First Regular Session
Seventy-fourth General Assembly
STATE OF COLORADO
REVISED
This Version Includes All Amendments Adopted
on Second Reading in the Second House
LLS NO. 23-0564.01 Christopher McMichael x4775
SENATE BILL 23-090
Senate Committees House Committees
Judiciary 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
HOUSE
Amended 2nd Reading
March 3, 2023
SENATE
3rd Reading Unamended
February 22, 2023
SENATE
Amended 2nd Reading
February 21, 2023
SENATE SPONSORSHIP
Gardner, Priola, Rich
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 THE LAWS OF ANOTHER STATE4
THAT:5
(a) LIMITS, OR LIMITS IF CONDITIONS SPECIFIED UNDER THE LAW6
ARE SATISFIED, THE ABILITY OF A CREDITOR OF THE ENTITY OR OF ANY7
OTHER PROTECTED SERIES OF THE ENTITY TO SATISFY A CLAIM FROM8
ASSETS OF THE PROTECTED SERIES; AND9
(b) TREATS THE PROTECTED SERIES AS AN ENTITY .10
(36) "Send", in connection with a writing, record or notice11
NOTIFICATION, means to:12
(A) Deposit in the mail, or deliver for transmission, OR TRANSMIT13
by any other usual means of communication with postage or cost of14
transmission provided for, and properly addressed and, in the case of an15
instrument, to an address specified thereon or otherwise agreed, or, if16
there is none, ADDRESSED to any address reasonable under the17
circumstances; or18
(B) In any other way cause to be received any record or notice19
within the time it would have arrived if properly sent CAUSE THE RECORD20
OR NOTIFICATION TO BE RECEIVED WITHIN THE TIME IT WOULD HAVE BEEN21
RECEIVED IF PROPERLY SENT UNDER SUBSECTION (b)(36)(A) OF THIS22
SECTION.23
(37) (A) "Signed" includes any symbol executed or adopted with24
present intention to adopt or accept a writing. "SIGN" MEANS, WITH25
PRESENT INTENT TO AUTHENTICATE OR ADOPT A RECORD :26
(i) E
XECUTE OR ADOPT A TANGIBLE SYMBOL ; OR27
090
-4- (ii) ATTACH TO OR LOGICALLY ASSOCIATE WITH THE RECORD AN1
ELECTRONIC SYMBOL, SOUND, OR PROCESS.2
(B) "S
IGNED", "SIGNING", AND "SIGNATURE" HAVE3
CORRESPONDING MEANINGS .4
SECTION 2. In Colorado Revised Statutes, 4-1-204, amend the5
introductory portion as follows:6
4-1-204. Value. Except as otherwise provided in articles 3, 4, and
7
5, 6,
AND 12 of this title
TITLE 4, a person gives value for rights if the8
person acquires them:9
SECTION 3. In Colorado Revised Statutes, 4-1-301, add (c)(9)10
as follows:11
4-1-301. Territorial applicability - parties' power to choose12
applicable law. (c) If one of the following provisions of the "Uniform13
Commercial Code" specifies the applicable law, that provision governs14
and a contrary agreement is effective only to the extent permitted by the15
law so specified:16
(9) S
ECTION 4-12-107.17
SECTION 4. In Colorado Revised Statutes, amend 4-1-306 as18
follows:19
4-1-306. Waiver or renunciation of claim or right after breach.20
A claim or right arising out of an alleged breach may be discharged in21
whole or in part without consideration by agreement of the aggrieved22
party in an authenticated
A SIGNED record.23
SECTION 5. In Colorado Revised Statutes, amend 4-2-102 as24
follows:25
4-2-102. Scope - certain security and other transactions26
excluded from this article. (1) Unless the context otherwise requires,27
090
-5- this article applies to transactions in goods; it does not apply to: UNLESS1
THE CONTEXT OTHERWISE REQUIRES , AND EXCEPT AS PROVIDED IN2
SUBSECTION (3) OF THIS SECTION, THIS ARTICLE 2 APPLIES TO3
TRANSACTIONS IN GOODS AND , IN THE CASE OF A HYBRID TRANSACTION,4
IT APPLIES TO THE EXTENT PROVIDED IN SUBSECTION (2) OF THIS SECTION.5
(a) Any transaction which, although in the form of an6
unconditional contract to sell or present sale, is intended to operate only7
as a security transaction, nor does this article impair or repeal any statute8
regulating sales to consumers, farmers, or other specified classes of9
buyers; and10
(b) The donation, whether for or without valuable consideration,11
acquisition, preparation, transplantation, injection, or transfusion of any12
human tissue, organ, or blood or component thereof for or to a human13
being.14
(2) I
N A HYBRID TRANSACTION:15
(a) I
F THE SALE-OF-GOODS ASPECTS DO NOT PREDOMINATE , ONLY16
THE PROVISIONS OF THIS ARTICLE 2 WHICH RELATE PRIMARILY TO THE17
SALE-OF-GOODS ASPECTS OF THE TRANSACTION APPLY , AND THE18
PROVISIONS THAT RELATE PRIMARILY TO THE TRANSACTION AS A WHOLE19
DO NOT APPLY.20
(b) I
F THE SALE-OF-GOODS ASPECTS PREDOMINATE , THIS ARTICLE21
2
APPLIES TO THE TRANSACTION BUT DOES NOT PRECLUDE APPLICATION IN22
APPROPRIATE CIRCUMSTANCES OF OTHER LAW TO ASPECTS OF THE23
TRANSACTION WHICH DO NOT RELATE TO THE SALE OF GOODS .24
(3) T
HIS ARTICLE 2 DOES NOT:25
(a) A
PPLY TO A TRANSACTION THAT, EVEN THOUGH IN THE FORM26
OF AN UNCONDITIONAL CONTRACT TO SELL OR PRESENT SALE , OPERATES27
090
-6- ONLY TO CREATE A SECURITY INTEREST ; OR1
(b) I
MPAIR OR REPEAL A STATUTE REGULATING SALES TO2
CONSUMERS, FARMERS, OR OTHER SPECIFIED CLASSES OF BUYERS.3
SECTION 6. In Colorado Revised Statutes, 4-2-106, add (5) as4
follows:5
4-2-106. Definitions: "contract" - "agreement" - "contract for6
sale" - "sale" - "present sale" - "conforming" to contract -7
"termination" - "cancellation" - "hybrid transaction". (5) "H
YBRID8
TRANSACTION" MEANS A SINGLE TRANSACTION INVOLVING A SALE OF9
GOODS AND:10
(a) T
HE PROVISION OF SERVICES;11
(b) A
LEASE OF OTHER GOODS; OR12
(c) A
SALE, LEASE, OR LICENSE OF PROPERTY OTHER THAN GOODS .13
SECTION 7. In Colorado Revised Statutes, 4-2-201, amend (1)14
and (2) as follows:15
4-2-201. Formal requirements - statute of frauds. (1) Except16
as otherwise provided in this section, a contract for the sale of goods for17
the price of five hundred dollars or more is not enforceable by way of18
action or defense unless there is some writing
A RECORD sufficient to19
indicate that a contract for sale has been made between the parties and20
signed by the party against whom enforcement is sought or by his THE21
PARTY'S authorized agent or broker. A writing RECORD is not insufficient22
because it omits or incorrectly states a term agreed upon, but the contract23
is not enforceable under this paragraph SUBSECTION (1) beyond the24
quantity of goods shown in such writing THE RECORD.25
(2) Between merchants, if within a reasonable time a writing26
RECORD in confirmation of the contract and sufficient against the sender27
090
-7- is received and the party receiving it has reason to know its contents, it1
satisfies the requirements of subsection (1) of this section against such2
THE party unless written notice IN A RECORD of objection to its contents3
is given within ten days after it is received.4
SECTION 8. In Colorado Revised Statutes, 4-2-202, amend the5
introductory portion and (b) as follows:6
4-2-202. Final expression - parol or extrinsic evidence. Terms7
with respect to which the confirmatory memoranda of the parties agree or8
which are otherwise set forth in a writing RECORD intended by the parties9
as a final expression of their agreement with respect to such terms as are10
included therein may not be contradicted by evidence of any prior11
agreement or of a contemporaneous oral agreement but may be explained12
or supplemented:13
(b) By evidence of consistent additional terms unless the court14
finds the writing RECORD to have been intended also as a complete and15
exclusive statement of the terms of the agreement.16
SECTION 9. In Colorado Revised Statutes, amend 4-2-203 as17
follows:18
4-2-203. Seals inoperative. The affixing of a seal to a writing19
RECORD evidencing a contract for sale or an offer to buy or sell goods20
does not constitute the writing RECORDING OF a sealed instrument, and the21
law with respect to sealed instruments does not apply to such a contract22
or offer.23
SECTION 10. In Colorado Revised Statutes, amend 4-2-205 as24
follows:25
4-2-205. Firm offers. An offer by a merchant to buy or sell goods26
in a signed writing RECORD which by its terms gives assurance that it will27
090
-8- be held open is not revocable, for lack of consideration, during the time1
stated or, if no time is stated, for a reasonable time, but in no event may2
such period of irrevocability exceed three months; but any such term of3
assurance on a form supplied by the offeree must be separately signed by4
the offeror.5
SECTION 11. In Colorado Revised Statutes, 4-2-209, amend (2)6
as follows:7
4-2-209. Modification, rescission, and waiver. (2) A signed8
agreement which excludes modification or rescission except by a signed9
writing
OR OTHER SIGNED RECORD cannot be otherwise modified or10
rescinded, but except as between merchants such a requirement on a form11
supplied by the merchant must be separately signed by the other party.12
SECTION 12. In Colorado Revised Statutes, amend 4-2.5-10213
as follows:14
4-2.5-102. Scope. (1) This article
ARTICLE 2.5 applies to any15
transaction, regardless of form, that creates a lease,
AND, IN THE CASE OF16
A HYBRID LEASE, THIS ARTICLE 2.5 APPLIES TO THE EXTENT PROVIDED IN17
SUBSECTION (2) OF THIS SECTION.18
(2) I
N A HYBRID LEASE:19
(a) I
F THE LEASE-OF-GOODS ASPECTS DO NOT PREDOMINATE :20
(i) O
NLY THE PROVISIONS OF THIS ARTICLE 2.5 WHICH RELATE21
PRIMARILY TO THE LEASE -OF-GOODS ASPECTS OF THE TRANSACTION22
APPLY, AND THE PROVISIONS THAT RELATE PRIMARILY TO THE23
TRANSACTION AS A WHOLE DO NOT APPLY ;24
(ii) S
ECTION 4-2.5-209 APPLIES IF THE LEASE IS A FINANCE LEASE;25
AND26
(iii) S
ECTION 4-2.5-407 APPLIES TO THE PROMISES OF THE LESSEE27
090
-9- IN A FINANCE LEASE TO THE EXTENT THE PROMISES ARE CONSIDERATION1
FOR THE RIGHT TO POSSESSION AND USE OF THE LEASED GOODS ; AND2
(b) I
F THE LEASE-OF-GOODS ASPECTS PREDOMINATE , THIS ARTICLE3
2.5
APPLIES TO THE TRANSACTION BUT DOES NOT PRECLUDE APPLICATION4
IN APPROPRIATE CIRCUMSTANCES OF OTHER LAW TO ASPECTS OF THE5
LEASE WHICH DO NOT RELATE TO THE LEASE OF GOODS .6
SECTION 13. In Colorado Revised Statutes, 4-2.5-103, amend7
(1) introductory portion; and add (1)(h.5) as follows:8
4-2.5-103. Definitions and index of definitions. (1) In this9
article
ARTICLE 2.5, unless the context otherwise requires:10
(h.5) "H
YBRID LEASE" MEANS A SINGLE TRANSACTION INVOLVING11
A LEASE OF GOODS AND:12
(i) T
HE PROVISION OF SERVICES;13
(ii) A
SALE OF OTHER GOODS; OR14
(iii) A
SALE, LEASE, OR LICENSE OF PROPERTY OTHER THAN GOODS.15
SECTION 14. In Colorado Revised Statutes, amend 4-2.5-10716
as follows:17
4-2.5-107. Waiver or renunciation of claim or right after18
default. Any claim or right arising out of an alleged default or breach of19
warranty may be discharged in whole or in part without consideration by20
a written
waiver or renunciation IN A signed and RECORD delivered by the21
aggrieved party.22
SECTION 15. In Colorado Revised Statutes, 4-2.5-201, amend23
(1)(b), (3), and (5)(a) as follows:24
4-2.5-201. Statute of frauds. (1) A lease contract is not25
enforceable by way of action or defense unless:26
(b) There is a writing RECORD, signed by the party against whom27
090
-10- enforcement is sought or by that party's authorized agent, sufficient to1
indicate that a lease contract has been made between the parties and to2
describe the goods leased and the lease term.3
(3) A writing RECORD is not insufficient because it omits or4
incorrectly states a term agreed upon, but the lease contract is not5
enforceable under subsection (1)(b) of this section beyond the lease term6
and the quantity of goods shown in the writing RECORD.7
(5) The lease term under a lease contract referred to in subsection8
(4) of this section is:9
(a) If there is a writing RECORD signed by the party against whom10
enforcement is sought or by that party's authorized agent specifying the11
lease term, the term so specified;12
SECTION 16. In Colorado Revised Statutes, 4-2.5-202, amend13
(1) introductory portion and (1)(b) as follows:14
4-2.5-202. Final written expression: Parol or extrinsic15
evidence. (1) Terms with respect to which the confirmatory memoranda16
of the parties agree or which are otherwise set forth in a writing RECORD17
intended by the parties as a final expression of their agreement with18
respect to such terms as are included therein may not be contradicted by19
evidence of any prior agreement or of a contemporaneous oral agreement20
but may be explained or supplemented:21
(b) By evidence of consistent additional terms unless the court22
finds the writing RECORD to have been intended also as a complete and23
exclusive statement of the terms of the agreement.24
SECTION 17. In Colorado Revised Statutes, amend 4-2.5-20325
as follows:26
4-2.5-203. Seals inoperative. The affixing of a seal to a writing27
090
-11- RECORD evidencing a lease contract or an offer to enter into a lease1
contract does not render the writing RECORD a sealed instrument and the2
law with respect to sealed instruments does not apply to the lease contract3
or offer.4
SECTION 18. In Colorado Revised Statutes, amend 4-2.5-2055
as follows:6
4-2.5-205. Firm offers. An offer by a merchant to lease goods to7
or from another person in a signed writing RECORD that by its terms gives8
assurance it will be held open is not revocable, for lack of consideration,9
during the time stated or, if no time is stated, for a reasonable time, but in10
no event may the period of irrevocability exceed three months. Any such11
term of assurance on a form supplied by the offeree must be separately12
signed by the offeror.13
SECTION 19. In Colorado Revised Statutes, 4-2.5-208, amend14
(2) as follows:15
4-2.5-208. Modification, rescission, and waiver. (2) A signed16
lease agreement that excludes modification or rescission except by a17
signed writing RECORD may not be otherwise modified or rescinded, but,18
except as between merchants, such a requirement on a form supplied by19
a merchant must be separately signed by the other party.20
SECTION 20. In Colorado Revised Statutes, 4-3-104, amend21
(a)(3) as follows:22
4-3-104. Negotiable instrument. (a) Except as provided in23
subsections (c) and (d) of this section, "negotiable instrument" means an24
unconditional promise or order to pay a fixed amount of money, with or25
without interest or other charges described in the promise or order, if it:26
(3) Does not state any other undertaking or instruction by the27
090
-12- person promising or ordering payment to do any act in addition to the1
payment of money, but the promise or order may contain: (i) an2
undertaking or power to give, maintain, or protect collateral to secure3
payment; (ii) an authorization or power to the holder to confess judgment4
or realize on or dispose of collateral; or (iii) a waiver of the benefit of any5
law intended for the advantage or protection of an obligor; (iv)
A TERM6
THAT SPECIFIES THE LAW THAT GOVERNS THE PROMISE OR ORDER ; OR (v)7
AN UNDERTAKING TO RESOLVE IN A SPECIFIED FORUM A DISPUTE8
CONCERNING THE PROMISE OR ORDER .9
SECTION 21. In Colorado Revised Statutes, 4-3-105, amend (a)10
as follows:11
4-3-105. Issue of instrument. (a) "Issue" means:12
(1) The first delivery of an instrument by the maker or drawer,13
whether to a holder or nonholder, for the purpose of giving rights on the14
instrument to any person;
OR15
(2) I
F AGREED BY THE PAYEE, THE FIRST TRANSMISSION BY THE16
DRAWER TO THE PAYEE OF AN IMAGE OF AN ITEM AND INFORMATION17
DERIVED FROM THE ITEM THAT ENABLES THE DEPOSITARY BANK TO18
COLLECT THE ITEM BY TRANSFERRING OR PRESENTING UNDER FEDERAL19
LAW AN ELECTRONIC CHECK .20
SECTION 22. In Colorado Revised Statutes, amend 4-3-401 as21
follows:22
4-3-401. Signature necessary for liability on instrument. (a)
A23
person is not liable on an instrument unless (i) the person signed the24
instrument or (ii) the person is represented by an agent or representative25
who signed the instrument and the signature is binding on the represented26
person under section 4-3-402.27
090
-13- (b) A signature may be made (i) manually or by means of a device1
or machine, and (ii) by the use of any name, including a trade or assumed2
name, or by a word, mark, or symbol executed or adopted by a person3
with present intention to authenticate a writing.4
SECTION 23. In Colorado Revised Statutes, 4-3-604, amend (a)5
as follows:6
4-3-604. Discharge by cancellation or renunciation. (a) A7
person entitled to enforce an instrument, with or without consideration,8
may discharge the obligation of a party to pay the instrument (i) by an9
intentional voluntary act, such as surrender of the instrument to the party,10
destruction, mutilation, or cancellation of the instrument, cancellation or11
striking out of the party's signature, or the addition of words to the12
instrument indicating discharge or (ii) by agreeing not to sue or otherwise13
renouncing rights against the party by a signed writing RECORD. THE14
OBLIGATION OF A PARTY TO PAY A CHECK IS NOT DISCHARGED SOLELY BY15
DESTRUCTION OF THE CHECK IN CONNECTION WITH A PROCESS IN WHICH16
INFORMATION IS EXTRACTED FROM THE CHECK AND AN IMAGE OF THE17
CHECK IS MADE AND, SUBSEQUENTLY, THE INFORMATION AND IMAGE ARE18
TRANSMITTED FOR PAYMENT .19
SECTION 24. In Colorado Revised Statutes, 4-4.5-103, amend20
(a) introductory portion and (a)(1) introductory portion as follows:21
4-4.5-103. Payment order - definitions. (a) In this article22
ARTICLE 4.5:23
(1) "Payment order" means an instruction of a sender to a24
receiving bank, transmitted orally electronically, or in writing OR IN A25
RECORD, to pay, or to cause another bank to pay, a fixed or determinable26
amount of money to a beneficiary if:27
090
-14- SECTION 25. In Colorado Revised Statutes, amend 4-4.5-2011
as follows:2
