Texas 2021 - 87th Regular

Texas House Bill HB4474 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	H.B. No. 4474
	1	+	By: Parker, et al. (Senate Sponsor - Paxton) H.B. No. 4474
	2	+	(In the Senate - Received from the House May 12, 2021;
	3	+	May 13, 2021, read first time and referred to Committee on Business &
	4	+	Commerce; May 20, 2021, reported favorably by the following vote:
	5	+	Yeas 9, Nays 0; May 20, 2021, sent to printer.)
	6	+	Click here to see the committee vote
2	7
3	8
	9	+	A BILL TO BE ENTITLED
4	10		AN ACT
5	11		relating to the control of virtual currency and the rights of
6	12		purchasers who obtain control of virtual currency for purposes of
7	13		the Uniform Commercial Code.
8	14		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	15		SECTION 1. Section 9.102(b), Business & Commerce Code, is
10	16		amended to read as follows:
11	17		(b) The following definitions in other chapters apply to
12	18		this chapter:
13	19		"Applicant"Section 5.102.
14	20		"Beneficiary"Section 5.102.
15	21		"Broker"Section 8.102.
16	22		"Certificated security"Section 8.102.
17	23		"Check"Section 3.104.
18	24		"Clearing corporation"Section 8.102.
19	25		"Contract for sale"Section 2.106.
20	26		"Control" (with respect to a document of title)Section 7.106.
21	27		"Customer"Section 4.104.
22	28		"Entitlement holder"Section 8.102.
23	29		"Financial asset"Section 8.102.
24	30		"Holder in due course"Section 3.302.
25	31		"Issuer" (with respect to a letter of credit
26	32		or letter-of-credit right)Section 5.102.
27	33		"Issuer" (with respect to a security)Section 8.201.
28	34		"Lease"Section 2A.103.
29	35		"Lease agreement"Section 2A.103.
30	36		"Lease contract"Section 2A.103.
31	37		"Leasehold interest"Section 2A.103.
32	38		"Lessee"Section 2A.103.
33	39		"Lessee in ordinary course of business"Section 2A.103.
34	40		"Lessor"Section 2A.103.
35	41		"Lessor's residual interest"Section 2A.103.
36	42		"Letter of credit"Section 5.102.
37	43		"Merchant"Section 2.104.
38	44		"Negotiable instrument"Section 3.104.
39	45		"Nominated person"Section 5.102.
40	46		"Note"Section 3.104.
41	47		"Proceeds of a letter of credit"Section 5.114.
42	48		"Prove"Section 3.103.
43	49		"Sale"Section 2.106.
44	50		"Securities account"Section 8.501.
45	51		"Securities intermediary"Section 8.102.
46	52		"Security"Section 8.102.
47	53		"Security certificate"Section 8.102.
48	54		"Security entitlement"Section 8.102.
49	55		"Uncertificated security"Section 8.102.
50	56		"Virtual currency"Section 12.001.
51	57		SECTION 2. Subchapter A, Chapter 9, Business & Commerce
52	58		Code, is amended by adding Section 9.1071 to read as follows:
53	59		Sec. 9.1071. CONTROL OF VIRTUAL CURRENCY. A secured party
54	60		has control of virtual currency as provided by Section 12.004.
55	61		SECTION 3. Section 9.310(b), Business & Commerce Code, is
56	62		amended to read as follows:
57	63		(b) The filing of a financing statement is not necessary to
58	64		perfect a security interest:
59	65		(1) that is perfected under Section 9.308(d), (e),
60	66		(f), or (g);
61	67		(2) that is perfected under Section 9.309 when it
62	68		attaches;
63	69		(3) in property subject to a statute, regulation, or
64	70		treaty described in Section 9.311(a);
65	71		(4) in goods in possession of a bailee that is
66	72		perfected under Section 9.312(d)(1) or (2);
67	73		(5) in certificated securities, documents, goods, or
68	74		instruments which is perfected without filing, control or
69	75		possession under Section 9.312(e), (f), or (g);
70	76		(6) in collateral in the secured party's possession
71	77		under Section 9.313;
72	78		(7) in a certificated security that is perfected by
73	79		delivery of the security certificate to the secured party under
74	80		Section 9.313;
75	81		(8) in deposit accounts, electronic chattel paper,
76	82		electronic documents, investment property, virtual currencies, or
77	83		letter-of-credit rights that is perfected by control under Section
78	84		9.314;
79	85		(9) in proceeds that is perfected under Section 9.315;
80	86		(10) that is perfected under Section 9.316; or
81	87		(11) in oil or gas production or their proceeds under
82	88		Section 9.343.
