VT
Vermont House Bill H0206

Vermont 2025-2026 Regular Session

Vermont House Bill H0206 Compare Versions

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1-BILLASPASSEDBYTHEHOUSE H.206
1+BILL AS INTRODUCED H.206
22 2025 Page 1 of 124
3-H.206
4-IntroducedbyRepresentativesMarcotteofCoventry,GraningofJericho,and
5-WhiteofBethel
6-ReferredtoCommitteeon
7-Date:
8-Subject:UniformCommercialCode
9-Statementofpurposeofbillasintroduced:Thisbillproposestorevisethe
10-UniformCommercialCode.
11-AnactrelatingtotheUniformCommercialCode
12-ItisherebyenactedbytheGeneralAssemblyoftheStateofVermont:
13-Sec.1.9AV.S.A.article1isamendedtoread:
14-ARTICLE1.GENERALPROVISIONS
15-***
16-§1—201.GENERALDEFINITIONS
17-***
18-(b)Subjecttodefinitionscontainedinotherarticlesofthistitlethatapply
19-toparticulararticlesorpartsthereof:
20-***
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38-18 BILLASPASSEDBYTHEHOUSE H.206
3+
4+
5+VT LEG #378799 v.1
6+H.206 1
7+Introduced by Representatives Marcotte of Coventry, Graning of Jericho, and 2
8+White of Bethel 3
9+Referred to Committee on 4
10+Date: 5
11+Subject: Uniform Commercial Code 6
12+Statement of purpose of bill as introduced: This bill proposes to revise the 7
13+Uniform Commercial Code. 8
14+An act relating to the Uniform Commercial Code 9
15+It is hereby enacted by the General Assembly of the State of Vermont: 10
16+Sec. 1. 9A V.S.A. article 1 is amended to read: 11
17+ARTICLE 1. GENERAL PROVISIONS 12
18+* * * 13
19+§ 1—201. GENERAL DEFINITIONS 14
20+* * * 15
21+(b) Subject to definitions contained in other articles of this title that apply 16
22+to particular articles or parts thereof: 17
23+* * * 18
24+(10) “Conspicuous,” with reference to a term, means so written, 19
25+displayed, or presented that, based on the totality of the circumstances, a 20 BILL AS INTRODUCED H.206
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40-(10)“Conspicuous,”withreferencetoaterm,meanssowritten,
41-displayed,orpresentedthat,basedonthetotalityofthecircumstances,a
42-reasonablepersonagainstwhichitistooperateoughttohavenoticedit.
43-Whetheratermis“conspicuous”ornotisadecisionforthecourt.
44-Conspicuoustermsincludethefollowing:
45-(A)aheadingincapitalsequaltoorgreaterinsizethanthe
46-surroundingtext,orincontrastingtype,font,orcolortothesurroundingtext
47-ofthesameorlessersize;and
48-(B)languageinthebodyofarecordordisplayinlargertypethanthe
49-surroundingtext,orincontrastingtype,font,orcolortothesurroundingtext
50-ofthesamesize,orsetofffromsurroundingtextofthesamesizebysymbols
51-orothermarksthatcallattentiontothelanguage.
52-***
53-(15)“Delivery,”withrespecttoanelectronicdocumentoftitlemeans
54-voluntarytransferofcontrolandwithrespecttoaninstrument,atangible
55-documentoftitle,oranauthoritativetangiblecopyofarecordevidencing
56-chattelpaper,meansvoluntarytransferofpossession.
57-(16)“Documentoftitle”meansarecord(i)thatintheregularcourseof
58-businessorfinancingistreatedasadequatelyevidencingthatthepersonin
59-possessionorcontroloftherecordisentitledtoreceive,control,hold,and
60-disposeoftherecordandthegoodstherecordcovers;and(ii)thatpurportsto
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81-21 BILLASPASSEDBYTHEHOUSE H.206
27+
28+
29+VT LEG #378799 v.1
30+reasonable person against which it is to operate ought to have noticed it. 1
31+Whether a term is “conspicuous” or not is a decision for the court. 2
32+Conspicuous terms include the following: 3
33+(A) a heading in capitals equal to or greater in size than the 4
34+surrounding text, or in contrasting type, font, or color to the surrounding text of 5
35+the same or lesser size; and 6
36+(B) language in the body of a record or display in larger type than the 7
37+surrounding text, or in contrasting type, font, or color to the surrounding text of 8
38+the same size, or set off from surrounding text of the same size by symbols or 9
39+other marks that call attention to the language. 10
40+* * * 11
41+(15) “Delivery,” with respect to an electronic document of title means 12
42+voluntary transfer of control and with respect to an instrument, a tangible 13
43+document of title, or an authoritative tangible copy of a record evidencing 14
44+chattel paper, means voluntary transfer of possession. 15
45+(16) “Document of title” means a record (i) that in the regular course of 16
46+business or financing is treated as adequately evidencing that the person in 17
47+possession or control of the record is entitled to receive, control, hold, and 18
48+dispose of the record and the goods the record covers; and (ii) that purports to 19
49+be issued by or addressed to a bailee and to cover goods in the bailee’s 20
50+possession which are either identified or are fungible portions of an identified 21 BILL AS INTRODUCED H.206
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83-beissuedbyoraddressedtoabaileeandtocovergoodsinthebailee’s
84-possessionwhichareeitheridentifiedorarefungibleportionsofanidentified
85-mass.Thetermincludesabilloflading,transportdocument,dockwarrant,
86-dockreceipt,warehousereceipt,andorderfordeliveryofgoods.An
87-electronicdocumentoftitlemeansadocumentoftitleevidencedbyarecord
88-consistingofinformationstoredinanelectronicmedium.Atangible
89-documentoftitlemeansadocumentoftitleevidencedbyarecordconsisting
90-ofinformationthatisinscribedonatangiblemedium.
91-(16A)“Electronic”meansrelatingtotechnologyhavingelectrical,
92-digital,magnetic,wireless,optical,electromagnetic,orsimilarcapabilities.
93-***
94-(21)“Holder”means:
95-(A)thepersoninpossessionofanegotiableinstrumentthatis
96-payableeithertobearerortoanidentifiedpersonthatisthepersonin
97-possession;
98-(B)thepersoninpossessionofanegotiabletangibledocumentof
99-titleifthegoodsaredeliverableeithertobearerortotheorderofthepersonin
100-possession;or
101-(C)thepersonincontrol,otherthanpursuanttosubsection7-106(g)
102-ofthistitle,ofanegotiableelectronicdocumentoftitle.
103-***
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52+
53+
54+VT LEG #378799 v.1
55+mass. The term includes a bill of lading, transport document, dock warrant, 1
56+dock receipt, warehouse receipt, and order for delivery of goods. An electronic 2
57+document of title means a document of title evidenced by a record consisting 3
58+of information stored in an electronic medium. A tangible document of title 4
59+means a document of title evidenced by a record consisting of information that 5
60+is inscribed on a tangible medium. 6
61+(16A) “Electronic” means relating to technology having electrical, 7
62+digital, magnetic, wireless, optical, electromagnetic, or similar capabilities. 8
63+* * * 9
64+(21) “Holder” means: 10
65+(A) the person in possession of a negotiable instrument that is 11
66+payable either to bearer or to an identified person that is the person in 12
67+possession; 13
68+(B) the person in possession of a negotiable tangible document of 14
69+title if the goods are deliverable either to bearer or to the order of the person in 15
70+possession; or 16
71+(C) the person in control, other than pursuant to section 7-106(g) of 17
72+this title, of a negotiable electronic document of title. 18
73+* * * 19
74+(24) “Money” means a medium of exchange that is currently authorized 20
75+or adopted by a domestic or foreign government. The term includes a 21 BILL AS INTRODUCED H.206
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126-(24)“Money”meansamediumofexchangethatiscurrentlyauthorized
127-oradoptedbyadomesticorforeigngovernment.Thetermincludesa
128-monetaryunitofaccountestablishedbyanintergovernmentalorganizationor
129-byagreementbetweentwoormorecountries.Thetermdoesnotincludean
130-electronicrecordthatisamediumofexchangerecordedandtransferableina
131-systemthatexistedandoperatedforthemediumofexchangebeforethe
132-mediumofexchangewasauthorizedoradoptedbythegovernment.
133-***
134-(27)“Person”meansanindividual,corporation,businesstrust,estate,
135-trust,partnership,limitedliabilitycompany,association,jointventure,
136-government,governmentalsubdivision,agency,orinstrumentality,public
137-corporation,oranyotherlegalorcommercialentity.Thetermincludesa
138-protectedseries,howeverdenominated,ofanentityiftheprotectedseriesis
139-establishedunderlawotherthanprovidedinthistitlethatlimits,orlimitsif
140-conditionsspecifiedunderthelawaresatisfied,theabilityofacreditorofthe
141-entityorofanyotherprotectedseriesoftheentitytosatisfyaclaimfrom
142-assetsoftheprotectedseries.
143-***
144-(36)“Send”“Send,”inconnectionwithawriting,record,ornotice
145-notification,means:
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165-20 BILLASPASSEDBYTHEHOUSE H.206
77+
78+
79+VT LEG #378799 v.1
80+monetary unit of account established by an intergovernmental organization or 1
81+by agreement between two or more countries. The term does not include an 2
82+electronic record that is a medium of exchange recorded and transferable in a 3
83+system that existed and operated for the medium of exchange before the 4
84+medium of exchange was authorized or adopted by the government. 5
85+* * * 6
86+(27) “Person” means an individual, corporation, business trust, estate, 7
87+trust, partnership, limited liability company, association, joint venture, 8
88+government, governmental subdivision, agency, or instrumentality, public 9
89+corporation, or any other legal or commercial entity. The term includes a 10
90+protected series, however denominated, of an entity if the protected series is 11
91+established under law other than provided in this title that limits, or limits if 12
92+conditions specified under the law are satisfied, the ability of a creditor of the 13
93+entity or of any other protected series of the entity to satisfy a claim from 14
94+assets of the protected series. 15
95+* * * 16
96+(36) “Send” “Send,” in connection with a writing, record, or notice 17
97+notification, means: 18
98+(A) to deposit in the mail or, deliver for transmission, or transmit by 19
99+any other usual means of communication, with postage or cost of transmission 20
100+provided for and properly addressed and, in the case of an instrument, to an 21 BILL AS INTRODUCED H.206
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167-(A)todepositinthemailor,deliverfortransmission,ortransmitby
168-anyotherusualmeansofcommunication,withpostageorcostoftransmission
169-providedforandproperlyaddressedand,inthecaseofaninstrument,toan
170-addressspecifiedthereonorotherwiseagreed,oriftherebenone,addressedto
171-anyaddressreasonableunderthecircumstances;or
172-(B)inanyotherwaytocausetobereceivedanyrecordornotice
173-withinthetimeitwouldhavearrivedifproperlysenttocausetherecordor
174-notificationtobereceivedwithinthetimeitwouldhavebeenreceivedif
175-properlysentundersubdivision(A)ofthissubdivision(b)(36).
176-(37)“Signed”includesusinganysymbolexecutedoradoptedwith
177-presentintentiontoadoptoracceptawriting.“Sign,”“signed,”“signing,”and
178-“signature”means,withpresentintenttoauthenticateoradoptarecord:
179-(A)executeoradoptatangiblesymbol;or
180-(B)attachtoorlogicallyassociatewiththerecordanelectronic
181-symbol,sound,orprocess.
182-***
183-§1—204.VALUE
184-ExceptasotherwiseprovidedinArticles3,4,and5,6,and12ofthistitle,a
185-persongivesvalueforrightsifthepersonacquiresthem:
186-***
187-§1—301.TERRITORIALAPPLICABILITY;PARTIES’POWERTO
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208-21 BILLASPASSEDBYTHEHOUSE H.206
102+
103+
104+VT LEG #378799 v.1
105+address specified thereon or otherwise agreed, or if there be none, addressed to 1
106+any address reasonable under the circumstances; or 2
107+(B) in any other way to cause to be received any record or notice 3
108+within the time it would have arrived if properly sent to cause the record or 4
109+notification to be received within the time it would have been received if 5
110+properly sent under subdivision (A) of this subdivision (b)(36). 6
111+(37) “Signed” includes using any symbol executed or adopted with 7
112+present intention to adopt or accept a writing. “Sign,” “signed,” “signing,” and 8
113+“signature” means, with present intent to authenticate or adopt a record: 9
114+(A) execute or adopt a tangible symbol; or 10
115+(B) attach to or logically associate with the record an electronic 11
116+symbol, sound, or process. 12
117+* * * 13
118+§ 1—204. VALUE 14
119+Except as otherwise provided in Articles 3, 4, and 5, 6, and 12 of this title, a 15
120+person gives value for rights if the person acquires them: 16
121+* * * 17
122+§ 1—301. TERRITORIAL APPLICABILITY; PARTIES’ POWER TO 18
123+ CHOOSE APPLICABLE LAW 19
124+* * * 20 BILL AS INTRODUCED H.206
209125 2025 Page 6 of 124
210-CHOOSEAPPLICABLELAW
211-***
212-(c)Ifoneofthefollowingprovisionsofthistitlespecifiestheapplicable
213-law,thatprovisiongovernsandacontraryagreementiseffectiveonlytothe
214-extentpermittedbythelawsospecified:
215-***
216-(7)Sections9—301through9—307.LawGoverningPerfection,the
217-EffectofPerfectionorNonperfection,andthePriorityofSecurityInterests.;
218-(8)Section12—107.GoverningLaw.
219-***
220-§1—306.WAIVERORRENUNCIATIONOFCLAIMORRIGHTAFTER
221-BREACH
222-Aclaimorrightarisingoutofanallegedbreachmaybedischargedin
223-wholeorinpartwithoutconsiderationbyagreementoftheaggrievedpartyin
224-anauthenticatedasignedrecord.
225-***
226-Sec.2.9AV.S.A.article2isamendedtoread:
227-ARTICLE2.SALES
228-***
229-§2—102.SCOPE;CERTAINSECURITYANDOTHERTRANSACTIONS
230-EXCLUDEDFROMTHISARTICLE
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126+
127+
128+VT LEG #378799 v.1
129+(c) If one of the following provisions of this title specifies the applicable 1
130+law, that provision governs and a contrary agreement is effective only to the 2
131+extent permitted by the law so specified: 3
132+* * * 4
133+(7) Sections 9—301 through 9—307. Law Governing Perfection, the 5
134+Effect of Perfection or Nonperfection, and the Priority of Security Interests.; 6
135+(8) Section 12—107. Governing Law. 7
136+* * * 8
137+§ 1—306. WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER 9
138+ BREACH 10
139+A claim or right arising out of an alleged breach may be discharged in 11
140+whole or in part without consideration by agreement of the aggrieved party in 12
141+an authenticated a signed record. 13
142+* * * 14
143+Sec. 2. 9A V.S.A. article 2 is amended to read: 15
144+ARTICLE 2. SALES 16
145+* * * 17
146+§ 2—102. SCOPE; CERTAIN SECURITY AND OTHER TRANSACTIONS 18
147+ EXCLUDED FROM THIS ARTICLE 19
148+Unless the context otherwise requires, this article applies to transactions in 20
149+goods; it does not apply to any transaction which although in the form of an 21 BILL AS INTRODUCED H.206
252150 2025 Page 7 of 124
253-Unlessthecontextotherwiserequires,thisarticleappliestotransactionsin
254-goods;itdoesnotapplytoanytransactionwhichalthoughintheformofan
255-unconditionalcontracttosellorpresentsaleisintendedtooperateonlyasa
256-securitytransactionnordoesthisarticleimpairorrepealanystatuteregulating
257-salestoconsumers,farmersorotherspecifiedclassesofbuyers.
258-(a)Unlessthecontextotherwiserequires,andexceptasprovidedin
259-subsection(c)ofthissection,thisarticleappliestotransactionsingoodsand,
260-inthecaseofahybridtransaction,itappliestotheextentprovidedin
261-subsection(b)ofthissection.
262-(b)Inahybridtransaction:
263-(1)Ifthesale-of-goodsaspectsdonotpredominate,onlytheprovisions
264-ofthisarticlewhichrelateprimarilytothesale-of-goodsaspectsofthe
265-transactionapply,andtheprovisionsthatrelateprimarilytothetransactionas
266-awholedonotapply.
267-(2)Ifthesale-of-goodsaspectspredominate,thisarticleappliestothe
268-transactionbutdoesnotprecludeapplicationinappropriatecircumstancesof
269-otherlawtoaspectsofthetransactionwhichdonotrelatetothesaleofgoods.
270-(c)Thisarticledoesnot:
271-(1)applytoatransactionthat,eventhoughintheformofan
272-unconditionalcontracttosellorpresentsale,operatesonlytocreateasecurity
273-interest;or
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294-21 BILLASPASSEDBYTHEHOUSE H.206
151+
152+
153+VT LEG #378799 v.1
154+unconditional contract to sell or present sale is intended to operate only as a 1
155+security transaction nor does this article impair or repeal any statute regulating 2
156+sales to consumers, farmers or other specified classes of buyers. 3
157+(a) Unless the context otherwise requires, and except as provided in 4
158+subsection (c) of this section, this article applies to transactions in goods and, 5
159+in the case of a hybrid transaction, it applies to the extent provided in 6
160+subsection (b) of this section. 7
161+(b) In a hybrid transaction: 8
162+(1) If the sale-of-goods aspects do not predominate, only the provisions 9
163+of this article which relate primarily to the sale-of-goods aspects of the 10
164+transaction apply, and the provisions that relate primarily to the transaction as a 11
165+whole do not apply. 12
166+(2) If the sale-of-goods aspects predominate, this article applies to the 13
167+transaction but does not preclude application in appropriate circumstances of 14
168+other law to aspects of the transaction which do not relate to the sale of goods. 15
169+(c) This article does not: 16
170+(1) apply to a transaction that, even though in the form of an 17
171+unconditional contract to sell or present sale, operates only to create a security 18
172+interest; or 19
173+(2) impair or repeal a statute regulating sales to consumers, farmers, or 20
174+other specified classes of buyers. 21 BILL AS INTRODUCED H.206
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296-(2)impairorrepealastatuteregulatingsalestoconsumers,farmers,or
297-otherspecifiedclassesofbuyers.
298-***
299-§2—106.DEFINITIONS:“CONTRACT”;“AGREEMENT”;“CONTRACT
300-FORSALE”;“SALE”;“PRESENTSALE”;“CONFORMING”
301-TOCONTRACT;“TERMINATION”;“CANCELLATION”;
302-“HYBRIDTRANSACTION”
303-***
304-(5)“Hybridtransaction”meansasingletransactioninvolvingasaleof
305-goodsand:
306-(A)theprovisionofservices;
307-(B)aleaseofothergoods;or
308-(C)asale,lease,orlicenseofpropertyotherthangoods.
309-***
310-§2—201.FORMALREQUIREMENTS;STATUTEOFFRAUDS
311-(1)Exceptasotherwiseprovidedinthissectionacontractforthesaleof
312-goodsforthepriceof$500ormoreisnotenforceablebywayofactionor
313-defenseunlessthereissomewritingarecordsufficienttoindicatethata
314-contractforsalehasbeenmadebetweenthepartiesandsignedbytheparty
315-againstwhomenforcementissoughtorbyhistheparty’sauthorizedagentor
316-broker.Awritingrecordisnotinsufficientbecauseitomitsorincorrectly
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337-21 BILLASPASSEDBYTHEHOUSE H.206
176+
177+
178+VT LEG #378799 v.1
179+* * * 1
180+§ 2—106. DEFINITIONS: “CONTRACT”; “AGREEMENT”; “CONTRACT 2
181+ FOR SALE”; “SALE”; “PRESENT SALE”; “CONFORMING” TO 3
182+ CONTRACT; “TERMINATION”; “CANCELLATION”; 4
183+ “HYBRID TRANSACTION” 5
184+* * * 6
185+(5) “Hybrid transaction” means a single transaction involving a sale of 7
186+goods and: 8
187+(A) the provision of services; 9
188+(B) a lease of other goods; or 10
189+(C) a sale, lease, or license of property other than goods. 11
190+* * * 12
191+§ 2—201. FORMAL REQUIREMENTS; STATUTE OF FRAUDS 13
192+(1) Except as otherwise provided in this section a contract for the sale of 14
193+goods for the price of $500 or more is not enforceable by way of action or 15
194+defense unless there is some writing a record sufficient to indicate that a 16
195+contract for sale has been made between the parties and signed by the party 17
196+against whom enforcement is sought or by his the party’s authorized agent or 18
197+broker. A writing record is not insufficient because it omits or incorrectly 19
198+states a term agreed upon but the contract is not enforceable under this 20 BILL AS INTRODUCED H.206
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339-statesatermagreeduponbutthecontractisnotenforceableunderthis
340-paragraphsubsectionbeyondthequantityofgoodsshowninsuchwritingthe
341-record.
342-(2)Betweenmerchantsifwithinareasonabletimeawritingrecordin
343-confirmationofthecontractandsufficientagainstthesenderisreceivedand
344-thepartyreceivingithasreasontoknowitscontents,itsatisfiesthe
345-requirementsofsubsection(1)againstsuchthepartyunlesswrittennoticeina
346-recordofobjectiontoitscontentsisgivenwithintendaysafteritisreceived.
347-***
348-§2—202.FINALWRITTENEXPRESSION:PAROLOREXTRINSIC
349-EVIDENCE
350-Termswithrespecttowhichtheconfirmatorymemorandaoftheparties
351-agreeorwhichareotherwisesetforthinawritingrecordintendedbythe
352-partiesasafinalexpressionoftheiragreementwithrespecttosuchtermsas
353-areincludedthereinmaynotbecontradictedbyevidenceofanyprior
354-agreementorofacontemporaneousoralagreementbutmaybeexplainedor
355-supplemented:
356-(a)bycourseofperformance,courseofdealing,orusageoftrade(§
357-1—303);and
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376-19 BILLASPASSEDBYTHEHOUSE H.206
200+
201+
202+VT LEG #378799 v.1
203+paragraph subsection beyond the quantity of goods shown in such writing the 1
204+record. 2
205+(2) Between merchants if within a reasonable time a writing record in 3
206+confirmation of the contract and sufficient against the sender is received and 4
207+the party receiving it has reason to know its contents, it satisfies the 5
208+requirements of subsection (1) against such the party unless written notice in a 6
209+record of objection to its contents is given within ten days after it is received. 7
210+* * * 8
211+§ 2—202. FINAL WRITTEN EXPRESSION: PAROL OR EXTRINSIC 9
212+ EVIDENCE 10
213+Terms with respect to which the confirmatory memoranda of the parties 11
214+agree or which are otherwise set forth in a writing record intended by the 12
215+parties as a final expression of their agreement with respect to such terms as 13
216+are included therein may not be contradicted by evidence of any prior 14
217+agreement or of a contemporaneous oral agreement but may be explained or 15
218+supplemented: 16
219+(a) by course of performance, course of dealing, or usage of trade (§ 1—17
220+303); and 18
221+(b) by evidence of consistent additional terms unless the court finds the 19
222+writing record to have been intended also as a complete and exclusive 20
223+statement of the terms of the agreement. 21 BILL AS INTRODUCED H.206
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378-(b)byevidenceofconsistentadditionaltermsunlessthecourtfindsthe
379-writingrecordtohavebeenintendedalsoasacompleteandexclusive
380-statementofthetermsoftheagreement.
381-§2—203.SEALSINOPERATIVE
382-Theaffixingofasealtoawritingrecordevidencingacontractforsaleor
383-anoffertobuyorsellgoodsdoesnotconstitutethewritingrecordasealed
384-instrumentandthelawwithrespecttosealedinstrumentsdoesnotapplyto
385-suchacontractoroffer.
386-***
387-§2—205.FIRMOFFERS
388-Anofferbyamerchanttobuyorsellgoodsinasignedwritingrecord
389-whichbyitstermsgivesassurancethatitwillbeheldopenisnotrevocable,
390-forlackofconsideration,duringthetimestatedorifnotimeisstatedfora
391-reasonabletime,butinnoeventmaysuchperiodofirrevocabilityexceedthree
392-months;butanysuchtermofassuranceonaformsuppliedbytheoffereemust
393-beseparatelysignedbytheofferor.
394-***
395-§2—209.MODIFICATION,RESCISSION,ANDWAIVER
396-(1)Anagreementmodifyingacontractwithinthisarticleneedsno
397-considerationtobebinding.
398-1
399-2
400-3
401-4
402-5
403-6
404-7
405-8
406-9
407-10
408-11
409-12
410-13
411-14
412-15
413-16
414-17
415-18
416-19
417-20 BILLASPASSEDBYTHEHOUSE H.206
225+
226+
227+VT LEG #378799 v.1
228+§ 2—203. SEALS INOPERATIVE 1
229+The affixing of a seal to a writing record evidencing a contract for sale or an 2
230+offer to buy or sell goods does not constitute the writing record a sealed 3
231+instrument and the law with respect to sealed instruments does not apply to 4
232+such a contract or offer. 5
233+* * * 6
234+§ 2—205. FIRM OFFERS 7
235+An offer by a merchant to buy or sell goods in a signed writing record 8
236+which by its terms gives assurance that it will be held open is not revocable, 9
237+for lack of consideration, during the time stated or if no time is stated for a 10
238+reasonable time, but in no event may such period of irrevocability exceed three 11
239+months; but any such term of assurance on a form supplied by the offeree must 12
240+be separately signed by the offeror. 13
241+* * * 14
242+§ 2—209. MODIFICATION, RESCISSION, AND WA IVER 15
243+(1) An agreement modifying a contract within this article needs no 16
244+consideration to be binding. 17
245+(2) A signed agreement which excludes modification or rescission except 18
246+by a signed writing or other signed record cannot be otherwise modified or 19
247+rescinded, but except as between merchants such a requirement on a form 20
248+supplied by the merchant must be separately signed by the other party. 21 BILL AS INTRODUCED H.206
418249 2025 Page 11 of 124
419-(2)Asignedagreementwhichexcludesmodificationorrescissionexcept
420-byasignedwritingorothersignedrecordcannotbeotherwisemodifiedor
421-rescinded,butexceptasbetweenmerchantssucharequirementonaform
422-suppliedbythemerchantmustbeseparatelysignedbytheotherparty.
423-***
424-Sec.3.9AV.S.A.article2Aisamendedtoread:
425-ARTICLE2A.LEASES
426-***
427-§2A—102.SCOPE
428-(1)Thisarticleappliestoanytransaction,regardlessofform,thatcreatesa
429-lease,and,inthecaseofahybridlease,itappliestotheextentprovidedin
430-subdivision(2)ofthissection.
431-(2)Inahybridlease:
432-A)ifthelease-of-goodsaspectsdonotpredominate:
433-(i)onlytheprovisionsofthisarticlewhichrelateprimarilytothe
434-lease-of-goodsaspectsofthetransactionapply,andtheprovisionsthatrelate
435-primarilytothetransactionasawholedonotapply;
436-(ii)section2A—209ofthistitleappliesiftheleaseisafinance
437-lease;and
438-(iii)section2A—407ofthistitleappliestothepromisesofthe
439-lesseeinafinanceleasetotheextentthepromisesareconsiderationforthe
440-1
441-2
442-3
443-4
444-5
445-6
446-7
447-8
448-9
449-10
450-11
451-12
452-13
453-14
454-15
455-16
456-17
457-18
458-19
459-20
460-21 BILLASPASSEDBYTHEHOUSE H.206
250+
251+
252+VT LEG #378799 v.1
253+* * * 1
254+Sec. 3. 9A V.S.A. article 2A is amended to read: 2
255+ARTICLE 2A. LEASES 3
256+* * * 4
257+§ 2A—102. SCOPE 5
258+(1) This article applies to any transaction, regardless of form, that creates a 6
259+lease, and, in the case of a hybrid lease, it applies to the extent provided in 7
260+subdivision (2) of this section. 8
261+(2) In a hybrid lease: 9
262+A) if the lease-of-goods aspects do not predominate: 10
263+(i) only the provisions of this article which relate primarily to the 11
264+lease-of-goods aspects of the transaction apply, and the provisions that relate 12
265+primarily to the transaction as a whole do not apply; 13
266+(ii) section 2A—209 of this title applies if the lease is a finance 14
267+lease; and 15
268+(iii) section 2A—407 of this title applies to the promises of the 16
269+lessee in a finance lease to the extent the promises are consideration for the 17
270+right to possession and use of the leased goods; and 18
271+(B) if the lease-of-goods aspects predominate, this article applies to 19
272+the transaction, but does not preclude application in appropriate circumstances 20
273+of other law to aspects of the lease which do not relate to the lease of goods. 21 BILL AS INTRODUCED H.206
461274 2025 Page 12 of 124
462-righttopossessionanduseoftheleasedgoods;and
463-(B)ifthelease-of-goodsaspectspredominate,thisarticleappliesto
464-thetransaction,butdoesnotprecludeapplicationinappropriatecircumstances
465-ofotherlawtoaspectsoftheleasewhichdonotrelatetotheleaseofgoods.
466-§2A—103.DEFINITIONSANDINDEXOFDEFINITIONS
467-(1)Inthisarticleunlessthecontextotherwiserequires:
468-***
469-(h)“Goods”meansallthingsthataremovableatthetimeof
470-identificationtotheleasecontract,orarefixtures(§2A—309),buttheterm
471-doesnotincludemoney,documents,instruments,accounts,chattelpaper,
472-generalintangibles,ormineralsorthelike,includingoilandgas,before
473-extraction.Thetermalsoincludestheunbornyoungofanimals.
474-(h.1)“Hybridlease”meansasingletransactioninvolvingaleaseof
475-goodsand:
476-(i)theprovisionofservices;
477-(ii)asaleofothergoods;or
478-(iii)asale,lease,orlicenseofpropertyotherthangoods.
479-***
480-§2A—107.WAIVERORRENUNCIATIONOFCLAIMORRIGHT
481-AFTERDEFAULT
482-1
483-2
484-3
485-4
486-5
487-6
488-7
489-8
490-9
491-10
492-11
493-12
494-13
495-14
496-15
497-16
498-17
499-18
500-19
501-20 BILLASPASSEDBYTHEHOUSE H.206
275+
276+
277+VT LEG #378799 v.1
278+§ 2A—103. DEFINITIONS AND INDEX OF DEFINITIONS 1
279+(1) In this article unless the context otherwise requires: 2
280+* * * 3
281+(h) “Goods” means all things that are movable at the time of 4
282+identification to the lease contract, or are fixtures (§ 2A—309), but the term 5
283+does not include money, documents, instruments, accounts, chattel paper, 6
284+general intangibles, or minerals or the like, including oil and gas, before 7
285+extraction. The term also includes the unborn young of animals. 8
286+(h.1) “Hybrid lease” means a single transaction involving a lease of 9
287+goods and: 10
288+(i) the provision of services; 11
289+(ii) a sale of other goods; or 12
290+(iii) a sale, lease, or license of property other than goods. 13
291+* * * 14
292+§ 2A—107. WAIVER OR RENUNCIATION OF CLAIM OR RIGHT 15
293+ AFTER DEFAULT 16
294+Any claim or right arising out of an alleged default or breach of warranty 17
295+may be discharged in whole or in part without consideration by a written 18
296+waiver or renunciation in a signed and record delivered by the aggrieved party. 19
297+* * * 20 BILL AS INTRODUCED H.206
502298 2025 Page 13 of 124
503-Anyclaimorrightarisingoutofanallegeddefaultorbreachofwarranty
504-maybedischargedinwholeorinpartwithoutconsiderationbyawritten
505-waiverorrenunciationinasignedandrecorddeliveredbytheaggrievedparty.
506-***
507-§2A—201.STATUTEOFFRAUDS
508-(1)Aleasecontractisnotenforceablebywayofactionordefenseunless:
509-***
510-(b)thereisawritingrecord,signedbythepartyagainstwhom
511-enforcementissoughtorbythatparty’sauthorizedagent,sufficienttoindicate
512-thataleasecontracthasbeenmadebetweenthepartiesandtodescribethe
513-goodsleasedandtheleaseterm.
514-(2)Anydescriptionofleasedgoodsoroftheleasetermissufficientand
515-satisfiessubsection(1)(b)ofthissection,whetherornotitisspecific,ifit
516-reasonablyidentifieswhatisdescribed.
517-(3)Awritingrecordisnotinsufficientbecauseitomitsorincorrectlystates
518-atermagreedupon,buttheleasecontractisnotenforceableundersubsection
519-(1)(b)ofthissectionbeyondtheleasetermandthequantityofgoodsshownin
520-thewritingrecord.
521-***
522-(5)Theleasetermunderaleasecontractreferredtoinsubsection(4)of
523-thissectionis:
524-1
525-2
526-3
527-4
528-5
529-6
530-7
531-8
532-9
533-10
534-11
535-12
536-13
537-14
538-15
539-16
540-17
541-18
542-19
543-20
544-21 BILLASPASSEDBYTHEHOUSE H.206
299+
300+
301+VT LEG #378799 v.1
302+§ 2A—201. STATUTE OF FRAUDS 1
303+(1) A lease contract is not enforceable by way of action or defense unless: 2
304+* * * 3
305+(b) there is a writing record, signed by the party against whom 4
306+enforcement is sought or by that party’s authorized agent, sufficient to indicate 5
307+that a lease contract has been made between the parties and to describe the 6
308+goods leased and the lease term. 7
309+(2) Any description of leased goods or of the lease term is sufficient and 8
310+satisfies subsection (1)(b) of this section, whether or not it is specific, if it 9
311+reasonably identifies what is described. 10
312+(3) A writing record is not insufficient because it omits or incorrectly states 11
313+a term agreed upon, but the lease contract is not enforceable under subsection 12
314+(1)(b) of this section beyond the lease term and the quantity of goods shown in 13
315+the writing record. 14
316+* * * 15
317+(5) The lease term under a lease contract referred to in subsection (4) of 16
318+this section is: 17
319+(a) if there is a writing record signed by the party against whom 18
320+enforcement is sought or by that party’s authorized agent specifying the lease 19
321+term, the term so specified; 20
322+* * * 21 BILL AS INTRODUCED H.206
545323 2025 Page 14 of 124
546-(a)ifthereisawritingrecordsignedbythepartyagainstwhom
547-enforcementissoughtorbythatparty’sauthorizedagentspecifyingthelease
548-term,thetermsospecified;
549-***
550-§2A—202.FINALWRITTENEXPRESSION;PAROLOREXTRINSIC
551-EVIDENCE
552-Termswithrespecttowhichtheconfirmatorymemorandaoftheparties
553-agreeorwhichareotherwisesetforthinawritingrecordintendedbythe
554-partiesasafinalexpressionoftheiragreementwithrespecttosuchtermsas
555-areincludedthereinmaynotbecontradictedbyevidenceofanyprior
556-agreementorofacontemporaneousoralagreementbutmaybeexplainedor
557-supplemented:
558-(a)bycourseofdealingorusageoftradeorbycourseofperformance;
559-and
560-(b)byevidenceofconsistentadditionaltermsunlessthecourtfindsthe
561-writingrecordtohavebeenintendedalsoasacompleteandexclusive
562-statementofthetermsoftheagreement.
563-§2A—203.SEALSINOPERATIVE
564-Theaffixingofasealtoawritingrecordevidencingaleasecontractoran
565-offertoenterintoaleasecontractdoesnotrenderthewritingrecordasealed
566-1
567-2
568-3
569-4
570-5
571-6
572-7
573-8
574-9
575-10
576-11
577-12
578-13
579-14
580-15
581-16
582-17
583-18
584-19
585-20 BILLASPASSEDBYTHEHOUSE H.206
324+
325+
326+VT LEG #378799 v.1
327+§ 2A—202. FINAL WRITTEN EXPRESSION; PAROL OR EXTRINSIC 1
328+ EVIDENCE 2
329+Terms with respect to which the confirmatory memoranda of the parties 3
330+agree or which are otherwise set forth in a writing record intended by the 4
331+parties as a final expression of their agreement with respect to such terms as 5
332+are included therein may not be contradicted by evidence of any prior 6
333+agreement or of a contemporaneous oral agreement but may be explained or 7
334+supplemented: 8
335+(a) by course of dealing or usage of trade or by course of performance; 9
336+and 10
337+(b) by evidence of consistent additional terms unless the court finds the 11
338+writing record to have been intended also as a complete and exclusive 12
339+statement of the terms of the agreement. 13
340+§ 2A—203. SEALS INOPERATIVE 14
341+The affixing of a seal to a writing record evidencing a lease contract or an 15
342+offer to enter into a lease contract does not render the writing record a sealed 16
343+instrument and the law with respect to sealed instruments does not apply to the 17
344+lease contract or offer. 18
345+* * * 19 BILL AS INTRODUCED H.206
586346 2025 Page 15 of 124
587-instrumentandthelawwithrespecttosealedinstrumentsdoesnotapplytothe
588-leasecontractoroffer.
589-***
590-§2A—205.FIRMOFFERS
591-Anofferbyamerchanttoleasegoodstoorfromanotherpersoninasigned
592-writingrecordthatbyitstermsgivesassuranceitwillbeheldopenisnot
593-revocable,forlackofconsideration,duringthetimestatedor,ifnotimeis
594-stated,forareasonabletime,butinnoeventmaytheperiodofirrevocability
595-exceedthreemonths.Anysuchtermofassuranceonaformsuppliedbythe
596-offereemustbeseparatelysignedbytheofferor.
597-***
598-§2A—208.MODIFICATION,RESCISSIONANDWAIVER
599-(1)Anagreementmodifyingaleasecontractneedsnoconsiderationtobe
600-binding.
601-(2)Asignedleaseagreementthatexcludesmodificationorrescission
602-exceptbyasignedwritingrecordmaynotbeotherwisemodifiedorrescinded,
603-but,exceptasbetweenmerchants,sucharequirementonaformsuppliedbya
604-merchantmustbeseparatelysignedbytheotherparty.
605-***
606-Sec.4.9AV.S.A.article3isamendedtoread:
607-ARTICLE3.COMMERCIAL PAPER
608-1
609-2
610-3
611-4
612-5
613-6
614-7
615-8
616-9
617-10
618-11
619-12
620-13
621-14
622-15
623-16
624-17
625-18
626-19
627-20
628-21 BILLASPASSEDBYTHEHOUSE H.206
347+
348+
349+VT LEG #378799 v.1
350+§ 2A—205. FIRM OFFERS 1
351+An offer by a merchant to lease goods to or from another person in a signed 2
352+writing record that by its terms gives assurance it will be held open is not 3
353+revocable, for lack of consideration, during the time stated or, if no time is 4
354+stated, for a reasonable time, but in no event may the period of irrevocability 5
355+exceed three months. Any such term of assurance on a form supplied by the 6
356+offeree must be separately signed by the offeror. 7
357+* * * 8
358+§ 2A—208. MODIFICATION, RESCISSION AND WAIVER 9
359+(1) An agreement modifying a lease contract needs no consideration to be 10
360+binding. 11
361+(2) A signed lease agreement that excludes modification or rescission 12
362+except by a signed writing record may not be otherwise modified or rescinded, 13
363+but, except as between merchants, such a requirement on a form supplied by a 14
364+merchant must be separately signed by the other party. 15
365+* * * 16
366+Sec. 4. 9A V.S.A. article 3 is amended to read: 17
367+ARTICLE 3. COMMERCIAL PAPER 18
368+* * * 19 BILL AS INTRODUCED H.206
629369 2025 Page 16 of 124
630-***
631-§3—104.NEGOTIABLEINSTRUMENT
632-(a)Exceptasprovidedinsubsections(c)and(d)ofthissection,
633-“negotiableinstrument”meansanunconditionalpromiseorordertopaya
634-fixedamountofmoney,withorwithoutinterestorotherchargesdescribedin
635-thepromiseororder,ifit:
636-***
637-(3)doesnotstateanyotherundertakingorinstructionbytheperson
638-promisingororderingpaymenttodoanyactinadditiontothepaymentof
639-money,butthepromiseorordermaycontain(i)anundertakingorpowerto
640-give,maintain,orprotectcollateraltosecurepayment,(ii)anauthorizationor
641-powertotheholdertoconfessjudgmentorrealizeonordisposeofcollateral,
642-or(iii)awaiverofthebenefitofanylawintendedfortheadvantageor
643-protectionofanobligor,(iv)atermthatspecifiesthelawthatgovernsthe
644-promiseororder,or(v)anundertakingtoresolveinaspecifiedforuma
645-disputeconcerningthepromiseororder.
646-***
647-§3—105.ISSUEOFINSTRUMENT
648-(a)“Issue”means:
649-1
650-2
651-3
652-4
653-5
654-6
655-7
656-8
657-9
658-10
659-11
660-12
661-13
662-14
663-15
664-16
665-17
666-18
667-19 BILLASPASSEDBYTHEHOUSE H.206
370+
371+
372+VT LEG #378799 v.1
373+§ 3—104. NEGOTIABLE INSTRUMENT 1
374+(a) Except as provided in subsections (c) and (d) of this section, 2
375+“negotiable instrument” means an unconditional promise or order to pay a 3
376+fixed amount of money, with or without interest or other charges described in 4
377+the promise or order, if it: 5
378+* * * 6
379+(3) does not state any other undertaking or instruction by the person 7
380+promising or ordering payment to do any act in addition to the payment of 8
381+money, but the promise or order may contain (i) an undertaking or power to 9
382+give, maintain, or protect collateral to secure payment, (ii) an authorization or 10
383+power to the holder to confess judgment or realize on or dispose of collateral, 11
384+or (iii) a waiver of the benefit of any law intended for the advantage or 12
385+protection of an obligor, (iv) a term that specifies the law that governs the 13
386+promise or order, or (v) an undertaking to resolve in a specified forum a 14
387+dispute concerning the promise or order. 15
388+* * * 16
389+§ 3—105. ISSUE OF INSTRUMENT 17
390+(a) “Issue” means: 18
391+(1) the first delivery of an instrument by the maker or drawer, whether 19
392+to a holder or nonholder, for the purpose of giving rights on the instrument to 20
393+any person; or 21 BILL AS INTRODUCED H.206
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669-(1)thefirstdeliveryofaninstrumentbythemakerordrawer,whether
670-toaholderornonholder,forthepurposeofgivingrightsontheinstrumentto
671-anyperson;or
672-(2)ifagreedbythepayee,thefirsttransmissionbythedrawertothe
673-payeeofanimageofanitemandinformationderivedfromtheitemthat
674-enablesthedepositarybanktocollecttheitembytransferringorpresenting
675-underfederallawanelectroniccheck.
676-***
677-§3—401.SIGNATURENECESSARYFORLIABILITYON
678-INSTRUMENT
679-(a)Apersonisnotliableonaninstrumentunless(i)thepersonsignedthe
680-instrument,or(ii)thepersonisrepresentedbyanagentorrepresentativewho
681-signedtheinstrumentandthesignatureisbindingontherepresentedperson
682-undersection3—402ofthistitle.
683-(b)Asignaturemaybemade(i)manuallyorbymeansofadeviceor
684-machine,and(ii)bytheuseofanyname,includingatradeorassumedname,
685-orbyaword,mark,orsymbolexecutedoradoptedbyapersonwithpresent
686-intentiontoauthenticateawriting.
687-***
688-§3—604.DISCHARGEBYCANCELLATIONORRENUNCIATION
689-1
690-2
691-3
692-4
693-5
694-6
695-7
696-8
697-9
698-10
699-11
700-12
701-13
702-14
703-15
704-16
705-17
706-18
707-19
708-20 BILLASPASSEDBYTHEHOUSE H.206
395+
396+
397+VT LEG #378799 v.1
398+(2) if agreed by the payee, the first transmission by the drawer to the 1
399+payee of an image of an item and information derived from the item that 2
400+enables the depositary bank to collect the item by transferring or presenting 3
401+under federal law an electronic check. 4
402+* * * 5
403+§ 3—401. SIGNATURE NECESSARY FOR LIABILITY ON 6
404+ INSTRUMENT 7
405+(a) A person is not liable on an instrument unless (i) the person signed the 8
406+instrument, or (ii) the person is represented by an agent or representative who 9
407+signed the instrument and the signature is binding on the represented person 10
408+under section 3—402 of this title. 11
409+(b) A signature may be made (i) manually or by means of a device or 12
410+machine, and (ii) by the use of any name, including a trade or assumed name, 13
411+or by a word, mark, or symbol executed or adopted by a person with present 14
412+intention to authenticate a writing. 15
413+* * * 16
414+§ 3—604. DISCHARGE BY CANCELLATION OR RENUNCIATION 17
415+(a) A person entitled to enforce an instrument, with or without 18
416+consideration, may discharge the obligation of a party to pay the instrument (i) 19
417+by an intentional voluntary act, such as surrender of the instrument to the party, 20
418+destruction, mutilation, or cancellation of the instrument, cancellation or 21 BILL AS INTRODUCED H.206
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710-(a)Apersonentitledtoenforceaninstrument,withorwithout
711-consideration,maydischargetheobligationofapartytopaytheinstrument(i)
712-byanintentionalvoluntaryact,suchassurrenderoftheinstrumenttothe
713-party,destruction,mutilation,orcancellationoftheinstrument,cancellationor
714-strikingoutoftheparty’ssignature,ortheadditionofwordstotheinstrument
715-indicatingdischarge,or(ii)byagreeingnottosueorotherwiserenouncing
716-rightsagainstthepartybyasignedwritingrecord.Theobligationofapartyto
717-payacheckisnotdischargedsolelybydestructionofthecheckinconnection
718-withaprocessinwhichinformationisextractedfromthecheckandanimage
719-ofthecheckismadeand,subsequently,theinformationandimageare
720-transmittedforpayment.
