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ENGROSSED HOUSE
BILL NO. 3323 By: Staires and Maynard of the
House
and
Coleman of the Senate
An Act relating to the Uniform Commercial Code;
amending 12A O.S. 2021, Section 1 -201, which relates
to general definitions; defining central bank digital
currency; modifying definition; amending 12A O.S.
2021, Section 1-9-102, which relates to de finitions;
modifying definition; and providing an effective
date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 12A O.S. 2021, Section 1 -201, is
amended to read as follow s:
Section 1-201. General Definitions and Principles of
Interpretation.
(a) Unless the context otherwise re quires, words or phrases
defined in this section, or in the additional definitions contained
in other articles of the Uniform Commercial Code that apply to
particular articles or parts thereof, have the meanings stated.
(b) Subject to definitions containe d in other articles of the
Uniform Commercial Code that apply to particular articles or parts
thereof:
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(1) "Action" in the sense of a judicial pro ceeding includes a
recoupment, counterclaim, s etoff, suit in equity, and a ny other
proceedings in which right s are determined.
(2) "Aggrieved party" means a party entitled to pursue a
remedy.
(3) "Agreement", as distinguished from "contract", means the
bargain of the parties in fact as found in thei r language or
inferred from other circumstances including course of performance,
course of dealing, or usage of trade as provided in Section 1-303 of
this title.
(4) "Bank" means a person engaged in the busine ss of banking
and includes a savings bank, sav ings and loan association, c redit
union, and trust company.
(5) "Bearer" means a person in control of a negotiable
electronic document of title or a person in possession of an
instrument, negotiable tangible document of title, or certificated
security payable to bearer or endorsed i n blank.
(6) "Bill of lading" means a document of title evidencing the
receipt of goods for sh ipment issued by a person engaged in t he
business of directly or indirectly transporting or forwarding goods .
The term does not incl ude a warehouse receipt.
(7) "Branch" includes a separately in corporated foreign branch
of a bank.
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(8) "Burden of establishing" means the burden of persuading the
trier of fact that the existence of the fact is more probable than
its nonexistence.
(9) "Buyer in ordinary course of business" means a person that
buys goods in good faith, without knowledge that the sale violate s
the rights of another person in the goods, and in the or dinary
course from a person, other than a pawnbroker, in the business of
selling goods of that kind. A person buys goods in the ordinary
course if the sale to the person comports with the usual or
customary practices in the kind of bus iness in which the s eller is
engaged or with the seller's own usual or customary practices. A
person that sells oil, gas, or other minerals at the wellhead o r
minehead is a person in the business of selling goods of t hat kind.
A buyer in ordinary course of business may buy for cash, by exchange
of other property, or on secured or unsecured credit, and may
acquire goods or documents of title under a preexistin g contract for
sale. Only a buyer that takes possession of the goods or has a
right to recover the goods from the sel ler under Article 2 may be a
buyer in ordinary course of business. "Buyer in ordinary course of
business" does not include a person that acquires goods in a
transfer in bulk or as security for or t otal or partial satisfaction
of a money debt.
(10) "Central bank digital curren cy" means a digital currency,
a digital medium of exc hange, or a digital monetary unit of account
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issued by the United States Federal Reserve System, a federal
agency, a foreign government, a foreign central bank, or a foreign
reserve system that is made directly available to a consumer by such
entities. The term includes a digital currency, a digital medium of
exchange, or a digital monetary unit of account issued by the Unite d
States Federal Reserve System, a federal agency , a foreign
government, a foreign central bank, or a foreign reserve system that
is processed or validated directly by such entities.
(11) "Conspicuous", with reference to a term means so written,
displayed, or presented that a reasonable person ag ainst whom it is
to operate ought to have not iced it. Whether a term is
"conspicuous" or not is a decision for the court . Conspicuous terms
include the following:
(A) a heading in capitals equal to or greater in size than
the surrounding text, or in contrasting type, font, or
color to the surrounding text of same or lesser size;
and
(B) language in the body of a record or display in larger
type than the surrounding text of the same size, or
set off from surroundin g text of the same size by
symbols or other marks that call attention to the
language.
(11) (12) "Consumer" means an individual who enters into a
transaction primarily for personal, family, or household purposes.
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(12) (13) "Contract", as distinguished fr om "agreement", means
the total legal obligation that results from the parties ' agreement
as determined by the provisions of the Uniform Commercial Code as
supplemented by any other applicable laws.