4-4.5-201. Security procedure. "Security procedure" means a3
procedure established by agreement of a customer and a receiving bank4
for the purpose of (i) verifying that a payment order or communication5
amending or cancelling a payment order is that of the customer or (ii)6
detecting error in the transmission or the content of the payment order or7
communication. A security procedure
MAY IMPOSE AN OBLIGATION ON8
THE RECEIVING BANK OR THE CUSTOMER AND may require the use of9
algorithms or other codes, identifying words, or
numbers, SYMBOLS,10
SOUNDS, BIOMETRICS, encryption, callback procedures, or similar security11
devices. Comparison of a signature on a payment order or communication12
with an authorized specimen signature of the customer
OR REQUIRING A13
PAYMENT ORDER TO BE SENT FROM A KNOWN E -MAIL ADDRESS, IP14
ADDRESS, OR TELEPHONE NUMBER is not by itself a security procedure.15
SECTION 26. In Colorado Revised Statutes, 4-4.5-202, amend16
(b) and (c) as follows:17
4-4.5-202. Authorized and verified payment orders. (b) If a18
bank and its customer have agreed that the authenticity of payment orders19
issued to the bank in the name of the customer as sender will be verified20
pursuant to a security procedure, a payment order received by the21
receiving bank is effective as the order of the customer, whether or not22
authorized, if (i) the security procedure is a commercially reasonable23
method of providing security against unauthorized payment orders and24
(ii) the bank proves that it accepted the payment order in good faith and25
in compliance with
THE BANK'S OBLIGATIONS UNDER the security26
procedure and any written
agreement or instruction of the customer,27
090
-15- EVIDENCED BY A RECORD, restricting acceptance of payment orders issued1
in the name of the customer. The bank is not required to follow an2
instruction that violates a written AN agreement with the customer,3
EVIDENCED BY A RECORD, or notice of which is not received at a time and4
in a manner affording the bank a reasonable opportunity to act on it5
before the payment order is accepted.6
(c) Commercial reasonableness of a security procedure is a7
question of law to be determined by considering the wishes of the8
customer expressed to the bank; the circumstances of the customer known9
to the bank, including the size, type, and frequency of payment orders10
normally issued by the customer to the bank; alternative security11
procedures offered to the customer; and security procedures in general12
use by customers and receiving banks similarly situated. A security13
procedure is deemed to be commercially reasonable if (i) the security14
procedure was chosen by the customer after the bank offered, and the15
customer refused, a security procedure that was commercially reasonable16
for that customer and (ii) the customer expressly agreed in writing A17
RECORD to be bound by any payment order, whether or not authorized,18
issued in its name and accepted by the bank in compliance with
THE19
BANK'S OBLIGATIONS UNDER the security procedure chosen by the20
customer.21
SECTION 27. In Colorado Revised Statutes, 4-4.5-203, amend22
(a)(1) as follows:23
4-4.5-203. Unenforceability of certain verified payment24
orders. (a) If an accepted payment order is not, under section 4-4.5-20225
(a), an authorized order of a customer identified as sender, but is effective26
as an order of the customer pursuant to section 4-4.5-202 (b), the27
090
-16- following rules apply:1
(1) By express written agreement EVIDENCED BY A RECORD, the2
receiving bank may limit the extent to which it is entitled to enforce or3
retain payment of the payment order.4
SECTION 28. In Colorado Revised Statutes, 4-4.5-207, amend5
(c)(2) as follows:6
4-4.5-207. Misdescription of beneficiary. (c) If (i) a payment7
order described in subsection (b) of this section is accepted, (ii) the8
originator's payment order described the beneficiary inconsistently by9
name and number, and (iii) the beneficiary's bank pays the person10
identified by number as permitted by subsection (b)(1) of this section, the11
following rules apply:12
(2) If the originator is not a bank and proves that the person13
identified by number was not entitled to receive payment from the14
originator, the originator is not obliged to pay its order unless the15
originator's bank proves that the originator, before acceptance of the16
originator's order, had notice that payment of a payment order issued by17
the originator might be made by the beneficiary's bank on the basis of an18
identifying or bank account number even if it identifies a person different19
from the named beneficiary. Proof of notice may be made by any20
admissible evidence. The originator's bank satisfies the burden of proof21
if it proves that the originator, before the payment order was accepted,22
signed a writing RECORD stating the information to which the notice23
relates.24
SECTION 29. In Colorado Revised Statutes, 4-4.5-208, amend25
(b)(2) as follows: 26
4-4.5-208. Misdescription of intermediary bank or27
090
-17- beneficiary's bank. (b) This subsection (b) applies to a payment order1
identifying an intermediary bank or the beneficiary's bank both by name2
and an identifying number if the name and number identify different3
persons.4
(2) If the sender is not a bank and the receiving bank proves that5
the sender, before the payment order was accepted, had notice that the6
receiving bank might rely on the number as the proper identification of7
the intermediary or beneficiary's bank even if it identifies a person8
different from the bank identified by name, the rights and obligations of9
the sender and the receiving bank are governed by subsection (b)(1) of10
this section, as though the sender were a bank. Proof of notice may be11
made by any admissible evidence. The receiving bank satisfies the burden12
of proof if it proves that the sender, before the payment order was13
accepted, signed a writing RECORD stating the information to which the14
notice relates.15
SECTION 30. In Colorado Revised Statutes, 4-4.5-210, amend16
(a) as follows:17
4-4.5-210. Rejection of payment order. (a) A payment order is18
rejected by the receiving bank by a notice of rejection transmitted to the19
sender orally electronically, or in writing A RECORD. A notice of rejection20
need not use any particular words and is sufficient if it indicates that the21
receiving bank is rejecting the order or will not execute or pay the order.22
Rejection is effective when the notice is given if transmission is by a23
means that is reasonable in the circumstances. If notice of rejection is24
given by a means that is not reasonable, rejection is effective when the25
notice is received. If an agreement of the sender and receiving bank26
establishes the means to be used to reject a payment order, (i) any means27
090
-18- complying with the agreement is reasonable and (ii) any means not1
complying is not reasonable unless no significant delay in receipt of the2
notice resulted from the use of the noncomplying means.3
SECTION 31. In Colorado Revised Statutes, 4-4.5-211, amend4
(a) as follows:5
4-4.5-211. Cancellation and amendment of payment order.6
(a) A communication of the sender of a payment order cancelling or7
amending the order may be transmitted to the receiving bank orally8
electronically, or in writing A RECORD. If a security procedure is in effect9
between the sender and the receiving bank, the communication is not10
effective to cancel or amend the order unless the communication is11
verified pursuant to the security procedure or the bank agrees to the12
cancellation or amendment.13
SECTION 32. In Colorado Revised Statutes, 4-4.5-305, amend14
(c) and (d) as follows:15
4-4.5-305. Liability for late or improper execution or failure16
to execute payment order. (c) In addition to the amounts payable under17
subsections (a) and (b) of this section, damages, including consequential18
damages, are recoverable to the extent provided in an express written19
agreement of the receiving bank,
EVIDENCED BY A RECORD.20
(d) If a receiving bank fails to execute a payment order it was21
obliged by express agreement to execute, the receiving bank is liable to22
the sender for its expenses in the transaction and for incidental expenses23
and interest losses resulting from the failure to execute. Additional24
damages, including consequential damages, are recoverable to the extent25
provided in an express written agreement of the receiving bank,26
EVIDENCED BY A RECORD, but are not otherwise recoverable.27
090
-19- SECTION 33. In Colorado Revised Statutes, amend 4-5-104 as1
follows:2
4-5-104. Formal requirements. A letter of credit, confirmation,3
advice, transfer, amendment, or cancellation may be issued in any form4
that is a
SIGNED record. and is authenticated (i) by a signature or (ii) in
5
accordance with the agreement of the parties or the standard practice6
referred to in section 4-5-108 (e).7
SECTION 34. In Colorado Revised Statutes, amend 4-5-116 as8
follows:9
4-5-116. Choice of law and forum. (a) The liability of an issuer,10
nominated person, or adviser for action or omission is governed by the11
law of the jurisdiction chosen by an agreement in the form of a record12
signed or otherwise authenticated by the affected parties in the manner13
provided in section 4-5-104 or by a provision in the person's letter of14
credit, confirmation, or other undertaking. The jurisdiction whose law is15
chosen need not bear any relation to the transaction.16
(b) Unless subsection (a) of this section applies, the liability of an17
issuer, nominated person, or adviser for action or omission is governed18
by the law of the jurisdiction in which the person is located. The person19
is considered to be located at the address indicated in the person's20
undertaking. If more than one address is indicated, the person is21
considered to be located at the address from which the person's22
undertaking was issued. For the purpose of jurisdiction, choice of law,23
and recognition of interbranch letters of credit, but not enforcement of a24
judgment, all branches of a bank are considered separate juridical entities25
and a bank is considered to be located at the place where its relevant26
branch is considered to be located under this subsection (b).27
090
-20- (c) Except as otherwise provided in this subsection (c), the1
liability of an issuer, nominated person, or adviser is governed by any2
rules of custom or practice, such as the "Uniform Customs and Practice3
for Documentary Credits", to which the letter of credit, confirmation, or4
other undertaking is expressly made subject. If (i) this article would5
govern the liability of an issuer, nominated person, or adviser under6
subsection (a) or (b) of this section, (ii) the relevant undertaking7
incorporates rules of custom or practice, and (iii) there is conflict between8
this article and those rules as applied to that undertaking, those rules9
govern except to the extent of any conflict with the nonvariable10
provisions specified in section 4-5-103 (c) FOR THE PURPOSE OF11
JURISDICTION, CHOICE OF LAW, AND RECOGNITION OF INTERBRANCH12
LETTERS OF CREDIT, BUT NOT ENFORCEMENT OF A JUDGMENT , ALL13
BRANCHES OF A BANK ARE CONSIDERED SEPARATE JURIDICAL ENTITIES ,14
AND A BANK IS CONSIDERED TO BE LOCATED AT THE PLACE WHERE ITS15
RELEVANT BRANCH IS CONSIDERED TO BE LOCATED UNDER SUBSECTION (d)16
OF THIS SECTION.17
(d) If there is conflict between this article and article 3, 4, 4.5, or18
9 of this title, this article governs A BRANCH OF A BANK IS CONSIDERED TO19
BE LOCATED AT THE ADDRESS INDICATED IN THE BRANCH 'S UNDERTAKING.20
I
F MORE THAN ONE ADDRESS IS INDICATED , THE BRANCH IS CONSIDERED21
TO BE LOCATED AT THE ADDRESS FROM WHICH THE UNDERTAKING WAS22
ISSUED.23
(e) The forum for settling disputes arising out of an undertaking
24
within this article may be chosen in the manner and with the binding25
effect that governing law may be chosen in accordance with subsection26
(a) of this section EXCEPT AS OTHERWISE PROVIDED IN THIS SUBSECTION27
090
-21- (e), THE LIABILITY OF AN ISSUER, NOMINATED PERSON, OR ADVISER IS1
GOVERNED BY ANY RULES OF CUSTOM OR PRACTICE , SUCH AS THE2
"U
NIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS", TO3
WHICH THE LETTER OF CREDIT, CONFIRMATION, OR OTHER UNDERTAKING4
IS EXPRESSLY MADE SUBJECT. IF (i) THIS ARTICLE 5 WOULD GOVERN THE5
LIABILITY OF AN ISSUER, NOMINATED PERSON , OR ADVISER UNDER6
SUBSECTION (a) OR (b) OF THIS SECTION; (ii) THE RELEVANT7
UNDERTAKING INCORPORATES RULES OF CUSTOM OR PRACTICE ; AND (iii)8
THERE IS CONFLICT BETWEEN THIS ARTICLE 5 AND THOSE RULES AS9
APPLIED TO THAT UNDERTAKING , THOSE RULES GOVERN EXCEPT TO THE10
EXTENT OF ANY CONFLICT WITH THE NONVARIABLE PROVISIONS SPECIFIED11
IN SECTION 4-5-103 (c).12
(f) I
F THERE IS CONFLICT BETWEEN THIS ARTICLE 5 AND ARTICLE13
3,
4, 4.5, OR 9 OF THIS TITLE 4, THIS ARTICLE 5 GOVERNS.14
(g) T
HE FORUM FOR SETTLING DISPUTES ARISING OUT OF AN15
UNDERTAKING WITHIN THIS ARTICLE 5 MAY BE CHOSEN IN THE MANNER16
AND WITH THE BINDING EFFECT THAT GOVERNING LAW MAY BE CHOSEN IN17
ACCORDANCE WITH SUBSECTION (a) OF THIS SECTION.18
SECTION 35. In Colorado Revised Statutes, 4-7-102, amend (a)19
introductory portion; and repeal (a)(10) and (a)(12) as follows:20
4-7-102. Definitions and index of definitions. (a) In this article
21
ARTICLE 7, unless the context otherwise requires:22
(10) "Record" means information that is inscribed on a tangible23
medium or that is stored in an electronic or other medium and is24
retrievable in perceivable form.25
(12) "Sign" means, with present intent to authenticate or adopt a26
record:27
090
-22- (A) To execute or adopt a tangible symbol; or1
(B) To attach to or logically associate with the record an2
electronic sound, symbol, or process.3
SECTION 36. In Colorado Revised Statutes, 4-7-106, amend (b)4
introductory portion and (b)(4); and add (c), (d), (e), (f), (g), (h), and (i)5
as follows:6
4-7-106. Control of electronic document of title. (b) A system7
satisfies subsection (a) of this section, and a person is deemed to have8
HAS control of an electronic document of title, if the document is created,9
stored, and assigned TRANSFERRED in such a manner that:10
(4) Copies or amendments that add or change an identified11
assignee TRANSFEREE of the authoritative copy can be made only with the12
consent of the person asserting control;13
(c) A
SYSTEM SATISFIES SUBSECTION (a) OF THIS SECTION, AND A14
PERSON HAS CONTROL OF AN ELECTRONIC DOCUMENT OF TITLE , IF AN15
AUTHORITATIVE ELECTRONIC COPY OF THE DOCUMENT , A RECORD16
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE ELECTRONIC COPY ,17
OR A SYSTEM IN WHICH THE ELECTRONIC COPY IS RECORDED :18
(1) E
NABLES THE PERSON READILY TO IDENTIFY EACH ELECTRONIC19
COPY AS EITHER AN AUTHORITATIVE COPY OR A NONAUTHORITATIVE20
COPY;21
(2) E
NABLES THE PERSON READILY TO IDENTIFY ITSELF IN ANY22
WAY, INCLUDING BY NAME, IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY,23
OFFICE, OR ACCOUNT NUMBER , AS THE PERSON TO WHICH EACH24
AUTHORITATIVE ELECTRONIC COPY WAS ISSUED OR TRANSFERRED ; AND25
(3) G
IVES THE PERSON EXCLUSIVE POWER , SUBJECT TO26
SUBSECTION (d) OF THIS SECTION, TO:27
090
-23- (A) PREVENT OTHERS FROM ADDING OR CHANGING THE PERSON TO1
WHICH EACH AUTHORITATIVE ELECTRONIC COPY HAS BEEN ISSUED OR2
TRANSFERRED; AND3
(B) T
RANSFER CONTROL OF EACH AUTHORITATIVE ELECTRONIC4
COPY.5
(d) S
UBJECT TO SUBSECTION (e) OF THIS SECTION, A POWER IS6
EXCLUSIVE UNDER SUBSECTIONS (c)(3)(A) AND (c)(3)(B) OF THIS SECTION7
EVEN IF:8
(1) T
HE AUTHORITATIVE ELECTRONIC COPY , A RECORD ATTACHED9
TO OR LOGICALLY ASSOCIATED WITH THE AUTHORITATIVE ELECTRONIC10
COPY, OR A SYSTEM IN WHICH THE AUTHORITATIVE ELECTRONIC COPY IS11
RECORDED LIMITS THE USE OF THE DOCUMENT OF TITLE OR HAS A12
PROTOCOL THAT IS PROGRAMMED TO CAUSE A CHANGE , INCLUDING A13
TRANSFER OR LOSS OF CONTROL; OR14
(2) T
HE POWER IS SHARED WITH ANOTHER PERSON .15
(e) A
POWER OF A PERSON IS NOT SHARED WITH ANOTHER PERSON16
UNDER SUBSECTION (d)(2) OF THIS SECTION AND THE PERSON'S POWER IS17
NOT EXCLUSIVE IF:18
(1) T
HE PERSON CAN EXERCISE THE POWER ONLY IF THE POWER19
ALSO IS EXERCISED BY THE OTHER PERSON ; AND20
(2) T
HE OTHER PERSON:21
(A) C
AN EXERCISE THE POWER WITHOUT EXERCISE OF THE POWER22
BY THE PERSON; OR23
(B) I
S THE TRANSFEROR TO THE PERSON OF AN INTEREST IN THE24
DOCUMENT OF TITLE.25
(f) I
F A PERSON HAS THE POWERS SPECIFIED IN SUBSECTIONS26
(c)(3)(A)
AND (c)(3)(B) OF THIS SECTION, THE POWERS ARE PRESUMED TO27
090
-24- BE EXCLUSIVE.1
(g) A
PERSON HAS CONTROL OF AN ELECTRONIC DOCUMENT OF2
TITLE IF ANOTHER PERSON, OTHER THAN THE TRANSFEROR TO THE PERSON3
OF AN INTEREST IN THE DOCUMENT:4
(1) H
AS CONTROL OF THE DOCUMENT AND ACKNOWLEDGES THAT5
IT HAS CONTROL ON BEHALF OF THE PERSON ; OR6
(2) O
BTAINS CONTROL OF THE DOCUMENT AFTER HAVING7
ACKNOWLEDGED THAT IT WILL OBTAIN CONTROL OF THE DOCUMENT ON8
BEHALF OF THE PERSON.9
(h) A
PERSON THAT HAS CONTROL UNDER THIS SECTION IS NOT10
REQUIRED TO ACKNOWLEDGE THAT IT HAS CONTROL ON BEHALF OF11
ANOTHER PERSON.12
(i) I
F A PERSON ACKNOWLEDGES THAT IT HAS OR WILL OBTAIN13
CONTROL ON BEHALF OF ANOTHER PERSON , UNLESS THE PERSON14
OTHERWISE AGREES OR LAW OTHER THAN THIS ARTICLE 7 OR ARTICLE 9 OF15
THIS TITLE 4 OTHERWISE PROVIDES, THE PERSON DOES NOT OWE ANY DUTY16
TO THE OTHER PERSON AND IS NOT REQUIRED TO CONFIRM THE17
ACKNOWLEDGMENT TO ANY OTHER PERSON .18
SECTION 37. In Colorado Revised Statutes, 4-8-102, amend (a)19
introductory portion, (a)(6)(i), and (b) as follows:20
