Sec.  14. K.S.A. 2001 Supp. 84-9-331 is hereby amended to read as follows: 84-9-331. (a) Rights under Articles 3, 7, and 8
not limited. 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) Protection under Article 8. 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 an adverse a claim under article 8.

      (c) Filing not notice. 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).

      Sec.  15. K.S.A. 2001 Supp. 84-9-334 is hereby amended to read as follows: 84-9-334. (a) Security interest in fixtures under
this article. 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) Security interest in fixtures under real-property law. This article does not prevent creation of an encumbrance upon
fixtures under real property law.

      (c) General rule: subordination of security interest in fixtures. 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) Fixtures purchase-money priority. 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 20 days thereafter.

      (e) Priority of security interest in fixtures over interests in real property. 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 K.S.A. 2001 Supp. 84-9-311(a)(2) and amendments thereto.

      (f) Priority based on consent, disclaimer, or right to remove. 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) Continuation of subsection (f) paragraph (f)(2) priority. The priority of the security interest under subsection (f)
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) Priority of construction mortgage. 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) Priority of security interest in crops. 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.

      (j) Subsection (i) prevails. Subsection (i) prevails over any inconsistent provisions of law of this state.

      Sec.  16. K.S.A. 2001 Supp. 84-9-406 is hereby amended to read as follows: 84-9-406. (a) Discharge of account debtor; effect
of notification. Subject to subsections (b) through (i), an account debtor on an account, chattel paper, or a payment intangible
may discharge the account debtor's 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 the account debtor's obligation by paying
the assignee and may not discharge the obligation by paying the assignor.

      (b) When notification ineffective. 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 general 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) Proof of assignment. 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) Term restricting assignment generally ineffective. Except as otherwise provided in subsection (e), K.S.A. 84-2a-303
and K.S.A. 2001 Supp. 84-9-407, and amendments thereto, 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 assign-
ment 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) Inapplicability of subsection (d) to certain sales. Subsection (d) does not apply to the sale of a payment intangible or
promissory note.

      (f) Legal restrictions on assignment generally ineffective. Except as otherwise provided in K.S.A. 84-2a-303 and K.S.A.
2001 Supp. 84-9-407 and amendments thereto, 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) Subsection (b)(3) not waivable. Subject to subsection (h), an account debtor may not waive or vary its option under
subsection (b)(3).

      (h) Rule for individual under other law. 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) Inapplicability to health-care-insurance receivable. This section does not apply to an assignment of a health-care-
insurance receivable.

      (j) Section prevails over specified inconsistent law. This section prevails over any inconsistent provisions of any laws, rules,
and regulations.

      Sec.  17. K.S.A. 2001 Supp. 84-9-509 is hereby amended to read as follows: 84-9-509. (a) Person entitled to file record. 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 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) Security agreement as authorization. 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 K.S.A. 2001 Supp. 84-9-315(a)(2) and amendments thereto, whether or not the
security agreement expressly covers proceeds.

      (c) Acquisition of collateral as authorization. By acquiring collateral in which a security interest or agricultural lien continues
under K.S.A. 2001 Supp. 84-9-315(a)(1) and amendments thereto, a debtor authorizes the filing of an initial financing statement,
and an amendment, covering the collateral and property that becomes collateral under K.S.A. 2001 Supp. 84-9-315(a)(2) and
amendments thereto.

      (d) Person entitled to file certain amendments. 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 K.S.A. 2001 Supp. 84-9-513(a) or (c) and amendments thereto, the debtor
authorizes the filing, and the termination statement indicates that the debtor authorized it to be filed.

      (e) Multiple secured parties of record. If there is more than one secured party of record for a financing statement, each
secured party of record may authorize the filing of an amendment under subsection (d).

