Bill Text: NY A03307 | 2025-2026 | General Assembly | Introduced
Bill Title: Incorporates the 2022 Uniform Law Commission recommended amendments to the Uniform Commercial Code to provide for emerging technologies; addresses emerging technologies, providing updated rules for commercial transactions involving virtual currencies, distributed ledger technologies (including blockchain), artificial intelligence, and other technological developments.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2025-01-27 - referred to judiciary [A03307 Detail]
Download: New_York-2025-A03307-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 3307 2025-2026 Regular Sessions IN ASSEMBLY January 27, 2025 ___________ Introduced by M. of A. BORES -- read once and referred to the Committee on Judiciary AN ACT to amend the uniform commercial code, in relation to addressing emerging technologies The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraphs 10, 15, 21, 24, 27, 36 and 37 of subsection (b) 2 of section 1--201 of the uniform commercial code, as added by chapter 3 505 of the laws of 2014, are amended and a new paragraph 16-a is added 4 to read as follows: 5 (10) "Conspicuous", with reference to a term, means so written, 6 displayed, or presented that, based on the totality of the circum- 7 stances, a reasonable person against which it is to operate ought to 8 have noticed it. Whether a term is "conspicuous" or not is a decision 9 for the court. 10 (15) "Delivery", with respect to an electronic document of title means 11 voluntary transfer of control and with respect to an instrument, a 12 tangible document of title, or an authoritative tangible copy of a 13 record evidencing chattel paper, means voluntary transfer of possession. 14 (16-a) "Electronic" means relating to technology having electrical, 15 digital, magnetic, wireless, optical, electromagnetic, or similar capa- 16 bilities. 17 (21) "Holder" means: 18 (A) the person in possession of a negotiable instrument that is paya- 19 ble either to bearer or to an identified person that is the person in 20 possession; or 21 (B) the person in possession of a negotiable tangible document of 22 title if the goods are deliverable either to bearer or to the order of 23 the person in possession; or 24 (C) the person in control, other than pursuant to Section 7--106(g), 25 of a negotiable electronic document of title. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD04308-01-5A. 3307 2 1 (24) "Money" means a medium of exchange that is currently authorized 2 or adopted by a domestic or foreign government. The term includes a 3 monetary unit of account established by an intergovernmental organiza- 4 tion or by agreement between two or more countries. The term does not 5 include an electronic record that is a medium of exchange recorded and 6 transferable in a system that existed and operated for the medium of 7 exchange before the medium of exchange was authorized or adopted by the 8 government. 9 (27) "Person" means an individual, corporation, business trust, 10 estate, trust, partnership, limited liability company, association, 11 joint venture, government, governmental subdivision, agency, [or instru-12mentality, public corporation,] or any other legal or commercial entity. 13 The term includes a protected series, however denominated, of an entity 14 if the protected series is established under law other than this act 15 that limits, or limits if conditions specified under the law are satis- 16 fied, the ability of a creditor of the entity or of any other protected 17 series of the entity to satisfy a claim from assets of the protected 18 series. 19 (36) "Send", in connection with a [writing,] record[, or notice] or 20 notification means: 21 (A) to deposit in the mail [or], deliver for transmission, or transmit 22 by any other usual means of communication with postage or cost of trans- 23 mission provided for [and properly], addressed [and, in the case of an24instrument, to an address specified thereon or otherwise agreed, or if25there be none] to any address reasonable under the circumstances; or 26 (B) [in any other way] to cause the record or notification to be 27 received [any record or notice] within the time it would have [arrived] 28 been received if properly sent pursuant to subparagraph (A). 29 (37) ["Signed" includes using any symbol executed or adopted with30present intention to adopt or accept a writing.] "Sign" means, with 31 present intent to authenticate or adopt a record: 32 (A) execute or adopt a tangible symbol; or 33 (B) attach to or logically associate with the record an electronic 34 symbol, sound, or process. 35 "Signed, "signing", and "signature" have corresponding meanings. 36 § 2. Section 1--204 of the uniform commercial code, as added by chap- 37 ter 505 of the laws of 2014, is amended to read as follows: 38 Section 1--204. Value. 39 Except as otherwise provided in articles 3, 4, [and] 5, and 12 of this 40 act a person gives value for rights if the person acquires them: 41 (a) in return for a binding commitment to extend credit or for the 42 extension of immediately available credit, whether or not drawn upon and 43 whether or not a charge-back is provided for in the event of difficul- 44 ties in collection; 45 (b) as security for, or in total or partial satisfaction of, a preex- 46 isting claim; 47 (c) by accepting delivery under a preexisting contract for purchase; 48 or 49 (d) in return for any consideration sufficient to support a simple 50 contract. 51 § 3. Subsection (c) of section 1--301 of the uniform commercial code, 52 as added by chapter 505 of the laws of 2014, is amended to read as 53 follows: 54 (c) If one of the following provisions of this act specifies the 55 applicable law, that provision governs and a contrary agreement is 56 effective only to the extent permitted by the law so specified:A. 3307 3 1 (1) Section 2--402; 2 (2) Sections 2-A--105 and 2-A--106; 3 (3) Section 4--102; 4 (4) Section 4-A--507; 5 (5) Section 5--116; 6 (6) Section 8--110; [and] 7 (7) Sections 9--301 through 9--307; and 8 (8) Section 12--107. 9 § 4. Section 1--306 of the uniform commercial code, as added by chap- 10 ter 505 of the laws of 2014, is amended to read as follows: 11 Section 1--306. Waiver or Renunciation of Claim or Right After Breach. 12 A claim or right arising out of an alleged breach may be discharged in 13 whole or in part without consideration by agreement of the aggrieved 14 party in [an authenticated] a signed record. 15 § 5. Section 2--102 of the uniform commercial code is amended to read 16 as follows: 17 Section 2--102. Scope; Certain Security and Other Transactions Excluded 18 From This Article. 19 (1) Unless the context otherwise requires, and except as provided in 20 subsection (3), this Article applies to transactions in goods[; it does21not apply to any transaction which although in the form of an uncondi-22tional contract to sell or present sale is intended to operate only as a23security transaction nor does this Article impair or repeal any statute24regulating sales to consumers, farmers or other specified classes of25buyers], it applies to the extent provided in subsection (2). 26 (2) In a hybrid transaction: 27 (a) If the sale-of-goods aspects do not predominate, only the 28 provisions of this Article which relate primarily to the sale-of-goods 29 aspects of the transaction apply, and the provisions that relate prima- 30 rily to the transaction as a whole do not apply. 31 (b) If the sale-of-goods aspects predominate, this Article applies to 32 the transaction but does not preclude application in appropriate circum- 33 stances of other law to aspects of the transaction which do not relate 34 to the sale of goods. 35 (3) This Article does not: 36 (a) apply to a transaction that, even though in the form of an uncon- 37 ditional contract to sell or present sale, operates only to create a 38 security interest; or 39 (b) impair or repeal a statute regulating sales to consumers, farmers, 40 or other specified classes of buyers. 41 § 6. Section 2--106 of the uniform commercial code is amended to read 42 as follows: 43 Section 2--106. Definitions. "Contract"; "Agreement"; "Contract for 44 Sale"; "Sale"; "Present Sale"; "Conforming" to 45 Contract; "Termination"; "Cancellation"; "Hybrid Tran- 46 saction". 47 (1) In this Article, unless the context otherwise requires, "contract" 48 and "agreement" are limited to those relating to the present or future 49 sale of goods. "Contract for sale" includes both a present sale of goods 50 and a contract to sell goods at a future time. A "sale" consists in the 51 passing of title from the seller to the buyer for a price (Section 52 2--401). A "present sale" means a sale which is accomplished by the 53 making of the contract. 54 (2) Goods or conduct including any part of a performance are "conform- 55 ing" or conform to the contract when they are in accordance with the 56 obligations under the contract.A. 3307 4 1 (3) "Termination" occurs when either party pursuant to a power created 2 by agreement or law puts an end to the contract otherwise than for its 3 breach. On "termination" all obligations which are still executory on 4 both sides are discharged but any right based on prior breach or 5 performance survives. 6 (4) "Cancellation" occurs when either party puts an end to the 7 contract for breach by the other and its effect is the same as that of 8 "termination" except that the cancelling party also retains any remedy 9 for breach of the whole contract or any unperformed balance. 10 (5) "Hybrid transaction" means a single transaction involving a sale 11 of goods and: 12 (a) the provision of services; 13 (b) a lease of other goods; or 14 (c) a sale, lease, or license of property other than goods. 15 § 7. Subsections 1 and 2 of section 2--201 of the uniform commercial 16 code are amended to read as follows: 17 (1) Except as otherwise provided in this section a contract for the 18 sale of goods for the price of $500 or more is not enforceable by way of 19 action or defense unless there is [some writing] a record sufficient to 20 indicate that a contract for sale has been made between the parties and 21 signed by the party against whom enforcement is sought or by [his] the 22 party's authorized agent or broker. A writing is not insufficient 23 because it omits or incorrectly states a term agreed upon but the 24 contract is not enforceable under this [paragraph] subsection beyond the 25 quantity of goods shown in [such writing] the record. 26 (2) Between merchants if within a reasonable time a [writing] record 27 in confirmation of the contract and sufficient against the sender is 28 received and the party receiving it has reason to know its contents, it 29 satisfies the requirements of subsection (1) against [such] the party 30 unless written notice in a record of objection to its contents is given 31 within ten days after it is received. 32 § 8. Section 2--202 of the uniform commercial code, as amended by 33 chapter 505 of the laws of 2014, is amended to read as follows: 34 Section 2--202. Final Written Expression: Parol or Extrinsic Evidence. 35 Terms with respect to which the confirmatory memoranda of the parties 36 agree or which are otherwise set forth in a [writing] record intended by 37 the parties as a final expression of their agreement with respect to 38 such terms as are included therein may not be contradicted by evidence 39 of any prior agreement or of a contemporaneous oral agreement but may be 40 explained or supplemented 41 (a) by course of performance, course of dealing, or usage of trade 42 (Section 1--303); and 43 (b) by evidence of consistent additional terms unless the court finds 44 the [writing] record to have been intended also as a complete and exclu- 45 sive statement of the terms of the agreement. 46 § 9. Section 2--203 of the uniform commercial code is amended to read 47 as follows: 48 Section 2--203. Seals Inoperative. 49 The affixing of a seal to a [writing] record evidencing a contract for 50 sale or an offer to buy or sell goods does not constitute the [writing] 51 record a sealed instrument and the law with respect to sealed instru- 52 ments does not apply to such a contract or offer. 53 § 10. Section 2--205 of the uniform commercial code is amended to read 54 as follows: 55 Section 2--205. Firm Offers.A. 3307 5 1 An offer by a merchant to buy or sell goods in a signed [writing] 2 record which by its terms gives assurance that it will be held open is 3 not revocable, for lack of consideration, during the time stated or if 4 no time is stated for a reasonable time, but in no event may such period 5 of irrevocability exceed three months; but any such term of assurance on 6 a form supplied by the offeree must be separately signed by the offeror. 7 § 11. Subsection 2 of section 2--209 of the uniform commercial code is 8 amended to read as follows: 9 (2) A signed agreement which excludes modification or rescission 10 except by a signed writing or other signed record cannot be otherwise 11 modified or rescinded, but except as between merchants such a require- 12 ment on a form supplied by the merchant must be separately signed by the 13 other party. 14 § 12. Section 2-A-102 of the uniform commercial code, as added by 15 chapter 114 of the laws of 1994, is amended to read as follows: 16 Section 2-A-102. Scope. 17 (1) This Article applies to any transaction, regardless of form, that 18 creates a lease and, in the case of a hybrid lease, it applies to the 19 extent provided in subsection (2). 20 (2) In a hybrid lease: 21 (a) if the lease-of-goods aspects do not predominate: 22 (i) only the provisions of this article which relate primarily to the 23 lease-of-goods aspects of the transaction apply, and the provisions that 24 relate primarily to the transaction as a whole do not apply; 25 (ii) Section 2-A-209 applies if the lease is a finance lease; and 26 (iii) Section 2-A-407 applies to the promises of the lessee in a 27 finance lease to the extent the promises are consideration for the right 28 to possession and use of the leased goods; and 29 (b) if the lease-of-goods aspects predominate, this Article applies to 30 the transaction, but does not preclude application in appropriate 31 circumstances of other law to aspects of the lease which do not relate 32 to the lease of goods. 33 § 13. Subsection 1 of section 2-A-103 of the uniform commercial code 34 is amended by adding a new paragraph (h-1) to read as follows: 35 (h-1) "Hybrid lease" means a single transaction involving a lease of 36 goods and: 37 (i) the provision of services; 38 (ii) a sale of other goods; or 39 (iii) a sale, lease, or license of property other than goods. 40 § 14. Section 2-A-107 of the uniform commercial code, as added by 41 chapter 114 of the laws of 1994, is amended to read as follows: 42 Section 2-A-107. Waiver or Renunciation of Claim or Right After Default. 43 Any claim or right arising out of an alleged default or breach of 44 warranty may be discharged in whole or in part without consideration by 45 a [written] waiver or renunciation in a signed [and] record delivered by 46 the aggrieved party. 47 § 15. Subsections 1, 3 and 5 of section 2-A-201 of the uniform commer- 48 cial code, as added by chapter 114 of the laws of 1994, are amended to 49 read as follows: 50 (1) A lease contract is not enforceable by way of action or defense 51 unless: 52 (a) the total payments to be made under the lease contract, 53 excluding payments for options to renew or buy, are less than 54 $1,000; or 55 (b) there is a [writing] record, signed by the party against whom 56 enforcement is sought or by that party's authorized agent,A. 3307 6 1 sufficient to indicate that a lease contract has been made 2 between the parties and to describe the goods leased and the 3 lease term. 4 (3) A [writing] record is not insufficient because it omits or incor- 5 rectly states a term agreed upon, but the lease contract is not enforce- 6 able under subsection (1)(b) beyond the lease term and the quantity of 7 goods shown in the [writing] record. 8 (5) The lease term under a lease contract referred to in subsection 9 (4) is: 10 (a) if there is a [writing] record signed by the party against 11 whom enforcement is sought or by that party's authorized 12 agent specifying the lease term, the term so specified; 13 (b) if the party against whom enforcement is sought admits in 14 that party's pleading, testimony, or otherwise in court a 15 lease term, the term so admitted; or 16 (c) a reasonable lease term. 17 § 16. Section 2-A-202 of the uniform commercial code, as added by 18 chapter 114 of the laws of 1994, is amended to read as follows: 19 Section 2-A-202. Final Written Expression: Parol or Extrinsic Evidence. 20 Terms with respect to which the confirmatory memoranda of the parties 21 agree or which are otherwise set forth in a [writing] record intended by 22 the parties as a final expression of their agreement with respect to 23 such terms as are included therein may not be contradicted by evidence 24 of any prior agreement or of a contemporaneous oral agreement but may be 25 explained or supplemented: 26 (a) by course of dealing or usage of trade or by course of 27 performance; and 28 (b) by evidence of consistent additional terms unless the court 29 finds the [writing] record to have been intended also as a 30 complete and exclusive statement of the terms of the agree- 31 ment. 32 § 17. Section 2-A-203 of the uniform commercial code, as added by 33 chapter 114 of the laws of 1994, is amended to read as follows: 34 Section 2-A-203. Seals Inoperative. 35 The affixing of a seal to a [writing] record evidencing a lease 36 contract or an offer to enter into a lease contract does not render the 37 [writing] record a sealed instrument and the law with respect to sealed 38 instruments does not apply to the lease contract or offer. 39 § 18. Section 2-A-205 of the uniform commercial code, as added by 40 chapter 114 of the laws of 1994, is amended to read as follows: 41 Section 2-A-205. Firm Offers. 42 An offer by a merchant to lease goods to or from another person in a 43 signed [writing] record that by its terms gives assurance it will be 44 held open is not revocable, for lack of consideration, during the time 45 stated or, if no time is stated, for a reasonable time, but in no event 46 may the period of irrevocability exceed three months. Any such term of 47 assurance on a form supplied by the offeree must be separately signed by 48 the offeror. 49 § 19. Subsection 2 of section 2-A-208 of the uniform commercial code, 50 as added by chapter 114 of the laws of 1994, is amended to read as 51 follows: 52 (2) A signed lease agreement that excludes modification or rescission 53 except by a signed [writing] record may not be otherwise modified or 54 rescinded, but, except as between merchants, such a requirement on a 55 form supplied by a merchant must be separately signed by the other 56 party.A. 3307 7 1 § 20. Paragraph (a) of subsection 1 of section 3--102 of the uniform 2 commercial code is amended to read as follows: 3 (a) "Issue" means: 4 (i) the first delivery of an instrument to a holder or a 5 remitter; or 6 (ii) if agreed by the payee, the first transmission by the 7 drawer to the payee of an image of an item and information 8 derived from the item that enables the depositary bank to 9 collect the item by transferring or presenting under federal 10 law an electronic check. 11 § 21. Paragraph (g) of subsection 1 of section 3--112 of the uniform 12 commercial code is amended and two new paragraphs (h) and (i) are added 13 to read as follows: 14 (g) a statement in a draft drawn in a set of parts (Section 15 3--801) to the effect that the order is effective only if no 16 other part has been honored[.]; or 17 (h) a term that specifies the law that governs the promise or 18 order; or 19 (i) an undertaking to resolve in a specified forum a dispute 20 concerning the promise or order. 