First Regular Session
Seventy-fourth General Assembly
STATE OF COLORADO
ENGROSSED
This Version Includes All Amendments Adopted
on Second Reading in the House of Introduction
LLS NO. 23-0564.01 Christopher McMichael x4775
SENATE BILL 23-090
Senate Committees House Committees
Judiciary
A BILL FOR AN ACT
C
ONCERNING THE ENACTMENT OF THE 2022 AMENDMENTS TO THE101
"U
NIFORM COMMERCIAL CODE".102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov/
.)
Colorado Commission on Uniform State Laws. The bill makes
changes to the "Uniform Commercial Code" (UCC), drafted by the
Uniform Law Commission.
The 2022 amendments update the UCC to account for emerging
technologies by:
! Amending the definitions of "conspicuous", "send", and
SENATE
Amended 2nd Reading
February 21, 2023
SENATE SPONSORSHIP
Gardner,
HOUSE SPONSORSHIP
Snyder,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. "sign";
! Adding the definition of "electronic"; and
! Changing current references to "writing" or "written" to
refer instead to a "record".
The 2022 amendments update the provisions of the UCC related
to secured transactions by:
! Addressing security interests and rights to payment related
to controllable electronic records;
! Specifying how to perfect security interests in controllable
accounts and controllable payment intangibles;
! Updating the definition of "chattel paper" to distinguish
between a right to payment and the record evidencing the
right to payment;
! Updating definitions related to money generally, including
creating a new definition of "electronic money"; and
! Creating a new definition of "assignee" and "assignor".
The bill creates a new article within the UCC that governs the
transfer of property rights in certain intangible digital assets that have
been or may be created and may involve the use of new technologies,
including such assets as certain types of virtual currency and nonfungible
tokens.
The bill provides guidance for which laws apply during the
transition from the current UCC to the UCC as amended by the bill.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 4-1-201, amend (b)2
introductory portion, (b)(10), (b)(14), (b)(20)(C), (b)(23), (b)(26), (b)(36),3
and (b)(37); and add (b)(15.5) as follows:4
4-1-201. General definitions. (b) Subject to definitions5
contained in other articles of this title
TITLE 4 that apply to particular6
articles or parts thereof OF THIS TITLE 4:7
(10) "Conspicuous", with reference to a term, means so written,8
displayed, or presented that a reasonable person against which it is to9
operate ought to have noticed it. Whether a term is "conspicuous" or not10
is a decision for the court. Conspicuous terms include the following:11
(A) A heading in capital letters equal to or greater in size than the12
090-2- surrounding text, or in contrasting type, font, or color to the surrounding1
text of the same or lesser size; and2
(B) Language in the body of a record or display in larger type than3
the surrounding text, or in contrasting type, font, or color to the4
surrounding text of the same size, or set off from surrounding text of the5
same size by symbols or other marks that call attention to the language.6
(14) "Delivery", with respect to an electronic document of title,7
means voluntary transfer of control; and with respect to an instrument, a8
tangible document of title, or
AN AUTHORITATIVE TANGIBLE COPY OF A9
RECORD EVIDENCING chattel paper, means voluntary transfer of10
possession.11
(15.5) "E
LECTRONIC" MEANS RELATING TO TECHNOLOGY HAVING12
ELECTRICAL, DIGITAL, MAGNETIC , WIRELESS, OPTICAL,13
ELECTROMAGNETIC, OR SIMILAR CAPABILITIES.14
(20) "Holder" means:15
(C) The person in control,
OTHER THAN PURSUANT TO SECTION16
4-7-106 (g),
OF A NEGOTIABLE ELECTRONIC DOCUMENT OF TITLE .17
(23) "Money" means a medium of exchange currently authorized18
or adopted by a domestic or foreign government. The term includes a19
monetary unit of account established by an intergovernmental20
organization or by agreement between two or more countries. T
HE TERM21
DOES NOT INCLUDE AN ELECTRONIC RECORD THAT IS A MEDIUM OF22
EXCHANGE RECORDED AND TRANSFERABLE IN A SYSTEM THAT EXISTED23
AND OPERATED FOR THE MEDIUM OF EXCHANGE BEFORE THE MEDIUM OF24
EXCHANGE WAS AUTHORIZED OR ADOPTED BY THE GOVERNMENT .25
(26) "Person" means an individual, corporation, business trust,26
estate, trust, partnership, limited liability company, association, joint27
090
-3- venture, government, government subdivision, agency, or instrumentality,1
or any other legal or commercial entity. T
HE TERM INCLUDES A2
PROTECTED SERIES, HOWEVER DENOMINATED , OF AN ENTITY IF THE3
PROTECTED SERIES IS ESTABLISHED UNDER LAW OTHER THAN THIS TITLE4
4
THAT LIMITS, OR LIMITS IF CONDITIONS SPECIFIED UNDER THE LAW ARE5
SATISFIED, THE ABILITY OF A CREDITOR OF THE ENTITY OR OF ANY OTHER6
PROTECTED SERIES OF THE ENTITY TO SATISFY A CLAIM FROM ASSETS OF7
THE PROTECTED SERIES.8
(36) "Send", in connection with a writing,
record or notice9
NOTIFICATION, means to:10
(A) Deposit in the mail, or deliver for transmission, OR TRANSMIT11
by any other usual means of communication with postage or cost of12
transmission provided for, and properly addressed and, in the case of an13
instrument, to an address specified thereon or otherwise agreed, or, if14
there is none, ADDRESSED to any address reasonable under the15
circumstances; or16
(B) In any other way cause to be received any record or notice17
within the time it would have arrived if properly sent CAUSE THE RECORD18
OR NOTIFICATION TO BE RECEIVED WITHIN THE TIME IT WOULD HAVE BEEN19
RECEIVED IF PROPERLY SENT UNDER SUBSECTION (b)(36)(A) OF THIS20
SECTION.21
(37) (A) "Signed" includes any symbol executed or adopted with22
present intention to adopt or accept a writing. "SIGN" MEANS, WITH23
PRESENT INTENT TO AUTHENTICATE OR ADOPT A RECORD :24
(i) E
XECUTE OR ADOPT A TANGIBLE SYMBOL ; OR25
(ii) A
TTACH TO OR LOGICALLY ASSOCIATE WITH THE RECORD AN26
ELECTRONIC SYMBOL, SOUND, OR PROCESS.27
090
-4- (B) "SIGNED", "SIGNING", AND "SIGNATURE" HAVE1
CORRESPONDING MEANINGS .2
SECTION 2. In Colorado Revised Statutes, 4-1-204, amend the3
introductory portion as follows:4
4-1-204. Value. Except as otherwise provided in articles 3, 4, and5
5, 6,
AND 12 of this title
TITLE 4, a person gives value for rights if the6
person acquires them:7
SECTION 3. In Colorado Revised Statutes, 4-1-301, add (c)(9)8
as follows:9
4-1-301. Territorial applicability - parties' power to choose10
applicable law. (c) If one of the following provisions of the "Uniform11
Commercial Code" specifies the applicable law, that provision governs12
and a contrary agreement is effective only to the extent permitted by the13
law so specified:14
(9) S
ECTION 4-12-107.15
SECTION 4. In Colorado Revised Statutes, amend 4-1-306 as16
follows:17
4-1-306. Waiver or renunciation of claim or right after breach.18
A claim or right arising out of an alleged breach may be discharged in19
whole or in part without consideration by agreement of the aggrieved20
party in an authenticated
A SIGNED record.21
SECTION 5. In Colorado Revised Statutes, amend 4-2-102 as22
follows:23
4-2-102. Scope - certain security and other transactions24
excluded from this article. (1) Unless the context otherwise requires,25
this article applies to transactions in goods; it does not apply to: UNLESS26
THE CONTEXT OTHERWISE REQUIRES , AND EXCEPT AS PROVIDED IN27
090
-5- SUBSECTION (3) OF THIS SECTION, THIS ARTICLE 2 APPLIES TO1
TRANSACTIONS IN GOODS AND , IN THE CASE OF A HYBRID TRANSACTION,2
IT APPLIES TO THE EXTENT PROVIDED IN SUBSECTION (2) OF THIS SECTION.3
(a) Any transaction which, although in the form of an4
unconditional contract to sell or present sale, is intended to operate only5
as a security transaction, nor does this article impair or repeal any statute6
regulating sales to consumers, farmers, or other specified classes of7
buyers; and8
(b) The donation, whether for or without valuable consideration,9
acquisition, preparation, transplantation, injection, or transfusion of any10
human tissue, organ, or blood or component thereof for or to a human11
being.12
(2) I
N A HYBRID TRANSACTION:13
(a) I
F THE SALE-OF-GOODS ASPECTS DO NOT PREDOMINATE , ONLY14
THE PROVISIONS OF THIS ARTICLE 2 WHICH RELATE PRIMARILY TO THE15
SALE-OF-GOODS ASPECTS OF THE TRANSACTION APPLY , AND THE16
PROVISIONS THAT RELATE PRIMARILY TO THE TRANSACTION AS A WHOLE17
DO NOT APPLY.18
(b) I
F THE SALE-OF-GOODS ASPECTS PREDOMINATE , THIS ARTICLE19
2
APPLIES TO THE TRANSACTION BUT DOES NOT PRECLUDE APPLICATION IN20
APPROPRIATE CIRCUMSTANCES OF OTHER LAW TO ASPECTS OF THE21
TRANSACTION WHICH DO NOT RELATE TO THE SALE OF GOODS .22
(3) T
HIS ARTICLE 2 DOES NOT:23
(a) A
PPLY TO A TRANSACTION THAT, EVEN THOUGH IN THE FORM24
OF AN UNCONDITIONAL CONTRACT TO SELL OR PRESENT SALE , OPERATES25
ONLY TO CREATE A SECURITY INTEREST ; OR26
(b) I
MPAIR OR REPEAL A STATUTE REGULATING SALES TO27
090
-6- CONSUMERS, FARMERS, OR OTHER SPECIFIED CLASSES OF BUYERS.1
SECTION 6. In Colorado Revised Statutes, 4-2-106, add (5) as2
follows:3
4-2-106. Definitions: "contract" - "agreement" - "contract for4
sale" - "sale" - "present sale" - "conforming" to contract -5
"termination" - "cancellation" - "hybrid transaction". (5) "H
YBRID6
TRANSACTION" MEANS A SINGLE TRANSACTION INVOLVING A SALE OF7
GOODS AND:8
(a) T
HE PROVISION OF SERVICES;9
(b) A
LEASE OF OTHER GOODS; OR10
(c) A
SALE, LEASE, OR LICENSE OF PROPERTY OTHER THAN GOODS .11
SECTION 7. In Colorado Revised Statutes, 4-2-201, amend (1)12
and (2) as follows:13
4-2-201. Formal requirements - statute of frauds. (1) Except14
as otherwise provided in this section, a contract for the sale of goods for15
the price of five hundred dollars or more is not enforceable by way of16
action or defense unless there is some writing
A RECORD sufficient to17
indicate that a contract for sale has been made between the parties and18
signed by the party against whom enforcement is sought or by his THE19
PARTY'S authorized agent or broker. A writing RECORD is not insufficient20
because it omits or incorrectly states a term agreed upon, but the contract21
is not enforceable under this paragraph SUBSECTION (1) beyond the22
quantity of goods shown in such writing THE RECORD.23
(2) Between merchants, if within a reasonable time a writing24
RECORD in confirmation of the contract and sufficient against the sender25
is received and the party receiving it has reason to know its contents, it26
satisfies the requirements of subsection (1) of this section against such27
090
-7- THE party unless written notice IN A RECORD of objection to its contents1
is given within ten days after it is received.2
SECTION 8. In Colorado Revised Statutes, 4-2-202, amend the3
introductory portion and (b) as follows:4
4-2-202. Final expression - parol or extrinsic evidence. Terms5
with respect to which the confirmatory memoranda of the parties agree or6
which are otherwise set forth in a writing RECORD intended by the parties7
as a final expression of their agreement with respect to such terms as are8
included therein may not be contradicted by evidence of any prior9
agreement or of a contemporaneous oral agreement but may be explained10
or supplemented:11
(b) By evidence of consistent additional terms unless the court12
finds the writing RECORD to have been intended also as a complete and13
exclusive statement of the terms of the agreement.14
SECTION 9. In Colorado Revised Statutes, amend 4-2-203 as15
follows:16
4-2-203. Seals inoperative. The affixing of a seal to a writing17
RECORD evidencing a contract for sale or an offer to buy or sell goods18
does not constitute the writing RECORDING OF a sealed instrument, and the19
law with respect to sealed instruments does not apply to such a contract20
or offer.21
SECTION 10. In Colorado Revised Statutes, amend 4-2-205 as22
follows:23
4-2-205. Firm offers. An offer by a merchant to buy or sell goods24
in a signed writing RECORD which by its terms gives assurance that it will25
be held open is not revocable, for lack of consideration, during the time26
stated or, if no time is stated, for a reasonable time, but in no event may27
090
-8- such period of irrevocability exceed three months; but any such term of1
assurance on a form supplied by the offeree must be separately signed by2
the offeror.3
SECTION 11. In Colorado Revised Statutes, 4-2-209, amend (2)4
as follows:5
4-2-209. Modification, rescission, and waiver. (2) A signed6
agreement which excludes modification or rescission except by a signed7
writing
OR OTHER SIGNED RECORD cannot be otherwise modified or8
rescinded, but except as between merchants such a requirement on a form9
supplied by the merchant must be separately signed by the other party.10
SECTION 12. In Colorado Revised Statutes, amend 4-2.5-10211
as follows:12
4-2.5-102. Scope. (1) This article
ARTICLE 2.5 applies to any13
transaction, regardless of form, that creates a lease,
AND, IN THE CASE OF14
A HYBRID LEASE, THIS ARTICLE 2.5 APPLIES TO THE EXTENT PROVIDED IN15
SUBSECTION (2) OF THIS SECTION.16
(2) I
N A HYBRID LEASE:17
(a) I
F THE LEASE-OF-GOODS ASPECTS DO NOT PREDOMINATE :18
(i) O
NLY THE PROVISIONS OF THIS ARTICLE 2.5 WHICH RELATE19
PRIMARILY TO THE LEASE -OF-GOODS ASPECTS OF THE TRANSACTION20
APPLY, AND THE PROVISIONS THAT RELATE PRIMARILY TO THE21
TRANSACTION AS A WHOLE DO NOT APPLY ;22
(ii) S
ECTION 4-2.5-209 APPLIES IF THE LEASE IS A FINANCE LEASE;23
AND24
(iii) S
ECTION 4-2.5-407 APPLIES TO THE PROMISES OF THE LESSEE25
IN A FINANCE LEASE TO THE EXTENT THE PROMISES ARE CONSIDERATION26
FOR THE RIGHT TO POSSESSION AND USE OF THE LEASED GOODS ; AND27
090
-9- (b) IF THE LEASE-OF-GOODS ASPECTS PREDOMINATE , THIS ARTICLE1
2.5
APPLIES TO THE TRANSACTION BUT DOES NOT PRECLUDE APPLICATION2
IN APPROPRIATE CIRCUMSTANCES OF OTHER LAW TO ASPECTS OF THE3
LEASE WHICH DO NOT RELATE TO THE LEASE OF GOODS .4
SECTION 13. In Colorado Revised Statutes, 4-2.5-103, amend5
(1) introductory portion; and add (1)(h.5) as follows:6
4-2.5-103. Definitions and index of definitions. (1) In this7
article
ARTICLE 2.5, unless the context otherwise requires:8
(h.5) "H
YBRID LEASE" MEANS A SINGLE TRANSACTION INVOLVING9
A LEASE OF GOODS AND:10
(i) T
HE PROVISION OF SERVICES;11
(ii) A
SALE OF OTHER GOODS; OR12
(iii) A
SALE, LEASE, OR LICENSE OF PROPERTY OTHER THAN GOODS.13
SECTION 14. In Colorado Revised Statutes, amend 4-2.5-10714
as follows:15
4-2.5-107. Waiver or renunciation of claim or right after16
default. Any claim or right arising out of an alleged default or breach of17
warranty may be discharged in whole or in part without consideration by18
a written
waiver or renunciation IN A signed and RECORD delivered by the19
aggrieved party.20
SECTION 15. In Colorado Revised Statutes, 4-2.5-201, amend21
(1)(b), (3), and (5)(a) as follows:22
4-2.5-201. Statute of frauds. (1) A lease contract is not23
enforceable by way of action or defense unless:24
(b) There is a writing RECORD, signed by the party against whom25
enforcement is sought or by that party's authorized agent, sufficient to26
indicate that a lease contract has been made between the parties and to27
090
-10- describe the goods leased and the lease term.1
(3) A writing RECORD is not insufficient because it omits or2
incorrectly states a term agreed upon, but the lease contract is not3
enforceable under subsection (1)(b) of this section beyond the lease term4
and the quantity of goods shown in the writing RECORD.5
(5) The lease term under a lease contract referred to in subsection6
(4) of this section is:7
(a) If there is a writing RECORD signed by the party against whom8
enforcement is sought or by that party's authorized agent specifying the9
lease term, the term so specified;10
SECTION 16. In Colorado Revised Statutes, 4-2.5-202, amend11
(1) introductory portion and (1)(b) as follows:12
4-2.5-202. Final written expression: Parol or extrinsic13
evidence. (1) Terms with respect to which the confirmatory memoranda14
of the parties agree or which are otherwise set forth in a writing RECORD15
intended by the parties as a final expression of their agreement with16
respect to such terms as are included therein may not be contradicted by17
evidence of any prior agreement or of a contemporaneous oral agreement18
but may be explained or supplemented:19
(b) By evidence of consistent additional terms unless the court20
finds the writing RECORD to have been intended also as a complete and21
exclusive statement of the terms of the agreement.22
SECTION 17. In Colorado Revised Statutes, amend 4-2.5-20323
as follows:24
4-2.5-203. Seals inoperative. The affixing of a seal to a writing25
RECORD evidencing a lease contract or an offer to enter into a lease26
contract does not render the writing RECORD a sealed instrument and the27
090
-11- law with respect to sealed instruments does not apply to the lease contract1
or offer.2
SECTION 18. In Colorado Revised Statutes, amend 4-2.5-2053
as follows:4
4-2.5-205. Firm offers. An offer by a merchant to lease goods to5
or from another person in a signed writing RECORD that by its terms gives6
assurance it will be held open is not revocable, for lack of consideration,7
during the time stated or, if no time is stated, for a reasonable time, but in8
no event may the period of irrevocability exceed three months. Any such9
term of assurance on a form supplied by the offeree must be separately10
signed by the offeror.11
SECTION 19. In Colorado Revised Statutes, 4-2.5-208, amend12
(2) as follows:13
4-2.5-208. Modification, rescission, and waiver. (2) A signed14
lease agreement that excludes modification or rescission except by a15
signed writing RECORD may not be otherwise modified or rescinded, but,16
except as between merchants, such a requirement on a form supplied by17
a merchant must be separately signed by the other party.18
SECTION 20. In Colorado Revised Statutes, 4-3-104, amend19
(a)(3) as follows:20
4-3-104. Negotiable instrument. (a) Except as provided in21
subsections (c) and (d) of this section, "negotiable instrument" means an22