      Sec.  18. K.S.A. 2001 Supp. 84-9-513 is hereby amended to read as follows: 84-9-513. (a) Consumer goods. 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) Time for compliance with subsection (a). To comply with subsection (a), a secured party shall cause the secured party
of record to file the termination statement:

      (1) Within one month after there is no obligation secured by the collateral covered by the financing statement and no com-
mitment to make an advance, incur an obligation, or otherwise give value; or

      (2) if earlier, within 20 days after the secured party receives an authenticated demand from a debtor.

      (c) Other collateral. In cases not governed by subsection (a), within 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) Effect of filing termination statement. Except as otherwise provided in K.S.A. 2001 Supp. 84-9-510 and amendments
thereto, 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 K.S.A. 2001 Supp. 84-9-510, and amendments thereto, for purposes
of K.S.A. 2001 Supp. 84-9-519(g), K.S.A. 2001 Supp. 84-9-522(a), and K.S.A. 2001 Supp. 84-9-523(c), and amendments thereto, 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.

      Sec.  19. K.S.A. 2001 Supp. 84-9-515 is hereby amended to read as follows: 84-9-515. (a) Five-year effectiveness. Except as
otherwise provided in subsections (b), (e), (f), and (g), a filed financing statement is effective for a period of five years after the
date of filing.

      (b) Public-finance or Manufactured-home transaction. 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 30 years after the date of filing if it indicates that it is filed in connection with a public-finance transaction or manufac-
tured-home transaction.

      (c) Lapse and continuation of financing statement. 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) When continuation statement may be filed. A continuation statement may be filed only within six 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) Effect of filing continuation statement. Except as otherwise provided in K.S.A. 2001 Supp. 84-9-510 and amendments
thereto, upon timely filing of a continuation statement, the effectiveness of the initial financing statement continues for a period of
five 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) Transmitting utility financing statement. If a debtor is a transmitting utility and a filed financing statement so indicates,
the financing statement is effective until a termination statement is filed.

      (g) Record of mortgage as financing statement. A record of a mortgage that is effective as a financing statement filed as a
fixture filing under subsection (c) of K.S.A. 2001 Supp. 84-9-502(c) and amendments thereto, 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.

      Sec.  20. K.S.A. 2001 Supp. 84-9-525 is hereby amended to read as follows: 84-9-525. (a) Initial financing statement or other
record: general rule. The fee for filing and indexing a record under this part shall be provided by the secretary of state.

      Sec.  21. K.S.A. 2001 Supp. 84-9-608 is hereby amended to read as follows: 84-9-608. (a) Application of proceeds, surplus,
and deficiency if obligation secured. 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 this section
K.S.A. 2001 Supp. 84-9-607, and amendments thereto, 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 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 this
section K.S.A. 2001 Supp. 84-9-607, and amendments thereto, 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) No surplus or deficiency in sales of certain rights to payment. 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.

      Sec.  22. K.S.A. 2001 Supp. 84-9-613 is hereby amended to read as follows: 84-9-613. 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 sale 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 K.S.A. 2001 Supp. 84-9-614(3) and amendments thereto, 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].

      Sec.  23. K.S.A. 2001 Supp. 84-9-615 is hereby amended to read as follows: 84-9-615. (a) Application of proceeds. A secured
party shall apply or pay over for application the cash proceeds of disposition under K.S.A. 2001 Supp. 84-9-610, and amendments
thereto, 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 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) Proof of subordinate interest. 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) Application of noncash proceeds. A secured party need not apply or pay over for application noncash proceeds of
disposition under this section K.S.A. 2001 Supp. 84-9-610, and amendments thereto, unless the failure to do so would be commer-
cially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially
reasonable manner.

      (d) Surplus or deficiency if obligation secured. 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) No surplus or deficiency in sales of certain rights to payment. 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) Calculation of surplus or deficiency in disposition to person related to secured party. 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) Cash proceeds received by junior secured party. 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.

