest management or silvicultural activities, nursery products, foliage plants or ornamental trees, except such products or services sold at retail and not grown or produced within Mississippi;

(j) Sales of agricultural services.

(2) A transient vendor not otherwise exempted from this chapter is not exempted from this chapter because of a temporary association with a local dealer, auctioneer, trader, contractor or merchant, or by conducting the transient business in connection with or in the name of any local dealer, auctioneer, trader, contractor or merchant.

§ 75-85-5

A transient vendor may not transact business in any county or municipality in this state unless the vendor, and the owner of the merchandise or provider of the services to be offered if the merchandise is not owned or the services are not provided by the vendor, has secured a license in accordance with this chapter and otherwise complied with this chapter.

§ 75-85-7

(1) A transient vendor who desires to transact business in a county or municipality in this state shall apply for and obtain a license in each county and in each municipality in which the vendor desires to transact business. A license issued by a county authorizes a transient vendor to transact business outside of the municipalities in the county, and a license issued by a municipality authorizes a transient vendor to transact business within the municipality. The license application shall be filed with the county tax collector or municipal tax collector, as the case may be, and must include:

(a) The name and permanent address of the transient vendor making the application;

(b) A statement describing the kind of business to be conducted, the length of time for which the applicant desires to transact the business, and the proposed location of the business;

(c) The name and permanent address of the applicant's registered agent or office; and

(d) Proof that the applicant has acquired all other required city, county and state permits and licenses. Such proof shall include a Mississippi sales tax number and, if the transient vendor desires to transact business in a municipality, such number shall include such municipality's sales tax diversion code.

(2) If the applicant is an association or a corporation, the applicant must also include the names and addresses of the members of the association or the officers of the corporation. If the applicant is a corporation, the application must state the date of incorporation and the state in which it was incorporated. If the applicant is a corporation organized under the laws of another state, the applicant must state the date on which the corporation qualified to transact business as a foreign corporation in this state.

§ 75-85-9

The State Tax Commission shall prepare uniform forms for license applications, license certificates and license renewals issued under this chapter.

§ 75-85-11

(1) Each applicant for a transient vendor license shall designate a registered agent on the license application. The registered agent must be a resident of the county or municipality for which the license is sought and shall be the agent on whom any process, notice or demand required or permitted by law to be served on the licensee may be served. The registered agent must agree in writing to act as the agent. The license applicant shall file a copy of the agreement with the license application.

(2) The county tax collector and the municipal tax collector shall maintain an alphabetical list of all transient vendors in the county or municipality, as the case may be, and the names and addresses of their registered agents.

(3) If a transient vendor who does business in a county or municipality fails to have or to maintain a registered agent in that county or municipality or if the designated registered agent cannot be found at the stated permanent address, the county tax collector or municipal tax collector, as the case may be, is the agent of the transient vendor for service of process, notices or demands. Service on the tax collector is made by delivering to his office duplicate copies of the process, notice or demand. If such a process, notice or demand is served on the tax collector, he shall immediately forward one (1) copy by registered or certified mail to the permanent address of the transient vendor.

(4) This section does not limit or otherwise affect the right of any person to serve a process, notice or demand in any other manner authorized by law.

§ 75-85-13

(1) Each applicant for a transient vendor license shall include a license fee set by the governing authority of the county or municipality not to exceed Two Hundred Fifty Dollars ($250.00) with the application, which fee shall be deposited in the general fund of the county or municipality that issues the license. The applicant shall also execute a cash bond or a surety bond issued by a corporate surety authorized to do business in this state in an amount that is the lesser of either Two Thousand Dollars ($2,000.00) or five percent (5%) of the wholesale value of any merchandise or service to be offered for sale by the applicant. The surety bond shall be issued in favor of the state and shall be conditioned upon payment of: (a) all taxes due from the applicant to the state or to a political subdivision of the state; (b) any fines assessed against the applicant or the applicant's agents or employees for a violation of this chapter; and (c) any judgment rendered against the applicant or the applicant's agents or employees in a cause of action commenced by a purchaser of merchandise or services not later than one (1) year after the date the merchandise or services were sold by the applicant.

(2) The transient vendor shall maintain the bond during the period that the vendor conducts business in the county or municipality and for a period of one (1) year after the termination of the business. After the transient vendor furnishes satisfactory proof to the county tax collector or municipal tax collector, as the case may be, that the vendor has satisfied all claims of purchasers of merchandise from or services offered by the vendor and that all sales taxes and other applicable taxes have been paid, the bond shall be released.

§ 75-85-15

(1) The county tax collector and the municipal tax collector shall issue a transient vendor license under this chapter only if all requirements of this chapter have been met. The license is not transferable and is valid only within the territorial limits of the issuing county or municipality. A license expires ninety (90) days after the day of issuance.

(2) A license may be renewed on payment of a Twenty-five Dollar ($25.00) renewal fee and filing for renewal with the county tax collector or municipal tax collector, as the case may be, before the expiration of the current license. A license may be renewed only one (1) time after which a licensee must once again purchase a new license pursuant to the provisions of Section 75-85-13, Mississippi Code of 1972.

§ 75-85-17

While transacting his business, a transient vendor shall post in a prominent place, so that they may clearly be seen by purchasers of the merchandise or services which he is offering, his state sales tax number, his transient vendor license number, and a statement that he is required to give purchasers, at the time of payment, receipts for purchases that include sales tax. The postings required in this section shall be written in bold, legible letters and numbers not less than one (1) inch in height. The transient vendor shall keep a running total of his sales.

§ 75-85-19

Any person who knowingly or intentionally operates a transient business without a valid license as provided by this chapter or who knowingly or intentionally advertises, offers for sale, or sells any merchandise or services in violation of this chapter shall, upon conviction, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than Five Hundred Dollars ($500.00) or be imprisoned in the county jail not more than six (6) months, or be both fined and imprisoned. Such person may also be proceeded against by suit, and the tax collector may seize and sell any property of the person liable for the tax and penalty in the same manner as property of taxpayers delinquent for the payment of ad valorem taxes due on personal property may be distrained and sold.

Chapter 87 Contracts Between Out-Of-State Principals and Commissioned Sales Representatives

§ 75-87-1

As used in this chapter:

(a) “Commission” means compensation accruing to a sales representative for payment by a principal, the rate of which is expressed as a percentage of the dollar amount of certain orders or sales.

(b) “Principal” means any person who does not have a permanent or fixed place of business in this state and who:

(i) Engages in the business of manufacturing, producing, importing or distributing a product or products for sale to customers who purchase such product or products for resale;

(ii) Utilizes sales representatives to solicit orders for such product or products; and

(iii) Compensates the sales representatives, in whole or in part, by commission.

(c) “Sales representative” means any person who engages in the business of soliciting, on behalf of a principal, orders for the purchase at wholesale of the product or products of the principal. The term “sales representative” shall not include a person who places orders or purchases for such person's own account for resale or is engaged in home solicitation sales regulated pursuant to Section 75-66-1 et seq., Mississippi Code of 1972.

§ 75-87-3

Whenever any principal enters into an oral or written contract with a sales representative for services to be rendered within this state and the contemplated method of compensation of the sales representative involves a commission, the contract shall set forth the means by which the commission shall be computed and paid.