(13) (14) "Creditor" includes a general creditor, a secu red
creditor, a lien creditor, and any representative of creditors,
including an assignee for the benefit of cre ditors, a trustee in
bankruptcy, a receiver in equi ty, and an executor or administrator
of an insolvent debtor's or assignor's estate.
(14) (15) "Defendant" includes a person in the position of
defendant in a counterclaim, cross-claim, or third-party claim.
(15) (16) "Delivery" with respect to an electronic document of
title means voluntary transfer of control and with respect to an
instrument, a tangible document of title, or chattel paper means
voluntary transfer of possession.
(16) (17) "Document of title" means a record that in the
regular course of business or financing is treated as adequately
evidencing that the person in possession or control of the record is
entitled to receive, control, hold, and dispose of the record and
the goods the record covers and that purports to be issued by or
addressed to a bailee and to cover goods in the bailee's possession
which are either identified or are fungible portions of an
identified mass. The term includes a bill of lading, transport
document, dock warrant, dock receipt, warehouse receipt, and order
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for delivery of goods. An electronic document of title means a
document of title evidenced by a rec ord consisting of information
stored in an electronic medi um. A tangible document of title means
a document of title evidenced by a record consisting of information
that is inscribed on a tangible medium.
(17) (18) "Fault" means a default, breach, or wrongful act or
omission.
(18) (19) "Fungible goods" means:
(A) goods of which any unit, by nature or usage of trade,
is the equivalent of any other like unit; or
(B) goods that by agreement are treated as equivalent.
(19) (20) "Genuine" means free of forgery or counterfeiting.
(20) (21) "Good faith", except as otherwise provided in Article
5 of this title, means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(21) (22) "Holder" means:
(A) the person in possession of a negotiable instrument
that is payable either to bearer or to an identified
person that is the person in possession;
(B) the person in possession of a document of title if the
goods are deliverable either to bearer or to the order
of the person in possess ion; or
(C) the person in control of a negotiable electron ic
document of title.
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(22) (23) "Insolvency proceeding" includes any assignment for
the benefit of creditors or other proceeding intended to liquidate
or rehabilitate the estat e of the person invol ved.
(23) (24) "Insolvent" means:
(A) having generally ceased to pay debts in the ordinary
course of business other than as a result of bona fide
dispute;
(B) being unable to pay debts as they become due; or
(C) being insolvent within the meaning of the federal
bankruptcy law.
(24) (25) "Money" means a medium of exchange authorized or
adopted by a domestic or fore ign government. The term includes a
monetary unit of account established by an intergovernmental
organization or by agreement betwee n two or more countries. The
term does not include central bank digital currency.
(25) (26) "Organization" means a person other than an
individual.
(26) (27) "Party", as distinguished from "third party", means a
person who has engaged in a transaction or made an a greement subject
to the Uniform Commercial Code.
(27) (28) "Person" means an individual, corporation, business
trust, estate, trust, partnership, limited liability company,
association, joint venture, government, governmental subdivision,
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agency, or instrumentality, public corporation, or any other legal
or commercial entity.
(28) (29) "Present value" means the amount as of a date cer tain
of one or more sums payable in the future, discounted to the date
certain by use of either an interest rate specified by the parties
if that rate is not manifestly unreasonable at the time the
transaction is entered into or, if an interest rate is not so
specified, a commercially reasonable rate that takes into account
the facts and circumstances at the time the transacti on is entered
into.
(29) (30) "Purchase" means taking by sale, discount,
negotiation, mortgage, pledge, lien, security interest, iss ue or
reissue, gift, or any other voluntary transaction creating an
interest in property.
(30) (31) "Purchaser" means a person who takes by purchase.
(31) (32) "Record" means information that is inscribed on a
tangible medium or that is stored in an elec tronic or other medium
and is retrievable in perceivable form.
(32) (33) "Remedy" means any remedial right to which an
aggrieved party is entitled with or without resort to a tribunal.
(33) (34) "Representative" means a person empowe red to act for
another, including an agent, an officer of a corporation or
association, and a trustee, executor, or administrator of an estate.
(34) (35) "Right" includes remedy.
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(35) (36) "Security interest" means an interest in personal
property or fixtures which secures payment or performance of an
obligation. "Security interest" includes any interest of a
consignor and a buyer of accounts, chattel paper, a payment
intangible, or a promissory note in a transaction that is subject to
Article 9 of this title. "Security interest" does not include the
special property interest of a buyer of goods on identification of
those goods to a contract fo r sale under Section 2-401 of this
title, but a buyer may also acquire a "security interest" by
complying with the provisio ns of Article 9 of this title. Except as
otherwise provided in Section 2-505 of this title, the right of a
seller or lessor of goods under Article 2 or 2A of this title to
retain or acquire possession of the goods is not a "security
interest", but a seller or lessor may also acquire a "security
interest" by complying with Article 9 of this title. The retention
or reservation of title by a seller of goods notwithstanding
shipment or delivery to the buyer under Section 2-401 of this title
is limited in effect to a reservation of a "security interest".