      Sec.  24. K.S.A. 2001 Supp. 84-9-625 is hereby amended to read as follows: 84-9-625. (a) Judicial orders concerning non-
compliance. 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) Damages for noncompliance. 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 with a request under K.S.A. 2001 Supp. 84-
9-210 and amendments thereto may include loss resulting from the debtor's inability to obtain, or increased costs of, alternative
financing.

      (c) Persons entitled to recover damages; statutory damages in consumer-goods transaction. Except as otherwise pro-
vided in K.S.A. 2001 Supp. 84-9-628 and amendments thereto:

      (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 10 percent
of the principal amount of the obligation or the time-price differential plus 10 percent of the cash price.

      (d) Recovery when deficiency eliminated or reduced. A debtor whose deficiency is eliminated under K.S.A. 2001 Supp.
84-9-626 and amendments thereto may recover damages for the loss of any surplus. However, a debtor or secondary obligor whose
deficiency is eliminated or reduced under K.S.A. 2001 Supp. 84-9-626 and amendments thereto may not otherwise recover under
subsection (b) for noncompliance with the provisions of this part relating to collection, enforcement, disposition, or acceptance.

      (e) Statutory damages: noncompliance with specified provisions. 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 $500 in each case from
a person that:

      (1) Fails to comply with K.S.A. 2001 Supp. 84-9-208 and amendments thereto;

      (2) fails to comply with K.S.A. 2001 Supp. 84-9-209 and amendments thereto;

      (3) files a record that the person is not entitled to file under K.S.A. 2001 Supp. 84-9-509(a) and amendments thereto;

      (4) fails to cause the secured party of record to file or send a termination statement as required by K.S.A. 2001 Supp. 84-9-
513(a) or (c) and amendments thereto;

      (5) fails to comply with K.S.A. 2001 Supp. 84-9-616(b)(1) and amendments thereto, and whose failure is part of a pattern, or
consistent with a practice, of noncompliance; or

      (6) fails to comply with K.S.A. 2001 Supp. 84-9-616(b)(2) and amendments thereto.

      (f) Statutory damages: noncompliance with K.S.A. 2001 Supp. 84-9-210 and amendments thereto. A debtor or con-
sumer obligor may recover damages under subsection (b) and, in addition, $500 in each case from a person that, without reasonable
cause, fails to comply with a request under K.S.A. 2001 Supp. 84-9-210 and amendments thereto. A recipient of a request under
K.S.A. 2001 Supp. 84-9-210 and amendments thereto 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) Limitation of security interest: noncompliance with K.S.A. 2001 Supp. 84-9-210 and amendments thereto. If a
secured party fails to comply with a request regarding a list of collateral or a statement of account under K.S.A. 2001 Supp. 84-9-
210 and amendments thereto, 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.

      Sec.  25. K.S.A. 2001 Supp. 84-9-628 is hereby amended to read as follows: 84-9-628. (a) Limitation of liability to debtor or
obligor of secured party for noncompliance with article. 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) Limitation of liability to debtor, obligor, another secured party, or lienholder based on status as secured party. 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) Limitation of liability if reasonable belief that transaction not a consumer-goods transaction or consumer trans-
action. 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) Limitation of liability for statutory damages. A secured party is not liable to any person under K.S.A. 2001 Supp. 84-
9-625(c)(2) and amendments thereto, for its failure to comply with K.S.A. 2001 Supp. 84-9-616 and amendments thereto.

      (e) Limitation of multiple liability for statutory damages. A secured party is not liable under K.S.A. 2001 Supp. 84-9-
625(c)(2) and amendments thereto, more than once with respect to any one secured obligation.

      Sec.  26. K.S.A. 2001 Supp. 84-9-702 is hereby amended to read as follows: 84-9-702. (a) Pre-effective date transactions or
liens. 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 this act takes effect.