83	89		SECTION 4. The heading to Section 9.312, Business &
84	90		Commerce Code, is amended to read as follows:
85	91		Sec. 9.312. PERFECTION OF SECURITY INTERESTS IN CHATTEL
86	92		PAPER, DEPOSIT ACCOUNTS, DOCUMENTS, AND GOODS COVERED BY DOCUMENTS,
87	93		INSTRUMENTS, INVESTMENT PROPERTY, VIRTUAL CURRENCIES,
88	94		LETTER-OF-CREDIT RIGHTS, AND MONEY; PERFECTION BY PERMISSIVE
89	95		FILING; TEMPORARY PERFECTION WITHOUT FILING OR TRANSFER OF
90	96		POSSESSION.
91	97		SECTION 5. Section 9.312(a), Business & Commerce Code, is
92	98		amended to read as follows:
93	99		(a) A security interest in chattel paper, negotiable
94	100		documents, instruments, [or] investment property, and virtual
95	101		currencies may be perfected by filing.
96	102		SECTION 6. Sections 9.314(a) and (b), Business & Commerce
97	103		Code, are amended to read as follows:
98	104		(a) A security interest in investment property, deposit
99	105		accounts, letter-of-credit rights, virtual currencies, electronic
100	106		chattel paper, or electronic documents may be perfected by control
101	107		of the collateral under Section 7.106, 9.104, 9.105, 9.106, [or]
102	108		9.107, or 9.1071.
103	109		(b) A security interest in deposit accounts, electronic
104	110		chattel paper, virtual currencies, letter-of-credit rights, or
105	111		electronic documents is perfected by control under Section 7.106,
106	112		9.104, 9.105, [or] 9.107, or 9.1071 when the secured party obtains
107	113		control and remains perfected by control only while the secured
108	114		party retains control.
109	115		SECTION 7. The heading to Section 9.331, Business &
110	116		Commerce Code, is amended to read as follows:
111	117		Sec. 9.331. PRIORITY OF RIGHTS OF PURCHASERS OF
112	118		INSTRUMENTS, DOCUMENTS, [AND] SECURITIES, AND VIRTUAL CURRENCIES
113	119		UNDER OTHER CHAPTERS; PRIORITY OF INTERESTS IN FINANCIAL ASSETS AND
114	120		SECURITY ENTITLEMENTS UNDER CHAPTER 8 AND VIRTUAL CURRENCIES UNDER
115	121		CHAPTER 12.
116	122		SECTION 8. Sections 9.331(a) and (b), Business & Commerce
117	123		Code, are amended to read as follows:
118	124		(a) This chapter does not limit the rights of a holder in due
119	125		course of a negotiable instrument, a holder to which a negotiable
120	126		document of title has been duly negotiated, [or] a protected
121	127		purchaser of a security, or a qualifying purchaser of a virtual
122	128		currency. These holders or purchasers take priority over an earlier
123	129		security interest, even if perfected, to the extent provided in
124	130		Chapters 3, 7, [and] 8, and 12.
125	131		(b) This chapter does not limit the rights of or impose
126	132		liability on a person to the extent that the person is protected
127	133		against the assertion of a claim under Chapter 8 or 12.
128	134		SECTION 9. Title 1, Business & Commerce Code, is amended by
129	135		adding Chapter 12 to read as follows:
130	136		CHAPTER 12. VIRTUAL CURRENCY
131	137		Sec. 12.001. DEFINITION. In this chapter, "virtual
132	138		currency":
133	139		(1) means a digital representation of value that:
134	140		(A) is used as a medium of exchange, unit of
135	141		account, or store of value; and
136	142		(B) is not legal tender, whether or not
137	143		denominated in legal tender; and
138	144		(2) does not include:
139	145		(A) a transaction in which a merchant grants, as
140	146		part of an affinity or rewards program, value that cannot be taken
141	147		from or exchanged with the merchant for legal tender, bank credit,
142	148		or virtual currency; or
143	149		(B) a digital representation of value issued by
144	150		or on behalf of a publisher and used solely within an online game,
145	151		game platform, or family of games sold by the same publisher or
146	152		offered on the same game platform.
147	153		Sec. 12.002. SCOPE. This chapter applies to virtual
148	154		currency.