21 § 22. Section 3--605 of the uniform commercial code is amended by 22 adding a new subsection 3 to read as follows: 23 (3) The obligation of a party to pay a check is not discharged solely 24 by destruction of the check in connection with a process in which infor- 25 mation is extracted from the check and an image of the check is made 26 and, subsequently, the information and image are transmitted for 27 payment. 28 § 23. Paragraph (a) of subsection 1 of section 4-A-103 of the uniform 29 commercial code, as amended by chapter 208 of the laws of 1990, is 30 amended to read as follows: 31 (a) "Payment order" means an instruction of a sender to a receiv- 32 ing bank, transmitted orally[, electronically,] or in [writ-33ing] a record, to pay, or to cause another bank to pay, a 34 fixed or determinable amount of money to a beneficiary if: 35 (i) the instruction does not state a condition to payment to 36 the beneficiary other than time of payment, 37 (ii) the receiving bank is to be reimbursed by debiting an 38 account of, or otherwise receiving payment from, the 39 sender, and 40 (iii) the instruction is transmitted by the sender directly to 41 the receiving bank or to an agent, funds transfer system, 42 or communication system for transmittal to the receiving 43 bank. 44 § 24. Section 4-A-201 of the uniform commercial code, as added by 45 chapter 208 of the laws of 1990, is amended to read as follows: 46 Section 4-A-201. Security Procedure. 47 "Security procedure" means a procedure established by agreement of a 48 customer and a receiving bank for the purpose of (1) verifying that a 49 payment order or communication amending or cancelling a payment order is 50 that of the customer, or (2) detecting error in the transmission or the 51 content of the payment order or communication. A security procedure may 52 impose an obligation on the receiving bank or the customer and may 53 require the use of algorithms or other codes, identifying words [or], 54 numbers, symbols, sounds, biometrics, encryption, callback procedures, 55 or similar security devices. Comparison of a signature on a payment 56 order or communication with an authorized specimen signature of theA. 3307 8 1 customer or requiring a payment order to be sent from a known email 2 address, IP address, or telephone number is not by itself a security 3 procedure. 4 § 25. Subsections 2 and 3 of section 4-A-202 of the uniform commercial 5 code, as added by chapter 208 of the laws of 1990, are amended to read 6 as follows: 7 (2) If a bank and its customer have agreed that the authenticity of 8 payment orders issued to the bank in the name of the customer as sender 9 will be verified pursuant to a security procedure, a payment order 10 received by the receiving bank is effective as the order of the custom- 11 er, whether or not authorized, if (a) the security procedure is a 12 commercially reasonable method of providing security against unauthor- 13 ized payment orders, and (b) the bank proves that it accepted the 14 payment order in good faith and in compliance with the bank's obli- 15 gations under the security procedure and any [written] agreement or 16 instruction of the customer, evidenced by a record, restricting accept- 17 ance of payment orders issued in the name of the customer. The bank is 18 not required to follow an instruction that violates [a written] an 19 agreement with the customer, evidenced by a record, or notice of which 20 is not received at a time and in a manner affording the bank a reason- 21 able opportunity to act on it before the payment order is accepted. 22 (3) Commercial reasonableness of a security procedure is a question of 23 law to be determined by considering the wishes of the customer expressed 24 to the bank, the circumstances of the customer known to the bank, 25 including the size, type, and frequency of payment orders normally 26 issued by the customer to the bank, alternative security procedures 27 offered to the customer, and security procedures in general use by 28 customers and receiving banks similarly situated. A security procedure 29 is deemed to be commercially reasonable if (a) the security procedure 30 was chosen by the customer after the bank offered, and the customer 31 refused, a security procedure that was commercially reasonable for that 32 customer, and (b) the customer expressly agreed in [writing] a record to 33 be bound by any payment order, whether or not authorized, issued in its 34 name and accepted by the bank in compliance with the bank's obligations 35 under the security procedure chosen by the customer. 36 § 26. Subsection 1 of section 4-A-203 of the uniform commercial code, 37 as added by chapter 208 of the laws of 1990, is amended to read as 38 follows: 39 (1) If an accepted payment order is not, under subsection (1) of 40 Section 4-A-202, an authorized order of a customer identified as sender, 41 but is effective as an order of the customer pursuant to subsection (2) 42 of Section 4-A-202, the following rules apply: 43 (a) By express [written] agreement evidenced by a record, the 44 receiving bank may limit the extent to which it is entitled 45 to enforce or retain payment of the payment order. 46 (b) The receiving bank is not entitled to enforce or retain 47 payment of the payment order if the customer proves that the 48 order was not caused, directly or indirectly, by a person (i) 49 entrusted at any time with duties to act for the customer 50 with respect to payment orders or the security procedure, or 51 (ii) who obtained access to transmitting facilities of the 52 customer or who obtained, from a source controlled by the 53 customer and without authority of the receiving bank, infor- 54 mation facilitating breach of the security procedure, regard- 55 less of how the information was obtained or whether theA. 3307 9 1 customer was at fault. Information includes any access 2 device, computer software, or the like. 3 § 27. Subsection 3 of section 4-A-207 of the uniform commercial code, 4 as added by chapter 208 of the laws of 1990, is amended to read as 5 follows: 6 (3) If (i) a payment order described in subsection (2) is accepted, 7 (ii) the originator's payment order described the beneficiary inconsist- 8 ently by name and number, and (iii) the beneficiary's bank pays the 9 person identified by number as permitted by paragraph (a) of subsection 10 (2), the following rules apply: 11 (a) If the originator is a bank, the originator is obliged to pay 12 its order. 13 (b) If the originator is not a bank and proves that the person 14 identified by number was not entitled to receive payment from 15 the originator, the originator is not obliged to pay its 16 order unless the originator's bank proves that the origina- 17 tor, before acceptance of the originator's order, had notice 18 that payment of a payment order issued by the originator 19 might be made by the beneficiary's bank on the basis of an 20 identifying or bank account number even if it identifies a 21 person different from the named beneficiary. Proof of notice 22 may be made by any admissible evidence. The originator's bank 23 satisfies the burden of proof if it proves that the origina- 24 tor, before the payment order was accepted, signed a [writ-25ing] record stating the information to which the notice 26 relates. 27 § 28. Paragraph (b) of subsection 2 of section 4-A-208 of the uniform 28 commercial code, as added by chapter 208 of the laws of 1990, is amended 29 to read as follows: 30 (b) If the sender is not a bank and the receiving bank proves 31 that the sender, before the payment order was accepted, had 32 notice that the receiving bank might rely on the number as 33 the proper identification of the intermediary or benefici- 34 ary's bank even if it identifies a person different from the 35 bank identified by name, the rights and obligations of the 36 sender and the receiving bank are governed by paragraph (a) 37 of subsection (2), as though the sender were a bank. Proof of 38 notice may be made by any admissible evidence. The receiving 39 bank satisfies the burden of proof if it proves that the 40 sender, before the payment order was accepted, signed a 41 [writing] record stating the information to which the notice 42 relates. 43 § 29. Subsection 1 of section 4-A-210 of the uniform commercial code, 44 as added by chapter 208 of the laws of 1990, is amended to read as 45 follows: 46 (1) A payment order is rejected by the receiving bank by a notice of 47 rejection transmitted to the sender orally, [electronically,] or in 48 [writing] a record. A notice of rejection need not use any particular 49 words and is sufficient if it indicates that the receiving bank is 50 rejecting the order or will not execute or pay the order. Rejection is 51 effective when the notice is given if transmission is by a means that is 52 reasonable in the circumstances. If notice of rejection is given by a 53 means that is not reasonable, rejection is effective when the notice is 54 received. If an agreement of the sender and receiving bank establishes 55 the means to be used to reject a payment order, (i) any means complying 56 with the agreement is reasonable and (ii) any means not complying is notA. 3307 10 1 reasonable unless no significant delay in receipt of the notice resulted 2 from the use of the noncomplying means. 3 § 30. Subsection 1 of section 4-A-211 of the uniform commercial code, 4 as added by chapter 208 of the laws of 1990, is amended to read as 5 follows: 6 (1) A communication of the sender of a payment order cancelling or 7 amending the order may be transmitted to the receiving bank orally[,8electronically,] or in [writing] a record. If a security procedure is in 9 effect between the sender and the receiving bank, the communication is 10 not effective to cancel or amend the order unless the communication is 11 verified pursuant to the security procedure or the bank agrees to the 12 cancellation or amendment. 13 § 31. Subsections 3 and 4 of section 4-A-305 of the uniform commercial 14 code, as added by chapter 208 of the laws of 1990, are amended to read 15 as follows: 16 (3) In addition to the amounts payable under subsections (1) and (2), 17 damages, including consequential damages, are recoverable to the extent 18 provided in an express [written] agreement of the receiving bank, 19 evidenced by a record. 20 (4) If a receiving bank fails to execute a payment order it was 21 obliged by express agreement to execute, the receiving bank is liable to 22 the sender for its expenses in the transaction and for incidental 23 expenses and interest losses resulting from the failure to execute. 24 Additional damages, including consequential damages, are recoverable to 25 the extent provided in an express [written] agreement of the receiving 26 bank, evidenced by a record, but are not otherwise recoverable. 27 § 32. Section 5--104 of the uniform commercial code, as added by chap- 28 ter 471 of the laws of 2000, is amended to read as follows: 29 Section 5--104. Formal requirements. 30 A letter of credit, confirmation, advice, transfer, amendment, or 31 cancellation may be issued in any form that is a signed record [and is32authenticated:33(a) by a signature, or34(b) in accordance with the agreement of the parties or the standard35practice referred to in subsection (e) of section 5--108]. 36 § 33. Section 5--116 of the uniform commercial code, as added by chap- 37 ter 471 of the laws of 2000, is amended to read as follows: 38 Section 5--116. Choice of law and forum. 39 (a) The liability of an issuer, nominated person, or adviser for 40 action or omission is governed by the law of the jurisdiction chosen by 41 an agreement in the form of a record signed [or otherwise authenticated] 42 by the affected parties [in the manner provided in section 5--104] or by 43 a provision in the person's letter of credit, confirmation, or other 44 undertaking. The jurisdiction whose law is chosen need not bear any 45 relation to the transaction. 46 (b) Unless subsection (a) of this section applies, the liability of an 47 issuer, nominated person, or adviser for action or omission is governed 48 by the law of the jurisdiction in which the person is located. The 49 person is considered to be located at the address indicated in the 50 person's undertaking. If more than one address is indicated, the person 51 is considered to be located at the address from which the person's 52 undertaking was issued. For the purpose of jurisdiction, choice of law, 53 and recognition of interbranch letters of credit, but not enforcement of 54 a [judgement] judgment, all branches of a bank are considered separate 55 juridical entities and a bank is considered to be located at the placeA. 3307 11 1 where its relevant branch is considered to be located under [this] 2 subsection (c). 3 (c) A branch of a bank is considered to be located at the address 4 indicated in the branch's undertaking. If more than one address is 5 indicated, the branch is considered to be located at the address from 6 which the undertaking was issued. 7 (d) Except as otherwise provided in this subsection, the liability of 8 an issuer, nominated person, or adviser is governed by any rules of 9 custom or practice, such as the uniform customs and practice for docu- 10 mentary credits, to which the letter of credit, confirmation, or other 11 undertaking is expressly made subject. If (1) this article would govern 12 the liability of an issuer, nominated person, or adviser under 13 subsection (a) or (b) of this section, (2) the relevant undertaking 14 incorporates rules of custom or practice, and (3) there is conflict 15 between this article and those rules as applied to that undertaking, 16 those rules govern except to the extent of any conflict with the nonvar- 17 iable provisions specified in subsection (c) of section 5--103. 18 [(d)] (e) If there is conflict between this article and article 3, 4, 19 4-A or 9, this article governs. 20 [(e)] (f) The forum for settling disputes arising out of an undertak- 21 ing within this article may be chosen in the manner and with the binding 22 effect that governing law may be chosen in accordance with subsection 23 (a) of this section. 24 § 34. Paragraph 11 of subsection (a) of section 7--102 of the uniform 25 commercial code, as added by chapter 505 of the laws of 2014, is amended 26 to read as follows: 27 (11) ["Sign" means, with present intent to authenticate or adopt a28record:29(A) to execute or adopt a tangible symbol; or30(B) to attach to or logically associate with the record an electronic31sound, symbol, or process] Reserved. 32 § 35. Section 7--106 of the uniform commercial code, as added by chap- 33 ter 505 of the laws of 2014, is amended to read as follows: 34 Section 7--106. Control of Electronic Document of Title. 35 (a) A person has control of an electronic document of title if a 36 system employed for evidencing the transfer of interests in the elec- 37 tronic document reliably establishes that person as the person to which 38 the electronic document was issued or transferred. 39 (b) A system satisfies subsection (a), and a person [is deemed to40have] has control of an electronic document of title, if the document is 41 created, stored and [assigned] transferred in [such] a manner that: 42 (1) a single authoritative copy of the document exists which is 43 unique, identifiable, and, except as otherwise provided in paragraphs 44 (4), (5), and (6), unalterable; 45 (2) the authoritative copy identifies the person asserting control as: 46 (A) the person to which the document was issued; or 47 (B) if the authoritative copy indicates that the document has been 48 transferred, the person to which the document was most recently trans- 49 ferred; 50 (3) the authoritative copy is communicated to and maintained by the 51 person asserting control or its designated custodian; 52 (4) copies or amendments that add or change an identified [assignee] 53 transferee of the authoritative copy can be made only with the consent 54 of the person asserting control; 55 (5) each copy of the authoritative copy and any copy of a copy is 56 readily identifiable as a copy that is not the authoritative copy; andA. 3307 12 1 (6) any amendment of the authoritative copy is readily identifiable as 2 authorized or unauthorized. 3 (c) A system satisfies subsection (a), and a person has control of an 4 electronic document of title, if an authoritative electronic copy of the 5 document, a record attached to or logically associated with the elec- 6 tronic copy, or a system in which the electronic copy is recorded: 7 (1) enables the person readily to identify each electronic copy as 8 either an authoritative copy or a nonauthoritative copy; 9 (2) enables the person readily to identify itself in any way, includ- 10 ing by name, identifying number, cryptographic key, office, or account 11 number, as the person to which each authoritative electronic copy was 12 issued or transferred; and 13 (3) gives the person exclusive power, subject to subsection (d), to: 14 (A) prevent others from adding or changing the person to which each 15 authoritative electronic copy has been issued or transferred; and 16 (B) transfer control of each authoritative electronic copy. 17 (d) Subject to subsection (e), a power is exclusive under subsection 18 (c) (3) (A) even if: 19 (1) the authoritative electronic copy, a record attached to or 20 logically associated with the authoritative electronic copy, or a system 21 in which the authoritative electronic copy is recorded limits the use of 22 the document of title or has a protocol that is programmed to cause a 23 change, including a transfer or loss of control; or 24 (2) the power is shared with another person. 25 (e) A power of a person is not shared with another person under 26 subsection (d) (2) and the person's power is not exclusive if: 27 (1) the person can exercise the power only if the power also is exer- 28 cised by the other person; and 29 (2) the other person: 30 (A) can exercise the power without exercise of the power by the 31 person; or 32 (B) is the transferor to the person of an interest in the document of 33 title. 34 (f) If a person has the powers specified in subsection (c) (3) (A) and 35 (B), the powers are presumed to be exclusive. 36 (g) A person has control of an electronic document of title if another 37 person, other than the transferor to the person of an interest in the 38 document: 39 (1) has control of the document and acknowledges that it has control 40 on behalf of the person; or 41 (2) obtains control of the document after having acknowledged that it 42 will obtain control of the document on behalf of the person. 43 (h) A person that has control under this section is not required to 44 acknowledge that it has control on behalf of another person. 45 (i) If a person acknowledges that it has or will obtain control on 46 behalf of another person, unless the person otherwise agrees or law 47 other than this article or Article 9 otherwise provides, the person does 48 not owe any duty to the other person and is not required to confirm the 49 acknowledgment to any other person. 50 § 36. Paragraph 6 of subsection (a) of section 8--102 of the uniform 51 commercial code, as added by chapter 566 of the laws of 1997, is amended 52 to read as follows: 53 (6) "Communicate" means to: 54 (i) send a signed [writing] record; or 55 (ii) transmit information by any mechanism agreed upon by 56 the persons transmitting and receiving the information.A. 3307 13 1 § 37. Subsections (b) and (e) of section 8--102 of the uniform commer- 2 cial code, subsection (b) as added by chapter 566 of the laws of 1997 3 and subsection (e) as added by chapter 84 of the laws of 2001, are 4 amended to read as follows: 5 (b) Other definitions applying to this Article and the sections in 6 which they appear are: 7 "Appropriate person". Section 8--107. 