      (b) Continuing validity. Except as otherwise provided in subsection (c) and K.S.A. 2001 Supp. 84-9-304 and 84-9-703 through
84-9-709 and amendments thereto:

      (1) Transactions and liens that were not governed by former article 9, were validly entered into or created before this act takes
effect, and would be subject to this act if they had been entered into or created after this act takes effect, and the rights, duties,
and interests flowing from those transactions and liens remain valid after this act takes effect; 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) Pre-effective date proceedings. This act does not affect an action, case, or proceeding commenced before this act takes
effect.

      Sec.  27. K.S.A. 2001 Supp. 84-9-705 is hereby amended to read as follows: 84-9-705. (a) Pre-effective date action; one-year
perfection period unless reperfected. If action, other than the filing of a financing statement, is taken before this act takes effect
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 this act takes effect, the action is effective to perfect a security interest that attaches
under this act within one year after this act takes effect. An attached security interest becomes unperfected one year after this act
takes effect unless the security interest becomes a perfected security interest under this act before the expiration of that period.

      (b) Pre-effective date filing. 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) Pre-effective date filing in jurisdiction formerly governing perfection. This act does not render ineffective an effective
financing statement that, before this act takes effect, is filed and satisfies the applicable requirements for perfection under the law
of the jurisdiction governing perfection as provided in K.S.A. 84-9-103 prior to the effective date of this act. However, except as
otherwise provided in subsections (d) and (e) and K.S.A. 2001 Supp. 84-9-706 and amendments thereto, 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) June 30, 2006.

      (d) Continuation statement. The filing of a continuation statement after this act takes effect does not continue the effective-
ness of the financing statement filed before this act takes effect. However, upon the timely filing of a continuation statement after
this act takes effect 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 this act takes effect continues for the period provided
by the law of that jurisdiction.

      (e) Application of subsection (c)(2) to transmitting utility financing statement. Subsection (c)(2) applies to a financing
statement that, before this act takes effect, is filed against a transmitting utility and satisfies the applicable requirements for perfection
under the law of the jurisdiction governing perfection as provided in K.S.A. 84-9-103 prior to the effective date of this act 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) Application of Part 5. A financing statement that includes a financing statement filed before this act takes effect and a
continuation statement filed after this act takes effect is effective only to the extent that it satisfies the requirements of part 5 for
an initial financing statement.

      New Sec.  28. (a) Pre-effective-date financing statement. In this section, ``pre-effective-date financing statement'' means a
financing statement filed before this act takes effect.

      (b) Applicable law. After this act takes effect, 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) Method of amending: general rule. 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 this act takes
effect only if:

      (1) The pre-effective-date financing statement and an amendment are filed in the office specified in K.S.A. 2001 Supp. 84-9-
501, and amendments thereto;

      (2) an amendment is filed in the office specified in K.S.A. 2001 Supp. 84-9-501, and amendments thereto, concurrently with,
or after the filing in that office of, an initial financing statement that satisfies K.S.A. 2001 Supp. 84-9-706(c), and amendments
thereto; or

      (3) an initial financing statement that provides the information as amended and satisfies K.S.A. 2001 Supp. 84-9-706(c), and
amendments thereto, is filed in the office specified in K.S.A. 2001 Supp. 84-9-501, and amendments thereto.

      (d) Method of amending: continuation. 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 K.S.A. 2001 Supp. 84-9-705(d) and (f), and amendments
thereto.

      (e) Method of amending: additional termination rule. 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 this act takes effect
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 K.S.A. 2001 Supp. 84-9-706(c), and amendments thereto, 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.

      Sec.  29. K.S.A. 2001 Supp. 84-1-105 is hereby amended to read as follows: 84-1-105. (1) 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 this act
applies to transactions bearing an appropriate relation to this state.

      (2) Where one of the following provisions of this act 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. K.S.A. 84-2-402 and amendments thereto.

      Applicability of the article on leases. K.S.A. 84-2a-105 and 84-2a-106, and amendments thereto.

      Applicability of the article on bank deposits and collections. K.S.A. 84-4-102 and amendments thereto.

