Georgia 2023-2024 Regular Session

Georgia House Bill HB1240 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	24 LC 48 1222S~~/AP~~
2		-	House Bill 1240 (~~AS PASSED HOUSE AND SENATE~~)
	1	+	24 LC 48 1222S
	2	+	House Bill 1240 (COMMITTEE SUBSTITUTE)
3	3		By: Representatives Reeves of the 99
4	4		th
5	5		, Gunter of the 8
6	6		th
7	7		, Leverett of the 123
8	8		rd
9	9		, Oliver of the
10	10		82
11	11		nd
12	12		, Evans of the 57
13	13		th
14	14		, and others
15	15		A BILL TO BE ENTITLED
16	16		AN ACT
17	17		To amend Title 11 of the Official Code of Georgia Annotated, relating to the commercial
18	18		1
19	19		code, so as to update and modernize various statutes in the commercial code relating to2
20	20		commercial transactions in order to maintain uniformity in this state's statutes governing3
21	21		commercial transactions as recommended by the National Conference of Commissioners on4
22	22		Uniform State Laws; to establish commercial law for transactions involving digital assets;5
23	23		to provide for a short title; to renumber Article 12 as Article 13; to add a new Article 12 to6
24	24		the commercial code pertaining to controllable electronic records; to add a new Article 12A7
25	25		pertaining to transitional provisions; to make conforming amendments; to provide that8
26	26		nothing in this Act shall be construed to support, endorse, create, or implement a national9
27	27		digital currency; to provide for related matters; to repeal conflicting laws; and for other10
28	28		purposes.11
29	29		BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:12
30		-	H. B. 1240
31		-	- 1 - 24 LC 48 1222S~~/AP~~
	30	+	H. B. 1240 (SUB)
	31	+	- 1 - 24 LC 48 1222S
32	32		PART I
33	33		13
34	34		SHORT TITLE14
35	35		SECTION 1-1.15
36	36		This Act shall be known and may be cited as the "Uniform Commercial Code Modernization16
37	37		Act of 2024."17
38	38		SECTION 1-2.18
39	39		Nothing in this Act shall be construed to support, endorse, create, or implement a national19
40	40		digital currency.20
41	41		PART II21
42	42		RENUMBERING OF EXISTING ARTICLE 12 TO THE COMMERCIAL CODE22
43	43		SECTION 2-1.23
44	44		Title 11 of the Official Code of Georgia Annotated, relating to the commercial code, is24
45	45		amended by renumbering Article 12 as Article 13, by renumbering Code Section 11-12-10125
46	46		as Code Section 11-13-101, and by renumbering Code Section 11-12-102 as Code Section26
47	47		11-13-102.27
48	48		PART III28
49	49		ADOPTION OF ARTICLE 12 TO THE COMMERCIAL CODE29
50	50		SECTION 3-1.30
51	51		Said title is further amended by adopting a new Article 12, relating to controllable electronic31
52	52		records, as follows:32
53		-	H. B. 1240
54		-	- 2 - 24 LC 48 1222S~~/AP~~
	53	+	H. B. 1240 (SUB)
	54	+	- 2 - 24 LC 48 1222S
55	55		"ARTICLE 1233
56	56		CONTROLLABLE ELECTRONIC RECORDS34
57	57		11-12-101.Short title.35
58	58		This article shall be known and may be cited as the 'Uniform Commercial Code —36
59	59		Controllable Electronic Records.'37
60	60		11-12-102.Definitions.38
61	61		(a) Article 12 definitions. As used in this article, the term:39
62	62		(1) 'Controllable electronic record' means a record stored in an electronic medium that40
63	63		can be subjected to control under Code Section 11-12-105. The term does not include a41
64	64		controllable account, a controllable payment intangible, a deposit account, an electronic42
65	65		copy of a record evidencing chattel paper, an electronic document of title, electronic43
66	66		money, investment property, or a transferable record.44
67	67		(2) 'Qualifying purchaser' means a purchaser of a controllable electronic record or an45
68	68		interest in a controllable electronic record that obtains control of the controllable46
69	69		electronic record for value, in good faith, and without notice of a claim of a property right47
70	70		in the controllable electronic record.48
71	71		(3) 'Transferable record' has the meaning provided for that term in:49
72	72		(A) Section 201(a)(1) of the Electronic Signatures in Global and National Commerce50
73	73		Act, 15 U.S.C. Section 7021(a)(1), as amended; or51
74	74		(B) Subsection (a) of Code Section 10-12-16.52
75	75		(4) 'Value' has the meaning provided in subsection (a) of Code Section 11-3-303, as if53
76	76		references in that subsection to an 'instrument' were references to a controllable account,54
77	77		controllable electronic record, or controllable payment intangible.55
78		-	H. B. 1240
79		-	- 3 - 24 LC 48 1222S~~/AP~~
	78	+	H. B. 1240 (SUB)
	79	+	- 3 - 24 LC 48 1222S
80	80		(b) Definitions in Article 9. The definitions in Article 9 of this title of 'account debtor,'56
81	81		'controllable account,' 'controllable payment intangible,' 'chattel paper,' 'deposit account,'57
82	82		'electronic money,' and 'investment property' apply to this article.58
83	83		(c) Article 1 definitions and principles. Article 1 of this title contains general definitions59
84	84		and principles of construction and interpretation applicable throughout this article.60
85	85		11-12-103.Relation to Article 9 and consumer laws.61
86	86		(a) Article 9 of this title governs in case of conflict. If there is conflict between this62
87	87		article and Article 9 of this title, Article 9 of this title governs.63
88	88		(b) Applicable consumer law and other laws. A transaction subject to this article is64
89	89		subject to any applicable rule of law that establishes a different rule for consumers and to65
90	90		any other statute or regulation of this state that regulates the rates, charges, agreements, and66
91	91		practices for loans, credit sales, or other extensions of credit, and to any consumer67
92	92		protection statute or regulation of this state.68
93	93		11-12-104.Rights in controllable account, controllable electronic record, and69
94	94		controllable payment intangible.70
95	95		(a) Applicability of section to controllable account and controllable payment71
96	96		intangible. This Code section applies to the acquisition and purchase of rights in a72
97	97		controllable account or controllable payment intangible, including the rights and benefits73
98	98		under subsections (c), (d), (e), (g), and (h) of this Code section of a purchaser and74
99	99		qualifying purchaser, in the same manner this Code section applies to a controllable75
100	100		electronic record.76
101	101		(b) Control of controllable account and controllable payment intangible. To77
102	102		determine whether a purchaser of a controllable account or a controllable payment78
103	103		intangible is a qualifying purchaser, the purchaser obtains control of the account or79
104		-	H. B. 1240
105		-	- 4 - 24 LC 48 1222S~~/AP~~
	104	+	H. B. 1240 (SUB)
	105	+	- 4 - 24 LC 48 1222S
106	106		payment intangible if it obtains control of the controllable electronic record that evidences80
107	107		the account or payment intangible.81
108	108		(c) Applicability of other law to acquisition of rights. Except as provided in this Code82
109	109		section, law other than this article determines whether a person acquires a right in a83
110	110		controllable electronic record and the right the person acquires.84
111	111		(d) Shelter principle and purchase of limited interest. A purchaser of a controllable85
112	112		electronic record acquires all rights in the controllable electronic record that the transferor86
113	113		had or had power to transfer, except that a purchaser of a limited interest in a controllable87
114	114		electronic record acquires rights only to the extent of the interest purchased.88
115	115		(e) Rights of qualifying purchaser. A qualifying purchaser acquires its rights in the89
116	116		controllable electronic record free of a claim of a property right in the controllable90
117	117		electronic record.91
118	118		(f) Limitation of rights of qualifying purchaser in other property. Except as provided92
119	119		in subsections (a) and (e) of this Code section for a controllable account and a controllable93
120	120		payment intangible or law other than this article, a qualifying purchaser takes a right to94
121	121		payment, right to performance, or other interest in property evidenced by the controllable95
122	122		electronic record subject to a claim of a property right in the right to payment, right to96
123	123		performance, or other interest in property.97
124	124		(g) No-action protection for qualifying purchaser. An action may not be asserted98
125	125		against a qualifying purchaser based on both a purchase by the qualifying purchaser of a99
126	126		controllable electronic record and a claim of a property right in another controllable100
127	127		electronic record, whether the action is framed in conversion, replevin, constructive trust,101
128	128		equitable lien, or other theory.102
129	129		(h) Filing not notice. Filing of a financing statement under Article 9 of this title is not103
130	130		notice of a claim of a property right in a controllable electronic record.104
131		-	H. B. 1240
132		-	- 5 - 24 LC 48 1222S~~/AP~~
	131	+	H. B. 1240 (SUB)
	132	+	- 5 - 24 LC 48 1222S
133	133		11-12-105.Control of controllable electronic record.105
134	134		(a) General rule: control of controllable electronic record. A person has control of a106
135	135		controllable electronic record if the electronic record, a record attached to or logically107
136	136		associated with the electronic record, or a system in which the electronic record is108
137	137		recorded:109
138	138		(1) Gives the person:110
139	139		(A) Power to avail itself of substantially all the benefit from the electronic record; and111
140	140		(B) Exclusive power, subject to subsection (b) of this Code section, to:112
141	141		(i) Prevent others from availing themselves of substantially all the benefit from the113
142	142		electronic record; and114
143	143		(ii) Transfer control of the electronic record to another person or cause another115
144	144		person to obtain control of another controllable electronic record as a result of the116
145	145		transfer of the electronic record; and117
146	146		(2) Enables the person readily to identify itself in any way, including by name,118
147	147		identifying number, cryptographic key, office, or account number, as having the powers119
148	148		specified in paragraph (1) of this subsection.120
149	149		(b) Meaning of exclusive. Subject to subsection (c) of this Code section, a power is121
150	150		exclusive under subparagraphs (a)(1)(B)(i) and (a)(1)(B)(ii) of this Code section even if:122
151	151		(1) The controllable electronic record, a record attached to or logically associated with123
152	152		the electronic record, or a system in which the electronic record is recorded limits the use124
153	153		of the electronic record or has a protocol programmed to cause a change, including a125
154	154		transfer or loss of control or a modification of benefits afforded by the electronic record;126
155	155		or127
156	156		(2) The power is shared with another person.128
157	157		(c) When power not shared with another person. A power of a person is not shared129
158	158		with another person under paragraph (2) of subsection (b) of this Code section and the130
159	159		person's power is not exclusive if:131
160		-	H. B. 1240
161		-	- 6 - 24 LC 48 1222S~~/AP~~
	160	+	H. B. 1240 (SUB)
	161	+	- 6 - 24 LC 48 1222S
162	162		(1) The person can exercise the power only if the power also is exercised by the other132
163	163		person; and133
164	164		(2) The other person:134
165	165		(A) Can exercise the power without exercise of the power by the person; or135
166	166		(B) Is the transferor to the person of an interest in the controllable electronic record or136
167	167		a controllable account or controllable payment intangible evidenced by the controllable137
168	168		electronic record.138
169	169		(d) Presumption of exclusivity of certain powers. If a person has the powers specified139
170	170		in subparagraphs (a)(1)(B)(i) and (a)(1)(B)(ii) of this Code section, the powers are140
171	171		presumed to be exclusive.141
172	172		(e) Control through another person. A person has control of a controllable electronic142
173	173		record if another person, other than the transferor to the person of an interest in the143
174	174		controllable electronic record or a controllable account or controllable payment intangible144
175	175		evidenced by the controllable electronic record:145
176	176		(1) Has control of the electronic record and acknowledges that it has control on behalf146
177	177		of the person; or147
178	178		(2) Obtains control of the electronic record after having acknowledged that it will obtain148
179	179		control of the electronic record on behalf of the person.149
180	180		(f) No requirement to acknowledge. A person that has control under this Code section150
181	181		is not required to acknowledge that it has control on behalf of another person.151
182	182		(g) No duties or confirmation. If a person acknowledges that it has or will obtain control152
183	183		on behalf of another person, unless the person otherwise agrees or law other than this153
184	184		article or Article 9 of this title otherwise provides, the person does not owe any duty to the154
185	185		other person and is not required to confirm the acknowledgment to any other person.155
186		-	H. B. 1240
187		-	- 7 - 24 LC 48 1222S~~/AP~~
	186	+	H. B. 1240 (SUB)
	187	+	- 7 - 24 LC 48 1222S
188	188		11-12-106.Discharge of account debtor on controllable account or controllable156
189	189		payment intangible.157
190	190		(a) Discharge of account debtor. An account debtor on a controllable account or158
191	191		controllable payment intangible may discharge its obligation by paying:159
192	192		(1) The person having control of the controllable electronic record that evidences the160
193	193		controllable account or controllable payment intangible; or161
194	194		(2) Except as provided in subsection (b) of this Code section, a person that formerly had162
195	195		control of the controllable electronic record.163
196	196		(b) Content and effect of notification. Subject to subsection (d) of this Code section, the164
197	197		account debtor may not discharge its obligation by paying a person that formerly had165
198	198		control of the controllable electronic record if the account debtor receives a notification166
199	199		that:167
200	200		(1) Is signed by a person that formerly had control or the person to which control was168
201	201		transferred;169
202	202		(2) Reasonably identifies the controllable account or controllable payment intangible;170
203	203		(3) Notifies the account debtor that control of the controllable electronic record that171
204	204		evidences the controllable account or controllable payment intangible was transferred;172
205	205		(4) Identifies the transferee, in any reasonable way, including by name, identifying173
206	206		number, cryptographic key, office, or account number; and174
207	207		(5) Provides a commercially reasonable method by which the account debtor is to pay175
208	208		the transferee.176
209	209		(c) Discharge following effective notification. After receipt of a notification that177
210	210		complies with subsection (b) of this Code section, the account debtor may discharge its178
211	211		obligation by paying in accordance with the notification and may not discharge the179
212	212		obligation by paying a person that formerly had control.180
213	213		(d) When notification ineffective. Subject to subsection (h) of this Code section,181
214	214		notification is ineffective under subsection (b) of this Code section:182
215		-	H. B. 1240
216		-	- 8 - 24 LC 48 1222S~~/AP~~
	215	+	H. B. 1240 (SUB)
	216	+	- 8 - 24 LC 48 1222S
217	217		(1) Unless, before the notification is sent, the account debtor and the person that, at that183
218	218		time, had control of the controllable electronic record that evidences the controllable184
219	219		account or controllable payment intangible agree in a signed record to a commercially185
220	220		reasonable method by which a person may furnish reasonable proof that control has been186
221	221		transferred;187
222	222		(2) To the extent an agreement between the account debtor and seller of a payment188
223	223		intangible limits the account debtor's duty to pay a person other than the seller and the189
224	224		limitation is effective under law other than this article; or190
225	225		(3) At the option of the account debtor, if the notification notifies the account debtor to:191
226	226		(A) Divide a payment;192
227	227		(B) Make less than the full amount of an installment or other periodic payment; or193
228	228		(C) Pay any part of a payment by more than one method or to more than one person.194
229	229		(e) Proof of transfer of control. Subject to subsection (h) of this Code section, if195
230	230		requested by the account debtor, the person giving the notification under subsection (b) of196
231	231		this Code section seasonably shall furnish reasonable proof, using the method in the197
232	232		agreement referred to in paragraph (1) of subsection (d) of this Code section, that control198
233	233		of the controllable electronic record has been transferred. Unless the person complies with199
234	234		the request, the account debtor may discharge its obligation by paying a person that200
235	235		formerly had control, even if the account debtor has received a notification under201
236	236		subsection (b) of this Code section.202
237	237		(f) What constitutes reasonable proof. A person furnishes reasonable proof under203
238	238		subsection (e) of this Code section that control has been transferred if the person204
239	239		demonstrates, using the method in the agreement referred to in paragraph (1) of205
240	240		subsection (d) of this Code section, that the transferee has the power to:206
241	241		(1) Avail itself of substantially all the benefit from the controllable electronic record;207
242	242		(2) Prevent others from availing themselves of substantially all the benefit from the208
243	243		controllable electronic record; and209
244		-	H. B. 1240
245		-	- 9 - 24 LC 48 1222S~~/AP~~
	244	+	H. B. 1240 (SUB)
	245	+	- 9 - 24 LC 48 1222S
246	246		(3) Transfer the powers specified in paragraphs (1) and (2) of this subsection to another210
247	247		person.211
248	248		(g) Rights not waivable. Subject to subsection (h) of this Code section, an account debtor212
249	249		may not waive or vary its rights under paragraph (1) of subsection (d) of this Code section213
250	250		and subsection (e) of this Code section or its option under paragraph (3) of subsection (d)214
251	251		of this Code section.215
252	252		(h) Rule for individual under other law. This Code section is subject to law other than216
253	253		this article which establishes a different rule for an account debtor who is an individual and217
254	254		who incurred the obligation primarily for personal, family, or household purposes.218
255	255		11-12-107.Governing law.219
256	256		(a) Governing law: general rule. Except as provided in subsection (b) of this Code220
257	257		section, the local law of a controllable electronic record's jurisdiction governs a matter221
258	258		covered by this article.222
259	259		(b) Governing law: Code Section 11-12-106. For a controllable electronic record that223
260	260		evidences a controllable account or controllable payment intangible, the local law of the224
261	261		controllable electronic record's jurisdiction governs a matter covered by Code225
262	262		Section 11-12-106 unless an effective agreement determines that the local law of another226
263	263		jurisdiction governs.227
264	264		(c) Controllable electronic record's jurisdiction. The following rules determine a228
265	265		controllable electronic record's jurisdiction under this Code section:229
266	266		(1) If the controllable electronic record, or a record attached to or logically associated230
267	267		with the controllable electronic record and readily available for review, expressly231
268	268		provides that a particular jurisdiction is the controllable electronic record's jurisdiction232
269	269		for purposes of this article or this title, that jurisdiction is the controllable electronic233
270	270		record's jurisdiction;234
271		-	H. B. 1240
272		-	- 10 - 24 LC 48 1222S~~/AP~~
	271	+	H. B. 1240 (SUB)
	272	+	- 10 - 24 LC 48 1222S
273	273		(2) If paragraph (1) of this subsection does not apply and the rules of the system in which235
274	274		the controllable electronic record is recorded are readily available for review and236
275	275		expressly provide that a particular jurisdiction is the controllable electronic record's237
276	276		jurisdiction for purposes of this article or this title, that jurisdiction is the controllable238
277	277		electronic record's jurisdiction;239
278	278		(3) If paragraphs (1) and (2) of this subsection do not apply and the controllable240
279	279		electronic record, or a record attached to or logically associated with the controllable241
280	280		electronic record and readily available for review, expressly provides that the controllable242
281	281		electronic record is governed by the law of a particular jurisdiction, that jurisdiction is the243
282	282		controllable electronic record's jurisdiction;244
283	283		(4) If paragraphs (1), (2), and (3) of this subsection do not apply and the rules of the245
284	284		system in which the controllable electronic record is recorded are readily available for246
285	285		review and expressly provide that the controllable electronic record or the system is247
286	286		governed by the law of a particular jurisdiction, that jurisdiction is the controllable248
287	287		electronic record's jurisdiction; and249
288	288		(5) If paragraphs (1) through (4) of this subsection do not apply, the controllable250
289	289		electronic record's jurisdiction is the District of Columbia.251
290	290		(d) Applicability of Article 12. If paragraph (5) of subsection (c) of this Code section252
291	291		applies and Article 12 is not in effect in the District of Columbia without material253
292	292		modification, the governing law for a matter covered by this article is the law of the District254
293	293		of Columbia as though Article 12 were in effect in the District of Columbia without255
294	294		material modification. In this subsection, the term 'Article 12' means Article 12 of Uniform256
295	295		Commercial Code Amendments (2022).257
296	296		(e) Relation of matter or transaction to controllable electronic record's jurisdiction258
297	297		not necessary. To the extent subsections (a) and (b) of this Code section provide that the259
298	298		local law of the controllable electronic record's jurisdiction governs a matter covered by260
299		-	H. B. 1240
300		-	- 11 - 24 LC 48 1222S~~/AP~~
	299	+	H. B. 1240 (SUB)
	300	+	- 11 - 24 LC 48 1222S
301	301		this article, that law governs even if the matter or a transaction to which the matter relates261
302	302		does not bear any relation to the controllable electronic record's jurisdiction.262
303	303		(f) Rights of purchasers determined at time of purchase. The rights acquired under263
304	304		Code Section 11-12-104 by a purchaser or qualifying purchaser are governed by the law264
305	305		applicable under this Code section at the time of purchase."265
306	306		PART IV266
307	307		ADOPTION OF ARTICLE 12A TO THE COMMERCIAL CODE267
308	308		SECTION 4-1.268
309	309		Said title is further amended by adopting a new Article 12A, relating to transitional269
310	310		provisions for Uniform Commercial Code Amendments, as follows:270
311	311		"ARTICLE 12A271
312	312		TRANSITIONAL PROVISIONS272
313	313		FOR UNIFORM COMMERCIAL CODE AMENDMENTS273
314	314		Part 1274
315	315		General Provisions and Definitions275
316	316		11-12A-101.Title.276
317	317		This article shall be known and may be cited as 'Transitional Provisions for Uniform277
318	318		Commercial Code Amendments (2024).'278
319	319		11-12A-102.Definitions.279
320	320		(a) Article 12A Definitions. In this article:280
321	321		(1) 'Adjustment date' means July 1, 2025.281
322		-	H. B. 1240
323		-	- 12 - 24 LC 48 1222S~~/AP~~
	322	+	H. B. 1240 (SUB)
	323	+	- 12 - 24 LC 48 1222S
324	324		(2) 'Article 12' means Article 12 of this title.282
325	325		(3) 'Article 12 property' means a controllable account, controllable electronic record, or283
326	326		controllable payment intangible.284
327	327		(b) Definitions in other articles. The following definitions in other articles of this title285
328	328		apply to this article:286
329	329		'Controllable account.' Code Section 11-9-102.287
330	330		'Controllable electronic record.' Code Section 11-12-102.288
331	331		'Controllable payment intangible.' Code Section 11-9-102.289
332	332		'Electronic money.' Code Section 11-9-102.290
333	333		'Financing statement.' Code Section 11-9-102.291
334	334		(c) Article 1 definitions and principles. Article 1 contains general definitions and292
335	335		principles of construction and interpretation applicable throughout this article.293
336	336		Part 2294
337	337		General Transitional Provisions295
338	338		11-12A-201.Saving clause.296
339	339		Except as provided in Part 3 of this article, a transaction validly entered into before July297
340	340		1, 2024, and the rights, duties, and interests flowing from the transaction remain valid298
341	341		thereafter and may be terminated, completed, consummated, or enforced as required or299
342	342		permitted by law other than this title or, if applicable, this title, as though the Uniform300
343	343		Commercial Code Modernization Act of 2024 had not taken effect.301
344		-	H. B. 1240
345		-	- 13 - 24 LC 48 1222S~~/AP~~
	344	+	H. B. 1240 (SUB)
	345	+	- 13 - 24 LC 48 1222S
346	346		Part 3302
347	347		Transitional Provisions for Articles 9 and 12303
348	348		11-12A-301.Saving clause.304
349	349		(a) Pre-effective date transaction, lien, or interest. Except as provided in this part,305
350	350		Article 9 of this title as amended by the Uniform Commercial Code Modernization Act of306
351	351		2024 and Article 12 of this title apply to a transaction, lien, or other interest in property,307
352	352		even if the transaction, lien, or interest was entered into, created, or acquired before July308
353	353		1, 2024.309
354	354		(b) Continuing validity. Except as provided in subsection (c) of this Code section and310
355	355		Code Sections 11-12A-302 through 11-12A-306:311
356	356		(1) A transaction, lien, or interest in property that was validly entered into, created, or312
357	357		transferred before July 1, 2024, and was not governed by this title, but would be subject313
358	358		to Article 9 of this title as amended by the Uniform Commercial Code Modernization Act314
359	359		of 2024 or Article 12 of this title if it had been entered into, created, or transferred on or315
360	360		after July 1, 2024, including the rights, duties, and interests flowing from the transaction,316
361	361		lien, or interest, remains valid on and after July 1, 2024; and317
362	362		(2) The transaction, lien, or interest may be terminated, completed, consummated, and318
363	363		enforced as required or permitted by the Uniform Commercial Code Modernization Act319
364	364		of 2024 or by the law that would apply if the Uniform Commercial Code Modernization320
365	365		Act of 2024 had not taken effect.321
366	366		(c) Pre-effective date proceeding. The Uniform Commercial Code Modernization Act322
367	367		of 2024 does not affect an action, case, or proceeding commenced before July 1, 2024.323
368	368		11-12A-302.Security interest perfected before effective date.324
369	369		(a) Continuing perfection: perfection requirements satisfied. A security interest that325
370	370		is enforceable and perfected immediately before July 1, 2024, is a perfected security326
371		-	H. B. 1240
372		-	- 14 - 24 LC 48 1222S~~/AP~~
	371	+	H. B. 1240 (SUB)
	372	+	- 14 - 24 LC 48 1222S
373	373		interest under the Uniform Commercial Code Modernization Act of 2024, if, on July 1,327
374	374		2024, the requirements for enforceability and perfection under the Uniform Commercial328
375	375		Code Modernization Act of 2024 are satisfied without further action.329
376	376		(b) Continuing perfection: enforceability or perfection requirements not satisfied. 330
377	377		If a security interest is enforceable and perfected immediately before July 1, 2024, but the331
378	378		requirements for enforceability or perfection under the Uniform Commercial Code332
379	379		Modernization Act of 2024 are not satisfied on July 1, 2024, the security interest:333
380	380		(1) Is a perfected security interest until the earlier of the time perfection would have334
381	381		ceased under the law in effect immediately before July 1, 2024, or the adjustment date;335
382	382		(2) Remains enforceable thereafter only if the security interest satisfies the requirements336
383	383		for enforceability under Code Section 11-9-203, as amended by the Uniform Commercial337
384	384		Code Modernization Act of 2024, before the adjustment date; and338
385	385		(3) Remains perfected thereafter only if the requirements for perfection under the339
386	386		Uniform Commercial Code Modernization Act of 2024 are satisfied before the time340
387	387		specified in paragraph (1) of this subsection.341
388	388		11-12A-303.Security interest unperfected before effective date.342
389	389		A security interest that is enforceable immediately before July 1, 2024, but is unperfected343
390	390		at that time:344
391	391		(1) Remains an enforceable security interest until the adjustment date;345
392	392		(2) Remains enforceable thereafter if the security interest becomes enforceable under346
393	393		Code Section 11-9-203, as amended by the Uniform Commercial Code Modernization347
394	394		Act of 2024, on July 1, 2024, or before the adjustment date; and348
395	395		(3) Becomes perfected:349
396	396		(A) Without further action, on July 1, 2024, if the requirements for perfection under350
397	397		the Uniform Commercial Code Modernization Act of 2024 are satisfied before or at that351
398	398		time; or352
399		-	H. B. 1240
400		-	- 15 - 24 LC 48 1222S~~/AP~~
	399	+	H. B. 1240 (SUB)
	400	+	- 15 - 24 LC 48 1222S
401	401		(B) When the requirements for perfection are satisfied if the requirements are satisfied353
402	402		after that time.354
403	403		11-12A-304.Effectiveness of actions taken before effective date.355
404	404		(a) Pre-effective date action; attachment and perfection before adjustment date. If356
405	405		action, other than the filing of a financing statement, is taken before July 1, 2024, and the357
406	406		action would have resulted in perfection of the security interest had the security interest358
407	407		become enforceable before July 1, 2024, the action is effective to perfect a security interest359
408	408		that attaches under the Uniform Commercial Code Modernization Act of 2024 before the360
409	409		adjustment date. An attached security interest becomes unperfected on the adjustment date361
410	410		unless the security interest becomes a perfected security interest under the Uniform362
411	411		Commercial Code Modernization Act of 2024 before the adjustment date.363
412	412		(b) Pre-effective date filing. The filing of a financing statement before July 1, 2024, is364
413	413		effective to perfect a security interest on July 1, 2024, to the extent the filing would satisfy365
414	414		the requirements for perfection under the Uniform Commercial Code Modernization Act366
415	415		of 2024.367
416	416		(c) Pre-effective date enforceability action. The taking of an action before July 1, 2024,368
417	417		is sufficient for the enforceability of a security interest on July 1, 2024, if the action would369
418	418		satisfy the requirements for enforceability under the Uniform Commercial Code370
419	419		Modernization Act of 2024.371
420	420		11-12A-305.Priority.372
421	421		(a) Determination of priority. Subject to subsections (b) and (c) of this Code section, the373
422	422		Uniform Commercial Code Modernization Act of 2024 determines the priority of374
423	423		conflicting claims to collateral.375
424		-	H. B. 1240
425		-	- 16 - 24 LC 48 1222S~~/AP~~
	424	+	H. B. 1240 (SUB)
	425	+	- 16 - 24 LC 48 1222S
426	426		(b) Established priorities. Subject to subsection (c) of this Code section, if the priorities376
427	427		of claims to collateral were established before July 1, 2024, Article 9 of this title as in377
428	428		effect before July 1, 2024, determines priority.378
429	429		(c) Determination of certain priorities on adjustment date. On the adjustment date, to379
430	430		the extent the priorities determined by Article 9 of this title as amended by the Uniform380
431	431		Commercial Code Modernization Act of 2024 modify the priorities established before July381
432	432		1, 2024, the priorities of claims to Article 12 property and electronic money established382
433	433		before July 1, 2024, cease to apply.383
434	434		11-12A-306.Priority of claims when priority rules of Article 9 of this title do not384
435	435		apply.385
436	436		(a) Determination of priority. Subject to subsections (b) and (c) of this Code section,386
437	437		Article 12 of this title determines the priority of conflicting claims to Article 12 property387
438	438		when the priority rules of Article 9 of this title as amended by the Uniform Commercial388
439	439		Code Modernization Act of 2024 do not apply.389
440	440		(b) Established priorities. Subject to subsection (c) of this Code section, when the390
441	441		priority rules of Article 9 of this title as amended by the Uniform Commercial Code391
