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Senate Study Bill 1177 - IntroducedA Bill ForAn Act 1relating to commercial transactions, including control
2and transmission of electronic records and digital assets.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2UNIFORM COMMERCIAL CODE
3PART A
4CONTROLLABLE ELECTRONIC RECORDS
5 Section 1. Section 554.14101, Code 2023, is amended to read
6as follows:
7554.14101 Short title.
8This Article may be cited as the Uniform Commercial Code —
9Controllable Electronic Records.
10 Sec. 2. Section 554.14102, Code 2023, is amended to read as
11follows:
12554.14102 Definitions.
131. Article 14 definitions. Article 14 definitions. In this
14Article:
15a. “Controllable electronic record” means a record stored
16in an electronic medium that can be subjected to control under
17section 554.14105. The term does not include a controllable
18account, a controllable payment intangible, a deposit account,
19electronic chattel paper, an electronic copy of a record
20evidencing chattel paper, an electronic document of title,
21electronic money, investment property, or a transferable
22record.
23b. “Qualifying purchaser” means a purchaser of a
24controllable electronic record or an interest in the a
25 controllable electronic record that obtains control of the
26controllable electronic record for value, in good faith,
27and without notice of a claim of a property right in the
28controllable electronic record.
29c. “Transferable record” means has the meaning provided for
30that term in:
31(1) “Transferable record”, as defined in the federal Section
32201(a)(1) of the Electronic Signatures in Global and National
33Commerce Act, 15 U.S.C. §7021(a)(1), as amended.; or
34(2) “Transferable record” as defined in the uniform
35electronic transactions Uniform Electronic Transactions Act,
-1-1section 554D.118, subsection 1.
2d. “Value” has the meaning provided in section 554.3303,
3subsection 1, as if references in that subsection to an
4“instrument” were references to a controllable account,
5controllable electronic record, or controllable payment
6intangible.
72. Definitions in Article 9. Definitions in Article 9. The
8definitions in Article 9 of “account debtor”, “authenticate”,
9 “controllable account”, “controllable payment intangible”,
10“chattel paper”, “deposit account”, “electronic chattel paper”,
11 “electronic money”, and “investment property” apply to this
12Article.
133. Article 1 definitions and principles. Article 1 contains
14general definitions and principles of construction and
15interpretation applicable throughout this Article.
16 Sec. 3. Section 554.14103, Code 2023, is amended to read as
17follows:
18554.14103 Scope Relation to Article 9 and consumer laws.
191. Article 9 governs in case of conflict. If there is
20conflict between this Article and Article 9, Article 9 governs.
212. Applicable consumer law and other laws. A transaction
22subject to this Article is subject to:
23a. any applicable rule of law that establishes a different
24rule for consumers, including as provided in chapter 537 and
25any other consumer protection statute or regulation of this
26state; and
27b. any other statute or regulation of this state that
28regulates the rates, charges, agreements, and practices for
29loans, credit sales, or other extensions of credit or credit
30transactions, including as provided in chapter 535.
31 Sec. 4. Section 554.14104, Code 2023, is amended to read as
32follows:
33554.14104 Rights in controllable account, controllable
34electronic record, and controllable payment intangible.
351. Applicability of section to controllable account and
-2-1controllable payment intangible. This section applies to the
2acquisition and purchase of rights in a controllable account
3or controllable payment intangible, including the rights and
4benefits under subsections 3, 4, 5, 7, and 8 of a purchaser
5and a qualifying purchaser, and under subsections 3, 4, and 6,
6and in the same manner this section applies to a controllable
7electronic record.
82. Control of controllable account and controllable payment
9intangible. To determine whether a purchaser of a controllable
10account or a controllable payment intangible is a qualifying
11purchaser, the purchaser obtains control of the account or
12payment intangible if it obtains control of the controllable
13electronic record that evidences the account or payment
14intangible.
152. 3. Applicability of other law to acquisition of
16rights. Except as provided in this section, law other than
17this Article determines whether a person acquires a right in
18a controllable electronic record and the right the person
19acquires.
203. 4. Shelter principle and purchase of limited interest. A
21purchaser of a controllable electronic record acquires
22all rights in the controllable electronic record that the
23transferor had or had power to transfer, except that a
24purchaser of a limited interest in a controllable electronic
25record acquires rights only to the extent of the interest
26purchased.
274. 5. Rights of qualifying purchaser. A qualifying
28purchaser acquires its rights in the controllable electronic
29record free of a claim of a property right in the controllable
30electronic record.
315. 6. Limitation of rights of qualifying purchaser in
32other property. Except as provided in subsections 1 and 4
33 5 for a controllable accounts account and a controllable
34payment intangibles intangible or law other than this Article,
35a qualifying purchaser takes a right to payment, right to
-3-1performance, or other interest in property evidenced by the
2controllable electronic record subject to a claim of a property
3right in the right to payment, right to performance, or other
4interest in property.
56. 7. No-action protection for qualifying purchaser. An
6action shall not be asserted against a qualifying purchaser
7based on both a purchase by the qualifying purchaser of a
8controllable electronic record and a claim of a property
9right in another controllable electronic record, whether the
10action is framed in conversion, replevin, constructive trust,
11equitable lien, or other theory.
127. 8. Filing not notice. Filing of a financing statement
13under Article 9 is not notice of a claim of a property right in
14a controllable electronic record.
15 Sec. 5. Section 554.14105, Code 2023, is amended to read as
16follows:
17554.14105 Control of controllable electronic record.
181. General rule: — control of controllable electronic
19record. A person has control of a controllable electronic
20record if the electronic record, a record attached to or
21logically associated with the electronic record, or a system in
22which the electronic record is recorded:
23a. the electronic record, a record attached to or logically
24associated with the electronic record, or a system in which the
25electronic record is recorded gives the person:
26(1) the power to avail itself of substantially all the
27benefit from the electronic record; and
28(2) exclusive power, subject to subsection 2, to:
29(a) prevent others from availing themselves of
30substantially all the benefit from the electronic record; and
31(b) transfer control of the electronic record to another
32person or cause another person to obtain control of another
33controllable electronic record as a result of the transfer of
34the electronic record; and
35b. the electronic record, a record attached to or logically
-4-1associated with the electronic record, or a system in which
2the electronic record is recorded enables the person readily
3to identify itself in any way, including by name, identifying
4number, cryptographic key, office, or account number, as having
5the powers specified in paragraph “a”.
62. Control through another person. A person has control of
7a controllable electronic record if another person, other than
8the transferor of an interest in the electronic record:
9a. has control of the electronic record and acknowledges
10that it has control on behalf of the person, or
11b. obtains control of the electronic record after having
12acknowledged that it will obtain control of the electronic
13record on behalf of the person.
143. 2. Meaning of exclusive. A power specified in Subject
15to subsection 1 3, paragraph “a”, subparagraph (2), a power is
16exclusive, under subsection 1, paragraph “a”, subparagraph (2),
17subparagraph divisions (a) and (b) even if:
18a. the controllable electronic record, a record attached
19to or logically associated with the electronic record, or a
20system in which the electronic record is recorded limits the
21use of the electronic record or has a protocol programmed to
22cause a change, including a transfer or loss of control or a
23modification of benefits afforded by the electronic record; or
24b. the person has agreed to share the power is shared with
25another person.
263. When power not shared with another person. A power of a
27person is not shared with another person under subsection 2,
28paragraph “b” and the person’s power is not exclusive if:
29a. the person can exercise the power only if the power also
30is exercised by the other person; and
31b. the other person:
32(1) can exercise the power without exercise of the power by
33the person; or
34(2) is the transferor to the person of an interest in the
35controllable electronic record or a controllable account or
-5-1controllable payment intangible evidenced by the controllable
2electronic record.
34. Presumption of exclusivity of certain powers. If a
4person has the powers specified in subsection 1, paragraph “a”,
5subparagraph (2), subparagraph divisions (a) and (b) the powers
6are presumed to be exclusive.
75. Control through another person. A person has control of
8a controllable electronic record if another person, other than
9the transferor to the person of an interest in the controllable
10electronic record or a controllable account or controllable
11payment intangible evidenced by the controllable electronic
12record:
13a. has control of the electronic record and acknowledges
14that it has control on behalf of the person; or
15b. obtains control of the electronic record after having
16acknowledged that it will obtain control of the electronic
17record on behalf of the person.
186. No requirement to acknowledge. A person that has control
19under this section is not required to acknowledge that it has
20control on behalf of another person.
217. No duties or confirmation. If a person acknowledges that
22it has or will obtain control on behalf of another person,
23unless the person otherwise agrees or law other than this
24Article or Article 9 otherwise provides, the person does not
25owe any duty to the other person and is not required to confirm
26the acknowledgment to any other person.
27 Sec. 6. Section 554.14106, Code 2023, is amended to read as
28follows:
29554.14106 Discharge of account debtor on controllable account
30or controllable payment intangible.
311. Discharge of account debtor. An account debtor on a
32controllable account or controllable payment intangible may
33discharge its obligation by paying:
34a. the person having control of the controllable electronic
35record that evidences the controllable account or controllable
-6-1payment intangible; or
2b. except as provided in subsection 2, a person that
3formerly had control of the controllable electronic record.
42. Effect Content and effect of notification. Subject to
5subsection 4, an the account debtor shall not discharge its
6obligation by paying a person that formerly had control of the
7controllable electronic record if the account debtor receives a
8notification that:
9a. is authenticated signed by a person that formerly had
10control or the person to which control was transferred;
11b. reasonably identifies the controllable account or
12controllable payment intangible;
13c. notifies the account debtor that control of the
14controllable electronic record that evidences the controllable
15account or controllable payment intangible was transferred;
16d. identifies the transferee, in any reasonable way,
17including by name, identifying number, cryptographic key,
18office, or account number; and
19e. provides a commercially reasonable method by which the
20account debtor is to pay the transferee.
213. Discharge following effective notification. After
22receipt of a notification that complies with subsection 2, the
23account debtor may discharge its obligation only by paying in
24accordance with the notification and shall not discharge the
25obligation by paying a person that formerly had control.
264. When notification ineffective. Notification Subject to
27subsection 8, notification is ineffective under subsection 2:
28a. unless, before the notification is sent, an the account
29debtor and the person that, at that time, had control of the
30controllable electronic record that evidences the controllable
31account or controllable payment intangible agree in an
32authenticated a signed record to a commercially reasonable
33method by which a person must furnish reasonable proof that
34control has been transferred;
35b. to the extent an agreement between an the account debtor
-7-1and seller of a payment intangible limits the account debtor’s
2duty to pay a person other than the seller and the limitation
3is effective under law other than this Article; or
4c. at the option of an the account debtor, if the
5notification notifies the account debtor to:
6(1) divide a payment;
7(2) make less than the full amount of any an installment or
8other periodic payment; or
9(3) pay any part of a payment by more than one method or to
10more than one person.
115. Proof of transfer of control. If Subject to subsection
128, if requested by the account debtor, the person giving the
13notification under subsection 2 seasonably shall furnish
14reasonable proof, using the agreed method in the agreement
15referred to in subsection 4, paragraph “a”, that control of the
16controllable electronic record has been transferred. Unless
17the person complies with the request, the account debtor may
18discharge its obligation by paying a person that formerly had
19control, even if the account debtor has received a notification
20under subsection 2.
216. What constitutes reasonable proof. A person furnishes
22reasonable proof under subsection 5 that control has been
23transferred if the person demonstrates, using the agreed method
24in the agreement referred to in subsection 4, paragraph “a”,
25that the transferee has the power to:
26a. avail itself of substantially all the benefit from the
27controllable electronic record;
28b. prevent others from availing themselves of substantially
29all the benefit from the controllable electronic record; and
30c. transfer the powers mentioned specified in paragraphs “a”
31and “b” to another person.
327. Rights not waivable. An Subject to subsection 8,
33an account debtor shall not waive or vary its rights under
34subsection 4, paragraph “a”, and subsection 5 or its option
35under subsection 4, paragraph “c”.
-8- 18. Rule for individual under other law. This section is
2subject to law other than this Article which establishes a
3different rule for an account debtor who is an individual and
4who incurred the obligation primarily for personal, family, or
5household purposes.
6 Sec. 7. Section 554.14107, Code 2023, is amended by striking
7the section and inserting in lieu thereof the following:
8554.14107 Governing law.
91. Governing law: general rule. Except as provided in
10subsection 2, the local law of a controllable electronic
11record’s jurisdiction governs a matter covered by this Article.
122. Governing law: section 554.14106. For a controllable
13electronic record that evidences a controllable account
14or controllable payment intangible, the local law of the
15controllable electronic record’s jurisdiction governs a matter
16covered by section 554.14106 unless an effective agreement
17determines that the local law of another jurisdiction governs.
183. Controllable electronic record’s jurisdiction. The
19following rules determine a controllable electronic record’s
20jurisdiction under this section:
21a. if the controllable electronic record, or a record
22attached to or logically associated with the controllable
23electronic record and readily available for review, expressly
24provides that a particular jurisdiction is the controllable
25electronic record’s jurisdiction for purposes of this section,
26Article, or chapter, that jurisdiction is the controllable
27electronic record’s jurisdiction.
28b. if paragraph “a” does not apply and the rules of the
29system in which the controllable electronic record is recorded
30are readily available for review and expressly provide that a
31particular jurisdiction is the controllable electronic record’s
32jurisdiction for purposes of this section, Article, or chapter,
33that jurisdiction is the controllable electronic record’s
34jurisdiction.
35c. if paragraphs “a” and “b” do not apply and the
-9-1controllable electronic record, or a record attached to or
2logically associated with the controllable electronic record
3and readily available for review, expressly provides that the
4controllable electronic record is governed by the law of a
5particular jurisdiction, that jurisdiction is the controllable
6electronic record’s jurisdiction.
7d. if paragraphs “a”, “b”, and “c” do not apply and the
8rules of the system in which the controllable electronic
9record is recorded are readily available for review and
10expressly provide that the controllable electronic record or
11the system is governed by the law of a particular jurisdiction,
12that jurisdiction is the controllable electronic record’s
13jurisdiction.
14e. if paragraphs “a” through “d” do not apply, the
15controllable electronic record’s jurisdiction is the District
16of Columbia.
174. Applicability of Article 12. If subsection 3, paragraph
18“e”, applies and Article 12 is not in effect in the District of
19Columbia without material modification, the governing law for
20a matter covered by this Article is the law of the District of
21Columbia as though Article 12 were in effect in the District of
22Columbia without material modification. In this subsection,
23“Article 12” means Article 12 of Uniform Commercial Code
24Amendments (2022) approved by the uniform law commission at its
25annual meeting in July 2022.