4-8-102. Definitions. (a) In this article
ARTICLE 8:21
(6) "Communicate" means to:22
(i) Send a signed writing RECORD; or23
(b) Other THE FOLLOWING definitions applying to IN this article24
ARTICLE 8 and the sections in which they appear are OTHER ARTICLES25
APPLY TO THIS ARTICLE 8:26
Appropriate person Section 4-8-10727
090
-25- Control Section 4-8-1061
C
ONTROLLABLE ACCOUNT SECTION 4-9-1022
C
ONTROLLABLE ELECTRONIC RECORD SECTION 4-12-1023
C
ONTROLLABLE PAYMENT INTANGIBLE SECTION 4-9-1024
Delivery Section 4-8-3015
Investment company security Section 4-8-1036
Issuer Section 4-8-2017
Overissue Section 4-8-2108
Protected purchaser Section 4-8-3039
Securities account Section 4-8-50110
SECTION 38. In Colorado Revised Statutes, 4-8-103, add (h) as11
follows:12
4-8-103. Rules for determining whether certain obligations13
and interests are securities or financial assets. (h) A
CONTROLLABLE14
ACCOUNT, CONTROLLABLE ELECTRONIC RECORD , OR CONTROLLABLE15
PAYMENT INTANGIBLE IS NOT A FINANCIAL ASSET UNLESS SECTION 4-8-10216
(a)(9)(iii)
APPLIES.17
SECTION 39. In Colorado Revised Statutes, 4-8-106, amend18
(d)(3); and add (h) and (i) as follows:19
4-8-106. Control. (d) A purchaser has "control" of a security20
entitlement if:21
(3) Another person, has control of the security entitlement on
22
behalf of the purchaser or, having previously acquired control of the23
security entitlement, acknowledges that it has control on behalf of the24
purchaser. OTHER THAN THE TRANSFEROR TO THE PURCHASER OF AN25
INTEREST IN THE SECURITY ENTITLEMENT :26
(A) H
AS CONTROL OF THE SECURITY ENTITLEMENT AND27
090
-26- ACKNOWLEDGES THAT IT HAS CONTROL ON BEHALF OF THE PURCHASER ; OR1
(B) O
BTAINS CONTROL OF THE SECURITY ENTITLEMENT AFTER2
HAVING ACKNOWLEDGED THAT IT WILL OBTAIN CONTROL OF THE SECURITY3
ENTITLEMENT ON BEHALF OF THE PURCHASER .4
(h) A
PERSON THAT HAS CONTROL UNDER THIS SECTION IS NOT5
REQUIRED TO ACKNOWLEDGE THAT IT HAS CONTROL ON BEHALF OF A6
PURCHASER.7
(i) I
F A PERSON ACKNOWLEDGES THAT IT HAS OR WILL OBTAIN8
CONTROL ON BEHALF OF A PURCHASER , UNLESS THE PERSON OTHERWISE9
AGREES OR LAW OTHER THAN THIS ARTICLE 8 OR ARTICLE 9 OF THIS TITLE10
4
OTHERWISE PROVIDES, THE PERSON DOES NOT OWE ANY DUTY TO THE11
PURCHASER AND IS NOT REQUIRED TO CONFIRM THE ACKNOWLEDGMENT12
TO ANY OTHER PERSON.13
SECTION 40. In Colorado Revised Statutes, 4-8-110, add (g) as14
follows:15
4-8-110. Applicability - choice of law. (g) T
HE LOCAL LAW OF16
THE ISSUER'S JURISDICTION OR THE SECURITIES INTERMEDIARY 'S17
JURISDICTION GOVERNS A MATTER OR TRANSACTION SPECIFIED IN18
SUBSECTION (a) OR (b) OF THIS SECTION EVEN IF THE MATTER OR19
TRANSACTION DOES NOT BEAR ANY RELATION TO THE JURISDICTION .20
SECTION 41. In Colorado Revised Statutes, 4-8-303, amend (b)21
as follows:22
4-8-303. Protected purchaser. (b) In addition to acquiring the
23
rights of a purchaser, A protected purchaser also acquires its interest in24
the security free of any adverse claim.25
SECTION 42. In Colorado Revised Statutes, 4-9-102, amend (a)26
introductory portion, (a)(2), (a)(3), (a)(4)(A), (a)(11), (a)(42), (a)(47),27
090
-27- (a)(61), (a)(66), and (b); repeal (a)(7), (a)(31), (a)(77), and (a)(81); and1
add (a)(7.3), (a)(7.5), (a)(27.5), (a)(27.7), (a)(31.5), (a)(54.5), and2
(a)(81.5) as follows:3
4-9-102. Definitions and index of definitions. (a) In this article4
ARTICLE 9:5
(2) "Account", except as used in "account for", "
ACCOUNT6
STATEMENT", "ACCOUNT TO", "COMMODITY ACCOUNT " IN SUBSECTION7
(a)(14)
OF THIS SECTION, "CUSTOMER'S ACCOUNT", "DEPOSIT ACCOUNT"8
IN SUBSECTION (a)(29) OF THIS SECTION, "ON ACCOUNT OF", AND9
"
STATEMENT OF ACCOUNT ", means a right to payment of a monetary10
obligation, whether or not earned by performance, (i) for property that has11
been or is to be sold, leased, licensed, assigned, or otherwise disposed of;12
(ii) for services rendered or to be rendered; (iii) for a policy of insurance13
issued or to be issued; (iv) for a secondary obligation incurred or to be14
incurred; (v) for energy provided or to be provided; (vi) for the use or hire15
of a vessel under a charter or other contract; (vii) arising out of the use of16
a credit or charge card or information contained on or for use with the17
card; or (viii) as winnings in a lottery or other game of chance operated18
or sponsored by a state, governmental unit of a state, or person licensed19
or authorized to operate the game by a state or governmental unit of a20
state. The term includes
CONTROLLABLE ACCOUNTS AND21
health-care-insurance receivables. The term does not include (i) rights to
22
payment evidenced by chattel paper; or an instrument, (ii) commercial tort23
claims; (iii) deposit accounts; (iv) investment property; (v) letter-of-credit24
rights or letters of credit; or (vi) rights to payment for money or funds25
advanced or sold, other than rights arising out of the use of a credit or26
charge card or information contained on or for use with the card;
OR (vii)27
090
-28- RIGHTS TO PAYMENT EVIDENCED BY AN INSTRUMENT .1
(3) "Account debtor" means a person obligated on an account,2
chattel paper, or general intangible. The term does not include persons3
obligated to pay a negotiable instrument, even if the
NEGOTIABLE4
instrument constitutes part of
EVIDENCES chattel paper.5
(4) "Accounting", except as used in "accounting for", means a6
record:7
(A) Authenticated SIGNED by a secured party;8
(7) "Authenticate" means:9
(A) To sign; or10
(B) With present intent to adopt or accept a record, to attach to or11
logically associate with the record an electronic sound, symbol, or12
process.13
(7.3) "A
SSIGNEE", EXCEPT AS USED IN "ASSIGNEE FOR BENEFIT OF14
CREDITORS", MEANS A PERSON (i) IN WHOSE FAVOR A SECURITY INTEREST15
THAT SECURES AN OBLIGATION IS CREATED OR PROVIDED FOR UNDER A16
SECURITY AGREEMENT , WHETHER OR NOT THE OBLIGATION IS17
OUTSTANDING OR (ii) TO WHICH AN ACCOUNT, CHATTEL PAPER, PAYMENT18
INTANGIBLE, OR PROMISSORY NOTE HAS BEEN SOLD. THE TERM INCLUDES19
A PERSON TO WHICH A SECURITY INTEREST HAS BEEN TRANSFERRED BY A20
SECURED PARTY.21
(7.5) "A
SSIGNOR" MEANS A PERSON THAT (i) UNDER A SECURITY22
AGREEMENT CREATES OR PROVIDES FOR A SECURITY INTEREST THAT23
SECURES AN OBLIGATION OR (ii) SELLS AN ACCOUNT, CHATTEL PAPER,24
PAYMENT INTANGIBLE, OR PROMISSORY NOTE. THE TERM INCLUDES A25
SECURED PARTY THAT HAS TRANSFERRED A SECURITY INTEREST TO26
ANOTHER PERSON.27
090
-29- (11) "Chattel paper" means: a record or records that evidence both1
a monetary obligation and a security interest in specific goods, a security2
interest in specific goods and software used in the goods, a security3
interest in specific goods and license of software used in the goods, a4
lease of specific goods, or a lease of specific goods and license of5
software used in the goods. In this paragraph (11), "monetary obligation"6
means a monetary obligation secured by the goods or owed under a lease7
of the goods and includes a monetary obligation with respect to software8
used in the goods. The term does not include (i) charters or other9
contracts involving the use or hire of a vessel or (ii) records that evidence10
a right to payment arising out of the use of a credit or charge card or11
information contained on or for use with the card. If a transaction is12
evidenced by records that include an instrument or series of instruments,13
the group of records taken together constitutes chattel paper.14
(A) A
RIGHT TO PAYMENT OF A MONETARY OBLIGATION SECURED15
BY SPECIFIC GOODS, IF THE RIGHT TO PAYMENT AND SECURITY AGREEMENT16
ARE EVIDENCED BY A RECORD; OR17
(B) A
RIGHT TO PAYMENT OF A MONETARY OBLIGATION OWED BY18
A LESSEE UNDER A LEASE AGREEMENT WITH RESPECT TO SPECIFIC GOODS19
AND A MONETARY OBLIGATION OWED BY THE LESSEE IN CONNECTION WITH20
THE TRANSACTION GIVING RISE TO THE LEASE , IF:21
(i) T
HE RIGHT TO PAYMENT AND LEASE AGREEMENT ARE22
EVIDENCED BY A RECORD; AND23
(ii) T
HE PREDOMINANT PURPOSE OF THE TRANSACTION GIVING RISE24
TO THE LEASE WAS TO GIVE THE LESSEE THE RIGHT TO POSSESSION AND25
USE OF THE GOODS. THE TERM DOES NOT INCLUDE A RIGHT TO PAYMENT26
ARISING OUT OF A CHARTER OR OTHER CONTRACT INVOLVING THE USE OR27
090
-30- HIRE OF A VESSEL OR A RIGHT TO PAYMENT ARISING OUT OF THE USE OF A1
CREDIT OR CHARGE CARD OR INFORMATION CONTAINED ON OR FOR USE2
WITH THE CARD.3
(27.5) "C
ONTROLLABLE ACCOUNT " MEANS AN ACCOUNT4
EVIDENCED BY A CONTROLLABLE ELECTRONIC RECORD THAT PROVIDES5
THAT THE ACCOUNT DEBTOR UNDERTAKES TO PAY THE PERSON THAT HAS6
CONTROL UNDER SECTION 4-12-105 OF THE CONTROLLABLE ELECTRONIC7
RECORD.8
(27.7) "C
ONTROLLABLE PAYMENT INTANGIBLE " MEANS A9
PAYMENT INTANGIBLE EVIDENCED BY A CONTROLLABLE ELECTRONIC10
RECORD THAT PROVIDES THAT THE ACCOUNT DEBTOR UNDERTAKES TO11
PAY THE PERSON THAT HAS CONTROL UNDER SECTION 4-12-105 OF THE12
CONTROLLABLE ELECTRONIC RECORD .13
(31) "Electronic chattel paper" means chattel paper evidenced by
14
a record or records consisting of information stored in an electronic15
medium.16
(31.5) "E
LECTRONIC MONEY" MEANS MONEY IN AN ELECTRONIC17
FORM.18
(42) "General intangible" means any personal property, including19
things in action, other than accounts, chattel paper, commercial tort20
claims, deposit accounts, documents, goods, instruments, investment21
property, letter-of-credit rights, letters of credit, money, and oil, gas, or22
other minerals before extraction. The term includes
CONTROLLABLE23
ELECTRONIC RECORDS, payment intangibles, and software.24
(47) "Instrument" means a negotiable instrument or any other25
writing that evidences a right to the payment of a monetary obligation, is26
not itself a security agreement or lease, and is of a type that in
THE27
090
-31- ordinary course of business is transferred by delivery with any necessary1
indorsement or assignment. The term does not include (i) investment2
property; (ii) letters of credit; or (iii) writings that evidence a right to3
payment arising out of the use of a credit or charge card or information4
contained on or for use with the card;
OR (iv) WRITINGS THAT EVIDENCE5
CHATTEL PAPER.6
(54.5) "M
ONEY" HAS THE MEANING IN SECTION 4-1-201 (b)(24),7
BUT DOES NOT INCLUDE (i) A DEPOSIT ACCOUNT OR (ii) MONEY IN AN8
ELECTRONIC FORM THAT CANNOT BE SUBJECTED TO CONTROL UNDER9
SECTION 4-9-105.5.10
(61) "Payment intangible" means a general intangible under which11
the account debtor's principal obligation is a monetary obligation. T
HE12
TERM INCLUDES A CONTROLLABLE PAYMENT INTANGIBLE .13
(66) "Proposal" means a record authenticated
SIGNED by a secured14
party which includes the terms on which the secured party is willing to15
accept collateral in full or partial satisfaction of the obligation it secures16
pursuant to sections 4-9-620, 4-9-621, and 4-9-622.17
(77) "Send", in connection with a record or notification, means:18
(A) To deposit in the mail, deliver for transmission, or transmit by19
any other usual means of communication, with postage or cost of20
transmission provided for, addressed to any address reasonable under the21
circumstances; or22
(B) To cause the record or notification to be received within the23
time that it would have been received if properly sent under subparagraph24
(A) of this paragraph (77).25
(81) "Tangible chattel paper" means chattel paper evidenced by26
a record or records consisting of information that is inscribed on a27
090
-32- tangible medium.1
(81.5) "T
ANGIBLE MONEY" MEANS MONEY IN A TANGIBLE FORM .2
(b) "Control" as provided in section 4-7-106 and the following3
definitions in other articles apply to this article
ARTICLE 9:4
"Applicant" Section 4-5-102. 5
"Beneficiary" Section 4-5-102. 6
"Broker" Section 4-8-102. 7
"Certificated security" Section 4-8-102. 8
"Check" Section 4-3-104. 9
"Clearing corporation" Section 4-8-102. 10
"Contract for sale" Section 4-2-106. 11
"C
ONTROLLABLE ELECTRONIC RECORD " SECTION 4-12-102. 12
"Customer" Section 4-4-104. 13
"Entitlement holder" Section 4-8-102. 14
"Financial asset" Section 4-8-102. 15
"Holder in due course" Section 4-3-302. 16
"Issuer" (with respect to a letter of credit17
or letter-of-credit right) Section 4-5-102. 18
"Issuer" (with respect to a security) Section 4-8-201. 19
"Issuer" (with respect to documents of title) Section 4-7-102. 20
"Lease" Section 4-2.5-103. 21
"Lease agreement" Section 4-2.5-103. 22
"Lease contract" Section 4-2.5-103. 23
"Leasehold interest" Section 4-2.5-103. 24
"Lessee" Section 4-2.5-103. 25
"Lessee in ordinary course of business" Section 4-2.5-103. 26
"Lessor" Section 4-2.5-103. 27
090
-33- "Lessor's residual interest" Section 4-2.5-103. 1
"Letter of credit" Section 4-5-102. 2
"Merchant" Section 4-2-104. 3
"Negotiable instrument" Section 4-3-104. 4
"Nominated person" Section 4-5-102. 5
"Note" Section 4-3-104. 6
"Proceeds of a letter of credit" Section 4-5-114. 7
"P
ROTECTED PURCHASER" SECTION 4-8-303. 8
"Prove" Section 4-3-103. 9
"Q
UALIFYING PURCHASER" SECTION 4-12-102. 10
"Sale" Section 4-2-106. 11
"Securities account" Section 4-8-501. 12
"Securities intermediary" Section 4-8-102. 13
"Security" Section 4-8-102. 14
"Security certificate" Section 4-8-102. 15
"Security entitlement" Section 4-8-102. 16
"Uncertificated security" Section 4-8-102. 17
SECTION 43. In Colorado Revised Statutes, 4-9-104, amend18
(a)(2) and (a)(3); and add (a)(4) as follows:19
4-9-104. Control of deposit account. (a) A secured party has20
control of a deposit account if:21
(2) The debtor, secured party, and bank have agreed in an
22
authenticated A SIGNED record that the bank will comply with instructions23
originated by the secured party directing disposition of the funds in the24
deposit account without further consent by the debtor; or25
(3) The secured party becomes the bank's customer with respect26
to the deposit account;
OR27
090
-34- (4) ANOTHER PERSON, OTHER THAN THE DEBTOR:1
(A) H
AS CONTROL OF THE DEPOSIT ACCOUNT AND ACKNOWLEDGES2
THAT IT HAS CONTROL ON BEHALF OF THE SECURED PARTY ; OR3
(B) O
BTAINS CONTROL OF THE DEPOSIT ACCOUNT AFTER HAVING4
ACKNOWLEDGED THAT IT WILL OBTAIN CONTROL OF THE DEPOSIT5
ACCOUNT ON BEHALF OF THE SECURED PARTY .6
SECTION 44. In Colorado Revised Statutes, 4-9-105, amend (a),7
(b) introductory portion, (b)(1), (b)(2), (b)(3), and (b)(4); and add (c), (d),8
(e), (f), and (g) as follows:9
4-9-105. Control of electronic copy of record evidencing10
chattel paper. (a) A secured party has control of electronic chattel paper
11
if a system employed for evidencing the transfer of interests in the chattel12
paper reliably establishes the secured party as the person to which the13
chattel paper was assigned A PURCHASER HAS CONTROL OF AN14
AUTHORITATIVE ELECTRONIC COPY OF A RECORD EVIDENCING CHATTEL15
PAPER IF A SYSTEM EMPLOYED FOR EVIDENCING THE ASSIGNMENT OF16
INTERESTS IN THE CHATTEL PAPER RELIABLY ESTABLISHES THE PURCHASER17
AS THE PERSON TO WHICH THE AUTHORITATIVE ELECTRONIC COPY WAS18
ASSIGNED.19
(b) A system satisfies subsection (a) of this section if the record20
or records comprising the chattel paper are created, stored, and assigned21
in such a manner that A SYSTEM SATISFIES SUBSECTION (a) OF THIS22
SECTION IF THE RECORD OR RECORDS EVIDENCING THE CHATTEL PAPER23
ARE CREATED, STORED, AND ASSIGNED IN A MANNER THAT:24
(1) A single authoritative copy of the record or records exists that25
is unique, identifiable, and, except as otherwise provided in paragraphs26
(4), (5), and (6) of this subsection (b), unalterable A SINGLE27
090
-35- AUTHORITATIVE COPY OF THE RECORD OR RECORDS EXISTS WHICH IS1
UNIQUE, IDENTIFIABLE, AND, EXCEPT AS OTHERWISE PROVIDED IN2
SUBSECTIONS (a)(4), (a)(5), AND (a)(6) OF THIS SECTION, UNALTERABLE;3
(2) The authoritative copy identifies the secured party PURCHASER4
as the assignee of the record or records;5
(3) The authoritative copy is communicated to and maintained by6
the secured party PURCHASER or its designated custodian;7
(4) Copies or amendments that add or change an identified8
assignee of the authoritative copy can be made only with the consent of9
the secured party purchaser;10
(c) A
SYSTEM SATISFIES SUBSECTION (a) OF THIS SECTION, AND A11
PURCHASER HAS CONTROL OF AN AUTHORITATIVE ELECTRONIC COPY OF A12
RECORD EVIDENCING CHATTEL PAPER , IF THE ELECTRONIC COPY, A RECORD13
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE ELECTRONIC COPY ,14
OR A SYSTEM IN WHICH THE ELECTRONIC COPY IS RECORDED :15
(1) E
NABLES THE PURCHASER READILY TO IDENTIFY EACH16
ELECTRONIC COPY AS EITHER AN AUTHORITATIVE COPY OR A17
NONAUTHORITATIVE COPY ;18
(2) E
NABLES THE PURCHASER READILY TO IDENTIFY ITSELF IN ANY19
WAY, INCLUDING BY NAME, IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY,20
OFFICE, OR ACCOUNT NUMBER, AS THE ASSIGNEE OF THE AUTHORITATIVE21
ELECTRONIC COPY; AND22
(3) G
IVES THE PURCHASER EXCLUSIVE POWER , SUBJECT TO23
SUBSECTION (d) OF THIS SECTION, TO:24
(A) P
REVENT OTHERS FROM ADDING OR CHANGING AN IDENTIFIED25
ASSIGNEE OF THE AUTHORITATIVE ELECTRONIC COPY ; AND26
(B) T
RANSFER CONTROL OF THE AUTHORITATIVE ELECTRONIC27
090
-36- COPY.1
(d) S
UBJECT TO SUBSECTION (e) OF THIS SECTION, A POWER IS2
EXCLUSIVE UNDER SUBSECTIONS (c)(3)(A) AND (c)(3)(B) OF THIS SECTION3
EVEN IF:4
(1) T
HE AUTHORITATIVE ELECTRONIC COPY , A RECORD ATTACHED5
TO OR LOGICALLY ASSOCIATED WITH THE AUTHORITATIVE ELECTRONIC6
COPY, OR A SYSTEM IN WHICH THE AUTHORITATIVE ELECTRONIC COPY IS7
RECORDED LIMITS THE USE OF THE AUTHORITATIVE ELECTRONIC COPY OR8
HAS A PROTOCOL PROGRAMMED TO CAUSE A CHANGE , INCLUDING A9
TRANSFER OR LOSS OF CONTROL; OR10
(2) T
HE POWER IS SHARED WITH ANOTHER PERSON .11
(e) A
