District Of Columbia 2023-2024 Regular Session

District Of Columbia Council Bill B25-0005 Compare Versions

Version 1 (Old)

Version 2 (New)

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	1	+	ENGROSSED ORIGINAL
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9		-	AN ACT
10		-
11		-	_____________
12		-
13		-	IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
14		-	__________________________
15		-
16		-
17		-	To amend Subtitle I of Title 28 of the District of Columbia Official Code to add a new Article
18		-	12—Controllable Electronic Records, to provide rules for transactions involving digital
19		-	assets, including cryptocurrency, non-fungible tokens, and electronic promises to pay,
20		-	and to provide for their negotiability and their perfection by control; to make conforming
21		-	and related amendments to Articles 1, 2, 2A, 4A, 5, 7, 8, and 9; and to provide transition
22		-	rules to protect the expectations of parties to existing transactions and for other purposes.
23		-
24		-	BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
25		-	act may be cited as the “Uniform Commercial Code Amendment Act of 2024”.
26		-
27		-	Sec. 2. Subtitle I of Title 28 of the District of Columbia Official Code is amended as
28		-	follows:
29		-	(a) The Table of Contents is amended as follows:
30		-	(1) The section heading for section 28:2-106 is amended by striking the period at
31		-	the end and inserting the phrase “; hybrid transaction.” in its place.
32		-	(2) The section heading for section 28:2-202 is amended by striking the word
33		-	“written”.
34		-	(3) The section heading for section 28:2A-202 is amended by striking the word
35		-	“written”.
36		-	(4) The section heading for section 28:3-401 is amended to read as follows:
37		-	“28:3-401. Signature necessary for liability on instrument.”.
38		-	(5) The section heading for section 28:9-105 is amended to read as follows:
39		-	“28:9-105. Control of electronic copy of record evidencing chattel paper.”.
40		-	(6) A new section heading is added after the section heading for section 28:9-105
41		-	to read as follows:
42		-	“28:9-105A. Control of electronic money.”.
43		-	(7) New section headings are added after the section heading for section 28:9-107
44		-	to read as follows:
45		-	“28:9-107A. Control of controllable electronic record, controllable account, or controllable
46		-	payment intangible.
47		-	“28:9-107B. No Requirement to Acknowledge or Confirm; No Duties.”. ENROLLED ORIGINAL
48		-
49		-
50		-
51		-
52		-
	8	+	A BILL 1
53	9		2
54		-
55		-	(8) New section headings are added after the section heading for section 28:9-306
56		-	to read as follows:
57		-	“28:9-306A. Law governing perfection and priority of security interests in chattel paper.
58		-	“28:9-306B. Law governing perfection and priority of security interests in controllable accounts,
59		-	controllable electronic records, and controllable payment intangibles.”.
60		-	(9) The section heading for section 28:9-312 is amended to read as follows:
61		-	"28:9-312. Perfection of security interests in chattel paper, controllable accounts, controllable
62		-	electronic records, controllable payment intangibles, deposit accounts, negotiable documents,
63		-	goods covered by documents, instruments, investment property, letter-of-credit rights, and
64		-	money; perfection by permissive filing; temporary perfection without filing or transfer of
65		-	possession.”.
66		-	(10) A new section heading is added after the section heading for section 28:9-
67		-	314 to read as follows:
68		-	“28:9-314A. Perfection by possession and control of chattel paper.”.
69		-	(11) A new section heading is added after the section heading for section 28:9-
70		-	326 to read as follows:
71		-	“28:9-326A. Priority of security interest in controllable account, controllable electronic record,
72		-	and controllable payment intangible.”.
73		-	(12) The section heading for section 28:9-331 is amended to read as follows:
74		-	“28:9-331. Priority of rights of purchasers of controllable accounts, controllable electronic
75		-	records, controllable payment intangibles, documents, instruments, and securities under other
76		-	articles; priority of interests in financial assets and security entitlements and protection against
77		-	assertion of claim under Articles 8 and 12.”.
78		-	(13) Headings for a new Article 12 are added to read as follows:
79		-	“Article 12. Controllable Electronic Records.”
80		-	“Part I. General Provisions.
81		-	“28:12-101. Title.
82		-	“28:12-102. Definitions.
83		-	“28:12-103. Relation to Article 9 and consumer laws.
84		-	“28:12-104. Rights in controllable account, controllable electronic record, and controllable
85		-	payment intangible.
86		-	“28:12-105. Control of controllable electronic record.
87		-	“28:12-106. Discharge of account debtor on controllable account or controllable
88		-	payment intangible.
89		-	“28:12-107. Governing law.
90		-	“Part II. Transitional Provisions for Articles 9 and 12.”
91		-	“28:12-201. Definitions.
92		-	“28:12-202. Saving clause.
93		-	“28:12-203. Security interest perfected before effective date of the 2024 Act. ENROLLED ORIGINAL
94		-
	10	+	25-5 3
	11	+	4
	12	+	IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 5
	13	+	6
	14	+	__________________________ 7
	15	+	8
	16	+	9
	17	+	To amend Subtitle I of Title 28 of the District of Columbia Code, to add a new Article 12—10
	18	+	Controllable Electronic Records, to provide rules for transactions involving digital assets, 11
	19	+	including cryptocurrency, non-fungible tokens, and electronic promises to pay, and to 12
	20	+	provide for their negotiability and their perfection by control; to make conforming and 13
	21	+	related amendments to Article 1—General Provisions, Article 2—Sales, Article 2A—14
	22	+	Leases, Article 4A—Funds Transfers, Article 5—Letters of Credit, Article 7—15
	23	+	Documents of Title, Article 8—Investment Securities, and Article 9—Secured 16
	24	+	Transactions; to provide transition rules to protect the expectations of parties to existing 17
	25	+	transactions; and for other purposes. 18
	26	+	19
	27	+	BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this 20
	28	+	act may be cited as the “Uniform Commercial Code Amendment Act of 2023”. 21
	29	+	Sec. 2. Subtitle I of Title 28 of the District of Columbia Code is amended as follows: 22
	30	+	(a) The Table of Contents is amended as follows: 23
	31	+	(1) The section heading for section 28:2-106 is amended by striking the period at 24
	32	+	the end and inserting the phrase “; hybrid transaction.” in its place. 25
	33	+	(2) The section heading for section 28:2-202 is amended by striking the word 26
	34	+	“written”. 27
	35	+	(3) The section heading for section 28:2A-202 is amended by striking the word 28
	36	+	“written”. 29
	37	+	(4) The section heading for section 28:3-401 is amended to read as follows: 30 ENGROSSED ORIGINAL
	38	+
	39	+
	40	+
	41	+
	42	+	2
	43	+
	44	+	“28:3-401. Signature necessary for liability on instrument.” 31
	45	+	(5) The section heading for section 28:9-105 is amended to read as follows: 32
	46	+	“28:9-105. Control of electronic copy of record evidencing chattel paper.” 33
	47	+	(6) A new section heading is added after the section heading for section 28:9-105 34
	48	+	to read as follows: 35
	49	+	“28:9-105A. Control of electronic money.” 36
	50	+	(7) New section headings are added after the section heading for section 28:9-107 37
	51	+	to read as follows: 38
	52	+	“28:9-107A. Control of controllable electronic record, controllable account, or controllable 39
	53	+	payment intangible. 40
	54	+	“28:9-107B. No Requirement to Acknowledge or Confirm; No Duties.” 41
	55	+	(8) New section headings are added after the section heading for section 28:9-306 42
	56	+	to read as follows: 43
	57	+	“28:9-306A. Law governing perfection and priority of security interests in chattel paper. 44
	58	+	“28:9-306B. Law governing perfection and priority of security interests in controllable accounts, 45
	59	+	controllable electronic records, and controllable payment intangibles.” 46
	60	+	(9) The section heading for section 28:9-312 is amended to read as follows: 47
	61	+	"28:9-312. Perfection of security interests in chattel paper, controllable accounts, controllable 48
	62	+	electronic records, controllable payment intangibles, deposit accounts, negotiable documents, 49
	63	+	goods covered by documents, instruments, investment property, letter-of-credit rights, and 50 ENGROSSED ORIGINAL
95	64
96	65
97	66
98	67
99	68		3
100	69
101		-	“28:12-204. Security interest unperfected before effective date of the 2024 Act.
102		-	“28:12-206. Effectiveness of actions taken before effective date of the 2024 Act.
103		-	“28:12-206. Priority.
104		-	“28:12-207. Priority of claims when priority rules of Article 9 do not apply.”.
105		-	(b) Article 1 is amended as follows:
106		-	(1) Section 28:1-201(b) is amended as follows:
107		-	(A) Paragraph (10) is amended to read as follows:
108		-	“(10) “Conspicuous”, with reference to a term, means so written, displayed, or
109		-	presented that, based on the totality of the circumstances, a reasonable person against which it is
110		-	to operate ought to have noticed it. Whether a term is “conspicuous” or not is a decision for the
111		-	court.”.
112		-	(B) Paragraph (15) is amended to read as follows:
113		-	“(15) “Delivery”, with respect to an electronic document of title, means voluntary
114		-	transfer of control; and, with respect to an instrument, a tangible document of title, or an
115		-	authoritative tangible copy of a record evidencing chattel paper, means voluntary transfer of
116		-	possession.”.
117		-	(C) A new paragraph (16A) is added to read as follows:
118		-	“(16A) “Electronic” means relating to technology having electrical, digital,
119		-	magnetic, wireless, optical, electromagnetic, or similar capabilities.”.
120		-	(D) Paragraph (21)(C) is amended by striking the word “control” and
121		-	inserting the phrase “control, other than pursuant to § 28:7-106(g),” in its place.
122		-	(E) Paragraph (24) is amended to read as follows:
123		-	“(24) “Money” means a medium of exchange that is currently authorized or
124		-	adopted by a domestic or foreign government. The term “money” includes a monetary unit of
125		-	account established by an intergovernmental organization or pursuant to an agreement between 2
126		-	or more countries. The term “money” does not include an electronic record that is a medium of
127		-	exchange recorded and transferable in a system that existed and operated for the medium of
128		-	exchange before the medium of exchange was authorized or adopted by the government.”.
129		-	(F) Paragraph (27) is amended by to read as follows:
130		-	“(27) “Person” means an individual, estate, business or nonprofit entity,
131		-	government or governmental subdivision, agency, or instrumentality, or other legal entity. The
132		-	term “person” includes a protected series, however denominated, of an entity, if the protected
133		-	series is established under law, other than this subtitle, that limits, or limits if conditions
134		-	specified under the law are satisfied, the ability of a creditor of the entity or of any other
135		-	protected series of the entity to satisfy a claim from assets of the protected series.”.
136		-	(G) Paragraph (36) is amended by to read as follows:
137		-	“(36) “Send” in connection with a record or notification means:
138		-	“(A) To deposit in the mail, or deliver for transmission, or transmit by any
139		-	other usual means of communication, with postage or cost of transmission provided for, ENROLLED ORIGINAL
140		-
	70	+	money; perfection by permissive filing; temporary perfection without filing or transfer of 51
	71	+	possession.” 52
	72	+	(10) A new section heading is added after the section heading for section 28:9-53
	73	+	314 to read as follows: 54
	74	+	“28:9-314A. Perfection by possession and control of chattel paper.” 55
	75	+	(11) A new section heading is added after the section heading for section 28:9-56
	76	+	326 to read as follows: 57
	77	+	“28:9-326A. Priority of security interest in controllable account, controllable electronic record, 58
	78	+	and controllable payment intangible.” 59
	79	+	(12) The section heading for section 28:9-331 is amended to read as follows: 60
	80	+	“28:9-331. Priority of rights of purchasers of controllable accounts, controllable electronic 61
	81	+	records, controllable payment intangibles, documents, instruments, and securities under other 62
	82	+	articles; priority of interests in financial assets and security entitlements and protection against 63
	83	+	assertion of claim under Articles 8 and 12.” 64
	84	+	(13) Headings for a new article 12 are added to read as follows: 65
	85	+	“Article 12. Controllable Electronic Records.” 66
	86	+	“Part I. General Provisions. 67
	87	+	“28:12-101. Title. 68
	88	+	“28:12-102. Definitions. 69
	89	+	“28:12-103. Relation to Article 9 and consumer laws. 70 ENGROSSED ORIGINAL
141	90
142	91
143	92
144	93
145	94		4
146	95
147		-	addressed to any address reasonable under the circumstances; or
148		-	“(B) To cause the record or notification to be received within the time it
149		-	would have been received if properly sent under subparagraph (A) of this paragraph.”.
150		-	(H) Paragraph (37) is amended by to read as follows:
151		-	“(37) “Sign”, “signed”, “signing”, and “signature” mean with present intent to
152		-	authenticate or adopt a record:
153		-	“(i) To execute or adopt a tangible symbol; or
154		-	“(ii) To attach to or logically associate with the record an
155		-	electronic symbol, sound, or process.”.
156		-
157		-	(2) Section 28:1-204 is amended by striking the phrase “Articles 3, 4, and 5” and
158		-	inserting the phrase “Articles 3, 4, 5, and 12” in its place.
159		-	(3) Section 28:1-301(c) is amended as follows:
160		-	(A) Paragraph (7) is amended by striking the period at the end and
161		-	inserting a semicolon in its place.
162		-	(B) A new paragraph (8) is added to read as follows:
163		-	“(8) Section 28:12-107.”
164		-	(4) Section 28:1-306 is amended by striking the phrase “an authenticated” and
165		-	inserting the phrase “a signed” in its place.
166		-	(c) Article 2 is amended as follows:
167		-	(1) Section 28:2-102 is amended to read as follows:
168		-	“§ 28:2-102. Scope; certain security and other transactions excluded from this article.
169		-	“(a) Unless the context otherwise requires, and except as provided in subsection (c) of
170		-	this section, this article applies to transactions in goods and, in the case of a hybrid transaction, it
171		-	applies to the extent provided in subsection (b) of this section.
172		-	“(b) In a hybrid transaction:
173		-	“(1) If the sale-of-goods aspects do not predominate, only the provisions of this
174		-	article that relate primarily to the sale-of-goods aspects of the transaction apply, and the
175		-	provisions that relate primarily to the transaction as a whole do not apply.
176		-	“(2) If the sale-of-goods aspects predominate, this article applies to the transaction
177		-	but does not preclude application in appropriate circumstances of other law to aspects of the
178		-	transaction which do not relate to the sale of goods.
179		-	“(c) This article does not:
180		-	“(1) Apply to a transaction that, even though in the form of an unconditional
181		-	contract to sell or present sale, operates only to create a security interest; or
182		-	“(2) Impair or repeal a statute regulating sales to consumers, farmers, or other
183		-	specified classes of buyers.”.
184		-	(2) Section 28:2-106 is amended as follows:
185		-	(A) The section heading is amended by striking the period at the end and ENROLLED ORIGINAL
186		-
	96	+	“28:12-104. Rights in controllable account, controllable electronic record, and controllable 71
	97	+	payment intangible. 72
	98	+	“28:12-105. Control of controllable electronic record. 73
	99	+	“28:12-106. Discharge of account debtor on controllable account or controllable 74
	100	+	payment intangible. 75
	101	+	“28:12-107. Governing law. 76
	102	+	“Part II. Transitional Provisions for Articles 9 and 12.” 77
	103	+	“28:12-201. Definitions. 78
	104	+	“28:12-202. Saving clause. 79
	105	+	“28:12-203. Security interest perfected before effective date of 2023 Act. 80
	106	+	“28:12-204. Security interest unperfected before effective date of 2023 Act. 81
	107	+	“28:12-206. Effectiveness of actions taken before effective date of 2023 Act. 82
	108	+	“28:12-206. Priority. 83
	109	+	“28:12-207. Priority of claims when priority rules of Article 9 do not apply.” 84
	110	+	(b) Article 1 is amended as follows: 85
	111	+	(1) Section 28:1-201(b) is amended as follows: 86
	112	+	(A) Paragraph (10) is amended to read as follows: 87
	113	+	“(10) “Conspicuous”, with reference to a term, means so written, displayed, or presented 88
	114	+	that, based on the totality of the circumstances, a reasonable person against which it is to operate 89
	115	+	ought to have noticed it. Whether a term is “conspicuous” or not is a decision for the court.” 90 ENGROSSED ORIGINAL
187	116
188	117
189	118
190	119
191	120		5
192	121
193		-	inserting the phrase “; hybrid transaction.” in its place.
194		-	(B) A new paragraph (5) is added to read as follows:
195		-	“(5) “Hybrid transaction” means a single transaction involving a sale of goods
196		-	and:
197		-	“(A) The provision of services;
198		-	“(B) A lease of other goods; or
199		-	“(C) A sale, lease, or license of property other than goods.”.
200		-	(3) Section 28:2-201 is amended as follows:
201		-	(A) Paragraphs (1) and (2) are amended to read as follows:
202		-	“(1) Except as otherwise provided in this section a contract for the sale of goods
203		-	for the price of $500 or more is not enforceable by way of action or defense unless there is a
204		-	record sufficient to indicate that a contract for sale has been made between the parties and signed
205		-	by the party against whom enforcement is sought or by the party’s authorized agent or broker. A
206		-	record is not insufficient because it omits or incorrectly states a term agreed upon but the
207		-	contract is not enforceable under this subsection beyond the quantity of goods shown in the
208		-	record.
209		-	“(2) Between merchants if within a reasonable time a record in confirmation of
210		-	the contract and sufficient against the sender is received and the party receiving it has reason to
211		-	know its contents, it satisfies the requirements of subsection (1) of this section against the party
212		-	unless notice in a record of objection to its contents is given within 10 days after it is received.”.
213		-	(4) Section 28:2-202 is amended as follows:
214		-	(A) The section heading is amended by striking the word “written”.
215		-	(B) Subsection (b) is amended by striking the word “writing” and inserting
216		-	the word “record” in its place.
217		-	(5) Section 28:2-203 is amended by striking the word “writing” both times it
218		-	appears and inserting the word “record” in its place.
219		-	(6) Section 28:2-205 is amended by striking the word “writing” and inserting the
220		-	word “record” in its place.
221		-	(7) Section 28:209(2) is amended by striking the word “writing” and inserting the
222		-	phrase “writing or other signed record” in its place.
223		-	(d) Article 2A is amended as follows:
224		-	(1) Section 28:2A-102 is amended to read as follows:
225		-	“28:2A-102. Scope.
226		-	“(a) This article applies to any transaction, regardless of form, that creates a lease; in
227		-	the case of a hybrid lease, this article applies to the extent provided in subsection (b) of this
228		-	section.
229		-	“(b) In a hybrid lease:
230		-	“(1) If the lease-of-goods aspects do not predominate:
231		-	“(A) Only the provisions of this article which relate primarily to the ENROLLED ORIGINAL
232		-
	122	+	(B) Paragraph (15) is amended to read as follows: 91
	123	+	“(15) “Delivery”, with respect to an electronic document of title, means voluntary 92
	124	+	transfer of control; and, with respect to an instrument, a tangible document of title, or an 93
	125	+	authoritative tangible copy of a record evidencing chattel paper, means voluntary transfer of 94
	126	+	possession.” 95
	127	+	(C) A new paragraph (16A) is added to read as follows: 96
	128	+	“(16A) “Electronic” means relating to technology having electrical, digital, magnetic, 97
	129	+	wireless, optical, electromagnetic, or similar capabilities.” 98
	130	+	(D) Paragraph (21)(C) is amended by striking the word “control” and 99
	131	+	inserting the phrase “control, other than pursuant to § 28:7-106(g),”. 100
	132	+	(E) Paragraph (24) is amended to read as follows: 101
	133	+	“(24) “Money” means a medium of exchange that is currently authorized or adopted by a 102
	134	+	domestic or foreign government. The term “money” includes a monetary unit of account 103
	135	+	established by an intergovernmental organization or pursuant to an agreement between 2 or more 104
	136	+	countries. The term “money” does not include an electronic record that is a medium of exchange 105
	137	+	recorded and transferable in a system that existed and operated for the medium of exchange 106
	138	+	before the medium of exchange was authorized or adopted by the government.” 107
	139	+	(F) Paragraph (27) is amended by to read as follows: 108
	140	+	“(27) “Person” means an individual, estate, business or nonprofit entity, government or 109
	141	+	governmental subdivision, agency, or instrumentality, or other legal entity. The term “person” 110 ENGROSSED ORIGINAL
233	142
234	143
235	144
236	145
237	146		6
238	147
239		-	lease-of-goods aspects of the transaction apply, and the provisions that relate primarily to the
240		-	transaction as a whole do not apply;
241		-	“(B) Section 28:2A-209 applies if the lease is a finance lease; and
242		-	“(C) Section 28:2A-407 applies to the promises of the lessee in a
243		-	finance lease to the extent the promises are consideration for the right to possession and use
244		-	of the leased goods; and
245		-	“(2) If the lease-of-goods aspects predominate, this article applies to the
246		-	transaction, but does not preclude application in appropriate circumstances of other law to
247		-	aspects of the lease which do not relate to the lease of goods.”.
248		-	(2) Section 28:2A-103(a) is amended by adding a new paragraph (8A) to read
249		-	as follows:
250		-	“(8A) “Hybrid lease” means a single transaction involving a lease of goods
251		-	and:
252		-	“(A) The provision of services;
253		-	“(B) A sale of other goods; or
254		-	“(C) A sale, lease, or license of property other than goods.”.
255		-	(3) Section 28:2A-107 is amended by striking the phrase “written waiver or
256		-	renunciation signed and” and inserting the phrase “waiver or renunciation in a signed record”
257		-	in its place.
258		-	(4) Section 28:2A-201 is amended as follows:
259		-	(A) Subsection (a)(2) is amended by striking the word “writing” and
260		-	inserting the word “record” in its place.”
261		-	(B) Subsection (c) is amended by striking the word “writing” both
262		-	times it appears and inserting the word “record” in its place.
263		-	(C) Subsection (e)(1) is amended by striking the word “writing” and
264		-	inserting the word “record” in its place.”
265		-	(5) Section 28:2A-202 is amended as follows:
266		-	(A) The section heading is amended by striking the word “written”.
267		-	(B) The lead-in sentence is amended by striking the word “writing” and
268		-	inserting the word “record” in its place.
269		-	(C) Paragraph (2) is amended by striking the word “writing” and
270		-	inserting the word “record” in its place.
271		-	(6) Section 28:2A-203 is amended by striking the word “writing” both times it
272		-	appears and inserting the word “record” in its place.
273		-	(7) Section 28:2A-205 is amended by striking the word “writing” and inserting
274		-	the word “record” in its place.
275		-	(8) Section 28:2A-208(b) is amended by striking the word “writing” and
276		-	inserting the word “record” in its place.
277		-	(e) Article 3 is amended as follows: ENROLLED ORIGINAL
278		-
	148	+	includes a protected series, however denominated, of an entity, if the protected series is 111
	149	+	established under law, other than this subtitle, that limits, or limits if conditions specified under 112
	150	+	the law are satisfied, the ability of a creditor of the entity or of any other protected series of the 113
	151	+	entity to satisfy a claim from assets of the protected series.” 114
	152	+	(G) Paragraph (36) is amended by to read as follows: 115
	153	+	“(36) “Send”, in connection with a record or notification means: 116
	154	+	“(A) To deposit in the mail, or deliver for transmission, or transmit by any other 117
	155	+	usual means of communication, with postage or cost of transmission provided for, addressed to 118
	156	+	any address reasonable under the circumstances; or 119
	157	+	“(B) To cause the record or notification to be received within the time it would 120
	158	+	have been received if properly sent under subparagraph (A).” 121
	159	+	(H) Paragraph (37) is amended by to read as follows: 122
	160	+	“(37)(A) “Sign” means, with present intent to authenticate or adopt a record: 123
	161	+	“(i) To execute or adopt a tangible symbol; or 124
	162	+	“(ii) To attach to or logically associate with the record an electronic 125
	163	+	symbol, sound, or process. 126
	164	+	“(B) “Signed”, “signing”, and “signature” have corresponding meanings.” 127
	165	+	(2) Section 28:1-204 is amended by deleting the phrase “Articles 3, 4, and 5” and 128
	166	+	inserting the phrase “articles 3, 4, 5, and 12” in its place. 129
	167	+	(3) Section 28:1-301(c) is amended as follows: 130 ENGROSSED ORIGINAL
279	168
280	169
281	170
282	171
283	172		7
284	173
285		-	(1) Section 28:3-104(a)(3) is amended to read as follows:
286		-	“(3) Does not state any other undertaking or instruction by the person
287		-	promising or ordering payment to do any act in addition to the payment of money, but the
288		-	promise or order may contain (i) an undertaking or power to give, maintain, or protect
289		-	collateral to secure payment, (ii) an authorization or power to the holder to confess judgment
290		-	or realize on or dispose of collateral, (iii) a waiver of the benefit of any law intended for the
291		-	advantage or protection of an obligor, (iv) a term that specifies the law that governs the
292		-	promise or order, or (v) an undertaking to resolve in a specified forum a dispute concerning
293		-	the promise or order.”.
294		-	(2) Section 28:3-105(a) is amended to read as follows:
295		-	“(a) “Issue” means:
296		-	“(1) The first delivery of an instrument by the maker or drawer, whether to a
297		-	holder or non-holder, for the purpose of giving rights on the instrument to any person; or
298		-	“(2) If agreed by the payee, the first transmission by the drawer to the payee of
299		-	an image of an item and information derived from the item that enables the depositary bank
300		-	to collect the item by transferring or presenting under federal law an electronic check.”.
301		-	(3) Section 28:3-401(b) is repealed.
302		-	(4) Section 28:3-604 is amended as follows:
303		-	(A) Subsection (a) is amended by adding a new sentence at the end to
304		-	read as follows: “The obligation of a party to pay a check is not discharged solely by
305		-	destruction of the check in connection with a process in which information is extracted from
306		-	the check and an image of the check is made and, subsequently, the information and image
307		-	are transmitted for payment.”.
308		-	(B) Subsection (c) is repealed.
309		-	(f) Article 4A is amended as follows:
310		-	(1) Section 28:4A-103(a)(3) is amended by striking the phrase “,
311		-	electronically, or in writing” and inserting the phrase “or in a record” in its place.
312		-	(2) Section 28:4A-201 is amended to read as follows:
313		-	““Security procedure” means a procedure established by agreement of a customer and
314		-	a receiving bank for the purpose of (i) verifying that a payment order or communication
315		-	amending or cancelling a payment order is that of the customer, or (ii) detecting error in the
316		-	transmission or the content of the payment order or communication. A security procedure
317		-	may impose an obligation on the receiving bank or the customer and may require the use of
318		-	algorithms or other codes, identifying words, numbers, symbols, sounds, biometrics,
319		-	encryption, callback procedures, or similar security devices. Comparison of a signature on a
320		-	payment order or communication with an authorized specimen signature of the customer or
321		-	requiring a payment order to be sent from a known email address, Internet Protocol address,
322		-	or telephone number is not by itself a security procedure.”.
