Maryland 2025 Regular Session

Maryland House Bill HB1353 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb1353
6	6
7	7	HOUSE BILL 1353
8	8	I4 5lr3292
9	9
10	10	By: Delegate Boafo
11	11	Introduced and read first time: February 7, 2025
12	12	Assigned to: Economic Matters
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Commercial Law – Uniform Commercial Code – Controllable Electronic Records 2
19	19
20	20	FOR the purpose of adding Article 12 of the Uniform Commercial Code to the Maryland 3
21	21	Uniform Commercial Code to establish provisions governing the transfer of property 4
22	22	rights in certain controllable electronic records, controllable accounts, and 5
23	23	controllable payment intangibles; and generally relating to property rights under the 6
24	24	Maryland Uniform Commercial Code. 7
25	25
26	26	BY repealing and reenacting, with amendments, 8
27	27	Article – Commercial Law 9
28	28	Section 1–101 10
29	29	Annotated Code of Maryland 11
30	30	(2013 Replacement Volume and 2024 Supplement) 12
31	31
32	32	BY adding to 13
33	33	Article – Commercial Law 14
34	34	Section 10A–101 through 10A–107 to be under the new title “Title 10A. Controllable 15
35	35	Electronic Records” 16
36	36	Annotated Code of Maryland 17
37	37	(2013 Replacement Volume and 2024 Supplement) 18
38	38
39	39	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
40	40	That the Laws of Maryland read as follows: 20
41	41
42	42	Article – Commercial Law 21
43	43
44	44	1–101. 22
45	45
46	46	(a) Titles 1 through [10] 10A of this article may be cited as the Maryland Uniform 23
47	47	Commercial Code. 24 2 HOUSE BILL 1353
48	48
49	49
50	50
51	51	(b) This title may be cited as Maryland Uniform Commercial Code – General 1
52	52	Provisions. 2
53	53
54	54	TITLE 10A. CONTROLLABLE ELECTRONIC RECORDS. 3
55	55
56	56	10A–101. 4
57	57
58	58	THIS TITLE MAY BE CIT ED AS THE MARYLAND UNIFORM COMMERCIAL CODE 5
59	59	– CONTROLLABLE ELECTRONIC RECORDS. 6
60	60
61	61	10A–102. 7
62	62
63	63	(A) IN THIS TITLE THE FOL LOWING WORDS HAVE TH E MEANINGS 8
64	64	INDICATED. 9
65	65
66	66	(B) (1) “ACCOUNT DEBTOR ” MEANS A PERSON OBLIG ATED ON AN 10
67	67	ACCOUNT, A CHATTEL PAPER , OR A GENERAL INTANGIBLE . 11
68	68
69	69	(2) “ACCOUNT DEBTOR” DOES NOT INCLUDE A P ERSON OBLIGATED 12
70	70	TO PAY A NEGOTIABLE INSTRUMENT , EVEN IF THE NEGOTIAB LE INSTRUMENT 13
71	71	EVIDENCES CHATTEL PA PER. 14
72	72
73	73	(C) (1) “CHATTEL PAPER ” MEANS: 15
74	74
75	75	(I) A RIGHT TO PAYMENT OF A MONETARY OBLIGATIO N 16
76	76	SECURED BY SPECIFIC GOODS, IF THE RIGHT TO PAYMENT AND S ECURITY 17
77	77	AGREEMENT ARE EVIDEN CED BY A RECORD ; OR 18
78	78
79	79	(II) A RIGHT TO PAYMENT OF A MONETARY OBLIGATIO N OWED 19
80	80	BY A LESSEE UNDER A LEASE AGREEMENT WITH RESPECT TO SPECIFIC GOODS AND 20