§ 75-87-5

Whenever the contract between a sales representative and any principal is terminated, all commissions due the sales representative by the principal shall be due and payable within twenty-one (21) days of such termination.

§ 75-87-7

Any principal who fails to timely pay the sales representative as provided in Section 75-87-5, shall be liable to the sales representative in a civil action for up to triple the commissions due to the sales representative, plus reasonable attorney's fees and costs.

Chapter 89 Mississippi Commodities Enforcement Act

§ 75-89-1

This chapter shall be know and may be cited as the “Mississippi Commodities Enforcement Act.”

§ 75-89-3

As used in this chapter, the following words and phrases shall have the following meanings unless the context clearly indicates otherwise:

(a) “Administrator” means the Secretary of State of Mississippi.

(b) “Board of trade” means any person or group of persons engaged in buying or selling any commodity or receiving the same for sale on consignment, whether such person or group of persons is characterized as a board of trade, exchange or other form of marketplace.

(c) “CFTC rule” means any rule, regulation or order of the Commodity Futures Trading Commission in effect on July 1, 1993, and all subsequent amendments, additions or other revisions thereto, unless the administrator, within thirty (30) days following the effective date of any such amendment, addition or revision, disallows the application thereof to this chapter or to any provision thereof by rule, regulation or order.

(d) “Commodity” means, except as otherwise specified by the administrator by rule, regulation or order, any agricultural, grain or livestock product or by-product, any metal or mineral, including a precious metal set forth in paragraph (m) of this section, any gem or gemstone, whether characterized as precious, semiprecious or otherwise, any fuel, whether liquid, gaseous or otherwise, any foreign currency, and all other goods, articles, products or items of any kind. “Commodity” shall not include:

(i) A numismatic coin whose fair market value is at least fifteen percent (15%) higher than the value of the metal it contains;

(ii) Real property or any timber, agricultural or livestock product grown or raised on real property and offered or sold by the owner or lessee of such real property;

(iii) Any work of art offered or sold by art dealers, at public auction or offered or sold through a private sale by the owner thereof; or

(iv) A “security” as that term is defined in Section 75-71-102(28) of the Mississippi Securities Act.

(e) “Commodity contract” means any account, agreement or contract for the purchase or sale, primarily for speculation or investment purposes and not for use or consumption by the offeree or purchaser, of one or more commodities, whether for immediate or subsequent delivery or whether delivery is intended by the parties, and whether characterized as a cash contract, deferred shipment or deferred delivery contract, forward contract, futures contract, installment or margin contract, leverage contract or otherwise. Any commodity contract offered or sold shall, in the absence of evidence to the contrary, be presumed to be offered or sold for speculation or investment purposes. “Commodity contract” shall not include, except to the extent set forth in paragraph (1)(b) of Section 75-89-9, any contract or agreement which requires, and under which the purchaser receives, within twenty-eight (28) calendar days from the payment in good funds of any portion of the purchase price, physical delivery of the total amount of each commodity to be purchased under the contract or agreement.

(f) “Commodity Exchange Act” means the act of Congress known as the Commodity Exchange Act, as amended prior to July 1, 1993, codified as 7 U.S.C.S., Section 1 et seq., and all subsequent amendments, additions of other revisions thereto, unless the administrator, within thirty (30) days following the effective date of any such amendment, addition or revision, disallows the application thereof to this chapter or to any provision thereof by rule, regulation or order.

(g) “Commodity Futures Trading Commission” or “CFTC” means the independent regulatory agency established by Congress to administer the Commodity Exchange Act.

(h) “Commodity merchant” means any of the following as defined or described in the Commodity Exchange Act or by CFTC rule:

(i) Futures commission merchant;

(ii) Commodity pool operator;

(iii) Commodity trading advisor;

(iv) Introducing broker;

(v) Leverage transaction merchant;

(vi) An associated person of any of the foregoing;

(vii) Floor broker; and

(viii) Any other person, other than a futures association, required to register with the Commodity Futures Trading Commission.

(i) “Commodity option” means any account, agreement or contract giving a party thereto the right but not the obligation to purchase or sell one or more commodities and/or one or more commodity contracts, whether characterized as an option, privilege, indemnity, bid, offer, put, call, advance guaranty, decline guaranty or otherwise. “Commodity contract” shall not include an option traded on a national securities exchange registered with the United States Securities and Exchange Commission.

(j) “Financial institution” means a bank, savings institution or trust company organized under, or supervised pursuant to, the laws of the United States or of any state.

(k) “Offer” includes every offer to sell, offer to purchase or offer to enter into a commodity contract or commodity option.

(l) “Person” means an individual, a corporation, a partnership, association, a joint-stock company, a trust where the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government or a political subdivision of a government. “Person” shall not include a contract market designated by the Commodity Futures Trading Commission or any clearinghouse thereof or a national securities exchange registered with the Securities and Exchange Commission or any employee, officer or director of such contract market, clearinghouse or exchange acting solely in that capacity.

(m) “Precious metal” means the following in either coin, bullion or other form:

(i) Silver;

(ii) Gold;

(iii) Platinum;

(iv) Palladium;

(v) Copper; and

(vi) Such other items as the administrator may specify by rule, regulation or order.

(n) “Sale” or “sell” includes every sale, contract of sale, contract to sell or disposition for value.

§ 75-89-5

Except as otherwise provided in Section 75-89-7 or Section 75-89-9, no person shall sell or purchase, or offer to sell or purchase, any commodity under any commodity contract or under any commodity option, or offer to enter into or enter into as seller or purchaser any commodity contract or any commodity option.

§ 75-89-7

The prohibitions in Section 75-89-5 shall not apply to any transaction offered by and in which any of the following persons, or any employee, officer or director thereof acting solely in that capacity, is the purchaser or seller:

(a) A person registered with the Commodity Futures Trading Commission as a futures commission merchant or as a leverage transaction merchant whose activities require such registration;

(b) A person registered with the Securities and Exchange Commission or registered under the laws of this state as a securities broker-dealer whose activities require such registration;

(c) A person affiliated with, and whose obligations and liabilities under the transaction are guaranteed by, a person referred to in paragraph (a) or (b) of this section;

(d) A person who is a member of a contract market designated by the Commodity Futures Trading Commission or any clearinghouse thereof;

(e) A financial institution.

The exemption provided by this section shall not apply to any transaction or activity which is prohibited by the Commodity Exchange Act or CFTC rule.