323		-	(3) Section 28:4A-202 is amended as follows: ENROLLED ORIGINAL
324		-
	174	+	(A) Paragraph (7) is amended by striking the period at the end and 131
	175	+	inserting a semicolon in its place; and 132
	176	+	(B) A new paragraph (8) is added to read as follows: 133
	177	+	“(8) Section 28:12-107.” 134
	178	+	(4) Section 28:1-306 is amended by striking the phrase “an authenticated” and 135
	179	+	inserting the phrase “a signed” in its place. 136
	180	+	(c) Article 2 is amended as follows: 137
	181	+	(1) Section 28:2-102 is amended to read as follows: 138
	182	+	“§ 28:2-102. Scope; certain security and other transactions excluded from this article. 139
	183	+	“(a) Unless the context otherwise requires, and except as provided in subsection (c) of 140
	184	+	this section, this article applies to transactions in goods and, in the case of a hybrid transaction, it 141
	185	+	applies to the extent provided in subsection (b) of this section. 142
	186	+	“(b) In a hybrid transaction: 143
	187	+	“(1) If the sale-of-goods aspects do not predominate, only the provisions of this 144
	188	+	article that relate primarily to the sale-of-goods aspects of the transaction apply, and the 145
	189	+	provisions that relate primarily to the transaction as a whole do not apply. 146
	190	+	“(2) If the sale-of-goods aspects predominate, this article applies to the transaction 147
	191	+	but does not preclude application in appropriate circumstances of other law to aspects of the 148
	192	+	transaction which do not relate to the sale of goods. 149
	193	+	“(c) This article does not: 150 ENGROSSED ORIGINAL
325	194
326	195
327	196
328	197
329	198		8
330	199
331		-	(A) Subsection (b) is amended to read as follows:
332		-	“(b) If a bank and its customer have agreed that the authenticity of payment orders
333		-	issued to the bank in the name of the customer as sender will be verified pursuant to a
334		-	security procedure, a payment order received by the receiving bank is effective as the order
335		-	of the customer, whether or not authorized, if (i) the security procedure is a commercially
336		-	reasonable method of providing security against unauthorized payment orders, and (ii) the
337		-	bank proves that it accepted the payment order in good faith and in compliance with the
338		-	bank’s obligations under the security procedure and any agreement or instruction of the
339		-	customer, evidenced by a record, restricting acceptance of payment orders issued in the name
340		-	of the customer. The bank is not required to follow an instruction that violates an agreement
341		-	with the customer, evidenced by a record, or notice of which is not received at a time and in
342		-	a manner affording the bank a reasonable opportunity to act on it before the payment order is
343		-	accepted.”.
344		-	(B) Subsection (c) is amended by:
345		-	(i) Striking the word “writing” and inserting the phrase “a
346		-	record” in its place; and
347		-	(ii) Striking the phrase “in compliance with the security
348		-	procedure chosen by the customer” and inserting the phrase “in compliance with the bank’s
349		-	security obligation under the security procedure chosen by the customer” in its place.
350		-	(4) Section 28:4A-203(a)(1) is amended by striking the phrase “written
351		-	agreement” and inserting the phrase “agreement evidenced by a record” in its place.
352		-	(5) Section 28:4A-207(c)(2) is amended by striking the word “writing” and
353		-	inserting the word “record” in its place.
354		-	(6) Section 28:4A-208(b)(2) is amended by striking the word “writing” and
355		-	inserting the word “record” in its place.
356		-	(7) Section 28:4A-210(a) is amended by striking the phrase “, electronically,
357		-	or in writing” and inserting the phrase “or in a record” in its place.
358		-	(8) Section 28:4A-211(a) is amended by striking the phrase “, electronically,
359		-	or in a writing” and inserting the phrase “or in a record” in its place.
360		-	(9) Section 28:4A-305 is amended as follows:
361		-	(A) Subsection (c) is amended by striking the phrase “written
362		-	agreement of the receiving bank” and inserting the phrase “agreement of the receiving bank,
363		-	evidenced by a record” in its place.
364		-	(B) Subsection (d) is amended by striking the phrase “written
365		-	agreement of the receiving bank” and inserting the phrase “agreement of the receiving bank,
366		-	evidenced by a record” in its place.
367		-	(g) Article 5 is amended as follows:
368		-	(1) Section 28:5-104 is amended by striking the phrase “record and is
369		-	authenticated (i) by a signature or (ii) in accordance with the agreement of the parties or the ENROLLED ORIGINAL
370		-
	200	+	“(1) Apply to a transaction that, even though in the form of an unconditional 151
	201	+	contract to sell or present sale, operates only to create a security interest; or 152
	202	+	“(2) Impair or repeal a statute regulating sales to consumers, farmers, or other 153
	203	+	specified classes of buyers.” 154
	204	+	(2) Section 28:2-106 is amended as follows: 155
	205	+	(A) The section heading is amended by striking the period at the end and 156
	206	+	inserting the phrase “; hybrid transaction.” in its place. 157
	207	+	(B) A new paragraph (5) is added to read as follows: 158
	208	+	“(5) “Hybrid transaction” means a single transaction involving a sale of goods 159
	209	+	and: 160
	210	+	“(A) The provision of services; 161
	211	+	“(B) A lease of other goods; or 162
	212	+	“(C) A sale, lease, or license of property other than goods.” 163
	213	+	(3) Section 28:2-201 is amended as follows: 164
	214	+	(A) Paragraph (1) is amended to read as follows: 165
	215	+	“(1) Except as otherwise provided in this section a contract for the sale of goods for the 166
	216	+	price of $500 or more is not enforceable by way of action or defense unless there is a record 167
	217	+	sufficient to indicate that a contract for sale has been made between the parties and signed by the 168
	218	+	party against whom enforcement is sought or by the party’s authorized agent or broker. A record 169
	219	+	is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not 170 ENGROSSED ORIGINAL
371	220
372	221
373	222
374	223
375	224		9
376	225
377		-	standard practice referred to in § 28:5-108(e)” and inserting the phrase “signed record” in its
378		-	place.
379		-	(2) Section 28:5-116 is amended as follows:
380		-	(A) Subsection (a) is amended by striking the phrase “or otherwise
381		-	authenticated by the affected parties in the manner provided in § 28:5-104” and inserting the
382		-	phrase “by the affected parties” in its place.
383		-	(B) Subsection (b) is amended by striking the fourth sentence.
384		-	(C) New subsections (b-1) and (b-2) are added to read as follows:
385		-	“(b-1) For the purpose of jurisdiction, choice of law, and recognition of interbranch
386		-	letters of credit, but not enforcement of a judgment, all branches of a bank are considered
387		-	separate juridical entities and a bank is considered to be located at the place where its
388		-	relevant branch is considered to be located under subsection (b-2) of this section.
389		-	“(b-2) A branch of a bank is considered to be located at the address indicated in the
390		-	branch’s undertaking. If more than one address is indicated, the branch is considered to be
391		-	located at the address from which the undertaking was issued.”.
392		-	(h) Article 7 is amended as follows:
393		-	(1) Section 28:7-102(a) is amended as follows:
394		-	(A) Paragraph (10) is repealed.
395		-	(B) Paragraph (12) is repealed.
396		-	(2) Section 28:7-106 is amended to read as follows:
397		-	(A) Subsection (b) is amended as follows:
398		-	(i) The lead-in language is amended as follows:
399		-	(I) Strike the phrase “is deemed to have” and insert the
400		-	word “has” in its place.
401		-	(II) Strike the phrase “assigned in such” and insert the
402		-	phrase “transferred in” in its place.
403		-	(ii) Paragraph (4) is amended by striking the word “assignee”
404		-	and inserting the word “transferee” in its place.
405		-	(B) New subsections (c), (d), (e), (f), (g), (h), and (i) are added to read
406		-	as follows:
407		-	“(c) A system satisfies subsection (a) of this section, and a person has control of an
408		-	electronic document of title, if an authoritative electronic copy of the document, a record
409		-	attached to or logically associated with the electronic copy, or a system in which the
410		-	electronic copy is recorded:
411		-	“(1) Enables the person readily to identify each electronic copy as either an
412		-	authoritative copy or a non-authoritative copy;
413		-	“(2) Enables the person readily to identify itself in any way, including by
414		-	name, identifying number, cryptographic key, office, or account number, as the person to
415		-	which each authoritative electronic copy was issued or transferred; and ENROLLED ORIGINAL
416		-
	226	+	enforceable under this subsection beyond the quantity of goods shown in the record.” 171
	227	+	(B) Paragraph (2) is amended to read as follows: 172
	228	+	“(2) Between merchants if within a reasonable time a record in confirmation of the 173
	229	+	contract and sufficient against the sender is received and the party receiving it has reason to 174
	230	+	know its contents, it satisfies the requirements of subsection (1) of this section against the party 175
	231	+	unless notice in a record of objection to its contents is given within 10 days after it is received.” 176
	232	+	(4) Section 28:2-202 is amended as follows: 177
	233	+	(A) The section heading is amended by striking the word “written”. 178
	234	+	(B) Subsection (b) is amended by striking the word “writing” and inserting 179
	235	+	the word “record” in its place. 180
	236	+	(5) Section 28:2-203 is amended by striking the word “writing” both places it 181
	237	+	appears and inserting the word “record” in its place. 182
	238	+	(6) Section 28:2-205 is amended by striking the word “writing” and inserting the 183
	239	+	word “record” in its place. 184
	240	+	(7) Section 28:209(2) is amended by striking the word “writing” and inserting the 185
	241	+	phrase “writing or other signed record” in its place. 186
	242	+	(d) Article 2A is amended as follows: 187
	243	+	(1) Section 28:2A-102 is amended to read as follows: 188
	244	+	“28:2A-102. Scope. 189
	245	+	“(a) This article applies to any transaction, regardless of form, that creates a lease; in 190 ENGROSSED ORIGINAL
417	246
418	247
419	248
420	249
421	250		10
422	251
423		-	“(3) Gives the person exclusive power, subject to subsection (d) of this
424		-	section, to:
425		-	“(A) Prevent others from adding or changing the person to which each
426		-	authoritative electronic copy has been issued or transferred; and
427		-	“(B) Transfer control of each authoritative electronic copy.
428		-	“(d) Subject to subsection (e) of this section, a power is exclusive under subsection
429		-	(c)(3) of this section even if:
430		-	“(1) The authoritative electronic copy, a record attached to or logically
431		-	associated with the authoritative electronic copy, or a system in which the authoritative
432		-	electronic copy is recorded limits the use of the document of title or has a protocol that is
433		-	programmed to cause a change, including a transfer or loss of control; or
434		-	“(2) The power is shared with another person.
435		-	“(e) A power of a person is not shared with another person under subsection (d)(2) of
436		-	this section and the person’s power is not exclusive if:
437		-	“(1) The person can exercise the power only if the power also is exercised by
438		-	the other person; and
439		-	“(2) The other person:
440		-	“(A) Can exercise the power without exercise of the power by the
441		-	person; or
442		-	“(B) Is the transferor to the person of an interest in the document of
443		-	title.
444		-	“(f) If a person has the powers specified in subsection (c)(3) of this section, those
445		-	powers are presumed to be exclusive.
446		-	“(g) A person has control of an electronic document of title if another person, other
447		-	than the transferor to the person of an interest in the document:
448		-	“(1) Has control of the document and acknowledges that it has control on
449		-	behalf of the person; or
450		-	“(2) Obtains control of the document after having acknowledged that it will
451		-	obtain control of the document on behalf of the person.
452		-	“(h) A person that has control under this section is not required to acknowledge that it
453		-	has control on behalf of another person.
454		-	“(i) If a person acknowledges that it has or will obtain control on behalf of another
455		-	person, unless the person otherwise agrees or law other than this article or Article 9
456		-	otherwise provides, the person does not owe any duty to the other person and is not required
457		-	to confirm the acknowledgment to any other person.”.
458		-	(i) Article 8 is amended as follows:
459		-	(1) Section 28:8-102 is amended as follows:
460		-	(A) Subsection (a)(6)(A) is amended by striking the word “writing” and
461		-	inserting the word “record” in its place. ENROLLED ORIGINAL
462		-
	252	+	the case of a hybrid lease, this article applies to the extent provided in subsection (b) of this 191
	253	+	section. 192
	254	+	“(b) In a hybrid lease: 193
	255	+	“(1) If the lease-of-goods aspects do not predominate: 194
	256	+	“(A) Only the provisions of this article which relate primarily to the 195
	257	+	lease-of-goods aspects of the transaction apply, and the provisions that relate primarily to the 196
	258	+	transaction as a whole do not apply; 197
	259	+	“(B) Section 28:2A-209 applies if the lease is a finance lease; and 198
	260	+	“(C) Section 28:2A-407 applies to the promises of the lessee in a 199
	261	+	finance lease to the extent the promises are consideration for the right to possession and use 200
	262	+	of the leased goods; and 201
	263	+	“(2) If the lease-of-goods aspects predominate, this article applies to the 202
	264	+	transaction, but does not preclude application in appropriate circumstances of other law to 203
	265	+	aspects of the lease which do not relate to the lease of goods.” 204
	266	+	(2) Section 28:2A-103(a) is amended by adding a new paragraph (8A) to read 205
	267	+	as follows: 206
	268	+	“(8A) “Hybrid lease” means a single transaction involving a lease of goods and: 207
	269	+	“(A) The provision of services; 208
	270	+	“(B) A sale of other goods; or 209
	271	+	“(C) A sale, lease, or license of property other than goods.” 210 ENGROSSED ORIGINAL
463	272
464	273
465	274
466	275
467	276		11
468	277
469		-	(B) Subsection (b) is amended to read as follows:
470		-	“(b) The following definitions in this article and other articles apply to this article:
471		-	"(1) “Appropriate person”. § 28:8-107.
472		-	“(2) “Control”. § 28:8-106.
473		-	“(3) “Controllable account”. § 28:9-102.
474		-	“(4) “Controllable electronic record”. § 28:12-102.
475		-	“(5) “Controllable payment intangible”. § 28:9-102.
476		-	“(6) “Delivery”. § 28:8-28:8-301.
477		-	“(7) “Investment company security”. § 28:8-103.
478		-	“(8) “Issuer”. § 28:8-201.
479		-	“(9) “Overissue”. § 28:8-210.
480		-	“(10) “Protected purchaser”. § 28:8-303.
481		-	“(11) “Securities account”. § 28:8-501.”.
482		-	(2) Section 28:8-103 is amended by adding a new subsection (h) to read as
483		-	follows:
484		-	“(h) A controllable account, controllable electronic record, or controllable payment
485		-	intangible is not a financial asset unless § 28:8-102(a)(9)(A)(iii) applies.”.
486		-	(3) Section 28:8-106 is amended as follows:
487		-	(A) Subsection (d)(3) is amended to read as follows:
488		-	“(3) Another person, other than the transferor to the purchaser of an interest in
489		-	the security entitlement:
490		-	“(A) Has control of the security entitlement and acknowledges that it
491		-	has control on behalf of the purchaser; or
492		-	“(B) Obtains control of the security entitlement after having
493		-	acknowledged that it will obtain control of the security entitlement on behalf of the
494		-	purchaser.”.
495		-	(B) New subsections (h) and (i) are added to read as follows:
496		-	“(h) A person that has control under this section is not required to acknowledge that it has
497		-	control on behalf of a purchaser.
498		-	“(i) If a person acknowledges that it has or will obtain control on behalf of a purchaser,
499		-	unless the person otherwise agrees or law other than this article or Article 9 otherwise provides,
500		-	the person does not owe any duty to the purchaser and is not required to confirm the
501		-	acknowledgment to any other person.”.
502		-	(4) Section 28:8-110 is amended by adding a new subsection (g) to read as
503		-	follows:
504		-	“(g) The local law of the issuer’s jurisdiction or the securities intermediary’s
505		-	jurisdiction governs a matter or transaction specified in subsection (a) or (b) of this section,
506		-	even if the matter or transaction does not bear any relation to the jurisdiction.”.
507		-	(5) Section 28:8-303(b) is amended by striking the phrase “In addition to ENROLLED ORIGINAL
508		-
	278	+	(3) Section 28:2A-107 is amended by striking the phrase “written waiver or 211
	279	+	renunciation signed and” and inserting the phrase “waiver or renunciation in a signed record” 212
	280	+	in its place. 213
	281	+	(4) Section 28:2A-201 is amended as follows: 214
	282	+	(A) Subsection (a)(2) is amended by striking the word “writing” and 215
	283	+	inserting the word “record” in its place.” 216
	284	+	(B) Subsection (c) is amended by striking the word “writing” both time 217
	285	+	it appears and inserting the word “record” in its place. 218
	286	+	(C) Subsection (e)(1) is amended by striking the word “writing” and 219
	287	+	inserting the word “record” in its place.” 220
	288	+	(5) Section 28:2A-202 is amended as follows: 221
	289	+	(A) The section heading is amended by striking the word “written”. 222
	290	+	(B) The lead-in sentence is amended by striking the word “writing” and 223
	291	+	inserting the word “record” in its place. 224
	292	+	(C) Paragraph (2) is amended by striking the word “writing” and 225
	293	+	inserting the word “record” in its place. 226
	294	+	(6) Section 28:2A-203 is amended by striking the word “writing” both times it 227
	295	+	appears and inserting the word “record” in its place. 228
	296	+	(7) Section 28:2A-205 is amended by striking the word “writing” and inserting 229
	297	+	the word “record” in its place. 230 ENGROSSED ORIGINAL
509	298
510	299
511	300
512	301
513	302		12
514	303
515		-	acquiring the rights of a purchaser, a” and inserting the word “A” in its place.
516		-	(j) Article 9 is amended as follows:
517		-	(1) Section 28:9-102 is amended as follows:
518		-	(A) Subsection (a) is amended as follows:
519		-	(i) Paragraph (2) is amended to read as follows:
520		-	“(2) “Account”, except as used in “account for”, “account statement”,
521		-	“account to”, “commodity account” in paragraph (14) of this subsection, “customer’s
522		-	account”, “deposit account” in paragraph (29) of this subsection, “on account of”, and
523		-	“statement of account”, means a right to payment of a monetary obligation, whether or not
524		-	earned by performance, (i) for property that has been or is to be sold, leased, licensed,
525		-	assigned, or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
526		-	policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be
527		-	incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a
528		-	charter or other contract, (vii) arising out of the use of a credit or charge card or information
529		-	contained on or for use with the card, or (viii) as winnings in a lottery or other game of
530		-	chance operated or sponsored by a State, governmental unit of a State, or person licensed or
531		-	authorized to operate the game by a State or governmental unit of a State. The term includes
532		-	controllable accounts and health-care-insurance receivables. The term does not include (i)
533		-	chattel paper, (ii) commercial tort claims, (iii) deposit accounts, (iv) investment property, (v)
534		-	letter-of-credit rights or letters of credit, (vi) rights to payment for money or funds advanced
535		-	or sold, other than rights arising out of the use of a credit or charge card or information
536		-	contained on or for use with the card, or (vii) rights to payment evidenced by an
537		-	instrument.”.
538		-	(ii) Paragraph (3) is amended by striking the phrase “instrument
539		-	constitutes part of” and inserting the phrase “negotiable instrument evidences” in its place.
540		-	(iii) Paragraph (4)(A) is amended by striking the word
541		-	“Authenticated” and inserting the word “Signed” in its place.
542		-	(iv) Paragraph (7) is repealed.
543		-	(v) New paragraphs (7A) and (7B) are added to read as follows:
544		-	“(7A) “Assignee”, except as used in “assignee for benefit of creditors”, means
545		-	a person (i) in whose favor a security interest that secures an obligation is created or
546		-	provided for under a security agreement, whether or not the obligation is outstanding or (ii)
547		-	to which an account, chattel paper, payment intangible, or promissory note has been sold.
548		-	The term includes a person to which a security interest has been transferred by a secured
549		-	party.
550		-	“(7B) “Assignor” means a person that (i) under a security agreement creates or
551		-	provides for a security interest that secures an obligation or (ii) sells an account, chattel
552		-	paper, payment intangible, or promissory note. The term includes a secured party that has
553		-	transferred a security interest to another person.”. ENROLLED ORIGINAL
554		-
	304	+	(8) Section 28:2A-208(b) is amended by striking the word “writing” and 231
	305	+	inserting the word “record” in its place. 232
	306	+	(e) Article 3 is amended as follows: 233
	307	+	(1) Section 28:3-104(a)(3) is amended to read as follows: 234
	308	+	“(3) Does not state any other undertaking or instruction by the person 235
	309	+	promising or ordering payment to do any act in addition to the payment of money, but the 236
	310	+	promise or order may contain (i) an undertaking or power to give, maintain, or protect 237
	311	+	collateral to secure payment, (ii) an authorization or power to the holder to confess judgment 238
	312	+	or realize on or dispose of collateral, (iii) a waiver of the benefit of any law intended for the 239
	313	+	advantage or protection of an obligor, (iv) a term that specifies the law that governs the 240
	314	+	promise or order, or (v) an undertaking to resolve in a specified forum a dispute concerning 241
	315	+	the promise or order.” 242
	316	+	(2) Section 28:3-105(a) is amended to read as follows: 243
	317	+	“(a) “Issue” means: 244
	318	+	“(1) The first delivery of an instrument by the maker or drawer, whether to a 245
	319	+	holder or non-holder, for the purpose of giving rights on the instrument to any person; or 246
	320	+	“(2) If agreed by the payee, the first transmission by the drawer to the payee of 247
	321	+	an image of an item and information derived from the item that enables the depositary bank 248
	322	+	to collect the item by transferring or presenting under federal law an electronic check.” 249
	323	+	(3) Section 28:3-401(b) is repealed. 250 ENGROSSED ORIGINAL
555	324
556	325
557	326
558	327
559	328		13
560	329
561		-	(vi) Paragraph (11) is amended to read as follows:
562		-	“(11)(A) “Chattel paper” means:
563		-	“(i) A right to payment of a monetary obligation secured by
564		-	specific goods, if the right to payment and security agreement are evidenced by a record; or
565		-	“(ii) A right to payment of a monetary obligation owed by a
566		-	lessee under a lease agreement with respect to specific goods and a monetary obligation
567		-	owed by the lessee in connection with the transaction giving rise to the lease, if:
568		-	“(I) The right to payment and lease agreement are
569		-	evidenced by a record; and
570		-	“(II) The predominant purpose of the transaction giving
571		-	rise to the lease was to give the lessee the right to possession and use of the goods.
572		-	“(B) The term does not include a right to payment arising out of a
573		-	charter or other contract involving the use or hire of a vessel or a right to payment arising out
574		-	of the use of a credit or charge card or information contained on or for use with the card.”.
575		-	(vii) New paragraphs (27A) and (27B) are added to read as
576		-	follows:
577		-	“(27A) “Controllable account” means an account evidenced by a controllable
578		-	electronic record that provides that the account debtor undertakes to pay the person that has
579		-	control under § 28:12-105 of the controllable electronic record.
580		-	“(27B) “Controllable payment intangible” means a payment intangible
581		-	evidenced by a controllable electronic record that provides that the account debtor undertakes
582		-	to pay the person that has control under §28:12-105 of the controllable electronic record.”.
583		-	(viii) Paragraph (31) is repealed.
584		-	(ix) A new paragraph (31A) is added to read as follows:
585		-	“(31A) “Electronic money” means money in an electronic form.”
586		-	(x) Paragraph (42) is amended by striking the second sentence
587		-	and inserting the sentence “The term includes controllable electronic records, payment
588		-	intangibles, and software.” in its place.
589		-	(xi) Paragraph (47) is amended striking the period at the end and
590		-	inserting the phrase “, or (iv) writings that evidence chattel paper.” in its place.
591		-	(xii) A new paragraph (54A) is added to read as follows:
592		-	“(54A) “Money” has the meaning in §28:1-201(b)(24), but does not include (i)
593		-	a deposit account or (ii) money in an electronic form that cannot be subjected to control
594		-	under §28:9-105A.”.
595		-	(xiii) Paragraph (61) is amended by adding a new sentence at
596		-	the end to read as follows: “The term includes a controllable payment intangible.”.
597		-	(xiv) Paragraph (66) is amended by striking the word
598		-	“authenticated” and inserting the word “signed” in its place.
599		-	(xv) Paragraph (75) is repealed. ENROLLED ORIGINAL
600		-
	330	+	(4) Section 28:3-604 is amended as follows: 251
	331	+	(A) Subsection (a) is amended by adding a new sentence at the end to 252
	332	+	read as follows: “The obligation of a party to pay a check is not discharged solely by 253
	333	+	destruction of the check in connection with a process in which information is extracted from 254
	334	+	the check and an image of the check is made and, subsequently, the information and image 255
	335	+	are transmitted for payment.” 256
	336	+	(B) Subsection (c) is repealed. 257
	337	+	(f) Article 4A is amended as follows: 258
	338	+	(1) Section 28:4A-103(a)(3) is amended by striking the phrase “, 259
	339	+	electronically, or in writing” and inserting the phrase “or in a record” in its place. 260
	340	+	(2) Section 28:4A-201 is amended to read as follows: 261
	341	+	““Security procedure” means a procedure established by agreement of a customer and 262
	342	+	a receiving bank for the purpose of (i) verifying that a payment order or communication 263
	343	+	amending or cancelling a payment order is that of the customer, or (ii) detecting error in the 264
	344	+	transmission or the content of the payment order or communication. A security procedure 265
	345	+	may impose an obligation on the receiving bank or the customer and may require the use of 266
	346	+	algorithms or other codes, identifying words, or numbers, symbols, sounds, biometrics, 267
	347	+	encryption, callback procedures, or similar security devices. Comparison of a signature on a 268
	348	+	payment order or communication with an authorized specimen signature of the customer or 269
	349	+	requiring a payment order to be sent from a known email address, Internet Protocol address, 270 ENGROSSED ORIGINAL
601	350
602	351
603	352
604	353
605	354		14
606	355
607		-	(xvi) Paragraph (79) is repealed.
608		-	(xvii) A new paragraph (79A) is added to read as follows:
609		-	“(79A) “Tangible money” means money in a tangible form.”.
610		-	(B) Subsection (b) is amended to read as follows:
611		-	“(b) “Control” as provided in § 28:7-106 and the following definitions in other
612		-	articles apply to this article:
613		-	“(1) “Applicant” § 28:5-102.
614		-	“(2) “Beneficiary” § 28:5-102.
615		-	“(3) “Broker” § 28:8-102.
616		-	“(4) “Certificated security” § 28:8-102.
617		-	“(5) “Check” § 28:3-104.
618		-	“(6) “Clearing corporation” § 28:8-102.
619		-	“(7) “Contract for sale” § 28:2-106.
620		-	“(8) “Controllable electronic record”. § 28:12-102.
621		-	“(9) “Customer” § 28:4-104.
622		-	“(10) “Entitlement holder” § 28:8-102.
623		-	“(11) “Financial asset” § 28:8-102.
624		-	“(12) “Holder in due course” § 28:3-302.
625		-	“(13)(A) “Issuer” (with respect to a letter of credit or letter-of-credit right) §
626		-	28:5-102;
627		-	“(B) “Issuer” (with respect to a security) § 28:8-201; and
628		-	“(C) “Issuer” (with respect to documents of title) § 28:7-102.
629		-	“(14) “Lease” § 28:2A-103.
630		-	“(15) “Lease agreement” § 28:2A-103.
631		-	“(16) “Lease contract” § 28:2A-103.
632		-	“(17) “Leasehold interest” § 28:2A-103.
633		-	“(18) “Lessee” § 28:2A-103.
634		-	“(19) “Lessee in ordinary course of business” § 28:2A-103.
635		-	“(20) “Lessor” § 28:2A-103.
636		-	“(21) “Lessor's residual interest” § 28:2A-103.
637		-	“(22) “Letter of credit” § 28:5-102.
638		-	“(23) “Merchant” § 28:2-104.
639		-	“(24) “Negotiable instrument” § 28:3-104.
640		-	“(25) “Nominated person” § 28:5-102.
641		-	“(26) “Note” § 28:3-104.
642		-	“(27) “Proceeds of a letter of credit” § 28:5-114.
643		-	“(28) “Protected purchaser”. § 28:8-303.
644		-	“(29) “Prove” § 28:3-103.
645		-	“(30) “Qualifying purchaser”. § 28:12-102. ENROLLED ORIGINAL
646		-
	356	+	or telephone number is not by itself a security procedure.” 271
	357	+	(3) Section 28:4A-202 is amended as follows: 272
	358	+	(A) Subsection (b) is amended to read as follows: 273
	359	+	“(b) If a bank and its customer have agreed that the authenticity of payment orders 274
	360	+	issued to the bank in the name of the customer as sender will be verified pursuant to a 275
	361	+	security procedure, a payment order received by the receiving bank is effective as the order 276
	362	+	of the customer, whether or not authorized, if (i) the security procedure is a commercially 277
	363	+	reasonable method of providing security against unauthorized payment orders, and (ii) the 278
	364	+	bank proves that it accepted the payment order in good faith and in compliance with the 279
	365	+	bank’s obligations under the security procedure and any agreement or instruction of the 280
	366	+	customer, evidenced by a record, restricting acceptance of payment orders issued in the name 281
	367	+	of the customer. The bank is not required to follow an instruction that violates an agreement 282
	368	+	with the customer, evidenced by a record, or notice of which is not received at a time and in 283
	369	+	a manner affording the bank a reasonable opportunity to act on it before the payment order is 284
	370	+	accepted.” 285
	371	+	(B) Subsection (c) is amended by: 286
	372	+	(i) Striking the word “writing” and inserting the phrase “a 287
	373	+	record” in its place; and 288
	374	+	(ii) Striking the phrase “in compliance with the security 289
	375	+	procedure chosen by the customer” and inserting the phrase “in compliance with the bank’s 290 ENGROSSED ORIGINAL
647	376
648	377
649	378
650	379
651	380		15
652	381
653		-	“(31) “Sale” § 28:2-106.