8 "Control". Section 8--106. 9 "Controllable account". Section 9--102. 10 "Controllable electronic record". Section 12--102. 11 "Controllable payment intangible". Section 9--102. 12 "Delivery". Section 8--301. 13 "Investment company security". Section 8--103. 14 "Issuer". Section 8--201. 15 "Overissue". Section 8--210. 16 "Protected purchaser". Section 8--303. 17 "Securities account". Section 8--501. 18 (e) The following definitions in Article 9 apply to this article: 19 Cooperative interest Section [9--102(a)(27-b)] 20 9--102(a)(27-d) 21 Cooperative organization Section [9--102(a)(27-c)] 22 9--102(a)(27-e) 23 Cooperative record Section [9--102(a)(27-e)] 24 9--102(a)(27-g) 25 § 38. Section 8--103 of the uniform commercial code is amended by 26 adding a new subsection (i) to read as follows: 27 (i) A controllable account, controllable electronic record, or 28 controllable payment intangible is not a financial asset unless Section 29 8--102(a)(9)(iii) applies. 30 § 39. Subsection (d) of section 8--106 of the uniform commercial code, 31 as amended by chapter 84 of the laws of 2001, is amended and two new 32 subsections (j) and (k) are added to read as follows: 33 (d) A purchaser has "control" of a security entitlement if: 34 (1) the purchaser becomes the entitlement holder; 35 (2) the securities intermediary has agreed that it will comply 36 with entitlement orders originated by the purchaser without 37 further consent by the entitlement holder; or 38 (3) another person, other than the transferor to the purchaser of 39 an interest in the security entitlement: 40 (A) has control of the security entitlement on behalf of the 41 purchaser or, having previously acquired control of the secu- 42 rity entitlement, acknowledges that it has control on behalf 43 of the purchaser[.]; 44 (B) has control of the security entitlement and acknowledges that 45 it has control on behalf of the purchaser; or 46 (C) obtains control of the security entitlement after having 47 acknowledged that it will obtain control of the security 48 entitlement on behalf of the purchaser. 49 (j) A person that has control under this section is not required to 50 acknowledge that it has control on behalf of a purchaser. 51 (k) If a person acknowledges that it has or will obtain control on 52 behalf of a purchaser, unless the person otherwise agrees or law other 53 than this article or Article 9 otherwise provides, the person does not 54 owe any duty to the purchaser and is not required to confirm the 55 acknowledgment to any other person.A. 3307 14 1 § 40. Section 8--110 of the uniform commercial code is amended by 2 adding a new subsection (g) to read as follows: 3 (g) The local law of the issuer's jurisdiction or the securities 4 intermediary's jurisdiction governs a matter or transaction specified in 5 subsection (a) or (b) even if the matter or transaction does not bear 6 any relation to the jurisdiction. 7 § 41. Subsection (b) of section 8--303 of the uniform commercial code, 8 as added by chapter 566 of the laws of 1997, is amended to read as 9 follows: 10 (b) [In addition to acquiring the rights of a purchaser, a] A 11 protected purchaser also acquires its interest in the security free of 12 any adverse claim. 13 § 42. Paragraphs 2, 3, 4, 7, 11, 27-a, 27-b, 27-c, 27-d, 27-e, 27-f, 14 31, 42, 47, 61, 66, 66-a, 75 and 79 of subsection (a) of section 9--102 15 of the uniform commercial code, as amended by chapter 505 of the laws of 16 2014, are amended, and five new paragraphs 7-a, 7-b, 31-a, 54-a and 79-a 17 are added to read as follows: 18 (2) "Account", except as used in "account for", means a right to 19 payment of a monetary obligation, whether or not earned by 20 performance, (i) for property that has been or is to be sold, 21 leased, licensed, assigned, or otherwise disposed of, (ii) 22 for services rendered or to be rendered, (iii) for a policy 23 of insurance issued or to be issued, (iv) for a secondary 24 obligation incurred or to be incurred, (v) for energy 25 provided or to be provided, (vi) for the use or hire of a 26 vessel under a charter or other contract, (vii) arising out 27 of the use of a credit or charge card or information 28 contained on or for use with the card, or (viii) as winnings 29 in a lottery or other game of chance operated or sponsored by 30 a state, governmental unit of a State, or person licensed or 31 authorized to operate the game by a State or governmental 32 unit of a State. The term includes health-care-insurance 33 receivables. The term does not include (i) [rights to payment34evidenced by] chattel paper [or an instrument], (ii) commer- 35 cial tort claims, (iii) deposit accounts, (iv) investment 36 property, (v) letter-of-credit rights or letters of credit, 37 or (vi) rights to payment for money or funds advanced or 38 sold, other than rights arising out of the use of a credit or 39 charge card or information contained on or for use with the 40 card. 41 (3) "Account debtor" means a person obligated on an account, 42 chattel paper, or general intangible. The term does not 43 include persons obligated to pay a negotiable instrument, 44 even if the instrument [constitutes part of] evidences chat- 45 tel paper. 46 (4) "Accounting", except as used in "accounting for", means a 47 record: 48 (A) [authenticated] signed by a secured party; 49 (B) indicating the aggregate unpaid secured obligations as of 50 a date not more than 35 days earlier or 35 days later 51 than the date of the record; and 52 (C) identifying the components of the obligations in reason- 53 able detail. 54 (7) ["Authenticate" means:55(A) to sign; orA. 3307 15 1(B) with present intent to adopt or accept a record, to2attach to or logically associate with the record an elec-3tronic sound, symbol, or process] Reserved. 4 (7-a) "Assignee", except as used in "assignee for benefit of 5 creditors", means a person (A) in whose favor a securi- 6 ty interest that secures an obligation is created or 7 provided for under a security agreement, whether or not 8 the obligation is outstanding or (B) to which an account, 9 chattel paper, payment intangible, or promissory note has 10 been sold. The term includes a person to which a security 11 interest has been transferred by a secured party. 12 (7-b) "Assignor" means a person that (A) under a security 13 agreement creates or provides for a security interest that 14 secures an obligation or (B) sells an account, chattel paper, 15 payment intangible, or promissory note. The term includes a 16 secured party that has transferred a security interest to 17 another person. 18 (11) "Chattel paper" means [a record or records that evidence19both a monetary obligation and a security interest in specif-20ic goods, a security interest in specific goods and software21used in the goods, a security interest in specific goods and22license of software used in the goods, a lease of specific23goods, or a lease of specific goods and license of software24used in the goods. In this paragraph, "monetary obligation"25means a monetary obligation secured by the goods or owed26under a lease of the goods and includes a monetary obligation27with respect to software used in the goods. The term does not28include (i) charters or other contracts involving the use or29hire of a vessel or (ii) records that evidence a right to30payment arising out of the use of a credit or charge card or31information contained on or for use with the card. If a tran-32saction is evidenced by records that include an instrument or33series of instruments, the group of records taken together34constitutes chattel paper.]: 35 (A) a right to payment of a monetary obligation secured by 36 specific goods, if the right to payment and security 37 agreement are evidenced by a record; or 38 (B) a right to payment of a monetary obligation owed by a 39 lessee under a lease agreement with respect to specific 40 goods and a monetary obligation owed by the lessee in 41 connection with the transaction giving rise to the lease, 42 if: 43 (i) the right to payment and lease agreement are evidenced by 44 a record; and 45 (ii) the predominant purpose of the transaction giving rise 46 to the lease was to give the lessee the right to 47 possession and use of the goods; but 48 (C) does not include a right to payment arising out of a 49 charter or other contract involving the use or hire of a 50 vessel or a right to payment arising out of the use of a 51 credit or charge card or information contained on or for 52 use with the card. 53 (27-a) "Controllable account" means an account evidenced by a 54 controllable electronic record that provides that the 55 account debtor undertakes to pay the person that hasA. 3307 16 1 control under Section 12--105 of the controllable elec- 2 tronic record. 3 (27-b) "Controllable payment intangible" means a payment intangi- 4 ble evidenced by a controllable electronic record that 5 provides that the account debtor undertakes to pay the 6 person that has control under Section 12--105 of the 7 controllable electronic record. 8 (27-c) "Cooperative addendum" means a record that satisfies 9 Section 9--502(e). 10 [(27-b)] (27-d) "Cooperative interest" means an ownership inter- 11 est in a cooperative organization, which interest, when 12 created, is coupled with possessory rights of a proprie- 13 tary nature in identified physical space belonging to the 14 cooperative organization. A subsequent termination of the 15 possessory rights shall not cause an ownership interest to 16 cease being a cooperative interest. 17 [(27-c)] (27-e) "Cooperative organization" means an organization 18 which has as its principal asset an interest in real prop- 19 erty in this state and in which organization all ownership 20 interests are cooperative interests. 21 [(27-d)] (27-f) "Cooperative organization security interest" 22 means a security interest which is in a cooperative inter- 23 est, is in favor of the cooperative organization, is 24 created by the cooperative record, and secures only obli- 25 gations incident to ownership of that cooperative inter- 26 est. 27 [(27-e)] (27-g) "Cooperative record" means those records which, 28 as a whole, evidence cooperative interests and define the 29 mutual rights and obligations of the owners of the cooper- 30 ative interests and the cooperative organization. 31 [(27-f)] (27-h) "Cooperative unit" means the physical space asso- 32 ciated with a cooperative interest. 33 (31) ["Electronic chattel paper" means chattel paper evidenced by34a record or records consisting of information stored in an35electronic medium.] Reserved. 36 (31-a) "Electronic money" means money in an electronic form. 37 (42) "General intangible" means any personal property, including 38 things in action, other than accounts, chattel paper, 39 commercial tort claims, deposit accounts, documents, goods, 40 instruments, investment property, letter-of-credit rights, 41 letters of credit, money, and oil, gas, or other minerals 42 before extraction. The term includes controllable electronic 43 records, payment intangibles and software. 44 (47) "Instrument" means a negotiable instrument or any other 45 writing that evidences a right to the payment of a monetary 46 obligation, is not itself a security agreement or lease, and 47 is of a type that in ordinary course of business is trans- 48 ferred by delivery with any necessary indorsement or assign- 49 ment. The term does not include (i) investment property, 50 (ii) letters of credit, [or] (iii) writings that evidence a 51 right to payment arising out of the use of a credit or 52 charge card or information contained on or for use with the 53 card, or (iv) writings that evidence chattel paper. 54 (54-a) "Money" has the same meaning as in Section 1--201(b)(24), 55 but does not include (A) a deposit account or (B) money inA. 3307 17 1 an electronic form that cannot be subjected to control under 2 Section 9-105A. 3 (61) "Payment intangible" means a general intangible under which 4 the account debtor's principal obligation is a monetary 5 obligation. The term includes a controllable payment intan- 6 gible. 7 (66) "Proposal" means a record [authenticated] signed by a 8 secured party which includes the terms on which the secured 9 party is willing to accept collateral in full or partial 10 satisfaction of the obligation it secures pursuant to 11 Sections 9--620, 9--621, and 9--622. 12 (66-a) "Prove" with respect to a fact means to meet the burden of 13 establishing the fact (Section [1-201(8)] 1--201(b)(8)). 14 (75) ["Send", in connection with a record or notification,15means:16(A) to deposit in the mail, deliver for transmission, or17transmit by any other usual means of communication, with18postage or cost of transmission provided for, addressed19to any address reasonable under the circumstances; or20(B) to cause the record or notification to be received within21the time that it would have been received if properly22sent under subparagraph (A).] Reserved. 23 (79) ["Tangible chattel paper" means chattel paper evidenced by24a record or records consisting of information that is25inscribed on a tangible medium.] Reserved. 26 (79-a) "Tangible money" means money in a tangible form. 27 § 43. Subsection (b) of section 9--102 of the uniform commercial code 28 is amended by adding three new definitions Controllable electronic 29 record, Protected purchaser and Qualifying purchaser in alphabetical 30 order to read as follows: 31 "Controllable electronic record" Section 12--102. 32 "Protected purchaser" Section 8--303. 33 "Qualifying purchaser" Section 12--102. 34 § 44. Paragraphs 2 and 5 of subsection (a) of section 9--104 of the 35 uniform commercial code, as amended by chapter 505 of the laws of 2014, 36 are amended to read as follows: 37 (2) the debtor, secured party, and bank have agreed in [an38authenticated] a signed record that the bank will comply with 39 instructions originated by the secured party directing dispo- 40 sition of the funds in the deposit account without further 41 consent by the debtor; 42 (5) another person, other than the debtor: 43 (A) has control of the deposit account and acknowledges that it has 44 control on behalf of the secured party [or, having previously acquired]; 45 or 46 (B) obtains control of the deposit account[, acknowledges] after 47 having acknowledged that it [has] will obtain control of the deposit 48 account on behalf of the secured party. 49 § 45. Section 9--105 of the uniform commercial code, as added by chap- 50 ter 84 of the laws of 2001, is amended to read as follows: 51 Section 9--105. Control of Electronic Copy of Record Evidencing Chattel 52 Paper.A. 3307 18 1 [A secured party has control of electronic chattel paper if the record2or records comprising the chattel paper are created, stored, and3assigned in such a manner that:] 4 (a) General rule: control of electronic copy of record evidencing 5 chattel paper. A purchaser has control of an authoritative electronic 6 copy of a record evidencing chattel paper if a system employed for 7 evidencing the assignment of interests in the chattel paper reliably 8 establishes the purchaser as the person to which the authoritative elec- 9 tronic copy was assigned. 10 (b) Single authoritative copy. A system satisfies subsection (a) if 11 the record or records evidencing the chattel paper are created, stored, 12 and assigned in a manner that: 13 (1) a single authoritative copy of the record or records exists 14 which is unique, identifiable and, except as otherwise 15 provided in paragraphs (4), (5), and (6), unalterable; 16 (2) the authoritative copy identifies the secured party as the 17 assignee of the record or records; 18 (3) the authoritative copy is communicated to and maintained by 19 the secured party or its designated custodian; 20 (4) copies or revisions that add or change an identified assignee 21 of the authoritative copy can be made only with the partic- 22 ipation of the secured party; 23 (5) each copy of the authoritative copy and any copy of a copy is 24 readily identifiable as a copy that is not the authoritative 25 copy; and 26 (6) any revision of the authoritative copy is readily identifi- 27 able as an authorized or unauthorized revision. 28 (c) One or more authoritative copies. A system satisfies subsection 29 (a), and a purchaser has control of an authoritative electronic copy of 30 a record evidencing chattel paper, if the electronic copy, a record 31 attached to or logically associated with the electronic copy, or a 32 system in which the electronic copy is recorded: 33 (1) enables the purchaser readily to identify each electronic copy as 34 either an authoritative copy or a nonauthoritative copy; 35 (2) enables the purchaser readily to identify itself in any way, 36 including by name, identifying number, cryptographic key, office, or 37 account number, as the assignee of the authoritative electronic copy; 38 and 39 (3) gives the purchaser exclusive power, subject to subsection (d), 40 to: 41 (A) prevent others from adding or changing an identified assignee of 42 the authoritative electronic copy; and 43 (B) transfer control of the authoritative electronic copy. 44 (d) Meaning of exclusive. Subject to subsection (e), a power is exclu- 45 sive under subsection (c)(3)(A) and (B) even if: 46 (1) the authoritative electronic copy, a record attached to or 47 logically associated with the authoritative electronic copy, or a system 48 in which the authoritative electronic copy is recorded limits the use of 49 the authoritative electronic copy or has a protocol programmed to cause 50 a change, including a transfer or loss of control; or 51 (2) the power is shared with another person. 52 (e) When power not shared with another person. A power of a purchaser 53 is not shared with another person under subsection (d)(2) and the 54 purchaser's power is not exclusive if: 55 (1) the purchaser can exercise the power only if the power also is 56 exercised by the other person; andA. 3307 19 1 (2) the other person: 2 (A) can exercise the power without exercise of the power by the 3 purchaser; or 4 (B) is the transferor to the purchaser of an interest in the chattel 5 paper. 6 (f) Presumption of exclusivity of certain powers. If a purchaser has 7 the powers specified in subsection (c)(3)(A) and (B), the powers are 8 presumed to be exclusive. 9 (g) Obtaining control through another person. A purchaser has control 10 of an authoritative electronic copy of a record evidencing chattel paper 11 if another person, other than the transferor to the purchaser of an 12 interest in the chattel paper: 13 (1) has control of the authoritative electronic copy and acknowledges 14 that it has control on behalf of the purchaser; or 15 (2) obtains control of the authoritative electronic copy after having 16 acknowledged that it will obtain control of the electronic copy on 17 behalf of the purchaser. 18 § 46. The uniform commercial code is amended by adding three new 19 sections 9--105A, 9--107A and 9--107B to read as follows: 20 Section 9--105A. Control of Electronic Money. 