81	81	A MONETARY OBLIGATIO N OWED BY THE LESSEE IN CONNECTION WITH THE 21
82	82	TRANSACTION GIVING R ISE TO THE LEASE, IF: 22
83	83
84	84	1. THE RIGHT TO PAYMENT AND THE LEASE AGREEM ENT 23
85	85	ARE EVIDENCED BY A R ECORD; AND 24
86	86
87	87	2. THE PREDOMINANT PURPO SE OF THE TRANSACTIO N 25
88	88	GIVING RISE TO THE L EASE WAS TO GIVE THE LESSEE THE RIGHT TO POSSESSION 26
89	89	AND USE OF THE GOODS . 27
90	90
91	91	(2) “CHATTEL PAPER ” DOES NOT INCLUDE A R IGHT TO A PAYMENT 28
92	92	ARISING OUT OF A CHA RTER OR OTHER CONTRA CT INVOLVING THE USE OR HIRE OF 29 HOUSE BILL 1353 3
93	93
94	94
95	95	A VESSEL OR A RIGHT TO PAYMENT ARISING O UT OF THE USE OF A C REDIT OR 1
96	96	CHARGE CARD OR INFOR MATION CONTAIN ED ON OR FOR USE WIT H THE CARD. 2
97	97
98	98	(D) “CONTROLLABLE ACCOUNT ” MEANS AN ACCOUNT EVI DENCED BY A 3
99	99	CONTROLLABLE ELECTRO NIC RECORD THAT PROV IDES THAT THE ACCOUN T 4
100	100	DEBTOR UNDERTAKES TO PAY THE PERSON THAT HAS CONTROL OF THE 5
101	101	CONTROLLABLE ELECTRO NIC RECORD IN ACCORD ANCE WITH § 10A–105 OF THIS 6
102	102	TITLE. 7
103	103
104	104	(E) (1) “CONTROLLABLE ELECTRON IC RECORD” MEANS A RECORD 8
105	105	STORED IN AN ELECTRO NIC MEDIUM THAT CAN BE SUBJECTED TO CONT ROL UNDER 9
106	106	§ 10A–105 OF THIS TITLE. 10
107	107
108	108	(2) “CONTROLLABLE ELECTRON IC RECORD” DOES NOT INCLUDE A 11
109	109	CONTROLLABLE ACCOUNT , A CONTROLLABLE PAYME NT INTANGIBLE , A DEPOSIT 12
110	110	ACCOUNT, AN ELECTRONIC COPY O F A RECORD EVIDENCIN G CHATTEL PAPER , AN 13
111	111	ELECTRONIC DOCUMENT OF TITLE, ELECTRONIC MONEY , INVESTMENT PROPERTY , 14
112	112	OR A TRANSFERABLE RE CORD. 15
113	113
114	114	(F) “CONTROLLABLE PAYME NT INTANGIBLE ” MEANS A PAYMENT 16
115	115	INTANGIBLE EVIDENCED BY A CONTROLLABLE EL ECTRONIC RECORD THAT 17
116	116	PROVIDES THAT THE AC COUNT DEBTOR UNDERTA KES TO PAY THE PERSO N THAT 18
117	117	HAS CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD IN ACCORDANCE WITH 19
118	118	§ 10A–105 OF THIS TITLE. 20
119	119
120	120	(G) “DEPOSIT ACCOUNT ” HAS THE MEANING STAT ED IN § 9–102 OF THIS 21
121	121	ARTICLE. 22
122	122
123	123	(H) “ELECTRONIC MONEY ” MEANS MONEY IN AN EL ECTRONIC FORM . 23
124	124
125	125	(I) “INVESTMENT PROPERTY ” HAS THE MEANING STAT ED IN § 9–102 OF 24
126	126	THIS ARTICLE. 25
127	127
128	128	(J) “QUALIFYING PURCHASER ” MEANS A PURCHA SER OF A CONTROLLABL E 26
129	129	ELECTRONIC RECORD OR AN INTEREST IN A CON TROLLABLE ELECTRONIC RECORD 27
130	130	THAT OBTAINS CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD FO R VALUE, 28
131	131	IN GOOD FAITH , AND WITHOUT NOTICE O F A CLAIM OF PROPERT Y RIGHT IN THE 29
132	132	CONTROLLABLE ELECTRO NIC RECORD. 30
133	133
134	134	(K) “TRANSFERABLE RECORDS ” HAS THE MEANING STAT ED IN § 21–115 OF 31
135	135	THIS ARTICLE. 32
136	136	4 HOUSE BILL 1353
137	137
138	138