Whether a transaction in the form of a lease creates security
interest is determined pursuant to Section 1-203 of this title.
(36) (37) "Send" in connection with any writing, record, or
notice means:
(A) to deposit in the mail or deliver for transmission by
any other usual means of communication with postage or
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cost of transmission provide d for and properly
addressed and, in the case of an instru ment, to an
address specified thereon or otherwise agreed, or if
there be none, to any address reasonable under the
circumstances; or
(B) in any other way to cause to be received any record or
notice within the time at which it would have arrived
if properly sent.
(37) (38) "Signed" includes any symbol execut ed or adopted with
present intention to adopt or accept a writing.
(38) (39) "State" means a state of the United States, the
District of Columbia, Puerto Rico, the United States Virgin Islands,
or any territory or insular possession subject to the jurisdiction
of the United States.
(39) (40) "Surety" includes guarantor or other secondary
obligor.
(40) (41) "Term" means a portion of an agreemen t which relates
to a particular matter.
(41) (42) "Unauthorized signature" means a signature made
without actual, implied or apparen t authority. The term includes a
forgery.
(42) (43) "Warehouse receipt" means a document of title issued
by a person engaged in the business of storing goods for hire.
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(43) (44) "Writing" includes printing, typewriting, or any
other intentional reductio n to tangible form. "Written" has a
corresponding meaning.
SECTION 2. AMENDATORY 12A O.S. 2021, Section 1-9-102, is
amended to read as follows:
Section 1-9-102.
DEFINITIONS AND INDEX OF DEFI NITIONS
(a) In this article:
(1) "Accession" means goods that are physically united with
other goods in such a manner that the identity of the original goods
is not lost.
(2) (A) "Account", except as used in "account for", means a
right to payment of a m onetary obligation, whether or
not earned by performance:
(i) for property that has been or is to be sold,
leased, licensed, assigned, or otherwise disposed
of;
(ii) for services rendered or to be rendered;
(iii) for a policy of insurance issued or to be i ssued;
(iv) for a secondary obligation incurred or to be
incurred;
(v) for energy provided or to be provided ;
(vi) for the use or hire of a vessel under a char ter
or other contract;
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(vii) arising out of the use of a credit or charge card
or information contained on or for use with the
card; or
(viii) as winnings in a lottery or other game of chance
operated or sponsored by a state, governmental
unit of a state, or a person licensed or
authorized to operate the game by a state or
governmental unit of a state .
(B) The term includes health -care-insurance receivables.
(C) The term does not include:
(i) rights to payment evidenced by chattel paper or
an instrument;
(ii) commercial tort claims;
(iii) deposit accounts;
(iv) investment property;
(v) letter-of-credit rights or letters of credit; or
(vi) rights to payment for mon ey or funds advanced or
sold, other than righ ts arising out of the use of
a credit or charge car d or information contained
on or for use with the card.
(3) "Account debtor" means a person obligated on an account,
chattel paper, or general intangible. The term does not include
persons obligated to p ay a negotiable instrument, even if the
instrument constitutes part of chattel paper.
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(4) "Accounting", except as used in "accounting for", means a
record:
(A) authenticated by a secured party;
(B) indicating the aggregate unpaid secured obligations as
of a date not more than thirty-five (35) days earlier
or thirty-five (35) days later than the date of the
record; and
(C) identifying the components o f the obligations in
reasonable detail.
(5) "Agricultural lien" means an interest in farm products:
(A) which secures payment or performance of an obligation
for:
(i) goods or services furnished in connection with a
debtor's farming operation; or
(ii) rent on real property leased by a debtor i n
connection with its fa rming operation;
(B) which is created by stat ute in favor of a person that:
(i) in the ordinary course of its business furnished
goods or services to a debtor in connection with
a debtor's farming operation; or
(ii) leased real property to a debtor in conn ection
with the debtor's farming operation; a nd
(C) whose effectiveness does not depend on the p erson's
possession of the personal property.
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(6) "As-extracted collateral " means:
(A) oil, gas, or other minerals that are subject to a
security interest that:
(i) is created by a debtor having an interes t in the
minerals before extraction; and
(ii) attaches to the minerals as extracted; or
(B) accounts arising out of the sale at the wellhead or
minehead of oil, gas, or other minerals in which the
debtor had an interest before extraction.