265. Relation of matter or transaction to controllable
27electronic record’s jurisdiction not necessary. To the
28extent subsections 1 and 2 provide that the local law of the
29controllable electronic record’s jurisdiction governs a matter
30covered by this Article, that law governs even if the matter
31or a transaction to which the matter relates does not bear any
32relation to the controllable electronic record’s jurisdiction.
336. Rights of purchasers determined at time of purchase. The
34rights acquired under section 554.14104 by a purchaser or
35qualifying purchaser are governed by the law applicable under
-10-1this section at the time of purchase.
2 Sec. 8. Section 554.14108, Code 2023, is amended to read as
3follows:
4554.14108 Applicability.
51. This Article applies to any transaction involving a
6controllable electronic record that arises on or after July 1,
72022. This Article does not apply to any transaction involving
8a controllable electronic record that arises before July 1,
92022, even if the transaction would be subject to this Article
10if the transaction had arisen on or after July 1, 2022. This
11Article does not apply to a right of action with regard to any
12transaction involving a controllable electronic record that has
13accrued before July 1, 2022.
142. This section is repealed on July 1, 2025.
15 Sec. 9. Section 554.14109, Code 2023, is amended to read as
16follows:
17554.14109 Savings clause.
181. Any transaction involving a controllable electronic
19record that arose before July 1, 2022, and the rights,
20obligations, and interests flowing from that transaction are
21governed by any statute or other rule amended or repealed by
22this Article as if such amendment or repeal had not occurred
23and may be terminated, completed, consummated, or enforced
24under that statute or other rule.
252. This section is repealed on July 1, 2025.
26PART B
27RELATED ARTICLES
28GENERAL
29 Sec. 10. Section 554.1201, subsection 2, paragraphs o, y,
30ak, and al, Code 2023, are amended to read as follows:
31o. “Delivery”, with respect to an electronic document
32of title, means voluntary transfer of control and, with
33respect to an instrument, a tangible document of title, or an
34authoritative tangible copy of a record evidencing chattel
35paper, means voluntary transfer of possession.
-11- 1y. “Money” means a medium of exchange that: is currently
2authorized or adopted by a domestic or foreign government. The
3term includes a monetary unit of account established by an
4intergovernmental organization, or pursuant to an agreement
5between two or more countries. The term does not include an
6electronic record that is a medium of exchange recorded and
7transferable in a system that existed and operated for the
8medium of exchange before the medium of exchange was authorized
9or adopted by the government.
10(1) is currently authorized or adopted by a domestic or
11foreign government, by an intergovernmental organization, or
12pursuant to an agreement between two or more governments; and
13(2) was initially issued, created, or distributed by
14a domestic or foreign government, by an intergovernmental
15organization, or pursuant to an agreement between two or more
16governments.
17ak. “Send” in connection with a writing, record, or notice
18 notification means:
19(1) to deposit in the mail, or deliver for transmission,
20or transmit by any other usual means of communication, with
21postage or cost of transmission provided for, and properly
22 addressed and, in the case of an instrument, to an address
23specified thereon or otherwise agreed, or if there be none to
24any address reasonable under the circumstances; or
25(2) in any other way to cause to be received any the record
26or notice notification to be received within the time it would
27have arrived been received if properly sent under subparagraph
28(1).
29al. (1) “Signed” includes using any symbol executed
30or adopted “Sign” means with present intention intent to
31authenticate or adopt or accept a writing. record that:
32(a) executes or adopts a tangible symbol; or
33(b) attaches to or logically associates with the record an
34electronic symbol, sound, or process.
35(2) “Signed”, “signing”, and “signature” have corresponding
-12-1meanings.
2 Sec. 11. Section 554.1301, subsection 3, paragraph g, Code
32023, is amended to read as follows:
4g. Sections 554.13105 and 554.13106.;
5 Sec. 12. Section 554.1301, subsection 3, Code 2023, is
6amended by adding the following new paragraph:
7 NEW PARAGRAPH. h. Section 554.14107.
8 Sec. 13. Section 554.1306, Code 2023, is amended to read as
9follows:
10554.1306 Waiver or renunciation of claim or right after
11breach.
12A claim or right arising out of an alleged breach may
13be discharged in whole or in part without consideration by
14agreement of the aggrieved party in an authenticated a signed
15 record.
16PART C
17RELATED ARTICLES
18SECURED TRANSACTIONS
19 Sec. 14. Section 554.9102, subsection 1, paragraphs b, c,
20d, ab, ac, as, ax, bf, and br, Code 2023, are amended to read
21as follows:
22b. “Account”, except as used in “account for”, “account
23statement”, “account to”, “commodity account” in paragraph “n”,
24“customer’s account”, “deposit account” in paragraph “ae”, “on
25account of”, and paragraph “ae” “statement of account”, means
26a right to payment of a monetary obligation, whether or not
27earned by performance, (i) for property that has been or is
28to be sold, leased, licensed, assigned, or otherwise disposed
29of; (ii) for services rendered or to be rendered; (iii) for
30a policy of insurance issued or to be issued; (iv) for a
31secondary obligation incurred or to be incurred; (v) for energy
32provided or to be provided; (vi) for the use or hire of a vessel
33under a charter or other contract; (vii) arising out of the use
34of a credit or charge card or information contained on or for
35use with the card; or (viii) as winnings in a lottery or other
-13-1game of chance operated or sponsored by a state, governmental
2unit of a state, or person licensed or authorized to operate
3the game by a state or governmental unit of a state. The
4term includes controllable accounts and health care insurance
5receivables. The term does not include (i) chattel paper, (ii)
6commercial tort claims, (iii) deposit accounts, (iv) investment
7property, (v) letter-of-credit rights or letters of credit,
8(vi) rights to payment for money or funds advanced or sold,
9other than rights arising out of the use of a credit or charge
10card or information contained on or for use with the card, or
11(vii) rights to payment evidenced by an instrument.
12c. “Account debtor” means a person obligated on an account,
13chattel paper, or general intangible. The term does not
14include persons obligated to pay a negotiable instrument, even
15if the negotiable instrument constitutes part of evidences
16 chattel paper.
17d. “Accounting”, except as used in “accounting for”, means a
18record:
19(1) authenticated signed by a secured party;
20(2) indicating the aggregate unpaid secured obligations as
21of a date not more than thirty-five days earlier or thirty-five
22days later than the date of the record; and
23(3) identifying the components of the obligations in
24reasonable detail.
25ab. “Controllable account” means an account evidenced by a
26controllable electronic record that provides that the account
27debtor undertakes to pay the person that has control under
28section 554.14105 has control of the controllable electronic
29record.
30ac. “Controllable payment intangible” means a payment
31intangible evidenced by a controllable electronic record that
32provides that the account debtor undertakes to pay the person
33that has control under section 554.14105 has control of the
34controllable electronic record.
35as. “General intangible” means any personal property,
-14-1including things in action, other than accounts, chattel paper,
2commercial tort claims, deposit accounts, documents, goods,
3instruments, investment property, letter-of-credit rights,
4letters of credit, money, and oil, gas, or other minerals
5before extraction. The term includes controllable electronic
6records, payment intangibles, and software.
7ax. “Instrument” means a negotiable instrument or any
8other writing that evidences a right to the payment of a
9monetary obligation, is not itself a security agreement or
10lease, and is of a type that in ordinary course of business
11is transferred by delivery with any necessary indorsement or
12assignment. The term does not include (i) investment property,
13(ii) letters of credit, or (iii) writings that evidence a right
14to payment arising out of the use of a credit or charge card
15or information contained on or for use with the card, or (iv)
16writings that evidence chattel paper.
17bf. “Money” has the meaning provided in section 554.1201,
18subsection 2, paragraph “y”, but does not include (i) a deposit
19account or (ii) money in an electronic form that cannot be
20subjected to control under section 554.9105A.
21br. “Proposal” means a record authenticated signed by a
22secured party which includes the terms on which the secured
23party is willing to accept collateral in full or partial
24satisfaction of the obligation it secures pursuant to sections
25554.9620, 554.9621, and 554.9622.
26 Sec. 15. Section 554.9102, subsection 1, Code 2023, is
27amended by adding the following new paragraphs:
28 NEW PARAGRAPH. 0g. “Assignee”, except as used in “assignee
29for benefit of creditors”, means a person (i) in whose favor
30a security interest that secures an obligation is created or
31provided for under a security agreement, whether or not the
32obligation is outstanding or (ii) to which an account, chattel
33paper, payment intangible, or promissory note has been sold.
34The term includes a person to which a security interest has
35been transferred by a secured party.
-15-1 NEW PARAGRAPH. 00g. “Assignor” means a person that (i)
2under a security agreement creates or provides for a security
3interest that secures an obligation or (ii) sells an account,
4chattel paper, payment intangible, or promissory note. The
5term includes a secured party that has transferred a security
6interest to another person.
7 Sec. 16. Section 554.9102, subsection 1, paragraphs g, ag,
8ca, and ce, Code 2023, are amended by striking the paragraphs.
9 Sec. 17. Section 554.9102, subsection 1, paragraph k, Code
102023, is amended by striking the paragraph and inserting in
11lieu thereof the following:
12k. (1) “Chattel paper” means:
13(a) a right to payment of a monetary obligation secured by
14specific goods, if the right to payment and security agreement
15are evidenced by a record; or
16(b) a right to payment of a monetary obligation owed by a
17lessee under a lease agreement with respect to specific goods
18and a monetary obligation owed by the lessee in connection with
19the transaction giving rise to the lease, if:
20(i) the right to payment and lease agreement are evidenced
21by a record; and
22(ii) the predominant purpose of the transaction giving rise
23to the lease was to give the lessee the right to possession and
24use of the goods.
25(2) “Chattel paper” does not include a right to payment
26arising out of a charter or other contract involving the use or
27hire of a vessel or a right to payment arising out of the use of
28a credit or charge card or information contained on or for use
29with the card.
30 Sec. 18. Section 554.9102, subsection 2, Code 2023, is
31amended by adding the following new paragraph:
32 NEW PARAGRAPH. 0ae. “Protected purchaser” ... Section
33554.8303.
34 Sec. 19. Section 554.9104, subsection 1, Code 2023, is
35amended to read as follows:
-16- 11. Requirements for control. A secured party has control
2of a deposit account if:
3a. the secured party is the bank with which the deposit
4account is maintained;
5b. the debtor, secured party, and bank have agreed in
6an authenticated a signed record that the bank will comply
7with instructions originated by the secured party directing
8disposition of the funds in the deposit account without further
9consent by the debtor; or
10c. the secured party becomes the bank’s customer with
11respect to the deposit account.; or
12d. another person, other than the debtor:
13(1) has control of the deposit account and acknowledges that
14it has control on behalf of the secured party; or
15(2) obtains control of the deposit account after having
16acknowledged that it will obtain control of the deposit account
17on behalf of the secured party.
18DIVISION II
19UNIFORM COMMERCIAL CODE
20PART A
21SECURED TRANSACTIONS
22 Sec. 20. Section 554.9105, Code 2023, is amended by striking
23the section and inserting in lieu thereof the following:
24554.9105 Control of electronic copy of record evidencing
25chattel paper.
261. General rule: control of electronic copy of record
27evidencing chattel paper. A purchaser has control of an
28authoritative electronic copy of a record evidencing chattel
29paper if a system employed for evidencing the assignment
30of interests in the chattel paper reliably establishes the
31purchaser as the person to which the authoritative electronic
32copy was assigned.
332. Single authoritative copy. A system satisfies subsection
341 if the record or records evidencing the chattel paper are
35created, stored, and assigned in a manner that:
-17- 1a. a single authoritative copy of the record or records
2exists which is unique, identifiable, and, except as otherwise
3provided in paragraphs “d”, “e”, and “f”, unalterable;
4b. the authoritative copy identifies the purchaser as the
5assignee of the record or records;
6c. the authoritative copy is communicated to and maintained
7by the purchaser or its designated custodian;
8d. copies or amendments that add or change an identified
9assignee of the authoritative copy can be made only with the
10consent of the purchaser;
11e. each copy of the authoritative copy and any copy of
12a copy is readily identifiable as a copy that is not the
13authoritative copy; and
14f. any amendment of the authoritative copy is readily
15identifiable as authorized or unauthorized.
163. One or more authoritative copies. A system satisfies
17subsection 1, and a purchaser has control of an authoritative
18electronic copy of a record evidencing chattel paper, if the
19electronic copy, a record attached to or logically associated
20with the electronic copy, or a system in which the electronic
21copy is recorded:
22a. enables the purchaser readily to identify each electronic
23copy as either an authoritative copy or a nonauthoritative
24copy;
25b. enables the purchaser readily to identify itself in any
26way, including by name, identifying number, cryptographic key,
27office, or account number, as the assignee of the authoritative
28electronic copy; and
29c. gives the purchaser exclusive power, subject to
30subsection 4, to:
31(1) prevent others from adding or changing an identified
32assignee of the authoritative electronic copy; and
33(2) transfer control of the authoritative electronic copy.
344. Meaning of exclusive. Subject to subsection 5, a power
35is exclusive under subsection 3, paragraph “c”, subparagraphs
-18-1(1) and (2), even if:
2a. the authoritative electronic copy, a record attached
3to or logically associated with the authoritative electronic
4copy, or a system in which the authoritative electronic copy is
5recorded limits the use of the authoritative electronic copy
6or has a protocol programmed to cause a change, including a
7transfer or loss of control; or
8b. the power is shared with another person.
95. When power not shared with another person. A power of a
10purchaser is not shared with another person under subsection 4,
11paragraph “b”, and the purchaser’s power is not exclusive if:
12a. the purchaser can exercise the power only if the power
13also is exercised by the other person; and
14b. the other person:
15(1) can exercise the power without exercise of the power by
16the purchaser; or
17(2) is the transferor to the purchaser of an interest in the
18chattel paper.
196. Presumption of exclusivity of certain powers. If a
20purchaser has the powers specified in subsection 3, paragraph
21“c”, subparagraphs (1) and (2), the powers are presumed to be
22exclusive.
237. Obtaining control through another person. A purchaser
24has control of an authoritative electronic copy of a record
25evidencing chattel paper if another person, other than the
26transferor to the purchaser of an interest in the chattel
27paper:
28a. has control of the authoritative electronic copy and
29acknowledges that it has control on behalf of the purchaser; or
30b. obtains control of the authoritative electronic copy
31after having acknowledged that it will obtain control of the
32electronic copy on behalf of the purchaser.
33 Sec. 21. Section 554.9105A, Code 2023, is amended to read
34as follows:
35554.9105A Control of electronic money.