POWER OF A PURCHASER IS NOT SHARED WITH ANOTHER12
PERSON UNDER SUBSECTION (d)(2) OF THIS SECTION AND THE PURCHASER'S13
POWER IS NOT EXCLUSIVE IF:14
(1) T
HE PURCHASER CAN EXERCISE THE POWER ONLY IF THE POWER15
ALSO IS EXERCISED BY THE OTHER PERSON ; AND16
(2) T
HE OTHER PERSON:17
(A) C
AN EXERCISE THE POWER WITHOUT EXERCISE OF THE POWER18
BY THE PURCHASER; OR19
(B) I
S THE TRANSFEROR TO THE PURCHASER OF AN INTEREST IN20
THE CHATTEL PAPER.21
(f) I
F A PURCHASER HAS THE POWERS SPECIFIED IN SUBSECTIONS22
(c)(3)(A)
AND (c)(3)(B) OF THIS SECTION, THE POWERS ARE PRESUMED TO23
BE EXCLUSIVE.24
(g) A
PURCHASER HAS CONTROL OF AN AUTHORITATIVE25
ELECTRONIC COPY OF A RECORD EVIDENCING CHATTEL PAPER IF ANOTHER26
PERSON, OTHER THAN THE TRANSFEROR TO THE PURCHASER OF AN27
090
-37- INTEREST IN THE CHATTEL PAPER:1
(1) H
AS CONTROL OF THE AUTHORITATIVE ELECTRONIC COPY AND2
ACKNOWLEDGES THAT IT HAS CONTROL ON BEHALF OF THE PURCHASER ; OR3
(2) O
BTAINS CONTROL OF THE AUTHORITATIVE ELECTRONIC COPY4
AFTER HAVING ACKNOWLEDGED THAT IT WILL OBTAIN CONTROL OF THE5
ELECTRONIC COPY ON BEHALF OF THE PURCHASER .6
SECTION 45. In Colorado Revised Statutes, add 4-9-105.5 and7
4-9-107.5 as follows:8
4-9-105.5. Control of electronic money. (a) A
PERSON HAS9
CONTROL OF ELECTRONIC MONEY IF :10
(1) T
HE ELECTRONIC MONEY , A RECORD ATTACHED TO OR11
LOGICALLY ASSOCIATED WITH THE ELECTRONIC MONEY , OR A SYSTEM IN12
WHICH THE ELECTRONIC MONEY IS RECORDED GIVES THE PERSON :13
(A) P
OWER TO AVAIL ITSELF OF SUBSTANTIALLY ALL THE BENEFIT14
FROM THE ELECTRONIC MONEY ; AND15
(B) E
XCLUSIVE POWER, SUBJECT TO SUBSECTION (b) OF THIS16
SECTION, TO:17
(i) P
REVENT OTHERS FROM AVAILING THEMSELVES OF18
SUBSTANTIALLY ALL THE BENEFIT FROM THE ELECTRONIC MONEY ; AND19
(ii) T
RANSFER CONTROL OF THE ELECTRONIC MONEY TO ANOTHER20
PERSON OR CAUSE ANOTHER PERSON TO OBTAIN CONTROL OF OTHER21
ELECTRONIC MONEY AS A RESULT OF THE TRANSFER OF THE ELECTRONIC22
MONEY; AND23
(2) T
HE ELECTRONIC MONEY , A RECORD ATTACHED TO OR24
LOGICALLY ASSOCIATED WITH THE ELECTRONIC MONEY , OR A SYSTEM IN25
WHICH THE ELECTRONIC MONEY IS RECORDED ENABLES THE PERSON26
READILY TO IDENTIFY ITSELF IN ANY WAY , INCLUDING BY NAME ,27
090
-38- IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY , OFFICE, OR ACCOUNT1
NUMBER, AS HAVING THE POWERS UNDER SUBSECTION (a)(1) OF THIS2
SECTION.3
(b) S
UBJECT TO SUBSECTION (c) OF THIS SECTION, A POWER IS4
EXCLUSIVE UNDER SUBSECTIONS (a)(1)(B)(i) AND (a)(1)(B)(ii) OF THIS5
SECTION EVEN IF:6
(1) T
HE ELECTRONIC MONEY , A RECORD ATTACHED TO OR7
LOGICALLY ASSOCIATED WITH THE ELECTRONIC MONEY , OR A SYSTEM IN8
WHICH THE ELECTRONIC MONEY IS RECORDED LIMITS THE USE OF THE9
ELECTRONIC MONEY OR HAS A PROTOCOL PROGRAMMED TO CAUSE A10
CHANGE, INCLUDING A TRANSFER OR LOSS OF CONTROL ; OR11
(2) T
HE POWER IS SHARED WITH ANOTHER PERSON .12
(c) A
POWER OF A PERSON IS NOT SHARED WITH ANOTHER PERSON13
UNDER SUBSECTION (b)(2) OF THIS SECTION AND THE PERSON'S POWER IS14
NOT EXCLUSIVE IF:15
(1) T
HE PERSON CAN EXERCISE THE POWER ONLY IF THE POWER16
ALSO IS EXERCISED BY THE OTHER PERSON ; AND17
(2) T
HE OTHER PERSON:18
(A) C
AN EXERCISE THE POWER WITHOUT EXERCISE OF THE POWER19
BY THE PERSON; OR20
(B) I
S THE TRANSFEROR TO THE PERSON OF AN INTEREST IN THE21
ELECTRONIC MONEY.22
(d) I
F A PERSON HAS THE POWERS SPECIFIED IN SUBSECTIONS23
(a)(1)(B)(i)
AND (a)(1)(B)(ii) OF THIS SECTION, THE POWERS ARE24
PRESUMED TO BE EXCLUSIVE.25
(e) A
PERSON HAS CONTROL OF ELECTRONIC MONEY IF ANOTHER26
PERSON, OTHER THAN THE TRANSFEROR TO THE PERSON OF AN INTEREST27
090
-39- IN THE ELECTRONIC MONEY:1
(1) H
AS CONTROL OF THE ELECTRONIC MONEY AND2
ACKNOWLEDGES THAT IT HAS CONTROL ON BEHALF OF THE PERSON ; OR3
(2) O
BTAINS CONTROL OF THE ELECTRONIC MONEY AFTER HAVING4
ACKNOWLEDGED THAT IT WILL OBTAIN CONTROL OF THE ELECTRONIC5
MONEY ON BEHALF OF THE PERSON .6
4-9-107.5. Control of controllable electronic record,7
controllable account, or controllable payment intangible. (a) A8
SECURED PARTY HAS CONTROL OF A CONTROLLABLE ELECTRONIC RECORD9
AS PROVIDED IN SECTION 4-12-105.10
(b) A
SECURED PARTY HAS CONTROL OF A CONTROLLABLE11
ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE IF THE SECURED12
PARTY HAS CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD THAT13
EVIDENCES THE CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT14
INTANGIBLE.15
SECTION 46. In Colorado Revised Statutes, 4-9-203, amend16
(b)(3)(A), (b)(3)(C), and (b)(3)(D); and add (b)(3)(E) as follows:17
4-9-203. Attachment and enforceability of security interest;18
proceeds; supporting obligations; formal requisites. (b) Except as19
otherwise provided in subsections (c) to (i) of this section, a security20
interest is enforceable against the debtor and third parties with respect to21
the collateral only if:22
(3) One of the following conditions is met:23
(A) The debtor has authenticated
SIGNED a security agreement that24
provides a description of the collateral and, if the security interest covers25
timber to be cut, a description of the land concerned;26
(C) The collateral is a certificated security in registered form, and27
090
-40- the security certificate has been delivered to the secured party under1
section 4-8-301 pursuant to the debtor's security agreement; or2
(D) The collateral is
CONTROLLABLE ACCOUNTS , CONTROLLABLE3
ELECTRONIC RECORDS, CONTROLLABLE PAYMENT INTANGIBLES , deposit4
accounts, electronic chattel paper
ELECTRONIC DOCUMENTS , ELECTRONIC5
MONEY, investment property, OR letter-of-credit rights, or electronic6
documents, and the secured party has control under section 4-7-106,7
4-9-104, 4-9-105 4-9-105.5, 4-9-106, or 4-9-107, OR 4-9-107.5 pursuant8
to the debtor's security agreement;
OR9
(E) T
HE COLLATERAL IS CHATTEL PAPER, AND THE SECURED PARTY10
HAS POSSESSION AND CONTROL UNDER SECTION 4-9-314.5 PURSUANT TO11
THE DEBTOR'S SECURITY AGREEMENT.12
SECTION 47. In Colorado Revised Statutes, 4-9-204, amend (b)13
introductory portion; and add (b.1) as follows:14
4-9-204. After-acquired property - future advances. (b) A
15
S
UBJECT TO SUBSECTION (b.1) OF THIS SECTION, A security interest does16
not attach under a term constituting an after-acquired property clause to:17
(b.1) S
UBSECTION (b) OF THIS SECTION DOES NOT PREVENT A18
SECURITY INTEREST FROM ATTACHING :19
(1) T
O CONSUMER GOODS AS PROCEEDS UNDER SECTION 4-9-31520
(a)
OR COMMINGLED GOODS UNDER SECTION 4-9-336 (c);21
(2) T
O A COMMERCIAL TORT CLAIM AS PROCEEDS UNDER SECTION22
4-9-315 (a);
OR23
(3) U
NDER AN AFTER-ACQUIRED PROPERTY CLAUSE TO PROPERTY24
THAT IS PROCEEDS OF CONSUMER GOODS OR A COMMERCIAL TORT CLAIM .25
SECTION 48. In Colorado Revised Statutes, 4-9-207, amend (c)26
introductory portion as follows:27
090
-41- 4-9-207. Rights and duties of secured party having possession1
or control of collateral. (c) Except as otherwise provided in subsection2
(d) of this section, a secured party having possession of collateral or3
control of collateral under section 4-7-106, 4-9-104, 4-9-105, 4-9-105.5,4
4-9-106, or 4-9-107, OR 4-9-107.5:5
SECTION 49. In Colorado Revised Statutes, 4-9-208, amend (b)6
introductory portion, (b)(1), (b)(3), (b)(4), (b)(5), and (b)(6); and add7
(b)(7) and (b)(8) as follows:8
4-9-208. Additional duties of secured party having control of9
collateral. (b) Within five business days after receiving an authenticated10
A SIGNED demand by the debtor:11
(1) A secured party having control of a deposit account under12
section 4-9-104 (a)(2) shall send to the bank with which the deposit13
account is maintained an authenticated statement A SIGNED RECORD that14
releases the bank from any further obligation to comply with instructions15
originated by the secured party;16
(3) A secured party, other than a buyer, having control of17
electronic chattel paper under section 4-9-105 shall: A SECURED PARTY,18
OTHER THAN A BUYER, HAVING CONTROL UNDER SECTION 4-9-105 OF AN19
AUTHORITATIVE ELECTRONIC COPY OF A RECORD EVIDENCING CHATTEL20
PAPER SHALL TRANSFER CONTROL OF THE ELECTRONIC COPY TO THE21
DEBTOR OR A PERSON DESIGNATED BY THE DEBTOR ;22
(A) Communicate the authoritative copy of the electronic chattel23
paper to the debtor or its designated custodian;24
(B) If the debtor designates a custodian that is the designated25
custodian with which the authoritative copy of the electronic chattel paper26
is maintained for the secured party, communicate to the custodian an27
090
-42- authenticated record releasing the designated custodian from any further1
obligation to comply with instructions originated by the secured party and2
instructing the custodian to comply with instructions originated by the3
debtor; and4
(C) Take appropriate action to enable the debtor or its designated5
custodian to make copies of or revisions to the authoritative copy which6
add or change an identified assignee of the authoritative copy without the7
consent of the secured party;8
(4) A secured party having control of investment property under9
section 4-8-106 (d)(2) or 4-9-106 (b) shall send to the securities10
intermediary or commodity intermediary with which the security11
entitlement or commodity contract is maintained an authenticated A12
SIGNED record that releases the securities intermediary or commodity13
intermediary from any further obligation to comply with entitlement14
orders or directions originated by the secured party;15
(5) A secured party having control of a letter-of-credit right under16
section 4-9-107 shall send to each person having an unfulfilled obligation17
to pay or deliver proceeds of the letter of credit to the secured party an18
authenticated A SIGNED release from any further obligation to pay or19
deliver proceeds of the letter of credit to the secured party; and20
(6) A secured party having control of an electronic document21
shall: A SECURED PARTY HAVING CONTROL UNDER SECTION 4-7-106 OF AN22
AUTHORITATIVE ELECTRONIC COPY OF AN ELECTRONIC DOCUMENT SHALL23
TRANSFER CONTROL OF THE ELECTRONIC COPY TO THE DEBTOR OR A24
PERSON DESIGNATED BY THE DEBTOR ;25
(A) Give control of the electronic document to the debtor or its26
designated custodian;27
090
-43- (B) If the debtor designates a custodian that is the designated1
custodian with which the authoritative copy of the electronic document2
is maintained for the secured party, communicate to the custodian an3
authenticated record releasing the designated custodian from any further4
obligation to comply with instructions originated by the secured party and5
instructing the custodian to comply with instructions originated by the6
debtor; and7
(C) Take appropriate action to enable the debtor or its designated8
custodian to make copies of or revisions to the authoritative copy that add9
or change an identified assignee of the authoritative copy without the10
consent of the secured party.11
(7) A
SECURED PARTY HAVING CONTROL UNDER SECTION 4-9-105.512
OF ELECTRONIC MONEY SHALL TRANSFER CONTROL OF THE ELECTRONIC13
MONEY TO THE DEBTOR OR A PERSON DESIGNATED BY THE DEBTOR ; AND14
(8) A
SECURED PARTY HAVING CONTROL UNDER SECTION 4-12-10515
OF A CONTROLLABLE ELECTRONIC RECORD , OTHER THAN A BUYER OF A16
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE17
EVIDENCED BY THE CONTROLLABLE ELECTRONIC RECORD , SHALL18
TRANSFER CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD TO THE19
DEBTOR OR A PERSON DESIGNATED BY THE DEBTOR .20
SECTION 50. In Colorado Revised Statutes, 4-9-209, amend (b)21
as follows:22
4-9-209. Duties of secured party if account debtor has been23
notified of assignment. (b) Within ten days after receiving an
24
authenticated A SIGNED demand by the debtor, a secured party shall send25
to an account debtor that has received notification under section 4-9-40626
(a)
OR 4-12-106 (b) of an assignment to the secured party as assignee27
090
-44- under section 4-9-406 (a) an authenticated A SIGNED record that releases1
the account debtor from any further obligation to the secured party.2
SECTION 51. In Colorado Revised Statutes, 4-9-210, amend3
(a)(2), (a)(3), (b), (c), and (d) introductory portion as follows: 4
4-9-210. Request for accounting - request regarding list of5
collateral or statement of account - definitions. (a) In this section:6
(2) "Request for an accounting" means a record authenticated7
SIGNED by a debtor requesting that the recipient provide an accounting of8
the unpaid obligations secured by collateral and reasonably identifying9
the transaction or relationship that is the subject of the request.10
(3) "Request regarding a list of collateral" means a record11
authenticated SIGNED by a debtor requesting that the recipient approve or12
correct a list of what the debtor believes to be the collateral securing an13
obligation and reasonably identifying the transaction or relationship that14
is the subject of the request.15
(b) Subject to subsections (c), (d), (e), and (f) of this section, a16
secured party, other than a buyer of accounts, chattel paper, payment17
intangibles, or promissory notes or a consignor, shall comply with a18
request within fourteen days after receipt:19
(1) In the case of a request for an accounting, by authenticating20
SIGNING and sending to the debtor an accounting; and21
(2) In the case of a request regarding a list of collateral or a22
request regarding a statement of account, by authenticating SIGNING and23
sending to the debtor an approval or correction.24
(c) A secured party that claims a security interest in all of a25
particular type of collateral owned by the debtor may comply with a26
request regarding a list of collateral by sending to the debtor an27
090
-45- authenticated A SIGNED record including a statement to that effect within1
fourteen days after receipt.2
(d) A person that receives a request regarding a list of collateral,3
THAT claims no interest in the collateral when it receives the request, and4
that claimed an interest in the collateral at an earlier time shall comply5
with the request within fourteen days after receipt by sending to the6
debtor an authenticated
A SIGNED record:7
SECTION 52. In Colorado Revised Statutes, 4-9-301, amend the8
introductory portion and (3) introductory portion as follows:9
4-9-301. Law governing perfection and priority of security10
interests. Except as otherwise provided in sections 4-9-303 to 4-9-30611
4-9-306.7, the following rules determine the law governing perfection,12
the effect of perfection or nonperfection, and the priority of a security13
interest in collateral:14
(3) Except as otherwise provided in paragraph SUBSECTION (4) of15
this section, while tangible negotiable TANGIBLE documents, goods,16
instruments,
OR TANGIBLE money or tangible chattel paper
is located in17
a jurisdiction, the local law of that jurisdiction governs:18
SECTION 53. In Colorado Revised Statutes, 4-9-304, amend (a)19
as follows:20
4-9-304. Law governing perfection and priority of security21
interests in deposit accounts. (a) The local law of a bank's jurisdiction22
governs perfection, the effect of perfection or nonperfection, and the23
priority of a security interest in a deposit account maintained with that24
bank
EVEN IF THE TRANSACTION DOES NOT BEAR ANY RELATION TO THE25
BANK'S JURISDICTION.26
SECTION 54. In Colorado Revised Statutes, 4-9-305, add (a)(5)27
090
-46- as follows:1
4-9-305. Law governing perfection and priority of security2
interests in investment property. (a) Except as otherwise provided in3
subsection (c) of this section, the following rules apply:4
(5) S
UBSECTIONS (a)(2), (a)(3), AND (a)(4) OF THIS SECTION APPLY5
EVEN IF THE TRANSACTION DOES NOT BEAR ANY RELATION TO THE6
JURISDICTION.7
SECTION 55. In Colorado Revised Statutes, add 4-9-306.5 and8
4-9-306.7 as follows:9
4-9-306.5. Law governing perfection and priority of security10
interests in chattel paper. (a) E
XCEPT AS PROVIDED IN SUBSECTION (d)11
OF THIS SECTION, IF CHATTEL PAPER IS EVIDENCED ONLY BY AN12
AUTHORITATIVE ELECTRONIC COPY OF THE CHATTEL PAPER OR IS13
EVIDENCED BY AN AUTHORITATIVE ELECTRONIC COPY AND AN14
AUTHORITATIVE TANGIBLE COPY , THE LOCAL LAW OF THE CHATTEL15
PAPER'S JURISDICTION GOVERNS PERFECTION, THE EFFECT OF PERFECTION16
OR NONPERFECTION, AND THE PRIORITY OF A SECURITY INTEREST IN THE17
CHATTEL PAPER, EVEN IF THE TRANSACTION DOES NOT BEAR ANY18
RELATION TO THE CHATTEL PAPER'S JURISDICTION.19
(b) T
HE FOLLOWING RULES DETERMINE THE CHATTEL PAPER 'S20
JURISDICTION UNDER THIS SECTION:21
(1) I
F THE AUTHORITATIVE ELECTRONIC COPY OF THE RECORD22
EVIDENCING CHATTEL PAPER, OR A RECORD ATTACHED TO OR LOGICALLY23
ASSOCIATED WITH THE ELECTRONIC COPY AND READILY AVAILABLE FOR24
REVIEW, EXPRESSLY PROVIDES THAT A PARTICULAR JURISDICTION IS THE25
CHATTEL PAPER'S JURISDICTION FOR PURPOSES OF THIS PART 3, THIS26
ARTICLE 9, OR THIS TITLE 4, THAT JURISDICTION IS THE CHATTEL PAPER'S27
090
-47- JURISDICTION.1
(2) I
F SUBSECTION (b)(1) OF THIS SECTION DOES NOT APPLY AND2
THE RULES OF THE SYSTEM IN WHICH THE AUTHORITATIVE ELECTRONIC3
COPY IS RECORDED ARE READILY AVAILABLE FOR REVIEW AND EXPRESSLY4
PROVIDE THAT A PARTICULAR JURISDICTION IS THE CHATTEL PAPER 'S5
JURISDICTION FOR PURPOSES OF THIS PART 3, THIS ARTICLE 9, OR THIS6
TITLE 4, THAT JURISDICTION IS THE CHATTEL PAPER'S JURISDICTION.7
(3) I
F SUBSECTIONS (b)(1) AND (b)(2) OF THIS SECTION DO NOT8
APPLY AND THE AUTHORITATIVE ELECTRONIC COPY , OR A RECORD9
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE ELECTRONIC COPY10
AND READILY AVAILABLE FOR REVIEW , EXPRESSLY PROVIDES THAT THE11
CHATTEL PAPER IS GOVERNED BY THE LAW OF A PARTICULAR12
JURISDICTION, THAT JURISDICTION IS THE CHATTEL PAPER'S JURISDICTION.13
(4) I