721-***
722-Sec.5.9AV.S.A.article4Aisamendedtoread:
723-ARTICLE4A.FUNDSTRANSFERS
724-***
725-§4A—103.PAYMENTORDER—DEFINITIONS
726-(a)Inthisarticle:
727-(1)“Paymentorder”meansaninstructionofasendertoareceiving
728-bank,transmittedorally,electronically,orinwritingorinarecord,topay,or
729-tocauseanotherbanktopay,afixedordeterminableamountofmoneytoa
730-beneficiaryif:
731-1
732-2
733-3
734-4
735-5
736-6
737-7
738-8
739-9
740-10
741-11
742-12
743-13
744-14
745-15
746-16
747-17
748-18
749-19
750-20
751-21 BILLASPASSEDBYTHEHOUSE H.206
420+
421+
422+VT LEG #378799 v.1
423+striking out of the party’s signature, or the addition of words to the instrument 1
424+indicating discharge, or (ii) by agreeing not to sue or otherwise renouncing 2
425+rights against the party by a signed writing record. The obligation of a party to 3
426+pay a check is not discharged solely by destruction of the check in connection 4
427+with a process in which information is extracted from the check and an image 5
428+of the check is made and, subsequently, the information and image are 6
429+transmitted for payment. 7
430+* * * 8
431+Sec. 5. 9A V.S.A. article 4A is amended to read: 9
432+ARTICLE 4A. FUNDS TRANSFERS 10
433+* * * 11
434+§ 4A—103. PAYMENT ORDER—DEFINITIONS 12
435+(a) In this article: 13
436+(1) “Payment order” means an instruction of a sender to a receiving 14
437+bank, transmitted orally, electronically, or in writing or in a record, to pay, or 15
438+to cause another bank to pay, a fixed or determinable amount of money to a 16
439+beneficiary if: 17
440+(i) the instruction does not state a condition to payment to the 18
441+beneficiary other than time of payment; 19
442+(ii) the receiving bank is to be reimbursed by debiting an account of, 20
443+or otherwise receiving payment from, the sender; and 21 BILL AS INTRODUCED H.206
752444 2025 Page 19 of 124
753-(i)theinstructiondoesnotstateaconditiontopaymenttothe
754-beneficiaryotherthantimeofpayment;
755-(ii)thereceivingbankistobereimbursedbydebitinganaccountof,
756-orotherwisereceivingpaymentfrom,thesender;and
757-(iii)theinstructionistransmittedbythesenderdirectlytothe
758-receivingbankortoanagent,funds-transfersystem,orcommunicationsystem
759-fortransmittaltothereceivingbank.
760-***
761-§4A—201.SECURITYPROCEDURE
762-“Securityprocedure”meansaprocedureestablishedbyagreementofa
763-customerandareceivingbankforthepurposeof(i)verifyingthatapayment
764-orderorcommunicationamendingorcancellingapaymentorderisthatofthe
765-customer,or(ii)detectingerrorinthetransmissionorthecontentofthe
766-paymentorderorcommunication.Asecurityproceduremayimposean
767-obligationonthereceivingbankorthecustomerandmayrequiretheuseof
768-algorithmsorothercodes,identifyingwordsor,numbers,symbols,sounds,
769-biometrics,encryption,callbackprocedures,orsimilarsecuritydevices.
770-Comparisonofasignatureonapaymentorderorcommunicationwithan
771-authorizedspecimensignatureofthecustomerorrequiringapaymentorderto
772-besentfromaknownemailaddress,IPaddress,ortelephonenumberisnotby
773-itselfasecurityprocedure.
774-1
775-2
776-3
777-4
778-5
779-6
780-7
781-8
782-9
783-10
784-11
785-12
786-13
787-14
788-15
789-16
790-17
791-18
792-19
793-20
794-21 BILLASPASSEDBYTHEHOUSE H.206
445+
446+
447+VT LEG #378799 v.1
448+(iii) the instruction is transmitted by the sender directly to the 1
449+receiving bank or to an agent, funds-transfer system, or communication system 2
450+for transmittal to the receiving bank. 3
451+* * * 4
452+§ 4A—201. SECURITY PROCEDURE 5
453+“Security procedure” means a procedure established by agreement of a 6
454+customer and a receiving bank for the purpose of (i) verifying that a payment 7
455+order or communication amending or cancelling a payment order is that of the 8
456+customer, or (ii) detecting error in the transmission or the content of the 9
457+payment order or communication. A security procedure may impose an 10
458+obligation on the receiving bank or the customer and may require the use of 11
459+algorithms or other codes, identifying words or, numbers, symbols, sounds, 12
460+biometrics, encryption, callback procedures, or similar security devices. 13
461+Comparison of a signature on a payment order or communication with an 14
462+authorized specimen signature of the customer or requiring a payment order to 15
463+be sent from a known email address, IP address, or telephone number is not by 16
464+itself a security procedure. 17
465+§ 4A—202. AUTHORIZED AND VERIFIED PAYMENT ORDERS 18
466+* * * 19
467+(b) If a bank and its customer have agreed that the authenticity of payment 20
468+orders issued to the bank in the name of the customer as sender will be verified 21 BILL AS INTRODUCED H.206
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796-§4A—202.AUTHORIZEDANDVERIFIEDPAYMENTORDERS
797-***
798-(b)Ifabankanditscustomerhaveagreedthattheauthenticityofpayment
799-ordersissuedtothebankinthenameofthecustomerassenderwillbeverified
800-pursuanttoasecurityprocedure,apaymentorderreceivedbythereceiving
801-bankiseffectiveastheorderofthecustomer,whetherornotauthorized,if(i)
802-thesecurityprocedureisacommerciallyreasonablemethodofproviding
803-securityagainstunauthorizedpaymentorders,and(ii)thebankprovesthatit
804-acceptedthepaymentorderingoodfaithandincompliancewiththebank’s
805-obligationsunderthesecurityprocedureandanywrittenagreementor
806-instructionofthecustomer,evidencedbyarecord,restrictingacceptanceof
807-paymentordersissuedinthenameofthecustomer.Thebankisnotrequired
808-tofollowaninstructionthatviolatesawrittenanagreementwiththecustomer,
809-evidencedbyarecord,ornoticeofwhichisnotreceivedatatimeandina
810-manneraffordingthebankareasonableopportunitytoactonitbeforethe
811-paymentorderisaccepted.
812-(c)Commercialreasonablenessofasecurityprocedureisaquestionoflaw
813-tobedeterminedbyconsideringthewishesofthecustomerexpressedtothe
814-bank,thecircumstancesofthecustomerknowntothebank,includingthesize,
815-type,andfrequencyofpaymentordersnormallyissuedbythecustomertothe
816-bank,alternativesecurityproceduresofferedtothecustomer,andsecurity
817-1
818-2
819-3
820-4
821-5
822-6
823-7
824-8
825-9
826-10
827-11
828-12
829-13
830-14
831-15
832-16
833-17
834-18
835-19
836-20
837-21 BILLASPASSEDBYTHEHOUSE H.206
470+
471+
472+VT LEG #378799 v.1
473+pursuant to a security procedure, a payment order received by the receiving 1
474+bank is effective as the order of the customer, whether or not authorized, if (i) 2
475+the security procedure is a commercially reasonable method of providing 3
476+security against unauthorized payment orders, and (ii) the bank proves that it 4
477+accepted the payment order in good faith and in compliance with the bank’s 5
478+obligations under the security procedure and any written agreement or 6
479+instruction of the customer, evidenced by a record, restricting acceptance of 7
480+payment orders issued in the name of the customer. The bank is not required 8
481+to follow an instruction that violates a written an agreement with the customer, 9
482+evidenced by a record, or notice of which is not received at a time and in a 10
483+manner affording the bank a reasonable opportunity to act on it before the 11
484+payment order is accepted. 12
485+(c) Commercial reasonableness of a security procedure is a question of law 13
486+to be determined by considering the wishes of the customer expressed to the 14
487+bank, the circumstances of the customer known to the bank, including the size, 15
488+type, and frequency of payment orders normally issued by the customer to the 16
489+bank, alternative security procedures offered to the customer, and security 17
490+procedures in general use by customers and receiving banks similarly situated. 18
491+A security procedure is deemed to be commercially reasonable if (i) the 19
492+security procedure was chosen by the customer after the bank offered, and the 20
493+customer refused, a security procedure that was commercially reasonable for 21 BILL AS INTRODUCED H.206
838494 2025 Page 21 of 124
839-proceduresingeneralusebycustomersandreceivingbankssimilarlysituated.
840-Asecurityprocedureisdeemedtobecommerciallyreasonableif(i)the
841-securityprocedurewaschosenbythecustomerafterthebankoffered,andthe
842-customerrefused,asecurityprocedurethatwascommerciallyreasonablefor
843-thatcustomer,and(ii)thecustomerexpresslyagreedinwritingarecordtobe
844-boundbyanypaymentorder,whetherornotauthorized,issuedinitsnameand
845-acceptedbythebankincompliancewiththebank’sobligationsunderthe
846-securityprocedurechosenbythecustomer.
847-***
848-§4A—203.UNENFORCEABILITY OFCERTAINVERIFIEDPAYMENT
849-ORDERS
850-(a)Ifanacceptedpaymentorderisnot,undersubsection4A—202(a)of
851-thistitle,anauthorizedorderofacustomeridentifiedassender,butiseffective
852-asanorderofthecustomerpursuanttosubsection4A—202(b)ofthistitle,the
853-followingrulesapply:
854-(1)Byexpresswrittenagreementevidencedbyarecord,thereceiving
855-bankmaylimittheextenttowhichitisentitledtoenforceorretainpaymentof
856-thepaymentorder.
857-***
858-§4A—207.MISDESCRIPTIONOFBENEFICIARY
859-***
860-1
861-2
862-3
863-4
864-5
865-6
866-7
867-8
868-9
869-10
870-11
871-12
872-13
873-14
874-15
875-16
876-17
877-18
878-19
879-20
880-21 BILLASPASSEDBYTHEHOUSE H.206
495+
496+
497+VT LEG #378799 v.1
498+that customer, and (ii) the customer expressly agreed in writing a record to be 1
499+bound by any payment order, whether or not authorized, issued in its name and 2
500+accepted by the bank in compliance with the bank’s obligations under the 3
501+security procedure chosen by the customer. 4
502+* * * 5
503+§ 4A—203. UNENFORCEABILITY OF CERTAIN VERIFIED PAYMENT 6
504+ ORDERS 7
505+(a) If an accepted payment order is not, under subsection 4A—202(a) of 8
506+this title, an authorized order of a customer identified as sender, but is effective 9
507+as an order of the customer pursuant to subsection 4A—202(b) of this title, the 10
508+following rules apply: 11
509+(1) By express written agreement evidenced by a record, the receiving 12
510+bank may limit the extent to which it is entitled to enforce or retain payment of 13
511+the payment order. 14
512+* * * 15
513+§ 4A—207. MISDESCRIPTION OF BENEFICIARY 16
514+* * * 17
515+(c) If (i) a payment order described in subsection (b) of this section is 18
516+accepted, (ii) the originator’s payment order described the beneficiary 19
517+inconsistently by name and number, and (iii) the beneficiary’s bank pays the 20 BILL AS INTRODUCED H.206
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882-(c)If(i)apaymentorderdescribedinsubsection(b)ofthissectionis
883-accepted,(ii)theoriginator’spaymentorderdescribedthebeneficiary
884-inconsistentlybynameandnumber,and(iii)thebeneficiary’sbankpaysthe
885-personidentifiedbynumberaspermittedbysubdivision(b)(1)ofthissection,
886-thefollowingrulesapply:
887-(1)Iftheoriginatorisabank,theoriginatorisobligedtopayitsorder.
888-(2)Iftheoriginatorisnotabankandprovesthatthepersonidentified
889-bynumberwasnotentitledtoreceivepaymentfromtheoriginator,the
890-originatorisnotobligedtopayitsorderunlesstheoriginator’sbankproves
891-thattheoriginator,beforeacceptanceoftheoriginator’sorder,hadnoticethat
892-paymentofapaymentorderissuedbytheoriginatormightbemadebythe
893-beneficiary’sbankonthebasisofanidentifyingorbankaccountnumbereven
894-ifitidentifiesapersondifferentfromthenamedbeneficiary.Proofofnotice
895-maybemadebyanyadmissibleevidence.Theoriginator’sbanksatisfiesthe
896-burdenofproofifitprovesthattheoriginator,beforethepaymentorderwas
897-accepted,signedawritingrecordstatingtheinformationtowhichthenotice
898-relates.
899-***
900-§4A—208.MISDESCRIPTIONOFINTERMEDIARYBANKOR
901-BENEFICIARY’SBANK
902-***
903-1
904-2
905-3
906-4
907-5
908-6
909-7
910-8
911-9
912-10
913-11
914-12
915-13
916-14
917-15
918-16
919-17
920-18
921-19
922-20
923-21 BILLASPASSEDBYTHEHOUSE H.206
519+
520+
521+VT LEG #378799 v.1
522+person identified by number as permitted by subdivision (b)(1) of this section, 1
523+the following rules apply: 2
524+(1) If the originator is a bank, the originator is obliged to pay its order. 3
525+(2) If the originator is not a bank and proves that the person identified 4
526+by number was not entitled to receive payment from the originator, the 5
527+originator is not obliged to pay its order unless the originator’s bank proves 6
528+that the originator, before acceptance of the originator’s order, had notice that 7
529+payment of a payment order issued by the originator might be made by the 8
530+beneficiary’s bank on the basis of an identifying or bank account number even 9
531+if it identifies a person different from the named beneficiary. Proof of notice 10
532+may be made by any admissible evidence. The originator’s bank satisfies the 11
533+burden of proof if it proves that the originator, before the payment order was 12
534+accepted, signed a writing record stating the information to which the notice 13
535+relates. 14
536+* * * 15
537+§ 4A—208. MISDESCRIPTION OF INTERMEDIARY BANK OR 16
538+ BENEFICIARY’S BANK 17
539+* * * 18
540+(b) This subsection applies to a payment order identifying an intermediary 19
541+bank or the beneficiary’s bank both by name and an identifying number if the 20
542+name and number identify different persons. 21 BILL AS INTRODUCED H.206
924543 2025 Page 23 of 124
925-(b)Thissubsectionappliestoapaymentorderidentifyinganintermediary
926-bankorthebeneficiary’sbankbothbynameandanidentifyingnumberifthe
927-nameandnumberidentifydifferentpersons.
928-***
929-(2)Ifthesenderisnotabankandthereceivingbankprovesthatthe
930-sender,beforethepaymentorderwasaccepted,hadnoticethatthereceiving
931-bankmightrelyonthenumberastheproperidentificationoftheintermediary
932-orbeneficiary’sbankevenifitidentifiesapersondifferentfromthebank
933-identifiedbyname,therightsandobligationsofthesenderandthereceiving
934-bankaregovernedbysubdivision(1)ofthissubsection,asthoughthesender
935-wereabank.Proofofnoticemaybemadebyanyadmissibleevidence.The
936-receivingbanksatisfiestheburdenofproofifitprovesthatthesender,before
937-thepaymentorderwasaccepted,signedawritingrecordstatingthe
938-informationtowhichthenoticerelates.
939-***
940-§4A—210.REJECTIONOFPAYMENTORDER
941-(a)Apaymentorderisrejectedbythereceivingbankbyanoticeof
942-rejectiontransmittedtothesenderorally,electronically,orinwritingarecord.
943-Anoticeofrejectionneednotuseanyparticularwordsandissufficientifit
944-indicatesthatthereceivingbankisrejectingtheorderorwillnotexecuteor
945-paytheorder.Rejectioniseffectivewhenthenoticeisgiveniftransmissionis
946-1
947-2
948-3
949-4
950-5
951-6
952-7
953-8
954-9
955-10
956-11
957-12
958-13
959-14
960-15
961-16
962-17
963-18
964-19
965-20
966-21 BILLASPASSEDBYTHEHOUSE H.206
544+
545+
546+VT LEG #378799 v.1
547+* * * 1
548+(2) If the sender is not a bank and the receiving bank proves that the 2
549+sender, before the payment order was accepted, had notice that the receiving 3
550+bank might rely on the number as the proper identification of the intermediary 4
551+or beneficiary’s bank even if it identifies a person different from the bank 5
552+identified by name, the rights and obligations of the sender and the receiving 6
553+bank are governed by subdivision (1) of this subsection, as though the sender 7
554+were a bank. Proof of notice may be made by any admissible evidence. The 8
555+receiving bank satisfies the burden of proof if it proves that the sender, before 9
556+the payment order was accepted, signed a writing record stating the 10
557+information to which the notice relates. 11
558+* * * 12
559+§ 4A—210. REJECTION OF PAYMENT ORDER 13
560+(a) A payment order is rejected by the receiving bank by a notice of 14
561+rejection transmitted to the sender orally, electronically, or in writing a record. 15
562+A notice of rejection need not use any particular words and is sufficient if it 16
563+indicates that the receiving bank is rejecting the order or will not execute or 17
564+pay the order. Rejection is effective when the notice is given if transmission is 18
565+by a means that is reasonable in the circumstances. If notice of rejection is 19
566+given by a means that is not reasonable, rejection is effective when the notice 20
567+is received. If an agreement of the sender and receiving bank establishes the 21 BILL AS INTRODUCED H.206
967568 2025 Page 24 of 124
968-byameansthatisreasonableinthecircumstances.Ifnoticeofrejectionis
969-givenbyameansthatisnotreasonable,rejectioniseffectivewhenthenotice
970-isreceived.Ifanagreementofthesenderandreceivingbankestablishesthe
971-meanstobeusedtorejectapaymentorder,(i)anymeanscomplyingwiththe
972-agreementisreasonableand(ii)anymeansnotcomplyingisnotreasonable
973-unlessnosignificantdelayinreceiptofthenoticeresultedfromtheuseofthe
974-noncomplyingmeans.
975-***
976-§4A—211.CANCELLATIONANDAMENDMENT OFPAYMENT
977-ORDER
978-(a)Acommunicationofthesenderofapaymentordercancellingor
979-amendingtheordermaybetransmittedtothereceivingbankorally,
980-electronically,orinwritingarecord.Ifasecurityprocedureisineffect
981-betweenthesenderandthereceivingbank,thecommunicationisnoteffective
982-tocanceloramendtheorderunlessthecommunicationisverifiedpursuantto
983-thesecurityprocedureorthebankagreestothecancellationoramendment.
984-***
985-§4A—305.LIABILITYFORLATEORIMPROPEREXECUTIONOR
986-FAILURETOEXECUTEPAYMENTORDER
987-***
988-1
989-2
990-3
991-4
992-5
993-6
994-7
995-8
996-9
997-10
998-11
999-12
1000-13
1001-14
1002-15
1003-16
1004-17
1005-18
1006-19
1007-20 BILLASPASSEDBYTHEHOUSE H.206
569+
570+
571+VT LEG #378799 v.1
572+means to be used to reject a payment order, (i) any means complying with the 1
573+agreement is reasonable and (ii) any means not complying is not reasonable 2
574+unless no significant delay in receipt of the notice resulted from the use of the 3
575+noncomplying means. 4
576+* * * 5
577+§ 4A—211. CANCELLATION AND AMENDMENT OF PAYMENT 6
578+ ORDER 7
579+(a) A communication of the sender of a payment order cancelling or 8
580+amending the order may be transmitted to the receiving bank orally, 9
581+electronically, or in writing a record. If a security procedure is in effect 10
582+between the sender and the receiving bank, the communication is not effective 11
583+to cancel or amend the order unless the communication is verified pursuant to 12
584+the security procedure or the bank agrees to the cancellation or amendment. 13
585+* * * 14
586+§ 4A—305. LIABILITY FOR LATE OR IMPROPER EXECUTION OR 15
587+ FAILURE TO EXECUTE PAYMENT ORDER 16
588+* * * 17
589+(c) In addition to the amounts payable under subsections (a) and (b) of this 18
590+section, damages, including consequential damages, are recoverable to the 19
591+extent provided in an express written agreement of the receiving bank, 20
592+evidenced by a record. 21 BILL AS INTRODUCED H.206
1008593 2025 Page 25 of 124
1009-(c)Inadditiontotheamountspayableundersubsections(a)and(b)ofthis
1010-section,damages,includingconsequentialdamages,arerecoverabletothe
1011-extentprovidedinanexpresswrittenagreementofthereceivingbank,
1012-evidencedbyarecord.
1013-(d)Ifareceivingbankfailstoexecuteapaymentorderitwasobligedby
1014-expressagreementtoexecute,thereceivingbankisliabletothesenderforits
1015-expensesinthetransactionandforincidentalexpensesandinterestlosses
1016-resultingfromthefailuretoexecute.Additionaldamages,including
1017-consequentialdamages,arerecoverabletotheextentprovidedinanexpress
1018-writtenagreementofthereceivingbank,evidencedbyarecord,butarenot
1019-otherwiserecoverable.
1020-***
1021-Sec.6.9AV.S.A.article5isamendedtoread:
1022-ARTICLE5.LETTERSOFCREDIT
1023-***
1024-§5—104.FORMALREQUIREMENTS
1025-Aletterofcredit,confirmation,advice,transfer,amendment,or
1026-cancellationmaybeissuedinanyformthatisasignedrecordandis
1027-authenticated(i)byasignatureor(ii)inaccordancewiththeagreementofthe
1028-partiesorthestandardpracticereferredtoinsubsection5—108(e)ofthistitle.
1029-***
1030-1
1031-2
1032-3
1033-4
1034-5
1035-6
1036-7
1037-8
1038-9
1039-10
1040-11
1041-12
1042-13
1043-14
1044-15
1045-16
1046-17
1047-18
1048-19
1049-20
1050-21 BILLASPASSEDBYTHEHOUSE H.206
594+
595+
596+VT LEG #378799 v.1
597+(d) If a receiving bank fails to execute a payment order it was obliged by 1
598+express agreement to execute, the receiving bank is liable to the sender for its 2
599+expenses in the transaction and for incidental expenses and interest losses 3
600+resulting from the failure to execute. Additional damages, including 4
601+consequential damages, are recoverable to the extent provided in an express 5
602+written agreement of the receiving bank, evidenced by a record, but are not 6
603+otherwise recoverable. 7
604+* * * 8
605+Sec. 6. 9A V.S.A. article 5 is amended to read: 9
606+ARTICLE 5. LETTERS OF CREDIT 10
607+* * * 11
608+§ 5—104. FORMAL REQUIREMENTS 12
609+A letter of credit, confirmation, advice, transfer, amendment, or cancellation 13
610+may be issued in any form that is a signed record and is authenticated (i) by a 14
611+signature or (ii) in accordance with the agreement of the parties or the standard 15
612+practice referred to in subsection 5—108(e) of this title. 16
613+* * * 17
614+§ 5—116. CHOICE OF LAW AND FORUM 18
615+(a) The liability of an issuer, nominated person, or adviser for action or 19
616+omission is governed by the law of the jurisdiction chosen by an agreement in 20
617+the form of a record signed or otherwise authenticated by the affected parties in 21 BILL AS INTRODUCED H.206
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1052-§5—116.CHOICEOFLAWANDFORUM
1053-(a)Theliabilityofanissuer,nominatedperson,oradviserforactionor
1054-omissionisgovernedbythelawofthejurisdictionchosenbyanagreementin
1055-theformofarecordsignedorotherwiseauthenticatedbytheaffectedparties
1056-inthemannerprovidedinsection5—104ofthistitleorbyaprovisioninthe
1057-person’sletterofcredit,confirmation,orotherundertaking.Thejurisdiction
1058-whoselawischosenneednotbearanyrelationtothetransaction.
1059-(b)Unlesssubsection(a)ofthissectionapplies,theliabilityofanissuer,
1060-nominatedperson,oradviserforactionoromissionisgovernedbythelawof
1061-thejurisdictioninwhichthepersonislocated.Thepersonisconsideredtobe
1062-locatedattheaddressindicatedintheperson’sundertaking.Ifmorethanone
1063-addressisindicated,thepersonisconsideredtobelocatedattheaddressfrom
1064-whichtheperson’sundertakingwasissued.
1065-(c)Forthepurposeofjurisdiction,choiceoflaw,andrecognitionof
1066-interbranchlettersofcredit,butnotenforcementofajudgment,allbranchesof
1067-abankareconsideredseparatejuridicalentitiesandabankisconsideredtobe
1068-locatedattheplacewhereitsrelevantbranchisconsideredtobelocatedunder
1069-thissubsection(d)ofthissection.
1070-(d)Abranchofabankisconsideredtobelocatedattheaddressindicated
1071-inthebranch’sundertaking.Ifmorethanoneaddressisindicated,thebranch
1072-1
1073-2
1074-3
1075-4
1076-5
1077-6
1078-7
1079-8
1080-9
1081-10
1082-11
1083-12
1084-13
1085-14
1086-15
1087-16
1088-17
1089-18
1090-19
1091-20 BILLASPASSEDBYTHEHOUSE H.206
619+
620+
621+VT LEG #378799 v.1
622+the manner provided in section 5—104 of this title or by a provision in the 1
623+person’s letter of credit, confirmation, or other undertaking. The jurisdiction 2
624+whose law is chosen need not bear any relation to the transaction. 3
625+(b) Unless subsection (a) of this section applies, the liability of an issuer, 4
626+nominated person, or adviser for action or omission is governed by the law of 5
627+the jurisdiction in which the person is located. The person is considered to be 6
628+located at the address indicated in the person’s undertaking. If more than one 7
629+address is indicated, the person is considered to be located at the address from 8
630+which the person’s undertaking was issued. 9
631+(c) For the purpose of jurisdiction, choice of law, and recognition of 10
632+interbranch letters of credit, but not enforcement of a judgment, all branches of 11
633+a bank are considered separate juridical entities and a bank is considered to be 12
634+located at the place where its relevant branch is considered to be located under 13
635+this subsection (d) of this section. 14
636+(d) A branch of a bank is considered to be located at the address indicated 15
637+in the branch’s undertaking. If more than one address is indicated, the branch 16
638+is considered to be located at the address from which the undertaking was 17
639+issued. 18
640+(c)(e) Except as otherwise provided in this subsection, the liability of an 19
641+issuer, nominated person, or adviser is governed by any rules of custom or 20
642+practice, such as the Uniform Customs and Practice for Documentary Credits, 21 BILL AS INTRODUCED H.206
1092643 2025 Page 27 of 124
1093-isconsideredtobelocatedattheaddressfromwhichtheundertakingwas
1094-issued.
1095-(c)(e)Exceptasotherwiseprovidedinthissubsection,theliabilityofan
1096-issuer,nominatedperson,oradviserisgovernedbyanyrulesofcustomor
1097-practice,suchastheUniformCustomsandPracticeforDocumentaryCredits,
1098-towhichtheletterofcredit,confirmation,orotherundertakingisexpressly
1099-madesubject.If(i)thisarticlewouldgoverntheliabilityofanissuer,
1100-nominatedperson,oradviserundersubsection(a)or(b)ofthissection,(ii)the
1101-relevantundertakingincorporatesrulesofcustomorpractice,and(iii)thereis
1102-conflictbetweenthisarticleandthoserulesasappliedtothatundertaking,
1103-thoserulesgovernexcepttotheextentofanyconflictwiththenonvariable
1104-provisionsspecifiedinsubsection5—103(c)ofthistitle.
1105-(d)(f)IfthereisconflictbetweenthisarticleandArticle3,4,4A,or9of
1106-thistitle,thisarticlegoverns.
1107-(e)(g)Theforumforsettlingdisputesarisingoutofanundertakingwithin
1108-thisarticlemaybechoseninthemannerandwiththebindingeffectthat
1109-governinglawmaybechoseninaccordancewithsubsection(a)ofthissection.
1110-***
1111-1
1112-2
1113-3
1114-4
1115-5
1116-6
1117-7
1118-8
1119-9
1120-10
1121-11
1122-12
1123-13
1124-14
1125-15
1126-16
1127-17
1128-18 BILLASPASSEDBYTHEHOUSE H.206
644+
645+
646+VT LEG #378799 v.1
647+to which the letter of credit, confirmation, or other undertaking is expressly 1
648+made subject. If (i) this article would govern the liability of an issuer, 2
649+nominated person, or adviser under subsection (a) or (b) of this section, (ii) the 3
650+relevant undertaking incorporates rules of custom or practice, and (iii) there is 4
651+conflict between this article and those rules as applied to that undertaking, 5
652+those rules govern except to the extent of any conflict with the nonvariable 6
653+provisions specified in subsection 5—103(c) of this title. 7
654+(d)(f) If there is conflict between this article and Article 3, 4, 4A, or 9 of 8
655+this title, this article governs. 9
656+(e)(g) The forum for settling disputes arising out of an undertaking within 10
657+this article may be chosen in the manner and with the binding effect that 11
658+governing law may be chosen in accordance with subsection (a) of this section. 12
659+* * * 13
660+Sec. 7. 9A V.S.A. article 7 is amended to read: 14
661+ARTICLE 7. DOCUMENTS OF TITLE 15
662+* * * 16
663+§ 7—102. DEFINITIONS AND INDEX OF DEFINITIONS 17
664+(a) In this article, unless the context otherwise requires: 18
665+* * * 19
666+(9) “Sign” means, with present intent to authenticate or adopt a record: 20
667+(A) to execute or adopt a tangible symbol; or 21 BILL AS INTRODUCED H.206
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1130-Sec.7.9AV.S.A.article7isamendedtoread:
1131-ARTICLE7.DOCUMENTSOFTITLE
1132-***
1133-§7—102.DEFINITIONSANDINDEXOFDEFINITIONS
1134-(a)Inthisarticle,unlessthecontextotherwiserequires:
1135-***
1136-(9)“Sign”means,withpresentintenttoauthenticateoradoptarecord:
1137-(A)toexecuteoradoptatangiblesymbol;or
1138-(B)toattachtoorlogicallyassociatewiththerecordanelectronic
1139-sound,symbol,orprocess.[Reserved.]
1140-***
1141-§7—106.CONTROLOFELECTRONICDOCUMENTOFTITLE
1142-***
1143-(b)Asystemsatisfiessubsection(a)ofthissection,andapersonisdeemed
1144-tohavehascontrolofanelectronicdocumentoftitle,ifthedocumentis
1145-created,stored,andassignedtransferredinsuchamannerthat:
1146-***
1147-(4)copiesoramendmentsthataddorchangeanidentifiedassignee
1148-transfereeoftheauthoritativecopycanbemadeonlywiththeconsentofthe
1149-personassertingcontrol;
1150-***
1151-1
1152-2
1153-3
1154-4
1155-5
1156-6
1157-7
1158-8
1159-9
1160-10
1161-11
1162-12
1163-13
1164-14
1165-15
1166-16
1167-17
1168-18
1169-19
1170-20
1171-21 BILLASPASSEDBYTHEHOUSE H.206
669+
670+
671+VT LEG #378799 v.1
672+(B) to attach to or logically associate with the record an electronic 1
673+sound, symbol, or process.[Reserved.] 2
674+* * * 3
675+§ 7—106. CONTROL OF ELECTRONIC DOCUMENT OF TITLE 4
676+* * * 5
677+(b) A system satisfies subsection (a) of this section, and a person is deemed 6
678+to have has control of an electronic document of title, if the document is 7
679+created, stored, and assigned transferred in such a manner that: 8
680+* * * 9
681+(4) copies or amendments that add or change an identified assignee 10
682+transferee of the authoritative copy can be made only with the consent of the 11
683+person asserting control; 12
684+* * * 13
685+(c) A system satisfies subsection (a) of this section, and a person has 14
686+control of an electronic document of title, if an authoritative electronic copy of 15
687+the document, a record attached to or logically associated with the electronic 16
688+copy, or a system in which the electronic copy is recorded: 17
689+(1) enables the person readily to identify each electronic copy as either 18
690+an authoritative copy or a nonauthoritative copy; 19
691+(2) enables the person readily to identify itself in any way, including by 20
692+name, identifying number, cryptographic key, office, or account number, as the 21 BILL AS INTRODUCED H.206
1172693 2025 Page 29 of 124
1173-(c)Asystemsatisfiessubsection(a)ofthissection,andapersonhas
1174-controlofanelectronicdocumentoftitle,ifanauthoritativeelectroniccopyof
1175-thedocument,arecordattachedtoorlogicallyassociatedwiththeelectronic
1176-copy,orasysteminwhichtheelectroniccopyisrecorded:
1177-(1)enablesthepersonreadilytoidentifyeachelectroniccopyaseither
1178-anauthoritativecopyoranonauthoritativecopy;
1179-(2)enablesthepersonreadilytoidentifyitselfinanyway,includingby
1180-name,identifyingnumber,cryptographickey,office,oraccountnumber,asthe
1181-persontowhicheachauthoritativeelectroniccopywasissuedortransferred;
1182-and
1183-(3)givesthepersonexclusivepower,subjecttosubsection(d)ofthis
1184-section,to:
1185-(A)preventothersfromaddingorchangingthepersontowhicheach
1186-authoritativeelectroniccopyhasbeenissuedortransferred;and
1187-(B)transfercontrolofeachauthoritativeelectroniccopy.
1188-(d)Subjecttosubsection(e)ofthissection,apowerisexclusiveunder
1189-subdivisions(c)(3)(A)and(c)(3)(B)ofthissectionevenif:
1190-(1)theauthoritativeelectroniccopy,arecordattachedtoorlogically
1191-associatedwiththeauthoritativeelectroniccopy,orasysteminwhichthe
1192-authoritativeelectroniccopyisrecordedlimitstheuseofthedocumentoftitle
1193-orhasaprotocolthatisprogrammedtocauseachange,includingatransferor
1194-1
1195-2
1196-3
1197-4
1198-5
1199-6
1200-7
1201-8
1202-9
1203-10
1204-11
1205-12
1206-13
1207-14
1208-15
1209-16
1210-17
1211-18
1212-19
1213-20
1214-21 BILLASPASSEDBYTHEHOUSE H.206
694+
695+
696+VT LEG #378799 v.1
697+person to which each authoritative electronic copy was issued or transferred; 1
698+and 2
699+(3) gives the person exclusive power, subject to subsection (d) of this 3
700+section, to: 4
701+(A) prevent others from adding or changing the person to which each 5
702+authoritative electronic copy has been issued or transferred; and 6
703+(B) transfer control of each authoritative electronic copy. 7
704+(d) Subject to subsection (e) of this section, a power is exclusive under 8
705+subdivisions (c)(3)(A) and (c)(3)(B) of this section even if: 9
706+(1) the authoritative electronic copy, a record attached to or logically 10
707+associated with the authoritative electronic copy, or a system in which the 11
708+authoritative electronic copy is recorded limits the use of the document of title 12
709+or has a protocol that is programmed to cause a change, including a transfer or 13
710+loss of control; or 14
711+(2) the power is shared with another person. 15
712+(e) A power of a person is not shared with another person under 16
713+subdivision (d)(2) of this section and the person’s power is not exclusive if: 17
714+(1) the person can exercise the power only if the power also is exercised 18
715+by the other person; and 19
716+(2) the other person: 20
717+(A) can exercise the power without exercise of the power by the 21 BILL AS INTRODUCED H.206
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1216-lossofcontrol;or
1217-(2)thepowerissharedwithanotherperson.
1218-(e)Apowerofapersonisnotsharedwithanotherpersonunder
1219-subdivision(d)(2)ofthissectionandtheperson’spowerisnotexclusiveif:
1220-(1)thepersoncanexercisethepoweronlyifthepoweralsoisexercised
1221-bytheotherperson;and
1222-(2)theotherperson:
1223-(A)canexercisethepowerwithoutexerciseofthepowerbythe
1224-person;or
1225-(B)isthetransferortothepersonofaninterestinthedocumentof
1226-title.
1227-(f)Ifapersonhasthepowersspecifiedinsubdivisions(c)(3)(A)and
1228-(c)(3)(B)ofthissection,thepowersarepresumedtobeexclusive.
1229-(g)Apersonhascontrolofanelectronicdocumentoftitleifanother
1230-person,otherthanthetransferortothepersonofaninterestinthedocument:
1231-(1)hascontrolofthedocumentandacknowledgesthatithascontrolon
1232-behalfoftheperson;or
1233-(2)obtainscontrolofthedocumentafterhavingacknowledgedthatit
1234-willobtaincontrolofthedocumentonbehalfoftheperson.
1235-(h)Apersonthathascontrolunderthissectionisnotrequiredto
1236-acknowledgethatithascontrolonbehalfofanotherperson.
1237-1
1238-2
1239-3
1240-4
1241-5
1242-6
1243-7
1244-8
1245-9
1246-10
1247-11
1248-12
1249-13
1250-14
1251-15
1252-16
1253-17
1254-18
1255-19
1256-20
1257-21 BILLASPASSEDBYTHEHOUSE H.206
719+
720+
721+VT LEG #378799 v.1
722+person; or 1
723+(B) is the transferor to the person of an interest in the document of 2
724+title. 3
725+(f) If a person has the powers specified in subdivisions (c)(3)(A) and 4
726+(c)(3)(B) of this section, the powers are presumed to be exclusive. 5
727+(g) A person has control of an electronic document of title if another 6
728+person, other than the transferor to the person of an interest in the document: 7
729+(1) has control of the document and acknowledges that it has control on 8
730+behalf of the person; or 9
731+(2) obtains control of the document after having acknowledged that it 10
732+will obtain control of the document on behalf of the person. 11
733+(h) A person that has control under this section is not required to 12
734+acknowledge that it has control on behalf of another person. 13
735+(i) If a person acknowledges that it has or will obtain control on behalf of 14
736+another person, unless the person otherwise agrees or law other than this article 15
737+or Article 9 of this title otherwise provides, the person does not owe any duty 16
738+to the other person and is not required to confirm the acknowledgment to any 17
739+other person. 18
740+* * * 19 BILL AS INTRODUCED H.206
1258741 2025 Page 31 of 124
1259-(i)Ifapersonacknowledgesthatithasorwillobtaincontrolonbehalfof
1260-anotherperson,unlessthepersonotherwiseagreesorlawotherthanthis
1261-articleorArticle9ofthistitleotherwiseprovides,thepersondoesnotoweany
1262-dutytotheotherpersonandisnotrequiredtoconfirmtheacknowledgmentto
1263-anyotherperson.
1264-***
1265-Sec.8.9AV.S.A.article8isamendedtoread:
1266-ARTICLE8.INVESTMENTSECURITIES
1267-***
1268-§8—102.DEFINITIONS
1269-(a)Inthisarticle:
1270-***
1271-(6)“Communicate”meansto:
1272-(i)sendasignedwritingrecord;or
1273-(ii)transmitinformationbyanymechanismagreeduponbythe
1274-personstransmittingandreceivingtheinformation.
1275-***
1276-(b)OtherThefollowingdefinitionsapplyingtointhisarticleandthe
1277-sectionsinwhichtheyappearareotherarticlesapplytothisarticle:
1278-Appropriateperson section8—107
1279-Control section8—106
1280-1
1281-2
1282-3
1283-4
1284-5
1285-6
1286-7
1287-8
1288-9
1289-10
1290-11
1291-12
1292-13
1293-14
1294-15
1295-16
1296-17
1297-18
1298-19
1299-20
1300-21 BILLASPASSEDBYTHEHOUSE H.206
742+
743+
744+VT LEG #378799 v.1
745+Sec. 8. 9A V.S.A. article 8 is amended to read: 1
746+ARTICLE 8. INVESTMENT SECURITIES 2
747+* * * 3
748+§ 8—102. DEFINITIONS 4
749+(a) In this article: 5
750+* * * 6
751+(6) “Communicate” means to: 7
752+(i) send a signed writing record; or 8
753+(ii) transmit information by any mechanism agreed upon by the 9
754+persons transmitting and receiving the information. 10
755+* * * 11
756+(b) Other The following definitions applying to in this article and the 12
757+sections in which they appear are other articles apply to this article: 13
758+Appropriate person section 8—107 14
759+Control section 8—106 15
760+Controllable account section 9—102 16
761+Controllable electronic record section 12—102 17
762+Controllable payment intangible section 9—102 18
763+Delivery section 8—301 19
764+* * * 20 BILL AS INTRODUCED H.206
1301765 2025 Page 32 of 124
1302-Controllableaccount section9—102
1303-Controllableelectronicrecord section12—102
1304-Controllablepaymentintangible section9—102
1305-Delivery section8—301
1306-***
1307-§8—103.RULESFORDETERMININGWHETHERCERTAIN
1308-OBLIGATIONSANDINTERESTSARESECURITIESOR
1309-FINANCIALASSETS
1310-***
1311-(h)Acontrollableaccount,controllableelectronicrecord,orcontrollable
1312-paymentintangibleisnotafinancialassetunlesssubdivisions8—
1313-102(a)(9)(iii)applies.
1314-***
1315-§8—106.CONTROL
1316-***
1317-(d)Apurchaserhas“control”ofasecurityentitlementif:
1318-***
1319-(3)anotherpersonhascontrolofthesecurityentitlementonbehalfof
1320-thepurchaseror,havingpreviouslyacquiredcontrolofthesecurity
1321-entitlement,acknowledgesthatithascontrolonbehalfofthepurchaser,other
1322-thanthetransferortothepurchaserofaninterestinthesecurityentitlement:
1323-1
1324-2
1325-3
1326-4
1327-5
1328-6
1329-7
1330-8
1331-9
1332-10
1333-11
1334-12
1335-13
1336-14
1337-15
1338-16
1339-17
1340-18
1341-19
1342-20
1343-21 BILLASPASSEDBYTHEHOUSE H.206
766+
767+
768+VT LEG #378799 v.1
769+§ 8—103. RULES FOR DETERMINING WHETHER CERTAIN 1
770+ OBLIGATIONS AND INTERESTS ARE SECURITIES OR 2
771+ FINANCIAL ASSETS 3
772+* * * 4
773+(h) A controllable account, controllable electronic record, or controllable 5
774+payment intangible is not a financial asset unless subdivisions 8—102(a)(9)(iii) 6
775+applies. 7
776+* * * 8
777+§ 8—106. CONTROL 9
778+* * * 10
779+(d) A purchaser has “control” of a security entitlement if: 11
780+* * * 12
781+(3) another person has control of the security entitlement on behalf of 13
782+the purchaser or, having previously acquired control of the security 14
783+entitlement, acknowledges that it has control on behalf of the purchaser, other 15
784+than the transferor to the purchaser of an interest in the security entitlement: 16
785+(A) has control of the security entitlement and acknowledges that it 17
786+has control on behalf of the purchaser; or 18
787+(B) obtains control of the security entitlement after having 19
788+acknowledged that it will obtain control of the security entitlement on behalf of 20
789+the purchaser. 21 BILL AS INTRODUCED H.206
1344790 2025 Page 33 of 124
1345-(A)hascontrolofthesecurityentitlementandacknowledgesthatit
1346-hascontrolonbehalfofthepurchaser;or
1347-(B)obtainscontrolofthesecurityentitlementafterhaving
1348-acknowledgedthatitwillobtaincontrolofthesecurityentitlementonbehalf
1349-ofthepurchaser.
1350-***
1351-(h)Apersonthathascontrolunderthissectionisnotrequiredto
1352-acknowledgethatithascontrolonbehalfofapurchaser.
1353-(i)Ifapersonacknowledgesthatithasorwillobtaincontrolonbehalfofa
1354-purchaser,unlessthepersonotherwiseagreesorlawotherthanthisarticleor
1355-Article9otherwiseprovides,thepersondoesnotoweanydutytothe
1356-purchaserandisnotrequiredtoconfirmtheacknowledgmenttoanyother
1357-person.
1358-***
1359-§8—110.APPLICABILITY;CHOICEOFLAW
1360-***
1361-(g)Thelocallawoftheissuer’sjurisdictionorthesecuritiesintermediary’s
1362-jurisdictiongovernsamatterortransactionspecifiedinsubsection(a)or(b)of
1363-thissectionevenifthematterortransactiondoesnotbearanyrelationtothe
1364-jurisdiction.
1365-***
1366-1
1367-2
1368-3
1369-4
1370-5
1371-6
1372-7
1373-8
1374-9
1375-10
1376-11
1377-12
1378-13
1379-14
1380-15
1381-16
1382-17
1383-18
1384-19
1385-20
1386-21 BILLASPASSEDBYTHEHOUSE H.206
791+
792+
793+VT LEG #378799 v.1
794+* * * 1
795+(h) A person that has control under this section is not required to 2
796+acknowledge that it has control on behalf of a purchaser. 3
797+(i) If a person acknowledges that it has or will obtain control on behalf of a 4
798+purchaser, unless the person otherwise agrees or law other than this article or 5
799+Article 9 otherwise provides, the person does not owe any duty to the 6
800+purchaser and is not required to confirm the acknowledgment to any other 7
801+person. 8
802+* * * 9
803+§ 8—110. APPLICABILITY; CHOICE OF LAW 10
804+* * * 11
805+(g) The local law of the issuer’s jurisdiction or the securities intermediary’s 12
806+jurisdiction governs a matter or transaction specified in subsection (a) or (b) of 13
807+this section even if the matter or transaction does not bear any relation to the 14
808+jurisdiction. 15
809+* * * 16
810+§ 8—303. PROTECTED PURCHASER 17
811+(a) “Protected purchaser” means a purchaser of a certificated or 18
812+uncertificated security, or of an interest therein, who: 19
813+(1) gives value; 20
814+(2) does not have notice of any adverse claim to the security; and 21 BILL AS INTRODUCED H.206
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1388-§8—303.PROTECTEDPURCHASER
1389-(a)“Protectedpurchaser”meansapurchaserofacertificatedor
1390-uncertificatedsecurity,orofaninteresttherein,who:
1391-(1)givesvalue;
1392-(2)doesnothavenoticeofanyadverseclaimtothesecurity;and
1393-(3)obtainscontrolofthecertificatedoruncertificatedsecurity.
1394-(b)Inadditiontoacquiringtherightsofapurchaser,aAprotected
1395-purchaseralsoacquiresitsinterestinthesecurityfreeofanyadverseclaim.
1396-***
1397-Sec.9.9AV.S.A.article9isamendedtoread:
1398-ARTICLE9.SECUREDTRANSACTIONS
1399-***
1400-§9—102.DEFINITIONSANDINDEXOFDEFINITIONS
1401-(a)Inthisarticle:
1402-(1)“Accession”meansgoodsthatarephysicallyunitedwithother
1403-goodsinsuchamannerthattheidentityoftheoriginalgoodsisnotlost.