442	442		Modernization Act of 2024 do not apply and the priorities of claims to Article 12 property392
443	443		were established before July 1, 2024, law other than Article 12 of this title determines393
444	444		priority.394
445	445		(c) Determination of certain priorities on adjustment date. When the priority rules of395
446	446		Article 9 of this title as amended by the Uniform Commercial Code Modernization Act of396
447	447		2024 do not apply, to the extent the priorities determined by the Uniform Commercial Code397
448	448		Modernization Act of 2024 modify the priorities established before July 1, 2024, the398
449	449		priorities of claims to Article 12 property established before July 1, 2024, cease to apply399
450	450		on the adjustment date.400
451		-	H. B. 1240
452		-	- 17 - 24 LC 48 1222S~~/AP~~
	451	+	H. B. 1240 (SUB)
	452	+	- 17 - 24 LC 48 1222S
453	453		Part 4401
454	454		Effective Date402
455	455		11-12A-401.Effective date.403
456	456		The Uniform Commercial Code Modernization Act of 2024 takes effect on July 1, 2024."404
457	457		PART V405
458	458		NATIONAL CONFERENCE OF406
459	459		COMMISSIONERS ON UNIFORM STATE LAWS407
460	460		RECOMMENDED CHANGES TO THE COMMERCIAL CODE408
461	461		SECTION 5-1.409
462	462		Said title is further amended by revising Code Section 11-1-201, relating to general410
463	463		definitions, as follows:411
464	464		"11-1-201.General definitions.412
465	465		(a) Unless the context otherwise requires, words or phrases defined in this Code section,413
466	466		or in the additional definitions contained in other articles of this title that apply to particular414
467	467		articles or parts thereof, have the meanings stated.415
468	468		(b) Subject to additional definitions contained in the other articles of this title that are416
469	469		applicable to specific articles or parts thereof, in this title:417
470	470		(1) 'Action' in the sense of a judicial proceeding includes recoupment, counterclaim,418
471	471		setoff, suit in equity, and any other proceedings in which rights are determined.419
472	472		(2) 'Aggrieved party' means a party entitled to pursue a remedy.420
473	473		(3) 'Agreement,' as distinguished from 'contract,' means the bargain of the parties in fact421
474	474		as found in their language or inferred from other circumstances including course of422
475	475		performance, course of dealing, or usage of trade as provided in Code Section 11-1-303.423
476		-	H. B. 1240
477		-	- 18 - 24 LC 48 1222S~~/AP~~
	476	+	H. B. 1240 (SUB)
	477	+	- 18 - 24 LC 48 1222S
478	478		(4) 'Bank' means a person engaged in the business of banking and includes a savings
479	479		424
480	480		bank, savings and loan association, credit union, or trust company.425
481	481		(5) 'Bearer' means a person in control of a negotiable electronic document of title or a
482	482		426
483	483		person in possession of a negotiable instrument, negotiable tangible document of title, or 427
484	484		certificated security that is payable to bearer or indorsed in blank.428
485	485		(6) 'Bill of lading' means a document evidencing the receipt of goods for shipment issued429
486	486		by a person engaged in the business of directly or indirectly transporting or forwarding430
487	487		goods. The term does not include a warehouse receipt.431
488	488		(7) 'Branch' includes a separately incorporated foreign branch of a bank.432
489	489		(8) 'Burden of establishing' a fact means the burden of persuading the trier of fact that433
490	490		the existence of the fact is more probable than its nonexistence.434
491	491		(9) 'Buyer in ordinary course of business' means a person that buys goods in good faith435
492	492		without knowledge that the sale violates the rights of another person in the goods, and in436
493	493		the ordinary course from a person, other than a pawnbroker, in the business of selling437
494	494		goods of that kind. A person buys goods in the ordinary course if the sale to the person438
495	495		comports with the usual or customary practices in the kind of business in which the seller439
496	496		is engaged or with the seller's own usual or customary practices. A person that sells oil,440
497	497		gas, or other minerals at the wellhead or minehead is a person in the business of selling441
498	498		goods of that kind. A buyer in the ordinary course of business may buy for cash, by442
499	499		exchange of other property, or on secured or unsecured credit, and may acquire goods or443
500	500		documents of title under a preexisting contract for sale. Only a buyer that takes444
501	501		possession of the goods or has a right to recover the goods from the seller under Article445
502	502		2 of this title may be a buyer in ordinary course of business. A person that acquires446
503	503		goods in a transfer in bulk or as security for or in total or partial satisfaction of a money447
504	504		debt is not a buyer in ordinary course of business.448
505	505		(10) 'Conspicuous,' with reference to a term, means so written, displayed, or presented449
506	506		that, based on the totality of the circumstances, a reasonable person against which it is to450
507		-	H. B. 1240
508		-	- 19 - 24 LC 48 1222S~~/AP~~
	507	+	H. B. 1240 (SUB)
	508	+	- 19 - 24 LC 48 1222S
509	509		operate ought to have noticed it. Whether a term is 'conspicuous' or not is a decision for
510	510		451
511	511		the court. Conspicuous terms include the following:
512	512		452
513	513		(A) A heading in capitals equal to or greater in size than the surrounding text, or in453
514	514		contrasting type, font, or color to the surrounding text of the same or lesser size; and454
515	515		(B) Language in the body of a record or display in larger type than the surrounding455
516	516		text, or in contrasting type, font, or color to the surrounding text of the same size, or set456
517	517		off from the surrounding text of the same size by symbols or other marks that call457
518	518		attention to the language.458
519	519		(11) 'Consumer' means an individual who enters into a transaction primarily for personal,459
520	520		family, or household purposes.460
521	521		(12) 'Contract,' as distinguished from 'agreement,' means the total legal obligation that461
522	522		results from the parties' agreement as determined by this title and any other applicable462
523	523		law.463
524	524		(13) 'Creditor' includes a general creditor, a secured creditor, a lien creditor and any464
525	525		representative of creditors, including an assignee for the benefit of creditors, a trustee in465
526	526		bankruptcy, a receiver in equity, and an executor or administrator of an insolvent debtor's466
527	527		or assignor's estate.467
528	528		(14) 'Defendant' includes a person in the position of defendant in a counterclaim,468
529	529		cross-claim, or third-party claim.469
530	530		(15) 'Delivery,' with respect to an electronic document of title, means voluntary transfer470
531	531		of control and, with respect to an instrument, a tangible document of title, or an471
532	532		authoritative tangible copy of a record evidencing chattel paper, means voluntary transfer472
533	533		of possession.473
534	534		(16) 'Document of title' includes a bill of lading, dock warrant, dock receipt, warehouse474
535	535		receipt, or order for delivery of goods and any other document which means a record (A)475
536	536		that in the regular course of business or financing is treated as adequately evidencing that476
537	537		the person in possession or control of it the record is entitled to receive, control, hold, and477
538		-	H. B. 1240
539		-	- 20 - 24 LC 48 1222S~~/AP~~
	538	+	H. B. 1240 (SUB)
	539	+	- 20 - 24 LC 48 1222S
540	540		dispose of the document record and the goods it the record covers. To be a document of478
541	541		title, a document must purport and (B) that purports to be issued by or addressed to a479
542	542		bailee and purport to cover goods in the bailee's possession which are either identified or480
543	543		are fungible portions of an identified mass. The term includes a bill of lading, transport481
544	544		document, dock warrant, dock receipt, warehouse receipt, and order for delivery of482
545	545		goods. An electronic document of title means a document of title evidenced by a record483
546	546		consisting of information stored in an electronic medium. A tangible document of title484
547	547		means a document of title evidenced by a record consisting of information that is485
548	548		inscribed on a tangible medium.486
549	549		(16.1) 'Electronic' means relating to technology having electrical, digital, magnetic,487
550	550		wireless, optical, electromagnetic, or similar capabilities.488
551	551		(17) 'Fault' means a default, breach, or wrongful act or omission.489
552	552		(18) 'Fungible goods' means:490
553	553		(A) Goods of which any unit is, by nature or usage of trade, the equivalent of any other491
554	554		like unit; or492
555	555		(B) Goods that by agreement are treated as equivalent.493
556	556		(19) 'Genuine' means free of forgery or counterfeiting.494
557	557		(20) 'Good faith,' except as otherwise provided in Article 5 of this title, means honesty495
558	558		in fact and the observance of reasonable commercial standards of fair dealing.496
559	559		(21) 'Holder' means:497
560	560		(A) The person in possession of a negotiable instrument that is payable either to bearer498
561	561		or to an identified person that is the person in possession; or499
562	562		(B) The person in possession of a negotiable tangible document of title if the goods are500
563	563		deliverable either to bearer or to the order of the person in possession; or501
564	564		(C) The person in control, other than pursuant to subsection (g) of Code Section502
565	565		11-7-106, of a negotiable electronic document of title.503
566		-	H. B. 1240
567		-	- 21 - 24 LC 48 1222S~~/AP~~
	566	+	H. B. 1240 (SUB)
	567	+	- 21 - 24 LC 48 1222S
568	568		(22) 'Insolvency proceeding' includes any assignment for the benefit of creditors or other
569	569		504
570	570		proceeding intended to liquidate or rehabilitate the estate of the person involved.505
571	571		(23) 'Insolvent' means:506
572	572		(A) Having generally ceased to pay debts in the ordinary course of business other than507
573	573		as a result of bona fide dispute;508
574	574		(B) Being unable to pay debts as they become due; or509
575	575		(C) Being insolvent within the meaning of the federal bankruptcy law.510
576	576		(24) 'Money' means a medium of exchange that is currently
577	577		authorized or adopted by a511
578	578		domestic or foreign government. The term and includes a monetary unit of account512
579	579		established by an intergovernmental organization or by agreement between two or more513
580	580		countries. The term does not include an electronic record that is a medium of exchange514
581	581		recorded and transferable in a system that existed and operated for the medium of515
582	582		exchange before the medium of exchange was authorized or adopted by the government.516
583	583		(25) 'Organization' means a person other than an individual.517
584	584		(26) 'Party,' as distinct from 'third party,' means a person who has engaged in a518
585	585		transaction or made an agreement subject to this title.519
586	586		(27) 'Person' means an individual, corporation, business trust, estate, trust, partnership,520
587	587		limited liability company, association, joint venture, government, governmental521
588	588		subdivision, agency, or instrumentality, public corporation, or any other legal or522
589	589		commercial entity. The term includes a protected series, however denominated, of an523
590	590		entity if the protected series is established under law other than this title that limits, or524
591	591		limits if conditions specified under the law are satisfied, the ability of a creditor of the525
592	592		entity or of any other protected series of the entity to satisfy a claim from assets of the526
593	593		protected series.527
594	594		(28) 'Present value' means the amount as of a date certain of one or more sums payable528
595	595		in the future, discounted to the date certain by use of either an interest rate specified by529
596	596		the parties if that rate is not manifestly unreasonable at the time the transaction is entered530
597		-	H. B. 1240
598		-	- 22 - 24 LC 48 1222S~~/AP~~
	597	+	H. B. 1240 (SUB)
	598	+	- 22 - 24 LC 48 1222S
599	599		into or, if an interest rate is not so specified, a commercially reasonable rate that takes
600	600		531
601	601		into account the facts and circumstances at the time the transaction is entered into.532
602	602		(29) 'Purchase' means taking by sale, lease,
603	603		discount, negotiation, mortgage, pledge, lien,533
604	604		security interest, issue or reissue, gift, or any other voluntary transaction creating an534
605	605		interest in property.535
606	606		(30) 'Purchaser' means a person who takes by purchase.536
607	607		(31) 'Record' means information that is inscribed on a tangible medium or that is stored537
608	608		in an electronic or other medium and is retrievable in perceivable form.538
609	609		(32) 'Remedy' means any remedial right to which an aggrieved party is entitled with or539
610	610		without resort to a tribunal.540
611	611		(33) 'Representative' means a person empowered to act for another, including an agent,541
612	612		an officer of a corporation or association, and a trustee, executor, or administrator of an542
613	613		estate.543
614	614		(34) 'Rights' includes remedies.544
615	615		(35) 'Security interest' means an interest in personal property or fixtures which secures545
616	616		payment or performance of an obligation. The term also includes any interest of a546
617	617		consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory547
618	618		note in a transaction that is subject to Article 9 of this title. The term does not include the548
619	619		special property interest of a buyer of goods on identification of those goods to a contract549
620	620		for sale under Code Section 11-2-401, but a buyer may also acquire a 'security interest'550
621	621		by complying with Article 9 of this title. Except as otherwise provided in Code Section551
622	622		11-2-505, the right of a seller or lessor of goods under Article 2 or 2A of this title to552
623	623		retain or acquire possession of the goods is not a 'security interest,' but a seller or lessor553
624	624		may also acquire a 'security interest' by complying with Article 9 of this title. The554
625	625		retention or reservation of title by a seller of goods notwithstanding shipment or delivery555
626	626		to the buyer under Code Section 11-2-401 is limited in effect to a reservation of a556
627	627		'security interest.'557
628		-	H. B. 1240
629		-	- 23 - 24 LC 48 1222S~~/AP~~
	628	+	H. B. 1240 (SUB)
	629	+	- 23 - 24 LC 48 1222S
630	630		Whether a transaction in the form of a lease creates a 'security interest' shall be
631	631		558
632	632		determined pursuant to Code Section 11-1-203.559
633	633		(36) 'Send,
634	634		' in connection with a writing, record, or notice notification, means:560
635	635		(A) To deposit in the mail, or deliver for transmission, or transmit by any other usual561
636	636		means of communication with postage or cost of transmission provided for, and562
637	637		properly addressed and, in the case of an instrument, to an address specified thereon or563
638	638		otherwise agreed, or if there be none addressed to any address reasonable under the564
639	639		circumstances; or565
640	640		(B) To cause the record or notification to be received within the time it would have566
641	641		been received if properly sent under subparagraph (A) of this paragraph. In any other567
642	642		way to cause to be received any record or notice within the time it would have arrived568
643	643		if properly sent.569
644	644		(37) 'Sign' 'Signed' includes using any symbol executed or adopted with present intention570
645	645		to adopt or accept a writing. means, with present intent to authenticate or adopt a record:571
646	646		(A) Execute or adopt a tangible symbol; or572
647	647		(B) Attach to or logically associate with the record an electronic symbol, sound, or573
648	648		process.574
649	649		'Signed', 'signing', and 'signature' have corresponding meanings.575
650	650		(38) 'State' means a state of the United States, the District of Columbia, Puerto Rico, the576
651	651		United States Virgin Islands, or any territory or insular possession subject to the577
652	652		jurisdiction of the United States.578
653	653		(39) 'Surety' includes a guarantor or other secondary obligor.579
654	654		(40) 'Term' means that portion of an agreement that relates to a particular matter.580
655	655		(41) 'Unauthorized signature' means a signature made without actual, implied, or581
656	656		apparent authority. The term includes a forgery.582
657	657		(42) 'Warehouse receipt' means a receipt document of title issued by a person engaged583
658	658		in the business of storing goods for hire.584
659		-	H. B. 1240
660		-	- 24 - 24 LC 48 1222S~~/AP~~
	659	+	H. B. 1240 (SUB)
	660	+	- 24 - 24 LC 48 1222S
661	661		(43) 'Written' or 'writing' includes printing, typewriting, or any other intentional
662	662		585
663	663		reduction to tangible form."586
664	664		SECTION 5-2.587
665	665		Said title is further amended in Code Section 11-1-203, relating to distinguishing leases from588
666	666		security interests, by revising subsection (a) as follows:589
667	667		"(a) Whether a transaction in the form of a lease creates a lease or
668	668		security interest is590
669	669		determined by the facts of each case."591
670	670		SECTION 5-3.592
671	671		Said title is further amended by revising Code Section 11-1-204, relating to value, as follows:593
672	672		"11-1-204.Value.594
673	673		Except as otherwise provided in Articles 3, 4, 5, and 6 12 of this title, a person gives value595
674	674		for rights if the person acquires them:596
675	675		(1) In return for a binding commitment to extend credit or for the extension of597
676	676		immediately available credit, whether or not drawn upon and whether or not a598
677	677		charge-back is provided for in the event of difficulties in collection;599
678	678		(2) As security for, or in total or partial satisfaction of, a preexisting claim;600
679	679		(3) By accepting delivery under a preexisting contract for purchase; or601
680	680		(4) In return for any consideration sufficient to support a simple contract."602
681	681		SECTION 5-4.603
682	682		Said title is further amended in Code Section 11-1-301, relating to territorial applicability and604
683	683		parties' power to choose applicable law, by revising subsection (c) as follows:605
684	684		"(c) If one of the following provisions of this title specifies the applicable law, that606
685	685		provision governs and a contrary agreement is effective only to the extent permitted by the607
686	686		law so specified:608
687		-	H. B. 1240
688		-	- 25 - 24 LC 48 1222S~~/AP~~
	687	+	H. B. 1240 (SUB)
	688	+	- 25 - 24 LC 48 1222S
689	689		(1) Code Section 11-2-402;
690	690		609
691	691		(2) Code Sections 11-2A-105 and 11-2A-106;610
692	692		(3) Code Section 11-4-102;611
693	693		(4) Code Section 11-4A-507;612
694	694		(5) Code Section 11-5-116;613
695	695		(6) Code Section 11-6-103
696	696		Reserved;614
697	697		(7) Code Section 11-8-110; or615
698	698		(8) Code Sections 11-9-301 through 11-9-307; or616
699	699		(9) Code Section 11-12-107."617
700	700		SECTION 5-5.618
701	701		Said title is further amended in Code Section 11-1-303, relating to course of performance,619
702	702		course of dealing, and usage of trade, by revising subsection (f) as follows:620
703	703		"(f) Subject to Code Section Sections 11-2-209 and 11-2A-208, a course of performance621
704	704		is relevant to show a waiver or modification of any term inconsistent with the course of622
705	705		performance."623
706	706		SECTION 5-6.624
707	707		Said title is further amended by revising Code Section 11-2-102, relating to scope and625
708	708		certain security and other transactions excluded from this article, as follows:626
709	709		"11-2-102.Scope; certain security and other transactions excluded from this article.627
710	710		(1) Unless the context otherwise requires, and except as provided in subsection (3) of this628
711	711		Code section, this article applies to transactions in goods and, in the case of a hybrid629
712	712		transaction, it applies to the extent provided in subsection (2) of this Code section. Unless630
713	713		the context otherwise requires, this article applies to transactions in goods; it does not apply631
714	714		to any transaction which although in the form of an unconditional contract to sell or present632
715	715		sale is intended to operate only as a security transaction nor does this article impair or633
716		-	H. B. 1240
717		-	- 26 - 24 LC 48 1222S~~/AP~~
	716	+	H. B. 1240 (SUB)
	717	+	- 26 - 24 LC 48 1222S
718	718		repeal any statute regulating sales to consumers, farmers, or other specified classes of634
719	719		buyers.635
720	720		(2) In a hybrid transaction:636
721	721		(a) If the sale-of-goods aspects do not predominate, only the provisions of this article637
722	722		which relate primarily to the sale-of-goods aspects of the transaction apply, and the638
723	723		provisions that relate primarily to the transaction as a whole do not apply.639
724	724		(b) If the sale-of-goods aspects predominate, this article applies to the transaction but640
725	725		does not preclude application in appropriate circumstances of other law to aspects of the641
726	726		transaction which do not relate to the sale of goods.642
727	727		(3) This article does not:643
728	728		(a) Apply to a transaction that, even though in the form of an unconditional contract to644
729	729		sell or present sale, operates only to create a security interest; or645
730	730		(b) Impair or repeal a statute regulating sales to consumers, farmers, or other specified646
731	731		classes of buyers."647
732	732		SECTION 5-7.648
733	733		Said title is further amended by revising Code Section 11-2-106, relating to definitions of649
734	734		"contract"; "agreement"; "contract for sale"; "sale"; "present sale"; "conforming" to contract;650
735	735		"termination"; and "cancellation", as follows:651
736	736		"11-2-106.Definitions: 'contract'; 'agreement'; 'contract for sale'; 'sale'; 'present652
737	737		sale'; 'conforming' to contract; 'termination'; 'cancellation.'; hybrid653
738	738		transaction.'654
739	739		(1) In this article unless the context otherwise requires 'contract' and 'agreement' are655
740	740		limited to those relating to the present or future sale of goods. 'Contract for sale' includes656
741	741		both a present sale of goods and a contract to sell goods at a future time. A 'sale' consists657
742	742		in the passing of title from the seller to the buyer for a price (Code Section 11-2-401). A658
743	743		'present sale' means a sale which is accomplished by the making of the contract.659
744		-	H. B. 1240
745		-	- 27 - 24 LC 48 1222S~~/AP~~
	744	+	H. B. 1240 (SUB)
	745	+	- 27 - 24 LC 48 1222S
746	746		(2) Goods or conduct including any part of a performance are 'conforming' or conform to
747	747		660
748	748		the contract when they are in accordance with the obligations under the contract.661
749	749		(3) 'Termination' occurs when either party pursuant to a power created by agreement or662
750	750		law puts an end to the contract otherwise than for its breach. On 'termination' all663
751	751		obligations which are still executory on both sides are discharged but any right based on664
752	752		prior breach or performance survives.665
753	753		(4) 'Cancellation' occurs when either party puts an end to the contract for breach by the666
754	754		other and its effect is the same as that of 'termination' except that the canceling party also667
755	755		retains any remedy for breach of the whole contract or any unperformed balance.668
756	756		(5) 'Hybrid transaction' means a single transaction involving a sale of goods and:
757	757		669
758	758		(a) The provision of services;670
759	759		(b) A lease of other goods; or671
760	760		(c) A sale, lease, or license of property other than goods."672
761	761		SECTION 5-8.673
762	762		Said title is further amended by revising Code Section 11-2-201, relating to formal674
763	763		requirements and statute of frauds, as follows:675
764	764		"11-2-201.Formal requirements; statute of frauds.676
765	765		(1) Except as otherwise provided in this Code section a contract for the sale of goods for677
766	766		the price of $500.00 or more is not enforceable by way of action or defense unless there is678
767	767		some writing a record sufficient to indicate that a contract for sale has been made between679
768	768		the parties and signed by the party against whom enforcement is sought or by his the party's680
769	769		authorized agent or broker. A writing record is not insufficient because it omits or681
770	770		incorrectly states a term agreed upon but the contract is not enforceable under this682
771	771		paragraph subsection beyond the quantity of goods shown in such writing the record.683
772	772		(2) Between merchants if within a reasonable time a writing record in confirmation of the684
773	773		contract and sufficient against the sender is received and the party receiving it has reason685
774		-	H. B. 1240
775		-	- 28 - 24 LC 48 1222S~~/AP~~
	774	+	H. B. 1240 (SUB)
	775	+	- 28 - 24 LC 48 1222S
776	776		to know its contents, it satisfies the requirements of subsection (1) of this Code section
777	777		686
778	778		against such
779	779		the party unless written notice in a record of objection to its contents is given687
780	780		within ten days after it is received.688
781	781		(3) A contract which does not satisfy the requirements of subsection (1) of this Code689
782	782		section but which is valid in other respects is enforceable:690
783	783		(a) If the goods are to be specially manufactured for the buyer and are not suitable for691
784	784		sale to others in the ordinary course of the seller's business and the seller, before notice692
785	785		of repudiation is received and under circumstances which reasonably indicate that the693
786	786		goods are for the buyer, has made either a substantial beginning of their manufacture or694
787	787		commitments for their procurement; or695
788	788		(b) If the party against whom enforcement is sought admits in his or her pleading,696
789	789		testimony, or otherwise in court that a contract for sale was made, but the contract is not697
790	790		enforceable under this provision beyond the quantity of goods admitted; or698
791	791		(c) With respect to goods for which payment has been made and accepted or which have699
792	792		been received and accepted (Code Section 11-2-606)."700
793	793		SECTION 5-9.701
794	794		Said title is further amended by revising Code Section 11-2-202, relating to final written702
795	795		expression and parol or extrinsic evidence, as follows:703
796	796		"11-2-202.Final written expression; parol or extrinsic evidence.704
797	797		Terms with respect to which the confirmatory memoranda of the parties agree or which are705
798	798		otherwise set forth in a writing record intended by the parties as a final expression of their706
799	799		agreement with respect to such terms as are included therein may not be contradicted by707
800	800		evidence of any prior agreement or of a contemporaneous oral agreement but may be708
801	801		explained or supplemented:709
802	802		(a) By course of performance, course of dealing, or usage of trade (Code Section710
803	803		11-1-303); and711
804		-	H. B. 1240
805		-	- 29 - 24 LC 48 1222S~~/AP~~
	804	+	H. B. 1240 (SUB)
	805	+	- 29 - 24 LC 48 1222S
806	806		(b) By evidence of consistent additional terms unless the court finds the writing record712
807	807		to have been intended also as a complete and exclusive statement of the terms of the713
808	808		agreement."714
809	809		SECTION 5-10.715
810	810		Said title is further amended in Code Section 11-2-209, relating to modification, rescission,716
811	811		and waiver, by revising subsection (2) as follows:717
812	812		"(2) A signed agreement which excludes modification or rescission except by a signed718
813	813		writing or other signed record cannot be otherwise modified or rescinded, but except as719
814	814		between merchants such a requirement on a form supplied by the merchant must be720
815	815		separately signed by the other party."721
816	816		SECTION 5-11.722
817	817		Said title is further amended by revising Code Section 11-2A-102, relating to scope, as723
818	818		follows:724
819	819		"11-2A-102.Scope.725
820	820		(1) This article applies to any transaction, regardless of form, that creates a lease and, in726
821	821		the case of a hybrid lease, it applies to the extent provided in subsection (2) of this Code727
822	822		section.728
823	823		(2) In a hybrid lease:729
824	824		(a) If the lease-of-goods aspects do not predominate:730
825	825		(i) Only the provisions of this article which relate primarily to the lease-of-goods731
826	826		aspects of the transaction apply, and the provisions that relate primarily to the732
827	827		transaction as a whole do not apply;733
828	828		(ii) Code Section 11-2A-209 applies if the lease is a finance lease; and734
829		-	H. B. 1240
830		-	- 30 - 24 LC 48 1222S~~/AP~~
	829	+	H. B. 1240 (SUB)
	830	+	- 30 - 24 LC 48 1222S
831	831		(iii) Code Section 11-2A-407 applies to the promises of the lessee in a finance lease735
832	832		to the extent the promises are consideration for the right to possession and use of the736
833	833		leased goods; and737
834	834		(b) If the lease-of-goods aspects predominate, this article applies to the transaction, but738
835	835		does not preclude application in appropriate circumstances of other law to aspects of the739
836	836		lease which do not relate to the lease of goods."740
837	837		SECTION 5-12.741
838	838		Said title is further amended in subsection (1) of Code Section 11-2A-103, relating to742
839	839		definitions and index of definitions, by adding a new paragraph to read as follows:743
840	840		"(h.1) 'Hybrid lease' means a single transaction involving a lease of goods and:744
841	841		(i) The provision of services;745
842	842		(ii) A sale of other goods; or746
843	843		(iii) A sale, lease, or license of property other than goods."747
844	844		SECTION 5-13.748
845	845		Said title is further amended by revising Code Section 11-2A-107, relating to waiver or749
846	846		renunciation of claim or right after default, as follows:750
847	847		"11-2A-107.Waiver or renunciation of claim or right after default.751
848	848		Any claim or right arising out of an alleged default or breach of warranty may be752
849	849		discharged in whole or in part without consideration by a written waiver or renunciation753
850	850		in a signed and record delivered by the aggrieved party."754
851	851		SECTION 5-14.755
852	852		Said title is further amended by revising Code Section 11-2A-202, relating to final756
853	853		expression: parole or extrinsic evidence, as follows:757
854	854		"11-2A-202.Final written expression: Parole or extrinsic evidence.758
855		-	H. B. 1240
856		-	- 31 - 24 LC 48 1222S~~/AP~~
	855	+	H. B. 1240 (SUB)
	856	+	- 31 - 24 LC 48 1222S
857	857		Terms with respect to which the confirmatory memoranda of the parties agree or which are
858	858		759
859	859		otherwise set forth in a writing
860	860		record intended by the parties as a final expression of their760
861	861		agreement with respect to such terms as are included therein may not be contradicted by761
862	862		evidence of any prior agreement or of a contemporaneous oral agreement but may be762
863	863		explained or supplemented:763
864	864		(a) By course of dealing or usage of trade or by course of performance; and764
865	865		(b) By evidence of consistent additional terms unless the court finds the writing record765
866	866		to have been intended also as a complete and exclusive statement of the terms of the766
867	867		agreement."767
868	868		SECTION 5-15.768
869	869		Said title is further amended by revising Code Section 11-2A-208, relating to modification,769
870	870		rescission and waiver, as follows:770
871	871		"11-2A-208.Modification, rescission, and waiver.771
872	872		(1) An agreement modifying a lease contract needs no consideration to be binding.772
873	873		(2) A signed lease agreement that excludes modification or rescission except by a signed773
874	874		writing record may not be otherwise modified or rescinded, but, except as between774
875	875		merchants, such a requirement on a form supplied by a merchant must be separately signed775
876	876		by the other party.776
877	877		(3) The requirements of the statute of frauds section of this article (Code Section777
878	878		11-2A-201) must be satisfied if the contract as modified is within its provisions.778
879	879		(4) Although an attempt at modification or rescission does not satisfy the requirements of779
880	880		subsection (2) of this Code section, it may operate as a waiver.780
881	881		(5) A party who has made a waiver affecting an executory portion of a lease contract may781
882	882		retract the waiver by reasonable notification received by the other party that strict782
883	883		performance will be required of any term waived, unless the retraction would be unjust in783
884	884		view of a material change of position in reliance on the waiver."784
885		-	H. B. 1240
886		-	- 32 - 24 LC 48 1222S~~/AP~~
	885	+	H. B. 1240 (SUB)
	886	+	- 32 - 24 LC 48 1222S
887	887		SECTION 5-16.