-19- 11. General rule: — control of electronic money. A person
2has control of electronic money if:
3a. the electronic money, a record attached to or logically
4associated with the electronic money, or a system in which the
5electronic money is recorded gives the person:
6(1) the power to avail itself of substantially all the
7benefit from the electronic money; and
8(2) exclusive power, subject to subsection 2, to:
9(a) prevent others from availing themselves of
10substantially all the benefit from the electronic money; and
11(b) transfer control of the electronic money to another
12person or cause another person to obtain control of other
13electronic money as a result of the transfer of the electronic
14money; and
15b. the electronic money, a record attached to or logically
16associated with the electronic money, or a system in which
17the electronic money is recorded enables the person readily
18to identify itself in any way, including by name, identifying
19number, cryptographic key, office, or account number, as having
20the powers under paragraph “a”.
212. Meaning of exclusive. Subject to subsection 3, a power
22is exclusive under subsection 1, paragraph “a”, subparagraph
23(2), subparagraph divisions (a) and (b) even if:
24a. the electronic money, a record attached to or logically
25associated with the electronic money, or a system in which the
26electronic money is recorded limits the use of the electronic
27money or has a protocol programmed to cause a change, including
28a transfer or loss of control; or
29b. the power is shared with another person.
303. When power not shared with another person. A power of a
31person is not shared with another person under subsection 2,
32paragraph “b” and the person’s power is not exclusive if:
33a. the person can exercise the power only if the power also
34is exercised by the other person; and
35b. the other person:
-20- 1(1) can exercise the power without exercise of the power by
2the person; or
3(2) is the transferor to the person of an interest in the
4electronic money.
54. Presumption of exclusivity of certain powers. If a
6person has the powers specified in subsection 1, paragraph “a”,
7subparagraph (2), subparagraph divisions (a) and (b) the powers
8are presumed to be exclusive.
92. 5. Control through another person. A person has
10control of electronic money if another person, other than the
11transferor of an interest in the electronic money:
12a. has control of the electronic money and acknowledges that
13it has control on behalf of the person, or
14b. obtains control of the electronic money after having
15acknowledged that it will obtain control of the electronic
16money on behalf of the person.
173. Meaning of exclusive. A power is exclusive under
18subsection 1, paragraph “a”, subparagraph (2), even if:
19a. the electronic money or a system in which the electronic
20money is recorded limits the use of the electronic money or has
21a protocol programmed to transfer control; or
22b. the person has agreed to share the power with another
23person.
24 Sec. 22. NEW SECTION. 554.9107B No requirement to
25acknowledge or confirm; no duties.
261. No requirement to acknowledge. A person that has control
27under section 554.9104, 554.9105, or 554.9105A is not required
28to acknowledge that it has control on behalf of another person.
292. No duties or confirmation. If a person acknowledges
30that it has or will obtain control on behalf of another
31person, unless the person otherwise agrees or law other than
32this Article otherwise provides, the person does not owe any
33duty to the other person and is not required to confirm the
34acknowledgment to any other person.
35 Sec. 23. Section 554.9203, subsection 2, Code 2023, is
-21-1amended to read as follows:
22. Enforceability. Except as otherwise provided in
3subsections 3 through 10 9, a security interest is enforceable
4against the debtor and third parties with respect to the
5collateral only if:
6a. value has been given;
7b. the debtor has rights in the collateral or the power to
8transfer rights in the collateral to a secured party; and
9c. one of the following conditions is met:
10(1) the debtor has authenticated signed a security
11agreement that provides a description of the collateral and, if
12the security interest covers timber to be cut, a description
13of the land concerned;
14(2) the collateral is not a certificated security and is
15in the possession of the secured party under section 554.9313
16pursuant to the debtor’s security agreement;
17(3) the collateral is a certificated security in registered
18form and the security certificate has been delivered to the
19secured party under section 554.8301 pursuant to the debtor’s
20security agreement; or
21(4) the collateral is controllable accounts, controllable
22electronic records, controllable payment intangibles, deposit
23accounts, electronic chattel paper, electronic documents,
24electronic money, investment property, or letter-of-credit
25rights, and the secured party has control under section
26554.7106, 554.9104, 554.9105, 554.9105A, 554.9106, 554.9107, or
27554.9107A pursuant to the debtor’s security agreement.; or
28(5) the collateral is chattel paper and the secured party
29has possession and control under section 554.9314A pursuant to
30the debtor’s security agreement.
31 Sec. 24. Section 554.9203, subsection 10, Code 2023, is
32amended by striking the subsection.
33 Sec. 25. Section 554.9208, subsection 2, Code 2023, is
34amended to read as follows:
352. Duties of secured party after receiving demand from
-22-1debtor. Within ten days after receiving an authenticated a
2signed demand by the debtor:
3a. a secured party having control of a deposit account
4under section 554.9104, subsection 1, paragraph “b”, shall
5send to the bank with which the deposit account is maintained
6an authenticated statement a signed record that releases the
7bank from any further obligation to comply with instructions
8originated by the secured party;
9b. a secured party having control of a deposit account under
10section 554.9104, subsection 1, paragraph “c”, shall:
11(1) pay the debtor the balance on deposit in the deposit
12account; or
13(2) transfer the balance on deposit into a deposit account
14in the debtor’s name;
15c. a secured party, other than a buyer, having control of
16electronic chattel paper under section 554.9105 shall: of an
17authoritative electronic copy of a record evidencing chattel
18paper shall transfer control of the electronic copy to the
19debtor or a person designated by the debtor;
20(1) communicate the authoritative copy of the electronic
21chattel paper to the debtor or its designated custodian;
22(2) if the debtor designates a custodian that is the
23designated custodian with which the authoritative copy of
24the electronic chattel paper is maintained for the secured
25party, communicate to the custodian an authenticated record
26releasing the designated custodian from any further obligation
27to comply with instructions originated by the secured party
28and instructing the custodian to comply with instructions
29originated by the debtor; and
30(3) take appropriate action to enable the debtor or its
31designated custodian to make copies of or revisions to the
32authoritative copy which add or change an identified assignee
33of the authoritative copy without the consent of the secured
34party;
35d. a secured party having control of investment property
-23-1under section 554.8106, subsection 4, paragraph “b”, or
2section 554.9106, subsection 2, shall send to the securities
3intermediary or commodity intermediary with which the
4security entitlement or commodity contract is maintained an
5authenticated a signed record that releases the securities
6intermediary or commodity intermediary from any further
7obligation to comply with entitlement orders or directions
8originated by the secured party;
9e. a secured party having control of a letter-of-credit
10right under section 554.9107 shall send to each person having
11an unfulfilled obligation to pay or deliver proceeds of the
12letter of credit to the secured party an authenticated a signed
13 release from any further obligation to pay or deliver proceeds
14of the letter of credit to the secured party;
15f. a secured party having control under section 554.7106
16 of an authoritative electronic copy of an electronic document
17shall: transfer control of the electronic copy to the debtor or
18a person designated by the debtor;
19(1) give control of the electronic document to the debtor or
20its designated custodian;
21(2) if the debtor designates a custodian that is the
22designated custodian with which the authoritative copy of
23the electronic document is maintained for the secured party,
24communicate to the custodian an authenticated record releasing
25the designated custodian from any further obligation to
26comply with instructions originated by the secured party
27and instructing the custodian to comply with instructions
28originated by the debtor; and
29(3) take appropriate action to enable the debtor or its
30designated custodian to make copies of or revisions to the
31authoritative copy which add or change an identified assignee
32of the authoritative copy without the consent of the secured
33party; and
34g. a secured party having control under section 554.9105A of
35electronic money shall transfer control of the electronic money
-24-1to the debtor or a person designated by the debtor; and
2h. a secured party having control under section 554.14105
3of a controllable electronic record, other than a buyer of
4a controllable account or controllable payment intangible
5evidenced by the controllable electronic record, shall transfer
6control of the controllable electronic record to the debtor or
7a person designated by the debtor.
8 Sec. 26. Section 554.9209, subsection 2, Code 2023, is
9amended to read as follows:
102. Duties of secured party after receiving demand from
11debtor. Within ten days after receiving an authenticated a
12signed demand by the debtor, a secured party shall send to
13an account debtor under section 554.9406, subsection 1 or
14554.14106, subsection 2, that has received notification of
15an assignment to the secured party as assignee under section
16554.9406, subsection 1, an authenticated a signed record that
17releases the account debtor from any further obligation to the
18secured party.
19 Sec. 27. Section 554.9210, subsections 1, 2, 3, 4, and 5,
20Code 2023, are amended to read as follows:
211. Definitions. In this section:
22a. “Request” means a record of a type described in paragraph
23“b”, “c”, or “d”.
24b. “Request for an accounting” means a record authenticated
25 signed by a debtor requesting that the recipient provide an
26accounting of the unpaid obligations secured by collateral and
27reasonably identifying the transaction or relationship that is
28the subject of the request.
29c. “Request regarding a list of collateral” means a record
30authenticated signed by a debtor requesting that the recipient
31approve or correct a list of what the debtor believes to be the
32collateral securing an obligation and reasonably identifying
33the transaction or relationship that is the subject of the
34request.
35d. “Request regarding a statement of account” means a record
-25-1authenticated signed by a debtor requesting that the recipient
2approve or correct a statement indicating what the debtor
3believes to be the aggregate amount of unpaid obligations
4secured by collateral as of a specified date and reasonably
5identifying the transaction or relationship that is the subject
6of the request.
72. Duty to respond to requests. Subject to subsections 3,
84, 5, and 6, a secured party, other than a buyer of accounts,
9chattel paper, payment intangibles, or promissory notes or a
10consignor, shall comply with a request within fourteen days
11after receipt:
12a. in the case of a request for an accounting, by
13authenticating signing and sending to the debtor an accounting;
14and
15b. in the case of a request regarding a list of
16collateral or a request regarding a statement of account, by
17authenticating signing and sending to the debtor an approval
18or correction.
193. Request regarding list of collateral — statement
20concerning type of collateral. A secured party that claims a
21security interest in all of a particular type of collateral
22owned by the debtor may comply with a request regarding a
23list of collateral by sending to the debtor an authenticated
24 a signed record including a statement to that effect within
25fourteen days after receipt.
264. Request regarding list of collateral — no interest
27claimed. A person that receives a request regarding a list
28of collateral, claims no interest in the collateral when
29it receives the request, and claimed an interest in the
30collateral at an earlier time shall comply with the request
31within fourteen days after receipt by sending to the debtor an
32authenticated a signed record:
33a. disclaiming any interest in the collateral; and
34b. if known to the recipient, providing the name and mailing
35address of any assignee of or successor to the recipient’s
-26-1interest in the collateral.
25. Request for accounting or regarding statement of account
3— no interest in obligation claimed. A person that receives a
4request for an accounting or a request regarding a statement of
5account, claims no interest in the obligations when it receives
6the request, and claimed an interest in the obligations at an
7earlier time shall comply with the request within fourteen
8days after receipt by sending to the debtor an authenticated a
9signed record:
10a. disclaiming any interest in the obligations; and
11b. if known to the recipient, providing the name and mailing
12address of any assignee of or successor to the recipient’s
13interest in the obligations.
14 Sec. 28. Section 554.9301, unnumbered paragraph 1, Code
152023, is amended to read as follows:
16Except as otherwise provided in sections 554.9303, 554.9304,
17554.9305, and 554.9306 through 554.9306B, the following
18rules determine the law governing perfection, the effect of
19perfection or nonperfection, and the priority of a security
20interest in collateral:
21 Sec. 29. Section 554.9301, subsection 3, unnumbered
22paragraph 1, Code 2023, is amended to read as follows:
23Except as otherwise provided in subsection 4, while tangible
24 negotiable tangible documents, goods, instruments, or tangible
25money, or tangible chattel paper is located in a jurisdiction,
26the local law of that jurisdiction governs:
27 Sec. 30. Section 554.9305, subsection 1, Code 2023, is
28amended by adding the following new paragraph:
29 NEW PARAGRAPH. e. Paragraphs “b”, “c”, and “d” apply
30even if the transaction does not bear any relation to the
31jurisdiction.
32 Sec. 31. Section 554.9306A, Code 2023, is amended by
33striking the section and inserting in lieu thereof the
34following:
35554.9306A Law governing perfection and priority of security
-27-1interests in chattel paper.
21. Chattel paper evidenced by authoritative electronic
3copy. Except as provided in subsection 4, if chattel paper
4is evidenced only by an authoritative electronic copy of the
5chattel paper or is evidenced by an authoritative electronic
6copy and an authoritative tangible copy, the local law of the
7chattel paper’s jurisdiction governs perfection, the effect of
8perfection or nonperfection, and the priority of a security
9interest in the chattel paper, even if the transaction does not
10bear any relation to the chattel paper’s jurisdiction.
112. Chattel paper’s jurisdiction. The following rules
12determine the chattel paper’s jurisdiction under this section:
13a. If the authoritative electronic copy of the record
14evidencing chattel paper, or a record attached to or logically
15associated with the electronic copy and readily available for
16review, expressly provides that a particular jurisdiction is
17the chattel paper’s jurisdiction for purposes of this section,
18this part, this Article, or this chapter, that jurisdiction is
19the chattel paper’s jurisdiction.
20b. If paragraph “a” does not apply and the rules of the
21system in which the authoritative electronic copy is recorded
22are readily available for review and expressly provide that a
23particular jurisdiction is the chattel paper’s jurisdiction
24for purposes of this section, this part, this Article, or this
25chapter that jurisdiction is the chattel paper’s jurisdiction.
26c. If paragraphs “a” and “b” do not apply and the
27authoritative electronic copy, or a record attached to or
28logically associated with the electronic copy and readily
29available for review, expressly provides that the chattel paper
30is governed by the law of a particular jurisdiction, that
31jurisdiction is the chattel paper’s jurisdiction.
32d. If paragraphs “a”, “b”, and “c” do not apply and the
33rules of the system in which the authoritative electronic copy
34is recorded are readily available for review and expressly
35provide that the chattel paper or the system is governed by
-28-1the law of a particular jurisdiction, that jurisdiction is the
2chattel paper’s jurisdiction.
3e. If paragraphs “a” through “d” do not apply, the chattel
4paper’s jurisdiction is the jurisdiction in which the debtor
5is located.
63. Chattel paper evidenced by authoritative tangible
7copy. If an authoritative tangible copy of a record evidences
8chattel paper and the chattel paper is not evidenced by an
9authoritative electronic copy, while the authoritative tangible
10copy of the record evidencing chattel paper is located in a
11jurisdiction, the local law of that jurisdiction governs:
12a. perfection of a security interest in the chattel paper by
13possession under section 554.9314A; and
14b. the effect of perfection or nonperfection and the
15priority of a security interest in the chattel paper.
164. When perfection governed by law of jurisdiction where
17debtor located. The local law of the jurisdiction in which the
18debtor is located governs perfection of a security interest in
19chattel paper by filing.
20 Sec. 32. NEW SECTION. 554.9306B Law governing perfection
21and priority of security interests in controllable accounts,
22controllable electronic records, and controllable payment
23intangibles.