1404-(2)“Account,”exceptasusedin“accountfor,”“accountstatement,”
1405-“accountto,”“commodityaccount”insubdivision(14)ofthissubsection,
1406-“customer’saccount,”“depositaccount”insubdivision(29)ofthissubsection,
1407-“onaccountof,”and“statementofaccount,”meansarighttopaymentofa
1408-monetaryobligation,whetherornotearnedbyperformance,(i)forproperty
1409-1
1410-2
1411-3
1412-4
1413-5
1414-6
1415-7
1416-8
1417-9
1418-10
1419-11
1420-12
1421-13
1422-14
1423-15
1424-16
1425-17
1426-18
1427-19
1428-20
1429-21 BILLASPASSEDBYTHEHOUSE H.206
816+
817+
818+VT LEG #378799 v.1
819+(3) obtains control of the certificated or uncertificated security. 1
820+(b) In addition to acquiring the rights of a purchaser, a A protected purchaser 2
821+also acquires its interest in the security free of any adverse claim. 3
822+* * * 4
823+Sec. 9. 9A V.S.A. article 9 is amended to read: 5
824+ARTICLE 9. SECURED TRANSACTIONS 6
825+* * * 7
826+§ 9—102. DEFINITIONS AND INDEX OF DEFINITIONS 8
827+(a) In this article: 9
828+(1) “Accession” means goods that are physically united with other 10
829+goods in such a manner that the identity of the original goods is not lost. 11
830+(2) “Account,” except as used in “account for,” “account statement,” 12
831+“account to,” “commodity account” in subdivision (14) of this subsection, 13
832+“customer’s account,” “deposit account” in subdivision (29) of this subsection, 14
833+“on account of,” and “statement of account,” means a right to payment of a 15
834+monetary obligation, whether or not earned by performance, (i) for property 16
835+that has been or is to be sold, leased, licensed, assigned, or otherwise disposed 17
836+of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance 18
837+issued or to be issued, (iv) for a secondary obligation incurred or to be 19
838+incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a 20
839+vessel under a charter or other contract, (vii) arising out of the use of a credit or 21 BILL AS INTRODUCED H.206
1430840 2025 Page 35 of 124
1431-thathasbeenoristobesold,leased,licensed,assigned,orotherwisedisposed
1432-of,(ii)forservicesrenderedortoberendered,(iii)forapolicyofinsurance
1433-issuedortobeissued,(iv)forasecondaryobligationincurredortobe
1434-incurred,(v)forenergyprovidedortobeprovided,(vi)fortheuseorhireofa
1435-vesselunderacharterorothercontract,(vii)arisingoutoftheuseofacredit
1436-orchargecardorinformationcontainedonorforusewiththecard,or(viii)as
1437-winningsinalotteryorothergameofchanceoperatedorsponsoredbyastate,
1438-governmentalunitofastate,orpersonlicensedorauthorizedtooperatethe
1439-gamebyastateorgovernmentalunitofastate.Thetermincludes
1440-controllableaccountsandhealth-care-insurancereceivables.Thetermdoes
1441-notinclude(i)rightstopaymentevidencedbychattelpaperoraninstrument
1442-chattelpaper,(ii)commercialtortclaims,(iii)depositaccounts,(iv)
1443-investmentproperty,(v)letter-of-creditrightsorlettersofcredit,or(vi)rights
1444-topaymentformoneyorfundsadvancedorsold,otherthanrightsarisingout
1445-oftheuseofacreditorchargecardorinformationcontainedonorforuse
1446-withthecard,or(vii)rightstopaymentevidencedbyaninstrument.
1447-(3)“Accountdebtor”meansapersonobligatedonanaccount,chattel
1448-paper,orgeneralintangible.Thetermdoesnotincludepersonsobligatedto
1449-payanegotiableinstrument,evenifthenegotiableinstrumentconstitutespart
1450-ofevidenceschattelpaper.
1451-(4)“Accounting,”exceptasusedin“accountingfor,”meansarecord:
1452-1
1453-2
1454-3
1455-4
1456-5
1457-6
1458-7
1459-8
1460-9
1461-10
1462-11
1463-12
1464-13
1465-14
1466-15
1467-16
1468-17
1469-18
1470-19
1471-20
1472-21 BILLASPASSEDBYTHEHOUSE H.206
841+
842+
843+VT LEG #378799 v.1
844+charge card or information contained on or for use with the card, or (viii) as 1
845+winnings in a lottery or other game of chance operated or sponsored by a state, 2
846+governmental unit of a state, or person licensed or authorized to operate the 3
847+game by a state or governmental unit of a state. The term includes controllable 4
848+accounts and health-care-insurance receivables. The term does not include (i) 5
849+rights to payment evidenced by chattel paper or an instrument chattel paper, 6
850+(ii) commercial tort claims, (iii) deposit accounts, (iv) investment property, (v) 7
851+letter-of-credit rights or letters of credit, or (vi) rights to payment for money or 8
852+funds advanced or sold, other than rights arising out of the use of a credit or 9
853+charge card or information contained on or for use with the card, or (vii) rights 10
854+to payment evidenced by an instrument. 11
855+(3) “Account debtor” means a person obligated on an account, chattel 12
856+paper, or general intangible. The term does not include persons obligated to 13
857+pay a negotiable instrument, even if the negotiable instrument constitutes part 14
858+of evidences chattel paper. 15
859+(4) “Accounting,” except as used in “accounting for,” means a record: 16
860+(A) authenticated signed by a secured party; 17
861+(B) indicating the aggregate unpaid secured obligations as of a date 18
862+not more than 35 days earlier or 35 days later than the date of the record; and 19
863+(C) identifying the components of the obligations in reasonable 20
864+detail. 21 BILL AS INTRODUCED H.206
1473865 2025 Page 36 of 124
1474-(A)authenticatedsignedbyasecuredparty;
1475-(B)indicatingtheaggregateunpaidsecuredobligationsasofadate
1476-notmorethan35daysearlieror35dayslaterthanthedateoftherecord;and
1477-(C)identifyingthecomponentsoftheobligationsinreasonable
1478-detail.
1479-***
1480-(7)“Authenticate”means:
1481-(A)tosign;or
1482-(B)withpresentintenttoadoptoracceptarecord,toattachtoor
1483-logicallyassociatewiththerecordanelectronicsound,symbol,orprocess.
1484-[Reserved.]
1485-(7A)“Assignee,”exceptasusedin“assigneeforbenefitofcreditors,”
1486-meansaperson(i)inwhosefavorasecurityinterestthatsecuresanobligation
1487-iscreatedorprovidedforunderasecurityagreement,whetherornotthe
1488-obligationisoutstandingor(ii)towhichanaccount,chattelpaper,payment
1489-intangible,orpromissorynotehasbeensold.Thetermincludesapersonto
1490-whichasecurityinteresthasbeentransferredbyasecuredparty.
1491-(7B)“Assignor”meansapersonthat(i)underasecurityagreement
1492-createsorprovidesforasecurityinterestthatsecuresanobligationor(ii)sells
1493-anaccount,chattelpaper,paymentintangible,orpromissorynote.Theterm
1494-includesasecuredpartythathastransferredasecurityinteresttoanother
1495-1
1496-2
1497-3
1498-4
1499-5
1500-6
1501-7
1502-8
1503-9
1504-10
1505-11
1506-12
1507-13
1508-14
1509-15
1510-16
1511-17
1512-18
1513-19
1514-20
1515-21 BILLASPASSEDBYTHEHOUSE H.206
866+
867+
868+VT LEG #378799 v.1
869+* * * 1
870+(7) “Authenticate” means: 2
871+(A) to sign; or 3
872+(B) with present intent to adopt or accept a record, to attach to or 4
873+logically associate with the record an electronic sound, symbol, or process. 5
874+[Reserved.] 6
875+(7A) “Assignee,” except as used in “assignee for benefit of creditors,” 7
876+means a person (i) in whose favor a security interest that secures an obligation 8
877+is created or provided for under a security agreement, whether or not the 9
878+obligation is outstanding or (ii) to which an account, chattel paper, payment 10
879+intangible, or promissory note has been sold. The term includes a person to 11
880+which a security interest has been transferred by a secured party. 12
881+(7B) “Assignor” means a person that (i) under a security agreement 13
882+creates or provides for a security interest that secures an obligation or (ii) sells 14
883+an account, chattel paper, payment intangible, or promissory note. The term 15
884+includes a secured party that has transferred a security interest to another 16
885+person. 17
886+* * * 18
887+(11) “Chattel paper” means a record or records that evidence both a 19
888+monetary obligation and a security interest in specific goods, a security interest 20
889+in specific goods and software used in the goods, a security interest in specific 21 BILL AS INTRODUCED H.206
1516890 2025 Page 37 of 124
1517-person.
1518-***
1519-(11)“Chattelpaper”meansarecordorrecordsthatevidencebotha
1520-monetaryobligationandasecurityinterestinspecificgoods,asecurityinterest
1521-inspecificgoodsandsoftwareusedinthegoods,asecurityinterestinspecific
1522-goodsandlicenseofsoftwareusedinthegoods,aleaseofspecificgoods,ora
1523-leaseofspecificgoodsandlicenseofsoftwareusedinthegoods.Inthis
1524-subdivision,“monetaryobligation”meansamonetaryobligationsecuredby
1525-thegoodsorowedunderaleaseofthegoodsandincludesamonetary
1526-obligationwithrespecttosoftwareusedinthegoods.Thetermdoesnot
1527-include:
1528-(A)Chartersorothercontractsinvolvingtheuseorhireofavessel.
1529-(B)Recordsthatevidencearighttopaymentarisingoutoftheuseof
1530-acreditorchargecard,orinformationcontainedonorforusewiththecard.If
1531-atransactionisevidencedbyrecordsthatincludeaninstrumentorseriesof
1532-instruments,thegroupofrecordstakentogetherconstituteschattelpaper.
1533-(11)“Chattelpaper”means:
1534-(A)arighttopaymentofamonetaryobligationsecuredbyspecific
1535-goods,iftherighttopaymentandsecurityagreementareevidencedbya
1536-record;or
1537-(B)arighttopaymentofamonetaryobligationowedbyalessee
1538-1
1539-2
1540-3
1541-4
1542-5
1543-6
1544-7
1545-8
1546-9
1547-10
1548-11
1549-12
1550-13
1551-14
1552-15
1553-16
1554-17
1555-18
1556-19
1557-20
1558-21 BILLASPASSEDBYTHEHOUSE H.206
891+
892+
893+VT LEG #378799 v.1
894+goods and license of software used in the goods, a lease of specific goods, or a 1
895+lease of specific goods and license of software used in the goods. In this 2
896+subdivision, “monetary obligation” means a monetary obligation secured by 3
897+the goods or owed under a lease of the goods and includes a monetary 4
898+obligation with respect to software used in the goods. The term does not 5
899+include: 6
900+(A) Charters or other contracts involving the use or hire of a vessel. 7
901+(B) Records that evidence a right to payment arising out of the use of 8
902+a credit or charge card, or information contained on or for use with the card. If 9
903+a transaction is evidenced by records that include an instrument or series of 10
904+instruments, the group of records taken together constitutes chattel paper. 11
905+(11) “Chattel paper” means: 12
906+(A) a right to payment of a monetary obligation secured by specific 13
907+goods, if the right to payment and security agreement are evidenced by a 14
908+record; or 15
909+(B) a right to payment of a monetary obligation owed by a lessee 16
910+under a lease agreement with respect to specific goods and a monetary 17
911+obligation owed by the lessee in connection with the transaction giving rise to 18
912+the lease, if: 19
913+(i) the right to payment and lease agreement are evidenced by a 20
914+record; and 21 BILL AS INTRODUCED H.206
1559915 2025 Page 38 of 124
1560-underaleaseagreementwithrespecttospecificgoodsandamonetary
1561-obligationowedbythelesseeinconnectionwiththetransactiongivingriseto
1562-thelease,if:
1563-(i)therighttopaymentandleaseagreementareevidencedbya
1564-record;and
1565-(ii)thepredominantpurposeofthetransactiongivingrisetothe
1566-leasewastogivethelesseetherighttopossessionanduseofthegoods.
1567-Thetermdoesnotincludearighttopaymentarisingoutofacharterorother
1568-contractinvolvingtheuseorhireofavesselorarighttopaymentarisingout
1569-oftheuseofacreditorchargecardorinformationcontainedonorforuse
1570-withthecard.
1571-***
1572-(27)“Continuationstatement”meansanamendmentofafinancing
1573-statementwhich:
1574-(A)identifies,byitsfilenumber,theinitialfinancingstatementto
1575-whichitrelates;and
1576-(B)indicatesthatitisacontinuationstatementfor,orthatitisfiled
1577-tocontinuetheeffectivenessof,theidentifiedfinancingstatement.
1578-(27A)“Controllableaccount”meansanaccountevidencedbya
1579-controllableelectronicrecordthatprovidesthattheaccountdebtorundertakes
1580-topaythepersonthathascontrolundersection12—105ofthistitleofthe
1581-1
1582-2
1583-3
1584-4
1585-5
1586-6
1587-7
1588-8
1589-9
1590-10
1591-11
1592-12
1593-13
1594-14
1595-15
1596-16
1597-17
1598-18
1599-19
1600-20
1601-21 BILLASPASSEDBYTHEHOUSE H.206
916+
917+
918+VT LEG #378799 v.1
919+(ii) the predominant purpose of the transaction giving rise to the 1
920+lease was to give the lessee the right to possession and use of the goods. 2
921+The term does not include a right to payment arising out of a charter or other 3
922+contract involving the use or hire of a vessel or a right to payment arising out 4
923+of the use of a credit or charge card or information contained on or for use with 5
924+the card. 6
925+* * * 7
926+(27) “Continuation statement” means an amendment of a financing 8
927+statement which: 9
928+(A) identifies, by its file number, the initial financing statement to 10
929+which it relates; and 11
930+(B) indicates that it is a continuation statement for, or that it is filed 12
931+to continue the effectiveness of, the identified financing statement. 13
932+(27A) “Controllable account” means an account evidenced by a 14
933+controllable electronic record that provides that the account debtor undertakes 15
934+to pay the person that has control under section 12—105 of this title of the 16
935+controllable electronic record. 17
936+(27B) “Controllable payment intangible” means a payment intangible 18
937+evidenced by a controllable electronic record that provides that the account 19
938+debtor undertakes to pay the person that has control under section 12—105 of 20
939+this title of the controllable electronic record. 21 BILL AS INTRODUCED H.206
1602940 2025 Page 39 of 124
1603-controllableelectronicrecord.
1604-(27B)“Controllablepaymentintangible”meansapaymentintangible
1605-evidencedbyacontrollableelectronicrecordthatprovidesthattheaccount
1606-debtorundertakestopaythepersonthathascontrolundersection12—105of
1607-thistitleofthecontrollableelectronicrecord.
1608-***
1609-(31)“Electronicchattelpaper”meanschattelpaperevidencedbya
1610-recordorrecordsconsistingofinformationstoredinanelectronicmedium.
1611-[Reserved.]
1612-(31A)“Electronicmoney”meansmoneyinanelectronicform.
1613-***
1614-(42)“Generalintangible”meansanypersonalproperty,includingthings
1615-inaction,otherthanaccounts,chattelpaper,commercialtortclaims,deposit
1616-accounts,documents,goods,instruments,investmentproperty,letter-of-credit
1617-rights,lettersofcredit,money,andoil,gas,orothermineralsbefore
1618-extraction.Thetermincludescontrollableelectronicrecords,payment
1619-intangibles,andsoftware.
1620-***
1621-(47)“Instrument”meansanegotiableinstrumentoranyotherwriting
1622-thatevidencesarighttothepaymentofamonetaryobligation,isnotitselfa
1623-securityagreementorlease,andisofatypethatinordinarycourseofbusiness
1624-1
1625-2
1626-3
1627-4
1628-5
1629-6
1630-7
1631-8
1632-9
1633-10
1634-11
1635-12
1636-13
1637-14
1638-15
1639-16
1640-17
1641-18
1642-19
1643-20
1644-21 BILLASPASSEDBYTHEHOUSE H.206
941+
942+
943+VT LEG #378799 v.1
944+* * * 1
945+(31) “Electronic chattel paper” means chattel paper evidenced by a 2
946+record or records consisting of information stored in an electronic medium. 3
947+[Reserved.] 4
948+(31A) “Electronic money” means money in an electronic form. 5
949+* * * 6
950+(42) “General intangible” means any personal property, including things 7
951+in action, other than accounts, chattel paper, commercial tort claims, deposit 8
952+accounts, documents, goods, instruments, investment property, letter-of-credit 9
953+rights, letters of credit, money, and oil, gas, or other minerals before extraction. 10
954+The term includes controllable electronic records, payment intangibles, and 11
955+software. 12
956+* * * 13
957+(47) “Instrument” means a negotiable instrument or any other writing 14
958+that evidences a right to the payment of a monetary obligation, is not itself a 15
959+security agreement or lease, and is of a type that in ordinary course of business 16
960+is transferred by delivery with any necessary indorsement or assignment. The 17
961+term does not include (i) investment property, (ii) letters of credit, or (iii) 18
962+writings that evidence a right to payment arising out of the use of a credit or 19
963+charge card or information contained on or for use with the card, or (iv) 20
964+writings that evidence chattel paper. 21 BILL AS INTRODUCED H.206
1645965 2025 Page 40 of 124
1646-istransferredbydeliverywithanynecessaryindorsementorassignment.The
1647-termdoesnotinclude(i)investmentproperty,(ii)lettersofcredit,or(iii)
1648-writingsthatevidencearighttopaymentarisingoutoftheuseofacreditor
1649-chargecardorinformationcontainedonorforusewiththecard,or(iv)
1650-writingsthatevidencechattelpaper.
1651-***
1652-(54A)“Money”hasthemeaninginsubdivision1—201(b)(24)ofthis
1653-title,butdoesnotinclude(i)adepositaccountor(ii)moneyinanelectronic
1654-formthatcannotbesubjectedtocontrolundersection9—105Aofthistitle.
1655-***
1656-(61)“Paymentintangible”meansageneralintangibleunderwhichthe
1657-accountdebtor’sprincipalobligationisamonetaryobligation.Theterm
1658-includesacontrollablepaymentintangible.
1659-***
1660-(65)“Production-moneycrops”meanscropsthatsecureaproduction
1661-moneyobligationincurredwithrespecttothosecrops.
1662-(66)“Production-moneyobligation”meansanobligationofanobligor
1663-incurredfornewvaluegiventoenablethedebtortoproducecropsifthevalue
1664-isinfactusedfortheproductionofthecrops.
1665-1
1666-2
1667-3
1668-4
1669-5
1670-6
1671-7
1672-8
1673-9
1674-10
1675-11
1676-12
1677-13
1678-14
1679-15
1680-16
1681-17
1682-18
1683-19 BILLASPASSEDBYTHEHOUSE H.206
966+
967+
968+VT LEG #378799 v.1
969+* * * 1
970+(54A) “Money” has the meaning in subdivision 1—201(b)(24) of this 2
971+title, but does not include (i) a deposit account or (ii) money in an electronic 3
972+form that cannot be subjected to control under section 9—105A of this title. 4
973+* * * 5
974+(61) “Payment intangible” means a general intangible under which the 6
975+account debtor’s principal obligation is a monetary obligation. The term 7
976+includes a controllable payment intangible. 8
977+* * * 9
978+(65) “Production-money crops” means crops that secure a production 10
979+money obligation incurred with respect to those crops. 11
980+(66) “Production-money obligation” means an obligation of an obligor 12
981+incurred for new value given to enable the debtor to produce crops if the value 13
982+is in fact used for the production of the crops. 14
983+(67) “Production of crops” includes tilling and otherwise preparing land 15
984+for growing, planting, cultivating, fertilizing, irrigating, harvesting and 16
985+gathering crops, and protecting them from damage or disease. 17
986+(68) “Promissory note” means an instrument that evidences a promise to 18
987+pay a monetary obligation, does not evidence an order to pay, and does not 19
988+contain an acknowledgment by a bank that the bank has received for deposit a 20
989+sum of money or funds. 21 BILL AS INTRODUCED H.206
1684990 2025 Page 41 of 124
1685-(67)“Productionofcrops”includestillingandotherwisepreparingland
1686-forgrowing,planting,cultivating,fertilizing,irrigating,harvestingand
1687-gatheringcrops,andprotectingthemfromdamageordisease.
1688-(68)“Promissorynote”meansaninstrumentthatevidencesapromiseto
1689-payamonetaryobligation,doesnotevidenceanordertopay,anddoesnot
1690-containanacknowledgmentbyabankthatthebankhasreceivedfordeposita
1691-sumofmoneyorfunds.
1692-(69)“Proposal”meansarecordauthenticatedsignedbyasecuredparty
1693-whichincludesthetermsonwhichthesecuredpartyiswillingtoaccept
1694-collateralinfullorpartialsatisfactionoftheobligationitsecurespursuantto
1695-sections9—620,9—621,and9—622ofthistitle.
1696-***
1697-(78)“Send,”inconnectionwitharecordornotification,means:
1698-(A)todepositinthemail,deliverfortransmission,ortransmitbyany
1699-otherusualmeansofcommunication,withpostageorcostoftransmission
1700-providedfor,addressedtoanyaddressreasonableunderthecircumstances;or
1701-(B)tocausetherecordornotificationtobereceivedwithinthetime
1702-thatitwouldhavebeenreceivedifproperlysentundersubdivision(A)ofthis
1703-subdivision(78).[Reserved.]
1704-***
1705-1
1706-2
1707-3
1708-4
1709-5
1710-6
1711-7
1712-8
1713-9
1714-10
1715-11
1716-12
1717-13
1718-14
1719-15
1720-16
1721-17
1722-18
1723-19
1724-20 BILLASPASSEDBYTHEHOUSE H.206
991+
992+
993+VT LEG #378799 v.1
994+(69) “Proposal” means a record authenticated signed by a secured party 1
995+which includes the terms on which the secured party is willing to accept 2
996+collateral in full or partial satisfaction of the obligation it secures pursuant to 3
997+sections 9—620, 9—621, and 9—622 of this title. 4
998+* * * 5
999+(78) “Send,” in connection with a record or notification, means: 6
1000+(A) to deposit in the mail, deliver for transmission, or transmit by any 7
1001+other usual means of communication, with postage or cost of transmission 8
1002+provided for, addressed to any address reasonable under the circumstances; or 9
1003+(B) to cause the record or notification to be received within the time 10
1004+that it would have been received if properly sent under subdivision (A) of this 11
1005+subdivision (78). [Reserved.] 12
1006+* * * 13
1007+(82) “Tangible chattel paper” means chattel paper evidenced by a record 14
1008+or records consisting of information that is inscribed on a tangible medium. 15
1009+[Reserved.] 16
1010+(82A) “Tangible money” means money in a tangible form. 17
1011+* * * 18
1012+(b) “Control” as provided in section 7—106 of this title and the following 19
1013+definitions in other articles apply to this article: 20 BILL AS INTRODUCED H.206
17251014 2025 Page 42 of 124
1726-(82)“Tangiblechattelpaper”meanschattelpaperevidencedbyarecord
1727-orrecordsconsistingofinformationthatisinscribedonatangiblemedium.
1728-[Reserved.]
1729-(82A)“Tangiblemoney”meansmoneyinatangibleform.
1730-***
1731-(b)“Control”asprovidedinsection7—106ofthistitleandthefollowing
1732-definitionsinotherarticlesapplytothisarticle:
1733-“Applicant”Section5—102.
1734-“Beneficiary”Section5—102.
1735-“Broker”Section8—102.
1736-“Certificatedsecurity”Section8—102.
1737-“Check”Section3—104.
1738-“Clearingcorporation”Section8—102.
1739-“Contractforsale”Section2—106.
1740-“Controllableelectronicrecord”Section12—102.
1741-“Customer”Section4—104.
1742-“Entitlementholder”Section8—102.
1743-“Financialasset”Section8—102.
1744-“Holderinduecourse”Section3—302.
1745-“Issuer”(withrespecttoaletterofcreditorletter-of-creditright)Section
1746-5—102.
1747-1
1748-2
1749-3
1750-4
1751-5
1752-6
1753-7
1754-8
1755-9
1756-10
1757-11
1758-12
1759-13
1760-14
1761-15
1762-16
1763-17
1764-18
1765-19
1766-20
1767-21 BILLASPASSEDBYTHEHOUSE H.206
1015+
1016+
1017+VT LEG #378799 v.1
1018+“Applicant” Section 5—102. 1
1019+“Beneficiary” Section 5—102. 2
1020+“Broker” Section 8—102. 3
1021+“Certificated security” Section 8—102. 4
1022+“Check” Section 3—104. 5
1023+“Clearing corporation” Section 8—102. 6
1024+“Contract for sale” Section 2—106. 7
1025+“Controllable electronic record” Section 12—102. 8
1026+“Customer” Section 4—104. 9
1027+“Entitlement holder” Section 8—102. 10
1028+“Financial asset” Section 8—102. 11
1029+“Holder in due course” Section 3—302. 12
1030+“Issuer” (with respect to a letter of credit or letter-of-credit right) Section 13
1031+5—102. 14
1032+“Issuer” (with respect to documents of title) Section 7—102. 15
1033+“Issuer” (with respect to a security) Section 8—201. 16
1034+“Lease” Section 2A—103. 17
1035+“Lease agreement” Section 2A—103. 18
1036+“Lease contract” Section 2A—103. 19
1037+“Leasehold interest” Section 2A—103. 20
1038+“Lessee” Section 2A—103. 21 BILL AS INTRODUCED H.206
17681039 2025 Page 43 of 124
1769-“Issuer”(withrespecttodocumentsoftitle)Section7—102.
1770-“Issuer”(withrespecttoasecurity)Section8—201.
1771-“Lease”Section2A—103.
1772-“Leaseagreement”Section2A—103.
1773-“Leasecontract”Section2A—103.
1774-“Leaseholdinterest”Section2A—103.
1775-“Lessee”Section2A—103.
1776-“Lesseeinordinarycourseofbusiness”Section2A—103.
1777-“Lessor”Section2A—103.
1778-“Lessor’sresidualinterest”Section2A—103.
1779-“Letterofcredit”Section5—102.
1780-“Merchant”Section2—104.
1781-“Negotiableinstrument”Section3—104.
1782-“Nominatedperson”Section5—102.
1783-“Note”Section3—104.
1784-“Proceedsofaletterofcredit”Section5—114.
1785-“Protectedpurchaser”Section8—303.
1786-“Prove”Section3—103.
1787-“Qualifyingpurchaser”Section12—102.
1788-“Sale”Section2—106.
1789-***
1790-1
1791-2
1792-3
1793-4
1794-5
1795-6
1796-7
1797-8
1798-9
1799-10
1800-11
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1805-16
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1807-18
1808-19
1809-20
1810-21 BILLASPASSEDBYTHEHOUSE H.206
1040+
1041+
1042+VT LEG #378799 v.1
1043+“Lessee in ordinary course of business” Section 2A—103. 1
1044+“Lessor” Section 2A—103. 2
1045+“Lessor’s residual interest” Section 2A—103. 3
1046+“Letter of credit” Section 5—102. 4
1047+“Merchant” Section 2—104. 5
1048+“Negotiable instrument” Section 3—104. 6
1049+“Nominated person” Section 5—102. 7
1050+“Note” Section 3—104. 8
1051+“Proceeds of a letter of credit” Section 5—114. 9
1052+“Protected purchaser” Section 8—303. 10
1053+“Prove” Section 3—103. 11
1054+“Qualifying purchaser” Section 12—102. 12
1055+“Sale” Section 2—106. 13
1056+* * * 14
1057+§ 9—104. CONTROL OF DEPOSIT ACCOUNT 15
1058+(a) A secured party has control of a deposit account if: 16
1059+(1) the secured party is the bank with which the deposit account is 17
1060+maintained; 18
1061+(2) the debtor, secured party, and bank have agreed in an authenticated a 19
1062+signed record that the bank will comply with instructions originated by the 20 BILL AS INTRODUCED H.206
18111063 2025 Page 44 of 124
1812-§9—104.CONTROLOFDEPOSITACCOUNT
1813-(a)Asecuredpartyhascontrolofadepositaccountif:
1814-(1)thesecuredpartyisthebankwithwhichthedepositaccountis
1815-maintained;
1816-(2)thedebtor,securedparty,andbankhaveagreedinanauthenticateda
1817-signedrecordthatthebankwillcomplywithinstructionsoriginatedbythe
1818-securedpartydirectingdispositionofthefundsintheaccountwithoutfurther
1819-consentbythedebtor;or
1820-(3)thesecuredpartybecomesthebank’scustomerwithrespecttothe
1821-depositaccount;or
1822-(4)anotherperson,otherthanthedebtor:
1823-(A)hascontrolofthedepositaccountandacknowledgesthatithas
1824-controlonbehalfofthesecuredparty;or
1825-(B)obtainscontrolofthedepositaccountafterhavingacknowledged
1826-thatitwillobtaincontrolofthedepositaccountonbehalfofthesecuredparty.
1827-***
1828-§9—105.CONTROLOFELECTRONICCHATTELPAPER
1829-(a)Asecuredpartyhascontrolofelectronicchattelpaperifasystem
1830-employedforevidencingthetransferofinterestsinthechattelpaperreliably
1831-establishesthesecuredpartyasthepersontowhichthechattelpaperwas
1832-assigned.
1833-1
1834-2
1835-3
1836-4
1837-5
1838-6
1839-7
1840-8
1841-9
1842-10
1843-11
1844-12
1845-13
1846-14
1847-15
1848-16
1849-17
1850-18
1851-19
1852-20
1853-21 BILLASPASSEDBYTHEHOUSE H.206
1064+
1065+
1066+VT LEG #378799 v.1
1067+secured party directing disposition of the funds in the account without further 1
1068+consent by the debtor; or 2
1069+(3) the secured party becomes the bank’s customer with respect to the 3
1070+deposit account; or 4
1071+(4) another person, other than the debtor: 5
1072+(A) has control of the deposit account and acknowledges that it has 6
1073+control on behalf of the secured party; or 7
1074+(B) obtains control of the deposit account after having acknowledged 8
1075+that it will obtain control of the deposit account on behalf of the secured party. 9
1076+* * * 10
1077+§ 9—105. CONTROL OF ELECTRONIC CHATTEL PAPER 11
1078+(a) A secured party has control of electronic chattel paper if a system 12
1079+employed for evidencing the transfer of interests in the chattel paper reliably 13
1080+establishes the secured party as the person to which the chattel paper was 14
1081+assigned. 15
1082+(b) A system satisfies subsection (a) of this section if the record or records 16
1083+comprising the chattel paper are created, stored, and assigned in such a manner 17
1084+that: 18
1085+(1) a single authoritative copy of the record or records exists which is 19
1086+unique, identifiable and, except as otherwise provided in subdivisions (4), (5), 20
1087+and (6) of this subsection, unalterable; 21 BILL AS INTRODUCED H.206
18541088 2025 Page 45 of 124
1855-(b)Asystemsatisfiessubsection(a)ofthissectioniftherecordorrecords
1856-comprisingthechattelpaperarecreated,stored,andassignedinsuchamanner
1857-that:
1858-(1)asingleauthoritativecopyoftherecordorrecordsexistswhichis
1859-unique,identifiableand,exceptasotherwiseprovidedinsubdivisions(4),(5),
1860-and(6)ofthissubsection,unalterable;
1861-(2)theauthoritativecopyidentifiesthesecuredpartyastheassigneeof
1862-therecordorrecords;
1863-(3)theauthoritativecopyiscommunicatedtoandmaintainedbythe
1864-securedpartyoritsdesignatedcustodian;
1865-(4)copiesoramendmentsthataddorchangeanidentifiedassigneeof
1866-theauthoritativecopycanbemadeonlywiththeconsentofthesecuredparty;
1867-(5)eachcopyoftheauthoritativecopyandanycopyofacopyisreadily
1868-identifiableasacopythatisnottheauthoritativecopy;and
1869-(6)anyamendmentoftheauthoritativecopyisreadilyidentifiableas
1870-authorizedorunauthorized.
1871-§9—105.CONTROLOFELECTRONICCOPYOFRECORD
1872-EVIDENCINGCHATTELPAPER
1873-(a)Apurchaserhascontrolofanauthoritativeelectroniccopyofarecord
1874-evidencingchattelpaperifasystememployedforevidencingtheassignment
1875-ofinterestsinthechattelpaperreliablyestablishesthepurchaserastheperson
1876-1
1877-2
1878-3
1879-4
1880-5
1881-6
1882-7
1883-8
1884-9
1885-10
1886-11
1887-12
1888-13
1889-14
1890-15
1891-16
1892-17
1893-18
1894-19
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1089+
1090+
1091+VT LEG #378799 v.1
1092+(2) the authoritative copy identifies the secured party as the assignee of 1
1093+the record or records; 2
1094+(3) the authoritative copy is communicated to and maintained by the 3
1095+secured party or its designated custodian; 4
1096+(4) copies or amendments that add or change an identified assignee of 5
1097+the authoritative copy can be made only with the consent of the secured party; 6
1098+(5) each copy of the authoritative copy and any copy of a copy is readily 7
1099+identifiable as a copy that is not the authoritative copy; and 8
1100+(6) any amendment of the authoritative copy is readily identifiable as 9
1101+authorized or unauthorized. 10
1102+§ 9—105. CONTROL OF ELECTRONIC COPY OF RECORD 11
1103+ EVIDENCING CHATTEL PAPER 12
1104+(a) A purchaser has control of an authoritative electronic copy of a record 13
1105+evidencing chattel paper if a system employed for evidencing the assignment 14
1106+of interests in the chattel paper reliably establishes the purchaser as the person 15
1107+to which the authoritative electronic copy was assigned. 16
1108+(b) A system satisfies subsection (a) of this section if the record or records 17
1109+evidencing the chattel paper are created, stored, and assigned in a manner that: 18
1110+(1) a single authoritative copy of the record or records exists which is 19
1111+unique, identifiable, and, except as otherwise provided in subdivisions (4), (5), 20
1112+and (6) of this subsection, unalterable; 21 BILL AS INTRODUCED H.206
18971113 2025 Page 46 of 124
1898-towhichtheauthoritativeelectroniccopywasassigned.
1899-(b)Asystemsatisfiessubsection(a)ofthissectioniftherecordorrecords
1900-evidencingthechattelpaperarecreated,stored,andassignedinamannerthat:
1901-(1)asingleauthoritativecopyoftherecordorrecordsexistswhichis
1902-unique,identifiable,and,exceptasotherwiseprovidedinsubdivisions(4),(5),
1903-and(6)ofthissubsection,unalterable;
1904-(2)theauthoritativecopyidentifiesthepurchaserastheassigneeofthe
1905-recordorrecords;
1906-(3)theauthoritativecopyiscommunicatedtoandmaintainedbythe
1907-purchaseroritsdesignatedcustodian;
1908-(4)copiesoramendmentsthataddorchangeanidentifiedassigneeof
1909-theauthoritativecopycanbemadeonlywiththeconsentofthepurchaser;
1910-(5)eachcopyoftheauthoritativecopyandanycopyofacopyisreadily
1911-identifiableasacopythatisnottheauthoritativecopy;and
1912-(6)anyamendmentoftheauthoritativecopyisreadilyidentifiableas
1913-authorizedorunauthorized.
1914-(c)Asystemsatisfiessubsection(a)ofthissection,andapurchaserhas
1915-controlofanauthoritativeelectroniccopyofarecordevidencingchattelpaper,
1916-iftheelectroniccopy,arecordattachedtoorlogicallyassociatedwiththe
1917-electroniccopy,orasysteminwhichtheelectroniccopyisrecorded:
1918-(1)enablesthepurchaserreadilytoidentifyeachelectroniccopyas
1919-1
1920-2
1921-3
1922-4
1923-5
1924-6
1925-7
1926-8
1927-9
1928-10
1929-11
1930-12
1931-13
1932-14
1933-15
1934-16
1935-17
1936-18
1937-19
1938-20
1939-21 BILLASPASSEDBYTHEHOUSE H.206
1114+
1115+
1116+VT LEG #378799 v.1
1117+(2) the authoritative copy identifies the purchaser as the assignee of the 1
1118+record or records; 2
1119+(3) the authoritative copy is communicated to and maintained by the 3
1120+purchaser or its designated custodian; 4
1121+(4) copies or amendments that add or change an identified assignee of 5
1122+the authoritative copy can be made only with the consent of the purchaser; 6
1123+(5) each copy of the authoritative copy and any copy of a copy is readily 7
1124+identifiable as a copy that is not the authoritative copy; and 8
1125+(6) any amendment of the authoritative copy is readily identifiable as 9
1126+authorized or unauthorized. 10
1127+(c) A system satisfies subsection (a) of this section, and a purchaser has 11
1128+control of an authoritative electronic copy of a record evidencing chattel paper, 12
1129+if the electronic copy, a record attached to or logically associated with the 13
1130+electronic copy, or a system in which the electronic copy is recorded: 14
1131+(1) enables the purchaser readily to identify each electronic copy as 15
1132+either an authoritative copy or a nonauthoritative copy; 16
1133+(2) enables the purchaser readily to identify itself in any way, including 17
1134+by name, identifying number, cryptographic key, office, or account number, as 18
1135+the assignee of the authoritative electronic copy; and 19
1136+(3) gives the purchaser exclusive power, subject to subsection (d) of this 20
1137+section, to: 21 BILL AS INTRODUCED H.206
19401138 2025 Page 47 of 124
1941-eitheranauthoritativecopyoranonauthoritativecopy;
1942-(2)enablesthepurchaserreadilytoidentifyitselfinanyway,including
1943-byname,identifyingnumber,cryptographickey,office,oraccountnumber,as
1944-theassigneeoftheauthoritativeelectroniccopy;and
1945-(3)givesthepurchaserexclusivepower,subjecttosubsection(d)ofthis
1946-section,to:
1947-(A)preventothersfromaddingorchanginganidentifiedassigneeof
1948-theauthoritativeelectroniccopy;and
1949-(B)transfercontroloftheauthoritativeelectroniccopy.
1950-(d)Subjecttosubsection(e)ofthissection,apowerisexclusiveunder
1951-subdivisions(c)(3)(A)and(B)ofthissectionevenif:
1952-(1)theauthoritativeelectroniccopy,arecordattachedtoorlogically
1953-associatedwiththeauthoritativeelectroniccopy,orasysteminwhichthe
1954-authoritativeelectroniccopyisrecordedlimitstheuseoftheauthoritative
1955-electroniccopyorhasaprotocolprogrammedtocauseachange,includinga
1956-transferorlossofcontrol;or
1957-(2)thepowerissharedwithanotherperson.
1958-(e)Apowerofapurchaserisnotsharedwithanotherpersonunder
1959-subdivision(d)(2)ofthissectionandthepurchaser’spowerisnotexclusiveif:
1960-(1)thepurchasercanexercisethepoweronlyifthepoweralsois
1961-exercisedbytheotherperson;and
1962-1
1963-2
1964-3
1965-4
1966-5
1967-6
1968-7
1969-8
1970-9
1971-10
1972-11
1973-12
1974-13
1975-14
1976-15
1977-16
1978-17
1979-18
1980-19
1981-20
1982-21 BILLASPASSEDBYTHEHOUSE H.206
1139+
1140+
1141+VT LEG #378799 v.1
1142+(A) prevent others from adding or changing an identified assignee of 1
1143+the authoritative electronic copy; and 2
1144+(B) transfer control of the authoritative electronic copy. 3
1145+(d) Subject to subsection (e) of this section, a power is exclusive under 4
1146+subdivisions (c)(3)(A) and (B) of this section even if: 5
1147+(1) the authoritative electronic copy, a record attached to or logically 6
1148+associated with the authoritative electronic copy, or a system in which the 7
1149+authoritative electronic copy is recorded limits the use of the authoritative 8
1150+electronic copy or has a protocol programmed to cause a change, including a 9
1151+transfer or loss of control; or 10
1152+(2) the power is shared with another person. 11
1153+(e) A power of a purchaser is not shared with another person under 12
1154+subdivision (d)(2) of this section and the purchaser’s power is not exclusive if: 13
1155+(1) the purchaser can exercise the power only if the power also is 14
1156+exercised by the other person; and 15
1157+(2) the other person: 16
1158+(A) can exercise the power without exercise of the power by the 17
1159+purchaser; or 18
1160+(B) is the transferor to the purchaser of an interest in the chattel 19
1161+paper. 20
1162+(f) If a purchaser has the powers specified in subdivisions (c)(3)(A) and (B) 21 BILL AS INTRODUCED H.206
19831163 2025 Page 48 of 124
1984-(2)theotherperson:
1985-(A)canexercisethepowerwithoutexerciseofthepowerbythe
1986-purchaser;or
1987-(B)isthetransferortothepurchaserofaninterestinthechattel
1988-paper.
1989-(f)Ifapurchaserhasthepowersspecifiedinsubdivisions(c)(3)(A)and
1990-(B)ofthissection,thepowersarepresumedtobeexclusive.
1991-(g)Apurchaserhascontrolofanauthoritativeelectroniccopyofarecord
1992-evidencingchattelpaperifanotherperson,otherthanthetransferortothe
1993-purchaserofaninterestinthechattelpaper:
1994-(1)hascontroloftheauthoritativeelectroniccopyandacknowledges
1995-thatithascontrolonbehalfofthepurchaser;or
1996-(2)obtainscontroloftheauthoritativeelectroniccopyafterhaving
1997-acknowledgedthatitwillobtaincontroloftheelectroniccopyonbehalfofthe
1998-purchaser.
1999-§9—105A.CONTROLOFELECTRONICMONEY
2000-(a)Apersonhascontrolofelectronicmoneyif:
2001-(1)theelectronicmoney,arecordattachedtoorlogicallyassociated
2002-withtheelectronicmoney,orasysteminwhichtheelectronicmoneyis
2003-recordedgivestheperson:
2004-(A)powertoavailitselfofsubstantiallyallthebenefitfromthe
2005-1
2006-2
2007-3
2008-4
2009-5
2010-6
2011-7
2012-8
2013-9
2014-10
2015-11
2016-12
2017-13
2018-14
2019-15
2020-16
2021-17
2022-18
2023-19
2024-20
2025-21 BILLASPASSEDBYTHEHOUSE H.206
1164+
1165+
1166+VT LEG #378799 v.1
1167+of this section, the powers are presumed to be exclusive. 1
1168+(g) A purchaser has control of an authoritative electronic copy of a record 2
1169+evidencing chattel paper if another person, other than the transferor to the 3
1170+purchaser of an interest in the chattel paper: 4
1171+(1) has control of the authoritative electronic copy and acknowledges 5
1172+that it has control on behalf of the purchaser; or 6
1173+(2) obtains control of the authoritative electronic copy after having 7
1174+acknowledged that it will obtain control of the electronic copy on behalf of the 8
1175+purchaser. 9
1176+§ 9—105A. CONTROL OF ELECTRONIC MONEY 10
1177+(a) A person has control of electronic money if: 11
1178+(1) the electronic money, a record attached to or logically associated 12
1179+with the electronic money, or a system in which the electronic money is 13
1180+recorded gives the person: 14
1181+(A) power to avail itself of substantially all the benefit from the 15
1182+electronic money; and 16
1183+(B) exclusive power, subject to subsection (b) of this section, to: 17
1184+(i) prevent others from availing themselves of substantially all the 18
1185+benefit from the electronic money; and 19
1186+(ii) transfer control of the electronic money to another person or 20
1187+cause another person to obtain control of other electronic money as a result of 21 BILL AS INTRODUCED H.206
20261188 2025 Page 49 of 124
2027-electronicmoney;and
2028-(B)exclusivepower,subjecttosubsection(b)ofthissection,to:
2029-(i)preventothersfromavailingthemselvesofsubstantiallyallthe
2030-benefitfromtheelectronicmoney;and
2031-(ii)transfercontroloftheelectronicmoneytoanotherpersonor
2032-causeanotherpersontoobtaincontrolofotherelectronicmoneyasaresultof
2033-thetransferoftheelectronicmoney;and
2034-(2)theelectronicmoney,arecordattachedtoorlogicallyassociated
2035-withtheelectronicmoney,orasysteminwhichtheelectronicmoneyis
2036-recordedenablesthepersonreadilytoidentifyitselfinanyway,includingby
2037-name,identifyingnumber,cryptographickey,office,oraccountnumber,as
2038-havingthepowersundersubdivision(1)ofthissubsection.
2039-(b)Subjecttosubsection(c)ofthissection,apowerisexclusiveunder
2040-subdivisions(a)(1)(B)(i)and(ii)ofthissectionevenif:
2041-(1)theelectronicmoney,arecordattachedtoorlogicallyassociated
2042-withtheelectronicmoney,orasysteminwhichtheelectronicmoneyis
2043-recordedlimitstheuseoftheelectronicmoneyorhasaprotocolprogrammed
2044-tocauseachange,includingatransferorlossofcontrol;or
2045-(2)thepowerissharedwithanotherperson.