(7) "Authenticate" means:
(A) to sign; or
(B) with present intent t o adopt or accept a record, to
attach to or logically associate with the record an
electronic sound, symbol, or process.
(8) "Bank" means an organization that is engaged in the
business of banking. The t erm includes savings banks, savings and
loan associations, credit unions, and trust companies.
(9) "Cash proceeds" means proceeds that are money, c hecks,
deposit accounts, or the like.
(10) "Certificate of title" means a certificate of title with
respect to which a statute provides for the security inter est in
question to be indicated on the certificate as a condition or result
of the security inter est's obtaining priority over the right s of a
lien creditor with respect to the collateral. The term includ es
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another record maintained as an alternative to a certificate of
title by the governmental unit that issues certificates of title if
a statute permits the security interest in question to be indicated
on the record as a condition or result of the securit y interest's
obtaining priority over the rights of a lien creditor with respect
to the collateral.
(11) "Chattel paper" means a record or records t hat evidence
both a monetary obligation and a security interest in specific
goods, a security interest in sp ecific goods and software used in
the goods, a security interest in specific goods and license of
software used in the goods, a lease of specific go ods, or a lease of
specific goods and l icense of software used in the goods. In this
paragraph, "monetary obligation" means a monetary obligation secured
by the goods or owed under a lease of goods and includes a monetary
obligation with respect to softwa re used in the goods. The term
does not include charters or ot her contracts involving the use or
hire of a vessel. If a transaction is evidenced by records t hat
include an instrument or series of instruments, the group of records
taken together constitut es chattel paper.
(12) "Collateral" means the property subject to a security
interest or agricultural lien. The term includes:
(A) proceeds to which a securi ty interest attaches;
(B) accounts, chattel paper, payment intangibles, and
promissory notes that have been sold; and
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(C) goods that are the subject of a consig nment.
(13) "Commercial tort claim" means a claim arising in tort with
respect to which:
(A) the claimant is an organization; or
(B) the claimant is an individual and the claim:
(i) arose in the course of the claimant's business or
profession; and
(ii) does not include damages arising out of persona l
injury to or the death of an individual.
(14) "Commodity account" means an account maintained by a
commodity intermediary in which a commodity co ntract is carried for
a commodity customer.
(15) "Commodity contract" means a commodity futures contract,
an option on a commodity futures contract, a commodi ty option, or
another contract if the contract or option is:
(A) traded on or subject to the rule s of a board of trade
that has been designated as a contract ma rket for such
a contract pursuant to federal commodities laws; or
(B) traded on a foreign commod ity board of trade,
exchange, or market, and is carried on the books of a
commodity intermediary for a commodity customer.
(16) "Commodity customer" means a person for which a commodity
intermediary carries a commodity contract on its books.
(17) "Commodity intermediary" means a person that:
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(A) is registered as a futures commission merchant under
federal commodities law; or
(B) in the ordinary course of its bu siness provides
clearance or settlement servi ces for a board of trade
that has been designated a s a contract market pursuant
to federal commodities law.
(18) "Communicate" means:
(A) to send a written or other tangible record;
(B) to transmit a record by any means agreed upon by the
persons sending and receiving the record; or
(C) in the case of transmission of a record to or by a
filing office, to transmit a record by any means
prescribed by filing-office rule.
(19) "Consignee" means a merchant to which goods are delivered
in a consignment.
(20) "Consignment" means a transaction, regardless of its form,
in which a person delivers goods to a merchant for the purpose of
sale and:
(A) the merchant:
(i) deals in goods of that kind und er a name other
than the name of the person making delivery;
(ii) is not an auctioneer; and
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(iii) is not generally known by its creditors to be
substantially engaged in selling the goods of
others;
(B) with respect to each delivery, the aggregate value of
the goods is One Thousan d Dollars ($1,000.00) or more
at the time of delivery;
(C) the goods are not consumer goods imme diately before
delivery; and
(D) the transaction does not create a security interest
that secures an obligation.
(21) "Consignor" means a person that delivers goods to a
consignee in a consignment.
(22) "Consumer debtor" means a debtor in a consumer
transaction.
(23) "Consumer goods" means goods that are used or bought for
use primarily for persona l, family, or household purposes.
(24) "Consumer-goods transaction" means a consumer transaction
in which:
(A) an individual incurs an obligation primarily fo r
personal, family, or household purposes; and
(B) a security interest in consumer goods secures the
obligation.