241. Governing law: general rules. Except as provided in
25subsection 2, the local law of the controllable electronic
26record’s jurisdiction specified in section 554.14107,
27subsections 3 and 4 governs perfection, the effect of
28perfection or nonperfection, and the priority of a security
29interest in a controllable electronic record and a security
30interest in a controllable account or controllable payment
31intangible evidenced by the controllable electronic record.
322. When perfection governed by law of jurisdiction where
33debtor located. The local law of the jurisdiction in which the
34debtor is located governs:
35a. perfection of a security interest in a controllable
-29-1account, controllable electronic record, or controllable
2payment intangible by filing; and
3b. automatic perfection of a security interest in a
4controllable payment intangible created by a sale of the
5controllable payment intangible.
6 Sec. 33. Section 554.9308, subsection 8, Code 2023, is
7amended by striking the subsection.
8 Sec. 34. Section 554.9310, subsection 2, paragraph h, Code
92023, is amended to read as follows:
10h. in controllable accounts, controllable electronic
11records, controllable payment intangibles, deposit accounts,
12electronic chattel paper, electronic documents, investment
13property, or letter-of-credit rights which is are perfected by
14control under section 554.9314;
15 Sec. 35. Section 554.9310, subsection 2, Code 2023, is
16amended by adding the following new paragraph:
17 NEW PARAGRAPH. 0i. in chattel paper which is perfected by
18possession and control under section 554.9314A;
19 Sec. 36. Section 554.9312, Code 2023, is amended to read as
20follows:
21554.9312 Perfection of security interests in chattel
22paper, controllable accounts, controllable electronic records,
23controllable payment intangibles, chattel paper, deposit
24accounts, negotiable documents, goods covered by documents,
25instruments, investment property, letter-of-credit rights, and
26money — perfection by permissive filing — temporary perfection
27without filing or transfer of possession.
281. Perfection by filing permitted. A security interest in
29chattel paper, controllable accounts, controllable electronic
30records, controllable payment intangibles, chattel paper,
31negotiable documents, instruments, or investment property, or
32negotiable documents may be perfected by filing.
332. Control or possession of certain collateral. Except as
34otherwise provided in section 554.9315, subsections 3 and 4,
35for proceeds:
-30- 1a. a security interest in a deposit account may be perfected
2only by control under section 554.9314;
3b. and except as otherwise provided in section 554.9308,
4subsection 4, a security interest in a letter-of-credit right
5may be perfected only by control under section 554.9314;
6c. a security interest in tangible money may be perfected
7only by the secured party’s taking possession under section
8554.9313; and
9d. a security interest in electronic money may be perfected
10only by control under section 554.9314.
113. Goods covered by negotiable document. While goods are
12in the possession of a bailee that has issued a negotiable
13document covering the goods:
14a. a security interest in the goods may be perfected by
15perfecting a security interest in the document; and
16b. a security interest perfected in the document has
17priority over any security interest that becomes perfected in
18the goods by another method during that time.
194. Goods covered by nonnegotiable document. While goods are
20in the possession of a bailee that has issued a nonnegotiable
21document covering the goods, a security interest in the goods
22may be perfected by:
23a. issuance of a document in the name of the secured party;
24b. the bailee’s receipt of notification of the secured
25party’s interest; or
26c. filing as to the goods.
275. Temporary perfection — new value. A security
28interest in certificated securities, negotiable documents,
29or instruments is perfected without filing or the taking of
30possession or control for a period of twenty days from the time
31it attaches to the extent that it arises for new value given
32under an authenticated a signed security agreement.
336. Temporary perfection — goods or documents made available
34to debtor. A perfected security interest in a negotiable
35document or goods in possession of a bailee, other than one
-31-1that has issued a negotiable document for the goods, remains
2perfected for twenty days without filing if the secured
3party makes available to the debtor the goods or documents
4representing the goods for the purpose of:
5a. ultimate sale or exchange; or
6b. loading, unloading, storing, shipping, transshipping,
7manufacturing, processing, or otherwise dealing with them in a
8manner preliminary to their sale or exchange.
97. Temporary perfection — delivery of security certificate
10or instrument to debtor. A perfected security interest in
11a certificated security or instrument remains perfected for
12twenty days without filing if the secured party delivers the
13security certificate or instrument to the debtor for the
14purpose of:
15a. ultimate sale or exchange; or
16b. presentation, collection, enforcement, renewal, or
17registration of transfer.
188. Expiration of temporary perfection. After the twenty-day
19period specified in subsection 5, 6, or 7 expires, perfection
20depends upon compliance with this Article.
21 Sec. 37. Section 554.9313, subsections 1, 3, and 4, Code
222023, are amended to read as follows:
231. Perfection by possession or delivery. Except as otherwise
24provided in subsection 2, a secured party may perfect a
25security interest in tangible negotiable documents, goods,
26instruments, negotiable tangible documents, or tangible
27money, or tangible chattel paper by taking possession of the
28collateral. A secured party may perfect a security interest in
29certificated securities by taking delivery of the certificated
30securities under section 554.8301.
313. Collateral in possession of person other than
32debtor. With respect to collateral other than certificated
33securities and goods covered by a document, a secured party
34takes possession of collateral in the possession of a person
35other than the debtor, the secured party, or a lessee of
-32-1the collateral from the debtor in the ordinary course of the
2debtor’s business, when:
3a. the person in possession authenticates signs a record
4acknowledging that it holds possession of the collateral for
5the secured party’s benefit; or
6b. the person takes possession of the collateral after
7having authenticated signed a record acknowledging that it
8will hold possession of the collateral for the secured party’s
9benefit.
104. Time of perfection by possession — continuation of
11perfection. If perfection of a security interest depends upon
12possession of the collateral by a secured party, perfection
13occurs no not earlier than the time the secured party takes
14possession and continues only while the secured party retains
15possession.
16 Sec. 38. Section 554.9314, subsections 1, 2, and 3, Code
172023, are amended to read as follows:
181. Perfection by control. A security interest in
19controllable accounts, controllable electronic records,
20controllable payment intangibles, deposit accounts, electronic
21chattel paper, electronic documents, electronic money,
22investment property, or letter-of-credit rights may be
23perfected by control of the collateral under section 554.7106,
24554.9104, 554.9105, 554.9105A, 554.9106, 554.9107, or
25554.9107A.
262. Specified collateral — time of perfection by control —
27continuation of perfection. A security interest in controllable
28accounts, controllable electronic records, controllable payment
29intangibles, deposit accounts, electronic chattel paper,
30 electronic documents, electronic money, or letter-of-credit
31rights is perfected by control under section 554.7106,
32554.9104, 554.9105, 554.9105A, 554.9107, or 554.9107A when
33 not earlier than the time the secured party obtains control
34and remains perfected by control only while the secured party
35retains control.
-33- 13. Investment property — time of perfection by control —
2continuation of perfection. A security interest in investment
3property is perfected by control under section 554.9106 from
4 not earlier than the time the secured party obtains control and
5remains perfected by control until:
6a. the secured party does not have control; and
7b. one of the following occurs:
8(1) if the collateral is a certificated security, the debtor
9has or acquires possession of the security certificate;
10(2) if the collateral is an uncertificated security, the
11issuer has registered or registers the debtor as the registered
12owner; or
13(3) if the collateral is a security entitlement, the debtor
14is or becomes the entitlement holder.
15 Sec. 39. NEW SECTION. 554.9314A Perfection by possession
16and control of chattel paper.
171. Perfection by possession and control. A secured party
18may perfect a security interest in chattel paper by taking
19possession of each authoritative tangible copy of the record
20evidencing the chattel paper and obtaining control of each
21authoritative electronic copy of the electronic record
22evidencing the chattel paper.
232. Time of perfection; continuation of perfection. A
24security interest is perfected under subsection 1 not earlier
25than the time the secured party takes possession and obtains
26control and remains perfected under subsection 1 only while the
27secured party retains possession and control.
283. Application of section 554.9313 to perfection by
29possession of chattel paper. Section 554.9313, subsections
303 and 6 through 9, apply to perfection by possession of an
31authoritative tangible copy of a record evidencing chattel
32paper.
33 Sec. 40. Section 554.9316, subsections 1 and 6, Code 2023,
34are amended to read as follows:
351. General rule — effect on perfection of change in
-34-1governing law. A security interest perfected pursuant to
2the law of the jurisdiction designated in section 554.9301,
3subsection 1, or section 554.9305, subsection 3, section
4554.9306A, subsection 4, or section 554.9306B, subsection 2,
5 remains perfected until the earliest of:
6a. the time perfection would have ceased under the law of
7that jurisdiction;
8b. the expiration of four months after a change of the
9debtor’s location to another jurisdiction; or
10c. the expiration of one year after a transfer of collateral
11to a person that thereby becomes a debtor and is located in
12another jurisdiction.
136. Change in jurisdiction of chattel paper, controllable
14electronic record, bank, issuer, nominated person, securities
15intermediary, or commodity intermediary. A security interest in
16chattel paper, controllable accounts, controllable electronic
17records, controllable payment intangibles, deposit accounts,
18letter-of-credit rights, or investment property which is
19perfected under the law of the chattel paper’s jurisdiction,
20the controllable electronic record’s jurisdiction, the bank’s
21jurisdiction, the issuer’s jurisdiction, a nominated person’s
22jurisdiction, the securities intermediary’s jurisdiction, or
23the commodity intermediary’s jurisdiction, as applicable,
24remains perfected until the earlier of:
25a. the time the security interest would have become
26unperfected under the law of that jurisdiction; or
27b. the expiration of four months after a change of the
28applicable jurisdiction to another jurisdiction.
29 Sec. 41. Section 554.9317, subsections 2 and 4, Code 2023,
30are amended to read as follows:
312. Buyers that receive delivery. Except as otherwise
32provided in subsection 5, a buyer, other than a secured
33party, of tangible chattel paper, tangible documents, goods,
34instruments, tangible documents, or a certificated security
35certificate takes free of a security interest or agricultural
-35-1lien if the buyer gives value and receives delivery of the
2collateral without knowledge of the security interest or
3agricultural lien and before it is perfected.
44. Licensees and buyers of certain collateral. A Subject to
5subsections 6 through 9, a licensee of a general intangible or
6a buyer, other than a secured party, of collateral other than
7tangible chattel paper, tangible documents, electronic money,
8 goods, instruments, tangible documents, or a certificated
9security takes free of a security interest if the licensee or
10buyer gives value without knowledge of the security interest
11and before it is perfected.
12 Sec. 42. Section 554.9317, Code 2023, is amended by adding
13the following new subsections:
14 NEW SUBSECTION. 6. Buyers of chattel paper. A buyer, other
15than a secured party, of chattel paper takes free of a security
16interest if, without knowledge of the security interest and
17before it is perfected, the buyer gives value and:
18a. receives delivery of each authoritative tangible copy of
19the record evidencing the chattel paper; and
20b. if each authoritative electronic copy of the record
21evidencing the chattel paper can be subjected to control
22under section 554.9105, obtains control of each authoritative
23electronic copy.
24 NEW SUBSECTION. 7. Buyers of electronic documents. A buyer
25of an electronic document takes free of a security interest
26if, without knowledge of the security interest and before it
27is perfected, the buyer gives value and, if each authoritative
28electronic copy of the document can be subjected to control
29under section 554.7106, obtains control of each authoritative
30electronic copy.
31 NEW SUBSECTION. 8. Buyers of controllable electronic
32records. A buyer of a controllable electronic record takes free
33of a security interest if, without knowledge of the security
34interest and before it is perfected, the buyer gives value and
35obtains control of the controllable electronic record.
-36-1 NEW SUBSECTION. 9. Buyers of controllable accounts and
2controllable payment intangibles. A buyer, other than a secured
3party, of a controllable account or a controllable payment
4intangible takes free of a security interest if, without
5knowledge of the security interest and before it is perfected,
6the buyer gives value and obtains control of the controllable
7account or controllable payment intangible.
8 Sec. 43. Section 554.9324, subsection 2, paragraph b, Code
92023, is amended to read as follows:
10b. the purchase-money secured party sends an authenticated
11 signed notification to the holder of the conflicting security
12interest;
13 Sec. 44. Section 554.9324, subsection 4, paragraph b, Code
142023, is amended to read as follows:
15b. the purchase-money secured party sends an authenticated
16 a signed notification to the holder of the conflicting security
17interest;
18 Sec. 45. Section 554.9330, subsections 1, 2, and 6, Code
192023, are amended to read as follows:
201. Purchaser’s priority — security interest claimed merely
21as proceeds. A purchaser of chattel paper has priority over a
22security interest in the chattel paper which is claimed merely
23as proceeds of inventory subject to a security interest if:
24a. in good faith and in the ordinary course of the
25purchaser’s business, the purchaser gives new value, and takes
26possession of each authoritative tangible copy of the record
27evidencing the chattel paper or, and obtains control of under
28section 554.9105 of each authoritative electronic copy of the
29record evidencing the chattel paper under section 554.9105; and
30b. the chattel paper does authoritative copies of the
31record evidencing the chattel paper do not indicate that it the
32chattel paper has been assigned to an identified assignee other
33than the purchaser.
342. Purchaser’s priority — other security interests. A
35purchaser of chattel paper has priority over a security
-37-1interest in the chattel paper which is claimed other than
2merely as proceeds of inventory subject to a security interest
3if the purchaser gives new value, and takes possession of
4each authoritative tangible copy of the record evidencing the
5chattel paper or, and obtains control of under section 554.9105
6of each authoritative electronic copy of the record evidencing
7 the chattel paper under section 554.9105 in good faith, in
8the ordinary course of the purchaser’s business, and without
9knowledge that the purchase violates the rights of the secured
10party.
116. Indication of assignment gives knowledge. For purposes of
12subsections 2 and 4, if the authoritative copies of the record
13evidencing chattel paper or an instrument indicates indicate
14 that it the chattel paper or instrument has been assigned to an
15identified secured party other than the purchaser, a purchaser
16of the chattel paper or instrument has knowledge that the
17purchase violates the rights of the secured party.
18 Sec. 46. Section 554.9331, Code 2023, is amended to read as
19follows:
20554.9331 Priority of rights of purchasers of controllable
21accounts, controllable electronic records, controllable payment
22intangibles, documents, instruments, and securities under
23other Articles — priority of interests in financial assets
24and security entitlements and protections protection against
25assertions assertion of claims under Articles 8 and 14.
261. Rights under Articles 3, 7, 8, and 14 not limited. This
27Article does not limit the rights of a holder in due course of a
28negotiable instrument, a holder to which a negotiable document
29of title has been duly negotiated, a protected purchaser of a
30security, or a qualifying purchaser of a controllable account,
31controllable electronic record, or controllable payment
32intangible. These holders or purchasers take priority over an
33earlier security interest, even if perfected, to the extent
34provided in Articles 3, 7, 8, and 14.