654		-	“(32) “Securities account” § 28:8-501.
655		-	“(33) “Securities intermediary” § 28:8-102.
656		-	“(34) “Security” § 28:8-102.
657		-	“(35) “Security certificate” § 28:8-102.
658		-	“(36) “Security entitlement” § 28:8-102.
659		-	“(37) “Uncertificated security” §§ 28:9-104.”.
660		-	(2) Section 28:9-104(a) is amended as follows:
661		-	(A) Paragraph (2) is amended as follows:
662		-	(i) Strike the phrase “an authenticated” and insert the phrase “a
663		-	signed” in its place.
664		-	(ii) Strike the word “or”.
665		-	(B) Paragraph (3) is amended by striking the period and inserting the
666		-	phrase “; or” in its place.
667		-	(C) A new paragraph (4) is added to read as follows:
668		-	“(4) Another person, other than the debtor:
669		-	“(A) Has control of the deposit account and acknowledges that it has
670		-	control on behalf of the secured party; or
671		-	“(B) Obtains control of the deposit account after acknowledged that it
672		-	will obtain control of the deposit account on behalf of the secured party.”.
673		-	(3) Section 28:9-105 is amended to read as follows:
674		-	“§ 28:9-105. Control of electronic copy of record evidencing chattel paper.
675		-	“(a) A purchaser has control of an authoritative electronic copy of a record evidencing
676		-	chattel paper if a system employed for evidencing the assignment of interests in the chattel
677		-	paper reliably establishes the purchaser as the person to which the authoritative electronic
678		-	copy was assigned.
679		-	“(b) A system satisfies subsection (a) if the record or records evidencing the chattel
680		-	paper are created, stored, and assigned in a manner that:
681		-	“(1) A single authoritative copy of the record or records exists which is
682		-	unique, identifiable, and, except as otherwise provided in paragraphs (4), (5), and (6) of this
683		-	section, unalterable;
684		-	“(2) The authoritative copy identifies the purchaser as the assignee of the
685		-	record or records;
686		-	“(3) The authoritative copy is communicated to and maintained by the
687		-	purchaser or its designated custodian;
688		-	“(4) Copies or amendments that add or change an identified assignee of the
689		-	authoritative copy can be made only with the consent of the purchaser;
690		-	“(5) Each copy of the authoritative copy and any copy of a copy is readily
691		-	identifiable as a copy that is not the authoritative copy; and ENROLLED ORIGINAL
692		-
	382	+	security obligation under the security procedure chosen by the customer” 291
	383	+	(4) Section 28:4A-203(a)(1) is amended by striking the phrase “written 292
	384	+	agreement” and inserting the phrase “agreement evidenced by a record” in its place. 293
	385	+	(5) Section 28:4A-207(c)(2) is amended by striking the word “writing” and 294
	386	+	inserting the word “record” in its place. 295
	387	+	(6) Section 28:4A-208(b)(2) is amended by striking the word “writing” and 296
	388	+	inserting the word “record” in its place. 297
	389	+	(7) Section 28:4A-210(a) is amended by striking the phrase “, electronically, 298
	390	+	or in writing” and inserting the phrase “or in a record” in its place. 299
	391	+	(8) Section 28:4A-211(a) is amended by striking the phrase “, electronically, 300
	392	+	or in a writing” and inserting the phrase “or in a record” in its place. 301
	393	+	(9) Section 28:4A-305 is amended as follows: 302
	394	+	(A) Subsection (c) is amended by striking the phrase “written 303
	395	+	agreement of the receiving bank” and inserting the phrase “agreement of the receiving bank, 304
	396	+	evidenced by a record”. 305
	397	+	(B) Subsection (d) is amended by striking the phrase “written 306
	398	+	agreement of the receiving bank” and inserting the phrase “agreement of the receiving bank, 307
	399	+	evidenced by a record”. 308
	400	+	(g) Article 5 is amended as follows: 309
	401	+	(1) Section 28:5-104 is amended by striking the phrase “record and is 310 ENGROSSED ORIGINAL
693	402
694	403
695	404
696	405
697	406		16
698	407
699		-	“(6) Any amendment of the authoritative copy is readily identifiable as
700		-	authorized or unauthorized.
701		-	“(c) A system satisfies subsection (a) of this section, and a purchaser has control of an
702		-	authoritative electronic copy of a record evidencing chattel paper, if the electronic copy, a
703		-	record attached to or logically associated with the electronic copy, or a system in which the
704		-	electronic copy is recorded:
705		-	“(1) Enables the purchaser readily to identify each electronic copy as either an
706		-	authoritative copy or a non-authoritative copy;
707		-	“(2) Enables the purchaser readily to identify itself in any way, including by
708		-	name, identifying number, cryptographic key, office, or account number, as the assignee of
709		-	the authoritative electronic copy; and
710		-	“(3) Gives the purchaser exclusive power, subject to subsection (d) of this
711		-	section, to:
712		-	“(A) Prevent others from adding or changing an identified assignee of
713		-	the authoritative electronic copy; and
714		-	“(B) Transfer control of the authoritative electronic copy.
715		-	“(d) Subject to subsection (e) of this section, a power is exclusive under subsection
716		-	(c)(3)(A) and (B) of this section even if:
717		-	“(1) The authoritative electronic copy, a record attached to or logically
718		-	associated with the authoritative electronic copy, or a system in which the authoritative
719		-	electronic copy is recorded limits the use of the authoritative electronic copy or has a
720		-	protocol programmed to cause a change, including a transfer or loss of control; or
721		-	“(2) The power is shared with another person.
722		-	“(e) A power of a purchaser is not shared with another person under subsection (d)(2)
723		-	of this section and the purchaser’s power is not exclusive if:
724		-	“(1) The purchaser can exercise the power only if the power also is exercised
725		-	by the other person; and
726		-	“(2) The other person:
727		-	“(A) Can exercise the power without exercise of the power by the
728		-	purchaser; or
729		-	“(B) Is the transferor to the purchaser of an interest in the chattel paper.
730		-	“(f) If a purchaser has the powers specified in subsection (c)(3)(A) and (B) of this
731		-	section, the powers are presumed to be exclusive.
732		-	“(g) A purchaser has control of an authoritative electronic copy of a record
733		-	evidencing chattel paper if another person, other than the transferor to the purchaser of an
734		-	interest in the chattel paper:
735		-	“(1) Has control of the authoritative electronic copy and acknowledges that it
736		-	has control on behalf of the purchaser; or
737		-	“(2) Obtains control of the authoritative electronic copy after having ENROLLED ORIGINAL
738		-
	408	+	authenticated (i) by a signature or (ii) in accordance with the agreement of the parties or the 311
	409	+	standard practice referred to in § 28:5-108(e)” and inserting the phrase “signed record” in its 312
	410	+	place. 313
	411	+	(2) Section 28:5-116 is amended as follows: 314
	412	+	(A) Subsection (a) is amended by striking the phrase “or otherwise 315
	413	+	authenticated by the affected parties in the manner provided in § 28:5-104” and inserting the 316
	414	+	phrase “by the affected parties” in its place. 317
	415	+	(B) Subsection (b) is amended by striking the fourth sentence. 318
	416	+	(C) A new subsection (b-1) is added to read as follows: 319
	417	+	“(b-1) For the purpose of jurisdiction, choice of law, and recognition of interbranch 320
	418	+	letters of credit, but not enforcement of a judgment, all branches of a bank are considered 321
	419	+	separate juridical entities and a bank is considered to be located at the place where its 322
	420	+	relevant branch is considered to be located under subsection (b-2) of this section.”. 323
	421	+	(F) A new subsection (b-2) is added to read as follows: 324
	422	+	“(b-2) A branch of a bank is considered to be located at the address indicated in the 325
	423	+	branch’s undertaking. If more than one address is indicated, the branch is considered to be 326
	424	+	located at the address from which the undertaking was issued.”. 327
	425	+	(h) Article 7 is amended as follows: 328
	426	+	(1) Section 28:7-102(a) is amended as follows: 329
	427	+	(A) Paragraph (10) is repealed. 330 ENGROSSED ORIGINAL
739	428
740	429
741	430
742	431
743	432		17
744	433
745		-	acknowledged that it will obtain control of the electronic copy on behalf of the purchaser.”.
746		-	(4) A new section 28:9-105A is added to read as follows:
747		-	“§ 28:9-105A. Control of electronic money.
748		-	“(a) A person has control of electronic money if:
749		-	“(1) The electronic money, a record attached to or logically associated with the
750		-	electronic money, or a system in which the electronic money is recorded gives the person:
751		-	“(A) Power to avail itself of substantially all the benefit from the
752		-	electronic money; and
753		-	“(B) Exclusive power, subject to subsection (b) of this section, to:
754		-	“(i) Prevent others from availing themselves of substantially all
755		-	the benefit from the electronic money; and
756		-	“(ii) Transfer control of the electronic money to another person
757		-	or cause another person to obtain control of other electronic money as a result of the transfer
758		-	of the electronic money; and
759		-	“(2) The electronic money, a record attached to or logically associated with the
760		-	electronic money, or a system in which the electronic money is recorded enables the person
761		-	readily to identify itself in any way, including by name, identifying number, cryptographic
762		-	key, office, or account number, as having the powers under paragraph (1) of this subsection.
763		-	“(b) Subject to subsection (c) of this section, a power is exclusive under subsection
764		-	(a)(1)(B)(i) and (ii) of this section even if:
765		-	“(1) The electronic money, a record attached to or logically associated with the
766		-	electronic money, or a system in which the electronic money is recorded limits the use of the
767		-	electronic money or has a protocol programmed to cause a change, including a transfer or
768		-	loss of control; or
769		-	“(2) The power is shared with another person.
770		-	“(c) A power of a person is not shared with another person under subsection (b)(2) of
771		-	this section and the person’s power is not exclusive if:
772		-	“(1) The person can exercise the power only if the power also is exercised by
773		-	the other person; and
774		-	“(2) The other person:
775		-	“(A) Can exercise the power without exercise of the power by the
776		-	person; or
777		-	“(B) Is the transferor to the person of an interest in the electronic
778		-	money.
779		-	“(d) If a person has the powers specified in subsection (a)(1)(B)(i) and (ii) of this
780		-	section, the powers are presumed to be exclusive.
781		-	“(e) A person has control of electronic money if another person, other than the
782		-	transferor to the person of an interest in the electronic money:
783		-	“(1) Has control of the electronic money and acknowledges that it has control ENROLLED ORIGINAL
784		-
	434	+	(B) Paragraph (12) is repealed. 331
	435	+	(2) Section 28:7-106 is amended to read as follows: 332
	436	+	(A) Subsection (b) is amended as follows: 333
	437	+	(i) The lead-in language is amended as follows: 334
	438	+	(I) Striking the phrase “is deemed to have” and inserting 335
	439	+	the word “has” in its place; and 336
	440	+	(II) striking the phrase “assigned in such” and inserting 337
	441	+	the phrase “transferred in” in its place. 338
	442	+	(ii) Paragraph (4) is amended by striking the word “assignee” 339
	443	+	and inserting the word “transferee” in its place. 340
	444	+	(B) New subsections are added to read as follows: 341
	445	+	“(c) A system satisfies subsection (a) of this section, and a person has control of an 342
	446	+	electronic document of title, if an authoritative electronic copy of the document, a record 343
	447	+	attached to or logically associated with the electronic copy, or a system in which the 344
	448	+	electronic copy is recorded: 345
	449	+	“(1) Enables the person readily to identify each electronic copy as either an 346
	450	+	authoritative copy or a non-authoritative copy; 347
	451	+	“(2) Enables the person readily to identify itself in any way, including by 348
	452	+	name, identifying number, cryptographic key, office, or account number, as the person to 349
	453	+	which each authoritative electronic copy was issued or transferred; and 350 ENGROSSED ORIGINAL
785	454
786	455
787	456
788	457
789	458		18
790	459
791		-	on behalf of the person; or
792		-	“(2) Obtains control of the electronic money after having acknowledged that it
793		-	will obtain control of the electronic money on behalf of the person.”.
794		-	(5) New sections 28:9-107A and 28:9-107B are added to read as follows:
795		-	“§ 28:9-107A. Control of controllable electronic record, controllable account, or
796		-	controllable payment intangible.
797		-	“(a) A secured party has control of a controllable electronic record as provided in
798		-	§ 28:12-105.
799		-	“(b) A secured party has control of a controllable account or controllable payment
800		-	intangible if the secured party has control of the controllable electronic record that evidences
801		-	the controllable account or controllable payment intangible.
802		-	“§ 28:9-107B. No requirement to acknowledge or confirm; no duties.
803		-	“(a) A person that has control under § 28:9-104, § 28:9-105, or § 28:9-105A is not
804		-	required to acknowledge that it has control on behalf of another person.
805		-	“(b) If a person acknowledges that it has or will obtain control on behalf of another
806		-	person, unless the person otherwise agrees or law other than this article otherwise provides,
807		-	the person does not owe any duty to the other person and is not required to confirm the
808		-	acknowledgment to any other person.”.
809		-	(6) Section 28:9-203(b)(3) is amended as follows:
810		-	(A) Subparagraph (A) is amended by striking the word “authenticated”
811		-	and inserting the word “signed” in its place.
812		-	(B) Subparagraph (C) is amended by striking the word “or”.
813		-	(C) Subparagraph (D) is amended to read as follows:
814		-	“(D) The collateral is controllable accounts, controllable electronic
815		-	records, controllable payment intangibles, deposit accounts, electronic documents, electronic
816		-	money, investment property, or letter-of-credit rights, and the secured party has control under
817		-	§ 28:7-106, § 28:9-104, § 28:9-105A, § 28:9-106, § 28:9-107, or § 28:9-107A pursuant to the
818		-	debtor’s security agreement; or”.
819		-	(D) A new subparagraph (E) is added to read as follows:
820		-	“(E) The collateral is chattel paper and the secured party has possession
821		-	and control under § 28:9-314A pursuant to the debtor’s security agreement.”.
822		-	(7) Section 28:9-204 is amended as follows:
823		-	(A) Subparagraph (b) is amended by striking the word “A” the first
824		-	time it appears and inserting the phrase “Subject to subsection (b-1) of this section, a” in its
825		-	place.
826		-	(B) A new subsection (b-1):
827		-	“(b-1) Subsection (b) of this section does not prevent a security interest from
828		-	attaching:
829		-	“(1) To consumer goods as proceeds under § 28:9-315(a) or commingled ENROLLED ORIGINAL
830		-
	460	+	“(3) Gives the person exclusive power, subject to subsection (d) of this 351
	461	+	section, to: 352
	462	+	“(A) Prevent others from adding or changing the person to which each 353
	463	+	authoritative electronic copy has been issued or transferred; and 354
	464	+	“(B) Transfer control of each authoritative electronic copy. 355
	465	+	“(d) Subject to subsection (e) of this section, a power is exclusive under subsection 356
	466	+	(c)(3) of this section even if: 357
	467	+	“(1) The authoritative electronic copy, a record attached to or logically 358
	468	+	associated with the authoritative electronic copy, or a system in which the authoritative 359
	469	+	electronic copy is recorded limits the use of the document of title or has a protocol that is 360
	470	+	programmed to cause a change, including a transfer or loss of control; or 361
	471	+	“(2) The power is shared with another person. 362
	472	+	“(e) A power of a person is not shared with another person under subsection (d)(2) of 363
	473	+	this section and the person’s power is not exclusive if: 364
	474	+	“(1) The person can exercise the power only if the power also is exercised by 365
	475	+	the other person; and 366
	476	+	“(2) The other person: 367
	477	+	“(A) Can exercise the power without exercise of the power by the 368
	478	+	person; or 369
	479	+	“(B) Is the transferor to the person of an interest in the document of 370 ENGROSSED ORIGINAL
831	480
832	481
833	482
834	483
835	484		19
836	485
837		-	goods under § 28:9-336(c);
838		-	“(2) To a commercial tort claim as proceeds under § 28:9-315(a); or
839		-	“(3) Under an after-acquired property clause to property that is proceeds of
840		-	consumer goods or a commercial tort claim.”.
841		-	(8) Section 28:9-207(c) is amended by striking the phrase “§ 28:7-106, § 28:9-
842		-	104, § 28:9-105, § 28:9-106, or § 28:9-107” and inserting the phrase “§ 28:7-106, § 28:9-
843		-	104, § 28:9-105, § 28:9-105A, § 28:9-106, § 28:9-107, or § 28:9-107A” in its place.
844		-	(9) Section 28:9-208(b) is amended as follows:
845		-	(A) Strike the phrase “an authenticated” and insert the phrase “a
846		-	signed” in its place.
847		-	(B) Paragraph (3) is amended to read as follows:
848		-	“(3) A secured party, other than a buyer, having control under § 28:9-105 of an
849		-	authoritative electronic copy of a record evidencing chattel paper shall transfer control of the
850		-	electronic copy to the debtor or a person designated by the debtor;”.
851		-	(C) Paragraph (4) is amended by striking the phrase “an authenticated”
852		-	and inserting the phrase “a signed” in its place.
853		-	(D) Paragraph (5) is amended as follows:
854		-	(i) Strike the phrase “an authenticated” and insert the phrase “a
855		-	signed” in its place.
856		-	(ii) Strike the phrase “; and” and insert a semicolon in its place.
857		-	(E) Paragraph (6) is amended to read as follows:
858		-	“(6) A secured party having control under § 28:7-106 of an authoritative
859		-	electronic copy of an electronic document of title shall transfer control of the electronic copy
860		-	to the debtor or a person designated by the debtor;”.
861		-	(F) New paragraphs (7) and (8) are added to read as follows:
862		-	“(7) A secured party having control under § 28:9-105A of electronic money
863		-	shall transfer control of the electronic money to the debtor or a person designated by the
864		-	debtor; and
865		-	“(8) A secured party having control under § 28:12-105 of a controllable
866		-	electronic record, other than a buyer of a controllable account or controllable payment
867		-	intangible evidenced by the controllable electronic record, shall transfer control of the
868		-	controllable electronic record to the debtor or a person designated by the debtor.”.
869		-	(10) Section 28:9-209(b) is amended to read as follows:
870		-	“(b) Within 10 days after receiving a signed demand by the debtor, a secured party
871		-	shall send to an account debtor that has received notification under § 28:9-406(a) or § 28:12-
872		-	106(b) of an assignment to the secured party as assignee a signed record that releases the
873		-	account debtor from any further obligation to the secured party.”.
874		-	(11) Section 28:9-210 is amended as follows:
875		-	(A) Subsection (a) is amended as by striking the word “authenticated” ENROLLED ORIGINAL
876		-
	486	+	title. 371
	487	+	“(f) If a person has the powers specified in subsection (c)(3) of this section, those 372
	488	+	powers are presumed to be exclusive. 373
	489	+	“(g) A person has control of an electronic document of title if another person, other 374
	490	+	than the transferor to the person of an interest in the document: 375
	491	+	“(1) Has control of the document and acknowledges that it has control on 376
	492	+	behalf of the person; or 377
	493	+	“(2) Obtains control of the document after having acknowledged that it will 378
	494	+	obtain control of the document on behalf of the person. 379
	495	+	“(h) A person that has control under this section is not required to acknowledge that it 380
	496	+	has control on behalf of another person. 381
	497	+	“(i) If a person acknowledges that it has or will obtain control on behalf of another 382
	498	+	person, unless the person otherwise agrees or law other than this article or article 9 otherwise 383
	499	+	provides, the person does not owe any duty to the other person and is not required to confirm 384
	500	+	the acknowledgment to any other person.” 385
	501	+	(i) Article 8 is amended as follows: 386
	502	+	(1) Section 28:8-102 is amended as follows: 387
	503	+	(A) Subsection (a)(6)(A) is amended by striking the word “writing” and 388
	504	+	inserting the word “record” in its place. 389
	505	+	(B) Subsection (b) is amended to read as follows: 390 ENGROSSED ORIGINAL
877	506
878	507
879	508
880	509
881	510		20
882	511
883		-	wherever it appears and inserting the word “signed” in its place.
884		-	(B) Subsection (b) is amended by striking the word “authenticating”
885		-	wherever it appears and inserting the word “signing” in its place.
886		-	(C) Subsection (c) is amended by striking the phrase “an authenticated”
887		-	and inserting the phrase “a signed” in its place.
888		-	(D) Subsection (d) is amended by striking the phrase “an authenticated”
889		-	and inserting the phrase “a signed” in its place.
890		-	(E) Subsection (e) is amended by striking the phrase “an authenticated”
891		-	and inserting the phrase “a signed” in its place.
892		-	(12) Section 28:9-301 is amended as follows:
893		-	(A) The lead-in language is amended by striking the phrase “28:9-306"
894		-	and inserting the phrase “28:9-306B” in its place.
895		-	(B) Paragraph (3) is amended by striking the phrase “while tangible
896		-	negotiable documents, goods, instruments, money, or tangible chattel paper” and inserting
897		-	the phrase “while negotiable tangible documents, goods, instruments, or tangible money” in
898		-	its place.
899		-	(13) Section 28:9-304(a) is amended by striking the phrase “bank.” and
900		-	inserting the phrase “bank, even if the transaction does not bear any relation to the bank’s
901		-	jurisdiction.” in its place.
902		-	(14) Section 28:9-305(a) is amended by adding a new paragraph (5) to read as
903		-	follows:
904		-	“(5) Paragraphs (2), (3), and (4) of this subsection apply even if the transaction
905		-	does not bear any relation to the jurisdiction.”.
906		-	(15) New sections 28:9-306A and 28:9-306B are added to read as follows:
907		-	“§ 28:9-306A. Law governing perfection and priority of security interests in chattel
908		-	paper.
909		-	“(a) Except as provided in subsection (d) of this section, if chattel paper is evidenced
910		-	only by an authoritative electronic copy of the chattel paper or is evidenced by an
911		-	authoritative electronic copy and an authoritative tangible copy, the local law of the chattel
912		-	paper’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the
913		-	priority of a security interest in the chattel paper, even if the transaction does not bear any
914		-	relation to the chattel paper’s jurisdiction.
915		-	“(b) The following rules determine the chattel paper’s jurisdiction under this section:
916		-	“(1) If the authoritative electronic copy of the record evidencing chattel paper,
917		-	or a record attached to or logically associated with the electronic copy and readily available
918		-	for review, expressly provides that a particular jurisdiction is the chattel paper’s jurisdiction
919		-	for purposes of this part, this article, or this subtitle, that jurisdiction is the chattel paper’s
920		-	jurisdiction.
921		-	“(2) If paragraph (1) of this subsection does not apply and the rules of the ENROLLED ORIGINAL
922		-
	512	+	“(b) The following definitions in this article and other articles apply to this article: 391
	513	+	"(1) “Appropriate person”. § 28:8-107. 392
	514	+	“(2) “Control”. § 28:8-106. 393
	515	+	“(3) “Controllable account”. § 28:9-102. 394
	516	+	“(4) “Controllable electronic record”. § 28:12-102. 395
	517	+	“(5) “Controllable payment intangible”. § 28:9-102. 396
	518	+	“(6) “Delivery”. § 28:8-28:8-301. 397
	519	+	“(7) “Investment company security”. § 28:8-103. 398
	520	+	“(8) “Issuer”. § 28:8-201. 399
	521	+	“(9) “Overissue”. § 28:8-210. 400
	522	+	“(10) “Protected purchaser”. § 28:8-303. 401
	523	+	“(11) “Securities account”. § 28:8-501.” 402
	524	+	(2) Section 28:8-103 is amended by adding a new subsection (h) to read 403
	525	+	as follows: 404
	526	+	“(h) A controllable account, controllable electronic record, or controllable payment 405
	527	+	intangible is not a financial asset unless § 28:8-102(a)(9)(A)(iii) applies.” 406
	528	+	(3) Section 28:8-106 is amended as follows: 407
	529	+	(A) Subsection (d)(3) is amended to read as follows: 408
	530	+	“(3) Another person, other than the transferor to the purchaser of an interest in 409
	531	+	the security entitlement: 410 ENGROSSED ORIGINAL
923	532
924	533
925	534
926	535
927	536		21
928	537
929		-	system in which the authoritative electronic copy is recorded are readily available for review
930		-	and expressly provide that a particular jurisdiction is the chattel paper’s jurisdiction for
931		-	purposes of this part, this article, or this subtitle, that jurisdiction is the chattel paper’s
932		-	jurisdiction.
933		-	“(3) If paragraphs (1) and (2) of this subsection do not apply and the
934		-	authoritative electronic copy, or a record attached to or logically associated with the
935		-	electronic copy and readily available for review, expressly provides that the chattel paper is
936		-	governed by the law of a particular jurisdiction, that jurisdiction is the chattel paper’s
937		-	jurisdiction.
938		-	“(4) If paragraphs (1), (2), and (3) of this subsection do not apply and the rules
939		-	of the system in which the authoritative electronic copy is recorded are readily available for
940		-	review and expressly provide that the chattel paper or the system is governed by the law of a
941		-	particular jurisdiction, that jurisdiction is the chattel paper’s jurisdiction.
942		-	“(5) If paragraphs (1) through (4) of this subsection do not apply, the chattel
943		-	paper’s jurisdiction is the jurisdiction in which the debtor is located.
944		-	“(c) If an authoritative tangible copy of a record evidences chattel paper and the
945		-	chattel paper is not evidenced by an authoritative electronic copy, while the authoritative
946		-	tangible copy of the record evidencing chattel paper is located in a jurisdiction, the local law
947		-	of that jurisdiction governs:
948		-	“(1) Perfection of a security interest in the chattel paper by possession under
949		-	§ 28:9-314A; and
950		-	“(2) The effect of perfection or nonperfection and the priority of a security
951		-	interest in the chattel paper.
952		-	“(d) The local law of the jurisdiction in which the debtor is located governs perfection
953		-	of a security interest in chattel paper by filing.
954		-	“§ 28:9-306B. Law governing perfection and priority of security interests in
955		-	controllable accounts, controllable electronic records, and controllable payment intangibles.
956		-	“(a) Except as provided in subsection (b) of this section, the local law of the
957		-	controllable electronic record’s jurisdiction specified in § 28:12-107(c) governs perfection,
958		-	the effect of perfection or nonperfection, and the priority of a security interest in a
959		-	controllable electronic record and a security interest in a controllable account or controllable
960		-	payment intangible evidenced by the controllable electronic record.
961		-	“(b) The local law of the jurisdiction in which the debtor is located governs:
962		-	“(1) Perfection of a security interest in a controllable account, controllable
963		-	electronic record, or controllable payment intangible by filing; and
964		-	“(2) Automatic perfection of a security interest in a controllable payment
965		-	intangible created by a sale of the controllable payment intangible.”.