888	888		785
889	889		Said title is further amended in subsection (a) of Code Section 11-3-104, relating to786
890	890		negotiable instruments, by revising paragraph (3) as follows:787
891	891		"(3) Does not state any other undertaking or instruction by the person promising or788
892	892		ordering payment to do any act in addition to the payment of money, but the promise or789
893	893		order may contain:790
894	894		(i) An undertaking or power to give, maintain, or protect collateral to secure payment;791
895	895		(ii) An authorization or power to the holder to confess judgment or realize on or792
896	896		dispose of collateral; or
897	897		793
898	898		(iii) A waiver of the benefit of any law intended for the advantage or protection of an794
899	899		obligor;795
900	900		(iv) A term that specifies the law that governs the promise or order; or796
901	901		(v) An undertaking to resolve in a specified forum a dispute concerning the promise797
902	902		or order."798
903	903		SECTION 5-17.799
904	904		Said title is further amended by revising Code Section 11-3-105, relating to issue of800
905	905		instruments, as follows:801
906	906		"11-3-105.Issue of instrument.802
907	907		(a) 'Issue' means:803
908	908		(1) The the first delivery of an instrument by the maker or drawer, whether to a holder804
909	909		or nonholder, for the purpose of giving rights on the instrument to any person; or805
910	910		(2) If agreed by the payee, the first transmission by the drawer to the payee of an image806
911	911		of an item and information derived from the item that enables the depositary bank to807
912	912		collect the item by transferring or presenting under federal law an electronic check.808
913	913		(b) An unissued instrument, or an unissued incomplete instrument that is completed, is809
914	914		binding on the maker or drawer, but nonissuance is a defense. An instrument that is810
915		-	H. B. 1240
916		-	- 33 - 24 LC 48 1222S~~/AP~~
	915	+	H. B. 1240 (SUB)
	916	+	- 33 - 24 LC 48 1222S
917	917		conditionally issued or is issued for a special purpose is binding on the maker or drawer,
918	918		811
919	919		but failure of the condition or special purpose to be fulfilled is a defense.812
920	920		(c) 'Issuer' applies to issued and unissued instruments and means a maker or drawer of an813
921	921		instrument."814
922	922		SECTION 5-18.815
923	923		Said title is further amended by revising Code Section 11-3-119, relating to notices of rights816
924	924		to defend actions, as follows:817
925	925		"11-3-119.Notice of right to defend action.818
926	926		In an action for breach of an obligation for which a third person is answerable over819
927	927		pursuant to this article or Article 4 of this title, the defendant may give the third person820
928	928		written
929	929		notice of the litigation in a record, and the person notified may then give similar821
930	930		notice to any other person who is answerable over. If the notice states that (i) the person822
931	931		notified may come in and defend; and (ii) failure to do so will bind the person notified in823
932	932		an action later brought by the person giving the notice as to any determination of fact824
933	933		common to the two litigations, the person notified is so bound unless after seasonable825
934	934		receipt of the notice the person notified does come in and defend."826
935	935		SECTION 5-19.827
936	936		Said title is further amended in subsection (a) of Code Section 11-3-312, relating to lost,828
937	937		destroyed, or stolen cashier's checks, teller's checks, or certified checks, by revising the829
938	938		introductory language of paragraph (3) as follows:830
939	939		"(3) 'Declaration of loss' means a written statement, made in a record under penalty of831
940	940		perjury, to the effect that:"832
941		-	H. B. 1240
942		-	- 34 - 24 LC 48 1222S~~/AP~~
	941	+	H. B. 1240 (SUB)
	942	+	- 34 - 24 LC 48 1222S
943	943		SECTION 5-20.
944	944		833
945	945		Said title is further amended by revising Code Section 11-3-401, relating to signatures, as834
946	946		follows:835
947	947		"11-3-401.Signature necessary for liability on instrument
948	948		.836
949	949		(a) A person is not liable on an instrument unless (i) the person signed the instrument;837
950	950		or (ii) the person is represented by an agent or representative who signed the instrument838
951	951		and the signature is binding on the represented person under Code Section 11-3-402.839
952	952		(b) A signature may be made (i) manually or by means of a device or machine; and (ii) by840
953	953		the use of any name, including a trade or assumed name or by a word, mark, or symbol841
954	954		executed or adopted by a person with present intention to authenticate a writing."842
955	955		SECTION 5-21.843
956	956		Said title is further amended by revising Code Section 11-3-604, relating to discharge by844
957	957		cancellation or renunciation, as follows:845
958	958		"11-3-604.Discharge by cancellation or renunciation.846
959	959		(a) A person entitled to enforce an instrument, with or without consideration, may847
960	960		discharge the obligation of a party to pay the instrument by (i) an intentional voluntary act848
961	961		such as surrender of the instrument to the party, destruction, mutilation, or cancellation of849
962	962		the instrument, cancellation or striking out of the party's signature, or the addition of words850
963	963		to the instrument indicating discharge; or (ii) agreeing not to sue or otherwise renouncing851
964	964		rights against the party by a signed writing record. The obligation of a party to pay a check852
965	965		is not discharged solely by destruction of the check in connection with a process in which853
966	966		information is extracted from the check and an image of the check is made and,854
967	967		subsequently, the information and image are transmitted for payment.855
968	968		(b) Cancellation or striking out of an indorsement pursuant to subsection (a) of this Code856
969	969		section does not affect the status and rights of a party derived from the indorsement."857
970		-	H. B. 1240
971		-	- 35 - 24 LC 48 1222S~~/AP~~
	970	+	H. B. 1240 (SUB)
	971	+	- 35 - 24 LC 48 1222S
972	972		SECTION 5-22.
973	973		858
974	974		Said title is further amended in Code Section 11-4-212, relating to presentment by notice of859
975	975		item not payable by, through, or at a bank and liability of drawer or indorser, by revising860
976	976		subsection (a) as follows:861
977	977		"(a) Unless otherwise instructed, a collecting bank may present an item not payable by,862
978	978		through, or at a bank by sending to the party to accept or pay a written
979	979		record providing863
980	980		notice that the bank holds the item for acceptance or payment. The notice must be sent in864
981	981		time to be received on or before the day when presentment is due and the bank must meet865
982	982		any requirement of the party to accept or pay under Code Section 11-3-501 by the close of866
983	983		the bank's next banking day after it knows of the requirement."867
984	984		SECTION 5-23.868
985	985		Said title is further amended in subsection (a) of Code Section 11-4-301, relating to deferred869
986	986		posting, recovery of payment by return of items, time of dishonor, and return of items by870
987	987		payor bank, by revising paragraph (2) as follows:871
988	988		"(2) Sends written a record providing notice of dishonor or nonpayment if the item is872
989	989		unavailable for return."873
990	990		SECTION 5-23.1.874
991	991		Said title is further amended in Code Section 11-4-403, relating to customer's right to stop875
992	992		payment and burden of proof of loss, by revising subsection (b) as follows:876
993	993		"(b) A stop-payment order is effective for six months, but it lapses after 14 calendar days877
994	994		if the original order was oral and was not confirmed in writing a record within that period. 878
995	995		A stop-payment order may be renewed for additional six-month periods by a writing record879
996	996		given to the bank within a period during which the stop-payment order is effective."880
997		-	H. B. 1240
998		-	- 36 - 24 LC 48 1222S~~/AP~~
	997	+	H. B. 1240 (SUB)
	998	+	- 36 - 24 LC 48 1222S
999	999		SECTION 5-24.
1000	1000		881
1001	1001		Said title is further amended in subsection (a) of Code Section 11-4A-103, relating to882
1002	1002		payment order – definitions, by revising the introductory language of paragraph (1) as883
1003	1003		follows:884
1004	1004		"(1) 'Payment order' means an instruction of a sender to a receiving bank, transmitted885
1005	1005		orally, electronically, or in writing
1006	1006		or in a record, to pay, or to cause another bank to pay,886
1007	1007		a fixed or determinable amount of money to a beneficiary if:"887
1008	1008		SECTION 5-25.888
1009	1009		Said title is further amended by revising Code Section 11-4A-201, relating to security889
1010	1010		procedures, as follows:890
1011	1011		"11-4A-201.Security procedure.891
1012	1012		'Security procedure' means a procedure established by agreement of a customer and a892
1013	1013		receiving bank for the purpose of (i) verifying that a payment order or communication893
1014	1014		amending or canceling a payment order is that of the customer, or (ii) detecting error in the894
1015	1015		transmission or the content of the payment order or communication. A security procedure895
1016	1016		may impose an obligation on the receiving bank or the customer and may require the use896
1017	1017		of algorithms or other codes, identifying words, or numbers, symbols, sounds, biometrics,897
1018	1018		encryption, callback procedures, or similar security devices. Comparison of a signature on898
1019	1019		a payment order or communication with an authorized specimen signature of the customer899
1020	1020		or requiring a payment order to be sent from a known email address, IP address, or900
1021	1021		telephone number is not by itself a security procedure."901
1022	1022		SECTION 5-26.902
1023	1023		Said title is further amended in Code Section 11-4A-202, relating to authorized and verified903
1024	1024		payment orders, by revising subsections (b) and (c) as follows:904
1025		-	H. B. 1240
1026		-	- 37 - 24 LC 48 1222S~~/AP~~
	1025	+	H. B. 1240 (SUB)
	1026	+	- 37 - 24 LC 48 1222S
1027	1027		"(b) If a bank and its customer have agreed that the authenticity of payment orders issued
1028	1028		905
1029	1029		to the bank in the name of the customer as sender will be verified pursuant to a security906
1030	1030		procedure, a payment order received by the receiving bank is effective as the order of the907
1031	1031		customer, whether or not authorized, if (i) the security procedure is a commercially908
1032	1032		reasonable method of providing security against unauthorized payment orders, and (ii) the909
1033	1033		bank proves that it accepted the payment order in good faith and in compliance with the
1034	1034		910
1035	1035		bank's obligations under the security procedure and any written agreement or instruction911
1036	1036		of the customer, evidenced by a record, restricting acceptance of payment orders issued in912
1037	1037		the name of the customer. The bank is not required to follow an instruction that violates913
1038	1038		a written an agreement, evidenced by a record, with the customer or notice of which is not914
1039	1039		received at a time and in a manner affording the bank a reasonable opportunity to act on915
1040	1040		it before the payment order is accepted.916
1041	1041		(c) Commercial reasonableness of a security procedure is a question of law to be917
1042	1042		determined by considering the wishes of the customer expressed to the bank, the918
1043	1043		circumstances of the customer known to the bank, including the size, type, and frequency919
1044	1044		of payment orders normally issued by the customer to the bank, alternative security920
1045	1045		procedures offered to the customer, and security procedures in general use by customers921
1046	1046		and receiving banks similarly situated. A security procedure is deemed to be commercially922
1047	1047		reasonable if (i) the security procedure was chosen by the customer after the bank offered,923
1048	1048		and the customer refused, a security procedure that was commercially reasonable for that924
1049	1049		customer, and (ii) the customer expressly agreed in writing a record to be bound by any925
1050	1050		payment order, whether or not authorized, issued in its name and accepted by the bank in926
1051	1051		compliance with the bank's obligations under the security procedure chosen by the927
1052	1052		customer."928
1053		-	H. B. 1240
1054		-	- 38 - 24 LC 48 1222S~~/AP~~
	1053	+	H. B. 1240 (SUB)
	1054	+	- 38 - 24 LC 48 1222S
1055	1055		SECTION 5-27.
1056	1056		929
1057	1057		Said title is further amended in subsection (a) of Code Section 11-4A-203, relating to930
1058	1058		unenforceability of certain verified payment orders, by revising paragraph (1) as follows:931
1059	1059		"(1) By express written
1060	1060		agreement evidenced by a record, the receiving bank may limit932
1061	1061		the extent to which it is entitled to enforce or retain payment of the payment order."933
1062	1062		SECTION 5-28.934
1063	1063		Said title is further amended in Code Section 11-4A-210, relating to rejection of payment935
1064	1064		order, by revising subsection (a) as follows:936
1065	1065		"(a) A payment order is rejected by the receiving bank by a notice of rejection transmitted937
1066	1066		to the sender orally, electronically, or in writing a record. A notice of rejection need not938
1067	1067		use any particular words and is sufficient if it indicates that the receiving bank is rejecting939
1068	1068		the order or will not execute or pay the order. Rejection is effective when the notice is940
1069	1069		given if transmission is by a means that is reasonable in the circumstances. If notice of941
1070	1070		rejection is given by a means that is not reasonable, rejection is effective when the notice942
1071	1071		is received. If an agreement of the sender and receiving bank establishes the means to be943
1072	1072		used to reject a payment order, (i) any means complying with the agreement is reasonable944
1073	1073		and (ii) any means not complying is not reasonable unless no significant delay in receipt945
1074	1074		of the notice resulted from the use of the noncomplying means."946
1075	1075		SECTION 5-29.947
1076	1076		Said title is further amended in Code Section 11-4A-211, relating to cancellation and948
1077	1077		amendment of payment orders, by revising subsection (a) as follows:949
1078	1078		"(a) A communication of the sender of a payment order canceling or amending the order950
1079	1079		may be transmitted to the receiving bank orally, electronically, or in writing a record. If951
1080	1080		a security procedure is in effect between the sender and the receiving bank, the952
1081	1081		communication is not effective to cancel or amend the order unless the communication is953
1082		-	H. B. 1240
1083		-	- 39 - 24 LC 48 1222S~~/AP~~
	1082	+	H. B. 1240 (SUB)
	1083	+	- 39 - 24 LC 48 1222S
1084	1084		verified pursuant to the security procedure or the bank agrees to the cancellation or
1085	1085		954
1086	1086		amendment."955
1087	1087		SECTION 5-30.956
1088	1088		Said title is further amended in Code Section 11-4A-305, relating to liability for late or957
1089	1089		improper execution or failure to execute a payment order, by revising subsections (c) and (d)958
1090	1090		as follows:959
1091	1091		"(c) In addition to the amounts payable under subsections (a) and (b), damages, including960
1092	1092		consequential damages, are recoverable to the extent provided in an express written
1093	1093		961
1094	1094		agreement of the receiving bank, evidenced by a record.962
1095	1095		(d) If a receiving bank fails to execute a payment order it was obliged by express963
1096	1096		agreement to execute, the receiving bank is liable to the sender for its expenses in the964
1097	1097		transaction and for incidental expenses and interest losses resulting from the failure to965
1098	1098		execute. Additional damages, including consequential damages, are recoverable to the966
1099	1099		extent provided in an express written agreement of the receiving bank, evidenced by a967
1100	1100		record, but are not otherwise recoverable."968
1101	1101		SECTION 5-31.969
1102	1102		Said title is further amended by revising Code Section 11-5-104, relating to formal970
1103	1103		requirements, as follows:971
1104	1104		"11-5-104.Formal requirements.972
1105	1105		A letter of credit, confirmation, advice, transfer, amendment, or cancellation may be issued973
1106	1106		in any form that is a signed record and is authenticated:974
1107	1107		(1) By a signature; or975
1108	1108		(2) In accordance with the agreement of the parties or the standard practice referred to976
1109	1109		in subsection (e) of Code Section 11-5-108."977
1110		-	H. B. 1240
1111		-	- 40 - 24 LC 48 1222S~~/AP~~
	1110	+	H. B. 1240 (SUB)
	1111	+	- 40 - 24 LC 48 1222S
1112	1112		SECTION 5-32.
1113	1113		978
1114	1114		Said title is further amended by revising Code Section 11-5-116, relating to choice of law and979
1115	1115		forum, as follows:980
1116	1116		"11-5-116.Choice of law and forum.981
1117	1117		(a) The liability of an issuer, nominated person, or adviser for any action or omission is982
1118	1118		governed by the law of the jurisdiction chosen by an agreement in the form of a record983
1119	1119		signed or otherwise authenticated
1120	1120		by the affected parties in the manner provided in Code984
1121	1121		Section 11-5-104 or by a provision in the person's letter of credit, confirmation, or other985
1122	1122		undertaking. The jurisdiction whose law is chosen need not bear any relation to the986
1123	1123		transaction.987
1124	1124		(b) Unless subsection (a) of this Code section applies, the liability of an issuer, nominated988
1125	1125		person, or adviser for any action or omission is governed by the law of the jurisdiction in989
1126	1126		which the person is located. The person is considered to be located at the address indicated990
1127	1127		in the person's undertaking. If more than one address is indicated, the person is considered991
1128	1128		to be located at the address from which the person's undertaking was issued.992
1129	1129		(c) For the purpose of jurisdiction, choice of law, and recognition of interbranch letters of993
1130	1130		credit, but not enforcement of a judgment, all branches of a bank are considered separate994
1131	1131		juridical entities and a bank is considered to be located at the place where its relevant995
1132	1132		branch is considered to be located under this subsection (d) of this Code section.996
1133	1133		(d) A branch of a bank is considered to be located at the address indicated in the branch's997
1134	1134		undertaking. If more than one address is indicated, the branch is considered to be located998
1135	1135		at the address from which the undertaking was issued.999
1136	1136		(c)(e) Except as otherwise provided in this subsection, the liability of an issuer, nominated1000
1137	1137		person, or adviser is governed by any rules of custom or practice, such as the Uniform1001
1138	1138		Customs and Practice for Documentary Credits, to which the letter of credit, confirmation,1002
1139	1139		or other undertaking, is expressly made subject. If:1003
1140		-	H. B. 1240
1141		-	- 41 - 24 LC 48 1222S~~/AP~~
	1140	+	H. B. 1240 (SUB)
	1141	+	- 41 - 24 LC 48 1222S
1142	1142		(1) This article would govern the liability of an issuer, nominated person, or adviser
1143	1143		1004
1144	1144		under subsection (a) or (b) of this Code section;1005
1145	1145		(2) The relevant undertaking incorporates rules of custom or practice; and1006
1146	1146		(3) There is conflict between this article and the incorporated rules as applied to that1007
1147	1147		undertaking,1008
1148	1148		the incorporated rules govern except to the extent of any conflict with the nonvariable1009
1149	1149		provisions specified in subsection (c) of Code Section 11-5-103.1010
1150	1150		(d)
1151	1151		(f) If there is conflict between this article and Article 3, 4, 4A, or 9 of this title, this1011
1152	1152		article governs.1012
1153	1153		(e)(g) The forum for settling disputes arising out of an undertaking within this article may1013
1154	1154		be chosen in the manner and with the binding effect that governing law may be chosen in1014
1155	1155		accordance with subsection (a) of this Code section."1015
1156	1156		SECTION 5-33.1016
1157	1157		Said title is further amended in subsection (a) of Code Section 11-7-102, relating to1017
1158	1158		definitions and index of definitions, by repealing and reserving paragraphs (10) and (11).1018
1159	1159		SECTION 5-34.1019
1160	1160		Said title is further amended by revising Code Section 11-7-106, relating to control of1020
1161	1161		electronic document of title, as follows:1021
1162	1162		"11-7-106.Control of electronic document of title.1022
1163	1163		(a) A person has control of an electronic document of title if a system employed for1023
1164	1164		evidencing the transfer of interests in the electronic document reliably establishes that1024
1165	1165		person as the person to which the electronic document was issued or transferred.1025
1166	1166		(b) A system satisfies subsection (a) of this Code section, and a person is deemed to have1026
1167	1167		has control of an electronic document of title, if the document is created, stored, and1027
1168	1168		assigned transferred in a manner that:1028
1169		-	H. B. 1240
1170		-	- 42 - 24 LC 48 1222S~~/AP~~
	1169	+	H. B. 1240 (SUB)
	1170	+	- 42 - 24 LC 48 1222S
1171	1171		(1) A single authoritative copy of the document exists which is unique, identifiable, and,
1172	1172		1029
1173	1173		except as otherwise provided in paragraphs (4), (5), and (6) of this subsection,1030
1174	1174		unalterable;1031
1175	1175		(2) The authoritative copy identifies the person asserting control as:1032
1176	1176		(A) The person to which the document was issued; or1033
1177	1177		(B) If the authoritative copy indicates that the document has been transferred, the1034
1178	1178		person to which the document was most recently transferred;1035
1179	1179		(3) The authoritative copy is communicated to and maintained by the person asserting1036
1180	1180		control or its designated custodian;1037
1181	1181		(4) Copies or amendments that add or change an identified assignee
1182	1182		transferee of the1038
1183	1183		authoritative copy can be made only with the consent of the person asserting control;1039
1184	1184		(5) Each copy of the authoritative copy and any copy of a copy is readily identifiable as1040
1185	1185		a copy that is not the authoritative copy; and1041
1186	1186		(6) Any amendment of the authoritative copy is readily identifiable as authorized or1042
1187	1187		unauthorized.1043
1188	1188		(c) A system satisfies subsection (a) of this Code section, and a person has control of an1044
1189	1189		electronic document of title, if an authoritative electronic copy of the document, a record1045
1190	1190		attached to or logically associated with the electronic copy, or a system in which the1046
1191	1191		electronic copy is recorded:1047
1192	1192		(1) Enables the person readily to identify each electronic copy as either an authoritative1048
1193	1193		copy or a nonauthoritative copy;1049
1194	1194		(2) Enables the person readily to identify itself in any way, including by name,1050
1195	1195		identifying number, cryptographic key, office, or account number, as the person to which1051
1196	1196		each authoritative electronic copy was issued or transferred; and1052
1197	1197		(3) Gives the person exclusive power, subject to subsection (d) of this Code section, to:1053
1198	1198		(A) Prevent others from adding or changing the person to which each authoritative1054
1199	1199		electronic copy has been issued or transferred; and1055
1200		-	H. B. 1240
1201		-	- 43 - 24 LC 48 1222S~~/AP~~
	1200	+	H. B. 1240 (SUB)
	1201	+	- 43 - 24 LC 48 1222S
1202	1202		(B) Transfer control of each authoritative electronic copy.1056
1203	1203		(d) Subject to subsection (e) of this Code section, a power is exclusive under1057
1204	1204		subparagraphs (c)(3)(A) and (c)(3)(B) of this Code section even if:1058
1205	1205		(1) The authoritative electronic copy, a record attached to or logically associated with1059
1206	1206		the authoritative electronic copy, or a system in which the authoritative electronic copy1060
1207	1207		is recorded limits the use of the document of title or has a protocol that is programmed1061
1208	1208		to cause a change, including a transfer or loss of control; or1062
1209	1209		(2) The power is shared with another person.1063
1210	1210		(e) A power of a person is not shared with another person under paragraph (2) of1064
1211	1211		subsection (d) of this Code section and the person's power is not exclusive if:1065
1212	1212		(1) The person can exercise the power only if the power also is exercised by the other1066
1213	1213		person; and1067
1214	1214		(2) The other person:1068
1215	1215		(A) Can exercise the power without exercise of the power by the person; or1069
1216	1216		(B) Is the transferor to the person of an interest in the document of title.1070
1217	1217		(f) If a person has the powers specified in subparagraphs (c)(3)(A) and (c)(3)(B) of this1071
1218	1218		Code section, the powers are presumed to be exclusive.1072
1219	1219		(g) A person has control of an electronic document of title if another person, other than the1073
1220	1220		transferor to the person of an interest in the document:1074
1221	1221		(1) Has control of the document and acknowledges that it has control on behalf of the1075
1222	1222		person; or1076
1223	1223		(2) Obtains control of the document after having acknowledged that it will obtain control1077
1224	1224		of the document on behalf of the person.1078
1225	1225		(h) A person that has control under this Code section is not required to acknowledge that1079
1226	1226		it has control on behalf of another person.1080
1227	1227		(i) If a person acknowledges that it has or will obtain control on behalf of another person,1081
1228	1228		unless the person otherwise agrees or law other than this article or Article 9 of this title1082
1229		-	H. B. 1240
1230		-	- 44 - 24 LC 48 1222S~~/AP~~
	1229	+	H. B. 1240 (SUB)
	1230	+	- 44 - 24 LC 48 1222S
1231	1231		otherwise provides, the person does not owe any duty to the other person and is not1083
1232	1232		required to confirm the acknowledgment to any other person."1084
1233	1233		SECTION 5-35.1085
1234	1234		Said title is further amended by revising Code Section 11-8-102, relating to definitions, as1086
1235	1235		follows:1087
1236	1236		"11-8-102.Definitions.1088
1237	1237		(a) In this article:1089
1238	1238		(1) 'Adverse claim' means a claim that a claimant has a property interest in a financial1090
1239	1239		asset and that it is a violation of the rights of the claimant for another person to hold,1091
1240	1240		transfer, or deal with the financial asset.1092
1241	1241		(2) 'Bearer form,' as applied to a certificated security, means a form in which the security1093
1242	1242		is payable to the bearer of the security certificate according to its terms but not by reason1094
1243	1243		of an indorsement.1095
1244	1244		(3) 'Broker' means a person defined as a broker or dealer under the federal securities1096
1245	1245		laws, but without excluding a bank acting in that capacity.1097
1246	1246		(4) 'Certificated security' means a security that is represented by a certificate.1098
1247	1247		(5) 'Clearing corporation' means:1099
1248	1248		(i) A person that is registered as a 'clearing agency' under the federal securities laws;1100
1249	1249		(ii) A federal reserve bank; or1101
1250	1250		(iii) Any other person that provides clearance or settlement services with respect to1102
1251	1251		financial assets that would require it to register as a clearing agency under the federal1103
1252	1252		securities laws but for an exclusion or exemption from the registration requirement, if1104
1253	1253		its activities as a clearing corporation, including promulgation of rules, are subject to1105
1254	1254		regulation by a federal or state governmental authority.1106
1255	1255		(6) 'Communicate' means to:1107
1256	1256		(i) Send a signed writing record; or1108
1257		-	H. B. 1240
1258		-	- 45 - 24 LC 48 1222S~~/AP~~
	1257	+	H. B. 1240 (SUB)
	1258	+	- 45 - 24 LC 48 1222S
1259	1259		(ii) Transmit information by any mechanism agreed upon by the persons transmitting
1260	1260		1109
1261	1261		and receiving the information.1110
1262	1262		(7) 'Entitlement holder' means a person identified in the records of a securities1111
1263	1263		intermediary as the person having a security entitlement against the securities1112
1264	1264		intermediary. If a person acquires a security entitlement by virtue of paragraph (2) or (3)1113
1265	1265		of subsection (b) of Code Section 11-8-501, that person is the entitlement holder.1114
1266	1266		(8) 'Entitlement order' means a notification communicated to a securities intermediary1115
1267	1267		directing transfer or redemption of a financial asset to which the entitlement holder has1116
1268	1268		a security entitlement.1117
1269	1269		(9) 'Financial asset,' except as otherwise provided in Code Section 11-8-103, means:1118
1270	1270		(i) A security;1119
1271	1271		(ii) An obligation of a person or a share, participation, or other interest in a person or1120
1272	1272		in property or an enterprise of a person, which is, or is of a type, dealt in or traded on1121
1273	1273		financial markets, or which is recognized in any area in which it is issued or dealt in as1122
1274	1274		a medium for investment; or1123
1275	1275		(iii) Any property that is held by a securities intermediary for another person in a1124
1276	1276		securities account if the securities intermediary has expressly agreed with the other1125
1277	1277		person that the property is to be treated as a financial asset under this article.1126
1278	1278		As context requires, the term means either the interest itself or the means by which a1127
1279	1279		person's claim to it is evidenced, including a certificated or uncertificated security, a1128
1280	1280		security certificate, or a security entitlement.1129
1281	1281		(10) Reserved.1130
1282	1282		(11) 'Indorsement' means a signature that alone or accompanied by other words is made1131
1283	1283		on a security certificate in registered form or on a separate document for the purpose of1132
1284	1284		assigning, transferring, or redeeming the security or granting a power to assign, transfer,1133
1285	1285		or redeem it.1134
1286		-	H. B. 1240
1287		-	- 46 - 24 LC 48 1222S~~/AP~~
	1286	+	H. B. 1240 (SUB)
	1287	+	- 46 - 24 LC 48 1222S
1288	1288		(12) 'Instruction' means a notification communicated to the issuer of an uncertificated
1289	1289		1135
1290	1290		security which directs that the transfer of the security be registered or that the security be1136
1291	1291		redeemed.1137
1292	1292		(13) 'Registered form,' as applied to a certificated security, means a form in which:1138
1293	1293		(i) The security certificate specifies a person entitled to the security; and1139
1294	1294		(ii) A transfer of the security may be registered upon books maintained for that purpose1140
1295	1295		by or on behalf of the issuer, or the security certificate so states.1141
1296	1296		(14) 'Securities intermediary' means:1142
1297	1297		(i) A clearing corporation; or1143
1298	1298		(ii) A person, including a bank or broker, that in the ordinary course of its business1144
1299	1299		maintains securities accounts for others and is acting in that capacity.1145
1300	1300		(15) 'Security,' except as otherwise provided in Code Section 11-8-103, means an1146
1301	1301		obligation of an issuer or a share, participation, or other interest in an issuer or in property1147
1302	1302		or an enterprise of an issuer:1148
1303	1303		(i) Which is represented by a security certificate in bearer or registered form, or the1149
1304	1304		transfer of which may be registered upon books maintained for that purpose by or on1150
1305	1305		behalf of the issuer;1151
1306	1306		(ii) Which is one of a class or series or by its terms is divisible into a class or series of1152
1307	1307		shares, participations, interests, or obligations; and1153
1308	1308		(iii) Which:1154
1309	1309		(A) Is, or is of a type, dealt in or traded on securities exchanges or securities markets;1155
1310	1310		or1156
1311	1311		(B) Is a medium for investment and by its terms expressly provides that it is a1157
1312	1312		security governed by this article.1158
1313	1313		(16) 'Security certificate' means a certificate representing a security.1159
1314	1314		(17) 'Security entitlement' means the rights and property interest of an entitlement holder1160
1315	1315		with respect to a financial asset specified in Part 5 of this article.1161
1316		-	H. B. 1240
1317		-	- 47 - 24 LC 48 1222S~~/AP~~
	1316	+	H. B. 1240 (SUB)
	1317	+	- 47 - 24 LC 48 1222S
1318	1318		(18) 'Uncertificated security' means a security that is not represented by a certificate.