2046-(c)Apowerofapersonisnotsharedwithanotherpersonunder
2047-subdivision(b)(2)ofthissectionandtheperson’spowerisnotexclusiveif:
2048-1
2049-2
2050-3
2051-4
2052-5
2053-6
2054-7
2055-8
2056-9
2057-10
2058-11
2059-12
2060-13
2061-14
2062-15
2063-16
2064-17
2065-18
2066-19
2067-20
2068-21 BILLASPASSEDBYTHEHOUSE H.206
1189+
1190+
1191+VT LEG #378799 v.1
1192+the transfer of the electronic money; and 1
1193+(2) the electronic money, a record attached to or logically associated 2
1194+with the electronic money, or a system in which the electronic money is 3
1195+recorded enables the person readily to identify itself in any way, including by 4
1196+name, identifying number, cryptographic key, office, or account number, as 5
1197+having the powers under subdivision (1) of this subsection. 6
1198+(b) Subject to subsection (c) of this section, a power is exclusive under 7
1199+subdivisions (a)(1)(B)(i) and (ii) of this section even if: 8
1200+(1) the electronic money, a record attached to or logically associated 9
1201+with the electronic money, or a system in which the electronic money is 10
1202+recorded limits the use of the electronic money or has a protocol programmed 11
1203+to cause a change, including a transfer or loss of control; or 12
1204+(2) the power is shared with another person. 13
1205+(c) A power of a person is not shared with another person under 14
1206+subdivision (b)(2) of this section and the person’s power is not exclusive if: 15
1207+(1) the person can exercise the power only if the power also is exercised 16
1208+by the other person; and 17
1209+(2) the other person: 18
1210+(A) can exercise the power without exercise of the power by the 19
1211+person; or 20
1212+(B) is the transferor to the person of an interest in the electronic 21 BILL AS INTRODUCED H.206
20691213 2025 Page 50 of 124
2070-(1)thepersoncanexercisethepoweronlyifthepoweralsoisexercised
2071-bytheotherperson;and
2072-(2)theotherperson:
2073-(A)canexercisethepowerwithoutexerciseofthepowerbythe
2074-person;or
2075-(B)isthetransferortothepersonofaninterestintheelectronic
2076-money.
2077-(d)Ifapersonhasthepowersspecifiedinsubdivisions(a)(1)(B)(i)and(ii)
2078-ofthissection,thepowersarepresumedtobeexclusive.
2079-(e)Apersonhascontrolofelectronicmoneyifanotherperson,otherthan
2080-thetransferortothepersonofaninterestintheelectronicmoney:
2081-(1)hascontroloftheelectronicmoneyandacknowledgesthatithas
2082-controlonbehalfoftheperson;or
2083-(2)obtainscontroloftheelectronicmoneyafterhavingacknowledged
2084-thatitwillobtaincontroloftheelectronicmoneyonbehalfoftheperson.
2085-***
2086-§ 9—107A.CONTROLOFCONTROLLABLE ELECTRONICRECORD,
2087-CONTROLLABLE ACCOUNT,ORCONTROLLABLE
2088-PAYMENTINTANGIBLE
2089-(a)Asecuredpartyhascontrolofacontrollableelectronicrecordas
2090-providedinsection12—105ofthistitle.
2091-1
2092-2
2093-3
2094-4
2095-5
2096-6
2097-7
2098-8
2099-9
2100-10
2101-11
2102-12
2103-13
2104-14
2105-15
2106-16
2107-17
2108-18
2109-19
2110-20
2111-21 BILLASPASSEDBYTHEHOUSE H.206
1214+
1215+
1216+VT LEG #378799 v.1
1217+money. 1
1218+(d) If a person has the powers specified in subdivisions (a)(1)(B)(i) and (ii) 2
1219+of this section, the powers are presumed to be exclusive. 3
1220+(e) A person has control of electronic money if another person, other than 4
1221+the transferor to the person of an interest in the electronic money: 5
1222+(1) has control of the electronic money and acknowledges that it has 6
1223+control on behalf of the person; or 7
1224+(2) obtains control of the electronic money after having acknowledged 8
1225+that it will obtain control of the electronic money on behalf of the person. 9
1226+* * * 10
1227+§ 9—107A. CONTROL OF CONTROLLABLE ELECTRONIC RECORD, 11
1228+ CONTROLLABLE ACCOUNT, OR CONTROLLABLE 12
1229+ PAYMENT INTANGIBLE 13
1230+(a) A secured party has control of a controllable electronic record as 14
1231+provided in section 12—105 of this title. 15
1232+(b) A secured party has control of a controllable account or controllable 16
1233+payment intangible if the secured party has control of the controllable 17
1234+electronic record that evidences the controllable account or controllable 18
1235+payment intangible. 19 BILL AS INTRODUCED H.206
21121236 2025 Page 51 of 124
2113-(b)Asecuredpartyhascontrolofacontrollableaccountorcontrollable
2114-paymentintangibleifthesecuredpartyhascontrolofthecontrollable
2115-electronicrecordthatevidencesthecontrollableaccountorcontrollable
2116-paymentintangible.
2117-§ 9—107B.NOREQUIREMENTTOACKNOWLEDGE ORCONFIRM;
2118-NODUTIES
2119-(a)Apersonthathascontrolundersection9—104,9—105,or9—105Aof
2120-thistitleisnotrequiredtoacknowledgethatithascontrolonbehalfofanother
2121-person.
2122-(b)Ifapersonacknowledgesthatithasorwillobtaincontrolonbehalfof
2123-anotherperson,unlessthepersonotherwiseagreesorlawotherthanthis
2124-articleotherwiseprovides,thepersondoesnotoweanydutytotheother
2125-personandisnotrequiredtoconfirmtheacknowledgmenttoanyotherperson.
2126-***
2127-§9—203.ATTACHMENTANDENFORCEABILITYOFSECURITY
2128-INTEREST;PROCEEDS;SUPPORTINGOBLIGATIONS;
2129-FORMALREQUISITES
2130-(a)Asecurityinterestattachestocollateralwhenitbecomesenforceable
2131-againstthedebtorwithrespecttothecollateral,unlessanagreementexpressly
2132-postponesthetimeofattachment.
2133-1
2134-2
2135-3
2136-4
2137-5
2138-6
2139-7
2140-8
2141-9
2142-10
2143-11
2144-12
2145-13
2146-14
2147-15
2148-16
2149-17
2150-18
2151-19
2152-20 BILLASPASSEDBYTHEHOUSE H.206
1237+
1238+
1239+VT LEG #378799 v.1
1240+§ 9—107B. NO REQUIREMENT TO ACKNOWLEDGE OR CONFIRM; 1
1241+ NO DUTIES 2
1242+(a) A person that has control under section 9—104, 9—105, or 9—105A of 3
1243+this title is not required to acknowledge that it has control on behalf of another 4
1244+person. 5
1245+(b) If a person acknowledges that it has or will obtain control on behalf of 6
1246+another person, unless the person otherwise agrees or law other than this article 7
1247+otherwise provides, the person does not owe any duty to the other person and is 8
1248+not required to confirm the acknowledgment to any other person. 9
1249+* * * 10
1250+§ 9—203. ATTACHMENT AND ENFORCEABILITY OF SECURITY 11
1251+ INTEREST; PROCEEDS; SUPPORTING OBLIGATIONS; 12
1252+ FORMAL REQUISITES 13
1253+(a) A security interest attaches to collateral when it becomes enforceable 14
1254+against the debtor with respect to the collateral, unless an agreement expressly 15
1255+postpones the time of attachment. 16
1256+(b) Except as otherwise provided in subsections (c) through (i) of this 17
1257+section, a security interest is enforceable against the debtor and third parties 18
1258+with respect to the collateral only if: 19
1259+(1) value has been given; 20 BILL AS INTRODUCED H.206
21531260 2025 Page 52 of 124
2154-(b)Exceptasotherwiseprovidedinsubsections(c)through(i)ofthis
2155-section,asecurityinterestisenforceableagainstthedebtorandthirdparties
2156-withrespecttothecollateralonlyif:
2157-(1)valuehasbeengiven;
2158-(2)thedebtorhasrightsinthecollateralorthepowertotransferrights
2159-inthecollateraltoasecuredparty;and
2160-(3)oneofthefollowingconditionsismet:
2161-(A)thedebtorhasauthenticatedsignedasecurityagreementthat
2162-providesadescriptionofthecollateraland,ifthesecurityinterestcovers
2163-timbertobecut,adescriptionofthelandconcerned;
2164-(B)thecollateralisnotacertificatedsecurityandisinthepossession
2165-ofthesecuredpartyundersection9—313ofthistitlepursuanttothedebtor’s
2166-securityagreement;
2167-(C)thecollateralisacertificatedsecurityinregisteredformandthe
2168-securitycertificatehasbeendeliveredtothesecuredpartyundersection8-301
2169-ofthistitlepursuanttothedebtor’ssecurityagreement;or
2170-(D)thecollateraliscontrollableaccounts,controllableelectronic
2171-records,controllablepaymentintangibles,depositaccounts,electronicchattel
2172-paper,electronicdocuments,electronicmoney,investmentproperty,orletter-
2173-of-creditrights,orelectronicdocuments,andthesecuredpartyhascontrol
2174-1
2175-2
2176-3
2177-4
2178-5
2179-6
2180-7
2181-8
2182-9
2183-10
2184-11
2185-12
2186-13
2187-14
2188-15
2189-16
2190-17
2191-18
2192-19
2193-20 BILLASPASSEDBYTHEHOUSE H.206
1261+
1262+
1263+VT LEG #378799 v.1
1264+(2) the debtor has rights in the collateral or the power to transfer rights 1
1265+in the collateral to a secured party; and 2
1266+(3) one of the following conditions is met: 3
1267+(A) the debtor has authenticated signed a security agreement that 4
1268+provides a description of the collateral and, if the security interest covers 5
1269+timber to be cut, a description of the land concerned; 6
1270+(B) the collateral is not a certificated security and is in the possession 7
1271+of the secured party under section 9—313 of this title pursuant to the debtor’s 8
1272+security agreement; 9
1273+(C) the collateral is a certificated security in registered form and the 10
1274+security certificate has been delivered to the secured party under section 8-301 11
1275+of this title pursuant to the debtor’s security agreement; or 12
1276+(D) the collateral is controllable accounts, controllable electronic 13
1277+records, controllable payment intangibles, deposit accounts, electronic chattel 14
1278+paper, electronic documents, electronic money, investment property, or letter-15
1279+of-credit rights, or electronic documents, and the secured party has control 16
1280+under section 7—106, 9—104, 9—105, 9-105A, 9—106, or 9—107, or 9-17
1281+107A of this title pursuant to the debtor’s security agreement; or 18
1282+(E) the collateral is chattel paper and the secured party has possession 19
1283+and control under section 9-314A of this title pursuant to the debtor’s security 20
1284+agreement. 21 BILL AS INTRODUCED H.206
21941285 2025 Page 53 of 124
2195-undersection7—106,9—104,9—105,9-105A,9—106,or9—107,or9-
2196-107Aofthistitlepursuanttothedebtor’ssecurityagreement;or
2197-(E)thecollateralischattelpaperandthesecuredpartyhas
2198-possessionandcontrolundersection9-314Aofthistitlepursuanttothe
2199-debtor’ssecurityagreement.
2200-***
2201-§9—204.AFTER-ACQUIREDPROPERTY;FUTUREADVANCES
2202-(a)Exceptasotherwiseprovidedinsubsection(b)ofthissection,a
2203-securityagreementmaycreateorprovideforasecurityinterestinafter-
2204-acquiredcollateral.
2205-(b)ASubjecttosubsection(b.1)ofthissection,asecurityinterestdoesnot
2206-attachunderatermconstitutinganafter-acquiredpropertyclauseto:
2207-(1)consumergoods,otherthananaccessionwhengivenasadditional
2208-security,unlessthedebtoracquiresrightsinthemwithin10daysafterthe
2209-securedpartygivesvalue;or
2210-(2)acommercialtortclaim.
2211-(b.1)Subsection(b)ofthissectiondoesnotpreventasecurityinterestfrom
2212-attaching:
2213-(1)toconsumergoodsasproceedsundersubsection9-315(a)ofthis
2214-titleorcommingledgoodsundersubsection9-336(c)ofthistitle;
2215-(2)toacommercialtortclaimasproceedsundersubsection9-315(a)of
2216-1
2217-2
2218-3
2219-4
2220-5
2221-6
2222-7
2223-8
2224-9
2225-10
2226-11
2227-12
2228-13
2229-14
2230-15
2231-16
2232-17
2233-18
2234-19
2235-20
2236-21 BILLASPASSEDBYTHEHOUSE H.206
1286+
1287+
1288+VT LEG #378799 v.1
1289+* * * 1
1290+§ 9—204. AFTER-ACQUIRED PROPERTY; FUTURE ADVANCES 2
1291+(a) Except as otherwise provided in subsection (b) of this section, a security 3
1292+agreement may create or provide for a security interest in after-acquired 4
1293+collateral. 5
1294+(b) A Subject to subsection (b.1) of this section, a security interest does not 6
1295+attach under a term constituting an after-acquired property clause to: 7
1296+(1) consumer goods, other than an accession when given as additional 8
1297+security, unless the debtor acquires rights in them within 10 days after the 9
1298+secured party gives value; or 10
1299+(2) a commercial tort claim. 11
1300+(b.1) Subsection (b) of this section does not prevent a security interest from 12
1301+attaching: 13
1302+(1) to consumer goods as proceeds under subsection 9-315(a) of this title 14
1303+or commingled goods under subsection 9-336(c) of this title; 15
1304+(2) to a commercial tort claim as proceeds under subsection 9-315(a) of 16
1305+this title; or 17
1306+(3) under an after-acquired property clause to property that is proceeds 18
1307+of consumer goods or a commercial tort claim. 19
1308+* * * 20 BILL AS INTRODUCED H.206
22371309 2025 Page 54 of 124
2238-thistitle;or
2239-(3)underanafter-acquiredpropertyclausetopropertythatisproceeds
2240-ofconsumergoodsoracommercialtortclaim.
2241-***
2242-§9—207.RIGHTSANDDUTIESOFSECUREDPARTYHAVING
2243-POSSESSIONORCONTROLOFCOLLATERAL
2244-***
2245-(c)Exceptasotherwiseprovidedinsubsection(d)ofthissection,asecured
2246-partyhavingpossessionofcollateralorcontrolofcollateralundersection7—
2247-106,9—104,9—105,9-105A,9-106,or9-107,or9-107Aofthistitle:
2248-***
2249-§9—208.ADDITIONALDUTIESOFSECUREDPARTYHAVING
2250-CONTROLOFCOLLATERAL
2251-***
2252-(b)Within10daysafterreceivinganauthenticatedasigneddemandbythe
2253-debtor:
2254-(1)asecuredpartyhavingcontrolofadepositaccountunder
2255-subdivision9—104(a)(2)ofthistitleshallsendtothebankwithwhichthe
2256-depositaccountismaintainedanauthenticatedstatementasignedrecordthat
2257-releasesthebankfromanyfurtherobligationtocomplywithinstructions
2258-originatedbythesecuredparty;
2259-1
2260-2
2261-3
2262-4
2263-5
2264-6
2265-7
2266-8
2267-9
2268-10
2269-11
2270-12
2271-13
2272-14
2273-15
2274-16
2275-17
2276-18
2277-19
2278-20
2279-21 BILLASPASSEDBYTHEHOUSE H.206
1310+
1311+
1312+VT LEG #378799 v.1
1313+§ 9—207. RIGHTS AND DUTIES OF SECURED PARTY HAVING 1
1314+ POSSESSION OR CONTROL OF COLLATERAL 2
1315+* * * 3
1316+(c) Except as otherwise provided in subsection (d) of this section, a secured 4
1317+party having possession of collateral or control of collateral under section 7—5
1318+106, 9—104, 9—105, 9-105A, 9-106, or 9-107, or 9-107A of this title: 6
1319+* * * 7
1320+§ 9—208. ADDITIONAL DUTIES OF SECURED PARTY HAVING 8
1321+ CONTROL OF COLLATERAL 9
1322+* * * 10
1323+(b) Within 10 days after receiving an authenticated a signed demand by the 11
1324+debtor: 12
1325+(1) a secured party having control of a deposit account under 13
1326+subdivision 9—104(a)(2) of this title shall send to the bank with which the 14
1327+deposit account is maintained an authenticated statement a signed record that 15
1328+releases the bank from any further obligation to comply with instructions 16
1329+originated by the secured party; 17
1330+* * * 18
1331+(3) a secured party, other than a buyer, having control of electronic 19
1332+chattel paper under section 9—105 of this title shall: 20 BILL AS INTRODUCED H.206
22801333 2025 Page 55 of 124
2281-***
2282-(3)asecuredparty,otherthanabuyer,havingcontrolofelectronic
2283-chattelpaperundersection9—105ofthistitleshall:
2284-(A)communicatetheauthoritativecopyoftheelectronicchattel
2285-papertothedebtororitsdesignatedcustodian;
2286-(B)ifthedebtordesignatesacustodianthatisthedesignated
2287-custodianwithwhichtheauthoritativecopyoftheelectronicchattelpaperis
2288-maintainedforthesecuredparty,communicatetothecustodianan
2289-authenticatedrecordreleasingthedesignatedcustodianfromanyfurther
2290-obligationtocomplywithinstructionsoriginatedbythesecuredpartyand
2291-instructingthecustodiantocomplywithinstructionsoriginatedbythedebtor;
2292-and
2293-(C)takeappropriateactiontoenablethedebtororitsdesignated
2294-custodiantomakecopiesoforrevisionstotheauthoritativecopywhichaddor
2295-changeanidentifiedassigneeoftheauthoritativecopywithouttheconsentof
2296-thesecuredpartyasecuredparty,otherthanabuyer,havingcontrolunder
2297-section9-105ofthistitleofanauthoritativeelectroniccopyofarecord
2298-evidencingchattelpapershalltransfercontroloftheelectroniccopytothe
2299-debtororapersondesignatedbythedebtor;
2300-(4)asecuredpartyhavingcontrolofinvestmentpropertyunder
2301-subdivision8—106(d)(2)orsubsection9—106(b)ofthistitleshallsendtothe
2302-1
2303-2
2304-3
2305-4
2306-5
2307-6
2308-7
2309-8
2310-9
2311-10
2312-11
2313-12
2314-13
2315-14
2316-15
2317-16
2318-17
2319-18
2320-19
2321-20
2322-21 BILLASPASSEDBYTHEHOUSE H.206
1334+
1335+
1336+VT LEG #378799 v.1
1337+(A) communicate the authoritative copy of the electronic chattel paper 1
1338+to the debtor or its designated custodian; 2
1339+(B) if the debtor designates a custodian that is the designated 3
1340+custodian with which the authoritative copy of the electronic chattel paper is 4
1341+maintained for the secured party, communicate to the custodian an 5
1342+authenticated record releasing the designated custodian from any further 6
1343+obligation to comply with instructions originated by the secured party and 7
1344+instructing the custodian to comply with instructions originated by the debtor; 8
1345+and 9
1346+(C) take appropriate action to enable the debtor or its designated 10
1347+custodian to make copies of or revisions to the authoritative copy which add or 11
1348+change an identified assignee of the authoritative copy without the consent of 12
1349+the secured party a secured party, other than a buyer, having control under 13
1350+section 9-105 of this title of an authoritative electronic copy of a record 14
1351+evidencing chattel paper shall transfer control of the electronic copy to the 15
1352+debtor or a person designated by the debtor; 16
1353+(4) a secured party having control of investment property under 17
1354+subdivision 8—106(d)(2) or subsection 9—106(b) of this title shall send to the 18
1355+securities intermediary or commodity intermediary with which the security 19
1356+entitlement or commodity contract is maintained an authenticated a signed 20
1357+record that releases the securities intermediary or commodity intermediary 21 BILL AS INTRODUCED H.206
23231358 2025 Page 56 of 124
2324-securitiesintermediaryorcommodityintermediarywithwhichthesecurity
2325-entitlementorcommoditycontractismaintainedanauthenticatedasigned
2326-recordthatreleasesthesecuritiesintermediaryorcommodityintermediary
2327-fromanyfurtherobligationtocomplywithentitlementordersordirections
2328-originatedbythesecuredparty;
2329-(5)asecuredpartyhavingcontrolofaletter-of-creditrightunder
2330-section9-107ofthistitleshallsendtoeachpersonhavinganunfulfilled
2331-obligationtopayordeliverproceedsoftheletterofcredittothesecuredparty
2332-anauthenticatedasignedreleasefromanyfurtherobligationtopayordeliver
2333-proceedsoftheletterofcredittothesecuredparty;and
2334-(6)asecuredpartyhavingcontrolofanelectronicdocumentshall:
2335-(A)givecontroloftheelectronicdocumenttothedebtororits
2336-designatedcustodian
2337-(B)ifthedebtordesignatesacustodianthatisthedesignated
2338-custodianwithwhichtheauthoritativecopyoftheelectronicdocumentis
2339-maintainedforthesecuredparty,communicatetothecustodianan
2340-authenticatedrecordreleasingthedesignatedcustodianfromanyfurther
2341-obligationtocomplywithinstructionsoriginatedbythesecuredpartyand
2342-instructingthecustodiantocomplywithinstructionsoriginatedbythedebtor;
2343-and
2344-1
2345-2
2346-3
2347-4
2348-5
2349-6
2350-7
2351-8
2352-9
2353-10
2354-11
2355-12
2356-13
2357-14
2358-15
2359-16
2360-17
2361-18
2362-19
2363-20 BILLASPASSEDBYTHEHOUSE H.206
1359+
1360+
1361+VT LEG #378799 v.1
1362+from any further obligation to comply with entitlement orders or directions 1
1363+originated by the secured party; 2
1364+(5) a secured party having control of a letter-of-credit right under section 3
1365+9-107 of this title shall send to each person having an unfulfilled obligation to 4
1366+pay or deliver proceeds of the letter of credit to the secured party an 5
1367+authenticated a signed release from any further obligation to pay or deliver 6
1368+proceeds of the letter of credit to the secured party; and 7
1369+(6) a secured party having control of an electronic document shall: 8
1370+(A) give control of the electronic document to the debtor or its 9
1371+designated custodian 10
1372+(B) if the debtor designates a custodian that is the designated 11
1373+custodian with which the authoritative copy of the electronic document is 12
1374+maintained for the secured party, communicate to the custodian an 13
1375+authenticated record releasing the designated custodian from any further 14
1376+obligation to comply with instructions originated by the secured party and 15
1377+instructing the custodian to comply with instructions originated by the debtor; 16
1378+and 17
1379+(C) take appropriate action to enable the debtor or its designated 18
1380+custodian to make copies of or revisions to the authoritative copy which add or 19
1381+change an identified assignee of the authoritative copy without the consent of 20
1382+the secured party a secured party having control under section 7—106 of this 21 BILL AS INTRODUCED H.206
23641383 2025 Page 57 of 124
2365-(C)takeappropriateactiontoenablethedebtororitsdesignated
2366-custodiantomakecopiesoforrevisionstotheauthoritativecopywhichaddor
2367-changeanidentifiedassigneeoftheauthoritativecopywithouttheconsentof
2368-thesecuredpartyasecuredpartyhavingcontrolundersection7—106ofthis
2369-titleofanauthoritativeelectroniccopyofanelectronicdocumentshalltransfer
2370-controloftheelectroniccopytothedebtororapersondesignatedbythe
2371-debtor;
2372-(7)asecuredpartyhavingcontrolundersection9-105Aofthistitleof
2373-electronicmoneyshalltransfercontroloftheelectronicmoneytothedebtoror
2374-apersondesignatedbythedebtor;and
2375-(8)asecuredpartyhavingcontrolundersection12-105ofthistitleofa
2376-controllableelectronicrecord,otherthanabuyerofacontrollableaccountor
2377-controllablepaymentintangibleevidencedbythecontrollableelectronic
2378-record,shalltransfercontrolofthecontrollableelectronicrecordtothedebtor
2379-orapersondesignatedbythedebtor.
2380-§9—209.DUTIESOFSECUREDPARTYIFACCOUNTDEBTORHAS
2381-BEENNOTIFIEDOFASSIGNMENT
2382-***
2383-(b)Within10daysafterreceivinganauthenticatedasigneddemandbythe
2384-debtor,asecuredpartyshallsendtoanaccountdebtorthathasreceived
2385-notificationundersubsection9-406(a)or12-106(b)ofthistitleofan
2386-1
2387-2
2388-3
2389-4
2390-5
2391-6
2392-7
2393-8
2394-9
2395-10
2396-11
2397-12
2398-13
2399-14
2400-15
2401-16
2402-17
2403-18
2404-19
2405-20
2406-21 BILLASPASSEDBYTHEHOUSE H.206
1384+
1385+
1386+VT LEG #378799 v.1
1387+title of an authoritative electronic copy of an electronic document shall transfer 1
1388+control of the electronic copy to the debtor or a person designated by the 2
1389+debtor; 3
1390+(7) a secured party having control under section 9-105A of this title of 4
1391+electronic money shall transfer control of the electronic money to the debtor or 5
1392+a person designated by the debtor; and 6
1393+(8) a secured party having control under section 12-105 of this title of a 7
1394+controllable electronic record, other than a buyer of a controllable account or 8
1395+controllable payment intangible evidenced by the controllable electronic 9
1396+record, shall transfer control of the controllable electronic record to the debtor 10
1397+or a person designated by the debtor. 11
1398+§ 9—209. DUTIES OF SECURED PARTY IF ACCOUNT DEBTOR HAS 12
1399+ BEEN NOTIFIED OF ASSIGNMENT 13
1400+* * * 14
1401+(b) Within 10 days after receiving an authenticated a signed demand by the 15
1402+debtor, a secured party shall send to an account debtor that has received 16
1403+notification under subsection 9-406(a) or 12-106(b) of this title of an 17
1404+assignment to the secured party as assignee under subsection 9—406(a) of this 18
1405+title an authenticated a signed record that releases the account debtor from any 19
1406+further obligation to the secured party. 20
1407+* * * 21 BILL AS INTRODUCED H.206
24071408 2025 Page 58 of 124
2408-assignmenttothesecuredpartyasassigneeundersubsection9—406(a)ofthis
2409-titleanauthenticatedasignedrecordthatreleasestheaccountdebtorfromany
2410-furtherobligationtothesecuredparty.
2411-***
2412-§9—210.REQUESTFORACCOUNTING;REQUESTREGARDINGLIST
2413-OFCOLLATERALORSTATEMENTOFACCOUNT
2414-(a)Inthissection:
2415-(1)“Request”meansarecordofatypedescribedinsubdivision(2),(3),
2416-or(4)ofthissubsection.
2417-(2)“Requestforanaccounting”meansarecordauthenticatedsignedby
2418-adebtorrequestingthattherecipientprovideanaccountingoftheunpaid
2419-obligationssecuredbycollateralandreasonablyidentifyingthetransactionor
2420-relationshipthatisthesubjectoftherequest.
2421-(3)“Requestregardingalistofcollateral”meansarecordauthenticated
2422-signedbyadebtorrequestingthattherecipientapproveorcorrectalistof
2423-whatthedebtorbelievestobethecollateralsecuringanobligationand
2424-reasonablyidentifyingthetransactionorrelationshipthatisthesubjectofthe
2425-request.
2426-(4)“Requestregardingastatementofaccount”meansarecord
2427-authenticatedsignedbyadebtorrequestingthattherecipientapproveor
2428-correctastatementindicatingwhatthedebtorbelievestobetheaggregate
2429-1
2430-2
2431-3
2432-4
2433-5
2434-6
2435-7
2436-8
2437-9
2438-10
2439-11
2440-12
2441-13
2442-14
2443-15
2444-16
2445-17
2446-18
2447-19
2448-20
2449-21 BILLASPASSEDBYTHEHOUSE H.206
1409+
1410+
1411+VT LEG #378799 v.1
1412+§ 9—210. REQUEST FOR ACCOUNTING; REQUEST REGARDING LIST 1
1413+ OF COLLATERAL OR STATEMENT OF ACCOUNT 2
1414+(a) In this section: 3
1415+(1) “Request” means a record of a type described in subdivision (2), (3), 4
1416+or (4) of this subsection. 5
1417+(2) “Request for an accounting” means a record authenticated signed by 6
1418+a debtor requesting that the recipient provide an accounting of the unpaid 7
1419+obligations secured by collateral and reasonably identifying the transaction or 8
1420+relationship that is the subject of the request. 9
1421+(3) “Request regarding a list of collateral” means a record authenticated 10
1422+signed by a debtor requesting that the recipient approve or correct a list of what 11
1423+the debtor believes to be the collateral securing an obligation and reasonably 12
1424+identifying the transaction or relationship that is the subject of the request. 13
1425+(4) “Request regarding a statement of account” means a record 14
1426+authenticated signed by a debtor requesting that the recipient approve or 15
1427+correct a statement indicating what the debtor believes to be the aggregate 16
1428+amount of unpaid obligations secured by collateral as of a specified date and 17
1429+reasonably identifying the transaction or relationship that is the subject of the 18
1430+request. 19
1431+(b) Subject to subsections (c), (d), (e), and (f) of this section, a secured 20
1432+party, other than a buyer of accounts, chattel paper, payment intangibles, or 21 BILL AS INTRODUCED H.206
24501433 2025 Page 59 of 124
2451-amountofunpaidobligationssecuredbycollateralasofaspecifieddateand
2452-reasonablyidentifyingthetransactionorrelationshipthatisthesubjectofthe
2453-request.
2454-(b)Subjecttosubsections(c),(d),(e),and(f)ofthissection,asecured
2455-party,otherthanabuyerofaccounts,chattelpaper,paymentintangibles,or
2456-promissorynotesoraconsignor,shallcomplywitharequestwithin14days
2457-afterreceipt:
2458-(1)inthecaseofarequestforanaccounting,byauthenticatingsigning
2459-andsendingtothedebtoranaccounting;and
2460-(2)inthecaseofarequestregardingalistofcollateralorarequest
2461-regardingastatementofaccount,byauthenticatingsigningandsendingtothe
2462-debtoranapprovalorcorrection.
2463-(c)Asecuredpartythatclaimsasecurityinterestinallofaparticulartype
2464-ofcollateralownedbythedebtormaycomplywitharequestregardingalistof
2465-collateralbysendingtothedebtoranauthenticatedasignedrecordincludinga
2466-statementtothateffectwithin14daysafterreceipt.
2467-(d)Apersonthatreceivesarequestregardingalistofcollateral,claimsno
2468-interestinthecollateralwhenitreceivestherequest,andclaimedaninterestin
2469-thecollateralatanearliertimeshallcomplywiththerequestwithin14days
2470-afterreceiptbysendingtothedebtoranauthenticatedasignedrecord:
2471-(1)disclaiminganyinterestinthecollateral;and
2472-1
2473-2
2474-3
2475-4
2476-5
2477-6
2478-7
2479-8
2480-9
2481-10
2482-11
2483-12
2484-13
2485-14
2486-15
2487-16
2488-17
2489-18
2490-19
2491-20
2492-21 BILLASPASSEDBYTHEHOUSE H.206
1434+
1435+
1436+VT LEG #378799 v.1
1437+promissory notes or a consignor, shall comply with a request within 14 days 1
1438+after receipt: 2
1439+(1) in the case of a request for an accounting, by authenticating signing 3
1440+and sending to the debtor an accounting; and 4
1441+(2) in the case of a request regarding a list of collateral or a request 5
1442+regarding a statement of account, by authenticating signing and sending to the 6
1443+debtor an approval or correction. 7
1444+(c) A secured party that claims a security interest in all of a particular type 8
1445+of collateral owned by the debtor may comply with a request regarding a list of 9
1446+collateral by sending to the debtor an authenticated a signed record including a 10
1447+statement to that effect within 14 days after receipt. 11
1448+(d) A person that receives a request regarding a list of collateral, claims no 12
1449+interest in the collateral when it receives the request, and claimed an interest in 13
1450+the collateral at an earlier time shall comply with the request within 14 days 14
1451+after receipt by sending to the debtor an authenticated a signed record: 15
1452+(1) disclaiming any interest in the collateral; and 16
1453+(2) if known to the recipient, providing the name and mailing address of 17
1454+any assignee of or successor to the recipient’s interest in the collateral. 18
1455+(e) A person that receives a request for an accounting or a request regarding 19
1456+a statement of account, claims no interest in the obligations when it receives 20
1457+the request, and claimed an interest in the obligations at an earlier time shall 21 BILL AS INTRODUCED H.206
24931458 2025 Page 60 of 124
2494-(2)ifknowntotherecipient,providingthenameandmailingaddressof
2495-anyassigneeoforsuccessortotherecipient’sinterestinthecollateral.
2496-(e)Apersonthatreceivesarequestforanaccountingorarequest
2497-regardingastatementofaccount,claimsnointerestintheobligationswhenit
2498-receivestherequest,andclaimedaninterestintheobligationsatanearlier
2499-timeshallcomplywiththerequestwithin14daysafterreceiptbysendingto
2500-thedebtoranauthenticatedasignedrecord:
2501-***
2502-§9—301.LAWGOVERNINGPERFECTIONANDPRIORITYOF
2503-SECURITYINTERESTS
2504-Exceptasotherwiseprovidedinsections9—303through9—3069—306B
2505-ofthistitle,thefollowingrulesdeterminethelawgoverningperfection,the
2506-effectofperfectionornonperfection,andthepriorityofasecurityinterestin
2507-collateral:
2508-***
2509-(3)Exceptasotherwiseprovidedinsubdivision(4)ofthissection,
2510-whiletangiblenegotiabletangibledocuments,goods,instruments,ortangible
2511-money,ortangiblechattelpaperislocatedinajurisdiction,thelocallawof
2512-thatjurisdictiongoverns:
2513-(A)perfectionofasecurityinterestinthegoodsbyfilingafixture
2514-filing;
2515-1
2516-2
2517-3
2518-4
2519-5
2520-6
2521-7
2522-8
2523-9
2524-10
2525-11
2526-12
2527-13
2528-14
2529-15
2530-16
2531-17
2532-18
2533-19
2534-20
2535-21 BILLASPASSEDBYTHEHOUSE H.206
1459+
1460+
1461+VT LEG #378799 v.1
1462+comply with the request within 14 days after receipt by sending to the debtor 1
1463+an authenticated a signed record: 2
1464+* * * 3
1465+§ 9—301. LAW GOVERNING PERFECTION AND PRIORITY OF 4
1466+ SECURITY INTERESTS 5
1467+Except as otherwise provided in sections 9—303 through 9—306 9—306B 6
1468+of this title, the following rules determine the law governing perfection, the 7
1469+effect of perfection or nonperfection, and the priority of a security interest in 8
1470+collateral: 9
1471+* * * 10
1472+(3) Except as otherwise provided in subdivision (4) of this section, while 11
1473+tangible negotiable tangible documents, goods, instruments, or tangible money, 12
1474+or tangible chattel paper is located in a jurisdiction, the local law of that 13
1475+jurisdiction governs: 14
1476+(A) perfection of a security interest in the goods by filing a fixture 15
1477+filing; 16
1478+(B) perfection of a security interest in timber to be cut; and 17
1479+(C) the effect of perfection or nonperfection and the priority of a 18
1480+nonpossessory security interest in the collateral. 19
1481+* * * 20 BILL AS INTRODUCED H.206
25361482 2025 Page 61 of 124
2537-(B)perfectionofasecurityinterestintimbertobecut;and
2538-(C)theeffectofperfectionornonperfectionandthepriorityofa
2539-nonpossessorysecurityinterestinthecollateral.
2540-***
2541-§9—304.LAWGOVERNINGPERFECTIONANDPRIORITYOF
2542-SECURITYINTERESTSINDEPOSITACCOUNTS
2543-(a)Thelocallawofabank’sjurisdictiongovernsperfection,theeffectof
2544-perfectionornonperfection,andthepriorityofasecurityinterestinadeposit
2545-accountmaintainedwiththatbankevenifthetransactiondoesnotbearany
2546-relationtothebank’sjurisdiction.
2547-***
2548-§9—305.LAWGOVERNINGPERFECTIONANDPRIORITYOF
2549-SECURITYINTERESTSININVESTMENTPROPERTY
2550-(a)Exceptasotherwiseprovidedinsubsection(c)ofthissection,the
2551-followingrulesapply:
2552-***
2553-(5)Subdivisions(2),(3),and(4)ofthissubsectionapplyevenifthe
2554-transactiondoesnotbearanyrelationtothejurisdiction.
2555-***
2556-1
2557-2
2558-3
2559-4
2560-5
2561-6
2562-7
2563-8
2564-9
2565-10
2566-11
2567-12
2568-13
2569-14
2570-15
2571-16
2572-17
2573-18
2574-19 BILLASPASSEDBYTHEHOUSE H.206
1483+
1484+
1485+VT LEG #378799 v.1
1486+§ 9—304. LAW GOVERNING PERFECTION AND PRIORITY OF 1
1487+ SECURITY INTERESTS IN DEPOSIT ACCOUNTS 2
1488+(a) The local law of a bank’s jurisdiction governs perfection, the effect of 3
1489+perfection or nonperfection, and the priority of a security interest in a deposit 4
1490+account maintained with that bank even if the transaction does not bear any 5
1491+relation to the bank’s jurisdiction. 6
1492+* * * 7
1493+§ 9—305. LAW GOVERNING PERFECTION AND PRIORITY OF 8
1494+ SECURITY INTERESTS IN INVESTMENT PROPERTY 9
1495+(a) Except as otherwise provided in subsection (c) of this section, the 10
1496+following rules apply: 11
1497+* * * 12
1498+(5) Subdivisions (2), (3), and (4) of this subsection apply even if the 13
1499+transaction does not bear any relation to the jurisdiction. 14
1500+* * * 15
1501+§ 9—306. LAW GOVERNING PERFECTION AND PRIORITY OF 16
1502+ SECURITY INTERESTS IN LETTER-OF-CREDIT RIGHTS 17
1503+* * * 18
1504+§ 9-306A. LAW GOVERNING PERFECTION AND PRIORITY OF 19
1505+ SECURITY INTERESTS IN CHATTEL PAPER 20
1506+(a) Except as provided in subsection (d) of this section, if chattel paper is 21 BILL AS INTRODUCED H.206
25751507 2025 Page 62 of 124
2576-§9—306.LAWGOVERNINGPERFECTIONANDPRIORITYOF
2577-SECURITYINTERESTSINLETTER-OF-CREDITRIGHTS
2578-***
2579-§ 9-306A.LAWGOVERNINGPERFECTIONANDPRIORITYOF
2580-SECURITYINTERESTSINCHATTELPAPER
2581-(a)Exceptasprovidedinsubsection(d)ofthissection,ifchattelpaperis
2582-evidencedonlybyanauthoritativeelectroniccopyofthechattelpaperoris
2583-evidencedbyanauthoritativeelectroniccopyandanauthoritativetangible
2584-copy,thelocallawofthechattelpaper’sjurisdictiongovernsperfection,the
2585-effectofperfectionornonperfection,andthepriorityofasecurityinterestin
2586-thechattelpaper,evenifthetransactiondoesnotbearanyrelationtothe
2587-chattelpaper’sjurisdiction.
2588-(b)Thefollowingrulesdeterminethechattelpaper’sjurisdictionunderthis
2589-section:
2590-(1)Iftheauthoritativeelectroniccopyoftherecordevidencingchattel
2591-paper,orarecordattachedtoorlogicallyassociatedwiththeelectroniccopy
2592-andreadilyavailableforreview,expresslyprovidesthataparticular
2593-jurisdictionisthechattelpaper’sjurisdictionforpurposesofthissection,this
2594-article,ortheUniformCommercialCode,thatjurisdictionisthechattel
2595-paper’sjurisdiction.
2596-(2)Ifsubdivision(1)ofthissubsectiondoesnotapplyandtherulesof
2597-1
2598-2
2599-3
2600-4
2601-5
2602-6
2603-7
2604-8
2605-9
2606-10
2607-11
2608-12
2609-13
2610-14
2611-15
2612-16
2613-17
2614-18
2615-19
2616-20
2617-21 BILLASPASSEDBYTHEHOUSE H.206
1508+
1509+
1510+VT LEG #378799 v.1
1511+evidenced only by an authoritative electronic copy of the chattel paper or is 1
1512+evidenced by an authoritative electronic copy and an authoritative tangible 2
1513+copy, the local law of the chattel paper’s jurisdiction governs perfection, the 3
1514+effect of perfection or nonperfection, and the priority of a security interest in 4
1515+the chattel paper, even if the transaction does not bear any relation to the 5
1516+chattel paper’s jurisdiction. 6
1517+(b) The following rules determine the chattel paper’s jurisdiction under this 7
1518+section: 8
1519+(1) If the authoritative electronic copy of the record evidencing chattel 9
1520+paper, or a record attached to or logically associated with the electronic copy 10
1521+and readily available for review, expressly provides that a particular 11
1522+jurisdiction is the chattel paper’s jurisdiction for purposes of this section, this 12
1523+article, or the Uniform Commercial Code, that jurisdiction is the chattel 13
1524+paper’s jurisdiction. 14
1525+(2) If subdivision (1) of this subsection does not apply and the rules of 15
1526+the system in which the authoritative electronic copy is recorded are readily 16
1527+available for review and expressly provide that a particular jurisdiction is the 17
1528+chattel paper’s jurisdiction for purposes of this part, this article, or the Uniform 18
1529+Commercial Code, that jurisdiction is the chattel paper’s jurisdiction. 19
1530+(3) If subdivisions (1) and (2) of this subsection do not apply and the 20
1531+authoritative electronic copy, or a record attached to or logically associated 21 BILL AS INTRODUCED H.206
26181532 2025 Page 63 of 124
2619-thesysteminwhichtheauthoritativeelectroniccopyisrecordedarereadily
2620-availableforreviewandexpresslyprovidethataparticularjurisdictionisthe
2621-chattelpaper’sjurisdictionforpurposesofthispart,thisarticle,orthe
2622-UniformCommercialCode,thatjurisdictionisthechattelpaper’sjurisdiction.
2623-(3)Ifsubdivisions(1)and(2)ofthissubsectiondonotapplyandthe
2624-authoritativeelectroniccopy,orarecordattachedtoorlogicallyassociated
2625-withtheelectroniccopyandreadilyavailableforreview,expresslyprovides
2626-thatthechattelpaperisgovernedbythelawofaparticularjurisdiction,that
2627-jurisdictionisthechattelpaper’sjurisdiction.
2628-(4)Ifsubdivisions(1),(2),and(3)ofthissubsectiondonotapplyand
2629-therulesofthesysteminwhichtheauthoritativeelectroniccopyisrecorded
2630-arereadilyavailableforreviewandexpresslyprovidethatthechattelpaperor
2631-thesystemisgovernedbythelawofaparticularjurisdiction,thatjurisdiction
2632-isthechattelpaper’sjurisdiction.
2633-(5)Ifsubdivisions(1)through(4)ofthissubsectiondonotapply,the
2634-chattelpaper’sjurisdictionisthejurisdictioninwhichthedebtorislocated.
2635-(c)Ifanauthoritativetangiblecopyofarecordevidenceschattelpaperand
2636-thechattelpaperisnotevidencedbyanauthoritativeelectroniccopy,whilethe
2637-authoritativetangiblecopyoftherecordevidencingchattelpaperislocatedin
2638-ajurisdiction,thelocallawofthatjurisdictiongoverns:
2639-(1)perfectionofasecurityinterestinthechattelpaperbypossession
2640-1
2641-2
2642-3
2643-4
2644-5
2645-6
2646-7
2647-8
2648-9
2649-10
2650-11
2651-12
2652-13
2653-14
2654-15
2655-16
2656-17
2657-18
2658-19
2659-20
2660-21 BILLASPASSEDBYTHEHOUSE H.206
1533+
1534+
1535+VT LEG #378799 v.1
1536+with the electronic copy and readily available for review, expressly provides 1
1537+that the chattel paper is governed by the law of a particular jurisdiction, that 2
1538+jurisdiction is the chattel paper’s jurisdiction. 3
1539+(4) If subdivisions (1), (2), and (3) of this subsection do not apply and 4
1540+the rules of the system in which the authoritative electronic copy is recorded 5
1541+are readily available for review and expressly provide that the chattel paper or 6
1542+the system is governed by the law of a particular jurisdiction, that jurisdiction 7
1543+is the chattel paper’s jurisdiction. 8
1544+(5) If subdivisions (1) through (4) of this subsection do not apply, the 9
1545+chattel paper’s jurisdiction is the jurisdiction in which the debtor is located. 10
1546+(c) If an authoritative tangible copy of a record evidences chattel paper and 11
1547+the chattel paper is not evidenced by an authoritative electronic copy, while the 12
1548+authoritative tangible copy of the record evidencing chattel paper is located in 13
1549+a jurisdiction, the local law of that jurisdiction governs: 14
1550+(1) perfection of a security interest in the chattel paper by possession 15
1551+under section 9-314A of this title; and 16
1552+(2) the effect of perfection or nonperfection and the priority of a security 17
1553+interest in the chattel paper. 18
1554+(d) The local law of the jurisdiction in which the debtor is located governs 19
1555+perfection of a security interest in chattel paper by filing. 20 BILL AS INTRODUCED H.206
26611556 2025 Page 64 of 124
2662-undersection9-314Aofthistitle;and
2663-(2)theeffectofperfectionornonperfectionandthepriorityofa
2664-securityinterestinthechattelpaper.
2665-(d)Thelocallawofthejurisdictioninwhichthedebtorislocatedgoverns
2666-perfectionofasecurityinterestinchattelpaperbyfiling.
2667-§ 9-306B.LAWGOVERNINGPERFECTIONANDPRIORITYOF
2668-SECURITYINTERESTSINCONTROLLABLE ACCOUNTS,
2669-CONTROLLABLE ELECTRONICRECORDS,AND
2670-CONTROLLABLE PAYMENTINTANGIBLES
2671-(a)Exceptasprovidedinsubsection(b)ofthissection,thelocallawofthe
2672-controllableelectronicrecord’sjurisdictionspecifiedinsubsections12-107(c)
2673-and(d)ofthistitlegovernsperfection,theeffectofperfectionor
2674-nonperfection,andthepriorityofasecurityinterestinacontrollableelectronic
2675-recordandasecurityinterestinacontrollableaccountorcontrollablepayment
2676-intangibleevidencedbythecontrollableelectronicrecord.
2677-(b)Thelocallawofthejurisdictioninwhichthedebtorislocatedgoverns:
2678-(1)perfectionofasecurityinterestinacontrollableaccount,
2679-controllableelectronicrecord,orcontrollablepaymentintangiblebyfiling;
2680-and
2681-(2)automaticperfectionofasecurityinterestinacontrollablepayment
2682-intangiblecreatedbyasaleofthecontrollablepaymentintangible.
