{"data":{"id":"us-ky/krs-278.686","jurisdiction":"us-ky","citation":"KRS 278.686","heading":"Exemption from Uniform Commercial Code -- Security interest binding --","body":"Filing of financing statement with Secretary of State -- Priority of securitized\ninterest -- Exercise of rights and remedies upon default.\n(1) The creation, perfection, priority, and enforcement of any security interest or lien in\nsecuritized property to secure the repayment of the principal and interest and other\namounts payable in respect of securitized bonds, amounts payable under any\nancillary agreement, and other finan cing costs are governed by KRS 278.670 to\n278.696 and 65.114 and not by the provisions of the code or other law, except as\notherwise provided in KRS 278.670 to 278.696 and 65.114.\n(2) A security interest in securitized property is created, valid, and bindi ng when the\nlast of all the following actions has occurred:\n(a) The financing order is issued;\n(b) A security agreement is executed and delivered by the debtor granting the\nsecurity interest;\n(c) The debtor has rights to the securitized property or the power to transfer rights\nin the securitized property; or\n(d) The value is received for the grant of the security interest in the securitized\nproperty.\n(3) A description of securitized property in a security agreement shall be sufficient if\nthe description ref ers to KRS 278.670 to 278.696 and 65.114 and the financing\norder creating the securitized property. A security interest shall attach as provided\nin this section without any physical delivery of collateral or other act.\n(4) Upon the filing of a financing st atement with the Office of the Secretary of State as\nprovided in this section, a security interest in securitized property shall be perfected\nagainst all parties having claims of any kind in tort, contract, or otherwise against\nthe person granting the secu rity interest, and regardless of whether the parties have\nnotice of the security interest. Without limiting the foregoing, upon the time of\nfiling a security interest in securitized property shall be perfected against all claims\nof lien creditors, and shal l have priority over all competing security interests and\nother claims other than any security interest previously perfected in accordance\nwith this section.\n(5) The priority of a security interest in securitized property shall not be affected by the\ncommingling of securitized surcharges with other amounts. Any pledgee or secured\nparty shall have a perfected security interest in the amount of all securitized\nsurcharges that are deposited in any cash or deposit account of the qualifying\nelectric utility wher e securitized surcharges have been commingled with other\nfunds, and any other security interest that may apply to those funds shall be\nterminated when the funds are transferred to a segregated account for the assignee\nor a financing party.\n(6) No applicati on of the formula -based true -up mechanism as provided in KRS\n278.670 to 278.696 and 65.114 shall affect the validity, perfection, or priority of a\nsecurity interest in or a transfer of securitized property.\n(7) If a default occurs of the securitized bonds that are secured by a security interest in\nthe securitized property, the financing parties or their representatives may exercise\nthe rights and remedies available to a secured party under the code, including the\nrights and remedies available under Article 9, Part 6 of the code. The commission\nalso may order amounts arising from securitized charges be transferred to a separate\naccount for the benefit of the financing party, to which their lien and security\ninterest shall apply. On application by or on behalf of the financing parties, the\nCircuit Court for the county or city in which the electric utility's headquarters is\nlocated shall order the sequestration and payment of revenues arising from the\nsecuritized charges to the financing parties.","path":["KRS Chapter 278"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=53808","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:53:31Z","sha256":"4ad0a676a1238f9670f6560ab7fa689fb0d569b27b1e062dead359d5eccfd221","source_id":"us-ky","stale":false,"prev":"us-ky/krs-278.684","next":"us-ky/krs-278.688"},"notice":"GroundRules: Original legal text. Not legal advice."}