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(25) "Consumer obligor" means an obligor who i s an individual
and who incurred the obligati on as part of a transaction entered
into primarily for personal, family, or household purposes.
(26) "Consumer transaction " means a transaction in which (i) an
individual incurs an oblig ation primarily for pers onal, family, or
household purposes, (ii) a s ecurity interest secures the obligation,
and (iii) the collateral is held or acquired primarily for personal,
family, or household purposes. The te rm includes consumer-goods
transactions.
(27) "Continuation statement" means an amendment of a financing
statement which:
(A) identifies, by its file number, the initial financing
statement to which it relates; and
(B) indicates that it is a continuation statement for, or
that it is filed to c ontinue the effectivenes s of, the
identified financing statement.
(28) "Debtor" means:
(A) a person having an interest, other than a security
interest or other lien, in the collateral, whether or
not the person is an obligor;
(B) a seller of accounts, cha ttel paper, payment
intangibles, or promissory notes; or
(C) a consignee.
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(29) "Deposit account" means a demand, time, savings, passbook,
or similar account maintained with a bank as defined in paragraph
(8) of this subsection. The term does not include investment
property or a deposit account evidenced by an instrument or a United
States central bank digital currency .
(30) "Document" means a document of title or a receipt of the
type described in subsection (b) of Section 7-201 of this title.
(31) "Electronic chattel paper " means chattel paper evidenced
by a record or records consisting of information stored in an
electronic medium.
(32) "Encumbrance" means a right, other than an ownership
interest, in real proper ty. The term includes mortgages and ot her
liens on real proper ty.
(33) "Equipment" means goods other than inventory, farm
products, or consumer goods.
(34) "Farm products" means goods, other than standing timber,
with respect to which the debtor is enga ged in a farming operation
and which are:
(A) crops grown, growing, or to be grown, including:
(i) crops produced on trees, vines, and bushes; and
(ii) aquatic goods produced in aquacultural
operations;
(B) livestock, born or unborn, including aquatic good s
produced in aquacultural operations;
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(C) supplies used or pro duced in a farming operation; or
(D) products of crops or livestock in their unmanufactured
states.
(35) "Farming operation" means raising, cultivating,
propagating, fattening, grazing, or any other farming, livestock, or
aquacultural operation.
(36) "File number" means the number assigned to an in itial
financing statement pursuant to subsection (a ) of Section 1-9-519 of
this title.
(37) "Filing office" means an office designated in Section 1 -9-
501 as the place to file a financing statement.
(38) "Filing-office rule" means a rule adopted pursuant to
Sections 1-9-526 and 1-9-526.1 of this title.
(39) "Financing statement" means a record or records composed
of an initial financing statement an d any filed record relating to
the initial financing statement.
(40) "Fixture filing" means the filing of a financing statement
covering goods that are or are to become fixtures and satisfying
subsections (a) and (b) of S ection 1-9-502 of this title. The term
includes the filing of a financin g statement covering goo ds of a
transmitting utility which are or are to become fixtures.
(41) "Fixtures" means goods that have become so related to
particular real property that an interest in them arises under real
property law.
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(42) "General intangible" means any personal pr operty,
including things in action, other tha n accounts, chattel paper,
commercial tort claims, deposit accounts, documents, goods,
instruments, investment pro perty, letter-of-credit rights, letters
of credit, money, and oil, gas, o r other minerals before extraction.
The term includes payment intang ibles and software.
(43) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(44) (A) "Goods" means all things that are movable when a
security interest att aches.
(B) The term includes:
(i) fixtures;
(ii) standing timber that is to be cut and removed
under a conveyance or contract for sale;
(iii) the unborn young of animals;
(iv) crops grown, growing, or to be grown, even if the
crops are produced on trees, v ines, or bushes;
and
(v) manufactured homes.
(C) The term also includes a computer program embed ded in
goods and any supporting information provided in
connection with a transaction relating to the program
if:
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(i) the program is associated with the goods i n such
a manner that it customarily is consid ered part
of the goods; or
(ii) by becoming the owner of the goods, a person
acquires a right to use the program i n connection
with the goods.
(D) The term does not include a computer pro gram which is
embedded in goods and that consist solely of the
medium in which the program is embedded.
(E) The term also does not include accounts, chattel
paper, commercial tort cla ims, deposit accounts,
documents, general intangibles, instruments,
investment property, letter -of-credit rights, letters
of credit, money, or oil, gas, or other minerals
before extraction.