unconditional promise or order to pay a fixed amount of money, with or23
without interest or other charges described in the promise or order, if it:24
(3) Does not state any other undertaking or instruction by the25
person promising or ordering payment to do any act in addition to the26
payment of money, but the promise or order may contain: (i) an27
090
-12- undertaking or power to give, maintain, or protect collateral to secure1
payment; (ii) an authorization or power to the holder to confess judgment2
or realize on or dispose of collateral; or (iii) a waiver of the benefit of any3
law intended for the advantage or protection of an obligor; (iv)
A TERM4
THAT SPECIFIES THE LAW THAT GOVERNS THE PROMISE OR ORDER ; OR (v)5
AN UNDERTAKING TO RESOLVE IN A SPECIFIED FORUM A DISPUTE6
CONCERNING THE PROMISE OR ORDER .7
SECTION 21. In Colorado Revised Statutes, 4-3-105, amend (a)8
as follows:9
4-3-105. Issue of instrument. (a) "Issue" means:10
(1) The first delivery of an instrument by the maker or drawer,11
whether to a holder or nonholder, for the purpose of giving rights on the12
instrument to any person;
OR13
(2) I
F AGREED BY THE PAYEE, THE FIRST TRANSMISSION BY THE14
DRAWER TO THE PAYEE OF AN IMAGE OF AN ITEM AND INFORMATION15
DERIVED FROM THE ITEM THAT ENABLES THE DEPOSITARY BANK TO16
COLLECT THE ITEM BY TRANSFERRING OR PRESENTING UNDER FEDERAL17
LAW AN ELECTRONIC CHECK .18
SECTION 22. In Colorado Revised Statutes, amend 4-3-401 as19
follows:20
4-3-401. Signature necessary for liability on instrument. (a)
A21
person is not liable on an instrument unless (i) the person signed the22
instrument or (ii) the person is represented by an agent or representative23
who signed the instrument and the signature is binding on the represented24
person under section 4-3-402.25
(b) A signature may be made (i) manually or by means of a device26
or machine, and (ii) by the use of any name, including a trade or assumed27
090
-13- name, or by a word, mark, or symbol executed or adopted by a person1
with present intention to authenticate a writing.2
SECTION 23. In Colorado Revised Statutes, 4-3-604, amend (a)3
as follows:4
4-3-604. Discharge by cancellation or renunciation. (a) A5
person entitled to enforce an instrument, with or without consideration,6
may discharge the obligation of a party to pay the instrument (i) by an7
intentional voluntary act, such as surrender of the instrument to the party,8
destruction, mutilation, or cancellation of the instrument, cancellation or9
striking out of the party's signature, or the addition of words to the10
instrument indicating discharge or (ii) by agreeing not to sue or otherwise11
renouncing rights against the party by a signed writing RECORD. THE12
OBLIGATION OF A PARTY TO PAY A CHECK IS NOT DISCHARGED SOLELY BY13
DESTRUCTION OF THE CHECK IN CONNECTION WITH A PROCESS IN WHICH14
INFORMATION IS EXTRACTED FROM THE CHECK AND AN IMAGE OF THE15
CHECK IS MADE AND, SUBSEQUENTLY, THE INFORMATION AND IMAGE ARE16
TRANSMITTED FOR PAYMENT .17
SECTION 24. In Colorado Revised Statutes, 4-4.5-103, amend18
(a) introductory portion and (a)(1) introductory portion as follows:19
4-4.5-103. Payment order - definitions. (a) In this article20
ARTICLE 4.5:21
(1) "Payment order" means an instruction of a sender to a22
receiving bank, transmitted orally electronically, or in writing OR IN A23
RECORD, to pay, or to cause another bank to pay, a fixed or determinable24
amount of money to a beneficiary if:25
SECTION 25. In Colorado Revised Statutes, amend 4-4.5-20126
as follows:27
090
-14- 4-4.5-201. Security procedure. "Security procedure" means a1
procedure established by agreement of a customer and a receiving bank2
for the purpose of (i) verifying that a payment order or communication3
amending or cancelling a payment order is that of the customer or (ii)4
detecting error in the transmission or the content of the payment order or5
communication. A security procedure
MAY IMPOSE AN OBLIGATION ON6
THE RECEIVING BANK OR THE CUSTOMER AND may require the use of7
algorithms or other codes, identifying words, or
numbers, SYMBOLS,8
SOUNDS, BIOMETRICS, encryption, callback procedures, or similar security9
devices. Comparison of a signature on a payment order or communication10
with an authorized specimen signature of the customer
OR REQUIRING A11
PAYMENT ORDER TO BE SENT FROM A KNOWN E -MAIL ADDRESS, IP12
ADDRESS, OR TELEPHONE NUMBER is not by itself a security procedure.13
SECTION 26. In Colorado Revised Statutes, 4-4.5-202, amend14
(b) and (c) as follows:15
4-4.5-202. Authorized and verified payment orders. (b) If a16
bank and its customer have agreed that the authenticity of payment orders17
issued to the bank in the name of the customer as sender will be verified18
pursuant to a security procedure, a payment order received by the19
receiving bank is effective as the order of the customer, whether or not20
authorized, if (i) the security procedure is a commercially reasonable21
method of providing security against unauthorized payment orders and22
(ii) the bank proves that it accepted the payment order in good faith and23
in compliance with
THE BANK'S OBLIGATIONS UNDER the security24
procedure and any written
agreement or instruction of the customer,25
EVIDENCED BY A RECORD, restricting acceptance of payment orders issued26
in the name of the customer. The bank is not required to follow an27
090
-15- instruction that violates a written AN agreement with the customer,1
EVIDENCED BY A RECORD, or notice of which is not received at a time and2
in a manner affording the bank a reasonable opportunity to act on it3
before the payment order is accepted.4
(c) Commercial reasonableness of a security procedure is a5
question of law to be determined by considering the wishes of the6
customer expressed to the bank; the circumstances of the customer known7
to the bank, including the size, type, and frequency of payment orders8
normally issued by the customer to the bank; alternative security9
procedures offered to the customer; and security procedures in general10
use by customers and receiving banks similarly situated. A security11
procedure is deemed to be commercially reasonable if (i) the security12
procedure was chosen by the customer after the bank offered, and the13
customer refused, a security procedure that was commercially reasonable14
for that customer and (ii) the customer expressly agreed in writing A15
RECORD to be bound by any payment order, whether or not authorized,16
issued in its name and accepted by the bank in compliance with
THE17
BANK'S OBLIGATIONS UNDER the security procedure chosen by the18
customer.19
SECTION 27. In Colorado Revised Statutes, 4-4.5-203, amend20
(a)(1) as follows:21
4-4.5-203. Unenforceability of certain verified payment22
orders. (a) If an accepted payment order is not, under section 4-4.5-20223
(a), an authorized order of a customer identified as sender, but is effective24
as an order of the customer pursuant to section 4-4.5-202 (b), the25
following rules apply:26
(1) By express written
agreement EVIDENCED BY A RECORD, the27
090
-16- receiving bank may limit the extent to which it is entitled to enforce or1
retain payment of the payment order.2
SECTION 28. In Colorado Revised Statutes, 4-4.5-207, amend3
(c)(2) as follows:4
4-4.5-207. Misdescription of beneficiary. (c) If (i) a payment5
order described in subsection (b) of this section is accepted, (ii) the6
originator's payment order described the beneficiary inconsistently by7
name and number, and (iii) the beneficiary's bank pays the person8
identified by number as permitted by subsection (b)(1) of this section, the9
following rules apply:10
(2) If the originator is not a bank and proves that the person11
identified by number was not entitled to receive payment from the12
originator, the originator is not obliged to pay its order unless the13
originator's bank proves that the originator, before acceptance of the14
originator's order, had notice that payment of a payment order issued by15
the originator might be made by the beneficiary's bank on the basis of an16
identifying or bank account number even if it identifies a person different17
from the named beneficiary. Proof of notice may be made by any18
admissible evidence. The originator's bank satisfies the burden of proof19
if it proves that the originator, before the payment order was accepted,20
signed a writing RECORD stating the information to which the notice21
relates.22
SECTION 29. In Colorado Revised Statutes, 4-4.5-208, amend23
(b)(2) as follows: 24
4-4.5-208. Misdescription of intermediary bank or25
beneficiary's bank. (b) This subsection (b) applies to a payment order26
identifying an intermediary bank or the beneficiary's bank both by name27
090
-17- and an identifying number if the name and number identify different1
persons.2
(2) If the sender is not a bank and the receiving bank proves that3
the sender, before the payment order was accepted, had notice that the4
receiving bank might rely on the number as the proper identification of5
the intermediary or beneficiary's bank even if it identifies a person6
different from the bank identified by name, the rights and obligations of7
the sender and the receiving bank are governed by subsection (b)(1) of8
this section, as though the sender were a bank. Proof of notice may be9
made by any admissible evidence. The receiving bank satisfies the burden10
of proof if it proves that the sender, before the payment order was11
accepted, signed a writing RECORD stating the information to which the12
notice relates.13
SECTION 30. In Colorado Revised Statutes, 4-4.5-210, amend14
(a) as follows:15
4-4.5-210. Rejection of payment order. (a) A payment order is16
rejected by the receiving bank by a notice of rejection transmitted to the17
sender orally electronically, or in writing A RECORD. A notice of rejection18
need not use any particular words and is sufficient if it indicates that the19
receiving bank is rejecting the order or will not execute or pay the order.20
Rejection is effective when the notice is given if transmission is by a21
means that is reasonable in the circumstances. If notice of rejection is22
given by a means that is not reasonable, rejection is effective when the23
notice is received. If an agreement of the sender and receiving bank24
establishes the means to be used to reject a payment order, (i) any means25
complying with the agreement is reasonable and (ii) any means not26
complying is not reasonable unless no significant delay in receipt of the27
090
-18- notice resulted from the use of the noncomplying means.1
SECTION 31. In Colorado Revised Statutes, 4-4.5-211, amend2
(a) as follows:3
4-4.5-211. Cancellation and amendment of payment order.4
(a) A communication of the sender of a payment order cancelling or5
amending the order may be transmitted to the receiving bank orally6
electronically, or in writing A RECORD. If a security procedure is in effect7
between the sender and the receiving bank, the communication is not8
effective to cancel or amend the order unless the communication is9
verified pursuant to the security procedure or the bank agrees to the10
cancellation or amendment.11
SECTION 32. In Colorado Revised Statutes, 4-4.5-305, amend12
(c) and (d) as follows:13
4-4.5-305. Liability for late or improper execution or failure14
to execute payment order. (c) In addition to the amounts payable under15
subsections (a) and (b) of this section, damages, including consequential16
damages, are recoverable to the extent provided in an express written17
agreement of the receiving bank,
EVIDENCED BY A RECORD.18
(d) If a receiving bank fails to execute a payment order it was19
obliged by express agreement to execute, the receiving bank is liable to20
the sender for its expenses in the transaction and for incidental expenses21
and interest losses resulting from the failure to execute. Additional22
damages, including consequential damages, are recoverable to the extent23
provided in an express written agreement of the receiving bank,24
EVIDENCED BY A RECORD, but are not otherwise recoverable.25
SECTION 33. In Colorado Revised Statutes, amend 4-5-104 as26
follows:27
090
-19- 4-5-104. Formal requirements. A letter of credit, confirmation,1
advice, transfer, amendment, or cancellation may be issued in any form2
that is a
SIGNED record. and is authenticated (i) by a signature or (ii) in
3
accordance with the agreement of the parties or the standard practice4
referred to in section 4-5-108 (e).5
SECTION 34. In Colorado Revised Statutes, amend 4-5-116 as6
follows:7
4-5-116. Choice of law and forum. (a) The liability of an issuer,8
nominated person, or adviser for action or omission is governed by the9
law of the jurisdiction chosen by an agreement in the form of a record10
signed or otherwise authenticated by the affected parties in the manner11
provided in section 4-5-104 or by a provision in the person's letter of12
credit, confirmation, or other undertaking. The jurisdiction whose law is13
chosen need not bear any relation to the transaction.14
(b) Unless subsection (a) of this section applies, the liability of an15
issuer, nominated person, or adviser for action or omission is governed16
by the law of the jurisdiction in which the person is located. The person17
is considered to be located at the address indicated in the person's18
undertaking. If more than one address is indicated, the person is19
considered to be located at the address from which the person's20
undertaking was issued. For the purpose of jurisdiction, choice of law,21
and recognition of interbranch letters of credit, but not enforcement of a22
judgment, all branches of a bank are considered separate juridical entities23
and a bank is considered to be located at the place where its relevant24
branch is considered to be located under this subsection (b).25
(c) Except as otherwise provided in this subsection (c), the26
liability of an issuer, nominated person, or adviser is governed by any27
090
-20- rules of custom or practice, such as the "Uniform Customs and Practice1
for Documentary Credits", to which the letter of credit, confirmation, or2
other undertaking is expressly made subject. If (i) this article would3
govern the liability of an issuer, nominated person, or adviser under4
subsection (a) or (b) of this section, (ii) the relevant undertaking5
incorporates rules of custom or practice, and (iii) there is conflict between6
this article and those rules as applied to that undertaking, those rules7
govern except to the extent of any conflict with the nonvariable8
provisions specified in section 4-5-103 (c) FOR THE PURPOSE OF9
JURISDICTION, CHOICE OF LAW, AND RECOGNITION OF INTERBRANCH10
LETTERS OF CREDIT, BUT NOT ENFORCEMENT OF A JUDGMENT , ALL11
BRANCHES OF A BANK ARE CONSIDERED SEPARATE JURIDICAL ENTITIES ,12
AND A BANK IS CONSIDERED TO BE LOCATED AT THE PLACE WHERE ITS13
RELEVANT BRANCH IS CONSIDERED TO BE LOCATED UNDER SUBSECTION (d)14
OF THIS SECTION.15
(d) If there is conflict between this article and article 3, 4, 4.5, or 16
9 of this title, this article governs A BRANCH OF A BANK IS CONSIDERED TO17
BE LOCATED AT THE ADDRESS INDICATED IN THE BRANCH 'S UNDERTAKING.18
I
F MORE THAN ONE ADDRESS IS INDICATED , THE BRANCH IS CONSIDERED19
TO BE LOCATED AT THE ADDRESS FROM WHICH THE UNDERTAKING WAS20
ISSUED.21
(e) The forum for settling disputes arising out of an undertaking
22
within this article may be chosen in the manner and with the binding23
effect that governing law may be chosen in accordance with subsection24
(a) of this section EXCEPT AS OTHERWISE PROVIDED IN THIS SUBSECTION25
(e),
THE LIABILITY OF AN ISSUER, NOMINATED PERSON, OR ADVISER IS26
GOVERNED BY ANY RULES OF CUSTOM OR PRACTICE , SUCH AS THE27
090
-21- "UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS", TO1
WHICH THE LETTER OF CREDIT, CONFIRMATION, OR OTHER UNDERTAKING2
IS EXPRESSLY MADE SUBJECT. IF (i) THIS ARTICLE 5 WOULD GOVERN THE3
LIABILITY OF AN ISSUER, NOMINATED PERSON , OR ADVISER UNDER4
SUBSECTION (a) OR (b) OF THIS SECTION; (ii) THE RELEVANT5
UNDERTAKING INCORPORATES RULES OF CUSTOM OR PRACTICE ; AND (iii)6
THERE IS CONFLICT BETWEEN THIS ARTICLE 5 AND THOSE RULES AS7
APPLIED TO THAT UNDERTAKING , THOSE RULES GOVERN EXCEPT TO THE8
EXTENT OF ANY CONFLICT WITH THE NONVARIABLE PROVISIONS SPECIFIED9
IN SECTION 4-5-103 (c).10
(f) I
F THERE IS CONFLICT BETWEEN THIS ARTICLE 5 AND ARTICLE11
3,
4, 4.5, OR 9 OF THIS TITLE 4, THIS ARTICLE 5 GOVERNS.12
(g) T
HE FORUM FOR SETTLING DISPUTES ARISING OUT OF AN13
UNDERTAKING WITHIN THIS ARTICLE 5 MAY BE CHOSEN IN THE MANNER14
AND WITH THE BINDING EFFECT THAT GOVERNING LAW MAY BE CHOSEN IN15
ACCORDANCE WITH SUBSECTION (a) OF THIS SECTION.16
SECTION 35. In Colorado Revised Statutes, 4-7-102, amend (a)17
introductory portion; and repeal (a)(10) and (a)(12) as follows:18
4-7-102. Definitions and index of definitions. (a) In this article
19
ARTICLE 7, unless the context otherwise requires:20
(10) "Record" means information that is inscribed on a tangible21
medium or that is stored in an electronic or other medium and is22
retrievable in perceivable form.23
(12) "Sign" means, with present intent to authenticate or adopt a24
record:25
(A) To execute or adopt a tangible symbol; or26
(B) To attach to or logically associate with the record an27
090
-22- electronic sound, symbol, or process.1
SECTION 36. In Colorado Revised Statutes, 4-7-106, amend (b)2
introductory portion and (b)(4); and add (c), (d), (e), (f), (g), (h), and (i)3
as follows:4
4-7-106. Control of electronic document of title. (b) A system5
satisfies subsection (a) of this section, and a person is deemed to have6
HAS control of an electronic document of title, if the document is created,7
stored, and assigned TRANSFERRED in such a manner that:8
(4) Copies or amendments that add or change an identified9
assignee TRANSFEREE of the authoritative copy can be made only with the10
consent of the person asserting control;11
(c) A
SYSTEM SATISFIES SUBSECTION (a) OF THIS SECTION, AND A12