1319	1319		1162
1320	1320		(b) The following
1321	1321		Other definitions applying to this article and the Code sections in which1163
1322	1322		they appear are in this article and other articles of this title apply to this article:1164
1323	1323		'Appropriate person.' Code Section 11-8-107.1165
1324	1324		'Control.' Code Section 11-8-106.1166
1325	1325		'Controllable account.' Code Section 11-9-102.1167
1326	1326		'Controllable electronic record.' Code Section 11-12-102.1168
1327	1327		'Controllable payment intangible.' Code Section 11-9-102.1169
1328	1328		'Delivery.' Code Section 11-8-301.1170
1329	1329		'Investment company security.' Code Section 11-8-103.1171
1330	1330		'Issuer.' Code Section 11-8-201.1172
1331	1331		'Overissue.' Code Section 11-8-210.1173
1332	1332		'Protected purchaser.' Code Section 11-8-303.1174
1333	1333		'Securities account.' Code Section 11-8-501.1175
1334	1334		(c) In addition, Article 1 of this title contains general definitions and principles of1176
1335	1335		construction and interpretation applicable throughout this article.1177
1336	1336		(d) The characterization of a person, business, or transaction for purposes of this article1178
1337	1337		does not determine the characterization of the person, business, or transaction for purposes1179
1338	1338		of any other law, regulation, or rule."1180
1339	1339		SECTION 5-36.1181
1340	1340		Said title is further amended in Code Section 11-8-103, relating to rules for determining1182
1341	1341		whether certain obligations and interests are securities or financial assets, by adding a new1183
1342	1342		subsection to read as follows:1184
1343	1343		"(h) A controllable account, controllable electronic record, or controllable payment1185
1344	1344		intangible is not a financial asset unless subparagraph (a)(9)(iii) of Code Section 11-8-1021186
1345	1345		applies."1187
1346		-	H. B. 1240
1347		-	- 48 - 24 LC 48 1222S~~/AP~~
	1346	+	H. B. 1240 (SUB)
	1347	+	- 48 - 24 LC 48 1222S
1348	1348		SECTION 5-37.
1349	1349		1188
1350	1350		Said title is further amended by revising Code Section 11-8-106, relating to control, as1189
1351	1351		follows:1190
1352	1352		"11-8-106.Control.1191
1353	1353		(a) A purchaser has 'control' of a certificated security in bearer form if the certificated1192
1354	1354		security is delivered to the purchaser.1193
1355	1355		(b) A purchaser has 'control' of a certificated security in registered form if the certificated1194
1356	1356		security is delivered to the purchaser, and:1195
1357	1357		(1) The certificate is indorsed to the purchaser or in blank by an effective indorsement;1196
1358	1358		or1197
1359	1359		(2) The certificate is registered in the name of the purchaser, upon original issue or1198
1360	1360		registration of transfer by the issuer.1199
1361	1361		(c) A purchaser has 'control' of an uncertificated security if:1200
1362	1362		(1) The uncertificated security is delivered to the purchaser; or1201
1363	1363		(2) The issuer has agreed that it will comply with instructions originated by the purchaser1202
1364	1364		without further consent by the registered owner.1203
1365	1365		(d) A purchaser has 'control' of a security entitlement if:1204
1366	1366		(1) The purchaser becomes the entitlement holder;1205
1367	1367		(2) The securities intermediary has agreed that it will comply with entitlement orders1206
1368	1368		originated by the purchaser without further consent by the entitlement holder; or1207
1369	1369		(3) Another person, other than the transferor to the purchaser of an interest in the security
1370	1370		1208
1371	1371		entitlement: has control of the security entitlement on behalf of the purchaser or, having1209
1372	1372		previously acquired control of the security entitlement, acknowledges that it has control1210
1373	1373		on behalf of the purchaser.1211
1374	1374		(A) Has control of the security entitlement and acknowledges that it has control on1212
1375	1375		behalf of the purchaser; or1213
1376		-	H. B. 1240
1377		-	- 49 - 24 LC 48 1222S~~/AP~~
	1376	+	H. B. 1240 (SUB)
	1377	+	- 49 - 24 LC 48 1222S
1378	1378		(B) Obtains control of the security entitlement after having acknowledged that it will1214
1379	1379		obtain control of the security entitlement on behalf of the purchaser.1215
1380	1380		(e) If an interest in a security entitlement is granted by the entitlement holder to the1216
1381	1381		entitlement holder's own securities intermediary, the securities intermediary has control.1217
1382	1382		(f) A purchaser who has satisfied the requirements of subsection (c) or (d) of this Code1218
1383	1383		section has control, even if the registered owner in the case of subsection (c) of this Code1219
1384	1384		section or the entitlement holder in the case of subsection (d) of this Code section retains1220
1385	1385		the right to make substitutions for the uncertificated security or security entitlement, to1221
1386	1386		originate instructions or entitlement orders to the issuer or securities intermediary, or1222
1387	1387		otherwise to deal with the uncertificated security or security entitlement.1223
1388	1388		(g) An issuer or a securities intermediary may not enter into an agreement of the kind1224
1389	1389		described in paragraph (2) of subsection (c) of this Code section or paragraph (2) of1225
1390	1390		subsection (d) of this Code section without the consent of the registered owner or1226
1391	1391		entitlement holder, but an issuer or a securities intermediary is not required to enter into1227
1392	1392		such an agreement even though the registered owner or entitlement holder so directs. An1228
1393	1393		issuer or securities intermediary that has entered into such an agreement is not required to1229
1394	1394		confirm the existence of the agreement to another party unless requested to do so by the1230
1395	1395		registered owner or entitlement holder.1231
1396	1396		(h) A person that has control under this Code section is not required to acknowledge that1232
1397	1397		it has control on behalf of a purchaser.1233
1398	1398		(i) If a person acknowledges that it has or will obtain control on behalf of a purchaser,1234
1399	1399		unless the person otherwise agrees or law other than this article or Article 9 of this title1235
1400	1400		otherwise provides, the person does not owe any duty to the purchaser and is not required1236
1401	1401		to confirm the acknowledgment to any other person."1237
1402		-	H. B. 1240
1403		-	- 50 - 24 LC 48 1222S~~/AP~~
	1402	+	H. B. 1240 (SUB)
	1403	+	- 50 - 24 LC 48 1222S
1404	1404		SECTION 5-38.
1405	1405		1238
1406	1406		Said title is further amended in Code Section 11-8-110, relating to applicability and choice1239
1407	1407		of law, by adding a new subsection to read as follows:1240
1408	1408		"(g) The local law of the issuer's jurisdiction or the securities intermediary's jurisdiction
1409	1409		1241
1410	1410		governs a matter or transaction specified in subsection (a) or (b) of this Code section even1242
1411	1411		if the matter or transaction does not bear any relation to the jurisdiction."1243
1412	1412		SECTION 5-39.1244
1413	1413		Said title is further amended by revising Code Section 11-8-303, relating to protected1245
1414	1414		purchasers, as follows:1246
1415	1415		"11-8-303.Protected purchaser.1247
1416	1416		(a) 'Protected purchaser' means a purchaser of a certificated or uncertificated security, or1248
1417	1417		of an interest therein, who:1249
1418	1418		(1) Gives value;1250
1419	1419		(2) Does not have notice of any adverse claim to the security; and1251
1420	1420		(3) Obtains control of the certificated or uncertificated security.1252
1421	1421		(b) A In addition to acquiring the rights of a purchaser, a protected purchaser also acquires1253
1422	1422		its interest in the security free of any adverse claim."1254
1423	1423		SECTION 5-40.1255
1424	1424		Said title is further amended by revising Code Section 11-9-102, relating to definitions and1256
1425	1425		index of definitions, as follows:1257
1426	1426		"11-9-102.Definitions and index of definitions.1258
1427	1427		(a) Article 9 definitions. As used in this article, the term:1259
1428	1428		(1) 'Accession' means goods that are physically united with other goods in such a manner1260
1429	1429		that the identity of the original goods is not lost.1261
1430		-	H. B. 1240
1431		-	- 51 - 24 LC 48 1222S~~/AP~~
	1430	+	H. B. 1240 (SUB)
	1431	+	- 51 - 24 LC 48 1222S
1432	1432		(2) 'Account,' except as used in 'account for,' 'account statement,' 'account to,'1262
1433	1433		'commodity account' in paragraph (15) of this Code section, 'customer's account,' 'deposit1263
1434	1434		account' in paragraph (30) of this Code section, 'on account of,' and 'statement of1264
1435	1435		account,' means a right to payment of a monetary obligation, whether or not earned by1265
1436	1436		performance, (i) for property that has been or is to be sold, leased, licensed, assigned, or1266
1437	1437		otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of1267
1438	1438		insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred,1268
1439	1439		(v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a1269
1440	1440		charter or other contract, (vii) arising out of the use of a credit or charge card or1270
1441	1441		information contained on or for use with the card, or (viii) as winnings in a lottery or1271
1442	1442		other game of chance operated or sponsored by a state, governmental unit of a state, or1272
1443	1443		person licensed or authorized to operate the game by a state or governmental unit of a1273
1444	1444		state. The term includes controllable accounts and health care insurance receivables. The1274
1445	1445		term does not include (i) rights to payment evidenced by chattel paper or an instrument,1275
1446	1446		(ii) commercial tort claims, (iii) deposit accounts, (iv) investment property, (v) letter of1276
1447	1447		credit rights or letters of credit, or (vi) rights to payment for money or funds advanced or1277
1448	1448		sold, other than rights arising out of the use of a credit or charge card or information1278
1449	1449		contained on or for use with the card, or (vii) rights to payment evidenced by an1279
1450	1450		instrument.1280
1451	1451		(3) 'Account debtor' means a person obligated on an account, chattel paper, or general1281
1452	1452		intangible. The term does not include persons obligated to pay a negotiable instrument,1282
1453	1453		even if the negotiable instrument constitutes part of evidences chattel paper.1283
1454	1454		(4) 'Accounting,' except as used in 'accounting for,' means a record:1284
1455	1455		(A) Signed Authenticated by a secured party;1285
1456	1456		(B) Indicating the aggregate unpaid secured obligations as of a date not more than 351286
1457	1457		days earlier or 35 days later than the date of the record; and1287
1458	1458		(C) Identifying the components of the obligations in reasonable detail.1288
1459		-	H. B. 1240
1460		-	- 52 - 24 LC 48 1222S~~/AP~~
	1459	+	H. B. 1240 (SUB)
	1460	+	- 52 - 24 LC 48 1222S
1461	1461		(5) 'Agricultural lien' means an interest in farm products:
1462	1462		1289
1463	1463		(A) Which secures payment or performance of an obligation for:1290
1464	1464		(i) Goods or services furnished in connection with a debtor's farming operation; or1291
1465	1465		(ii) Rent on real property leased by a debtor in connection with its farming operation;1292
1466	1466		(B) Which is created by statute in favor of a person that:1293
1467	1467		(i) In the ordinary course of its business furnished goods or services to a debtor in1294
1468	1468		connection with a debtor's farming operation; or1295
1469	1469		(ii) Leased real property to a debtor in connection with the debtor's farming1296
1470	1470		operation; and1297
1471	1471		(C) Whose effectiveness does not depend on the person's possession of the personal1298
1472	1472		property.1299
1473	1473		(6) 'As-extracted collateral' means:1300
1474	1474		(A) Oil, gas, or other minerals that are subject to a security interest that:1301
1475	1475		(i) Is created by a debtor having an interest in the minerals before extraction; and1302
1476	1476		(ii) Attaches to the minerals as extracted; or1303
1477	1477		(B) Accounts arising out of the sale at the wellhead or minehead of oil, gas, or other1304
1478	1478		minerals in which the debtor had an interest before extraction.1305
1479	1479		(7) 'Authenticate' means:
1480	1480		1306
1481	1481		(A) To sign; or1307
1482	1482		(B) With present intent to adopt or accept a record, to attach to or logically associate1308
1483	1483		with such record an electronic sound, symbol, or process Reserved.1309
1484	1484		(7.1) 'Assignee,' except as used in 'assignee for benefit of creditors,' means a person (i)1310
1485	1485		in whose favor a security interest that secures an obligation is created or provided for1311
1486	1486		under a security agreement, whether or not the obligation is outstanding or (ii) to which1312
1487	1487		an account, chattel paper, payment intangible, or promissory note has been sold. The1313
1488	1488		term includes a person to which a security interest has been transferred by a secured1314
1489	1489		party.1315
1490		-	H. B. 1240
1491		-	- 53 - 24 LC 48 1222S~~/AP~~
	1490	+	H. B. 1240 (SUB)
	1491	+	- 53 - 24 LC 48 1222S
1492	1492		(7.2) 'Assignor' means a person that (i) under a security agreement creates or provides1316
1493	1493		for a security interest that secures an obligation or (ii) sells an account, chattel paper,1317
1494	1494		payment intangible, or promissory note. The term includes a secured party that has1318
1495	1495		transferred a security interest to another person.1319
1496	1496		(8) 'Authority' means the Georgia Superior Court Clerks' Cooperative Authority.1320
1497	1497		(9) 'Bank' means an organization that is engaged in the business of banking. The term1321
1498	1498		includes savings banks, savings and loan associations, credit unions, and trust companies.1322
1499	1499		(10) 'Cash proceeds' means proceeds that are money, checks, deposit accounts, or the1323
1500	1500		like.1324
1501	1501		(11) 'Certificate of title' means a certificate of title with respect to which a statute1325
1502	1502		provides for the security interest in question to be indicated on the certificate as a1326
1503	1503		condition or result of the security interest's obtaining priority over the rights of a lien1327
1504	1504		creditor with respect to the collateral. The term shall include another record maintained1328
1505	1505		as an alternative to a certificate of title by the governmental unit that issues certificates1329
1506	1506		of title if a statute permits the security interest in question to be indicated on the record1330
1507	1507		as a condition or result of the security interest's obtaining priority over the rights of a lien1331
1508	1508		creditor with respect to the collateral.1332
1509	1509		(12) 'Chattel paper' means: a record or records that evidence both a monetary obligation1333
1510	1510		and a security interest in specific goods, a security interest in specific goods and software1334
1511	1511		used in the goods, a lease of specific goods, or a lease of specific goods and license of1335
1512	1512		software used in the goods. As used in this paragraph, 'monetary obligation' means a1336
1513	1513		monetary obligation secured by the goods or owed under a lease of the goods and1337
1514	1514		includes a monetary obligation with respect to software used in the goods. The term does1338
1515	1515		not include:1339
1516	1516		(A) Charters or other contracts involving the use or hire of a vessel; or1340
1517	1517		(B) Records that evidence a right to payment arising out of the use of a credit or charge1341
1518	1518		card or information contained on or for use with the card.1342
1519		-	H. B. 1240
1520		-	- 54 - 24 LC 48 1222S~~/AP~~
	1519	+	H. B. 1240 (SUB)
	1520	+	- 54 - 24 LC 48 1222S
1521	1521		If a transaction is evidenced by records that include an instrument or series of1343
1522	1522		instruments, the group of records taken together constitutes chattel paper.1344
1523	1523		(A) A right to payment of a monetary obligation secured by specific goods, if the right1345
1524	1524		to payment and security agreement are evidenced by a record; or1346
1525	1525		(B) A right to payment of a monetary obligation owed by a lessee under a lease1347
1526	1526		agreement with respect to specific goods and a monetary obligation owed by the lessee1348
1527	1527		in connection with the transaction giving rise to the lease, if:1349
1528	1528		(i) The right to payment and lease agreement are evidenced by a record; and1350
1529	1529		(ii) The predominant purpose of the transaction giving rise to the lease was to give1351
1530	1530		the lessee the right to possession and use of the goods.1352
1531	1531		The term does not include a right to payment arising out of a charter or other contract1353
1532	1532		involving the use or hire of a vessel or a right to payment arising out of the use of a credit1354
1533	1533		or charge card or information contained on or for use with the card.1355
1534	1534		(13) 'Collateral' means the property subject to a security interest or agricultural lien. The1356
1535	1535		term includes:1357
1536	1536		(A) Proceeds to which a security interest attaches;1358
1537	1537		(B) Accounts, chattel paper, payment intangibles, and promissory notes that have been1359
1538	1538		sold; and1360
1539	1539		(C) Goods that are the subject of a consignment.1361
1540	1540		(14) 'Commercial tort claim' means a claim arising in tort with respect to which:1362
1541	1541		(A) The claimant is an organization; or1363
1542	1542		(B) The claimant is an individual and the claim:1364
1543	1543		(i) Arose in the course of the claimant's business or profession; and1365
1544	1544		(ii) Does not include damages arising out of personal injury to or the death of an1366
1545	1545		individual.1367
1546	1546		(15) 'Commodity account' means an account maintained by a commodity intermediary1368
1547	1547		in which a commodity contract is carried for a commodity customer.1369
1548		-	H. B. 1240
1549		-	- 55 - 24 LC 48 1222S~~/AP~~
	1548	+	H. B. 1240 (SUB)
	1549	+	- 55 - 24 LC 48 1222S
1550	1550		(16) 'Commodity contract' means a commodity futures contract, an option on a
1551	1551		1370
1552	1552		commodity futures contract, a commodity option, or another contract if the contract or1371
1553	1553		option is:1372
1554	1554		(A) Traded on or subject to the rules of a board of trade that has been designated as a1373
1555	1555		contract market for such a contract pursuant to federal commodities laws; or1374
1556	1556		(B) Traded on a foreign commodity board of trade, exchange, or market and is carried1375
1557	1557		on the books of a commodity intermediary for a commodity customer.1376
1558	1558		(17) 'Commodity customer' means a person for which a commodity intermediary carries1377
1559	1559		a commodity contract on its books.1378
1560	1560		(18) 'Commodity intermediary' means a person that:1379
1561	1561		(A) Is registered as a futures commission merchant under federal commodities law; or1380
1562	1562		(B) In the ordinary course of its business provides clearance or settlement services for1381
1563	1563		a board of trade that has been designated as a contract market pursuant to federal1382
1564	1564		commodities law.1383
1565	1565		(19) 'Communicate' means:1384
1566	1566		(A) To send a written or other tangible record;1385
1567	1567		(B) To transmit a record by any means agreed upon by the persons sending and1386
1568	1568		receiving the record; or1387
1569	1569		(C) In the case of transmission of a record to or by a filing office or the authority, to1388
1570	1570		transmit a record by any means prescribed by filing office rule.1389
1571	1571		(20) 'Consignee' means a merchant to which goods are delivered in a consignment.1390
1572	1572		(21) 'Consignment' means a transaction, regardless of its form, in which a person delivers1391
1573	1573		goods to a merchant for the purpose of sale and:1392
1574	1574		(A) The merchant:1393
1575	1575		(i) Deals in goods of that kind under a name other than the name of the person1394
1576	1576		making delivery;1395
1577	1577		(ii) Is not an auctioneer; and1396
1578		-	H. B. 1240
1579		-	- 56 - 24 LC 48 1222S~~/AP~~
	1578	+	H. B. 1240 (SUB)
	1579	+	- 56 - 24 LC 48 1222S
1580	1580		(iii) Is not generally known by its creditors to be substantially engaged in selling the
1581	1581		1397
1582	1582		goods of others;1398
1583	1583		(B) With respect to each delivery, the aggregate value of the goods is $1,000.00 or1399
1584	1584		more at the time of delivery;1400
1585	1585		(C) The goods are not consumer goods immediately before delivery; and1401
1586	1586		(D) The transaction does not create a security interest that secures an obligation.1402
1587	1587		(22) 'Consignor' means a person that delivers goods to a consignee in a consignment.1403
1588	1588		(23) 'Consumer debtor' means a debtor in a consumer transaction.1404
1589	1589		(24) 'Consumer goods' means goods that are used or bought for use primarily for1405
1590	1590		personal, family, or household purposes.1406
1591	1591		(25) 'Consumer goods transaction' means a consumer transaction in which:1407
1592	1592		(A) An individual incurs an obligation primarily for personal, family, or household1408
1593	1593		purposes; and1409
1594	1594		(B) A security interest in consumer goods secures the obligation.1410
1595	1595		(26) 'Consumer obligor' means an obligor who is an individual and who incurred the1411
1596	1596		obligation as part of a transaction entered into primarily for personal, family, or1412
1597	1597		household purposes.1413
1598	1598		(27) 'Consumer transaction' means a transaction in which (i) an individual incurs an1414
1599	1599		obligation primarily for personal, family, or household purposes, (ii) a security interest1415
1600	1600		secures the obligation, and (iii) the collateral is held or acquired primarily for personal,1416
1601	1601		family, or household purposes. The term includes consumer goods transactions.1417
1602	1602		(28) 'Continuation statement' means an amendment of a financing statement which:1418
1603	1603		(A) Identifies, by its file number, the initial financing statement to which it relates; and1419
1604	1604		(B) Indicates that it is a continuation statement for, or that it is filed to continue the1420
1605	1605		effectiveness of, the identified financing statement.1421
1606		-	H. B. 1240
1607		-	- 57 - 24 LC 48 1222S~~/AP~~
	1606	+	H. B. 1240 (SUB)
	1607	+	- 57 - 24 LC 48 1222S
1608	1608		(28.1) 'Controllable account' means an account evidenced by a controllable electronic1422
1609	1609		record that provides that the account debtor undertakes to pay the person that has control1423
1610	1610		under Code Section 11-12-105 of the controllable electronic record.1424
1611	1611		(28.2) 'Controllable payment intangible' means a payment intangible evidenced by a1425
1612	1612		controllable electronic record that provides that the account debtor undertakes to pay the1426
1613	1613		person that has control under Code Section 11-12-105 of the controllable electronic1427
1614	1614		record.1428
1615	1615		(29) 'Debtor' means:1429
1616	1616		(A) A person having an interest, other than a security interest or other lien, in the1430
1617	1617		collateral, whether or not the person is an obligor;1431
1618	1618		(B) A seller of accounts, chattel paper, payment intangibles, or promissory notes; or1432
1619	1619		(C) A consignee.1433
1620	1620		(30) 'Deposit account' means a demand, time, savings, passbook, or similar account1434
1621	1621		maintained with a bank. The term does not include investment property or accounts1435
1622	1622		evidenced by an instrument.1436
1623	1623		(31) 'Document' means a document of title or a receipt of the type described in1437
1624	1624		subsection (2)(b) of Code Section 11-7-201.1438
1625	1625		(32) 'Electronic chattel paper' means chattel paper evidenced by a record or records1439
1626	1626		consisting of information stored in an electronic medium Reserved.1440
1627	1627		(32.1) 'Electronic money' means money in an electronic form.1441
1628	1628		(33) 'Encumbrance' means a right, other than an ownership interest, in real property. The1442
1629	1629		term includes mortgages and other liens on real property.1443
1630	1630		(34) 'Equipment' means goods other than inventory, farm products, or consumer goods.1444
1631	1631		(35) 'Farm products' means goods, other than standing timber, with respect to which the1445
1632	1632		debtor is engaged in a farming operation and which are:1446
1633	1633		(A) Crops grown, growing, or to be grown, including:1447
1634	1634		(i) Crops produced on trees, vines, and bushes; and1448
1635		-	H. B. 1240
1636		-	- 58 - 24 LC 48 1222S~~/AP~~
	1635	+	H. B. 1240 (SUB)
	1636	+	- 58 - 24 LC 48 1222S
1637	1637		(ii) Aquatic goods produced in aquacultural operations;
1638	1638		1449
1639	1639		(B) Livestock, born or unborn, including aquatic goods produced in aquacultural1450
1640	1640		operations;1451
1641	1641		(C) Supplies used or produced in a farming operation; or1452
1642	1642		(D) Products of crops or livestock in their unmanufactured states.1453
1643	1643		(36) 'Farming operation' means raising, cultivating, propagating, fattening, grazing, or1454
1644	1644		any other farming, livestock, or aquacultural operation.1455
1645	1645		(37) 'File number' means the number assigned to an initial financing statement pursuant1456
1646	1646		to subsection (a) of Code Section 11-9-519.1457
1647	1647		(38) 'Filing office' means an office designated in Code Section 11-9-501 as the place to1458
1648	1648		file a financing statement.1459
1649	1649		(39) 'Filing office rule' means a rule adopted pursuant to Code Section 11-9-526.1460
1650	1650		(40) 'Financing statement' means a record or records composed of an initial financing1461
1651	1651		statement and any filed record relating to the initial financing statement.1462
1652	1652		(41) 'Fixture filing' means the filing of a financing statement covering goods that are or1463
1653	1653		are to become fixtures and satisfying subsections (a) and (b) of Code Section 11-9-502. 1464
1654	1654		The term includes the filing of a financing statement covering goods of a transmitting1465
1655	1655		utility which are or are to become fixtures.1466
1656	1656		(42) 'Fixtures' means goods that have become so related to particular real property that1467
1657	1657		an interest in them arises under real property law.1468
1658	1658		(43) 'General intangible' means any personal property, including things in action, other1469
1659	1659		than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods,1470
1660	1660		instruments, investment property, letter of credit rights, letters of credit, money, and oil,1471
1661	1661		gas, or other minerals before extraction. The term includes controllable electronic
1662	1662		1472
1663	1663		records, payment intangibles, and software.1473
1664	1664		(44) Reserved.1474
1665		-	H. B. 1240
1666		-	- 59 - 24 LC 48 1222S~~/AP~~
	1665	+	H. B. 1240 (SUB)
	1666	+	- 59 - 24 LC 48 1222S
1667	1667		(45) 'Goods' means all things that are movable when a security interest attaches. The
1668	1668		1475
1669	1669		term includes (i) fixtures, (ii) standing timber that is to be cut and removed under a1476
1670	1670		conveyance or contract for sale, (iii) the unborn young of animals, and (iv) crops grown,1477
1671	1671		growing, or to be grown, even if the crops are produced on trees, vines, or bushes. The1478
1672	1672		term also includes a computer program embedded in goods and any supporting1479
1673	1673		information provided in connection with a transaction relating to the program if (i) the1480
1674	1674		program is associated with the goods in such a manner that it customarily is considered1481
1675	1675		part of the goods, or (ii) by becoming the owner of the goods, a person acquires a right1482
1676	1676		to use the program in connection with the goods. The term does not include a computer1483
1677	1677		program embedded in goods that consist solely of the medium in which the program is1484
1678	1678		embedded. The term also does not include accounts, chattel paper, commercial tort1485
1679	1679		claims, deposit accounts, documents, general intangibles, instruments, investment1486
1680	1680		property, letter of credit rights, letters of credit, money, or oil, gas, or other minerals1487
1681	1681		before extraction.1488
1682	1682		(46) 'Governmental unit' means a subdivision, agency, department, county, parish,1489
1683	1683		municipality, or other unit of the government of the United States, a state, or a foreign1490
1684	1684		country. The term includes an organization having a separate corporate existence if the1491
1685	1685		organization is eligible to issue debt on which interest is exempt from income taxation1492
1686	1686		under the laws of the United States.1493
1687	1687		(47) 'Health care insurance receivable' means an interest in or claim under a policy of1494
1688	1688		insurance which is a right to payment of a monetary obligation for health care goods or1495
1689	1689		services provided or to be provided.1496
1690	1690		(48) 'Instrument' means a negotiable instrument or any other writing that evidences a1497
1691	1691		right to the payment of a monetary obligation, is not itself a security agreement or lease,1498
1692	1692		and is of a type that in ordinary course of business is transferred by delivery with any1499
1693	1693		necessary indorsement or assignment. The term does not include (i) investment property,1500
1694	1694		(ii) letters of credit, or
1695	1695		(iii) writings that evidence a right to payment arising out of the use1501
1696		-	H. B. 1240
1697		-	- 60 - 24 LC 48 1222S~~/AP~~
	1696	+	H. B. 1240 (SUB)
	1697	+	- 60 - 24 LC 48 1222S
1698	1698		of a credit or charge card or information contained on or for use with the card, or (iv)1502
1699	1699		writings that evidence chattel paper.1503
1700	1700		(49) 'Inventory' means goods, other than farm products, which:1504
1701	1701		(A) Are leased by a person as lessor;1505
1702	1702		(B) Are held by a person for sale or lease or to be furnished under a contract of service;1506
1703	1703		(C) Are furnished by a person under a contract of service; or1507
1704	1704		(D) Consist of raw materials, work in process, or materials used or consumed in a1508
1705	1705		business.1509
1706	1706		(50) 'Investment property' means a security, whether certificated or uncertificated,1510
1707	1707		security entitlement, securities account, commodity contract, or commodity account.1511
1708	1708		(51) 'Jurisdiction of organization,' with respect to a registered organization, means the1512
1709	1709		jurisdiction under whose law the organization is formed or organized.1513
1710	1710		(52) 'Letter of credit right' means a right to payment or performance under a letter of1514
1711	1711		credit, whether or not the beneficiary has demanded or is at the time entitled to demand1515
1712	1712		payment or performance. The term does not include the right of a beneficiary to demand1516
1713	1713		payment or performance under a letter of credit.1517
1714	1714		(53) 'Lien creditor' means:1518
1715	1715		(A) A creditor that has acquired a lien on the property involved by attachment, levy,1519
1716	1716		or the like;1520
1717	1717		(B) An assignee for benefit of creditors from the time of assignment;1521
1718	1718		(C) A trustee in bankruptcy from the date of the filing of the petition; or1522
1719	1719		(D) A receiver in equity from the time of appointment.1523