(45) "Governmental unit" means a subdivision, agency,
department, county, parish, municipality, or other unit of the
government of the Uni ted States, a state, or a foreign country. The
term includes an orga nization having a separate corporate existence
if the organization is eligible to issue debt on which interest is
exempt from income taxation under the laws of the United States.
(46) "Health-care-insurance receivable" means an interest in or
claim under a policy of insurance which is a right to payment o f a
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monetary obligation for health-care goods or services provi ded or to
be provided.
(47) (A) "Instrument" means a negotiable instrumen t or any
other writing that evidences a right to the payment of
a monetary obligation, is not itself a security
agreement or lease, and is of a type that in ordinary
course of business is transferred by delivery with any
necessary endorsement or assignment .
(B) "Instrument" includes:
(i) an instrument as defined in subparag raph (A) of
this paragraph, whether the instrument is subject
to Section 3-104 of this title because it is not
payable to order; and
(ii) a writing that contains both an acknowledgment by
a bank as defined in pa ragraph (8) of this
subsection that a sum of money has been received
by the bank and its promise to repay the sum of
money, which is considered a certificate o f
deposit by the bank issuing it, even if the
writing provides that it is nontransferable or
uses similar language.
(C) The term does not incl ude:
(i) investment property;
(ii) letters of credit; or
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(iii) writings that evidence a right to payment arising
out of the use of a credit or charg e card or
information contained on or f or use with the
card.
(48) "Inventory" means goods, other than farm products, which:
(A) are leased by a person as less or;
(B) are held by a person for sale or lease or to be
furnished under a contract of service;
(C) are furnished by a person under a con tract of service;
or
(D) consist of raw materials, work in process, o r
materials used or consumed in a business.
(49) "Investment property" means a security, whether
certificated or uncertificated, security entitleme nt, securities
account, commodity contr act, or commodity accoun t.
(50) "Jurisdiction of organization ", with respect to a
registered organization, means the ju risdiction under whose law the
organization is formed or organi zed.
(51) "Letter-of-credit right" means a right to payment or
performance under a letter of cre dit, whether or not the beneficiary
has demanded or is at the time entitled to demand payment or
performance. The term does not include the right of a benefic iary
to demand payment or performa nce under a letter of credit.
(52) "Lien creditor" means:
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(A) a creditor that has acquired a lien on the pr operty
involved by attachment, levy, or the like;
(B) an assignee for benefit of creditors from the time of
assignment;
(C) a trustee in bankruptcy from the date of the filing of
the petition; or
(D) a receiver in equity from the time of appointment.
(53) (A) "Manufactured home" means a structure, transpor table
in one or more sections, which:
(i) in the traveling mode , is eight (8) body feet or
more in width or forty (40) body feet or more in
length, or, when ere cted on site, is three
hundred twenty (320) o r more square feet;
(ii) is built on a permanent ch assis;
(iii) is designed to be used as a dwelling with or
without a permanent foundation when con nected to
the required utilities; and
(iv) includes the plumbin g, heating, air-conditioning,
and electrical systems contained therein.
(B) The term includes an y structure that meets all of the
requirements of this paragrap h except the size
requirements and with respect to which the
manufacturer voluntarily files a cer tification
required by the United States Secr etary of Housing and
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Urban Development and complies with the standards
established under Title 42 of the United St ates Code.
(54) "Manufactured-home transaction" means a secured
transaction:
(A) that creates a purchase-money security interest in a
manufactured home, other than a manufactured home held
as inventory; or
(B) in which a manufactured home, other than a
manufactured home held as inventory, is the primary
collateral.
(55) "Mortgage" means a consensual interest in real property,
including fixtures, which secures payment or performance of an
obligation.
(56) "New debtor" means a person that becomes bound as a debtor
under subsection (d) of S ection 1-9-203 of this title by a secur ity
agreement previously entered into by another person.
(57) (A) "New value" means:
(i) money;
(ii) money's worth in property, services, or new
credit; or
(iii) release by a transfer ee of an interest in
property previously transferred to the
transferee.
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(B) The term does not inc lude an obligation substituted
for another obligation.
(58) "Noncash proceeds" means proceeds other than cash
proceeds.
(59) (A) "Obligor" means a person that, with respect to an
obligation secured by a security interest in or an
agricultural lien on the collateral:
(i) owes payment or other perform ance of the
obligation;
(ii) has provided property other than the collateral
to secure payment or other performanc e of the
obligation; or
(iii) is otherwise accountable in whole or in par t for
payment or other performance of the obligation.