PERSON HAS CONTROL OF AN ELECTRONIC DOCUMENT OF TITLE , IF AN13
AUTHORITATIVE ELECTRONIC COPY OF THE DOCUMENT , A RECORD14
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE ELECTRONIC COPY ,15
OR A SYSTEM IN WHICH THE ELECTRONIC COPY IS RECORDED :16
(1) E
NABLES THE PERSON READILY TO IDENTIFY EACH ELECTRONIC17
COPY AS EITHER AN AUTHORITATIVE COPY OR A NONAUTHORITATIVE18
COPY;19
(2) E
NABLES THE PERSON READILY TO IDENTIFY ITSELF IN ANY20
WAY, INCLUDING BY NAME, IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY,21
OFFICE, OR ACCOUNT NUMBER , AS THE PERSON TO WHICH EACH22
AUTHORITATIVE ELECTRONIC COPY WAS ISSUED OR TRANSFERRED ; AND23
(3) G
IVES THE PERSON EXCLUSIVE POWER , SUBJECT TO24
SUBSECTION (d) OF THIS SECTION, TO:25
(A) P
REVENT OTHERS FROM ADDING OR CHANGING THE PERSON TO26
WHICH EACH AUTHORITATIVE ELECTRONIC COPY HAS BEEN ISSUED OR27
090
-23- TRANSFERRED; AND1
(B) T
RANSFER CONTROL OF EACH AUTHORITATIVE ELECTRONIC2
COPY.3
(d) S
UBJECT TO SUBSECTION (e) OF THIS SECTION, A POWER IS4
EXCLUSIVE UNDER SUBSECTIONS (c)(3)(A) AND (c)(3)(B) OF THIS SECTION5
EVEN IF:6
(1) T
HE AUTHORITATIVE ELECTRONIC COPY , A RECORD ATTACHED7
TO OR LOGICALLY ASSOCIATED WITH THE AUTHORITATIVE ELECTRONIC8
COPY, OR A SYSTEM IN WHICH THE AUTHORITATIVE ELECTRONIC COPY IS9
RECORDED LIMITS THE USE OF THE DOCUMENT OF TITLE OR HAS A10
PROTOCOL THAT IS PROGRAMMED TO CAUSE A CHANGE , INCLUDING A11
TRANSFER OR LOSS OF CONTROL; OR12
(2) T
HE POWER IS SHARED WITH ANOTHER PERSON .13
(e) A
POWER OF A PERSON IS NOT SHARED WITH ANOTHER PERSON14
UNDER SUBSECTION (d)(2) OF THIS SECTION AND THE PERSON'S POWER IS15
NOT EXCLUSIVE IF:16
(1) T
HE PERSON CAN EXERCISE THE POWER ONLY IF THE POWER17
ALSO IS EXERCISED BY THE OTHER PERSON ; AND18
(2) T
HE OTHER PERSON:19
(A) C
AN EXERCISE THE POWER WITHOUT EXERCISE OF THE POWER20
BY THE PERSON; OR21
(B) I
S THE TRANSFEROR TO THE PERSON OF AN INTEREST IN THE22
DOCUMENT OF TITLE.23
(f) I
F A PERSON HAS THE POWERS SPECIFIED IN SUBSECTIONS24
(c)(3)(A)
AND (c)(3)(B) OF THIS SECTION, THE POWERS ARE PRESUMED TO25
BE EXCLUSIVE.26
(g) A
PERSON HAS CONTROL OF AN ELECTRONIC DOCUMENT OF27
090
-24- TITLE IF ANOTHER PERSON, OTHER THAN THE TRANSFEROR TO THE PERSON1
OF AN INTEREST IN THE DOCUMENT:2
(1) H
AS CONTROL OF THE DOCUMENT AND ACKNOWLEDGES THAT3
IT HAS CONTROL ON BEHALF OF THE PERSON ; OR4
(2) O
BTAINS CONTROL OF THE DOCUMENT AFTER HAVING5
ACKNOWLEDGED THAT IT WILL OBTAIN CONTROL OF THE DOCUMENT ON6
BEHALF OF THE PERSON.7
(h) A
PERSON THAT HAS CONTROL UNDER THIS SECTION IS NOT8
REQUIRED TO ACKNOWLEDGE THAT IT HAS CONTROL ON BEHALF OF9
ANOTHER PERSON.10
(i) I
F A PERSON ACKNOWLEDGES THAT IT HAS OR WILL OBTAIN11
CONTROL ON BEHALF OF ANOTHER PERSON , UNLESS THE PERSON12
OTHERWISE AGREES OR LAW OTHER THAN THIS ARTICLE 7 OR ARTICLE 9 OF13
THIS TITLE 4 OTHERWISE PROVIDES, THE PERSON DOES NOT OWE ANY DUTY14
TO THE OTHER PERSON AND IS NOT REQUIRED TO CONFIRM THE15
ACKNOWLEDGMENT TO ANY OTHER PERSON .16
SECTION 37. In Colorado Revised Statutes, 4-8-102, amend (a)17
introductory portion, (a)(6)(i), and (b) as follows:18
4-8-102. Definitions. (a) In this article
ARTICLE 8:19
(6) "Communicate" means to:20
(i) Send a signed writing RECORD; or21
(b) Other THE FOLLOWING definitions applying to IN this article22
ARTICLE 8 and the sections in which they appear are OTHER ARTICLES23
APPLY TO THIS ARTICLE 8:24
Appropriate person Section 4-8-10725
Control Section 4-8-10626
C
ONTROLLABLE ACCOUNT SECTION 4-9-10227
090
-25- CONTROLLABLE ELECTRONIC RECORD SECTION 4-12-1021
C
ONTROLLABLE PAYMENT INTANGIBLE SECTION 4-9-1022
Delivery Section 4-8-3013
Investment company security Section 4-8-1034
Issuer Section 4-8-2015
Overissue Section 4-8-2106
Protected purchaser Section 4-8-3037
Securities account Section 4-8-5018
SECTION 38. In Colorado Revised Statutes, 4-8-103, add (h) as9
follows:10
4-8-103. Rules for determining whether certain obligations11
and interests are securities or financial assets. (h) A
CONTROLLABLE12
ACCOUNT, CONTROLLABLE ELECTRONIC RECORD , OR CONTROLLABLE13
PAYMENT INTANGIBLE IS NOT A FINANCIAL ASSET UNLESS SECTION 4-8-10214
(a)(9)(iii)
APPLIES.15
SECTION 39. In Colorado Revised Statutes, 4-8-106, amend16
(d)(3); and add (h) and (i) as follows:17
4-8-106. Control. (d) A purchaser has "control" of a security18
entitlement if:19
(3) Another person, has control of the security entitlement on
20
behalf of the purchaser or, having previously acquired control of the21
security entitlement, acknowledges that it has control on behalf of the22
purchaser. OTHER THAN THE TRANSFEROR TO THE PURCHASER OF AN23
INTEREST IN THE SECURITY ENTITLEMENT :24
(A) H
AS CONTROL OF THE SECURITY ENTITLEMENT AND25
ACKNOWLEDGES THAT IT HAS CONTROL ON BEHALF OF THE PURCHASER ; OR26
(B) O
BTAINS CONTROL OF THE SECURITY ENTITLEMENT AFTER27
090
-26- HAVING ACKNOWLEDGED THAT IT WILL OBTAIN CONTROL OF THE SECURITY1
ENTITLEMENT ON BEHALF OF THE PURCHASER .2
(h) A
PERSON THAT HAS CONTROL UNDER THIS SECTION IS NOT3
REQUIRED TO ACKNOWLEDGE THAT IT HAS CONTROL ON BEHALF OF A4
PURCHASER.5
(i) I
F A PERSON ACKNOWLEDGES THAT IT HAS OR WILL OBTAIN6
CONTROL ON BEHALF OF A PURCHASER , UNLESS THE PERSON OTHERWISE7
AGREES OR LAW OTHER THAN THIS ARTICLE 8 OR ARTICLE 9 OF THIS TITLE8
4
OTHERWISE PROVIDES, THE PERSON DOES NOT OWE ANY DUTY TO THE9
PURCHASER AND IS NOT REQUIRED TO CONFIRM THE ACKNOWLEDGMENT10
TO ANY OTHER PERSON.11
SECTION 40. In Colorado Revised Statutes, 4-8-110, add (g) as12
follows:13
4-8-110. Applicability - choice of law. (g) T
HE LOCAL LAW OF14
THE ISSUER'S JURISDICTION OR THE SECURITIES INTERMEDIARY 'S15
JURISDICTION GOVERNS A MATTER OR TRANSACTION SPECIFIED IN16
SUBSECTION (a) OR (b) OF THIS SECTION EVEN IF THE MATTER OR17
TRANSACTION DOES NOT BEAR ANY RELATION TO THE JURISDICTION .18
SECTION 41. In Colorado Revised Statutes, 4-8-303, amend (b)19
as follows:20
4-8-303. Protected purchaser. (b) In addition to acquiring the
21
rights of a purchaser, A protected purchaser also acquires its interest in22
the security free of any adverse claim.23
SECTION 42. In Colorado Revised Statutes, 4-9-102, amend (a)24
introductory portion, (a)(2), (a)(3), (a)(4)(A), (a)(11), (a)(42), (a)(47),25
(a)(61), (a)(66), and (b); repeal (a)(7), (a)(31), (a)(77), and (a)(81); and26
add (a)(7.3), (a)(7.5), (a)(27.5), (a)(27.7), (a)(31.5), (a)(54.5), and27
090
-27- (a)(81.5) as follows:1
4-9-102. Definitions and index of definitions. (a) In this article2
ARTICLE 9:3
(2) "Account", except as used in "account for", "
ACCOUNT4
STATEMENT", "ACCOUNT TO", "COMMODITY ACCOUNT " IN SUBSECTION5
(a)(14)
OF THIS SECTION, "CUSTOMER'S ACCOUNT", "DEPOSIT ACCOUNT"6
IN SUBSECTION (a)(29) OF THIS SECTION, "ON ACCOUNT OF", AND7
"
STATEMENT OF ACCOUNT ", means a right to payment of a monetary8
obligation, whether or not earned by performance, (i) for property that has9
been or is to be sold, leased, licensed, assigned, or otherwise disposed of;10
(ii) for services rendered or to be rendered; (iii) for a policy of insurance11
issued or to be issued; (iv) for a secondary obligation incurred or to be12
incurred; (v) for energy provided or to be provided; (vi) for the use or hire13
of a vessel under a charter or other contract; (vii) arising out of the use of14
a credit or charge card or information contained on or for use with the15
card; or (viii) as winnings in a lottery or other game of chance operated16
or sponsored by a state, governmental unit of a state, or person licensed17
or authorized to operate the game by a state or governmental unit of a18
state. The term includes
CONTROLLABLE ACCOUNTS AND19
health-care-insurance receivables. The term does not include (i) rights to
20
payment evidenced by chattel paper; or an instrument, (ii) commercial tort21
claims; (iii) deposit accounts; (iv) investment property; (v) letter-of-credit22
rights or letters of credit; or (vi) rights to payment for money or funds23
advanced or sold, other than rights arising out of the use of a credit or24
charge card or information contained on or for use with the card;
OR (vii)25
RIGHTS TO PAYMENT EVIDENCED BY AN INSTRUMENT .26
(3) "Account debtor" means a person obligated on an account,27
090
-28- chattel paper, or general intangible. The term does not include persons1
obligated to pay a negotiable instrument, even if the
NEGOTIABLE2
instrument constitutes part of
EVIDENCES chattel paper.3
(4) "Accounting", except as used in "accounting for", means a4
record:5
(A) Authenticated SIGNED by a secured party;6
(7) "Authenticate" means:7
(A) To sign; or8
(B) With present intent to adopt or accept a record, to attach to or9
logically associate with the record an electronic sound, symbol, or10
process.11
(7.3) "A
SSIGNEE", EXCEPT AS USED IN "ASSIGNEE FOR BENEFIT OF12
CREDITORS", MEANS A PERSON (i) IN WHOSE FAVOR A SECURITY INTEREST13
THAT SECURES AN OBLIGATION IS CREATED OR PROVIDED FOR UNDER A14
SECURITY AGREEMENT , WHETHER OR NOT THE OBLIGATION IS15
OUTSTANDING OR (ii) TO WHICH AN ACCOUNT, CHATTEL PAPER, PAYMENT16
INTANGIBLE, OR PROMISSORY NOTE HAS BEEN SOLD. THE TERM INCLUDES17
A PERSON TO WHICH A SECURITY INTEREST HAS BEEN TRANSFERRED BY A18
SECURED PARTY.19
(7.5) "A
SSIGNOR" MEANS A PERSON THAT (i) UNDER A SECURITY20
AGREEMENT CREATES OR PROVIDES FOR A SECURITY INTEREST THAT21
SECURES AN OBLIGATION OR (ii) SELLS AN ACCOUNT, CHATTEL PAPER,22
PAYMENT INTANGIBLE, OR PROMISSORY NOTE. THE TERM INCLUDES A23
SECURED PARTY THAT HAS TRANSFERRED A SECURITY INTEREST TO24
ANOTHER PERSON.25
(11) "Chattel paper" means: a record or records that evidence both
26
a monetary obligation and a security interest in specific goods, a security27
090
-29- interest in specific goods and software used in the goods, a security1
interest in specific goods and license of software used in the goods, a2
lease of specific goods, or a lease of specific goods and license of3
software used in the goods. In this paragraph (11), "monetary obligation"4
means a monetary obligation secured by the goods or owed under a lease5
of the goods and includes a monetary obligation with respect to software6
used in the goods. The term does not include (i) charters or other7
contracts involving the use or hire of a vessel or (ii) records that evidence8
a right to payment arising out of the use of a credit or charge card or9
information contained on or for use with the card. If a transaction is10
evidenced by records that include an instrument or series of instruments,11
the group of records taken together constitutes chattel paper.12
(A) A
RIGHT TO PAYMENT OF A MONETARY OBLIGATION SECURED13
BY SPECIFIC GOODS, IF THE RIGHT TO PAYMENT AND SECURITY AGREEMENT14
ARE EVIDENCED BY A RECORD; OR15
(B) A
RIGHT TO PAYMENT OF A MONETARY OBLIGATION OWED BY16
A LESSEE UNDER A LEASE AGREEMENT WITH RESPECT TO SPECIFIC GOODS17
AND A MONETARY OBLIGATION OWED BY THE LESSEE IN CONNECTION WITH18
THE TRANSACTION GIVING RISE TO THE LEASE , IF:19
(i) T
HE RIGHT TO PAYMENT AND LEASE AGREEMENT ARE20
EVIDENCED BY A RECORD; AND21
(ii) T
HE PREDOMINANT PURPOSE OF THE TRANSACTION GIVING RISE22
TO THE LEASE WAS TO GIVE THE LESSEE THE RIGHT TO POSSESSION AND23
USE OF THE GOODS. THE TERM DOES NOT INCLUDE A RIGHT TO PAYMENT24
ARISING OUT OF A CHARTER OR OTHER CONTRACT INVOLVING THE USE OR25
HIRE OF A VESSEL OR A RIGHT TO PAYMENT ARISING OUT OF THE USE OF A26
CREDIT OR CHARGE CARD OR INFORMATION CONTAINED ON OR FOR USE27
090
-30- WITH THE CARD.1
(27.5) "C
ONTROLLABLE ACCOUNT " MEANS AN ACCOUNT2
EVIDENCED BY A CONTROLLABLE ELECTRONIC RECORD THAT PROVIDES3
THAT THE ACCOUNT DEBTOR UNDERTAKES TO PAY THE PERSON THAT HAS4
CONTROL UNDER SECTION 4-12-105 OF THE CONTROLLABLE ELECTRONIC5
RECORD.6
(27.7) "C
ONTROLLABLE PAYMENT INTANGIBLE " MEANS A7
PAYMENT INTANGIBLE EVIDENCED BY A CONTROLLABLE ELECTRONIC8
RECORD THAT PROVIDES THAT THE ACCOUNT DEBTOR UNDERTAKES TO9
PAY THE PERSON THAT HAS CONTROL UNDER SECTION 4-12-105 OF THE10
CONTROLLABLE ELECTRONIC RECORD .11
(31) "Electronic chattel paper" means chattel paper evidenced by
12
a record or records consisting of information stored in an electronic13
medium.14
(31.5) "E
LECTRONIC MONEY" MEANS MONEY IN AN ELECTRONIC15
FORM.16
(42) "General intangible" means any personal property, including17
things in action, other than accounts, chattel paper, commercial tort18
claims, deposit accounts, documents, goods, instruments, investment19
property, letter-of-credit rights, letters of credit, money, and oil, gas, or20
other minerals before extraction. The term includes
CONTROLLABLE21
ELECTRONIC RECORDS, payment intangibles, and software.22
(47) "Instrument" means a negotiable instrument or any other23
writing that evidences a right to the payment of a monetary obligation, is24
not itself a security agreement or lease, and is of a type that in
THE25
ordinary course of business is transferred by delivery with any necessary26
indorsement or assignment. The term does not include (i) investment27
090
-31- property; (ii) letters of credit; or (iii) writings that evidence a right to1
payment arising out of the use of a credit or charge card or information2
contained on or for use with the card;
OR (iv) WRITINGS THAT EVIDENCE3
CHATTEL PAPER.4
(54.5) "M
ONEY" HAS THE MEANING IN SECTION 4-1-201 (b)(24),5
BUT DOES NOT INCLUDE (i) A DEPOSIT ACCOUNT OR (ii) MONEY IN AN6
ELECTRONIC FORM THAT CANNOT BE SUBJECTED TO CONTROL UNDER7
SECTION 4-9-105.5.8
(61) "Payment intangible" means a general intangible under which9
the account debtor's principal obligation is a monetary obligation. T
HE10
TERM INCLUDES A CONTROLLABLE PAYMENT INTANGIBLE .11
(66) "Proposal" means a record authenticated
SIGNED by a secured12
party which includes the terms on which the secured party is willing to13
accept collateral in full or partial satisfaction of the obligation it secures14
pursuant to sections 4-9-620, 4-9-621, and 4-9-622.15
(77) "Send", in connection with a record or notification, means:16
(A) To deposit in the mail, deliver for transmission, or transmit by17
any other usual means of communication, with postage or cost of18
transmission provided for, addressed to any address reasonable under the19
circumstances; or20
(B) To cause the record or notification to be received within the21
time that it would have been received if properly sent under subparagraph22
(A) of this paragraph (77).23
(81) "Tangible chattel paper" means chattel paper evidenced by24
a record or records consisting of information that is inscribed on a25
tangible medium.26
(81.5) "T
ANGIBLE MONEY" MEANS MONEY IN A TANGIBLE FORM .27
090
-32- (b) "Control" as provided in section 4-7-106 and the following1
definitions in other articles apply to this article ARTICLE 9:2
"Applicant" Section 4-5-102. 3
"Beneficiary" Section 4-5-102. 4
"Broker" Section 4-8-102. 5
"Certificated security" Section 4-8-102. 6
"Check" Section 4-3-104. 7
"Clearing corporation" Section 4-8-102. 8
"Contract for sale" Section 4-2-106. 9
"C
ONTROLLABLE ELECTRONIC RECORD " SECTION 4-12-102. 10
"Customer" Section 4-4-104. 11
"Entitlement holder" Section 4-8-102. 12
"Financial asset" Section 4-8-102. 13
"Holder in due course" Section 4-3-302. 14
"Issuer" (with respect to a letter of credit15
or letter-of-credit right) Section 4-5-102. 16
"Issuer" (with respect to a security) Section 4-8-201. 17
"Issuer" (with respect to documents of title) Section 4-7-102. 18
"Lease" Section 4-2.5-103. 19
"Lease agreement" Section 4-2.5-103. 20
"Lease contract" Section 4-2.5-103. 21
"Leasehold interest" Section 4-2.5-103. 22
"Lessee" Section 4-2.5-103. 23
"Lessee in ordinary course of business" Section 4-2.5-103. 24
"Lessor" Section 4-2.5-103. 25
"Lessor's residual interest" Section 4-2.5-103. 26
"Letter of credit" Section 4-5-102. 27
090
-33- "Merchant" Section 4-2-104. 1
"Negotiable instrument" Section 4-3-104. 2
"Nominated person" Section 4-5-102. 3
"Note" Section 4-3-104. 4
"Proceeds of a letter of credit" Section 4-5-114. 5
"P
ROTECTED PURCHASER" SECTION 4-8-303. 6
"Prove" Section 4-3-103. 7
"Q
UALIFYING PURCHASER" SECTION 4-12-102. 8
"Sale" Section 4-2-106. 9
"Securities account" Section 4-8-501. 10
"Securities intermediary" Section 4-8-102. 11
"Security" Section 4-8-102. 12
"Security certificate" Section 4-8-102. 13
"Security entitlement" Section 4-8-102. 14
"Uncertificated security" Section 4-8-102. 15
SECTION 43. In Colorado Revised Statutes, 4-9-104, amend16
(a)(2) and (a)(3); and add (a)(4) as follows:17
4-9-104. Control of deposit account. (a) A secured party has18
control of a deposit account if:19
(2) The debtor, secured party, and bank have agreed in an
20
authenticated A SIGNED record that the bank will comply with instructions21
originated by the secured party directing disposition of the funds in the22
deposit account without further consent by the debtor; or23
(3) The secured party becomes the bank's customer with respect24
to the deposit account;
OR25
(4) A
NOTHER PERSON, OTHER THAN THE DEBTOR:26
(A) H
AS CONTROL OF THE DEPOSIT ACCOUNT AND ACKNOWLEDGES27
090
-34- THAT IT HAS CONTROL ON BEHALF OF THE SECURED PARTY ; OR1
(B) O
BTAINS CONTROL OF THE DEPOSIT ACCOUNT AFTER HAVING2
ACKNOWLEDGED THAT IT WILL OBTAIN CONTROL OF THE DEPOSIT3
ACCOUNT ON BEHALF OF THE SECURED PARTY .4
SECTION 44. In Colorado Revised Statutes, 4-9-105, amend (a),5
(b) introductory portion, (b)(1), (b)(2), (b)(3), and (b)(4); and add (c), (d),6
(e), (f), and (g) as follows:7
4-9-105. Control of electronic copy of record evidencing8
chattel paper. (a) A secured party has control of electronic chattel paper
9
if a system employed for evidencing the transfer of interests in the chattel10
paper reliably establishes the secured party as the person to which the11
chattel paper was assigned A PURCHASER HAS CONTROL OF AN12
AUTHORITATIVE ELECTRONIC COPY OF A RECORD EVIDENCING CHATTEL13
PAPER IF A SYSTEM EMPLOYED FOR EVIDENCING THE ASSIGNMENT OF14
INTERESTS IN THE CHATTEL PAPER RELIABLY ESTABLISHES THE PURCHASER15
AS THE PERSON TO WHICH THE AUTHORITATIVE ELECTRONIC COPY WAS16
ASSIGNED.17
(b) A system satisfies subsection (a) of this section if the record18
or records comprising the chattel paper are created, stored, and assigned19