F SUBSECTIONS (b)(1), (b)(2), AND (b)(3) OF THIS SECTION DO14
NOT APPLY AND THE RULES OF THE SYSTEM IN WHICH THE AUTHORITATIVE15
ELECTRONIC COPY IS RECORDED ARE READILY AVAILABLE FOR REVIEW16
AND EXPRESSLY PROVIDE THAT THE CHATTEL PAPER OR THE SYSTEM IS17
GOVERNED BY THE LAW OF A PARTICULAR JURISDICTION , THAT18
JURISDICTION IS THE CHATTEL PAPER'S JURISDICTION.19
(5) I
F SUBSECTIONS (b)(1) TO (b)(4) OF THIS SECTION DO NOT20
APPLY, THE CHATTEL PAPER'S JURISDICTION IS THE JURISDICTION IN WHICH21
THE DEBTOR IS LOCATED.22
(c) I
F AN AUTHORITATIVE TANGIBLE COPY OF A RECORD EVIDENCES23
CHATTEL PAPER AND THE CHATTEL PA PER IS NOT EVIDENCED BY AN24
AUTHORITATIVE ELECTRONIC COPY , WHILE THE AUTHORITATIVE TANGIBLE25
COPY OF THE RECORD EVIDENCING CHATTEL PAPER IS LOCATED IN A26
JURISDICTION, THE LOCAL LAW OF THAT JURISDICTION GOVERNS :27
090
-48- (1) PERFECTION OF A SECURITY INTEREST IN THE CHATTEL PAPER1
BY POSSESSION UNDER SECTION 4-9-314.5; AND2
(2) T
HE EFFECT OF PERFECTION OR NONPERFECTION AND THE3
PRIORITY OF A SECURITY INTEREST IN THE CHATTEL PAPER .4
(d) T
HE LOCAL LAW OF THE JURISDICTION IN WHICH THE DEBTOR5
IS LOCATED GOVERNS PERFECTION OF A SECURITY INTEREST IN CHATTEL6
PAPER BY FILING.7
4-9-306.7. Law governing perfection and priority of security8
interests in controllable accounts, controllable electronic records, and9
controllable payment intangibles. (a) E
XCEPT AS PROVIDED IN10
SUBSECTION (b) OF THIS SECTION, THE LOCAL LAW OF THE CONTROLLABLE11
ELECTRONIC RECORD'S JURISDICTION SPECIFIED IN SECTION 4-12-107 (c)12
AND (d) GOVERNS PERFECTION , THE EFFECT OF PERFECTION OR13
NONPERFECTION, AND THE PRIORITY OF A SECURITY INTEREST IN A14
CONTROLLABLE ELECTRONIC RECORD AND A SECURITY INTEREST IN A15
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE16
EVIDENCED BY THE CONTROLLABLE ELECTRONIC RECORD .17
(b) T
HE LOCAL LAW OF THE JURISDICTION IN WHICH THE DEBTOR18
IS LOCATED GOVERNS:19
(1) P
ERFECTION OF A SECURITY INTEREST IN A CONTROLLABLE20
ACCOUNT, CONTROLLABLE ELECTRONIC RECORD , OR CONTROLLABLE21
PAYMENT INTANGIBLE BY FILING; AND22
(2) A
UTOMATIC PERFECTION OF A SECURITY INTEREST IN A23
CONTROLLABLE PAYMENT INTANGIBLE CREATED BY A SALE OF THE24
CONTROLLABLE PAYMENT INTANGIBLE .25
SECTION 56. In Colorado Revised Statutes, 4-9-310, amend26
(b)(8); and add (b)(8.1) as follows:27
090
-49- 4-9-310. When filing required to perfect security interest or1
agricultural lien - security interests and agricultural liens to which2
filing provisions do not apply. (b) The filing of a financing statement3
is not necessary to perfect a security interest:4
(8) In
CONTROLLABLE ACCOUNTS , CONTROLLABLE ELECTRONIC5
RECORDS, CONTROLLABLE PAYMENT INTANGIBLES , deposit accounts,6
electronic chattel paper,
electronic documents, investment property, or7
letter-of-credit rights that is perfected by control under section 4-9-314;8
(8.1) I
N CHATTEL PAPER THAT IS PERFECTED BY POSSESSION AND9
CONTROL UNDER SECTION 4-9-314.5;10
SECTION 57. In Colorado Revised Statutes, 4-9-312, amend (a),11
(b)(2), (b)(3), and (e); and add (b)(4) as follows:12
4-9-312. Perfection of security interests in chattel paper,13
controllable accounts, controllable electronic records, controllable14
payment intangibles, deposit accounts, documents, goods covered by15
documents, instruments, investment property, letter-of-credit rights,16
and money - perfection by permissive filing - temporary perfection17
without filing or transfer of possession. (a) A security interest in18
chattel paper, negotiable documents
CONTROLLABLE ACCOUNTS ,19
CONTROLLABLE ELECTRONIC RECORDS , CONTROLLABLE PAYMENT20
INTANGIBLES, instruments, or investment property, OR NEGOTIABLE21
DOCUMENTS may be perfected by filing.22
(b) Except as otherwise provided in section 4-9-315 (c) and (d) for23
proceeds:24
(2) Except as otherwise provided in section 4-9-308 (d), a security25
interest in a letter-of-credit right may be perfected only by control under26
section 4-9-314; and27
090
-50- (3) A security interest in TANGIBLE money may be perfected only1
by the secured party's taking possession under section 4-9-313;
AND2
(4) A
SECURITY INTEREST IN ELECTRONIC MONEY MAY BE3
PERFECTED ONLY BY CONTROL UNDER SECTION 4-9-314.4
(e) A security interest in certificated securities, negotiable5
documents, or instruments is perfected without filing or the taking of6
possession or control for a period of twenty days from the time it attaches7
to the extent that it arises for new value given under an authenticated
A8
SIGNED security agreement.9
SECTION 58. In Colorado Revised Statutes, 4-9-313, amend (a),10
(c), and (d) as follows:11
4-9-313. When possession by or delivery to secured party12
perfects security interest without filing. (a) Except as otherwise13
provided in subsection (b) of this section, a secured party may perfect a14
security interest in tangible negotiable documents, goods, instruments,15
NEGOTIABLE TANGIBLE DOCUMENTS , OR TANGIBLE money or tangible16
chattel paper by taking possession of the collateral. A secured party may17
perfect a security interest in certificated securities by taking delivery of18
the certificated securities under section 4-8-301.19
(c) With respect to collateral other than certificated securities and20
goods covered by a document, a secured party takes possession of21
collateral in the possession of a person other than the debtor, the secured22
party, or a lessee of the collateral from the debtor in the ordinary course23
of the debtor's business when:24
(1) The person in possession authenticates SIGNS a record25
acknowledging that it holds possession of the collateral for the secured26
party's benefit; or27
090
-51- (2) The person takes possession of the collateral after having1
authenticated SIGNED a record acknowledging that it will hold possession2
of
THE collateral for the secured party's benefit.3
(d) If perfection of a security interest depends upon possession of4
the collateral by a secured party, perfection occurs no
NOT earlier than the5
time the secured party takes possession and continues only while the6
secured party retains possession.7
SECTION 59. In Colorado Revised Statutes, 4-9-314, amend (a),8
(b), and (c) introductory portion as follows:9
4-9-314. Perfection by control. (a) A security interest in10
investment property, deposit accounts, letter-of-credit rights, electronic11
chattel paper, or electronic documents CONTROLLABLE ACCOUNTS ,12
CONTROLLABLE ELECTRONIC RECORDS , CONTROLLABLE PAYMENT13
INTANGIBLES, DEPOSIT ACCOUNTS, ELECTRONIC DOCUMENTS, ELECTRONIC14
MONEY, INVESTMENT PROPERTY, OR LETTER-OF-CREDIT RIGHTS may be15
perfected by control of the collateral under section 4-7-106, 4-9-104,16
4-9-105 4-9-105.5, 4-9-106, or 4-9-107, OR 4-9-107.5.17
(b) A security interest in deposit accounts, electronic chattel18
paper, letter-of-credit rights, or electronic documents CONTROLLABLE19
ACCOUNTS, CONTROLLABLE ELECTRONIC RECORDS , CONTROLLABLE20
PAYMENT INTANGIBLES, DEPOSIT ACCOUNTS, ELECTRONIC DOCUMENTS ,21
ELECTRONIC MONEY, OR LETTER-OF-CREDIT RIGHTS is perfected by control22
under section 4-7-106, 4-9-104, 4-9-105, or 4-9-105.5, 4-9-107, when OR23
4-9-107.5
NOT EARLIER THAN THE TIME the secured party obtains control24
and remains perfected by control only while the secured party retains25
control.26
(c) A security interest in investment property is perfected by27
090
-52- control under section 4-9-106 from NOT EARLIER THAN the time the1
secured party obtains control and remains perfected by control until:2
SECTION 60. In Colorado Revised Statutes, add 4-9-314.5 as3
follows:4
4-9-314.5. Perfection by possession and control of chattel5
paper. (a) A
SECURED PARTY MAY PERFECT A SECURITY INTEREST IN6
CHATTEL PAPER BY TAKING POSSESSION OF EACH AUTHORITATIVE7
TANGIBLE COPY OF THE RECORD EVIDENCING THE CHATTEL PAPER AND8
OBTAINING CONTROL OF EACH AUTHORITATIVE ELECTRONIC COPY OF THE9
ELECTRONIC RECORD EVIDENCING THE CHATTEL PAPER .10
(b) A
SECURITY INTEREST IS PERFECTED UNDER SUBSECTION (a) OF11
THIS SECTION NOT EARLIER THAN THE TIME THE SECURED PARTY TAKES12
POSSESSION AND OBTAINS CONTROL AND REMAINS PERFECTED UNDER13
SUBSECTION (a) OF THIS SECTION ONLY WHILE THE SECURED PARTY14
RETAINS POSSESSION AND CONTROL .15
(c) S
ECTION 4-9-313 (c) AND (f) TO (i) APPLIES TO PERFECTION BY16
POSSESSION OF AN AUTHORITATIVE TANGIBLE COPY OF A RECORD17
EVIDENCING CHATTEL PAPER.18
SECTION 61. In Colorado Revised Statutes, 4-9-316, amend (a)19
introductory portion and (f) introductory portion as follows:20
4-9-316. Continued perfection of security interest following21
change in governing law. (a) A security interest perfected pursuant to22
the law of the jurisdiction designated in section 4-9-301 (1), or
4-9-30523
(c), 4-9-306.5 (d),
OR 4-9-306.7 (b) remains perfected until the earliest of:24
(f) A security interest in
CHATTEL PAPER, CONTROLLABLE25
ACCOUNTS, CONTROLLABLE ELECTRONIC RECORDS , CONTROLLABLE26
PAYMENT INTANGIBLES , deposit accounts, letter-of-credit rights, or27
090
-53- investment property which is perfected under the law of the CHATTEL1
PAPER'S JURISDICTION, THE CONTROLLABLE ELECTRONIC RECORD 'S2
JURISDICTION, THE bank's jurisdiction, the issuer's jurisdiction, a3
nominated person's jurisdiction, the securities intermediary's jurisdiction,4
or the commodity intermediary's jurisdiction, as applicable, remains5
perfected until the earlier of:6
SECTION 62. In Colorado Revised Statutes, 4-9-317, amend (b)7
and (d); and add (f), (g), (h), and (i) as follows:8
4-9-317. Interests that take priority over or take free of9
security interest or agricultural lien. (b) Except as otherwise provided10
in subsection (e) of this section, a buyer, other than a secured party, of11
tangible chattel paper, tangible documents, goods, instruments, TANGIBLE12
DOCUMENTS, or a certificated security takes free of a security interest or13
agricultural lien if the buyer gives value and receives delivery of the14
collateral without knowledge of the security interest or agricultural lien15
and before it is perfected.16
(d) S
UBJECT TO SUBSECTIONS (f) TO (i) OF THIS SECTION, a17
licensee of a general intangible or a buyer, other than a secured party, of18
collateral other than tangible chattel paper, tangible documents,
19
ELECTRONIC MONEY, goods, instruments, TANGIBLE DOCUMENTS , or a20
certificated security takes free of a security interest if the licensee or21
buyer gives value without knowledge of the security interest and before22
it is perfected.23
(f) A
BUYER, OTHER THAN A SECURED PARTY, OF CHATTEL PAPER24
TAKES FREE OF A SECURITY INTEREST IF, WITHOUT KNOWLEDGE OF THE25
SECURITY INTEREST AND BEFORE IT IS PERFECTED , THE BUYER GIVES26
VALUE AND:27
090
-54- (1) RECEIVES DELIVERY OF EACH AUTHORITATIVE TANGIBLE COPY1
OF THE RECORD EVIDENCING THE CHATTEL PAPER ; AND2
(2) I
F EACH AUTHORITATIVE ELECTRONIC COPY OF THE RECORD3
EVIDENCING THE CHATTEL PAPER CAN BE SUBJECTED TO CONTROL UNDER4
SECTION 4-9-105, OBTAINS CONTROL OF EACH AUTHORITATIVE5
ELECTRONIC COPY.6
(g) A
BUYER OF AN ELECTRONIC DOCUMENT TAKES FREE OF A7
SECURITY INTEREST IF, WITHOUT KNOWLEDGE OF THE SECURITY INTEREST8
AND BEFORE IT IS PERFECTED, THE BUYER GIVES VALUE AND , IF EACH9
AUTHORITATIVE ELECTRONIC COPY OF THE DOCUMENT CAN BE SUBJECTED10
TO CONTROL UNDER SECTION 4-7-106, OBTAINS CONTROL OF EACH11
AUTHORITATIVE ELECTRONIC COPY .12
(h) A
BUYER OF A CONTROLLABLE ELECTRONIC RECORD TAKES13
FREE OF A SECURITY INTEREST IF, WITHOUT KNOWLEDGE OF THE SECURITY14
INTEREST AND BEFORE IT IS PERFECTED, THE BUYER GIVES VALUE AND15
OBTAINS CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD .16
(i) A
BUYER, OTHER THAN A SECURED PARTY, OF A CONTROLLABLE17
ACCOUNT OR A CONTROLLABLE PAYMENT INTANGIBLE TAKES FREE OF A18
SECURITY INTEREST IF, WITHOUT KNOWLEDGE OF THE SECURITY INTEREST19
AND BEFORE IT IS PERFECTED, THE BUYER GIVES VALUE AND OBTAINS20
CONTROL OF THE CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT21
INTANGIBLE.22
SECTION 63. In Colorado Revised Statutes, 4-9-323, amend (d)23
introductory portion and (f) introductory portion as follows:24
4-9-323. Future advances. (d) Except as otherwise provided in25
subsection (e) of this section, a buyer of goods other than a buyer in
26
ordinary course of business takes free of a security interest to the extent27
090
-55- that it secures advances made after the earlier of:1
(f) Except as otherwise provided in subsection (g) of this section,2
a lessee of goods other than a lessee in ordinary course of business, takes3
the leasehold interest free of a security interest to the extent that it secures4
advances made after the earlier of:5
SECTION 64. In Colorado Revised Statutes, 4-9-324, amend6
(b)(2) and (d)(2) as follows:7
4-9-324. Priority of purchase-money security interests.8
(b) Subject to subsection (c) of this section and except as otherwise9
provided in subsection (g) of this section, a perfected purchase-money10
security interest in inventory has priority over a conflicting security11
interest in the same inventory, has priority over a conflicting security12
interest in chattel paper or an instrument constituting proceeds of the13
inventory and in proceeds of the chattel paper, if so provided in section14
4-9-330, and, except as otherwise provided in section 4-9-327, also has15
priority in identifiable cash proceeds of the inventory to the extent the16
identifiable cash proceeds are received on or before the delivery of the17
inventory to a buyer, if:18
(2) The purchase-money secured party sends an authenticated A19
SIGNED notification to the holder of the conflicting security interest;20
(d) Subject to subsection (e) of this section and except as21
otherwise provided in subsection (g) of this section, a perfected22
purchase-money security interest in livestock that are farm products has23
priority over a conflicting security interest in the same livestock, and,24
except as otherwise provided in section 4-9-327, a perfected security25
interest in their identifiable proceeds and identifiable products in their26
unmanufactured states also has priority, if:27
090
-56- (2) The purchase-money secured party sends an authenticated A1
SIGNED notification to the holder of the conflicting security interest;2
SECTION 65. In Colorado Revised Statutes, add 4-9-326.5 as3
follows:4
4-9-326.5. Priority of security interest in controllable account,5
controllable electronic record, and controllable payment intangible.6
A
SECURITY INTEREST IN A CONTROLLABLE ACCOUNT , CONTROLLABLE7
ELECTRONIC RECORD, OR CONTROLLABLE PAYMENT INTANGIBLE HELD BY8
A SECURED PARTY HAVING CONTROL OF THE ACCOUNT , ELECTRONIC9
RECORD, OR PAYMENT INTANGIBLE HAS PRIORITY OVER A CONFLICTING10
SECURITY INTEREST HELD BY A SECURED PARTY THAT DOES NOT HAVE11
CONTROL.12
SECTION 66. In Colorado Revised Statutes, 4-9-330, amend (a),13
(b), and (f) as follows:14
4-9-330. Priority of purchaser of chattel paper or instrument.15
(a) A purchaser of chattel paper has priority over a security interest in the16
chattel paper which is claimed merely as proceeds of inventory subject to17
a security interest if:18
(1) In good faith and in the ordinary course of the purchaser's19
business, the purchaser gives new value, and
takes possession of EACH20
AUTHORITATIVE TANGIBLE COPY OF THE RECORD EVIDENCING the chattel21
paper, or AND obtains control of UNDER SECTION 4-9-105 OF EACH22
AUTHORITATIVE ELECTRONIC COPY OF THE RECORD EVIDENCING the23
chattel paper; under section 4-9-105; and24
(2) The
AUTHORITATIVE COPIES OF THE RECORD EVIDENCING THE25
chattel paper does
DO not indicate that it THE CHATTEL PAPER has been26
assigned to an identified assignee other than the purchaser.27
090
-57- (b) A purchaser of chattel paper has priority over a security1
interest in the chattel paper which is claimed other than merely as2
proceeds of inventory subject to a security interest if the purchaser gives3
new value, and takes possession of EACH AUTHORITATIVE TANGIBLE COPY4
OF THE RECORD EVIDENCING the chattel paper, or AND obtains control of5
UNDER SECTION 4-9-105 OF EACH AUTHORITATIVE ELECTRONIC COPY OF6
THE RECORD EVIDENCING the chattel paper under section 4-9-105 in good7
faith, in the ordinary course of the purchaser's business, and without8
knowledge that the purchase violates the rights of the secured party.9
(f) For purposes of subsections (b) and (d) of this section, if
THE10
AUTHORITATIVE COPIES OF THE RECORD EVIDENCING chattel paper or an11
instrument indicates that it
THE CHATTEL PAPER OR INSTRUMENT has been12
assigned to an identified secured party other than the purchaser, a13
purchaser of the chattel paper or instrument has knowledge that the14
purchase violates the rights of the secured party.15
SECTION 67. In Colorado Revised Statutes, 4-9-331, amend (a)16
and (b) as follows:17
4-9-331. Priority of rights of purchasers of controllable18
accounts, controllable electronic records, controllable payment19
intangibles, documents, instruments, and securities under other20
articles - priority of interests in financial assets and security21
entitlements and protection against assertion of claim under articles22
8 and 12. (a) This article ARTICLE 9 does not limit the rights of a holder23
in due course of a negotiable instrument, a holder to which a negotiable24
document of title has been duly negotiated, or a protected purchaser of a25
security,
OR A QUALIFYING PURCHASER OF A CONTROLLABLE ACCOUNT ,26
CONTROLLABLE ELECTRONIC RECORD , OR CONTROLLABLE PAYMENT27
090
-58- INTANGIBLE. These holders or purchasers take priority over an earlier1
security interest, even if perfected, to the extent provided in articles 3, 7,2