1720	1720		(53.1) 'Money' has the meaning in paragraph (24) of subsection (b) of Code Section1524
1721	1721		11-1-201, but does not include (i) a deposit account or (ii) money in an electronic form1525
1722	1722		that cannot be subjected to control under Code Section 11-9-105A.1526
1723		-	H. B. 1240
1724		-	- 61 - 24 LC 48 1222S~~/AP~~
	1723	+	H. B. 1240 (SUB)
	1724	+	- 61 - 24 LC 48 1222S
1725	1725		(54) 'Mortgage' means a consensual interest in real property, including fixtures, which
1726	1726		1527
1727	1727		secures payment or performance of an obligation. The term includes a deed to secure1528
1728	1728		debt.1529
1729	1729		(55) 'New debtor' means a person that becomes bound as debtor under subsection (d) of1530
1730	1730		Code Section 11-9-203 by a security agreement previously entered into by another1531
1731	1731		person.1532
1732	1732		(56) 'New value' means (i) money, (ii) money's worth in property, services, or new credit,1533
1733	1733		or (iii) release by a transferee of an interest in property previously transferred to the1534
1734	1734		transferee. The term does not include an obligation substituted for another obligation.1535
1735	1735		(57) 'Noncash proceeds' means proceeds other than cash proceeds.1536
1736	1736		(58) 'Obligor' means a person that, with respect to an obligation secured by a security1537
1737	1737		interest in or an agricultural lien on the collateral, (i) owes payment or other performance1538
1738	1738		of the obligation, (ii) has provided property other than the collateral to secure payment1539
1739	1739		or other performance of the obligation, or (iii) is otherwise accountable in whole or in1540
1740	1740		part for payment or other performance of the obligation. The term does not include1541
1741	1741		issuers or nominated persons under a letter of credit.1542
1742	1742		(59) 'Original debtor,' except as used in subsection (c) of Code Section 11-9-310, means1543
1743	1743		a person that, as debtor, entered into a security agreement to which a new debtor has1544
1744	1744		become bound under subsection (d) of Code Section 11-9-203.1545
1745	1745		(60) 'Payment intangible' means a general intangible under which the account debtor's1546
1746	1746		principal obligation is a monetary obligation. The term includes a controllable payment
1747	1747		1547
1748	1748		intangible.1548
1749	1749		(61) 'Person related to,' with respect to an individual, means:1549
1750	1750		(A) The spouse of the individual;1550
1751	1751		(B) A brother, brother-in-law, sister, or sister-in-law of the individual;1551
1752	1752		(C) An ancestor or lineal descendant of the individual or the individual's spouse; or1552
1753		-	H. B. 1240
1754		-	- 62 - 24 LC 48 1222S~~/AP~~
	1753	+	H. B. 1240 (SUB)
	1754	+	- 62 - 24 LC 48 1222S
1755	1755		(D) Any other relative, by blood or marriage, of the individual or the individual's
1756	1756		1553
1757	1757		spouse who shares the same home with the individual.1554
1758	1758		(62) 'Person related to,' with respect to an organization, means:1555
1759	1759		(A) A person directly or indirectly controlling, controlled by, or under common control1556
1760	1760		with the organization;1557
1761	1761		(B) An officer or director of, or a person performing similar functions with respect to,1558
1762	1762		the organization;1559
1763	1763		(C) An officer or director of, or a person performing similar functions with respect to,1560
1764	1764		a person described in subparagraph (A) of this paragraph;1561
1765	1765		(D) The spouse of an individual described in subparagraph (A), (B), or (C) of this1562
1766	1766		paragraph; or1563
1767	1767		(E) An individual who is related by blood or marriage to an individual described in1564
1768	1768		subparagraph (A), (B), (C), or (D) of this paragraph and shares the same home with the1565
1769	1769		individual.1566
1770	1770		(63) 'Proceeds,' except as used in subsection (d)
1771	1771		(b) of Code Section 11-9-609, means the1567
1772	1772		following property:1568
1773	1773		(A) Whatever is acquired upon the sale, lease, license, exchange, or other disposition1569
1774	1774		of collateral;1570
1775	1775		(B) Whatever is collected on, or distributed on account of, collateral;1571
1776	1776		(C) Rights arising out of collateral;1572
1777	1777		(D) To the extent of the value of collateral, claims arising out of the loss,1573
1778	1778		nonconformity, or interference with the use of, defects or infringement of rights in, or1574
1779	1779		damage to the collateral; or1575
1780	1780		(E) To the extent of the value of collateral and to the extent payable to the debtor or the1576
1781	1781		secured party, insurance payable by reason of the loss or nonconformity of, defects or1577
1782	1782		infringement of rights in, or damage to the collateral.1578
1783		-	H. B. 1240
1784		-	- 63 - 24 LC 48 1222S~~/AP~~
	1783	+	H. B. 1240 (SUB)
	1784	+	- 63 - 24 LC 48 1222S
1785	1785		(64) 'Promissory note' means an instrument that evidences a promise to pay a monetary
1786	1786		1579
1787	1787		obligation, does not evidence an order to pay, and does not contain an acknowledgment1580
1788	1788		by a bank that the bank has received for deposit a sum of money or funds.1581
1789	1789		(65) 'Proposal' means a record authenticated
1790	1790		signed by a secured party which includes1582
1791	1791		the terms on which the secured party is willing to accept collateral in full or partial1583
1792	1792		satisfaction of the obligation it secures pursuant to Code Sections 11-9-620, 11-9-621,1584
1793	1793		and 11-9-622.1585
1794	1794		(66) 'Public finance transaction' means a secured transaction in connection with which:1586
1795	1795		(A) Debt securities are issued;1587
1796	1796		(B) All or a portion of the securities issued have an initial stated maturity of at least1588
1797	1797		five years; and1589
1798	1798		(C) The debtor, obligor, secured party, account debtor or other person obligated on1590
1799	1799		collateral, assignor or assignee of a secured obligation, or assignor or assignee of a1591
1800	1800		security interest is a state or a governmental unit of a state.1592
1801	1801		(67) 'Public organic record' means a record that is available to the public for inspection1593
1802	1802		and is:1594
1803	1803		(A) A record consisting of the record initially filed with or issued by a state or the1595
1804	1804		United States to form or organize an organization and any record filed with or issued1596
1805	1805		by such state or the United States which amends or restates the initial record;1597
1806	1806		(B) An organic record of a business trust consisting of the record initially filed with a1598
1807	1807		state and any record filed with such state which amends or restates the initial record, if1599
1808	1808		a statute of such state governing business trusts requires that the record be filed with1600
1809	1809		such state; or1601
1810	1810		(C) A record consisting of legislation enacted by the legislature of a state or the1602
1811	1811		Congress of the United States which forms or organizes an organization, any record1603
1812	1812		amending the legislation, and any record filed with or issued by such state or the United1604
1813	1813		States which amends or restates the name of the organization.1605
1814		-	H. B. 1240
1815		-	- 64 - 24 LC 48 1222S~~/AP~~
	1814	+	H. B. 1240 (SUB)
	1815	+	- 64 - 24 LC 48 1222S
1816	1816		(68) 'Pursuant to commitment,' with respect to an advance made or other value given by
1817	1817		1606
1818	1818		a secured party, means pursuant to the secured party's obligation, whether or not a1607
1819	1819		subsequent event of default or other event not within the secured party's control has1608
1820	1820		relieved or may relieve the secured party from its obligation.1609
1821	1821		(69) 'Record,' except as used in 'for record,' 'of record,' 'record or legal title,' and 'record1610
1822	1822		owner,' means information that is inscribed on a tangible medium or which is stored in1611
1823	1823		an electronic or other medium and is retrievable in perceivable form.1612
1824	1824		(70) 'Registered organization' means an organization formed or organized solely under1613
1825	1825		the law of a single state or the United States by the filing of a public organic record with,1614
1826	1826		the issuance of a public organic record by, or the enactment of legislation by a state or the1615
1827	1827		United States. The term shall include a business trust that is formed or organized under1616
1828	1828		the law of a single state if a statute of such state governing business trusts requires that1617
1829	1829		the business trust's organic record be filed with such state.1618
1830	1830		(71) 'Secondary obligor' means an obligor to the extent that:1619
1831	1831		(A) The obligor's obligation is secondary; or1620
1832	1832		(B) The obligor has a right of recourse with respect to an obligation secured by1621
1833	1833		collateral against the debtor, another obligor, or property of either.1622
1834	1834		(72) 'Secured party' means:1623
1835	1835		(A) A person in whose favor a security interest is created or provided for under a1624
1836	1836		security agreement, whether or not any obligation to be secured is outstanding;1625
1837	1837		(B) A person that holds an agricultural lien;1626
1838	1838		(C) A consignor;1627
1839	1839		(D) A person to which accounts, chattel paper, payment intangibles, or promissory1628
1840	1840		notes have been sold;1629
1841	1841		(E) A trustee, indenture trustee, agent, collateral agent, or other representative in whose1630
1842	1842		favor a security interest or agricultural lien is created or provided for; or1631
1843		-	H. B. 1240
1844		-	- 65 - 24 LC 48 1222S~~/AP~~
	1843	+	H. B. 1240 (SUB)
	1844	+	- 65 - 24 LC 48 1222S
1845	1845		(F) A person that holds a security interest arising under Code Section 11-2-401,
1846	1846		1632
1847	1847		11-2-505, or subsection (3) of Code Section 11-2-711, subsection (5) of Code Section1633
1848	1848		11-2A-508, Code Section 11-4-210, or Code Section 11-5-118.1634
1849	1849		(73) 'Security agreement' means an agreement that creates or provides for a security1635
1850	1850		interest.1636
1851	1851		(74) 'Send,' in connection with a record or notification, means:
1852	1852		1637
1853	1853		(A) To deposit in the mail, deliver for transmission, or transmit by any other usual1638
1854	1854		means of communication, with postage or cost of transmission provided for, addressed1639
1855	1855		to any address reasonable under the circumstances; or1640
1856	1856		(B) To cause the record or notification to be received within the time that it would have1641
1857	1857		been received if properly sent under subparagraph (A) of this paragraph Reserved.1642
1858	1858		(75) 'Software' means a computer program and any supporting information provided in1643
1859	1859		connection with a transaction relating to the program. The term does not include a1644
1860	1860		computer program that is included in the definition of goods.1645
1861	1861		(76) 'State' means a state of the United States, the District of Columbia, Puerto Rico, the1646
1862	1862		United States Virgin Islands, or any territory or insular possession subject to the1647
1863	1863		jurisdiction of the United States.1648
1864	1864		(77) 'Supporting obligation' means a letter of credit right or secondary obligation that1649
1865	1865		supports the payment or performance of an account, chattel paper, a document, a general1650
1866	1866		intangible, an instrument, or investment property.1651
1867	1867		(78) 'Tangible chattel paper' means chattel paper evidenced by a record or records1652
1868	1868		consisting of information that is inscribed on a tangible medium Reserved.1653
1869	1869		(78.1) 'Tangible money' means money in a tangible form.1654
1870	1870		(79) 'Termination statement' means an amendment of a financing statement which:1655
1871	1871		(A) Identifies, by its file number, the initial financing statement to which it relates; and1656
1872	1872		(B) Indicates either that it is a termination statement or that the identified financing1657
1873	1873		statement is no longer effective.1658
1874		-	H. B. 1240
1875		-	- 66 - 24 LC 48 1222S~~/AP~~
	1874	+	H. B. 1240 (SUB)
	1875	+	- 66 - 24 LC 48 1222S
1876	1876		(80) 'Transmitting utility' means a person primarily engaged in the business of:
1877	1877		1659
1878	1878		(A) Operating a railroad, subway, street railway, or trolley bus;1660
1879	1879		(B) Transmitting communications electrically, electromagnetically, or by light;1661
1880	1880		(C) Transmitting goods by pipeline or sewer; or1662
1881	1881		(D) Transmitting or producing and transmitting electricity, steam, gas, or water.1663
1882	1882		(b) Definitions in other articles. 'Control' as provided in Code Section 11-7-106 and the1664
1883	1883		following definitions in other articles apply to this article:1665
1884	1884		'Applicant.' Code Section 11-5-102.1666
1885	1885		'Beneficiary.' Code Section 11-5-102.1667
1886	1886		'Broker.' Code Section 11-8-102.1668
1887	1887		'Certificated security.' Code Section 11-8-102.1669
1888	1888		'Check.' Code Section 11-3-104.1670
1889	1889		'Clearing corporation.' Code Section 11-8-102.1671
1890	1890		'Contract for sale.' Code Section 11-2-106.1672
1891	1891		'Controllable electronic record.' Code Section 11-12-102.
1892	1892		1673
1893	1893		'Customer.' Code Section 11-4-104.1674
1894	1894		'Entitlement holder.' Code Section 11-8-102.1675
1895	1895		'Financial asset.' Code Section 11-8-102.1676
1896	1896		'Holder in due course.' Code Section 11-3-302.1677
1897	1897		'Issuer' (with respect to a letter of credit or letter of credit right). Code Section 11-5-102.1678
1898	1898		'Issuer' (with respect to a security). Code Section 11-8-201.1679
1899	1899		'Issuer' (with respect to documents of title). Code Section 11-7-102.1680
1900	1900		'Lease.' Code Section 11-2A-103.1681
1901	1901		'Lease agreement.' Code Section 11-2A-103.1682
1902	1902		'Lease contract.' Code Section 11-2A-103.1683
1903	1903		'Leasehold interest.' Code Section 11-2A-103.1684
1904	1904		'Lessee.' Code Section 11-2A-103.1685
1905		-	H. B. 1240
1906		-	- 67 - 24 LC 48 1222S~~/AP~~
	1905	+	H. B. 1240 (SUB)
	1906	+	- 67 - 24 LC 48 1222S
1907	1907		'Lessee in ordinary course of business.' Code Section 11-2A-103.
1908	1908		1686
1909	1909		'Lessor.' Code Section 11-2A-103.1687
1910	1910		'Lessor's residual interest.' Code Section 11-2A-103.1688
1911	1911		'Letter of credit.' Code Section 11-5-102.1689
1912	1912		'Merchant.' Code Section 11-2-104.1690
1913	1913		'Negotiable instrument.' Code Section 11-3-104.1691
1914	1914		'Nominated person.' Code Section 11-5-102.1692
1915	1915		'Note.' Code Section 11-3-104.1693
1916	1916		'Proceeds of a letter of credit.' Code Section 11-5-114.1694
1917	1917		'Protected purchaser.' Code Section 11-8-103.
1918	1918		1695
1919	1919		'Prove.' Code Section 11-3-103.1696
1920	1920		'Qualifying purchaser.' Code Section 11-12-102.1697
1921	1921		'Sale.' Code Section 11-2-106.1698
1922	1922		'Securities account.' Code Section 11-8-501.1699
1923	1923		'Securities intermediary.' Code Section 11-8-102.1700
1924	1924		'Security.' Code Section 11-8-102.1701
1925	1925		'Security certificate.' Code Section 11-8-102.1702
1926	1926		'Security entitlement.' Code Section 11-8-102.1703
1927	1927		'Uncertificated security.' Code Section 11-8-102.1704
1928	1928		(c) Article 1 definitions and principles. Article 1 of this title contains general definitions1705
1929	1929		and principles of construction and interpretation applicable throughout this article."1706
1930	1930		SECTION 5-41.1707
1931	1931		Said title is further amended by revising Code Section 11-9-104, relating to control of deposit1708
1932	1932		accounts, as follows:1709
1933	1933		"11-9-104.Control of deposit account.1710
1934	1934		(a) Requirements for control. A secured party has control of a deposit account if:1711
1935		-	H. B. 1240
1936		-	- 68 - 24 LC 48 1222S~~/AP~~
	1935	+	H. B. 1240 (SUB)
	1936	+	- 68 - 24 LC 48 1222S
1937	1937		(1) The secured party is the bank with which the deposit account is maintained;
1938	1938		1712
1939	1939		(2) The debtor, secured party, and bank have agreed in an authenticated
1940	1940		a signed record1713
1941	1941		that the bank will comply with instructions originated by the secured party directing1714
1942	1942		disposition of the funds in the deposit account without further consent by the debtor; or1715
1943	1943		(3) The secured party becomes the bank's customer with respect to the deposit account;1716
1944	1944		or1717
1945	1945		(4) Another person, other than the debtor:1718
1946	1946		(A) Has control of the deposit account and acknowledges that it has control on behalf1719
1947	1947		of the secured party; or1720
1948	1948		(B) Obtains control of the deposit account after having acknowledged that it will obtain1721
1949	1949		control of the deposit account on behalf of the secured party.1722
1950	1950		(b) Debtor's right to direct disposition. A secured party that has satisfied subsection (a)1723
1951	1951		of this Code section has control, even if the debtor retains the right to direct the disposition1724
1952	1952		of funds from the deposit account."1725
1953	1953		SECTION 5-42.1726
1954	1954		Said title is further amended by revising Code Section 11-9-105, relating to control of1727
1955	1955		electronic chattel paper, as follows:1728
1956	1956		"11-9-105.Control of electronic copy of record evidencing chattel paper.1729
1957	1957		(a) General rule; control of electronic chattel paper. A secured party has control of1730
1958	1958		electronic chattel paper if a system employed for evidencing the transfer of interests in the1731
1959	1959		chattel paper reliably establishes the secured party as the person to which the chattel paper1732
1960	1960		was assigned.1733
1961	1961		(b) Specific facts giving control. A system satisfies the provisions of subsection (a) of1734
1962	1962		this Code section if the record or records comprising the chattel paper are created, stored,1735
1963	1963		and assigned in such a manner that:1736
1964		-	H. B. 1240
1965		-	- 69 - 24 LC 48 1222S~~/AP~~
	1964	+	H. B. 1240 (SUB)
	1965	+	- 69 - 24 LC 48 1222S
1966	1966		(1) A single authoritative copy of the record or records exists which is unique,1737
1967	1967		identifiable, and, except as otherwise provided in paragraphs (4), (5), and (6) of this1738
1968	1968		subsection, unalterable;1739
1969	1969		(2) The authoritative copy identifies the secured party as the assignee of the record or1740
1970	1970		records;1741
1971	1971		(3) The authoritative copy is communicated to and maintained by the secured party or1742
1972	1972		its designated custodian;1743
1973	1973		(4) Copies or amendments that add or change an identified assignee of the authoritative1744
1974	1974		copy can be made only with the consent of the secured party;1745
1975	1975		(5) Each copy of the authoritative copy and any copy of a copy is readily identifiable as1746
1976	1976		a copy that is not the authoritative copy; and1747
1977	1977		(6) Any amendment of the authoritative copy is readily identifiable as authorized or1748
1978	1978		unauthorized.1749
1979	1979		(a) General rule: control of electronic copy of record evidencing chattel paper. A1750
1980	1980		purchaser has control of an authoritative electronic copy of a record evidencing chattel1751
1981	1981		paper if a system employed for evidencing the assignment of interests in the chattel paper1752
1982	1982		reliably establishes the purchaser as the person to which the authoritative electronic copy1753
1983	1983		was assigned.1754
1984	1984		(b) Single authoritative copy. A system satisfies subsection (a) of this Code section if1755
1985	1985		the record or records evidencing the chattel paper are created, stored, and assigned in a1756
1986	1986		manner that:1757
1987	1987		(1) A single authoritative copy of the record or records exists which is unique,1758
1988	1988		identifiable, and, except as otherwise provided in paragraphs (4), (5), and (6) of this1759
1989	1989		subsection, unalterable;1760
1990	1990		(2) The authoritative copy identifies the purchaser as the assignee of the record or1761
1991	1991		records;1762
1992		-	H. B. 1240
1993		-	- 70 - 24 LC 48 1222S~~/AP~~
	1992	+	H. B. 1240 (SUB)
	1993	+	- 70 - 24 LC 48 1222S
1994	1994		(3) The authoritative copy is communicated to and maintained by the purchaser or its1763
1995	1995		designated custodian;1764
1996	1996		(4) Copies or amendments that add or change an identified assignee of the authoritative1765
1997	1997		copy can be made only with the consent of the purchaser;1766
1998	1998		(5) Each copy of the authoritative copy and any copy of a copy is readily identifiable as1767
1999	1999		a copy that is not the authoritative copy; and1768
2000	2000		(6) Any amendment of the authoritative copy is readily identifiable as authorized or1769
2001	2001		unauthorized.1770
2002	2002		(c) One or more authoritative copies. A system satisfies subsection (a) of this Code1771
2003	2003		section, and a purchaser has control of an authoritative electronic copy of a record1772
2004	2004		evidencing chattel paper, if the electronic copy, a record attached to or logically associated1773
2005	2005		with the electronic copy, or a system in which the electronic copy is recorded:1774
2006	2006		(1) Enables the purchaser readily to identify each electronic copy as either an1775
2007	2007		authoritative copy or a nonauthoritative copy;1776
2008	2008		(2) Enables the purchaser readily to identify itself in any way, including by name,1777
2009	2009		identifying number, cryptographic key, office, or account number, as the assignee of the1778
2010	2010		authoritative electronic copy; and1779
2011	2011		(3) Gives the purchaser exclusive power, subject to subsection (d) of this Code section,1780
2012	2012		to:1781
2013	2013		(A) Prevent others from adding or changing an identified assignee of the authoritative1782
2014	2014		electronic copy; and1783
2015	2015		(B) Transfer control of the authoritative electronic copy.1784
2016	2016		(d) Meaning of exclusive. Subject to subsection (e) of this Code section, a power is1785
2017	2017		exclusive under subparagraphs (c)(3)(A) and (c)(3)(B) of this Code section even if:1786
2018	2018		(1) The authoritative electronic copy, a record attached to or logically associated with1787
2019	2019		the authoritative electronic copy, or a system in which the authoritative electronic copy1788
2020		-	H. B. 1240
2021		-	- 71 - 24 LC 48 1222S~~/AP~~
	2020	+	H. B. 1240 (SUB)
	2021	+	- 71 - 24 LC 48 1222S
2022	2022		is recorded limits the use of the authoritative electronic copy or has a protocol1789
2023	2023		programmed to cause a change, including a transfer or loss of control; or1790
2024	2024		(2) The power is shared with another person.1791
2025	2025		(e) When power not shared with another person. A power of a purchaser is not shared1792
2026	2026		with another person under paragraph (2) of subsection (d) of this Code section and the1793
2027	2027		purchaser's power is not exclusive if:1794
2028	2028		(1) The purchaser can exercise the power only if the power also is exercised by the other1795
2029	2029		person; and1796
2030	2030		(2) The other person:1797
2031	2031		(A) Can exercise the power without exercise of the power by the purchaser; or1798
2032	2032		(B) Is the transferor to the purchaser of an interest in the chattel paper.1799
2033	2033		(f) Presumption of exclusivity of certain powers. If a purchaser has the powers1800
2034	2034		specified in subparagraphs (c)(3)(A) and (c)(3)(B) of this Code section, the powers are1801
2035	2035		presumed to be exclusive.1802
2036	2036		(g) Obtaining control through another person. A purchaser has control of an1803
2037	2037		authoritative electronic copy of a record evidencing chattel paper if another person, other1804
2038	2038		than the transferor to the purchaser of an interest in the chattel paper:1805
2039	2039		(1) Has control of the authoritative electronic copy and acknowledges that it has control1806
2040	2040		on behalf of the purchaser; or1807
2041	2041		(2) Obtains control of the authoritative electronic copy after having acknowledged that1808
2042	2042		it will obtain control of the electronic copy on behalf of the purchaser."1809
2043	2043		SECTION 5-43.1810
2044	2044		Said title is further amended by adding new Code Section 11-9-105A, relating to control of1811
2045	2045		electronic money, as follows:1812
2046		-	H. B. 1240
2047		-	- 72 - 24 LC 48 1222S~~/AP~~
	2046	+	H. B. 1240 (SUB)
	2047	+	- 72 - 24 LC 48 1222S
2048	2048		"11-9-105A.Control of electronic money.1813
2049	2049		(a) General rule: control of electronic money. A person has control of electronic money1814
2050	2050		if:1815
2051	2051		(1) The electronic money, a record attached to or logically associated with the electronic1816
2052	2052		money, or a system in which the electronic money is recorded gives the person:1817
2053	2053		(A) Power to avail itself of substantially all the benefit from the electronic money; and1818
2054	2054		(B) Exclusive power, subject to subsection (b) of this Code section, to:1819
2055	2055		(i) Prevent others from availing themselves of substantially all the benefit from the1820
2056	2056		electronic money; and1821
2057	2057		(ii) Transfer control of the electronic money to another person or cause another1822
2058	2058		person to obtain control of other electronic money as a result of the transfer of the1823
2059	2059		electronic money; and1824
2060	2060		(2) The electronic money, a record attached to or logically associated with the electronic1825
2061	2061		money, or a system in which the electronic money is recorded enables the person readily1826
2062	2062		to identify itself in any way, including by name, identifying number, cryptographic key,1827
2063	2063		office, or account number, as having the powers under paragraph (1) of this subsection.1828
2064	2064		(b) Meaning of exclusive. Subject to subsection (c) of this Code section, a power is1829
2065	2065		exclusive under subparagraphs (a)(1)(B)(i) and (a)(1)(B)(ii) of this Code section even if:1830
2066	2066		(1) The electronic money, a record attached to or logically associated with the electronic1831
2067	2067		money, or a system in which the electronic money is recorded limits the use of the1832
2068	2068		electronic money or has a protocol programmed to cause a change, including a transfer1833
2069	2069		or loss of control; or1834
2070	2070		(2) The power is shared with another person.1835
2071	2071		(c) When power not shared with another person. A power of a person is not shared1836
2072	2072		with another person under paragraph (2) of subsection (b) of this Code section and the1837
2073	2073		person's power is not exclusive if:1838
2074		-	H. B. 1240
2075		-	- 73 - 24 LC 48 1222S~~/AP~~
	2074	+	H. B. 1240 (SUB)
	2075	+	- 73 - 24 LC 48 1222S
2076	2076		(1) The person can exercise the power only if the power also is exercised by the other1839
2077	2077		person; and1840
2078	2078		(2) The other person:1841
2079	2079		(A) Can exercise the power without exercise of the power by the person; or1842
2080	2080		(B) Is the transferor to the person of an interest in the electronic money.1843
2081	2081		(d) Presumption of exclusivity of certain powers. If a person has the powers specified1844
2082	2082		in subparagraphs (a)(1)(B)(i) and (a)(1)(B)(ii) of this Code section, the powers are1845
2083	2083		presumed to be exclusive.1846
2084	2084		(e) Control through another person. A person has control of electronic money if1847
2085	2085		another person, other than the transferor to the person of an interest in the electronic1848
2086	2086		money:1849
2087	2087		(1) Has control of the electronic money and acknowledges that it has control on behalf1850
2088	2088		of the person; or1851
2089	2089		(2) Obtains control of the electronic money after having acknowledged that it will obtain1852
2090	2090		control of the electronic money on behalf of the person."1853
2091	2091		SECTION 5-44.1854
2092	2092		Said title is further amended by adding new Code Section 11-9-107A, relating to control of1855
2093	2093		controllable electronic records, controllable accounts, or controllable payment intangibles,1856
2094	2094		as follows:1857
2095	2095		"11-9-107A.Control of controllable electronic record, controllable account, or1858
2096	2096		controllable payment intangible.1859
2097	2097		(a) Control under Code Section 11-12-105. A secured party has control of a controllable1860
2098	2098		electronic record as provided in Code Section 11-12-105.1861
2099	2099		(b) Control of controllable account and controllable payment intangible. A secured1862
2100	2100		party has control of a controllable account or controllable payment intangible if the secured1863
2101		-	H. B. 1240
2102		-	- 74 - 24 LC 48 1222S~~/AP~~
	2101	+	H. B. 1240 (SUB)
	2102	+	- 74 - 24 LC 48 1222S
2103	2103		party has control of the controllable electronic record that evidences the controllable1864
2104	2104		account or controllable payment intangible."1865
2105	2105		SECTION 5-45.1866
2106	2106		Said title is further amended by adding new Code Section 11-9-107B, relating to no1867
2107	2107		requirement to acknowledge or confirm and no duties, as follows:1868
2108	2108		"11-9-107B.No requirement to acknowledge or confirm; no duties.1869
2109	2109		(a) No requirement to acknowledge. A person that has control under Code Section1870
2110	2110		11-9-104, 11-9-105, or 11-9-105A is not required to acknowledge that it has control on1871
2111	2111		behalf of another person.1872
2112	2112		(b) No duties or confirmation. If a person acknowledges that it has or will obtain control1873
2113	2113		on behalf of another person, unless the person otherwise agrees or law other than this1874
2114	2114		article otherwise provides, the person does not owe any duty to the other person and is not1875
2115	2115		required to confirm the acknowledgment to any other person."1876
2116	2116		SECTION 5-46.1877
2117	2117		Said title is further amended in subsection (b) of Code Section 11-9-203, relating to1878
2118	2118		attachment and enforceability of security interests, proceeds, supporting obligations, and1879
2119	2119		formal requisites, by revising paragraph (3) as follows:1880
2120	2120		"(3) One of the following conditions is met:1881
2121	2121		(A) The debtor has authenticated signed a security agreement that provides a1882
2122	2122		description of the collateral and, if the security interest covers timber to be cut, a1883
2123	2123		description of the land concerned;1884
2124	2124		(B) The collateral is not a certificated security and is in the possession of the secured1885
2125	2125		party under Code Section 11-9-313 pursuant to the debtor's security agreement;1886
2126		-	H. B. 1240
2127		-	- 75 - 24 LC 48 1222S~~/AP~~
	2126	+	H. B. 1240 (SUB)
	2127	+	- 75 - 24 LC 48 1222S
2128	2128		(C) The collateral is a certificated security in registered form and the security
2129	2129		1887
2130	2130		certificate has been delivered to the secured party under Code Section 11-8-3011888
2131	2131		pursuant to the debtor's security agreement; or
2132	2132		1889
2133	2133		(D) The collateral is controllable accounts, controllable electronic records, controllable1890
2134	2134		payment intangibles, deposit accounts, electronic chattel paper, electronic documents,1891
2135	2135		electronic money, investment property, or letter of credit rights, or electronic1892
2136	2136		documents, and the secured party has control under Code Section 11-7-106, 11-9-104,1893