2683-1
2684-2
2685-3
2686-4
2687-5
2688-6
2689-7
2690-8
2691-9
2692-10
2693-11
2694-12
2695-13
2696-14
2697-15
2698-16
2699-17
2700-18
2701-19
2702-20
2703-21 BILLASPASSEDBYTHEHOUSE H.206
1557+
1558+
1559+VT LEG #378799 v.1
1560+§ 9-306B. LAW GOVERNING PERFECTION AND PRIORITY OF 1
1561+ SECURITY INTERESTS IN CONTROLLABLE ACCOUNTS, 2
1562+ CONTROLLABLE ELECTRONIC RECORDS, AND 3
1563+ CONTROLLABLE PAYMENT INTANGIBLES 4
1564+(a) Except as provided in subsection (b) of this section, the local law of the 5
1565+controllable electronic record’s jurisdiction specified in subsections 12-107(c) 6
1566+and (d) of this title governs perfection, the effect of perfection or 7
1567+nonperfection, and the priority of a security interest in a controllable electronic 8
1568+record and a security interest in a controllable account or controllable payment 9
1569+intangible evidenced by the controllable electronic record. 10
1570+(b) The local law of the jurisdiction in which the debtor is located governs: 11
1571+(1) perfection of a security interest in a controllable account, 12
1572+controllable electronic record, or controllable payment intangible by filing; and 13
1573+(2) automatic perfection of a security interest in a controllable payment 14
1574+intangible created by a sale of the controllable payment intangible. 15
1575+* * * 16
1576+§ 9—310. WHEN FILING REQUIRED TO PERFECT SECURITY 17
1577+ INTEREST OR AGRICULTURAL LIEN; SECURITY 18
1578+ INTERESTS AND AGRICULTURAL LIENS TO WHICH 19
1579+ FILING PROVISIONS DO NOT APPLY 20
1580+* * * 21 BILL AS INTRODUCED H.206
27041581 2025 Page 65 of 124
2705-***
2706-§9—310.WHENFILINGREQUIREDTOPERFECTSECURITY
2707-INTERESTORAGRICULTURALLIEN;SECURITY
2708-INTERESTSANDAGRICULTURALLIENSTOWHICH
2709-FILINGPROVISIONSDONOTAPPLY
2710-***
2711-(b)Thefilingofafinancingstatementisnotnecessarytoperfectasecurity
2712-interest:
2713-***
2714-(8)incontrollableaccounts,controllableelectronicrecords,controllable
2715-paymentintangibles,depositaccounts,electronicchattelpaper,electronic
2716-documents,investmentproperty,orletter-of-creditrightswhichisperfectedby
2717-controlundersection9—314ofthistitle;
2718-(8.1)inchattelpaperwhichisperfectedbypossessionandcontrolunder
2719-section9-314Aofthistitle;
2720-(9)inproceedswhichisperfectedundersection9—315ofthistitle;or
2721-***
2722-§9—312.PERFECTIONOFSECURITYINTERESTSINCHATTEL
2723-PAPER,CONTROLLABLE ACCOUNTS,CONTROLLABLE
2724-ELECTRONICRECORDS,CONTROLLABLE PAYMENT
2725-INTANGIBLES,DEPOSITACCOUNTS,NEGOTIABLE
2726-1
2727-2
2728-3
2729-4
2730-5
2731-6
2732-7
2733-8
2734-9
2735-10
2736-11
2737-12
2738-13
2739-14
2740-15
2741-16
2742-17
2743-18
2744-19
2745-20
2746-21 BILLASPASSEDBYTHEHOUSE H.206
1582+
1583+
1584+VT LEG #378799 v.1
1585+(b) The filing of a financing statement is not necessary to perfect a security 1
1586+interest: 2
1587+* * * 3
1588+(8) in controllable accounts, controllable electronic records, controllable 4
1589+payment intangibles, deposit accounts, electronic chattel paper, electronic 5
1590+documents, investment property, or letter-of-credit rights which is perfected by 6
1591+control under section 9—314 of this title; 7
1592+(8.1) in chattel paper which is perfected by possession and control under 8
1593+section 9-314A of this title; 9
1594+(9) in proceeds which is perfected under section 9—315 of this title; or 10
1595+* * * 11
1596+§ 9—312. PERFECTION OF SECURITY INTERESTS IN CHATTEL 12
1597+ PAPER, CONTROLLABLE ACCOUNTS, CONTROLLABLE 13
1598+ ELECTRONIC RECORDS, CONTROLLABLE PAYMENT 14
1599+ INTANGIBLES, DEPOSIT ACCOUNTS, NEGOTIABLE 15
1600+ DOCUMENTS, GOODS COVERED BY DOCUMENTS, 16
1601+ INSTRUMENTS, INVESTMENT PROPERTY, LETTER -OF- 17
1602+ CREDIT RIGHTS, AND MONEY; PERFECTION BY 18
1603+ PERMISSIVE FILING; TEMPORARY PERFECTION WITHOUT 19
1604+ FILING OR TRANSFER OF POSSESSION 20 BILL AS INTRODUCED H.206
27471605 2025 Page 66 of 124
2748-DOCUMENTS,GOODSCOVEREDBYDOCUMENTS,
2749-INSTRUMENTS,INVESTMENTPROPERTY,LETTER-OF-
2750-CREDITRIGHTS,ANDMONEY;PERFECTIONBY
2751-PERMISSIVEFILING;TEMPORARYPERFECTION
2752-WITHOUTFILINGORTRANSFEROFPOSSESSION
2753-(a)Asecurityinterestinchattelpaper,negotiabledocuments,controllable
2754-accounts,controllableelectronicrecords,controllablepaymentintangibles,
2755-instruments,orinvestmentproperty,ornegotiabledocumentsmaybe
2756-perfectedbyfiling.
2757-(b)Exceptasotherwiseprovidedinsubsections9—315(c)and(d)ofthis
2758-titleforproceeds:
2759-***
2760-(2)andexceptasotherwiseprovidedinsubsection9—308(d)ofthis
2761-title,asecurityinterestinaletter-of-creditrightmaybeperfectedonlyby
2762-controlundersection9—314ofthistitle;and
2763-(3)asecurityinterestintangiblemoneymaybeperfectedonlybythe
2764-securedparty’stakingpossessionundersection9—313ofthistitle;and
2765-(4)asecurityinterestinelectronicmoneymaybeperfectedonlyby
2766-controlundersection9—314ofthistitle.
2767-***
2768-1
2769-2
2770-3
2771-4
2772-5
2773-6
2774-7
2775-8
2776-9
2777-10
2778-11
2779-12
2780-13
2781-14
2782-15
2783-16
2784-17
2785-18
2786-19
2787-20 BILLASPASSEDBYTHEHOUSE H.206
1606+
1607+
1608+VT LEG #378799 v.1
1609+(a) A security interest in chattel paper, negotiable documents, controllable 1
1610+accounts, controllable electronic records, controllable payment intangibles, 2
1611+instruments, or investment property, or negotiable documents may be perfected 3
1612+by filing. 4
1613+(b) Except as otherwise provided in subsections 9—315(c) and (d) of this 5
1614+title for proceeds: 6
1615+* * * 7
1616+(2) and except as otherwise provided in subsection 9—308(d) of this 8
1617+title, a security interest in a letter-of-credit right may be perfected only by 9
1618+control under section 9—314 of this title; and 10
1619+(3) a security interest in tangible money may be perfected only by the 11
1620+secured party’s taking possession under section 9—313 of this title; and 12
1621+(4) a security interest in electronic money may be perfected only by 13
1622+control under section 9—314 of this title. 14
1623+* * * 15
1624+(e) A security interest in certificated securities, negotiable documents, or 16
1625+instruments is perfected without filing or the taking of possession or control for 17
1626+a period of 20 days from the time it attaches to the extent that it arises for new 18
1627+value given under an authenticated a signed security agreement. 19
1628+* * * 20 BILL AS INTRODUCED H.206
27881629 2025 Page 67 of 124
2789-(e)Asecurityinterestincertificatedsecurities,negotiabledocuments,or
2790-instrumentsisperfectedwithoutfilingorthetakingofpossessionorcontrol
2791-foraperiodof20daysfromthetimeitattachestotheextentthatitarisesfor
2792-newvaluegivenunderanauthenticatedasignedsecurityagreement.
2793-***
2794-§9—313.WHENPOSSESSIONBYORDELIVERYTOSECURED
2795-PARTYPERFECTSSECURITYINTERESTWITHOUTFILING
2796-(a)Perfectionbypossessionordelivery.Exceptasotherwiseprovidedin
2797-subsection(b)ofthissection,asecuredpartymayperfectasecurityinterestin
2798-tangiblenegotiabledocuments,goods,instruments,negotiabletangible
2799-documents,ortangiblemoney,ortangiblechattelpaperbytakingpossession
2800-ofthecollateral.Asecuredpartymayperfectasecurityinterestincertificated
2801-securitiesbytakingdeliveryofthecertificatedsecuritiesundersection8—301
2802-ofthistitle.
2803-***
2804-(c)Withrespecttocollateralotherthancertificatedsecuritiesandgoods
2805-coveredbyadocument,asecuredpartytakespossessionofcollateralinthe
2806-possessionofapersonotherthanthedebtor,thesecuredparty,oralesseeof
2807-thecollateralfromthedebtorintheordinarycourseofthedebtor’sbusiness,
2808-when:
2809-1
2810-2
2811-3
2812-4
2813-5
2814-6
2815-7
2816-8
2817-9
2818-10
2819-11
2820-12
2821-13
2822-14
2823-15
2824-16
2825-17
2826-18
2827-19
2828-20 BILLASPASSEDBYTHEHOUSE H.206
1630+
1631+
1632+VT LEG #378799 v.1
1633+§ 9—313. WHEN POSSESSION BY OR DELIVERY TO SECURED 1
1634+ PARTY PERFECTS SECURITY INTEREST WITHOUT FILING 2
1635+(a) Perfection by possession or delivery. Except as otherwise provided in 3
1636+subsection (b) of this section, a secured party may perfect a security interest in 4
1637+tangible negotiable documents, goods, instruments, negotiable tangible 5
1638+documents, or tangible money, or tangible chattel paper by taking possession 6
1639+of the collateral. A secured party may perfect a security interest in certificated 7
1640+securities by taking delivery of the certificated securities under section 8—301 8
1641+of this title. 9
1642+* * * 10
1643+(c) With respect to collateral other than certificated securities and goods 11
1644+covered by a document, a secured party takes possession of collateral in the 12
1645+possession of a person other than the debtor, the secured party, or a lessee of 13
1646+the collateral from the debtor in the ordinary course of the debtor’s business, 14
1647+when: 15
1648+(1) the person in possession authenticates signs a record acknowledging 16
1649+that it holds possession of the collateral for the secured party’s benefit; or 17
1650+(2) the person takes possession of the collateral after having 18
1651+authenticated signed a record acknowledging that it will hold possession of the 19
1652+collateral for the secured party’s benefit. 20 BILL AS INTRODUCED H.206
28291653 2025 Page 68 of 124
2830-(1)thepersoninpossessionauthenticatessignsarecordacknowledging
2831-thatitholdspossessionofthecollateralforthesecuredparty’sbenefit;or
2832-(2)thepersontakespossessionofthecollateralafterhaving
2833-authenticatedsignedarecordacknowledgingthatitwillholdpossessionofthe
2834-collateralforthesecuredparty’sbenefit.
2835-(d)Ifperfectionofasecurityinterestdependsuponpossessionofthe
2836-collateralbyasecuredparty,perfectionoccursnonotearlierthanthetimethe
2837-securedpartytakespossessionandcontinuesonlywhilethesecuredparty
2838-retainspossession.
2839-***
2840-§9—314.PERFECTIONBYCONTROL
2841-(a)Asecurityinterestininvestmentproperty,depositaccounts,letter-of-
2842-creditrights,electronicchattelpaper,orelectronicdocumentscontrollable
2843-accounts,controllableelectronicrecords,controllablepaymentintangibles,
2844-depositaccounts,electronicdocuments,electronicmoney,investmentproperty,
2845-orletter-of-creditrightsmaybeperfectedbycontrolofthecollateralunder
2846-section7—106,9—104,9-105,9-105A,9-106,or9-107,or9-107Aofthis
2847-title.
2848-(b)Asecurityinterestindepositaccounts,electronicchattelpaper,letter-
2849-of-creditrights,orelectronicdocumentscontrollableaccounts,controllable
2850-electronicrecords,controllablepaymentintangibles,depositaccounts,
2851-1
2852-2
2853-3
2854-4
2855-5
2856-6
2857-7
2858-8
2859-9
2860-10
2861-11
2862-12
2863-13
2864-14
2865-15
2866-16
2867-17
2868-18
2869-19
2870-20
2871-21 BILLASPASSEDBYTHEHOUSE H.206
1654+
1655+
1656+VT LEG #378799 v.1
1657+(d) If perfection of a security interest depends upon possession of the 1
1658+collateral by a secured party, perfection occurs no not earlier than the time the 2
1659+secured party takes possession and continues only while the secured party 3
1660+retains possession. 4
1661+* * * 5
1662+§ 9—314. PERFECTION BY CONTROL 6
1663+(a) A security interest in investment property, deposit accounts, letter-of-7
1664+credit rights, electronic chattel paper, or electronic documents controllable 8
1665+accounts, controllable electronic records, controllable payment intangibles, 9
1666+deposit accounts, electronic documents, electronic money, investment property, 10
1667+or letter-of-credit rights may be perfected by control of the collateral under 11
1668+section 7—106, 9—104, 9-105, 9-105A, 9-106, or 9-107, or 9-107A of this 12
1669+title. 13
1670+(b) A security interest in deposit accounts, electronic chattel paper, letter-14
1671+of-credit rights, or electronic documents controllable accounts, controllable 15
1672+electronic records, controllable payment intangibles, deposit accounts, 16
1673+electronic documents, electronic money, or letter-of-credit rights is perfected 17
1674+by control under section 7—106, 9—104, 9-105, or 9—105A, 9-107, or 9—18
1675+107A of this title when not earlier than the time the secured party obtains 19
1676+control and remains perfected by control only while the secured party retains 20
1677+control. 21 BILL AS INTRODUCED H.206
28721678 2025 Page 69 of 124
2873-electronicdocuments,electronicmoney,orletter-of-creditrightsisperfected
2874-bycontrolundersection7—106,9—104,9-105,or9—105A,9-107,or9—
2875-107Aofthistitlewhennotearlierthanthetimethesecuredpartyobtains
2876-controlandremainsperfectedbycontrolonlywhilethesecuredpartyretains
2877-control.
2878-(c)Asecurityinterestininvestmentpropertyisperfectedbycontrolunder
2879-section9—106ofthistitlefromnotearlierthanthetimethesecuredparty
2880-obtainscontrolandremainsperfectedbycontroluntil:
2881-***
2882-§ 9—314A.PERFECTIONBYPOSSESSIONANDCONTROLOF
2883-CHATTELPAPER
2884-(a)Asecuredpartymayperfectasecurityinterestinchattelpaperby
2885-takingpossessionofeachauthoritativetangiblecopyoftherecordevidencing
2886-thechattelpaperandobtainingcontrolofeachauthoritativeelectroniccopyof
2887-theelectronicrecordevidencingthechattelpaper.
2888-(b)Asecurityinterestisperfectedundersubsection(a)ofthissectionnot
2889-earlierthanthetimethesecuredpartytakespossessionandobtainscontroland
2890-remainsperfectedundersubsection(a)ofthissectiononlywhilethesecured
2891-partyretainspossessionandcontrol.
2892-(c)Subsections9—313(c)and(f)–(i)ofthistitleapplytoperfectionby
2893-possessionofanauthoritativetangiblecopyofarecordevidencingchattel
2894-1
2895-2
2896-3
2897-4
2898-5
2899-6
2900-7
2901-8
2902-9
2903-10
2904-11
2905-12
2906-13
2907-14
2908-15
2909-16
2910-17
2911-18
2912-19
2913-20
2914-21 BILLASPASSEDBYTHEHOUSE H.206
1679+
1680+
1681+VT LEG #378799 v.1
1682+(c) A security interest in investment property is perfected by control under 1
1683+section 9—106 of this title from not earlier than the time the secured party 2
1684+obtains control and remains perfected by control until: 3
1685+* * * 4
1686+§ 9—314A. PERFECTION BY POSSESSION AND CONTROL OF 5
1687+ CHATTEL PAPER 6
1688+(a) A secured party may perfect a security interest in chattel paper by 7
1689+taking possession of each authoritative tangible copy of the record evidencing 8
1690+the chattel paper and obtaining control of each authoritative electronic copy of 9
1691+the electronic record evidencing the chattel paper. 10
1692+(b) A security interest is perfected under subsection (a) of this section not 11
1693+earlier than the time the secured party takes possession and obtains control and 12
1694+remains perfected under subsection (a) of this section only while the secured 13
1695+party retains possession and control. 14
1696+(c) Subsections 9—313(c) and (f)–(i) of this title apply to perfection by 15
1697+possession of an authoritative tangible copy of a record evidencing chattel 16
1698+paper. 17
1699+* * * 18 BILL AS INTRODUCED H.206
29151700 2025 Page 70 of 124
2916-paper.
2917-***
2918-§9—316.EFFECTOFCHANGEINGOVERNINGLAW
2919-(a)Asecurityinterestperfectedpursuanttothelawofthejurisdiction
2920-designatedinsubdivision9—301(1)orinsubsection9—305(c),9—306A(d),
2921-or9—306B(b)ofthistitleremainsperfecteduntiltheearliestof:
2922-***
2923-(f)Asecurityinterestinchattelpaper,controllableaccounts,controllable
2924-electronicrecords,controllablepaymentintangibles,depositaccounts,letter-
2925-of-creditrights,orinvestmentpropertywhichisperfectedunderthelawofthe
2926-chattelpaper’sjurisdiction,thecontrollableelectronicrecord’sjurisdiction,the
2927-bank’sjurisdiction,theissuer’sjurisdiction,anominatedperson’sjurisdiction,
2928-thesecuritiesintermediary’sjurisdiction,orthecommodityintermediary’s
2929-jurisdiction,asapplicable,remainsperfecteduntiltheearlierof:
2930-***
2931-§9—317.INTERESTSTHATTAKEPRIORITYOVERORTAKEFREE
2932-OFSECURITYINTERESTORAGRICULTURALLIEN
2933-***
2934-(b)Exceptasotherwiseprovidedinsubsection(e)ofthissection,abuyer,
2935-otherthanasecuredparty,oftangiblechattelpaper,tangibledocuments,of
2936-goods,instruments,tangibledocuments,oracertificatedsecuritytakesfreeof
2937-1
2938-2
2939-3
2940-4
2941-5
2942-6
2943-7
2944-8
2945-9
2946-10
2947-11
2948-12
2949-13
2950-14
2951-15
2952-16
2953-17
2954-18
2955-19
2956-20
2957-21 BILLASPASSEDBYTHEHOUSE H.206
1701+
1702+
1703+VT LEG #378799 v.1
1704+§ 9—316. EFFECT OF CHANGE IN GOVERNING LAW 1
1705+(a) A security interest perfected pursuant to the law of the jurisdiction 2
1706+designated in subdivision 9—301(1) or in subsection 9—305(c), 9—306A(d), 3
1707+or 9—306B(b) of this title remains perfected until the earliest of: 4
1708+* * * 5
1709+(f) A security interest in chattel paper, controllable accounts, controllable 6
1710+electronic records, controllable payment intangibles, deposit accounts, letter-7
1711+of-credit rights, or investment property which is perfected under the law of the 8
1712+chattel paper’s jurisdiction, the controllable electronic record’s jurisdiction, the 9
1713+bank’s jurisdiction, the issuer’s jurisdiction, a nominated person’s jurisdiction, 10
1714+the securities intermediary’s jurisdiction, or the commodity intermediary’s 11
1715+jurisdiction, as applicable, remains perfected until the earlier of: 12
1716+* * * 13
1717+§ 9—317. INTERESTS THAT TAKE PRIORITY OVER OR TAKE FREE 14
1718+ OF SECURITY INTEREST OR AGRICULTURAL LIEN 15
1719+* * * 16
1720+(b) Except as otherwise provided in subsection (e) of this section, a buyer, 17
1721+other than a secured party, of tangible chattel paper, tangible documents, of 18
1722+goods, instruments, tangible documents, or a certificated security takes free of 19
1723+a security interest or agricultural lien if the buyer gives value and receives 20 BILL AS INTRODUCED H.206
29581724 2025 Page 71 of 124
2959-asecurityinterestoragriculturallienifthebuyergivesvalueandreceives
2960-deliveryofthecollateralwithoutknowledgeofthesecurityinterestor
2961-agriculturallienandbeforeitisperfected.
2962-***
2963-(d)ASubjecttosubsections(f)–(i)ofthissection,alicenseeofageneral
2964-intangibleorabuyer,otherthanasecuredparty,ofaccounts,electronicchattel
2965-paper,electronicdocuments,generalintangibles,orinvestmentpropertyother
2966-thanacertificatedsecuritycollateralotherthanelectronicmoney,goods,
2967-instruments,tangibledocuments,oracertifiedsecuritytakesfreeofasecurity
2968-interestifthelicenseeorbuyergivesvaluewithoutknowledgeofthesecurity
2969-interestandbeforeitisperfected.
2970-***
2971-(f)Abuyer,otherthanasecuredparty,ofchattelpapertakesfreeofa
2972-securityinterestif,withoutknowledgeofthesecurityinterestandbeforeitis
2973-perfected,thebuyergivesvalueand:
2974-(1)receivesdeliveryofeachauthoritativetangiblecopyoftherecord
2975-evidencingthechattelpaper;and
2976-(2)ifeachauthoritativeelectroniccopyoftherecordevidencingthe
2977-chattelpapercanbesubjectedtocontrolundersection9-105ofthistitle,
2978-obtainscontrolofeachauthoritativeelectroniccopy.
2979-(g)Abuyerofanelectronicdocumenttakesfreeofasecurityinterestif,
2980-1
2981-2
2982-3
2983-4
2984-5
2985-6
2986-7
2987-8
2988-9
2989-10
2990-11
2991-12
2992-13
2993-14
2994-15
2995-16
2996-17
2997-18
2998-19
2999-20
3000-21 BILLASPASSEDBYTHEHOUSE H.206
1725+
1726+
1727+VT LEG #378799 v.1
1728+delivery of the collateral without knowledge of the security interest or 1
1729+agricultural lien and before it is perfected. 2
1730+* * * 3
1731+(d) A Subject to subsections (f)–(i) of this section, a licensee of a general 4
1732+intangible or a buyer, other than a secured party, of accounts, electronic chattel 5
1733+paper, electronic documents, general intangibles, or investment property other 6
1734+than a certificated security collateral other than electronic money, goods, 7
1735+instruments, tangible documents, or a certified security takes free of a security 8
1736+interest if the licensee or buyer gives value without knowledge of the security 9
1737+interest and before it is perfected. 10
1738+* * * 11
1739+(f) A buyer, other than a secured party, of chattel paper takes free of a 12
1740+security interest if, without knowledge of the security interest and before it is 13
1741+perfected, the buyer gives value and: 14
1742+(1) receives delivery of each authoritative tangible copy of the record 15
1743+evidencing the chattel paper; and 16
1744+(2) if each authoritative electronic copy of the record evidencing the 17
1745+chattel paper can be subjected to control under section 9-105 of this title, 18
1746+obtains control of each authoritative electronic copy. 19
1747+(g) A buyer of an electronic document takes free of a security interest if, 20
1748+without knowledge of the security interest and before it is perfected, the buyer 21 BILL AS INTRODUCED H.206
30011749 2025 Page 72 of 124
3002-withoutknowledgeofthesecurityinterestandbeforeitisperfected,thebuyer
3003-givesvalueand,ifeachauthoritativeelectroniccopyofthedocumentcanbe
3004-subjectedtocontrolundersection7-106ofthistitle,obtainscontrolofeach
3005-authoritativeelectroniccopy.
3006-(h)Abuyerofacontrollableelectronicrecordtakesfreeofasecurity
3007-interestif,withoutknowledgeofthesecurityinterestandbeforeitisperfected,
3008-thebuyergivesvalueandobtainscontrolofthecontrollableelectronicrecord.
3009-(i)Abuyer,otherthanasecuredparty,ofacontrollableaccountora
3010-controllablepaymentintangibletakesfreeofasecurityinterestif,without
3011-knowledgeofthesecurityinterestandbeforeitisperfected,thebuyergives
3012-valueandobtainscontrolofthecontrollableaccountorcontrollablepayment
3013-intangible.
3014-***
3015-§9—323.FUTUREADVANCES
3016-***
3017-(d)Exceptasotherwiseprovidedinsubsection(e)ofthissection,abuyer
3018-ofgoodsotherthanabuyerinordinarycourseofbusinesstakesfreeofa
3019-securityinteresttotheextentthatitsecuresadvancesmadeaftertheearlierof:
3020-***
3021-(f)Exceptasotherwiseprovidedinsubsection(g)ofthissection,alessee
3022-ofgoods,otherthanalesseeinordinarycourseofbusiness,takestheleasehold
3023-1
3024-2
3025-3
3026-4
3027-5
3028-6
3029-7
3030-8
3031-9
3032-10
3033-11
3034-12
3035-13
3036-14
3037-15
3038-16
3039-17
3040-18
3041-19
3042-20
3043-21 BILLASPASSEDBYTHEHOUSE H.206
1750+
1751+
1752+VT LEG #378799 v.1
1753+gives value and, if each authoritative electronic copy of the document can be 1
1754+subjected to control under section 7-106 of this title, obtains control of each 2
1755+authoritative electronic copy. 3
1756+(h) A buyer of a controllable electronic record takes free of a security 4
1757+interest if, without knowledge of the security interest and before it is perfected, 5
1758+the buyer gives value and obtains control of the controllable electronic record. 6
1759+(i) A buyer, other than a secured party, of a controllable account or a 7
1760+controllable payment intangible takes free of a security interest if, without 8
1761+knowledge of the security interest and before it is perfected, the buyer gives 9
1762+value and obtains control of the controllable account or controllable payment 10
1763+intangible. 11
1764+* * * 12
1765+§ 9—323. FUTURE ADVANCES 13
1766+* * * 14
1767+(d) Except as otherwise provided in subsection (e) of this section, a buyer 15
1768+of goods other than a buyer in ordinary course of business takes free of a 16
1769+security interest to the extent that it secures advances made after the earlier of: 17
1770+* * * 18
1771+(f) Except as otherwise provided in subsection (g) of this section, a lessee 19
1772+of goods, other than a lessee in ordinary course of business, takes the leasehold 20 BILL AS INTRODUCED H.206
30441773 2025 Page 73 of 124
3045-interestfreeofasecurityinteresttotheextentthatitsecuresadvancesmade
3046-aftertheearlierof:
3047-***
3048-§9—324.PRIORITYOFPURCHASE-MONEYSECURITYINTERESTS
3049-***
3050-(b)Subjecttosubsection(c)ofthissectionandexceptasotherwise
3051-providedinsubsection(g)ofthissection,aperfectedpurchase-moneysecurity
3052-interestininventoryhaspriorityoveraconflictingsecurityinterestinthesame
3053-inventory,haspriorityoveraconflictingsecurityinterestinchattelpaperoran
3054-instrumentconstitutingproceedsoftheinventoryandinproceedsofthechattel
3055-paper,ifsoprovidedinsection9—330ofthistitle,and,exceptasotherwise
3056-providedinsection9—327ofthistitle,alsohaspriorityinidentifiablecash
3057-proceedsoftheinventorytotheextenttheidentifiablecashproceedsare
3058-receivedonorbeforethedeliveryoftheinventorytoabuyer,if:
3059-(1)thepurchase-moneysecurityinterestisperfectedwhenthedebtor
3060-receivespossessionoftheinventory;
3061-(2)thepurchase-moneysecuredpartysendsanauthenticatedasigned
3062-notificationtotheholderoftheconflictingsecurityinterest;
3063-***
3064-(d)Subjecttosubsection(e)ofthissectionandexceptasotherwise
3065-providedinsubsection(g)ofthissection,aperfectedpurchase-moneysecurity
3066-1
3067-2
3068-3
3069-4
3070-5
3071-6
3072-7
3073-8
3074-9
3075-10
3076-11
3077-12
3078-13
3079-14
3080-15
3081-16
3082-17
3083-18
3084-19
3085-20
3086-21 BILLASPASSEDBYTHEHOUSE H.206
1774+
1775+
1776+VT LEG #378799 v.1
1777+interest free of a security interest to the extent that it secures advances made 1
1778+after the earlier of: 2
1779+* * * 3
1780+§ 9—324. PRIORITY OF PURCHASE-MONEY SECURITY INTERESTS 4
1781+* * * 5
1782+(b) Subject to subsection (c) of this section and except as otherwise 6
1783+provided in subsection (g) of this section, a perfected purchase-money security 7
1784+interest in inventory has priority over a conflicting security interest in the same 8
1785+inventory, has priority over a conflicting security interest in chattel paper or an 9
1786+instrument constituting proceeds of the inventory and in proceeds of the chattel 10
1787+paper, if so provided in section 9—330 of this title, and, except as otherwise 11
1788+provided in section 9—327 of this title, also has priority in identifiable cash 12
1789+proceeds of the inventory to the extent the identifiable cash proceeds are 13
1790+received on or before the delivery of the inventory to a buyer, if: 14
1791+(1) the purchase-money security interest is perfected when the debtor 15
1792+receives possession of the inventory; 16
1793+(2) the purchase-money secured party sends an authenticated a signed 17
1794+notification to the holder of the conflicting security interest; 18
1795+* * * 19
1796+(d) Subject to subsection (e) of this section and except as otherwise 20
1797+provided in subsection (g) of this section, a perfected purchase-money security 21 BILL AS INTRODUCED H.206
30871798 2025 Page 74 of 124
3088-interestinlivestockthatarefarmproductshaspriorityoveraconflicting
3089-securityinterestinthesamelivestock,and,exceptasotherwiseprovidedin
3090-section9—327ofthistitle,aperfectedsecurityinterestintheiridentifiable
3091-proceedsandidentifiableproductsintheirunmanufacturedstatesalsohas
3092-priority,if:
3093-(1)thepurchase-moneysecurityinterestisperfectedwhenthedebtor
3094-receivespossessionofthelivestock;
3095-(2)thepurchase-moneysecuredpartysendsanauthenticatedasigned
3096-notificationtotheholderoftheconflictingsecurityinterest;
3097-***
3098-§9—324A.PRIORITYOFPRODUCTION-MONEYSECURITY
3099-INTERESTSANDAGRICULTURALLIENS
3100-(a)Exceptasotherwiseprovidedinsubsections(c),(d),and(e)ofthis
3101-section,iftherequirementsofsubsection(b)ofthissectionaresatisfied,a
3102-perfectedproduction-moneysecurityinterestinproduction-moneycropshas
3103-priorityoveraconflictingsecurityinterestinthesamecropsand,exceptas
3104-otherwiseprovidedinsection9—327ofthistitle,alsohaspriorityintheir
3105-identifiableproceeds.
3106-(b)Aproduction-moneysecurityinteresthaspriorityundersubsection(a)
3107-ofthissectionif:
3108-1
3109-2
3110-3
3111-4
3112-5
3113-6
3114-7
3115-8
3116-9
3117-10
3118-11
3119-12
3120-13
3121-14
3122-15
3123-16
3124-17
3125-18
3126-19
3127-20 BILLASPASSEDBYTHEHOUSE H.206
1799+
1800+
1801+VT LEG #378799 v.1
1802+interest in livestock that are farm products has priority over a conflicting 1
1803+security interest in the same livestock, and, except as otherwise provided in 2
1804+section 9—327 of this title, a perfected security interest in their identifiable 3
1805+proceeds and identifiable products in their unmanufactured states also has 4
1806+priority, if: 5
1807+(1) the purchase-money security interest is perfected when the debtor 6
1808+receives possession of the livestock; 7
1809+(2) the purchase-money secured party sends an authenticated a signed 8
1810+notification to the holder of the conflicting security interest; 9
1811+* * * 10
1812+§ 9—324A. PRIORITY OF PRODUCTION-MONEY SECURITY 11
1813+ INTERESTS AND AGRICULTURAL LIENS 12
1814+(a) Except as otherwise provided in subsections (c), (d), and (e) of this 13
1815+section, if the requirements of subsection (b) of this section are satisfied, a 14
1816+perfected production-money security interest in production-money crops has 15
1817+priority over a conflicting security interest in the same crops and, except as 16
1818+otherwise provided in section 9—327 of this title, also has priority in their 17
1819+identifiable proceeds. 18
1820+(b) A production-money security interest has priority under subsection (a) 19
1821+of this section if: 20 BILL AS INTRODUCED H.206
31281822 2025 Page 75 of 124
3129-(1)theproduction-moneysecurityinterestisperfectedbyfilingwhen
3130-theproduction-moneysecuredpartyfirstgivesnewvaluetoenablethedebtor
3131-toproducethecrops;
3132-(2)theproduction-moneysecuredpartysendsanauthenticated
3133-notificationtotheholderoftheconflictingsecurityinterestnotlessthan10or
3134-morethan30daysbeforetheproduction-moneysecuredpartyfirstgivesnew
3135-valuetoenablethedebtortoproducethecropsiftheholderhadfileda
3136-financingstatementcoveringthecropsbeforethedateofthefilingmadeby
3137-theproduction-moneysecuredparty;and
3138-(3)thenotificationstatesthattheproduction-moneysecuredpartyhas
3139-orexpectstoacquireaproduction-moneysecurityinterestinthedebtor’scrops
3140-andprovidesadescriptionofthecrops.
3141-(c)Exceptasotherwiseprovidedinsubsection(d)or(e)ofthissection,if
3142-morethanonesecurityinterestqualifiesforpriorityinthesamecollateral
3143-undersubsection(a)ofthissection,thesecurityinterestsrankaccordingto
3144-priorityintimeoffilingundersubsection9—322(a)ofthistitle.
3145-(d)Totheextentthatapersonholdingaperfectedsecurityinterestin
3146-production-moneycropsthatarethesubjectofaproduction-moneysecurity
3147-interestgivesnewvaluetoenablethedebtortoproducetheproduction-money
3148-cropsandthevalueisinfactusedfortheproductionoftheproduction-money
3149-1
3150-2
3151-3
3152-4
3153-5
3154-6
3155-7
3156-8
3157-9
3158-10
3159-11
3160-12
3161-13
3162-14
3163-15
3164-16
3165-17
3166-18
3167-19
3168-20 BILLASPASSEDBYTHEHOUSE H.206
1823+
1824+
1825+VT LEG #378799 v.1
1826+(1) the production-money security interest is perfected by filing when 1
1827+the production-money secured party first gives new value to enable the debtor 2
1828+to produce the crops; 3
1829+(2) the production-money secured party sends an authenticated 4
1830+notification to the holder of the conflicting security interest not less than 10 or 5
1831+more than 30 days before the production-money secured party first gives new 6
1832+value to enable the debtor to produce the crops if the holder had filed a 7
1833+financing statement covering the crops before the date of the filing made by the 8
1834+production-money secured party; and 9
1835+(3) the notification states that the production-money secured party has or 10
1836+expects to acquire a production-money security interest in the debtor’s crops 11
1837+and provides a description of the crops. 12
1838+(c) Except as otherwise provided in subsection (d) or (e) of this section, if 13
1839+more than one security interest qualifies for priority in the same collateral 14
1840+under subsection (a) of this section, the security interests rank according to 15
1841+priority in time of filing under subsection 9—322(a) of this title. 16
1842+(d) To the extent that a person holding a perfected security interest in 17
1843+production-money crops that are the subject of a production-money security 18
1844+interest gives new value to enable the debtor to produce the production-money 19
1845+crops and the value is in fact used for the production of the production-money 20 BILL AS INTRODUCED H.206
31691846 2025 Page 76 of 124
3170-crops,thesecurityinterestsrankaccordingtopriorityintimeoffilingunder
3171-subsection9—322(a)ofthistitle.
3172-(e)Totheextentthatapersonholdsbothanagriculturallienanda
3173-production-moneysecurityinterestinthesamecollateralsecuringthesame
3174-obligations,therulesofpriorityapplicabletoagriculturalliensgovernpriority.
3175-***
3176-§9—326.PRIORITYOFSECURITYINTERESTSCREATEDBYNEW
3177-DEBTOR
3178-***
3179-§ 9—326A.PRIORITYOFSECURITYINTERESTINCONTROLLABLE
3180-ACCOUNT,CONTROLLABLE ELECTRONICRECORD,
3181-ANDCONTROLLABLE PAYMENTINTANGIBLE
3182-Asecurityinterestinacontrollableaccount,controllableelectronicrecord,
3183-orcontrollablepaymentintangibleheldbyasecuredpartyhavingcontrolof
3184-theaccount,electronicrecord,orpaymentintangiblehaspriorityovera
3185-conflictingsecurityinterestheldbyasecuredpartythatdoesnothavecontrol.
3186-***
3187-1
3188-2
3189-3
3190-4
3191-5
3192-6
3193-7
3194-8
3195-9
3196-10
3197-11
3198-12
3199-13
3200-14
3201-15
3202-16
3203-17 BILLASPASSEDBYTHEHOUSE H.206
1847+
1848+
1849+VT LEG #378799 v.1
1850+crops, the security interests rank according to priority in time of filing under 1
1851+subsection 9—322(a) of this title. 2
1852+(e) To the extent that a person holds both an agricultural lien and a 3
1853+production-money security interest in the same collateral securing the same 4
1854+obligations, the rules of priority applicable to agricultural liens govern priority. 5
1855+* * * 6
1856+§ 9—326. PRIORITY OF SECURITY INTERESTS CREATED BY NEW 7
1857+ DEBTOR 8
1858+* * * 9
1859+§ 9—326A. PRIORITY OF SECURITY INTEREST IN CONTROLLABLE 10
1860+ ACCOUNT, CONTROLLABLE ELECTRONIC RECORD, 11
1861+ AND CONTROLLABLE PAYMENT INTANGIBLE 12
1862+A security interest in a controllable account, controllable electronic record, 13
1863+or controllable payment intangible held by a secured party having control of 14
1864+the account, electronic record, or payment intangible has priority over a 15
1865+conflicting security interest held by a secured party that does not have control. 16
1866+* * * 17 BILL AS INTRODUCED H.206
32041867 2025 Page 77 of 124
3205-§9—330.PRIORITYOFPURCHASEROFCHATTELPAPEROR
3206-INSTRUMENT
3207-(a)Apurchaserofchattelpaperhaspriorityoverasecurityinterestinthe
3208-chattelpaperwhichisclaimedmerelyasproceedsofinventorysubjecttoa
3209-securityinterestif:
3210-(1)ingoodfaithandintheordinarycourseofthepurchaser’sbusiness,
3211-thepurchasergivesnewvalueand,takespossessionofeachauthoritative
3212-tangiblecopyoftherecordevidencingthechattelpaperor,andobtainscontrol
3213-ofundersection9—105ofthistitleofeachauthoritativeelectroniccopyof
3214-therecordevidencingthechattelpaperundersection9—105ofthistitle;and
3215-(2)thechattelpaperdoesauthoritativecopiesoftherecordevidencing
3216-thechattelpaperdonotindicatethatitthechattelpaperhasbeenassignedto
3217-anidentifiedassigneeotherthanthepurchaser.
3218-(b)Apurchaserofchattelpaperhaspriorityoverasecurityinterestinthe
3219-chattelpaperwhichisclaimedotherthanmerelyasproceedsofinventory
3220-subjecttoasecurityinterestifthepurchasergivesnewvalueand,takes
3221-possessionofeachauthoritativetangiblecopyoftherecordevidencingthe
3222-chattelpaperor,andobtainscontrolofundersection9—105ofthistitleof
3223-eachauthoritativeelectroniccopyoftherecordevidencingthechattelpaper
3224-undersection9—105ofthistitleingoodfaith,intheordinarycourseofthe
3225-1
3226-2
3227-3
3228-4
3229-5
3230-6
3231-7
3232-8
3233-9
3234-10
3235-11
3236-12
3237-13
3238-14
3239-15
3240-16
3241-17
3242-18
3243-19
3244-20 BILLASPASSEDBYTHEHOUSE H.206
1868+
1869+
1870+VT LEG #378799 v.1
1871+§ 9—330. PRIORITY OF PURCHASER OF CHATTEL PAPER OR 1
1872+ INSTRUMENT 2
1873+(a) A purchaser of chattel paper has priority over a security interest in the 3
1874+chattel paper which is claimed merely as proceeds of inventory subject to a 4
1875+security interest if: 5
1876+(1) in good faith and in the ordinary course of the purchaser’s business, 6
1877+the purchaser gives new value and, takes possession of each authoritative 7
1878+tangible copy of the record evidencing the chattel paper or, and obtains control 8
1879+of under section 9—105 of this title of each authoritative electronic copy of the 9
1880+record evidencing the chattel paper under section 9—105 of this title; and 10
1881+(2) the chattel paper does authoritative copies of the record evidencing 11
1882+the chattel paper do not indicate that it the chattel paper has been assigned to 12
1883+an identified assignee other than the purchaser. 13
1884+(b) A purchaser of chattel paper has priority over a security interest in the 14
1885+chattel paper which is claimed other than merely as proceeds of inventory 15
1886+subject to a security interest if the purchaser gives new value and, takes 16
1887+possession of each authoritative tangible copy of the record evidencing the 17
1888+chattel paper or, and obtains control of under section 9—105 of this title of 18
1889+each authoritative electronic copy of the record evidencing the chattel paper 19
1890+under section 9—105 of this title in good faith, in the ordinary course of the 20 BILL AS INTRODUCED H.206
32451891 2025 Page 78 of 124
3246-purchaser’sbusiness,andwithoutknowledgethatthepurchaseviolatesthe
3247-rightsofthesecuredparty.
3248-***
3249-(f)Forpurposesofsubsections(b)and(d)ofthissection,ifthe
3250-authoritativecopiesoftherecordevidencingchattelpaperoraninstrument
3251-indicatesindicatethatitthechattelpaperorinstrumenthasbeenassignedtoan
3252-identifiedsecuredpartyotherthanthepurchaser,apurchaserofthechattel
3253-paperorinstrumenthasknowledgethatthepurchaseviolatestherightsofthe
3254-securedparty.
3255-§9—331.PRIORITYOFRIGHTSOFPURCHASERSOF
3256-INSTRUMENTS,
3257-CONTROLLABLE ACCOUNTS,CONTROLLABLE
3258-ELECTRONICRECORDS,CONTROLLABLE PAYMENT
3259-INTANGIBLES,DOCUMENTS,INSTRUMENTS,AND
3260-SECURITIESUNDEROTHERARTICLES;PRIORITYOF
3261-INTERESTSINFINANCIALASSETSANDSECURITY
3262-ENTITLEMENTSANDPROTECTIONAGAINSTASSERTION
3263-OFCLAIMUNDERARTICLEARTICLES8AND12
3264-(a)Thisarticledoesnotlimittherightsofaholderinduecourseofa
3265-negotiableinstrument,aholdertowhichanegotiabledocumentoftitlehas
3266-beendulynegotiated,oraprotectedpurchaserofasecurity,oraqualifying
3267-1
3268-2
3269-3
3270-4
3271-5
3272-6
3273-7
3274-8
3275-9
3276-10
3277-11
3278-12
3279-13
3280-14
3281-15
3282-16
3283-17
3284-18
3285-19
3286-20
3287-21 BILLASPASSEDBYTHEHOUSE H.206
1892+
1893+
1894+VT LEG #378799 v.1
1895+purchaser’s business, and without knowledge that the purchase violates the 1
1896+rights of the secured party. 2
1897+* * * 3
1898+(f) For purposes of subsections (b) and (d) of this section, if the 4
1899+authoritative copies of the record evidencing chattel paper or an instrument 5
1900+indicates indicate that it the chattel paper or instrument has been assigned to an 6
1901+identified secured party other than the purchaser, a purchaser of the chattel 7
1902+paper or instrument has knowledge that the purchase violates the rights of the 8
1903+secured party. 9
1904+§ 9—331. PRIORITY OF RIGHTS OF PURCHASERS OF INSTRUMENTS, 10
1905+ CONTROLLABLE ACCOUNTS, CONTROLLABLE 11
1906+ ELECTRONIC RECORDS, CONTROLLABLE PAYMENT 12
1907+ INTANGIBLES, DOCUMENTS, INSTRUMENTS, AND 13
1908+ SECURITIES UNDER OTHER ARTICLES; PRIORITY OF 14
1909+ INTERESTS IN FINANCIAL ASSETS AND SECURITY 15
1910+ ENTITLEMENTS AND PROTECTION AGAINST ASSERTION 16
1911+ OF CLAIM UNDER ARTICLE ARTICLES 8 AND 12 17
1912+(a) This article does not limit the rights of a holder in due course of a 18
1913+negotiable instrument, a holder to which a negotiable document of title has 19
1914+been duly negotiated, or a protected purchaser of a security, or a qualifying 20
1915+purchaser of a controllable account, controllable electronic record, or 21 BILL AS INTRODUCED H.206
32881916 2025 Page 79 of 124
3289-purchaserofacontrollableaccount,controllableelectronicrecord,or
3290-controllablepaymentintangible.Theseholdersorpurchaserstakepriority
3291-overanearliersecurityinterest,evenifperfected,totheextentprovidedin
3292-Articles3,7,and8,and12ofthistitle.
3293-(b)Thisarticledoesnotlimittherightsoforimposeliabilityonaperson
3294-totheextentthatthepersonisprotectedagainsttheassertionofanadverse
3295-claimunderArticle8or12ofthistitle.
3296-***
3297-§9—332.TRANSFEROFMONEY;TRANSFEROFFUNDSFROM
3298-DEPOSITACCOUNT
3299-(a)Atransfereeoftangiblemoneytakesthemoneyfreeofasecurity
3300-interestunlessthetransfereeactsifthetransfereereceivespossessionofthe
3301-moneywithoutactingincollusionwiththedebtorinviolatingtherightsofthe
3302-securedparty.