352. Protection under Articles 8 and 14. This Article does
-38-1not limit the rights of or impose liability on a person to the
2extent that the person is protected against the assertion of
3a claim under Article 8 or 14.
43. Filing not notice. Filing under this Article does
5not constitute notice of a claim or defense to the holders,
6purchasers, or persons described in subsections 1 and 2.
7 Sec. 47. Section 554.9332, Code 2023, is amended to read as
8follows:
9554.9332 Transfer of money — transfer of funds from deposit
10account.
111. Transferee of tangible money. A transferee of tangible
12money takes the money free of a security interest in the money
13 if the transferee when receiving delivery receives possession
14 of the money does not act without acting in collusion with the
15debtor in violating the rights of the secured party.
162. Transferee of electronic money. A transferee of
17electronic money takes the money free of a security interest
18in the money if the transferee when obtaining control of the
19money does not act in collusion with the debtor in violating
20the rights of the secured party.
213. 2. Transferee of funds from deposit account. A
22transferee of funds from a deposit account takes the funds free
23of a security interest in the deposit account if the transferee
24when receiving receives the funds does not act without acting
25 in collusion with the debtor in violating the rights of the
26secured party.
273. Transferee of electronic money. A transferee of
28electronic money takes the money free of a security interest
29if the transferee obtains control of the money without acting
30in collusion with the debtor in violating the rights of the
31secured party.
32 Sec. 48. Section 554.9334, subsection 6, paragraph a, Code
332023, is amended to read as follows:
34a. the encumbrancer or owner has, in an authenticated a
35signed record, consented to the security interest or disclaimed
-39-1an interest in the goods as fixtures; or
2 Sec. 49. Section 554.9341, unnumbered paragraph 1, Code
32023, is amended to read as follows:
4Except as otherwise provided in section 554.9340, subsection
53, and unless the bank otherwise agrees in an authenticated a
6signed record, a bank’s rights and duties with respect to a
7deposit account maintained with the bank are not terminated,
8suspended, or modified by:
9 Sec. 50. Section 554.9404, subsection 1, paragraph b, Code
102023, is amended to read as follows:
11b. any other defense or claim of the account debtor against
12the assignor which accrues before the account debtor receives
13a notification of the assignment authenticated signed by the
14assignor or the assignee.
15 Sec. 51. Section 554.9406, subsections 1, 4, 7, and 11, Code
162023, are amended to read as follows:
171. Discharge of account debtor — effect of
18notification. Subject to subsections 2 through 9 and
1911, an account debtor on an account, chattel paper, or a
20payment intangible may discharge its obligation by paying the
21assignor until, but not after, the account debtor receives
22a notification, authenticated signed by the assignor or
23the assignee, that the amount due or to become due has been
24assigned and that payment is to be made to the assignee. After
25receipt of the notification, the account debtor may discharge
26its obligation by paying the assignee and may not discharge the
27obligation by paying the assignor.
284. Term restricting assignment generally ineffective. In
29this subsection, “promissory note” includes a negotiable
30instrument that evidences chattel paper.Except as otherwise
31provided in subsection subsections 5 and 11 and sections
32554.9407 and 554.13303, and subject to subsection 8, a term in
33an agreement between an account debtor and an assignor or in a
34promissory note is ineffective to the extent that it:
35a. prohibits, restricts, or requires the consent of the
-40-1account debtor or person obligated on the promissory note to
2the assignment or transfer of, or the creation, attachment,
3perfection, or enforcement of a security interest in, the
4account, chattel paper, payment intangible, or promissory note;
5or
6b. provides that the assignment or transfer or the creation,
7attachment, perfection, or enforcement of the security interest
8may give rise to a default, breach, right of recoupment, claim,
9defense, termination, right of termination, or remedy under the
10account, chattel paper, payment intangible, or promissory note.
117. Subsection 2, paragraph “c”, not waivable. Subject to
12subsection subsections 8 and 11, an account debtor may shall
13 not waive or vary its option under subsection 2, paragraph “c”.
1411. Inapplicability of certain subsections. Subsections 1
15through, 2, 3, and 7 do not apply to a controllable account or
16controllable payment intangible.
17 Sec. 52. Section 554.9509, subsections 1 and 2, Code 2023,
18are amended to read as follows:
191. Person entitled to file record. A person may file an
20initial financing statement, amendment that adds collateral
21covered by a financing statement, or amendment that adds a
22debtor to a financing statement only if:
23a. the debtor authorizes the filing in an authenticated a
24signed record or pursuant to subsection 2 or 3; or
25b. the person holds an agricultural lien that has
26become effective at the time of filing and the financing
27statement covers only collateral in which the person holds an
28agricultural lien.
292. Security agreement as authorization. By authenticating
30 signing or becoming bound as debtor by a security agreement,
31a debtor or new debtor authorizes the filing of an initial
32financing statement, and an amendment, covering:
33a. the collateral described in the security agreement; and
34b. property that becomes collateral under section 554.9315,
35subsection 1, paragraph “b”, whether or not the security
-41-1agreement expressly covers proceeds.
2 Sec. 53. Section 554.9513, subsections 2 and 3, Code 2023,
3are amended to read as follows:
42. Time for compliance with subsection 1. To comply with
5subsection 1, a secured party shall cause the secured party of
6record to file the termination statement:
7a. within one month after there is no obligation secured
8by the collateral covered by the financing statement and
9no commitment to make an advance, incur an obligation, or
10otherwise give value; or
11b. if earlier, within twenty days after the secured party
12receives an authenticated a signed demand from a debtor.
133. Other collateral. In cases not governed by subsection
141, within twenty days after a secured party receives an
15authenticated a signed demand from a debtor, the secured
16party shall cause the secured party of record for a financing
17statement to send to the debtor a termination statement for the
18financing statement or file the termination statement in the
19filing office if:
20a. except in the case of a financing statement covering
21accounts or chattel paper that has been sold or goods that
22are the subject of a consignment, there is no obligation
23secured by the collateral covered by the financing statement
24and no commitment to make an advance, incur an obligation, or
25otherwise give value;
26b. the financing statement covers accounts or chattel paper
27that has been sold but as to which the account debtor or other
28person obligated has discharged its obligation;
29c. the financing statement covers goods that were the
30subject of a consignment to the debtor but are not in the
31debtor’s possession; or
32d. the debtor did not authorize the filing of the initial
33financing statement.
34 Sec. 54. Section 554.9605, Code 2023, is amended to read as
35follows:
-42- 1554.9605 Unknown debtor or secondary obligor.
21. Duties to unknown persons — general rule In general: no
3duty owed by a secured party. Except as provided in subsection
42, a secured party does not owe a duty based on its status as
5secured party:
6a. to a person that is a debtor or obligor, unless the
7secured party knows:
8(1) that the person is a debtor or obligor;
9(2) the identity of the person; and
10(3) how to communicate with the person; or
11b. to a secured party or lienholder that has filed a
12financing statement against a person, unless the secured party
13knows:
14(1) that the person is a debtor; and
15(2) the identity of the person.
162. When secured party owes duty to debtor notwithstanding
17subsection 1 Exception: secured party owes a duty to debtor
18or obligor. A secured party owes a duty based on its status
19as a secured party to a person that is a debtor if, at the
20time the secured party obtains control of collateral that is
21 a controllable account, controllable electronic record, or
22controllable payment intangible, or at the time the security
23interest attaches to the collateral, whichever is later:
24a. the person is a debtor or obligor; and
25b. the secured party has knowledge knows that the nature
26of the collateral or a system in which the collateral is
27recorded would prevent the secured party from acquiring the
28knowledge specified information in subsection 1, paragraph “a”,
29subparagraph (1), (2), or (3) relating to the person is not
30provided by the collateral, a record attached to or logically
31associated with the collateral, or the system in which the
32collateral is recorded.
33 Sec. 55. Section 554.9608, subsection 1, paragraph a,
34subparagraph (3), Code 2023, is amended to read as follows:
35(3) the satisfaction of obligations secured by any
-43-1subordinate security interest in or other lien on the
2collateral subject to the security interest or agricultural
3lien under which the collection or enforcement is made if the
4secured party receives an authenticated a signed demand for
5proceeds before distribution of the proceeds is completed.
6 Sec. 56. Section 554.9611, subsection 1, paragraph a, Code
72023, is amended to read as follows:
8a. a secured party sends to the debtor and any secondary
9obligor an authenticated a signed notification of disposition;
10or
11 Sec. 57. Section 554.9611, subsections 2 and 3, Code 2023,
12are amended to read as follows:
132. Notification of disposition required. Except as otherwise
14provided in subsection 4, a secured party that disposes of
15collateral under section 554.9610 shall send to the persons
16specified in subsection 3 a reasonable authenticated signed
17 notification of disposition.
183. Persons to be notified. To comply with subsection 2, the
19secured party shall send an authenticated a signed notification
20of disposition to:
21a. the debtor;
22b. any secondary obligor; and
23c. if the collateral is other than consumer goods:
24(1) any other person from which the secured party has
25received, before the notification date, an authenticated
26 a signed notification of a claim of an interest in the
27collateral;
28(2) any other secured party or lienholder that, ten days
29before the notification date, held a security interest in or
30other lien on the collateral perfected by the filing of a
31financing statement that:
32(a) identified the collateral;
33(b) was indexed under the debtor’s name as of that date; and
34(c) was filed in the office in which to file a financing
35statement against the debtor covering the collateral as of that
-44-1date; and
2(3) any other secured party that, ten days before the
3notification date, held a security interest in the collateral
4perfected by compliance with a statute, regulation, or treaty
5described in section 554.9311, subsection 1.
6 Sec. 58. Section 554.9611, subsection 5, paragraph b,
7subparagraph (2), Code 2023, is amended to read as follows:
8(2) received a response to the request for information and
9sent an authenticated a signed notification of disposition to
10each secured party or other lienholder named in that response
11whose financing statement covered the collateral.
12 Sec. 59. Section 554.9615, subsection 1, paragraph c,
13subparagraph (1), Code 2023, is amended to read as follows:
14(1) the secured party receives from the holder of the
15subordinate security interest or other lien an authenticated a
16signed demand for proceeds before distribution of the proceeds
17is completed; and
18 Sec. 60. Section 554.9615, subsection 1, paragraph d, Code
192023, is amended to read as follows:
20d. a secured party that is a consignor of the collateral if
21the secured party receives from the consignor an authenticated
22 a signed demand for proceeds before distribution of the
23proceeds is completed.
24 Sec. 61. Section 554.9616, subsection 1, paragraph b,
25subparagraph (1), Code 2023, is amended to read as follows:
26(1) authenticated signed by a debtor or consumer obligor;
27 Sec. 62. Section 554.9619, subsection 1, unnumbered
28paragraph 1, Code 2023, is amended to read as follows:
29In this section, “transfer statement” means a record
30authenticated signed by a secured party stating:
31 Sec. 63. Section 554.9620, subsection 1, paragraph b,
32unnumbered paragraph 1, Code 2023, is amended to read as
33follows:
34the secured party does not receive, within the time set forth
35in subsection 4, a notification of objection to the proposal
-45-1authenticated signed by:
2 Sec. 64. Section 554.9620, subsection 2, paragraph a, Code
32023, is amended to read as follows:
4a. the secured party consents to the acceptance in an
5authenticated a signed record or sends a proposal to the
6debtor; and
7 Sec. 65. Section 554.9620, subsection 3, Code 2023, is
8amended to read as follows:
93. Debtor’s consent. For purposes of this section:
10a. a debtor consents to an acceptance of collateral in
11partial satisfaction of the obligation it secures only if
12the debtor agrees to the terms of the acceptance in a record
13authenticated signed after default; and
14b. a debtor consents to an acceptance of collateral in full
15satisfaction of the obligation it secures only if the debtor
16agrees to the terms of the acceptance in a record authenticated
17 signed after default or the secured party:
18(1) sends to the debtor after default a proposal that is
19unconditional or subject only to a condition that collateral
20not in the possession of the secured party be preserved or
21maintained;
22(2) in the proposal, proposes to accept collateral in full
23satisfaction of the obligation it secures; and
24(3) does not receive a notification of objection
25authenticated signed by the debtor within twenty days after the
26proposal is sent.
27 Sec. 66. Section 554.9620, subsection 6, paragraph b, Code
282023, is amended to read as follows:
29b. within any longer period to which the debtor and all
30secondary obligors have agreed in an agreement to that effect
31entered into and authenticated signed after default.
32 Sec. 67. Section 554.9621, subsection 1, paragraph a, Code
332023, is amended to read as follows:
34a. any person from which the secured party has received,
35before the debtor consented to the acceptance, an authenticated
-46-1 a signed notification of a claim of an interest in the
2collateral;
3 Sec. 68. Section 554.9624, Code 2023, is amended to read as
4follows:
5554.9624 Waiver.
61. Waiver of disposition notification. A debtor or secondary
7obligor may waive the right to notification of disposition of
8collateral under section 554.9611 only by an agreement to that
9effect entered into and authenticated signed after default.
102. Waiver of mandatory disposition. A debtor may waive
11the right to require disposition of collateral under section
12554.9620, subsection 5, only by an agreement to that effect
13entered into and authenticated signed after default.
143. Waiver of redemption right. Except in a consumer-goods
15transaction, a debtor or secondary obligor may waive the
16right to redeem collateral under section 554.9623 only by an
17agreement to that effect entered into and authenticated signed
18 after default.
19 Sec. 69. Section 554.9628, subsection 1, unnumbered
20paragraph 1, Code 2023, is amended to read as follows:
21Unless Subject to subsection 6, unless a secured party knows
22that a person is a debtor or obligor, knows the identity of the
23person, and knows how to communicate with the person:
24 Sec. 70. Section 554.9628, subsection 6, Code 2023, is
25amended by striking the subsection and inserting in lieu
26thereof the following:
276. Exception: limitation of liability under subsections
281 and 2 does not apply. Subsections 1 and 2 do not apply to
29limit the liability of a secured party to a person if, at the
30time the secured party obtains control of collateral that is
31a controllable account, controllable electronic record, or
32controllable payment intangible or at the time the security
33interest attaches to the collateral, whichever is later:
34a. the person is a debtor or obligor; and
35b. the secured party knows that the information in
-47-1subsection 2, paragraph “a”, subparagraph (1), (2), or (3),
2relating to the person is not provided by the collateral, a
3record attached to or logically associated with the collateral,
4or the system in which the collateral is recorded.
5PART b
6TRANSITIONAL PROVISIONS
7 Sec. 71. NEW SECTION. 554.15101 Short title.
8This Article may be cited as the Transitional Provisions for
9Uniform Commercial Code Amendments (2022).