in such a manner that A SYSTEM SATISFIES SUBSECTION (a) OF THIS20
SECTION IF THE RECORD OR RECORDS EVIDENCING THE CHATTEL PAPER21
ARE CREATED, STORED, AND ASSIGNED IN A MANNER THAT:22
(1) A single authoritative copy of the record or records exists that23
is unique, identifiable, and, except as otherwise provided in paragraphs24
(4), (5), and (6) of this subsection (b), unalterable A SINGLE25
AUTHORITATIVE COPY OF THE RECORD OR RECORDS EXISTS WHICH IS26
UNIQUE, IDENTIFIABLE, AND, EXCEPT AS OTHERWISE PROVIDED IN27
090
-35- SUBSECTIONS (a)(4), (a)(5), AND (a)(6) OF THIS SECTION, UNALTERABLE;1
(2) The authoritative copy identifies the secured party PURCHASER2
as the assignee of the record or records;3
(3) The authoritative copy is communicated to and maintained by4
the secured party PURCHASER or its designated custodian;5
(4) Copies or amendments that add or change an identified6
assignee of the authoritative copy can be made only with the consent of7
the secured party purchaser;8
(c) A
SYSTEM SATISFIES SUBSECTION (a) OF THIS SECTION, AND A9
PURCHASER HAS CONTROL OF AN AUTHORITATIVE ELECTRONIC COPY OF A10
RECORD EVIDENCING CHATTEL PAPER , IF THE ELECTRONIC COPY, A RECORD11
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE ELECTRONIC COPY ,12
OR A SYSTEM IN WHICH THE ELECTRONIC COPY IS RECORDED :13
(1) E
NABLES THE PURCHASER READILY TO IDENTIFY EACH14
ELECTRONIC COPY AS EITHER AN AUTHORITATIVE COPY OR A15
NONAUTHORITATIVE COPY ;16
(2) E
NABLES THE PURCHASER READILY TO IDENTIFY ITSELF IN ANY17
WAY, INCLUDING BY NAME, IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY,18
OFFICE, OR ACCOUNT NUMBER, AS THE ASSIGNEE OF THE AUTHORITATIVE19
ELECTRONIC COPY; AND20
(3) G
IVES THE PURCHASER EXCLUSIVE POWER , SUBJECT TO21
SUBSECTION (d) OF THIS SECTION, TO:22
(A) P
REVENT OTHERS FROM ADDING OR CHANGING AN IDENTIFIED23
ASSIGNEE OF THE AUTHORITATIVE ELECTRONIC COPY ; AND24
(B) T
RANSFER CONTROL OF THE AUTHORITATIVE ELECTRONIC25
COPY.26
(d) S
UBJECT TO SUBSECTION (e) OF THIS SECTION, A POWER IS27
090
-36- EXCLUSIVE UNDER SUBSECTIONS (c)(3)(A) AND (c)(3)(B) OF THIS SECTION1
EVEN IF:2
(1) T
HE AUTHORITATIVE ELECTRONIC COPY , A RECORD ATTACHED3
TO OR LOGICALLY ASSOCIATED WITH THE AUTHORITATIVE ELECTRONIC4
COPY, OR A SYSTEM IN WHICH THE AUTHORITATIVE ELECTRONIC COPY IS5
RECORDED LIMITS THE USE OF THE AUTHORITATIVE ELECTRONIC COPY OR6
HAS A PROTOCOL PROGRAMMED TO CAUSE A CHANGE , INCLUDING A7
TRANSFER OR LOSS OF CONTROL; OR8
(2) T
HE POWER IS SHARED WITH ANOTHER PERSON .9
(e) A
POWER OF A PURCHASER IS NOT SHARED WITH ANOTHER10
PERSON UNDER SUBSECTION (d)(2) OF THIS SECTION AND THE PURCHASER'S11
POWER IS NOT EXCLUSIVE IF:12
(1) T
HE PURCHASER CAN EXERCISE THE POWER ONLY IF THE POWER13
ALSO IS EXERCISED BY THE OTHER PERSON ; AND14
(2) T
HE OTHER PERSON:15
(A) C
AN EXERCISE THE POWER WITHOUT EXERCISE OF THE POWER16
BY THE PURCHASER; OR17
(B) I
S THE TRANSFEROR TO THE PURCHASER OF AN INTEREST IN18
THE CHATTEL PAPER.19
(f) I
F A PURCHASER HAS THE POWERS SPECIFIED IN SUBSECTIONS20
(c)(3)(A)
AND (c)(3)(B) OF THIS SECTION, THE POWERS ARE PRESUMED TO21
BE EXCLUSIVE.22
(g) A
PURCHASER HAS CONTROL OF AN AUTHORITATIVE23
ELECTRONIC COPY OF A RECORD EVIDENCING CHATTEL PAPER IF ANOTHER24
PERSON, OTHER THAN THE TRANSFEROR TO THE PURCHASER OF AN25
INTEREST IN THE CHATTEL PAPER:26
(1) H
AS CONTROL OF THE AUTHORITATIVE ELECTRONIC COPY AND27
090
-37- ACKNOWLEDGES THAT IT HAS CONTROL ON BEHALF OF THE PURCHASER ; OR1
(2) O
BTAINS CONTROL OF THE AUTHORITATIVE ELECTRONIC COPY2
AFTER HAVING ACKNOWLEDGED THAT IT WILL OBTAIN CONTROL OF THE3
ELECTRONIC COPY ON BEHALF OF THE PURCHASER .4
SECTION 45. In Colorado Revised Statutes, add 4-9-105.5 and5
4-9-107.5 as follows:6
4-9-105.5. Control of electronic money. (a) A
PERSON HAS7
CONTROL OF ELECTRONIC MONEY IF :8
(1) T
HE ELECTRONIC MONEY , A RECORD ATTACHED TO OR9
LOGICALLY ASSOCIATED WITH THE ELECTRONIC MONEY , OR A SYSTEM IN10
WHICH THE ELECTRONIC MONEY IS RECORDED GIVES THE PERSON :11
(A) P
OWER TO AVAIL ITSELF OF SUBSTANTIALLY ALL THE BENEFIT12
FROM THE ELECTRONIC MONEY ; AND13
(B) E
XCLUSIVE POWER, SUBJECT TO SUBSECTION (b) OF THIS14
SECTION, TO:15
(i) P
REVENT OTHERS FROM AVAILING THEMSELVES OF16
SUBSTANTIALLY ALL THE BENEFIT FROM THE ELECTRONIC MONEY ; AND17
(ii) T
RANSFER CONTROL OF THE ELECTRONIC MONEY TO ANOTHER18
PERSON OR CAUSE ANOTHER PERSON TO OBTAIN CONTROL OF OTHER19
ELECTRONIC MONEY AS A RESULT OF THE TRANSFER OF THE ELECTRONIC20
MONEY; AND21
(2) T
HE ELECTRONIC MONEY , A RECORD ATTACHED TO OR22
LOGICALLY ASSOCIATED WITH THE ELECTRONIC MONEY , OR A SYSTEM IN23
WHICH THE ELECTRONIC MONEY IS RECORDED ENABLES THE PERSON24
READILY TO IDENTIFY ITSELF IN ANY WAY , INCLUDING BY NAME ,25
IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY , OFFICE, OR ACCOUNT26
NUMBER, AS HAVING THE POWERS UNDER SUBSECTION (a)(1) OF THIS27
090
-38- SECTION.1
(b) S
UBJECT TO SUBSECTION (c) OF THIS SECTION, A POWER IS2
EXCLUSIVE UNDER SUBSECTIONS (a)(1)(B)(i) AND (a)(1)(B)(ii) OF THIS3
SECTION EVEN IF:4
(1) T
HE ELECTRONIC MONEY , A RECORD ATTACHED TO OR5
LOGICALLY ASSOCIATED WITH THE ELECTRONIC MONEY , OR A SYSTEM IN6
WHICH THE ELECTRONIC MONEY IS RECORDED LIMITS THE USE OF THE7
ELECTRONIC MONEY OR HAS A PROTOCOL PROGRAMMED TO CAUSE A8
CHANGE, INCLUDING A TRANSFER OR LOSS OF CONTROL ; OR9
(2) T
HE POWER IS SHARED WITH ANOTHER PERSON .10
(c) A
POWER OF A PERSON IS NOT SHARED WITH ANOTHER PERSON11
UNDER SUBSECTION (b)(2) OF THIS SECTION AND THE PERSON'S POWER IS12
NOT EXCLUSIVE IF:13
(1) T
HE PERSON CAN EXERCISE THE POWER ONLY IF THE POWER14
ALSO IS EXERCISED BY THE OTHER PERSON ; AND15
(2) T
HE OTHER PERSON:16
(A) C
AN EXERCISE THE POWER WITHOUT EXERCISE OF THE POWER17
BY THE PERSON; OR18
(B) I
S THE TRANSFEROR TO THE PERSON OF AN INTEREST IN THE19
ELECTRONIC MONEY.20
(d) I
F A PERSON HAS THE POWERS SPECIFIED IN SUBSECTIONS21
(a)(1)(B)(i)
AND (a)(1)(B)(ii) OF THIS SECTION, THE POWERS ARE22
PRESUMED TO BE EXCLUSIVE.23
(e) A
PERSON HAS CONTROL OF ELECTRONIC MONEY IF ANOTHER24
PERSON, OTHER THAN THE TRANSFEROR TO THE PERSON OF AN INTEREST25
IN THE ELECTRONIC MONEY:26
(1) H
AS CONTROL OF THE ELECTRONIC MONEY AND27
090
-39- ACKNOWLEDGES THAT IT HAS CONTROL ON BEHALF OF THE PERSON ; OR1
(2) O
BTAINS CONTROL OF THE ELECTRONIC MONEY AFTER HAVING2
ACKNOWLEDGED THAT IT WILL OBTAIN CONTROL OF THE ELECTRONIC3
MONEY ON BEHALF OF THE PERSON .4
4-9-107.5. Control of controllable electronic record,5
controllable account, or controllable payment intangible. (a) A6
SECURED PARTY HAS CONTROL OF A CONTROLLABLE ELECTRONIC RECORD7
AS PROVIDED IN SECTION 4-12-105.8
(b) A
SECURED PARTY HAS CONTROL OF A CONTROLLABLE9
ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE IF THE SECURED10
PARTY HAS CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD THAT11
EVIDENCES THE CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT12
INTANGIBLE.13
SECTION 46. In Colorado Revised Statutes, 4-9-203, amend14
(b)(3)(A), (b)(3)(C), and (b)(3)(D); and add (b)(3)(E) as follows:15
4-9-203. Attachment and enforceability of security interest;16
proceeds; supporting obligations; formal requisites. (b) Except as17
otherwise provided in subsections (c) to (i) of this section, a security18
interest is enforceable against the debtor and third parties with respect to19
the collateral only if:20
(3) One of the following conditions is met:21
(A) The debtor has authenticated
SIGNED a security agreement that22
provides a description of the collateral and, if the security interest covers23
timber to be cut, a description of the land concerned;24
(C) The collateral is a certificated security in registered form, and25
the security certificate has been delivered to the secured party under26
section 4-8-301 pursuant to the debtor's security agreement; or27
090
-40- (D) The collateral is CONTROLLABLE ACCOUNTS , CONTROLLABLE1
ELECTRONIC RECORDS, CONTROLLABLE PAYMENT INTANGIBLES , deposit2
accounts, electronic chattel paper ELECTRONIC DOCUMENTS , ELECTRONIC3
MONEY, investment property, OR letter-of-credit rights, or electronic4
documents, and the secured party has control under section 4-7-106,5
4-9-104, 4-9-105 4-9-105.5, 4-9-106, or 4-9-107, OR 4-9-107.5 pursuant6
to the debtor's security agreement;
OR7
(E) T
HE COLLATERAL IS CHATTEL PAPER, AND THE SECURED PARTY8
HAS POSSESSION AND CONTROL UNDER SECTION 4-9-314.5 PURSUANT TO9
THE DEBTOR'S SECURITY AGREEMENT.10
SECTION 47. In Colorado Revised Statutes, 4-9-204, amend (b)11
introductory portion; and add (b.1) as follows:12
4-9-204. After-acquired property - future advances. (b) A
13
S
UBJECT TO SUBSECTION (b.1) OF THIS SECTION, A security interest does14
not attach under a term constituting an after-acquired property clause to:15
(b.1) S
UBSECTION (b) OF THIS SECTION DOES NOT PREVENT A16
SECURITY INTEREST FROM ATTACHING :17
(1) T
O CONSUMER GOODS AS PROCEEDS UNDER SECTION 4-9-31518
(a)
OR COMMINGLED GOODS UNDER SECTION 4-9-336 (c);19
(2) T
O A COMMERCIAL TORT CLAIM AS PROCEEDS UNDER SECTION20
4-9-315 (a);
OR21
(3) U
NDER AN AFTER-ACQUIRED PROPERTY CLAUSE TO PROPERTY22
THAT IS PROCEEDS OF CONSUMER GOODS OR A COMMERCIAL TORT CLAIM .23
SECTION 48. In Colorado Revised Statutes, 4-9-207, amend (c)24
introductory portion as follows:25
4-9-207. Rights and duties of secured party having possession26
or control of collateral. (c) Except as otherwise provided in subsection27
090
-41- (d) of this section, a secured party having possession of collateral or1
control of collateral under section 4-7-106, 4-9-104, 4-9-105, 4-9-105.5,2
4-9-106, or 4-9-107, OR 4-9-107.5:3
SECTION 49. In Colorado Revised Statutes, 4-9-208, amend (b)4
introductory portion, (b)(1), (b)(3), (b)(4), (b)(5), and (b)(6); and add5
(b)(7) and (b)(8) as follows:6
4-9-208. Additional duties of secured party having control of7
collateral. (b) Within five business days after receiving an authenticated8
A SIGNED demand by the debtor:9
(1) A secured party having control of a deposit account under10
section 4-9-104 (a)(2) shall send to the bank with which the deposit11
account is maintained an authenticated statement A SIGNED RECORD that12
releases the bank from any further obligation to comply with instructions13
originated by the secured party;14
(3) A secured party, other than a buyer, having control of15
electronic chattel paper under section 4-9-105 shall: A SECURED PARTY,16
OTHER THAN A BUYER, HAVING CONTROL UNDER SECTION 4-9-105 OF AN17
AUTHORITATIVE ELECTRONIC COPY OF A RECORD EVIDENCING CHATTEL18
PAPER SHALL TRANSFER CONTROL OF THE ELECTRONIC COPY TO THE19
DEBTOR OR A PERSON DESIGNATED BY THE DEBTOR ;20
(A) Communicate the authoritative copy of the electronic chattel21
paper to the debtor or its designated custodian;22
(B) If the debtor designates a custodian that is the designated23
custodian with which the authoritative copy of the electronic chattel paper24
is maintained for the secured party, communicate to the custodian an25
authenticated record releasing the designated custodian from any further26
obligation to comply with instructions originated by the secured party and27
090
-42- instructing the custodian to comply with instructions originated by the1
debtor; and2
(C) Take appropriate action to enable the debtor or its designated3
custodian to make copies of or revisions to the authoritative copy which4
add or change an identified assignee of the authoritative copy without the5
consent of the secured party;6
(4) A secured party having control of investment property under7
section 4-8-106 (d)(2) or 4-9-106 (b) shall send to the securities8
intermediary or commodity intermediary with which the security9
entitlement or commodity contract is maintained an authenticated A10
SIGNED record that releases the securities intermediary or commodity11
intermediary from any further obligation to comply with entitlement12
orders or directions originated by the secured party;13
(5) A secured party having control of a letter-of-credit right under14
section 4-9-107 shall send to each person having an unfulfilled obligation15
to pay or deliver proceeds of the letter of credit to the secured party an16
authenticated A SIGNED release from any further obligation to pay or17
deliver proceeds of the letter of credit to the secured party; and18
(6) A secured party having control of an electronic document19
shall: A SECURED PARTY HAVING CONTROL UNDER SECTION 4-7-106 OF AN20
AUTHORITATIVE ELECTRONIC COPY OF AN ELECTRONIC DOCUMENT SHALL21
TRANSFER CONTROL OF THE ELECTRONIC COPY TO THE DEBTOR OR A22
PERSON DESIGNATED BY THE DEBTOR ;23
(A) Give control of the electronic document to the debtor or its24
designated custodian;25
(B) If the debtor designates a custodian that is the designated26
custodian with which the authoritative copy of the electronic document27
090
-43- is maintained for the secured party, communicate to the custodian an1
authenticated record releasing the designated custodian from any further2
obligation to comply with instructions originated by the secured party and3
instructing the custodian to comply with instructions originated by the4
debtor; and5
(C) Take appropriate action to enable the debtor or its designated6
custodian to make copies of or revisions to the authoritative copy that add7
or change an identified assignee of the authoritative copy without the8
consent of the secured party.9
(7) A
SECURED PARTY HAVING CONTROL UNDER SECTION 4-9-105.510
OF ELECTRONIC MONEY SHALL TRANSFER CONTROL OF THE ELECTRONIC11
MONEY TO THE DEBTOR OR A PERSON DESIGNATED BY THE DEBTOR ; AND12
(8) A
SECURED PARTY HAVING CONTROL UNDER SECTION 4-12-10513
OF A CONTROLLABLE ELECTRONIC RECORD , OTHER THAN A BUYER OF A14
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE15
EVIDENCED BY THE CONTROLLABLE ELECTRONIC RECORD , SHALL16
TRANSFER CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD TO THE17
DEBTOR OR A PERSON DESIGNATED BY THE DEBTOR .18
SECTION 50. In Colorado Revised Statutes, 4-9-209, amend (b)19
as follows:20
4-9-209. Duties of secured party if account debtor has been21
notified of assignment. (b) Within ten days after receiving an
22
authenticated A SIGNED demand by the debtor, a secured party shall send23
to an account debtor that has received notification under section 4-9-40624
(a)
OR 4-12-106 (b) of an assignment to the secured party as assignee25
under section 4-9-406 (a) an authenticated
A SIGNED record that releases26
the account debtor from any further obligation to the secured party.27
090
-44- SECTION 51. In Colorado Revised Statutes, 4-9-210, amend1
(a)(2), (a)(3), (b), (c), and (d) introductory portion as follows: 2
4-9-210. Request for accounting - request regarding list of3
collateral or statement of account - definitions. (a) In this section:4
(2) "Request for an accounting" means a record authenticated5
SIGNED by a debtor requesting that the recipient provide an accounting of6
the unpaid obligations secured by collateral and reasonably identifying7
the transaction or relationship that is the subject of the request.8
(3) "Request regarding a list of collateral" means a record9
authenticated SIGNED by a debtor requesting that the recipient approve or10
correct a list of what the debtor believes to be the collateral securing an11
obligation and reasonably identifying the transaction or relationship that12
is the subject of the request.13
(b) Subject to subsections (c), (d), (e), and (f) of this section, a14
secured party, other than a buyer of accounts, chattel paper, payment15
intangibles, or promissory notes or a consignor, shall comply with a16
request within fourteen days after receipt:17
(1) In the case of a request for an accounting, by authenticating18
SIGNING and sending to the debtor an accounting; and19
(2) In the case of a request regarding a list of collateral or a20
request regarding a statement of account, by authenticating SIGNING and21
sending to the debtor an approval or correction.22
(c) A secured party that claims a security interest in all of a23
particular type of collateral owned by the debtor may comply with a24
request regarding a list of collateral by sending to the debtor an25
authenticated A SIGNED record including a statement to that effect within26
fourteen days after receipt.27
090
-45- (d) A person that receives a request regarding a list of collateral,1
THAT claims no interest in the collateral when it receives the request, and2
that claimed an interest in the collateral at an earlier time shall comply3
with the request within fourteen days after receipt by sending to the4
debtor an authenticated A SIGNED record:5
SECTION 52. In Colorado Revised Statutes, 4-9-301, amend the6
introductory portion and (3) introductory portion as follows:7
4-9-301. Law governing perfection and priority of security8
interests. Except as otherwise provided in sections 4-9-303 to 4-9-3069
4-9-306.7, the following rules determine the law governing perfection,10
the effect of perfection or nonperfection, and the priority of a security11
interest in collateral:12
(3) Except as otherwise provided in paragraph SUBSECTION (4) of13
this section, while tangible negotiable TANGIBLE documents, goods,14
instruments,
OR TANGIBLE money or tangible chattel paper
is located in15
a jurisdiction, the local law of that jurisdiction governs:16
SECTION 53. In Colorado Revised Statutes, 4-9-304, amend (a)17
as follows:18
4-9-304. Law governing perfection and priority of security19
interests in deposit accounts. (a) The local law of a bank's jurisdiction20
governs perfection, the effect of perfection or nonperfection, and the21
priority of a security interest in a deposit account maintained with that22
bank
EVEN IF THE TRANSACTION DOES NOT BEAR ANY RELATION TO THE23
BANK'S JURISDICTION.24
SECTION 54. In Colorado Revised Statutes, 4-9-305, add (a)(5)25
as follows:26
4-9-305. Law governing perfection and priority of security27
090
-46- interests in investment property. (a) Except as otherwise provided in1
subsection (c) of this section, the following rules apply:2
(5) S
UBSECTIONS (a)(2), (a)(3), AND (a)(4) OF THIS SECTION APPLY3
EVEN IF THE TRANSACTION DOES NOT BEAR ANY RELATION TO THE4