(B) The term does not include issuers or nominated persons
under a letter of credit.
(60) "Original debtor" means a person that, as debtor, entered
into a security agreement to which a new debtor has b ecome bound
under subsection (d) of Section 1-9-203 of this title.
(61) "Payment intangible" means a general intangible under
which the account debtor's principal obligation is a mon etary
obligation.
(62) "Person related to", with respect to an individua l, means:
(A) the spouse of the individual;
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(B) a brother, brother-in-law, sister, or sister-in-law of
the individual;
(C) an ancestor or lineal descendant of the individual or
the individual's spouse; or
(D) any other relative, by blood or marriage, of th e
individual or the indi vidual's spouse who shares the
same home with the individual.
(63) "Person related to", with respect to an organization,
means:
(A) a person directly or indir ectly controlling,
controlled by, or under common control with the
organization;
(B) an officer or director of, or a person performing
similar functions with respect to, the organization;
(C) an officer or director of, or a person performing
similar functions with respect to, a person desc ribed
in subparagraph (A);
(D) the spouse of an individual desc ribed in subparagraph
(A), (B), or (C) of thi s paragraph; or
(E) an individual who is related by blood or marriage to
an individual described in subparagraph ( A), (B), (C),
or (D) of this parag raph and who shares the same home
with the individual.
(64) "Proceeds" means the following property:
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(A) whatever is acquired upon the sale, lease, license,
exchange, or other disposition of collateral;
(B) whatever is collected on, or distributed on acco unt
of, collateral;
(C) rights arising out of collateral;
(D) to the extent of the value of collateral, clai ms
arising out of the loss, nonconformity, or
interference with the use of, defects or infringement
of rights in, or damage to, the collateral; or
(E) to the extent of the value of collat eral and to the
extent payable to the debtor or the secured party,
insurance payable by reason of the loss or
nonconformity of, defects or infringement of rights
in, or damage to, the collateral.
(65) "Promissory note" means an instrument that evidences a
promise to pay a moneta ry obligation, does not evidence an order to
pay, and does not contain an acknowledgment by a ba nk that the bank
has received for deposit a sum of money or fun ds.
(66) "Proposal" means a record authenticated by a secured party
which includes the terms on which the secured party is willing to
accept collateral in full or partial satisfaction of the o bligation
it secures pursuant to Sections 1-9-620, 1-9-621, and 1-9-622 of
this title.
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(67) "Public-finance transaction" means a secured transaction
in connection with which:
(A) debt securities are issue d;
(B) all or a portion of the securities issued ha ve an
initial stated maturity of at least twenty (20) years;
and
(C) the debtor, obligor, secured party, account debtor or
other person obligated on collateral, assignor or
assignee of a secured obligation , or assignor or
assignee of a security interest is a state or a
governmental unit of a state.
(68) "Public organic record" means a record that is available
to the public for inspection and that is:
(A) a record consisting of the record initially filed wi th
or issued by a state or the United States to for m or
organize an organization and any record filed with or
issued by the state or the United Stat es which amends
or restates the initial record;
(B) an organic record of a business trust consisting of
the record initially filed with a state and any record
filed with the state which amends or restates the
initial record, if a statute of the state gover ning
business trusts requires that the record be filed with
the state; or
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(C) a record consisting of legisla tion enacted by the
Legislature of a state or the C ongress of the United
States which forms or organizes an organi zation, any
record amending the le gislation, and any record filed
with or issued by the state or United States which
amends or restates the na me of the organization.
(69) "Pursuant to commitme nt", with respect to an advance made
or other value given by a secured party, means pursuant to t he
secured party's obligation, whether or not a subsequent even t of
default or other event not within the se cured party's control has
relieved or may relieve t he secured party from its obligation.
(70) "Record", except as used in "for record", "of record",
"record or legal title", and "record owner", means information that
is inscribed on a tangible medium or w hich is stored in an
electronic or other medium and is retrievable in perceivable form.
(71) "Registered organization" means an organization formed or
organized solely under the law of a single state or the Uni ted
States by the filing of a public organic record with, the issuance
of a public organic recor d by, or the enactment of legislation by
the state or United St ates. The term includes a busines s trust that
is formed or organized und er the law of a single s tate if a statute
of the state governing busi ness trusts requires that the business
trusts' organic record be filed with the state.
(72) "Secondary obligor" means an obligor to the extent that :
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(A) the obligor's obligation is secon dary; or
(B) the obligor has a right of recourse with respect to an
obligation secured by collateral against the debtor,
another obligor, or property of either.