2137	2137		11-9-105 11-9-105A, 11-9-106, or 11-9-107, or 11-9-107A pursuant to the debtor's1894
2138	2138		security agreement; or1895
2139	2139		(E) The collateral is chattel paper and the secured party has possession and control1896
2140	2140		under Code Section 11-9-314A pursuant to the debtor's security agreement."1897
2141	2141		SECTION 5-47.1898
2142	2142		Said title is further amended by revising Code Section 11-9-204, relating to after acquired1899
2143	2143		property and future advances, as follows:1900
2144	2144		"11-9-204.After acquired property; future advances.1901
2145	2145		(a) After acquired collateral. Except as otherwise provided in subsection (b) of this1902
2146	2146		Code section, a security agreement may create or provide for a security interest in after1903
2147	2147		acquired collateral.1904
2148	2148		(b) When after acquired property clause not effective. Subject to subsection (b.1) of1905
2149	2149		this Code section, a A security interest does not attach under a term constituting an after1906
2150	2150		acquired property clause to:1907
2151	2151		(1) Consumer goods, other than an accession when given as additional security, unless1908
2152	2152		the debtor acquires rights in them within ten days after the secured party gives value; or1909
2153	2153		(2) A commercial tort claim.1910
2154	2154		(b.1) Limitation on subsection (b) of this Code section. Subsection (b) of this Code1911
2155	2155		section does not prevent a security interest from attaching:1912
2156		-	H. B. 1240
2157		-	- 76 - 24 LC 48 1222S~~/AP~~
	2156	+	H. B. 1240 (SUB)
	2157	+	- 76 - 24 LC 48 1222S
2158	2158		(1) To consumer goods as proceeds under subsection (a) of Code Section 11-9-315 or1913
2159	2159		commingled goods under subsection (c) of Code Section 11-9-336;1914
2160	2160		(2) To a commercial tort claim as proceeds under subsection (a) of Code Section1915
2161	2161		11-9-315; or1916
2162	2162		(3) Under an after-acquired property clause to property that is proceeds of consumer1917
2163	2163		goods or a commercial tort claim.1918
2164	2164		(c) Future advances and other value. A security agreement may provide that collateral1919
2165	2165		secures, or that accounts, chattel paper, payment intangibles, or promissory notes are sold1920
2166	2166		in connection with, future advances or other value, whether or not the advances or value1921
2167	2167		are given pursuant to commitment."1922
2168	2168		SECTION 5-48.1923
2169	2169		Said title is further amended in Code Section 11-9-207, relating to rights and duties of a1924
2170	2170		secured party having possession or control of collateral, by revising the introductory1925
2171	2171		language of subsection (c) as follows:1926
2172	2172		"(c) Duties and rights when secured party in possession or control. Except as1927
2173	2173		otherwise provided in subsection (d) of this Code section, a secured party having1928
2174	2174		possession of collateral or control of collateral under Code Section 11-7-106, 11-9-104,1929
2175	2175		11-9-105, 11-9-105A, 11-9-106, or 11-9-107, or 11-9-107A:"1930
2176	2176		SECTION 5-49.1931
2177	2177		Said title is further amended by revising Code Section 11-9-208, relating to additional duties1932
2178	2178		of a secured party having control of collateral, as follows:1933
2179	2179		"11-9-208.Additional duties of secured party having control of collateral.1934
2180	2180		(a) Applicability of Code section. This Code section applies to cases in which there is1935
2181	2181		no outstanding secured obligation and the secured party is not committed to make1936
2182	2182		advances, incur obligations, or otherwise give value.1937
2183		-	H. B. 1240
2184		-	- 77 - 24 LC 48 1222S~~/AP~~
	2183	+	H. B. 1240 (SUB)
	2184	+	- 77 - 24 LC 48 1222S
2185	2185		(b) Duties of secured party after receiving demand from debtor. Within ten days after
2186	2186		1938
2187	2187		receiving an authenticated
2188	2188		a signed demand by the debtor:1939
2189	2189		(1) A secured party having control of a deposit account under paragraph (2) of1940
2190	2190		subsection (a) of Code Section 11-9-104 shall send to the bank with which the deposit1941
2191	2191		account is maintained an authenticated statement a signed record that releases the bank1942
2192	2192		from any further obligation to comply with instructions originated by the secured party;1943
2193	2193		(2) A secured party having control of a deposit account under paragraph (3) of1944
2194	2194		subsection (a) of Code Section 11-9-104 shall:1945
2195	2195		(A) Pay the debtor the balance on deposit in the deposit account; or1946
2196	2196		(B) Transfer the balance on deposit into a deposit account in the debtor's name;1947
2197	2197		(3) A secured party, other than a buyer, having control of electronic chattel paper under1948
2198	2198		Code Section 11-9-105 shall:1949
2199	2199		(A) Communicate the authoritative copy of the electronic chattel paper to the debtor1950
2200	2200		or its designated custodian;1951
2201	2201		(B) If the debtor designates a custodian that is the designated custodian with which the1952
2202	2202		authoritative copy of the electronic chattel paper is maintained for the secured party,1953
2203	2203		communicate to the custodian an authenticated record releasing the designated1954
2204	2204		custodian from any further obligation to comply with instructions originated by the1955
2205	2205		secured party and instructing the custodian to comply with instructions originated by1956
2206	2206		the debtor; and1957
2207	2207		(C) Take appropriate action to enable the debtor or its designated custodian to make1958
2208	2208		copies of or revisions to the authoritative copy which add or change an identified1959
2209	2209		assignee of the authoritative copy without the consent of the secured party;1960
2210	2210		(3) A secured party, other than a buyer, having control under Code Section 11-9-105 of1961
2211	2211		an authoritative electronic copy of a record evidencing chattel paper shall transfer control1962
2212	2212		of the electronic copy to the debtor or a person designated by the debtor;1963
2213		-	H. B. 1240
2214		-	- 78 - 24 LC 48 1222S~~/AP~~
	2213	+	H. B. 1240 (SUB)
	2214	+	- 78 - 24 LC 48 1222S
2215	2215		(4) A secured party having control of investment property under paragraph (2) of
2216	2216		1964
2217	2217		subsection (d) of Code Section 11-8-106 or subsection (b) of Code Section 11-9-106 shall1965
2218	2218		send to the securities intermediary or commodity intermediary with which the security1966
2219	2219		entitlement or commodity contract is maintained an authenticated
2220	2220		a signed record that1967
2221	2221		releases the securities intermediary or commodity intermediary from any further1968
2222	2222		obligation to comply with entitlement orders or directions originated by the secured party;1969
2223	2223		(5) A secured party having control of a letter of credit right under Code Section 11-9-1071970
2224	2224		shall send to each person having an unfulfilled obligation to pay or deliver proceeds of1971
2225	2225		the letter of credit to the secured party an authenticated a signed release from any further1972
2226	2226		obligation to pay or deliver proceeds of the letter of credit to the secured party; and1973
2227	2227		(6) A secured party having control of an electronic document shall:1974
2228	2228		(A) Give control of the electronic document to the debtor or its designated custodian;1975
2229	2229		(B) If the debtor designates a custodian that is the designated custodian with which the1976
2230	2230		authoritative copy of the electronic document is maintained for the secured party,1977
2231	2231		communicate to the custodian an authenticated record releasing the designated1978
2232	2232		custodian from any further obligation to comply with instructions originated by the1979
2233	2233		secured party and instructing the custodian to comply with instructions originated by1980
2234	2234		the debtor; and1981
2235	2235		(C) Take appropriate action to enable the debtor or its designated custodian to make1982
2236	2236		copies of or revisions to the authenticated copy which add or change an identified1983
2237	2237		assignee of the authoritative copy without the consent of the secured party.1984
2238	2238		(6) A secured party having control under Code Section 11-7-106 of an authoritative1985
2239	2239		electronic copy of an electronic document shall transfer control of the electronic copy to1986
2240	2240		the debtor or a person designated by the debtor;1987
2241	2241		(7) A secured party having control under Code Section 11-9-105A of electronic money1988
2242	2242		shall transfer control of the electronic money to the debtor or a person designated by the1989
2243	2243		debtor; and1990
2244		-	H. B. 1240
2245		-	- 79 - 24 LC 48 1222S~~/AP~~
	2244	+	H. B. 1240 (SUB)
	2245	+	- 79 - 24 LC 48 1222S
2246	2246		(8) A secured party having control under Code Section 11-12-105 of a controllable1991
2247	2247		electronic record, other than a buyer of a controllable account or controllable payment1992
2248	2248		intangible evidenced by the controllable electronic record, shall transfer control of the1993
2249	2249		controllable electronic record to the debtor or a person designated by the debtor."1994
2250	2250		SECTION 5-50.1995
2251	2251		Said title is further amended by revising Code Section 11-9-209, relating to duties of a1996
2252	2252		secured party if account debtor has been notified of assignment, as follows:1997
2253	2253		"11-9-209.Duties of secured party if account debtor has been notified of assignment.1998
2254	2254		(a) Applicability of Code section. Except as otherwise provided in subsection (c) of this1999
2255	2255		Code section, this Code section applies if:2000
2256	2256		(1) There is no outstanding secured obligation; and2001
2257	2257		(2) The secured party is not committed to make advances, incur obligations, or otherwise2002
2258	2258		give value.2003
2259	2259		(b) Duties of secured party after receiving demand from debtor. Within ten days after2004
2260	2260		receiving an authenticated a signed demand by the debtor, a secured party shall send to an2005
2261	2261		account debtor that has received notification under subsection (a) of Code Section 11-9-4062006
2262	2262		or subsection (b) of Code Section 11-12-106 of an assignment to the secured party as2007
2263	2263		assignee under subsection (a) of Code Section 11-9-406 an authenticated a signed record2008
2264	2264		that releases the account debtor from any further obligation to the secured party.2009
2265	2265		(c) Inapplicability to sales. This Code section does not apply to an assignment2010
2266	2266		constituting the sale of an account, chattel paper, or payment intangible."2011
2267	2267		SECTION 5-51.2012
2268	2268		Said title is further amended by revising Code Section 11-9-301, relating to law governing2013
2269	2269		perfection and priority of security interests, as follows:2014
2270		-	H. B. 1240
2271		-	- 80 - 24 LC 48 1222S~~/AP~~
	2270	+	H. B. 1240 (SUB)
	2271	+	- 80 - 24 LC 48 1222S
2272	2272		"11-9-301. Law governing perfection and priority of security interests.
2273	2273		2015
2274	2274		Except as otherwise provided in Code Sections 11-9-303 through 11-9-306
2275	2275		11-9-306B, the2016
2276	2276		following rules determine the law governing perfection, the effect of perfection or2017
2277	2277		nonperfection, and the priority of a security interest in collateral:2018
2278	2278		(1) Except as otherwise provided in this Code section, while a debtor is located in a2019
2279	2279		jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection2020
2280	2280		or nonperfection, and the priority of a security interest in collateral;2021
2281	2281		(2) While collateral is located in a jurisdiction, the local law of that jurisdiction governs2022
2282	2282		perfection, the effect of perfection or nonperfection, and the priority of a possessory2023
2283	2283		security interest in that collateral;2024
2284	2284		(3) Except as otherwise provided in paragraph (4) of this Code section, while tangible2025
2285	2285		negotiable tangible documents, goods, instruments, or tangible money, or tangible chattel2026
2286	2286		paper is located in a jurisdiction, the local law of that jurisdiction governs:2027
2287	2287		(A) Perfection of a security interest in the goods by filing a fixture filing;2028
2288	2288		(B) Perfection of a security interest in timber to be cut;2029
2289	2289		(C) Perfection of a security interest in crops; and2030
2290	2290		(D) The effect of perfection or nonperfection and the priority of a nonpossessory2031
2291	2291		security interest in the collateral; and2032
2292	2292		(4) The local law of the jurisdiction in which the wellhead or minehead is located2033
2293	2293		governs perfection, the effect of perfection or nonperfection, and the priority of a security2034
2294	2294		interest in as-extracted collateral."2035
2295	2295		SECTION 5-52.2036
2296	2296		Said title is further amended in Code Section 11-9-304, relating to law governing perfection2037
2297	2297		and priority of security interests in deposit accounts, by revising subsection (a) as follows:2038
2298	2298		"(a) Law of bank's jurisdiction governs. The local law of a bank's jurisdiction governs2039
2299	2299		perfection, the effect of perfection or nonperfection, and the priority of a security interest2040
2300		-	H. B. 1240
2301		-	- 81 - 24 LC 48 1222S~~/AP~~
	2300	+	H. B. 1240 (SUB)
	2301	+	- 81 - 24 LC 48 1222S
2302	2302		in a deposit account maintained with that bank even if the transaction does not bear any2041
2303	2303		relation to the bank's jurisdiction."2042
2304	2304		SECTION 5-53.2043
2305	2305		Said title is further amended in subsection (a) of Code Section 11-9-305, relating to law2044
2306	2306		governing perfection and priority of security interests in investment property, by deleting2045
2307	2307		"and" at the end of paragraph (3), by substituting "; and" for the period at the end of2046
2308	2308		paragraph (4), and by adding a new paragraph to read as follows:2047
2309	2309		"(5) Paragraphs (2), (3), and (4) of this subsection apply even if the transaction does not2048
2310	2310		bear any relation to the jurisdiction."2049
2311	2311		SECTION 5-54.2050
2312	2312		Said title is further amended by adding new Code Section 11-9-306A, relating to law2051
2313	2313		governing perfection and priority of security interests in chattel paper, as follows:2052
2314	2314		"11-9-306A.Law governing perfection and priority of security interests in chattel2053
2315	2315		paper.2054
2316	2316		(a) Chattel paper evidenced by authoritative electronic copy. Except as provided in2055
2317	2317		subsection (d) of this Code section, if chattel paper is evidenced only by an authoritative2056
2318	2318		electronic copy of the chattel paper or is evidenced by an authoritative electronic copy and2057
2319	2319		an authoritative tangible copy, the local law of the chattel paper's jurisdiction governs2058
2320	2320		perfection, the effect of perfection or nonperfection, and the priority of a security interest2059
2321	2321		in the chattel paper, even if the transaction does not bear any relation to the chattel paper's2060
2322	2322		jurisdiction.2061
2323	2323		(b) Chattel paper's jurisdiction. The following rules determine the chattel paper's2062
2324	2324		jurisdiction under this Code section:2063
2325	2325		(1) If the authoritative electronic copy of the record evidencing chattel paper, or a record2064
2326	2326		attached to or logically associated with the electronic copy and readily available for2065
2327		-	H. B. 1240
2328		-	- 82 - 24 LC 48 1222S~~/AP~~
	2327	+	H. B. 1240 (SUB)
	2328	+	- 82 - 24 LC 48 1222S
2329	2329		review, expressly provides that a particular jurisdiction is the chattel paper's jurisdiction2066
2330	2330		for purposes of this part, this article, or this title, that jurisdiction is the chattel paper's2067
2331	2331		jurisdiction;2068
2332	2332		(2) If paragraph (1) of this subsection does not apply and the rules of the system in which2069
2333	2333		the authoritative electronic copy is recorded are readily available for review and expressly2070
2334	2334		provide that a particular jurisdiction is the chattel paper's jurisdiction for purposes of this2071
2335	2335		part, this article, or this title, that jurisdiction is the chattel paper's jurisdiction;2072
2336	2336		(3) If paragraphs (1) and (2) of this subsection do not apply and the authoritative2073
2337	2337		electronic copy, or a record attached to or logically associated with the electronic copy2074
2338	2338		and readily available for review, expressly provides that the chattel paper is governed by2075
2339	2339		the law of a particular jurisdiction, that jurisdiction is the chattel paper's jurisdiction;2076
2340	2340		(4) If paragraphs (1), (2), and (3) of this subsection do not apply and the rules of the2077
2341	2341		system in which the authoritative electronic copy is recorded are readily available for2078
2342	2342		review and expressly provide that the chattel paper or the system is governed by the law2079
2343	2343		of a particular jurisdiction, that jurisdiction is the chattel paper's jurisdiction; and2080
2344	2344		(5) If paragraphs (1) through (4) of this subsection do not apply, the chattel paper's2081
2345	2345		jurisdiction is the jurisdiction in which the debtor is located.2082
2346	2346		(c) Chattel paper evidenced by authoritative tangible copy. If an authoritative tangible2083
2347	2347		copy of a record evidences chattel paper and the chattel paper is not evidenced by an2084
2348	2348		authoritative electronic copy, while the authoritative tangible copy of the record evidencing2085
2349	2349		chattel paper is located in a jurisdiction, the local law of that jurisdiction governs:2086
2350	2350		(1) Perfection of a security interest in the chattel paper by possession under Code Section2087
2351	2351		11-9-314A; and2088
2352	2352		(2) The effect of perfection or nonperfection and the priority of a security interest in the2089
2353	2353		chattel paper.2090
2354		-	H. B. 1240
2355		-	- 83 - 24 LC 48 1222S~~/AP~~
	2354	+	H. B. 1240 (SUB)
	2355	+	- 83 - 24 LC 48 1222S
2356	2356		(d) When perfection governed by law of jurisdiction where debtor located. The local2091
2357	2357		law of the jurisdiction in which the debtor is located governs perfection of a security2092
2358	2358		interest in chattel paper by filing."2093
2359	2359		SECTION 5-55.2094
2360	2360		Said title is further amended by adding new Code Section 11-9-306B, relating to law2095
2361	2361		governing perfection and priority of security interests in controllable accounts, controllable2096
2362	2362		electronic records, and controllable payment intangibles, as follows:2097
2363	2363		"11-9-306B.Law governing perfection and priority of security interests in2098
2364	2364		controllable accounts, controllable electronic records, and controllable2099
2365	2365		payment intangibles.2100
2366	2366		(a) Governing law: general rules. Except as provided in subsection (b) of this Code2101
2367	2367		section, the local law of the controllable electronic record's jurisdiction specified in2102
2368	2368		subsections (c) and (d) of Code Section 11-12-107 governs perfection, the effect of2103
2369	2369		perfection or nonperfection, and the priority of a security interest in a controllable2104
2370	2370		electronic record and a security interest in a controllable account or controllable payment2105
2371	2371		intangible evidenced by the controllable electronic record.2106
2372	2372		(b) When perfection governed by law of jurisdiction where debtor located. The local2107
2373	2373		law of the jurisdiction in which the debtor is located governs:2108
2374	2374		(1) Perfection of a security interest in a controllable account, controllable electronic2109
2375	2375		record, or controllable payment intangible by filing; and2110
2376	2376		(2) Automatic perfection of a security interest in a controllable payment intangible2111
2377	2377		created by a sale of the controllable payment intangible."2112
2378		-	H. B. 1240
2379		-	- 84 - 24 LC 48 1222S~~/AP~~
	2378	+	H. B. 1240 (SUB)
	2379	+	- 84 - 24 LC 48 1222S
2380	2380		SECTION 5-56.
2381	2381		2113
2382	2382		Said title is further amended in Code Section 11-9-310, relating to when filing is required to2114
2383	2383		perfect security interest or agricultural lien and security interests and agricultural liens to2115
2384	2384		which filing provisions do not apply, by revising subsection (b) as follows:2116
2385	2385		"(b) Exceptions; filing not necessary. The filing of a financing statement is not necessary2117
2386	2386		to perfect a security interest:2118
2387	2387		(1) That is perfected under subsection (d), (e), (f), or (g) of Code Section 11-9-308;2119
2388	2388		(2) That is perfected under Code Section 11-9-309 when it attaches;2120
2389	2389		(3) In property subject to a statute, regulation, or treaty described in subsection (a) of2121
2390	2390		Code Section 11-9-311;2122
2391	2391		(4) In goods in possession of a bailee which is perfected under paragraph (1) or (2) of2123
2392	2392		subsection (d) of Code Section 11-9-312;2124
2393	2393		(5) In certificated securities, documents, goods, or instruments which is perfected2125
2394	2394		without filing, control, or possession under subsection (e), (f), or (g) of Code Section2126
2395	2395		11-9-312;2127
2396	2396		(6) In collateral in the secured party's possession under Code Section 11-9-313;2128
2397	2397		(7) In a certificated security which is perfected by delivery of the security certificate to2129
2398	2398		the secured party under Code Section 11-9-313;2130
2399	2399		(8) In controllable accounts, controllable electronic records, controllable payment
2400	2400		2131
2401	2401		intangibles, deposit accounts, electronic chattel paper, electronic documents, investment2132
2402	2402		property, or letter of credit rights which is perfected by control under Code Section2133
2403	2403		11-9-314;2134
2404	2404		(8.1) In chattel paper which is perfected by possession and control under Code Section2135
2405	2405		11-9-314A;2136
2406	2406		(9) In proceeds which is perfected under Code Section 11-9-315; or2137
2407	2407		(10) That is perfected under Code Section 11-9-316."2138
2408		-	H. B. 1240
2409		-	- 85 - 24 LC 48 1222S~~/AP~~
	2408	+	H. B. 1240 (SUB)
	2409	+	- 85 - 24 LC 48 1222S
2410	2410		SECTION 5-57.
2411	2411		2139
2412	2412		Said title is further amended by revising Code Section 11-9-312, relating to perfection of2140
2413	2413		security interests in chattel paper, deposit accounts, documents, goods covered by2141
2414	2414		documents, instruments, investment property, letter of credit rights, and money; perfection2142
2415	2415		by permissive filing; and temporary perfection without filing or transfer of possession, as2143
2416	2416		follows:2144
2417	2417		"11-9-312.Perfection of security interests in chattel paper, controllable accounts,
2418	2418		2145
2419	2419		controllable electronic records, controllable payment intangibles, deposit2146
2420	2420		accounts, negotiable documents, goods covered by documents,2147
2421	2421		instruments, investment property, letter of credit rights, and money;2148
2422	2422		perfection by permissive filing; temporary perfection without filing or2149
2423	2423		transfer of possession.2150
2424	2424		(a) Perfection by filing permitted. A security interest in chattel paper, negotiable2151
2425	2425		documents, controllable accounts, controllable electronic records, controllable payment2152
2426	2426		intangibles, instruments, or investment property, or negotiable documents may be perfected2153
2427	2427		by filing.2154
2428	2428		(b) Control or possession of certain collateral. Except as otherwise provided in2155
2429	2429		subsections (c) and (d) of Code Section 11-9-315 for proceeds:2156
2430	2430		(1) A security interest in a deposit account may be perfected only by control under Code2157
2431	2431		Section 11-9-314;2158
2432	2432		(2) Except as otherwise provided in subsection (d) of Code Section 11-9-308, a security2159
2433	2433		interest in a letter of credit right may be perfected only by control under Code Section2160
2434	2434		11-9-314; and2161
2435	2435		(3) A security interest in tangible money may be perfected only by the secured party's2162
2436	2436		taking possession under Code Section 11-9-313; and2163
2437	2437		(4) A security interest in electronic money may be perfected only by control under Code2164
2438	2438		Section 11-9-314.2165
2439		-	H. B. 1240
2440		-	- 86 - 24 LC 48 1222S~~/AP~~
	2439	+	H. B. 1240 (SUB)
	2440	+	- 86 - 24 LC 48 1222S
2441	2441		(c) Goods covered by negotiable document. While goods are in the possession of a
2442	2442		2166
2443	2443		bailee that has issued a negotiable document covering the goods:2167
2444	2444		(1) A security interest in the goods may be perfected by perfecting a security interest in2168
2445	2445		the document; and2169
2446	2446		(2) A security interest perfected in the document has priority over any security interest2170
2447	2447		that becomes perfected in the goods by another method during that time.2171
2448	2448		(d) Goods covered by nonnegotiable document. While goods are in the possession of2172
2449	2449		a bailee that has issued a nonnegotiable document covering the goods, a security interest2173
2450	2450		in the goods may be perfected by:2174
2451	2451		(1) Issuance of a document in the name of the secured party;2175
2452	2452		(2) The bailee's receipt of notification of the secured party's interest; or2176
2453	2453		(3) Filing as to the goods.2177
2454	2454		(e) Temporary perfection; new value. A security interest in certificated securities,2178
2455	2455		negotiable documents, or instruments is perfected without filing or the taking of possession2179
2456	2456		or control for a period of 20 days from the time it attaches to the extent that it arises for2180
2457	2457		new value given under an authenticated
2458	2458		a signed security agreement.2181
2459	2459		(f) Temporary perfection; goods or documents made available to debtor. A perfected2182
2460	2460		security interest in a negotiable document or goods in possession of a bailee, other than one2183
2461	2461		that has issued a negotiable document for the goods, remains perfected for 20 days without2184
2462	2462		filing if the secured party makes available to the debtor the goods or documents2185
2463	2463		representing the goods for the purpose of:2186
2464	2464		(1) Ultimate sale or exchange; or2187
2465	2465		(2) Loading, unloading, storing, shipping, transshipping, manufacturing, processing, or2188
2466	2466		otherwise dealing with them in a manner preliminary to their sale or exchange.2189
2467	2467		(g) Temporary perfection; delivery of security certificate or instrument to debtor. 2190
2468	2468		A perfected security interest in a certificated security or instrument remains perfected for2191
2469		-	H. B. 1240
2470		-	- 87 - 24 LC 48 1222S~~/AP~~
	2469	+	H. B. 1240 (SUB)
	2470	+	- 87 - 24 LC 48 1222S
2471	2471		20 days without filing if the secured party delivers the security certificate or instrument to
2472	2472		2192
2473	2473		the debtor for the purpose of:2193
2474	2474		(1) Ultimate sale or exchange; or2194
2475	2475		(2) Presentation, collection, enforcement, renewal, or registration of transfer.2195
2476	2476		(h) Expiration of temporary perfection. After the 20 day period specified in2196
2477	2477		subsection (e), (f), or (g) of this Code section expires, perfection depends upon compliance2197
2478	2478		with this article."2198
2479	2479		SECTION 5-58.2199
2480	2480		Said title is further amended in Code Section 11-9-313, relating to when possession by or2200
2481	2481		delivery to a secured party perfects security interest without filing, by revising subsections2201
2482	2482		(a), (c), and (d) as follows:2202
2483	2483		"(a) Perfection by possession or delivery. Except as otherwise provided in subsection2203
2484	2484		(b) of this Code section, a secured party may perfect a security interest in tangible
2485	2485		2204
2486	2486		negotiable documents, goods, instruments, negotiable tangible documents, or tangible2205
2487	2487		money, or tangible chattel paper by taking possession of the collateral. A secured party2206
2488	2488		may perfect a security interest in certificated securities by taking delivery of the certificated2207
2489	2489		securities under Code Section 11-8-301."2208
2490	2490		"(c) Collateral in possession of person other than debtor. With respect to collateral2209
2491	2491		other than certificated securities and goods covered by a document, a secured party takes2210
2492	2492		possession of collateral in the possession of a person other than the debtor, the secured2211
2493	2493		party, or a lessee of the collateral from the debtor in the ordinary course of the debtor's2212
2494	2494		business, when:2213
2495	2495		(1) The person in possession authenticates signs a record acknowledging that it holds2214
2496	2496		possession of the collateral for the secured party's benefit; or2215
2497		-	H. B. 1240
2498		-	- 88 - 24 LC 48 1222S~~/AP~~
	2497	+	H. B. 1240 (SUB)
	2498	+	- 88 - 24 LC 48 1222S
2499	2499		(2) The person takes possession of the collateral after having authenticated signed a2216
2500	2500		record acknowledging that it will hold possession of the collateral for the secured party's2217
2501	2501		benefit.2218
2502	2502		(d) Time of perfection by possession; continuation of perfection. If perfection of a2219
2503	2503		security interest depends upon possession of the collateral by a secured party, perfection2220
2504	2504		occurs no not earlier than the time the secured party takes possession and continues only2221
2505	2505		while the secured party retains possession."2222
2506	2506		SECTION 5-59.2223
2507	2507		Said title is further amended by revising Code Section 11-9-314, relating to perfection by2224
2508	2508		control, as follows:2225
2509	2509		"11-9-314.Perfection by control.2226
2510	2510		(a) Perfection by control. A security interest in investment property, deposit accounts,2227
2511	2511		letter of credit rights, electronic chattel paper, or electronic documents controllable2228
2512	2512		accounts, controllable electronic records, controllable payment intangibles, deposit2229
2513	2513		accounts, electronic documents, electronic money, investment property, or letter of credit2230
2514	2514		rights may be perfected by control of the collateral under Code Section 11-7-106, 11-9-104,2231
2515	2515		11-9-105, 11-9-105A, 11-9-106, or 11-9-107, or 11-9-107A.2232
2516	2516		(b) Specified collateral; time of perfection by control; continuation of perfection. A2233
2517	2517		security interest in deposit accounts, electronic chattel paper, letter of credit rights, or2234
2518	2518		electronic documents controllable accounts, controllable electronic records, controllable2235
2519	2519		payment intangibles, deposit accounts, electronic documents, electronic money, or letter2236
2520	2520		of credit rights is perfected by control under Code Section 11-7-106, 11-9-104, 11-9-105,2237
2521	2521		11-9-105A, or 11-9-107, or 11-9-107A when not earlier than the time the secured party2238
2522	2522		obtains control and remains perfected by control only while the secured party retains2239
2523	2523		control.2240
2524		-	H. B. 1240
2525		-	- 89 - 24 LC 48 1222S~~/AP~~
	2524	+	H. B. 1240 (SUB)
	2525	+	- 89 - 24 LC 48 1222S
2526	2526		(c) Investment property; time of perfection by control; continuation of perfection.