3303-(b)Atransfereeoffundsfromadepositaccounttakesthefundsfreeofa
3304-securityinterestinthedepositaccountunlessthetransfereeactsifthe
3305-transfereereceivesthefundswithoutacting incollusionwiththedebtorin
3306-violatingtherightsofthesecuredparty.
3307-(c)Atransfereeofelectronicmoneytakesthemoneyfreeofasecurity
3308-interestifthetransfereeobtainscontrolofthemoneywithoutactingin
3309-collusionwiththedebtorinviolatingtherightsofthesecuredparty.
3310-1
3311-2
3312-3
3313-4
3314-5
3315-6
3316-7
3317-8
3318-9
3319-10
3320-11
3321-12
3322-13
3323-14
3324-15
3325-16
3326-17
3327-18
3328-19
3329-20
3330-21 BILLASPASSEDBYTHEHOUSE H.206
1917+
1918+
1919+VT LEG #378799 v.1
1920+controllable payment intangible. These holders or purchasers take priority 1
1921+over an earlier security interest, even if perfected, to the extent provided in 2
1922+Articles 3, 7, and 8, and 12 of this title. 3
1923+(b) This article does not limit the rights of or impose liability on a person to 4
1924+the extent that the person is protected against the assertion of an adverse claim 5
1925+under Article 8 or 12 of this title. 6
1926+* * * 7
1927+§ 9—332. TRANSFER OF MONEY; TRANSFER OF FUNDS FROM 8
1928+ DEPOSIT ACCOUNT 9
1929+(a) A transferee of tangible money takes the money free of a security 10
1930+interest unless the transferee acts if the transferee receives possession of the 11
1931+money without acting in collusion with the debtor in violating the rights of the 12
1932+secured party. 13
1933+(b) A transferee of funds from a deposit account takes the funds free of a 14
1934+security interest in the deposit account unless the transferee acts if the 15
1935+transferee receives the funds without acting in collusion with the debtor in 16
1936+violating the rights of the secured party. 17
1937+(c) A transferee of electronic money takes the money free of a security 18
1938+interest if the transferee obtains control of the money without acting in 19
1939+collusion with the debtor in violating the rights of the secured party. 20
1940+* * * 21 BILL AS INTRODUCED H.206
33311941 2025 Page 80 of 124
3332-***
3333-§9—334.PRIORITYOFSECURITYINTERESTSINFIXTURESAND
3334-CROPS
3335-***
3336-(f)Asecurityinterestinfixtures,whetherornotperfected,haspriority
3337-overaconflictinginterestofanencumbrancerorowneroftherealpropertyif:
3338-(1)theencumbrancerorownerhas,inanauthenticatedasignedrecord,
3339-consentedtothesecurityinterestordisclaimedaninterestinthegoodsas
3340-fixtures;or
3341-***
3342-§9—341.BANK’SRIGHTSANDDUTIESWITHRESPECTTO
3343-DEPOSITACCOUNT
3344-Exceptasotherwiseprovidedinsubsection9—340(c)ofthistitle,and
3345-unlessthebankotherwiseagreesinanauthenticatedasignedrecord,abank’s
3346-rightsanddutieswithrespecttoadepositaccountmaintainedwiththebank
3347-arenotterminated,suspended,ormodifiedby:
3348-***
3349-1
3350-2
3351-3
3352-4
3353-5
3354-6
3355-7
3356-8
3357-9
3358-10
3359-11
3360-12
3361-13
3362-14
3363-15
3364-16
3365-17 BILLASPASSEDBYTHEHOUSE H.206
1942+
1943+
1944+VT LEG #378799 v.1
1945+§ 9—334. PRIORITY OF SECURITY INTERESTS IN FIXTURES AND 1
1946+ CROPS 2
1947+* * * 3
1948+(f) A security interest in fixtures, whether or not perfected, has priority over 4
1949+a conflicting interest of an encumbrancer or owner of the real property if: 5
1950+(1) the encumbrancer or owner has, in an authenticated a signed record, 6
1951+consented to the security interest or disclaimed an interest in the goods as 7
1952+fixtures; or 8
1953+* * * 9
1954+§ 9—341. BANK’S RIGHTS AND DUTIES WITH RESPECT TO DEPOSIT 10
1955+ ACCOUNT 11
1956+Except as otherwise provided in subsection 9—340(c) of this title, and 12
1957+unless the bank otherwise agrees in an authenticated a signed record, a bank’s 13
1958+rights and duties with respect to a deposit account maintained with the bank are 14
1959+not terminated, suspended, or modified by: 15
1960+* * * 16 BILL AS INTRODUCED H.206
33661961 2025 Page 81 of 124
3367-§9—404.RIGHTSACQUIREDBYASSIGNEE;CLAIMSAND
3368-DEFENSESAGAINSTASSIGNEE
3369-(a)Unlessanaccountdebtorhasmadeanenforceableagreementnotto
3370-assertdefensesorclaims,andsubjecttosubsections(b)through(e)ofthis
3371-section,therightsofanassigneearesubjectto:
3372-(1)alltermsoftheagreementbetweentheaccountdebtorandassignor
3373-andanydefenseorclaiminrecoupmentarisingfromthetransactionthatgave
3374-risetothecontract;and
3375-(2)anyotherdefenseorclaimoftheaccountdebtoragainsttheassignor
3376-whichaccruesbeforetheaccountdebtorreceivesanotificationofthe
3377-assignmentauthenticatedsignedbytheassignorortheassignee.
3378-***
3379-§9—406.DISCHARGEOFACCOUNTDEBTOR;NOTIFICATIONOF
3380-ASSIGNMENT;IDENTIFICATIONANDPROOFOF
3381-ASSIGNMENT;RESTRICTIONSONASSIGNMENTOF
3382-ACCOUNTS,CHATTELPAPER,PAYMENTINTANGIBLES,
3383-ANDPROMISSORYNOTESINEFFECTIVE
3384-(a)Subjecttosubsections(b)through(h)(i)and(l)ofthissection,an
3385-accountdebtoronanaccount,chattelpaper,orapaymentintangiblemay
3386-dischargeitsobligationbypayingtheassignoruntil,butnotafter,theaccount
3387-debtorreceivesanotification,authenticatedsignedbytheassignororthe
3388-1
3389-2
3390-3
3391-4
3392-5
3393-6
3394-7
3395-8
3396-9
3397-10
3398-11
3399-12
3400-13
3401-14
3402-15
3403-16
3404-17
3405-18
3406-19
3407-20
3408-21 BILLASPASSEDBYTHEHOUSE H.206
1962+
1963+
1964+VT LEG #378799 v.1
1965+§ 9—404. RIGHTS ACQUIRED BY ASSIGNEE; CLAIMS AND 1
1966+ DEFENSES AGAINST ASSIGNEE 2
1967+(a) Unless an account debtor has made an enforceable agreement not to 3
1968+assert defenses or claims, and subject to subsections (b) through (e) of this 4
1969+section, the rights of an assignee are subject to: 5
1970+(1) all terms of the agreement between the account debtor and assignor 6
1971+and any defense or claim in recoupment arising from the transaction that gave 7
1972+rise to the contract; and 8
1973+(2) any other defense or claim of the account debtor against the assignor 9
1974+which accrues before the account debtor receives a notification of the 10
1975+assignment authenticated signed by the assignor or the assignee. 11
1976+* * * 12
1977+§ 9—406. DISCHARGE OF ACCOUNT DEBTOR; NOTIFICATION OF 13
1978+ ASSIGNMENT; IDENTIFICATION AND PROOF OF 14
1979+ ASSIGNMENT; RESTRICTIONS ON ASSIGNMENT OF 15
1980+ ACCOUNTS, CHATTEL PAPER, PAYMENT INTANGIBLES, 16
1981+ AND PROMISSORY NOTES INEFFECTIVE 17
1982+(a) Subject to subsections (b) through (h)(i) and (l) of this section, an 18
1983+account debtor on an account, chattel paper, or a payment intangible may 19
1984+discharge its obligation by paying the assignor until, but not after, the account 20
1985+debtor receives a notification, authenticated signed by the assignor or the 21 BILL AS INTRODUCED H.206
34091986 2025 Page 82 of 124
3410-assignee,thattheamountdueortobecomeduehasbeenassignedandthat
3411-paymentistobemadetotheassignee.Afterreceiptofthenotification,the
3412-accountdebtormaydischargeitsobligationbypayingtheassigneeandmay
3413-notdischargetheobligationbypayingtheassignor.
3414-(b)Subjecttosubsection(g)subsections(h)and(l)ofthissection,
3415-notificationisineffectiveundersubsection(a)ofthissection:
3416-***
3417-(c)Subjecttosubsection(g)subsections(h)and(l)ofthissection,if
3418-requestedbytheaccountdebtor,anassigneeshallseasonablyfurnish
3419-reasonableproofthattheassignmenthasbeenmade.Unlesstheassignee
3420-complies,theaccountdebtormaydischargeitsobligationbypayingthe
3421-assignor,eveniftheaccountdebtorhasreceivedanotificationunder
3422-subsection(a)ofthissection.
3423-(d)Inthissubsection,“promissorynote”includesanegotiableinstrument
3424-thatevidenceschattelpaper.Exceptasotherwiseprovidedinsubsection
3425-subsections(e)and(k)ofthissectionandsections2A—303and9—407of
3426-thistitle,andsubjecttosubsection(g)(h)ofthissection,aterminan
3427-agreementbetweenanaccountdebtorandanassignororinapromissorynote
3428-isineffectivetotheextentthatit:
3429-***
3430-1
3431-2
3432-3
3433-4
3434-5
3435-6
3436-7
3437-8
3438-9
3439-10
3440-11
3441-12
3442-13
3443-14
3444-15
3445-16
3446-17
3447-18
3448-19
3449-20 BILLASPASSEDBYTHEHOUSE H.206
1987+
1988+
1989+VT LEG #378799 v.1
1990+assignee, that the amount due or to become due has been assigned and that 1
1991+payment is to be made to the assignee. After receipt of the notification, the 2
1992+account debtor may discharge its obligation by paying the assignee and may 3
1993+not discharge the obligation by paying the assignor. 4
1994+(b) Subject to subsection (g) subsections (h) and (l) of this section, 5
1995+notification is ineffective under subsection (a) of this section: 6
1996+* * * 7
1997+(c) Subject to subsection (g) subsections (h) and (l) of this section, if 8
1998+requested by the account debtor, an assignee shall seasonably furnish 9
1999+reasonable proof that the assignment has been made. Unless the assignee 10
2000+complies, the account debtor may discharge its obligation by paying the 11
2001+assignor, even if the account debtor has received a notification under 12
2002+subsection (a) of this section. 13
2003+(d) In this subsection, “promissory note” includes a negotiable instrument 14
2004+that evidences chattel paper. Except as otherwise provided in subsection 15
2005+subsections (e) and (k) of this section and sections 2A—303 and 9—407 of 16
2006+this title, and subject to subsection (g)(h) of this section, a term in an 17
2007+agreement between an account debtor and an assignor or in a promissory note 18
2008+is ineffective to the extent that it: 19
2009+* * * 20 BILL AS INTRODUCED H.206
34502010 2025 Page 83 of 124
3451-(e)Subsection(d)ofthissectiondoesnotapplytothesaleofapayment
3452-intangibleorpromissorynote,otherthanasalepursuanttoadispositionunder
3453-section9—610ofthistitleoranacceptanceofcollateralundersection9—620
3454-ofthistitle.
3455-(f)Subjecttosubsection(g)ofthissection,anaccountdebtormaynot
3456-waiveorvaryitsoptionundersubdivision(b)(3)ofthissection.Exceptas
3457-otherwiseprovidedinsubsection(k)ofthissectionandsections2A—303and
3458-9—407ofthistitleandsubjecttosubsections(h)and(i)ofthissection,arule
3459-oflaw,statute,orregulationthatprohibits,restricts,orrequirestheconsentof
3460-agovernment,governmentalbodyorofficial,oraccountdebtortothe
3461-assignmentortransferof,orcreationofasecurityinterestin,anaccountor
3462-chattelpaperisineffectivetotheextentthattheruleoflaw,statute,or
3463-regulation:
3464-(1)prohibits,restricts,orrequirestheconsentofthegovernment,
3465-governmentalbodyorofficial,oraccountdebtortotheassignmentortransfer
3466-of,orthecreation,attachment,perfection,orenforcementof,asecurity
3467-interestintheaccountorchattelpaper;or
3468-(2)providesthattheassignmentortransferorthecreation,attachment,
3469-perfection,orenforcementofthesecurityinterestmaygiverisetoadefault,
3470-breach,rightofrecoupment,claim,defense,termination,rightoftermination,
3471-orremedyundertheaccountorchattelpaper.
3472-1
3473-2
3474-3
3475-4
3476-5
3477-6
3478-7
3479-8
3480-9
3481-10
3482-11
3483-12
3484-13
3485-14
3486-15
3487-16
3488-17
3489-18
3490-19
3491-20
3492-21 BILLASPASSEDBYTHEHOUSE H.206
2011+
2012+
2013+VT LEG #378799 v.1
2014+(e) Subsection (d) of this section does not apply to the sale of a payment 1
2015+intangible or promissory note, other than a sale pursuant to a disposition under 2
2016+section 9—610 of this title or an acceptance of collateral under section 9—620 3
2017+of this title. 4
2018+(f) Subject to subsection (g) of this section, an account debtor may not 5
2019+waive or vary its option under subdivision (b)(3) of this section. Except as 6
2020+otherwise provided in subsection (k) of this section and sections 2A—303 and 7
2021+9—407 of this title and subject to subsections (h) and (i) of this section, a rule 8
2022+of law, statute, or regulation that prohibits, restricts, or requires the consent of 9
2023+a government, governmental body or official, or account debtor to the 10
2024+assignment or transfer of, or creation of a security interest in, an account or 11
2025+chattel paper is ineffective to the extent that the rule of law, statute, or 12
2026+regulation: 13
2027+(1) prohibits, restricts, or requires the consent of the government, 14
2028+governmental body or official, or account debtor to the assignment or transfer 15
2029+of, or the creation, attachment, perfection, or enforcement of, a security interest 16
2030+in the account or chattel paper; or 17
2031+(2) provides that the assignment or transfer or the creation, attachment, 18
2032+perfection, or enforcement of the security interest may give rise to a default, 19
2033+breach, right of recoupment, claim, defense, termination, right of termination, 20
2034+or remedy under the account or chattel paper. 21 BILL AS INTRODUCED H.206
34932035 2025 Page 84 of 124
3494-(g)Thissectionissubjecttolawotherthanthisarticlewhichestablishesa
3495-differentruleforanaccountdebtorwhoisanindividualandwhoincurredthe
3496-obligationprimarilyforpersonal,family,orhouseholdpurposes.Subjectto
3497-subsections(h)and(l)ofthissection,anaccountdebtormaynotwaiveorvary
3498-itsoptionundersubdivision(b)(3)ofthissection.
3499-(h)Thissectiondoesnotapplytoanassignmentofahealthcareinsurance
3500-receivableThissectionissubjecttolawotherthanthisarticlewhich
3501-establishesadifferentruleforanaccountdebtorwhoisanindividualandwho
3502-incurredtheobligationprimarilyforpersonal,family,orhouseholdpurposes.
3503-(i)Thissectiondoesnotapplytoanassignmentofahealthcareinsurance
3504-receivable.
3505-(j)Thissectionprevailsoveranyinconsistentprovisionsofthistitle.
3506-(k)Subsections(d),(f),and(j)ofthissectiondonotapplytoasecurity
3507-interestinanownershipinterestinageneralpartnership,limitedpartnership,
3508-orlimitedliabilitycompany.
3509-(l)Subsections(a),(b),(c),and(g)ofthissectiondonotapplytoa
3510-controllableaccountorcontrollablepaymentintangible.
3511-***
3512-§9—408.RESTRICTIONSONASSIGNMENTOFPROMISSORY
3513-NOTES,HEALTHCAREINSURANCERECEIVABLES,AND
3514-CERTAINGENERALINTANGIBLESINEFFECTIVE
3515-1
3516-2
3517-3
3518-4
3519-5
3520-6
3521-7
3522-8
3523-9
3524-10
3525-11
3526-12
3527-13
3528-14
3529-15
3530-16
3531-17
3532-18
3533-19
3534-20
3535-21 BILLASPASSEDBYTHEHOUSE H.206
2036+
2037+
2038+VT LEG #378799 v.1
2039+(g) This section is subject to law other than this article which establishes a 1
2040+different rule for an account debtor who is an individual and who incurred the 2
2041+obligation primarily for personal, family, or household purposes. Subject to 3
2042+subsections (h) and (l) of this section, an account debtor may not waive or vary 4
2043+its option under subdivision (b)(3) of this section. 5
2044+(h) This section does not apply to an assignment of a health care insurance 6
2045+receivable This section is subject to law other than this article which 7
2046+establishes a different rule for an account debtor who is an individual and who 8
2047+incurred the obligation primarily for personal, family, or household purposes. 9
2048+(i) This section does not apply to an assignment of a health care insurance 10
2049+receivable. 11
2050+(j) This section prevails over any inconsistent provisions of this title. 12
2051+(k) Subsections (d), (f), and (j) of this section do not apply to a security 13
2052+interest in an ownership interest in a general partnership, limited partnership, 14
2053+or limited liability company. 15
2054+(l) Subsections (a), (b), (c), and (g) of this section do not apply to a 16
2055+controllable account or controllable payment intangible. 17
2056+* * * 18
2057+§ 9—408. RESTRICTIONS ON ASSIGNMENT OF PROMI SSORY 19
2058+ NOTES, HEALTH CARE INSURANCE RECEIVABLES, AND 20
2059+ CERTAIN GENERAL INTANGIBLES INEFFECTIVE 21 BILL AS INTRODUCED H.206
35362060 2025 Page 85 of 124
3537-(a)Exceptasotherwiseprovidedinsubsectionsubsections(b)and(f)of
3538-thissection,aterminapromissorynoteorinanagreementbetweenan
3539-accountdebtorandadebtorwhichrelatestoahealthcareinsurancereceivable
3540-orageneralintangible,includingacontract,permit,license,orfranchise,and
3541-whichtermprohibits,restricts,orrequirestheconsentofthepersonobligated
3542-onthepromissorynoteortheaccountdebtorto,theassignmentortransferof,
3543-orcreation,attachment,orperfectionofasecurityinterestin,thepromissory
3544-note,healthcareinsurancereceivable,orgeneralintangible,isineffectiveto
3545-theextentthattheterm:
3546-(1)wouldimpairthecreation,attachment,orperfectionofasecurity
3547-interest;or
3548-(2)providesthattheassignmentortransferorthecreation,attachment,
3549-orperfectionofthesecurityinterestmaygiverisetoadefault,breach,rightof
3550-recoupment,claim,defense,termination,rightoftermination,orremedyunder
3551-thepromissorynote,healthcareinsurancereceivable,orgeneralintangible.
3552-(b)Subsection(a)ofthissectionappliestoasecurityinterestinapayment
3553-intangibleorpromissorynoteonlyifthesecurityinterestarisesoutofasaleof
3554-thepaymentintangibleorpromissorynote,otherthanasalepursuanttoa
3555-dispositionundersection9—610ofthistitleoranacceptanceofcollateral
3556-undersection9—620ofthistitle.
3557-1
3558-2
3559-3
3560-4
3561-5
3562-6
3563-7
3564-8
3565-9
3566-10
3567-11
3568-12
3569-13
3570-14
3571-15
3572-16
3573-17
3574-18
3575-19
3576-20 BILLASPASSEDBYTHEHOUSE H.206
2061+
2062+
2063+VT LEG #378799 v.1
2064+(a) Except as otherwise provided in subsection subsections (b) and (f) of 1
2065+this section, a term in a promissory note or in an agreement between an 2
2066+account debtor and a debtor which relates to a health care insurance receivable 3
2067+or a general intangible, including a contract, permit, license, or franchise, and 4
2068+which term prohibits, restricts, or requires the consent of the person obligated 5
2069+on the promissory note or the account debtor to, the assignment or transfer of, 6
2070+or creation, attachment, or perfection of a security interest in, the promissory 7
2071+note, health care insurance receivable, or general intangible, is ineffective to 8
2072+the extent that the term: 9
2073+(1) would impair the creation, attachment, or perfection of a security 10
2074+interest; or 11
2075+(2) provides that the assignment or transfer or the creation, attachment, 12
2076+or perfection of the security interest may give rise to a default, breach, right of 13
2077+recoupment, claim, defense, termination, right of termination, or remedy under 14
2078+the promissory note, health care insurance receivable, or general intangible. 15
2079+(b) Subsection (a) of this section applies to a security interest in a payment 16
2080+intangible or promissory note only if the security interest arises out of a sale of 17
2081+the payment intangible or promissory note, other than a sale pursuant to a 18
2082+disposition under section 9—610 of this title or an acceptance of collateral 19
2083+under section 9—620 of this title. 20 BILL AS INTRODUCED H.206
35772084 2025 Page 86 of 124
3578-(c)AExceptasotherwiseprovidedinsubsection(f)ofthissection,arule
3579-oflaw,statute,orregulation,whichprohibits,restricts,orrequirestheconsent
3580-ofagovernment,governmentalbodyorofficial,personobligatedona
3581-promissorynote,oraccountdebtortotheassignmentortransferof,orcreation
3582-ofasecurityinterestin,apromissorynote,healthcareinsurancereceivable,or
3583-generalintangible,includingacontract,permit,license,orfranchisebetween
3584-anaccountdebtorandadebtor,isineffectivetotheextentthattheruleoflaw,
3585-statute,orregulation:
3586-(1)wouldimpairthecreation,attachment,orperfectionofasecurity
3587-interest;or
3588-(2)providesthattheassignmentortransferorthecreation,attachment,
3589-orperfectionofthesecurityinterestmaygiverisetoadefault,breach,rightof
3590-recoupment,claim,defense,termination,rightoftermination,orremedyunder
3591-thepromissorynote,healthcareinsurancereceivable,orgeneralintangible.
3592-(d)Totheextentthataterminapromissorynoteorinanagreement
3593-betweenanaccountdebtorandadebtorwhichrelatestoahealthcare
3594-insurancereceivableorgeneralintangibleoraruleoflaw,statute,or
3595-regulationdescribedinsubsection(c)ofthissectionwouldbeeffectiveunder
3596-lawotherthanthisarticlebutisineffectiveundersubsection(a)or(c)ofthis
3597-section,thecreation,attachment,orperfectionofasecurityinterestinthe
3598-promissorynote,healthcareinsurancereceivable,orgeneralintangible:
3599-1
3600-2
3601-3
3602-4
3603-5
3604-6
3605-7
3606-8
3607-9
3608-10
3609-11
3610-12
3611-13
3612-14
3613-15
3614-16
3615-17
3616-18
3617-19
3618-20
3619-21 BILLASPASSEDBYTHEHOUSE H.206
2085+
2086+
2087+VT LEG #378799 v.1
2088+(c) A Except as otherwise provided in subsection (f) of this section, a rule 1
2089+of law, statute, or regulation, which prohibits, restricts, or requires the consent 2
2090+of a government, governmental body or official, person obligated on a 3
2091+promissory note, or account debtor to the assignment or transfer of, or creation 4
2092+of a security interest in, a promissory note, health care insurance receivable, or 5
2093+general intangible, including a contract, permit, license, or franchise between 6
2094+an account debtor and a debtor, is ineffective to the extent that the rule of law, 7
2095+statute, or regulation: 8
2096+(1) would impair the creation, attachment, or perfection of a security 9
2097+interest; or 10
2098+(2) provides that the assignment or transfer or the creation, attachment, 11
2099+or perfection of the security interest may give rise to a default, breach, right of 12
2100+recoupment, claim, defense, termination, right of termination, or remedy under 13
2101+the promissory note, health care insurance receivable, or general intangible. 14
2102+(d) To the extent that a term in a promissory note or in an agreement 15
2103+between an account debtor and a debtor which relates to a health care 16
2104+insurance receivable or general intangible or a rule of law, statute, or 17
2105+regulation described in subsection (c) of this section would be effective under 18
2106+law other than this article but is ineffective under subsection (a) or (c) of this 19
2107+section, the creation, attachment, or perfection of a security interest in the 20
2108+promissory note, health care insurance receivable, or general intangible: 21 BILL AS INTRODUCED H.206
36202109 2025 Page 87 of 124
3621-(1)isnotenforceableagainstthepersonobligatedonthepromissory
3622-noteortheaccountdebtor;
3623-(2)doesnotimposeadutyorobligationonthepersonobligatedonthe
3624-promissorynoteortheaccountdebtor;
3625-(3)doesnotrequirethepersonobligatedonthepromissorynoteorthe
3626-accountdebtortorecognizethesecurityinterest,payorrenderperformanceto
3627-thesecuredparty,oracceptpaymentorperformancefromthesecuredparty;
3628-(4)doesnotentitlethesecuredpartytouseorassignthedebtor’srights
3629-underthepromissorynote,healthcareinsurancereceivable,orgeneral
3630-intangible,includinganyrelatedinformationormaterialsfurnishedtothe
3631-debtorinthetransactiongivingrisetothepromissorynote,healthcare
3632-insurancereceivable,orgeneralintangible;
3633-(5)doesnotentitlethesecuredpartytouse,assign,possess,orhave
3634-accesstoanytradesecretsorconfidentialinformationofthepersonobligated
3635-onthepromissorynoteortheaccountdebtor;and
3636-(6)doesnotentitlethesecuredpartytoenforcethesecurityinterestin
3637-thepromissorynote,healthcareinsurancereceivable,orgeneralintangible.
3638-(e)Thissectionprevailsoveranyinconsistentprovisionsofthistitle.
3639-(f)Thissectiondoesnotapplytoasecurityinterestinanownership
3640-interestinageneralpartnership,limitedpartnership,orlimitedliability
3641-company.
3642-1
3643-2
3644-3
3645-4
3646-5
3647-6
3648-7
3649-8
3650-9
3651-10
3652-11
3653-12
3654-13
3655-14
3656-15
3657-16
3658-17
3659-18
3660-19
3661-20
3662-21 BILLASPASSEDBYTHEHOUSE H.206
2110+
2111+
2112+VT LEG #378799 v.1
2113+(1) is not enforceable against the person obligated on the promissory 1
2114+note or the account debtor; 2
2115+(2) does not impose a duty or obligation on the person obligated on the 3
2116+promissory note or the account debtor; 4
2117+(3) does not require the person obligated on the promissory note or the 5
2118+account debtor to recognize the security interest, pay or render performance to 6
2119+the secured party, or accept payment or performance from the secured party; 7
2120+(4) does not entitle the secured party to use or assign the debtor’s rights 8
2121+under the promissory note, health care insurance receivable, or general 9
2122+intangible, including any related information or materials furnished to the 10
2123+debtor in the transaction giving rise to the promissory note, health care 11
2124+insurance receivable, or general intangible; 12
2125+(5) does not entitle the secured party to use, assign, possess, or have 13
2126+access to any trade secrets or confidential information of the person obligated 14
2127+on the promissory note or the account debtor; and 15
2128+(6) does not entitle the secured party to enforce the security interest in 16
2129+the promissory note, health care insurance receivable, or general intangible. 17
2130+(e) This section prevails over any inconsistent provisions of this title. 18
2131+(f) This section does not apply to a security interest in an ownership 19
2132+interest in a general partnership, limited partnership, or limited liability 20
2133+company. 21 BILL AS INTRODUCED H.206
36632134 2025 Page 88 of 124
3664-(g)Inthissection,“promissorynote”includesanegotiableinstrumentthat
3665-evidenceschattelpaper.
3666-***
3667-§9—509.PERSONSENTITLEDTOFILEARECORD
3668-(a)Apersonmayfileaninitialfinancingstatement,amendmentthatadds
3669-collateralcoveredbyafinancingstatement,oramendmentthataddsadebtor
3670-toafinancingstatementonlyif:
3671-(1)thedebtorauthorizesthefilinginanauthenticatedasignedrecordor
3672-pursuanttosubsection(b)or(c)ofthissection;or
3673-(2)thepersonholdsanagriculturallienthathasbecomeeffectiveatthe
3674-timeoffilingandthefinancingstatementcoversonlycollateralinwhichthe
3675-personholdsanagriculturallien.
3676-(b)Byauthenticatingsigningorbecomingboundasdebtorbyasecurity
3677-agreement,adebtorornewdebtorauthorizesthefilingofaninitialfinancing
3678-statement,andanamendment,covering:
3679-***
3680-§9—513.TERMINATIONSTATEMENT
3681-***
3682-(b)Tocomplywithsubsection(a)ofthissection,asecuredpartyshall
3683-causethesecuredpartyofrecordtofiletheterminationstatement:
3684-1
3685-2
3686-3
3687-4
3688-5
3689-6
3690-7
3691-8
3692-9
3693-10
3694-11
3695-12
3696-13
3697-14
3698-15
3699-16
3700-17
3701-18
3702-19
3703-20 BILLASPASSEDBYTHEHOUSE H.206
2135+
2136+
2137+VT LEG #378799 v.1
2138+(g) In this section, “promissory note” includes a negotiable instrument that 1
2139+evidences chattel paper. 2
2140+* * * 3
2141+§ 9—509. PERSONS ENTITLED TO FILE A RECORD 4
2142+(a) A person may file an initial financing statement, amendment that adds 5
2143+collateral covered by a financing statement, or amendment that adds a debtor to 6
2144+a financing statement only if: 7
2145+(1) the debtor authorizes the filing in an authenticated a signed record or 8
2146+pursuant to subsection (b) or (c) of this section; or 9
2147+(2) the person holds an agricultural lien that has become effective at the 10
2148+time of filing and the financing statement covers only collateral in which the 11
2149+person holds an agricultural lien. 12
2150+(b) By authenticating signing or becoming bound as debtor by a security 13
2151+agreement, a debtor or new debtor authorizes the filing of an initial financing 14
2152+statement, and an amendment, covering: 15
2153+* * * 16
2154+§ 9—513. TERMINATION STATEMENT 17
2155+* * * 18
2156+(b) To comply with subsection (a) of this section, a secured party shall 19
2157+cause the secured party of record to file the termination statement: 20 BILL AS INTRODUCED H.206
37042158 2025 Page 89 of 124
3705-(1)withinonemonthafterthereisnoobligationsecuredbythe
3706-collateralcoveredbythefinancingstatementandnocommitmenttomakean
3707-advance,incuranobligation,orotherwisegivevalue;or
3708-(2)ifearlier,within20daysafterthesecuredpartyreceivesan
3709-authenticatedasigneddemandfromadebtor.
3710-(c)Incasesnotgovernedbysubsection(a)ofthissection,within20days
3711-afterasecuredpartyreceivesanauthenticatedasigneddemandfromadebtor,
3712-thesecuredpartyshallcausethesecuredpartyofrecordforafinancing
3713-statementtosendtothedebtoraterminationstatementforthefinancing
3714-statementorfiletheterminationstatementinthefilingofficeif:
3715-***
3716-§9—601.RIGHTSAFTERDEFAULT;JUDICIALENFORCEMENT;
3717-CONSIGNORORBUYERACCOUNTS;CHATTELPAPER,
3718-PAYMENTINTANGIBLES,ORPROMISSORYNOTES
3719-***
3720-(b)Asecuredpartyinpossessionofcollateralorcontrolofcollateralunder
3721-section7—106,9—104,9—105,9—105A,9—106,or9—107,or9—107A
3722-ofthistitlehastherightsanddutiesprovidedinsection9—207ofthistitle.
3723-***
3724-1
3725-2
3726-3
3727-4
3728-5
3729-6
3730-7
3731-8
3732-9
3733-10
3734-11
3735-12
3736-13
3737-14
3738-15
3739-16
3740-17
3741-18
3742-19 BILLASPASSEDBYTHEHOUSE H.206
2159+
2160+
2161+VT LEG #378799 v.1
2162+(1) within one month after there is no obligation secured by the 1
2163+collateral covered by the financing statement and no commitment to make an 2
2164+advance, incur an obligation, or otherwise give value; or 3
2165+(2) if earlier, within 20 days after the secured party receives an 4
2166+authenticated a signed demand from a debtor. 5
2167+(c) In cases not governed by subsection (a) of this section, within 20 days 6
2168+after a secured party receives an authenticated a signed demand from a debtor, 7
2169+the secured party shall cause the secured party of record for a financing 8
2170+statement to send to the debtor a termination statement for the financing 9
2171+statement or file the termination statement in the filing office if: 10
2172+* * * 11
2173+§ 9—601. RIGHTS AFTER DEFAULT; JUDICIAL ENFORCEMENT; 12
2174+ CONSIGNOR OR BUYER ACCOUNTS; CHATTEL PAPER, 13
2175+ PAYMENT INTANGIBLES, OR PROMISSORY NOTES 14
2176+* * * 15
2177+(b) A secured party in possession of collateral or control of collateral under 16
2178+section 7—106, 9—104, 9—105, 9—105A, 9—106, or 9—107, or 9—107A of 17
2179+this title has the rights and duties provided in section 9—207 of this title. 18
2180+* * * 19 BILL AS INTRODUCED H.206
37432181 2025 Page 90 of 124
3744-§9—605.UNKNOWN DEBTORORSECONDARYOBLIGOR
3745-(a)AExceptasprovidedinsubsection(b)ofthissection,asecuredparty
3746-doesnotoweadutybasedonitsstatusassecuredparty:
3747-***
3748-(b)Asecuredpartyowesadutybasedonitsstatusasasecuredpartytoa
3749-personif,atthetimethesecuredpartyobtainscontrolofcollateralthatisa
3750-controllableaccount,controllableelectronicrecord,orcontrollablepayment
3751-intangibleoratthetimethesecurityinterestattachestothecollateral,
3752-whicheverislater:
3753-(1)thepersonisadebtororobligor;and
3754-(2)thesecuredpartyknowsthattheinformationinsubdivision
3755-(a)(1)(A),(B),or(C)ofthissectionrelatingtothepersonisnotprovidedby
3756-thecollateral,arecordattachedtoorlogicallyassociatedwiththecollateral,or
3757-thesysteminwhichthecollateralisrecorded.
3758-***
3759-§9—608.APPLICATIONOFPROCEEDSOFCOLLECTIONOR
3760-ENFORCEMENT;LIABILITYFORDEFICIENCYANDRIGHT
3761-TOSURPLUS
3762-(a)Ifasecurityinterestoragriculturalliensecurespaymentor
3763-performanceofanobligation,thefollowingrulesapply:
3764-1
3765-2
3766-3
3767-4
3768-5
3769-6
3770-7
3771-8
3772-9
3773-10
3774-11
3775-12
3776-13
3777-14
3778-15
3779-16
3780-17
3781-18
3782-19
3783-20 BILLASPASSEDBYTHEHOUSE H.206
2182+
2183+
2184+VT LEG #378799 v.1
2185+§ 9—605. UNKNOWN DEBTOR OR SECONDARY OBLIGOR 1
2186+(a)A Except as provided in subsection (b) of this section, a secured party 2
2187+does not owe a duty based on its status as secured party: 3
2188+* * * 4
2189+(b) A secured party owes a duty based on its status as a secured party to a 5
2190+person if, at the time the secured party obtains control of collateral that is a 6
2191+controllable account, controllable electronic record, or controllable payment 7
2192+intangible or at the time the security interest attaches to the collateral, 8
2193+whichever is later: 9
2194+(1) the person is a debtor or obligor; and 10
2195+(2) the secured party knows that the information in subdivision 11
2196+(a)(1)(A), (B), or (C) of this section relating to the person is not provided by 12
2197+the collateral, a record attached to or logically associated with the collateral, or 13
2198+the system in which the collateral is recorded. 14
2199+* * * 15
2200+§ 9—608. APPLICATION OF PROCEEDS OF COLLECTION OR 16
2201+ ENFORCEMENT; LIABILITY FOR DEFICIENCY AND RIGHT 17
2202+ TO SURPLUS 18
2203+(a) If a security interest or agricultural lien secures payment or performance 19
2204+of an obligation, the following rules apply: 20 BILL AS INTRODUCED H.206
37842205 2025 Page 91 of 124
3785-(1)Asecuredpartyshallapplyorpayoverforapplicationthecash
3786-proceedsofcollectionorenforcementundersection9—607ofthistitleinthe
3787-followingorderto:
3788-***
3789-(C)thesatisfactionofobligationssecuredbyanysubordinate
3790-securityinterestinorotherlienonthecollateralsubjecttothesecurityinterest
3791-oragriculturallienunderwhichthecollectionorenforcementismadeifthe
3792-securedpartyreceivesanauthenticatedasigneddemandforproceedsbefore
3793-distributionoftheproceedsiscompleted.
3794-***
3795-§9—611.NOTIFICATIONBEFOREDISPOSITIONOFCOLLATERAL
3796-(a)Inthissection,“notificationdate”meanstheearlierofthedateon
3797-which:
3798-(1)asecuredpartysendstothedebtorandanysecondaryobligoran
3799-authenticatedasignednotificationofdisposition;or
3800-(2)thedebtorandanysecondaryobligorwaivetherighttonotification.
3801-(b)Exceptasotherwiseprovidedinsubsection(d)ofthissection,asecured
3802-partythatdisposesofcollateralundersection9—610ofthistitleshallsendto
3803-thepersonsspecifiedinsubsection(c)ofthissectionareasonable
3804-authenticatedsignednotificationofdisposition.
3805-1
3806-2
3807-3
3808-4
3809-5
3810-6
3811-7
3812-8
3813-9
3814-10
3815-11
3816-12
3817-13
3818-14
3819-15
3820-16
3821-17
3822-18
3823-19
3824-20 BILLASPASSEDBYTHEHOUSE H.206
2206+
2207+
2208+VT LEG #378799 v.1
2209+(1) A secured party shall apply or pay over for application the cash 1
2210+proceeds of collection or enforcement under section 9—607 of this title in the 2
2211+following order to: 3
2212+* * * 4
2213+(C) the satisfaction of obligations secured by any subordinate 5
2214+security interest in or other lien on the collateral subject to the security interest 6
2215+or agricultural lien under which the collection or enforcement is made if the 7
2216+secured party receives an authenticated a signed demand for proceeds before 8
2217+distribution of the proceeds is completed. 9
2218+* * * 10
2219+§ 9—611. NOTIFICATION BEFORE DISPOSITION OF COLLATERAL 11
2220+(a) In this section, “notification date” means the earlier of the date on 12
2221+which: 13
2222+(1) a secured party sends to the debtor and any secondary obligor an 14
2223+authenticated a signed notification of disposition; or 15
2224+(2) the debtor and any secondary obligor waive the right to notification. 16
2225+(b) Except as otherwise provided in subsection (d) of this section, a secured 17
2226+party that disposes of collateral under section 9—610 of this title shall send to 18
2227+the persons specified in subsection (c) of this section a reasonable 19
2228+authenticated signed notification of disposition. 20 BILL AS INTRODUCED H.206
38252229 2025 Page 92 of 124
3826-(c)Tocomplywithsubsection(b)ofthissection,thesecuredpartyshall
3827-sendanauthenticatedasignednotificationofdispositionto:
3828-***
3829-(3)ifthecollateralisotherthanconsumergoods:
3830-(A)anyotherpersonfromwhichthesecuredpartyhasreceived,
3831-beforethenotificationdate,anauthenticatedasignednotificationofaclaimof
3832-aninterestinthecollateral;
3833-***
3834-(e)Asecuredpartycomplieswiththerequirementfornotification
3835-prescribedinsubdivision(c)(3)(B)ofthissectionif:
3836-***
3837-(2)beforethenotificationdate,thesecuredparty:
3838-(A)didnotreceivearesponsetotherequestforinformation;or
3839-(B)receivedaresponsetotherequestforinformationandsentan
3840-authenticatedasignednotificationofdispositiontoeachsecuredpartynamed
3841-inthatresponsewhosefinancingstatementcoveredthecollateral.
3842-***
3843-§9—613.CONTENTSANDFORMOFNOTIFICATIONBEFORE
3844-DISPOSITIONOFCOLLATERAL:GENERAL
3845-(a)Exceptinaconsumer-goodstransaction,thefollowingrulesapply:
3846-***
3847-1
3848-2
3849-3
3850-4
3851-5
3852-6
3853-7
3854-8
3855-9
3856-10
3857-11
3858-12
3859-13
3860-14
3861-15
3862-16
3863-17
3864-18
3865-19
3866-20
3867-21 BILLASPASSEDBYTHEHOUSE H.206
2230+
2231+
2232+VT LEG #378799 v.1
2233+(c) To comply with subsection (b) of this section, the secured party shall 1
2234+send an authenticated a signed notification of disposition to: 2
2235+* * * 3
2236+(3) if the collateral is other than consumer goods: 4
2237+(A) any other person from which the secured party has received, 5
2238+before the notification date, an authenticated a signed notification of a claim of 6
2239+an interest in the collateral; 7
2240+* * * 8
2241+(e) A secured party complies with the requirement for notification 9
2242+prescribed in subdivision (c)(3)(B) of this section if: 10
2243+* * * 11
2244+(2) before the notification date, the secured party: 12
2245+(A) did not receive a response to the request for information; or 13
2246+(B) received a response to the request for information and sent an 14
2247+authenticated a signed notification of disposition to each secured party named 15
2248+in that response whose financing statement covered the collateral. 16
2249+* * * 17
2250+§ 9—613. CONTENTS AND FORM OF NOTIFICATION BEFORE 18
2251+ DISPOSITION OF COLLATERAL: GENERAL 19
2252+(a) Except in a consumer-goods transaction, the following rules apply: 20
2253+* * * 21 BILL AS INTRODUCED H.206
38682254 2025 Page 93 of 124
3869-(5)Thefollowingformofnotificationandtheformappearingin
3870-subdivision9—614(3)9—614(a)(3)ofthistitle,whencompletedin
3871-accordancewiththeinstructionsinsubsection(b)ofthissectionand
3872-subsection9—614(b)ofthistitle,eachprovidessufficientinformation:
3873-NOTIFICATIONOFDISPOSITIONOFCOLLATERAL
3874-To:[Nameofdebtor,obligor,orotherpersontowhichthenotificationissent
3875-]
3876-From:[Name,address,andtelephonenumberofsecuredparty]
3877-NameofDebtor(s):[Includeonlyifdebtor(s)arenotanaddressee]
3878-Forapublicdisposition:
3879-Wewillsellthe[describecollateral]tothehighestqualifiedbidderinpublic
3880-asfollows:
3881-DayandDate:_______________
3882-Time:__________________
3883-Place:__________________
3884-Foraprivatedisposition:
3885-Wewillsellthe[describecollateral]privatelysometimeafter[dayanddate
3886-].
3887-Youareentitledtoanaccountingoftheunpaidindebtednesssecuredbythe
3888-propertythatweintendtosell.Youmayrequestanaccountingbycallingusat
3889-[telephonenumber].
3890-1
3891-2
3892-3
3893-4
3894-5
3895-6
3896-7
3897-8
3898-9
3899-10
3900-11
3901-12
3902-13
3903-14
3904-15
3905-16
3906-17
3907-18
3908-19
3909-20
3910-21 BILLASPASSEDBYTHEHOUSE H.206
2255+
2256+
2257+VT LEG #378799 v.1
2258+(5) The following form of notification and the form appearing in 1
2259+subdivision 9—614(3) 9—614(a)(3) of this title, when completed in 2
2260+accordance with the instructions in subsection (b) of this section and 3
2261+subsection 9—614(b) of this title, each provides sufficient information: 4
2262+NOTIFICATION OF DISPOSITION OF COLLATERAL 5
2263+To: [Name of debtor, obligor, or other person to which the notification is sent 6
2264+] 7
2265+From: [Name, address, and telephone number of secured party ] 8
2266+Name of Debtor(s): [Include only if debtor(s) are not an addressee ] 9
2267+For a public disposition: 10
2268+We will sell the [describe collateral ] to the highest qualified bidder in public 11
2269+as follows: 12
2270+Day and Date: _______________ 13
2271+Time: __________________ 14
2272+Place: __________________ 15
2273+For a private disposition: 16
2274+We will sell the [describe collateral ] privately sometime after [day and date ]. 17
2275+You are entitled to an accounting of the unpaid indebtedness secured by the 18
2276+property that we intend to sell. You may request an accounting by calling us at 19
2277+[telephone number ]. 20 BILL AS INTRODUCED H.206
39112278 2025 Page 94 of 124
3912-NOTIFICATIONOFDISPOSITIONOFCOLLATERAL
3913-To:(Nameofdebtor,obligor,orotherpersontowhichthenotificationissent)
3914-From:(Name,address,andtelephonenumberofsecuredparty)
3915-{1}Nameofanydebtorthatisnotanaddressee:(Nameofeachdebtor)
3916-{2}Wewillsell (describecollateral)(tothehighestqualifiedbidder)at
3917-publicsale.Asalecouldincludealeaseorlicense.Thesalewillbeheldas
3918-follows:
3919-(Date)
3920-(Time)
3921-(Place)
3922-{3}Wewillsell(describecollateral)atprivatesalesometimeafter (date).
3923-Asalecouldincludealeaseorlicense.
3924-{4}Youareentitledtoanaccountingoftheunpaidindebtednesssecured
3925-bythepropertythatweintendtosellor,asapplicable,leaseorlicense.
3926-{5}Ifyourequestanaccountingyoumustpayachargeof$(amount).
3927-{6}Youmayrequestanaccountingbycallingusat(telephonenumber).
3928-(b)Thefollowinginstructionsapplytotheformofnotificationin
3929-subdivision(a)(5)ofthissection:
3930-(1)Theinstructionsinthissubsectionrefertothenumbersinbraces
3931-beforeitemsintheformofnotificationinsubdivision(a)(5)ofthissection.