139	139	(L) “VALUE” HAS THE MEANING STAT ED IN § 3–303 OF THIS ARTICLE BUT 1
140	140	WITH RESPECT TO A CO NTROLLABLE ACCOUNT , CONTROLLABLE ELECTRO NIC 2
141	141	RECORD, OR CONTROLLABLE PAYM ENT INTANGIBLE , RATHER THAN AN 3
142	142	INSTRUMENT . 4
143	143
144	144	10A–103. 5
145	145
146	146	(A) IF THERE IS A CONFLICT BETWEEN THIS TITLE AND TITLE 9 OF THIS 6
147	147	ARTICLE, TITLE 9 OF THIS ARTICLE GOVERNS. 7
148	148
149	149	(B) A TRANSACTION SUBJECT TO THIS TITLE IS ALSO SUBJECT TO ANY 8
150	150	OTHER APPLICABLE STATE LAW. 9
151	151
152	152	10A–104. 10
153	153
154	154	(A) THIS SECTION APPLIES TO THE ACQUISITION O F RIGHTS IN A 11
155	155	CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYM ENT INTANGIBLE , INCLUDING 12
156	156	THE RIGHTS AND B ENEFITS PROVIDED UNDER SUBSE CTIONS (C) THROUGH (E), (G), 13
157	157	AND (H) OF THIS SECTION OF A PU RCHASER AND QUALIFYI NG PURCHASER , IN THE 14
158	158	SAME MANNER THIS SEC TION APPLIES TO A CO NTROLLABLE ELECTRONI C RECORD. 15
159	159
160	160	(B) TO DETERMINE WHETHER A PURCHASER OF A CON TROLLABLE 16
161	161	ACCOUNT OR A CONTROL LABLE PAYMENT INTANG IBLE IS A QUALIFYING 17
162	162	PURCHASER , THE PURCHASER OBTAIN S CONTROL OF THE ACC OUNT OR PAYMENT 18
163	163	INTANGIBLE IF THE PURCHASER OBTAINS CONTROL OF T HE CONTROLLABLE 19
164	164	ELECTRONIC RE CORD THAT EVIDENCES THE ACCOUNT OR PAYME NT INTANGIBLE. 20
165	165
166	166	(C) EXCEPT AS PROVIDED IN THIS SECTION, A DETERMINATION ABOUT 21
167	167	WHETHER A PERSON ACQ UIRES A RIGHT IN A CONTROLLABLE ELECTRON IC RECORD 22
168	168	AND THE TYPE OF RIGHT THE PERSON ACQ UIRES CAN BE MADE USING APPLICABL E 23
169	169	STATE OR FEDERAL LAW . 24
170	170
171	171	(D) (1) A PURCHASER OF A CONTR OLLABLE ELECTRONIC R ECORD 25
172	172	ACQUIRES ALL RIGHTS IN THE RECORD THAT THE TRAN SFEROR HAD THE 26
173	173	AUTHORITY TO TRANSFER. 27
174	174
175	175	(2) NOTWITHSTANDING PARAG RAPH (1) OF THIS SUBSECTION , A 28
176	176	PURCHASER OF A LIMIT ED INTEREST IN A CON TROLLABLE ELECTRONIC RECORD 29
177	177	SHALL ACQUIRE RIGHTS ONLY TO THE EXTENT OF THE INTEREST PURCHASED . 30
178	178
179	179	(E) A QUALIFYING PURCHASER ACQUIRES RIGHTS IN T HE CONTROLLABLE 31
180	180	ELECTRONIC RECORD FR EE OF A CLAIM OF A P ROPERTY RIGHT IN THE 32
181	181	CONTROLLABLE ELECTRO NIC RECORD. 33 HOUSE BILL 1353 5
182	182
183	183
184	184
185	185	(F) EXCEPT AS OTHERWISE PROVIDED IN A LAW NOT INCLUDED UNDER 1
186	186	THIS ARTICLE AND SUBSECTIONS (A) AND (E) OF THIS SECTION WITH RESPECT TO A 2
187	187	CONTROLLABLE ACCOUNT AND A CONTROLLABLE P AYMENT INTANGIBLE , A 3
188	188	QUALIFYING PURCHASER TAKES A RIGHT TO PAY MENT, RIGHT TO PERFORMANCE , 4
189	189	OR OTHER INTEREST IN PROPERTY EVIDENCED BY THE CONTROLLABLE 5
190	190	ELECTRONIC RECORD SU BJECT TO A CLAIM OF A PROPERTY RIGHT IN THE RIGHT TO 6