and 8, AND 12 of this title TITLE 4.3
(b) This article ARTICLE 9 does not limit the rights of or impose4
liability on a person to the extent that the person is protected against the5
assertion of a claim under article 8
OR 12 of this title
TITLE 4.6
SECTION 68. In Colorado Revised Statutes, amend 4-9-332 as7
follows:8
4-9-332. Transfer of tangible money - transfer of funds from9
deposit account. (a) A transferee of
TANGIBLE money takes the money10
free of a security interest unless the transferee acts
IF THE TRANSFEREE11
RECEIVES POSSESSION OF THE MONEY WITHOUT ACTING in collusion with12
the debtor in violating the rights of the secured party.13
(b) A transferee of funds from a deposit account takes the funds14
free of a security interest in the deposit account unless the transferee acts15
IF THE TRANSFEREE RECEIVES THE FUNDS WITHOUT ACTING in collusion16
with the debtor in violating the rights of the secured party.17
(c) A
TRANSFEREE OF ELECTRONIC MONEY TAKES THE MONEY FREE18
OF A SECURITY INTEREST IF THE TRANSFEREE OBTAINS CONTROL OF THE19
MONEY WITHOUT ACTING IN COLLUSION WITH THE DEBTOR IN VIOLATING20
THE RIGHTS OF THE SECURED PARTY.21
SECTION 69. In Colorado Revised Statutes, 4-9-334, amend22
(f)(1) as follows:23
4-9-334. Priority of security interests in fixtures and crops.24
(f) A security interest in fixtures, whether or not perfected, has priority25
over a conflicting interest of an encumbrancer or owner of the real26
property if:27
090
-59- (1) The encumbrancer or owner has, in an authenticated A SIGNED1
record, consented to the security interest or disclaimed an interest in the2
goods as fixtures; or3
SECTION 70. In Colorado Revised Statutes, 4-9-341, amend the4
introductory portion as follows:5
4-9-341. Bank's rights and duties with respect to deposit6
account. Except as otherwise provided in section 4-9-340 (c), and unless7
the bank otherwise agrees in an authenticated A SIGNED record, a bank's8
rights and duties with respect to a deposit account maintained with the9
bank are not terminated, suspended, or modified by:10
SECTION 71. In Colorado Revised Statutes, 4-9-404, amend11
(a)(2) as follows:12
4-9-404. Rights acquired by assignee; claims and defenses13
against assignee. (a) Unless an account debtor has made an enforceable14
agreement not to assert defenses or claims, and subject to subsections (b)15
to (e) of this section, the rights of an assignee are subject to:16
(2) Any other defense or claim of the account debtor against the17
assignor which accrues before the account debtor receives a notification18
of the assignment authenticated SIGNED by the assignor or the assignee.19
SECTION 72. In Colorado Revised Statutes, 4-9-406, amend (a),20
(b) introductory portion, (c), (d) introductory portion, and (g); and add21
(m) as follows:22
4-9-406. Discharge of account debtor - notification of23
assignment - identification and proof of assignment - restrictions on24
assignment of accounts, chattel paper, payment intangibles, and25
promissory notes ineffective. (a) Subject to subsections (b) to (i)
AND26
(m) of this section, an account debtor on an account, chattel paper, or a27
090
-60- payment intangible may discharge its obligation by paying the assignor1
until, but not after, the account debtor receives a notification,2
authenticated SIGNED by the assignor or the assignee, that the amount due3
or to become due has been assigned and that payment is to be made to the4
assignee. After receipt of the notification, the account debtor may5
discharge its obligation by paying the assignee and may not discharge the6
obligation by paying the assignor.7
(b) Subject to subsection (h) SUBSECTIONS (h) AND (m) of this8
section, notification is ineffective under subsection (a) of this section: 9
(c) Subject to subsection (h) SUBSECTIONS (h) AND (m) of this10
section, if requested by the account debtor, an assignee shall seasonably11
furnish reasonable proof that the assignment has been made. Unless the12
assignee complies, the account debtor may discharge its obligation by13
paying the assignor, even if the account debtor has received a notification14
under subsection (a) of this section.15
(d) I
N THIS SUBSECTION (d), "PROMISSORY NOTE" INCLUDES A16
NEGOTIABLE INSTRUMENT THAT EVIDENCES CHATTEL PAPER . Except as17
otherwise provided in subsections (e), (k), and
(l), AND (m) of this section18
and sections 4-2.5-303, 4-9-407, 8-80-103, 8-42-124, 13-64-210, and19
24-4.1-114, C.R.S., and subject to subsection (h) of this section, a term20
in an agreement between an account debtor and an assignor or in a21
promissory note is ineffective to the extent that it:22
(g) Subject to subsection (h) SUBSECTIONS (h) AND (m) of this23
section, an account debtor may not waive or vary its option under24
paragraph (3) of subsection (b) SUBSECTION (b)(3) of this section.25
(m) S
UBSECTIONS (a), (b), (c), AND (g) OF THIS SECTION DO NOT26
APPLY TO A CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT27
090
-61- INTANGIBLE.1
SECTION 73. In Colorado Revised Statutes, 4-9-408, add (h) as2
follows:3
4-9-408. Restrictions on assignment of promissory notes,4
health-care-insurance receivables, and certain general intangibles5
ineffective. (h) I
N THIS SECTION, "PROMISSORY NOTE" INCLUDES A6
NEGOTIABLE INSTRUMENT THAT EVIDENCES CHATTEL PAPER .7
SECTION 74. In Colorado Revised Statutes, 4-9-509, amend8
(a)(1) and (b) introductory portion as follows:9
4-9-509. Persons entitled to file a record. (a) A person may file10
an initial financing statement, amendment that adds collateral covered by11
a financing statement, or amendment that adds a debtor to a financing12
statement only if:13
(1) The debtor authorizes the filing in an authenticated
A SIGNED14
record or pursuant to subsection (b) or (c) of this section; or15
(b) By authenticating SIGNING or becoming bound as debtor by a16
security agreement, a debtor or new debtor authorizes the filing of an17
initial financing statement, and an amendment, covering:18
SECTION 75. In Colorado Revised Statutes, 4-9-513, amend19
(b)(2) and (c) introductory portion as follows:20
4-9-513. Termination statement. (b) To comply with subsection21
(a) of this section, a secured party shall cause the secured party of record22
to file the termination statement:23
(2) If earlier, within twenty days after the secured party receives24
an authenticated A SIGNED demand from a debtor.25
(c) In cases not governed by subsection (a) of this section, within26
twenty days after a secured party receives an authenticated A SIGNED27
090
-62- demand from a debtor, the secured party shall cause the secured party of1
record for a financing statement to send to the debtor a termination2
statement for the financing statement or file the termination statement in3
the filing office if:4
SECTION 76. In Colorado Revised Statutes, 4-9-601, amend (b)5
as follows:6
4-9-601. Rights after default - judicial enforcement - consignor7
or buyer of accounts, chattel paper, payment intangibles, or8
promissory notes. (b) A secured party in possession of collateral or9
control of collateral under section 4-7-106, 4-9-104, 4-9-105, 4-9-105.5,10
4-9-106, or 4-9-107, OR 4-9-107.5 has the rights and duties provided in11
section 4-9-207.12
SECTION 77. In Colorado Revised Statutes, 4-9-605, amend the13
introductory portion; and add (b) as follows:14
4-9-605. Unknown debtor or secondary obligor. (a) E
XCEPT AS15
PROVIDED IN SUBSECTION (b) OF THIS SECTION, a secured party does not16
owe a duty based on its status as secured party:17
(b) A
SECURED PARTY OWES A DUTY BASED ON ITS STATUS AS A18
SECURED PARTY TO A PERSON IF , AT THE TIME THE SECURED PARTY19
OBTAINS CONTROL OF COLLATERAL THAT IS A CONTROLLABLE ACCOUNT ,20
CONTROLLABLE ELECTRONIC RECORD , OR CONTROLLABLE PAYMENT21
INTANGIBLE OR AT THE TIME THE SECURITY INTEREST ATTACHES TO THE22
COLLATERAL, WHICHEVER IS LATER:23
(1) T
HE PERSON IS A DEBTOR OR OBLIGOR; AND24
(2) T
HE SECURED PARTY KNOWS THAT THE INFORMATION IN25
SUBSECTION (a)(1)(A), (a)(1)(B), OR (a)(1)(C) OF THIS SECTION RELATING26
TO THE PERSON IS NOT PROVIDED BY THE COLLATERAL , A RECORD27
090
-63- ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE COLLATERAL , OR THE1
SYSTEM IN WHICH THE COLLATERAL IS RECORDED .2
SECTION 78. In Colorado Revised Statutes, 4-9-608, amend3
(a)(1)(C) as follows:4
4-9-608. Application of proceeds of collection or enforcement5
- liability for deficiency and right to surplus. (a) If a security interest6
or agricultural lien secures payment or performance of an obligation, the7
following rules apply:8
(1) A secured party shall apply or pay over for application the9
cash proceeds of collection or enforcement under section 4-9-607 in the10
following order to:11
(C) The satisfaction of obligations secured by any subordinate12
security interest in or other lien on the collateral subject to the security13
interest or agricultural lien under which the collection or enforcement is14
made if the secured party receives an authenticated A SIGNED demand for15
proceeds before distribution of the proceeds is completed.16
SECTION 79. In Colorado Revised Statutes, 4-9-611, amend17
(a)(1), (b), (c) introductory portion, (c)(3)(A), (e) introductory portion,18
and (e)(2)(B) as follows:19
4-9-611. Notification before disposition of collateral -20
definition. (a) In this section, "notification date" means the earlier of the21
date on which:22
(1) A secured party sends to the debtor and any secondary obligor23
an authenticated A SIGNED notification of disposition; or24
(b) Except as otherwise provided in subsection (d) of this section,25
a secured party that disposes of collateral under section 4-9-610 shall26
send to the persons specified in subsection (c) of this section a reasonable27
090
-64- authenticated SIGNED notification of disposition.1
(c) To comply with subsection (b) of this section, the secured2
party shall send an authenticated A SIGNED notification of disposition to:3
(3) If the collateral is other than consumer goods:4
(A) Any other person from which the secured party has received,5
before the notification date, an authenticated A SIGNED notification of a6
claim of an interest in the collateral;7
(e) A secured party complies with the requirement for notification8
prescribed by subparagraph (B) of paragraph (3) of subsection (c)9
SUBSECTION (c)(3)(B) of this section if:10
(2) Before the notification date, the secured party:11
(B) Received a response to the request for information and sent12
an authenticated A SIGNED notification of disposition to each secured13
party or other lienholder named in that response whose financing14
statement covered the collateral.15
SECTION 80. In Colorado Revised Statutes, 4-9-613, amend16
(a)(5); and add (b) as follows:17
4-9-613. Contents and form of notification before disposition18
of collateral: general. (a) Except in a consumer-goods transaction, the19
following rules apply:20
(5) The following form of notification and the form appearing in21
section 4-9-614 (3) 4-9-614 (a)(3), when completed IN ACCORDANCE WITH22
THE INSTRUCTIONS IN SUBSECTION (b) OF THIS SECTION AND SECTION23
4-9-614 (b), each provides sufficient information:24
NOTIFICATION OF DISPOSITION OF COLLATERAL25
To: [Name of debtor, obligor, or other person to which the26
notification is sent]27
090
-65- From: [Name, address, and telephone number of secured party]1
Name of Debtor(s): [Include only if debtor(s) are not an2
addressee]3
[For a public disposition:]4
We will sell [or lease or license, as applicable] the [describe5
collateral] [to the highest qualified bidder] in public as follows:6
Day and Date: ____________________7
Time: ____________________8
Place: ____________________9
[For a private disposition:]10
We will sell [or lease or license, as applicable] the [describe11
collateral] privately sometime after [day and date].12
You are entitled to an accounting of the unpaid indebtedness13
secured by the property that we intend to sell [or lease or license, as14
applicable] [for a charge of $__________]. You may request an15
accounting by calling us at [telephone number] or writing us at [address].16
NOTIFICATION
OF DISPOSITION OF COLLATERAL17
T
O:(NAME OF DEBTOR, OBLIGOR, OR OTHER PERSON TO WHICH18
THE NOTIFICATION IS SENT)19
F
ROM:(N AME, ADDRESS, AND TELEPHONE NUMBER OF20
SECURED PARTY)21
{1}
NAME OF ANY DEBTOR THAT IS NOT AN ADDRESSEE : (NAME OF22
EACH DEBTOR)23
{2}
WE WILL SELL (DESCRIBE COLLATERAL) (TO THE HIGHEST24
QUALIFIED BIDDER) AT PUBLIC SALE. A SALE COULD INCLUDE A LEASE OR25
LICENSE. THE SALE WILL BE HELD AS FOLLOWS:26
(D
ATE)27
090
-66- (TIME)1
(P
LACE)2
{3}
WE WILL SELL (DESCRIBE COLLATERAL) AT PRIVATE SALE3
SOMETIME AFTER (DATE). A SALE COULD INCLUDE A LEASE OR LICENSE.4
{4}
YOU ARE ENTITLED TO AN ACCOUNTING OF THE UNPAID5
INDEBTEDNESS SECURED BY THE PROPERTY THAT WE INTEND TO SELL OR ,6
AS APPLICABLE, LEASE OR LICENSE.7
{5}
IF YOU REQUEST AN ACCOUNTING YOU MUST PAY A CHARGE OF8
$
(AMOUNT).9
{6}
YOU MAY REQUEST AN ACCOUNTING BY CALLING US AT10
(
TELEPHONE NUMBER).11
(b) T
HE FOLLOWING INSTRUCTIONS APPLY TO THE FORM OF12
NOTIFICATION IN SUBSECTION (a)(5) OF THIS SECTION:13
(1) T
HE INSTRUCTIONS IN THIS SUBSECTION (b) REFER TO THE14
NUMBERS IN BRACES BEFORE ITEMS IN THE FORM OF NOTIFICATION IN15
SUBSECTION (a)(5) OF THIS SECTION. DO NOT INCLUDE THE NUMBERS OR16
BRACES IN THE NOTIFICATION. THE NUMBERS AND BRACES ARE USED ONLY17
FOR THE PURPOSE OF THESE INSTRUCTIONS .18
(2) I
NCLUDE AND COMPLETE ITEM {1} ONLY IF THERE IS A DEBTOR19
THAT IS NOT AN ADDRESSEE OF THE NOTIFICATION AND LIST THE NAME OR20
NAMES.21
(3) I
NCLUDE AND COMPLETE EITHER ITEM {2}, IF THE22
NOTIFICATION RELATES TO A PUBLIC DISPOSITION OF THE COLLATERAL , OR23
ITEM {3}, IF THE NOTIFICATION RELATES TO A PRIVATE DISPOSITION OF THE24
COLLATERAL. IF ITEM {2} IS INCLUDED, INCLUDE THE WORDS "TO THE25
HIGHEST QUALIFIED BIDDER" ONLY IF APPLICABLE.26
(4) I
NCLUDE AND COMPLETE ITEMS {4} AND {6}.27
090
-67- (5) INCLUDE AND COMPLETE ITEM {5} ONLY IF THE SENDER WILL1
CHARGE THE RECIPIENT FOR AN ACCOUNTING .2
SECTION 81. In Colorado Revised Statutes, 4-9-614, amend3
(a)(1)(A) and (a)(3); and add (b) as follows:4
4-9-614. Contents and form of notification before disposition5
of collateral: consumer-goods transaction. (a) In a consumer-goods6
transaction, the following rules apply:7
(1) A notification of disposition must provide the following8
information:9
(A) The information specified in section 4-9-613 (1) 4-9-61310
(a)(1);11
(3) The following form of notification, when completed
IN12
ACCORDANCE WITH THE INSTRUCTIONS IN SUBSECTION (b) OF THIS13
SECTION, provides sufficient information:14
[Name and address of secured party]
15
[Date]16
NOTICE OF OUR PLAN TO SELL PROPERTY17
[Name and address of any obligor who is also a debtor]18
Subject: [Identification of Transaction]19
We have your [describe collateral], because you broke promises20
in our agreement.21
[For a public disposition:]22
We will sell [describe collateral] at public sale. A sale could23
include a lease or license. The sale will be held as follows:24
Date: ____________________25
Time: ____________________26
Place: ____________________27
090
-68- You may attend the sale and bring bidders if you want.1
[For a private disposition:]2
We will sell [describe collateral] at private sale sometime after3
[date]. A sale could include a lease or license.4
The money that we get from the sale (after paying our costs) will5
reduce the amount you owe. If we get less money than you owe, you [ will6
or will not, as applicable] still owe us the difference. If we get more7
money than you owe, you will get the extra money, unless we must pay8
it to someone else.9
You can get the property back at any time before we sell it by10
paying us the full amount you owe (not just the past due payments),11
including our expenses. To learn the exact amount you must pay, call us12
at [telephone number] or write us at [secured party's address].13
If you want us to explain to you in writing how we have figured14
the amount that you owe us, you may call us at [telephone number] [or15
write us at [secured party's address]] and request a written explanation.16
[We will charge you $__________ for the explanation if we have already17
sent you an explanation of the type requested within the last six months.]18
If you need more information about the sale call us at [telephone19
number] [or write us at [secured party's address]].20
We are sending this notice to the following other people who have21
an interest in [describe collateral] or who owe money under your22
agreement:23
[Names of all other debtors and obligors, if any]24
[Name and address of secured party]25
[Date]26
NOTICE OF OUR PLAN TO SELL PROPERTY27
090
-69- (NAME AND ADDRESS OF ANY OBLIGOR WHO IS ALSO A DEBTOR )1
S
UBJECT:(IDENTIFY TRANSACTION)2
W
E HAVE YOUR (DESCRIBE COLLATERAL), BECAUSE YOU BROKE3
PROMISES IN OUR AGREEMENT.4
{1}
WE WILL SELL (DESCRIBE COLLATERAL) AT PUBLIC SALE. A5
SALE COULD INCLUDE A LEASE OR LICENSE . THE SALE WILL BE HELD AS6
FOLLOWS:7
(D
ATE)8
(T
IME)9
(P
LACE)10
Y
OU MAY ATTEND THE SALE AND BRING BIDDERS IF YOU WANT .11
{2}
WE WILL SELL (DESCRIBE COLLATERAL) AT PRIVATE SALE12
SOMETIME AFTER (DATE). A SALE COULD INCLUDE A LEASE OR LICENSE.13
{3}
THE MONEY THAT WE GET FROM THE SALE , AFTER PAYING OUR14
COSTS, WILL REDUCE THE AMOUNT YOU OWE . IF WE GET LESS MONEY THAN15
YOU OWE, YOU (WILL OR WILL NOT, AS APPLICABLE) STILL OWE US THE16
DIFFERENCE. IF WE GET MORE MONEY THAN YOU OWE , YOU WILL GET THE17