966		-	(16) Section 28:9-310(b) is amended as follows:
967		-	(A) Paragraph (8) is amended by striking the phrase “In deposit ENROLLED ORIGINAL
968		-
	538	+	“(A) Has control of the security entitlement and acknowledges that it 411
	539	+	has control on behalf of the purchaser; or 412
	540	+	“(B) Obtains control of the security entitlement after having 413
	541	+	acknowledged that it will obtain control of the security entitlement on behalf of the 414
	542	+	purchaser.” 415
	543	+	(B) New subsections (h) and (i) are added to read as follows: 416
	544	+	“(h) A person that has control under this section is not required to acknowledge that it has 417
	545	+	control on behalf of a purchaser. 418
	546	+	“(i) If a person acknowledges that it has or will obtain control on behalf of a purchaser, 419
	547	+	unless the person otherwise agrees or law other than this article or article 9 otherwise provides, 420
	548	+	the person does not owe any duty to the purchaser and is not required to confirm the 421
	549	+	acknowledgment to any other person.” 422
	550	+	(4) Section 28:8-110 is amended by adding a new subsection (g) to read as 423
	551	+	follows: 424
	552	+	“(g) The local law of the issuer’s jurisdiction or the securities intermediary’s 425
	553	+	jurisdiction governs a matter or transaction specified in subsection (a) or (b) of this section, 426
	554	+	even if the matter or transaction does not bear any relation to the jurisdiction.” 427
	555	+	(5) Section 28:8-303(b) is amended by striking the phrase “In addition to 428
	556	+	acquiring the rights of a purchaser, a” and inserting the word “A” in its place. 429
	557	+	(j) Article 9 is amended as follows: 430 ENGROSSED ORIGINAL
969	558
970	559
971	560
972	561
973	562		22
974	563
975		-	accounts, electronic chattel paper;” and inserting the phrase “In controllable accounts,
976		-	controllable electronic records, controllable payment intangibles, deposit accounts,” in its
977		-	place.
978		-	(B) A new paragraph (8A) is added to read as follows:
979		-	“(8A) In chattel paper which is perfected by possession and control under
980		-	§ 28:9-314A;”.
981		-	(17) Section 28:9-312 is amended as follows:
982		-	(A) The section heading is amended by striking the phrase “in chattel
983		-	paper,” and inserting the phrase “in chattel paper, controllable accounts, controllable
984		-	electronic records, controllable payment intangibles,” in its place.
985		-	(B) Subsection (a) is amended to read as follows:
986		-	“(a) A security interest in chattel paper, controllable accounts, controllable electronic
987		-	records, controllable payment intangibles, instruments, investment property, or negotiable
988		-	documents may be perfected by filing.”.
989		-	(C) Subsection (b) is amended as follows:
990		-	(i) Paragraph (2) is amended by striking the word “and”.
991		-	(ii) Paragraph (3) is amended to read as follows:
992		-	“(3) a security interest in tangible money may be perfected only by the secured
993		-	party’s taking possession under § 28:9-313; and”.
994		-	(iii) A new paragraph (4) is added to read as follows:
995		-	“(4) A security interest in electronic money may be perfected only by control
996		-	under § 28:9-314.”.
997		-	(D) Subsection (e) is amended by striking the phrase “an authenticated”
998		-	and inserting the phrase “a signed” in its place.
999		-	(18) Section 28:9-313 is amended as follows:
1000		-	(A) Subsection (a) is amended by striking the phrase “in tangible
1001		-	negotiable documents, goods, instruments, money, or tangible chattel paper” and inserting
1002		-	the phrase “in goods, instruments, negotiable tangible documents, or tangible money” in its
1003		-	place.
1004		-	(B) Subsection (c) is amended as follows:
1005		-	(i) Paragraph (1) is amended by striking the word
1006		-	“authenticates” and inserting the word “signs” in its place.
1007		-	(ii) Paragraph (2) is amended to read as follows:
1008		-	“(2) The person takes possession of the collateral after having signed a record
1009		-	acknowledging that it will hold possession of the collateral for the secured party’s benefit.”.
1010		-	(C) Subsection (d) is amended by striking the phrase “no earlier than”
1011		-	and inserting the word “not earlier than” in its place.
1012		-	(19) Section 28:9-314 is amended as follows:
1013		-	(A) Subsections (a) and (b) are amended to read as follows: ENROLLED ORIGINAL
1014		-
	564	+	(1) Section 28:9-102 is amended as follows: 431
	565	+	(A) Subsection (a) is amended as follows: 432
	566	+	(i) Paragraph (2) is amended to read as follows: 433
	567	+	“(2) “Account”, except as used in “account for”, “account statement”, 434
	568	+	“account to”, “commodity account” in paragraph (14) of this subsection, “customer’s 435
	569	+	account”, “deposit account” in paragraph (29) of this subsection, “on account of”, and 436
	570	+	“statement of account”, means a right to payment of a monetary obligation, whether or not 437
	571	+	earned by performance, (i) for property that has been or is to be sold, leased, licensed, 438
	572	+	assigned, or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a 439
	573	+	policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be 440
	574	+	incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a 441
	575	+	charter or other contract, (vii) arising out of the use of a credit or charge card or information 442
	576	+	contained on or for use with the card, or (viii) as winnings in a lottery or other game of 443
	577	+	chance operated or sponsored by a State, governmental unit of a State, or person licensed or 444
	578	+	authorized to operate the game by a State or governmental unit of a State. The term includes 445
	579	+	controllable accounts and health-care-insurance receivables. The term does not include (i) 446
	580	+	chattel paper, (ii) commercial tort claims, (iii) deposit accounts, (iv) investment property, (v) 447
	581	+	letter-of-credit rights or letters of credit, (vi) rights to payment for money or funds advanced 448
	582	+	or sold, other than rights arising out of the use of a credit or charge card or information 449
	583	+	contained on or for use with the card, or (vii) rights to payment evidenced by an instrument.” 450 ENGROSSED ORIGINAL
1015	584
1016	585
1017	586
1018	587
1019	588		23
1020	589
1021		-	“(a) A security interest in controllable accounts, controllable electronic
1022		-	records, controllable payment intangibles, deposit accounts, electronic documents, electronic
1023		-	money, investment property, or letter-of-credit rights may be perfected by control of the
1024		-	collateral under § 28:7-106, § 28:9-104, § 28:9-105A, § 28:9-106, § 28:9-107, or § 28:9-
1025		-	107A.
1026		-	“(b) A security interest in controllable accounts, controllable electronic
1027		-	records, controllable payment intangibles, deposit accounts, electronic documents, electronic
1028		-	money, or letter-of-credit rights is perfected by control under § 28:7-106, § 28:9-104, § 28:9-
1029		-	105A, § 28:9-107, or § 28:9-107A not earlier than the time the secured party obtains control
1030		-	and remains perfected by control only while the secured party retains control.”
1031		-	(B) Subsection (c) is amended by striking the word “from the time” and
1032		-	inserting the phrase “not earlier than the time” in its place.
1033		-	(20) A new section 28:9-314A is added to read as follows:
1034		-	“§ 28:9-314A. Perfection by possession and control of chattel paper.
1035		-	“(a) A secured party may perfect a security interest in chattel paper by taking
1036		-	possession of each authoritative tangible copy of the record evidencing the chattel paper and
1037		-	obtaining control of each authoritative electronic copy of the electronic record evidencing the
1038		-	chattel paper.
1039		-	“(b) A security interest is perfected under subsection (a) of this section not earlier
1040		-	than the time the secured party takes possession and obtains control and remains perfected
1041		-	under subsection (a) of this section only while the secured party retains possession and
1042		-	control.
1043		-	“(c) § 28:9-313(c) and (f) through (i) applies to perfection by possession of an
1044		-	authoritative tangible copy of a record evidencing chattel paper.”.
1045		-	(21) Section 28:9-316 is amended as follows:
1046		-	(A) Subsection (a) is amended by striking the phrase “or § 28:9-305(c)”
1047		-	and inserting the phrase “, § 28:9-305(c), § 28:9-306A(d), or § 28:9-306B(b)” in its place.
1048		-	(B) Subsection (f) is amended striking the phrase “deposit accounts,
1049		-	letter-of-credit rights, or investment property which is perfected under the law of” and
1050		-	inserting the phrase “chattel paper, controllable accounts, controllable electronic records,
1051		-	controllable payment intangibles, deposit accounts, letter-of-credit rights, or investment
1052		-	property which is perfected under the law of the chattel paper’s jurisdiction, the controllable
1053		-	electronic record’s jurisdiction,” in its place.
1054		-	(22) Section 28:9-317 is amended as follows:
1055		-	(A) Subsection (b) is amended by striking the phrase “of tangible
1056		-	chattel paper, tangible documents, goods, instruments,” and inserting the phrase “of goods,
1057		-	instruments, tangible documents,” in its place.
1058		-	(B) Subsection (d) is amended to read as follows:
1059		-	“(d) Subject to subsections (f) through (i) of this section, a licensee of a general ENROLLED ORIGINAL
1060		-
	590	+	(ii) Paragraph (3) is amended by striking the phrase “instrument 451
	591	+	constitutes part of” and inserting the phrase “negotiable instrument evidences” in its place. 452
	592	+	(iii) Paragraph (4)(A) is amended by striking the word 453
	593	+	“Authenticated” and inserting the word “Signed” in its place. 454
	594	+	(iv) Paragraph (7) is repealed. 455
	595	+	(v) New paragraphs (7A) and (7B) are added to read as follows: 456
	596	+	“(7A) “Assignee”, except as used in “assignee for benefit of creditors”, means 457
	597	+	a person (i) in whose favor a security interest that secures an obligation is created or 458
	598	+	provided for under a security agreement, whether or not the obligation is outstanding or (ii) 459
	599	+	to which an account, chattel paper, payment intangible, or promissory note has been sold. 460
	600	+	The term includes a person to which a security interest has been transferred by a secured 461
	601	+	party. 462
	602	+	“(7B) “Assignor” means a person that (i) under a security agreement creates or 463
	603	+	provides for a security interest that secures an obligation or (ii) sells an account, chattel 464
	604	+	paper, payment intangible, or promissory note. The term includes a secured party that has 465
	605	+	transferred a security interest to another person.” 466
	606	+	(vi) Paragraph (11) is amended to read as follows: 467
	607	+	“(11)(A) “Chattel paper” means: 468
	608	+	“(i) A right to payment of a monetary obligation secured by 469
	609	+	specific goods, if the right to payment and security agreement are evidenced by a record; or 470 ENGROSSED ORIGINAL
1061	610
1062	611
1063	612
1064	613
1065	614		24
1066	615
1067		-	intangible or a buyer, other than a secured party, of collateral other than electronic money,
1068		-	goods, instruments, tangible documents, or a certificated security takes free of a security
1069		-	interest if the licensee or buyer gives value without knowledge of the security interest and
1070		-	before it is perfected.”.
1071		-	(C) New subsections (f), (g), (h), and (i) are added to read as follows:
1072		-	“(f) A buyer, other than a secured party, of chattel paper takes free of a security
1073		-	interest if, without knowledge of the security interest and before it is perfected, the buyer
1074		-	gives value and:
1075		-	“(1) Receives delivery of each authoritative tangible copy of the record
1076		-	evidencing the chattel paper; and
1077		-	“(2) If each authoritative electronic copy of the record evidencing the chattel
1078		-	paper can be subjected to control under § 28:9-105, obtains control of each authoritative
1079		-	electronic copy.
1080		-	“(g) A buyer of an electronic document takes free of a security interest if, without
1081		-	knowledge of the security interest and before it is perfected, the buyer gives value and, if
1082		-	each authoritative electronic copy of the document can be subjected to control under § 28:7-
1083		-	106, obtains control of each authoritative electronic copy.
1084		-	“(h) A buyer of a controllable electronic record takes free of a security interest if,
1085		-	without knowledge of the security interest and before it is perfected, the buyer gives value
1086		-	and obtains control of the controllable electronic record.
1087		-	“(i) A buyer, other than a secured party, of a controllable account or a controllable
1088		-	payment intangible takes free of a security interest if, without knowledge of the security
1089		-	interest and before it is perfected, the buyer gives value and obtains control of the
1090		-	controllable account or controllable payment intangible.”.
1091		-	(23) Section 28:9-323 is amended as follows:
1092		-	(A) Subsection (d) is amended by striking the phrase “other than a
1093		-	buyer in the ordinary course of business”.
1094		-	(B) Subsection (f) is amended by striking the phrase “, other than a
1095		-	lessee in ordinary course of business”.
1096		-	(24) Section 28:9-324 is amended as follows:
1097		-	(A) Subsection (b)(2) is amended by striking the phrase “an
1098		-	authenticated” and inserting the phrase “a signed” in its place.
1099		-	(B) Subsection (d)(2) is amended by striking the phrase “an
1100		-	authenticated” and inserting the phrase “a signed” in its place.
1101		-	(25) A new section 28:9-326A is added to read as follows:
1102		-	“§ 28:9-326A. Priority of security interest in controllable account, controllable
1103		-	electronic record, and controllable payment intangible.
1104		-	“A security interest in a controllable account, controllable electronic record, or
1105		-	controllable payment intangible held by a secured party having control of the account, ENROLLED ORIGINAL
1106		-
	616	+	“(ii) A right to payment of a monetary obligation owed by a 471
	617	+	lessee under a lease agreement with respect to specific goods and a monetary obligation 472
	618	+	owed by the lessee in connection with the transaction giving rise to the lease, if: 473
	619	+	“(I) The right to payment and lease agreement are 474
	620	+	evidenced by a record; and 475
	621	+	“(II) The predominant purpose of the transaction giving 476
	622	+	rise to the lease was to give the lessee the right to possession and use of the goods. 477
	623	+	“(B) The term does not include a right to payment arising out of a 478
	624	+	charter or other contract involving the use or hire of a vessel or a right to payment arising out 479
	625	+	of the use of a credit or charge card or information contained on or for use with the card.” 480
	626	+	(vii) New paragraphs (27A) and (27B) are added to read as 481
	627	+	follows: 482
	628	+	“(27A) “Controllable account” means an account evidenced by a controllable 483
	629	+	electronic record that provides that the account debtor undertakes to pay the person that has 484
	630	+	control under § 28:12-105 of the controllable electronic record. 485
	631	+	“(27B) “Controllable payment intangible” means a payment intangible 486
	632	+	evidenced by a controllable electronic record that provides that the account debtor undertakes 487
	633	+	to pay the person that has control under §28:12-105 of the controllable electronic record.” 488
	634	+	(viii) Paragraph (31) is repealed. 489
	635	+	(ix) A new paragraph (31A) is added to read as follows: 490 ENGROSSED ORIGINAL
1107	636
1108	637
1109	638
1110	639
1111	640		25
1112	641
1113		-	electronic record, or payment intangible has priority over a conflicting security interest held
1114		-	by a secured party that does not have control.”.
1115		-	(26) Section 28:9-330 is amended as follows:
1116		-	(A) Subsections (a) and (b) are amended to read as follows:
1117		-	“(a) A purchaser of chattel paper has priority over a security interest in the chattel
1118		-	paper which is claimed merely as proceeds of inventory subject to a security interest if:
1119		-	“(1) in good faith and in the ordinary course of the purchaser’s business, the
1120		-	purchaser gives new value, takes possession of each authoritative tangible copy of the record
1121		-	evidencing the chattel paper, and obtains control under § 28:9-105 of each authoritative
1122		-	electronic copy of the record evidencing the chattel paper; and
1123		-	“(2) the authoritative copies of the record evidencing the chattel paper do not
1124		-	indicate that the chattel paper has been assigned to an identified assignee other than the
1125		-	purchaser.
1126		-	“(b) A purchaser of chattel paper has priority over a security interest in the chattel
1127		-	paper which is claimed other than merely as proceeds of inventory subject to a security
1128		-	interest if the purchaser gives new value, takes possession of each authoritative tangible copy
1129		-	of the record evidencing the chattel paper, and obtains control under § 28:9-105 of each
1130		-	authoritative electronic copy of the record evidencing the chattel paper in good faith, in the
1131		-	ordinary course of the purchaser’s business, and without knowledge that the purchase
1132		-	violates the rights of the secured party.”
1133		-	(B) Subsection (f) is amended to read as follows:
1134		-	“(f) For purposes of subsections (b) and (d) of this section, if the authoritative copies
1135		-	of the record evidencing chattel paper or an instrument indicate that the chattel paper or
1136		-	instrument has been assigned to an identified secured party other than the purchaser, a
1137		-	purchaser of the chattel paper or instrument has knowledge that the purchase violates the
1138		-	rights of the secured party.”.
1139		-	(27) Section 28:9-331 is amended as follows:
1140		-	(A) The section heading is amended to read as follows:
1141		-	“§ 28:9-331. Priority of rights of purchasers of controllable accounts, controllable
1142		-	electronic records, controllable payment intangibles, documents, instruments, and securities
1143		-	under other articles; priority of interests in financial assets and security entitlements and
1144		-	protection against assertion of claim under Articles 8 and 12.”.
1145		-	(B) Subsection (a) is amended to read as follows:
1146		-	“(a) This article does not limit the rights of a holder in due course of a negotiable
1147		-	instrument, a holder to which a negotiable document of title has been duly negotiated, a
1148		-	protected purchaser of a security, or a qualifying purchaser of a controllable account,
1149		-	controllable electronic record, or controllable payment intangible. These holders or
1150		-	purchasers take priority over an earlier security interest, even if perfected, to the extent
1151		-	provided in Articles 3, 7, 8, and 12.”. ENROLLED ORIGINAL
1152		-
	642	+	“(31A) “Electronic money” means money in an electronic form.” 491
	643	+	(x) Paragraph (42) is amended by striking the second sentence 492
	644	+	and inserting the sentence “The term includes controllable electronic records, payment 493
	645	+	intangibles, and software.” in its place. 494
	646	+	(xi) Paragraph (47) is amended striking the period at the end and 495
	647	+	inserting the phrase “, or (iv) writings that evidence chattel paper.” in its place. 496
	648	+	(xii) A new paragraph (54A) is added to read as follows: 497
	649	+	“(54A) “Money” has the meaning in §28:1-201(b)(24), but does not include (i) 498
	650	+	a deposit account or (ii) money in an electronic form that cannot be subjected to control 499
	651	+	under §28:9-105A.” 500
	652	+	(xiii) Paragraph (61) is amended by adding a new sentence at 501
	653	+	the end to read as follows: “The term includes a controllable payment intangible.” 502
	654	+	(xiv) Paragraph (66) is amended by striking the word 503
	655	+	“authenticated” and inserting the word “signed” in its place. 504
	656	+	(xv) Paragraph (75) is repealed. 505
	657	+	(xvi) Paragraph (79) is repealed. 506
	658	+	(xvii) A new paragraph (79A) is added to read as follows: 507
	659	+	“(79A) “Tangible money” means money in a tangible form”. 508
	660	+	(B) Subsection (b) is amended to read as follows: 509
	661	+	“(b) “Control” as provided in § 28:7-106 and the following definitions in other 510 ENGROSSED ORIGINAL
1153	662
1154	663
1155	664
1156	665
1157	666		26
1158	667
1159		-	(C) Subsection (b) is amended striking the phrase “Article 8.” and
1160		-	inserting the phrase “Article 8 or 12.” in its place.
1161		-	(28) Section 28:9-332 is amended as follows:
1162		-	(A) Subsection (a) is amended to read as follows:
1163		-	“(a) A transferee of tangible money takes the money free of a security interest if the
1164		-	transferee receives possession of the money without acting in collusion with the debtor in
1165		-	violating the rights of the secured party.”.
1166		-	(B) Subsection (b) is amended by striking the phrase “unless the
1167		-	transferee acts” and inserting the phrase “if the transferee receives the funds without acting”
1168		-	in its place.
1169		-	(C) A new subsection (c) is added to read as follows:
1170		-	“(c) A transferee of electronic money takes the money free of a security interest if the
1171		-	transferee obtains control of the money without acting in collusion with the debtor in
1172		-	violating the rights of the secured party.”.
1173		-	(29) Section 28:9-334(f)(1) is amended by striking the phrase “an
1174		-	authenticated” and inserting the phrase “a signed” in its place.
1175		-	(30) Section 28:9-341 is amended by striking the phrase “an authenticated”
1176		-	and inserting the phrase “a signed” in its place.
1177		-	(31) Section 28:9-404(a)(2) is amended by striking the phrase “authenticated”
1178		-	and inserting the phrase “signed” in its place.
1179		-	(32) Section 28:9-406 is amended as follows:
1180		-	(A) Subsection (a) is amended as follows:
1181		-	(i) Strike the phrase “subsection (b) through (i)” and insert the
1182		-	phrase “subsections (b) through (k)” in its place.
1183		-	(ii) Strike the word “authenticated” and insert the word “signed”
1184		-	in its place.
1185		-	(B) Subsection (b) is amended by striking the phrase “subsection (h)”
1186		-	and inserting the phrase “subsections (h) and (k)” in its place.
1187		-	(C) Subsection (c) is amended by striking the phrase “subsection (h)”
1188		-	and inserting the phrase “subsections (h) and (k)” in its place.
1189		-	(D) Subsection (d) is amended striking the phrase “Except as otherwise
1190		-	provided in subsection (e)” and inserting the phrase “In this subsection, “promissory note”
1191		-	includes a negotiable instrument that evidences chattel paper. Except as otherwise provided
1192		-	in subsections of this section” in its place.
1193		-	(E) Subsection (f) is amended by striking the phrase “§§ 28:2A-303 and
1194		-	28:9-407” and inserting the phrase “subsection (j) of this section and §§ 28:2A-303 and 28:9-
1195		-	407”.
1196		-	(F) Subsection (g) is amended by striking the phrase “subsection (h)”
1197		-	and inserting the phrase “subsections (h) and (k) of this section” in its place. ENROLLED ORIGINAL
1198		-
	668	+	articles apply to this article: 511
	669	+	“(1) “Applicant” § 28:5-102. 512
	670	+	“(2) “Beneficiary” § 28:5-102. 513
	671	+	“(3) “Broker” § 28:8-102. 514
	672	+	“(4) “Certificated security” § 28:8-102. 515
	673	+	“(5) “Check” § 28:3-104. 516
	674	+	“(6) “Clearing corporation” § 28:8-102. 517
	675	+	“(7) “Contract for sale” § 28:2-106. 518
	676	+	“(8) “Controllable electronic record”. § 28:12-102. 519
	677	+	“(9) “Customer” § 28:4-104. 520
	678	+	“(10) “Entitlement holder” § 28:8-102. 521
	679	+	“(11) “Financial asset” § 28:8-102. 522
	680	+	“(12) “Holder in due course” § 28:3-302. 523
	681	+	“(13)(A) “Issuer” (with respect to a letter of credit or letter-of-credit right) § 524
	682	+	28:5-102; 525
	683	+	“(B) “Issuer” (with respect to a security) § 28:8-201; and 526
	684	+	“(C) “Issuer” (with respect to documents of title) § 28:7-102. 527
	685	+	“(14) “Lease” § 28:2A-103. 528
	686	+	“(15) “Lease agreement” § 28:2A-103. 529
	687	+	“(16) “Lease contract” § 28:2A-103. 530 ENGROSSED ORIGINAL
1199	688
1200	689
1201	690
1202	691
1203	692		27
1204	693
1205		-	(G) New subsections (j) and (k) are added to read as follows:
1206		-	“(j) Subsections (d) and (e) of this section do not apply to a security interest in an
1207		-	ownership interest in a general partnership, limited partnership, or limited liability company.
1208		-	“(k) Subsections (a), (b), (c) and (g) of this section do not apply to a controllable
1209		-	account or controllable payment intangible.”.
1210		-	(33) Section 28:9-408 is amended as follows:
1211		-	(A) Subsection (a) is amended by striking the phrase “subsection (b)”
1212		-	and inserting the phrase “subsections (b) and (e) of this section” in its place.
1213		-	(B) Subsection (c) is amended by striking the phrase “A rule of law”
1214		-	and inserting the phrase “Except as otherwise provided in subsection (e) of this section, a
1215		-	rule of law” in its place.
1216		-	(C) New subsections (e) and (f) are added to read as follows:
1217		-	“(e) This section does not apply to a security interest in an ownership interest in a
1218		-	general partnership, limited partnership, or limited liability company.
1219		-	“(f) For the purposes of this section, “promissory note” includes a negotiable
1220		-	instrument that evidences chattel paper.”.
1221		-	(34) Section 28:9-509 is amended as followed:
1222		-	(A) Subsection (a)(1) is amended by striking the phrase “an
1223		-	authenticated” and inserting the phrase “a signed” in its place.
1224		-	(B) Subsection (b) is amended by striking the word “authenticating”
1225		-	and inserting the word “signing” in its place.
1226		-	(35) Section 28:9-513 is amended as follows:
1227		-	(A) Subsection (b)(2) is amended by striking the phrase “an
1228		-	authenticated” and inserting the phrase “a signed” in its place.
1229		-	(B) Subsection (c) is amended by striking the phrase “an authenticated”
1230		-	and inserting the phrase “a signed” in its place.
1231		-	(36) Section 28:9-601(b) is amended by striking the phrase “28:7-106, § 28:9-
1232		-	104, § 28:9-105, § 28:9-107, or § 28:9-107” and inserting the phrase “28:7-106, § 28:9-104,
1233		-	§ 28:9-105, § 28:9-105A, § 28:9-107, § 28:9-107, or § 28:9-107A,” in its place.
1234		-	(37) Section 28:9-605 is amended as follows:
1235		-	(A) The lead-in language is amended to read as follows:
1236		-	“(a) Except as provided in subsection (b), a secured party does not owe a duty based
1237		-	on its status as a third party.”.
1238		-	(B) A new subsection (b) is added to read as follows:
1239		-	“(b) A secured party owes a duty based on its status as a secured party to a person if,
1240		-	at the time the secured party obtains control of collateral that is a controllable account,
1241		-	controllable electronic record, or controllable payment intangible or at the time the security
1242		-	interest attaches to the collateral, whichever is later:
1243		-	“(1) The person is a debtor or obligor; and ENROLLED ORIGINAL
1244		-
	694	+	“(17) “Leasehold interest” § 28:2A-103. 531
	695	+	“(18) “Lessee” § 28:2A-103. 532
	696	+	“(19) “Lessee in ordinary course of business” § 28:2A-103. 533
	697	+	“(20) “Lessor” § 28:2A-103. 534
	698	+	“(21) “Lessor's residual interest” § 28:2A-103. 535
	699	+	“(22) “Letter of credit” § 28:5-102. 536
	700	+	“(23) “Merchant” § 28:2-104. 537
	701	+	“(24) “Negotiable instrument” § 28:3-104. 538
	702	+	“(25) “Nominated person” § 28:5-102. 539
	703	+	“(26) “Note” § 28:3-104. 540
	704	+	“(27) “Proceeds of a letter of credit” § 28:5-114. 541
	705	+	“(28) “Protected purchaser”. § 28:8-303. 542
	706	+	“(29) “Prove” § 28:3-103. 543
	707	+	“(30) “Qualifying purchaser”. § 28:12-102. 544
	708	+	“(31) “Sale” § 28:2-106. 545
	709	+	“(32) “Securities account” § 28:8-501. 546
	710	+	“(33) “Securities intermediary” § 28:8-102. 547
	711	+	“(34) “Security” § 28:8-102. 548
	712	+	“(35) “Security certificate” § 28:8-102. 549
	713	+	“(36) “Security entitlement” § 28:8-102. 550 ENGROSSED ORIGINAL
1245	714
1246	715
1247	716
1248	717
1249	718		28
1250	719
1251		-	“(2) The secured party knows that the information in subsection (a)(1)(A), (B),
1252		-	or (C) of this section relating to the person is not provided by the collateral, a record attached
1253		-	to or logically associated with the collateral, or the system in which the collateral is
1254		-	recorded.”.
1255		-	(38) Section 28:9-608(a)(1)(C) is amended by striking the phrase “an
1256		-	authenticated”.
1257		-	(39) Section 28:9-611 is amended as follows:
1258		-	(A) Subsection (a)(1) is amended by striking the phrase “an
1259		-	authenticated” and inserting the phrase “a signed” in its place.
1260		-	(B) Subsection (b) is amended by striking the phrase “authenticated”
1261		-	and inserting the phrase “signed” in its place.
1262		-	(C) Subsection (c) is amended by striking the phrase “an authenticated”
1263		-	wherever it appears and inserting the phrase “a signed” in its place.
1264		-	(D) Subsection (e)(2)(B) is amended by striking the phrase “an
1265		-	authenticated” and inserting the phrase “a signed” in its place.
1266		-	(40) Section 28:9-613 is amended as follows:
1267		-	(A) The existing text is designated as subsection (a).