21 (a) General rule: control of electronic money. A person has control 22 of electronic money if: 23 (1) the electronic money, a record attached to or logically associated 24 with the electronic money, or a system in which the electronic money is 25 recorded gives the person: 26 (A) power to avail itself of substantially all the benefit from the 27 electronic money; and 28 (B) exclusive power, subject to subsection (b), to: 29 (i) prevent others from availing themselves of substantially all the 30 benefit from the electronic money; and 31 (ii) transfer control of the electronic money to another person or 32 cause another person to obtain control of other electronic money as a 33 result of the transfer of the electronic money; and 34 (2) the electronic money, a record attached to or logically associated 35 with the electronic money, or a system in which the electronic money is 36 recorded enables the person readily to identify itself in any way, 37 including by name, identifying number, cryptographic key, office, or 38 account number, as having the powers under paragraph (1). 39 (b) Meaning of exclusive. Subject to subsection (c), a power is 40 exclusive under subsection (a)(1)(B)(i) and (ii) even if: 41 (1) the electronic money, a record attached to or logically associated 42 with the electronic money, or a system in which the electronic money is 43 recorded limits the use of the electronic money or has a protocol 44 programmed to cause a change, including a transfer or loss of control; 45 or 46 (2) the power is shared with another person. 47 (c) When power not shared with another person. A power of a person is 48 not shared with another person under subsection (b)(2) and the person's 49 power is not exclusive if: 50 (1) the person can exercise the power only if the power also is exer- 51 cised by the other person; and 52 (2) the other person: 53 (A) can exercise the power without exercise of the power by the 54 person; or 55 (B) is the transferor to the person of an interest in the electronic 56 money.A. 3307 20 1 (d) Presumption of exclusivity of certain powers. If a person has the 2 powers specified in subsection (a)(1)(B)(i) and (ii), the powers are 3 presumed to be exclusive. 4 (e) Control through another person. A person has control of electron- 5 ic money if another person, other than the transferor to the person of 6 an interest in the electronic money: 7 (1) has control of the electronic money and acknowledges that it has 8 control on behalf of the person; or 9 (2) obtains control of the electronic money after having acknowledged 10 that it will obtain control of the electronic money on behalf of the 11 person. 12 Section 9--107A. Control of Controllable Electronic Record, Controllable 13 Account, or Controllable Payment Intangible. 14 (a) Control under Section 12--105. A secured party has control of a 15 controllable electronic record as provided in Section 12--105. 16 (b) Control of controllable account and controllable payment intangi- 17 ble. A secured party has control of a controllable account or control- 18 lable payment intangible if the secured party has control of the 19 controllable electronic record that evidences the controllable account 20 or controllable payment intangible. 21 Section 9--107B. No Requirement to Acknowledge or Confirm; No Duties. 22 (a) No requirement to acknowledge. A person that has control under 23 Section 9--104, 9--105, or 9--105A is not required to acknowledge that 24 it has control on behalf of another person. 25 (b) No duties or confirmation. If a person acknowledges that it has or 26 will obtain control on behalf of another person, unless the person 27 otherwise agrees or law other than this article otherwise provides, the 28 person does not owe any duty to the other person and is not required to 29 confirm the acknowledgment to any other person. 30 § 47. Subsection (b) of section 9--203 of the uniform commercial code, 31 as added by chapter 84 of the laws of 2001 and subparagraph (D) of para- 32 graph 3 as amended by chapter 505 of the laws of 2014, is amended to 33 read as follows: 34 (b) Enforceability. Except as otherwise provided in subsections (c) 35 through (i), a security interest is enforceable against the debtor and 36 third parties with respect to the collateral only if: 37 (1) value has been given; 38 (2) the debtor has rights in the collateral or the power to 39 transfer rights in the collateral to a secured party; and 40 (3) one of the following conditions is met: 41 (A) the debtor has [authenticated] signed a security agree- 42 ment that provides a description of the collateral and, 43 if the security interest covers timber to be cut, a 44 description of the land concerned; 45 (B) the collateral is not a certificated security and is in 46 the possession of the secured party under Section 9--313 47 pursuant to the debtor's security agreement; 48 (C) the collateral is a certificated security in registered 49 form and the security certificate has been delivered to 50 the secured party under Section 8--301 pursuant to the 51 debtor's security agreement; [or] 52 (D) the collateral is controllable accounts, controllable 53 electronic records, controllable payment intangibles, 54 deposit accounts, electronic [chattel paper] documents, 55 electronic money, investment property[,] or letter-of- 56 credit rights, [or electronic documents,] and the securedA. 3307 21 1 party has control under Section 7--106, 9--104, 9--105, 2 9--105A, 9--106, [or] 9--107, or 9--107A pursuant to the 3 debtor's security agreement; or 4 (E) the collateral is chattel paper and the secured party has 5 possession and control under Section 9--314A pursuant to 6 the debtor's security agreement. 7 § 48. Subsection (b) of section 9--204 of the uniform commercial code, 8 as added by chapter 84 of the laws of 2001, is amended and a new 9 subsection (b-1) is added to read as follows: 10 (b) When after-acquired property clause not effective. [A] Subject to 11 subsection (b-1), a security interest does not attach under a term 12 constituting an after-acquired property clause to: 13 (1) consumer goods, other than an accession when given as addi- 14 tional security, unless the debtor acquires rights in them 15 within 10 days after the secured party gives value; or 16 (2) a commercial tort claim. 17 (b-1) Limitation on subsection (b). Subsection (b) does not prevent a 18 security interest from attaching: 19 (1) to consumer goods as proceeds under Section 9--315(a) or 20 commingled goods under Section 9--336(c); 21 (2) to a commercial tort claim as proceeds under Section 22 9--315(a); or 23 (3) under an after-acquired property clause to property that is 24 proceeds of consumer goods or a commercial tort claim. 25 § 49. Subsection (c) of section 9--207 of the uniform commercial code, 26 as amended by chapter 505 of the laws of 2014, is amended to read as 27 follows: 28 (c) Duties and rights when secured party in possession or control. 29 Except as otherwise provided in subsection (d), a secured party having 30 possession of collateral or control of collateral under Section 7--106, 31 9--104, 9--105, 9--105A, 9--106, [or] 9--107, or 9--107A: 32 (1) may hold as additional security any proceeds, except money or 33 funds, received from the collateral; 34 (2) shall apply money or funds received from the collateral to 35 reduce the secured obligation, unless remitted to the debtor; 36 and 37 (3) may create a security interest in the collateral. 38 § 50. Subsection (b) of section 9--208 of the uniform commercial code, 39 as added by chapter 84 of the laws of 2001, paragraphs 4 and 5 as 40 amended and paragraph 6 as added by chapter 505 of the laws of 2014, is 41 amended to read as follows: 42 (b) Duties of secured party after receiving demand from debtor. Within 43 10 days after receiving [an authenticated] a signed demand by the 44 debtor: 45 (1) a secured party having control of a deposit account under 46 Section 9--104(a)(2) shall send to the bank with which the 47 deposit account is maintained [an authenticated statement] a 48 signed record that releases the bank from any further obli- 49 gation to comply with instructions originated by the secured 50 party; 51 (2) a secured party having control of a deposit account under 52 Section 9--104(a)(3) shall: 53 (A) pay the debtor the balance on deposit in the deposit 54 account; or 55 (B) transfer the balance on deposit into a deposit account in 56 the debtor's name;A. 3307 22 1 (3) a secured party, other than a buyer, having control [of elec-2tronic chattel paper] under Section 9--105 [shall:3(A) communicate the authoritative copy of the electronic4chattel paper to the debtor or its designated custodian;5(B) if the debtor designates a custodian that is the desig-6nated custodian with which the authoritative copy of the7electronic chattel paper is maintained for the secured8party, communicate to the custodian an authenticated9record releasing the designated custodian from any10further obligation to comply with instructions originated11by the secured party and instructing the custodian to12comply with instructions originated by the debtor; and13(C) take appropriate action to enable the debtor or its14designated custodian to make copies of or revisions to15the authoritative copy which add or change an identified16assignee of the authoritative copy without the consent of17the secured party] of an authoritative electronic copy of 18 a record evidencing chattel paper shall transfer control 19 of the electronic copy to debtor or a person designated 20 by the debtor; 21 (4) a secured party having control of investment property under 22 Section 8--106(d)(2) or 9--106(b) shall send to the securi- 23 ties intermediary or commodity intermediary with which the 24 security entitlement or commodity contract is maintained [an25authenticated] a signed record that releases the securities 26 intermediary or commodity intermediary from any further obli- 27 gation to comply with entitlement orders or directions origi- 28 nated by the secured party; 29 (5) a secured party having control of a letter-of-credit right 30 under Section 9--107 shall send to each person having an 31 unfulfilled obligation to pay or deliver proceeds of the 32 letter-of-credit to the secured party [an authenticated] a 33 signed release from any further obligation to pay or deliver 34 proceeds of the letter-of-credit to the secured party; [and] 35 (6) a secured party having control [of an electronic document36shall:37(A) give control of the electronic document to the debtor or38its designated custodian;39(B) if the debtor designates a custodian that is the desig-40nated custodian with which the authoritative copy of the41electronic document is maintained for the secured party,42communicate to the custodian an authenticated record43releasing the designated custodian from any further obli-44gation to comply with instructions originated by the45secured party and instructing the custodian to comply46with instructions originated by the debtor; and47(C) take appropriate action to enable the debtor or its48designated custodian to make copies of or revisions to49the authoritative copy which add or change an identified50assignee of the authoritative copy without the consent of51the secured party] under Section 7--106 of an authori- 52 tative electronic copy of an electronic document of title 53 shall transfer control of the electronic copy to the 54 debtor or a person designated by the debtor; 55 (7) a secured party having control under Section 9--105A of 56 electronic money shall transfer control of the electronicA. 3307 23 1 money to the debtor or a person designated by the debtor; 2 and 3 (8) a secured party having control under Section 12--105 of a 4 controllable electronic record, other than a buyer of a 5 controllable account or controllable payment intangible 6 evidenced by the controllable electronic record, shall 7 transfer control of the controllable electronic record to 8 the debtor or a person designated by the debtor. 9 § 51. Subsection (b) of section 9--209 of the uniform commercial code, 10 as added by chapter 84 of the laws of 2001, is amended to read as 11 follows: 12 (b) Duties of secured party after receiving demand from debtor. Within 13 10 days after receiving [an authenticated] a signed demand by the 14 debtor, a secured party shall send to an account debtor that has 15 received notification under Section 9--406(a) or 12--106(b) of an 16 assignment to the secured party as assignee [under Section 9--406(a) an17authenticated] a signed record that releases the account debtor from any 18 further obligation to the secured party. 19 § 52. Section 9--210 of the uniform commercial code, as added by chap- 20 ter 84 of the laws of 2001, is amended to read as follows: 21 Section 9--210. Request for Accounting; Request Regarding List of Colla- 22 teral or Statement of Account. 23 (a) Definitions in this section: 24 (1) "Request" means a record of a type described in paragraph 25 (2), (3), or (4). 26 (2) "Request for an accounting" means a record [authenticated] 27 signed by a debtor requesting that the recipient provide an 28 accounting of the unpaid obligations secured by collateral 29 and reasonably identifying the transaction or relationship 30 that is the subject of the request. 31 (3) "Request regarding a list of collateral" means a record 32 [authenticated] signed by a debtor requesting that the recip- 33 ient approve or correct a list of what the debtor believes to 34 be the collateral securing an obligation and reasonably iden- 35 tifying the transaction or relationship that is the subject 36 of the request. 37 (4) "Request regarding a statement of account" means a record 38 [authenticated] signed by a debtor requesting that the recip- 39 ient approve or correct a statement indicating what the 40 debtor believes to be the aggregate amount of unpaid obli- 41 gations secured by collateral as of a specified date and 42 reasonably identifying the transaction or relationship that 43 is the subject of the request. 44 (b) Duty to respond to requests. Subject to subsections (c), (d), (e), 45 and (f), a secured party, other than a buyer of accounts, chattel paper, 46 payment intangibles, or promissory notes or a consignor, shall comply 47 with a request within 14 days after receipt: 48 (1) in the case of a request for an accounting, by [authenticat-49ing] signing and sending to the debtor an accounting; and 50 (2) in the case of a request regarding a list of collateral or a 51 request regarding a statement of account, by [authenticating] 52 signing and sending to the debtor an approval or correction. 53 (c) Request regarding list of collateral; statement concerning type of 54 collateral. A secured party that claims a security interest in all of a 55 particular type of collateral owned by the debtor may comply with a 56 request regarding a list of collateral by sending to the debtor [anA. 3307 24 1authenticated] a signed record including a statement to that effect 2 within 14 days after receipt. 3 (d) Request regarding list of collateral; no interest claimed. A 4 person that receives a request regarding a list of collateral, claims no 5 interest in the collateral when it receives the request, and claimed an 6 interest in the collateral at an earlier time shall comply with the 7 request within 14 days after receipt by sending to the debtor [an8authenticated] a signed record: 9 (1) disclaiming any interest in the collateral; and 10 (2) if known to the recipient, providing the name and mailing 11 address of any assignee of or successor to the recipient's 12 interest in the collateral. 13 (e) Request for accounting or regarding statement of account; no 14 interest in obligation claimed. A person that receives a request for an 15 accounting or a request regarding a statement of account, claims no 16 interest in the obligations when it receives the request, and claimed an 17 interest in the obligations at an earlier time shall comply with the 18 request within 14 days after receipt by sending to the debtor [an19authenticated] a signed record: 20 (1) disclaiming any interest in the obligations; and 21 (2) if known to the recipient, providing the name and mailing 22 address of any assignee of or successor to the recipient's 23 interest in the obligations. 24 (f) Charges for responses. A debtor is entitled without charge to one 25 response to a request under this section during any six-month period. 26 The secured party may require payment of a charge not exceeding $25 for 27 each additional response. 28 § 53. The opening paragraph and subsection (c) of section 9--301 of 29 the uniform commercial code, the opening paragraph as added by chapter 30 84 of the laws of 2001 and subsection (c) as amended by chapter 505 of 31 the laws of 2014, are amended to read as follows: 32 Except as otherwise provided in Sections 9--303 through [9--306] 33 9-306B, the following rules determine the law governing perfection, the 34 effect of perfection or nonperfection, and the priority of a security 35 interest in collateral: 36 (c) Except as otherwise provided in subsection (d), while [tangible] 37 negotiable tangible documents, goods, instruments, [money,] or tangible 38 [chattel paper] money is located in a jurisdiction, the local law of 39 that jurisdiction governs: 40 (1) perfection of a security interest in the goods by filing a 41 fixture filing; 42 (2) perfection of a security interest in timber to be cut; and 43 (3) the effect of perfection or nonperfection and the priority of 44 a nonpossessory security interest in the collateral. 45 § 54. Subsection (a) of section 9--304 of the uniform commercial code, 46 as added by chapter 84 of the laws of 2001, is amended to read as 47 follows: 48 (a) Law of bank's jurisdiction governs. The local law of a bank's 49 jurisdiction governs perfection, the effect of perfection or nonper- 50 fection, and the priority of a security interest in a deposit account 51 maintained with that bank even if the transaction does not bear any 52 relation to the bank's jurisdiction. 53 § 55. Subsection (a) of section 9--305 of the uniform commercial code 54 is amended by adding a new paragraph 5 to read as follows: 55 (5) Paragraphs (2), (3), and (4) apply even if the transaction does 56 not bear any relation to the jurisdiction.A. 3307 25 1 § 56. The uniform commercial code is amended by adding two new 2 sections 9-306A and 9-306B to read as follows: 3 Section 9-306A. Law Governing Perfection and Priority of Security Inter- 4 ests in Chattel Paper. 5 (a) Chattel paper evidenced by authoritative electronic copy. Except 6 as provided in subsection (d), if chattel paper is evidenced only by an 7 authoritative electronic copy of the chattel paper or is evidenced by an 8 authoritative electronic copy and an authoritative tangible copy, the 9 local law of the chattel paper's jurisdiction governs perfection, the 10 effect of perfection or nonperfection, and the priority of a security 11 interest in the chattel paper, even if the transaction does not bear any 12 relation to the chattel paper's jurisdiction. 13 (b) Chattel paper's jurisdiction. The following rules determine the 14 chattel paper's jurisdiction under this section: 15 (1) If the authoritative electronic copy of the record evidencing 16 chattel paper, or a record attached to or logically associated with the 17 electronic copy and readily available for review, expressly provides 18 that a particular jurisdiction is the chattel paper's jurisdiction for 19 purposes of this part, this article, or this code, that jurisdiction is 20 the chattel paper's jurisdiction. 21 (2) If paragraph (1) does not apply and the rules of the system in 22 which the authoritative electronic copy is recorded are readily avail- 23 able for review and expressly provide that a particular jurisdiction is 24 the chattel paper's jurisdiction for purposes of this part, this arti- 25 cle, or this code, that jurisdiction is the chattel paper's jurisdic- 26 tion. 27 (3) If paragraphs (1) and (2) do not apply and the authoritative elec- 28 tronic copy, or a record attached to or logically associated with the 29 electronic copy and readily available for review, expressly provides 30 that the chattel paper is governed by the law of a particular jurisdic- 31 tion, that jurisdiction is the chattel paper's jurisdiction. 