§ 75-89-9

(1) The prohibitions in Section 75-89-5 shall not apply to the following:

(a) An account, agreement or transaction within the exclusive jurisdiction of the Commodity Futures Trading Commission as granted under the Commodity Exchange Act;

(b) A commodity contract for the purchase of one or more precious metals which requires, and under which the purchaser receives, within twenty-eight (28) calendar days from the payment in good funds of any portion of the purchase price, physical delivery of the quantity of the precious metals purchased by such payment. Physical delivery shall be deemed to have occurred if, within such twenty-eight-day period, such quantity of precious metals purchased by such payment is delivered, whether in specifically segregated or fungible bulk form, into the possession of a depository, other than the seller, which is either:

(i) A financial institution;

(ii) A depository whose warehouse receipts are recognized for delivery purposes for any commodity on a contract market designated by the Commodity Futures Trading Commission;

(iii) A storage facility licensed or regulated by the United States or any agency thereof; or

(iv) A depository designated by the administrator; provided that such depository, or other person which itself qualifies as a depository as aforesaid, or a qualified seller, issues and the purchaser receives a certificate, document of title, confirmation or other instrument evidencing that such quantity of precious metals has been delivered to the depository and is being and will continue to be held by the depository on the purchaser's behalf, free and clear of all liens and encumbrances, other than liens of the purchaser, tax liens, liens agreed to by the purchaser, or liens of the depository for fees and expenses, which have previously been disclosed to the purchaser;

(c) A commodity contract or commodity option solely between persons engaged in producing, processing, using commercially or handling as merchants, each commodity subject thereto, or any by-product thereof;

(d) A commodity contract under which the offeree or the purchaser is a person referred to in Section 75-89-7, an insurance company, an investment company as defined in the Investment Company Act of 1940, or an employee pension and profit-sharing or benefit plan, other than a self-employed individual retirement plan or individual retirement account; or

(e) Any other transaction which the administrator by rule or order exempts from the prohibitions in Section 75-89-5 upon finding that such exemption is consistent with public interest and with the purpose fairly intended by the policy and provisions of this chapter.

(2) For the purposes of paragraph (1)(b) of this section, a qualified seller is a person who:

(a) Is a seller of precious metals and has a tangible net worth of at least Five Million Dollars ($5,000,000.00), or has an affiliate who has unconditionally guaranteed the obligations and liabilities of the seller and the affiliate has a tangible net worth of at least Five Million Dollars ($5,000,000.00); and

(b) Has stored precious metals with one or more depositories on behalf of customers for at least the previous three (3) years; and

(c) Prior to any offer, and annually thereafter, files with the administrator a sworn application to act as a qualified seller under paragraph (1)(b) of this section, containing:

(i) The seller's name and address, names of its directors, officers, controlling shareholders, partners, principals and other controlling persons;

(ii) The address of its principal place of business, state and date of incorporation or organization, and the name and address of seller's registered agent in this state;

(iii) A statement that the seller, or a person affiliated with the seller who has guaranteed the obligations and liabilities of the seller, has a tangible net worth of at least Five Million Dollars ($5,000,000.00);

(iv) Depository information including the name and address of the depository or depositories that the seller intends to use, and the name and address of each and every depository where the seller has stored precious metals on behalf of customers for the previous three (3) years together with independent verification from each and every named depository that the seller has in fact stored precious metals on behalf of the seller's customers for the previous three (3) years and a statement of total deposits made during this period;

(v) Financial statements for the seller, or the person affiliated with the seller who has guaranteed the obligations and liabilities of the seller, for the past three (3) years, audited by an independent certified public accountant together with the accountant's report;

(vi) A statement describing the details of all civil, criminal or administrative proceedings currently pending or adversely resolved against the seller or its directors, officers, controlling shareholders, partners, principals or other controlling persons during the past ten (10) years, including civil litigation and administrative proceedings involving securities or commodities violations or fraud; criminal proceedings; denials, suspensions or revocations of securities or commodities licenses or registrations; and suspensions or expulsions from membership in, or associations with, self-regulatory organizations registered under the Securities Exchange Act of 1934, or the Commodities Exchange Act; or a statement that there were no such proceedings; and

(d) Notifies the administrator within fifteen (15) days of any material changes in the information provided in the application; and

(e) Annually furnishes to each purchaser for whom the seller is then storing precious metals, and to the administrator, a report by an independent certified public accountant of the accountant's examination of the seller's precious metals storage program.

(3) The administrator may, upon request by the person seeking designation as a qualified seller, waive any of the exemption requirements in subsection (2) of this section, conditionally or unconditionally.

(4) The administrator may, by order, deny, suspend, revoke or place limitations on the authority to engage in business as a qualified seller under paragraph (1)(b) of this section if the administrator finds that the order is in the public interest and that the person, the person's officers, directors, partners, agents, servants or employees, any person occupying a similar status or performing similar functions, any person who directly or indirectly controls or is controlled by the seller, or any of them, the seller's affiliates or subsidiaries:

(a) Has made a filing under subsection (2) of this section with the administrator or the designee of the administrator which was incomplete in any material respect or contained any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact;

(b) Has, within the last ten (10) years, pled guilty or nolo contendere to, or been convicted of any crime indicating a lack of fitness to engage in the investment commodity business;

(c) Has been permanently or temporarily enjoined by any court of competent jurisdiction from engaging in, or continuing, any conduct or practice which injunction indicates a lack of fitness to engage in the investment commodities business;

(d) Is the subject of an order of the administrator denying, suspending or revoking the person's license as a securities broker-dealer, securities broker-dealer agent, investment advisor or investment advisor representative;

(e) Is the subject of any of the following orders which are currently effective and which were issued within the last five (5) years:

(i) An order by the securities agency or administrator of another state, Canadian province or territory, the Securities and Exchange Commission or the Commodity Futures Trading Commission, entered after notice and opportunity for hearing, denying, suspending or revoking the person's registration as a futures commission merchant, commodity trading advisor, commodity pool operator, securities broker-dealer, securities broker-dealer agent, investment advisor, investment advisor representative or the substantial equivalent of those terms;

(ii) Suspension or expulsion from membership in, or association with, a self-regulatory organization registered under the Securities Exchange Act of 1934 or the Commodity Exchange Act;

(iii) A United States Postal Service fraud order;

(iv) A cease and desist order entered after notice and opportunity of hearing by the administrator or the securities or commodities agency or administrator of any other state, Canadian province or territory, the Securities and Exchange Commission or the Commodity Futures Trading Commission;

(v) An order entered by the Commodity Futures Trading Commission denying, suspending or revoking registration under the Commodity Exchange Act;

(f) Has engaged in an unethical or dishonest act or practice in the investment commodities or securities business; or

(g) Has failed reasonably to supervise sales representatives or employees.

(5) If the public interest or the protection of investors so requires, the administrator may, by order, summarily deny or suspend the exemption for a qualified seller. Upon the entry of the order, the administrator shall promptly notify the party against whom the order has been entered that the order has been entered and the reasons therefor. The administrator shall also inform the party against whom the order has been entered that a written request for a hearing on the matters set forth in the order must be filed with the administrator within thirty (30) days from receipt of a certified copy of the order. The provisions of Section 75-89-37 shall apply with respect to all subsequent proceedings.

(6) If the administrator finds that any applicant or qualified seller is no longer in existence or has ceased to do business or is subject to an adjudication of mental incompetence or to the control of a committee, conservator or guardian, or whose designated place of business cannot be located after reasonable search, the administrator may, by order, deny or revoke the exemption for a qualified seller.

(7) The administrator may issue rules, regulations or orders prescribing the terms and conditions of all transactions and contracts covered by the provisions of this chapter which are not within the exclusive jurisdiction of the Commodity Futures Trading Commission as granted by the Commodity Exchange Act, exempting and conditionally or unconditionally or otherwise implementing the provisions of this chapter for the protection of purchasers and sellers of commodities.