1268		-	(B) The newly designated subsection (a)(5) is amended to read as
1269		-	follows:
1270		-	“(5) The following form of notification and the form appearing in § 28:9-
1271		-	614(a)(3), when completed in accordance with the instructions in subsection (b) of this
1272		-	section and § 28:9-614(b), each provides sufficient information:
1273		-	“NOTIFICATION OF DISPOSITION OF COLLATERAL
1274		-	“To: (Name of debtor, obligor, or other person to which the notification is sent)
1275		-	“From: (Name, address, and telephone number of secured party)
1276		-	“(1) Name of any debtor that is not an addressee: (Name of each debtor)
1277		-	“(2) We will sell (describe collateral) (to the highest qualified bidder) at public sale.
1278		-	A sale could include a lease or license. The sale will be held as follows:
1279		-	“(Date)
1280		-	“(Time)
1281		-	“(Place)
1282		-	“(3) We will sell (describe collateral) at private sale sometime after (date). A sale
1283		-	could include a lease or license.
1284		-	“(4) You are entitled to an accounting of the unpaid indebtedness secured by the
1285		-	property that we intend to sell or, as applicable, lease or license.
1286		-	“(5) If you request an accounting you must pay a charge of $ (amount).
1287		-	“(6) You may request an accounting by calling us at (telephone number).
1288		-	“(End of Form)”.
1289		-	(C) A new subsection (b) is added to read as follows: ENROLLED ORIGINAL
1290		-
	720	+	“(37) “Uncertificated security” §§ 28:9-104.” 551
	721	+	(2) Section 28:9-104(a) is amended as follows: 552
	722	+	(A) Paragraph (2) is amended by: 553
	723	+	(i) Striking the phrase “an authenticated” and inserting the 554
	724	+	phrase “a signed” in its place; and 555
	725	+	(ii) Striking the word “or”. 556
	726	+	(B) Paragraph (3) is amended by striking the period and inserting the 557
	727	+	phrase “; or” in its place. 558
	728	+	(C) A new paragraph (4) is added to read as follows: 559
	729	+	“(4) Another person, other than the debtor: 560
	730	+	“(A) Has control of the deposit account and acknowledges that it has 561
	731	+	control on behalf of the secured party; or 562
	732	+	“(B) Obtains control of the deposit account after acknowledged that it 563
	733	+	will obtain control of the deposit account on behalf of the secured party.” 564
	734	+	(3) Section 28:9-105 is amended to read as follows: 565
	735	+	“§ 28:9-105. Control of electronic copy of record evidencing chattel paper. 566
	736	+	“(a) A purchaser has control of an authoritative electronic copy of a record evidencing 567
	737	+	chattel paper if a system employed for evidencing the assignment of interests in the chattel 568
	738	+	paper reliably establishes the purchaser as the person to which the authoritative electronic 569
	739	+	copy was assigned. 570 ENGROSSED ORIGINAL
1291	740
1292	741
1293	742
1294	743
1295	744		29
1296	745
1297		-	“(b) The following instructions apply to the form of notification in subsection (a)(5)
1298		-	of this section:
1299		-	“(1) The instructions in this subsection refer to the numbers in braces before
1300		-	items in the form of notification in subsection (a)(5) of this section. Do not include the
1301		-	numbers or braces in the notification. The numbers and braces are used only for the purpose
1302		-	of these instructions.
1303		-	“(2) Include and complete item (1) only if there is a debtor that is not an
1304		-	addressee of the notification and list the name or names.
1305		-	“(3) Include and complete either item (2), if the notification relates to a public
1306		-	disposition of the collateral, or item (3), if the notification relates to a private disposition of
1307		-	the collateral. If item (2) is included, include the words “to the highest qualified bidder” only
1308		-	if applicable.
1309		-	“(4) Include and complete items (4) and (6).
1310		-	“(5) Include and complete item (5) only if the sender will charge the recipient
1311		-	for an accounting.”.
1312		-	(41) Section 28:9-614 is amended as follows:
1313		-	(A) The existing text is designated as subsection (a).
1314		-	(B) The newly designated subsection (a) is amended as follows:
1315		-	(i) Paragraph (1)(A) is amended by striking the phrase “§ 28:9-
1316		-	613(1)” and inserting the phrase “§ 28:9-613(a)(1)” in its place.
1317		-	(ii) Paragraph (3) is amended to read as follows:
1318		-	“(3) The following form of notification, when completed in accordance with
1319		-	the instructions in subsection (b) of this section, provides sufficient information:
1320		-	“(Name and address of secured party)
1321		-	“(Date)
1322		-	“NOTICE OF OUR PLAN TO SELL PROPERTY
1323		-	“(Name and address of any obligor who is also a debtor)
1324		-	“Subject: (Identify transaction)
1325		-	“We have your (describe collateral) because you broke promises in our agreement.
1326		-	“(1) We will sell (describe collateral) at public sale. A sale could include a lease or
1327		-	license. The sale will be held as follows:
1328		-	“(Date)
1329		-	“(Time)
1330		-	“(Place)
1331		-	“You may attend the sale and bring bidders if you want.
1332		-	“(2) We will sell (describe collateral) at private sale sometime after (date). A sale
1333		-	could include a lease or license.
1334		-	“(3) The money that we get from the sale, after paying our costs, will reduce the
1335		-	amount you owe. If we get less money than you owe, you (will or will not, as applicable) still ENROLLED ORIGINAL
1336		-
	746	+	“(b) A system satisfies subsection (a) if the record or records evidencing the chattel 571
	747	+	paper are created, stored, and assigned in a manner that: 572
	748	+	“(1) A single authoritative copy of the record or records exists which is 573
	749	+	unique, identifiable, and, except as otherwise provided in paragraphs (4), (5), and (6) of this 574
	750	+	section, unalterable; 575
	751	+	“(2) The authoritative copy identifies the purchaser as the assignee of the 576
	752	+	record or records; 577
	753	+	“(3) The authoritative copy is communicated to and maintained by the 578
	754	+	purchaser or its designated custodian; 579
	755	+	“(4) Copies or amendments that add or change an identified assignee of the 580
	756	+	authoritative copy can be made only with the consent of the purchaser; 581
	757	+	“(5) Each copy of the authoritative copy and any copy of a copy is readily 582
	758	+	identifiable as a copy that is not the authoritative copy; and 583
	759	+	“(6) Any amendment of the authoritative copy is readily identifiable as 584
	760	+	authorized or unauthorized. 585
	761	+	“(c) A system satisfies subsection (a) of this section, and a purchaser has control of an 586
	762	+	authoritative electronic copy of a record evidencing chattel paper, if the electronic copy, a 587
	763	+	record attached to or logically associated with the electronic copy, or a system in which the 588
	764	+	electronic copy is recorded: 589
	765	+	“(1) Enables the purchaser readily to identify each electronic copy as either an 590 ENGROSSED ORIGINAL
1337	766
1338	767
1339	768
1340	769
1341	770		30
1342	771
1343		-	owe us the difference. If we get more money than you owe, you will get the extra money,
1344		-	unless we must pay it to someone else.
1345		-	“(4) You can get the property back at any time before we sell it by paying us the full
1346		-	amount you owe, not just the past due payments, including our expenses. To learn the exact
1347		-	amount you must pay, call us at (telephone number).
1348		-	“(5) If you want us to explain to you in (writing) (writing or in (description of
1349		-	electronic record)) (description of electronic record) how we have figured the amount that
1350		-	you owe us,
1351		-	“(6) call us at (telephone number) (or) (write us at (secured party’s address)) (or
1352		-	contact us by (description of electronic communication method)).
1353		-	“(7) and request (a written explanation) (a written explanation or an explanation in
1354		-	(description of electronic record)) (an explanation in (description of electronic record)).
1355		-	“(8) We will charge you $ (amount) for the explanation if we have sent you another
1356		-	written explanation of the amount you owe us within the last six months.
1357		-	“(9) If you need more information about the sale (call us at (telephone number)) (or)
1358		-	(write us at (secured party’s address)) (or contact us by (description of electronic
1359		-	communication method)).
1360		-	“(10) We are sending this notice to the following other people who have an interest in
1361		-	(describe collateral) or who owe money under your agreement:
1362		-	“(Names of all other debtors and obligors, if any)
1363		-	“[End of Form]”.
1364		-	(C) A new subsection (b) is added to read as follows:
1365		-	“(b) The following instructions apply to the form of notification in subsection (a)(3)
1366		-	of this section:
1367		-	“(1) The instructions in this subsection refer to the numbers in braces before
1368		-	items in the form of notification in subsection (a)(3) of this section. Do not include the
1369		-	numbers or braces in the notification. The numbers and braces are used only for the purpose
1370		-	of these instructions.
1371		-	“(2) Include and complete either item (1), if the notification relates to a public
1372		-	disposition of the collateral, or item (2), if the notification relates to a private disposition of
1373		-	the collateral.
1374		-	“(3) Include and complete items (3), (4), (5), (6), and (7).
1375		-	“(4) In item (5), include and complete any one of the three alternative methods
1376		-	for the explanation, writing, writing or electronic record, or electronic record.
1377		-	“(5) In item (6), include the telephone number. In addition, the sender may
1378		-	include and complete either or both of the two additional alternative methods of
1379		-	communication, writing or electronic communication, for the recipient of the notification to
1380		-	communicate with the sender. Neither of the two additional methods of communication is
1381		-	required to be included. ENROLLED ORIGINAL
1382		-
	772	+	authoritative copy or a non-authoritative copy; 591
	773	+	“(2) Enables the purchaser readily to identify itself in any way, including by 592
	774	+	name, identifying number, cryptographic key, office, or account number, as the assignee of 593
	775	+	the authoritative electronic copy; and 594
	776	+	“(3) Gives the purchaser exclusive power, subject to subsection (d) of this 595
	777	+	section, to: 596
	778	+	“(A) Prevent others from adding or changing an identified assignee of 597
	779	+	the authoritative electronic copy; and 598
	780	+	“(B) Transfer control of the authoritative electronic copy. 599
	781	+	“(d) Subject to subsection (e) of this section, a power is exclusive under subsection 600
	782	+	(c)(3)(A) and (B) of this section even if: 601
	783	+	“(1) The authoritative electronic copy, a record attached to or logically 602
	784	+	associated with the authoritative electronic copy, or a system in which the authoritative 603
	785	+	electronic copy is recorded limits the use of the authoritative electronic copy or has a 604
	786	+	protocol programmed to cause a change, including a transfer or loss of control; or 605
	787	+	“(2) The power is shared with another person. 606
	788	+	“(e) A power of a purchaser is not shared with another person under subsection (d)(2) 607
	789	+	of this section and the purchaser’s power is not exclusive if: 608
	790	+	“(1) The purchaser can exercise the power only if the power also is exercised 609
	791	+	by the other person; and 610 ENGROSSED ORIGINAL
1383	792
1384	793
1385	794
1386	795
1387	796		31
1388	797
1389		-	“(6) In item (7), include and complete the method or methods for the
1390		-	explanation, writing, writing or electronic record, or electronic record, included in item (5).
1391		-	“(7) Include and complete item (8) only if a written explanation is included in
1392		-	item (5) as a method for communicating the explanation and the sender will charge the
1393		-	recipient for another written explanation.
1394		-	“(8) In item (9), include either the telephone number or the address or both the
1395		-	telephone number and the address. In addition, the sender may include and complete the
1396		-	additional method of communication, electronic communication, for the recipient of the
1397		-	notification to communicate with the sender. The additional method of electronic
1398		-	communication is not required to be included.
1399		-	“(9) If item (10) does not apply, insert “None” after “agreement:”.
1400		-	(42) Section 28:9-615(a) is amended by striking the phrase “an authenticated”
1401		-	wherever it appears and inserting the phrase “a signed” in its place.
1402		-	(43) Section 28:9-616 is amended as follows:
1403		-	(A) Subsection (a) is amended as follows:
1404		-	(i) Paragraph (1) is amended by striking the word “writing” and
1405		-	inserting the word “record” in its place.
1406		-	(ii) Paragraph (2)(A) is amended by striking the word
1407		-	“authenticated” and inserting the word “signed” in its place.
1408		-	(B) Subsection (b)(1)(A) is amended by striking the phrase “written
1409		-	demand” and inserting the phrase “demand in a record” in its place.
1410		-	(C) Subsection (c) is amended by striking the phrase “a writing” and
1411		-	inserting the phrase “an explanation” in its place.
1412		-	(44) Section 28:9-619(a) is amended by striking the word “authenticated” and
1413		-	inserting the word “signed” in its place.
1414		-	(45) Section 28:9-620 is amended as follows:
1415		-	(A) Subsection (a)(2) is amended by striking the word “authenticated”
1416		-	and inserting the word “signed” in its place.
1417		-	(B) Subsection (b)(1) is amended by striking the phrase “an
1418		-	authenticated” and inserting the phrase “a signed” in its place.
1419		-	(C) Subsection (c) is amended by striking the word “authenticated”
1420		-	wherever it appears and inserting the word “signed” in its place.
1421		-	(D) Subsection (f)(2) is amended by striking the word “authenticated”
1422		-	and inserting the word “signed’ in its place.
1423		-	(46) Section 28:9-621(a)(1) is amended by striking the phrase “an
1424		-	authenticated” and inserting the phrase “a signed” in its place.
1425		-	(47) Section 28:9-624 is amended by striking the word “authenticated”
1426		-	wherever it appears and inserting the word “signed’ in its place.
1427		-	(48) Section 28:9-628 is amended as follows: ENROLLED ORIGINAL
1428		-
	798	+	“(2) The other person: 611
	799	+	“(A) Can exercise the power without exercise of the power by the 612
	800	+	purchaser; or 613
	801	+	“(B) Is the transferor to the purchaser of an interest in the chattel paper. 614
	802	+	“(f) If a purchaser has the powers specified in subsection (c)(3)(A) and (B) of this 615
	803	+	section, the powers are presumed to be exclusive. 616
	804	+	“(g) A purchaser has control of an authoritative electronic copy of a record 617
	805	+	evidencing chattel paper if another person, other than the transferor to the purchaser of an 618
	806	+	interest in the chattel paper: 619
	807	+	“(1) Has control of the authoritative electronic copy and acknowledges that it 620
	808	+	has control on behalf of the purchaser; or 621
	809	+	“(2) Obtains control of the authoritative electronic copy after having 622
	810	+	acknowledged that it will obtain control of the electronic copy on behalf of the purchaser.” 623
	811	+	(4) A new section 28:9-105A is added to read as follows: 624
	812	+	“§ 28:9-105A. Control of electronic money. 625
	813	+	“(a) A person has control of electronic money if: 626
	814	+	“(1) The electronic money, a record attached to or logically associated with the 627
	815	+	electronic money, or a system in which the electronic money is recorded gives the person: 628
	816	+	“(A) Power to avail itself of substantially all the benefit from the 629
	817	+	electronic money; and 630 ENGROSSED ORIGINAL
1429	818
1430	819
1431	820
1432	821
1433	822		32
1434	823
1435		-	(A) Subsection (a) is amended by striking the phrase “Unless a” and
1436		-	inserting the phrase “Subject to subsection (f), unless a” in its place.
1437		-	(B) A new subsection (f) is added to read as follows:
1438		-	“(f) Subsections (a) and (b) of this section do not apply to limit the liability of a
1439		-	secured party to a person if, at the time the secured party obtains control of collateral that is a
1440		-	controllable account, controllable electronic record, or controllable payment intangible or at
1441		-	the time the security interest attaches to the collateral, whichever is later:
1442		-	“(1) The person is a debtor or obligor; and
1443		-	“(2) The secured party knows that the information in subsection (b)(1)(A), (B),
1444		-	or (C) of this section relating to the person is not provided by the collateral, a record attached
1445		-	to or logically associated with the collateral, or the system in which the collateral is
1446		-	recorded.”.
1447		-	(k) A new article 12 is added to read as follows:
1448		-	“ARTICLE 12. CONTROLLABLE ELECTRONIC RECORDS .
1449		-	“Part 1. General Provisions.
1450		-	“§ 28:12-101. Short title.
1451		-	“This article may be cited as “Uniform Commercial Code—Controllable Electronic
1452		-	Records.
1453		-	“§ 28:12-102. Definitions.
1454		-	“(a) For the purposes of this article, the term:
1455		-	“(1) “Controllable electronic record” means a record stored in an electronic
1456		-	medium that can be subjected to control under § 28:12-105. The term does not include a
1457		-	controllable account, a controllable payment intangible, a deposit account, an electronic copy
1458		-	of a record evidencing chattel paper, an electronic document of title, electronic money,
1459		-	investment property, or a transferable record.
1460		-	“(2) “Qualifying purchaser” means a purchaser of a controllable electronic
1461		-	record or an interest in a controllable electronic record that obtains control of the controllable
1462		-	electronic record for value, in good faith, and without notice of a claim of a property right in
1463		-	the controllable electronic record.
1464		-	“(3) “Transferable record” has the meaning provided for that term in:
1465		-	“(A) Section 201(a)(1) of the Electronic Signatures in Global and
1466		-	National Commerce Act, 15 U.S.C. § 7021(a)(1); or
1467		-	“(B) § 28-4915(a).
1468		-	“(4) “Value” has the meaning provided in § 28:3-303(a), as if references in
1469		-	that section to an “instrument” were references to a controllable account, controllable
1470		-	electronic record, or controllable payment intangible.
1471		-	“(b) The definitions in § 28:9-102 of “account debtor”, “controllable account”,
1472		-	“controllable payment intangible”, “chattel paper”, “deposit account”, “electronic money”,
1473		-	and “investment property” apply to this article. ENROLLED ORIGINAL
1474		-
	824	+	“(B) Exclusive power, subject to subsection (b) of this section, to: 631
	825	+	“(i) Prevent others from availing themselves of substantially all 632
	826	+	the benefit from the electronic money; and 633
	827	+	“(ii) Transfer control of the electronic money to another person 634
	828	+	or cause another person to obtain control of other electronic money as a result of the transfer 635
	829	+	of the electronic money; and 636
	830	+	“(2) The electronic money, a record attached to or logically associated with the 637
	831	+	electronic money, or a system in which the electronic money is recorded enables the person 638
	832	+	readily to identify itself in any way, including by name, identifying number, cryptographic 639
	833	+	key, office, or account number, as having the powers under paragraph (1) of this subsection. 640
	834	+	“(b) Subject to subsection (c) of this section, a power is exclusive under subsection 641
	835	+	(a)(1)(B)(i) and (ii) of this section even if: 642
	836	+	“(1) The electronic money, a record attached to or logically associated with the 643
	837	+	electronic money, or a system in which the electronic money is recorded limits the use of the 644
	838	+	electronic money or has a protocol programmed to cause a change, including a transfer or 645
	839	+	loss of control; or 646
	840	+	“(2) The power is shared with another person. 647
	841	+	“(c) A power of a person is not shared with another person under subsection (b)(2) of 648
	842	+	this section and the person’s power is not exclusive if: 649
	843	+	“(1) The person can exercise the power only if the power also is exercised by 650 ENGROSSED ORIGINAL
1475	844
1476	845
1477	846
1478	847
1479	848		33
1480	849
1481		-	“(c) Article 1 contains general definitions and principles of construction and
1482		-	interpretation applicable throughout this article.
1483		-	“§ 28:12-103. Relation to Article 9 and consumer laws.
1484		-	“(a) If there is conflict between this article and Article 9, Article 9 governs.
1485		-	“(b) A transaction subject to this article is subject to any applicable rule of law that
1486		-	establishes a different rule for consumers and §§ 28-3301 to 28-3315.
1487		-	“§ 28:12-104. Rights in controllable account, controllable electronic record, and
1488		-	controllable payment intangible.
1489		-	“(a) This section applies to the acquisition and purchase of rights in a controllable
1490		-	account or controllable payment intangible, including the rights and benefits under
1491		-	subsections (c), (d), (e), (g), and (h) of this section, of a purchaser and qualifying purchaser,
1492		-	in the same manner this section applies to a controllable electronic record.
1493		-	“(b) To determine whether a purchaser of a controllable account or a controllable
1494		-	payment intangible is a qualifying purchaser, the purchaser obtains control of the account or
1495		-	payment intangible if it obtains control of the controllable electronic record that evidences
1496		-	the account or payment intangible.
1497		-	“(c) Except as provided in this section, law other than this article determines whether
1498		-	a person acquires a right in a controllable electronic record and the right the person acquires.
1499		-	“(d) A purchaser of a controllable electronic record acquires all rights in the
1500		-	controllable electronic record that the transferor had or had power to transfer, except that a
1501		-	purchaser of a limited interest in a controllable electronic record acquires rights only to the
1502		-	extent of the interest purchased.
1503		-	“(e) A qualifying purchaser acquires its rights in the controllable electronic record
1504		-	free of a claim of a property right in the controllable electronic record.
1505		-	“(f) Except as provided in subsections (a) and (e) of this section for a controllable
1506		-	account and a controllable payment intangible or law other than this article, a qualifying
1507		-	purchaser takes a right to payment, right to performance, or other interest in property
1508		-	evidenced by the controllable electronic record subject to a claim of a property right in the
1509		-	right to payment, right to performance, or other interest in property.
1510		-	“(g) An action may not be asserted against a qualifying purchaser based on both a
1511		-	purchase by the qualifying purchaser of a controllable electronic record and a claim of a
1512		-	property right in another controllable electronic record, whether the action is framed in
1513		-	conversion, replevin, constructive trust, equitable lien, or other theory.
1514		-	“(h) Filing of a financing statement under Article 9 is not notice of a claim of a
1515		-	property right in a controllable electronic record.
1516		-	“§ 28:12-105. Control of controllable electronic record.
1517		-	“(a) A person has control of a controllable electronic record if the electronic record, a
1518		-	record attached to or logically associated with the electronic record, or a system in which the
1519		-	electronic record is recorded: ENROLLED ORIGINAL
1520		-
	850	+	the other person; and 651
	851	+	“(2) The other person: 652
	852	+	“(A) Can exercise the power without exercise of the power by the 653
	853	+	person; or 654
	854	+	“(B) Is the transferor to the person of an interest in the electronic 655
	855	+	money. 656
	856	+	“(d) If a person has the powers specified in subsection (a)(1)(B)(i) and (ii) of this 657
	857	+	section, the powers are presumed to be exclusive. 658
	858	+	“(e) A person has control of electronic money if another person, other than the 659
	859	+	transferor to the person of an interest in the electronic money: 660
	860	+	“(1) Has control of the electronic money and acknowledges that it has control 661
	861	+	on behalf of the person; or 662
	862	+	“(2) Obtains control of the electronic money after having acknowledged that it 663
	863	+	will obtain control of the electronic money on behalf of the person.” 664
	864	+	(5) New sections 28:9-107A and 28:9-107B are added to read as follows: 665
	865	+	“§ 28:9-107A. Control of controllable electronic record, controllable account, or 666
	866	+	controllable payment intangible. 667
	867	+	“(a) A secured party has control of a controllable electronic record as provided in 668
	868	+	§ 28:12-105. 669
	869	+	“(b) A secured party has control of a controllable account or controllable payment 670 ENGROSSED ORIGINAL
1521	870
1522	871
1523	872
1524	873
1525	874		34
1526	875
1527		-	“(1) Gives the person:
1528		-	“(A) Power to avail itself of substantially all the benefit from the
1529		-	electronic record; and
1530		-	“(B) Exclusive power, subject to subsection (b) of this section, to:
1531		-	“(i) Prevent others from availing themselves of substantially all
1532		-	the benefit from the electronic record; and
1533		-	“(ii) Transfer control of the electronic record to another person
1534		-	or cause another person to obtain control of another controllable electronic record as a result
1535		-	of the transfer of the electronic record; and
1536		-	“(2) Enables the person readily to identify itself in any way, including by
1537		-	name, identifying number, cryptographic key, office, or account number, as having the
1538		-	powers specified in paragraph (1) of this subsection.
1539		-	“(b) Subject to subsection (c) of this section, a power is exclusive under subsections
1540		-	(a)(1)(B)(i) and (ii) of this section even if:
1541		-	“(1) The controllable electronic record, a record attached to or logically
1542		-	associated with the electronic record, or a system in which the electronic record is recorded
1543		-	limits the use of the electronic record or has a protocol programmed to cause a change,
1544		-	including a transfer or loss of control or a modification of benefits afforded by the electronic
1545		-	record; or
1546		-	“(2) The power is shared with another person.
1547		-	“(c) A power of a person is not shared with another person under subsection (b)(2) of
1548		-	this section and the person’s power is not exclusive if:
1549		-	“(1) The person can exercise the power only if the power also is exercised by
1550		-	the other person; and
1551		-	“(2) The other person:
1552		-	“(A) Can exercise the power without exercise of the power by the
1553		-	person; or
1554		-	“(B) Is the transferor to the person of an interest in the controllable
1555		-	electronic record or a controllable account or controllable payment intangible evidenced by
1556		-	the controllable electronic record.
1557		-	“(d) If a person has the powers specified in subsection (a)(1)(B)(i) and (ii) of this
1558		-	section, the powers are presumed to be exclusive.
1559		-	“(e) A person has control of a controllable electronic record if another person, other
1560		-	than the transferor to the person of an interest in the controllable electronic record or a
1561		-	controllable account or controllable payment intangible evidenced by the controllable
1562		-	electronic record:
1563		-	“(1) Has control of the electronic record and acknowledges that it has control
1564		-	on behalf of the person; or
1565		-	“(2) Obtains control of the electronic record after having acknowledged that it ENROLLED ORIGINAL
1566		-
	876	+	intangible if the secured party has control of the controllable electronic record that evidences 671
	877	+	the controllable account or controllable payment intangible. 672
	878	+	“§ 28:9-107B. No requirement to acknowledge or confirm; no duties. 673
	879	+	“(a) A person that has control under § 28:9-104, § 28:9-105, or § 28:9-105A is not 674
	880	+	required to acknowledge that it has control on behalf of another person. 675
	881	+	“(b) If a person acknowledges that it has or will obtain control on behalf of another 676
	882	+	person, unless the person otherwise agrees or law other than this article otherwise provides, 677
	883	+	the person does not owe any duty to the other person and is not required to confirm the 678
	884	+	acknowledgment to any other person.” 679
	885	+	(6) Section 28:9-203(b)(3) is amended as follows: 680
	886	+	(A) Subparagraph (A) is amended by striking the word “authenticated” 681
	887	+	and inserting the word “signed” in its place. 682
	888	+	(B) Subparagraph (C) is amended by striking the word “or”. 683
	889	+	(C) Subparagraph (D) is amended to read as follows: 684
	890	+	“(D) the collateral is controllable accounts, controllable electronic 685
	891	+	records, controllable payment intangibles, deposit accounts, electronic documents, electronic 686
	892	+	money, investment property, or letter-of-credit rights, and the secured party has control under 687
	893	+	§ 28:7-106, § 28:9-104, § 28:9-105A, § 28:9-106, § 28:9-107, or § 28:9-107A pursuant to the 688
	894	+	debtor’s security agreement; or”. 689
	895	+	(D) A new subparagraph (E) is added to read as follows: 690 ENGROSSED ORIGINAL
1567	896
1568	897
1569	898
1570	899
1571	900		35
1572	901
1573		-	will obtain control of the electronic record on behalf of the person.
1574		-	“(f) A person that has control under this section is not required to acknowledge that it
1575		-	has control on behalf of another person.
1576		-	“(g) If a person acknowledges that it has or will obtain control on behalf of another
1577		-	person, unless the person otherwise agrees or law other than this article or Article 9
1578		-	otherwise provides, the person does not owe any duty to the other person and is not required
1579		-	to confirm the acknowledgment to any other person.
1580		-	“§ 28:12-106. Discharge of account debtor on controllable account or controllable
1581		-	payment intangible.
1582		-	“(a) An account debtor on a controllable account or controllable payment intangible
1583		-	may discharge its obligation by paying:
1584		-	“(1) The person having control of the controllable electronic record that
1585		-	evidences the controllable account or controllable payment intangible; or
1586		-	“(2) Except as provided in subsection (b) of this section, a person that
1587		-	formerly had control of the controllable electronic record.