32 (4) If paragraphs (1), (2) and (3) do not apply and the rules of the 33 system in which the authoritative electronic copy is recorded are readi- 34 ly available for review and expressly provide that the chattel paper or 35 the system is governed by the law of a particular jurisdiction, that 36 jurisdiction is the chattel paper's jurisdiction. 37 (5) If paragraphs (1) through (4) do not apply, the chattel paper's 38 jurisdiction is the jurisdiction in which the debtor is located. 39 (c) Chattel paper evidenced by authoritative tangible copy. If an 40 authoritative tangible copy of a record evidences chattel paper and the 41 chattel paper is not evidenced by an authoritative electronic copy, 42 while the authoritative tangible copy of the record evidencing chattel 43 paper is located in a jurisdiction, the local law of that jurisdiction 44 governs: 45 (1) perfection of a security interest in the chattel paper by 46 possession under Section 9--314A; and 47 (2) the effect of perfection or nonperfection and the priority of a 48 security interest in the chattel paper. 49 (d) When perfection governed by law of jurisdiction where debtor 50 located. The local law of the jurisdiction in which the debtor is 51 located governs perfection of a security interest in chattel paper by 52 filing. 53 Section 9-306B. Law Governing Perfection and Priority of Security Inter- 54 ests in Controllable Accounts, Controllable Electron- 55 ic Records, and Controllable Payment Intangibles.A. 3307 26 1 (a) Governing law: general rules. Except as provided in subsection 2 (b), the local law of the controllable electronic record's jurisdiction 3 specified in Section 12--107(c) and (d) governs perfection, the effect 4 of perfection or nonperfection, and the priority of a security interest 5 in a controllable electronic record and a security interest in a 6 controllable account or controllable payment intangible evidenced by the 7 controllable electronic record. 8 (b) When perfection governed by law of jurisdiction where debtor 9 located. The local law of the jurisdiction in which the debtor is 10 located governs: 11 (1) perfection of a security interest in a controllable account, 12 controllable electronic record, or controllable payment intangible by 13 filing; and 14 (2) automatic perfection of a security interest in a controllable 15 payment intangible created by a sale of the controllable payment intan- 16 gible. 17 § 57. Paragraph 8 of subsection (b) of section 9--310 of the uniform 18 commercial code, as amended by chapter 505 of the laws of 2014, is 19 amended and a new paragraph 8-a is added to read as follows: 20 (8) in controllable accounts, controllable electronic records, 21 controllable payment intangibles, deposit accounts, [elec-22tronic chattel paper,] electronic documents, investment prop- 23 erty, or letter-of-credit rights which is perfected by 24 control under Section 9--314; 25 (8-a) in chattel paper which is perfected by possession and 26 control under Section 9--314A; 27 § 58. The section heading and subsections (a), (b) and (e) of section 28 9--312 of the uniform commercial code, the section heading and 29 subsections (a) and (b) as added by chapter 84 of the laws of 2001, and 30 subsection (e) as amended by chapter 505 of the laws of 2014, are 31 amended to read as follows: 32 Perfection of Security Interests in Chattel Paper, Controllable 33 Accounts, Controllable Electronic Records, Controlla- 34 ble Payment Intangibles, Deposit Accounts, Documents, 35 Goods Covered by Documents, Instruments, Investment 36 Property, Letter-of-credit Rights, and Money; 37 Perfection by Permissive Filing; Temporary Perfection 38 Without Filing or Transfer of Possession. 39 (a) Perfection by filing permitted. A security interest in chattel 40 paper, [negotiable documents,] controllable accounts, controllable elec- 41 tronic records, controllable payment intangibles, instruments, [or] 42 investment property, or negotiable documents may be perfected by filing. 43 (b) Control or possession of certain collateral. Except as otherwise 44 provided in Section 9--315(c) and (d) for proceeds: 45 (1) a security interest in a deposit account may be perfected 46 only by control under Section 9--314; 47 (2) and except as otherwise provided in Section 9--308(d), a 48 security interest in a letter-of-credit right may be 49 perfected only by control under Section 9--314; [and] 50 (3) a security interest in tangible money may be perfected only 51 by the secured party's taking possession under Section 52 9--313; and 53 (4) a security interest in electronic money may be 54 perfected only by control under Section 9--314. 55 (e) Temporary perfection: new value. A security interest in certif- 56 icated securities, negotiable documents, or instruments is perfectedA. 3307 27 1 without filing or the taking of possession or control for a period of 20 2 days from the time it attaches to the extent that it arises for new 3 value given under [an authenticated] a signed security agreement. 4 § 59. Subsections (a), (c) and (d) of section 9--313 of the uniform 5 commercial code, subsection (a) as amended by chapter 505 of the laws of 6 2014, and subsections (c) and (d) as added by chapter 84 of the laws of 7 2001, are amended to read as follows: 8 (a) Perfection by possession or delivery. Except as otherwise provided 9 in subsection (b), a secured party may perfect a security interest in 10 [tangible] goods, instruments, negotiable tangible documents, [goods,11instruments, money,] or tangible [chattel paper] money by taking 12 possession of the collateral. A secured party may perfect a security 13 interest in certificated securities by taking delivery of the certif- 14 icated securities under Section 8--301. 15 (c) Collateral in possession of person other than debtor. With respect 16 to collateral other than certificated securities and goods covered by a 17 document, a secured party takes possession of collateral in the 18 possession of a person other than the debtor, the secured party, or a 19 lessee of the collateral from the debtor in the ordinary course of the 20 debtor's business, when: 21 (1) the person in possession [authenticates] signs a record 22 acknowledging that it holds possession of the collateral for 23 the secured party's benefit; or 24 (2) the person takes possession of the collateral after having 25 [authenticated] signed a record acknowledging that it will 26 hold possession of the collateral for the secured party's 27 benefit. 28 (d) Time of perfection by possession; continuation of perfection. If 29 perfection of a security interest depends upon possession of the collat- 30 eral by a secured party, perfection occurs [no] not earlier than the 31 time the secured party takes possession and continues only while the 32 secured party retains possession. 33 § 60. Section 9--314 of the uniform commercial code, as added by chap- 34 ter 84 of the laws of 2001, subsections (a) and (b) as amended by chap- 35 ter 505 of the laws of 2014, is amended to read as follows: 36 Section 9--314. Perfection by Control. 37 (a) Perfection by control. A security interest in controllable 38 accounts, controllable electronic records, controllable payment intangi- 39 bles, deposit accounts, electronic documents, electronic money, invest- 40 ment property, [deposit accounts,] or letter-of-credit rights, [elec-41tronic chattel paper, or electronic documents] may be perfected by 42 control of the collateral under Section 7--106, 9--104, [9--105] 43 9--105A, 9--106, [or] 9--107 or 9--107A. 44 (b) Specified collateral: time of perfection by control; continuation 45 of perfection. A security interest in controllable accounts, controlla- 46 ble electronic records, controllable payment intangibles, deposit 47 accounts, electronic [chattel paper] documents, electronic money, or 48 letter-of-credit rights[, or electronic documents] is perfected by 49 control under Section 7--106, 9--104, [9--105] 9--105A, [or] 9--107, or 50 9--107A not earlier than the time when the secured party obtains control 51 and remains perfected by control only while the secured party retains 52 control. 53 (c) Investment property: time of perfection by control; continuation 54 of perfection. A security interest in investment property is perfected 55 by control under Section 9--106 [from] not earlier than the time the 56 secured party obtains control and remains perfected by control until:A. 3307 28 1 (1) the secured party does not have control; and 2 (2) one of the following occurs: 3 (A) if the collateral is a certificated security, the debtor 4 has or acquires possession of the security certificate; 5 (B) if the collateral is an uncertificated security, the 6 issuer has registered or registers the debtor as the 7 registered owner; or 8 (C) if the collateral is a security entitlement, the debtor 9 is or becomes the entitlement holder. 10 (d) Cooperative interests. Subsections (a) through (c) do not apply to 11 cooperative interests. 12 § 61. The uniform commercial code is amended by adding a new section 13 9-314A to read as follows: 14 Section 9-314A. Perfection by Possession and Control of Chattel Paper. 15 (a) Perfection by possession and control. A secured party may perfect 16 a security interest in chattel paper by taking possession of each 17 authoritative tangible copy of the record evidencing the chattel paper 18 and obtaining control of each authoritative electronic copy of the elec- 19 tronic record evidencing the chattel paper. 20 (b) Time of perfection; continuation of perfection. A security inter- 21 est is perfected under subsection (a) not earlier than the time the 22 secured party takes possession and obtains control and remains perfected 23 under subsection (a) only while the secured party retains possession and 24 control. 25 (c) Application of Section 9--313 to perfection by possession of chat- 26 tel paper. Section 9--313(c) and (f) through (i) applies to perfection 27 by possession of an authoritative tangible copy of a record evidencing 28 chattel paper. 29 § 62. Subsections (a) and (f) of section 9--316 of the uniform commer- 30 cial code, as added by chapter 84 of the laws of 2001, are amended to 31 read as follows: 32 (a) General rule: effect on perfection of change in governing law. A 33 security interest perfected pursuant to the law of the jurisdiction 34 designated in Section 9--301(a) [or], 9--305(c), 9-306A(d), or 9-306B(b) 35 remains perfected until the earliest of: 36 (1) the time perfection would have ceased under the law of that 37 jurisdiction; 38 (2) the expiration of four months after a change of the debtor's 39 location to another jurisdiction; or 40 (3) the expiration of one year after a transfer of collateral to 41 a person that thereby becomes a debtor and is located in 42 another jurisdiction. 43 (f) Change in jurisdiction of chattel paper, controllable electronic 44 record, bank, issuer, nominated person, securities intermediary, or 45 commodity intermediary. A security interest in chattel paper, controlla- 46 ble accounts, controllable electronic records, controllable payment 47 intangibles, deposit accounts, letter-of-credit rights, or investment 48 property which is perfected under the law of the chattel paper's juris- 49 diction, the controllable electronic record's jurisdiction, the bank's 50 jurisdiction, the issuer's jurisdiction, a nominated person's jurisdic- 51 tion, the securities intermediary's jurisdiction, or the commodity 52 intermediary's jurisdiction, as applicable, remains perfected until the 53 earlier of: 54 (1) the time the security interest would have become unperfected 55 under the law of that jurisdiction; orA. 3307 29 1 (2) the expiration of four months after a change of the applica- 2 ble jurisdiction to another jurisdiction. 3 § 63. Subsections (b) and (d) of section 9--317 of the uniform commer- 4 cial code, as amended by chapter 505 of the laws of 2014, are amended 5 and four new subsections (f), (g), (h) and (i) are added to read as 6 follows: 7 (b) Buyers that receive delivery. Except as otherwise provided in 8 subsection (e), a buyer, other than a secured party, of [tangible chat-9tel paper] goods, instruments, tangible documents, [goods, instruments,] 10 or a certificated security takes free of a security interest or agricul- 11 tural lien if the buyer gives value and receives delivery of the collat- 12 eral without knowledge of the security interest or agricultural lien and 13 before it is perfected. 14 (d) Licensees and buyers of certain collateral. [A] Subject to 15 subsections (f) through (i), a licensee of a general intangible or a 16 buyer, other than a secured party, of [accounts,] collateral other than 17 electronic [chattel paper] money, [electronic documents, general intan-18gibles, or investment property other than] goods, instruments, intangi- 19 ble documents or a certificated security takes free of a security inter- 20 est if the licensee or buyer gives value without knowledge of the 21 security interest and before it is perfected. 22 (f) Buyers of chattel paper. A buyer, other than a secured party, of 23 chattel paper takes free of a security interest if, without knowledge of 24 the security interest and before it is perfected, the buyer gives value 25 and: 26 (1) receives delivery of each authoritative tangible copy of the 27 record evidencing the chattel paper; and 28 (2) if each authoritative electronic copy of the record evidencing the 29 chattel paper can be subjected to control under Section 9--105, obtains 30 control of each authoritative electronic copy. 31 (g) Buyers of electronic documents. A buyer of an electronic document 32 takes free of a security interest if, without knowledge of the security 33 interest and before it is perfected, the buyer gives value and, if each 34 authoritative electronic copy of the document can be subjected to 35 control under Section 7--106, obtains control of each authoritative 36 electronic copy. 37 (h) Buyers of controllable electronic records. A buyer of a control- 38 lable electronic record takes free of a security interest if, without 39 knowledge of the security interest and before it is perfected, the buyer 40 gives value and obtains control of the controllable electronic record. 41 (i) Buyers of controllable accounts and controllable payment intangi- 42 bles. A buyer, other than a secured party, of a controllable account or 43 a controllable payment intangible takes free of a security interest if, 44 without knowledge of the security interest and before it is perfected, 45 the buyer gives value and obtains control of the controllable account or 46 controllable payment intangible. 47 § 64. Subsections (d) and (f) of section 9--323 of the uniform commer- 48 cial code, as added by chapter 84 of the laws of 2001, are amended to 49 read as follows: 50 (d) Buyer of goods. Except as otherwise provided in subsection (e), a 51 buyer of goods [other than a buyer in ordinary course of business] takes 52 free of a security interest to the extent that it secures advances made 53 after the earlier of: 54 (1) the time the secured party acquires knowledge of the buyer's 55 purchase; or 56 (2) 45 days after the purchase.A. 3307 30 1 (f) Lessee of goods. Except as otherwise provided in subsection (g), a 2 lessee of goods[, other than a lessee in ordinary course of business,] 3 takes the leasehold interest free of a security interest to the extent 4 that it secures advances made after the earlier of: 5 (1) the time the secured party acquires knowledge of the lease; 6 or 7 (2) 45 days after the lease contract becomes enforceable. 8 § 65. Subsections (b) and (d) of section 9--324 of the uniform commer- 9 cial code, as added by chapter 84 of the laws of 2001, are amended to 10 read as follows: 11 (b) Inventory purchase-money priority. Subject to subsection (c) and 12 except as otherwise provided in subsection (g), a perfected purchase-mo- 13 ney security interest in inventory has priority over a conflicting secu- 14 rity interest in the same inventory, has priority over a conflicting 15 security interest in chattel paper or an instrument constituting 16 proceeds of the inventory and in proceeds of the chattel paper, if so 17 provided in Section 9--330, and, except as otherwise provided in Section 18 9--327, also has priority in identifiable cash proceeds of the inventory 19 to the extent the identifiable cash proceeds are received on or before 20 the delivery of the inventory to a buyer, if: 21 (1) the purchase-money security interest is perfected when the 22 debtor receives possession of the inventory; 23 (2) the purchase-money secured party sends [an authenticated] a 24 signed notification to the holder of the conflicting security 25 interest; 26 (3) the holder of the conflicting security interest receives the 27 notification within five years before the debtor receives 28 possession of the inventory; and 29 (4) the notification states that the person sending the notifica- 30 tion has or expects to acquire a purchase-money security 31 interest in inventory of the debtor and describes the inven- 32 tory. 33 (d) Livestock purchase-money priority. Subject to subsection (e) and 34 except as otherwise provided in subsection (g), a perfected purchase-mo- 35 ney security interest in livestock that are farm products has priority 36 over a conflicting security interest in the same livestock, and, except 37 as otherwise provided in Section 9--327, a perfected security interest 38 in their identifiable proceeds and identifiable products in their unman- 39 ufactured states also has priority, if: 40 (1) the purchase-money security interest is perfected when the 41 debtor receives possession of the livestock; 42 (2) the purchase-money secured party sends [an authenticated] a 43 signed notification to the holder of the conflicting security 44 interest; 45 (3) the holder of the conflicting security interest receives the 46 notification within six months before the debtor receives 47 possession of the livestock; and 48 (4) the notification states that the person sending the notifica- 49 tion has or expects to acquire a purchase-money security 50 interest in livestock of the debtor and describes the live- 51 stock. 52 § 66. The uniform commercial code is amended by adding a new section 53 9-326A to read as follows: 54 Section 9-326A. Priority of Security Interest in Controllable Account, 55 Controllable Electronic Record, and Controllable 56 Payment Intangible.A. 3307 31 1 A security interest in a controllable account, controllable electronic 2 record, or controllable payment intangible held by a secured party 3 having control of the account, electronic record, or payment intangible 4 has priority over a conflicting security interest held by a secured 5 party that does not have control. 6 § 67. Subsections (a), (b) and (f) of section 9--330 of the uniform 7 commercial code, as added by chapter 84 of the laws of 2001, are amended 8 to read as follows: 9 (a) Purchaser's priority: security interest claimed merely as 10 proceeds. A purchaser of chattel paper has priority over a security 11 interest in the chattel paper which is claimed merely as proceeds of 12 inventory subject to a security interest if: 13 (1) in good faith and in the ordinary course of the purchaser's 14 business, the purchaser gives new value [and], takes 15 possession of [the chattel paper or obtains control of] each 16 authoritative tangible copy of the record evidencing the 17 chattel paper, and obtains control under Section 9--105 of 18 each authoritative electronic copy of the record evidencing 19 the chattel paper; and 20 (2) the authoritative copies of the record evidencing the chattel 21 paper [does] do not indicate that [it] the chattel paper has 22 been assigned to an identified assignee other than the 23 purchaser. 