3932-Donotincludethenumbersorbracesinthenotification.Thenumbersand
3933-1
3934-2
3935-3
3936-4
3937-5
3938-6
3939-7
3940-8
3941-9
3942-10
3943-11
3944-12
3945-13
3946-14
3947-15
3948-16
3949-17
3950-18
3951-19
3952-20
3953-21 BILLASPASSEDBYTHEHOUSE H.206
2279+
2280+
2281+VT LEG #378799 v.1
2282+NOTIFICATION OF DISPOSITION OF COLLATERAL 1
2283+To: (Name of debtor, obligor, or other person to which the notification is sent) 2
2284+From: (Name, address, and telephone number of secured party) 3
2285+ {1} Name of any debtor that is not an addressee: (Name of each debtor) 4
2286+ {2} We will sell (describe collateral) (to the highest qualified bidder) at 5
2287+public sale. A sale could include a lease or license. The sale will be held as 6
2288+follows: 7
2289+ (Date) 8
2290+ (Time) 9
2291+ (Place) 10
2292+ {3} We will sell (describe collateral) at private sale sometime after (date). 11
2293+A sale could include a lease or license. 12
2294+ {4} You are entitled to an accounting of the unpaid indebtedness secured 13
2295+by the property that we intend to sell or, as applicable, lease or license. 14
2296+{5} If you request an accounting you must pay a charge of $ (amount). 15
2297+{6} You may request an accounting by calling us at (telephone number). 16
2298+(b) The following instructions apply to the form of notification in 17
2299+subdivision (a)(5) of this section: 18
2300+(1) The instructions in this subsection refer to the numbers in braces 19
2301+before items in the form of notification in subdivision (a)(5) of this section. 20
2302+Do not include the numbers or braces in the notification. The numbers and 21 BILL AS INTRODUCED H.206
39542303 2025 Page 95 of 124
3955-bracesareusedonlyforthepurposeoftheseinstructions.
3956-(2)Includeandcompleteitem{1}onlyifthereisadebtorthatisnotan
3957-addresseeofthenotificationandlistthenameornames.
3958-(3)Includeandcompleteeitheritem{2},ifthenotificationrelatestoa
3959-publicdispositionofthecollateral,oritem{3},ifthenotificationrelatestoa
3960-privatedispositionofthecollateral.Ifitem{2}isincluded,includethewords
3961-“tothehighestqualifiedbidder”onlyifapplicable.
3962-(4)Includeandcompleteitems{4}and{6}.
3963-(5)Includeandcompleteitem{5}onlyifthesenderwillchargethe
3964-recipientforanaccounting.
3965-§9—614.CONTENTSANDFORMOFNOTIFICATIONBEFORE
3966-DISPOSITIONOFCOLLATERAL;CONSUMERGOODS
3967-TRANSACTION
3968-(a)Inaconsumergoodstransaction,thefollowingrulesapply:
3969-(1)Anotificationofdispositionmustprovidethefollowing
3970-information:
3971-(A)theinformationspecifiedinsubdivision9—613(1)9—613(a)(1)
3972-ofthistitle;
3973-***
3974-1
3975-2
3976-3
3977-4
3978-5
3979-6
3980-7
3981-8
3982-9
3983-10
3984-11
3985-12
3986-13
3987-14
3988-15
3989-16
3990-17
3991-18
3992-19 BILLASPASSEDBYTHEHOUSE H.206
2304+
2305+
2306+VT LEG #378799 v.1
2307+braces are used only for the purpose of these instructions. 1
2308+(2) Include and complete item {1} only if there is a debtor that is not an 2
2309+addressee of the notification and list the name or names. 3
2310+(3) Include and complete either item {2}, if the notification relates to a 4
2311+public disposition of the collateral, or item {3}, if the notification relates to a 5
2312+private disposition of the collateral. If item {2} is included, include the words 6
2313+“to the highest qualified bidder” only if applicable. 7
2314+(4) Include and complete items {4} and {6}. 8
2315+(5) Include and complete item {5} only if the sender will charge the 9
2316+recipient for an accounting. 10
2317+§ 9—614. CONTENTS AND FORM OF NOTIFICATION BEFORE 11
2318+ DISPOSITION OF COLLATERAL; CONSUMER GOODS 12
2319+ TRANSACTION 13
2320+(a) In a consumer goods transaction, the following rules apply: 14
2321+(1) A notification of disposition must provide the following information: 15
2322+(A) the information specified in subdivision 9—613(1) 9—613(a)(1) 16
2323+of this title; 17
2324+* * * 18
2325+(3) The following form of notification, when completed in accordance 19
2326+with the instructions in subsection (b) of this section, provides sufficient 20
2327+information: 21 BILL AS INTRODUCED H.206
39932328 2025 Page 96 of 124
3994-(3)Thefollowingformofnotification,whencompletedinaccordance
3995-withtheinstructionsinsubsection(b)ofthissection,providessufficient
3996-information:
3997-.........................................[Nameandaddressofsecuredparty]
3998-.........................................
3999-.........................................[Date].........................................
4000-NOTICEOFOURPLANTOSELLPROPERTY
4001-.........................................[Nameandaddressofanyobligorwhoisalsoa
4002-debtor].........................................
4003-Subject:.........................................[IdentificationofTransaction]
4004-.........................................
4005-Wehaveyour...........[describecollateral]...........,becauseyoubroke
4006-promisesinouragreement.
4007-Forapublicdisposition:
4008-Wewillsell...........[describecollateral]...........atpublicsale.Asalecould
4009-includealeaseorlicense.Thesalewillbeheldasfollows:
4010-Date:.........................................
4011-Time:.........................................
4012-Place:.........................................
4013-Youmayattendthesaleandbringbiddersifyouwant.
4014-or
4015-1
4016-2
4017-3
4018-4
4019-5
4020-6
4021-7
4022-8
4023-9
4024-10
4025-11
4026-12
4027-13
4028-14
4029-15
4030-16
4031-17
4032-18
4033-19
4034-20
4035-21 BILLASPASSEDBYTHEHOUSE H.206
2329+
2330+
2331+VT LEG #378799 v.1
2332+......................................... [Name and address of secured party ] 1
2333+......................................... 2
2334+......................................... [Date ] ......................................... 3
2335+NOTICE OF OUR PLAN TO SELL PROPERTY 4
2336+......................................... [Name and address of any obligor who is also a 5
2337+debtor ] ......................................... 6
2338+Subject: ......................................... [Identification of Transaction ] 7
2339+......................................... 8
2340+We have your ........... [describe collateral ] ........... , because you broke 9
2341+promises in our agreement. 10
2342+For a public disposition: 11
2343+We will sell ........... [describe collateral ] ........... at public sale. A sale could 12
2344+include a lease or license. The sale will be held as follows: 13
2345+Date: ......................................... 14
2346+Time: ......................................... 15
2347+Place: ......................................... 16
2348+You may attend the sale and bring bidders if you want. 17
2349+or 18
2350+For a private disposition: 19
2351+We will sell ........... [describe collateral ] ........... at private sale sometime after 20
2352+...... [date ] ...... . A sale could include a lease or license. 21 BILL AS INTRODUCED H.206
40362353 2025 Page 97 of 124
4037-Foraprivatedisposition:
4038-Wewillsell...........[describecollateral]...........atprivatesalesometimeafter
4039-......[date].......Asalecouldincludealeaseorlicense.
4040-Themoneythatwegetfromthesale(afterpayingourcosts)willreducethe
4041-amountyouowe.Ifwegetlessmoneythanyouowe,you......[willorwill
4042-not,asapplicable]......stilloweusthedifference.Ifwegetmoremoneythan
4043-youowe,youwillgettheextramoney,unlesswemustpayittosomeoneelse.
4044-Youcangetthepropertybackatanytimebeforewesellitbypayingusthe
4045-fullamountyouowe(notjustthepastduepayments),includingourexpenses.
4046-Tolearntheexactamountyoumustpay,callusat.............[telephonenumber
4047-]..........................................
4048-Ifyouwantustoexplaintoyouinwritinghowwehavefiguredtheamount
4049-thatyouoweus,youmaycallusat.............[telephonenumber].............or
4050-writeusat..................[securedparty’saddress]....................andrequesta
4051-writtenexplanation.Wewillchargeyou$.....fortheexplanationifwesent
4052-youanotherwrittenexplanationoftheamountyouoweuswithinthelastsix
4053-months.
4054-Ifyouneedmoreinformationaboutthesalecallusat.............[telephone
4055-number].............orwriteusat....................[securedparty’saddress]
4056-.....................
4057-1
4058-2
4059-3
4060-4
4061-5
4062-6
4063-7
4064-8
4065-9
4066-10
4067-11
4068-12
4069-13
4070-14
4071-15
4072-16
4073-17
4074-18
4075-19
4076-20 BILLASPASSEDBYTHEHOUSE H.206
2354+
2355+
2356+VT LEG #378799 v.1
2357+The money that we get from the sale (after paying our costs) will reduce the 1
2358+amount you owe. If we get less money than you owe, you ...... [will or will not, 2
2359+as applicable ] ...... still owe us the difference. If we get more money than you 3
2360+owe, you will get the extra money, unless we must pay it to someone else. 4
2361+You can get the property back at any time before we sell it by paying us the 5
2362+full amount you owe (not just the past due payments), including our expenses. 6
2363+To learn the exact amount you must pay, call us at ............. [telephone number 7
2364+] ......................................... . 8
2365+If you want us to explain to you in writing how we have figured the amount 9
2366+that you owe us, you may call us at ............. [telephone number ] ............. or 10
2367+write us at .................. [secured party’s address ] .................... and request a 11
2368+written explanation. We will charge you $..... for the explanation if we sent you 12
2369+another written explanation of the amount you owe us within the last six 13
2370+months. 14
2371+If you need more information about the sale call us at ............. [telephone 15
2372+number ] ............. or write us at .................... [secured party’s address ] 16
2373+.................... . 17
2374+We are sending this notice to the following other people who have an interest 18
2375+in ...... [describe collateral ] ...... or who owe money under your agreement: 19
2376+............... [it Names of all other debtors and obligors, if any ] ............... 20
2377+(Name and address of secured party) 21 BILL AS INTRODUCED H.206
40772378 2025 Page 98 of 124
4078-Wearesendingthisnoticetothefollowingotherpeoplewhohaveaninterest
4079-in......[describecollateral]......orwhoowemoneyunderyouragreement:
4080-...............[itNamesofallotherdebtorsandobligors,ifany]...............
4081-(Nameandaddressofsecuredparty)
4082-(Date)
4083-NOTICEOFOURPLANTOSELLPROPERTY
4084-(Nameandaddressofanyobligorwhoisalsoadebtor)
4085-Subject:(Identifytransaction)
4086-Wehaveyour(describecollateral),becauseyoubrokepromisesinour
4087-agreement.
4088-{1}Wewillsell (describecollateral)atpublicsale.Asalecouldincludea
4089-leaseorlicense.Thesalewillbeheldasfollows:
4090-(Date)
4091-(Time)
4092-(Place)
4093-Youmayattendthesaleandbringbiddersifyouwant.
4094-{2}Wewillsell(describecollateral)atprivatesalesometimeafter (date).
4095-Asalecouldincludealeaseorlicense.
4096-{3}Themoneythatwegetfromthesale,afterpayingourcosts,will
4097-reducetheamountyouowe.Ifwegetlessmoneythanyouowe,you (willor
4098-willnot,asapplicable) stilloweusthedifference.Ifwegetmoremoneythan
4099-1
4100-2
4101-3
4102-4
4103-5
4104-6
4105-7
4106-8
4107-9
4108-10
4109-11
4110-12
4111-13
4112-14
4113-15
4114-16
4115-17
4116-18
4117-19
4118-20
4119-21 BILLASPASSEDBYTHEHOUSE H.206
2379+
2380+
2381+VT LEG #378799 v.1
2382+(Date) 1
2383+NOTICE OF OUR PLAN TO SELL PROPERTY 2
2384+(Name and address of any obligor who is also a debtor) 3
2385+Subject: (Identify transaction) 4
2386+ We have your (describe collateral), because you broke promises in our 5
2387+agreement. 6
2388+ {1} We will sell (describe collateral) at public sale. A sale could include a 7
2389+lease or license. The sale will be held as follows: 8
2390+ (Date) 9
2391+ (Time) 10
2392+ (Place) 11
2393+ You may attend the sale and bring bidders if you want. 12
2394+ {2} We will sell (describe collateral) at private sale sometime after (date). 13
2395+A sale could include a lease or license. 14
2396+ {3} The money that we get from the sale, after paying our costs, will 15
2397+reduce the amount you owe. If we get less money than you owe, you (will or 16
2398+will not, as applicable) still owe us the difference. If we get more money than 17
2399+you owe, you will get the extra money, unless we must pay it to someone else. 18
2400+ {4} You can get the property back at any time before we sell it by paying 19
2401+us the full amount you owe, not just the past due payments, including our 20
2402+expenses. To learn the exact amount you must pay, call us at (telephone 21 BILL AS INTRODUCED H.206
41202403 2025 Page 99 of 124
4121-youowe,youwillgettheextramoney,unlesswemustpayittosomeoneelse.
4122-{4}Youcangetthepropertybackatanytimebeforewesellitbypaying
4123-usthefullamountyouowe,notjustthepastduepayments,includingour
4124-expenses.Tolearntheexactamountyoumustpay,callusat(telephone
4125-number).
4126-{5}Ifyouwantustoexplaintoyouin(writing)(writingorin(description
4127-ofelectronicrecord))(descriptionofelectronicrecord)howwehavefigured
4128-theamountthatyouoweus,{6}callusat(telephonenumber)(or)(writeusat
4129-(securedparty’saddress))(orcontactusby (descriptionofelectronic
4130-communicationmethod)){7}andrequest(awrittenexplanation)(awritten
4131-explanationoranexplanationin(descriptionofelectronicrecord))(an
4132-explanationin(descriptionofelectronicrecord)).
4133-{8}Wewillchargeyou$(amount)fortheexplanationifwesentyou
4134-anotherwrittenexplanationoftheamountyouoweuswithinthelastsix
4135-months.
4136-{9}Ifyouneedmoreinformationaboutthesale(callusat(telephone
4137-number))(or)(writeusat(securedparty’saddress))(orcontactusby
4138-(descriptionofelectroniccommunicationmethod)).
4139-{10}Wearesendingthisnoticetothefollowingotherpeoplewhohavean
4140-interestin(describecollateral) orwhoowemoneyunderyouragreement:
4141-(Namesofallotherdebtorsandobligors,ifany)
4142-1
4143-2
4144-3
4145-4
4146-5
4147-6
4148-7
4149-8
4150-9
4151-10
4152-11
4153-12
4154-13
4155-14
4156-15
4157-16
4158-17
4159-18
4160-19
4161-20
4162-21 BILLASPASSEDBYTHEHOUSE H.206
2404+
2405+
2406+VT LEG #378799 v.1
2407+number). 1
2408+ {5} If you want us to explain to you in (writing) (writing or in (description 2
2409+of electronic record)) (description of electronic record) how we have figured 3
2410+the amount that you owe us, {6} call us at (telephone number) (or) (write us at 4
2411+(secured party’s address)) (or contact us by (description of electronic 5
2412+communication method)) {7} and request (a written explanation) (a written 6
2413+explanation or an explanation in (description of electronic record)) (an 7
2414+explanation in (description of electronic record)). 8
2415+ {8} We will charge you $ (amount) for the explanation if we sent you 9
2416+another written explanation of the amount you owe us within the last six 10
2417+months. 11
2418+ {9} If you need more information about the sale (call us at (telephone 12
2419+number)) (or) (write us at (secured party’s address)) (or contact us by 13
2420+(description of electronic communication method)). 14
2421+ {10} We are sending this notice to the following other people who have an 15
2422+interest in (describe collateral) or who owe money under your agreement: 16
2423+(Names of all other debtors and obligors, if any) 17
2424+* * * 18
2425+(b) The following instructions apply to the form of notification in 19
2426+subdivision (a)(3) of this section: 20
2427+(1) The instructions in this subsection refer to the numbers in braces 21 BILL AS INTRODUCED H.206
41632428 2025 Page 100 of 124
4164-***
4165-(b)Thefollowinginstructionsapplytotheformofnotificationin
4166-subdivision(a)(3)ofthissection:
4167-(1)Theinstructionsinthissubsectionrefertothenumbersinbraces
4168-beforeitemsintheformofnotificationinsubdivision(a)(3)ofthissection.
4169-Donotincludethenumbersorbracesinthenotification.Thenumbersand
4170-bracesareusedonlyforthepurposeoftheseinstructions.
4171-(2)Includeandcompleteeitheritem{1},ifthenotificationrelatestoa
4172-publicdispositionofthecollateral,oritem{2},ifthenotificationrelatestoa
4173-privatedispositionofthecollateral.
4174-(3)Includeandcompleteitems{3},{4},{5},{6},and{7}.
4175-(4)Initem{5},includeandcompleteanyoneofthethreealternative
4176-methodsfortheexplanation—writing,writingorelectronicrecord,or
4177-electronicrecord.
4178-(5)Initem{6},includethetelephonenumber.Inaddition,thesender
4179-mayincludeandcompleteeitherorbothofthetwoadditionalalternative
4180-methodsofcommunication—writingorelectroniccommunication—forthe
4181-recipientofthenotificationtocommunicatewiththesender.Neitherofthe
4182-twoadditionalmethodsofcommunicationisrequiredtobeincluded.
4183-(6)Initem{7},includeandcompletethemethodormethodsforthe
4184-explanation—writing,writingorelectronicrecord,orelectronicrecord—
4185-1
4186-2
4187-3
4188-4
4189-5
4190-6
4191-7
4192-8
4193-9
4194-10
4195-11
4196-12
4197-13
4198-14
4199-15
4200-16
4201-17
4202-18
4203-19
4204-20
4205-21 BILLASPASSEDBYTHEHOUSE H.206
2429+
2430+
2431+VT LEG #378799 v.1
2432+before items in the form of notification in subdivision (a)(3) of this section. 1
2433+Do not include the numbers or braces in the notification. The numbers and 2
2434+braces are used only for the purpose of these instructions. 3
2435+(2) Include and complete either item {1}, if the notification relates to a 4
2436+public disposition of the collateral, or item {2}, if the notification relates to a 5
2437+private disposition of the collateral. 6
2438+(3) Include and complete items {3}, {4}, {5}, {6}, and {7}. 7
2439+(4) In item {5}, include and complete any one of the three alternative 8
2440+methods for the explanation—writing, writing or electronic record, or 9
2441+electronic record. 10
2442+(5) In item {6}, include the telephone number. In addition, the sender 11
2443+may include and complete either or both of the two additional alternative 12
2444+methods of communication—writing or electronic communication—for the 13
2445+recipient of the notification to communicate with the sender. Neither of the 14
2446+two additional methods of communication is required to be included. 15
2447+(6) In item {7}, include and complete the method or methods for the 16
2448+explanation—writing, writing or electronic record, or electronic record—17
2449+included in item {5}. 18
2450+(7) Include and complete item {8} only if a written explanation is 19
2451+included in item {5} as a method for communicating the explanation and the 20
2452+sender will charge the recipient for another written explanation. 21 BILL AS INTRODUCED H.206
42062453 2025 Page 101 of 124
4207-includedinitem{5}.
4208-(7)Includeandcompleteitem{8}onlyifawrittenexplanationis
4209-includedinitem{5}asamethodforcommunicatingtheexplanationandthe
4210-senderwillchargetherecipientforanotherwrittenexplanation.
4211-(8)Initem{9},includeeitherthetelephonenumberortheaddressor
4212-boththetelephonenumberandtheaddress.Inaddition,thesendermay
4213-includeandcompletetheadditionalmethodofcommunication—electronic
4214-communication—fortherecipientofthenotificationtocommunicatewiththe
4215-sender.Theadditionalmethodofelectroniccommunicationisnotrequiredto
4216-beincluded.
4217-(9)Ifitem{10}doesnotapply,insert“None”after“agreement:”.
4218-§9—615.APPLICATIONOFPROCEEDSOFDISPOSITION;LIABILITY
4219-FORDEFICIENCYANDRIGHTTOSURPLUS
4220-(a)Asecuredpartyshallapplyorpayoverforapplicationthecash
4221-proceedsofdispositionundersection9—610ofthistitleinthefollowing
4222-orderto:
4223-***
4224-(3)thesatisfactionofobligationssecuredbyanysubordinatesecurity
4225-interestinorothersubordinatelienonthecollateralif:
4226-1
4227-2
4228-3
4229-4
4230-5
4231-6
4232-7
4233-8
4234-9
4235-10
4236-11
4237-12
4238-13
4239-14
4240-15
4241-16
4242-17
4243-18
4244-19 BILLASPASSEDBYTHEHOUSE H.206
2454+
2455+
2456+VT LEG #378799 v.1
2457+(8) In item {9}, include either the telephone number or the address or 1
2458+both the telephone number and the address. In addition, the sender may 2
2459+include and complete the additional method of communication—electronic 3
2460+communication—for the recipient of the notification to communicate with the 4
2461+sender. The additional method of electronic communication is not required to 5
2462+be included. 6
2463+(9) If item {10} does not apply, insert “None” after “agreement:”. 7
2464+§ 9—615. APPLICATION OF PROCEEDS OF DISPOSITION; LIABILITY 8
2465+ FOR DEFICIENCY AND RIGHT TO SURPLUS 9
2466+(a) A secured party shall apply or pay over for application the cash 10
2467+proceeds of disposition under section 9—610 of this title in the following order 11
2468+to: 12
2469+* * * 13
2470+(3) the satisfaction of obligations secured by any subordinate security 14
2471+interest in or other subordinate lien on the collateral if: 15
2472+(A) the secured party receives from the holder of the subordinate 16
2473+security interest or other lien an authenticated a signed demand for proceeds 17
2474+before distribution of the proceeds is completed; and 18
2475+(B) in a case in which a consignor has an interest in the collateral, the 19
2476+subordinate security interest or other lien is senior to the interest of the 20
2477+consignor; and 21 BILL AS INTRODUCED H.206
42452478 2025 Page 102 of 124
4246-(A)thesecuredpartyreceivesfromtheholderofthesubordinate
4247-securityinterestorotherlienanauthenticatedasigneddemandforproceeds
4248-beforedistributionoftheproceedsiscompleted;and
4249-(B)inacaseinwhichaconsignorhasaninterestinthecollateral,the
4250-subordinatesecurityinterestorotherlienisseniortotheinterestofthe
4251-consignor;and
4252-(4)asecuredpartythatisaconsignorofthecollateralifthesecured
4253-partyreceivesfromtheconsignoranauthenticatedasigneddemandfor
4254-proceedsbeforedistributionoftheproceedsiscompleted.
4255-***
4256-§9—616.EXPLANATIONOFCALCULATIONOFSURPLUSOR
4257-DEFICIENCY
4258-(a)Inthissection:
4259-(1)“Explanation”meansawritingrecordthat:
4260-***
4261-(2)“Request”meansarecord:
4262-(A)authenticatedsignedbyadebtororconsumerobligor;
4263-***
4264-(b)Inaconsumergoodstransactioninwhichthedebtorisentitledtoa
4265-surplusoraconsumerobligorisliableforadeficiencyundersection9—615
4266-ofthistitle,thesecuredpartyshall:
4267-1
4268-2
4269-3
4270-4
4271-5
4272-6
4273-7
4274-8
4275-9
4276-10
4277-11
4278-12
4279-13
4280-14
4281-15
4282-16
4283-17
4284-18
4285-19
4286-20
4287-21 BILLASPASSEDBYTHEHOUSE H.206
2479+
2480+
2481+VT LEG #378799 v.1
2482+(4) a secured party that is a consignor of the collateral if the secured 1
2483+party receives from the consignor an authenticated a signed demand for 2
2484+proceeds before distribution of the proceeds is completed. 3
2485+* * * 4
2486+§ 9—616. EXPLANATION OF CALCULATION OF SURPLUS OR 5
2487+ DEFICIENCY 6
2488+(a) In this section: 7
2489+(1) “Explanation” means a writing record that: 8
2490+* * * 9
2491+(2) “Request” means a record: 10
2492+(A) authenticated signed by a debtor or consumer obligor; 11
2493+* * * 12
2494+(b) In a consumer goods transaction in which the debtor is entitled to a 13
2495+surplus or a consumer obligor is liable for a deficiency under section 9—615 of 14
2496+this title, the secured party shall: 15
2497+(1) send an explanation to the debtor or consumer obligor, as applicable, 16
2498+after the disposition and: 17
2499+(A) before or when the secured party accounts to the debtor and pays 18
2500+any surplus or first makes written demand in a record on the consumer obligor 19
2501+after the disposition for payment of the deficiency; and 20
2502+* * * 21 BILL AS INTRODUCED H.206
42882503 2025 Page 103 of 124
4289-(1)sendanexplanationtothedebtororconsumerobligor,asapplicable,
4290-afterthedispositionand:
4291-(A)beforeorwhenthesecuredpartyaccountstothedebtorandpays
4292-anysurplusorfirstmakeswrittendemandinarecordontheconsumerobligor
4293-afterthedispositionforpaymentofthedeficiency;and
4294-***
4295-(c)Tocomplywithsubdivision(a)(1)(B)ofthissection,awritingan
4296-explanationmustprovidethefollowinginformationinthefollowingorder:
4297-***
4298-§9—619.TRANSFEROFRECORDORLEGALTITLE
4299-(a)Inthissection,“transferstatement”meansarecordauthenticatedsigned
4300-byasecuredpartystating:
4301-***
4302-§9—620.ACCEPTANCEOFCOLLATERALINFULLORPARTIAL
4303-SATISFACTIONOFOBLIGATION;COMPULSORY
4304-DISPOSITIONOFCOLLATERAL
4305-(a)Exceptasotherwiseprovidedinsubsection(g)ofthissection,asecured
4306-partymayacceptcollateralinfullorpartialsatisfactionoftheobligationit
4307-securesonlyif:
4308-(1)thedebtorconsentstotheacceptanceundersubsection(c)ofthis
4309-section;
4310-1
4311-2
4312-3
4313-4
4314-5
4315-6
4316-7
4317-8
4318-9
4319-10
4320-11
4321-12
4322-13
4323-14
4324-15
4325-16
4326-17
4327-18
4328-19
4329-20
4330-21 BILLASPASSEDBYTHEHOUSE H.206
2504+
2505+
2506+VT LEG #378799 v.1
2507+(c) To comply with subdivision (a)(1)(B) of this section, a writing an 1
2508+explanation must provide the following information in the following order: 2
2509+* * * 3
2510+§ 9—619. TRANSFER OF RECORD OR LEGAL TITLE 4
2511+(a) In this section, “transfer statement” means a record authenticated signed 5
2512+by a secured party stating: 6
2513+* * * 7
2514+§ 9—620. ACCEPTANCE OF COLLATERAL IN FULL OR PARTIAL 8
2515+ SATISFACTION OF OBLIGATION; COMPULSORY 9
2516+ DISPOSITION OF COLLATERAL 10
2517+(a) Except as otherwise provided in subsection (g) of this section, a secured 11
2518+party may accept collateral in full or partial satisfaction of the obligation it 12
2519+secures only if: 13
2520+(1) the debtor consents to the acceptance under subsection (c) of this 14
2521+section; 15
2522+(2) the secured party does not receive, within the time set forth in 16
2523+subsection (d) of this section, a notification of objection to the proposal 17
2524+authenticated signed by: 18
2525+* * * 19
2526+(b) A purported or apparent acceptance of collateral under this section is 20
2527+ineffective unless: 21 BILL AS INTRODUCED H.206
43312528 2025 Page 104 of 124
4332-(2)thesecuredpartydoesnotreceive,withinthetimesetforthin
4333-subsection(d)ofthissection,anotificationofobjectiontotheproposal
4334-authenticatedsignedby:
4335-***
4336-(b)Apurportedorapparentacceptanceofcollateralunderthissectionis
4337-ineffectiveunless:
4338-(1)thesecuredpartyconsentstotheacceptanceinanauthenticateda
4339-signedrecordorsendsaproposaltothedebtor;and
4340-(2)theconditionsofsubsection(a)ofthissectionaremet.
4341-(c)Forpurposesofthissection:
4342-(1)adebtorconsentstoanacceptanceofcollateralinpartialsatisfaction
4343-oftheobligationitsecuresonlyifthedebtoragreestothetermsofthe
4344-acceptanceinarecordauthenticatedsignedafterdefault;and
4345-(2)adebtorconsentstoanacceptanceofcollateralinfullsatisfactionof
4346-theobligationitsecuresonlyifthedebtoragreestothetermsoftheacceptance
4347-inarecordauthenticatedsignedafterdefaultorthesecuredparty:
4348-***
4349-(C)doesnotreceiveanotificationofobjectionauthenticatedsigned
4350-bythedebtorwithin20daysaftertheproposalissent.
4351-***
4352-1
4353-2
4354-3
4355-4
4356-5
4357-6
4358-7
4359-8
4360-9
4361-10
4362-11
4363-12
4364-13
4365-14
4366-15
4367-16
4368-17
4369-18
4370-19
4371-20 BILLASPASSEDBYTHEHOUSE H.206
2529+
2530+
2531+VT LEG #378799 v.1
2532+(1) the secured party consents to the acceptance in an authenticated a 1
2533+signed record or sends a proposal to the debtor; and 2
2534+(2) the conditions of subsection (a) of this section are met. 3
2535+(c) For purposes of this section: 4
2536+(1) a debtor consents to an acceptance of collateral in partial satisfaction 5
2537+of the obligation it secures only if the debtor agrees to the terms of the 6
2538+acceptance in a record authenticated signed after default; and 7
2539+(2) a debtor consents to an acceptance of collateral in full satisfaction of 8
2540+the obligation it secures only if the debtor agrees to the terms of the acceptance 9
2541+in a record authenticated signed after default or the secured party: 10
2542+* * * 11
2543+(C) does not receive a notification of objection authenticated signed 12
2544+by the debtor within 20 days after the proposal is sent. 13
2545+* * * 14
2546+(f) To comply with subsection (e) of this section, the secured party shall 15
2547+dispose of the collateral: 16
2548+(1) within 90 days after taking possession; or 17
2549+(2) within any longer period to which the debtor and all secondary 18
2550+obligors have agreed in an agreement to that effect entered into and 19
2551+authenticated signed after default. 20
2552+* * * 21 BILL AS INTRODUCED H.206
43722553 2025 Page 105 of 124
4373-(f)Tocomplywithsubsection(e)ofthissection,thesecuredpartyshall
4374-disposeofthecollateral:
4375-(1)within90daysaftertakingpossession;or
4376-(2)withinanylongerperiodtowhichthedebtorandallsecondary
4377-obligorshaveagreedinanagreementtothateffectenteredintoand
4378-authenticatedsignedafterdefault.
4379-***
4380-§9—621.NOTIFICATIONOFPROPOSALTOACCEPTCOLLATERAL
4381-(a)Asecuredpartythatdesirestoacceptcollateralinfullorpartial
4382-satisfactionoftheobligationitsecuresshallsenditsproposalto:
4383-(1)anypersonfromwhichthesecuredpartyhasreceived,beforethe
4384-debtorconsentedtotheacceptance,anauthenticatedasignednotificationofa
4385-claimofaninterestinthecollateral;
4386-***
4387-§9—624.WAIVER
4388-(a)Adebtororsecondaryobligormaywaivetherighttonotificationof
4389-dispositionofcollateralundersection9—611ofthistitleonlybyan
4390-agreementtothateffectenteredintoandauthenticatedsignedafterdefault.
4391-(b)Adebtormaywaivetherighttorequiredispositionofcollateralunder
4392-subsection9—620(e)ofthistitleonlybyanagreementtothateffectentered
4393-intoandauthenticatedsignedafterdefault.
4394-1
4395-2
4396-3
4397-4
4398-5
4399-6
4400-7
4401-8
4402-9
4403-10
4404-11
4405-12
4406-13
4407-14
4408-15
4409-16
4410-17
4411-18
4412-19
4413-20
4414-21 BILLASPASSEDBYTHEHOUSE H.206
2554+
2555+
2556+VT LEG #378799 v.1
2557+§ 9—621. NOTIFICATION OF PROPOSAL TO ACCEPT COLLATERAL 1
2558+(a) A secured party that desires to accept collateral in full or partial 2
2559+satisfaction of the obligation it secures shall send its proposal to: 3
2560+(1) any person from which the secured party has received, before the 4
2561+debtor consented to the acceptance, an authenticated a signed notification of a 5
2562+claim of an interest in the collateral; 6
2563+* * * 7
2564+§ 9—624. WAIVER 8
2565+(a) A debtor or secondary obligor may waive the right to notification of 9
2566+disposition of collateral under section 9—611 of this title only by an agreement 10
2567+to that effect entered into and authenticated signed after default. 11
2568+(b) A debtor may waive the right to require disposition of collateral under 12
2569+subsection 9—620(e) of this title only by an agreement to that effect entered 13
2570+into and authenticated signed after default. 14
2571+(c) Except in a consumer goods transaction, a debtor or secondary obligor 15
2572+may waive the right to redeem collateral under section 9—623 of this title only 16
2573+by an agreement to that effect entered into and authenticated signed after 17
2574+default. 18
2575+* * * 19
2576+§ 9—628. NONLIABILITY AND LIMITATION ON LIABILITY OF 20
2577+ SECURED PARTY; LIABILITY OF SECONDARY OBLIGOR 21 BILL AS INTRODUCED H.206
44152578 2025 Page 106 of 124
4416-(c)Exceptinaconsumergoodstransaction,adebtororsecondaryobligor
4417-maywaivetherighttoredeemcollateralundersection9—623ofthistitleonly
4418-byanagreementtothateffectenteredintoandauthenticatedsignedafter
4419-default.
4420-***
4421-§9—628.NONLIABILITYANDLIMITATIONONLIABILITYOF
4422-SECUREDPARTY;LIABILITYOFSECONDARYOBLIGOR
4423-(a)UnlessSubjecttosubsection(f)ofthissection,unlessasecuredparty
4424-knowsthatapersonisadebtororobligor,knowstheidentityoftheperson,
4425-andknowshowtocommunicatewiththeperson:
4426-***
4427-(b)ASubjecttosubsection(f)ofthissection,asecuredpartyisnotliable
4428-becauseofitsstatusassecuredparty:
4429-***
4430-(f)Subsections(a)and(b)ofthissectiondonotapplytolimittheliability
4431-ofasecuredpartytoapersonif,atthetimethesecuredpartyobtainscontrol
4432-ofcollateralthatisacontrollableaccount,controllableelectronicrecord,or
4433-controllablepaymentintangibleoratthetimethesecurityinterestattachesto
4434-thecollateral,whicheverislater:
4435-(1)thepersonisadebtororobligor;and
4436-1
4437-2
4438-3
4439-4
4440-5
4441-6
4442-7
4443-8
4444-9
4445-10
4446-11
4447-12
4448-13
4449-14
4450-15
4451-16
4452-17
4453-18
4454-19
4455-20 BILLASPASSEDBYTHEHOUSE H.206
2579+
2580+
2581+VT LEG #378799 v.1
2582+(a) Unless Subject to subsection (f) of this section, unless a secured party 1
2583+knows that a person is a debtor or obligor, knows the identity of the person, 2
2584+and knows how to communicate with the person: 3
2585+* * * 4
2586+(b) A Subject to subsection (f) of this section, a secured party is not liable 5
2587+because of its status as secured party: 6
2588+* * * 7
2589+(f) Subsections (a) and (b) of this section do not apply to limit the liability 8
2590+of a secured party to a person if, at the time the secured party obtains control of 9
2591+collateral that is a controllable account, controllable electronic record, or 10
2592+controllable payment intangible or at the time the security interest attaches to 11
2593+the collateral, whichever is later: 12
2594+(1) the person is a debtor or obligor; and 13
2595+(2) the secured party knows that the information in subdivision 14
2596+(b)(1)(A), (B), or (C) of this section relating to the person is not provided by 15
2597+the collateral, a record attached to or logically associated with the collateral, or 16
2598+the system in which the collateral is recorded. 17
2599+* * * 18 BILL AS INTRODUCED H.206
44562600 2025 Page 107 of 124
4457-(2)thesecuredpartyknowsthattheinformationinsubdivision
4458-(b)(1)(A),(B),or(C)ofthissectionrelatingtothepersonisnotprovidedby
4459-thecollateral,arecordattachedtoorlogicallyassociatedwiththecollateral,or
4460-thesysteminwhichthecollateralisrecorded.
4461-***
4462-Sec.10.9AV.S.A.article12isaddedtoread:
4463-ARTICLE12.
4464-CONTROLLABLE ELECTRONICRECORDS
4465-§ 12—101.TITLE
4466-ThisarticlemaybecitedasUniformCommercialCode—Controllable
4467-ElectronicRecords.
4468-§ 12—102.DEFINITIONS
4469-(a)Inthisarticle:
4470-(1)“Controllableelectronicrecord”meansarecordstoredinan
4471-electronicmediumthatcanbesubjectedtocontrolundersection12—105of
4472-thistitle.Thetermdoesnotincludeacontrollableaccount,acontrollable
4473-paymentintangible,adepositaccount,anelectroniccopyofarecord
4474-evidencingchattelpaper,anelectronicdocumentoftitle,electronicmoney,
4475-investmentproperty,oratransferablerecord.
4476-(2)“Qualifyingpurchaser”meansapurchaserofacontrollable
4477-electronicrecordoraninterestinacontrollableelectronicrecordthatobtains
4478-1
4479-2
4480-3
4481-4
4482-5
4483-6
4484-7
4485-8
4486-9
4487-10
4488-11
4489-12
4490-13
4491-14
4492-15
4493-16
4494-17
4495-18
4496-19
4497-20
4498-21 BILLASPASSEDBYTHEHOUSE H.206
2601+
2602+
2603+VT LEG #378799 v.1
2604+Sec. 10. 9A V.S.A. article 12 is added to read: 1
2605+ARTICLE 12. 2
2606+CONTROLLABLE ELECTRONIC RECORDS 3
2607+§ 12—101. TITLE 4
2608+This article may be cited as Uniform Commercial Code—Controllable 5
2609+Electronic Records. 6
2610+§ 12—102. DEFINITIONS 7
2611+(a) In this article: 8
2612+(1) “Controllable electronic record” means a record stored in an 9
2613+electronic medium that can be subjected to control under section 12—105 of 10
2614+this title. The term does not include a controllable account, a controllable 11
2615+payment intangible, a deposit account, an electronic copy of a record 12
2616+evidencing chattel paper, an electronic document of title, electronic money, 13
2617+investment property, or a transferable record. 14
2618+(2) “Qualifying purchaser” means a purchaser of a controllable 15
2619+electronic record or an interest in a controllable electronic record that obtains 16
2620+control of the controllable electronic record for value, in good faith, and 17
2621+without notice of a claim of a property right in the controllable electronic 18
2622+record. 19
2623+(3) “Transferable record” has the meaning provided for that term: 20 BILL AS INTRODUCED H.206
44992624 2025 Page 108 of 124
4500-controlofthecontrollableelectronicrecordforvalue,ingoodfaith,and
4501-withoutnoticeofaclaimofapropertyrightinthecontrollableelectronic
4502-record.
4503-(3)“Transferablerecord”hasthemeaningprovidedforthatterm:
4504-(A)insection201(a)(1)oftheElectronicSignaturesinGlobaland
4505-NationalCommerceAct,15U.S.C.Section7021(a)(1),asmaybeamended;
4506-or
4507-(B)asdefinedin9V.S.A.§285.
4508-(4)“Value”hasthemeaningprovidedinsubsection3—303(a)ofthis
4509-title,asifreferencesinthatsubsectiontoan“instrument”werereferencestoa
4510-controllableaccount,controllableelectronicrecord,orcontrollablepayment
4511-intangible.
4512-(b)ThedefinitionsinArticle9ofthistitleof“accountdebtor,”
4513-“controllableaccount,”“controllablepaymentintangible,”“chattelpaper,”
4514-“depositaccount,”“electronicmoney,”and“investmentproperty”applytothis
4515-article.
4516-§ 12—103.RELATIONTOARTICLE9ANDCONSUMERLAWS
4517-(a)IfthereisconflictbetweenthisarticleandArticle9,Article9governs.
4518-(b)Atransactionsubjecttothisarticleissubjecttoanyapplicableruleof
4519-lawthatestablishesadifferentruleforconsumers,toanyotherstatuteorrule
4520-ofthisStatethatregulatestherates,charges,agreements,andpracticesfor
4521-1
4522-2
4523-3
4524-4
4525-5
4526-6
4527-7
4528-8
4529-9
4530-10
4531-11
4532-12
4533-13
4534-14
4535-15
4536-16
4537-17
4538-18
4539-19
4540-20
4541-21 BILLASPASSEDBYTHEHOUSE H.206
2625+
2626+
2627+VT LEG #378799 v.1
2628+(A) in section 201(a)(1) of the Electronic Signatures in Global and 1
2629+National Commerce Act, 15 U.S.C. Section 7021(a)(1), as may be amended; or 2
2630+(B) as defined in 9 V.S.A. § 285. 3
2631+(4) “Value” has the meaning provided in subsection 3—303(a) of this 4
2632+title, as if references in that subsection to an “instrument” were references to a 5
2633+controllable account, controllable electronic record, or controllable payment 6
2634+intangible. 7
2635+(b) The definitions in Article 9 of this title of “account debtor,” 8
2636+“controllable account,” “controllable payment intangible,” “chattel paper,” 9
2637+“deposit account,” “electronic money,” and “investment property” apply to this 10
2638+article. 11
2639+§ 12—103. RELATION TO ARTICLE 9 AND CONSUMER LAWS 12
2640+(a) If there is conflict between this article and Article 9, Article 9 governs. 13
2641+(b) A transaction subject to this article is subject to any applicable rule of 14
2642+law that establishes a different rule for consumers, to any other statute or rule 15
2643+of this State that regulates the rates, charges, agreements, and practices for 16
2644+loans, credit sales, or other extensions of credit, and to any consumer 17
2645+protection statute or rule of this State. 18
2646+(c) Article 1 of this title contains general definitions and principles of 19
2647+construction and interpretation applicable throughout this article. 20 BILL AS INTRODUCED H.206
45422648 2025 Page 109 of 124
4543-loans,creditsales,orotherextensionsofcredit,andtoanyconsumer
4544-protectionstatuteorruleofthisState.
4545-(c)Article1ofthistitlecontainsgeneraldefinitionsandprinciplesof
4546-constructionandinterpretationapplicablethroughoutthisarticle.
4547-12—104.RIGHTSINCONTROLLABLE ACCOUNT,CONTROLLABLE
4548-ELECTRONICRECORD,ANDCONTROLLABLE PAYMENT
4549-INTANGIBLE
4550-(a)Thissectionappliestotheacquisitionandpurchaseofrightsina
4551-controllableaccountorcontrollablepaymentintangible,includingtherights
4552-andbenefitsundersubsections(c),(d),(e),(g),and(h)ofthissectionofa
4553-purchaserandqualifyingpurchaser,inthesamemannerthissectionappliesto
4554-acontrollableelectronicrecord.
4555-(b)Todeterminewhetherapurchaserofacontrollableaccountora
4556-controllablepaymentintangibleisaqualifyingpurchaser,thepurchaser
4557-obtainscontroloftheaccountorpaymentintangibleifitobtainscontrolofthe
4558-controllableelectronicrecordthatevidencestheaccountorpayment
4559-intangible.
4560-(c)Exceptasprovidedinthissection,lawotherthanthisarticledetermines
4561-whetherapersonacquiresarightinacontrollableelectronicrecordandthe
4562-rightthepersonacquires.
4563-1
4564-2
4565-3
4566-4
4567-5
4568-6
4569-7
4570-8
4571-9
4572-10
4573-11
4574-12
4575-13
4576-14
4577-15
4578-16
4579-17
4580-18
4581-19
4582-20 BILLASPASSEDBYTHEHOUSE H.206
2649+
2650+
2651+VT LEG #378799 v.1
2652+12—104. RIGHTS IN CONTROLLABLE ACCOUNT, CONTROLLABLE 1
2653+ ELECTRONIC RECORD, AND CONTROLLABLE PAYMENT 2
2654+ INTANGIBLE 3
2655+(a) This section applies to the acquisition and purchase of rights in a 4
2656+controllable account or controllable payment intangible, including the rights 5
2657+and benefits under subsections (c), (d), (e), (g), and (h) of this section of a 6
2658+purchaser and qualifying purchaser, in the same manner this section applies to 7
2659+a controllable electronic record. 8
2660+(b) To determine whether a purchaser of a controllable account or a 9
2661+controllable payment intangible is a qualifying purchaser, the purchaser 10
2662+obtains control of the account or payment intangible if it obtains control of the 11
2663+controllable electronic record that evidences the account or payment 12
2664+intangible. 13
2665+(c) Except as provided in this section, law other than this article determines 14
2666+whether a person acquires a right in a controllable electronic record and the 15
2667+right the person acquires. 16
2668+(d) A purchaser of a controllable electronic record acquires all rights in the 17
2669+controllable electronic record that the transferor had or had power to transfer, 18
2670+except that a purchaser of a limited interest in a controllable electronic record 19
2671+acquires rights only to the extent of the interest purchased. 20 BILL AS INTRODUCED H.206
45832672 2025 Page 110 of 124
4584-(d)Apurchaserofacontrollableelectronicrecordacquiresallrightsinthe
4585-controllableelectronicrecordthatthetransferorhadorhadpowertotransfer,
4586-exceptthatapurchaserofalimitedinterestinacontrollableelectronicrecord
4587-acquiresrightsonlytotheextentoftheinterestpurchased.
4588-(e)Aqualifyingpurchaseracquiresitsrightsinthecontrollableelectronic
4589-recordfreeofaclaimofapropertyrightinthecontrollableelectronicrecord.
4590-(f)Exceptasprovidedinsubsections(a)and(e)ofthissectionfora
4591-controllableaccountandacontrollablepaymentintangibleorlawotherthan
4592-thisarticle,aqualifyingpurchasertakesarighttopayment,rightto
4593-performance,orotherinterestinpropertyevidencedbythecontrollable
4594-electronicrecordsubjecttoaclaimofapropertyrightintherighttopayment,
4595-righttoperformance,orotherinterestinproperty.
