Iowa Senate Bill SSB1177

Iowa 2023-2024 Regular Session

• Introduced: 2/21/23
• Refer: 2/21/23

Caption

A bill for an act relating to commercial transactions, including control and transmission of electronic records and digital assets.(See SF 540, SF 2389.)

Impact

If enacted, SSB1177 would impact transactions involving electronic records, providing clearer definitions and rules related to the perfection of security interests in these assets. A key feature of the bill is the establishment of the legal status of digital assets, enabling more efficient transfers and control of these assets in commercial transactions. Additionally, the bill introduces transitional provisions to ensure that existing legal frameworks remain effective until the new rules take effect, thereby protecting parties engaged in ongoing transactions.

Summary

Senate Study Bill 1177 (SSB1177) is a legislative proposal aimed at reforming laws related to commercial transactions, specifically focusing on the control and transmission of electronic records and digital assets. The bill amends provisions in the Uniform Commercial Code (UCC) to provide a clearer framework regarding controllable electronic records, which are defined as records stored in an electronic medium that can be controlled under specified UCC sections. This modernizes Iowa's approach to handling electronic assets and aligns with evolving commercial practices.

Contention

There are potential points of contention surrounding the bill's provision for eliminating certain terms like 'electronic chattel paper' in favor of more streamlined terminologies. Critics may express concerns over the implications of changing terminologies and the effects it may have on existing rights and obligations in transactions that rely on traditional definitions. The bill's amendment of numerous UCC provisions may also lead to debates over how these changes address current market needs and protect consumer interests, particularly in light of the rapidly evolving digital economy.