24 (b) Purchaser's priority: other security interests. A purchaser of 25 chattel paper has priority over a security interest in the chattel paper 26 which is claimed other than merely as proceeds of inventory subject to a 27 security interest if the purchaser gives new value [and], takes 28 possession of each authoritative tangible copy of the record evidencing 29 the chattel paper [or], and obtains control [of the chattel paper] under 30 Section 9--105 of each authoritative electronic copy of the record 31 evidencing the chattel paper in good faith, in the ordinary course of 32 the purchaser's business, and without knowledge that the purchase 33 violates the rights of the secured party. 34 (f) Indication of assignment gives knowledge. For purposes of 35 subsections (b) and (d), if the authoritative copies of the record 36 evidencing chattel paper or an instrument [indicates] indicate that [it] 37 the chattel paper or instrument has been assigned to an identified 38 secured party other than the purchaser, a purchaser of the chattel paper 39 or instrument has knowledge that the purchase violates the rights of the 40 secured party. 41 § 68. Section 9--331 of the uniform commercial code, as added by chap- 42 ter 84 of the laws of 2001, is amended to read as follows: 43 Section 9--331. Priority of Rights of Purchasers of Controllable 44 Accounts, Controllable Electronic Records, Controlla- 45 ble Payment Intangibles, Documents, Instruments, 46 [Documents,] and Securities under Other Articles; 47 Priority of Interests in Financial Assets and Security 48 Entitlements and Protection Against Assertion of Claim 49 under [Article] Articles 8 and 12. 50 (a) Rights under Articles 3, 7, [and] 8, and 12 not limited. This 51 article does not limit the rights of a holder in due course of a negoti- 52 able instrument, a holder to which a negotiable document of title has 53 been duly negotiated, [or a] protected purchaser of a security, or a 54 qualifying purchaser of a controllable account, controllable electronic 55 record, or controllable payment intangible. These holders or purchasersA. 3307 32 1 take priority over an earlier security interest, even if perfected, to 2 the extent provided in Articles 3, 7, [and] 8, and 12. 3 (b) Protection under [Article] Articles 8 and 12. This article does 4 not limit the rights of or impose liability on a person to the extent 5 that the person is protected against the assertion of a claim under 6 Article 8 or 12. 7 (c) Filing not notice. Filing under this article does not constitute 8 notice of a claim or defense to the holders, or purchasers, or persons 9 described in subsections (a) and (b). 10 (d) Section not applicable to cooperative interests. Subsections (a), 11 (b), and (c) do not apply to cooperative interests. 12 § 69. Section 9--332 of the uniform commercial code, as added by 13 chapter 84 of the laws of 2001, is amended to read as follows: 14 Section 9--332. Transfer of Money; Transfer of Funds from Deposit 15 Account. 16 (a) Transferee of tangible money. A transferee of tangible money 17 takes the money free of a security interest [unless] if the transferee 18 [acts] receives possession of the money without acting in collusion with 19 the debtor in violating the rights of the secured party. 20 (b) Transferee of funds from deposit account. A transferee of funds 21 from a deposit account takes the funds free of a security interest in 22 the deposit account [unless] if the transferee [acts] receives the funds 23 without acting in collusion with the debtor in violating the rights of 24 the secured party. 25 (c) Transferee of electronic money. A transferee of electronic money 26 takes the money free of a security interest if the transferee obtains 27 control of the money without acting in collusion with the debtor in 28 violating the rights of the secured party. 29 § 70. Subsection (f) of section 9--334 of the uniform commercial code, 30 as added by chapter 84 of the laws of 2001, is amended to read as 31 follows: 32 (f) Priority based on consent, disclaimer, or right to remove. A secu- 33 rity interest in fixtures, whether or not perfected, has priority over a 34 conflicting interest of an encumbrancer or owner of the real property 35 if: 36 (1) the encumbrancer or owner has, in [an authenticated] a signed 37 record, consented to the security interest or disclaimed an 38 interest in the goods as fixtures; or 39 (2) the debtor has a right to remove the goods as against the 40 encumbrancer or owner. 41 § 71. Section 9--341 of the uniform commercial code, as added by chap- 42 ter 84 of the laws of 2001, is amended to read as follows: 43 Section 9--341. Bank's Rights and Duties with Respect to Deposit 44 Account. 45 Except as otherwise provided in Section 9--340 (c), and unless the 46 bank otherwise agrees in [an authenticated] a signed record, a bank's 47 rights and duties with respect to a deposit account maintained with the 48 bank are not terminated, suspended, or modified by: 49 (a) the creation, attachment, or perfection of a security inter- 50 est in the deposit account; 51 (b) the bank's knowledge of the security interest; or 52 (c) the bank's receipt of instructions from the secured party. 53 § 72. Paragraph 2 of subsection (a) of section 9--404 of the uniform 54 commercial code, as added by chapter 84 of the laws of 2001, is amended 55 to read as follows:A. 3307 33 1 (2) any other defense or claim of the account debtor against the 2 assignor which accrues before the account debtor receives a 3 notification of the assignment [authenticated] signed by the 4 assignor or the assignee. 5 § 73. Section 9--406 of the uniform commercial code, as added by chap- 6 ter 84 of the laws of 2001, is amended to read as follows: 7 Section 9--406. Discharge of Account Debtor; Notification of Assignment; 8 Identification and Proof of Assignment; Restrictions 9 on Assignment of Accounts, Chattel Paper, Payment 10 Intangibles, and Promissory Notes Ineffective. 11 (a) Discharge of account debtor; effect of notification. Subject to 12 subsections (b) through [(h)] (i), an account debtor on an account, 13 chattel paper, or a payment intangible may discharge its obligation by 14 paying the assignor until, but not after, the account debtor receives a 15 notification, [authenticated] signed by the assignor or the assignee, 16 that the amount due or to become due has been assigned and that payment 17 is to be made to the assignee. After receipt of the notification, the 18 account debtor may discharge its obligation by paying the assignee and 19 may not discharge the obligation by paying the assignor. 20 (b) When notification ineffective. Subject to [subsection] subsections 21 (g) and (i), notification is ineffective under subsection (a): 22 (1) if it does not reasonably identify the rights assigned; 23 (2) to the extent that an agreement between an account debtor and 24 a seller of a payment intangible limits the account debtor's 25 duty to pay a person other than the seller and the limitation 26 is effective under law other than this article; or 27 (3) at the option of an account debtor, if the notification noti- 28 fies the account debtor to make less than the full amount of 29 any installment or other periodic payment to the assignee, 30 even if: 31 (A) only a portion of the account, chattel paper, or payment 32 intangible has been assigned to that assignee; 33 (B) a portion has been assigned to another assignee; or 34 (C) the account debtor knows that the assignment to that 35 assignee is limited. 36 (c) Proof of assignment. Subject to [subsection] subsections (g) and 37 (i), if requested by the account debtor, an assignee shall seasonably 38 furnish reasonable proof that the assignment has been made. Unless the 39 assignee complies, the account debtor may discharge its obligation by 40 paying the assignor, even if the account debtor has received a notifica- 41 tion under subsection (a). 42 (d) Term restricting assignment generally ineffective. For purposes of 43 this subsection, "promissory note" includes a negotiable instrument that 44 evidences chattel paper. Except as otherwise provided in subsection (e) 45 and Sections 2-A-303 and 9--407, and subject to subsection (g), a term 46 in an agreement between an account debtor and an assignor or in a prom- 47 issory note is ineffective to the extent that it: 48 (1) prohibits, restricts, or requires the consent of the account 49 debtor or person obligated on the promissory note to the 50 assignment or transfer of, or the creation, attachment, 51 perfection, or enforcement of a security interest in, the 52 account, chattel paper, payment intangible, or promissory 53 note; or 54 (2) provides that the assignment or transfer or the creation, 55 attachment, perfection, or enforcement of the security inter- 56 est may give rise to a default, breach, right of recoupment,A. 3307 34 1 claim, defense, termination, right of termination, or remedy 2 under the account, chattel paper, payment intangible, or 3 promissory note. 4 (e) Inapplicability of subsection (d) to certain sales. Subsection (d) 5 does not apply to the sale of a payment intangible or promissory note. 6 (f) Subsection (b)(3) not waivable. Subject to [subsection] 7 subsections (g) and (i), an account debtor may not waive or vary its 8 option under subsection (b)(3). 9 (g) Rule for individual under other law. This section is subject to a 10 rule of law, statute, rule or regulation other than this article which 11 establishes a different rule for an account debtor who is an individual 12 and who incurred the obligation primarily for personal, family, or 13 household purposes. 14 (h) Inapplicability. This section does not apply to: 15 (1) an assignment of a health care insurance receivable to the 16 extent such assignment conflicts with other law or the 17 parties have otherwise agreed in writing that such receivable 18 is non-assignable, 19 (2) a claim or right to receive compensation for injuries or 20 sickness as described in 26 U.S.C. § 104(a)(1) and (2), as 21 amended from time to time, or 22 (3) a claim or right to receive benefits under a special needs 23 trust as described in 42 U.S.C. § 1396p (d)(4), as amended 24 from time to time. 25 (i) Inapplicability of certain subsections. Subsections (a), 26 (b), (c) and (f) do not apply to a controllable account or 27 controllable payment [intandible] intangible. 28 § 74. Section 9--408 of the uniform commercial code is amended by 29 adding a new subsection (e) to read as follows: 30 (e) "Promissory note". In this section, "promissory note" includes a 31 negotiable instrument that evidences chattel paper. 32 § 75. Paragraph 1 of subsection (a) and the opening paragraph of 33 subsection (b) of section 9--509 of the uniform commercial code, as 34 added by chapter 84 of the laws of 2001, are amended to read as follows: 35 (1) the debtor authorizes the filing in [an authenticated] a 36 signed record or pursuant to subsection (b) or (c); or 37 By [authenticating] signing or becoming bound as debtor by a security 38 agreement, a debtor or new debtor authorizes the filing of an initial 39 financing statement, and an amendment, covering: 40 § 76. Paragraph 2 of subsection (b) and the opening paragraph of 41 subsection (c) of section 9--513 of the uniform commercial code, as 42 added by chapter 84 of the laws of 2001, are amended to read as follows: 43 (2) if earlier, within 20 days after the secured party receives 44 [an authenticated] a signed demand from a debtor. 45 In cases not governed by subsection (a), within 20 days after a 46 secured party receives [an authenticated] a signed demand from a debtor, 47 the secured party shall cause the secured party of record for a financ- 48 ing statement to send to the debtor a termination statement for the 49 financing statement or file the termination statement in the filing 50 office if: 51 § 77. Subsection (b) of section 9--601 of the uniform commercial code, 52 as amended by chapter 505 of the laws of 2014, is amended to read as 53 follows: 54 (b) Rights and duties of secured party in possession or control. A 55 secured party in possession of collateral or control of collateral underA. 3307 35 1 Section 7--106, 9--104, 9--105, 9--105A, 9--106, [or] 9--107, or 9--107A 2 has the rights and duties provided in Section 9--207. 3 § 78. Section 9--605 of the uniform commercial code, as added by chap- 4 ter 84 of the laws of 2001, is amended to read as follows: 5 Section 9--605. Unknown Debtor or Secondary Obligor. 6 [A] (a) In general: No duty owed by secured party. Except as 7 provided in subsection (b), a secured party does not owe a duty based on 8 its status as secured party: 9 [(a)] (1) to a person that is a debtor or obligor, unless the secured 10 party knows: 11 [(1)] (A) that the person is a debtor or obligor; 12 [(2)] (B) the identity of the person; and 13 [(3)] (C) how to communicate with the person; or 14 [(b)] (2) to a secured party or lienholder that has filed a financing 15 statement against a person, unless the secured party knows: 16 [(1)] (A) that the person is a debtor; and 17 [(2)] (B) the identity of the person. 18 (b) Exception: Secured party owes duty to debtor or obligor. A 19 secured party owes a duty based on its status as a secured party to a 20 person if, at the time the secured party obtains control of collateral 21 that is a controllable account, controllable electronic record, or 22 controllable payment intangible or at the time the security interest 23 attaches to the collateral, whichever is later: 24 (1) the person is a debtor or obligor; and 25 (2) the secured party knows that the information in subsection 26 (a)(1)(A), (B), or (C) relating to the person is not provided by the 27 collateral, a record attached to or logically associated with the colla- 28 teral, or the system in which the collateral is recorded. 29 § 79. Subparagraph (C) of paragraph 1 of subsection (a) of section 30 9--608 of the uniform commercial code, as added by chapter 84 of the 31 laws of 2001, is amended to read as follows: 32 (C) the satisfaction of obligations secured by any subordi- 33 nate security interest in or other lien on the collateral 34 subject to the security interest or agricultural lien 35 under which the collection or enforcement is made if the 36 secured party receives [an authenticated] a signed demand 37 for proceeds before distribution of the proceeds is 38 completed. 39 § 80. Subsections (a), (b), (c) and (e) of section 9--611 of the 40 uniform commercial code, as added by chapter 84 of the laws of 2001, are 41 amended to read as follows: 42 (a) "Notification date." In this section, "notification date" means 43 the earlier of the date on which: 44 (1) a secured party sends to the debtor and any secondary obligor 45 [an authenticated] a signed notification of disposition; or 46 (2) the debtor and any secondary obligor waive the right to 47 notification. 48 (b) Notification of disposition required. Except as otherwise provided 49 in subsection (d), a secured party that disposes of collateral under 50 Section 9--610 shall send to the persons specified in subsection (c) a 51 reasonable [authenticated] signed notification of disposition. 52 (c) Persons to be notified. To comply with subsection (b), the secured 53 party shall send [an authenticated] a signed notification of disposition 54 to: 55 (1) the debtor; 56 (2) any secondary obligor; andA. 3307 36 1 (3) if the collateral is other than consumer goods: 2 (A) any other person from which the secured party has 3 received, before the notification date, [an authenticat-4ed] a signed notification of a claim of an interest in 5 the collateral; 6 (B) any other secured party or lienholder that, 10 days 7 before the notification date, held a security interest in 8 or other lien on the collateral perfected by the filing 9 of a financing statement that: 10 (i) identified the collateral; 11 (ii) was indexed under the debtor's name as of that date; 12 and 13 (iii) was filed in the office in which to file a financ- 14 ing statement against the debtor covering the 15 collateral as of that date; and 16 (C) any other secured party that, 10 days before the notifi- 17 cation date, held a security interest in the collateral 18 perfected by compliance with a statute, regulation, or 19 treaty described in Section 9--311(a). 20 (e) Compliance with subsection (c) (3) (B). A secured party complies 21 with the requirement for notification prescribed by subsection (c) 22 (3) (B) if: 23 (1) not later than twenty days or earlier than thirty days before 24 the notification date, the secured party requests, in a 25 commercially reasonable manner, information concerning 26 financing statements indexed under the debtor's name in the 27 office indicated in subsection (c) (3) (B); and 28 (2) before the notification date, the secured party: 29 (A) did not receive a response to the request for informa- 30 tion; or 31 (B) received a response to the request for information and 32 sent [an authenticated] a signed notification of disposi- 33 tion to each secured party or other lienholder named in 34 that response whose financing statement covered the 35 collateral. 36 § 81. Section 9--613 of the uniform commercial code, as added by chap- 37 ter 84 of the laws of 2001, is amended to read as follows: 38 Section 9--613. Contents and Form of Notification Before Disposition of 39 Collateral: General. 40 (a) Contents and form of notification. Except in a consumer-goods 41 transaction, the following rules apply: 42 [(a)] (1) The contents of a notification of disposition are suffi- 43 cient if the notification: 44 [(1)] (A) describes the debtor and the secured party; 45 [(2)] (B) describes the collateral that is the subject of the 46 intended disposition; 47 [(3)] (C) states the method of intended disposition; 48 [(4)] (D) states that the debtor is entitled to an accounting of 49 the unpaid indebtedness and states the charge, if any, for an 50 accounting; and 51 [(5)] (E) states the time and place of a public disposition or 52 the time after which any other disposition is to be made. 53 [(b)] (2) Whether the contents of a notification that lacks any of 54 the information specified in subsection (a) are nevertheless sufficient 55 is a question of fact.A. 3307 37 1 [(c)] (3) The contents of a notification providing substantially the 2 information specified in subsection (a) are sufficient, even if the 3 notification includes: 4 [(1)] (A) information not specified by subsection (a); or 5 [(2)] (B) minor errors that are not seriously misleading. 6 [(d)] (4) A particular phrasing of the notification is not required. 7 [(e)] (5) The following form of notification and the form appearing 8 in Section [9--614(c)] 9--614(a)(3), when completed in accordance with 9 the instructions in subsection (b) and Section 9--614(b), each provides 10 sufficient information: 11 NOTIFICATION OF DISPOSITION OF COLLATERAL 12 To: (Name of debtor, obligor, or other person to which the notifica- 13 tion is sent) 14 From: (Name, address, and telephone number of secured party) 15 [Name of Debtor(s): (Include only if debtor(s) are not an addressee)16(For a public disposition:)17We will sell (or lease or license, as applicable) the (describe colla-18teral) (to the highest qualified bidder) in public as follows:19Day and Date: ____________________20Time: ____________________21Place: ____________________22(For a private disposition:)23We will sell (or lease or license, as applicable) the (describe colla-24teral) privately sometime after (day and date).25You are entitled to an accounting of the unpaid indebtedness secured26by the property that we intend to sell (or lease or license, as applica-27ble) (for a charge of $ ). You may request an accounting by calling us28at (telephone number).] 