      Applicability of the article on investment securities. K.S.A. 84-8-110 and amendments thereto.

      Governing law in the article on funds transfers. K.S.A. 84-4a-507 and amendments thereto.

      Letters of credit. K.S.A. 84-5-116 and amendments thereto.

      Law governing perfection, the effect of perfection or nonperfection, and the priority of security interests and agricultural liens.
K.S.A. 2001 Supp. 84-9-301 through 84-9-307 and amendments thereto.

      Sec.  30. K.S.A. 34-2,101 is hereby amended to read as follows: 34-2,101. The provisions of this act relating to licensing, bonding
and supervision of warehouses shall not be construed to apply to any public warehouseman who is, or shall hereafter be, duly
licensed under the federal warehouse act, except that the provisions of K.S.A. 34-2,112, and amendments thereto, shall apply to all
state and federally licensed warehouses.

      Sec.  31. K.S.A. 34-2,112 is hereby amended to read as follows: 34-2,112. (a) Whenever any amount of grain is received in any
public warehouse from a producer and is sold by the producer to the public warehouseman with, or if a grain producer delivers
grain for sale pursuant to an agreement with the public warehouseman for deferred payment or deferred pricing, and if upon
demand for payment by the producer, the warehouseman fails to make full payment as due or makes payment by check, if the check
that fails, because of insufficient funds, to clear the bank or other financial institution on which it is drawn within 10 15 days after
the date the check is issued or the demand is made, excluding Saturdays, Sundays and holidays, the sale of such amount of grain
may be voided by the producer by notifying the public warehouseman in writing that the sale is void. In any such case, the public
warehouseman shall include such amount of grain in the public warehouseman's daily position record and other records as an open
storage obligation upon receiving such written notice voiding the sale.

      (b) As used in this section, the words and phrases defined in K.S.A. 34-223 and amendments thereto shall have the meanings
ascribed to them in that statute.

      (c) This section shall be construed as supplemental to the statutes contained in article 2 of chapter 34 of the Kansas Statutes
Annotated and amendments thereto.

      Sec.  32. K.S.A. 58-204 is hereby amended to read as follows: 58-204. Any person claiming a lien as aforesaid as provided in
K.S.A. 58-203, and amendments thereto, shall file in the office of the register of deeds of the county in which said the threshing or
harvesting is done, a statement in writing, duly verified by him or her, setting such person. Such statement shall set forth the name
of the owner or owners of the grain or grain crops, threshed or harvested, the kind of grain, the number of bushels threshed or
acres harvested, the description of the land upon which said such grain or grain crop was raised, the contract price for such threshing
or harvesting, or the price or value of such wages, the date of the threshing or harvesting, the amount due and the name of the
claimant.

      Said Such statement shall be filed and entered by the register of deeds in the same manner and upon the same books as in the
case of other financing statements provided for under the uniform commercial code, and the said. The register of deeds shall collect
from the person presenting the same statement, a fee equal to the fee for filing financing statements under the uniform commercial
code;. Such statement shall be filed within fifteen 30 days after the completion of said such threshing or harvesting or the rendering
of such services, and in case said threshing or harvesting has begun and the work is interrupted for more than five days, such
statement shall be filed within fifteen days after the beginning of such interruption.

      Sec.  33. K.S.A. 34-2-101, 34-2-112, 58-204, 58-244, 66-1217, 66-1219, 79-2616 and 79-2617 and K.S.A. 2001 Supp. 17-630,
84-1-105, 84-9-102, 84-9-104, 84-9-109, 84-9-306, 84-9-311, 84-9-316, 84-9-317, 84-9-331, 84-9-334, 84-9-406, 84-9-509, 84-9-513,
84-9-515, 84-9-525, 84-9-608, 84-9-613, 84-9-615, 84-9-625, 84-9-628, 84-9-702 and 84-9-705 are hereby repealed.

 Sec.  34. This act shall take effect and be in force from and after its publication in the Kansas register.