§ 75-89-11

(1) No person shall engage in the trade or business of, or otherwise act as, a commodity merchant unless such person:

(a) Is registered or temporarily licensed with the Commodity Futures Trading Commission for each activity constituting such person as a commodity merchant and such registration or temporary license shall not have expired, nor been suspended nor revoked; or

(b) Is exempt from such registration by virtue of the Commodity Exchange Act or of a CFTC rule.

(2) No board of trade shall trade, or provide a place for the trading of, any commodity contract or commodity option required to be traded on or subject to the rules of a contract market designated by the Commodity Futures Trading Commission unless such board of trade has been so designated for such commodity contract or commodity option and such designation shall not have been vacated, nor suspended nor revoked.

§ 75-89-13

No person, in connection with the purchase or sale of, the offer to sell, the offer to purchase, the offer to enter into, or the entry into any commodity contract or commodity option, shall directly or indirectly:

(a) Cheat or defraud, or attempt to cheat or defraud, any other person or employ any device, scheme or artifice to defraud any other person;

(b) Make any false report, enter any false record or make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading;

(c) Engage in any transaction, act, practice or course of business, including without limitation any form of advertising or solicitation, which operates or would operate as a fraud or deceit upon any person; or

(d) Misappropriate or convert the funds, security or property of any other person.

§ 75-89-15

(1) The act, omission or failure of any official, agent, or other person acting for any individual, association, partnership, corporation or trust within the scope of his employment or office shall be deemed the act, omission or failure of such individual, association, partnership, corporation or trust, as well as of such official, agent or other person.

(2) Every person who directly or indirectly controls another person liable under any provision of this chapter, every partner, officer, or director of such other person, every person occupying a similar status or performing similar functions, every employee of such other person who materially aids in the violation is also liable jointly and severally with and to the same extent as such other person, unless the person who is also liable by virtue of this provision sustains the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist.

§ 75-89-17

This chapter may be construed and implemented to effectuate its general purpose to protect investors, to prevent and prosecute illegal and fraudulent schemes involving commodity contracts and to maximize coordination with federal and other states' laws and the administration and enforcement thereof. This chapter is not intended to create any rights or remedies upon which actions may be brought by private persons against persons who violate the provisions of this chapter.

§ 75-89-19

(1) The administrator may conduct investigations, within or without this state, as he finds necessary or appropriate to:

(a) Determine whether any person has violated, or is about to violate, any provision of this chapter or any rule or order of the administrator; or

(b) Aid in enforcement of this chapter.

(2) The administrator may publish information concerning any violation of this chapter or any rule or order of the administrator.

(3) For purposes of any investigation or proceeding under this chapter, the administrator or any officer or employee designated by rule or order, may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence and require the production of any books, papers, correspondence, memoranda, agreements or other documents or records which the administrator finds to be relevant or material to the inquiry.

(4)(a) If a person does not give testimony or produce the documents required by the administrator or a designated employee pursuant to an administrative subpoena, the administrator or designated employee may apply for a court order compelling compliance with the subpoena or the giving of the required testimony.

(b) The request for order of compliance may be addressed to either:

(i) The Chancery Court of the First Judicial District of Hinds County, Mississippi, if the person is within this state; or

(ii) The appropriate court of the state having jurisdiction over the person refusing to testify or produce, if the person is outside this state.

§ 75-89-21

(1) If the administrator believes, whether or not based upon an investigation conducted under Section 75-89-19, that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, the administrator may seek any or all of the following remedies:

(a) Issue a cease and desist order with or without a prior hearing against the person(s) engaged in the prohibited activities, directing them to cease and desist from further illegal activity;

(b) Issue an order imposing an administrative penalty up to a maximum of Twenty-five Thousand Dollars ($25,000.00) for each offense and each violation shall be considered as a separate offense in a single proceeding or a series of related proceedings, to be paid to the administrator and requiring reimbursement to the administrator for all costs and expenses incurred in the investigation of the violation(s) and in the institution of administrative proceedings, if any, as a result thereof; or

(c) Initiate any of the actions specified in subsection (2) of this section.

(2) The administrator may institute any or all of the following actions in the Chancery Court of the First Judicial District of Hinds County, Mississippi, or in the appropriate courts of another state, in addition to any legal or equitable remedies otherwise available:

(a) An action for a declaratory judgment;

(b) An action for a prohibitory or mandatory injunction to enjoin the violation and to ensure compliance with this chapter or any rule or order of the administrator;

(c) An action for disgorgement; or

(d) An action for appointment of a receiver or conservator for the defendant or the defendant's assets.

§ 75-89-23

(1)(a) Upon a proper showing by the administrator that a person has violated, or is about to violate, any provision of this chapter or any rule or order of the administrator, the court may grant appropriate legal or equitable remedies.

(b) Upon a showing of violation of this chapter or a rule or order of the administrator, the court, in addition to traditional legal and equitable remedies, including temporary restraining orders, permanent or temporary prohibitory or mandatory injunctions, and writs of prohibition or mandamus, may grant the following special remedies:

(i) Disgorgement;

(ii) Declaratory judgment;

(iii) Restitution to investors wishing restitution; and

(iv) Appointment of a receiver or conservator for the defendant or the defendant's assets.

(c) Appropriate remedies when the defendant is shown only about to violate this chapter or a rule or order of the administrator shall be limited to:

(i) A temporary restraining order;

(ii) A temporary or permanent injunction;

(iii) A writ of prohibition or mandamus; or

(iv) An order appointing a receiver or conservator for the defendant or the defendant's assets.

(d) Upon a proper showing by the administrator or commodity agency of another state that a person, other than a government or governmental agency or instrumentality, has violated, or is about to violate, any provision of the commodity code of that state or any rule or order of the administrator or commodity agency of that state, the Chancery Court of the First Judicial District of Hinds County, Mississippi, may grant appropriate legal and equitable remedies.

(e) Upon showing of a violation of the commodity act of another state or a rule or order of the administrator or commodity agency of another state, the court, in addition to traditional legal or equitable remedies including temporary restraining orders, permanent or temporary prohibitory or mandatory injunctions and writs of prohibition or mandamus, may grant the following special remedies:

(i) Disgorgement; and

(ii) Appointment of a receiver, conservator or ancillary receiver or conservator for the defendant or the defendant's assets located in this state.

(f) Appropriate remedies when the defendant is shown only about to violate the commodity act of another state or a rule or order of the administrator or commodity agency of another state shall be limited to:

(i) A temporary restraining order;

(ii) A temporary or permanent injunction;

(iii) A writ of prohibition or mandamus; and

(iv) An order appointing a receiver, conservator or ancillary receiver or conservator for the defendant or the defendant's assets located in this state.

(2) The court shall not require the administrator to post a bond in any official action under this chapter.

§ 75-89-25

(1) Any person who willfully violates:

(a) Any provision of this chapter; or

(b) Any rule or order of the administrator under this chapter shall, upon conviction, be fined not more than Twenty-five Thousand Dollars ($25,000.00) or imprisoned not more than five (5) years, or both, for each violation.

(2) Any person convicted of violating a rule or order under this chapter may be fined, but may not be imprisoned, if the person proves he had no knowledge of the rule or order.

(3) No indictment or information may be returned under this chapter more than five (5) years after the alleged violation.