191	191	PAYMENT, RIGHT TO PERFORMANCE , OR OTHER INTEREST IN PROPERTY. 7
192	192
193	193	(G) AN ACTION MAY NOT BE ASSERTED AGAINST A Q UALIFYING PURCHASER 8
194	194	BASED ON BOTH A PURC HASE BY THE QUALIFYI NG PURCHASER OF A 9
195	195	CONTROLLABLE ELECTRO NIC RECORD AND A CLA IM OF PROPERTY RIGHT IN 10
196	196	ANOTHER CONTROLLABLE ELECTRONIC RECORD , WHETHER THE ACTION IS 11
197	197	FRAMED IN CONVERSION , REPLEVIN, CONSTRUCTIVE TRUST, EQUITABLE LIEN , OR 12
198	198	OTHER THEORY . 13
199	199
200	200	(H) THE FILING OF A FINANCING STATEMENT UNDER TITLE 9 OF THIS 14
201	201	ARTICLE IS NOT NOTICE OF A C LAIM OF A PROPERTY R IGHT IN A CONTROLLAB LE 15
202	202	ELECTRONIC RECORD . 16
203	203
204	204	10A–105. 17
205	205
206	206	(A) A PERSON HAS CONTROL O F A CONTROLLABLE ELE CTRONIC RECORD IF 18
207	207	THE CONTROLLABLE ELECTRONIC RECORD , A RECORD ATTACHED TO OR 19
208	208	LOGICALLY ASSOCIATED WITH THE CONTROLLABLE ELECTRONIC RECORD , OR A 20
209	209	SYSTEM IN WHICH THE CONTROLLABLE ELECTRONIC RECORD IS RECORDED: 21
210	210
211	211	(1) GIVES THE PERSON : 22
212	212
213	213	(I) THE AUTHORITY TO AVAI L THE PERSON OF SUBSTANTIALLY 23
214	214	ALL THE BENEFIT FROM THE CONTROLLABLE ELECTRONIC RECORD ; AND 24
215	215
216	216	(II) SUBJECT TO SUBSECTION (B) OF THIS SECTION, EXCLUSIVE 25
217	217	POWER TO: 26
218	218
219	219	1. PREVENT OTHERS FROM A VAILING THEMSELVES O F 27
220	220	SUBSTANTIALLY ALL OF THE BENEFIT FROM THE CONTROLLABLE ELECTRONIC 28
221	221	RECORD; AND 29
222	222
223	223	2. TRANSFER CONTROL OF T HE CONTROLLABLE 30
224	224	ELECTRONIC RECORD TO ANOTHER PERSON OR CA USE ANOTHER PERSON T O 31
225	225	OBTAIN CONTROL OF ANOTHER CO NTROLLABLE ELECTRONI C RECORD AS A RESULT 32
226	226	OF THE TRANSFER OF T HE CONTROLLABLE ELECTRONIC RECORD ; AND 33 6 HOUSE BILL 1353
227	227
228	228
229	229
230	230	(2) ENABLES THE PERSON RE ADILY TO IDENTIFY THE PERSON IN ANY 1
231	231	WAY, INCLUDING BY NAME , IDENTIFYING NUMBER , CRYPTOGRAPHIC KEY , OFFICE, 2
232	232	OR ACCOUNT NUMBER AS HAVING THE POWERS SP ECIFIED UNDER PARAGRAPH (1) 3
233	233	OF THIS SUBSECTION . 4
234	234
235	235	(B) SUBJECT TO SUBSECTION (C) OF THIS SECTION , POWER IS EXCLUSIVE 5
236	236	UNDER SUBSECTION (A)(1)(II) OF THIS SECTION, EVEN IF: 6
237	237
238	238	(1) THE CONTROLLABLE ELEC TRONIC RECORD , A RECORD 7
239	239	ATTACHED TO OR LOGIC ALLY ASSOCIATED WITH THE CONTROLLABLE ELECTRONIC 8
240	240	RECORD, OR A SYSTEM IN WHICH THE CONTROLLABLE ELECTRONIC RECORD IS 9
241	241	RECORDED LIMITS THE USE OF THE CONTROLLABLE ELECTRONIC RECORD OR HAS 10
242	242	A PROTOCOL PROGRAM MED TO CAUSE A CHANGE , INCLUDING A TRANSFER O R LOSS 11
243	243	OF CONTROL OR A MODI FICATION OF BENEFITS AFFORDED BY THE CONTROLLABLE 12
244	244	ELECTRONIC RECORD ; OR 13
245	245
246	246	(2) THE POWER IS SHARED W ITH ANOTHER PERSON . 14
247	247