29 {1} Name of any debtor that is not an addressee: (Name of each 30 debtor) 31 {2} We will sell (describe collateral) (to the highest qualified 32 bidder) at public sale. A sale could include a lease or license. The 33 sale will be held as follows: 34 (Date) 35 (Time) 36 (Place) 37 {3} We will sell (describe collateral) at private sale sometime after 38 (date). A sale could include a lease or license. 39 {4} You are entitled to an accounting of the unpaid indebtedness 40 secured by the property that we intend to sell or, as applicable, lease 41 or license. 42 {5} If you request an accounting you must pay a charge of $ (amount). 43 {6} You may request an accounting by calling us at (telephone number). 44 (End of Form) 45 (b) Instructions for form of notification. The following instructions 46 apply to the form of notification in subsection (a)(5):A. 3307 38 1 (1) The instructions in this subsection refer to the numbers in braces 2 before items in the form of notification in subsection (a)(5). Do not 3 include the numbers or braces in the notification. The numbers and 4 braces are used only for the purpose of these instructions. 5 (2) Include and complete subsection (a)(5) item {1} only if there is a 6 debtor that is not an addressee of the notification and list the name or 7 names. 8 (3) Include and complete either item {2}, if the notification relates 9 to a public disposition of the collateral, or item {3}, if the notifica- 10 tion relates to a private disposition of the collateral. If item {2} is 11 included, include the words "to the highest qualified bidder" only if 12 applicable. 13 (4) Include and complete items {4} and {6}. 14 (5) Include and complete item {5} only if the sender will charge the 15 recipient for an accounting. 16 § 82. Section 9--614 of the uniform commercial code, as added by chap- 17 ter 84 of the laws of 2001, is amended to read as follows: 18 Section 9--614. Contents and Form of Notification Before Disposition of 19 Collateral: Consumer-goods Transaction. 20 (a) Contents and form of notification. In a consumer-goods trans- 21 action, the following rules apply: 22 [(a)](1) A notification of disposition must provide the following 23 information: 24 [(1)](A) the information specified in Section 9--613(a); 25 [(2)](B) a description of any liability for a deficiency of the 26 person to which the notification is sent; 27 [(3)](C) a telephone number from which the amount that must be 28 paid to the secured party to redeem the collateral under 29 Section 9--623 is available; and 30 [(4)](D) a telephone number or mailing address from which addi- 31 tional information concerning the disposition and the obli- 32 gation secured is available. 33 [(b)](2) A particular phrasing of the notification is not required. 34 [(c)](3) The following form of notification, when completed in accord- 35 ance with the instructions in subsection (b), provides sufficient infor- 36 mation: 37 (Name and address of secured party) 38 (Date) 39 NOTICE OF OUR PLAN TO SELL PROPERTY 40 (Name and address of any obligor who is also a debtor) 41 Subject: (Identification of Transaction) 42 We have your (describe collateral), because you broke promises in our 43 agreement. 44 [(For a public disposition:)] 45 {1} We will sell (describe collateral) at public sale. A sale could 46 include a lease or license. The sale will be held as follows: 47 Date: ____________________ 48 Time: ____________________ 49 Place: ____________________ 50 You may attend the sale and bring bidders if you want. 51 [(For a private disposition:)] 52 {2} We will sell (describe collateral) at private sale sometime after 53 (date). A sale could include a lease or license. 54 {3} The money that we get from the sale [(], after paying our 55 costs[)], will reduce the amount you owe. If we get less money than you 56 owe, you (will or will not, as applicable) still owe us the difference.A. 3307 39 1 If we get more money than you owe, you will get the extra money, unless 2 we must pay it to someone else. 3 {4} You can get the property back at any time before we sell it by 4 paying us the full amount you owe [(], not just the past due 5 payments[)], including our expenses. To learn the exact amount you must 6 pay, call us at (telephone number). 7 {5} If you want us to explain to you in writing or in (description of 8 electronic record) (description of electronic record) how we have 9 figured the amount that you owe us, [you may] {6} call us at (telephone 10 number) [(]or write us at (secured party's address)[)] or contact us by 11 (description of electronic communication method) {7} and request a writ- 12 ten explanation or an explanation in (description of electronic record) 13 an explanation in (description of electronic record). 14 [(]{8} We will charge you $ (amount) for the explanation if we sent 15 you another written explanation of the amount you owe us within the last 16 six months.[)] 17 {9} If you need more information about the sale call us at (telephone 18 number) [(]or write us at (secured party's address)[)] or contact us by 19 (description of electronic communication method). 20 {10} We are sending this notice to the following other people who have 21 an interest in (describe collateral) or who owe money under your agree- 22 ment: 23 (Names of all other debtors and obligors, if any) 24 (End of Form) 25 [(d)](4) A notification in the form of [subsection (c)] paragraph (3) 26 is sufficient, even if additional information appears at the end of the 27 form. 28 [(e)](5) A notification in the form of [subsection (c)] paragraph (3) 29 is sufficient, even if it includes errors in information not required by 30 [subsection (a)] paragraph (3), unless the error is misleading with 31 respect to rights arising under this article. 32 [(f)](6) If a notification under this section is not in the form of 33 [subsection (c)] paragraph (3), law other than this article determines 34 the effect of including information not required by [subsection (a)] 35 paragraph (3). 36 (b) Instructions for form of notification. The following instructions 37 apply to the form of notification in subsection (a)(3): 38 (1) The instructions in this subsection refer to the numbers in braces 39 before items in the form of notification in subsection (a)(3). Do not 40 include the numbers or braces in the notification. The numbers and brac- 41 es are used only for the purpose of these instructions. 42 (2) Include and complete either item {1}, if the notification relates 43 to a public disposition of the collateral, or item {2}, if the notifica- 44 tion relates to a private disposition of the collateral. 45 (3) Include and complete items {3}, {4}, {5}, {6}, and {7}. 46 (4) In item {5}, include and complete any one of the three alternative 47 methods for the explanation--writing, writing or electronic record, or 48 electronic record. 49 (5) In item {6}, include the telephone number. In addition, the sender 50 may include and complete either or both of the two additional alterna- 51 tive methods of communication--writing or electronic communication-for 52 the recipient of the notification to communicate with the sender. 53 Neither of the two additional methods of communication is required to be 54 included.A. 3307 40 1 (6) In item {7}, include and complete the method or methods for the 2 explanation--writing, writing or electronic record, or electronic 3 record--included in item {5}. 4 (7) Include and complete item {8} only if a written explanation is 5 included in item {5} as a method for communicating the explanation and 6 the sender will charge the recipient for another written explanation. 7 (8) In item {9}, include either the telephone number or the address or 8 both the telephone number and the address. In addition, the sender may 9 include and complete the additional method of communication--electronic 10 communication--for the recipient of the notification to communicate with 11 the sender. The additional method of electronic communication is not 12 required to be included. 13 (9) If item {10} does not apply, insert "None" after "agreement:". 14 § 83. Paragraphs 3 and 4 of subsection (a) of section 9--615 of the 15 uniform commercial code, as added by chapter 84 of the laws of 2001, are 16 amended to read as follows: 17 (3) the satisfaction of obligations secured by any subordinate 18 security interest in or other subordinate lien on the collat- 19 eral if: 20 (A) the secured party receives from the holder of the subor- 21 dinate security interest or other lien [an authenticated] 22 a signed demand for proceeds before distribution of the 23 proceeds is completed; and 24 (B) in a case in which a consignor has an interest in the 25 collateral, the subordinate security interest or other 26 lien is senior to the interest of the consignor; and 27 (4) a secured party that is a consignor of the collateral if the 28 secured party receives from the consignor [an authenticated] 29 a signed demand for proceeds before distribution of the 30 proceeds is completed. 31 § 84. Subsections (a) and (b) and the opening paragraph of subsection 32 (c) of section 9--616 of the uniform commercial code, as added by chap- 33 ter 84 of the laws of 2001, are amended to read as follows: 34 (a) Definitions. In this section: 35 (1) "Explanation" means a [writing] record that: 36 (A) states the amount of the surplus or deficiency; 37 (B) provides an explanation in accordance with subsection (c) 38 of how the secured party calculated the surplus or defi- 39 ciency; 40 (C) states, if applicable, that future debits, credits, 41 charges, including additional credit service charges or 42 interest, rebates, and expenses may affect the amount of 43 the surplus or deficiency; and 44 (D) provides a telephone number or mailing address from which 45 additional information concerning the transaction is 46 available. 47 (2) "Request" means a record: 48 (A) [authenticated] signed by a debtor or consumer obligor; 49 (B) requesting that the recipient provide an explanation; and 50 (C) sent after disposition of the collateral under Section 51 9--610. 52 (b) Explanation of calculation. In a consumer-goods transaction in 53 which the debtor is entitled to a surplus or a consumer obligor is 54 liable for a deficiency under Section 9--615, the secured party shall: 55 (1) send an explanation to the debtor or consumer obligor, as 56 applicable, after the disposition and:A. 3307 41 1 (A) before or when the secured party accounts to the debtor 2 and pays any surplus or first makes [written] demand in a 3 record on the consumer obligor after the disposition for 4 payment of the deficiency; and 5 (B) within fourteen days after receipt of a request; or 6 (2) in the case of a consumer obligor who is liable for a defi- 7 ciency, within fourteen days after receipt of a request, send 8 to the consumer obligor a record waiving the secured party's 9 right to a deficiency. 10 To comply with subsection (a)(1)(B), [a writing] an explanation 11 must provide the following information in the following 12 order: 13 § 85. The opening paragraph of subsection (a) of section 9--619 of the 14 uniform commercial code, as added by chapter 84 of the laws of 2001, is 15 amended to read as follows: 16 In this section, "transfer statement" means a record [authenticated] 17 signed by a secured party stating: 18 § 86. The uniform commercial code is amended by adding a new article 19 12 to read as follows: 20 ARTICLE 12 21 CONTROLLABLE ELECTRONIC RECORDS 22 Section 12--101. Short title. 23 This article may be cited as Uniform Commercial Code--Controllable 24 Electronic Records. 25 Section 12--102. Definitions. 26 (a) In this article: 27 (1) "Controllable electronic record" means a record stored in an elec- 28 tronic medium that can be subjected to control under Section 12-105. The 29 term does not include a controllable account, a controllable payment 30 intangible, a deposit account, an electronic copy of a record evidencing 31 chattel paper, an electronic document of title, electronic money, 32 investment property, or a transferable record. 33 (2) "Qualifying purchaser" means a purchaser of a controllable elec- 34 tronic record or an interest in a controllable electronic record that 35 obtains control of the controllable electronic record for value, in good 36 faith, and without notice of a claim of a property right in the control- 37 lable electronic record. In the case of a controllable electronic record 38 that would be a "draft" or a "note", as those terms are defined in 39 Section 3--104, if the controllable electronic record were a signed 40 writing, Section 3--304(7) applies to the determination of whether a 41 purchaser obtains control of the controllable electronic record without 42 notice of a claim of a property right in it as if the reference in that 43 subsection to "the instrument" referred to the controllable electronic 44 record. The preceding sentence applies even if the controllable elec- 45 tronic record contains a term by which an obligor or account debtor on 46 the controllable account or controllable payment intangible evidenced by 47 the controllable electronic record waives or agrees not to assert 48 against an assignee of the controllable electronic record any claim or 49 defense that the obligor or account debtor may have against the assig- 50 nor. 51 (3) "Transferable record" means an electronic record that either: 52 (A) is a "transferable record" under Section 201(a)(1) of the Elec- 53 tronic Signatures in Global and National Commerce Act, 15 U.S.C. 54 Section 7021(a)(1), as amended; or,A. 3307 42 1 (B) is governed by the law of any State that has enacted or adopted 2 the Uniform Electronic Transactions Act substantially as approved and 3 recommended for enactment in all the States by the National Conference 4 of Commissioners on Uniform State Laws in 1999 and is a "transferable 5 record" under Section 16(a) of that Act. 6 (4) "Value" has the meaning provided in Section 3-303(a), as if refer- 7 ences in that subsection to an "instrument" were references to a 8 controllable account, controllable electronic record, or controllable 9 payment intangible. 10 (b) Definitions in other articles. The following definitions in other 11 articles apply to this article: 12 (1) The definitions in Article 9 of "account debtor", "controllable 13 account", "controllable payment intangible", "chattel paper", "deposit 14 account", "electronic money", and "investment property" apply to this 15 article. 16 (2) Article 1 contains general definitions and principles of 17 construction and interpretation applicable throughout this article. 18 Section 12--103. Relation to Article 9 and Consumer Laws. 19 (a) Article 9 governs in case of conflict. If there is conflict 20 between this article and Article 9, Article 9 governs. 21 (b) Applicable consumer law and other laws. A transaction subject to 22 this article is subject to any applicable rule of law that establishes a 23 different rule for consumers, including Article 22-A of the General 24 Business Law and chapter 5 of title 20 of the New York City Administra- 25 tive Code. 26 (c) Enforceability or effectiveness. If an electronic record is a 27 controllable electronic record under this article, Section 307.2 of the 28 Electronic Signatures and Records Act (State Technology Law 301 et seq.) 29 shall not impair the enforceability or effectiveness of such electronic 30 record under this article nor shall such Act cause such controllable 31 electronic record to be governed by Article 3 rather than this article, 32 except to the extent the electronic record expressly provides otherwise 33 or was created prior to the effective date of this article. 34 Section 12--104. Rights in Controllable Account, Controllable Electronic 35 Record, and Controllable Payment Intangible. 36 (a) Applicability of section to controllable account and controllable 37 payment intangible. This section applies to the acquisition and 38 purchase of rights in a controllable account or controllable payment 39 intangible, including the rights and benefits under subsections (c), 40 (d), (e), (g), and (h) of a purchaser and qualifying purchaser, in the 41 same manner this section applies to a controllable electronic record. 42 (b) Control of controllable account and controllable payment intangi- 43 ble. To determine whether a purchaser of a controllable account or a 44 controllable payment intangible is a qualifying purchaser, the purchaser 45 obtains control of the account or payment intangible if it obtains 46 control of the controllable electronic record that evidences the account 47 or payment intangible. 48 (c) Applicability of other law to acquisition of rights. Except as 49 provided in this section, law other than this article determines whether 50 a person acquires a right in a controllable electronic record and the 51 right the person acquires. 52 (d) Shelter principle and purchase of limited interest. A purchaser of 53 a controllable electronic record acquires all rights in the controllable 54 electronic record that the transferor had or had power to transfer, 55 except that a purchaser of a limited interest in a controllable elec-A. 3307 43 1 tronic record acquires rights only to the extent of the interest 2 purchased. 3 (e) Rights of qualifying purchaser. A qualifying purchaser acquires 4 its rights in the controllable electronic record free of a claim of a 5 property right in the controllable electronic record. 6 (f) Limitation of rights of qualifying purchaser in other property. 7 Except as provided in subsections (a) and (e) for a controllable account 8 and a controllable payment intangible or law other than this article, a 9 qualifying purchaser takes a right to payment, right to performance, or 10 other interest in property evidenced by the controllable electronic 11 record subject to a claim of a property right in the right to payment, 12 right to performance, or other interest in property. 13 (g) No-action protection for qualifying purchaser. An action may not 14 be asserted against a qualifying purchaser based on both a purchase by 15 the qualifying purchaser of a controllable electronic record and a claim 16 of a property right in another controllable electronic record, whether 17 the action is framed in conversion, replevin, constructive trust, equi- 18 table lien, or other theory. 19 (h) Filing not notice. Filing of a financing statement under Article 9 20 is not notice of a claim of a property right in a controllable electron- 21 ic record. 22 Section 12--105. Control of Controllable Electronic Record. 23 (a) General rule: control of controllable electronic record. A person 24 has control of a controllable electronic record if the electronic 25 record, a record attached to or logically associated with the electronic 26 record, or a system in which the electronic record is recorded: 27 (1) gives the person: 28 (A) power to avail itself of substantially all the benefit from the 29 electronic record; and 30 (B) exclusive power, subject to subsection (b), to: 31 (i) prevent others from availing themselves of substantially all the 32 benefit from the electronic record; and 33 (ii) transfer control of the electronic record to another person or 34 cause another person to obtain control of another controllable electron- 35 ic record as a result of the transfer of the electronic record; and 36 (2) enables the person readily to identify itself in any way, includ- 37 ing by name, identifying number, cryptographic key, office, or account 38 number, as having the powers specified in paragraph (1). 