(4) The administrator may refer such evidence as is available concerning violations of this chapter or any rule or order of the administrator to the Attorney General or to the proper district attorney, who may, with or without such a referral from the administrator, institute the appropriate criminal proceedings under this chapter.

§ 75-89-27

(1) This chapter shall be administered by the Secretary of State of Mississippi.

(2) Neither the administrator nor any employees of the administrator shall use any information which is filed with or obtained by the administrator which is not public information for personal gain or benefit, nor shall the administrator or any employees of the administrator conduct any commodity dealings whatsoever based upon any such information, even though public, if there has not been a sufficient period of time for the commodity markets to assimilate such information.

(3)(a) Except as provided in paragraph (b) of this subsection (3), all information collected, assembled or maintained by the administrator is public information and is available for the examination of the public as provided by the Mississippi Public Records Act of 1983.

(b) The following are exceptions to paragraph (a) of this subsection (3) which are deemed to be confidential:

(i) Information obtained in private investigations pursuant to Section 75-89-19;

(ii) Information made confidential by the provisions of the Mississippi Public Records Act of 1983, and any statutory exceptions thereto;

(iii) Information obtained from federal agencies which may not be disclosed under federal law.

(c) The administrator in his discretion may disclose any information made confidential under paragraph (3)(b) of this section to persons identified in subsection (1) of Section 75-89-29.

(d) No provision of this chapter either creates or derogates any privilege which exists at common law, by statute or otherwise when any documentary or other evidence is sought under subpoena directed to the administrator or any employee of the administrator.

§ 75-89-29

(1) To encourage uniform application and interpretation of this chapter and commodities regulation and enforcement in general, the administrator and the employees of the administrator may cooperate, including bearing the expense of the cooperation, with the commodities agencies or administrator of another jurisdiction, Canadian province or territory or such other agencies administering this chapter, the Commodity Futures Trading Commission, the Securities and Exchange Commission, any self-regulatory organization established under the Commodity Exchange Act or the Securities Exchange Act of 1934, any national or international organization of commodities officials or agencies and any governmental law enforcement agency.

(2) The cooperation authorized by subsection (1) shall include, but need not be limited to, the following:

(a) Making joint examinations or investigations;

(b) Holding joint administrative hearings;

(c) Filing and prosecuting joint litigation;

(d) Sharing and exchanging personnel;

(e) Sharing and exchanging information and documents;

(f) Formulating and adopting mutual regulations, statements of policy, guidelines, proposed statutory changes and releases; and

(g) Issuing and enforcing subpoenas at the request of the commodity agency in another jurisdiction, the securities agency of another jurisdiction, the Commodity Futures Trading Commission or the Securities and Exchange Commission, if the information sought would also be subject to lawful subpoena for conduct occurring in this state.

§ 75-89-31

(1) In addition to specific authority granted elsewhere in this chapter, the administrator may make, amend and rescind rules, forms and orders as are necessary to carry out the provisions of this chapter. Such rules or forms shall include, but need not be limited to rules defining any terms, whether or not used in this chapter, insofar as the definitions are not inconsistent with the provisions of this chapter. For the purpose of rules or forms, the administrator may classify commodities and commodity contracts, persons and matters within the administrator's jurisdiction.

(2) Unless specifically provided in this chapter, no rule, form or order may be adopted, amended or rescinded unless the administrator finds that the action is:

(a) Necessary or appropriate in the public interest or for the protection of investors; and

(b) Consistent with the purposes fairly intended by the policy and provisions of this chapter.

(3) All rules and forms of the administrator shall be published.

(4) No provision of this chapter imposing any liability applies to any act done or omitted in good faith in conformity with a rule, order or form adopted by the administrator, notwithstanding that the rule, order or form may later be amended, or rescinded or be determined by judicial or other authority to be invalid for any reason.

§ 75-89-33

When a person, including a nonresident of this state, engages in conduct prohibited or made actionable by this chapter or any rule or order of the administrator, the engaging in the conduct shall constitute the appointment of the administrator as the person's attorney to receive service of any lawful process in a noncriminal proceeding against the person, a successor or personal representative, which grows out of that conduct and which is brought under this chapter or any rule or order of the administrator with the same force and validity as if served personally.

§ 75-89-35

(1)Sections 75-89-5, 75-89-11, and 75-89-13 apply to persons who sell or offer to sell when:

(a) An offer to sell is made in this state; or

(b) An offer to buy is made and accepted in this state.

(2)Sections 75-89-5, 75-89-11, and 75-89-13 apply to persons who buy or offer to buy when:

(a) An offer to buy is made in this state; or

(b) An offer to sell is made and accepted in this state.

(3) For the purpose of this section, an offer to sell or to buy is made in this state, whether or not either party is then present in this state, when the offer:

(a) Originates from this state; or

(b) Is directed by the offeror to this state and received at the place to which it is directed, or at any post office in this state in the case of a mailed offer.

(4) For the purpose of this section, an offer to buy or to sell is accepted in this state when acceptance:

(a) Is communicated to the offeror in this state; and

(b) Has not previously been communicated to the offeror, orally or in writing, outside this state; and acceptance is communicated to the offeror in this state, whether or not either party is then present in this state, when the offeree directs it to the offeror in this state, reasonably believing the offeror to be in this state and it is received at the place to which it is directed, or at any post office in this state in the case of a mailed acceptance.

(5) An offer to sell or to buy is not made in this state when:

(a) The publisher circulates or there is circulated on his behalf in this state any bona fide newspaper or other publication of general, regular and paid circulation which is not published in this state, or which is published in this state but has had more than two-thirds ( 2/3 ) of its circulation outside this state during the past twelve (12) months; or

(b) A radio or television program originating outside this state is received in this state.

§ 75-89-37

(1) The administrator shall commence an administrative proceeding under this chapter by entering either a notice of intent to take administrative action or a summary order. The notice of intent or summary order may be entered without notice, without opportunity for hearing and need not be supported by findings of fact or conclusions of law, but must be in writing.

(2) Upon entry of a notice of intent or summary order, the administrator shall promptly notify the party against whom the notice of intent or summary order is entered that the notice of intent or summary order has been entered and the reasons therefor. The administrator shall also inform the party against whom the notice or summary order is entered that a written request for a hearing on the matters set forth in the notice of intent or summary order must be filed with the administrator within thirty (30) calendar days from receipt of a certified copy of the notice of intent or summary order.

(3) If the proceeding is pursuant to a summary order, the administrator, whether or not a written request for a hearing is received from any interested party, may set the matter down for hearing on the administrator's own motion.

(4) If no hearing is requested within the requisite period of time and none is ordered by the administrator, the notice of intent or summary order will become final upon entry of an appropriate order.

(5) If a hearing is requested or ordered, the administrator shall give notice to the party against whom the notice or summary order has been entered of the date, time and place of the hearing. The administrator shall promulgate rules governing the procedure for conducting the hearing and for entering the appropriate final order thereafter. However, no final order or other order after the hearing may be entered without:

(a) Appropriate notice to the party or parties against whom the notice of intent or summary order has been entered;

(b) Opportunity for hearing by the party or parties against whom the notice of intent or summary order has been entered; and

(c) Entry of written findings of fact and conclusions of law.