10 Sec. 72. NEW SECTION. 554.15102 Definitions.
111. Article 15 definitions. In this Article:
12a. “Article 14” means Article 14 of this chapter.
13b. “Article 14 property” means a controllable account,
14controllable electronic record, or controllable payment
15intangible.
162. Definitions in other Articles. The following definitions
17in other Articles of this chapter apply to this Article:
18a. “Controllable account” ... Section 554.9102.
19b. “Controllable electronic record” ... Section 554.14102.
20c. “Controllable payment intangible” ... Section 554.9102.
21d. “Electronic money” ... Section 554.9102.
22e. “Financing statement” ... Section 554.9102.
233. Article 1 definitions and principles. Article 1 contains
24general definitions and principles of construction and
25interpretation applicable throughout this Article.
26 Sec. 73. NEW SECTION. 554.15201 Saving clause.
27Except as provided in part 3, a transaction validly entered
28into before the effective date of this Act and the rights,
29duties, and interests flowing from the transaction remain valid
30thereafter and may be terminated, completed, consummated,
31or enforced as required or permitted by law other than this
32chapter or, if applicable, this chapter, as though this Act had
33not taken effect.
34 Sec. 74. NEW SECTION. 554.15301 Saving clause.
351. Pre-effective-date transaction, lien, or interest. Except
-48-1as provided in this part, Article 9, as amended by this Act,
2and Article 14, as amended by this Act, apply to a transaction,
3lien, or other interest in property, even if the transaction,
4lien, or interest was entered into, created, or acquired before
5the effective date of this Act.
62. Continuing validity. Except as provided in subsection 3
7and sections 554.15302 through 554.15306:
8a. a transaction, lien, or interest in property that
9was validly entered into, created, or transferred before
10the effective date of this Act and was not governed by this
11chapter, but would be subject to Article 9 as amended by this
12Act or Article 14, as amended by this Act, if it had been
13entered into, created, or transferred on or after the effective
14date of this Act, including the rights, duties, and interests
15flowing from the transaction, lien, or interest, remains valid
16on and after the effective date of this Act; and
17b. the transaction, lien, or interest may be terminated,
18completed, consummated, and enforced as required or permitted
19by this Act or by the law that would apply if this Act had not
20taken effect.
213. Pre-effective-date proceeding. This Act does not affect
22an action, case, or proceeding commenced before the effective
23date of this Act.
24 Sec. 75. NEW SECTION. 554.15302 Security interest perfected
25before effective date.
261. Continuing perfection: perfection requirements
27satisfied. A security interest that is enforceable and
28perfected immediately before the effective date of this Act
29is a perfected security interest under this Act if, on the
30effective date of this Act, the requirements for enforceability
31and perfection under this Act are satisfied without further
32action.
332. Continuing perfection: enforceability or perfection
34requirements not satisfied. If a security interest is
35enforceable and perfected immediately before the effective
-49-1date of this Act, but the requirements for enforceability or
2perfection under this Act are not satisfied on the effective
3date of this Act, the security interest:
4a. is a perfected security interest until the earlier of
5the time perfection would have ceased under the law in effect
6immediately before the effective date of this Act or July 1,
72025;
8b. remains enforceable thereafter only if the security
9interest satisfies the requirements for enforceability under
10section 554.9203, as amended by this Act, before July 1, 2025;
11and
12c. remains perfected thereafter only if the requirements
13for perfection under this Act are satisfied before the time
14specified in paragraph “a”.
15 Sec. 76. NEW SECTION. 554.15303 Security interest
16unperfected before effective date.
17A security interest that is enforceable immediately before
18the effective date of this Act but is unperfected at that time:
191. remains an enforceable security interest until July 1,
202025;
212. remains enforceable thereafter if the security interest
22becomes enforceable under section 554.9203, as amended by this
23Act, on the effective date of this Act or before July 1, 2025;
24and
253. becomes perfected:
26a. without further action, on the effective date of this Act
27if the requirements for perfection under this Act are satisfied
28before or at that time; or
29b. when the requirements for perfection are satisfied if the
30requirements are satisfied after that time.
31 Sec. 77. NEW SECTION. 554.15304 Effectiveness of actions
32taken before effective date.
331. Pre-effective-date action; attachment and perfection
34before July 1, 2025. If action, other than the filing of a
35financing statement, is taken before the effective date of this
-50-1Act and this action would have resulted in perfection of the
2security interest had the security interest become enforceable
3before the effective date of this Act, this action is effective
4to perfect a security interest that attaches under this Act
5before July 1, 2025. An attached security interest becomes
6unperfected on July 1, 2025, unless the security interest
7becomes a perfected security interest under this Act before
8July 1, 2025.
92. Pre-effective-date filing. The filing of a financing
10statement before the effective date of this Act is effective
11to perfect a security interest on the effective date of this
12Act to the extent the filing would satisfy the requirements for
13perfection under this Act.
143. Pre-effective-date enforceability action. The taking of
15an action before the effective date of this Act is sufficient
16for the enforceability of a security interest on the effective
17date of this Act if this action would satisfy the requirements
18for enforceability under this Act.
19 Sec. 78. NEW SECTION. 554.15305 Priority.
201. Determination of priority. Subject to subsections 2 and
213, this Act determines the priority of conflicting claims to
22collateral.
232. Established priorities. Subject to subsection 3, if the
24priorities of claims to collateral were established before the
25effective date of this Act, Article 9, as in effect before the
26effective date of this Act, determines priority.
273. Determination of certain priorities on July 1, 2025. On
28July 1, 2025, to the extent the priorities determined by
29Article 9, as amended by this Act, modify the priorities
30established before the effective date of this Act, the
31priorities of claims to Article 14 property and electronic
32money established before the effective date of this Act cease
33to apply.
34 Sec. 79. NEW SECTION. 554.15306 Priority of claims when
35priority rules of Article 9 do not apply.
-51- 11. Determination of priority. Subject to subsections 2 and
23, Article 14 determines the priority of conflicting claims to
3Article 14 property when the priority rules of Article 9, as
4amended by this Act, do not apply.
52. Established priorities. Subject to subsection 3, when
6the priority rules of Article 9, as amended by this Act, do not
7apply and the priorities of claims to Article 14 property were
8established before the effective date of this Act, law other
9than Article 14 determines priority.
103. Determination of certain priorities on July 1, 2025. When
11the priority rules of Article 9, as amended by this Act, do
12not apply, to the extent the priorities determined by this Act
13modify the priorities established before the effective date
14of this Act, the priorities of claims to Article 14 property
15established before the effective date of this Act cease to
16apply on July 1, 2025.
17 Sec. 80. DIRECTIONS TO THE CODE EDITOR — ARTICLE 15
18PARTS. The Code editor is directed to divide the provisions of
19chapter 554, Article 15, as enacted in this division of this
20Act, into parts as follows:
211. Part 1, including sections 554.15101 and 554.15102.
222. Part 2, including section 554.15201.
233. Part 3, including sections 554.15301, 554.15302,
24554.15303, 554.15304, 554.15305, and 554.15306.
25DIVISION III
26DIGITAL ASSETS
27 Sec. 81. Section 554E.1, Code 2023, is amended by striking
28the section and inserting in lieu thereof the following:
29554E.1 Definitions.
30As used in this chapter, unless the context otherwise
31requires:
321. “Contract” means the same as defined in section 554D.103.
332. “Digital asset” means any electronic record that
34represents, evidences, or comprises economic value or economic,
35proprietary, or access rights, is maintained or stored in or
-52-1as an electronic ledger or other record of transactions, or
2is used as a medium of exchange, unit of account, method of
3payment, or store of value.
43. “Distributed ledger technology” means an electronic
5ledger or other record of transactions or other data to which
6all of the following apply:
7a. The electronic ledger is uniformly ordered.
8b. The electronic ledger is redundantly maintained or
9processed by more than one computer or machine to guarantee the
10consistency or nonrepudiation of the recorded transactions or
11other data.
124. “Electronic” means the same as defined in section
13554D.103.
145. “Electronic record” means the same as defined in section
15554D.103.
166. “Electronic services system” means the county land record
17information system, or electronic services system, created
18under the agreement entered into under chapter 28E between the
19counties and the Iowa county recorders association as required
20by 2005 Iowa Acts, ch.179, §101, as amended by 2021 Iowa Acts,
21ch.126, §2.
227. “Record” means the same as defined in section 554D.103.
238. “Smart contract” means an electronic record that is an
24event-driven program or computerized transaction protocol that
25runs on a distributed, decentralized, shared, and replicated
26ledger that executes the term of a contract, including taking
27custody over and instructing the transfer of assets.
289. “Transaction” means a sale, trade, exchange, transfer,
29payment, or conversion of a digital asset or any other property
30or any other action or set of actions occurring between two or
31more persons relating to the conduct of business, commercial,
32or governmental affairs.
33 Sec. 82. Section 554E.2, Code 2023, is amended to read as
34follows:
35554E.2 Classification of digital assets.
-53- 1Digital assets are intangible personal property.
2EXPLANATION
3The inclusion of this explanation does not constitute agreement with
4the explanation’s substance by the members of the general assembly.
5GENERAL. This bill amends Code chapter 554, Iowa’s version
6of the uniform commercial code (UCC), governing certain
7commercial transactions involving forms of personal electronic
8property that do not derive value from physical attributes
9(sometimes referred to as form of intangible personal
10property). In 2022, the general assembly enacted two bills
11dealing with these types of transactions: (1) new Article 14
12of the UCC (Code chapter 554) and referred to as the “Uniform
13Commercial Code — Controllable Electronic Records” (2022 Iowa
14Acts, chapter 1117) and (2) new Code chapter 554E referring to
15smart contracts, distributed ledger technology, and digital
16assets (2022 Iowa Acts, chapter 1116).
17CONTROLLABLE ELECTRONIC RECORDS — BACKGROUND. The 2022 Act
18creating new Article 14 of the UCC, in part included amendments
19to Article 1 providing general provisions applicable throughout
20the UCC, and amendments to Article 9 governing secured
21transactions, as prepared by a committee appointed jointly by
22the uniform law commission and the American law institute.
23The Act provided for forms of electronic property sometimes
24referred to as digital assets including non-fiat currency
25and blockchain based non-fungible tokens, commonly referred
26to as NFTs, and transactions involving sale to a purchaser
27(qualified purchaser) and associated payment obligations
28(a controllable payment intangible) by an account debtor.
29Note, the UCC does not use the term “intangible property”
30but “personal property” which includes general intangibles,
31including controllable electronic records. Iowa’s new Article
3214 is connected to Article 9, which allows a creditor to
33obtain a security interest attached to a debtor’s personal
34property as collateral and to obtain priority when enforcing
35that security interest over other creditors having a security
-54-1interest in that same collateral. Under Code section 554.9102,
2the term “account” means having a present and future right
3to a payment based on the transfer of services or property
4including by sale or lease, and includes accounts receivable,
5but excludes an item represented by a negotiable instrument
6or chattel paper. The term “payment intangible” (under the
7catchall term “general intangible”) means a debtor’s principal
8obligation is the payment of money and includes a controllable
9payment intangible. An account debtor is a person who owes
10an obligation on an account, chattel paper, or intangible
11property. Chattel paper is a debt obligation supported with a
12security interest in tangible property and includes electronic
13chattel paper evidenced by an electronic record. An electronic
14record cannot include electronic money operating as a medium of
15exchange before being authorized or adopted by a governmental
16entity. Like a controllable electronic record, electronic
17money is perfected by rules of control rather than rules of
18possession traditionally governing forms of tangible personal
19property.
20CONTROLLABLE ELECTRONIC RECORDS — BILL’S PROVISIONS. The
21bill eliminates several terms, including “electronic chattel
22paper” and substitutes the term used to complete a document
23from “authenticate” to “sign”. The bill provides for rights
24in controllable accounts, controllable electronic records,
25and controllable payment intangibles (amended Code section
26554.14104), the control of controllable electronic records
27(amended Code section 554.14105), and what state law controls
28in cases of jurisdictional questions (amended Code section
29554.14107). The bill defines a number of terms used throughout
30the UCC, including “money”. The bill amends a number of
31Article 9 provisions, including the control of an electronic
32copy of a record evidencing chattel paper (amended Code section
33554.9105); the control of electronic money (amended Code
34section 554.9105A); that no duty exists to confirm control on
35behalf of another person (new Code section 554.9107B); the
-55-1duty of a secured party to transfer control of electronic
2document of title to a debtor (amended Code section 554.9208);
3the law governing the perfection and priority of a security
4interest in chattel paper (amended Code section 554.9306A) and
5in controllable accounts, controllable electronic records,
6and controllable payment intangibles (new Code section
7554.9306B); the perfection of chattel paper, including an
8electronic copy of a record evidencing chattel paper (new Code
9section 554.9314A); the right of a buyer of chattel paper,
10electronic document, a controllable electronic record, and
11a controllable account or controllable payment intangible
12to take clear of a security interest prior to perfection
13(amended Code section 554.9317); and the liability of a secured
14party obtaining control of collateral that is a controllable
15account, controllable electronic record, or controllable
16payment intangible (amended Code section 554.9628). The bill
17also includes a number of transitional provisions, including
18a saving clause (new Code sections 554.15201 and 554.15301),
19the enforceability of a security interest that is perfected
20or unperfected before the bill’s effective date (new Code
21sections 554.15302 and 554.15303), the effectiveness of actions
22taken before the bill’s effective date (new Code section
23554.15304), and rules of priority (new Code sections 554.15305
24and 554.15306).
25REGULATION OF DIGITAL ASSETS — BACKGROUND. The 2022 Act
26regulating transactions involving distributed ledger technology
27and smart contracts is connected to Article 14. In both
28cases, the medium of exchange is a digital asset. Distributed
29ledger technology allows different computers to validate
30transactions and update records and a smart contract is a type
31of electronic record that executes the term of a contract,
32including the transfer of assets. A digital asset is a form
33of an electronic record that represents or is used as a medium
34of exchange, unit of account, method of payment, or store of
35value. However, the term expressly excludes certain personal
-56-1property recognized under the UCC, including a deposit account,
2electronic record evidencing chattel paper, electronic chattel
3paper, controllable account, controllable payment intangible,
4money, electronic document of title, investment property, or a
5transferable record (Code section 554E.1). A contract cannot
6be denied legal effect or enforceability solely because it
7is effectuated by distributed ledger technology or a smart
8contract (Code section 554E.3). In addition, the 2022 Act
9provides that a real estate conveyance can be recorded by a
10county if the evidence of conveyance complies with the general
11requirements of Code chapter 558 and is in a format conforming
12with standards established by the electronic services system
13allowing counties and the Iowa county recorders association
14to enter into an agreement under Code chapter 28E for the
15implementation of the county land record information system
16(Code section 554E.4).