EXTRA MONEY, UNLESS WE MUST PAY IT TO SOMEONE ELSE .18
{4}
YOU CAN GET THE PROPERTY BACK AT ANY TIME BEFORE WE19
SELL IT BY PAYING US THE FULL AMOUNT YOU OWE , NOT JUST THE PAST20
DUE PAYMENTS, INCLUDING OUR EXPENSES . TO LEARN THE EXACT21
AMOUNT YOU MUST PAY , CALL US AT (TELEPHONE NUMBER).22
{5}
IF YOU WANT US TO EXPLAIN TO YOU IN (WRITING) (WRITING23
OR IN (DESCRIPTION OF ELECTRONIC RECORD )) (DESCRIPTION OF24
ELECTRONIC RECORD) HOW WE HAVE FIGURED THE AMOUNT THAT YOU25
OWE US, {6} CALL US AT (TELEPHONE NUMBER ) (OR) (WRITE US AT26
(
SECURED PARTY'S ADDRESS)) (OR CONTACT US BY (DESCRIPTION OF27
090
-70- ELECTRONIC COMMUNICATION METHOD )) {7} AND REQUEST (A WRITTEN1
EXPLANATION) (A WRITTEN EXPLANATION OR AN EXPLANATION IN2
(
DESCRIPTION OF ELECTRONIC RECORD )) (AN EXPLANATION IN3
(
DESCRIPTION OF ELECTRONIC RECORD )).4
{8}
WE WILL CHARGE YOU $ (AMOUNT) FOR THE EXPLANATION IF5
WE SENT YOU ANOTHER WRITTEN EXPLANATION OF THE AMOUNT YOU OWE6
US WITHIN THE LAST SIX MONTHS.7
{9}
IF YOU NEED MORE INFORMATION ABOUT THE SALE (CALL US8
AT (TELEPHONE NUMBER )) (OR) (WRITE US AT (SECURED PARTY'S9
ADDRESS)) (OR CONTACT US BY (DESCRIPTION OF ELECTRONIC10
COMMUNICATION METHOD )).11
{10}
WE ARE SENDING THIS NOTICE TO THE FOLLOWING OTHER12
PEOPLE WHO HAVE AN INTEREST IN (DESCRIBE COLLATERAL) OR WHO OWE13
MONEY UNDER YOUR AGREEMENT :14
(N
AMES OF ALL OTHER DEBTORS AND OBLIGORS , IF ANY)15
(b) T
HE FOLLOWING INSTRUCTIONS APPLY TO THE FORM OF16
NOTIFICATION IN SUBSECTION (a)(3) OF THIS SECTION:17
(1) T
HE INSTRUCTIONS IN THIS SUBSECTION (b) REFER TO THE18
NUMBERS IN BRACES BEFORE ITEMS IN THE FORM OF NOTIFICATION IN19
SUBSECTION (a)(3) OF THIS SECTION. DO NOT INCLUDE THE NUMBERS OR20
BRACES IN THE NOTIFICATION. THE NUMBERS AND BRACES ARE USED ONLY21
FOR THE PURPOSE OF THESE INSTRUCTIONS .22
(2) I
NCLUDE AND COMPLETE EITHER ITEM {1}, IF THE23
NOTIFICATION RELATES TO A PUBLIC DISPOSITION OF THE COLLATERAL , OR24
ITEM {2}, IF THE NOTIFICATION RELATES TO A PRIVATE DISPOSITION OF THE25
COLLATERAL.26
(3) I
NCLUDE AND COMPLETE ITEMS {3}, {4}, {5}, {6}, AND {7}.27
090
-71- (4) IN ITEM {5}, INCLUDE AND COMPLETE ANY ONE OF THE THREE1
ALTERNATIVE METHODS FOR THE EXPLANATION -WRITING, WRITING OR2
ELECTRONIC RECORD, OR ELECTRONIC RECORD.3
(5) I
N ITEM {6}, INCLUDE THE TELEPHONE NUMBER . IN ADDITION,4
THE SENDER MAY INCLUDE AND COMPLETE EITHER OR BOTH OF THE TWO5
ADDITIONAL ALTERNATIVE METHODS OF COMMUNICATION --WRITING OR6
ELECTRONIC COMMUNICATION --FOR THE RECIPIENT OF THE NOTIFICATION7
TO COMMUNICATE WITH THE SENDER . NEITHER OF THE TWO ADDITIONAL8
METHODS OF COMMUNICATION IS REQUIRED TO BE INCLUDED .9
(6) I
N ITEM {7}, INCLUDE AND COMPLETE THE METHOD OR10
METHODS FOR THE EXPLANATION --WRITING, WRITING OR ELECTRONIC11
RECORD, OR ELECTRONIC RECORD-INCLUDED IN ITEM {5}.12
(7) I
NCLUDE AND COMPLETE ITEM {8} ONLY IF A WRITTEN13
EXPLANATION IS INCLUDED IN ITEM {5} AS A METHOD FOR14
COMMUNICATING THE EXPLANATION AND THE SENDER WILL CHARGE THE15
RECIPIENT FOR ANOTHER WRITTEN EXPLANATION .16
(8) I
N ITEM {9}, INCLUDE EITHER THE TELEPHONE NUMBER OR THE17
ADDRESS OR BOTH THE TELEPHONE NUMBER AND THE ADDRESS . IN18
ADDITION, THE SENDER MAY INCLUDE AND COMPLETE THE ADDITIONAL19
METHOD OF COMMUNICATION --ELECTRONIC COMMUNICATION --FOR THE20
RECIPIENT OF THE NOTIFICATION TO COMMUNICATE WITH THE SENDER .21
T
HE ADDITIONAL METHOD OF ELECTRONIC COMMUNICATION IS NOT22
REQUIRED TO BE INCLUDED.23
(9) I
F ITEM {10} DOES NOT APPLY, INSERT "NONE" AFTER24
"
AGREEMENT:".25
SECTION 82. In Colorado Revised Statutes, 4-9-615, amend26
(a)(3)(A) and (a)(4) as follows:27
090
-72- 4-9-615. Application of proceeds of disposition; liability for1
deficiency and right to surplus. (a) A secured party shall apply or pay2
over for application the cash proceeds of disposition under section3
4-9-610 in the following order to:4
(3) The satisfaction of obligations secured by any subordinate5
security interest in or other subordinate lien on the collateral if:6
(A) The secured party receives from the holder of the subordinate7
security interest or other lien an authenticated A SIGNED demand for8
proceeds before distribution of the proceeds is completed; and9
(4) A secured party that is a consignor of the collateral if the10
secured party receives from the consignor an authenticated A SIGNED11
demand for proceeds before distribution of the proceeds is completed.12
SECTION 83. In Colorado Revised Statutes, 4-9-616, amend13
(a)(1) introductory portion, (a)(2)(A), (b)(1)(A), and (c) introductory14
portion as follows:15
4-9-616. Explanation of calculation of surplus or deficiency -16
definitions. (a) In this section:17
(1) "Explanation" means a writing RECORD that:18
(2) "Request" means a record:19
(A) Authenticated SIGNED by a debtor or consumer obligor;20
(b) In a consumer-goods transaction in which the debtor is entitled21
to a surplus or a consumer obligor is liable for a deficiency under section22
4-9-615, the secured party shall:23
(1) Send an explanation to the debtor or consumer obligor, as24
applicable, after the disposition and:25
(A) Before or when the secured party accounts to the debtor and26
pays any surplus or first makes written demand IN A RECORD on the27
090
-73- consumer obligor after the disposition for payment of the deficiency; and1
(c) To comply with subparagraph (B) of paragraph (1) of2
subsection (a) SUBSECTION (a)(1)(B) of this section, a writing AN3
EXPLANATION must provide the following information in the following4
order:5
SECTION 84. In Colorado Revised Statutes, 4-9-619, amend (a)6
introductory portion as follows:7
4-9-619. Transfer of record or legal title. (a) In this section,8
"transfer statement" means a record authenticated SIGNED by a secured9
party stating:10
SECTION 85. In Colorado Revised Statutes, 4-9-620, amend11
(a)(2) introductory portion, (c)(1), (c)(2) introductory portion, (c)(2)(C),12
and (f)(2) as follows:13
4-9-620. Acceptance of collateral in full or partial satisfaction14
of obligation - compulsory disposition of collateral. (a) Except as15
otherwise provided in subsection (g) of this section, a secured party may16
accept collateral in full or partial satisfaction of the obligation it secures17
only if:18
(2) The secured party does not receive, within the time set forth19
in subsection (d) of this section, a notification of objection to the proposal20
authenticated SIGNED by:21
(c) For purposes of this section:22
(1) A debtor consents to an acceptance of collateral in partial23
satisfaction of the obligation it secures only if the debtor agrees to the24
terms of the acceptance in a record authenticated SIGNED after default;25
and26
(2) A debtor consents to an acceptance of collateral in full27
090
-74- satisfaction of the obligation it secures only if the debtor agrees to the1
terms of the acceptance in a record authenticated SIGNED after default or2
the secured party:3
(C) Does not receive a notification of objection authenticated4
SIGNED by the debtor within twenty days after the proposal is sent.5
(f) To comply with subsection (e) of this section, the secured party6
shall dispose of the collateral:7
(2) Within any longer period to which the debtor and all secondary8
obligors have agreed in an agreement to that effect entered into and9
authenticated SIGNED after default.10
SECTION 86. In Colorado Revised Statutes, 4-9-621, amend11
(a)(1) as follows:12
4-9-621. Notification of proposal to accept collateral. (a) A13
secured party that desires to accept collateral in full or partial satisfaction14
of the obligation it secures shall send its proposal to:15
(1) Any person from which the secured party has received, before16
the debtor consented to the acceptance, an authenticated A SIGNED17
notification of a claim of an interest in the collateral;18
SECTION 87. In Colorado Revised Statutes, amend 4-9-624 as19
follows:20
4-9-624. Waiver. (a) A debtor or secondary obligor may waive21
the right to notification of disposition of collateral under section 4-9-61122
only by an agreement to that effect entered into and authenticated SIGNED23
after default.24
(b) A debtor may waive the right to require disposition of25
collateral under section 4-9-620 (e) only by an agreement to that effect26
entered into and authenticated SIGNED after default.27
090
-75- (c) Except in a consumer-goods transaction, a debtor or secondary1
obligor may waive the right to redeem collateral under section 4-9-623.2
Any such waiver must be by an agreement to that effect entered into and3
authenticated SIGNED after default.4
SECTION 88. In Colorado Revised Statutes, 4-9-628, amend (a)5
introductory portion and (b) introductory portion; and add (f) as follows: 6
4-9-628. Nonliability and limitation on liability of secured7
party - liability of secondary obligor. (a) S
UBJECT TO SUBSECTION (f)8
OF THIS SECTION, unless a secured party knows that a person is a debtor9
or obligor, knows the identity of the person, and knows how to10
communicate with the person:11
(b) S
UBJECT TO SUBSECTION (f) OF THIS SECTION, a secured party12
is not liable because of its status as secured party:13
(f) S
UBSECTIONS (a) AND (b) OF THIS SECTION DO NOT APPLY TO14
LIMIT THE LIABILITY OF A SECURED PARTY TO A PERSON IF , AT THE TIME15
THE SECURED PARTY OBTAINS CONTROL OF COLLATERAL THAT IS A16
CONTROLLABLE ACCOUNT , CONTROLLABLE ELECTRONIC RECORD , OR17
CONTROLLABLE PAYMENT INTANGIBLE OR AT THE TIME THE SECURITY18
INTEREST ATTACHES TO THE COLLATERAL , WHICHEVER IS LATER:19
(1) T
HE PERSON IS A DEBTOR OR OBLIGOR; AND20
(2) T
HE SECURED PARTY KNOWS THAT THE INFORMATION IN21
SUBSECTION (b)(1)(A), (b)(1)(B), OR (b)(1)(C) OF THIS SECTION RELATING22
TO THE PERSON IS NOT PROVIDED BY THE COLLATERAL , A RECORD23
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE COLLATERAL , OR THE24
SYSTEM IN WHICH THE COLLATERAL IS RECORDED .25
SECTION 89. In Colorado Revised Statutes, add articles 12 and26
13 to title 4 as follows:27
090
-76- ARTICLE 121
Controllable Electronic Records2
4-12-101. Title. T
HIS ARTICLE 12 MAY BE CITED AS THE "UNIFORM3
C
OMMERCIAL CODE-CONTROLLABLE ELECTRONIC RECORDS".4
4-12-102. Definitions. (a) I
N THIS ARTICLE 12:5
(1) "C
ONTROLLABLE ELECTRONIC RECORD " MEANS A RECORD6
STORED IN AN ELECTRONIC MEDIUM THAT CAN BE SUBJECTED TO CONTROL7
UNDER SECTION 4-12-105. THE TERM DOES NOT INCLUDE A8
CONTROLLABLE ACCOUNT , A CONTROLLABLE PAYMENT INTANGIBLE , A9
DEPOSIT ACCOUNT, AN ELECTRONIC COPY OF A RECORD EVIDENCING10
CHATTEL PAPER, AN ELECTRONIC DOCUMENT OF TITLE , ELECTRONIC11
MONEY, INVESTMENT PROPERTY, OR A TRANSFERABLE RECORD.12
(2) "Q
UALIFYING PURCHASER" MEANS A PURCHASER OF A13
CONTROLLABLE ELECTRONIC RECORD OR AN INTEREST IN A14
CONTROLLABLE ELECTRONIC RECORD THAT OBTAINS CONTROL OF THE15
CONTROLLABLE ELECTRONIC RECORD FOR VALUE , IN GOOD FAITH, AND16
WITHOUT NOTICE OF A CLAIM OF A PROPERTY RIGHT IN THE17
CONTROLLABLE ELECTRONIC RECORD .18
(3) "T
RANSFERABLE RECORD" HAS THE MEANING PROVIDED FOR19
THAT TERM IN SECTION 201(a)(1) OF THE FEDERAL "ELECTRONIC20
S
IGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT", 15 U.S.C. SEC.21
7021 (a)(1),
AS AMENDED.22
(4) "V
ALUE" HAS THE MEANING PROVIDED IN SECTION 4-3-303 (a),23
AS IF REFERENCES IN THAT SUBSECTION (a) TO AN "INSTRUMENT" WERE24
REFERENCES TO A CONTROLLABLE ACCOUNT , CONTROLLABLE ELECTRONIC25
RECORD, OR CONTROLLABLE PAYMENT INTANGIBLE .26
(b) T
HE DEFINITIONS IN ARTICLE 9 OF THIS TITLE 4 OF "ACCOUNT27
090
-77- DEBTOR", "CONTROLLABLE ACCOUNT ", "CONTROLLABLE PAYMENT1
INTANGIBLE", "CHATTEL PAPER", "DEPOSIT ACCOUNT", "ELECTRONIC2
MONEY", AND "INVESTMENT PROPERTY" APPLY TO THIS ARTICLE 12.3
(c) A
RTICLE 1 OF THIS TITLE 4 CONTAINS GENERAL DEFINITIONS4
AND PRINCIPLES OF CONSTRUCTION AND INTERPRETATION APPLICABLE5
THROUGHOUT THIS ARTICLE 12.6
4-12-103. Relation to article 9 and consumer laws. (a) I
F THERE7
IS CONFLICT BETWEEN THIS ARTICLE 12 AND ARTICLE 9 OF THIS TITLE 4,8
ARTICLE 9 OF THIS TITLE 4 GOVERNS.9
(b) A
TRANSACTION SUBJECT TO THIS ARTICLE 12 IS SUBJECT TO10
ANY APPLICABLE RULE OF LAW THAT ESTABLISHES A DIFFERENT RULE FOR11
CONSUMERS AND ANY OTHER STATE LAW .12
4-12-104. Rights in controllable account, controllable13
electronic record, and controllable payment intangible. (a) T
HIS14
SECTION APPLIES TO THE ACQUISITION AND PURCHASE OF RIGHTS IN A15
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE ,16
INCLUDING THE RIGHTS AND BENEFITS UNDER SUBSECTIONS (c), (d), (e),17
(g),
AND (h) OF THIS SECTION OF A PURCHASER AND QUALIFYING18
PURCHASER, IN THE SAME MANNER THIS SECTION APPLIES TO A19
CONTROLLABLE ELECTRONIC RECORD .20
(b) T
O DETERMINE WHETHER A PURCHASER OF A CONTROLLABLE21
ACCOUNT OR A CONTROLLABLE PAYMENT INTANGIBLE IS A QUALIFYING22
PURCHASER, THE PURCHASER OBTAINS CONTROL OF THE ACCOUNT OR23
PAYMENT INTANGIBLE IF IT OBTAINS CONTROL OF THE CONTROLLABLE24
ELECTRONIC RECORD THAT EVIDENCES THE ACCOUNT OR PAYMENT25
INTANGIBLE.26
(c) E
XCEPT AS PROVIDED IN THIS SECTION, LAW OTHER THAN THIS27
090
-78- ARTICLE 12 DETERMINES WHETHER A PERSON ACQUIRES A RIGHT IN A1
CONTROLLABLE ELECTRONIC RECORD AND THE RIGHT THE PERSON2
ACQUIRES.3
(d) A
PURCHASER OF A CONTROLLABLE ELECTRONIC RECORD4
ACQUIRES ALL RIGHTS IN THE CONTROLLABLE ELECTRONIC RECORD THAT5
THE TRANSFEROR HAD OR HAD POWER TO TRANSFER ; EXCEPT THAT A6
PURCHASER OF A LIMITED INTEREST IN A CONTROLLABLE ELECTRONIC7
RECORD ACQUIRES RIGHTS ONLY TO THE EXTENT OF THE INTEREST8
PURCHASED.9
(e) A
QUALIFYING PURCHASER ACQUIRES ITS RIGHTS IN THE10
CONTROLLABLE ELECTRONIC RECORD FREE OF A CLAIM OF A PROPERTY11
RIGHT IN THE CONTROLLABLE ELECTRONIC RECORD .12
(f) E
XCEPT AS PROVIDED IN SUBSECTIONS (a) AND (e) OF THIS13
SECTION FOR A CONTROLLABLE ACCOUNT AND A CONTROLLABLE PAYMENT14
INTANGIBLE OR LAW OTHER THAN THIS ARTICLE 12, A QUALIFYING15
PURCHASER TAKES A RIGHT TO PAYMENT , RIGHT TO PERFORMANCE, OR16
OTHER INTEREST IN PROPERTY EVIDENCED BY THE CONTROLLABLE17
ELECTRONIC RECORD SUBJECT TO A CLAIM OF A PROPERTY RIGHT IN THE18
RIGHT TO PAYMENT, RIGHT TO PERFORMANCE , OR OTHER INTEREST IN19
PROPERTY.20
(g) A
N ACTION MAY NOT BE ASSERTED AGAINST A QUALIFYING21
PURCHASER BASED ON BOTH A PURCHASE BY THE QUALIFYING PURCHASER22
OF A CONTROLLABLE ELECTRONIC RECORD AND A CLAIM OF A PROPERTY23
RIGHT IN ANOTHER CONTROLLABLE ELECTRONIC RECORD , WHETHER THE24
ACTION IS FRAMED IN CONVERSION , REPLEVIN, CONSTRUCTIVE TRUST,25
EQUITABLE LIEN, OR OTHER THEORY.26
(h) F
ILING OF A FINANCING STATEMENT UNDER ARTICLE 9 OF THIS27
090
-79- TITLE 4 IS NOT NOTICE OF A CLAIM OF A PROPERTY RIGHT IN A1
CONTROLLABLE ELECTRONIC RECORD .2
4-12-105. Control of controllable electronic record. (a) A3
PERSON HAS CONTROL OF A CONTROLLABLE ELECTRONIC RECORD IF THE4
ELECTRONIC RECORD , A RECORD ATTACHED TO OR LOGICALLY5
ASSOCIATED WITH THE ELECTRONIC RECORD , OR A SYSTEM IN WHICH THE6
ELECTRONIC RECORD IS RECORDED :7
(1) G
IVES THE PERSON:8
(A) P
OWER TO AVAIL ITSELF OF SUBSTANTIALLY ALL THE BENEFIT9
FROM THE ELECTRONIC RECORD ; AND10
(B)
EXCLUSIVE POWER, SUBJECT TO SUBSECTION (b) OF THIS11
SECTION, TO:12
(i) P
REVENT OTHERS FROM AVAILING THEMSELVES OF13
SUBSTANTIALLY ALL THE BENEFIT FROM THE ELECTRONIC RECORD ; AND14
(ii) T
RANSFER CONTROL OF THE ELECTRONIC RECORD TO ANOTHER15
PERSON OR CAUSE ANOTHER PERSON TO OBTAIN CONTROL OF ANOTHER16
CONTROLLABLE ELECTRONIC RECORD AS A RESULT OF THE TRANSFER OF17
THE ELECTRONIC RECORD; AND18
(2) E
NABLES THE PERSON READILY TO IDENTIFY ITSELF IN ANY19
WAY, INCLUDING BY NAME, IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY,20
OFFICE, OR ACCOUNT NUMBER , AS HAVING THE POWERS SPECIFIED IN21
SUBSECTION (a)(1) OF THIS SECTION.22
(b) S
UBJECT TO SUBSECTION (c) OF THIS SECTION, A POWER IS23
EXCLUSIVE UNDER SUBSECTIONS (a)(1)(B)(i) AND (a)(1)(B)(ii) OF THIS24
SECTION EVEN IF:25
(1) T
HE CONTROLLABLE ELECTRONIC RECORD , A RECORD26
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE ELECTRONIC RECORD ,27
090
-80- OR A SYSTEM IN WHICH THE ELECTRONIC RECORD IS RECORDED LIMITS THE1
USE OF THE ELECTRONIC RECORD OR HAS A PROTOCOL PROGRAMMED TO2
CAUSE A CHANGE, INCLUDING A TRANSFER OR LOSS OF CONTROL OR A3
MODIFICATION OF BENEFITS AFFORDED BY THE ELECTRONIC RECORD ; OR4
(2) T
HE POWER IS SHARED WITH ANOTHER PERSON .5
(c) A
POWER OF A PERSON IS NOT SHARED WITH ANOTHER PERSON6
UNDER SUBSECTION (b)(2) OF THIS SECTION AND THE PERSON'S POWER IS7
NOT EXCLUSIVE IF:8
(1) T
HE PERSON CAN EXERCISE THE POWER ONLY IF THE POWER9
ALSO IS EXERCISED BY THE OTHER PERSON ; AND10
(2) T
HE OTHER PERSON:11
(A) C
AN EXERCISE THE POWER WITHOUT EXERCISE OF THE POWER12
BY THE PERSON; OR13
(B) I
S THE TRANSFEROR TO THE PERSON OF AN INTEREST IN THE14
CONTROLLABLE ELECTRONIC RECORD OR A CONTROLLABLE ACCOUNT OR15
CONTROLLABLE PAYMENT INTANGIBLE EVIDENCED BY THE CONTROLLABLE16
ELECTRONIC RECORD.17
(d) I
F A PERSON HAS THE POWERS SPECIFIED IN SUBSECTIONS18
(a)(1)(B)(i)
AND (a)(1)(B)(ii) OF THIS SECTION, THE POWERS ARE19
PRESUMED TO BE EXCLUSIVE.20
(e) A
PERSON HAS CONTROL OF A CONTROLLABLE ELECTRONIC21
RECORD IF ANOTHER PERSON , OTHER THAN THE TRANSFEROR TO THE22
PERSON OF AN INTEREST IN THE CONTROLLABLE ELECTRONIC RECORD OR23
A CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE24
EVIDENCED BY THE CONTROLLABLE ELECTRONIC RECORD :25
(1) H
AS CONTROL OF THE ELECTRONIC RECORD AND26
ACKNOWLEDGES THAT IT HAS CONTROL ON BEHALF OF THE PERSON ; OR27
090
-81- (2) OBTAINS CONTROL OF THE ELECTRONIC RECORD AFTER HAVING1
ACKNOWLEDGED THAT IT WILL OBTAIN CONTROL OF THE ELECTRONIC2
RECORD ON BEHALF OF THE PERSON .3
(f) A
PERSON THAT HAS CONTROL UNDER THIS SECTION IS NOT4
REQUIRED TO ACKNOWLEDGE THAT IT HAS CONTROL ON BEHALF OF5
ANOTHER PERSON.6
(g) I