2527	2527		2241
2528	2528		A security interest in investment property is perfected by control under Code2242
2529	2529		Section 11-9-106 from
2530	2530		not earlier than the time the secured party obtains control and2243
2531	2531		remains perfected by control until:2244
2532	2532		(1) The secured party does not have control; and2245
2533	2533		(2) One of the following occurs:2246
2534	2534		(A) If the collateral is a certificated security, the debtor has or acquires possession of2247
2535	2535		the security certificate;2248
2536	2536		(B) If the collateral is an uncertificated security, the issuer has registered or registers2249
2537	2537		the debtor as the registered owner; or2250
2538	2538		(C) If the collateral is a security entitlement, the debtor is or becomes the entitlement2251
2539	2539		holder."2252
2540	2540		SECTION 5-60.2253
2541	2541		Said title is further amended by adding new Code Section 11-9-314A, relating to perfection2254
2542	2542		by possession and control of chattel paper, as follows:2255
2543	2543		"11-9-314A.Perfection by possession and control of chattel paper.2256
2544	2544		(a) Perfection by possession and control. A secured party may perfect a security interest2257
2545	2545		in chattel paper by taking possession of each authoritative tangible copy of the record2258
2546	2546		evidencing the chattel paper and obtaining control of each authoritative electronic copy of2259
2547	2547		the electronic record evidencing the chattel paper.2260
2548	2548		(b) Time of perfection; continuation of perfection. A security interest is perfected under2261
2549	2549		subsection (a) of this Code section not earlier than the time the secured party takes2262
2550	2550		possession and obtains control and remains perfected under subsection (a) of this Code2263
2551	2551		section only while the secured party retains possession and control.2264
2552		-	H. B. 1240
2553		-	- 90 - 24 LC 48 1222S~~/AP~~
	2552	+	H. B. 1240 (SUB)
	2553	+	- 90 - 24 LC 48 1222S
2554	2554		(c) Application of Code Section 11-9-313 to perfection by possession of chattel paper. 2265
2555	2555		Subsections (c) and (f) through (i) of Code Section 11-9-313 apply to perfection by2266
2556	2556		possession of an authoritative tangible copy of a record evidencing chattel paper."2267
2557	2557		SECTION 5-61.2268
2558	2558		Said title is further amended in Code Section 11-9-316, relating to effect of change in2269
2559	2559		governing law, by revising subsection (a) and (f) as follows:2270
2560	2560		"(a) General rule; effect on perfection of change in governing law. A security interest2271
2561	2561		perfected pursuant to the law of the jurisdiction designated in paragraph (1) of Code2272
2562	2562		Section 11-9-301, or subsection (c) of Code Section 11-9-305, subsection (d) of Code2273
2563	2563		Section 11-9-306A, or subsection (b) of Code Section 11-9-306B remains perfected until2274
2564	2564		the earliest of:2275
2565	2565		(1) The time perfection would have ceased under the law of that jurisdiction;2276
2566	2566		(2) The expiration of four months after a change of the debtor's location to another2277
2567	2567		jurisdiction; or2278
2568	2568		(3) The expiration of one year after a transfer of collateral to a person that thereby2279
2569	2569		becomes a debtor and is located in another jurisdiction."2280
2570	2570		"(f) Change in jurisdiction of chattel paper, controllable electronic record, bank,2281
2571	2571		issuer, nominated person, securities intermediary, or commodity intermediary. A2282
2572	2572		security interest in chattel paper, controllable accounts, controllable electronic records,2283
2573	2573		controllable payment intangibles, deposit accounts, letter of credit rights, or investment2284
2574	2574		property which is perfected under the law of the chattel paper's jurisdiction, the controllable2285
2575	2575		electronic record's jurisdiction, the bank's jurisdiction, the issuer's jurisdiction, a nominated2286
2576	2576		person's jurisdiction, the securities intermediary's jurisdiction, or the commodity2287
2577	2577		intermediary's jurisdiction, as applicable, remains perfected until the earlier of:2288
2578	2578		(1) The time the security interest would have become unperfected under the law of that2289
2579	2579		jurisdiction; or2290
2580		-	H. B. 1240
2581		-	- 91 - 24 LC 48 1222S~~/AP~~
	2580	+	H. B. 1240 (SUB)
	2581	+	- 91 - 24 LC 48 1222S
2582	2582		(2) The expiration of four months after a change of the applicable jurisdiction to another
2583	2583		2291
2584	2584		jurisdiction."2292
2585	2585		SECTION 5-62.2293
2586	2586		Said title is further amended by revising Code Section 11-9-317, relating to interests that take2294
2587	2587		priority over or take free of security interest or agricultural lien, as follows:2295
2588	2588		"11-9-317.Interests that take priority over or take free of security interest or2296
2589	2589		agricultural lien.2297
2590	2590		(a) Conflicting security interests and rights of lien creditors. A security interest or2298
2591	2591		agricultural lien is subordinate to the rights of:2299
2592	2592		(1) A person entitled to priority under Code Section 11-9-322; and2300
2593	2593		(2) Except as otherwise provided in subsection (e) of this Code section, a person that2301
2594	2594		becomes a lien creditor before the earlier of the time:2302
2595	2595		(A) The security interest or agricultural lien is perfected; or2303
2596	2596		(B) A financing statement covering the collateral is filed.2304
2597	2597		(b) Buyers that receive delivery. Except as otherwise provided in subsection (e) of this2305
2598	2598		Code section, a buyer, other than a secured party, of tangible chattel paper, tangible
2599	2599		2306
2600	2600		documents, goods, instruments, tangible documents, or a certificated security takes free of2307
2601	2601		a security interest or agricultural lien if the buyer gives value and receives delivery of the2308
2602	2602		collateral without knowledge of the security interest or agricultural lien and before it is2309
2603	2603		perfected.2310
2604	2604		(c) Lessees that receive delivery. Except as otherwise provided in subsection (e) of this2311
2605	2605		Code section, a lessee of goods takes free of a security interest or agricultural lien if the2312
2606	2606		lessee gives value and receives delivery of the collateral without knowledge of the security2313
2607	2607		interest or agricultural lien and before it is perfected.2314
2608	2608		(d) Licensees and buyers of certain collateral. Subject to subsections (f) through (i) of2315
2609	2609		this Code section, a A licensee of a general intangible or a buyer, other than a secured2316
2610		-	H. B. 1240
2611		-	- 92 - 24 LC 48 1222S~~/AP~~
	2610	+	H. B. 1240 (SUB)
	2611	+	- 92 - 24 LC 48 1222S
2612	2612		party, of collateral other than tangible chattel paper, tangible documents, electronic money,2317
2613	2613		goods, instruments, tangible documents, or a certificated security takes free of a security2318
2614	2614		interest if the licensee or buyer gives value without knowledge of the security interest and2319
2615	2615		before it is perfected.2320
2616	2616		(e) Purchase money security interest. Except as otherwise provided in Code Sections2321
2617	2617		11-9-320 and 11-9-321, if a person files a financing statement with respect to a purchase2322
2618	2618		money security interest before or within 20 days after the debtor receives delivery of the2323
2619	2619		collateral, the security interest takes priority over the rights of a buyer, lessee, or lien2324
2620	2620		creditor which arise between the time the security interest attaches and the time of filing.2325
2621	2621		(f) Buyers of chattel paper. A buyer, other than a secured party, of chattel paper takes2326
2622	2622		free of a security interest if, without knowledge of the security interest and before it is2327
2623	2623		perfected, the buyer gives value and:2328
2624	2624		(1) Receives delivery of each authoritative tangible copy of the record evidencing the2329
2625	2625		chattel paper; and2330
2626	2626		(2) If each authoritative electronic copy of the record evidencing the chattel paper can2331
2627	2627		be subjected to control under Code Section 11-9-105, obtains control of each2332
2628	2628		authoritative electronic copy.2333
2629	2629		(g) Buyers of electronic documents. A buyer of an electronic document takes free of a2334
2630	2630		security interest if, without knowledge of the security interest and before it is perfected, the2335
2631	2631		buyer gives value and, if each authoritative electronic copy of the document can be2336
2632	2632		subjected to control under Code Section 11-7-106, obtains control of each authoritative2337
2633	2633		electronic copy.2338
2634	2634		(h) Buyers of controllable electronic records. A buyer of a controllable electronic2339
2635	2635		record takes free of a security interest if, without knowledge of the security interest and2340
2636	2636		before it is perfected, the buyer gives value and obtains control of the controllable2341
2637	2637		electronic record.2342
2638		-	H. B. 1240
2639		-	- 93 - 24 LC 48 1222S~~/AP~~
	2638	+	H. B. 1240 (SUB)
	2639	+	- 93 - 24 LC 48 1222S
2640	2640		(i) Buyers of controllable accounts and controllable payment intangibles. A buyer,2343
2641	2641		other than a secured party, of a controllable account or a controllable payment intangible2344
2642	2642		takes free of a security interest if, without knowledge of the security interest and before it2345
2643	2643		is perfected, the buyer gives value and obtains control of the controllable account or2346
2644	2644		controllable payment intangible."2347
2645	2645		SECTION 5-63.2348
2646	2646		Said title is further amended in Code Section 11-9-323, relating to future advances, by2349
2647	2647		revising subsections (c) and (e) as follows:2350
2648	2648		"(c) Buyer of goods. Except as otherwise provided in subsection (d) of this Code section,2351
2649	2649		a buyer of goods other than a buyer in ordinary course of business takes free of a security2352
2650	2650		interest to the extent that it secures advances made after the earlier of:2353
2651	2651		(1) The time the secured party acquires knowledge of the buyer's purchase; or2354
2652	2652		(2) Forty-five days after the purchase."2355
2653	2653		"(e) Lessee of goods. Except as otherwise provided in subsection (f) of this Code section,2356
2654	2654		a lessee of goods, other than a lessee in ordinary course of business, takes the leasehold2357
2655	2655		interest free of a security interest to the extent that it secures advances made after the2358
2656	2656		earlier of:2359
2657	2657		(1) The time the secured party acquires knowledge of the lease; or2360
2658	2658		(2) Forty-five days after the lease contract becomes enforceable."2361
2659	2659		SECTION 5-64.2362
2660	2660		Said title is further amended by adding new Code Section 11-9-326A, relating to priority of2363
2661	2661		security interests in controllable accounts, controllable electronic records, and controllable2364
2662	2662		payment intangibles, as follows:2365
2663		-	H. B. 1240
2664		-	- 94 - 24 LC 48 1222S~~/AP~~
	2663	+	H. B. 1240 (SUB)
	2664	+	- 94 - 24 LC 48 1222S
2665	2665		"11-9-326A.Priority of security interest in controllable account, controllable2366
2666	2666		electronic record, and controllable payment intangible.2367
2667	2667		A security interest in a controllable account, controllable electronic record, or controllable2368
2668	2668		payment intangible held by a secured party having control of the account, electronic record,2369
2669	2669		or payment intangible has priority over a conflicting security interest held by a secured2370
2670	2670		party that does not have control."2371
2671	2671		SECTION 5-65.2372
2672	2672		Said title is further amended by revising Code Section 11-9-330, relating to priority of2373
2673	2673		purchaser of chattel paper or instrument, as follows:2374
2674	2674		"11-9-330.Priority of purchaser of chattel paper or instrument.2375
2675	2675		(a) Purchaser's priority; security interest claimed merely as proceeds. A purchaser2376
2676	2676		of chattel paper has priority over a security interest in the chattel paper which is claimed2377
2677	2677		merely as proceeds of inventory subject to a security interest if:2378
2678	2678		(1) In good faith and in the ordinary course of the purchaser's business, the purchaser2379
2679	2679		gives new value, and takes possession of each authoritative tangible copy of the record2380
2680	2680		evidencing the chattel paper, or and obtains control of under Code Section 11-9-105 of2381
2681	2681		each authoritative electronic copy of the record evidencing the chattel paper under Code2382
2682	2682		Section 11-9-105; and2383
2683	2683		(2) The chattel paper does authoritative copies of the record evidencing the chattel paper2384
2684	2684		do not indicate that it the chattel paper has been assigned to an identified assignee other2385
2685	2685		than the purchaser.2386
2686	2686		(b) Purchaser's priority; other security interests. A purchaser of chattel paper has2387
2687	2687		priority over a security interest in the chattel paper which is claimed other than merely as2388
2688	2688		proceeds of inventory subject to a security interest if the purchaser gives new value, and2389
2689	2689		takes possession of each authoritative tangible copy of the record evidencing the chattel2390
2690	2690		paper, or and obtains control of under Code Section 11-9-105 of each authoritative2391
2691		-	H. B. 1240
2692		-	- 95 - 24 LC 48 1222S~~/AP~~
	2691	+	H. B. 1240 (SUB)
	2692	+	- 95 - 24 LC 48 1222S
2693	2693		electronic copy of the record evidencing the chattel paper under Code Section 11-9-105 in2392
2694	2694		good faith, in the ordinary course of the purchaser's business, and without knowledge that2393
2695	2695		the purchase violates the rights of the secured party.2394
2696	2696		(c) Chattel paper purchaser's priority in proceeds. Except as otherwise provided in2395
2697	2697		Code Section 11-9-327, a purchaser having priority in chattel paper under subsection (a)2396
2698	2698		or (b) of this Code section also has priority in proceeds of the chattel paper to the extent2397
2699	2699		that:2398
2700	2700		(1) Code Section 11-9-322 provides for priority in the proceeds; or2399
2701	2701		(2) The proceeds consist of the specific goods covered by the chattel paper or cash2400
2702	2702		proceeds of the specific goods, even if the purchaser's security interest in the proceeds is2401
2703	2703		unperfected.2402
2704	2704		(d) Instrument purchaser's priority. Except as otherwise provided in subsection (a) of2403
2705	2705		Code Section 11-9-331, a purchaser of an instrument has priority over a security interest2404
2706	2706		in the instrument perfected by a method other than possession if the purchaser gives value2405
2707	2707		and takes possession of the instrument in good faith and without knowledge that the2406
2708	2708		purchase violates the rights of the secured party.2407
2709	2709		(e) Holder of purchase money security interest gives new value. For purposes of2408
2710	2710		subsections (a) and (b) of this Code section, the holder of a purchase money security2409
2711	2711		interest in inventory gives new value for chattel paper constituting proceeds of the2410
2712	2712		inventory.2411
2713	2713		(f) Indication of assignment gives knowledge. For purposes of subsections (b) and (d)2412
2714	2714		of this Code section, if the authoritative copies of the record evidencing chattel paper or an2413
2715	2715		instrument indicates indicate that it the chattel paper or instrument has been assigned to an2414
2716	2716		identified secured party other than the purchaser, a purchaser of the chattel paper or2415
2717	2717		instrument has knowledge that the purchase violates the rights of the secured party."2416
2718		-	H. B. 1240
2719		-	- 96 - 24 LC 48 1222S~~/AP~~
	2718	+	H. B. 1240 (SUB)
	2719	+	- 96 - 24 LC 48 1222S
2720	2720		SECTION 5-66.
2721	2721		2417
2722	2722		Said title is further amended by revising Code Section 11-9-331, relating to priority of rights2418
2723	2723		of purchasers of instruments, documents, and securities under other articles, and priority of2419
2724	2724		interests in financial assets and security entitlements under Article 8 of this title, as follows:2420
2725	2725		"11-9-331.Priority of rights of purchasers of instruments,
2726	2726		controllable accounts,2421
2727	2727		controllable electronic records, controllable payment intangibles,2422
2728	2728		documents, instruments, and securities under other articles; priority of2423
2729	2729		interests in financial assets and security entitlements and protection2424
2730	2730		against assertion of claim under Article Articles 8 and 12 of this title.2425
2731	2731		(a) Rights under Articles 3, 7, and 8, and 12 of this title not limited. This article does2426
2732	2732		not limit the rights of a holder in due course of a negotiable instrument, a holder to which2427
2733	2733		a negotiable document of title has been duly negotiated, or a protected purchaser of a2428
2734	2734		security, or a qualifying purchaser of a controllable account, controllable electronic record,2429
2735	2735		or controllable payment intangible. These holders or purchasers take priority over an2430
2736	2736		earlier security interest, even if perfected, to the extent provided in Articles 3, 7, and 8, and2431
2737	2737		12 of this title.2432
2738	2738		(b) Protection under Article Articles 8 and 12 of this title. This article does not limit2433
2739	2739		the rights of or impose liability on a person to the extent that the person is protected against2434
2740	2740		the assertion of a claim under Article 8 or 12 of this title.2435
2741	2741		(c) Filing not notice. Filing under this article does not constitute notice of a claim or2436
2742	2742		defense to the holders or purchasers or persons described in subsections (a) and (b) of this2437
2743	2743		Code section."2438
2744	2744		SECTION 5-67.2439
2745	2745		Said title is further amended by revising Code Section 11-9-332, relating to transfers of2440
2746	2746		money and transfers of funds from deposit account, as follows:2441
2747		-	H. B. 1240
2748		-	- 97 - 24 LC 48 1222S~~/AP~~
	2747	+	H. B. 1240 (SUB)
	2748	+	- 97 - 24 LC 48 1222S
2749	2749		"11-9-332.Transfer of money; transfer of funds from deposit account.
2750	2750		2442
2751	2751		(a) Transferee of tangible
2752	2752		money. A transferee of tangible money takes the money free2443
2753	2753		of a security interest unless the transferee acts if the transferee receives possession of the2444
2754	2754		money without acting in collusion with the debtor in violating the rights of the secured2445
2755	2755		party.2446
2756	2756		(b) Transferee of funds from deposit account. A transferee of funds from a deposit2447
2757	2757		account takes the funds free of a security interest in the deposit account unless the2448
2758	2758		transferee acts if the transferee receives the funds without acting in collusion with the2449
2759	2759		debtor in violating the rights of the secured party.2450
2760	2760		(c) Transferee of electronic money. A transferee of electronic money takes the money2451
2761	2761		free of a security interest if the transferee obtains control of the money without acting in2452
2762	2762		collusion with the debtor in violating the rights of the secured party."2453
2763	2763		SECTION 5-68.2454
2764	2764		Said title is further amended by revising Code Section 11-9-406, relating to discharges of2455
2765	2765		account debtors, notifications of assignment, identification and proof of assignment, and2456
2766	2766		restrictions on assignment of accounts, chattel paper, payment intangibles, and promissory2457
2767	2767		notes ineffective, as follows:2458
2768	2768		"11-9-406.Discharge of account debtor; notification of assignment; identification and2459
2769	2769		proof of assignment; restrictions on assignment of accounts, chattel paper,2460
2770	2770		payment intangibles, and promissory notes ineffective.2461
2771	2771		(a) Discharge of account debtor; effect of notification. Subject to subsections (b)2462
2772	2772		through (i) and (j) of this Code section, an account debtor on an account, chattel paper, or2463
2773	2773		a payment intangible may discharge its obligation by paying the assignor until, but not2464
2774	2774		after, the account debtor receives a notification, authenticated signed by the assignor or the2465
2775	2775		assignee, that the amount due or to become due has been assigned and that payment is to2466
2776	2776		be made to the assignee. After receipt of the notification, the account debtor may discharge2467
2777		-	H. B. 1240
2778		-	- 98 - 24 LC 48 1222S~~/AP~~
	2777	+	H. B. 1240 (SUB)
	2778	+	- 98 - 24 LC 48 1222S
2779	2779		its obligation by paying the assignee and may not discharge the obligation by paying the
2780	2780		2468
2781	2781		assignor.2469
2782	2782		(b) When notification ineffective. Subject to subsection
2783	2783		subsections (h) and (j) of this2470
2784	2784		Code section, notification is ineffective under subsection (a) of this Code section:2471
2785	2785		(1) If it does not reasonably identify the rights assigned;2472
2786	2786		(2) To the extent that an agreement between an account debtor and a seller of a payment2473
2787	2787		intangible limits the account debtor's duty to pay a person other than the seller and the2474
2788	2788		limitation is effective under law other than this article; or2475
2789	2789		(3) At the option of an account debtor, if the notification notifies the account debtor to2476
2790	2790		make less than the full amount of any installment or other periodic payment to the2477
2791	2791		assignee, even if:2478
2792	2792		(A) Only a portion of the account, chattel paper, or payment intangible has been2479
2793	2793		assigned to that assignee;2480
2794	2794		(B) A portion has been assigned to another assignee; or2481
2795	2795		(C) The account debtor knows that the assignment to that assignee is limited.2482
2796	2796		(c) Proof of assignment. Subject to subsection subsections (h) and (j) of this Code2483
2797	2797		section, if requested by the account debtor, an assignee shall seasonably furnish reasonable2484
2798	2798		proof that the assignment has been made. Unless the assignee complies, the account debtor2485
2799	2799		may discharge its obligation by paying the assignor, even if the account debtor has received2486
2800	2800		a notification under subsection (a) of this Code section.2487
2801	2801		(d) Term restricting assignment generally ineffective. In this subsection, the term2488
2802	2802		'promissory note' includes a negotiable instrument that evidences chattel paper. Except as2489
2803	2803		otherwise provided in subsection (e) of this Code section and Code Sections 11-2A-303,2490
2804	2804		11-9-407, and 53-12-80 through 53-12-83 and subject to subsection (h) of this Code2491
2805	2805		section, a term in an agreement between an account debtor and an assignor or in a2492
2806	2806		promissory note shall be is ineffective to the extent that it:2493
2807		-	H. B. 1240
2808		-	- 99 - 24 LC 48 1222S~~/AP~~
	2807	+	H. B. 1240 (SUB)
	2808	+	- 99 - 24 LC 48 1222S
2809	2809		(1) Prohibits, restricts, or requires the consent of the account debtor or person obligated
2810	2810		2494
2811	2811		on the promissory note to the assignment or transfer of, or the creation, attachment,2495
2812	2812		perfection, or enforcement of a security interest in, the account, chattel paper, payment2496
2813	2813		intangible, or promissory note; or2497
2814	2814		(2) Provides that the assignment, transfer, creation, attachment, perfection, or2498
2815	2815		enforcement of the security interest may give rise to a default, breach, right of2499
2816	2816		recoupment, claim, defense, termination, right of termination, or remedy under the2500
2817	2817		account, chattel paper, payment intangible, or promissory note.2501
2818	2818		(e) Inapplicability of subsection (d) of this Code section to certain sales. 2502
2819	2819		Subsection (d) of this Code section does not apply to the sale of a payment intangible or2503
2820	2820		promissory note, other than a sale pursuant to a disposition under Code Section 11-9-6102504
2821	2821		or an acceptance of collateral under Code Section 11-9-620.2505
2822	2822		(f) Legal restrictions on assignment generally ineffective. Except as otherwise provided2506
2823	2823		in Code Sections 11-2A-303 and 11-9-407 and subject to subsections (h) and (i) of this2507
2824	2824		Code section, a rule of law, statute, or regulation that prohibits, restricts, or requires the2508
2825	2825		consent of a government, governmental body or official, or account debtor to the2509
2826	2826		assignment or transfer of, or creation of a security interest in, an account or chattel paper2510
2827	2827		is ineffective to the extent that the rule of law, statute, or regulation:2511
2828	2828		(1) Prohibits, restricts, or requires the consent of the government, governmental body or2512
2829	2829		official, or account debtor to the assignment or transfer of, or the creation, attachment,2513
2830	2830		perfection, or enforcement of a security interest, in the account or chattel paper; or2514
2831	2831		(2) Provides that the assignment, transfer, creation, attachment, perfection, or2515
2832	2832		enforcement of the security interest may give rise to a default, breach, right of2516
2833	2833		recoupment, claim, defense, termination, right of termination, or remedy under the2517
2834	2834		account or chattel paper.2518
2835		-	H. B. 1240
2836		-	- 100 - 24 LC 48 1222S~~/AP~~
	2835	+	H. B. 1240 (SUB)
	2836	+	- 100 - 24 LC 48 1222S
2837	2837		(g) Paragraph (3) of subsection (b) not waivable. Subject to subsection subsections (h)2519
2838	2838		and (j) of this Code section, an account debtor may not waive or vary its option under2520
2839	2839		paragraph (3) of subsection (b) of this Code section.2521
2840	2840		(h) Rule for individual under other law. This Code section is subject to law other than2522
2841	2841		this article which establishes a different rule for an account debtor who is an individual and2523
2842	2842		who incurred the obligation primarily for personal, family, or household purposes.2524
2843	2843		(i) Inapplicability to health care insurance receivable. This Code section does not2525
2844	2844		apply to an assignment of a health care insurance receivable.2526
2845	2845		(j) Inapplicability of certain subsections. Subsections (a), (b), (c), and (g) of this Code2527
2846	2846		section do not apply to a controllable account or controllable payment intangible."2528
2847	2847		SECTION 5-69.2529
2848	2848		Said title is further amended in Code Section 11-9-408, relating to restrictions on assignment2530
2849	2849		of promissory notes, health care insurance receivables, and certain general intangibles2531
2850	2850		ineffective, by adding a new subsection to read as follows:2532
2851	2851		"(e) 'Promissory note.' In this Code section, the term 'promissory note' includes a2533
2852	2852		negotiable instrument that evidences chattel paper."2534
2853	2853		SECTION 5-70.2535
2854	2854		Said title is further amended in Code Section 11-9-601, relating to rights after default,2536
2855	2855		judicial enforcement and consignors or buyers of accounts, chattel paper, payment2537
2856	2856		intangibles, or promissory notes, by revising subsection (b) as follows:2538
2857	2857		"(b) Rights and duties of secured party in possession or control. A secured party in2539
2858	2858		possession of collateral or control of collateral under Code Section 11-7-106, 11-9-104,2540
2859	2859		11-9-105, 11-9-105A, 11-9-106, or 11-9-107, or 11-9-107A has the rights and duties2541
2860	2860		provided in Code Section 11-9-207."2542
2861		-	H. B. 1240
2862		-	- 101 - 24 LC 48 1222S~~/AP~~
	2861	+	H. B. 1240 (SUB)
	2862	+	- 101 - 24 LC 48 1222S
2863	2863		SECTION 5-71.