17REGULATION OF DIGITAL ASSETS — BILL’S PROVISIONS. The
18bill amends the definition of “digital asset” by eliminating
19exceptions recognized by the UCC including electronic records
20evidencing chattel paper. The bill provides that a digital
21asset is classified simply as personal property rather than
22intangible personal property. Finally, the bill defines
23“electronic services system” by citing its source in the Iowa
24Acts.
-57-da/jh
2and transmission of electronic records and digital assets.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2UNIFORM COMMERCIAL CODE
3PART A
4CONTROLLABLE ELECTRONIC RECORDS
5 Section 1. Section 554.14101, Code 2023, is amended to read
6as follows:
7554.14101 Short title.
8This Article may be cited as the Uniform Commercial Code —
9Controllable Electronic Records.
10 Sec. 2. Section 554.14102, Code 2023, is amended to read as
11follows:
12554.14102 Definitions.
131. Article 14 definitions. Article 14 definitions. In this
14Article:
15a. “Controllable electronic record” means a record stored
16in an electronic medium that can be subjected to control under
17section 554.14105. The term does not include a controllable
18account, a controllable payment intangible, a deposit account,
19electronic chattel paper, an electronic copy of a record
20evidencing chattel paper, an electronic document of title,
21electronic money, investment property, or a transferable
22record.
23b. “Qualifying purchaser” means a purchaser of a
24controllable electronic record or an interest in the a
25 controllable electronic record that obtains control of the
26controllable electronic record for value, in good faith,
27and without notice of a claim of a property right in the
28controllable electronic record.
29c. “Transferable record” means has the meaning provided for
30that term in:
31(1) “Transferable record”, as defined in the federal Section
32201(a)(1) of the Electronic Signatures in Global and National
33Commerce Act, 15 U.S.C. §7021(a)(1), as amended.; or
34(2) “Transferable record” as defined in the uniform
35electronic transactions Uniform Electronic Transactions Act,
-1-1section 554D.118, subsection 1.
2d. “Value” has the meaning provided in section 554.3303,
3subsection 1, as if references in that subsection to an
4“instrument” were references to a controllable account,
5controllable electronic record, or controllable payment
6intangible.
72. Definitions in Article 9. Definitions in Article 9. The
8definitions in Article 9 of “account debtor”, “authenticate”,
9 “controllable account”, “controllable payment intangible”,
10“chattel paper”, “deposit account”, “electronic chattel paper”,
11 “electronic money”, and “investment property” apply to this
12Article.
133. Article 1 definitions and principles. Article 1 contains
14general definitions and principles of construction and
15interpretation applicable throughout this Article.
16 Sec. 3. Section 554.14103, Code 2023, is amended to read as
17follows:
18554.14103 Scope Relation to Article 9 and consumer laws.
191. Article 9 governs in case of conflict. If there is
20conflict between this Article and Article 9, Article 9 governs.
212. Applicable consumer law and other laws. A transaction
22subject to this Article is subject to:
23a. any applicable rule of law that establishes a different
24rule for consumers, including as provided in chapter 537 and
25any other consumer protection statute or regulation of this
26state; and
27b. any other statute or regulation of this state that
28regulates the rates, charges, agreements, and practices for
29loans, credit sales, or other extensions of credit or credit
30transactions, including as provided in chapter 535.
31 Sec. 4. Section 554.14104, Code 2023, is amended to read as
32follows:
33554.14104 Rights in controllable account, controllable
34electronic record, and controllable payment intangible.
351. Applicability of section to controllable account and
-2-1controllable payment intangible. This section applies to the
2acquisition and purchase of rights in a controllable account
3or controllable payment intangible, including the rights and
4benefits under subsections 3, 4, 5, 7, and 8 of a purchaser
5and a qualifying purchaser, and under subsections 3, 4, and 6,
6and in the same manner this section applies to a controllable
7electronic record.
82. Control of controllable account and controllable payment
9intangible. To determine whether a purchaser of a controllable
10account or a controllable payment intangible is a qualifying
11purchaser, the purchaser obtains control of the account or
12payment intangible if it obtains control of the controllable
13electronic record that evidences the account or payment
14intangible.
152. 3. Applicability of other law to acquisition of
16rights. Except as provided in this section, law other than
17this Article determines whether a person acquires a right in
18a controllable electronic record and the right the person
19acquires.
203. 4. Shelter principle and purchase of limited interest. A
21purchaser of a controllable electronic record acquires
22all rights in the controllable electronic record that the
23transferor had or had power to transfer, except that a
24purchaser of a limited interest in a controllable electronic
25record acquires rights only to the extent of the interest
26purchased.
274. 5. Rights of qualifying purchaser. A qualifying
28purchaser acquires its rights in the controllable electronic
29record free of a claim of a property right in the controllable
30electronic record.
315. 6. Limitation of rights of qualifying purchaser in
32other property. Except as provided in subsections 1 and 4
33 5 for a controllable accounts account and a controllable
34payment intangibles intangible or law other than this Article,
35a qualifying purchaser takes a right to payment, right to
-3-1performance, or other interest in property evidenced by the
2controllable electronic record subject to a claim of a property
3right in the right to payment, right to performance, or other
4interest in property.
56. 7. No-action protection for qualifying purchaser. An
6action shall not be asserted against a qualifying purchaser
7based on both a purchase by the qualifying purchaser of a
8controllable electronic record and a claim of a property
9right in another controllable electronic record, whether the
10action is framed in conversion, replevin, constructive trust,
11equitable lien, or other theory.
127. 8. Filing not notice. Filing of a financing statement
13under Article 9 is not notice of a claim of a property right in
14a controllable electronic record.
15 Sec. 5. Section 554.14105, Code 2023, is amended to read as
16follows:
17554.14105 Control of controllable electronic record.
181. General rule: — control of controllable electronic
19record. A person has control of a controllable electronic
20record if the electronic record, a record attached to or
21logically associated with the electronic record, or a system in
22which the electronic record is recorded:
23a. the electronic record, a record attached to or logically
24associated with the electronic record, or a system in which the
25electronic record is recorded gives the person:
26(1) the power to avail itself of substantially all the
27benefit from the electronic record; and
28(2) exclusive power, subject to subsection 2, to:
29(a) prevent others from availing themselves of
30substantially all the benefit from the electronic record; and
31(b) transfer control of the electronic record to another
32person or cause another person to obtain control of another
33controllable electronic record as a result of the transfer of
34the electronic record; and
35b. the electronic record, a record attached to or logically
-4-1associated with the electronic record, or a system in which
2the electronic record is recorded enables the person readily
3to identify itself in any way, including by name, identifying
4number, cryptographic key, office, or account number, as having
5the powers specified in paragraph “a”.
62. Control through another person. A person has control of
7a controllable electronic record if another person, other than
8the transferor of an interest in the electronic record:
9a. has control of the electronic record and acknowledges
10that it has control on behalf of the person, or
11b. obtains control of the electronic record after having
12acknowledged that it will obtain control of the electronic
13record on behalf of the person.
143. 2. Meaning of exclusive. A power specified in Subject
15to subsection 1 3, paragraph “a”, subparagraph (2), a power is
16exclusive, under subsection 1, paragraph “a”, subparagraph (2),
17subparagraph divisions (a) and (b) even if:
18a. the controllable electronic record, a record attached
19to or logically associated with the electronic record, or a
20system in which the electronic record is recorded limits the
21use of the electronic record or has a protocol programmed to
22cause a change, including a transfer or loss of control or a
23modification of benefits afforded by the electronic record; or
24b. the person has agreed to share the power is shared with
25another person.
263. When power not shared with another person. A power of a
27person is not shared with another person under subsection 2,
28paragraph “b” and the person’s power is not exclusive if:
29a. the person can exercise the power only if the power also
30is exercised by the other person; and
31b. the other person:
32(1) can exercise the power without exercise of the power by
33the person; or
34(2) is the transferor to the person of an interest in the
35controllable electronic record or a controllable account or
-5-1controllable payment intangible evidenced by the controllable
2electronic record.
34. Presumption of exclusivity of certain powers. If a
4person has the powers specified in subsection 1, paragraph “a”,
5subparagraph (2), subparagraph divisions (a) and (b) the powers
6are presumed to be exclusive.
75. Control through another person. A person has control of
8a controllable electronic record if another person, other than
9the transferor to the person of an interest in the controllable
10electronic record or a controllable account or controllable
11payment intangible evidenced by the controllable electronic
12record:
13a. has control of the electronic record and acknowledges
14that it has control on behalf of the person; or
15b. obtains control of the electronic record after having
16acknowledged that it will obtain control of the electronic
17record on behalf of the person.
186. No requirement to acknowledge. A person that has control
19under this section is not required to acknowledge that it has
20control on behalf of another person.
217. No duties or confirmation. If a person acknowledges that
22it has or will obtain control on behalf of another person,
23unless the person otherwise agrees or law other than this
24Article or Article 9 otherwise provides, the person does not
25owe any duty to the other person and is not required to confirm
26the acknowledgment to any other person.
27 Sec. 6. Section 554.14106, Code 2023, is amended to read as
28follows:
29554.14106 Discharge of account debtor on controllable account
30or controllable payment intangible.
311. Discharge of account debtor. An account debtor on a
32controllable account or controllable payment intangible may
33discharge its obligation by paying:
34a. the person having control of the controllable electronic
35record that evidences the controllable account or controllable
-6-1payment intangible; or
2b. except as provided in subsection 2, a person that
3formerly had control of the controllable electronic record.
42. Effect Content and effect of notification. Subject to
5subsection 4, an the account debtor shall not discharge its
6obligation by paying a person that formerly had control of the
7controllable electronic record if the account debtor receives a
8notification that:
9a. is authenticated signed by a person that formerly had
10control or the person to which control was transferred;
11b. reasonably identifies the controllable account or
12controllable payment intangible;
13c. notifies the account debtor that control of the
14controllable electronic record that evidences the controllable
15account or controllable payment intangible was transferred;
16d. identifies the transferee, in any reasonable way,
17including by name, identifying number, cryptographic key,
18office, or account number; and
19e. provides a commercially reasonable method by which the
20account debtor is to pay the transferee.
213. Discharge following effective notification. After
22receipt of a notification that complies with subsection 2, the
23account debtor may discharge its obligation only by paying in
24accordance with the notification and shall not discharge the
25obligation by paying a person that formerly had control.
264. When notification ineffective. Notification Subject to
27subsection 8, notification is ineffective under subsection 2:
28a. unless, before the notification is sent, an the account
29debtor and the person that, at that time, had control of the
30controllable electronic record that evidences the controllable
31account or controllable payment intangible agree in an
32authenticated a signed record to a commercially reasonable
33method by which a person must furnish reasonable proof that
34control has been transferred;
35b. to the extent an agreement between an the account debtor
-7-1and seller of a payment intangible limits the account debtor’s
2duty to pay a person other than the seller and the limitation
3is effective under law other than this Article; or
4c. at the option of an the account debtor, if the
5notification notifies the account debtor to:
6(1) divide a payment;
7(2) make less than the full amount of any an installment or
8other periodic payment; or
9(3) pay any part of a payment by more than one method or to
10more than one person.
115. Proof of transfer of control. If Subject to subsection
128, if requested by the account debtor, the person giving the
13notification under subsection 2 seasonably shall furnish
14reasonable proof, using the agreed method in the agreement
15referred to in subsection 4, paragraph “a”, that control of the
16controllable electronic record has been transferred. Unless
17the person complies with the request, the account debtor may
18discharge its obligation by paying a person that formerly had
19control, even if the account debtor has received a notification
20under subsection 2.
216. What constitutes reasonable proof. A person furnishes
22reasonable proof under subsection 5 that control has been
23transferred if the person demonstrates, using the agreed method
24in the agreement referred to in subsection 4, paragraph “a”,
25that the transferee has the power to:
26a. avail itself of substantially all the benefit from the
27controllable electronic record;
28b. prevent others from availing themselves of substantially
29all the benefit from the controllable electronic record; and
30c. transfer the powers mentioned specified in paragraphs “a”
31and “b” to another person.
327. Rights not waivable. An Subject to subsection 8,
33an account debtor shall not waive or vary its rights under
34subsection 4, paragraph “a”, and subsection 5 or its option
35under subsection 4, paragraph “c”.
-8- 18. Rule for individual under other law. This section is
2subject to law other than this Article which establishes a
3different rule for an account debtor who is an individual and
4who incurred the obligation primarily for personal, family, or
5household purposes.
6 Sec. 7. Section 554.14107, Code 2023, is amended by striking
7the section and inserting in lieu thereof the following:
8554.14107 Governing law.
91. Governing law: general rule. Except as provided in
10subsection 2, the local law of a controllable electronic
11record’s jurisdiction governs a matter covered by this Article.
122. Governing law: section 554.14106. For a controllable
13electronic record that evidences a controllable account
14or controllable payment intangible, the local law of the
15controllable electronic record’s jurisdiction governs a matter
16covered by section 554.14106 unless an effective agreement
17determines that the local law of another jurisdiction governs.
183. Controllable electronic record’s jurisdiction. The
19following rules determine a controllable electronic record’s
20jurisdiction under this section:
21a. if the controllable electronic record, or a record
22attached to or logically associated with the controllable
23electronic record and readily available for review, expressly
24provides that a particular jurisdiction is the controllable
25electronic record’s jurisdiction for purposes of this section,
26Article, or chapter, that jurisdiction is the controllable
27electronic record’s jurisdiction.
28b. if paragraph “a” does not apply and the rules of the
29system in which the controllable electronic record is recorded
30are readily available for review and expressly provide that a
31particular jurisdiction is the controllable electronic record’s
32jurisdiction for purposes of this section, Article, or chapter,
33that jurisdiction is the controllable electronic record’s
34jurisdiction.
35c. if paragraphs “a” and “b” do not apply and the
-9-1controllable electronic record, or a record attached to or
2logically associated with the controllable electronic record
3and readily available for review, expressly provides that the
4controllable electronic record is governed by the law of a
5particular jurisdiction, that jurisdiction is the controllable
6electronic record’s jurisdiction.
7d. if paragraphs “a”, “b”, and “c” do not apply and the
8rules of the system in which the controllable electronic
9record is recorded are readily available for review and
10expressly provide that the controllable electronic record or
11the system is governed by the law of a particular jurisdiction,
12that jurisdiction is the controllable electronic record’s
13jurisdiction.
14e. if paragraphs “a” through “d” do not apply, the
15controllable electronic record’s jurisdiction is the District
16of Columbia.
174. Applicability of Article 12. If subsection 3, paragraph
18“e”, applies and Article 12 is not in effect in the District of
19Columbia without material modification, the governing law for
20a matter covered by this Article is the law of the District of
21Columbia as though Article 12 were in effect in the District of
22Columbia without material modification. In this subsection,
23“Article 12” means Article 12 of Uniform Commercial Code
24Amendments (2022) approved by the uniform law commission at its
25annual meeting in July 2022.