1588		-	“(b) Subject to subsection (d) of this section, the account debtor may not discharge its
1589		-	obligation by paying a person that formerly had control of the controllable electronic record
1590		-	if the account debtor receives a notification that:
1591		-	“(1) Is signed by a person that formerly had control or the person to which
1592		-	control was transferred;
1593		-	“(2) Reasonably identifies the controllable account or controllable payment
1594		-	intangible;
1595		-	“(3) Notifies the account debtor that control of the controllable electronic
1596		-	record that evidences the controllable account or controllable payment intangible was
1597		-	transferred;
1598		-	“(4) Identifies the transferee, in any reasonable way, including by name,
1599		-	identifying number, cryptographic key, office, or account number; and
1600		-	“(5) Provides a commercially reasonable method by which the account debtor
1601		-	is to pay the transferee.
1602		-	“(c) After receipt of a notification that complies with subsection (b) of this section,
1603		-	the account debtor may discharge its obligation by paying in accordance with the notification
1604		-	and may not discharge the obligation by paying a person that formerly had control.
1605		-	“(d) Subject to subsection (h) of this section, notification is ineffective under
1606		-	subsection (b) of this section:
1607		-	“(1) Unless, before the notification is sent, the account debtor and the person
1608		-	that, at that time, had control of the controllable electronic record that evidences the
1609		-	controllable account or controllable payment intangible agree in a signed record to a
1610		-	commercially reasonable method by which a person may furnish reasonable proof that
1611		-	control has been transferred; ENROLLED ORIGINAL
1612		-
	902	+	“(E) The collateral is chattel paper and the secured party has possession 691
	903	+	and control under § 28:9-314A pursuant to the debtor’s security agreement.” 692
	904	+	(7) Section 28:9-204 is amended as follows: 693
	905	+	(A) Subparagraph (b) is amended by striking the word “A” the first 694
	906	+	time it appears and inserting the phrase “Subject to subsection (b1) of this section, a” in its 695
	907	+	place. 696
	908	+	(B) A new subsection (b-1): 697
	909	+	“(b-1) Subsection (b) of this section does not prevent a security interest from 698
	910	+	attaching: 699
	911	+	“(1) To consumer goods as proceeds under § 28:9-315(a) or commingled 700
	912	+	goods under § 28:9-336(c); 701
	913	+	“(2) To a commercial tort claim as proceeds under § 28:9-315(a); or 702
	914	+	“(3) Under an after-acquired property clause to property that is proceeds of 703
	915	+	consumer goods or a commercial tort claim.” 704
	916	+	(8) Section 28:9-207(c) is amended by striking the phrase “§ 28:7-106, § 28:9-705
	917	+	104, § 28:9-105, § 28:9-106, or § 28:9-107” and inserting the phrase “§ 28:7-106, § 28:9-706
	918	+	104, § 28:9-105, § 28:9-105A, § 28:9-106, § 28:9-107, or § 28:9-107A” in its place. 707
	919	+	(9) Section 28:9-208(b) is amended as follows: 708
	920	+	(A) Striking the phrase “an authenticated” and inserting the phrase “a 709
	921	+	signed” in its place. 710 ENGROSSED ORIGINAL
1613	922
1614	923
1615	924
1616	925
1617	926		36
1618	927
1619		-	“(2) To the extent an agreement between the account debtor and seller of a
1620		-	payment intangible limits the account debtor’s duty to pay a person other than the seller and
1621		-	the limitation is effective under law other than this article; or
1622		-	“(3) At the option of the account debtor, if the notification notifies the account
1623		-	debtor to:
1624		-	“(A) Divide a payment;
1625		-	“(B) Make less than the full amount of an installment or other periodic
1626		-	payment; or
1627		-	“(C) Pay any part of a payment by more than one method or to more
1628		-	than one person.
1629		-	“(e) Subject to subsection (h) of this section, if requested by the account debtor, the
1630		-	person giving the notification under subsection (b) of this section seasonably shall furnish
1631		-	reasonable proof, using the method in the agreement referred to in subsection (d)(1) of this
1632		-	section, that control of the controllable electronic record has been transferred. Unless the
1633		-	person complies with the request, the account debtor may discharge its obligation by paying
1634		-	a person that formerly had control, even if the account debtor has received a notification
1635		-	under subsection (b) of this section.
1636		-	“(f) A person furnishes reasonable proof under subsection (e) of this section that
1637		-	control has been transferred if the person demonstrates, using the method in the agreement
1638		-	referred to in subsection (d)(1) of this section, that the transferee has the power to:
1639		-	“(1) Avail itself of substantially all the benefit from the controllable electronic
1640		-	record;
1641		-	“(2) Prevent others from availing themselves of substantially all the benefit
1642		-	from the controllable electronic record; and
1643		-	“(3) Transfer the powers specified in paragraphs (1) and (2) of this subsection
1644		-	to another person.
1645		-	“(g) Subject to subsection (h) of this section, an account debtor may not waive or vary
1646		-	its rights under subsections (d)(1) and (e) of this section or its option under subsection (d)(3)
1647		-	of this section.
1648		-	“(h) This section is subject to law other than this article which establishes a different
1649		-	rule for an account debtor who is an individual and who incurred the obligation primarily for
1650		-	personal, family, or household purposes.
1651		-	“§ 28:12-107. Governing law.
1652		-	“(a) Except as provided in subsection (b) of this section, the local law of a
1653		-	controllable electronic record’s jurisdiction governs a matter covered by this article.
1654		-	“(b) For a controllable electronic record that evidences a controllable account or
1655		-	controllable payment intangible, the local law of the controllable electronic record’s
1656		-	jurisdiction governs a matter covered by § 28:12-106 unless an effective agreement
1657		-	determines that the local law of another jurisdiction governs. ENROLLED ORIGINAL
1658		-
	928	+	(B) Paragraph (3) is amended to read as follows: 711
	929	+	“(3) A secured party, other than a buyer, having control under § 28:9-105 of an 712
	930	+	authoritative electronic copy of a record evidencing chattel paper shall transfer control of the 713
	931	+	electronic copy to the debtor or a person designated by the debtor;”. 714
	932	+	(C) Paragraph (4) is amended by striking the phrase “an authenticated” 715
	933	+	and inserting the phrase “a signed” in its place. 716
	934	+	(D) Paragraph (5) is amended by: 717
	935	+	(i) Striking the phrase “an authenticated” and inserting the 718
	936	+	phrase “a signed” in its place; and 719
	937	+	(ii) Striking the phrase “; and” and inserting a semicolon in its 720
	938	+	place. 721
	939	+	(E) Paragraph (6) is amended to read as follows: 722
	940	+	“(6) A secured party having control under § 28:7-106 of an authoritative 723
	941	+	electronic copy of an electronic document of title shall transfer control of the electronic copy 724
	942	+	to the debtor or a person designated by the debtor;”. 725
	943	+	(F) New paragraphs (7) and (8) are added to read as follows: 726
	944	+	“(7) A secured party having control under § 28:9-105A of electronic money 727
	945	+	shall transfer control of the electronic money to the debtor or a person designated by the 728
	946	+	debtor; and 729
	947	+	“(8) A secured party having control under § 28:12-105 of a controllable 730 ENGROSSED ORIGINAL
1659	948
1660	949
1661	950
1662	951
1663	952		37
1664	953
1665		-	“(c) The following rules determine a controllable electronic record’s jurisdiction
1666		-	under this section:
1667		-	“(1) If the controllable electronic record, or a record attached to or logically
1668		-	associated with the controllable electronic record and readily available for review, expressly
1669		-	provides that a particular jurisdiction is the controllable electronic record’s jurisdiction for
1670		-	purposes of this article or this subtitle, that jurisdiction is the controllable electronic record’s
1671		-	jurisdiction.
1672		-	“(2) If paragraph (1) of this subsection does not apply and the rules of the
1673		-	system in which the controllable electronic record is recorded are readily available for review
1674		-	and expressly provide that a particular jurisdiction is the controllable electronic record’s
1675		-	jurisdiction for purposes of this article or this subtitle, that jurisdiction is the controllable
1676		-	electronic record’s jurisdiction.
1677		-	“(3) If paragraphs (1) and (2) of this subsection do not apply and the
1678		-	controllable electronic record, or a record attached to or logically associated with the
1679		-	controllable electronic record and readily available for review, expressly provides that the
1680		-	controllable electronic record is governed by the law of a particular jurisdiction, that
1681		-	jurisdiction is the controllable electronic record’s jurisdiction.
1682		-	“(4) If paragraphs (1), (2), and (3) of this subsection do not apply and the rules
1683		-	of the system in which the controllable electronic record is recorded are readily available for
1684		-	review and expressly provide that the controllable electronic record or the system is
1685		-	governed by the law of a particular jurisdiction, that jurisdiction is the controllable electronic
1686		-	record’s jurisdiction.
1687		-	“(5) If paragraphs (1) through (4) of this subsection do not apply, the
1688		-	controllable electronic record’s jurisdiction is the District of Columbia.
1689		-	“(d) To the extent subsections (a) and (b) of this section provide that the local law of
1690		-	the controllable electronic record’s jurisdiction governs a matter covered by this article, that
1691		-	law governs even if the matter or a transaction to which the matter relates does not bear any
1692		-	relation to the controllable electronic record’s jurisdiction.
1693		-	“(e) The rights acquired under § 28:12-104 by a purchaser or qualifying purchaser are
1694		-	governed by the law applicable under this section at the time of purchase.
1695		-	“Part 2. Transitional Provisions for Articles 9 and 12.
1696		-	“§ 28:12-201. Definitions.
1697		-	“(a) In this part, the term:
1698		-	“(1) “Adjustment date” means July 1, 2025, or the date that is one year after
1699		-	the effective date of this act, whichever is later.
1700		-	“(2) “Article 12 property” means a controllable account, controllable
1701		-	electronic record, or controllable payment intangible.
1702		-	“(3) “2024 Act” means the Uniform Commercial Code Amendment Act of
1703		-	2024, passed on 2nd reading on February 6, 2024 (Enrolled version of B25-5). ENROLLED ORIGINAL
1704		-
	954	+	electronic record, other than a buyer of a controllable account or controllable payment 731
	955	+	intangible evidenced by the controllable electronic record, shall transfer control of the 732
	956	+	controllable electronic record to the debtor or a person designated by the debtor.” 733
	957	+	(10) Section 28:9-209(b) is amended to read as follows: 734
	958	+	“(b) Within 10 days after receiving a signed demand by the debtor, a secured party 735
	959	+	shall send to an account debtor that has received notification under § 28:9-406(a) or § 28:12-736
	960	+	106(b) of an assignment to the secured party as assignee a signed record that releases the 737
	961	+	account debtor from any further obligation to the secured party.” 738
	962	+	(11) Section 28:9-210 is amended as follows: 739
	963	+	(A) Subsection (a) is amended as by striking the word “authenticated” 740
	964	+	wherever it appears and inserting the word “signed” in its place. 741
	965	+	(B) Subsection (b) is amended by striking the word “authenticating” 742
	966	+	wherever it appears and inserting the word “signing” in its place. 743
	967	+	(C) Subsection (c) is amended by striking the phrase “an authenticated” 744
	968	+	and inserting the phrase “a signed” in its place. 745
	969	+	(D) Subsection (d) is amended by striking the phrase “an authenticated” 746
	970	+	and inserting the phrase “a signed” in its place. 747
	971	+	(E) Subsection (e) is amended by striking the phrase “an authenticated” 748
	972	+	and inserting the phrase “a signed” in its place. 749
	973	+	(12) Section 28:9-301 is amended as follows: 750 ENGROSSED ORIGINAL
1705	974
1706	975
1707	976
1708	977
1709	978		38
1710	979
1711		-	“(b) The following definitions in other articles of this subtitle apply to this part.
1712		-	“(1) “Controllable account” § 28:9-102.
1713		-	“(2) “Controllable electronic record” § 28:12-102.
1714		-	“(3) “Controllable payment intangible” § 28:9-102.
1715		-	“(4) “Electronic money” § 28:9-102.
1716		-	“(5) “Financing statement” § 28:9-102.
1717		-	“§ 28:12-202. Saving clause.
1718		-	“(a) Except as provided in this part, a transaction validly entered into before the
1719		-	effective date of the 2024 Act and the rights, duties, and interests flowing from the
1720		-	transaction remain valid thereafter and may be terminated, completed, consummated, or
1721		-	enforced as required or permitted by law other than this subtitle or, if applicable, this
1722		-	subtitle, as though the 2024 Act had not taken effect.
1723		-	“(b) Except as provided in this part, Article 9, as amended by the 2024 Act, and
1724		-	Article 12 apply to a transaction, lien, or other interest in property, even if the transaction,
1725		-	lien, or interest was entered into, created, or acquired before the effective date of this act.
1726		-	“(c) Except as provided in subsection (d) of this section and §§ 28:12-203 to 12-208:
1727		-	“(1) A transaction, lien, or interest in property that was validly entered into,
1728		-	created, or transferred before the effective date of the 2024 Act and was not governed by this
1729		-	subtitle, but would be subject to Article 9 as amended by the 2024 Act or Article 12 if it had
1730		-	been entered into, created, or transferred on or after the effective date of the 2024 Act,
1731		-	including the rights, duties, and interests flowing from the transaction, lien, or interest,
1732		-	remains valid on and after the effective date of the 2024 Act; and
1733		-	“(2) The transaction, lien, or interest may be terminated, completed,
1734		-	consummated, and enforced as required or permitted by the 2024 Act or by the law that
1735		-	would apply if the 2024 Act had not taken effect.
1736		-	“(d) The 2024 Act does not affect an action, case, or proceeding commenced before
1737		-	the effective date of the 2024 Act.
1738		-	“§ 28:12-203. Security interest perfected before effective date of 2024 Act.
1739		-	“(a) A security interest that is enforceable and perfected immediately before the
1740		-	effective date of the 2024 Act is a perfected security interest under the 2024 Act if, on the
1741		-	effective date of the 2024 Act, the requirements for enforceability and perfection under the
1742		-	2024 Act are satisfied without further action.
1743		-	“(b) If a security interest is enforceable and perfected immediately before the
1744		-	effective date of the 2024 Act, but the requirements for enforceability or perfection under the
1745		-	2024 Act are not satisfied on the effective date of the 2024 Act, the security interest:
1746		-	“(1) Is a perfected security interest until the earlier of the time perfection
1747		-	would have ceased under the law in effect immediately before the effective date of the 2024
1748		-	Act or the adjustment date;
1749		-	“(2) Remains enforceable thereafter only if the security interest satisfies the ENROLLED ORIGINAL
1750		-
	980	+	(A) The lead-in language is amended by striking the word “28:9-306" 751
	981	+	and inserting the word “28:9-306B” in its place. 752
	982	+	(B) Paragraph (3) is amended by striking the phrase “while tangible 753
	983	+	negotiable documents, goods, instruments, money, or tangible chattel paper” and inserting 754
	984	+	the phrase “while negotiable tangible documents, goods, instruments, or tangible money” in 755
	985	+	its place. 756
	986	+	(13) Section 28:9-304(a) is amended by striking the phrase “bank.” and 757
	987	+	inserting the phrase “bank, even if the transaction does not bear any relation to the bank’s 758
	988	+	jurisdiction.” in its place. 759
	989	+	(14) Section 28:9-305(a) is amended by adding a new paragraph (5) to read as 760
	990	+	follows: 761
	991	+	“(5) Paragraphs (2), (3), and (4) of this subsection apply even if the transaction 762
	992	+	does not bear any relation to the jurisdiction.” 763
	993	+	(15) New sections 28:9-306A and 28:9-306B are added to read as follows: 764
	994	+	“§ 28:9-306A. Law governing perfection and priority of security interests in chattel 765
	995	+	paper. 766
	996	+	“(a) Except as provided in subsection (d) of this section, if chattel paper is evidenced 767
	997	+	only by an authoritative electronic copy of the chattel paper or is evidenced by an 768
	998	+	authoritative electronic copy and an authoritative tangible copy, the local law of the chattel 769
	999	+	paper’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the 770 ENGROSSED ORIGINAL
1751	1000
1752	1001
1753	1002
1754	1003
1755	1004		39
1756	1005
1757		-	requirements for enforceability under § 28:9-203, as amended by the 2024 Act, before the
1758		-	adjustment date; and
1759		-	“(3) Remains perfected thereafter only if the requirements for perfection under
1760		-	the 2024 Act are satisfied before the time specified in paragraph (1) of this subsection.
1761		-	“§ 28:12-204. Security interest unperfected before effective date of 2024 Act.
1762		-	“A security interest that is enforceable immediately before the effective date of the
1763		-	2024 Act but is unperfected at that time:
1764		-	“(1) Remains an enforceable security interest until the adjustment date;
1765		-	“(2) Remains enforceable thereafter if the security interest becomes
1766		-	enforceable under § 28:9-203, as amended by the 2024 Act, on the effective date of the 2024
1767		-	Act or before the adjustment date; and
1768		-	“(3) Becomes perfected:
1769		-	“(A) Without further action, on the effective date of the 2024 Act if the
1770		-	requirements for perfection under the 2024 Act are satisfied before or at that time; or
1771		-	“(B) When the requirements for perfection are satisfied if the
1772		-	requirements are satisfied after that time.
1773		-	“§ 28:12-205. Effectiveness of actions taken before effective date of the 2024 Act.
1774		-	“(a) If action, other than the filing of a financing statement, is taken before the
1775		-	effective date of the 2024 Act and the action would have resulted in perfection of the security
1776		-	interest had the security interest become enforceable before the effective date of the 2024
1777		-	Act, the action is effective to perfect a security interest that attaches under the 2024 Act
1778		-	before the adjustment date. An attached security interest becomes unperfected on the
1779		-	adjustment date unless the security interest becomes a perfected security interest under the
1780		-	2024 Act before the adjustment date.
1781		-	“(b) The filing of a financing statement before the effective date of the 2024 Act is
1782		-	effective to perfect a security interest on the effective date of the 2024 Act to the extent the
1783		-	filing would satisfy the requirements for perfection under the 2024 Act.
1784		-	“(c) The taking of an action before the effective date of the 2024 Act is sufficient for
1785		-	the enforceability of a security interest on the effective date of the 2024 Act if the action
1786		-	would satisfy the requirements for enforceability under the 2024 Act.
1787		-	“§ 28:12-206. Priority.
1788		-	“(a) Subject to subsections (b) and (c) of this section, the 2024 Act determines the
1789		-	priority of conflicting claims to collateral.
1790		-	“(b) Subject to subsection (c) of this section, if the priorities of claims to collateral
1791		-	were established before the effective date of the 2024 Act, Article 9 as in effect before the
1792		-	effective date of the 2024 Act determines priority.
1793		-	“(c) On the adjustment date, to the extent the priorities determined by Article 9 as
1794		-	amended by the 2024 Act modify the priorities established before the effective date of the
1795		-	2024 Act, the priorities of claims to Article 12 property and electronic money established ENROLLED ORIGINAL
1796		-
	1006	+	priority of a security interest in the chattel paper, even if the transaction does not bear any 771
	1007	+	relation to the chattel paper’s jurisdiction. 772
	1008	+	“(b) The following rules determine the chattel paper’s jurisdiction under this section: 773
	1009	+	“(1) If the authoritative electronic copy of the record evidencing chattel paper, 774
	1010	+	or a record attached to or logically associated with the electronic copy and readily available 775
	1011	+	for review, expressly provides that a particular jurisdiction is the chattel paper’s jurisdiction 776
	1012	+	for purposes of this part, this article, or this subtitle, that jurisdiction is the chattel paper’s 777
	1013	+	jurisdiction. 778
	1014	+	“(2) If paragraph (1) of this subsection does not apply and the rules of the 779
	1015	+	system in which the authoritative electronic copy is recorded are readily available for review 780
	1016	+	and expressly provide that a particular jurisdiction is the chattel paper’s jurisdiction for 781
	1017	+	purposes of this part, this article, or this subtitle, that jurisdiction is the chattel paper’s 782
	1018	+	jurisdiction. 783
	1019	+	“(3) If paragraphs (1) and (2) of this subsection do not apply and the 784
	1020	+	authoritative electronic copy, or a record attached to or logically associated with the 785
	1021	+	electronic copy and readily available for review, expressly provides that the chattel paper is 786
	1022	+	governed by the law of a particular jurisdiction, that jurisdiction is the chattel paper’s 787
	1023	+	jurisdiction. 788
	1024	+	“(4) If paragraphs (1), (2), and (3) of this subsection do not apply and the rules 789
	1025	+	of the system in which the authoritative electronic copy is recorded are readily available for 790 ENGROSSED ORIGINAL
1797	1026
1798	1027
1799	1028
1800	1029
1801	1030		40
1802	1031
1803		-	before the effective date of the 2024 Act cease to apply.
1804		-	“§ 28:12-207. Priority of claims when priority rules of Article 9 do not apply.
1805		-	“(a) Subject to subsections (b) and (c) of this section, Article 12 determines the
1806		-	priority of conflicting claims to Article 12 property when the priority rules of Article 9 as
1807		-	amended by the 2024 Act do not apply.
1808		-	“(b) Subject to subsection (c) of this section, when the priority rules of Article 9 as
1809		-	amended by the 2024 Act do not apply and the priorities of claims to Article 12 property
1810		-	were established before the effective date of the 2024 Act, law other than Article 12
1811		-	determines priority.
1812		-	“(c) When the priority rules of Article 9 as amended by the 2024 Act do not apply, to
1813		-	the extent the priorities determined by the 2024 Act modify the priorities established before
1814		-	the effective date of the 2024 Act, the priorities of claims to Article 12 property established
1815		-	before the effective date of the 2024 Act cease to apply on the adjustment date.”.
1816		-
1817		-	Sec. 3. Fiscal impact statement.
1818		-	The Council adopts the fiscal impact statement in the committee report as the fiscal
1819		-	impact statement required by section 602(c)(3) of the District of Columbia Home Rule Act,
1820		-	approved December 24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(3)).
1821		-
1822		-	Sec. 4. Effective date.
1823		-	This act shall take effect following approval by the Mayor (or in the event of veto by
1824		-	the Mayor, action by the Council to override the veto) and a 30-day period of congressional
1825		-	review as provided in section 602(c)(1) of the District of Columbia Home Rule Act,
1826		-	approved December 24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)).