2864	2864		2543
2865	2865		Said title is further amended by revising Code Section 11-9-605, relating to unknown debtors2544
2866	2866		or secondary obligors, as follows:2545
2867	2867		"11-9-605.Unknown debtor or secondary obligor.2546
2868	2868		(a) In general: no duty owed by secured party. Except as provided in subsection (b) of
2869	2869		2547
2870	2870		this Code section, a A secured party does not owe a duty based on its status as secured2548
2871	2871		party:2549
2872	2872		(1) To a person that is a debtor or obligor, unless the secured party knows:2550
2873	2873		(A) That the person is a debtor or obligor;2551
2874	2874		(B) The identity of the person; and2552
2875	2875		(C) How to communicate with the person; or2553
2876	2876		(2) To a secured party or lienholder that has filed a financing statement against a person,2554
2877	2877		unless the secured party knows:2555
2878	2878		(A) That the person is a debtor; and2556
2879	2879		(B) The identity of the person.2557
2880	2880		(b) Exception: secured party owes duty to debtor or obligor. A secured party owes a2558
2881	2881		duty based on its status as a secured party to a person if, at the time the secured party2559
2882	2882		obtains control of collateral that is a controllable account, controllable electronic record,2560
2883	2883		or controllable payment intangible or at the time the security interest attaches to the2561
2884	2884		collateral, whichever is later:2562
2885	2885		(1) The person is a debtor or obligor; and2563
2886	2886		(2) The secured party knows that the information in subparagraphs (a)(1)(A), (a)(1)(B),2564
2887	2887		or (a)(1)(C) of this Code section relating to the person is not provided by the collateral,2565
2888	2888		a record attached to or logically associated with the collateral, or the system in which the2566
2889	2889		collateral is recorded."2567
2890		-	H. B. 1240
2891		-	- 102 - 24 LC 48 1222S~~/AP~~
	2890	+	H. B. 1240 (SUB)
	2891	+	- 102 - 24 LC 48 1222S
2892	2892		SECTION 5-72.
2893	2893		2568
2894	2894		Said title is further amended by revising Code Section 11-9-613, relating to consents and the2569
2895	2895		form of notification before disposition of collateral, as follows:2570
2896	2896		"11-9-613.Contents and form of notification before disposition of collateral; general.2571
2897	2897		(a) Contents and form of notification.
2898	2898		Except in a consumer goods transaction, the2572
2899	2899		following rules apply:2573
2900	2900		(1) The contents of a notification of disposition are sufficient if the notification:2574
2901	2901		(A) Describes the debtor and the secured party;2575
2902	2902		(B) Describes the collateral that is the subject of the intended disposition;2576
2903	2903		(C) States the method of intended disposition;2577
2904	2904		(D) States that the debtor is entitled to an accounting of the unpaid indebtedness and2578
2905	2905		states the charge, if any, for an accounting; and2579
2906	2906		(E) States the time and place of a public disposition or the time after which any other2580
2907	2907		disposition is to be made;2581
2908	2908		(2) Whether the contents of a notification that lacks any of the information specified in2582
2909	2909		paragraph (1) of this Code section subsection are nevertheless sufficient is a question of2583
2910	2910		fact;2584
2911	2911		(3) The contents of a notification providing substantially the information specified in2585
2912	2912		paragraph (1) of this Code section subsection are sufficient, even if the notification2586
2913	2913		includes:2587
2914	2914		(A) Information not specified by that paragraph; or2588
2915	2915		(B) Minor errors that are not seriously misleading;2589
2916	2916		(4) A particular phrasing of the notification is not required; and2590
2917	2917		(5) The following form of notification and the form appearing in paragraph (3) of2591
2918	2918		subsection (a) of Code Section 11-9-614, when completed in accordance with the2592
2919	2919		instructions in subsection (b) of this Code section and subsection (b) of Code2593
2920	2920		Section 11-9-614, each provides sufficient information:2594
2921		-	H. B. 1240
2922		-	- 103 - 24 LC 48 1222S~~/AP~~
	2921	+	H. B. 1240 (SUB)
	2922	+	- 103 - 24 LC 48 1222S
2923	2923		NOTIFICATION OF DISPOSITION OF COLLATERAL2595
2924	2924		To: (Name of debtor, obligor, or other person to which the notification is sent)2596
2925	2925		From: (Name, address, and telephone number of secured party)2597
2926	2926		Name of Debtor(s): (Include only if debtor(s) is (are) not an addressee)2598
2927	2927		(For a public disposition:)2599
2928	2928		We will sell (or lease or license, as applicable) the (describe collateral) to the highest2600
2929	2929		qualified bidder in public as follows:2601
2930	2930		Day and date: _______________________2602
2931	2931		Time: _______________________2603
2932	2932		Place: _______________________2604
2933	2933		(For a private disposition:)2605
2934	2934		We will sell (or lease or license, as applicable) the (describe collateral) privately2606
2935	2935		sometime after (day and date).2607
2936	2936		You are entitled to an accounting of the unpaid indebtedness secured by the property2608
2937	2937		that we intend to sell (or lease or license, as applicable) (for a charge of2609
2938	2938		$__________). You may request an accounting by calling us at (telephone number).2610
2939	2939		'NOTIFICATION OF DISPOSITION OF COLLATERAL2611
2940	2940		To: (Name of debtor, obligor, or other person to which the notification is sent)2612
2941	2941		From: (Name, address, and telephone number of secured party)2613
2942	2942		{1} Name of any debtor that is not an addressee: (Name of each debtor)2614
2943	2943		{2} We will sell (describe collateral) (to the highest qualified bidder) at public sale. A2615
2944	2944		sale could include a lease or license. The sale will be held as follows:2616
2945	2945		___________(Date)2617
2946	2946		___________(Time)2618
2947		-	H. B. 1240
2948		-	- 104 - 24 LC 48 1222S~~/AP~~
	2947	+	H. B. 1240 (SUB)
	2948	+	- 104 - 24 LC 48 1222S
2949	2949		___________(Place)2619
2950	2950		{3} We will sell (describe collateral) at private sale sometime after (date). A sale could2620
2951	2951		include a lease or license.2621
2952	2952		{4} You are entitled to an accounting of the unpaid indebtedness secured by the property2622
2953	2953		that we intend to sell or, as applicable, lease or license.2623
2954	2954		{5} If you request an accounting you must pay a charge of $ (amount).2624
2955	2955		{6} You may request an accounting by calling us at (telephone number).'2625
2956	2956		(b) Instructions for form of notification. The following instructions apply to the form2626
2957	2957		of notification in paragraph (5) of subsection (a) of this Code section:2627
2958	2958		(1) The instructions in this subsection refer to the numbers in braces before items in the2628
2959	2959		form of notification in paragraph (5) of subsection (a) of this Code section. Do not2629
2960	2960		include the numbers or braces in the notification. The numbers and braces are used only2630
2961	2961		for the purpose of these instructions;2631
2962	2962		(2) Include and complete item {1} only if there is a debtor that is not an addressee of the2632
2963	2963		notification and list the name or names;2633
2964	2964		(3) Include and complete either item {2}, if the notification relates to a public disposition2634
2965	2965		of the collateral, or item {3}, if the notification relates to a private disposition of the2635
2966	2966		collateral. If item {2} is included, include the words 'to the highest qualified bidder' only2636
2967	2967		if applicable;2637
2968	2968		(4) Include and complete items {4} and {6}; and2638
2969	2969		(5) Include and complete item {5} only if the sender will charge the recipient for an2639
2970	2970		accounting."2640
2971	2971		SECTION 5-73.2641
2972	2972		Said title is further amended by revising Code Section 11-9-614, relating to contents and the2642
2973	2973		form of notification before disposition of collateral in a consumer goods transaction, as2643
2974	2974		follows:2644
2975		-	H. B. 1240
2976		-	- 105 - 24 LC 48 1222S~~/AP~~
	2975	+	H. B. 1240 (SUB)
	2976	+	- 105 - 24 LC 48 1222S
2977	2977		"11-9-614.Contents and form of notification before disposition of collateral;
2978	2978		2645
2979	2979		consumer goods transaction.2646
2980	2980		(a) Contents and form of notification.
2981	2981		In a consumer goods transaction, the following2647
2982	2982		rules apply:2648
2983	2983		(1) A notification of disposition must provide the following information:2649
2984	2984		(A) The information specified in paragraph (1) of subsection (a) of Code Section2650
2985	2985		11-9-613;2651
2986	2986		(B) A description of any liability for a deficiency of the person to which the2652
2987	2987		notification is sent;2653
2988	2988		(C) A telephone number from which the amount that must be paid to the secured party2654
2989	2989		to redeem the collateral under Code Section 11-9-623 is available; and2655
2990	2990		(D) A telephone number or mailing address from which additional information2656
2991	2991		concerning the disposition and the obligation secured is available;2657
2992	2992		(2) A particular phrasing of the notification is not required;2658
2993	2993		(3) The following form of notification, when completed in accordance with the2659
2994	2994		instructions in subsection (b) of this Code section, provides sufficient information:2660
2995	2995		(Name and address of secured party)2661
2996	2996		(Date) 2662
2997	2997		NOTICE OF OUR PLAN TO SELL PROPERTY2663
2998	2998		(Name and address of any obligor who is also a debtor)2664
2999	2999		Subject: (Identification of transaction)2665
3000	3000		We have your (describe collateral), because you broke promises in our agreement.2666
3001	3001		(For a public disposition:)2667
3002	3002		We will sell (describe collateral) at public sale. A sale could include a lease or license. 2668
3003	3003		The sale will be held as follows:2669
3004		-	H. B. 1240
3005		-	- 106 - 24 LC 48 1222S~~/AP~~
	3004	+	H. B. 1240 (SUB)
	3005	+	- 106 - 24 LC 48 1222S
3006	3006		Date: _______________________2670
3007	3007		Time: _______________________2671
3008	3008		Place: _______________________2672
3009	3009		You may attend the sale and bring bidders if you want.2673
3010	3010		(For a private disposition:)2674
3011	3011		We will sell (describe collateral) at private sale sometime after (date). A sale could2675
3012	3012		include a lease or license.2676
3013	3013		The money that we get from the sale (after paying our costs) will reduce the amount2677
3014	3014		you owe. If we get less money than you owe, you (will or will not, as applicable) still2678
3015	3015		owe us the difference. If we get more money than you owe, you will get the extra2679
3016	3016		money, unless we must pay it to someone else.2680
3017	3017		You can get the property back at any time before we sell it by paying us the full amount2681
3018	3018		you owe (not just the past due payments), including our expenses. To learn the exact2682
3019	3019		amount you must pay, call us at (telephone number).2683
3020	3020		If you want us to explain to you in writing how we have figured the amount that you2684
3021	3021		owe us, you may call us at (telephone number) or write us at (secured party's address)2685
3022	3022		and request a written explanation. (We will charge you $__________ for the2686
3023	3023		explanation if we sent you another written explanation of the amount you owe us within2687
3024	3024		the last six months.)2688
3025	3025		If you need more information about the sale call us at (telephone number) or write us2689
3026	3026		at (secured party's address).2690
3027	3027		We are sending this notice to the following other people who have an interest in2691
3028	3028		(describe collateral) or who owe money under your agreement:2692
3029	3029		(Names of all other debtors and obligors, if any);2693
3030		-	H. B. 1240
3031		-	- 107 - 24 LC 48 1222S~~/AP~~
	3030	+	H. B. 1240 (SUB)
	3031	+	- 107 - 24 LC 48 1222S
3032	3032		'(Name and address of secured party) (Date)2694
3033	3033		NOTICE OF OUR PLAN TO SELL PROPERTY2695
3034	3034		(Name and address of any obligor who is also a debtor)2696
3035	3035		Subject: (Identify transaction)2697
3036	3036		We have your (describe collateral), because you broke promises in our agreement.2698
3037	3037		{1} We will sell (describe collateral) at public sale. A sale could include a lease or2699
3038	3038		license. The sale will be held as follows:2700
3039	3039		___________(Date)2701
3040	3040		___________(Time)2702
3041	3041		___________(Place)2703
3042	3042		You may attend the sale and bring bidders if you want.2704
3043	3043		{2} We will sell (describe collateral) at private sale sometime after (date). A sale could2705
3044	3044		include a lease or license.2706
3045	3045		{3} The money that we get from the sale, after paying our costs, will reduce the amount2707
3046	3046		you owe. If we get less money than you owe, you (will or will not, as applicable) still2708
3047	3047		owe us the difference. If we get more money than you owe, you will get the extra money,2709
3048	3048		unless we must pay it to someone else.2710
3049	3049		{4} You can get the property back at any time before we sell it by paying us the full2711
3050	3050		amount you owe, not just the past due payments, including our expenses. To learn the2712
3051	3051		exact amount you must pay, call us at (telephone number).2713
3052	3052		{5} If you want us to explain to you in (writing) (writing or in (description of electronic2714
3053	3053		record)) (description of electronic record) how we have figured the amount that you owe2715
3054	3054		us, {6} call us at (telephone number) (or) (write us at (secured party's address)) (or2716
3055	3055		contact us by (description of electronic communication method)) {7} and request (a2717
3056		-	H. B. 1240
3057		-	- 108 - 24 LC 48 1222S~~/AP~~
	3056	+	H. B. 1240 (SUB)
	3057	+	- 108 - 24 LC 48 1222S
3058	3058		written explanation) (a written explanation or an explanation in (description of electronic2718
3059	3059		record)) (an explanation in (description of electronic record)).2719
3060	3060		{8} We will charge you $(amount) for the explanation if we sent you another written2720
3061	3061		explanation of the amount you owe us within the last six months.2721
3062	3062		{9} If you need more information about the sale (call us at (telephone number)) (or)2722
3063	3063		(write us at (secured party's address)) (or contact us by (description of electronic2723
3064	3064		communication method)).2724
3065	3065		{10} We are sending this notice to the following other people who have an interest in2725
3066	3066		(describe collateral) or who owe money under your agreement:2726
3067	3067		(Names of all other debtors and obligors, if any)'2727
3068	3068		(4) A notification in the form of paragraph (3) of this Code section subsection is2728
3069	3069		sufficient, even if additional information appears at the end of the form;2729
3070	3070		(5) A notification in the form of paragraph (3) of this Code section subsection is2730
3071	3071		sufficient, even if it includes errors in information not required by paragraph (1) of this2731
3072	3072		Code section subsection, unless the error is misleading with respect to rights arising under2732
3073	3073		this article; and2733
3074	3074		(6) If a notification under this Code section is not in the form of paragraph (3) of this2734
3075	3075		Code section subsection, law other than this article determines the effect of including2735
3076	3076		information not required by paragraph (1) of this Code section subsection.2736
3077	3077		(b) Instructions for form of notification. The following instructions apply to the form2737
3078	3078		of notification in paragraph (3) of subsection (a) of this Code section:2738
3079	3079		(1) The instructions in this subsection refer to the numbers in braces before items in the2739
3080	3080		form of notification in paragraph (3) of subsection (a) of this Code section. Do not2740
3081	3081		include the numbers or braces in the notification. The numbers and braces are used only2741
3082	3082		for the purpose of these instructions;2742
3083		-	H. B. 1240
3084		-	- 109 - 24 LC 48 1222S~~/AP~~
	3083	+	H. B. 1240 (SUB)
	3084	+	- 109 - 24 LC 48 1222S
3085	3085		(2) Include and complete either item {1}, if the notification relates to a public disposition2743
3086	3086		of the collateral, or item {2}, if the notification relates to a private disposition of the2744
3087	3087		collateral;2745
3088	3088		(3) Include and complete items {3}, {4}, {5}, {6}, and {7};2746
3089	3089		(4) In item {5}, include and complete any one of the three alternative methods for the2747
3090	3090		explanation — writing, writing or electronic record, or electronic record;2748
3091	3091		(5) In item {6}, include the telephone number. In addition, the sender may include and2749
3092	3092		complete either or both of the two additional alternative methods of communication —2750
3093	3093		writing or electronic communication — for the recipient of the notification to2751
3094	3094		communicate with the sender. Neither of the two additional methods of communication2752
3095	3095		is required to be included;2753
3096	3096		(6) In item {7}, include and complete the method or methods for the explanation —2754
3097	3097		writing, writing or electronic record, or electronic record — included in item {5};2755
3098	3098		(7) Include and complete item {8} only if a written explanation is included in item {5}2756
3099	3099		as a method for communicating the explanation and the sender will charge the recipient2757
3100	3100		for another written explanation;2758
3101	3101		(8) In item {9}, include either the telephone number or the address or both the telephone2759
3102	3102		number and the address. In addition, the sender may include and complete the additional2760
3103	3103		method of communication — electronic communication — for the recipient of the2761
3104	3104		notification to communicate with the sender. The additional method of electronic2762
3105	3105		communication is not required to be included; and2763
3106	3106		(9) If item {10} does not apply, insert 'None' after 'agreement:'."2764
3107	3107		SECTION 5-74.2765
3108	3108		Said title is further amended by revising Code Section 11-9-616, relating to explanations of2766
3109	3109		calculation of surplus or deficiency, as follows:2767
3110		-	H. B. 1240
3111		-	- 110 - 24 LC 48 1222S~~/AP~~
	3110	+	H. B. 1240 (SUB)
	3111	+	- 110 - 24 LC 48 1222S
3112	3112		"11-9-616.Explanation of calculation of surplus or deficiency.
3113	3113		2768
3114	3114		(a) Definitions. As used in this Code section, the term:2769
3115	3115		(1) 'Explanation' means a writing
3116	3116		record that:2770
3117	3117		(A) States the amount of the surplus or deficiency;2771
3118	3118		(B) Provides an explanation in accordance with subsection (c) of this Code section of2772
3119	3119		how the secured party calculated the surplus or deficiency;2773
3120	3120		(C) States, if applicable, that future debits, credits, charges, including additional credit2774
3121	3121		service charges or interest, rebates, and expenses may affect the amount of the surplus2775
3122	3122		or deficiency; and2776
3123	3123		(D) Provides a telephone number or mailing address from which additional information2777
3124	3124		concerning the transaction is available.2778
3125	3125		(2) 'Request' means a record:2779
3126	3126		(A) Signed Authenticated by a debtor or consumer obligor;2780
3127	3127		(B) Requesting that the recipient provide an explanation; and2781
3128	3128		(C) Sent after disposition of the collateral under Code Section 11-9-610.2782
3129	3129		(b) Explanation of calculation. In a consumer goods transaction in which the debtor is2783
3130	3130		entitled to a surplus or a consumer obligor is liable for a deficiency under Code Section2784
3131	3131		11-9-615, the secured party shall:2785
3132	3132		(1) Send an explanation to the debtor or consumer obligor, as applicable, after the2786
3133	3133		disposition and:2787
3134	3134		(A) Before or when the secured party accounts to the debtor and pays any surplus or2788
3135	3135		first makes written demand in a record on the consumer obligor after the disposition for2789
3136	3136		payment of the deficiency; and2790
3137	3137		(B) Within 14 days after receipt of a request; or2791
3138	3138		(2) In the case of a consumer obligor who is liable for a deficiency, within 14 days after2792
3139	3139		receipt of a request, send to the consumer obligor a record waiving the secured party's2793
3140	3140		right to a deficiency.2794
3141		-	H. B. 1240
3142		-	- 111 - 24 LC 48 1222S~~/AP~~
	3141	+	H. B. 1240 (SUB)
	3142	+	- 111 - 24 LC 48 1222S
3143	3143		(c) Required information. To comply with subparagraph (a)(1)(B) of this Code section,
3144	3144		2795
3145	3145		a writing
3146	3146		an explanation must provide the following information in the following order:2796
3147	3147		(1) The aggregate amount of obligations secured by the security interest under which the2797
3148	3148		disposition was made, and, if the amount reflects a rebate of unearned interest or credit2798
3149	3149		service charge, an indication of that fact, calculated as of a specified date:2799
3150	3150		(A) If the secured party takes or receives possession of the collateral after default, not2800
3151	3151		more than 35 days before the secured party takes or receives possession; or2801
3152	3152		(B) If the secured party takes or receives possession of the collateral before default or2802
3153	3153		does not take possession of the collateral, not more than 35 days before the disposition;2803
3154	3154		(2) The amount of proceeds of the disposition;2804
3155	3155		(3) The aggregate amount of the obligations after deducting the amount of proceeds;2805
3156	3156		(4) The amount, in the aggregate or by type, and types of expenses, including expenses2806
3157	3157		of retaking, holding, preparing for disposition, processing, and disposing of the collateral,2807
3158	3158		and attorney's fees secured by the collateral which are known to the secured party and2808
3159	3159		relate to the current disposition;2809
3160	3160		(5) The amount, in the aggregate or by type, and types of credits, including rebates of2810
3161	3161		interest or credit service charges, to which the obligor is known to be entitled and which2811
3162	3162		are not reflected in the amount in paragraph (1) of this subsection; and2812
3163	3163		(6) The amount of the surplus or deficiency.2813
3164	3164		(d) Substantial compliance. A particular phrasing of the explanation is not required. An2814
3165	3165		explanation complying substantially with the requirements of subsection (a) of this Code2815
3166	3166		section is sufficient, even if it includes minor errors that are not seriously misleading.2816
3167	3167		(e) Charges for responses. A debtor or consumer obligor is entitled without charge to2817
3168	3168		one response to a request under this Code section during any six-month period in which the2818
3169	3169		secured party did not send to the debtor or consumer obligor an explanation pursuant to2819
3170	3170		paragraph (1) of subsection (b) of this Code section. The secured party may require2820
3171	3171		payment of a charge not exceeding $10.00 for each additional response."2821
3172		-	H. B. 1240
3173		-	- 112 - 24 LC 48 1222S~~/AP~~
	3172	+	H. B. 1240 (SUB)
	3173	+	- 112 - 24 LC 48 1222S
3174	3174		SECTION 5-75.
3175	3175		2822
3176	3176		Said title is further amended by revising Code Section 11-9-628, relating to nonliability and2823
3177	3177		limitation on liability of secured parties and liability of secondary obligors, as follows:2824
3178	3178		"11-9-628.Nonliability and limitation on liability of secured party; liability of2825
3179	3179		secondary obligor.2826
3180	3180		(a) Limitation of liability of secured party for noncompliance with article. Subject to
3181	3181		2827
3182	3182		subsection (f) of this Code section, unless Unless a secured party knows that a person is a2828
3183	3183		debtor or obligor, knows the identity of the person, and knows how to communicate with2829
3184	3184		the person:2830
3185	3185		(1) The secured party is not liable to the person, or to a secured party or lienholder that2831
3186	3186		has filed a financing statement against the person, for failure to comply with this article;2832
3187	3187		and2833
3188	3188		(2) The secured party's failure to comply with this article does not affect the liability of2834
3189	3189		the person for a deficiency.2835
3190	3190		(b) Limitation of liability based on status as secured party. Subject to subsection (f)2836
3191	3191		of this Code section, a A secured party is not liable because of its status as secured party:2837
3192	3192		(1) To a person that is a debtor or obligor, unless the secured party knows:2838
3193	3193		(A) That the person is a debtor or obligor;2839
3194	3194		(B) The identity of the person; and2840
3195	3195		(C) How to communicate with the person; or2841
3196	3196		(2) To a secured party or lienholder that has filed a financing statement against a person,2842
3197	3197		unless the secured party knows:2843
3198	3198		(A) That the person is a debtor; and2844
3199	3199		(B) The identity of the person.2845
3200	3200		(c) Limitation of liability if reasonable belief that transaction not a consumer goods2846
3201	3201		transaction or consumer transaction. A secured party is not liable to any person, and a2847
3202	3202		person's liability for a deficiency is not affected, because of any act or omission arising out2848
3203		-	H. B. 1240
3204		-	- 113 - 24 LC 48 1222S~~/AP~~
	3203	+	H. B. 1240 (SUB)
	3204	+	- 113 - 24 LC 48 1222S
3205	3205		of the secured party's reasonable belief that a transaction is not a consumer goods
3206	3206		2849
3207	3207		transaction or a consumer transaction or that goods are not consumer goods, if the secured2850
3208	3208		party's belief is based on its reasonable reliance on:2851
3209	3209		(1) A debtor's representation concerning the purpose for which collateral was to be used,2852
3210	3210		acquired, or held; or2853
3211	3211		(2) An obligor's representation concerning the purpose for which a secured obligation2854
3212	3212		was incurred.2855
3213	3213		(d) Limitation of liability for statutory damages. A secured party is not liable to any2856
3214	3214		person under paragraph (2) of subsection (c) of Code Section 11-9-625 for its failure to2857
3215	3215		comply with Code Section 11-9-616.2858
3216	3216		(e) Limitation of multiple liability for statutory damages. A secured party is not liable2859
3217	3217		under paragraph (2) of subsection (c) of Code Section 11-9-625 more than once with2860
3218	3218		respect to any one secured obligation.2861
3219	3219		(f) Exception: limitation of liability under subsections (a) and (b) of this Code section
3220	3220		2862
3221	3221		does not apply. Subsections (a) and (b) of this Code section do not apply to limit the2863
3222	3222		liability of a secured party to a person if, at the time the secured party obtains control of2864
3223	3223		collateral that is a controllable account, controllable electronic record, or controllable2865
3224	3224		payment intangible or at the time the security interest attaches to the collateral, whichever2866
3225	3225		is later:2867
3226	3226		(1) The person is a debtor or obligor; and2868
3227	3227		(2) The secured party knows that the information in subparagraph (b)(1)(A), (b)(1)(B),2869
3228	3228		or (b)(1)(C) of this Code section relating to the person is not provided by the collateral,2870
3229	3229		a record attached to or logically associated with the collateral, or the system in which the2871
3230	3230		collateral is recorded."2872
3231		-	H. B. 1240
3232		-	- 114 - 24 LC 48 1222S~~/AP~~
	3231	+	H. B. 1240 (SUB)
	3232	+	- 114 - 24 LC 48 1222S
3233	3233		PART VI
3234	3234		2873
3235	3235		ADDITIONAL CHANGES2874
3236	3236		SECTION 6-1.2875
3237	3237		Said title is further amended by replacing "authenticated" with "signed", "authenticating"2876
3238	3238		with "signing", and "an authenticated" with "a signed" wherever the phrases occur in:2877
3239	3239		(1) Code Section 11-1-306, relating to waiver or renunciation of claim or right after breach;2878
3240	3240		(2) Code Section 11-9-210, relating to request for accounting and request regarding list of2879
3241	3241		collateral or statement of account;2880
3242	3242		(3) Code Section 11-9-324, relating to priority of purchase money security interests;2881
3243	3243		(4) Code Section 11-9-334, relating to priority of security interests in fixtures and crops;2882
3244	3244		(5) Code Section 11-9-341, relating to a bank's rights and duties with respect to a deposit2883
3245	3245		account;2884
3246	3246		(6) Code Section 11-9-404, relating to rights acquired by assignee and claims and defenses2885
3247	3247		against assignee;2886
3248	3248		(7) Code Section 11-9-509, relating to persons entitled to file a record;2887
3249	3249		(8) Code Section 11-9-513, relating to termination statement;2888
3250	3250		(9) Code Section 11-9-608, relating to application of proceeds of collection or enforcement2889
3251	3251		and liability for deficiency and right to surplus;2890
3252	3252		(10) Code Section 11-9-611, relating to notification before disposition of collateral;2891
3253	3253		(11) Code Section 11-9-615, relating to application of proceeds of disposition and liability2892
3254	3254		for deficiency and right to surplus;2893
3255	3255		(12) Code Section 11-9-619, relating to transfer of record or legal title;2894
3256	3256		(13) Code Section 11-9-620, relating to acceptance of collateral in full or partial2895
3257	3257		satisfaction of obligation and compulsory disposition of collateral;2896
3258	3258		(14) Code Section 11-9-621, relating to notification of proposal to accept collateral; and2897
3259	3259		(15) Code Section 11-9-624, relating to waiver.2898
3260		-	H. B. 1240
3261		-	- 115 - 24 LC 48 1222S~~/AP~~
	3260	+	H. B. 1240 (SUB)
	3261	+	- 115 - 24 LC 48 1222S
3262	3262		SECTION 6-2.
3263	3263		2899
3264	3264		Said title is further amended by replacing "writing" with "record" wherever the term occurs2900
3265	3265		in:2901
3266	3266		(1) Code Section 11-2-203, relating to seals inoperative;2902
3267	3267		(2) Code Section 11-2-205, relating to firm offers;2903
3268	3268		(3) Code Section 11-2A-201, relating to statute of frauds;2904
3269	3269		(4) Code Section 11-2A-203, relating to seals inoperative;2905
3270	3270		(5) Code Section 11-2A-205, relating to firm offers;2906
3271	3271		(6) Code Section 11-3-106, relating to unconditional promise or order;2907
3272	3272		(7) Code Section 11-4A-207, relating to misdescription of beneficiary; and2908
3273	3273		(8) Code Section 11-4A-208, relating to misdescription of intermediary bank or2909
3274	3274		beneficiary's bank.2910
3275	3275		PART VII2911
3276	3276		REPEALER2912
3277	3277		SECTION 7-1.2913
3278	3278		All laws and parts of laws in conflict with this Act are repealed.2914
3279		-	H. B. 1240
	3279	+	H. B. 1240 (SUB)
3280	3280		- 116 -