248	248	(C) THE POWER OF A PERSON IS NOT SHARED WITH A NOTHER PERSON 15
249	249	UNDER SUBSECTION (B)(2) OF THIS SECTION AND THE PERSON ’S POWER IS NOT 16
250	250	EXCLUSIVE IF: 17
251	251
252	252	(1) THE PERSON CAN EXERCI SE THE POWER ONLY IF THE POWER IS 18
253	253	ALSO EXERCISED BY TH E OTHER PERSON ; AND 19
254	254
255	255	(2) THE OTHER PERSON : 20
256	256
257	257	(I) CAN EXERCISE THE POWE R WITHOUT EXERCISE O F THE 21
258	258	POWER BY THE PERSON; OR 22
259	259
260	260	(II) IS THE TRANSFER OR TO THE PERSON OF A N INTEREST IN 23
261	261	THE CONTROLLABLE ELE CTRONIC RECORD OR A CONTROLLABLE ACCOUNT OR 24
262	262	CONTROLLABLE PAYMENT INTANGIBLE EVIDENCE D BY THE CONTROLLABLE 25
263	263	ELECTRONIC RECORD . 26
264	264
265	265	(D) IF A PERSON HAS THE P OWER SPECIFIED IN SUBSECT ION (A)(1)(II) OF 27
266	266	THIS SECTION, THE POWERS ARE PRESU MED TO BE EXCLUSIVE . 28
267	267
268	268	(E) A PERSON HAS CONTROL O F A CONTROLLABLE ELE CTRONIC RECORD IF 29
269	269	ANOTHER PERSON , OTHER THAN THE TRANS FEROR TO THE PERSON OF AN 30
270	270	INTEREST IN THE CONT ROLLABLE ELECTR ONIC RECORD OR A CON TROLLABLE 31 HOUSE BILL 1353 7
271	271
272	272
273	273	ACCOUNT OR CONTROLLA BLE PAYMENT INTANGIB LE EVIDENCE D BY THE 1
274	274	CONTROLLABLE ELECTRO NIC RECORD: 2
275	275
276	276	(1) HAS CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD 3
277	277	AND ACKNOWLEDGES THA T THE PERSON HAS CONTROL ON BEHAL F OF THE PERSON; 4
278	278	OR 5
279	279
280	280	(2) OBTAINS CONTROL OF TH E CONTROLLABLE ELECTRONIC 6
281	281	RECORD AFTER HAVING ACKNOWLEDGED THAT THE PERSON WILL OBTAIN CONTROL 7
282	282	OF THE CONTROLLABLE ELECTRONIC RECORD ON BEHALF OF THE PERSON . 8
283	283
284	284	(F) A PERSON THAT HAS CONT ROL UNDER THIS SECTI ON IS NOT REQUIRED 9
285	285	TO ACKNOWLEDGE THAT THE PERSON HAS CONTROL ON BEHAL F OF ANOTHER 10
286	286	PERSON. 11
287	287
288	288	(G) IF A PERSON ACKNOWLED GES THAT THE PERSON HAS, OR WILL OBTAIN, 12
289	289	CONTROL ON BEHALF OF ANOTHER PERSON , UNLESS THE PERSON OTHERWISE 13
290	290	AGREES, OR A LAW OTHER THAN IN THIS TITLE OR TITLE 9 OF THIS ARTICLE 14
291	291	OTHERWISE PROVIDES , THE PERSON DOES NOT OWE A DUTY TO THE OTHER PERSON 15
292	292	AND IS NOT REQUIRED TO CO NFIRM THE ACKNOWLEDG MENT TO ANY OTHER 16
293	293	PERSON. 17
294	294
295	295	10A–106. 18
296	296
297	297	(A) AN ACCOUNT DEBTOR ON A CONTROLLABLE ACCOU NT OR 19
298	298	CONTROLLABLE PAYMENT INTANGIBLE MAY DISCH ARGE THE ACCOUNT DEBTOR ’S 20
299	299	OBLIGATION BY PAYING : 21
300	300
301	301	(1) THE PERSON HAVING CON TROL OF THE CONTROLL ABLE 22
302	302	ELECTRONIC RECORD TH AT EVIDENCES THE CON TROLLABLE ACCOUNT OR 23
303	303	CONTROLLABLE PAYMENT INTANGIBLE; OR 24
304	304
305	305	(2) EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION , A 25
306	306	PERSON THAT FORMERLY HAD CONTROL OF THE C ONTROLLABLE ELECTRON IC 26
