S T A T E   O F   N E W   Y O R K
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                                  8013

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                              June 14, 2013
                               ___________

Introduced  by  M. of A. GABRYSZAK -- (at request of the Office of Court
  Administration) -- read once and referred to the Committee on  Judici-
  ary

AN ACT to amend the judiciary law, the penal law and the uniform commer-
  cial code, in relation to financing statements falsely filed under the
  uniform commercial code

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Legislative findings. The legislature finds that the retal-
iatory filing of false financing statements under the uniform commercial
code by members of separatist  groups  against  New  Yorkers  in  public
service  and  private service is a growing and pernicious practice. As a
result of the proliferation of such filings, the credit of  New  Yorkers
in  public  service and private service has been impaired solely because
they were doing their jobs on behalf of the citizens of the state. It is
vital that all appropriate steps be  taken  to  counter  this  practice.
Accordingly, it is the objective of this act to discourage the filing of
false  financing  statements and to provide a meaningful and expeditious
remedy for those who have been harmed by such filings. It  is  also  the
objective  of  this  measure  to  declare the state's interest in future
effectuation of a second step: careful review of procedures  authorizing
the filing of financing statements under the uniform commercial code and
subsequent  modification  of  laws and procedures as may be necessary to
ensure that the public is  adequately  protected  against  the  kind  of
retaliatory  filing  of  false financing statements to which this act is
addressed.
  S 2. Subdivision 2 of section 212 of the judiciary law is  amended  by
adding a new paragraph (s) to read as follows:
  (S)  ESTABLISH  RULES FOR SPECIAL PROCEEDINGS AUTHORIZED BY SUBSECTION
(D) OF SECTION 9--518 OF THE UNIFORM COMMERCIAL  CODE.  SUCH  RULES  MAY

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08971-06-3

              

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AUTHORIZE  THE  COURT  IN  WHICH SUCH A SPECIAL PROCEEDING IS PENDING TO
ORDER A REFEREE TO HEAR AND DETERMINE SUCH SPECIAL PROCEEDING.
  S  3. Section 175.35 of the penal law, as amended by chapter 99 of the
laws of 1998, is amended to read as follows:
S 175.35 Offering a false instrument for filing in the first degree.
  A person is guilty of offering a false instrument for  filing  in  the
first degree when[,]:
  1.  knowing  that  a  written instrument contains a false statement or
false information, and with intent to defraud the state or any political
subdivision, public authority  or  public  benefit  corporation  of  the
state,  he OR SHE offers or presents it to a public office, public serv-
ant, public authority or public benefit corporation with  the  knowledge
or  belief  that  it  will  be  filed with, registered or recorded in or
otherwise become a part of the records of  such  public  office,  public
servant, public authority or public benefit corporation[.]; OR
  2.  (A) HE OR SHE COMMITS THE CRIME OF OFFERING A FALSE INSTRUMENT FOR
FILING IN THE SECOND DEGREE; AND
  (B) SUCH INSTRUMENT IS A FINANCING STATEMENT THE CONTENTS OF WHICH ARE
PRESCRIBED BY SECTION 9--502 OF THE UNIFORM COMMERCIAL CODE, THE COLLAT-
ERAL ASSERTED TO BE COVERED IN SUCH  STATEMENT  IS  THE  PROPERTY  OF  A
PERSON  WHO IS A STATE OR LOCAL OFFICER AS DEFINED BY SECTION TWO OF THE
PUBLIC OFFICERS LAW OR WHO OTHERWISE  IS  A  JUDGE  OR  JUSTICE  OF  THE
UNIFIED  COURT  SYSTEM,  SUCH  FINANCING STATEMENT DOES NOT RELATE TO AN
ACTUAL TRANSACTION, AND HE OR SHE  FILED  SUCH  FINANCING  STATEMENT  IN
RETALIATION FOR THE PERFORMANCE OF OFFICIAL DUTIES BY SUCH PERSON.
  Offering  a false instrument for filing in the first degree is a class
E felony.
  S 4. Section 9--518 of the  uniform  commercial  code  is  amended  by
adding a new subsection (d) to read as follows:
  (D) SPECIAL PROCEEDING TO REDACT OR EXPUNGE A FALSELY FILED OR AMENDED
FINANCING  STATEMENT. (1) PROVIDED HE OR SHE IS AN EMPLOYEE OF THE STATE
OR A POLITICAL SUBDIVISION THEREOF, A PERSON IDENTIFIED AS A DEBTOR IN A
FINANCING STATEMENT FILED PURSUANT TO THIS SUBPART MAY BRING  A  SPECIAL
PROCEEDING  AGAINST  THE  NAMED FILER OF SUCH STATEMENT OR ANY AMENDMENT
THEREOF TO INVALIDATE THE FILING OR AMENDMENT THEREOF WHERE SUCH  STATE-
MENT WAS FALSELY FILED OR AMENDED; EXCEPT THAT AN ATTORNEY WHO IS NOT AN
EMPLOYEE  OF THE STATE OR A POLITICAL SUBDIVISION THEREOF MAY ALSO BRING
A SPECIAL PROCEEDING HEREUNDER WHERE HE OR SHE REPRESENTS OR HAS REPRES-
ENTED THE RESPONDENT THEREIN IN A CRIMINAL COURT. SUCH SPECIAL  PROCEED-
ING  SHALL  BE  GOVERNED  BY  ARTICLE FOUR OF THE CIVIL PRACTICE LAW AND
RULES, AND SHALL BE COMMENCED IN THE SUPREME COURT OF ALBANY COUNTY, THE
COUNTY OF THE PETITIONER'S RESIDENCE OR A  COUNTY  WITHIN  THE  JUDICIAL
DISTRICT  IN  WHICH  ANY  PROPERTY COVERED BY THE FINANCING STATEMENT IS
LOCATED. NO FEE PURSUANT TO ARTICLE EIGHTY OF THE CIVIL PRACTICE LAW AND
RULES SHALL BE COLLECTED IN SUCH SPECIAL PROCEEDING.
  (2) THE PETITION IN A SPECIAL PROCEEDING HEREUNDER SHALL PLEAD THAT:
  (A) THE FINANCING STATEMENT FILED OR AMENDED BY THE RESPONDENT  PURSU-
ANT TO SECTION 9--509 WAS FALSELY FILED OR AMENDED TO RETALIATE FOR: (I)
THE PERFORMANCE OF THE PETITIONER'S OFFICIAL DUTIES IN HIS OR HER CAPAC-
ITY  AS  AN EMPLOYEE OF THE STATE OR A POLITICAL SUBDIVISION THEREOF, OR
(II) IN THE CASE OF A SPECIAL PROCEEDING BROUGHT BY AN ATTORNEY  WHO  IS
NOT  AN  EMPLOYEE  OF  THE  STATE OR A POLITICAL SUBDIVISION THEREOF, TO
RETALIATE FOR THE PERFORMANCE OF THE PETITIONER'S DUTIES IN HIS  OR  HER
CAPACITY AS AN ATTORNEY FOR THE RESPONDENT IN A CRIMINAL COURT; AND