1827		-
1828		-
1829		-
1830		-
1831		-	______________________________
1832		-	Chairman
1833		-	Council of the District of Columbia
1834		-
1835		-
1836		-
1837		-
1838		-
1839		-	_________________________________
1840		-	Mayor
1841		-	District of Columbia
	1032	+	review and expressly provide that the chattel paper or the system is governed by the law of a 791
	1033	+	particular jurisdiction, that jurisdiction is the chattel paper’s jurisdiction. 792
	1034	+	“(5) If paragraphs (1) through (4) of this subsection do not apply, the chattel 793
	1035	+	paper’s jurisdiction is the jurisdiction in which the debtor is located. 794
	1036	+	“(c) If an authoritative tangible copy of a record evidences chattel paper and the 795
	1037	+	chattel paper is not evidenced by an authoritative electronic copy, while the authoritative 796
	1038	+	tangible copy of the record evidencing chattel paper is located in a jurisdiction, the local law 797
	1039	+	of that jurisdiction governs: 798
	1040	+	“(1) Perfection of a security interest in the chattel paper by possession under 799
	1041	+	§ 28:9-314A; and 800
	1042	+	“(2) The effect of perfection or nonperfection and the priority of a security 801
	1043	+	interest in the chattel paper. 802
	1044	+	“(d) The local law of the jurisdiction in which the debtor is located governs perfection 803
	1045	+	of a security interest in chattel paper by filing. 804
	1046	+	“§ 28:9-306B. Law governing perfection and priority of security interests in 805
	1047	+	controllable accounts, controllable electronic records, and controllable payment intangibles. 806
	1048	+	“(a) Except as provided in subsection (b) of this section, the local law of the 807
	1049	+	controllable electronic record’s jurisdiction specified in § 28:12-107(c) governs perfection, 808
	1050	+	the effect of perfection or nonperfection, and the priority of a security interest in a 809
	1051	+	controllable electronic record and a security interest in a controllable account or controllable 810 ENGROSSED ORIGINAL
	1052	+
	1053	+
	1054	+
	1055	+
	1056	+	41
	1057	+
	1058	+	payment intangible evidenced by the controllable electronic record. 811
	1059	+	“(b) The local law of the jurisdiction in which the debtor is located governs: 812
	1060	+	“(1) Perfection of a security interest in a controllable account, controllable 813
	1061	+	electronic record, or controllable payment intangible by filing; and 814
	1062	+	“(2) Automatic perfection of a security interest in a controllable payment 815
	1063	+	intangible created by a sale of the controllable payment intangible.” 816
	1064	+	(16) Section 28:9-310(b) is amended as follows: 817
	1065	+	(A) Paragraph (8) is amended by striking the phrase “In deposit 818
	1066	+	accounts, electronic chattel paper;” and inserting the phrase “In controllable accounts, 819
	1067	+	controllable electronic records, controllable payment intangibles, deposit accounts,” in its 820
	1068	+	place. 821
	1069	+	(B) A new paragraph (8A) is added to read as follows: 822
	1070	+	“(8A) In chattel paper which is perfected by possession and control under 823
	1071	+	§ 28:9-314A;”. 824
	1072	+	(17) Section 28:9-312 is amended as follows: 825
	1073	+	(A) The section heading is amended by striking the phrase “in chattel 826
	1074	+	paper,” and inserting the phrase “in chattel paper, controllable accounts, controllable 827
	1075	+	electronic records, controllable payment intangibles,”. 828
	1076	+	(B) Subsection (a) is amended to read as follows: 829
	1077	+	“(a) A security interest in chattel paper, controllable accounts, controllable electronic 830 ENGROSSED ORIGINAL
	1078	+
	1079	+
	1080	+
	1081	+
	1082	+	42
	1083	+
	1084	+	records, controllable payment intangibles, instruments, investment property, or negotiable 831
	1085	+	documents may be perfected by filing.” 832
	1086	+	(C) Subsection (b) is amended as follows: 833
	1087	+	(i) Paragraph (2) is amended by striking the word “and”. 834
	1088	+	(ii) Paragraph (3) is amended to read as follows: 835
	1089	+	“(3) a security interest in tangible money may be perfected only by the secured 836
	1090	+	party’s taking possession under § 28:9-313; and”. 837
	1091	+	(iii) A new paragraph (4) is added to read as follows: 838
	1092	+	“(4) A security interest in electronic money may be perfected only by control 839
	1093	+	under § 28:9-314.”. 840
	1094	+	(D) Subsection (e) is amended by striking the phrase “an authenticated” 841
	1095	+	and inserting the phrase “a signed” in its place. 842
	1096	+	(18) Section 28:9-313 is amended as follows: 843
	1097	+	(A) Subsection (a) is amended by striking the phase “in tangible 844
	1098	+	negotiable documents, goods, instruments, money, or tangible chattel paper” and inserting 845
	1099	+	the phrase “in goods, instruments, negotiable tangible documents, or tangible money” in its 846
	1100	+	place. 847
	1101	+	(B) Subsection (c) is amended as follows: 848
	1102	+	(i) Paragraph (1) is amended by striking the word 849
	1103	+	“authenticates” and inserting the word “signs” in its place. 850 ENGROSSED ORIGINAL
	1104	+
	1105	+
	1106	+
	1107	+
	1108	+	43
	1109	+
	1110	+	(ii) Paragraph (2) is amended to read as follows: 851
	1111	+	“(2) The person takes possession of the collateral after having signed a record 852
	1112	+	acknowledging that it will hold possession of the collateral for the secured party’s benefit.” 853
	1113	+	(C) Subsection (d) is amended by striking the phrase “no earlier than” 854
	1114	+	and inserting the word “not earlier than” in its place. 855
	1115	+	(19) Section 28:9-314 is amended as follows: 856
	1116	+	(A) Subsection (a) is amended to read as follows: 857
	1117	+	“(a) A security interest in controllable accounts, controllable electronic records, 858
	1118	+	controllable payment intangibles, deposit accounts, electronic documents, electronic money, 859
	1119	+	investment property, or letter-of-credit rights may be perfected by control of the collateral 860
	1120	+	under § 28:7-106, § 28:9-104, § 28:9-105A, § 28:9-106, § 28:9-107, or § 28:9-107A.” 861
	1121	+	(B) Subsection (b) is amended to read as follows: 862
	1122	+	“(b) A security interest in controllable accounts, controllable electronic records, 863
	1123	+	controllable payment intangibles, deposit accounts, electronic documents, electronic money, 864
	1124	+	or letter-of-credit rights is perfected by control under § 28:7-106, § 28:9-104, § 28:9-105A, 865
	1125	+	§ 28:9-107, or § 28:9-107A not earlier than the time the secured party obtains control and 866
	1126	+	remains perfected by control only while the secured party retains control.” 867
	1127	+	(C) Subsection (c) is amended by striking the word “from the time” and 868
	1128	+	inserting the phrase “not earlier than the time” in its place. 869
	1129	+	(20) A new section 28:9-314A is added to read as follows: 870 ENGROSSED ORIGINAL
	1130	+
	1131	+
	1132	+
	1133	+
	1134	+	44
	1135	+
	1136	+	“§ 28:9-314A. Perfection by possession and control of chattel paper. 871
	1137	+	“(a) A secured party may perfect a security interest in chattel paper by taking 872
	1138	+	possession of each authoritative tangible copy of the record evidencing the chattel paper and 873
	1139	+	obtaining control of each authoritative electronic copy of the electronic record evidencing the 874
	1140	+	chattel paper. 875
	1141	+	“(b) A security interest is perfected under subsection (a) of this section not earlier 876
	1142	+	than the time the secured party takes possession and obtains control and remains perfected 877
	1143	+	under subsection (a) of this section only while the secured party retains possession and 878
	1144	+	control. 879
	1145	+	“(c) § 28:9-313(c) and (f) through (i) applies to perfection by possession of an 880
	1146	+	authoritative tangible copy of a record evidencing chattel paper.” 881
	1147	+	(21) Section 28:9-316 is amended as follows: 882
	1148	+	(A) Subsection (a) is amended by striking the phrase “or § 28:9-305(c)” 883
	1149	+	and inserting the phrase “, § 28:9-305(c), § 28:9-306A(d), or § 28:9-306B(b)” in its place. 884
	1150	+	(B) Subsection (f) is amended striking the phrase “deposit accounts, 885
	1151	+	letter-of-credit rights, or investment property which is perfected under the law of” and 886
	1152	+	inserting the phrase “chattel paper, controllable accounts, controllable electronic records, 887
	1153	+	controllable payment intangibles, deposit accounts, letter-of-credit rights, or investment 888
	1154	+	property which is perfected under the law of the chattel paper’s jurisdiction, the controllable 889
	1155	+	electronic record’s jurisdiction,” in its place. 890 ENGROSSED ORIGINAL
	1156	+
	1157	+
	1158	+
	1159	+
	1160	+	45
	1161	+
	1162	+	(22) Section 28:9-317 is amended as follows: 891
	1163	+	(A) Subsection (b) is amended by striking the phrase “of tangible 892
	1164	+	chattel paper, tangible documents, goods, instruments,” and inserting the phrase “of goods, 893
	1165	+	instruments, tangible documents,” in its place. 894
	1166	+	(B) Subsection (d) is amended to read as follows: 895
	1167	+	“(d) Subject to subsections (f) through (i) of this section, a licensee of a general 896
	1168	+	intangible or a buyer, other than a secured party, of collateral other than electronic money, 897
	1169	+	goods, instruments, tangible documents, or a certificated security takes free of a security 898
	1170	+	interest if the licensee or buyer gives value without knowledge of the security interest and 899
	1171	+	before it is perfected.” 900
	1172	+	(C) The following new subsections are added to read as follows: 901
	1173	+	“(f) A buyer, other than a secured party, of chattel paper takes free of a security 902
	1174	+	interest if, without knowledge of the security interest and before it is perfected, the buyer 903
	1175	+	gives value and: 904
	1176	+	“(1) Receives delivery of each authoritative tangible copy of the record 905
	1177	+	evidencing the chattel paper; and 906
	1178	+	“(2) If each authoritative electronic copy of the record evidencing the chattel 907
	1179	+	paper can be subjected to control under § 28:9-105, obtains control of each authoritative 908
	1180	+	electronic copy. 909
	1181	+	“(g) A buyer of an electronic document takes free of a security interest if, without 910 ENGROSSED ORIGINAL
	1182	+
	1183	+
	1184	+
	1185	+
	1186	+	46
	1187	+
	1188	+	knowledge of the security interest and before it is perfected, the buyer gives value and, if 911
	1189	+	each authoritative electronic copy of the document can be subjected to control under § 28:7-912
	1190	+	106, obtains control of each authoritative electronic copy. 913
	1191	+	“(h) A buyer of a controllable electronic record takes free of a security interest if, 914
	1192	+	without knowledge of the security interest and before it is perfected, the buyer gives value 915
	1193	+	and obtains control of the controllable electronic record. 916
	1194	+	“(i) A buyer, other than a secured party, of a controllable account or a controllable 917
	1195	+	payment intangible takes free of a security interest if, without knowledge of the security 918
	1196	+	interest and before it is perfected, the buyer gives value and obtains control of the 919
	1197	+	controllable account or controllable payment intangible.” 920
	1198	+	(23) Section 28:9-323 is amended as follows: 921
	1199	+	(A) Subsection (d) is amended by striking the phrase “other than a 922
	1200	+	buyer in the ordinary course of business”. 923
	1201	+	(B) Subsection (f) is amended by striking the phrase “, other than a 924
	1202	+	lessee in ordinary course of business”. 925
	1203	+	(24) Section 28:9-324 is amended as follows: 926
	1204	+	(A) Subsection (b)(2) is amended by striking the phrase “an 927
	1205	+	authenticated” and inserting the phrase “a signed” in its place. 928
	1206	+	(B) Subsection (d)(2) is amended by striking the phrase “an 929
	1207	+	authenticated” and inserting the phrase “a signed” in its place. 930 ENGROSSED ORIGINAL
	1208	+
	1209	+
	1210	+
	1211	+
	1212	+	47
	1213	+
	1214	+	(25) A new section 28:9-326A is added to read as follows: 931
	1215	+	“§ 28:9-326A. Priority of security interest in controllable account, controllable 932
	1216	+	electronic record, and controllable payment intangible. 933
	1217	+	“A security interest in a controllable account, controllable electronic record, or 934
	1218	+	controllable payment intangible held by a secured party having control of the account, 935
	1219	+	electronic record, or payment intangible has priority over a conflicting security interest held 936
	1220	+	by a secured party that does not have control.” 937
	1221	+	(26) Section 28:9-330 is amended as follows: 938
	1222	+	(A) Subsection (a) is amended to read as follows: 939
	1223	+	“(a) A purchaser of chattel paper has priority over a security interest in the chattel 940
	1224	+	paper which is claimed merely as proceeds of inventory subject to a security interest if: 941
	1225	+	“(1) in good faith and in the ordinary course of the purchaser’s business, the 942
	1226	+	purchaser gives new value, takes possession of each authoritative tangible copy of the record 943
	1227	+	evidencing the chattel paper, and obtains control under § 28:9-105 of each authoritative 944
	1228	+	electronic copy of the record evidencing the chattel paper; and 945
	1229	+	“(2) the authoritative copies of the record evidencing the chattel paper do not 946
	1230	+	indicate that it the chattel paper has been assigned to an identified assignee other than the 947
	1231	+	purchaser.” 948
	1232	+	(B) Subsection (b) is amended to read as follows: 949
	1233	+	“(b) A purchaser of chattel paper has priority over a security interest in the 950 ENGROSSED ORIGINAL
	1234	+
	1235	+
	1236	+
	1237	+
	1238	+	48
	1239	+
	1240	+	chattel paper which is claimed other than merely as proceeds of inventory subject to a 951
	1241	+	security interest if the purchaser gives new value, takes possession of each authoritative 952
	1242	+	tangible copy of the record evidencing the chattel paper, and obtains control under § 28:9-953
	1243	+	105 of each authoritative electronic copy of the record evidencing the chattel paper in good 954
	1244	+	faith, in the ordinary course of the purchaser’s business, and without knowledge that the 955
	1245	+	purchase violates the rights of the secured party.” 956
	1246	+	(C) Subsection (f) is amended to read as follows: 957
	1247	+	“(f) For purposes of subsections (b) and (d) of this section, if the authoritative copies 958
	1248	+	of the record evidencing chattel paper or an instrument indicate that the chattel paper or 959
	1249	+	instrument has been assigned to an identified secured party other than the purchaser, a 960
	1250	+	purchaser of the chattel paper or instrument has knowledge that the purchase violates the 961
	1251	+	rights of the secured party.” 962
	1252	+	(27) Section 28:9-331 is amended as follows: 963
	1253	+	(A) The section heading is amended to read as follows: 964
	1254	+	“§ 28:9-331. Priority of rights of purchasers of controllable accounts, controllable 965
	1255	+	electronic records, controllable payment intangibles, documents, instruments, and securities 966
	1256	+	under other articles; priority of interests in financial assets and security entitlements and 967
	1257	+	protection against assertion of claim under Articles 8 and 12.” 968
	1258	+	(B) Subsection (a) is amended to read as follows: 969
	1259	+	“(a) This article does not limit the rights of a holder in due course of a negotiable 970 ENGROSSED ORIGINAL
	1260	+
	1261	+
	1262	+
	1263	+
	1264	+	49
	1265	+
	1266	+	instrument, a holder to which a negotiable document of title has been duly negotiated, a 971
	1267	+	protected purchaser of a security, or a qualifying purchaser of a controllable account, 972
	1268	+	controllable electronic record, or controllable payment intangible. These holders or 973
	1269	+	purchasers take priority over an earlier security interest, even if perfected, to the extent 974
	1270	+	provided in Articles 3, 7, 8, and 12.” 975
	1271	+	(C) Subsection (b) is amended striking the phrase “Article 8.” and 976
	1272	+	inserting the phrase “Article 8 or 12” in its place. 977
	1273	+	(28) Section 28:9-332 is amended as follows: 978
	1274	+	(A) Subsection (a) is amended to read as follows: 979
	1275	+	“(a) A transferee of tangible money takes the money free of a security interest if the 980
	1276	+	transferee receives possession of the money without acting in collusion with the debtor in 981
	1277	+	violating the rights of the secured party.” 982
	1278	+	(B) Subsection (b) is amended by striking the phrase “unless the 983
	1279	+	transferee acts” and inserting the phrase “if the transferee receives the funds without acting” 984
	1280	+	in its place. 985
	1281	+	(C) A new subsection (c) is added to read as follows: 986
	1282	+	“(c) A transferee of electronic money takes the money free of a security interest if the 987
	1283	+	transferee obtains control of the money without acting in collusion with the debtor in 988
	1284	+	violating the rights of the secured party.” 989
	1285	+	(29) Section 28:9-334(f)(1) is amended by striking the phrase “an 990 ENGROSSED ORIGINAL
	1286	+
	1287	+
	1288	+
	1289	+
	1290	+	50
	1291	+
	1292	+	authenticated” and inserting the phrase “a signed” in its place. 991
	1293	+	(30) Section 28:9-341 is amended by striking the phrase “an authenticated” 992
	1294	+	and inserting the phrase “a signed” in its place. 993
	1295	+	(31) Section 28:9-404(a)(2) is amended by striking the phrase “authenticated” 994
	1296	+	and inserting the phrase “signed” in its place. 995
	1297	+	(32) Section 28:9-406 is amended as follows: 996
	1298	+	(A) Subsection (a) is amended by: 997
	1299	+	(i) Striking the phrase “subsection (b) through (i)” and inserting 998
	1300	+	the phrase “subsections (b) through (k)”; and 999
	1301	+	(ii) Striking the word “authenticated” and inserting the word 1000
	1302	+	“signed” in its place. 1001
	1303	+	(B) Subsection (b) is amended by striking the phrase “subsection (h)” 1002
	1304	+	and inserting the phrase “subsections (h) and (k)” in its place. 1003
	1305	+	© Subsecti©(c) is amended by striking the phrase “subsection (h)” and 1004
	1306	+	inserting the phrase “subsections (h) and (k)” in its place. 1005
	1307	+	(D) Subsection (d) is amended striking the phrase “Except as otherwise 1006
	1308	+	provided in subsection (e)” and inserting the phrease “In this subsection, “promissory note” 1007
	1309	+	includes a negotiable instrument that evidences chattel paper. Except as otherwise provided 1008
	1310	+	in subsections of this section” in its place. 1009
	1311	+	(E) Subsection (f) is amended by striking the phrase “§§ 28:2A-303 and 1010 ENGROSSED ORIGINAL
	1312	+
	1313	+
	1314	+
	1315	+
	1316	+	51
	1317	+
	1318	+	28:9-407” and inserting the phrase “subsection (j) of this section and §§ 28:2A-303 and 28:9-1011
	1319	+	407”. 1012
	1320	+	(F) Subsection (g) is amended by striking the phrase “subsection (h)” 1013
	1321	+	and inserting the phrase “subsections (h) and (k) of this section” in its place. 1014
	1322	+	(G) New subsections (j) and (k) are added to read as follows: 1015
	1323	+	“(j) Subsections (d) and (e) of this section do not apply to a security interest in an 1016
	1324	+	ownership interest in a general partnership, limited partnership, or limited liability 1017
	1325	+	company.” 1018
	1326	+	“(k) Subsections (a), (b), (c) and (g) of this section do not apply to a controllable 1019
	1327	+	account or controllable payment intangible.” 1020
	1328	+	(33) Section 28:9-408 is amended as follows: 1021
	1329	+	(A) Subsection (a) is amended by striking the phrase “subsection (b)” 1022
	1330	+	and inserting the phrase “subsections (b) and (e) of this section” in its place. 1023
	1331	+	(B) Subsection (c) is amended by striking the phrase “A rule of law” 1024
	1332	+	and inserting the phrase “Except as otherwise provided in subsection (e) of this section, a 1025
	1333	+	rule of law” in its place. 1026
	1334	+	(C) New subsections (e) and (f) are added to read as follows: 1027
	1335	+	“(e) This section does not apply to a security interest in an ownership interest in a 1028
	1336	+	general partnership, limited partnership, or limited liability company. 1029
	1337	+	“(f) For the purposes of this section, “promissory note” includes a negotiable 1030 ENGROSSED ORIGINAL
	1338	+
	1339	+
	1340	+
	1341	+
	1342	+	52
	1343	+
	1344	+	instrument that evidences chattel paper.” 1031
	1345	+	(34) Section 28:9-509 is amended as followed: 1032
	1346	+	(A) Subsection (a)(1) is amended by striking the phrase “an 1033
	1347	+	authenticated” and inserting the phrase “a signed” in its place. 1034
	1348	+	(B) Subsection (b) is amended by striking the word “authenticating” 1035
	1349	+	and inserting the word “signing” in its place. 1036
	1350	+	(35) Section 28:9-513 is amended as follows: 1037
	1351	+	(A) Subsection (b)(2) is amended by striking the phrase “an 1038
	1352	+	authenticated” and inserting the phrase “a signed” in its place. 1039
	1353	+	(B) Subsection (c) is amended by striking the phrase “an authenticated” 1040
	1354	+	and inserting the phrase “a signed” in its place. 1041
	1355	+	(36) Section 28:9-601(b) is amended by striking the phrase “28:7-106, § 28:9-1042
	1356	+	104, § 28:9-105, § 28:9-107, or § 28:9-107” and inserting the phrase “28:7-106, § 28:9-104, 1043
	1357	+	§ 28:9-105, § 28:9-105A, § 28:9-107, § 28:9-107, or § 28:9-107A,” in its place. 1044
	1358	+	(37) Section 28:9-605 is amended as follows: 1045
	1359	+	(A) The lead-in language is amended to read as follows: 1046
	1360	+	“(a) Except as provided in subsection (b), a secured party does not owe a duty based 1047
	1361	+	on its status as a third party.” 1048
	1362	+	(B) A new subsection (b) is added to read as follows: 1049
	1363	+	“(b) A secured party owes a duty based on its status as a secured party to a person if, 1050 ENGROSSED ORIGINAL
	1364	+
	1365	+
	1366	+
	1367	+
	1368	+	53
	1369	+
	1370	+	at the time the secured party obtains control of collateral that is a controllable account, 1051
	1371	+	controllable electronic record, or controllable payment intangible or at the time the security 1052
	1372	+	interest attaches to the collateral, whichever is later: 1053
	1373	+	“(1) The person is a debtor or obligor; and 1054
	1374	+	“(2) The secured party knows that the information in subsection (a)(1)(A), (B), 1055
	1375	+	or (C) of this section relating to the person is not provided by the collateral, a record attached 1056
	1376	+	to or logically associated with the collateral, or the system in which the collateral is 1057
	1377	+	recorded.” 1058
	1378	+	(38) Section 28:9-608(a)(1)(C) is amended by striking the phrase “an 1059
	1379	+	authenticated”. 1060
	1380	+	(39) Section 28:9-611 is amended as follows: 1061
	1381	+	(A) Subsection (a)(1) is amended by striking the phrase “an 1062
	1382	+	authenticated” and inserting the phrase “a signed” in its place. 1063
	1383	+	(B) Subsection (b) is amended by striking the phrase “authenticated” 1064
	1384	+	and inserting the phrase “signed” in its place. 1065
	1385	+	(C) Subsection (c) is amended by striking the phrase “an authenticated” 1066
	1386	+	wherever it appears and inserting the phrase “a signed” in its place. 1067
	1387	+	(D) Subsection (e)(2)(B) is amended by striking the phrase “an 1068
	1388	+	authenticated” and inserting the phrase “a signed” in its place. 1069
	1389	+	(40) Section 28:9-613 is amended as follows: 1070 ENGROSSED ORIGINAL
	1390	+
	1391	+
	1392	+
	1393	+
	1394	+	54
	1395	+
	1396	+	(A) The existing text is designated as subsection (a). 1071
	1397	+	(B) The newly designated subsection (a)(5) 1072
	1398	+	is amended to read as follows: 1073
	1399	+	“(5) The following form of notification and the form appearing in § 28:9-1074
	1400	+	614(a)(3), when completed in accordance with the instructions in subsection (b) of this 1075
	1401	+	section and § 28:9-614(b), each provides sufficient information: 1076
	1402	+	“NOTIFICATION OF DISPOSITION OF COLLATERAL 1077
	1403	+	“To: (Name of debtor, obligor, or other person to which the notification is sent) 1078
	1404	+	“From: (Name, address, and telephone number of secured party) 1079
	1405	+	“(1) Name of any debtor that is not an addressee: (Name of each debtor) 1080
	1406	+	“(2) We will sell (describe collateral) (to the highest qualified bidder) at public sale. 1081
	1407	+	A sale could include a lease or license. The sale will be held as follows: 1082
	1408	+	“(Date) 1083
	1409	+	“(Time) 1084
	1410	+	“(Place) 1085
	1411	+	“(3) We will sell (describe collateral) at private sale sometime after (date). A sale 1086
	1412	+	could include a lease or license. 1087
	1413	+	“(4) You are entitled to an accounting of the unpaid indebtedness secured by the 1088
	1414	+	property that we intend to sell or, as applicable, lease or license. 1089
	1415	+	“(5) If you request an accounting you must pay a charge of $ (amount). 1090 ENGROSSED ORIGINAL
	1416	+
	1417	+
	1418	+
	1419	+
	1420	+	55
	1421	+
	1422	+	“(6) You may request an accounting by calling us at (telephone number). 1091
	1423	+	“(End of Form) 1092
	1424	+	(B) A new subsection (b) is added to read as follows: 1093
	1425	+	“(b) The following instructions apply to the form of notification in subsection (a)(5) 1094
	1426	+	of this section: 1095
	1427	+	“(1) The instructions in this subsection refer to the numbers in braces before 1096
	1428	+	items in the form of notification in subsection (a)(5) of this section. Do not include the 1097
	1429	+	numbers or braces in the notification. The numbers and braces are used only for the purpose 1098
	1430	+	of these instructions. 1099
	1431	+	“(2) Include and complete item (1) only if there is a debtor that is not an 1100
	1432	+	addressee of the notification and list the name or names. 1101
	1433	+	“(3) Include and complete either item (2), if the notification relates to a public 1102
	1434	+	disposition of the collateral, or item (3), if the notification relates to a private disposition of 1103
	1435	+	the collateral. If item (2) is included, include the words “to the highest qualified bidder” only 1104
	1436	+	if applicable. 1105
	1437	+	“(4) Include and complete items (4) and (6). 1106
	1438	+	“(5) Include and complete item (5) only if the sender will charge the recipient 1107
	1439	+	for an accounting.” 1108
	1440	+	(41) Section 28:9-614 is amended as follows: 1109
	1441	+	(A) The existing text is designated as subsection (a). 1110 ENGROSSED ORIGINAL
	1442	+
	1443	+
	1444	+
	1445	+
	1446	+	56
	1447	+
	1448	+	(B) The new designated subsection (a) is amended as follows: 1111
	1449	+	(i) Paragraph (1)(A) is amended by striking the phrase “§ 28:9-1112
	1450	+	613(1)” and inserting the phrase “§ 28:9-613(a)(1)” in its place. 1113
	1451	+	(ii) Paragraph (3) is amended to read as follows: 1114
	1452	+	“(3) The following form of notification, when completed in accordance with 1115
	1453	+	the instructions in subsection (b) of this section, provides sufficient information: 1116
	1454	+	“(Name and address of secured party) 1117
	1455	+	“(Date) 1118
	1456	+	“NOTICE OF OUR PLAN TO SELL PROPERTY 1119
	1457	+	“(Name and address of any obligor who is also a debtor) 1120
	1458	+	“Subject: (Identify transaction) 1121
	1459	+	“We have your (describe collateral) because you broke promises in our agreement. 1122
	1460	+	“(1) We will sell (describe collateral) at public sale. A sale could include a lease or 1123
	1461	+	license. The sale will be held as follows: 1124
	1462	+	“(Date) 1125
	1463	+	“(Time) 1126
	1464	+	“(Place) 1127
	1465	+	“You may attend the sale and bring bidders if you want. 1128
	1466	+	“(2) We will sell (describe collateral) at private sale sometime after (date). A sale 1129
	1467	+	could include a lease or license. 1130 ENGROSSED ORIGINAL
	1468	+
	1469	+
	1470	+
	1471	+
	1472	+	57
	1473	+
	1474	+	“(3) The money that we get from the sale, after paying our costs, will reduce the 1131
	1475	+	amount you owe. If we get less money than you owe, you (will or will not, as applicable) still 1132
	1476	+	owe us the difference. If we get more money than you owe, you will get the extra money, 1133
	1477	+	unless we must pay it to someone else. 1134
	1478	+	“(4) You can get the property back at any time before we sell it by paying us the full 1135
	1479	+	amount you owe, not just the past due payments, including our expenses. To learn the exact 1136
	1480	+	amount you must pay, call us at (telephone number). 1137
	1481	+	“(5) If you want us to explain to you in (writing) (writing or in (description of 1138
	1482	+	electronic record)) (description of electronic record) how we have figured the amount that 1139
	1483	+	you owe us, 1140
	1484	+	“(6) call us at (telephone number) (or) (write us at (secured party’s address)) (or 1141
	1485	+	contact us by (description of electronic communication method)). 1142
	1486	+	“(7) and request (a written explanation) (a written explanation or an explanation in 1143
	1487	+	(description of electronic record)) (an explanation in (description of electronic record)). 1144
	1488	+	“(8) We will charge you $ (amount) for the explanation if we sent you another written 1145
	1489	+	explanation of the amount you owe us within the last six months. 1146
	1490	+	“(9) If you need more information about the sale (call us at (telephone number)) (or) 1147
	1491	+	(write us at (secured party’s address)) (or contact us by (description of electronic 1148
	1492	+	communication method)). 1149
	1493	+	“(10) We are sending this notice to the following other people who have an interest in 1150 ENGROSSED ORIGINAL
	1494	+
	1495	+
	1496	+
	1497	+
	1498	+	58
	1499	+
	1500	+	(describe collateral) or who owe money under your agreement: 1151
	1501	+	“(Names of all other debtors and obligors, if any) 1152
	1502	+	“[End of Form]” 1153
	1503	+	(C) A new subsection (b) is added to read as follows: 1154
	1504	+	“(b) The following instructions apply to the form of notification in subsection (a)(3) 1155
	1505	+	of this section: 1156
	1506	+	“(1) The instructions in this subsection refer to the numbers in braces before 1157
	1507	+	items in the form of notification in subsection (a)(3) of this section. Do not include the 1158
	1508	+	numbers or braces in the notification. The numbers and braces are used only for the purpose 1159
	1509	+	of these instructions. 1160
	1510	+	“(2) Include and complete either item (1), if the notification relates to a public 1161
	1511	+	disposition of the collateral, or item (2), if the notification relates to a private disposition of 1162
	1512	+	the collateral. 1163
	1513	+	“(3) Include and complete items (3), (4), (5), (6), and (7). 1164
	1514	+	“(4) In item (5), include and complete any one of the three alternative methods 1165
	1515	+	for the explanation, writing, writing or electronic record, or electronic record. 1166
	1516	+	“(5) In item (6), include the telephone number. In addition, the sender may 1167
	1517	+	include and complete either or both of the two additional alternative methods of 1168
	1518	+	communication, writing or electronic communication, for the recipient of the notification to 1169
	1519	+	communicate with the sender. Neither of the two additional methods of communication is 1170 ENGROSSED ORIGINAL
	1520	+
	1521	+
	1522	+
	1523	+
	1524	+	59
	1525	+
	1526	+	required to be included. 1171
	1527	+	“(6) In item (7), include and complete the method or methods for the 1172
	1528	+	explanation, writing, writing or electronic record, or electronic record, included in item (5). 1173
	1529	+	“(7) Include and complete item (8) only if a written explanation is included in 1174
	1530	+	item (5) as a method for communicating the explanation and the sender will charge the 1175