§ 75-89-39

(1) Any person aggrieved by a final order of the administrator may obtain a review of the order in the Chancery Court of the First Judicial District of Hinds County, Mississippi, by filing in court within sixty (60) days after the entry of the order a written petition praying that the order be modified or set aside in whole or in part. A copy of the petition for review shall be served upon the administrator.

(2) Upon the filing of a petition for review, except where the taking of additional evidence is ordered by court pursuant to subsection (5) or (6) of this section, the court shall have exclusive jurisdiction of the matter, and the administrator may not modify or set aside the order in whole or in part.

(3) The filing of a petition for review under subsection (1) of this section does not, unless specifically ordered by the court, operate as a stay of the administrator's order, and the administrator may enforce or ask the court to enforce the order pending the outcome of the review proceedings.

(4) Upon receipt of the petition for review, the administrator shall certify and file in the court a copy of the order and the transcript or record of the evidence upon which it was based. If the order became final under subsection (4) of Section 75-89-37, the administrator shall file in court an affidavit certifying that no hearing has been held and that the order became final pursuant to subsection (4) of Section 75-89-37.

(5) If either the aggrieved party or the administrator applies to the court for leave to adduce additional evidence, and shows to the satisfaction of the court, that there were reasonable grounds for failure to adduce the evidence in the hearing before the administrator or other good cause, the court may order the additional evidence to be taken by the administrator under such conditions as the court considers proper.

(6) If new evidence is ordered taken by the court, the administrator may modify the findings and order by reason of the additional evidence and shall file in the court the additional evidence together with any modified or new findings or order.

(7) The court shall review the petition based upon the original record before the administrator plus any additional evidence ordered to be taken pursuant to subsections (5) and (6) of this section. The findings of the administrator as to the facts, if supported by competent, material and substantive evidence, are conclusive. Based upon this review, the court may affirm, modify, enforce or set aside the order in whole or in part.

§ 75-89-41

It shall not be necessary to negate any of the exemptions of this chapter in any complaint, information or indictment, or in any writ or proceeding brought under this chapter. The burden of proof of any such exemption shall be upon the party claiming the same.

§ 75-89-43

It shall be a defense in any complaint, information, indictment, any writ or proceeding brought under this chapter alleging a violation of Section 75-89-5 based solely on the failure in an individual case to make physical delivery within the applicable time period under paragraph (e) of Section 75-89-3 or paragraph (1)(b) of Section 75-89-9 that:

(a) Failure to make physical delivery was due solely to factors beyond the control of the seller, the seller's officers, directors, partners, agents, servants or employees, every person occupying a similar status or performing similar functions, every person who directly or indirectly controls or is controlled by the seller, or any of them, the seller's affiliates, subsidiaries or successors; and

(b) Physical delivery was completed within a reasonable time under the applicable circumstances.

§ 75-89-45

The administrator may honor requests from interested persons for interpretative opinions or may issue determinations that no enforcement proceedings will be instituted against certain specified persons for engaging in certain specified activities when the determination is consistent with the purposes fairly intended by the policy and provisions of this chapter. The administrator may charge a fee for interpretative opinions and for no-action determinations.

Chapter 91 Truth in Music Advertising

§ 75-91-1

This chapter shall be known and may be cited as the “Truth in Music Advertising Act.”

§ 75-91-3

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:

(a) “Performing group” means a vocal or instrumental group seeking to use the name of another group that has previously released a commercial sound recording under that name.

(b) “Recording group” means a vocal or instrumental group at least one (1) of whose members has previously released a commercial sound recording under that group's name and in which the member or members have a legal right by virtue of use or operation under the group name without having abandoned the name or affiliation with the group.

(c) “Sound recording” means a work that results from the fixation on a material object of a series of musical, spoken or other sounds regardless of the nature of the material object, such as a disk, tape or other phono-record, in which the sounds are embodied.

§ 75-91-5

It shall be unlawful for any person to advertise or conduct a live musical performance or production in this state through the use of a false, deceptive or misleading affiliation, connection or association between a performing group and a recording group. This section does not apply if any of the following apply:

(a) The performing group is the authorized registrant and owner of a federal service mark for that group registered in the United States Patent and Trademark Office.

(b) At least one (1) member of the performing group was a member of the recording group and has a legal right by virtue of use or operation under the group name without having abandoned the name or affiliation with the group.

(c) The live musical performance or production is identified in all advertising and promotion as a salute or tribute and the name of the vocal or instrumental group performing is not so closely related or similar to that used by the recording group that it would tend to confuse or mislead the public.

(d) The advertising does not relate to a live musical performance or production taking place in this state.

(e) The performance or production is expressly authorized by the recording group.

§ 75-91-7

(1) Whenever the Attorney General or a district attorney has reason to believe that any person is advertising or conducting or is about to advertise or conduct a live musical performance or production in violation of Section 75-91-5 and that proceedings would be in the public interest, the Attorney General or district attorney may bring an action in the name of the state against the person to restrain by temporary or permanent injunction that practice.

(2) Whenever any court issues a permanent injunction to restrain and prevent violations of this chapter as authorized in subsection (1) of this section, the court may, in its discretion, direct that the defendant restore to any person in interest any monies or property, real or personal, which may have been acquired by means of any violation of this chapter, under terms and conditions to be established by the court.

§ 75-91-9

Any person who violates Section 75-91-5 is liable for a civil penalty of not less than Five Thousand Dollars ($5,000.00) nor more than Fifteen Thousand Dollars ($15,000. 00) per violation, which civil penalty shall be in addition to any other relief which may be granted under Section 75-91-7. Each performance or production declared unlawful by Section 75-91-5 shall constitute a separate violation.

Chapter 93 Fictitious Business Name Registration Act

§ 75-93-1

This chapter may be cited as the “Fictitious Business Name Registration Act.”

§ 75-93-3

The purpose of this chapter is to establish a centralized, statewide system of voluntary registration of fictitious business names being used in this state in order to provide the public with the legal names of persons or entities doing business under a fictitious name.

§ 75-93-5

As used in this chapter:

(a) “Business” means any commercial or professional activity.

(b) “Fictitious business name” means any name under which an entity transacts business in this state, other than (i) the entity's legal name, or (ii) a fictitious name adopted by a foreign entity under Title 79, Mississippi Code of 1972, because its legal name is unavailable.

(c) “Entity” means any corporation; limited liability company; partnership; limited partnership; limited liability partnership; sole proprietorship; firm; enterprise; franchise; association; organization; holding company; self-employed individual; joint-stock company; receivership; trust; other legal entity or undertaking organized for economic gain; nonprofit corporation; association or organization receiving public funds; or other such entity.

§ 75-93-7

(1) An entity may apply to register a fictitious business name by filing with the Secretary of State the following information:

(a) The fictitious business name to be registered;

(b) The applicant's legal name and mailing address;

(c) Every street address or physical location where the entity uses or will be using the fictitious business name to transact business;

(d) If the applicant is a domestic corporation or limited liability company, its Mississippi business identification number;

(e) If the applicant is a foreign corporation or limited liability company, the state or nation of its organization and a copy of its certificate of authority to transact business in Mississippi;

(f) A statement that the applicant is familiar with the provisions of this chapter and understands that filing under this section does not create any exclusive rights in or to the fictitious business name; and

(g) Any other information the Secretary of State may reasonably require by rule, including, without limitation, the applicant's electronic mailing address, the address of the entity's official Web site, if applicable, and the general nature of the business conducted by the applicant.