4596-(g)Anactionmaynotbeassertedagainstaqualifyingpurchaserbasedon
4597-bothapurchasebythequalifyingpurchaserofacontrollableelectronicrecord
4598-andaclaimofapropertyrightinanothercontrollableelectronicrecord,
4599-whethertheactionisframedinconversion,replevin,constructivetrust,
4600-equitablelien,orothertheory.
4601-(h)FilingofafinancingstatementunderArticle9isnotnoticeofaclaim
4602-ofapropertyrightinacontrollableelectronicrecord.
4603-12—105.CONTROLOFCONTROLLABLE ELECTRONICRECORD
4604-1
4605-2
4606-3
4607-4
4608-5
4609-6
4610-7
4611-8
4612-9
4613-10
4614-11
4615-12
4616-13
4617-14
4618-15
4619-16
4620-17
4621-18
4622-19
4623-20 BILLASPASSEDBYTHEHOUSE H.206
2673+
2674+
2675+VT LEG #378799 v.1
2676+(e) A qualifying purchaser acquires its rights in the controllable electronic 1
2677+record free of a claim of a property right in the controllable electronic record. 2
2678+(f) Except as provided in subsections (a) and (e) of this section for a 3
2679+controllable account and a controllable payment intangible or law other than 4
2680+this article, a qualifying purchaser takes a right to payment, right to 5
2681+performance, or other interest in property evidenced by the controllable 6
2682+electronic record subject to a claim of a property right in the right to payment, 7
2683+right to performance, or other interest in property. 8
2684+(g) An action may not be asserted against a qualifying purchaser based on 9
2685+both a purchase by the qualifying purchaser of a controllable electronic record 10
2686+and a claim of a property right in another controllable electronic record, 11
2687+whether the action is framed in conversion, replevin, constructive trust, 12
2688+equitable lien, or other theory. 13
2689+(h) Filing of a financing statement under Article 9 is not notice of a claim 14
2690+of a property right in a controllable electronic record. 15
2691+12—105. CONTROL OF CONTROLLABLE ELECTRONIC RECORD 16
2692+(a) A person has control of a controllable electronic record if the electronic 17
2693+record, a record attached to or logically associated with the electronic record, 18
2694+or a system in which the electronic record is recorded: 19
2695+(1) gives the person: 20
2696+(A) power to avail itself of substantially all the benefit from the 21 BILL AS INTRODUCED H.206
46242697 2025 Page 111 of 124
4625-(a)Apersonhascontrolofacontrollableelectronicrecordiftheelectronic
4626-record,arecordattachedtoorlogicallyassociatedwiththeelectronicrecord,
4627-orasysteminwhichtheelectronicrecordisrecorded:
4628-(1)givestheperson:
4629-(A)powertoavailitselfofsubstantiallyallthebenefitfromthe
4630-electronicrecord;and
4631-(B)exclusivepower,subjecttosubsection(b)ofthissection,to:
4632-(i)preventothersfromavailingthemselvesofsubstantiallyallthe
4633-benefitfromtheelectronicrecord;and
4634-(ii)transfercontroloftheelectronicrecordtoanotherpersonor
4635-causeanotherpersontoobtaincontrolofanothercontrollableelectronicrecord
4636-asaresultofthetransferoftheelectronicrecord;and
4637-(2)enablesthepersonreadilytoidentifyitselfinanyway,includingby
4638-name,identifyingnumber,cryptographickey,office,oraccountnumber,as
4639-havingthepowersspecifiedinsubdivision(1)ofthissubsection.
4640-(b)Subjecttosubsection(c)ofthissection,apowerisexclusiveunder
4641-subdivisions(a)(1)(B)(i)and(ii)ofthissectionevenif:
4642-(1)thecontrollableelectronicrecord,arecordattachedtoorlogically
4643-associatedwiththeelectronicrecord,orasysteminwhichtheelectronic
4644-recordisrecordedlimitstheuseoftheelectronicrecordorhasaprotocol
4645-programmedtocauseachange,includingatransferorlossofcontrolora
4646-1
4647-2
4648-3
4649-4
4650-5
4651-6
4652-7
4653-8
4654-9
4655-10
4656-11
4657-12
4658-13
4659-14
4660-15
4661-16
4662-17
4663-18
4664-19
4665-20
4666-21 BILLASPASSEDBYTHEHOUSE H.206
2698+
2699+
2700+VT LEG #378799 v.1
2701+electronic record; and 1
2702+(B) exclusive power, subject to subsection (b) of this section, to: 2
2703+(i) prevent others from availing themselves of substantially all the 3
2704+benefit from the electronic record; and 4
2705+(ii) transfer control of the electronic record to another person or 5
2706+cause another person to obtain control of another controllable electronic record 6
2707+as a result of the transfer of the electronic record; and 7
2708+(2) enables the person readily to identify itself in any way, including by 8
2709+name, identifying number, cryptographic key, office, or account number, as 9
2710+having the powers specified in subdivision (1) of this subsection. 10
2711+(b) Subject to subsection (c) of this section, a power is exclusive under 11
2712+subdivisions (a)(1)(B)(i) and (ii) of this section even if: 12
2713+(1) the controllable electronic record, a record attached to or logically 13
2714+associated with the electronic record, or a system in which the electronic 14
2715+record is recorded limits the use of the electronic record or has a protocol 15
2716+programmed to cause a change, including a transfer or loss of control or a 16
2717+modification of benefits afforded by the electronic record; or 17
2718+(2) the power is shared with another person. 18
2719+(c) A power of a person is not shared with another person under 19
2720+subdivision (b)(2) of this section and the person’s power is not exclusive if: 20
2721+(1) the person can exercise the power only if the power also is exercised 21 BILL AS INTRODUCED H.206
46672722 2025 Page 112 of 124
4668-modificationofbenefitsaffordedbytheelectronicrecord;or
4669-(2)thepowerissharedwithanotherperson.
4670-(c)Apowerofapersonisnotsharedwithanotherpersonunder
4671-subdivision(b)(2)ofthissectionandtheperson’spowerisnotexclusiveif:
4672-(1)thepersoncanexercisethepoweronlyifthepoweralsoisexercised
4673-bytheotherperson;and
4674-(2)theotherperson:
4675-(A)canexercisethepowerwithoutexerciseofthepowerbythe
4676-person;or
4677-(B)isthetransferortothepersonofaninterestinthecontrollable
4678-electronicrecordoracontrollableaccountorcontrollablepaymentintangible
4679-evidencedbythecontrollableelectronicrecord.
4680-(d)Ifapersonhasthepowersspecifiedinsubdivisions(a)(1)(B)(i)and(ii)
4681-ofthissection,thepowersarepresumedtobeexclusive.
4682-(e)Apersonhascontrolofacontrollableelectronicrecordifanother
4683-person,otherthanthetransferortothepersonofaninterestinthecontrollable
4684-electronicrecordoracontrollableaccountorcontrollablepaymentintangible
4685-evidencedbythecontrollableelectronicrecord:
4686-(1)hascontroloftheelectronicrecordandacknowledgesthatithas
4687-controlonbehalfoftheperson;or
4688-(2)obtainscontroloftheelectronicrecordafterhavingacknowledged
4689-1
4690-2
4691-3
4692-4
4693-5
4694-6
4695-7
4696-8
4697-9
4698-10
4699-11
4700-12
4701-13
4702-14
4703-15
4704-16
4705-17
4706-18
4707-19
4708-20
4709-21 BILLASPASSEDBYTHEHOUSE H.206
2723+
2724+
2725+VT LEG #378799 v.1
2726+by the other person; and 1
2727+(2) the other person: 2
2728+(A) can exercise the power without exercise of the power by the 3
2729+person; or 4
2730+(B) is the transferor to the person of an interest in the controllable 5
2731+electronic record or a controllable account or controllable payment intangible 6
2732+evidenced by the controllable electronic record. 7
2733+(d) If a person has the powers specified in subdivisions (a)(1)(B)(i) and (ii) 8
2734+of this section, the powers are presumed to be exclusive. 9
2735+(e) A person has control of a controllable electronic record if another 10
2736+person, other than the transferor to the person of an interest in the controllable 11
2737+electronic record or a controllable account or controllable payment intangible 12
2738+evidenced by the controllable electronic record: 13
2739+(1) has control of the electronic record and acknowledges that it has 14
2740+control on behalf of the person; or 15
2741+(2) obtains control of the electronic record after having acknowledged 16
2742+that it will obtain control of the electronic record on behalf of the person. 17
2743+(f) A person that has control under this section is not required to 18
2744+acknowledge that it has control on behalf of another person. 19
2745+(g) If a person acknowledges that it has or will obtain control on behalf of 20
2746+another person, unless the person otherwise agrees or law other than this article 21 BILL AS INTRODUCED H.206
47102747 2025 Page 113 of 124
4711-thatitwillobtaincontroloftheelectronicrecordonbehalfoftheperson.
4712-(f)Apersonthathascontrolunderthissectionisnotrequiredto
4713-acknowledgethatithascontrolonbehalfofanotherperson.
4714-(g)Ifapersonacknowledgesthatithasorwillobtaincontrolonbehalfof
4715-anotherperson,unlessthepersonotherwiseagreesorlawotherthanthis
4716-articleorArticle9otherwiseprovides,thepersondoesnotoweanydutytothe
4717-otherpersonandisnotrequiredtoconfirmtheacknowledgmenttoanyother
4718-person.
4719-12—106.DISCHARGEOFACCOUNTDEBTORONCONTROLLABLE
4720-ACCOUNTORCONTROLLABLE PAYMENTINTANGIBLE
4721-(a)Anaccountdebtoronacontrollableaccountorcontrollablepayment
4722-intangiblemaydischargeitsobligationbypaying:
4723-(1)thepersonhavingcontrolofthecontrollableelectronicrecordthat
4724-evidencesthecontrollableaccountorcontrollablepaymentintangible;or
4725-(2)exceptasprovidedinsubsection(b)ofthissection,apersonthat
4726-formerlyhadcontrolofthecontrollableelectronicrecord.
4727-(b)Subjecttosubsection(d)ofthissection,theaccountdebtormaynot
4728-dischargeitsobligationbypayingapersonthatformerlyhadcontrolofthe
4729-controllableelectronicrecordiftheaccountdebtorreceivesanotificationthat:
4730-(1)issignedbyapersonthatformerlyhadcontrolorthepersonto
4731-whichcontrolwastransferred;
4732-1
4733-2
4734-3
4735-4
4736-5
4737-6
4738-7
4739-8
4740-9
4741-10
4742-11
4743-12
4744-13
4745-14
4746-15
4747-16
4748-17
4749-18
4750-19
4751-20
4752-21 BILLASPASSEDBYTHEHOUSE H.206
2748+
2749+
2750+VT LEG #378799 v.1
2751+or Article 9 otherwise provides, the person does not owe any duty to the other 1
2752+person and is not required to confirm the acknowledgment to any other person. 2
2753+12—106. DISCHARGE OF ACCOUNT DEBTOR ON CONTROLLABLE 3
2754+ ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE 4
2755+(a) An account debtor on a controllable account or controllable payment 5
2756+intangible may discharge its obligation by paying: 6
2757+(1) the person having control of the controllable electronic record that 7
2758+evidences the controllable account or controllable payment intangible; or 8
2759+(2) except as provided in subsection (b) of this section, a person that 9
2760+formerly had control of the controllable electronic record. 10
2761+(b) Subject to subsection (d) of this section, the account debtor may not 11
2762+discharge its obligation by paying a person that formerly had control of the 12
2763+controllable electronic record if the account debtor receives a notification that: 13
2764+(1) is signed by a person that formerly had control or the person to 14
2765+which control was transferred; 15
2766+(2) reasonably identifies the controllable account or controllable 16
2767+payment intangible; 17
2768+(3) notifies the account debtor that control of the controllable electronic 18
2769+record that evidences the controllable account or controllable payment 19
2770+intangible was transferred; 20 BILL AS INTRODUCED H.206
47532771 2025 Page 114 of 124
4754-(2)reasonablyidentifiesthecontrollableaccountorcontrollable
4755-paymentintangible;
4756-(3)notifiestheaccountdebtorthatcontrolofthecontrollableelectronic
4757-recordthatevidencesthecontrollableaccountorcontrollablepayment
4758-intangiblewastransferred;
4759-(4)identifiesthetransferee,inanyreasonableway,includingbyname,
4760-identifyingnumber,cryptographickey,office,oraccountnumber;and
4761-(5)providesacommerciallyreasonablemethodbywhichtheaccount
4762-debtoristopaythetransferee.
4763-(c)Afterreceiptofanotificationthatcomplieswithsubsection(b)ofthis
4764-section,theaccountdebtormaydischargeitsobligationbypayingin
4765-accordancewiththenotificationandmaynotdischargetheobligationby
4766-payingapersonthatformerlyhadcontrol.
4767-(d)Subjecttosubsection(h)ofthissection,notificationisineffective
4768-undersubsection(b)ofthissection:
4769-(1)unless,beforethenotificationissent,theaccountdebtorandthe
4770-personthat,atthattime,hadcontrolofthecontrollableelectronicrecordthat
4771-evidencesthecontrollableaccountorcontrollablepaymentintangibleagreein
4772-asignedrecordtoacommerciallyreasonablemethodbywhichapersonmay
4773-furnishreasonableproofthatcontrolhasbeentransferred;
4774-1
4775-2
4776-3
4777-4
4778-5
4779-6
4780-7
4781-8
4782-9
4783-10
4784-11
4785-12
4786-13
4787-14
4788-15
4789-16
4790-17
4791-18
4792-19
4793-20 BILLASPASSEDBYTHEHOUSE H.206
2772+
2773+
2774+VT LEG #378799 v.1
2775+(4) identifies the transferee, in any reasonable way, including by name, 1
2776+identifying number, cryptographic key, office, or account number; and 2
2777+(5) provides a commercially reasonable method by which the account 3
2778+debtor is to pay the transferee. 4
2779+(c) After receipt of a notification that complies with subsection (b) of this 5
2780+section, the account debtor may discharge its obligation by paying in 6
2781+accordance with the notification and may not discharge the obligation by 7
2782+paying a person that formerly had control. 8
2783+(d) Subject to subsection (h) of this section, notification is ineffective under 9
2784+subsection (b) of this section: 10
2785+(1) unless, before the notification is sent, the account debtor and the 11
2786+person that, at that time, had control of the controllable electronic record that 12
2787+evidences the controllable account or controllable payment intangible agree in 13
2788+a signed record to a commercially reasonable method by which a person may 14
2789+furnish reasonable proof that control has been transferred; 15
2790+(2) to the extent an agreement between the account debtor and seller of a 16
2791+payment intangible limits the account debtor’s duty to pay a person other than 17
2792+the seller and the limitation is effective under law other than this article; or 18
2793+(3) at the option of the account debtor, if the notification notifies the 19
2794+account debtor to: 20 BILL AS INTRODUCED H.206
47942795 2025 Page 115 of 124
4795-(2)totheextentanagreementbetweentheaccountdebtorandsellerof
4796-apaymentintangiblelimitstheaccountdebtor’sdutytopayapersonother
4797-thanthesellerandthelimitationiseffectiveunderlawotherthanthisarticle;
4798-or
4799-(3)attheoptionoftheaccountdebtor,ifthenotificationnotifiesthe
4800-accountdebtorto:
4801-(A)divideapayment;
4802-(B)makelessthanthefullamountofaninstallmentorotherperiodic
4803-payment;or
4804-(C)payanypartofapaymentbymorethanonemethodortomore
4805-thanoneperson.
4806-(e)Subjecttosubsection(h)ofthissection,ifrequestedbytheaccount
4807-debtor,thepersongivingthenotificationundersubsection(b)ofthissection
4808-seasonablyshallfurnishreasonableproof,usingthemethodintheagreement
4809-referredtoinsubdivision(d)(1)ofthissection,thatcontrolofthecontrollable
4810-electronicrecordhasbeentransferred.Unlessthepersoncomplieswiththe
4811-request,theaccountdebtormaydischargeitsobligationbypayingaperson
4812-thatformerlyhadcontrol,eveniftheaccountdebtorhasreceiveda
4813-notificationundersubsection(b)ofthissection.
4814-(f)Apersonfurnishesreasonableproofundersubsection(e)ofthissection
4815-thatcontrolhasbeentransferredifthepersondemonstrates,usingthemethod
4816-1
4817-2
4818-3
4819-4
4820-5
4821-6
4822-7
4823-8
4824-9
4825-10
4826-11
4827-12
4828-13
4829-14
4830-15
4831-16
4832-17
4833-18
4834-19
4835-20
4836-21 BILLASPASSEDBYTHEHOUSE H.206
2796+
2797+
2798+VT LEG #378799 v.1
2799+(A) divide a payment; 1
2800+(B) make less than the full amount of an installment or other periodic 2
2801+payment; or 3
2802+(C) pay any part of a payment by more than one method or to more 4
2803+than one person. 5
2804+(e) Subject to subsection (h) of this section, if requested by the account 6
2805+debtor, the person giving the notification under subsection (b) of this section 7
2806+seasonably shall furnish reasonable proof, using the method in the agreement 8
2807+referred to in subdivision (d)(1) of this section, that control of the controllable 9
2808+electronic record has been transferred. Unless the person complies with the 10
2809+request, the account debtor may discharge its obligation by paying a person 11
2810+that formerly had control, even if the account debtor has received a notification 12
2811+under subsection (b) of this section. 13
2812+(f) A person furnishes reasonable proof under subsection (e) of this section 14
2813+that control has been transferred if the person demonstrates, using the method 15
2814+in the agreement referred to in subdivision (d)(1) of this section, that the 16
2815+transferee has the power to: 17
2816+(1) avail itself of substantially all the benefit from the controllable 18
2817+electronic record; 19
2818+(2) prevent others from availing themselves of substantially all the 20
2819+benefit from the controllable electronic record; and 21 BILL AS INTRODUCED H.206
48372820 2025 Page 116 of 124
4838-intheagreementreferredtoinsubdivision(d)(1)ofthissection,thatthe
4839-transfereehasthepowerto:
4840-(1)availitselfofsubstantiallyallthebenefitfromthecontrollable
4841-electronicrecord;
4842-(2)preventothersfromavailingthemselvesofsubstantiallyallthe
4843-benefitfromthecontrollableelectronicrecord;and
4844-(3)transferthepowersspecifiedinsubdivisions(1)and(2)ofthis
4845-subsectiontoanotherperson.
4846-(g)Subjecttosubsection(h)ofthissection,anaccountdebtormaynot
4847-waiveorvaryitsrightsundersubdivision(d)(1)orsubsection(e)ofthis
4848-sectionoritsoptionundersubdivision(d)(3)ofthissection.
4849-(h)Thissectionissubjecttolawotherthanthisarticlewhichestablishesa
4850-differentruleforanaccountdebtorwhoisanindividualandwhoincurredthe
4851-obligationprimarilyforpersonal,family,orhouseholdpurposes.
4852-12—107.GOVERNINGLAW
4853-(a)Exceptasprovidedinsubsection(b)ofthissection,thelocallawofa
4854-controllableelectronicrecord’sjurisdictiongovernsamattercoveredbythis
4855-article.
4856-(b)Foracontrollableelectronicrecordthatevidencesacontrollable
4857-accountorcontrollablepaymentintangible,thelocallawofthecontrollable
4858-electronicrecord’sjurisdictiongovernsamattercoveredbysection12—106
4859-1
4860-2
4861-3
4862-4
4863-5
4864-6
4865-7
4866-8
4867-9
4868-10
4869-11
4870-12
4871-13
4872-14
4873-15
4874-16
4875-17
4876-18
4877-19
4878-20
4879-21 BILLASPASSEDBYTHEHOUSE H.206
2821+
2822+
2823+VT LEG #378799 v.1
2824+(3) transfer the powers specified in subdivisions (1) and (2) of this 1
2825+subsection to another person. 2
2826+(g) Subject to subsection (h) of this section, an account debtor may not 3
2827+waive or vary its rights under subdivision (d)(1) or subsection (e) of this 4
2828+section or its option under subdivision (d)(3) of this section. 5
2829+(h) This section is subject to law other than this article which establishes a 6
2830+different rule for an account debtor who is an individual and who incurred the 7
2831+obligation primarily for personal, family, or household purposes. 8
2832+12—107. GOVERNING LAW 9
2833+(a) Except as provided in subsection (b) of this section, the local law of a 10
2834+controllable electronic record’s jurisdiction governs a matter covered by this 11
2835+article. 12
2836+(b) For a controllable electronic record that evidences a controllable 13
2837+account or controllable payment intangible, the local law of the controllable 14
2838+electronic record’s jurisdiction governs a matter covered by section 12—106 of 15
2839+this title unless an effective agreement determines that the local law of another 16
2840+jurisdiction governs. 17
2841+(c) The following rules determine a controllable electronic record’s 18
2842+jurisdiction under this section: 19
2843+(1) If the controllable electronic record, or a record attached to or 20
2844+logically associated with the controllable electronic record and readily 21 BILL AS INTRODUCED H.206
48802845 2025 Page 117 of 124
4881-ofthistitleunlessaneffectiveagreementdeterminesthatthelocallawof
4882-anotherjurisdictiongoverns.
4883-(c)Thefollowingrulesdetermineacontrollableelectronicrecord’s
4884-jurisdictionunderthissection:
4885-(1)Ifthecontrollableelectronicrecord,orarecordattachedtoor
4886-logicallyassociatedwiththecontrollableelectronicrecordandreadily
4887-availableforreview,expresslyprovidesthataparticularjurisdictionisthe
4888-controllableelectronicrecord’sjurisdictionforpurposesofthisarticleortitle,
4889-thatjurisdictionisthecontrollableelectronicrecord’sjurisdiction.
4890-(2)Ifsubdivision(1)ofthissubsectiondoesnotapplyandtherulesof
4891-thesysteminwhichthecontrollableelectronicrecordisrecordedarereadily
4892-availableforreviewandexpresslyprovidethataparticularjurisdictionisthe
4893-controllableelectronicrecord’sjurisdictionforpurposesofthisarticleortitle,
4894-thatjurisdictionisthecontrollableelectronicrecord’sjurisdiction.
4895-(3)Ifsubdivisions(1)and(2)ofthissubsectiondonotapplyandthe
4896-controllableelectronicrecord,orarecordattachedtoorlogicallyassociated
4897-withthecontrollableelectronicrecordandreadilyavailableforreview,
4898-expresslyprovidesthatthecontrollableelectronicrecordisgovernedbythe
4899-lawofaparticularjurisdiction,thatjurisdictionisthecontrollableelectronic
4900-record’sjurisdiction.
4901-1
4902-2
4903-3
4904-4
4905-5
4906-6
4907-7
4908-8
4909-9
4910-10
4911-11
4912-12
4913-13
4914-14
4915-15
4916-16
4917-17
4918-18
4919-19
4920-20 BILLASPASSEDBYTHEHOUSE H.206
2846+
2847+
2848+VT LEG #378799 v.1
2849+available for review, expressly provides that a particular jurisdiction is the 1
2850+controllable electronic record’s jurisdiction for purposes of this article or title, 2
2851+that jurisdiction is the controllable electronic record’s jurisdiction. 3
2852+(2) If subdivision (1) of this subsection does not apply and the rules of 4
2853+the system in which the controllable electronic record is recorded are readily 5
2854+available for review and expressly provide that a particular jurisdiction is the 6
2855+controllable electronic record’s jurisdiction for purposes of this article or title, 7
2856+that jurisdiction is the controllable electronic record’s jurisdiction. 8
2857+(3) If subdivisions (1) and (2) of this subsection do not apply and the 9
2858+controllable electronic record, or a record attached to or logically associated 10
2859+with the controllable electronic record and readily available for review, 11
2860+expressly provides that the controllable electronic record is governed by the 12
2861+law of a particular jurisdiction, that jurisdiction is the controllable electronic 13
2862+record’s jurisdiction. 14
2863+(4) If subdivisions (1), (2), and (3) of this subsection do not apply and 15
2864+the rules of the system in which the controllable electronic record is recorded 16
2865+are readily available for review and expressly provide that the controllable 17 BILL AS INTRODUCED H.206
49212866 2025 Page 118 of 124
4922-(4)Ifsubdivisions(1),(2),and(3)ofthissubsectiondonotapplyand
4923-therulesofthesysteminwhichthecontrollableelectronicrecordisrecorded
4924-arereadilyavailableforreviewandexpresslyprovidethatthecontrollable
4925-electronicrecordorthesystemisgovernedbythelawofaparticular
4926-jurisdiction,thatjurisdictionisthecontrollableelectronicrecord’sjurisdiction.
4927-(5)Ifsubdivisions(1)–(4)ofthissubsectiondonotapply,the
4928-controllableelectronicrecord’sjurisdictionistheDistrictofColumbia.
4929-(d)Ifsubdivision(5)ofsubsection(c)ofthissectionappliesandArticle12
4930-isnotineffectintheDistrictofColumbiawithoutmaterialmodification,the
4931-governinglawforamattercoveredbythisarticleisthelawoftheDistrictof
4932-ColumbiaasthoughArticle12wereineffectintheDistrictofColumbia
4933-withoutmaterialmodification.Inthissubsection,“Article12”meansArticle
4934-12ofUniformCommercialCodeAmendments(2022).
4935-(e)Totheextentsubsections(a)and(b)ofthissectionprovidethatthe
4936-locallawofthecontrollableelectronicrecord’sjurisdictiongovernsamatter
4937-coveredbythisarticle,thatlawgovernsevenifthematteroratransactionto
4938-whichthematterrelatesdoesnotbearanyrelationtothecontrollable
4939-electronicrecord’sjurisdiction.
4940-(f)Therightsacquiredundersection12—104ofthistitlebyapurchaseror
4941-qualifyingpurchaseraregovernedbythelawapplicableunderthissectionat
4942-thetimeofpurchase.
4943-1
4944-2
4945-3
4946-4
4947-5
4948-6
4949-7
4950-8
4951-9
4952-10
4953-11
4954-12
4955-13
4956-14
4957-15
4958-16
4959-17
4960-18
4961-19
4962-20
4963-21 BILLASPASSEDBYTHEHOUSE H.206
2867+
2868+
2869+VT LEG #378799 v.1
2870+electronic record or the system is governed by the law of a particular 1
2871+jurisdiction, that jurisdiction is the controllable electronic record’s jurisdiction. 2
2872+(5) If subdivisions (1)–(4) of this subsection do not apply, the 3
2873+controllable electronic record’s jurisdiction is the District of Columbia. 4
2874+(d) If subdivision (5) of subsection (c) of this section applies and Article 12 5
2875+is not in effect in the District of Columbia without material modification, the 6
2876+governing law for a matter covered by this article is the law of the District of 7
2877+Columbia as though Article 12 were in effect in the District of Columbia 8
2878+without material modification. In this subsection, “Article 12” means Article 9
2879+12 of Uniform Commercial Code Amendments (2022). 10
2880+(e) To the extent subsections (a) and (b) of this section provide that the 11
2881+local law of the controllable electronic record’s jurisdiction governs a matter 12
2882+covered by this article, that law governs even if the matter or a transaction to 13
2883+which the matter relates does not bear any relation to the controllable 14
2884+electronic record’s jurisdiction. 15
2885+(f) The rights acquired under section 12—104 of this title by a purchaser or 16
2886+qualifying purchaser are governed by the law applicable under this section at 17
2887+the time of purchase. 18 BILL AS INTRODUCED H.206
49642888 2025 Page 119 of 124
4965-Sec.11.TRANSITIONALPROVISIONSFORARTICLES9AND12OF
4966-THEUNIFORMCOMMERCIALCODEAMENDMENTS
4967-(a)Generalprovisionsanddefinitions.
4968-(1)ThissectionmaybecitedasTransitionalProvisionsforUniform
4969-CommercialCodeAmendments(2022).
4970-(2)Asusedinthissection:
4971-(A)“Adjustmentdate”meansJuly1,2026,orthedatethatisone
4972-yearaftertheeffectivedateofthisact,whicheverislater.
4973-(B)“Article12”meansArticle12oftheUniformCommercialCode.
4974-(C)“Article12property”meansacontrollableaccount,controllable
4975-electronicrecord,orcontrollablepaymentintangible.
4976-(D)“Controllableaccount”hasthesamemeaningasinsection9—
4977-102oftheUniformCommercialCode—SecuredTransactions.
4978-(E)“Controllableelectronicrecord”hasthesamemeaningasin
4979-section12—102oftheUniformCommercialCode—ControllableElectronic
4980-Records.
4981-(F)“Controllablepaymentintangible”hasthesamemeaningasin
4982-section9—102oftheUniformCommercialCode—SecuredTransactions.
4983-(G)“Electronicmoney”hasthesamemeaningasinsection9-102of
4984-theUniformCommercialCode—SecuredTransactions.
4985-1
4986-2
4987-3
4988-4
4989-5
4990-6
4991-7
4992-8
4993-9
4994-10
4995-11
4996-12
4997-13
4998-14
4999-15
5000-16
5001-17
5002-18
5003-19
5004-20 BILLASPASSEDBYTHEHOUSE H.206
2889+
2890+
2891+VT LEG #378799 v.1
2892+Sec. 11. TRANSITIONAL PROVISIONS FOR ARTICLES 9 AND 12 OF 1
2893+ THE UNIFORM COMMERCIAL CODE AMENDMENTS 2
2894+(a) General provisions and definitions. 3
2895+(1) This section may be cited as Transitional Provisions for Uniform 4
2896+Commercial Code Amendments (2022). 5
2897+(2) As used in this section: 6
2898+(A) “Adjustment date” means July 1, 2026, or the date that is one 7
2899+year after the effective date of this act, whichever is later. 8
2900+(B) “Article 12” means Article 12 of the Uniform Commercial Code. 9
2901+(C) “Article 12 property” means a controllable account, controllable 10
2902+electronic record, or controllable payment intangible. 11
2903+(D) “Controllable account” has the same meaning as in section 9—12
2904+102 of the Uniform Commercial Code—Secured Transactions. 13
2905+(E) “Controllable electronic record” has the same meaning as in 14
2906+section 12—102 of the Uniform Commercial Code—Controllable Electronic 15
2907+Records. 16
2908+(F) “Controllable payment intangible” has the same meaning as in 17
2909+section 9—102 of the Uniform Commercial Code—Secured Transactions. 18
2910+(G) “Electronic money” has the same meaning as in section 9-102 of 19
2911+the Uniform Commercial Code—Secured Transactions. 20 BILL AS INTRODUCED H.206
50052912 2025 Page 120 of 124
5006-(H)“Financingstatement”hasthesamemeaningasinsection9—
5007-102oftheUniformCommercialCode—SecuredTransactions.
5008-(3)Article1oftheUniformCommercialCodecontainsgeneral
5009-definitionsandprinciplesofconstructionandinterpretationapplicable
5010-throughoutthissection.
5011-(b)Savingclauseandexceptions.
5012-(1)Exceptasprovidedinsubsections(c)–(g)ofthissection:
5013-(A)AtransactionvalidlyenteredintoJuly1,2025andtherights,
5014-duties,andinterestsflowingfromthetransactionremainvalidthereafterand
5015-maybeterminated,completed,consummated,orenforcedasrequiredor
5016-permittedbylawotherthantheUniformCommercialCode,or,ifapplicable,
5017-theUniformCommercialCode,asthoughthisacthadnottakeneffect.
5018-(B)Exceptasprovidedinsubsections(c)—(g)ofthissection,
5019-Article9asamendedbythisactandArticle12applytoatransaction,lien,or
5020-otherinterestinproperty,evenifthetransaction,lien,orinterestwasentered
5021-into,created,oracquiredbeforeJuly1,2025.
5022-(2)Exceptasprovidedinsubdivision(3)ofthissubsectionand
5023-subsections(c)–(g)ofthissection:
5024-(A)atransaction,lien,orinterestinpropertythatwasvalidlyentered
5025-into,created,ortransferredbeforeJuly1,2025andwasnotgovernedbythe
5026-UniformCommercialCode,butwouldbesubjecttoArticle9asamendedby
5027-1
5028-2
5029-3
5030-4
5031-5
5032-6
5033-7
5034-8
5035-9
5036-10
5037-11
5038-12
5039-13
5040-14
5041-15
5042-16
5043-17
5044-18
5045-19
5046-20
5047-21 BILLASPASSEDBYTHEHOUSE H.206
2913+
2914+
2915+VT LEG #378799 v.1
2916+(H) “Financing statement” has the same meaning as in section 9—1
2917+102 of the Uniform Commercial Code—Secured Transactions. 2
2918+(3) Article 1 of the Uniform Commercial Code contains general 3
2919+definitions and principles of construction and interpretation applicable 4
2920+throughout this section. 5
2921+(b) Saving clause and exceptions. 6
2922+(1) Except as provided in subsections (c)–(g) of this section: 7
2923+(A) A transaction validly entered into July 1, 2025 and the rights, 8
2924+duties, and interests flowing from the transaction remain valid thereafter and 9
2925+may be terminated, completed, consummated, or enforced as required or 10
2926+permitted by law other than the Uniform Commercial Code, or, if applicable, 11
2927+the Uniform Commercial Code, as though this act had not taken effect. 12
2928+(B) Except as provided in subsections (c)—(g) of this section, 13
2929+Article 9 as amended by this act and Article 12 apply to a transaction, lien, or 14
2930+other interest in property, even if the transaction, lien, or interest was entered 15
2931+into, created, or acquired before July 1, 2025. 16
2932+(2) Except as provided in subdivision (3) of this subsection and 17
2933+subsections (c)–(g) of this section: 18
2934+(A) a transaction, lien, or interest in property that was validly entered 19
2935+into, created, or transferred before July 1, 2025 and was not governed by the 20
2936+Uniform Commercial Code, but would be subject to Article 9 as amended by 21 BILL AS INTRODUCED H.206
50482937 2025 Page 121 of 124
5049-thisactorArticle12ifithadbeenenteredinto,created,ortransferredonor
5050-afterJuly1,2025,includingtherights,duties,andinterestsflowingfromthe
5051-transaction,lien,orinterest,remainsvalidonandafterJuly1,2025;and
5052-(B)thetransaction,lien,orinterestmaybeterminated,completed,
5053-consummated,andenforcedasrequiredorpermittedbythisactorbythelaw
5054-thatwouldapplyifthisacthadnottakeneffect.
5055-(3)Thisactdoesnotaffectanaction,case,orproceedingcommenced
5056-beforeJuly1,2025.
5057-(c)Securityinterestperfectedbeforeeffectivedate.
5058-(1)Asecurityinterestthatisenforceableandperfectedimmediately
5059-beforeJuly1,2025isaperfectedsecurityinterestunderthisactif,onJuly1,
5060-2025,therequirementsforenforceabilityandperfectionunderthisactare
5061-satisfiedwithoutfurtheraction.
5062-(2)Ifasecurityinterestisenforceableandperfectedimmediatelybefore
5063-theJuly1,2025,buttherequirementsforenforceabilityorperfectionunder
5064-thisactarenotsatisfiedonJuly1,2025,thesecurityinterest:
5065-(A)isaperfectedsecurityinterestuntiltheearlierofthetime
5066-perfectionwouldhaveceasedunderthelawineffectimmediatelybeforeJuly
5067-1,2025ortheadjustmentdate;
5068-(B)remainsenforceablethereafteronlyifthesecurityinterest
5069-satisfiestherequirementsforenforceabilityundersection9—203ofthe
5070-1
5071-2
5072-3
5073-4
5074-5
5075-6
5076-7
5077-8
5078-9
5079-10
5080-11
5081-12
5082-13
5083-14
5084-15
5085-16
5086-17
5087-18
5088-19
5089-20
5090-21 BILLASPASSEDBYTHEHOUSE H.206
2938+
2939+
2940+VT LEG #378799 v.1
2941+this act or Article 12 if it had been entered into, created, or transferred on or 1
2942+after July 1, 2025, including the rights, duties, and interests flowing from the 2
2943+transaction, lien, or interest, remains valid on and after July 1, 2025; and 3
2944+(B) the transaction, lien, or interest may be terminated, completed, 4
2945+consummated, and enforced as required or permitted by this act or by the law 5
2946+that would apply if this act had not taken effect. 6
2947+(3) This act does not affect an action, case, or proceeding commenced 7
2948+before July 1, 2025. 8
2949+(c) Security interest perfected before effective date. 9
2950+(1) A security interest that is enforceable and perfected immediately 10
2951+before July 1, 2025 is a perfected security interest under this act if, on July 1, 11
2952+2025, the requirements for enforceability and perfection under this act are 12
2953+satisfied without further action. 13
2954+(2) If a security interest is enforceable and perfected immediately before 14
2955+the July 1, 2025, but the requirements for enforceability or perfection under 15
2956+this act are not satisfied on July 1, 2025, the security interest: 16
2957+(A) is a perfected security interest until the earlier of the time 17
2958+perfection would have ceased under the law in effect immediately before July 18
2959+1, 2025 or the adjustment date; 19
2960+(B) remains enforceable thereafter only if the security interest 20
2961+satisfies the requirements for enforceability under section 9—203 of the 21 BILL AS INTRODUCED H.206
50912962 2025 Page 122 of 124
5092-UniformCommercialCode,asamendedbythisact,beforetheadjustment
5093-date;and
5094-(C)remainsperfectedthereafteronlyiftherequirementsfor
5095-perfectionunderthisactaresatisfiedbeforethetimespecifiedinsubdivision
5096-(A)ofthissubdivision(c)(2).
5097-(d)Securityinterestunperfectedbeforeeffectivedate.Asecurityinterest
5098-thatisenforceableimmediatelybeforeJuly1,2025butisunperfectedatthat
5099-time:
5100-(1)remainsanenforceablesecurityinterestuntiltheadjustmentdate;
5101-(2)remainsenforceablethereafterifthesecurityinterestbecomes
5102-enforceableundersection9—203oftheUniformCommercialCode,as
5103-amendedbythisact,onJuly1,2025orbeforetheadjustmentdate;and
5104-(3)becomesperfected:
5105-(A)withoutfurtheraction,onJuly1,2025iftherequirementsfor
5106-perfectionunderthisactaresatisfiedbeforeoratthattime;or
5107-(B)whentherequirementsforperfectionaresatisfiedifthe
5108-requirementsaresatisfiedafterthattime.
5109-(e)Effectivenessofactionstakenbeforeeffectivedate.
5110-(1)Ifaction,otherthanthefilingofafinancingstatement,istaken
5111-beforeJuly1,2025andtheactionwouldhaveresultedinperfectionofthe
5112-securityinteresthadthesecurityinterestbecomeenforceablebeforeJuly1,
5113-1
5114-2
5115-3
5116-4
5117-5
5118-6
5119-7
5120-8
5121-9
5122-10
5123-11
5124-12
5125-13
5126-14
5127-15
5128-16
5129-17
5130-18
5131-19
5132-20
5133-21 BILLASPASSEDBYTHEHOUSE H.206
2963+
2964+
2965+VT LEG #378799 v.1
2966+Uniform Commercial Code, as amended by this act, before the adjustment 1
2967+date; and 2
2968+(C) remains perfected thereafter only if the requirements for 3
2969+perfection under this act are satisfied before the time specified in subdivision 4
2970+(A) of this subdivision (c)(2). 5
2971+(d) Security interest unperfected before effective date. A security interest 6
2972+that is enforceable immediately before July 1, 2025 but is unperfected at that 7
2973+time: 8
2974+(1) remains an enforceable security interest until the adjustment date; 9
2975+(2) remains enforceable thereafter if the security interest becomes 10
2976+enforceable under section 9—203 of the Uniform Commercial Code, as 11
2977+amended by this act, on July 1, 2025 or before the adjustment date; and 12
2978+(3) becomes perfected: 13
2979+(A) without further action, on July 1, 2025 if the requirements for 14
2980+perfection under this act are satisfied before or at that time; or 15
2981+(B) when the requirements for perfection are satisfied if the 16
2982+requirements are satisfied after that time. 17
2983+(e) Effectiveness of actions taken before effective date. 18
2984+(1) If action, other than the filing of a financing statement, is taken 19
2985+before July 1, 2025 and the action would have resulted in perfection of the 20
2986+security interest had the security interest become enforceable before July 1, 21 BILL AS INTRODUCED H.206
51342987 2025 Page 123 of 124
5135-2025,theactioniseffectivetoperfectasecurityinterestthatattachesunder
5136-thisactbeforetheadjustmentdate.Anattachedsecurityinterestbecomes
5137-unperfectedontheadjustmentdateunlessthesecurityinterestbecomesa
5138-perfectedsecurityinterestunderthisactbeforetheadjustmentdate.
5139-(2)ThefilingofafinancingstatementbeforeJuly1,2025iseffectiveto
5140-perfectasecurityinterestonJuly1,2025totheextentthefilingwouldsatisfy
5141-therequirementsforperfectionunderthisact.
5142-(3)ThetakingofanactionbeforeJuly1,2025issufficientforthe
5143-enforceabilityofasecurityinterestonJuly1,2025iftheactionwouldsatisfy
5144-therequirementsforenforceabilityunderthisact.
5145-(f)Priority.
5146-(1)Subjecttosubdivisions(2)and(3)ofthissubsection,thisact
5147-determinesthepriorityofconflictingclaimstocollateral.
5148-(2)Subjecttosubdivision(3)ofthissubsection,iftheprioritiesof
5149-claimstocollateralwereestablishedbeforeJuly1,2025,Article9asineffect
5150-beforeJuly1,2025determinespriority.
5151-(3)Ontheadjustmentdate,totheextenttheprioritiesdeterminedby
5152-Article9asamendedbythisactmodifytheprioritiesestablishedbeforeJuly
5153-1,2025,theprioritiesofclaimstoArticle12propertyandelectronicmoney
5154-establishedbeforeJuly1,2025ceasetoapply.
5155-(g)PriorityofclaimswhenpriorityrulesofArticle9donotapply.
5156-1
5157-2
5158-3
5159-4
5160-5
5161-6
5162-7
5163-8
5164-9
5165-10
5166-11
5167-12
5168-13
5169-14
5170-15
5171-16
5172-17
5173-18
5174-19
5175-20
5176-21 BILLASPASSEDBYTHEHOUSE H.206
2988+
2989+
2990+VT LEG #378799 v.1
2991+2025, the action is effective to perfect a security interest that attaches under 1
2992+this act before the adjustment date. An attached security interest becomes 2
2993+unperfected on the adjustment date unless the security interest becomes a 3
2994+perfected security interest under this act before the adjustment date. 4
2995+(2) The filing of a financing statement before July 1, 2025 is effective to 5
2996+perfect a security interest on July 1, 2025 to the extent the filing would satisfy 6
2997+the requirements for perfection under this act. 7
2998+(3) The taking of an action before July 1, 2025 is sufficient for the 8
2999+enforceability of a security interest on July 1, 2025 if the action would satisfy 9
3000+the requirements for enforceability under this act. 10
3001+(f) Priority. 11
3002+(1) Subject to subdivisions (2) and (3) of this subsection, this act 12
3003+determines the priority of conflicting claims to collateral. 13
3004+(2) Subject to subdivision (3) of this subsection, if the priorities of 14
3005+claims to collateral were established before July 1, 2025, Article 9 as in effect 15
3006+before July 1, 2025 determines priority. 16
3007+(3) On the adjustment date, to the extent the priorities determined by 17
3008+Article 9 as amended by this act modify the priorities established before July 1, 18
3009+2025, the priorities of claims to Article 12 property and electronic money 19
3010+established before July 1, 2025 cease to apply. 20
3011+(g) Priority of claims when priority rules of Article 9 do not apply. 21 BILL AS INTRODUCED H.206
51773012 2025 Page 124 of 124
5178-(1)Subjecttosubdivisions(2)and(3)ofthissubsection,Article12
5179-determinesthepriorityofconflictingclaimstoArticle12propertywhenthe
5180-priorityrulesofArticle9asamendedbythisactdonotapply.
5181-(2)Subjecttosubdivision(3)ofthissubsection,whenthepriorityrules
5182-ofArticle9asamendedbythisactdonotapplyandtheprioritiesofclaimsto
5183-Article12propertywereestablishedbeforeJuly1,2025,lawotherthan
5184-Article12determinespriority.
5185-(3)WhenthepriorityrulesofArticle9asamendedbythisactdonot
5186-apply,totheextenttheprioritiesdeterminedbythisactmodifythepriorities
5187-establishedbeforeJuly1,2025,theprioritiesofclaimstoArticle12property
5188-establishedbeforeJuly1,2025ceasetoapplyontheadjustmentdate.
5189-Sec.11a.INCLUSIONOFOFFICIALCOMMENTS
5190-Codificationofthechangessetforthinthisactshallincludetheofficial
5191-commentsoftheUniformCommercialCodeassetforthinthefinalofficialtext
5192-oftheAmericanLawInstituteandtheNationalConferenceofCommissioners
5193-onUniformStateLaws,providedthatthecommentsshall,inaddition,include
5194-appropriatereferencestoanyVermontvariationstotheofficialtext.
5195-Sec.12.EFFECTIVEDATE
5196-ThisactshalltakeeffectonJuly1,2025.
5197-1
5198-2
5199-3
5200-4
5201-5
5202-6
5203-7
5204-8
5205-9
5206-10
5207-11
5208-12
5209-13
3013+
3014+
3015+VT LEG #378799 v.1
3016+(1) Subject to subdivisions (2) and (3) of this subsection, Article 12 1
3017+determines the priority of conflicting claims to Article 12 property when the 2
3018+priority rules of Article 9 as amended by this act do not apply. 3
3019+(2) Subject to subdivision (3) of this subsection, when the priority rules 4
3020+of Article 9 as amended by this act do not apply and the priorities of claims to 5
3021+Article 12 property were established before July 1, 2025, law other than Article 6
3022+12 determines priority. 7
3023+(3) When the priority rules of Article 9 as amended by this act do not 8
3024+apply, to the extent the priorities determined by this act modify the priorities 9
3025+established before July 1, 2025, the priorities of claims to Article 12 property 10
3026+established before July 1, 2025 cease to apply on the adjustment date. 11
3027+Sec. 12. EFFECTIVE DATE 12
3028+This act shall take effect on July 1, 2025. 13