307	307	RECORD. 27
308	308
309	309	(B) SUBJECT TO SUBSECTION (D) OF THIS SECTION, THE ACCOUNT DEBTOR 28
310	310	MAY NOT DISCHARGE THE ACCOUNT DEBTOR ’S OBLIGATION BY PAYING THE PERSON 29
311	311	THAT FORMERLY HAD CO NTROL OF THE CONTROL LABLE ELECTRONIC REC ORD IF 30
312	312	THE ACCOUNT DEBTOR R ECEIVES A NOTIFICATI ON THAT: 31
313	313
314	314	(1) IS SIGNED BY A PERSON THAT FORMERLY HAD CO NTROL OR THE 32
315	315	PERSON TO WHOM CONTR OL WAS TRANSFERRED ; 33 8 HOUSE BILL 1353
316	316
317	317
318	318
319	319	(2) REASONABLY IDENTIFIES THE CONTROLLABLE ACC OUNT OR 1
320	320	CONTROLLABLE PAYMENT INTANGIBLE; 2
321	321
322	322	(3) NOTIFIES THE ACCOUNT DEBTOR THAT CONTROL OF THE 3
323	323	CONTROLLABLE ELECTRO NIC RECORD THAT EVID ENCES THE CONTROLLAB LE 4
324	324	ACCOUNT OR CONTROLLA BLE PAYMENT INTANGIBLE WAS TRANS FERRED; 5
325	325
326	326	(4) IDENTIFIES THE TRANSF EREE IN ANY REASONAB LE WAY, 6
327	327	INCLUDING BY NAME , IDENTIFYING NUMBER , CRYPTOGRAPHIC KEY , OFFICE, OR 7
328	328	ACCOUNT NUMBER ; AND 8
329	329
330	330	(5) PROVIDES A COMMERCIAL LY REASONABLE METHOD BY WHICH 9
331	331	THE ACCOUNT DEBTOR I S TO PAY THE TRANSFEREE . 10
332	332
333	333	(C) AFTER RECEIPT OF A NO TIFICATION THAT COMP LIES WITH SUBSECTION 11
334	334	(B) OF THIS SECTION, THE ACCOUNT DEBTOR : 12
335	335
336	336	(1) MAY DISCHARGE THE ACCOUNT DEBTOR ’S OBLIGATION BY 13
337	337	PAYING ACCORDING TO INSTRUCTIONS IN THE NOTIFICATION ; AND 14
338	338
339	339	(2) MAY NOT DISCHARGE THE OB LIGATION BY PAYING A PERSON 15
340	340	THAT FORMERLY HAD CO NTROL. 16
341	341
342	342	(D) SUBJECT TO SUBSECTION (H) OF THE SECTION , NOTIFICATION IS 17
343	343	INEFFECTIVE UNDER SU BSECTION (B) OF THIS SECTION: 18
344	344
345	345	(1) UNLESS, BEFORE NOTIFICATION IS SENT, THE ACCOUNT DEBTOR 19
346	346	AND THE PERSON THAT AT T HAT TIME HAD CONTROL OF THE CONTROLLABLE 20
347	347	ELECTRONIC RECORD TH AT EVIDENCES THE CON TROLLABLE ACCOUNT OR 21
348	348	CONTROLLABLE PAYMENT INTANGIBLE AGREE IN A SIGNED RECORD TO A 22
349	349	COMMERCIALLY REASONA BLE METHOD BY WHICH A PER SON MAY FURNISH 23
350	350	REASONABLE PROOF THAT CONTROL H AS BEEN TRANSFERRED ; 24
351	351
352	352	(2) TO THE EXTENT AN AGRE EMENT BETWEEN THE AC COUNT DEBTOR 25
353	353	AND SELLER OF A PAYM ENT INTANGIBLE LIMIT S THE ACCOUNT DEBTOR ’S DUTY TO 26
354	354	PAY A PERSON OTHER T HAN THE SELLER AND T HE LIMITATION IS EFF ECTIVE UNDER 27
355	355	LAW OTHER THAN UNDER THIS TITLE; OR 28
356	356
357	357	(3) AT THE OPTION OF THE ACCOUNT DEBTOR , IF THE NOTIFICATION 29
358	358	NOTIFIES THE ACCOUNT DEBTOR TO: 30
359	359
360	360	(I) DIVIDE A PAYMENT ; 31 HOUSE BILL 1353 9
361	361
362	362
363	363
364	364	(II) MAKE LESS THAN THE FU LL AMOUNT OF AN INST ALLMENT 1
365	365	OR OTHER PERIODIC PA YMENT; OR 2
366	366
367	367	(III) PAY ANY PART OF A PAYMENT BY M ORE THAN ONE METHOD 3