(2) The applicant shall sign and verify the application.

(3) Upon compliance by the applicant with the requirements of this section, the Secretary of State shall return to the applicant a stamped copy of the approved registration application.

(4) The Secretary of State shall not refuse registration of a fictitious business name on the grounds that the name is indistinguishable from a previously registered fictitious business name, registered trademark, or legal name of an entity required by law to register with the Secretary of State.

(5) Only one (1) fictitious business name may be registered per application submitted under the provisions of this section.

§ 75-93-9

The registrant of a fictitious business name shall, within thirty (30) days of a material change in any of the information listed in Section 75-93-7(1), file with the Secretary of State an amendment of fictitious business name registration. The amendment shall set forth all information that would be required in an original application for registration of a fictitious business name, and the amendment shall be executed in the same manner as an original application.

§ 75-93-11

(1) The registration period for a fictitious business name registered under this chapter shall be five (5) years; registration shall expire on December 31 of the year in which the fifth anniversary of registration occurs.

(2) Renewal of fictitious business name registrations:

(a) Renewal of a fictitious business name registration may be made on or between January 1 and December 31 of the expiration year. Upon timely filing of a renewal statement, the effectiveness of the registration shall continue for five (5) years as provided in this section.

(b) If the registration is not timely renewed on or before December 31 of the year of expiration, the registration shall expire. The Secretary of State shall remove any expired or canceled registration from its records and may purge such registrations.

§ 75-93-13

Notwithstanding the provisions of any other law, registration of a fictitious business name under this chapter is for public notice only and gives rise to no presumption of the registrant's exclusive rights to own or use the fictitious business name registered, nor does it affect trademark, service mark, trade name, or other name rights previously acquired by others in the same or similar name. Registration under this chapter does not preserve a fictitious business name against future use or registration by others. The issuance of a registration under this chapter shall not constitute due organization or authority to transact business in this state.

§ 75-93-15

The registrant of a fictitious business name may withdraw its registration by delivering to the Secretary of State a statement containing the following:

(a) The legal name of the entity utilizing the fictitious business name;

(b) The fictitious business name with respect to which the statement of withdrawal relates;

(c) That the entity will no longer transact business in this state under the fictitious business name;

(d) An acknowledgement that the applicant understands the fictitious business name registration will no longer be effective upon the filing of the statement of withdrawal; and

(e) The signature of the withdrawing registrant.

§ 75-93-17

The Secretary of State shall cancel a fictitious business name registration if:

(a) The Secretary of State receives a voluntary withdrawal of registration from the registrant or the assignee of record;

(b) The registration is not renewed in accordance with this chapter;

(c) A court of competent jurisdiction orders the cancellation on any grounds; or

(d) The registration was obtained fraudulently by containing false or misleading information.

§ 75-93-19

Any fictitious business name registered under this chapter may be assigned by filing a duly executed written instrument with the Secretary of State.

§ 75-93-21

(1) All filings required under this chapter shall be made on forms prescribed by the Secretary of State.

(2) Subject to the provisions of subsection (3), the Secretary of State shall charge and collect nonrefundable processing fees as follows:

(a) For registration or renewal of a fictitious business name, Twenty-five Dollars ($25.00).

(b) For withdrawal, cancellation, amendment, or assignment of a fictitious business name, Twenty-five Dollars ($25.00).

(c) For furnishing a certified copy of a fictitious business name document, Ten Dollars ($10.00).

(3) Entities required by law to file annual reports with the Secretary of State shall not be charged a separate fee for registration or renewal of a fictitious business name, provided that the application for registration or renewal is filed along with the entity's annual report.

(4) The Secretary of State shall prescribe by rule the means of electronic filing of documents required under this chapter.

§ 75-93-23

Notwithstanding any other provision of law to the contrary, a fictitious business name registered as provided in this chapter is not required to contain within that name a designation reflecting the applicant's type of legal entity, including the terms “corporation,” “limited liability company,” “limited liability partnership,” “limited partnership,” or any abbreviations or derivatives thereof.

§ 75-93-25

(1) The Secretary of State shall refuse registration of a fictitious business name, which, in the Secretary of State's sole discretion, is potentially misleading, or which includes any of the following terms:

(a) “Corporation,” “Corp.,” “Incorporated,” or “Inc.,” unless the applicant is a corporation organized or qualified to do business pursuant to the laws of this state;

(b) “Limited Liability Company,” “Limited Company” or the abbreviation “L.L.C.,” “L.C.,” “LLC,” or “LC,” unless the applicant is a limited liability company organized or registered to do business pursuant to the laws of this state;

(c) “Business Trust” or the abbreviation “B.T.” or “BT,” unless the applicant is a business trust organized or registered to do business pursuant to the laws of this state;

(d) “Professional Corporation” or the abbreviation “Prof. Corp.,” “P.C.,” or “PC” or the word “Chartered” or the abbreviation “Chtd.,” unless the applicant is a professional corporation organized to do business pursuant to the laws of this state;

(e) “Professional Association,” “Professional Organization,” or the abbreviation “Prof. Ass'n” or “Prof. Org.,” unless the applicant is a professional association organized to do business pursuant to the laws of this state;

(f) “Limited” or the abbreviation “Ltd.,” unless the applicant is a corporation, limited liability company, registered limited liability partnership, limited partnership, or professional corporation organized, qualified, or registered to do business pursuant to the laws of this state;

(g) Words not permitted to be used in any business name without governmental consent, unless the applicant provides to the Secretary of State written evidence of such consent.

(2) Notwithstanding the other provisions of this section, the Secretary of State may allow registration of a fictitious business name which contains a prohibited term if, in the Secretary of State's sole discretion, the term is not misleading.

§ 75-93-27

The Secretary of State shall keep for public examination a record of all fictitious business names registered or renewed under the provisions of this chapter.

§ 75-93-29

The Secretary of State is granted the power reasonably necessary to enable it to administer this chapter efficiently, to perform the duties herein imposed upon it, and to adopt reasonable rules necessary to carry out its duties and functions under this chapter.

§ 75-93-31

Any person who shall knowingly and willfully procure the registration of a fictitious business name or apply for registration of a fictitious business name under the provisions of this chapter by knowingly making any false or fraudulent representation or declaration, orally or in writing, or by any other fraudulent means, is guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not more than Five Hundred Dollars ($500.00).

Chapter 95 Business of Purchasing Precious Items for Resale

§ 75-95-1

(1) As used in this chapter, the following words and phrases have the meanings ascribed in this section unless the context clearly indicates otherwise:

(a) “Dealer” means any person, corporation or partnership that engages in the business of purchasing precious items for the purpose of reselling such items in any form. The term “dealer” does not include a manufacturer, retail merchant, pawnbroker licensed under the Mississippi Pawnshop Act (Article 7, Chapter 67, Title 75, Mississippi Code of 1972) or person in the wholesale business, nor does it include any person who purchases precious items at a social gathering in a private residence.

(b) “Local law enforcement agency” means the chief of police for businesses located within the jurisdiction of a municipality and the county sheriff for businesses located outside the jurisdiction of a municipality.