(73) "Secured party" means:
(A) a person in whose favor a security interest is created
or provided for under a securit y agreement, whether or
not any obligation to be secured is outstanding;
(B) a person that holds an agricultural lien;
(C) a consignor;
(D) a person to which accounts, chattel paper, payment
intangibles, or promissory notes have bee n sold;
(E) a trustee, indenture trustee, agent, collateral agent,
or other representative in whose favor a security
interest or agricultural lien is created or provided
for; or
(F) a person that holds a security inte rest arising under
Section 2-401, 2-505, paragraph (3) of Secti on 2-711,
paragraph (5) of Section 2A -508, 4-210, or 5-118 of
this title.
(74) "Security agreement" means an agreement that creates or
provides for a security interest.
(75) "Send", in connection with a record or notification,
means:
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(A) to deposit in the mail, deliver for transmission, or
transmit by any other usual means of communication,
with postage or cost of transmission provided for,
addressed to any address reasonable under the
circumstances; or
(B) to cause the record or n otification to be receiv ed
within the time that it would have been re ceived if
properly sent under subparagraph (A) of t his
paragraph.
(76) "Software" means a computer program and an y supporting
information provided in connection with a transaction relati ng to
the program. The term does not include a computer program that is
included in the definition of goods.
(77) "State" means a state of the United States, the District
of Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the
United States.
(78) "Supporting obligation" means a letter-of-credit right or
secondary obligation that supports the payment or per formance of an
account, chattel paper, a document, a general intangible, an
instrument, or invest ment property.
(79) "Tangible chattel paper " means chattel paper evidenced by
a record or records consisting of information that is inscribed on a
tangible medium.
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(80) "Termination statement " means an amendment of a financing
statement which:
(A) identifies, by its file number, the initial financi ng
statement to which it relates; and
(B) indicates either that it is a termination statement or
that the identified financing statement is no longe r
effective.
(81) "Transmitting utility" means a person primar ily engaged in
the business of:
(A) operating a railroad, subway, street railway, or
trolley bus;
(B) transmitting communications electrically,
electromagnetically, or by light;
(C) transmitting goods by pipeline or sewer; or
(D) transmitting or producing and transmitting
electricity, steam, gas, or water.
(b) "Control" as provided in Section 7 -106 of this title and
the following definitions in other articles o f this title apply to
this article:
"Applicant" - Section 5-102 of this title.
"Beneficiary" - Section 5-102 of this title.
"Broker" - Section 8-102 of this title.
"Certificated security " - Section 8-102 of this title.
"Check" - Section 3-104 of this title.
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"Clearing corporation " - Section 8-102 of this title.
"Contract for sale" - Section 2-106 of this title.
"Customer" - Section 4-104 of this title.
"Entitlement holder" - Section 8-102 of this title.
"Financial asset" - Section 8-102 of this title.
"Holder in due course" - Section 3-302 of this title.
"Issuer" (with respect to a letter of credit or l etter-of-credit
right)- Section 5-102 of this title.
"Issuer" – (with respect to a security) – Section 8-201 of this
title.
"Issuer" – (with respect to documen ts of title) – Section 7-102
of this title.
"Lease" - Section 2A-103 of this title.
"Lease agreement" - Section 2A-103 of this title.
"Lease contract" - Section 2A-103 of this title.
"Leasehold interest" - Section 2A-103 of this title.
"Lessee" - Section 2A-103 of this title.
"Lessee in ordinary course of business" - Section 2A-103 of this
title.
"Lessor" - Section 2A-103 of this title.
"Lessor's residual interest" - Section 2A-103 of this title.
"Letter of credit" - Section 5-102 of this title.
"Merchant" - Section 2-104 of this title.
"Negotiable instrument" - Section 3-104 of this title.
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"Nominated person" - Section 5-102 of this title.
"Note" - Section 3-104 of this title.
"Proceeds of a letter of credit" - Section 5-114 of this title.
"Prove" - Section 3-103 of this title.
"Sale" - Section 2-106 of this title.
"Securities account" - Section 8-501 of this title.
"Securities intermediary " - Section 8-102 of this title.
"Security" - Section 8-102 of this title.
"Security certificate" - Section 8-102 of this title.
"Security entitlement " - Section 8-102 of this title.
"Uncertificated security" - Section 8-102 of this title.
(c) Article 1 of this title contains general definitions and
principles of construction and interpretation applicable throughout
this article.
SECTION 3. This act shall become effective November 1, 2024.
Passed the House of Representatives the 12th day of March, 2024.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2024.
Presiding Officer of the Senate