368	368	OR TO MORE THAN ONE PERSON. 4
369	369
370	370	(E) (1) SUBJECT TO SUBSECTION (H) OF THIS SECTION, IF REQUESTED BY 5
371	371	THE ACCOUNT DEBTOR , THE PERSON GIVING TH E NOTIFICATION UNDER 6
372	372	SUBSECTION (B) OF THIS SECTION SHALL FURNISH REASONABLE PROOF, USING THE 7
373	373	METHOD IN THE AGREEM ENT REFERRED TO UNDER SUBSECTION (D)(1) OF THIS 8
374	374	SECTION, THAT CONTROL OF THE CONTROLLABLE ELECTRO NIC RECORD HAS BEEN 9
375	375	TRANSFERRED . 10
376	376
377	377	(2) UNLESS THE PERSON COM PLIES WITH THE REQUE ST, THE 11
378	378	ACCOUNT DEBTOR MAY D ISCHARGE THE ACCOUNT DEBTOR ’S OBLIGATION BY 12
379	379	PAYING A PERSON THAT FORMERLY HAD CONTROL EVEN IF THE ACCOUNT DEBTOR 13
380	380	HAD RECEIVED A NOTIF ICATION UNDER SUBSEC TION (B) OF THIS SECTION. 14
381	381
382	382	(F) A PERSON FURNISHES PROO F UNDER SUBSECTION (E) OF THIS SECTION 15
383	383	THAT CONTROL HAS BEE N TRANSFERRED IF THE PERSON DEMONST RATES, USING 16
384	384	THE METHOD IN THE AG REEMENT REFERRED TO UNDER SUBSECTION (D)(1) OF THIS 17
385	385	SECTION, THAT THE TRANSFEREE HAS THE POWER TO : 18
386	386
387	387	(1) AVAIL THE TRANSFEREE OF SUBSTANTIALLY ALL THE BENEFIT S 19
388	388	FROM THE CONTROLLABL E ELECTRONIC RECORD ; 20
389	389
390	390	(2) PREVENT OTHERS FROM A VAILING THEMSELVES O F 21
391	391	SUBSTANTIALLY ALL TH E BENEFITS FROM THE CONTROLLABLE ELECTRO NIC 22
392	392	RECORD; AND 23
393	393
394	394	(3) TRANSFER THE POWER SP ECIFIED UNDER ITEMS (1) AND (2) OF 24
395	395	THIS SUBSECTION TO ANOTHER PERSON . 25
396	396
397	397	(G) SUBJECT TO SUBSECTION (H) OF THIS SECTION , AN ACCOUNT DEBTOR 26
398	398	MAY NOT WAIVE OR MODIFY THE ACCOUNT DEBTOR ’S RIGHTS: 27
399	399
400	400	(1) UNDER SUBSECTION (D)(1) OR (E) OF THIS SECTION; OR 28
401	401
402	402	(2) IF ELECTED BY THE ACC OUNT DEBTOR , UNDER SUBSECTION (D) 29
403	403	OF THIS SECTION. 30
404	404	10 HOUSE BILL 1353
405	405
406	406
407	407	(H) THIS SECTION IS SUBJE CT TO ANY OTHER LAW THAT ESTABLISHES A 1
408	408	DIFFERENT RULE FOR A N ACCOUNT DEBTOR WHO IS AN INDIVIDUAL AND WHO 2
409	409	INCURRED THE OBLIGAT ION PRIMARILY FOR PE RSONAL, FAMILY, OR HOUSEHOLD 3
410	410	PURPOSES. 4
411	411
412	412	10A–107. 5
413	413
414	414	(A) EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION, THE LOCAL 6
415	415	LAW OF THE CONTROLLA BLE ELECTRONIC RECOR D’S JURISDICTION GOVER NS A 7
416	416	MATTER COVERED BY TH IS TITLE. 8
417	417
418	418	(B) FOR A CONTROLLABLE EL ECTRONIC RECORD THAT EVIDENCES A 9
419	419	CONTROLLABLE ACCOUNT OR CONTROL LABLE PAYMENT INTANG IBLE, THE LOCAL 10
420	420	LAW OF THE CONTROLLA BLE ELECTRONIC RECOR D’S JURISDICTION GOVER NS A 11
421	421	MATTER COVERED BY § 10A–106 OF THIS TITLE UNLESS AN EFFEC TIVE AGREEMENT 12
422	422	DETERMINES THAT THE LOCAL LAW OF ANOTHER JURISDICTION GOVERNS . 13
