Stricken language would be deleted from and underlined language would be added to present law.
Act 603 of the Regular Session
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State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 HOUSE BILL 1736 3
4
By: Representative M. Brown 5
By: Senator Dees 6
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For An Act To Be Entitled 8
AN ACT TO AMEND ARTICLE 9 OF THE UNIFORM COMMERCIAL 9
CODE; AND FOR OTHER PURPOSES. 10
11
12
Subtitle 13
TO AMEND ARTICLE 9 OF THE UNIFORM 14
COMMERCIAL CODE. 15
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 17
18
SECTION 1. Arkansas Code § 4 -9-406(d), concerning the ineffectiveness 19
of certain assignments under the Uniform Commercial Code, is amended to read 20
as follows: 21
(d) Except as otherwise provided in subsection (e) subsections (e) and 22
(k) and §§ 4-2A-303 and 4-9-407, and subject to subsection (h), a term in an 23
agreement between an account debtor and an assignor or in a promissory note 24
is ineffective to the extent that it: 25
(1) prohibits, restricts, or requires the consent of the account 26
debtor or person obligated on the promissory note to the assignment or 27
transfer of, or the creation, attachment, perfection, or enforcement of a 28
security interest in, the account, chattel paper, payment intangible, or 29
promissory note; or 30
(2) provides that the assignment or transfer or the creation, 31
attachment, perfection, or enforcement of the security interest may give rise 32
to a default, breach, right of recoupment, claim, defense, termination, right 33
of termination, or remedy under the account, chattel paper, payment 34
intangible, or promissory note. 35
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SECTION 2. Arkansas Code § 4 -9-406(f), concerning the ineffectiveness 1
of certain legal restrictions on assignments under the Uniform Commercial 2
Code, is amended to read as follows: 3
(f) Except as otherwise provided in subsection (k) and §§ 4-2A-303 and 4
4-9-407 and subject to subsections (h) and (i), a rule of law, statute, or 5
regulation that prohibits, restricts, or requires the consent of a 6
government, governmental body or official, or account debtor to the 7
assignment or transfer of, or creation of a security interest in, an account 8
or chattel paper is ineffective to the extent that the rule of law, statute, 9
or regulation: 10
(1) prohibits, restricts, or requires the consent of the 11
government, governmental body or official, or account debtor to the 12
assignment or transfer of, or the creation, attachment, perfection, or 13
enforcement of a security interest in the account or chattel paper; or 14
(2) provides that the assignment or transfer or the creation, 15
attachment, perfection, or enforcement of the security interest may give rise 16
to a default, breach, right of recoupment, claim, defense, termination, right 17
of termination, or remedy under the account or chattel paper. 18
19
SECTION 3. Arkansas Code § 4 -9-406, concerning the discharge of an 20
account debtor under the Uniform Commercial Code, is amended to add an 21
additional subsection to read as follows: 22
(k) Subsections (d), (f), and (j) do not apply to a security interest 23
in an ownership interest in a general partnership, limited partnership, or 24
limited liability company. 25
26
SECTION 4. Arkansas Code § 4 -9-408(a), concerning the ineffectiveness 27
of certain assignments under the Uniform Commercial Code, is amended to read 28
as follows: 29
(a) Except as otherwise provided in subsection (b) subsections (b) and 30
(g), a term in a promissory note or in an agreement between an account debtor 31
and a debtor which relates to a health -care-insurance receivable or a general 32
intangible, including a contract, permit, license, or franchise, and which 33
term prohibits, restricts, or requires the consent of the person obligated on 34
the promissory note or the account debtor to, the assignment or transfer of, 35
or creation, attachment, or perfection of a security interest in, the 36 HB1736
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promissory note, health -care-insurance receivable, or general intangible, is 1
ineffective to the extent that the term: 2
(1) would impair the creation, attachment, or perfection of a 3
security interest; or 4
(2) provides that the assignment or transfer or the creation, 5
attachment, or perfection of the security interest may give rise to a 6
default, breach, right of recoupment, claim, defense, termination, right of 7
termination, or remedy under the promissory note, health -care-insurance 8
receivable, or general intangible. 9
10
SECTION 5. Arkansas Code § 4 -9-408(c), concerning the ineffectiveness 11
of certain legal restrictions on assignments under the Uniform Commercial 12
Code, is amended to read as follows: 13
(c) A Except as otherwise provided in subsection (g), a rule of law, 14
statute, or regulation that prohibits, restricts, or requires the consent of 15
a government, governmental body or official, person obligated on a promissory 16
note, or account debtor to the assignment or transfer of, or creation of a 17
security interest in, a promissory note, health -care-insurance receivable, or 18
general intangible, including a contract, permit, license, or franchise 19
between an account debtor and a debtor, is ineffective to the extent that the 20
rule of law, statute, or regulation: 21
(1) would impair the creation, attachment, or perfection of a 22
security interest; or 23
(2) provides that the assignment or transfer or the creation, 24
attachment, or perfection of the security interest may give rise to a 25
default, breach, right of recoupment, claim, defense, termination, right of 26
termination, or remedy under the promissory note, health -care-insurance 27
receivable, or general intangible. 28
29
SECTION 6. Arkansas Code § 4 -9-408, concerning restrictions on certain 30
assignments under the Uniform Commercial Code, is amended to add an 31
additional subsection to read as follows: 32
(g) This section does not apply to a security interest in an ownership 33
interest in a general partnership, limited partnership, or limited liability 34
company. 35
APPROVED: 4/14/25 36 HB1736
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