JURISDICTION.5
SECTION 55. In Colorado Revised Statutes, add 4-9-306.5 and6
4-9-306.7 as follows:7
4-9-306.5. Law governing perfection and priority of security8
interests in chattel paper. (a) E
XCEPT AS PROVIDED IN SUBSECTION (d)9
OF THIS SECTION, IF CHATTEL PAPER IS EVIDENCED ONLY BY AN10
AUTHORITATIVE ELECTRONIC COPY OF THE CHATTEL PAPER OR IS11
EVIDENCED BY AN AUTHORITATIVE ELECTRONIC COPY AND AN12
AUTHORITATIVE TANGIBLE COPY , THE LOCAL LAW OF THE CHATTEL13
PAPER'S JURISDICTION GOVERNS PERFECTION, THE EFFECT OF PERFECTION14
OR NONPERFECTION, AND THE PRIORITY OF A SECURITY INTEREST IN THE15
CHATTEL PAPER, EVEN IF THE TRANSACTION DOES NOT BEAR ANY16
RELATION TO THE CHATTEL PAPER'S JURISDICTION.17
(b) T
HE FOLLOWING RULES DETERMINE THE CHATTEL PAPER 'S18
JURISDICTION UNDER THIS SECTION:19
(1) I
F THE AUTHORITATIVE ELECTRONIC COPY OF THE RECORD20
EVIDENCING CHATTEL PAPER, OR A RECORD ATTACHED TO OR LOGICALLY21
ASSOCIATED WITH THE ELECTRONIC COPY AND READILY AVAILABLE FOR22
REVIEW, EXPRESSLY PROVIDES THAT A PARTICULAR JURISDICTION IS THE23
CHATTEL PAPER'S JURISDICTION FOR PURPOSES OF THIS PART 3, THIS24
ARTICLE 9, OR THIS TITLE 4, THAT JURISDICTION IS THE CHATTEL PAPER'S25
JURISDICTION.26
(2) I
F SUBSECTION (b)(1) OF THIS SECTION DOES NOT APPLY AND27
090
-47- THE RULES OF THE SYSTEM IN WHICH THE AUTHORITATIVE ELECTRONIC1
COPY IS RECORDED ARE READILY AVAILABLE FOR REVIEW AND EXPRESSLY2
PROVIDE THAT A PARTICULAR JURISDICTION IS THE CHATTEL PAPER 'S3
JURISDICTION FOR PURPOSES OF THIS PART 3, THIS ARTICLE 9, OR THIS4
TITLE 4, THAT JURISDICTION IS THE CHATTEL PAPER'S JURISDICTION.5
(3) I
F SUBSECTIONS (b)(1) AND (b)(2) OF THIS SECTION DO NOT6
APPLY AND THE AUTHORITATIVE ELECTRONIC COPY , OR A RECORD7
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE ELECTRONIC COPY8
AND READILY AVAILABLE FOR REVIEW , EXPRESSLY PROVIDES THAT THE9
CHATTEL PAPER IS GOVERNED BY THE LAW OF A PARTICULAR10
JURISDICTION, THAT JURISDICTION IS THE CHATTEL PAPER'S JURISDICTION.11
(4) I
F SUBSECTIONS (b)(1), (b)(2), AND (b)(3) OF THIS SECTION DO12
NOT APPLY AND THE RULES OF THE SYSTEM IN WHICH THE AUTHORITATIVE13
ELECTRONIC COPY IS RECORDED ARE READILY AVAILABLE FOR REVIEW14
AND EXPRESSLY PROVIDE THAT THE CHATTEL PAPER OR THE SYSTEM IS15
GOVERNED BY THE LAW OF A PARTICULAR JURISDICTION , THAT16
JURISDICTION IS THE CHATTEL PAPER'S JURISDICTION.17
(5) I
F SUBSECTIONS (b)(1) TO (b)(4) OF THIS SECTION DO NOT18
APPLY, THE CHATTEL PAPER'S JURISDICTION IS THE JURISDICTION IN WHICH19
THE DEBTOR IS LOCATED.20
(c) I
F AN AUTHORITATIVE TANGIBLE COPY OF A RECORD EVIDENCES21
CHATTEL PAPER AND THE CHATTEL PA PER IS NOT EVIDENCED BY AN22
AUTHORITATIVE ELECTRONIC COPY , WHILE THE AUTHORITATIVE TANGIBLE23
COPY OF THE RECORD EVIDENCING CHATTEL PAPER IS LOCATED IN A24
JURISDICTION, THE LOCAL LAW OF THAT JURISDICTION GOVERNS :25
(1) P
ERFECTION OF A SECURITY INTEREST IN THE CHATTEL PAPER26
BY POSSESSION UNDER SECTION 4-9-314.5; AND27
090
-48- (2) THE EFFECT OF PERFECTION OR NONPERFECTION AND THE1
PRIORITY OF A SECURITY INTEREST IN THE CHATTEL PAPER .2
(d) T
HE LOCAL LAW OF THE JURISDICTION IN WHICH THE DEBTOR3
IS LOCATED GOVERNS PERFECTION OF A SECURITY INTEREST IN CHATTEL4
PAPER BY FILING.5
4-9-306.7. Law governing perfection and priority of security6
interests in controllable accounts, controllable electronic records, and7
controllable payment intangibles. (a) E
XCEPT AS PROVIDED IN8
SUBSECTION (b) OF THIS SECTION, THE LOCAL LAW OF THE CONTROLLABLE9
ELECTRONIC RECORD'S JURISDICTION SPECIFIED IN SECTION 4-12-107 (c)10
AND (d) GOVERNS PERFECTION , THE EFFECT OF PERFECTION OR11
NONPERFECTION, AND THE PRIORITY OF A SECURITY INTEREST IN A12
CONTROLLABLE ELECTRONIC RECORD AND A SECURITY INTEREST IN A13
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE14
EVIDENCED BY THE CONTROLLABLE ELECTRONIC RECORD .15
(b) T
HE LOCAL LAW OF THE JURISDICTION IN WHICH THE DEBTOR16
IS LOCATED GOVERNS:17
(1) P
ERFECTION OF A SECURITY INTEREST IN A CONTROLLABLE18
ACCOUNT, CONTROLLABLE ELECTRONIC RECORD , OR CONTROLLABLE19
PAYMENT INTANGIBLE BY FILING; AND20
(2) A
UTOMATIC PERFECTION OF A SECURITY INTEREST IN A21
CONTROLLABLE PAYMENT INTANGIBLE CREATED BY A SALE OF THE22
CONTROLLABLE PAYMENT INTANGIBLE .23
SECTION 56. In Colorado Revised Statutes, 4-9-310, amend24
(b)(8); and add (b)(8.1) as follows:25
4-9-310. When filing required to perfect security interest or26
agricultural lien - security interests and agricultural liens to which27
090
-49- filing provisions do not apply. (b) The filing of a financing statement1
is not necessary to perfect a security interest:2
(8) In
CONTROLLABLE ACCOUNTS , CONTROLLABLE ELECTRONIC3
RECORDS, CONTROLLABLE PAYMENT INTANGIBLES , deposit accounts,4
electronic chattel paper,
electronic documents, investment property, or5
letter-of-credit rights that is perfected by control under section 4-9-314;6
(8.1) I
N CHATTEL PAPER THAT IS PERFECTED BY POSSESSION AND7
CONTROL UNDER SECTION 4-9-314.5;8
SECTION 57. In Colorado Revised Statutes, 4-9-312, amend (a),9
(b)(2), (b)(3), and (e); and add (b)(4) as follows:10
4-9-312. Perfection of security interests in chattel paper,11
controllable accounts, controllable electronic records, controllable12
payment intangibles, deposit accounts, documents, goods covered by13
documents, instruments, investment property, letter-of-credit rights,14
and money - perfection by permissive filing - temporary perfection15
without filing or transfer of possession. (a) A security interest in16
chattel paper, negotiable documents
CONTROLLABLE ACCOUNTS ,17
CONTROLLABLE ELECTRONIC RECORDS , CONTROLLABLE PAYMENT18
INTANGIBLES, instruments, or investment property, OR NEGOTIABLE19
DOCUMENTS may be perfected by filing.20
(b) Except as otherwise provided in section 4-9-315 (c) and (d) for21
proceeds:22
(2) Except as otherwise provided in section 4-9-308 (d), a security23
interest in a letter-of-credit right may be perfected only by control under24
section 4-9-314; and25
(3) A security interest in
TANGIBLE money may be perfected only26
by the secured party's taking possession under section 4-9-313;
AND27
090
-50- (4) A SECURITY INTEREST IN ELECTRONIC MONEY MAY BE1
PERFECTED ONLY BY CONTROL UNDER SECTION 4-9-314.2
(e) A security interest in certificated securities, negotiable3
documents, or instruments is perfected without filing or the taking of4
possession or control for a period of twenty days from the time it attaches5
to the extent that it arises for new value given under an authenticated A6
SIGNED security agreement.7
SECTION 58. In Colorado Revised Statutes, 4-9-313, amend (a),8
(c), and (d) as follows:9
4-9-313. When possession by or delivery to secured party10
perfects security interest without filing. (a) Except as otherwise11
provided in subsection (b) of this section, a secured party may perfect a12
security interest in tangible negotiable documents, goods, instruments,13
NEGOTIABLE TANGIBLE DOCUMENTS , OR TANGIBLE money or tangible14
chattel paper by taking possession of the collateral. A secured party may15
perfect a security interest in certificated securities by taking delivery of16
the certificated securities under section 4-8-301.17
(c) With respect to collateral other than certificated securities and18
goods covered by a document, a secured party takes possession of19
collateral in the possession of a person other than the debtor, the secured20
party, or a lessee of the collateral from the debtor in the ordinary course21
of the debtor's business when:22
(1) The person in possession authenticates SIGNS a record23
acknowledging that it holds possession of the collateral for the secured24
party's benefit; or25
(2) The person takes possession of the collateral after having26
authenticated SIGNED a record acknowledging that it will hold possession27
090
-51- of THE collateral for the secured party's benefit.1
(d) If perfection of a security interest depends upon possession of2
the collateral by a secured party, perfection occurs no NOT earlier than the3
time the secured party takes possession and continues only while the4
secured party retains possession.5
SECTION 59. In Colorado Revised Statutes, 4-9-314, amend (a),6
(b), and (c) introductory portion as follows:7
4-9-314. Perfection by control. (a) A security interest in8
investment property, deposit accounts, letter-of-credit rights, electronic9
chattel paper, or electronic documents CONTROLLABLE ACCOUNTS ,10
CONTROLLABLE ELECTRONIC RECORDS , CONTROLLABLE PAYMENT11
INTANGIBLES, DEPOSIT ACCOUNTS, ELECTRONIC DOCUMENTS, ELECTRONIC12
MONEY, INVESTMENT PROPERTY, OR LETTER-OF-CREDIT RIGHTS may be13
perfected by control of the collateral under section 4-7-106, 4-9-104,14
4-9-105 4-9-105.5, 4-9-106, or 4-9-107, OR 4-9-107.5.15
(b) A security interest in deposit accounts, electronic chattel16
paper, letter-of-credit rights, or electronic documents CONTROLLABLE17
ACCOUNTS, CONTROLLABLE ELECTRONIC RECORDS , CONTROLLABLE18
PAYMENT INTANGIBLES, DEPOSIT ACCOUNTS, ELECTRONIC DOCUMENTS ,19
ELECTRONIC MONEY, OR LETTER-OF-CREDIT RIGHTS is perfected by control20
under section 4-7-106, 4-9-104, 4-9-105, or 4-9-105.5, 4-9-107, when OR21
4-9-107.5
NOT EARLIER THAN THE TIME the secured party obtains control22
and remains perfected by control only while the secured party retains23
control.24
(c) A security interest in investment property is perfected by25
control under section 4-9-106 from
NOT EARLIER THAN the time the26
secured party obtains control and remains perfected by control until:27
090
-52- SECTION 60. In Colorado Revised Statutes, add 4-9-314.5 as1
follows:2
4-9-314.5. Perfection by possession and control of chattel3
paper. (a) A
SECURED PARTY MAY PERFECT A SECURITY INTEREST IN4
CHATTEL PAPER BY TAKING POSSESSION OF EACH AUTHORITATIVE5
TANGIBLE COPY OF THE RECORD EVIDENCING THE CHATTEL PAPER AND6
OBTAINING CONTROL OF EACH AUTHORITATIVE ELECTRONIC COPY OF THE7
ELECTRONIC RECORD EVIDENCING THE CHATTEL PAPER .8
(b) A
SECURITY INTEREST IS PERFECTED UNDER SUBSECTION (a) OF9
THIS SECTION NOT EARLIER THAN THE TIME THE SECURED PARTY TAKES10
POSSESSION AND OBTAINS CONTROL AND REMAINS PERFECTED UNDER11
SUBSECTION (a) OF THIS SECTION ONLY WHILE THE SECURED PARTY12
RETAINS POSSESSION AND CONTROL .13
(c) S
ECTION 4-9-313 (c) AND (f) TO (i) APPLIES TO PERFECTION BY14
POSSESSION OF AN AUTHORITATIVE TANGIBLE COPY OF A RECORD15
EVIDENCING CHATTEL PAPER.16
SECTION 61. In Colorado Revised Statutes, 4-9-316, amend (a)17
introductory portion and (f) introductory portion as follows:18
4-9-316. Continued perfection of security interest following19
change in governing law. (a) A security interest perfected pursuant to20
the law of the jurisdiction designated in section 4-9-301 (1), or
4-9-30521
(c), 4-9-306.5 (d),
OR 4-9-306.7 (b) remains perfected until the earliest of:22
(f) A security interest in
CHATTEL PAPER, CONTROLLABLE23
ACCOUNTS, CONTROLLABLE ELECTRONIC RECORDS , CONTROLLABLE24
PAYMENT INTANGIBLES , deposit accounts, letter-of-credit rights, or25
investment property which is perfected under the law of the
CHATTEL26
PAPER'S JURISDICTION, THE CONTROLLABLE ELECTRONIC RECORD 'S27
090
-53- JURISDICTION, THE bank's jurisdiction, the issuer's jurisdiction, a1
nominated person's jurisdiction, the securities intermediary's jurisdiction,2
or the commodity intermediary's jurisdiction, as applicable, remains3
perfected until the earlier of:4
SECTION 62. In Colorado Revised Statutes, 4-9-317, amend (b)5
and (d); and add (f), (g), (h), and (i) as follows:6
4-9-317. Interests that take priority over or take free of7
security interest or agricultural lien. (b) Except as otherwise provided8
in subsection (e) of this section, a buyer, other than a secured party, of9
tangible chattel paper, tangible documents, goods, instruments, TANGIBLE10
DOCUMENTS, or a certificated security takes free of a security interest or11
agricultural lien if the buyer gives value and receives delivery of the12
collateral without knowledge of the security interest or agricultural lien13
and before it is perfected.14
(d) S
UBJECT TO SUBSECTIONS (f) TO (i) OF THIS SECTION, a15
licensee of a general intangible or a buyer, other than a secured party, of16
collateral other than tangible chattel paper, tangible documents,
17
ELECTRONIC MONEY, goods, instruments, TANGIBLE DOCUMENTS , or a18
certificated security takes free of a security interest if the licensee or19
buyer gives value without knowledge of the security interest and before20
it is perfected.21
(f) A
BUYER, OTHER THAN A SECURED PARTY, OF CHATTEL PAPER22
TAKES FREE OF A SECURITY INTEREST IF, WITHOUT KNOWLEDGE OF THE23
SECURITY INTEREST AND BEFORE IT IS PERFECTED , THE BUYER GIVES24
VALUE AND:25
(1) R
ECEIVES DELIVERY OF EACH AUTHORITATIVE TANGIBLE COPY26
OF THE RECORD EVIDENCING THE CHATTEL PAPER ; AND27
090
-54- (2) IF EACH AUTHORITATIVE ELECTRONIC COPY OF THE RECORD1
EVIDENCING THE CHATTEL PAPER CAN BE SUBJECTED TO CONTROL UNDER2
SECTION 4-9-105, OBTAINS CONTROL OF EACH AUTHORITATIVE3
ELECTRONIC COPY.4
(g) A
BUYER OF AN ELECTRONIC DOCUMENT TAKES FREE OF A5
SECURITY INTEREST IF, WITHOUT KNOWLEDGE OF THE SECURITY INTEREST6
AND BEFORE IT IS PERFECTED, THE BUYER GIVES VALUE AND , IF EACH7
AUTHORITATIVE ELECTRONIC COPY OF THE DOCUMENT CAN BE SUBJECTED8
TO CONTROL UNDER SECTION 4-7-106, OBTAINS CONTROL OF EACH9
AUTHORITATIVE ELECTRONIC COPY .10
(h) A
BUYER OF A CONTROLLABLE ELECTRONIC RECORD TAKES11
FREE OF A SECURITY INTEREST IF, WITHOUT KNOWLEDGE OF THE SECURITY12
INTEREST AND BEFORE IT IS PERFECTED, THE BUYER GIVES VALUE AND13
OBTAINS CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD .14
(i) A
BUYER, OTHER THAN A SECURED PARTY, OF A CONTROLLABLE15
ACCOUNT OR A CONTROLLABLE PAYMENT INTANGIBLE TAKES FREE OF A16
SECURITY INTEREST IF, WITHOUT KNOWLEDGE OF THE SECURITY INTEREST17
AND BEFORE IT IS PERFECTED, THE BUYER GIVES VALUE AND OBTAINS18
CONTROL OF THE CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT19
INTANGIBLE.20
SECTION 63. In Colorado Revised Statutes, 4-9-323, amend (d)21
introductory portion and (f) introductory portion as follows:22
4-9-323. Future advances. (d) Except as otherwise provided in23
subsection (e) of this section, a buyer of goods other than a buyer in
24
ordinary course of business takes free of a security interest to the extent25
that it secures advances made after the earlier of:26
(f) Except as otherwise provided in subsection (g) of this section,27
090
-55- a lessee of goods other than a lessee in ordinary course of business, takes1
the leasehold interest free of a security interest to the extent that it secures2
advances made after the earlier of:3
SECTION 64. In Colorado Revised Statutes, 4-9-324, amend4
(b)(2) and (d)(2) as follows:5
4-9-324. Priority of purchase-money security interests.6
(b) Subject to subsection (c) of this section and except as otherwise7
provided in subsection (g) of this section, a perfected purchase-money8
security interest in inventory has priority over a conflicting security9
interest in the same inventory, has priority over a conflicting security10
interest in chattel paper or an instrument constituting proceeds of the11
inventory and in proceeds of the chattel paper, if so provided in section12
4-9-330, and, except as otherwise provided in section 4-9-327, also has13
priority in identifiable cash proceeds of the inventory to the extent the14
identifiable cash proceeds are received on or before the delivery of the15
inventory to a buyer, if:16
(2) The purchase-money secured party sends an authenticated A17
SIGNED notification to the holder of the conflicting security interest;18
(d) Subject to subsection (e) of this section and except as19
otherwise provided in subsection (g) of this section, a perfected20
purchase-money security interest in livestock that are farm products has21
priority over a conflicting security interest in the same livestock, and,22
except as otherwise provided in section 4-9-327, a perfected security23
interest in their identifiable proceeds and identifiable products in their24
unmanufactured states also has priority, if:25
(2) The purchase-money secured party sends an authenticated A26
SIGNED notification to the holder of the conflicting security interest;27
090
-56- SECTION 65. In Colorado Revised Statutes, add 4-9-326.5 as1
follows:2
4-9-326.5. Priority of security interest in controllable account,3
controllable electronic record, and controllable payment intangible.4
A
SECURITY INTEREST IN A CONTROLLABLE ACCOUNT , CONTROLLABLE5
ELECTRONIC RECORD, OR CONTROLLABLE PAYMENT INTANGIBLE HELD BY6
A SECURED PARTY HAVING CONTROL OF THE ACCOUNT , ELECTRONIC7
RECORD, OR PAYMENT INTANGIBLE HAS PRIORITY OVER A CONFLICTING8
SECURITY INTEREST HELD BY A SECURED PARTY THAT DOES NOT HAVE9
CONTROL.10
SECTION 66. In Colorado Revised Statutes, 4-9-330, amend (a),11
(b), and (f) as follows:12
4-9-330. Priority of purchaser of chattel paper or instrument.13
(a) A purchaser of chattel paper has priority over a security interest in the14
chattel paper which is claimed merely as proceeds of inventory subject to15
a security interest if:16
(1) In good faith and in the ordinary course of the purchaser's17
business, the purchaser gives new value, and
takes possession of EACH18
AUTHORITATIVE TANGIBLE COPY OF THE RECORD EVIDENCING the chattel19
paper, or AND obtains control of UNDER SECTION 4-9-105 OF EACH20
AUTHORITATIVE ELECTRONIC COPY OF THE RECORD EVIDENCING the21
chattel paper; under section 4-9-105; and22
(2) The
AUTHORITATIVE COPIES OF THE RECORD EVIDENCING THE23
chattel paper does
DO not indicate that it THE CHATTEL PAPER has been24
assigned to an identified assignee other than the purchaser.25
(b) A purchaser of chattel paper has priority over a security26
interest in the chattel paper which is claimed other than merely as27
090
-57- proceeds of inventory subject to a security interest if the purchaser gives1
new value, and takes possession of EACH AUTHORITATIVE TANGIBLE COPY2
OF THE RECORD EVIDENCING the chattel paper, or AND obtains control of3
UNDER SECTION 4-9-105 OF EACH AUTHORITATIVE ELECTRONIC COPY OF4