(c) “Permanent place of business” means a fixed premises either owned by the dealer or leased by the dealer for at least one (1) year.

(d) “Precious item” means any of the following:

(i) An article made, in whole or in part, of gold, silver or platinum.

(ii) Precious or semiprecious stones or pearls, whether mounted or unmounted.

(e) “Purchase” means the acquisition of a precious item or items for a consideration of cash, goods or another precious item.

(2) This chapter shall not apply to any person who purchases precious items from a retail merchant, pawnbroker licensed under the Mississippi Pawnshop Act, manufacturer or wholesale dealer, nor does it apply to any person who purchases precious items at a social gathering in a private residence.

(3) For purposes of this section, the term “private residence” means a separate dwelling or a separate apartment in a multiple dwelling, which is occupied by members of a single-family unit.

§ 75-95-3

(1) A dealer desiring to engage in the business of purchasing precious items for the purpose of reselling those items must purchase a privilege license under Section 27-17-9 which authorizes him or her to engage in that business. A dealer may not operate in the State of Mississippi unless he or she has a current privilege license to engage in the business of purchasing precious items for the purpose of reselling those items.

(2) A dealer may operate only from the permanent place of business listed on the privilege license. The dealer must forward a copy of each privilege license to the local law enforcement agency within five (5) days of receipt of the license.

§ 75-95-5

(1) Each dealer shall keep the following information for six (6) months from the date of purchase of a precious item:

(a) The name, current address, date of birth and signature of the person from whom the dealer purchased the item.

(b) A description of the person, including height, weight, race, complexion and hair color.

(c) A copy and the serial number of a valid identification card number, as required under subsection (2).

(d) A list describing the items purchased from that person.

Upon the request of a local law enforcement agency, the dealer must make available any of the information required under this subsection.

(2) Before making a purchase, a dealer shall require the person from whom he or she is purchasing the precious item to identify himself or herself with a valid driver's license, nondriver's identification card, armed services identification card, tribal identification card or other valid photo identification sufficient to obtain the information required under subsection (1). The photo identification must contain a traceable serial number, which must be recorded by the dealer. The local law enforcement agency shall make available to each dealer a list of the forms of photo identification that are acceptable under this chapter. A valid, unexpired tribal identification card is acceptable under this chapter.

(3) Each dealer, at least once each week in which he or she makes a purchase, shall make out and deliver to the local law enforcement agency a true, complete and legible list of all items purchased during the period since the last report. If the local law enforcement agency has issued forms for the making of the reports, the dealer must use those forms to meet the requirements of this subsection. The list of items must include the following:

(a) The brand name and serial number, if any, of the item or items purchased.

(b) An accurate description of each item sufficient to enable the law enforcement agency to identify the item.

(c) The date and time when the item was received.

(d) The amount paid for each item.

(e) All information required under subsection (1) of this section.

§ 75-95-7

(1) Any item purchased must be held in the dealer's custody in the same shape and form for which it was receipted for fifteen (15) business days after delivering the list of items required under Section 75-95-5 to the local law enforcement agency.

(2) A dealer may make payment to a seller only by check made payable to a named actual intended seller.

(3) It is presumptive evidence of intent to violate this chapter if the items purchased are not listed or fail to agree with the description contained in the required list.

(4) On notification by a law enforcement agency or district attorney's office that the items purchased are the fruits of a crime, a dealer may not dispose of those items.

(5) A dealer may not purchase items from any person under eighteen (18) years of age unless the person is accompanied by a parent or guardian who submits the identification required under Section 75-95-5.

§ 75-95-9

Each dealer must display prominently a copy of this chapter in a conspicuous place on the premises of the business.

§ 75-95-11

A violation of this chapter is a misdemeanor punishable by a fine of not more than One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for not more than six (6) months, or by both fine and imprisonment.

Chapter 97 Third-Party Delivery Services

§ 75-97-1

As used in this chapter, the following words and phrases have the following meanings, unless the context clearly indicates otherwise:

(a) “Agreement” means a written contractual agreement between the restaurant, the restaurant owner and the third-party delivery service.

(b) “Consumer” means a person, business or other entity that places an order for restaurant products through the third-party delivery platform.

(c) “Logo” means the logo, motto or any identifiable symbols attributed and easily identified as belonging to a specific restaurant.

(d) “Restaurant” means and includes a restaurant or entity with a food permit as listed with the Mississippi Department of Health.

(e) “Third-party delivery platform” means the online communication platform of the third-party delivery service on which a consumer can view and search the menus of restaurants and place an order for restaurant products through internet-enabled technology and digital media, including websites and consumer applications accessible through smartphones and other mobile devices.

(f) “Third-party delivery service” means a company, organization or other entity, other than a restaurant, that is licensed to do business in this state and provides limited delivery services to a consumer.

§ 75-97-3

(1) In the absence of an agreement, a third-party delivery service shall not advertise, promote or otherwise convey any relationship with a restaurant and restaurant owner, or use the menu, logo or intellectual property belonging to a restaurant and restaurant owner on the third-party delivery platform.

(2) A restaurant whose menu, logo or intellectual property is used by a third-party delivery service in violation of this chapter shall have the right to bring an action in a court of competent jurisdiction.

(3) Upon a finding by a court of competent jurisdiction that a third-party delivery service used the menu, logo or intellectual property of a restaurant and restaurant owner in violation of this chapter, the court may impose a civil penalty in an amount not to exceed Two Thousand Five Hundred Dollars ($2,500.00), or the amount of the restaurant's actual damages, whichever is greater.

Chapter 99 Consumer Freedom of Choice in Appliances Act

§ 75-99-1

This chapter shall be known and may be cited as the Consumer Freedom of Choice in Appliances Act.

§ 75-99-3

For purposes of this chapter, the following terms shall be defined as follows, unless the context clearly indicates otherwise:

(a) “Governmental entity” means any agency, department, institution, instrumentality, or political subdivision of the State of Mississippi, or any agency, department, institution of a political subdivision.

(b) “Utility service” means electrical, natural gas, or liquified petroleum (L.P.) gas service provided to an end user.

(c) “Appliance” means a device or apparatus which uses a utility service for its energy operating requirements and has been manufactured and designed to perform a specific task in a domestic or household setting or manufactured and designed to perform similar functions in a commercial or industrial setting. The term “appliance” includes a device used for cooking, space heating, water heating, or another end use.

§ 75-99-5

A governmental entity shall not enact or enforce any resolution, ordinance, regulation, rule, code, or policy to take any action that restricts or prohibits, or has the effect of restricting or prohibiting, any person or entity from using any appliance based on the type of utility service required to operate the appliance.

§ 75-99-7

Nothing in this chapter shall be construed as affecting a governmental entity's authority to do the following:

(a) Require that utility services necessary to operate an appliance be obtained from a provider that is authorized to do business in the location.

(b) Prohibit the usage of any appliance for an illegal purpose.

(c) Exercise existing police powers to review and approve an application before building permits, or to otherwise enforce building, fire, and other public safety codes or subdivision regulations. However, no governmental entity may deny a building permit or subdivision regulation application based solely on the type of appliance and/or utility service proposed for the project.

(d) Taking actions to ensure the safe use of appliances in accordance with the manufacturer's recommendations for usage.