423	423
424	424	(C) THE FOLLOWING RULES DETE RMINE A CONTROLLABLE ELECTRONIC 14
425	425	RECORD’S JURISDICTION UNDER THIS SECTION: 15
426	426
427	427	(1) IF THE CONTROLLABLE E LECTRONIC RECORD , OR A RECORD 16
428	428	ATTACHED TO OR LOGIC ALLY ASSOCIATED WITH THE CONTROLLABLE ELE CTRONIC 17
429	429	RECORD THAT IS READILY AVAILABLE FO R REVIEW, EXPRESSLY PROVIDES THAT A 18
430	430	PARTICULAR JURISDICT ION IS THE CONTROLLA BLE ELECTRONIC RECOR D’S 19
431	431	JURISDICTION, THEN FOR PURPOSES OF THIS TITLE, THAT JURISDICTION IS THE 20
432	432	CONTROLLABLE ELECTRO NIC RECORD’S JURISDICTION; 21
433	433
434	434	(2) IF ITEM (1) OF THIS SUBSECTION DOES NOT APPLY AND T HE 22
435	435	RULES OF THE SYSTEM IN WHICH THE CONTROL LABLE ELECTRONIC REC ORD IS 23
436	436	RECORDED ARE READILY AVAILABLE FOR REVIEW AND EXPRESSLY PROVID E THAT 24
437	437	A PARTICULAR JURISDI CTION IS THE CONTROL LABLE ELECTRONIC REC ORD’S 25
438	438	JURISDICTION, THEN FOR PURPOSE S OF THIS TITLE, THAT JURISDICTION IS THE 26
439	439	CONTROLLABLE ELECTRO NIC RECORD’S JURISDICTION; 27
440	440
441	441	(3) IF ITEMS (1) AND (2) OF THIS SUBSECTION D O NOT APPLY AND THE 28
442	442	CONTROLLABLE ELECTRO NIC RECORD, OR A RECORD ATTACHED TO OR LOGICALLY 29
443	443	ASSOCIATED WITH THE CONTROLLAB LE ELECTRONIC RECORD THAT IS READILY 30
444	444	AVAILABLE FOR REVIEW , EXPRESSLY PROVIDES T HAT THE CONTROLLABLE 31
445	445	ELECTRONIC RECORD IS GOVERNED BY THE LAW OF A PARTICULAR JURI SDICTION, 32
446	446	THEN THAT JURISDICTION IS THE CONTROLLABLE ELE CTRONIC RECORD ’S 33
447	447	JURISDICTION; AND 34
448	448	HOUSE BILL 1353 11
449	449
450	450
451	451	(4) IF ITEMS (1) THROUGH (3) OF THIS SUBSECTION D O NOT APPLY 1
452	452	AND THE RULES OF THE SYSTEM IN WHICH THE CONTROLLABLE ELECTRO NIC 2
453	453	RECORD IS RECORDED A RE READILY AVAILABLE FOR REVIEW AND EXPRE SSLY 3
454	454	PROVIDE THAT THE CON TROLLABLE ELECTRONIC RECORD OR SYSTEM IS 4
455	455	GOVERNED BY THE LAW OF A PARTICULAR JURISDICT ION, THEN THAT 5
456	456	JURISDICTION IS THE CONTROLLABLE ELECTRO NIC RECORD’S JURISDICTION. 6
457	457
458	458	(D) TO THE EXTENT SUBSECT IONS (A) AND (B) OF THIS SECTION PROV IDE 7
459	459	THAT THE LOCAL LAW O F THE CONTROLLABLE E LECTRONIC RECORD ’S 8
460	460	JURISDICTION GOVERNS A MATTER COVERED BY THIS TITLE, THAT LAW GOVERNS 9
461	461	EVEN IF THE MATTER O R A TRANSACTION TO WHICH THE MATTER RELATES D OES 10
462	462	NOT BEAR ANY RELATIO N TO THE CONTROLLABL E ELECTRONIC RECORD ’S 11
463	463	JURISDICTION. 12
464	464
465	465	(E) THE RIGHTS ACQUIRED U NDER § 10A–104 OF THIS TITLE BY A 13
466	466	PURCHASER OR QUALIFY ING PURCHASER ARE GO VERNED BY THE LAW AP PLICABLE 14
467	467	UNDER THIS SECTION A T THE TIME OF PURCHA SE. 15
468	468
469	469	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 16
470	470	October 1, 2025. 17