THE RECORD EVIDENCING the chattel paper under section 4-9-105 in good5
faith, in the ordinary course of the purchaser's business, and without6
knowledge that the purchase violates the rights of the secured party.7
(f) For purposes of subsections (b) and (d) of this section, if
THE8
AUTHORITATIVE COPIES OF THE RECORD EVIDENCING chattel paper or an9
instrument indicates that it
THE CHATTEL PAPER OR INSTRUMENT has been10
assigned to an identified secured party other than the purchaser, a11
purchaser of the chattel paper or instrument has knowledge that the12
purchase violates the rights of the secured party.13
SECTION 67. In Colorado Revised Statutes, 4-9-331, amend (a)14
and (b) as follows:15
4-9-331. Priority of rights of purchasers of controllable16
accounts, controllable electronic records, controllable payment17
intangibles, documents, instruments, and securities under other18
articles - priority of interests in financial assets and security19
entitlements and protection against assertion of claim under articles20
8 and 12. (a) This article ARTICLE 9 does not limit the rights of a holder21
in due course of a negotiable instrument, a holder to which a negotiable22
document of title has been duly negotiated, or a protected purchaser of a23
security,
OR A QUALIFYING PURCHASER OF A CONTROLLABLE ACCOUNT ,24
CONTROLLABLE ELECTRONIC RECORD , OR CONTROLLABLE PAYMENT25
INTANGIBLE. These holders or purchasers take priority over an earlier26
security interest, even if perfected, to the extent provided in articles 3, 7,27
090
-58- and 8, AND 12 of this title TITLE 4.1
(b) This article ARTICLE 9 does not limit the rights of or impose2
liability on a person to the extent that the person is protected against the3
assertion of a claim under article 8
OR 12 of this title
TITLE 4.4
SECTION 68. In Colorado Revised Statutes, amend 4-9-332 as5
follows:6
4-9-332. Transfer of tangible money - transfer of funds from7
deposit account. (a) A transferee of
TANGIBLE money takes the money8
free of a security interest unless the transferee acts
IF THE TRANSFEREE9
RECEIVES POSSESSION OF THE MONEY WITHOUT ACTING in collusion with10
the debtor in violating the rights of the secured party.11
(b) A transferee of funds from a deposit account takes the funds12
free of a security interest in the deposit account unless the transferee acts13
IF THE TRANSFEREE RECEIVES THE FUNDS WITHOUT ACTING in collusion14
with the debtor in violating the rights of the secured party.15
(c) A
TRANSFEREE OF ELECTRONIC MONEY TAKES THE MONEY FREE16
OF A SECURITY INTEREST IF THE TRANSFEREE OBTAINS CONTROL OF THE17
MONEY WITHOUT ACTING IN COLLUSION WITH THE DEBTOR IN VIOLATING18
THE RIGHTS OF THE SECURED PARTY.19
SECTION 69. In Colorado Revised Statutes, 4-9-334, amend20
(f)(1) as follows:21
4-9-334. Priority of security interests in fixtures and crops.22
(f) A security interest in fixtures, whether or not perfected, has priority23
over a conflicting interest of an encumbrancer or owner of the real24
property if:25
(1) The encumbrancer or owner has, in an authenticated
A SIGNED26
record, consented to the security interest or disclaimed an interest in the27
090
-59- goods as fixtures; or1
SECTION 70. In Colorado Revised Statutes, 4-9-341, amend the2
introductory portion as follows:3
4-9-341. Bank's rights and duties with respect to deposit4
account. Except as otherwise provided in section 4-9-340 (c), and unless5
the bank otherwise agrees in an authenticated A SIGNED record, a bank's6
rights and duties with respect to a deposit account maintained with the7
bank are not terminated, suspended, or modified by:8
SECTION 71. In Colorado Revised Statutes, 4-9-404, amend9
(a)(2) as follows:10
4-9-404. Rights acquired by assignee; claims and defenses11
against assignee. (a) Unless an account debtor has made an enforceable12
agreement not to assert defenses or claims, and subject to subsections (b)13
to (e) of this section, the rights of an assignee are subject to:14
(2) Any other defense or claim of the account debtor against the15
assignor which accrues before the account debtor receives a notification16
of the assignment authenticated SIGNED by the assignor or the assignee.17
SECTION 72. In Colorado Revised Statutes, 4-9-406, amend (a),18
(b) introductory portion, (c), (d) introductory portion, and (g); and add19
(m) as follows:20
4-9-406. Discharge of account debtor - notification of21
assignment - identification and proof of assignment - restrictions on22
assignment of accounts, chattel paper, payment intangibles, and23
promissory notes ineffective. (a) Subject to subsections (b) to (i)
AND24
(m) of this section, an account debtor on an account, chattel paper, or a25
payment intangible may discharge its obligation by paying the assignor26
until, but not after, the account debtor receives a notification,27
090
-60- authenticated SIGNED by the assignor or the assignee, that the amount due1
or to become due has been assigned and that payment is to be made to the2
assignee. After receipt of the notification, the account debtor may3
discharge its obligation by paying the assignee and may not discharge the4
obligation by paying the assignor.5
(b) Subject to subsection (h) SUBSECTIONS (h) AND (m) of this6
section, notification is ineffective under subsection (a) of this section: 7
(c) Subject to subsection (h) SUBSECTIONS (h) AND (m) of this8
section, if requested by the account debtor, an assignee shall seasonably9
furnish reasonable proof that the assignment has been made. Unless the10
assignee complies, the account debtor may discharge its obligation by11
paying the assignor, even if the account debtor has received a notification12
under subsection (a) of this section.13
(d) I
N THIS SUBSECTION (d), "PROMISSORY NOTE" INCLUDES A14
NEGOTIABLE INSTRUMENT THAT EVIDENCES CHATTEL PAPER . Except as15
otherwise provided in subsections (e), (k), and
(l), AND (m) of this section16
and sections 4-2.5-303, 4-9-407, 8-80-103, 8-42-124, 13-64-210, and17
24-4.1-114, C.R.S., and subject to subsection (h) of this section, a term18
in an agreement between an account debtor and an assignor or in a19
promissory note is ineffective to the extent that it:20
(g) Subject to subsection (h) SUBSECTIONS (h) AND (m) of this21
section, an account debtor may not waive or vary its option under22
paragraph (3) of subsection (b) SUBSECTION (b)(3) of this section.23
(m) S
UBSECTIONS (a), (b), (c), AND (g) OF THIS SECTION DO NOT24
APPLY TO A CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT25
INTANGIBLE.26
SECTION 73. In Colorado Revised Statutes, 4-9-408, add (h) as27
090
-61- follows:1
4-9-408. Restrictions on assignment of promissory notes,2
health-care-insurance receivables, and certain general intangibles3
ineffective. (h) I
N THIS SECTION, "PROMISSORY NOTE" INCLUDES A4
NEGOTIABLE INSTRUMENT THAT EVIDENCES CHATTEL PAPER .5
SECTION 74. In Colorado Revised Statutes, 4-9-509, amend6
(a)(1) and (b) introductory portion as follows:7
4-9-509. Persons entitled to file a record. (a) A person may file8
an initial financing statement, amendment that adds collateral covered by9
a financing statement, or amendment that adds a debtor to a financing10
statement only if:11
(1) The debtor authorizes the filing in an authenticated
A SIGNED12
record or pursuant to subsection (b) or (c) of this section; or13
(b) By authenticating SIGNING or becoming bound as debtor by a14
security agreement, a debtor or new debtor authorizes the filing of an15
initial financing statement, and an amendment, covering:16
SECTION 75. In Colorado Revised Statutes, 4-9-513, amend17
(b)(2) and (c) introductory portion as follows:18
4-9-513. Termination statement. (b) To comply with subsection19
(a) of this section, a secured party shall cause the secured party of record20
to file the termination statement:21
(2) If earlier, within twenty days after the secured party receives22
an authenticated A SIGNED demand from a debtor.23
(c) In cases not governed by subsection (a) of this section, within24
twenty days after a secured party receives an authenticated A SIGNED25
demand from a debtor, the secured party shall cause the secured party of26
record for a financing statement to send to the debtor a termination27
090
-62- statement for the financing statement or file the termination statement in1
the filing office if:2
SECTION 76. In Colorado Revised Statutes, 4-9-601, amend (b)3
as follows:4
4-9-601. Rights after default - judicial enforcement - consignor5
or buyer of accounts, chattel paper, payment intangibles, or6
promissory notes. (b) A secured party in possession of collateral or7
control of collateral under section 4-7-106, 4-9-104, 4-9-105, 4-9-105.5,8
4-9-106, or 4-9-107, OR 4-9-107.5 has the rights and duties provided in9
section 4-9-207.10
SECTION 77. In Colorado Revised Statutes, 4-9-605, amend the11
introductory portion; and add (b) as follows:12
4-9-605. Unknown debtor or secondary obligor. (a) E
XCEPT AS13
PROVIDED IN SUBSECTION (b) OF THIS SECTION, a secured party does not14
owe a duty based on its status as secured party:15
(b) A
SECURED PARTY OWES A DUTY BASED ON ITS STATUS AS A16
SECURED PARTY TO A PERSON IF , AT THE TIME THE SECURED PARTY17
OBTAINS CONTROL OF COLLATERAL THAT IS A CONTROLLABLE ACCOUNT ,18
CONTROLLABLE ELECTRONIC RECORD , OR CONTROLLABLE PAYMENT19
INTANGIBLE OR AT THE TIME THE SECURITY INTEREST ATTACHES TO THE20
COLLATERAL, WHICHEVER IS LATER:21
(1) T
HE PERSON IS A DEBTOR OR OBLIGOR; AND22
(2) T
HE SECURED PARTY KNOWS THAT THE INFORMATION IN23
SUBSECTION (a)(1)(A), (a)(1)(B), OR (a)(1)(C) OF THIS SECTION RELATING24
TO THE PERSON IS NOT PROVIDED BY THE COLLATERAL , A RECORD25
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE COLLATERAL , OR THE26
SYSTEM IN WHICH THE COLLATERAL IS RECORDED .27
090
-63- SECTION 78. In Colorado Revised Statutes, 4-9-608, amend1
(a)(1)(C) as follows:2
4-9-608. Application of proceeds of collection or enforcement3
- liability for deficiency and right to surplus. (a) If a security interest4
or agricultural lien secures payment or performance of an obligation, the5
following rules apply:6
(1) A secured party shall apply or pay over for application the7
cash proceeds of collection or enforcement under section 4-9-607 in the8
following order to:9
(C) The satisfaction of obligations secured by any subordinate10
security interest in or other lien on the collateral subject to the security11
interest or agricultural lien under which the collection or enforcement is12
made if the secured party receives an authenticated A SIGNED demand for13
proceeds before distribution of the proceeds is completed.14
SECTION 79. In Colorado Revised Statutes, 4-9-611, amend15
(a)(1), (b), (c) introductory portion, (c)(3)(A), (e) introductory portion,16
and (e)(2)(B) as follows:17
4-9-611. Notification before disposition of collateral -18
definition. (a) In this section, "notification date" means the earlier of the19
date on which:20
(1) A secured party sends to the debtor and any secondary obligor21
an authenticated A SIGNED notification of disposition; or22
(b) Except as otherwise provided in subsection (d) of this section,23
a secured party that disposes of collateral under section 4-9-610 shall24
send to the persons specified in subsection (c) of this section a reasonable25
authenticated SIGNED notification of disposition.26
(c) To comply with subsection (b) of this section, the secured27
090
-64- party shall send an authenticated A SIGNED notification of disposition to:1
(3) If the collateral is other than consumer goods:2
(A) Any other person from which the secured party has received,3
before the notification date, an authenticated A SIGNED notification of a4
claim of an interest in the collateral;5
(e) A secured party complies with the requirement for notification6
prescribed by subparagraph (B) of paragraph (3) of subsection (c)7
SUBSECTION (c)(3)(B) of this section if:8
(2) Before the notification date, the secured party:9
(B) Received a response to the request for information and sent10
an authenticated A SIGNED notification of disposition to each secured11
party or other lienholder named in that response whose financing12
statement covered the collateral.13
SECTION 80. In Colorado Revised Statutes, 4-9-613, amend14
(a)(5); and add (b) as follows:15
4-9-613. Contents and form of notification before disposition16
of collateral: general. (a) Except in a consumer-goods transaction, the17
following rules apply:18
(5) The following form of notification and the form appearing in19
section 4-9-614 (3) 4-9-614 (a)(3), when completed IN ACCORDANCE WITH20
THE INSTRUCTIONS IN SUBSECTION (b) OF THIS SECTION AND SECTION21
4-9-614 (b), each provides sufficient information:22
NOTIFICATION OF DISPOSITION OF COLLATERAL23
To: [Name of debtor, obligor, or other person to which the24
notification is sent]25
From: [Name, address, and telephone number of secured party]26
Name of Debtor(s): [Include only if debtor(s) are not an27
090
-65- addressee]1
[For a public disposition:]2
We will sell [or lease or license, as applicable] the [describe3
collateral] [to the highest qualified bidder] in public as follows:4
Day and Date: ____________________5
Time: ____________________6
Place: ____________________7
[For a private disposition:]8
We will sell [or lease or license, as applicable] the [describe9
collateral] privately sometime after [day and date].10
You are entitled to an accounting of the unpaid indebtedness11
secured by the property that we intend to sell [or lease or license, as12
applicable] [for a charge of $__________]. You may request an13
accounting by calling us at [telephone number] or writing us at [address].14
NOTIFICATION
OF DISPOSITION OF COLLATERAL15
T
O:(NAME OF DEBTOR, OBLIGOR, OR OTHER PERSON TO WHICH16
THE NOTIFICATION IS SENT)17
F
ROM:(N AME, ADDRESS, AND TELEPHONE NUMBER OF18
SECURED PARTY)19
{1}
NAME OF ANY DEBTOR THAT IS NOT AN ADDRESSEE : (NAME OF20
EACH DEBTOR)21
{2}
WE WILL SELL (DESCRIBE COLLATERAL) (TO THE HIGHEST22
QUALIFIED BIDDER) AT PUBLIC SALE. A SALE COULD INCLUDE A LEASE OR23
LICENSE. THE SALE WILL BE HELD AS FOLLOWS:24
(D
ATE)25
(T
IME)26
(P
LACE)27
090
-66- {3} WE WILL SELL (DESCRIBE COLLATERAL) AT PRIVATE SALE1
SOMETIME AFTER (DATE). A SALE COULD INCLUDE A LEASE OR LICENSE.2
{4}
YOU ARE ENTITLED TO AN ACCOUNTING OF THE UNPAID3
INDEBTEDNESS SECURED BY THE PROPERTY THAT WE INTEND TO SELL OR ,4
AS APPLICABLE, LEASE OR LICENSE.5
{5}
IF YOU REQUEST AN ACCOUNTING YOU MUST PAY A CHARGE OF6
$
(AMOUNT).7
{6}
YOU MAY REQUEST AN ACCOUNTING BY CALLING US AT8
(
TELEPHONE NUMBER).9
(b) T
HE FOLLOWING INSTRUCTIONS APPLY TO THE FORM OF10
NOTIFICATION IN SUBSECTION (a)(5) OF THIS SECTION:11
(1) T
HE INSTRUCTIONS IN THIS SUBSECTION (b) REFER TO THE12
NUMBERS IN BRACES BEFORE ITEMS IN THE FORM OF NOTIFICATION IN13
SUBSECTION (a)(5) OF THIS SECTION. DO NOT INCLUDE THE NUMBERS OR14
BRACES IN THE NOTIFICATION. THE NUMBERS AND BRACES ARE USED ONLY15
FOR THE PURPOSE OF THESE INSTRUCTIONS .16
(2) I
NCLUDE AND COMPLETE ITEM {1} ONLY IF THERE IS A DEBTOR17
THAT IS NOT AN ADDRESSEE OF THE NOTIFICATION AND LIST THE NAME OR18
NAMES.19
(3) I
NCLUDE AND COMPLETE EITHER ITEM {2}, IF THE20
NOTIFICATION RELATES TO A PUBLIC DISPOSITION OF THE COLLATERAL , OR21
ITEM {3}, IF THE NOTIFICATION RELATES TO A PRIVATE DISPOSITION OF THE22
COLLATERAL. IF ITEM {2} IS INCLUDED, INCLUDE THE WORDS "TO THE23
HIGHEST QUALIFIED BIDDER" ONLY IF APPLICABLE.24
(4) I
NCLUDE AND COMPLETE ITEMS {4} AND {6}.25
(5) I
NCLUDE AND COMPLETE ITEM {5} ONLY IF THE SENDER WILL26
CHARGE THE RECIPIENT FOR AN ACCOUNTING .27
090
-67- SECTION 81. In Colorado Revised Statutes, 4-9-614, amend1
(a)(1)(A) and (a)(3); and add (b) as follows:2
4-9-614. Contents and form of notification before disposition3
of collateral: consumer-goods transaction. (a) In a consumer-goods4
transaction, the following rules apply:5
(1) A notification of disposition must provide the following6
information:7
(A) The information specified in section 4-9-613 (1) 4-9-6138
(a)(1);9
(3) The following form of notification, when completed
IN10
ACCORDANCE WITH THE INSTRUCTIONS IN SUBSECTION (b) OF THIS11
SECTION, provides sufficient information:12
[Name and address of secured party]
13
[Date]14
NOTICE OF OUR PLAN TO SELL PROPERTY15
[Name and address of any obligor who is also a debtor]16
Subject: [Identification of Transaction]17
We have your [describe collateral], because you broke promises18
in our agreement.19
[For a public disposition:]20
We will sell [describe collateral] at public sale. A sale could21
include a lease or license. The sale will be held as follows:22
Date: ____________________23
Time: ____________________24
Place: ____________________25
You may attend the sale and bring bidders if you want.26
[For a private disposition:]27
090
-68- We will sell [describe collateral] at private sale sometime after1
[date]. A sale could include a lease or license.2
The money that we get from the sale (after paying our costs) will3
reduce the amount you owe. If we get less money than you owe, you [ will4
or will not, as applicable] still owe us the difference. If we get more5
money than you owe, you will get the extra money, unless we must pay6
it to someone else.7
You can get the property back at any time before we sell it by8
paying us the full amount you owe (not just the past due payments),9
including our expenses. To learn the exact amount you must pay, call us10
at [telephone number] or write us at [secured party's address].11
If you want us to explain to you in writing how we have figured12
the amount that you owe us, you may call us at [telephone number] [or13
write us at [secured party's address]] and request a written explanation.14
[We will charge you $__________ for the explanation if we have already15
sent you an explanation of the type requested within the last six months.]16
If you need more information about the sale call us at [telephone17
number] [or write us at [secured party's address]].18
We are sending this notice to the following other people who have19