149	155		Sec. 12.003. RIGHTS IN VIRTUAL CURRENCY. (a) In this
150	156		section:
151	157		(1) "Adverse claim" means a claim that a claimant has a
152	158		property interest in a virtual currency and that it is a violation
153	159		of the rights of the claimant for another person to hold, transfer,
154	160		or deal with the virtual currency.
155	161		(2) "Qualifying purchaser" means a purchaser that
156	162		obtains control of a virtual currency for value and without notice
157	163		of any adverse claim.
158	164		(b) Subject to Subsections (c) through (h), law other than
159	165		this chapter determines whether a person acquires rights in a
160	166		virtual currency and the rights that the person acquires.
161	167		(c) A purchaser of a virtual currency acquires all rights in
162	168		the virtual currency that the transferor had or had power to
163	169		transfer.
164	170		(d) A purchaser of a limited interest in a virtual currency
165	171		acquires rights only to the extent of the interest purchased.
166	172		(e) In addition to acquiring the rights of a purchaser, a
167	173		qualifying purchaser acquires the purchaser's rights in a virtual
168	174		currency free of any adverse claim.
169	175		(f) An action based on an adverse claim to a virtual
170	176		currency, whether framed in conversion, replevin, constructive
171	177		trust, equitable lien, or other theory, may not be asserted against
172	178		a qualifying purchaser that acquires the purchaser's interest in,
173	179		and obtains control of, the virtual currency for value and without
174	180		notice of the adverse claim.
175	181		(g) A person has notice of an adverse claim if:
176	182		(1) the person knows of the adverse claim; or
177	183		(2) the person is aware of facts sufficient to
178	184		indicate that there is a significant probability that the adverse
179	185		claim exists and deliberately avoids information that would
180	186		establish the existence of the adverse claim.
181	187		(h) Filing of a financing statement under Chapter 9 is not
182	188		notice of an adverse claim to a virtual currency.
183	189		Sec. 12.004. CONTROL OF VIRTUAL CURRENCY. (a) A person has
184	190		control of a virtual currency if the following conditions are met:
185	191		(1) the virtual currency or the system in which the
186	192		virtual currency is recorded, if any, gives the person:
187	193		(A) the power to derive substantially all the
188	194		benefit from the virtual currency;
189	195		(B) subject to Subsection (b), the exclusive
190	196		power to prevent others from deriving substantially all the benefit
191	197		from the virtual currency; and
192	198		(C) subject to Subsection (b), the exclusive
193	199		power to transfer control of the virtual currency to another person
194	200		or cause another person to obtain control of a virtual currency that
195	201		derives from the virtual currency; and
196	202		(2) the virtual currency, a record attached to or
197	203		logically associated with the virtual currency, or the system in
198	204		which the virtual currency is recorded, if any, enables the person
199	205		to readily identify the person as having the powers specified in
200	206		Subdivision (1).
201	207		(b) A power specified in Subsection (a)(1)(B) or (C) can be
202	208		exclusive, even if:
203	209		(1) the virtual currency or the system in which the
204	210		virtual currency is recorded, if any, limits the use to which the
205	211		virtual currency may be put or has protocols that are programmed to
206	212		result in a transfer of control; and
207	213		(2) the person has agreed to share the power with
208	214		another person.
209	215		(c) For the purposes of Subsection (a)(2), a person may be
210	216		identified in any way, including by name, identifying number,
211	217		cryptographic key, office, or account number.
212	218		SECTION 10. The changes in law made by this Act apply to a
213	219		transaction entered into on or after the effective date of this Act.
214	220		SECTION 11. The changes in law made by this Act apply only
215	221		to an action, case, or proceeding commenced on or after the
216	222		effective date of this Act.
217	223		SECTION 12. This Act takes effect September 1, 2021.
218		-	______________________________ ______________________________
219		-	President of the Senate Speaker of the House
220		-	I certify that H.B. No. 4474 was passed by the House on May
221		-	11, 2021, by the following vote: Yeas 126, Nays 17, 2 present, not
222		-	voting.
223		-	______________________________
224		-	Chief Clerk of the House
225		-	I certify that H.B. No. 4474 was passed by the Senate on May
226		-	27, 2021, by the following vote: Yeas 31, Nays 0.
227		-	______________________________
228		-	Secretary of the Senate
229		-	APPROVED: _____________________
230		-	Date
231		-	_____________________
232		-	Governor
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