HB 212 - This act modifies Uniform Commercial Code (U.C.C.) sections relating to secured transactions and funds transfers. The act modifies the definition of "authenticate", for the purposes of secured transactions, to include attaching to or logically associating with the record, an electronic sound, symbol or process with the intent to adopt or accept a record.
"Certificate of title" shall include another record maintained as an alternative to a certificate of title by the government unit that issues certificates of title if a controlling statute permits the security interest to be indicated on the record as a condition or result of the security interest's obtaining priority over the rights of a lien creditor.
The act defines "public organic record" to include records available for public inspection that are:
• A record consisting of the record initially filed with or issued by a state or the United States to form or organize an organization and any record filed with or issued by the state or the United States which amends or restates the initial record
• An organic record of a business trust consisting of the record initially filed with a state and any record filed with the state which amends or restates the initial record, if a statute of the state governing business trusts requires that the record be filed with the state; or
• A record consisting of legislation enacted by the legislature of a state or the Congress of the United States which forms or organizes an organization, any record amending the legislation, and any record filed with or issued by the state or the United States which amends or restates the name of the organization.
The act modifies the definition of "registered organization" to require the filing of a public organic record with, the issuance of a public organic record by, or the enactment of legislation by the state or the United States. Certain business trusts also qualify.
The act allows registered organizations to designate its main office, home office or other comparable office for the purposes of establishing its location.
Financing statements filed before the change of location of a debtor are effective to perfect a security interest in the collateral if such statement would have been effective to perfect had the location not changed. If such security interest becomes perfected in another jurisdiction before the earlier of the time the statement would have become ineffective under the original jurisdiction or the expiration of 4 months, it remains perfected. If it isn't perfected in such a manner, it becomes unperfected and deemed to have never been perfected.
The same procedures apply when a financing statement is filed to perfect a security interest in collateral in one jurisdiction and the collateral is acquired by a new debtor in another jurisdiction.
Under current law, a licensee of a general intangible or a buyer of accounts, electronic chattel paper, general intangibles or investment property take free of a security interest if such licensee or buyer gives value without knowledge of the interest and before it is perfected. This act extends this treatment to all collateral other than tangible chattel paper, tangible documents, goods, and instruments.
Under current law, certain terms in agreements between an account debtor and an assignor or in promissory notes are ineffective in certain instances. The act exempts sales pursuant to a disposition and acceptances of collateral.
The act establishes that records of mortgages do not need to indicate that it is to be filed in the real property records but that the name of debtor needs to be provided in order to be effective.
The act establishes requirements for providing a debtor's name in a financing statement in general, when collateral is being administered by a personal representative of a decedent, and when held in trust.
Under current law, a person may file a correction statement if a record is inaccurate or wrongfully filed. Under the act, that statement is called an information statement and may be filed by a secured party if such person believes the person who filed the statement was not authorized to do so.
The act stipulates that the sections of the U.C.C. governing funds transfers applies to a remittance transfer as defined in federal law unless it is defined as an electronic funds transfer under federal law. Regarding any inconsistency between the federal Electronic Funds Transfer act and the U.C.C., the federal act shall control.
CHRIS HOGERTY