an interest in [describe collateral] or who owe money under your20
agreement:21
[Names of all other debtors and obligors, if any]22
[Name and address of secured party]23
[Date]24
NOTICE OF OUR PLAN TO SELL PROPERTY25
(N
AME AND ADDRESS OF ANY OBLIGOR WHO IS ALSO A DEBTOR )26
S
UBJECT:(IDENTIFY TRANSACTION)27
090
-69- WE HAVE YOUR (DESCRIBE COLLATERAL), BECAUSE YOU BROKE1
PROMISES IN OUR AGREEMENT.2
{1}
WE WILL SELL (DESCRIBE COLLATERAL) AT PUBLIC SALE. A3
SALE COULD INCLUDE A LEASE OR LICENSE . THE SALE WILL BE HELD AS4
FOLLOWS:5
(D
ATE)6
(T
IME)7
(P
LACE)8
Y
OU MAY ATTEND THE SALE AND BRING BIDDERS IF YOU WANT .9
{2}
WE WILL SELL (DESCRIBE COLLATERAL) AT PRIVATE SALE10
SOMETIME AFTER (DATE). A SALE COULD INCLUDE A LEASE OR LICENSE.11
{3}
THE MONEY THAT WE GET FROM THE SALE , AFTER PAYING OUR12
COSTS, WILL REDUCE THE AMOUNT YOU OWE . IF WE GET LESS MONEY THAN13
YOU OWE, YOU (WILL OR WILL NOT, AS APPLICABLE) STILL OWE US THE14
DIFFERENCE. IF WE GET MORE MONEY THAN YOU OWE , YOU WILL GET THE15
EXTRA MONEY, UNLESS WE MUST PAY IT TO SOMEONE ELSE .16
{4}
YOU CAN GET THE PROPERTY BACK AT ANY TIME BEFORE WE17
SELL IT BY PAYING US THE FULL AMOUNT YOU OWE , NOT JUST THE PAST18
DUE PAYMENTS, INCLUDING OUR EXPENSES . TO LEARN THE EXACT19
AMOUNT YOU MUST PAY , CALL US AT (TELEPHONE NUMBER).20
{5}
IF YOU WANT US TO EXPLAIN TO YOU IN (WRITING) (WRITING21
OR IN (DESCRIPTION OF ELECTRONIC RECORD )) (DESCRIPTION OF22
ELECTRONIC RECORD) HOW WE HAVE FIGURED THE AMOUNT THAT YOU23
OWE US, {6} CALL US AT (TELEPHONE NUMBER ) (OR) (WRITE US AT24
(
SECURED PARTY'S ADDRESS)) (OR CONTACT US BY (DESCRIPTION OF25
ELECTRONIC COMMUNICATION METHOD )) {7} AND REQUEST (A WRITTEN26
EXPLANATION) (A WRITTEN EXPLANATION OR AN EXPLANATION IN27
090
-70- (DESCRIPTION OF ELECTRONIC RECORD )) (AN EXPLANATION IN1
(
DESCRIPTION OF ELECTRONIC RECORD )).2
{8}
WE WILL CHARGE YOU $ (AMOUNT) FOR THE EXPLANATION IF3
WE SENT YOU ANOTHER WRITTEN EXPLANATION OF THE AMOUNT YOU OWE4
US WITHIN THE LAST SIX MONTHS.5
{9}
IF YOU NEED MORE INFORMATION ABOUT THE SALE (CALL US6
AT (TELEPHONE NUMBER )) (OR) (WRITE US AT (SECURED PARTY'S7
ADDRESS)) (OR CONTACT US BY (DESCRIPTION OF ELECTRONIC8
COMMUNICATION METHOD )).9
{10}
WE ARE SENDING THIS NOTICE TO THE FOLLOWING OTHER10
PEOPLE WHO HAVE AN INTEREST IN (DESCRIBE COLLATERAL) OR WHO OWE11
MONEY UNDER YOUR AGREEMENT :12
(N
AMES OF ALL OTHER DEBTORS AND OBLIGORS , IF ANY)13
(b) T
HE FOLLOWING INSTRUCTIONS APPLY TO THE FORM OF14
NOTIFICATION IN SUBSECTION (a)(3) OF THIS SECTION:15
(1) T
HE INSTRUCTIONS IN THIS SUBSECTION (b) REFER TO THE16
NUMBERS IN BRACES BEFORE ITEMS IN THE FORM OF NOTIFICATION IN17
SUBSECTION (a)(3) OF THIS SECTION. DO NOT INCLUDE THE NUMBERS OR18
BRACES IN THE NOTIFICATION. THE NUMBERS AND BRACES ARE USED ONLY19
FOR THE PURPOSE OF THESE INSTRUCTIONS .20
(2) I
NCLUDE AND COMPLETE EITHER ITEM {1}, IF THE21
NOTIFICATION RELATES TO A PUBLIC DISPOSITION OF THE COLLATERAL , OR22
ITEM {2}, IF THE NOTIFICATION RELATES TO A PRIVATE DISPOSITION OF THE23
COLLATERAL.24
(3) I
NCLUDE AND COMPLETE ITEMS {3}, {4}, {5}, {6}, AND {7}.25
(4) I
N ITEM {5}, INCLUDE AND COMPLETE ANY ONE OF THE THREE26
ALTERNATIVE METHODS FOR THE EXPLANATION -WRITING, WRITING OR27
090
-71- ELECTRONIC RECORD, OR ELECTRONIC RECORD.1
(5) I
N ITEM {6}, INCLUDE THE TELEPHONE NUMBER . IN ADDITION,2
THE SENDER MAY INCLUDE AND COMPLETE EITHER OR BOTH OF THE TWO3
ADDITIONAL ALTERNATIVE METHODS OF COMMUNICATION --WRITING OR4
ELECTRONIC COMMUNICATION --FOR THE RECIPIENT OF THE NOTIFICATION5
TO COMMUNICATE WITH THE SENDER . NEITHER OF THE TWO ADDITIONAL6
METHODS OF COMMUNICATION IS REQUIRED TO BE INCLUDED .7
(6) I
N ITEM {7}, INCLUDE AND COMPLETE THE METHOD OR8
METHODS FOR THE EXPLANATION --WRITING, WRITING OR ELECTRONIC9
RECORD, OR ELECTRONIC RECORD-INCLUDED IN ITEM {5}.10
(7) I
NCLUDE AND COMPLETE ITEM {8} ONLY IF A WRITTEN11
EXPLANATION IS INCLUDED IN ITEM {5} AS A METHOD FOR12
COMMUNICATING THE EXPLANATION AND THE SENDER WILL CHARGE THE13
RECIPIENT FOR ANOTHER WRITTEN EXPLANATION .14
(8) I
N ITEM {9}, INCLUDE EITHER THE TELEPHONE NUMBER OR THE15
ADDRESS OR BOTH THE TELEPHONE NUMBER AND THE ADDRESS . IN16
ADDITION, THE SENDER MAY INCLUDE AND COMPLETE THE ADDITIONAL17
METHOD OF COMMUNICATION --ELECTRONIC COMMUNICATION --FOR THE18
RECIPIENT OF THE NOTIFICATION TO COMMUNICATE WITH THE SENDER .19
T
HE ADDITIONAL METHOD OF ELECTRONIC COMMUNICATION IS NOT20
REQUIRED TO BE INCLUDED.21
(9) I
F ITEM {10} DOES NOT APPLY, INSERT "NONE" AFTER22
"
AGREEMENT:".23
SECTION 82. In Colorado Revised Statutes, 4-9-615, amend24
(a)(3)(A) and (a)(4) as follows:25
4-9-615. Application of proceeds of disposition; liability for26
deficiency and right to surplus. (a) A secured party shall apply or pay27
090
-72- over for application the cash proceeds of disposition under section1
4-9-610 in the following order to:2
(3) The satisfaction of obligations secured by any subordinate3
security interest in or other subordinate lien on the collateral if:4
(A) The secured party receives from the holder of the subordinate5
security interest or other lien an authenticated A SIGNED demand for6
proceeds before distribution of the proceeds is completed; and7
(4) A secured party that is a consignor of the collateral if the8
secured party receives from the consignor an authenticated A SIGNED9
demand for proceeds before distribution of the proceeds is completed.10
SECTION 83. In Colorado Revised Statutes, 4-9-616, amend11
(a)(1) introductory portion, (a)(2)(A), (b)(1)(A), and (c) introductory12
portion as follows:13
4-9-616. Explanation of calculation of surplus or deficiency -14
definitions. (a) In this section:15
(1) "Explanation" means a writing RECORD that:16
(2) "Request" means a record:17
(A) Authenticated SIGNED by a debtor or consumer obligor;18
(b) In a consumer-goods transaction in which the debtor is entitled19
to a surplus or a consumer obligor is liable for a deficiency under section20
4-9-615, the secured party shall:21
(1) Send an explanation to the debtor or consumer obligor, as22
applicable, after the disposition and:23
(A) Before or when the secured party accounts to the debtor and24
pays any surplus or first makes written demand IN A RECORD on the25
consumer obligor after the disposition for payment of the deficiency; and26
(c) To comply with subparagraph (B) of paragraph (1) of27
090
-73- subsection (a) SUBSECTION (a)(1)(B) of this section, a writing AN1
EXPLANATION must provide the following information in the following2
order:3
SECTION 84. In Colorado Revised Statutes, 4-9-619, amend (a)4
introductory portion as follows:5
4-9-619. Transfer of record or legal title. (a) In this section,6
"transfer statement" means a record authenticated SIGNED by a secured7
party stating:8
SECTION 85. In Colorado Revised Statutes, 4-9-620, amend9
(a)(2) introductory portion, (c)(1), (c)(2) introductory portion, (c)(2)(C),10
and (f)(2) as follows:11
4-9-620. Acceptance of collateral in full or partial satisfaction12
of obligation - compulsory disposition of collateral. (a) Except as13
otherwise provided in subsection (g) of this section, a secured party may14
accept collateral in full or partial satisfaction of the obligation it secures15
only if:16
(2) The secured party does not receive, within the time set forth17
in subsection (d) of this section, a notification of objection to the proposal18
authenticated SIGNED by:19
(c) For purposes of this section:20
(1) A debtor consents to an acceptance of collateral in partial21
satisfaction of the obligation it secures only if the debtor agrees to the22
terms of the acceptance in a record authenticated SIGNED after default;23
and24
(2) A debtor consents to an acceptance of collateral in full25
satisfaction of the obligation it secures only if the debtor agrees to the26
terms of the acceptance in a record authenticated SIGNED after default or27
090
-74- the secured party:1
(C) Does not receive a notification of objection authenticated2
SIGNED by the debtor within twenty days after the proposal is sent.3
(f) To comply with subsection (e) of this section, the secured party4
shall dispose of the collateral:5
(2) Within any longer period to which the debtor and all secondary6
obligors have agreed in an agreement to that effect entered into and7
authenticated SIGNED after default.8
SECTION 86. In Colorado Revised Statutes, 4-9-621, amend9
(a)(1) as follows:10
4-9-621. Notification of proposal to accept collateral. (a) A11
secured party that desires to accept collateral in full or partial satisfaction12
of the obligation it secures shall send its proposal to:13
(1) Any person from which the secured party has received, before14
the debtor consented to the acceptance, an authenticated A SIGNED15
notification of a claim of an interest in the collateral;16
SECTION 87. In Colorado Revised Statutes, amend 4-9-624 as17
follows:18
4-9-624. Waiver. (a) A debtor or secondary obligor may waive19
the right to notification of disposition of collateral under section 4-9-61120
only by an agreement to that effect entered into and authenticated SIGNED21
after default.22
(b) A debtor may waive the right to require disposition of23
collateral under section 4-9-620 (e) only by an agreement to that effect24
entered into and authenticated SIGNED after default.25
(c) Except in a consumer-goods transaction, a debtor or secondary26
obligor may waive the right to redeem collateral under section 4-9-623.27
090
-75- Any such waiver must be by an agreement to that effect entered into and1
authenticated SIGNED after default.2
SECTION 88. In Colorado Revised Statutes, 4-9-628, amend (a)3
introductory portion and (b) introductory portion; and add (f) as follows: 4
4-9-628. Nonliability and limitation on liability of secured5
party - liability of secondary obligor. (a) S
UBJECT TO SUBSECTION (f)6
OF THIS SECTION, unless a secured party knows that a person is a debtor7
or obligor, knows the identity of the person, and knows how to8
communicate with the person:9
(b) S
UBJECT TO SUBSECTION (f) OF THIS SECTION, a secured party10
is not liable because of its status as secured party:11
(f) S
UBSECTIONS (a) AND (b) OF THIS SECTION DO NOT APPLY TO12
LIMIT THE LIABILITY OF A SECURED PARTY TO A PERSON IF , AT THE TIME13
THE SECURED PARTY OBTAINS CONTROL OF COLLATERAL THAT IS A14
CONTROLLABLE ACCOUNT , CONTROLLABLE ELECTRONIC RECORD , OR15
CONTROLLABLE PAYMENT INTANGIBLE OR AT THE TIME THE SECURITY16
INTEREST ATTACHES TO THE COLLATERAL , WHICHEVER IS LATER:17
(1) T
HE PERSON IS A DEBTOR OR OBLIGOR; AND18
(2) T
HE SECURED PARTY KNOWS THAT THE INFORMATION IN19
SUBSECTION (b)(1)(A), (b)(1)(B), OR (b)(1)(C) OF THIS SECTION RELATING20
TO THE PERSON IS NOT PROVIDED BY THE COLLATERAL , A RECORD21
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE COLLATERAL , OR THE22
SYSTEM IN WHICH THE COLLATERAL IS RECORDED .23
SECTION 89. In Colorado Revised Statutes, add articles 12 and24
13 to title 4 as follows:25
ARTICLE 1226
Controllable Electronic Records27
090
-76- 4-12-101. Title. T HIS ARTICLE 12 MAY BE CITED AS THE "UNIFORM1
C
OMMERCIAL CODE-CONTROLLABLE ELECTRONIC RECORDS".2
4-12-102. Definitions. (a) I
N THIS ARTICLE 12:3
(1) "C
ONTROLLABLE ELECTRONIC RECORD " MEANS A RECORD4
STORED IN AN ELECTRONIC MEDIUM THAT CAN BE SUBJECTED TO CONTROL5
UNDER SECTION 4-12-105. THE TERM DOES NOT INCLUDE A6
CONTROLLABLE ACCOUNT , A CONTROLLABLE PAYMENT INTANGIBLE , A7
DEPOSIT ACCOUNT, AN ELECTRONIC COPY OF A RECORD EVIDENCING8
CHATTEL PAPER, AN ELECTRONIC DOCUMENT OF TITLE , ELECTRONIC9
MONEY, INVESTMENT PROPERTY, OR A TRANSFERABLE RECORD.10
(2) "Q
UALIFYING PURCHASER" MEANS A PURCHASER OF A11
CONTROLLABLE ELECTRONIC RECORD OR AN INTEREST IN A12
CONTROLLABLE ELECTRONIC RECORD THAT OBTAINS CONTROL OF THE13
CONTROLLABLE ELECTRONIC RECORD FOR VALUE , IN GOOD FAITH, AND14
WITHOUT NOTICE OF A CLAIM OF A PROPERTY RIGHT IN THE15
CONTROLLABLE ELECTRONIC RECORD .16
(3) "T
RANSFERABLE RECORD" HAS THE MEANING PROVIDED FOR17
THAT TERM IN SECTION 201(a)(1) OF THE FEDERAL "ELECTRONIC18
S
IGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT", 15 U.S.C. SEC.19
7021 (a)(1),
AS AMENDED.20
(4) "V
ALUE" HAS THE MEANING PROVIDED IN SECTION 4-3-303 (a),21
AS IF REFERENCES IN THAT SUBSECTION (a) TO AN "INSTRUMENT" WERE22
REFERENCES TO A CONTROLLABLE ACCOUNT , CONTROLLABLE ELECTRONIC23
RECORD, OR CONTROLLABLE PAYMENT INTANGIBLE .24
(b) T
HE DEFINITIONS IN ARTICLE 9 OF THIS TITLE 4 OF "ACCOUNT25
DEBTOR", "CONTROLLABLE ACCOUNT ", "CONTROLLABLE PAYMENT26
INTANGIBLE", "CHATTEL PAPER", "DEPOSIT ACCOUNT", "ELECTRONIC27
090
-77- MONEY", AND "INVESTMENT PROPERTY" APPLY TO THIS ARTICLE 12.1
(c) A
RTICLE 1 OF THIS TITLE 4 CONTAINS GENERAL DEFINITIONS2
AND PRINCIPLES OF CONSTRUCTION AND INTERPRETATION APPLICABLE3
THROUGHOUT THIS ARTICLE 12.4
4-12-103. Relation to article 9 and consumer laws. (a) I
F THERE5
IS CONFLICT BETWEEN THIS ARTICLE 12 AND ARTICLE 9 OF THIS TITLE 4,6
ARTICLE 9 OF THIS TITLE 4 GOVERNS.7
(b) A
TRANSACTION SUBJECT TO THIS ARTICLE 12 IS SUBJECT TO8
ANY APPLICABLE RULE OF LAW THAT ESTABLISHES A DIFFERENT RULE FOR9
CONSUMERS AND ANY OTHER STATE LAW .10
4-12-104. Rights in controllable account, controllable11
electronic record, and controllable payment intangible. (a) T
HIS12
SECTION APPLIES TO THE ACQUISITION AND PURCHASE OF RIGHTS IN A13
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE ,14
INCLUDING THE RIGHTS AND BENEFITS UNDER SUBSECTIONS (c), (d), (e),15
(g),
AND (h) OF THIS SECTION OF A PURCHASER AND QUALIFYING16
PURCHASER, IN THE SAME MANNER THIS SECTION APPLIES TO A17
CONTROLLABLE ELECTRONIC RECORD .18
(b) T
O DETERMINE WHETHER A PURCHASER OF A CONTROLLABLE19
ACCOUNT OR A CONTROLLABLE PAYMENT INTANGIBLE IS A QUALIFYING20
PURCHASER, THE PURCHASER OBTAINS CONTROL OF THE ACCOUNT OR21
PAYMENT INTANGIBLE IF IT OBTAINS CONTROL OF THE CONTROLLABLE22
ELECTRONIC RECORD THAT EVIDENCES THE ACCOUNT OR PAYMENT23
INTANGIBLE.24
(c) E
XCEPT AS PROVIDED IN THIS SECTION, LAW OTHER THAN THIS25
ARTICLE 12 DETERMINES WHETHER A PERSON ACQUIRES A RIGHT IN A26
CONTROLLABLE ELECTRONIC RECORD AND THE RIGHT THE PERSON27
090
-78- ACQUIRES.1
(d) A
PURCHASER OF A CONTROLLABLE ELECTRONIC RECORD2
ACQUIRES ALL RIGHTS IN THE CONTROLLABLE ELECTRONIC RECORD THAT3
THE TRANSFEROR HAD OR HAD POWER TO TRANSFER ; EXCEPT THAT A4
PURCHASER OF A LIMITED INTEREST IN A CONTROLLABLE ELECTRONIC5
RECORD ACQUIRES RIGHTS ONLY TO THE EXTENT OF THE INTEREST6
PURCHASED.7
(e) A
QUALIFYING PURCHASER ACQUIRES ITS RIGHTS IN THE8
CONTROLLABLE ELECTRONIC RECORD FREE OF A CLAIM OF A PROPERTY9
RIGHT IN THE CONTROLLABLE ELECTRONIC RECORD .10
(f) E
XCEPT AS PROVIDED IN SUBSECTIONS (a) AND (e) OF THIS11
SECTION FOR A CONTROLLABLE ACCOUNT AND A CONTROLLABLE PAYMENT12
INTANGIBLE OR LAW OTHER THAN THIS ARTICLE 12, A QUALIFYING13
PURCHASER TAKES A RIGHT TO PAYMENT , RIGHT TO PERFORMANCE, OR14
OTHER INTEREST IN PROPERTY EVIDENCED BY THE CONTROLLABLE15
ELECTRONIC RECORD SUBJECT TO A CLAIM OF A PROPERTY RIGHT IN THE16
RIGHT TO PAYMENT, RIGHT TO PERFORMANCE, OR OTHER INTEREST IN17
PROPERTY.18
(g) A
N ACTION MAY NOT BE ASSERTED AGAINST A QUALIFYING19
PURCHASER BASED ON BOTH A PURCHASE BY THE QUALIFYING PURCHASER20
OF A CONTROLLABLE ELECTRONIC RECORD AND A CLAIM OF A PROPERTY21
RIGHT IN ANOTHER CONTROLLABLE ELECTRONIC RECORD , WHETHER THE22
ACTION IS FRAMED IN CONVERSION , REPLEVIN, CONSTRUCTIVE TRUST,23
EQUITABLE LIEN, OR OTHER THEORY.24
(h) F
ILING OF A FINANCING STATEMENT UNDER ARTICLE 9 OF THIS25
TITLE 4 IS NOT NOTICE OF A CLAIM OF A PROPERTY RIGHT IN A26
CONTROLLABLE ELECTRONIC RECORD .27
090
-79- 4-12-105. Control of controllable electronic record. (a) A1
PERSON HAS CONTROL OF A CONTROLLABLE ELECTRONIC RECORD IF THE2
ELECTRONIC RECORD , A RECORD ATTACHED TO OR LOGICALLY3
ASSOCIATED WITH THE ELECTRONIC RECORD , OR A SYSTEM IN WHICH THE4
ELECTRONIC RECORD IS RECORDED :5
(1) G
IVES THE PERSON:6
(A) P
OWER TO AVAIL ITSELF OF SUBSTANTIALLY ALL THE BENEFIT7
FROM THE ELECTRONIC RECORD ; AND8
(B)
EXCLUSIVE POWER, SUBJECT TO SUBSECTION (b) OF THIS9
SECTION, TO:10
(i) P
REVENT OTHERS FROM AVAILING THEMSELVES OF11
SUBSTANTIALLY ALL THE BENEFIT FROM THE ELECTRONIC RECORD ; AND12
(ii) T
RANSFER CONTROL OF THE ELECTRONIC RECORD TO ANOTHER13
PERSON OR CAUSE ANOTHER PERSON TO OBTAIN CONTROL OF ANOTHER14
CONTROLLABLE ELECTRONIC RECORD AS A RESULT OF THE TRANSFER OF15
THE ELECTRONIC RECORD; AND16
(2) E
NABLES THE PERSON READILY TO IDENTIFY ITSELF IN ANY17
WAY, INCLUDING BY NAME, IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY,18
OFFICE, OR ACCOUNT NUMBER , AS HAVING THE POWERS SPECIFIED IN19
SUBSECTION (a)(1) OF THIS SECTION.20
(b) S
UBJECT TO SUBSECTION (c) OF THIS SECTION, A POWER IS21
EXCLUSIVE UNDER SUBSECTIONS (a)(1)(B)(i) AND (a)(1)(B)(ii) OF THIS22
SECTION EVEN IF:23
(1) T
HE CONTROLLABLE ELECTRONIC RECORD , A RECORD24
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE ELECTRONIC RECORD ,25
OR A SYSTEM IN WHICH THE ELECTRONIC RECORD IS RECORDED LIMITS THE26
USE OF THE ELECTRONIC RECORD OR HAS A PROTOCOL PROGRAMMED TO27
090
-80- CAUSE A CHANGE, INCLUDING A TRANSFER OR LOSS OF CONTROL OR A1
MODIFICATION OF BENEFITS AFFORDED BY THE ELECTRONIC RECORD ; OR2
(2) T
HE POWER IS SHARED WITH ANOTHER PERSON .3
(c) A
POWER OF A PERSON IS NOT SHARED WITH ANOTHER PERSON4
UNDER SUBSECTION (b)(2) OF THIS SECTION AND THE PERSON'S POWER IS5
NOT EXCLUSIVE IF:6
(1) T
HE PERSON CAN EXERCISE THE POWER ONLY IF THE POWER7
ALSO IS EXERCISED BY THE OTHER PERSON ; AND8
(2) T
HE OTHER PERSON:9
(A) C
AN EXERCISE THE POWER WITHOUT EXERCISE OF THE POWER10
BY THE PERSON; OR11
(B) I
S THE TRANSFEROR TO THE PERSON OF AN INTEREST IN THE12
CONTROLLABLE ELECTRONIC RECORD OR A CONTROLLABLE ACCOUNT OR13
CONTROLLABLE PAYMENT INTANGIBLE EVIDENCED BY THE CONTROLLABLE14
ELECTRONIC RECORD.15
(d) I
F A PERSON HAS THE POWERS SPECIFIED IN SUBSECTIONS16
(a)(1)(B)(i)
AND (a)(1)(B)(ii) OF THIS SECTION, THE POWERS ARE17
PRESUMED TO BE EXCLUSIVE.18
(e) A
PERSON HAS CONTROL OF A CONTROLLABLE ELECTRONIC19
RECORD IF ANOTHER PERSON , OTHER THAN THE TRANSFEROR TO THE20
PERSON OF AN INTEREST IN THE CONTROLLABLE ELECTRONIC RECORD OR21
A CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE22