A. 8013                             3

  (B)  SUCH  FINANCING  STATEMENT  DOES  NOT  RELATE TO AN INTEREST IN A
CONSUMER-GOODS TRANSACTION, A COMMERCIAL TRANSACTION, OR ANY OTHER ACTU-
AL TRANSACTION BETWEEN THE PETITIONER AND THE RESPONDENT; AND
  (C) THE COLLATERAL COVERED IN SUCH FINANCING STATEMENT IS THE PROPERTY
OF THE PETITIONER; AND
  (D)  PROMPT  REDACTION  OR  INVALIDATION OF THE FINANCING STATEMENT IS
NECESSARY TO AVERT OR MITIGATE PREJUDICE TO THE PETITIONER.
  (3) IF THE COURT MAKES A WRITTEN FINDING THAT THE ALLEGATIONS IN PARA-
GRAPH TWO OF THIS SUBSECTION ARE ESTABLISHED, THE COURT SHALL ORDER  THE
EXPUNGEMENT  OF SUCH STATEMENT OR ITS REDACTION IN THE PUBLIC RECORDS IN
THE OFFICE IN WHICH THE FINANCING STATEMENT IS  FILED,  AS  APPROPRIATE,
AND  MAY  GRANT  ANY  ADDITIONAL RELIEF AUTHORIZED BY SECTION 9--625. IN
SUCH CASE, THE COURT SHALL CAUSE A COPY OF ITS ORDER TO  BE  FILED  WITH
THE  SECRETARY  OF  STATE OR OTHER APPROPRIATE FILING OFFICE PURSUANT TO
THIS CHAPTER. UPON A FINDING  THAT  THE  RESPONDENT  HAS  ENGAGED  IN  A
REPEATED  PATTERN  OF  FALSE FILINGS AS FOUND UNDER THIS SUBSECTION, THE
COURT ALSO MAY ENJOIN THE RESPONDENT FROM FILING OR AMENDING ANY FURTHER
FINANCING STATEMENT PURSUANT TO THIS ARTICLE WITHOUT LEAVE OF THE COURT.
IF THE RESPONDENT IS INCARCERATED AT THE TIME THE COURT ISSUES AN  ORDER
CONTAINING  SUCH  AN  INJUNCTION,  THE COURT SHALL CAUSE THE HEAD OF THE
CORRECTIONAL FACILITY IN WHICH THE RESPONDENT IS INCARCERATED TO RECEIVE
A COPY OF SUCH DETERMINATION. THE HEAD OF SUCH A FACILITY SHALL CAUSE  A
COPY OF SUCH ORDER TO BE PROVIDED TO THE RESPONDENT. IN ANY INSTANCES OF
THE  ISSUANCE  OF SUCH AN INJUNCTION WHERE THE RESPONDENT HAS DEFAULTED,
THE COURT SHALL DIRECT SERVICE OF SUCH INJUNCTION UPON THE RESPONDENT.
  S 5. This act shall take effect  immediately;  provided  that  section
three  of  this  act  shall  take  effect  on the first of November next
succeeding the date on which it  shall  have  become  a  law;  provided,
further,  subdivision  2 of section 175.35 of the penal law, as added by
section three of this act, shall apply solely to the filing or amendment
of financing statements under subpart 1 of part 5 of article  9  of  the
uniform commercial code on or after such effective date.