F A PERSON ACKNOWLEDGES THAT IT HAS OR WILL OBTAIN7
CONTROL ON BEHALF OF ANOTHER PERSON , UNLESS THE PERSON8
OTHERWISE AGREES OR LAW OTHER THAN THIS ARTICLE 12 OR ARTICLE 99
OF THIS TITLE 4 OTHERWISE PROVIDES, THE PERSON DOES NOT OWE ANY10
DUTY TO THE OTHER PERSON AND IS NOT REQUIRED TO CONFIRM THE11
ACKNOWLEDGMENT TO ANY OTHER PERSON .12
4-12-106. Discharge of account debtor on controllable account13
or controllable payment intangible. (a) A
N ACCOUNT DEBTOR ON A14
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INT ANGIBLE MAY15
DISCHARGE ITS OBLIGATION BY PAYING:16
(1) T
HE PERSON HAVING CONTROL OF THE CONTROLLABLE17
ELECTRONIC RECORD THAT EVIDENCES THE CONTROLLABLE ACCOUNT OR18
CONTROLLABLE PAYMENT INTANGIBLE ; OR19
(2) E
XCEPT AS PROVIDED IN SUBSECTION (b) OF THIS SECTION, A20
PERSON THAT FORMERLY HAD CONTROL OF THE CONTROLLABLE21
ELECTRONIC RECORD.22
(b) S
UBJECT TO SUBSECTION (d) OF THIS SECTION, THE ACCOUNT23
DEBTOR MAY NOT DISCHARGE ITS OBLIGATION BY PAYING A PERSON THAT24
FORMERLY HAD CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD IF25
THE ACCOUNT DEBTOR RECEIVES A NOTIFICATION THAT :26
(1) I
S SIGNED BY A PERSON THAT FORMERLY HAD CONTROL OR THE27
090
-82- PERSON TO WHICH CONTROL WAS TRANSFERRED ;1
(2) R
EASONABLY IDENTIFIES THE CONTROLLABLE ACCOUNT OR2
CONTROLLABLE PAYMENT INTANGIBLE ;3
(3) N
OTIFIES THE ACCOUNT DEBTOR THAT CONTROL OF THE4
CONTROLLABLE ELECTRONIC RECORD THAT EVIDENCES THE5
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE WAS6
TRANSFERRED;7
(4) I
DENTIFIES THE TRANSFEREE, IN ANY REASONABLE WAY ,8
INCLUDING BY NAME, IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY, OFFICE,9
OR ACCOUNT NUMBER; AND10
(5) P
ROVIDES A COMMERCIALLY REASONABLE METHOD BY WHICH11
THE ACCOUNT DEBTOR IS TO PAY THE TRANSFEREE .12
(c) A
FTER RECEIPT OF A NOTIFICATION THAT COMPLIES WITH13
SUBSECTION (b) OF THIS SECTION, THE ACCOUNT DEBTOR MAY DISCHARGE14
ITS OBLIGATION BY PAYING IN ACCORDANCE WITH THE NOTIFICATION AND15
MAY NOT DISCHARGE THE OBLIGATION BY PAYING A PERSON THAT16
FORMERLY HAD CONTROL .17
(d) S
UBJECT TO SUBSECTION (h) OF THIS SECTION, NOTIFICATION18
IS INEFFECTIVE UNDER SUBSECTION (b) OF THIS SECTION:19
(1) U
NLESS, BEFORE THE NOTIFICATION IS SENT, THE ACCOUNT20
DEBTOR AND THE PERSON THAT , AT THAT TIME, HAD CONTROL OF THE21
CONTROLLABLE ELECTRONIC RECORD THAT EVIDENCES THE22
CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE23
AGREE IN A SIGNED RECORD TO A COMMERCIALLY REASONABLE METHOD24
BY WHICH A PERSON MAY FURNISH REASONABLE PROOF THAT CONTROL25
HAS BEEN TRANSFERRED;26
(2) T
O THE EXTENT AN AGREEMENT BETWEEN THE ACCOUNT27
090
-83- DEBTOR AND SELLER OF A PAYMENT INTANGIBLE LIMITS THE ACCOUNT1
DEBTOR'S DUTY TO PAY A PERSON OTHER THAN THE SELLER AND THE2
LIMITATION IS EFFECTIVE UNDER LAW OTHER THAN THIS ARTICLE 12; OR3
(3) A
T THE OPTION OF THE ACCOUNT DEBTOR, IF THE NOTIFICATION4
NOTIFIES THE ACCOUNT DEBTOR TO :5
(A) D
IVIDE A PAYMENT;6
(B) M
AKE LESS THAN THE FULL AMOUNT OF AN INSTALLMENT OR7
OTHER PERIODIC PAYMENT; OR8
(C) P
AY ANY PART OF A PAYMENT BY MORE THAN ONE METHOD OR9
TO MORE THAN ONE PERSON.10
(e) S
UBJECT TO SUBSECTION (h) OF THIS SECTION, IF REQUESTED11
BY THE ACCOUNT DEBTOR, THE PERSON GIVING THE NOTIFICATION UNDER12
SUBSECTION (b) OF THIS SECTION SEASONABLY SHALL FURNISH13
REASONABLE PROOF, USING THE METHOD IN THE AGREEMENT REFERRED14
TO IN SUBSECTION (d)(1) OF THIS SECTION, THAT CONTROL OF THE15
CONTROLLABLE ELECTRONIC RECORD HAS BEEN TRANSFERRED . UNLESS16
THE PERSON COMPLIES WITH THE REQUEST , THE ACCOUNT DEBTOR MAY17
DISCHARGE ITS OBLIGATION BY PAYING A PERSON THAT FORMERLY HAD18
CONTROL, EVEN IF THE ACCOUNT DEBTOR HAS RECEIVED A NOTIFICATION19
UNDER SUBSECTION (b) OF THIS SECTION.20
(f) A
PERSON FURNISHES REASONABLE PROOF UNDER SUBSECTION21
(e)
OF THIS SECTION THAT CONTROL HAS BEEN TRANSFERRED IF THE22
PERSON DEMONSTRATES , USING THE METHOD IN THE AGREEMENT23
REFERRED TO IN SUBSECTION (d)(1) OF THIS SECTION, THAT THE24
TRANSFEREE HAS THE POWER TO :25
(1) A
VAIL ITSELF OF SUBSTANTIALLY ALL THE BENEFIT FROM THE26
CONTROLLABLE ELECTRONIC RECORD ;27
090
-84- (2) PREVENT OTHERS FROM AVAILING THEMSELVES OF1
SUBSTANTIALLY ALL THE BENEFIT FROM THE CONTROLLABLE ELECTRONIC2
RECORD; AND3
(3) T
RANSFER THE POWERS SPECIFIED IN SUBSECTIONS (f)(1) AND4
(f)(2)
OF THIS SECTION TO ANOTHER PERSON.5
(g) S
UBJECT TO SUBSECTION (h) OF THIS SECTION, AN ACCOUNT6
DEBTOR MAY NOT WAIVE OR VARY ITS RIGHTS UNDER SUBSECTIONS (d)(1)7
AND (e) OF THIS SECTION OR ITS OPTION UNDER SUBSECTION (d)(3) OF THIS8
SECTION.9
(h) T
HIS SECTION IS SUBJECT TO LAW OTHER THAN THIS ARTICLE10
12
WHICH ESTABLISHES A DIFFERENT RULE FOR AN ACCOUNT DEBTOR WHO11
IS AN INDIVIDUAL AND WHO INCURRED THE OBLIGATION PRIMARILY FOR12
PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES.13
4-12-107. Governing law. (a) E
XCEPT AS PROVIDED IN14
SUBSECTION (b) OF THIS SECTION, THE LOCAL LAW OF A CONTROLLABLE15
ELECTRONIC RECORD'S JURISDICTION GOVERNS A MA TTER COVERED BY16
THIS ARTICLE 12.17
(b) F
OR A CONTROLLABLE ELECTRONIC RECORD THAT EVIDENCES18
A CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE ,19
THE LOCAL LAW OF THE CONTROLLABLE ELECTRONIC RECORD 'S20
JURISDICTION GOVERNS A MATTER COVERED BY SECTION 4-12-106 UNLESS21
AN EFFECTIVE AGREEMENT DETERMINES THAT THE LOCAL LAW OF22
ANOTHER JURISDICTION GOVERNS .23
(c) T
HE FOLLOWING RULES DETERMINE A CONTROLLABLE24
ELECTRONIC RECORD'S JURISDICTION UNDER THIS SECTION:25
(1) I
F THE CONTROLLABLE ELECTRONIC RECORD , OR A RECORD26
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE CONTROLLABLE27
090
-85- ELECTRONIC RECORD AND READILY AVAILABLE FOR REVIEW , EXPRESSLY1
PROVIDES THAT A PARTICULAR JURISDICTION IS THE CONTROLLABLE2
ELECTRONIC RECORD'S JURISDICTION FOR PURPOSES OF THIS ARTICLE 12 OR3
THIS TITLE 4, THAT JURISDICTION IS THE CONTROLLABLE ELECTRONIC4
RECORD'S JURISDICTION.5
(2) I
F SUBSECTION (c)(1) OF THIS SECTION DOES NOT APPLY AND6
THE RULES OF THE SYSTEM IN WHICH THE CONTROLLABLE ELECTRONIC7
RECORD IS RECORDED ARE READILY AVAILABLE FOR REVIEW AND8
EXPRESSLY PROVIDE THAT A PARTICULAR JURISDICTION IS THE9
CONTROLLABLE ELECTRONIC RECORD 'S JURISDICTION FOR PURPOSES OF10
THIS ARTICLE 12 OR THIS TITLE 4, THAT JURISDICTION IS THE11
CONTROLLABLE ELECTRONIC RECORD 'S JURISDICTION.12
(3) I
F SUBSECTIONS (c)(1) AND (c)(2) OF THIS SECTION DO NOT13
APPLY AND THE CONTROLLABLE ELECTRONIC RECORD , OR A RECORD14
ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE CONTROLLABLE15
ELECTRONIC RECORD AND READILY AVAILABLE FOR REVIEW , EXPRESSLY16
PROVIDES THAT THE CONTROLLABLE ELECTRONIC RECORD IS GOVERNED17
BY THE LAW OF A PARTICULAR JURISDICTION , THAT JURISDICTION IS THE18
CONTROLLABLE ELECTRONIC RECORD 'S JURISDICTION.19
(4) I
F SUBSECTIONS (c)(1), (c)(2), AND (c)(3) OF THIS SECTION DO20
NOT APPLY AND THE RULES OF THE SYSTEM IN WHICH THE CONTROLLABLE21
ELECTRONIC RECORD IS RECORDED ARE READILY AVAILABLE FOR REVIEW22
AND EXPRESSLY PROVIDE THAT THE CONTROLLABLE ELECTRONIC RECORD23
OR THE SYSTEM IS GOVERNED BY THE LAW OF A PARTICULAR24
JURISDICTION, THAT JURISDICTION IS THE CONTROLLABLE ELECTRONIC25
RECORD'S JURISDICTION.26
(5) I
F SUBSECTIONS (c)(1) TO (c)(4) OF THIS SECTION DO NOT27
090
-86- APPLY, THE CONTROLLABLE ELECTRONIC RECORD 'S JURISDICTION IS THE1
D
ISTRICT OF COLUMBIA.2
(d) I
F SUBSECTION (c)(5) OF THIS SECTION APPLIES AND THIS3
ARTICLE 12 IS NOT IN EFFECT IN THE DISTRICT OF COLUMBIA WITHOUT4
MATERIAL MODIFICATION, THE GOVERNING LAW FOR A MATTER COVERED5
BY THIS ARTICLE 12 IS THE LAW OF THE DISTRICT OF COLUMBIA AS6
THOUGH THIS ARTICLE 12 WERE IN EFFECT IN THE DISTRICT OF COLUMBIA7
WITHOUT MATERIAL MODIFICATION . IN THIS SUBSECTION (d), "ARTICLE8
12"
MEANS ARTICLE 12 OF THE "UNIFORM COMMERCIAL CODE".9
(e) T
O THE EXTENT SUBSECTIONS (a) AND (b) OF THIS SECTION10
PROVIDE THAT THE LOCAL LAW OF THE CONTROLLABLE ELECTRONIC11
RECORD'S JURISDICTION GOVERNS A MATTER COVERED BY THIS ARTICLE12
12,
THAT LAW GOVERNS EVEN IF THE MATTER OR A TRANSACTION TO13
WHICH THE MATTER RELATES DOES NOT BEAR ANY RELATION TO THE14
CONTROLLABLE ELECTRONIC RECORD 'S JURISDICTION.15
(f) T
HE RIGHTS ACQUIRED UNDER SECTION 4-12-104 BY A16
PURCHASER OR QUALIFYING PURCHASER ARE GOVERNED BY THE LAW17
APPLICABLE UNDER THIS SECTION AT THE TIME OF PURCHASE .18
ARTICLE 1319
Transitional Provisions for Uniform Commercial Code20
Amendments (2022)21
PART 122
GENERAL PROVISIONS AND DEFINITIONS23
4-13-101. Short title. T
HIS ARTICLE 13 MAY BE CITED AS24
"T
RANSITIONAL PROVISIONS FOR UNIFORM COMMERCIAL CODE25
A
MENDMENTS (2022)".26
4-13-102. Definitions. (a) I
N THIS ARTICLE 13:27
090
-87- (1) "ADJUSTMENT DATE" MEANS JULY 1, 2025, OR THE DATE THAT1
IS ONE YEAR AFTER THE EFFECTIVE DATE OF THIS ARTICLE 13, WHICHEVER2
IS LATER.3
(2) "A
RTICLE 12" MEANS ARTICLE 12 OF THIS TITLE 4.4
(3) "A
RTICLE 12 PROPERTY" MEANS A CONTROLLABLE ACCOUNT ,5
CONTROLLABLE ELECTRONIC RECORD , OR CONTROLLABLE PAYMENT6
INTANGIBLE.7
(b) T
HE FOLLOWING DEFINITIONS IN OTHER ARTICLES OF THIS TITLE8
4
APPLY TO THIS ARTICLE 13.9
"C
ONTROLLABLE ACCOUNT "S ECTION 4-9-102. 10
"C
ONTROLLABLE ELECTRONIC RECORD "S ECTION 4-12-102. 11
"C
ONTROLLABLE PAYMENT INTANGIBLE "S ECTION 4-9-102. 12
"E
LECTRONIC MONEY"S ECTION 4-9-102. 13
"F
INANCING STATEMENT"S ECTION 4-9-102. 14
(c) A
RTICLE 1 OF THIS TITLE 4 CONTAINS GENERAL DEFINITIONS15
AND PRINCIPLES OF CONSTRUCTION AND INTERPRETATION APPLICABLE16
THROUGHOUT THIS ARTICLE 13.17
PART 218
GENERAL TRANSITIONAL PROVISION19
4-13-201. Saving clause. E
XCEPT AS PROVIDED IN PART 3 OF THIS20
ARTICLE 13, A TRANSACTION VALIDLY ENTERED INTO BEFORE THE21
EFFECTIVE DATE OF THIS ARTICLE 13 AND THE RIGHTS, DUTIES, AND22
INTERESTS FLOWING FROM THE TRANSACTION REMAIN VALID THEREAFTER23
AND MAY BE TERMINATED, COMPLETED, CONSUMMATED, OR ENFORCED AS24
REQUIRED OR PERMITTED BY LAW OTHER THAN THIS TITLE 4 OR, IF25
APPLICABLE, THIS TITLE 4, AS THOUGH THIS ARTICLE 13 HAD NOT TAKEN26
EFFECT.27
090
-88- PART 31
TRANSITIONAL PROVISIONS FOR2
ARTICLES 9 AND 12 OF THIS TITLE 43
4-13-301. Saving clause. (a) E
XCEPT AS PROVIDED IN THIS PART4
3,
ARTICLE 9, AS AMENDED BY SENATE BILL 23-090
, ENACTED IN 2023,5
AND ARTICLE 12 OF THIS TITLE 4, AS ENACTED BY SENATE BILL 23-090 ,6
ENACTED IN 2023, APPLY TO A TRANSACTION, LIEN, OR OTHER INTEREST7
IN PROPERTY, EVEN IF THE TRANSACTION , LIEN, OR INTEREST WAS8
ENTERED INTO, CREATED, OR ACQUIRED BEFORE THE EFFECTIVE DATE OF9
THIS ARTICLE 13.10
(b) E
XCEPT AS PROVIDED IN SUBSECTION (c) OF THIS SECTION AND11
SECTIONS 4-13-302 TO 4-13-306:12
(1) A
TRANSACTION, LIEN, OR INTEREST IN PROPERTY THAT WAS13
VALIDLY ENTERED INTO , CREATED, OR TRANSFERRED BEFORE THE14
EFFECTIVE DATE OF THIS ARTICLE 13 AND THAT WAS NOT GOVERNED BY15
THIS TITLE 4, BUT WOULD BE SUBJECT TO ARTICLE 9 OF THIS TITLE 4, AS16
AMENDED BY SENATE BILL 23-090
, ENACTED IN 2023, OR ARTICLE 12 OF17
THIS TITLE 4, AS ENACTED BY SENATE BILL 23-090, ENACTED IN 2023, IF18
IT HAD BEEN ENTERED INTO, CREATED, OR TRANSFERRED ON OR AFTER THE19
EFFECTIVE DATE OF THIS ARTICLE 13, INCLUDING THE RIGHTS, DUTIES, AND20
INTERESTS FLOWING FROM THE TRANSACTION , LIEN, OR INTEREST,21
REMAINS VALID ON AND AFTER THE EFFECTIVE DATE OF THIS ARTICLE 13;22
AND23
(2) T
HE TRANSACTION, LIEN, OR INTEREST MAY BE TERMINATED,24
COMPLETED, CONSUMMATED, AND ENFORCED AS REQUIRED OR PERMITTED25
BY THIS TITLE 4, AS AMENDED BY SENATE BILL 23-090
, ENACTED IN 2023,26
OR BY THE LAW THAT WOULD APPLY IF THIS TITLE 4, AS AMENDED BY27
090
-89- SENATE BILL 23-090, ENACTED IN 2023, HAD NOT TAKEN EFFECT.1
(c) T
HIS ARTICLE 13 DOES NOT AFFECT AN ACTION , CASE, OR2
PROCEEDING COMMENCED BEFORE THE EFFECTIVE DATE OF THIS ARTICLE3
13.4
4-13-302. Security interest perfected before effective date.5
(a) A
SECURITY INTEREST THAT IS ENFORCEABLE AND PERFECTED6
IMMEDIATELY BEFORE THE EFFECTIVE DATE OF THIS ARTICLE 13 IS A7
PERFECTED SECURITY INTEREST UNDER THIS TITLE 4 IF, ON THE EFFECTIVE8
DATE OF THIS ARTICLE 13, THE REQUIREMENTS FOR ENFORCEABILITY AND9
PERFECTION UNDER THIS TITLE 4 ARE SATISFIED WITHOUT FURTHER10
ACTION.11
(b) I
F A SECURITY INTEREST IS ENFORCEABLE AND PERFECTED12
IMMEDIATELY BEFORE THE EFFECTIVE DATE OF THIS ARTICLE 13, BUT THE13
REQUIREMENTS FOR ENFORCEABILITY OR PERFECTION UNDER THIS TITLE14
4
ARE NOT SATISFIED ON THE EFFECTIVE DATE OF THIS ARTICLE 13, THE15
SECURITY INTEREST:16
(1) I
S A PERFECTED SECURITY INTEREST UNTIL THE EARLIER OF THE17
TIME PERFECTION WOULD HAVE CEASED UNDER THE LAW IN EFFECT18
IMMEDIATELY BEFORE THE EFFECTIVE DATE OF THIS ARTICLE 13 OR THE19
ADJUSTMENT DATE;20
(2) R
EMAINS ENFORCEABLE THEREAFTER ONLY IF THE SECURITY21
INTEREST SATISFIES THE REQUIREMENTS FOR ENFORCEABILITY UNDER22
SECTION 4-9-203, AS AMENDED BY SENATE BILL 23-090
, ENACTED IN23
2023,
BEFORE THE ADJUSTMENT DATE ; AND24
(3) R
EMAINS PERFECTED THEREAFTER ONLY IF THE REQUIREMENTS25
FOR PERFECTION UNDER THIS TITLE 4 ARE SATISFIED BEFORE THE TIME26
SPECIFIED IN SUBSECTION (b)(1) OF THIS SECTION.27
090
-90- 4-13-303. Security interest unperfected before effective date.1
A
SECURITY INTEREST THAT IS ENFORCEABLE IMMEDIATELY BEFORE THE2
EFFECTIVE DATE OF THIS ARTICLE 13 BUT IS UNPERFECTED AT THAT TIME:3
(1) R
EMAINS AN ENFORCEABLE SECURITY INTEREST UNTIL THE4
ADJUSTMENT DATE;5
(2) R
EMAINS ENFORCEABLE THEREAFTER IF THE SECURITY6
INTEREST BECOMES ENFORCEABLE UNDER SECTION 4-9-203, AS AMENDED7
BY SENATE BILL 23-090
, ENACTED IN 2023, ON THE EFFECTIVE DATE OF8
THIS ARTICLE 13 OR BEFORE THE ADJUSTMENT DATE ; AND9
(3) B
ECOMES PERFECTED:10
(A) W
ITHOUT FURTHER ACTION, ON THE EFFECTIVE DATE OF THIS11
ARTICLE 13, IF THE REQUIREMENTS FOR PERFECTION UNDER THIS TITLE 412
ARE SATISFIED BEFORE OR AT THAT TIME; OR13
(B) W
HEN THE REQUIREMENTS FOR PERFECTION ARE SATISFIED IF14
THE REQUIREMENTS ARE SATISFIED AFTER THAT TIME .15
4-13-304. Effectiveness of actions taken before effective date.16
(a) I
F ACTION, OTHER THAN THE FILING OF A FINANCING STATEMENT , IS17
TAKEN BEFORE THE EFFECTIVE DATE OF THIS ARTICLE 13 AND THE ACTION18
WOULD HAVE RESULTED IN PERFECTION OF THE SECURITY INTEREST HAD19
THE SECURITY INTEREST BECOME ENFORCEABLE BEFORE THE EFFECTIVE20
DATE OF THIS ARTICLE 13, THE ACTION IS EFFECTIVE TO PERFECT A21
SECURITY INTEREST THAT ATTACHES UNDER THIS TITLE 4 BEFORE THE22
ADJUSTMENT DATE . AN ATTACHED SECURITY INTEREST BECOMES23
UNPERFECTED ON THE ADJUSTMENT DATE UNLESS THE SECURITY INTEREST24
BECOMES A PERFECTED SECURITY INTEREST UNDER THIS TITLE 4 BEFORE25
THE ADJUSTMENT DATE.26
(b) T
HE FILING OF A FINANCING STATEMENT BEFORE THE27
090
-91- EFFECTIVE DATE OF THIS ARTICLE 13 IS EFFECTIVE TO PERFECT A SECURITY1
INTEREST ON THE EFFECTIVE DATE OF THIS ARTICLE 13 TO THE EXTENT THE2
FILING WOULD SATISFY THE REQUIREMENTS FOR PERFECTION UNDER THIS3
TITLE 4.4
(c) T
HE TAKING OF AN ACTION BEFORE THE EFFECTIVE DATE OF5
THIS ARTICLE 13 IS SUFFICIENT FOR THE ENFORCEABILITY OF A SECURITY6
INTEREST ON THE EFFECTIVE DATE OF THIS ARTICLE 13 IF THE ACTION7
WOULD SATISFY THE REQUIREMENTS FOR ENFORCEABILITY UNDER THIS8
TITLE 4.9
4-13-305. Priority. (a) S
UBJECT TO SUBSECTIONS (b) AND (c) OF10
THIS SECTION, THIS TITLE 4 DETERMINES THE PRIORITY OF CONFLICTING11
CLAIMS TO COLLATERAL.12
(b) S
UBJECT TO SUBSECTION (c) OF THIS SECTION, IF THE13
PRIORITIES OF CLAIMS TO COLLATERAL WERE ESTABLISHED BEFORE THE14
EFFECTIVE DATE OF THIS ARTICLE 13, ARTICLE 9 OF THIS TITLE 4 AS IN15
EFFECT BEFORE THE EFFECTIVE DATE OF THIS ARTICLE 13 DETERMINES16
PRIORITY.17
(c) O
N THE ADJUSTMENT DATE, TO THE EXTENT THE PRIORITIES18
DETERMINED BY ARTICLE 9 OF THIS TITLE 4, AS AMENDED BY SENATE BILL19
23-090
, ENACTED IN 2023, MODIFY THE PRIORITIES ESTABLISHED BEFORE20
THE EFFECTIVE DATE OF THIS ARTICLE 13, THE PRIORITIES OF CLAIMS TO21
ARTICLE 12 PROPERTY AND ELECTRONIC MONEY ESTABLISHED BEFORE THE22
EFFECTIVE DATE OF THIS ARTICLE 13 CEASE TO APPLY.23
4-13-306. Priority of claims when priority rules of article 9 do24
not apply. (a) S
UBJECT TO SUBSECTIONS (b) AND (c) OF THIS SECTION,25
ARTICLE 12 OF THIS TITLE 4, AS ENACTED BY SENATE BILL 23-090
,26
ENACTED IN 2023, DETERMINES THE PRIORITY OF CONFLICTING CLAIMS TO27
090
-92- ARTICLE 12 PROPERTY WHEN THE PRIORITY RULES OF ARTICLE 9 OF THIS1
TITLE 4, AS AMENDED BY SENATE BILL 23-090, ENACTED IN 2023, DO NOT2
APPLY.3
(b) S
UBJECT TO SUBSECTION (c) OF THIS SECTION, WHEN THE4
PRIORITY RULES OF ARTICLE 9 OF THIS TITLE 4, AS AMENDED BY SENATE5
B
ILL 23-090
, ENACTED IN 2023, DO NOT APPLY AND THE PRIORITIES OF6
CLAIMS TO ARTICLE 12 PROPERTY WERE ESTABLISHED BEFORE THE7
EFFECTIVE DATE OF THIS ACT , LAW OTHER THAN THIS ARTICLE 128
DETERMINES PRIORITY.9
(c) W
HEN THE PRIORITY RULES OF ARTICLE 9 OF THIS TITLE 4, AS10
AMENDED BY SENATE BILL 23-090
, ENACTED IN 2023, DO NOT APPLY, TO11
THE EXTENT THE PRIORITIES DETERMINED BY THIS TITLE 4 MODIFY THE12
PRIORITIES ESTABLISHED BEFORE THE EFFECTIVE DATE OF THIS ARTICLE13
13,
THE PRIORITIES OF CLAIMS TO ARTICLE 12 PROPERTY ESTABLISHED14
BEFORE THE EFFECTIVE DATE OF THIS ARTICLE 13 CEASE TO APPLY ON THE15
ADJUSTMENT DATE.16
SECTION 90. Act subject to petition - effective date. This act17
takes effect at 12:01 a.m. on the day following the expiration of the18
ninety-day period after final adjournment of the general assembly; except19
that, if a referendum petition is filed pursuant to section 1 (3) of article V20
of the state constitution against this act or an item, section, or part of this21
act within such period, then the act, item, section, or part will not take22
effect unless approved by the people at the general election to be held in23
November 2024 and, in such case, will take effect on the date of the24
official declaration of the vote thereon by the governor.25
090
-93-