EVIDENCED BY THE CONTROLLABLE ELECTRONIC RECORD :23
(1) H
AS CONTROL OF THE ELECTRONIC RECORD AND24
ACKNOWLEDGES THAT IT HAS CONTROL ON BEHALF OF THE PERSON ; OR25
(2) O
BTAINS CONTROL OF THE ELECTRONIC RECORD AFTER HAVING26
ACKNOWLEDGED THAT IT WILL OBTAIN CONTROL OF THE ELECTRONIC27
090
-81- RECORD ON BEHALF OF THE PERSON .1
(f) A
PERSON THAT HAS CONTROL UNDER THIS SECTION IS NOT2
REQUIRED TO ACKNOWLEDGE THAT IT HAS CONTROL ON BEHALF OF3
ANOTHER PERSON.4
(g) I
F A PERSON ACKNOWLEDGES THAT IT HAS OR WILL OBTAIN5
CONTROL ON BEHALF OF ANOTHER PERSON , UNLESS THE PERSON6
OTHERWISE AGREES OR LAW OTHER THAN THIS ARTICLE 12 OR ARTICLE 97
OF THIS TITLE 4 OTHERWISE PROVIDES, THE PERSON DOES NOT OWE ANY8
DUTY TO THE OTHER PERSON AND IS NOT REQUIRED TO CONFIRM THE9
ACKNOWLEDGMENT TO ANY OTHER PERSON .10
4-12-106. Discharge of account debtor on controllable account11
or controllable payment intangible. (a) A
N ACCOUNT DEBTOR ON A12
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE MAY13
DISCHARGE ITS OBLIGATION BY PAYING:14
(1) T
HE PERSON HAVING CONTROL OF THE CONTROLLABLE15
ELECTRONIC RECORD THAT EVIDENCES THE CONTROLLABLE ACCOUNT OR16
CONTROLLABLE PAYMENT INTANGIBLE ; OR17
(2) E
XCEPT AS PROVIDED IN SUBSECTION (b) OF THIS SECTION, A18
PERSON THAT FORMERLY HAD CONTROL OF THE CONTROLLABLE19
ELECTRONIC RECORD.20
(b) S
UBJECT TO SUBSECTION (d) OF THIS SECTION, THE ACCOUNT21
DEBTOR MAY NOT DISCHARGE ITS OBLIGATION BY PAYING A PERSON THAT22
FORMERLY HAD CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD IF23
THE ACCOUNT DEBTOR RECEIVES A NOTIFICATION THAT :24
(1) I
S SIGNED BY A PERSON THAT FORMERLY HAD CONTROL OR THE25
PERSON TO WHICH CONTROL WAS TRANSFERRED ;26
(2) R
EASONABLY IDENTIFIES THE CONTROLLABLE ACCOUNT OR27
090
-82- CONTROLLABLE PAYMENT INTANGIBLE ;1
(3) N
OTIFIES THE ACCOUNT DEBTOR THAT CONTROL OF THE2
CONTROLLABLE ELECTRONIC RECORD THAT EVIDENCES THE3
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE WAS4
TRANSFERRED;5
(4) I
DENTIFIES THE TRANSFEREE, IN ANY REASONABLE WAY ,6
INCLUDING BY NAME, IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY, OFFICE,7
OR ACCOUNT NUMBER; AND8
(5) P
ROVIDES A COMMERCIALLY REASONABLE METHOD BY WHICH9
THE ACCOUNT DEBTOR IS TO PAY THE TRANSFEREE .10
(c) A
FTER RECEIPT OF A NOTIFICATION THAT COMPLIES WITH11
SUBSECTION (b) OF THIS SECTION, THE ACCOUNT DEBTOR MAY DISCHARGE12
ITS OBLIGATION BY PAYING IN ACCORDANCE WITH THE NOTIFICATION AND13
MAY NOT DISCHARGE THE OBLIGATION BY PAYING A PERSON THAT14
FORMERLY HAD CONTROL .15
(d) S
UBJECT TO SUBSECTION (h) OF THIS SECTION, NOTIFICATION16
IS INEFFECTIVE UNDER SUBSECTION (b) OF THIS SECTION:17
(1) U
NLESS, BEFORE THE NOTIFICATION IS SENT, THE ACCOUNT18
DEBTOR AND THE PERSON THAT , AT THAT TIME, HAD CONTROL OF THE19
CONTROLLABLE ELECTRONIC RECORD THAT EVIDENCES THE20
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE21
AGREE IN A SIGNED RECORD TO A COMMERCIALLY REASONABLE METHOD22
BY WHICH A PERSON MAY FURNISH REASONABLE PROOF THAT CONTROL23
HAS BEEN TRANSFERRED;24
(2) T
O THE EXTENT AN AGREEMENT BETWEEN THE ACCOUNT25
DEBTOR AND SELLER OF A PAYMENT INT ANGIBLE LIMITS THE ACCOUNT26
DEBTOR'S DUTY TO PAY A PERSON OTHER THAN THE SELLER AND THE27
090
-83- LIMITATION IS EFFECTIVE UNDER LAW OTHER THAN THIS ARTICLE 12; OR1
(3) A
T THE OPTION OF THE ACCOUNT DEBTOR, IF THE NOTIFICATION2
NOTIFIES THE ACCOUNT DEBTOR TO :3
(A) D
IVIDE A PAYMENT;4
(B) M
AKE LESS THAN THE FULL AMOUNT OF AN INSTALLMENT OR5
OTHER PERIODIC PAYMENT; OR6
(C) P
AY ANY PART OF A PAYMENT BY MORE THAN ONE METHOD OR7
TO MORE THAN ONE PERSON.8
(e) S
UBJECT TO SUBSECTION (h) OF THIS SECTION, IF REQUESTED9
BY THE ACCOUNT DEBTOR, THE PERSON GIVING THE NOTIFICATION UNDER10
SUBSECTION (b) OF THIS SECTION SEASONABLY SHALL FURNISH11
REASONABLE PROOF, USING THE METHOD IN THE AGREEMENT REFERRED12
TO IN SUBSECTION (d)(1) OF THIS SECTION, THAT CONTROL OF THE13
CONTROLLABLE ELECTRONIC RECORD HAS BEEN TRANSFERRED . UNLESS14
THE PERSON COMPLIES WITH THE REQUEST , THE ACCOUNT DEBTOR MAY15
DISCHARGE ITS OBLIGATION BY PAYING A PERSON THAT FORMERLY HAD16
CONTROL, EVEN IF THE ACCOUNT DEBTOR HAS RECEIVED A NOTIFICATION17
UNDER SUBSECTION (b) OF THIS SECTION.18
(f) A
PERSON FURNISHES REASONABLE PROOF UNDER SUBSECTION19
(e)
OF THIS SECTION THAT CONTROL HAS BEEN TRANSFERRED IF THE20
PERSON DEMONSTRATES , USING THE METHOD IN THE AGREEMENT21
REFERRED TO IN SUBSECTION (d)(1) OF THIS SECTION, THAT THE22
TRANSFEREE HAS THE POWER TO :23
(1) A
VAIL ITSELF OF SUBSTANTIALLY ALL THE BENEFIT FROM THE24
CONTROLLABLE ELECTRONIC RECORD ;25
(2) P
REVENT OTHERS FROM AVAILING THEMSELVES OF26
SUBSTANTIALLY ALL THE BENEFIT FROM THE CONTROLLABLE ELECTRONIC27
090
-84- RECORD; AND1
(3) T
RANSFER THE POWERS SPECIFIED IN SUBSECTIONS (f)(1) AND2
(f)(2)
OF THIS SECTION TO ANOTHER PERSON.3
(g) S
UBJECT TO SUBSECTION (h) OF THIS SECTION, AN ACCOUNT4
DEBTOR MAY NOT WAIVE OR VARY ITS RIGHTS UNDER SUBSECTIONS (d)(1)5
AND (e) OF THIS SECTION OR ITS OPTION UNDER SUBSECTION (d)(3) OF THIS6
SECTION.7
(h) T
HIS SECTION IS SUBJECT TO LAW OTHER THAN THIS ARTICLE8
12
WHICH ESTABLISHES A DIFFERENT RULE FOR AN ACCOUNT DEBTOR WHO9
IS AN INDIVIDUAL AND WHO INCURRED THE OBLIGATION PRIMARILY FOR10
PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES.11
4-12-107. Governing law. (a) E
XCEPT AS PROVIDED IN12
SUBSECTION (b) OF THIS SECTION, THE LOCAL LAW OF A CONTROLLABLE13
ELECTRONIC RECORD'S JURISDICTION GOVERNS A MATTER COVERED BY14
THIS ARTICLE 12.15
(b) F
OR A CONTROLLABLE ELECTRONIC RECORD THAT EVIDENCES16
A CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE ,17
THE LOCAL LAW OF THE CONTROLLABLE ELECTRONIC RECORD 'S18
JURISDICTION GOVERNS A MATTER COVERED BY SECTION 4-12-106 UNLESS19
AN EFFECTIVE AGREEMENT DETERMINES THAT THE LOCAL LAW OF20
ANOTHER JURISDICTION GOVERNS .21
(c) T
HE FOLLOWING RULES DETERMINE A CONTROLLABLE22
ELECTRONIC RECORD'S JURISDICTION UNDER THIS SECTION:23
(1) I
F THE CONTROLLABLE ELECTRONIC RECORD , OR A RECORD24
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE CONTROLLABLE25
ELECTRONIC RECORD AND READILY AVAILABLE FOR REVIEW , EXPRESSLY26
PROVIDES THAT A PARTICULAR JURISDICTION IS THE CONTROLLABLE27
090
-85- ELECTRONIC RECORD'S JURISDICTION FOR PURPOSES OF THIS ARTICLE 12 OR1
THIS TITLE 4, THAT JURISDICTION IS THE CONTROLLABLE ELECTRONIC2
RECORD'S JURISDICTION.3
(2) I
F SUBSECTION (c)(1) OF THIS SECTION DOES NOT APPLY AND4
THE RULES OF THE SYSTEM IN WHICH THE CONTROLLABLE ELECTRONIC5
RECORD IS RECORDED ARE READILY AVAILABLE FOR REVIEW AND6
EXPRESSLY PROVIDE THAT A PARTICULAR JURISDICTION IS THE7
CONTROLLABLE ELECTRONIC RECORD 'S JURISDICTION FOR PURPOSES OF8
THIS ARTICLE 12 OR THIS TITLE 4, THAT JURISDICTION IS THE9
CONTROLLABLE ELECTRONIC RECORD 'S JURISDICTION.10
(3) I
F SUBSECTIONS (c)(1) AND (c)(2) OF THIS SECTION DO NOT11
APPLY AND THE CONTROLLABLE ELECTRONIC RECORD , OR A RECORD12
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE CONTROLLABLE13
ELECTRONIC RECORD AND READILY AVAILABLE FOR REVIEW , EXPRESSLY14
PROVIDES THAT THE CONTROLLABLE ELECTRONIC RECORD IS GOVERNED15
BY THE LAW OF A PARTICULAR JURISDICTION , THAT JURISDICTION IS THE16
CONTROLLABLE ELECTRONIC RECORD 'S JURISDICTION.17
(4) I
F SUBSECTIONS (c)(1), (c)(2), AND (c)(3) OF THIS SECTION DO18
NOT APPLY AND THE RULES OF THE SYSTEM IN WHICH THE CONTROLLABLE19
ELECTRONIC RECORD IS RECORDED ARE READILY AVAILABLE FOR REVIEW20
AND EXPRESSLY PROVIDE THAT THE CONTROLLABLE ELECTRONIC RECORD21
OR THE SYSTEM IS GOVERNED BY THE LAW OF A PARTICULAR22
JURISDICTION, THAT JURISDICTION IS THE CONTROLLABLE ELECTRONIC23
RECORD'S JURISDICTION.24
(5) I
F SUBSECTIONS (c)(1) TO (c)(4) OF THIS SECTION DO NOT25
APPLY, THE CONTROLLABLE ELECTRONIC RECORD 'S JURISDICTION IS THE26
D
ISTRICT OF COLUMBIA.27
090
-86- (d) IF SUBSECTION (c)(5) OF THIS SECTION APPLIES AND THIS1
ARTICLE 12 IS NOT IN EFFECT IN THE DISTRICT OF COLUMBIA WITHOUT2
MATERIAL MODIFICATION, THE GOVERNING LAW FOR A MATTER COVERED3
BY THIS ARTICLE 12 IS THE LAW OF THE DISTRICT OF COLUMBIA AS4
THOUGH THIS ARTICLE 12 WERE IN EFFECT IN THE DISTRICT OF COLUMBIA5
WITHOUT MATERIAL MODIFICATION . IN THIS SUBSECTION (d), "ARTICLE6
12"
MEANS ARTICLE 12 OF THE "UNIFORM COMMERCIAL CODE".7
(e) T
O THE EXTENT SUBSECTIONS (a) AND (b) OF THIS SECTION8
PROVIDE THAT THE LOCAL LAW OF THE CONTROLLABLE ELECTRONIC9
RECORD'S JURISDICTION GOVERNS A MATTER COVERED BY THIS ARTICLE10
12,
THAT LAW GOVERNS EVEN IF THE MATTER OR A TRANSACTION TO11
WHICH THE MATTER RELATES DOES NOT BEAR ANY RELATION TO THE12
CONTROLLABLE ELECTRONIC RECORD 'S JURISDICTION.13
(f) T
HE RIGHTS ACQUIRED UNDER SECTION 4-12-104 BY A14
PURCHASER OR QUALIFYING PURCHASER ARE GOVERNED BY THE LAW15
APPLICABLE UNDER THIS SECTION AT THE TIME OF PURCHASE .16
ARTICLE 1317
Transitional Provisions for Uniform Commercial Code18
Amendments (2022)19
PART 120
GENERAL PROVISIONS AND DEFINITIONS21
4-13-101. Short title. T
HIS ARTICLE 13 MAY BE CITED AS22
"T
RANSITIONAL PROVISIONS FOR UNIFORM COMMERCIAL CODE23
A
MENDMENTS (2022)".24
4-13-102. Definitions. (a) I
N THIS ARTICLE 13:25
(1) "A
DJUSTMENT DATE" MEANS JULY 1, 2025, OR THE DATE THAT26
IS ONE YEAR AFTER THE EFFECTIVE DATE OF THIS ARTICLE 13, WHICHEVER27
090
-87- IS LATER.1
(2) "A
RTICLE 12" MEANS ARTICLE 12 OF THIS TITLE 4.2
(3) "A
RTICLE 12 PROPERTY" MEANS A CONTROLLABLE ACCOUNT ,3
CONTROLLABLE ELECTRONIC RECORD , OR CONTROLLABLE PAYMENT4
INTANGIBLE.5
(b) T
HE FOLLOWING DEFINITIONS IN OTHER ARTICLES OF THIS TITLE6
4
APPLY TO THIS ARTICLE 13.7
"C
ONTROLLABLE ACCOUNT "S ECTION 4-9-102. 8
"C
ONTROLLABLE ELECTRONIC RECORD "S ECTION 4-12-102. 9
"C
ONTROLLABLE PAYMENT INTANGIBLE "S ECTION 4-9-102. 10
"E
LECTRONIC MONEY"S ECTION 4-9-102. 11
"F
INANCING STATEMENT"S ECTION 4-9-102. 12
(c) A
RTICLE 1 OF THIS TITLE 4 CONTAINS GENERAL DEFINITIONS13
AND PRINCIPLES OF CONSTRUCTION AND INTERPRETATION APPLICABLE14
THROUGHOUT THIS ARTICLE 13.15
PART 216
GENERAL TRANSITIONAL PROVISION17
4-13-201. Saving clause. E
XCEPT AS PROVIDED IN PART 3 OF THIS18
ARTICLE 13, A TRANSACTION VALIDLY ENTERED INTO BEFORE THE19
EFFECTIVE DATE OF THIS ARTICLE 13 AND THE RIGHTS, DUTIES, AND20
INTERESTS FLOWING FROM THE TRANSACTION REMAIN VALID THEREAFTER21
AND MAY BE TERMINATED, COMPLETED, CONSUMMATED, OR ENFORCED AS22
REQUIRED OR PERMITTED BY LAW OTHER THAN THIS TITLE 4 OR, IF23
APPLICABLE, THIS TITLE 4, AS THOUGH THIS ARTICLE 13 HAD NOT TAKEN24
EFFECT.25
PART 326
TRANSITIONAL PROVISIONS FOR27
090
-88- ARTICLES 9 AND 12 OF THIS TITLE 41
4-13-301. Saving clause. (a) E
XCEPT AS PROVIDED IN THIS PART2
3,
ARTICLE 9, AS AMENDED BY SENATE BILL 23-090
, ENACTED IN 2023,3
AND ARTICLE 12 OF THIS TITLE 4, AS ENACTED BY SENATE BILL 23-090 ,4
ENACTED IN 2023, APPLY TO A TRANSACTION, LIEN, OR OTHER INTEREST5
IN PROPERTY, EVEN IF THE TRANSACTION , LIEN, OR INTEREST WAS6
ENTERED INTO, CREATED, OR ACQUIRED BEFORE THE EFFECTIVE DATE OF7
THIS ARTICLE 13.8
(b) E
XCEPT AS PROVIDED IN SUBSECTION (c) OF THIS SECTION AND9
SECTIONS 4-13-302 TO 4-13-306:10
(1) A
TRANSACTION, LIEN, OR INTEREST IN PROPERTY THAT WAS11
VALIDLY ENTERED INTO , CREATED, OR TRANSFERRED BEFORE THE12
EFFECTIVE DATE OF THIS ARTICLE 13 AND THAT WAS NOT GOVERNED BY13
THIS TITLE 4, BUT WOULD BE SUBJECT TO ARTICLE 9 OF THIS TITLE 4, AS14
AMENDED BY SENATE BILL 23-090
, ENACTED IN 2023, OR ARTICLE 12 OF15
THIS TITLE 4, AS ENACTED BY SENATE BILL 23-090, ENACTED IN 2023, IF16
IT HAD BEEN ENTERED INTO, CREATED, OR TRANSFERRED ON OR AFTER THE17
EFFECTIVE DATE OF THIS ARTICLE 13, INCLUDING THE RIGHTS, DUTIES, AND18
INTERESTS FLOWING FROM THE TRANSACTION , LIEN, OR INTEREST,19
REMAINS VALID ON AND AFTER THE EFFECTIVE DATE OF THIS ARTICLE 13;20
AND21
(2) T
HE TRANSACTION, LIEN, OR INTEREST MAY BE TERMINATED,22
COMPLETED, CONSUMMATED, AND ENFORCED AS REQUIRED OR PERMITTED23
BY THIS TITLE 4, AS AMENDED BY SENATE BILL 23-090
, ENACTED IN 2023,24
OR BY THE LAW THAT WOULD APPLY IF THIS TITLE 4, AS AMENDED BY25
S
ENATE BILL 23-090
, ENACTED IN 2023, HAD NOT TAKEN EFFECT.26
(c) T
HIS ARTICLE 13 DOES NOT AFFECT AN ACTION , CASE, OR27
090
-89- PROCEEDING COMMENCED BEFORE THE EFFECTIVE DATE OF THIS ARTICLE1
13.2
4-13-302. Security interest perfected before effective date.3
(a) A
SECURITY INTEREST THAT IS ENFORCEABLE AND PERFECTED4
IMMEDIATELY BEFORE THE EFFECTIVE DATE OF THIS ARTICLE 13 IS A5
PERFECTED SECURITY INTEREST UNDER THIS TITLE 4 IF, ON THE EFFECTIVE6
DATE OF THIS ARTICLE 13, THE REQUIREMENTS FOR ENFORCEABILITY AND7
PERFECTION UNDER THIS TITLE 4 ARE SATISFIED WITHOUT FURTHER8
ACTION.9
(b) I
F A SECURITY INTEREST IS ENFORCEABLE AND PERFECTED10
IMMEDIATELY BEFORE THE EFFECTIVE DATE OF THIS ARTICLE 13, BUT THE11
REQUIREMENTS FOR ENFORCEABILITY OR PERFECTION UNDER THIS TITLE12
4
ARE NOT SATISFIED ON THE EFFECTIVE DATE OF THIS ARTICLE 13, THE13
SECURITY INTEREST:14
(1) I
S A PERFECTED SECURITY INTEREST UNTIL THE EARLIER OF THE15
TIME PERFECTION WOULD HAVE CEASED UNDER THE LAW IN EFFECT16
IMMEDIATELY BEFORE THE EFFECTIVE DATE OF THIS ARTICLE 13 OR THE17
ADJUSTMENT DATE;18
(2) R
EMAINS ENFORCEABLE THEREAFTER ONLY IF THE SECURITY19
INTEREST SATISFIES THE REQUIREMENTS FOR ENFORCEABILITY UNDER20
SECTION 4-9-203, AS AMENDED BY SENATE BILL 23-090
, ENACTED IN21
2023,
BEFORE THE ADJUSTMENT DATE ; AND22
(3) R
EMAINS PERFECTED THEREAFTER ONLY IF THE REQUIREMENTS23
FOR PERFECTION UNDER THIS TITLE 4 ARE SATISFIED BEFORE THE TIME24
SPECIFIED IN SUBSECTION (b)(1) OF THIS SECTION.25
4-13-303. Security interest unperfected before effective date.26
A
SECURITY INTEREST THAT IS ENFORCEABLE IMMEDIATELY BEFORE THE27
090
-90- EFFECTIVE DATE OF THIS ARTICLE 13 BUT IS UNPERFECTED AT THAT TIME:1
(1) R
EMAINS AN ENFORCEABLE SECURITY INTEREST UNTIL THE2
ADJUSTMENT DATE;3
(2) R
EMAINS ENFORCEABLE THEREAFTER IF THE SECURITY4
INTEREST BECOMES ENFORCEABLE UNDER SECTION 4-9-203, AS AMENDED5
BY SENATE BILL 23-090
, ENACTED IN 2023, ON THE EFFECTIVE DATE OF6
THIS ARTICLE 13 OR BEFORE THE ADJUSTMENT DATE ; AND7
(3) B
ECOMES PERFECTED:8
(A) W
ITHOUT FURTHER ACTION, ON THE EFFECTIVE DATE OF THIS9
ARTICLE 13, IF THE REQUIREMENTS FOR PERFECTION UNDER THIS TITLE 410
ARE SATISFIED BEFORE OR AT THAT TIME; OR11
(B) W
HEN THE REQUIREMENTS FOR PERFECTION ARE SATISFIED IF12
THE REQUIREMENTS ARE SATISFIED AFTER THAT TIME .13
4-13-304. Effectiveness of actions taken before effective date.14
(a) I
F ACTION, OTHER THAN THE FILING OF A FINANCING STATEMENT , IS15
TAKEN BEFORE THE EFFECTIVE DATE OF THIS ARTICLE 13 AND THE ACTION16
WOULD HAVE RESULTED IN PERFECTION OF THE SECURITY INTEREST HAD17
THE SECURITY INTEREST BECOME ENFORCEABLE BEFORE THE EFFECTIVE18
DATE OF THIS ARTICLE 13, THE ACTION IS EFFECTIVE TO PERFECT A19
SECURITY INTEREST THAT ATTACHES UNDER THIS TITLE 4 BEFORE THE20
ADJUSTMENT DATE . AN ATTACHED SECURITY INTEREST BECOMES21
UNPERFECTED ON THE ADJUSTMENT DATE UNLESS THE SECURITY INTEREST22
BECOMES A PERFECTED SECURITY INTEREST UNDER THIS TITLE 4 BEFORE23
THE ADJUSTMENT DATE.24
(b) T
HE FILING OF A FINANCING STATEMENT BEFORE THE25
EFFECTIVE DATE OF THIS ARTICLE 13 IS EFFECTIVE TO PERFECT A SECURITY26
INTEREST ON THE EFFECTIVE DATE OF THIS ARTICLE 13 TO THE EXTENT THE27
090
-91- FILING WOULD SATISFY THE REQUIREMENTS FOR PERFECTION UNDER THIS1
TITLE 4.2
(c) T
HE TAKING OF AN ACTION BEFORE THE EFFECTIVE DATE OF3
THIS ARTICLE 13 IS SUFFICIENT FOR THE ENFORCEABILITY OF A SECURITY4
INTEREST ON THE EFFECTIVE DATE OF THIS ARTICLE 13 IF THE ACTION5
WOULD SATISFY THE REQUIREMENTS FOR ENFORCEABILITY UNDER THIS6
TITLE 4.7
4-13-305. Priority. (a) S
UBJECT TO SUBSECTIONS (b) AND (c) OF8
THIS SECTION, THIS TITLE 4 DETERMINES THE PRIORITY OF CONFLICTING9
CLAIMS TO COLLATERAL.10
(b) S
UBJECT TO SUBSECTION (c) OF THIS SECTION, IF THE11
PRIORITIES OF CLAIMS TO COLLATERAL WERE ESTABLISHED BEFORE THE12
EFFECTIVE DATE OF THIS ARTICLE 13, ARTICLE 9 OF THIS TITLE 4 AS IN13
EFFECT BEFORE THE EFFECTIVE DATE OF THIS ARTICLE 13 DETERMINES14
PRIORITY.15
(c) O
N THE ADJUSTMENT DATE, TO THE EXTENT THE PRIORITIES16
DETERMINED BY ARTICLE 9 OF THIS TITLE 4, AS AMENDED BY SENATE BILL17
23-090
, ENACTED IN 2023, MODIFY THE PRIORITIES ESTABLISHED BEFORE18
THE EFFECTIVE DATE OF THIS ARTICLE 13, THE PRIORITIES OF CLAIMS TO19
ARTICLE 12 PROPERTY AND ELECTRONIC MONEY ESTABLISHED BEFORE THE20
EFFECTIVE DATE OF THIS ARTICLE 13 CEASE TO APPLY.21
4-13-306. Priority of claims when priority rules of article 9 do22
not apply. (a) S
UBJECT TO SUBSECTIONS (b) AND (c) OF THIS SECTION,23
ARTICLE 12 OF THIS TITLE 4, AS ENACTED BY SENATE BILL 23-090
,24
ENACTED IN 2023, DETERMINES THE PRIORITY OF CONFLICTING CLAIMS TO25
ARTICLE 12 PROPERTY WHEN THE PRIORITY RULES OF ARTICLE 9 OF THIS26
TITLE 4, AS AMENDED BY SENATE BILL 23-090 , ENACTED IN 2023, DO NOT27
090
-92- APPLY.1
(b) S
UBJECT TO SUBSECTION (c) OF THIS SECTION, WHEN THE2
PRIORITY RULES OF ARTICLE 9 OF THIS TITLE 4, AS AMENDED BY SENATE3
B
ILL 23-090
, ENACTED IN 2023, DO NOT APPLY AND THE PRIORITIES OF4
CLAIMS TO ARTICLE 12 PROPERTY WERE ESTABLISHED BEFORE THE5
EFFECTIVE DATE OF THIS ACT , LAW OTHER THAN THIS ARTICLE 126
DETERMINES PRIORITY.7
(c) W
HEN THE PRIORITY RULES OF ARTICLE 9 OF THIS TITLE 4, AS8
AMENDED BY SENATE BILL 23-090
, ENACTED IN 2023, DO NOT APPLY, TO9
THE EXTENT THE PRIORITIES DETERMINED BY THIS TITLE 4 MODIFY THE10
PRIORITIES ESTABLISHED BEFORE THE EFFECTIVE DATE OF THIS ARTICLE11
13,
THE PRIORITIES OF CLAIMS TO ARTICLE 12 PROPERTY ESTABLISHED12
BEFORE THE EFFECTIVE DATE OF THIS ARTICLE 13 CEASE TO APPLY ON THE13
ADJUSTMENT DATE.14
SECTION 90. Act subject to petition - effective date. This act15
takes effect at 12:01 a.m. on the day following the expiration of the16
ninety-day period after final adjournment of the general assembly; except17
that, if a referendum petition is filed pursuant to section 1 (3) of article V18
of the state constitution against this act or an item, section, or part of this19
act within such period, then the act, item, section, or part will not take20
effect unless approved by the people at the general election to be held in21
November 2024 and, in such case, will take effect on the date of the22
official declaration of the vote thereon by the governor.23
090
-93-