39 (b) Meaning of exclusive. Subject to subsection (c), a power is exclu- 40 sive under subsection (a)(1)(B)(i) and (ii) even if: 41 (1) the controllable electronic record, a record attached to or 42 logically associated with the electronic record, or a system in which 43 the electronic record is recorded limits the use of the electronic 44 record or has a protocol programmed to cause a change, including a 45 transfer or loss of control or a modification of benefits afforded by 46 the electronic record; or 47 (2) the power is shared with another person. 48 (c) When power not shared with another person. A power of a person is 49 not shared with another person under subsection (b)(2) and the person's 50 power is not exclusive if: 51 (1) the person can exercise the power only if the power also is exer- 52 cised by the other person; and 53 (2) the other person: 54 (A) can exercise the power without exercise of the power by the 55 person; orA. 3307 44 1 (B) is the transferor to the person of an interest in the controllable 2 electronic record or a controllable account or controllable payment 3 intangible evidenced by the controllable electronic record. 4 (d) Presumption of exclusivity of certain powers. If a person has the 5 powers specified in subsection (a)(1)(B)(i) and (ii), the powers are 6 presumed to be exclusive. 7 (e) Control through another person. A person has control of a control- 8 lable electronic record if another person, other than the transferor to 9 the person of an interest in the controllable electronic record or a 10 controllable account or controllable payment intangible evidenced by the 11 controllable electronic record: 12 (1) has control of the electronic record and acknowledges that it has 13 control on behalf of the person; or 14 (2) obtains control of the electronic record after having acknowledged 15 that it will obtain control of the electronic record on behalf of the 16 person. 17 (f) No requirement to acknowledge. A person that has control under 18 this section is not required to acknowledge that it has control on 19 behalf of another person. 20 (g) No duties or confirmation. If a person acknowledges that it has or 21 will obtain control on behalf of another person, unless the person 22 otherwise agrees or law other than this article or Article 9 otherwise 23 provides, the person does not owe any duty to the other person and is 24 not required to confirm the acknowledgment to any other person. 25 Section 12--106. Discharge of Account Debtor on Controllable Account or 26 Controllable Payment Intangible. 27 (a) Discharge of account debtor. An account debtor on a controllable 28 account or controllable payment intangible may discharge its obligation 29 by paying: 30 (1) the person having control of the controllable electronic record 31 that evidences the controllable account or controllable payment intangi- 32 ble; or 33 (2) except as provided in subsection (b), a person that formerly had 34 control of the controllable electronic record. 35 (b) Content and effect of notification. Subject to subsection (d), the 36 account debtor may not discharge its obligation by paying a person that 37 formerly had control of the controllable electronic record if the 38 account debtor receives a notification that: 39 (1) is signed by a person that formerly had control or the person to 40 which control was transferred; 41 (2) reasonably identifies the controllable account or controllable 42 payment intangible; 43 (3) notifies the account debtor that control of the controllable elec- 44 tronic record that evidences the controllable account or controllable 45 payment intangible was transferred; 46 (4) identifies the transferee, in any reasonable way, including by 47 name, identifying number, cryptographic key, office, or account number; 48 and 49 (5) provides a commercially reasonable method by which the account 50 debtor is to pay the transferee. 51 (c) Discharge following effective notification. After receipt of a 52 notification that complies with subsection (b), the account debtor may 53 discharge its obligation by paying in accordance with the notification 54 and may not discharge the obligation by paying a person that formerly 55 had control.A. 3307 45 1 (d) When notification ineffective. Subject to subsection (h), notifi- 2 cation is ineffective under subsection (b): 3 (1) unless, before the notification is sent, the account debtor and 4 the person that, at that time, had control of the controllable electron- 5 ic record that evidences the controllable account or controllable 6 payment intangible agree in a signed record to a commercially reasonable 7 method by which a person may furnish reasonable proof that control has 8 been transferred; 9 (2) to the extent an agreement between the account debtor and seller 10 of a payment intangible limits the account debtor's duty to pay a person 11 other than the seller and the limitation is effective under law other 12 than this article; or 13 (3) at the option of the account debtor, if the notification notifies 14 the account debtor to: 15 (A) divide a payment; 16 (B) make less than the full amount of an installment or other periodic 17 payment; or 18 (C) pay any part of a payment by more than one method or to more than 19 one person. 20 (e) Proof of transfer of control. Subject to subsection (h), if 21 requested by the account debtor, the person giving the notification 22 under subsection (b) seasonably shall furnish reasonable proof, using 23 the method in the agreement referred to in subsection (d)(1), that 24 control of the controllable electronic record has been transferred. 25 Unless the person complies with the request, the account debtor may 26 discharge its obligation by paying a person that formerly had control, 27 even if the account debtor has received a notification under subsection 28 (b). 29 (f) What constitutes reasonable proof. A person furnishes reasonable 30 proof under subsection (e) that control has been transferred if the 31 person demonstrates, using the method in the agreement referred to in 32 subsection (d)(1), that the transferee has the power to: 33 (1) avail itself of substantially all the benefit from the controlla- 34 ble electronic record; 35 (2) prevent others from availing themselves of substantially all the 36 benefit from the controllable electronic record; and 37 (3) transfer the powers specified in paragraphs (1) and (2) to another 38 person. 39 (g) Rights not waivable. Subject to subsection (h), an account debtor 40 may not waive or vary its rights under subsections (d)(1) and (e) or its 41 option under subsection (d)(3). 42 (h) Rule for individual under other law. This section is subject to 43 law other than this article which establishes a different rule for an 44 account debtor who is an individual and who incurred the obligation 45 primarily for personal, family, or household purposes. 46 Section 12--107. Governing Law. 47 (a) Governing law: general rule. Except as provided in subsection (b), 48 the local law of a controllable electronic record's jurisdiction governs 49 a matter covered by this article. 50 (b) Governing law: Section 12--106. For a controllable electronic 51 record that evidences a controllable account or controllable payment 52 intangible, the local law of the controllable electronic record's juris- 53 diction governs a matter covered by Section 12--106 unless an effective 54 agreement determines that the local law of another jurisdiction governs.A. 3307 46 1 (c) Controllable electronic record's jurisdiction. The following rules 2 determine a controllable electronic record's jurisdiction under this 3 section: 4 (1) If the controllable electronic record, or a record attached to or 5 logically associated with the controllable electronic record and readily 6 available for review, expressly provides that a particular jurisdiction 7 is the controllable electronic record's jurisdiction for purposes of 8 this article, that jurisdiction is the controllable electronic record's 9 jurisdiction. 10 (2) If paragraph (1) does not apply and the rules of the system in 11 which the controllable electronic record is recorded are readily avail- 12 able for review and expressly provide that a particular jurisdiction is 13 the controllable electronic record's jurisdiction for purposes of this 14 article, that jurisdiction is the controllable electronic record's 15 jurisdiction. 16 (3) If paragraphs (1) and (2) do not apply and the controllable elec- 17 tronic record, or a record attached to or logically associated with the 18 controllable electronic record and readily available for review, 19 expressly provides that the controllable electronic record is governed 20 by the law of a particular jurisdiction, that jurisdiction is the 21 controllable electronic record's jurisdiction. 22 (4) If paragraphs (1), (2), and (3) do not apply and the rules of the 23 system in which the controllable electronic record is recorded are read- 24 ily available for review and expressly provide that the controllable 25 electronic record or the system is governed by the law of a particular 26 jurisdiction, that jurisdiction is the controllable electronic record's 27 jurisdiction. 28 (5) If paragraphs (1) through (4) do not apply, the controllable elec- 29 tronic record's jurisdiction is the District of Columbia. 30 (d) Applicability of Article 12. If subsection (c)(5) applies and 31 Article 12 is not in effect in the District of Columbia without material 32 modification, the governing law for a matter covered by this article is 33 the law of the District of Columbia as though Article 12 were in effect 34 in the District of Columbia without material modification. In this 35 subsection, "Article 12" means Article 12 of Uniform Commercial Code 36 Amendments (2022). 37 (e) Relation of matter or transaction to controllable electronic 38 record's jurisdiction not necessary. To the extent subsections (a) and 39 (b) provide that the local law of the controllable electronic record's 40 jurisdiction governs a matter covered by this article, that law governs 41 even if the matter or a transaction to which the matter relates does not 42 bear any relation to the controllable electronic record's jurisdiction. 43 (f) Rights of purchasers determined at time of purchase. The rights 44 acquired under Section 12--104 by a purchaser or qualifying purchaser 45 are governed by the law applicable under this section at the time of 46 purchase. 47 § 87. The uniform commercial code is amended by adding a new article 48 12-A to read as follows: 49 ARTICLE 12-A 50 TRANSITIONAL PROVISIONS FOR UNIFORM COMMERCIAL 51 CODE AMENDMENTS 52 PART 1 53 GENERAL PROVISIONS AND DEFINITIONSA. 3307 47 1 Section 12-A-101. Title. This article may be cited as Transitional 2 Provisions for the 2025 Uniform Commercial Code 3 Amendments. 4 Section 12-A-102. Definitions. 5 (a) Article A Definitions. In this article: 6 (1) "Adjustment date" means July 1, 2026, or the date that is one year 7 after the effective date of this article, whichever is later. 8 (2) "Article 12" means Article 12 of this code. 9 (3) "Article 12 property" means a controllable account, controllable 10 electronic record, or controllable payment intangible. 11 (b) Definitions in other articles. The following definitions in other 12 articles of this code apply to this article. 13 "Controllable account". Section 9--102. 14 "Controllable electronic record". Section 12--102. 15 "Controllable payment intangible". Section 9--102. 16 "Electronic money". Section 9--102. 17 "Financing statement". Section 9--102. 18 (c) Article 1 definitions and principles. Article 1 contains general 19 definitions and principles of construction and interpretation applicable 20 throughout this article. 21 PART 2 22 GENERAL TRANSITIONAL PROVISION 23 Section 12-A-201. Saving Clause. 24 Except as provided in Part 3, a transaction validly entered into 25 before the effective date of this article and the rights, duties, and 26 interests flowing from the transaction remain valid thereafter and may 27 be terminated, completed, consummated, or enforced as required or 28 permitted by law other than this article or, if applicable, this arti- 29 cle, as though this article had not taken effect. 30 PART 3 31 TRANSITIONAL PROVISIONS FOR ARTICLES 9 AND 12 32 Section 12-A-301. Saving Clause. 33 (a) Pre-effective-date transaction, lien, or interest. Except as 34 provided in this part, Article 9 as amended by a chapter of the laws of 35 two thousand twenty-five adding this article and Article 12 apply to a 36 transaction, lien, or other interest in property, even if the trans- 37 action, lien, or interest was entered into, created, or acquired before 38 the effective date of this article. 39 (b) Continuing validity. Except as provided in subsection (c) and 40 Sections 12-A-302 through 12-A-306: 41 (1) a transaction, lien, or interest in property that was validly 42 entered into, created, or transferred before the effective date of this 43 article and was not governed by this article, but would be subject to 44 Article 9 as amended by a chapter of the laws of two thousand twenty- 45 five adding this article or Article 12 if it had been entered into, 46 created, or transferred on or after the effective date of this article, 47 including the rights, duties, and interests flowing from the trans- 48 action, lien, or interest, remains valid on and after the effective date 49 of this article; and 50 (2) the transaction, lien, or interest may be terminated, completed, 51 consummated, and enforced as required or permitted by this code or by 52 the law that would apply if this article had not taken effect.A. 3307 48 1 (c) Pre-effective-date proceeding. This code does not affect an 2 action, case, or proceeding commenced before the effective date of this 3 article. 4 Section 12-A-302. Security Interest Perfected Before Effective Date. 5 (a) Continuing perfection: perfection requirements satisfied. A secu- 6 rity interest that is enforceable and perfected immediately before the 7 effective date of this article is a perfected security interest under 8 this article if, on the effective date of this article, the requirements 9 for enforceability and perfection under this article are satisfied with- 10 out further action. 11 (b) Continuing perfection: enforceability or perfection requirements 12 not satisfied. If a security interest is enforceable and perfected imme- 13 diately before the effective date of this article, but the requirements 14 for enforceability or perfection under this article are not satisfied on 15 the effective date of this article, the security interest: 16 (1) is a perfected security interest until the earlier of the time 17 perfection would have ceased under the law in effect immediately before 18 the effective date of this article or the adjustment date; 19 (2) remains enforceable thereafter only if the security interest 20 satisfies the requirements for enforceability under Section 9--203, as 21 amended by a chapter of the laws of two thousand twenty-five adding this 22 article before the adjustment date; and 23 (3) remains perfected thereafter only if the requirements for 24 perfection under this article are satisfied before the time specified in 25 paragraph (1). 26 Section 12-A-303. Security Interest Unperfected Before Effective Date. 27 A security interest that is enforceable immediately before the effec- 28 tive date of this article but is unperfected at that time: 29 (1) remains an enforceable security interest until the adjustment 30 date; 31 (2) remains enforceable thereafter if the security interest becomes 32 enforceable under Section 9--203, as amended by a chapter of the laws of 33 two thousand twenty-five that added this article, on the effective date 34 of this article or before the adjustment date; and 35 (3) becomes perfected: 36 (A) without further action, on the effective date of this article if 37 the requirements for perfection under this article are satisfied before 38 or at that time; or 39 (B) when the requirements for perfection are satisfied if the require- 40 ments are satisfied after that time. 41 Section 12-A-304. Effectiveness of Actions Taken Before Effective Date. 42 (a) Pre-effective-date action; attachment and perfection before 43 adjustment date. If action, other than the filing of a financing state- 44 ment, is taken before the effective date of this article and the action 45 would have resulted in perfection of the security interest had the secu- 46 rity interest become enforceable before the effective date of this arti- 47 cle, the action is effective to perfect a security interest that 48 attaches under this article before the adjustment date. An attached 49 security interest becomes unperfected on the adjustment date unless the 50 security interest becomes a perfected security interest under this arti- 51 cle before the adjustment date. 52 (b) Pre-effective-date filing. The filing of a financing statement 53 before the effective date of this article is effective to perfect a 54 security interest on the effective date of this article to the extent 55 the filing would satisfy the requirements for perfection under this 56 article.A. 3307 49 1 (c) Pre-effective-date enforceability action. The taking of an action 2 before the effective date of this article is sufficient for the enforce- 3 ability of a security interest on the effective date of this article if 4 the action would satisfy the requirements for enforceability under this 5 article. 6 Section 12-A-305. Priority. 7 (a) Determination of priority. Subject to subsections (b) and (c), 8 this code determines the priority of conflicting claims to collateral. 9 (b) Established priorities. Subject to subsection (c), if the priori- 10 ties of claims to collateral were established before the effective date 11 of this article, Article 9 as in effect before the effective date of a 12 chapter of the laws of two thousand twenty-five that added this article 13 determines priority. 14 (c) Determination of certain priorities on adjustment date. On the 15 adjustment date, to the extent the priorities determined by Article 9 as 16 amended by this code modify the priorities established before the effec- 17 tive date of a chapter of the laws of two thousand twenty-five that 18 added this article, the priorities of claims to Article 12 property and 19 electronic money established before the effective date of this article 20 cease to apply. 21 Section 12-A-306. Priority of Claims When Priority Rules of Article 9 Do 22 Not Apply. 23 (a) Determination of priority. Subject to subsections (b) and (c), 24 Article 12 determines the priority of conflicting claims to Article 12 25 property when the priority rules of Article 9 as amended by this article 26 do not apply. 27 (b) Established priorities. Subject to subsection (c), when the prior- 28 ity rules of Article 9 as amended by a chapter of the laws of two thou- 29 sand twenty-five that added this article do not apply and the priorities 30 of claims to Article 12 property were established before the effective 31 date of this article, law other than Article 12 determines priority. 32 (c) Determination of certain priorities on adjustment date. When the 33 priority rules of Article 9 as amended by this article do not apply, to 34 the extent the priorities determined by this code modify the priorities 35 established before the effective date this article, the priorities of 36 claims to Article 12 property established before the effective date of 37 this article cease to apply on the adjustment date. 38 § 88. This act shall take effect on the one hundred eightieth day 39 after it shall have become a law.