	1531	+	recipient for another written explanation. 1176
	1532	+	“(8) In item (9), include either the telephone number or the address or both the 1177
	1533	+	telephone number and the address. In addition, the sender may include and complete the 1178
	1534	+	additional method of communication, electronic communication, for the recipient of the 1179
	1535	+	notification to communicate with the sender. The additional method of electronic 1180
	1536	+	communication is not required to be included. 1181
	1537	+	“(9) If item (10) does not apply, insert “None” after “agreement:”. 1182
	1538	+	(42) Section 28:9-615(a) is amended by striking the phrase “an authenticated” 1183
	1539	+	wherever it appears and inserting the phrase “a signed” in its place. 1184
	1540	+	(43) Section 28:9-616 is amended as follows: 1185
	1541	+	(A) Subsection (a) is amended as follows: 1186
	1542	+	(i) Paragraph (1) is amended by striking the word “writing” and 1187
	1543	+	inserting the word “record” in its place. 1188
	1544	+	(ii) Paragraph (2)(A) is amended by striking the word 1189
	1545	+	“authenticated” and inserting the word “signed” in its place. 1190 ENGROSSED ORIGINAL
	1546	+
	1547	+
	1548	+
	1549	+
	1550	+	60
	1551	+
	1552	+	(B) Subsection (b)(1)(A) is amended by striking the phrase “written 1191
	1553	+	demand” and inserting the phrase “demand in a record” in its place. 1192
	1554	+	(C) Subsection (c) is amended by striking the phrase “a writing” and 1193
	1555	+	inserting the phrase “an explanation” in its place. 1194
	1556	+	(44) Section 28:9-619(a) is amended by striking the word “authenticated” and 1195
	1557	+	inserting the word “signed” in its place. 1196
	1558	+	(45) Section 28:9-620 is amended as follows: 1197
	1559	+	(A) Subsection (a)(2) is amended by striking the word “authenticated” 1198
	1560	+	and inserting the word “signed” in its place. 1199
	1561	+	(B) Subsection (b)(1) is amended by striking the phrase “an 1200
	1562	+	authenticated” and inserting the phrase “a signed” in its place. 1201
	1563	+	(C) Subsection (c) is amended by striking the word “authenticated” 1202
	1564	+	wherever it appears and inserting the word “signed” in its place. 1203
	1565	+	(D) Subsection (f)(2) is amended by striking the word “authenticated” 1204
	1566	+	and inserting the word “signed’ in its place. 1205
	1567	+	(46) Section 28:9-621(a)(1) is amended by striking the phase “an 1206
	1568	+	authenticated” and inserting the phrase “a signed” in its place. 1207
	1569	+	(47) Section 28:9-624 is amended by striking the word “authenticated” 1208
	1570	+	wherever it appears and inserting the word “signed’ in its place. 1209
	1571	+	(48) Section 28:9-628 is amended as follows: 1210 ENGROSSED ORIGINAL
	1572	+
	1573	+
	1574	+
	1575	+
	1576	+	61
	1577	+
	1578	+	(A) Subsection (a) is amended by striking the phrase “Unless a” and 1211
	1579	+	inserting the phrase “Subject to subsection (f), unless a” in its place. 1212
	1580	+	(B) A new subsection (f) is added to read as follows: 1213
	1581	+	“(f) Subsections (a) and (b) of this section do not apply to limit the liability of a 1214
	1582	+	secured party to a person if, at the time the secured party obtains control of collateral that is a 1215
	1583	+	controllable account, controllable electronic record, or controllable payment intangible or at 1216
	1584	+	the time the security interest attaches to the collateral, whichever is later: 1217
	1585	+	“(1) The person is a debtor or obligor; and 1218
	1586	+	“(2) The secured party knows that the information in subsection (b)(1)(A), (B), 1219
	1587	+	or (C) of this section relating to the person is not provided by the collateral, a record attached 1220
	1588	+	to or logically associated with the collateral, or the system in which the collateral is 1221
	1589	+	recorded.” 1222
	1590	+	(k) A new article 12 is added to read as follows: 1223
	1591	+	“ARTICLE 12. CONTROLLABLE ELECTRONIC RECORDS . 1224
	1592	+	“Part 1. General Provisions. 1225
	1593	+	“§ 28:12-101. Short title. 1226
	1594	+	“This article may be cited as “Uniform Commercial Code—Controllable Electronic 1227
	1595	+	Records”. 1228
	1596	+	“§ 28:12-102. Definitions. 1229
	1597	+	“(a) For the purposes of this article, the term: 1230 ENGROSSED ORIGINAL
	1598	+
	1599	+
	1600	+
	1601	+
	1602	+	62
	1603	+
	1604	+	“(1) “Controllable electronic record” means a record stored in an electronic 1231
	1605	+	medium that can be subjected to control under § 28:12-105. The term does not include a 1232
	1606	+	controllable account, a controllable payment intangible, a deposit account, an electronic copy 1233
	1607	+	of a record evidencing chattel paper, an electronic document of title, electronic money, 1234
	1608	+	investment property, or a transferable record. 1235
	1609	+	“(2) “Qualifying purchaser” means a purchaser of a controllable electronic 1236
	1610	+	record or an interest in a controllable electronic record that obtains control of the controllable 1237
	1611	+	electronic record for value, in good faith, and without notice of a claim of a property right in 1238
	1612	+	the controllable electronic record. 1239
	1613	+	“(3) “Transferable record” has the meaning provided for that term in: 1240
	1614	+	“(A) Section 201(a)(1) of the Electronic Signatures in Global and 1241
	1615	+	National Commerce Act, 15 U.S.C. § 7021(a)(1); or 1242
	1616	+	“(B) § 28-4915(a). 1243
	1617	+	“(4) “Value” has the meaning provided in § 28:3-303(a), as if references in 1244
	1618	+	that section to an “instrument” were references to a controllable account, controllable 1245
	1619	+	electronic record, or controllable payment intangible. 1246
	1620	+	“(b) The definitions in § 28:9-102 of “account debtor”, “controllable account”, 1247
	1621	+	“controllable payment intangible”, “chattel paper”, “deposit account”, “electronic money”, 1248
	1622	+	and “investment property” apply to this article. 1249
	1623	+	“(c) Article 1 contains general definitions and principles of construction and 1250 ENGROSSED ORIGINAL
	1624	+
	1625	+
	1626	+
	1627	+
	1628	+	63
	1629	+
	1630	+	interpretation applicable throughout this article. 1251
	1631	+	“§ 28:12-103. Relation to Article 9 and consumer laws. 1252
	1632	+	“(a) If there is conflict between this article and article 9, article 9 governs. 1253
	1633	+	“(b) A transaction subject to this article is subject to any applicable rule of law that 1254
	1634	+	establishes a different rule for consumers and §§ 28-3301 to 28-3315. 1255
	1635	+	“§ 28:12-104. Rights in controllable account, controllable electronic record, and 1256
	1636	+	controllable payment intangible. 1257
	1637	+	“(a) This section applies to the acquisition and purchase of rights in a controllable 1258
	1638	+	account or controllable payment intangible, including the rights and benefits under 1259
	1639	+	subsections (c), (d), (e), (g), and (h) of this section, of a purchaser and qualifying purchaser, 1260
	1640	+	in the same manner this section applies to a controllable electronic record. 1261
	1641	+	“(b) To determine whether a purchaser of a controllable account or a controllable 1262
	1642	+	payment intangible is a qualifying purchaser, the purchaser obtains control of the account or 1263
	1643	+	payment intangible if it obtains control of the controllable electronic record that evidences 1264
	1644	+	the account or payment intangible. 1265
	1645	+	“(c) Except as provided in this section, law other than this article determines whether 1266
	1646	+	a person acquires a right in a controllable electronic record and the right the person acquires. 1267
	1647	+	“(d) A purchaser of a controllable electronic record acquires all rights in the 1268
	1648	+	controllable electronic record that the transferor had or had power to transfer, except that a 1269
	1649	+	purchaser of a limited interest in a controllable electronic record acquires rights only to the 1270 ENGROSSED ORIGINAL
	1650	+
	1651	+
	1652	+
	1653	+
	1654	+	64
	1655	+
	1656	+	extent of the interest purchased. 1271
	1657	+	“(e) A qualifying purchaser acquires its rights in the controllable electronic record 1272
	1658	+	free of a claim of a property right in the controllable electronic record. 1273
	1659	+	“(f) Except as provided in subsections (a) and (e) of this section for a controllable 1274
	1660	+	account and a controllable payment intangible or law other than this article, a qualifying 1275
	1661	+	purchaser takes a right to payment, right to performance, or other interest in property 1276
	1662	+	evidenced by the controllable electronic record subject to a claim of a property right in the 1277
	1663	+	right to payment, right to performance, or other interest in property. 1278
	1664	+	“(g) An action may not be asserted against a qualifying purchaser based on both a 1279
	1665	+	purchase by the qualifying purchaser of a controllable electronic record and a claim of a 1280
	1666	+	property right in another controllable electronic record, whether the action is framed in 1281
	1667	+	conversion, replevin, constructive trust, equitable lien, or other theory. 1282
	1668	+	“(h) Filing of a financing statement under article 9 is not notice of a claim of a 1283
	1669	+	property right in a controllable electronic record. 1284
	1670	+	“§ 28:12-105. Control of controllable electronic record. 1285
	1671	+	“(a) A person has control of a controllable electronic record if the electronic record, a 1286
	1672	+	record attached to or logically associated with the electronic record, or a system in which the 1287
	1673	+	electronic record is recorded: 1288
	1674	+	“(1) Gives the person: 1289
	1675	+	“(A) Power to avail itself of substantially all the benefit from the 1290 ENGROSSED ORIGINAL
	1676	+
	1677	+
	1678	+
	1679	+
	1680	+	65
	1681	+
	1682	+	electronic record; and 1291
	1683	+	“(B) Exclusive power, subject to subsection (b) of this section, to: 1292
	1684	+	“(i) Prevent others from availing themselves of substantially all 1293
	1685	+	the benefit from the electronic record; and 1294
	1686	+	“(ii) Transfer control of the electronic record to another person 1295
	1687	+	or cause another person to obtain control of another controllable electronic record as a result 1296
	1688	+	of the transfer of the electronic record; and 1297
	1689	+	“(2) Enables the person readily to identify itself in any way, including by 1298
	1690	+	name, identifying number, cryptographic key, office, or account number, as having the 1299
	1691	+	powers specified in paragraph (1) of this subsection. 1300
	1692	+	“(b) Subject to subsection (c) of this section, a power is exclusive under subsections 1301
	1693	+	(a)(1)(B)(i) and (ii) of this section even if: 1302
	1694	+	“(1) The controllable electronic record, a record attached to or logically 1303
	1695	+	associated with the electronic record, or a system in which the electronic record is recorded 1304
	1696	+	limits the use of the electronic record or has a protocol programmed to cause a change, 1305
	1697	+	including a transfer or loss of control or a modification of benefits afforded by the electronic 1306
	1698	+	record; or 1307
	1699	+	“(2) The power is shared with another person. 1308
	1700	+	“(c) A power of a person is not shared with another person under subsection (b)(2) of 1309
	1701	+	this section and the person’s power is not exclusive if: 1310 ENGROSSED ORIGINAL
	1702	+
	1703	+
	1704	+
	1705	+
	1706	+	66
	1707	+
	1708	+	“(1) The person can exercise the power only if the power also is exercised by 1311
	1709	+	the other person; and 1312
	1710	+	“(2) The other person: 1313
	1711	+	“(A) Can exercise the power without exercise of the power by the 1314
	1712	+	person; or 1315
	1713	+	“(B) Is the transferor to the person of an interest in the controllable 1316
	1714	+	electronic record or a controllable account or controllable payment intangible evidenced by 1317
	1715	+	the controllable electronic record. 1318
	1716	+	“(d) If a person has the powers specified in subsection (a)(1)(B)(i) and (ii) of this 1319
	1717	+	section, the powers are presumed to be exclusive. 1320
	1718	+	“(e) A person has control of a controllable electronic record if another person, other 1321
	1719	+	than the transferor to the person of an interest in the controllable electronic record or a 1322
	1720	+	controllable account or controllable payment intangible evidenced by the controllable 1323
	1721	+	electronic record: 1324
	1722	+	“(1) Has control of the electronic record and acknowledges that it has control 1325
	1723	+	on behalf of the person; or 1326
	1724	+	“(2) Obtains control of the electronic record after having acknowledged that it 1327
	1725	+	will obtain control of the electronic record on behalf of the person. 1328
	1726	+	“(f) A person that has control under this section is not required to acknowledge that it 1329
	1727	+	has control on behalf of another person. 1330 ENGROSSED ORIGINAL
	1728	+
	1729	+
	1730	+
	1731	+
	1732	+	67
	1733	+
	1734	+	“(g) If a person acknowledges that it has or will obtain control on behalf of another 1331
	1735	+	person, unless the person otherwise agrees or law other than this article or article 9 otherwise 1332
	1736	+	provides, the person does not owe any duty to the other person and is not required to confirm 1333
	1737	+	the acknowledgment to any other person. 1334
	1738	+	“§ 28:12-106. Discharge of account debtor on controllable account or controllable 1335
	1739	+	payment intangible. 1336
	1740	+	“(a) An account debtor on a controllable account or controllable payment intangible 1337
	1741	+	may discharge its obligation by paying: 1338
	1742	+	“(1) The person having control of the controllable electronic record that 1339
	1743	+	evidences the controllable account or controllable payment intangible; or 1340
	1744	+	“(2) Except as provided in subsection (b) of this section, a person that 1341
	1745	+	formerly had control of the controllable electronic record. 1342
	1746	+	“(b) Subject to subsection (d) of this section, the account debtor may not discharge its 1343
	1747	+	obligation by paying a person that formerly had control of the controllable electronic record 1344
	1748	+	if the account debtor receives a notification that: 1345
	1749	+	“(1) Is signed by a person that formerly had control or the person to which 1346
	1750	+	control was transferred; 1347
	1751	+	“(2) Reasonably identifies the controllable account or controllable payment 1348
	1752	+	intangible; 1349
	1753	+	“(3) Notifies the account debtor that control of the controllable electronic 1350 ENGROSSED ORIGINAL
	1754	+
	1755	+
	1756	+
	1757	+
	1758	+	68
	1759	+
	1760	+	record that evidences the controllable account or controllable payment intangible was 1351
	1761	+	transferred; 1352
	1762	+	“(4) Identifies the transferee, in any reasonable way, including by name, 1353
	1763	+	identifying number, cryptographic key, office, or account number; and 1354
	1764	+	“(5) Provides a commercially reasonable method by which the account debtor 1355
	1765	+	is to pay the transferee. 1356
	1766	+	“(c) After receipt of a notification that complies with subsection (b) of this section, 1357
	1767	+	the account debtor may discharge its obligation by paying in accordance with the notification 1358
	1768	+	and may not discharge the obligation by paying a person that formerly had control. 1359
	1769	+	“(d) Subject to subsection (h) of this section, notification is ineffective under 1360
	1770	+	subsection (b) of this section: 1361
	1771	+	“(1) Unless, before the notification is sent, the account debtor and the person 1362
	1772	+	that, at that time, had control of the controllable electronic record that evidences the 1363
	1773	+	controllable account or controllable payment intangible agree in a signed record to a 1364
	1774	+	commercially reasonable method by which a person may furnish reasonable proof that 1365
	1775	+	control has been transferred; 1366
	1776	+	“(2) To the extent an agreement between the account debtor and seller of a 1367
	1777	+	payment intangible limits the account debtor’s duty to pay a person other than the seller and 1368
	1778	+	the limitation is effective under law other than this article; or 1369
	1779	+	“(3) At the option of the account debtor, if the notification notifies the account 1370 ENGROSSED ORIGINAL
	1780	+
	1781	+
	1782	+
	1783	+
	1784	+	69
	1785	+
	1786	+	debtor to: 1371
	1787	+	“(A) Divide a payment; 1372
	1788	+	“(B) Make less than the full amount of an installment or other periodic 1373
	1789	+	payment; or 1374
	1790	+	“(C) Pay any part of a payment by more than one method or to more 1375
	1791	+	than one person. 1376
	1792	+	“(e) Subject to subsection (h) of this section, if requested by the account debtor, the 1377
	1793	+	person giving the notification under subsection (b) of this section seasonably shall furnish 1378
	1794	+	reasonable proof, using the method in the agreement referred to in subsection (d)(1) of this 1379
	1795	+	section, that control of the controllable electronic record has been transferred. Unless the 1380
	1796	+	person complies with the request, the account debtor may discharge its obligation by paying 1381
	1797	+	a person that formerly had control, even if the account debtor has received a notification 1382
	1798	+	under subsection (b) of this section. 1383
	1799	+	“(f) A person furnishes reasonable proof under subsection (e) of this section that 1384
	1800	+	control has been transferred if the person demonstrates, using the method in the agreement 1385
	1801	+	referred to in subsection (d)(1) of this section, that the transferee has the power to: 1386
	1802	+	“(1) Avail itself of substantially all the benefit from the controllable electronic 1387
	1803	+	record; 1388
	1804	+	“(2) Prevent others from availing themselves of substantially all the benefit 1389
	1805	+	from the controllable electronic record; and 1390 ENGROSSED ORIGINAL
	1806	+
	1807	+
	1808	+
	1809	+
	1810	+	70
	1811	+
	1812	+	“(3) Transfer the powers specified in paragraphs (1) and (2) of this subsection 1391
	1813	+	to another person. 1392
	1814	+	“(g) Subject to subsection (h) of this section, an account debtor may not waive or vary 1393
	1815	+	its rights under subsections (d)(1) and (e) of this section or its option under subsection (d)(3) 1394
	1816	+	of this section. 1395
	1817	+	“(h) This section is subject to law other than this article which establishes a different 1396
	1818	+	rule for an account debtor who is an individual and who incurred the obligation primarily for 1397
	1819	+	personal, family, or household purposes. 1398
	1820	+	“§ 28:12-107. Governing law. 1399
	1821	+	“(a) Except as provided in subsection (b) of this section, the local law of a 1400
	1822	+	controllable electronic record’s jurisdiction governs a matter covered by this article. 1401
	1823	+	“(b) For a controllable electronic record that evidences a controllable account or 1402
	1824	+	controllable payment intangible, the local law of the controllable electronic record’s 1403
	1825	+	jurisdiction governs a matter covered by § 28:12-106 unless an effective agreement 1404
	1826	+	determines that the local law of another jurisdiction governs. 1405
	1827	+	“(c) The following rules determine a controllable electronic record’s jurisdiction 1406
	1828	+	under this section: 1407
	1829	+	“(1) If the controllable electronic record, or a record attached to or logically 1408
	1830	+	associated with the controllable electronic record and readily available for review, expressly 1409
	1831	+	provides that a particular jurisdiction is the controllable electronic record’s jurisdiction for 1410 ENGROSSED ORIGINAL
	1832	+
	1833	+
	1834	+
	1835	+
	1836	+	71
	1837	+
	1838	+	purposes of this article or this subtitle, that jurisdiction is the controllable electronic record’s 1411
	1839	+	jurisdiction. 1412
	1840	+	“(2) If paragraph (1) of this subsection does not apply and the rules of the 1413
	1841	+	system in which the controllable electronic record is recorded are readily available for review 1414
	1842	+	and expressly provide that a particular jurisdiction is the controllable electronic record’s 1415
	1843	+	jurisdiction for purposes of this article or this subtitle, that jurisdiction is the controllable 1416
	1844	+	electronic record’s jurisdiction. 1417
	1845	+	“(3) If paragraphs (1) and (2) of this subsection do not apply and the 1418
	1846	+	controllable electronic record, or a record attached to or logically associated with the 1419
	1847	+	controllable electronic record and readily available for review, expressly provides that the 1420
	1848	+	controllable electronic record is governed by the law of a particular jurisdiction, that 1421
	1849	+	jurisdiction is the controllable electronic record’s jurisdiction. 1422
	1850	+	“(4) If paragraphs (1), (2), and (3) of this subsection do not apply and the rules 1423
	1851	+	of the system in which the controllable electronic record is recorded are readily available for 1424
	1852	+	review and expressly provide that the controllable electronic record or the system is 1425
	1853	+	governed by the law of a particular jurisdiction, that jurisdiction is the controllable electronic 1426
	1854	+	record’s jurisdiction. 1427
	1855	+	“(5) If paragraphs (1) through (4) of this subsection do not apply, the 1428
	1856	+	controllable electronic record’s jurisdiction is the District of Columbia. 1429
	1857	+	“(d) To the extent subsections (a) and (b) of this section provide that the local law of 1430 ENGROSSED ORIGINAL
	1858	+
	1859	+
	1860	+
	1861	+
	1862	+	72
	1863	+
	1864	+	the controllable electronic record’s jurisdiction governs a matter covered by this article, that 1431
	1865	+	law governs even if the matter or a transaction to which the matter relates does not bear any 1432
	1866	+	relation to the controllable electronic record’s jurisdiction. 1433
	1867	+	“(e) The rights acquired under § 28:12-104 by a purchaser or qualifying purchaser are 1434
	1868	+	governed by the law applicable under this section at the time of purchase. 1435
	1869	+	“Part 2. Transitional Provisions for Articles 9 and 12. 1436
	1870	+	“§ 28:12-201. Definitions. 1437
	1871	+	“(a) In this part, the term: 1438
	1872	+	“(1) “Adjustment date” means July 1, 2025, or the date that is one year after 1439
	1873	+	the effective date of this act, whichever is later. 1440
	1874	+	“(2) “Article 12 property” means a controllable account, controllable 1441
	1875	+	electronic record, or controllable payment intangible. 1442
	1876	+	“(3) “2023 Act” means the Uniform Commercial Code Amendment Act of 1443
	1877	+	2023. 1444
	1878	+	“(b) The following definitions in other articles of this subtitle apply to this part. 1445
	1879	+	“(1) “Controllable account” § 28:9-102. 1446
	1880	+	“(2) “Controllable electronic record” § 28:12-102. 1447
	1881	+	“(3) “Controllable payment intangible” § 28:9-102. 1448
	1882	+	“(4) “Electronic money” § 28:9-102. 1449
	1883	+	“(5) “Financing statement” § 28:9-102. 1450 ENGROSSED ORIGINAL
	1884	+
	1885	+
	1886	+
	1887	+
	1888	+	73
	1889	+
	1890	+	“§ 28:12-202. Saving clause. 1451
	1891	+	“(a) Except as provided in this part, a transaction validly entered into before the 1452
	1892	+	effective date of the 2023 Act and the rights, duties, and interests flowing from the 1453
	1893	+	transaction remain valid thereafter and may be terminated, completed, consummated, or 1454
	1894	+	enforced as required or permitted by law other than this subtitle or, if applicable, this 1455
	1895	+	subtitle, as though the 2023 Act had not taken effect. 1456
	1896	+	“(b) Except as provided in this part, article 9, as amended by the 2023 Act, and article 1457
	1897	+	12 apply to a transaction, lien, or other interest in property, even if the transaction, lien, or 1458
	1898	+	interest was entered into, created, or acquired before the effective date of this act. 1459
	1899	+	“(c) Except as provided in subsection (d) of this section and §§ 28:12-203 to 12-208: 1460
	1900	+	“(1) A transaction, lien, or interest in property that was validly entered into, 1461
	1901	+	created, or transferred before the effective date of the 2023 Act and was not governed by this 1462
	1902	+	subtitle, but would be subject to article 9 as amended by the 2023 Act or article 12 if it had 1463
	1903	+	been entered into, created, or transferred on or after the effective date of the 2023 Act, 1464
	1904	+	including the rights, duties, and interests flowing from the transaction, lien, or interest, 1465
	1905	+	remains valid on and after the effective date of the 2023 Act; and 1466
	1906	+	“(2) the transaction, lien, or interest may be terminated, completed, 1467
	1907	+	consummated, and enforced as required or permitted by the 2023 Act or by the law that 1468
	1908	+	would apply if the 2023 Act had not taken effect. 1469
	1909	+	“(d) The 2023 Act does not affect an action, case, or proceeding commenced before 1470 ENGROSSED ORIGINAL
	1910	+
	1911	+
	1912	+
	1913	+
	1914	+	74
	1915	+
	1916	+	the effective date of the 2023 Act. 1471
	1917	+	“§ 28:12-203. Security interest perfected before effective date of 2023 Act. 1472
	1918	+	“(a) A security interest that is enforceable and perfected immediately before the 1473
	1919	+	effective date of the 2023 Act is a perfected security interest under the 2023 Act if, on the 1474
	1920	+	effective date of the 2023 Act, the requirements for enforceability and perfection under the 1475
	1921	+	2023 Act are satisfied without further action. 1476
	1922	+	“(b) If a security interest is enforceable and perfected immediately before the 1477
	1923	+	effective date of the 2023 Act, but the requirements for enforceability or perfection under the 1478
	1924	+	2023 Act are not satisfied on the effective date of the 2023 Act, the security interest: 1479
	1925	+	“(1) Is a perfected security interest until the earlier of the time perfection 1480
	1926	+	would have ceased under the law in effect immediately before the effective date of the 2023 1481
	1927	+	Act or the adjustment date; 1482
	1928	+	“(2) Remains enforceable thereafter only if the security interest satisfies the 1483
	1929	+	requirements for enforceability under § 28:9-203, as amended by the 2023 Act, before the 1484
	1930	+	adjustment date; and 1485
	1931	+	“(3) Remains perfected thereafter only if the requirements for perfection under 1486
	1932	+	the 2023 Act are satisfied before the time specified in paragraph (1) of this subsection. 1487
	1933	+	“§ 28:12-204. Security interest unperfected before effective date of 2023 Act. 1488
	1934	+	“A security interest that is enforceable immediately before the effective date of the 1489
	1935	+	2023 Act but is unperfected at that time: 1490 ENGROSSED ORIGINAL
	1936	+
	1937	+
	1938	+
	1939	+
	1940	+	75
	1941	+
	1942	+	“(1) Remains an enforceable security interest until the adjustment date; 1491
	1943	+	“(2) Remains enforceable thereafter if the security interest becomes 1492
	1944	+	enforceable under § 28:9-203, as amended by the 2023 Act, on the effective date of the 2023 1493
	1945	+	Act or before the adjustment date; and 1494
	1946	+	“(3) Becomes perfected: 1495
	1947	+	“(A) Without further action, on the effective date of the 2023 Act if the 1496
	1948	+	requirements for perfection under the 2023 Act are satisfied before or at that time; or 1497
	1949	+	“(B) When the requirements for perfection are satisfied if the 1498
	1950	+	requirements are satisfied after that time. 1499
	1951	+	“§ 28:12-205. Effectiveness of actions taken before effective date of 2023 Act. 1500
	1952	+	“(a) If action, other than the filing of a financing statement, is taken before the 1501
	1953	+	effective date of the 2023 Act and the action would have resulted in perfection of the security 1502
	1954	+	interest had the security interest become enforceable before the effective date of the 2023 1503
	1955	+	Act, the action is effective to perfect a security interest that attaches under the 2023 Act 1504
	1956	+	before the adjustment date. An attached security interest becomes unperfected on the 1505
	1957	+	adjustment date unless the security interest becomes a perfected security interest under the 1506
	1958	+	2023 Act before the adjustment date. 1507
	1959	+	“(b) The filing of a financing statement before the effective date of the 2023 Act is 1508
	1960	+	effective to perfect a security interest on the effective date of the 2023 Act to the extent the 1509
	1961	+	filing would satisfy the requirements for perfection under the 2023 Act. 1510 ENGROSSED ORIGINAL
	1962	+
	1963	+
	1964	+
	1965	+
	1966	+	76
	1967	+
	1968	+	“(c) The taking of an action before the effective date of the 2023 Act is sufficient for 1511
	1969	+	the enforceability of a security interest on the effective date of the 2023 Act if the action 1512
	1970	+	would satisfy the requirements for enforceability under the 2023 Act. 1513
	1971	+	“§ 28:12-206. Priority. 1514
	1972	+	“(a) Subject to subsections (b) and (c) of this section, the 2023 Act determines the 1515
	1973	+	priority of conflicting claims to collateral. 1516
	1974	+	“(b) Subject to subsection (c) of this section, if the priorities of claims to collateral 1517
	1975	+	were established before the effective date of the 2023 Act, article 9 as in effect before the 1518
	1976	+	effective date of the 2023 Act determines priority. 1519
	1977	+	“(c) On the adjustment date, to the extent the priorities determined by article 9 as 1520
	1978	+	amended by the 2023 Act modify the priorities established before the effective date of the 1521
	1979	+	2023 Act, the priorities of claims to Article 12 property and electronic money established 1522
	1980	+	before the effective date of the 2023 Act cease to apply. 1523
	1981	+	“§ 28:12-207. Priority of claims when priority rules of article 9 do not apply. 1524
	1982	+	“(a) Subject to subsections (b) and (c) of this section, article 12 determines the 1525
	1983	+	priority of conflicting claims to Article 12 property when the priority rules of article 9 as 1526
	1984	+	amended by the 2023 Act do not apply. 1527
	1985	+	“(b) Subject to subsection (c) of this section, when the priority rules of article 9 as 1528
	1986	+	amended by the 2023 Act do not apply and the priorities of claims to Article 12 property 1529
	1987	+	were established before the effective date of the 2023 Act, law other than article 12 1530 ENGROSSED ORIGINAL
	1988	+
	1989	+
	1990	+
	1991	+
	1992	+	77
	1993	+
	1994	+	determines priority. 1531
	1995	+	“(c) When the priority rules of article 9 as amended by the 2023 Act do not apply, to 1532
	1996	+	the extent the priorities determined by the 2023 Act modify the priorities established before 1533
	1997	+	the effective date of the 2023 Act, the priorities of claims to article 12 property established 1534
	1998	+	before the effective date of the 2023 Act cease to apply on the adjustment date.” 1535
	1999	+	Sec. 3. Fiscal impact statement. 1536
	2000	+	The Council adopts the fiscal impact statement in the committee report as the fiscal 1537
	2001	+	impact statement required by section 602(c)(3) of the District of Columbia Home Rule Act, 1538
	2002	+	approved December 24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(3)). 1539
	2003	+	Sec. 4. Effective date. 1540
	2004	+	This act shall take effect following approval by the Mayor (or in the event of veto by 1541
	2005	+	the Mayor, action by the Council to override the veto), a 30-day period of Congressional 1542
	2006	+	review as provided in section 602(c)(1) of the District of Columbia Home Rule Act, 1543
	2007	+	approved December 24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)), and 1544
	2008	+	publication in the District of Columbia Register. 1545