265. Relation of matter or transaction to controllable
27electronic record’s jurisdiction not necessary. To the
28extent subsections 1 and 2 provide that the local law of the
29controllable electronic record’s jurisdiction governs a matter
30covered by this Article, that law governs even if the matter
31or a transaction to which the matter relates does not bear any
32relation to the controllable electronic record’s jurisdiction.
336. Rights of purchasers determined at time of purchase. The
34rights acquired under section 554.14104 by a purchaser or
35qualifying purchaser are governed by the law applicable under
-10-1this section at the time of purchase.
2 Sec. 8. Section 554.14108, Code 2023, is amended to read as
3follows:
4554.14108 Applicability.
51. This Article applies to any transaction involving a
6controllable electronic record that arises on or after July 1,
72022. This Article does not apply to any transaction involving
8a controllable electronic record that arises before July 1,
92022, even if the transaction would be subject to this Article
10if the transaction had arisen on or after July 1, 2022. This
11Article does not apply to a right of action with regard to any
12transaction involving a controllable electronic record that has
13accrued before July 1, 2022.
142. This section is repealed on July 1, 2025.
15 Sec. 9. Section 554.14109, Code 2023, is amended to read as
16follows:
17554.14109 Savings clause.
181. Any transaction involving a controllable electronic
19record that arose before July 1, 2022, and the rights,
20obligations, and interests flowing from that transaction are
21governed by any statute or other rule amended or repealed by
22this Article as if such amendment or repeal had not occurred
23and may be terminated, completed, consummated, or enforced
24under that statute or other rule.
252. This section is repealed on July 1, 2025.
26PART B
27RELATED ARTICLES
28GENERAL
29 Sec. 10. Section 554.1201, subsection 2, paragraphs o, y,
30ak, and al, Code 2023, are amended to read as follows:
31o. “Delivery”, with respect to an electronic document
32of title, means voluntary transfer of control and, with
33respect to an instrument, a tangible document of title, or an
34authoritative tangible copy of a record evidencing chattel
35paper, means voluntary transfer of possession.
-11- 1y. “Money” means a medium of exchange that: is currently
2authorized or adopted by a domestic or foreign government. The
3term includes a monetary unit of account established by an
4intergovernmental organization, or pursuant to an agreement
5between two or more countries. The term does not include an
6electronic record that is a medium of exchange recorded and
7transferable in a system that existed and operated for the
8medium of exchange before the medium of exchange was authorized
9or adopted by the government.
10(1) is currently authorized or adopted by a domestic or
11foreign government, by an intergovernmental organization, or
12pursuant to an agreement between two or more governments; and
13(2) was initially issued, created, or distributed by
14a domestic or foreign government, by an intergovernmental
15organization, or pursuant to an agreement between two or more
16governments.
17ak. “Send” in connection with a writing, record, or notice
18 notification means:
19(1) to deposit in the mail, or deliver for transmission,
20or transmit by any other usual means of communication, with
21postage or cost of transmission provided for, and properly
22 addressed and, in the case of an instrument, to an address
23specified thereon or otherwise agreed, or if there be none to
24any address reasonable under the circumstances; or
25(2) in any other way to cause to be received any the record
26or notice notification to be received within the time it would
27have arrived been received if properly sent under subparagraph
28(1).
29al. (1) “Signed” includes using any symbol executed
30or adopted “Sign” means with present intention intent to
31authenticate or adopt or accept a writing. record that:
32(a) executes or adopts a tangible symbol; or
33(b) attaches to or logically associates with the record an
34electronic symbol, sound, or process.
35(2) “Signed”, “signing”, and “signature” have corresponding
-12-1meanings.
2 Sec. 11. Section 554.1301, subsection 3, paragraph g, Code
32023, is amended to read as follows:
4g. Sections 554.13105 and 554.13106.;
5 Sec. 12. Section 554.1301, subsection 3, Code 2023, is
6amended by adding the following new paragraph:
7 NEW PARAGRAPH. h. Section 554.14107.
8 Sec. 13. Section 554.1306, Code 2023, is amended to read as
9follows:
10554.1306 Waiver or renunciation of claim or right after
11breach.
12A claim or right arising out of an alleged breach may
13be discharged in whole or in part without consideration by
14agreement of the aggrieved party in an authenticated a signed
15 record.
16PART C
17RELATED ARTICLES
18SECURED TRANSACTIONS
19 Sec. 14. Section 554.9102, subsection 1, paragraphs b, c,
20d, ab, ac, as, ax, bf, and br, Code 2023, are amended to read
21as follows:
22b. “Account”, except as used in “account for”, “account
23statement”, “account to”, “commodity account” in paragraph “n”,
24“customer’s account”, “deposit account” in paragraph “ae”, “on
25account of”, and paragraph “ae” “statement of account”, means
26a right to payment of a monetary obligation, whether or not
27earned by performance, (i) for property that has been or is
28to be sold, leased, licensed, assigned, or otherwise disposed
29of; (ii) for services rendered or to be rendered; (iii) for
30a policy of insurance issued or to be issued; (iv) for a
31secondary obligation incurred or to be incurred; (v) for energy
32provided or to be provided; (vi) for the use or hire of a vessel
33under a charter or other contract; (vii) arising out of the use
34of a credit or charge card or information contained on or for
35use with the card; or (viii) as winnings in a lottery or other
-13-1game of chance operated or sponsored by a state, governmental
2unit of a state, or person licensed or authorized to operate
3the game by a state or governmental unit of a state. The
4term includes controllable accounts and health care insurance
5receivables. The term does not include (i) chattel paper, (ii)
6commercial tort claims, (iii) deposit accounts, (iv) investment
7property, (v) letter-of-credit rights or letters of credit,
8(vi) rights to payment for money or funds advanced or sold,
9other than rights arising out of the use of a credit or charge
10card or information contained on or for use with the card, or
11(vii) rights to payment evidenced by an instrument.
12c. “Account debtor” means a person obligated on an account,
13chattel paper, or general intangible. The term does not
14include persons obligated to pay a negotiable instrument, even
15if the negotiable instrument constitutes part of evidences
16 chattel paper.
17d. “Accounting”, except as used in “accounting for”, means a
18record:
19(1) authenticated signed by a secured party;
20(2) indicating the aggregate unpaid secured obligations as
21of a date not more than thirty-five days earlier or thirty-five
22days later than the date of the record; and
23(3) identifying the components of the obligations in
24reasonable detail.
25ab. “Controllable account” means an account evidenced by a
26controllable electronic record that provides that the account
27debtor undertakes to pay the person that has control under
28section 554.14105 has control of the controllable electronic
29record.
30ac. “Controllable payment intangible” means a payment
31intangible evidenced by a controllable electronic record that
32provides that the account debtor undertakes to pay the person
33that has control under section 554.14105 has control of the
34controllable electronic record.
35as. “General intangible” means any personal property,
-14-1including things in action, other than accounts, chattel paper,
2commercial tort claims, deposit accounts, documents, goods,
3instruments, investment property, letter-of-credit rights,
4letters of credit, money, and oil, gas, or other minerals
5before extraction. The term includes controllable electronic
6records, payment intangibles, and software.
7ax. “Instrument” means a negotiable instrument or any
8other writing that evidences a right to the payment of a
9monetary obligation, is not itself a security agreement or
10lease, and is of a type that in ordinary course of business
11is transferred by delivery with any necessary indorsement or
12assignment. The term does not include (i) investment property,
13(ii) letters of credit, or (iii) writings that evidence a right
14to payment arising out of the use of a credit or charge card
15or information contained on or for use with the card, or (iv)
16writings that evidence chattel paper.
17bf. “Money” has the meaning provided in section 554.1201,
18subsection 2, paragraph “y”, but does not include (i) a deposit
19account or (ii) money in an electronic form that cannot be
20subjected to control under section 554.9105A.
21br. “Proposal” means a record authenticated signed by a
22secured party which includes the terms on which the secured
23party is willing to accept collateral in full or partial
24satisfaction of the obligation it secures pursuant to sections
25554.9620, 554.9621, and 554.9622.
26 Sec. 15. Section 554.9102, subsection 1, Code 2023, is
27amended by adding the following new paragraphs:
28 NEW PARAGRAPH. 0g. “Assignee”, except as used in “assignee
29for benefit of creditors”, means a person (i) in whose favor
30a security interest that secures an obligation is created or
31provided for under a security agreement, whether or not the
32obligation is outstanding or (ii) to which an account, chattel
33paper, payment intangible, or promissory note has been sold.
34The term includes a person to which a security interest has
35been transferred by a secured party.
-15-1 NEW PARAGRAPH. 00g. “Assignor” means a person that (i)
2under a security agreement creates or provides for a security
3interest that secures an obligation or (ii) sells an account,
4chattel paper, payment intangible, or promissory note. The
5term includes a secured party that has transferred a security
6interest to another person.
7 Sec. 16. Section 554.9102, subsection 1, paragraphs g, ag,
8ca, and ce, Code 2023, are amended by striking the paragraphs.
9 Sec. 17. Section 554.9102, subsection 1, paragraph k, Code
102023, is amended by striking the paragraph and inserting in
11lieu thereof the following:
12k. (1) “Chattel paper” means:
13(a) a right to payment of a monetary obligation secured by
14specific goods, if the right to payment and security agreement
15are evidenced by a record; or
16(b) a right to payment of a monetary obligation owed by a
17lessee under a lease agreement with respect to specific goods
18and a monetary obligation owed by the lessee in connection with
19the transaction giving rise to the lease, if:
20(i) the right to payment and lease agreement are evidenced
21by a record; and
22(ii) the predominant purpose of the transaction giving rise
23to the lease was to give the lessee the right to possession and
24use of the goods.
25(2) “Chattel paper” does not include a right to payment
26arising out of a charter or other contract involving the use or
27hire of a vessel or a right to payment arising out of the use of
28a credit or charge card or information contained on or for use
29with the card.
30 Sec. 18. Section 554.9102, subsection 2, Code 2023, is
31amended by adding the following new paragraph:
32 NEW PARAGRAPH. 0ae. “Protected purchaser” ... Section
33554.8303.
34 Sec. 19. Section 554.9104, subsection 1, Code 2023, is
35amended to read as follows:
-16- 11. Requirements for control. A secured party has control
2of a deposit account if:
3a. the secured party is the bank with which the deposit
4account is maintained;
5b. the debtor, secured party, and bank have agreed in
6an authenticated a signed record that the bank will comply
7with instructions originated by the secured party directing
8disposition of the funds in the deposit account without further
9consent by the debtor; or
10c. the secured party becomes the bank’s customer with
11respect to the deposit account.; or
12d. another person, other than the debtor:
13(1) has control of the deposit account and acknowledges that
14it has control on behalf of the secured party; or
15(2) obtains control of the deposit account after having
16acknowledged that it will obtain control of the deposit account
17on behalf of the secured party.
18DIVISION II
19UNIFORM COMMERCIAL CODE
20PART A
21SECURED TRANSACTIONS
22 Sec. 20. Section 554.9105, Code 2023, is amended by striking
23the section and inserting in lieu thereof the following:
24554.9105 Control of electronic copy of record evidencing
25chattel paper.
261. General rule: control of electronic copy of record
27evidencing chattel paper. A purchaser has control of an
28authoritative electronic copy of a record evidencing chattel
29paper if a system employed for evidencing the assignment
30of interests in the chattel paper reliably establishes the
31purchaser as the person to which the authoritative electronic
32copy was assigned.
332. Single authoritative copy. A system satisfies subsection
341 if the record or records evidencing the chattel paper are
35created, stored, and assigned in a manner that:
-17- 1a. a single authoritative copy of the record or records
2exists which is unique, identifiable, and, except as otherwise
3provided in paragraphs “d”, “e”, and “f”, unalterable;
4b. the authoritative copy identifies the purchaser as the
5assignee of the record or records;
6c. the authoritative copy is communicated to and maintained
7by the purchaser or its designated custodian;
8d. copies or amendments that add or change an identified
9assignee of the authoritative copy can be made only with the
10consent of the purchaser;
11e. each copy of the authoritative copy and any copy of
12a copy is readily identifiable as a copy that is not the
13authoritative copy; and
14f. any amendment of the authoritative copy is readily
15identifiable as authorized or unauthorized.
163. One or more authoritative copies. A system satisfies
17subsection 1, and a purchaser has control of an authoritative
18electronic copy of a record evidencing chattel paper, if the
19electronic copy, a record attached to or logically associated
20with the electronic copy, or a system in which the electronic
21copy is recorded:
22a. enables the purchaser readily to identify each electronic
23copy as either an authoritative copy or a nonauthoritative
24copy;
25b. enables the purchaser readily to identify itself in any
26way, including by name, identifying number, cryptographic key,
27office, or account number, as the assignee of the authoritative
28electronic copy; and
29c. gives the purchaser exclusive power, subject to
30subsection 4, to:
31(1) prevent others from adding or changing an identified
32assignee of the authoritative electronic copy; and
33(2) transfer control of the authoritative electronic copy.
344. Meaning of exclusive. Subject to subsection 5, a power
35is exclusive under subsection 3, paragraph “c”, subparagraphs
-18-1(1) and (2), even if:
2a. the authoritative electronic copy, a record attached
3to or logically associated with the authoritative electronic
4copy, or a system in which the authoritative electronic copy is
5recorded limits the use of the authoritative electronic copy
6or has a protocol programmed to cause a change, including a
7transfer or loss of control; or
8b. the power is shared with another person.
95. When power not shared with another person. A power of a
10purchaser is not shared with another person under subsection 4,
11paragraph “b”, and the purchaser’s power is not exclusive if:
12a. the purchaser can exercise the power only if the power
13also is exercised by the other person; and
14b. the other person:
15(1) can exercise the power without exercise of the power by
16the purchaser; or
17(2) is the transferor to the purchaser of an interest in the
18chattel paper.
196. Presumption of exclusivity of certain powers. If a
20purchaser has the powers specified in subsection 3, paragraph
21“c”, subparagraphs (1) and (2), the powers are presumed to be
22exclusive.
237. Obtaining control through another person. A purchaser
24has control of an authoritative electronic copy of a record
25evidencing chattel paper if another person, other than the
26transferor to the purchaser of an interest in the chattel
27paper:
28a. has control of the authoritative electronic copy and
29acknowledges that it has control on behalf of the purchaser; or
30b. obtains control of the authoritative electronic copy
31after having acknowledged that it will obtain control of the
32electronic copy on behalf of the purchaser.
33 Sec. 21. Section 554.9105A, Code 2023, is amended to read
34as follows:
35554.9105A Control of electronic money.
-19- 11. General rule: — control of electronic money. A person
2has control of electronic money if:
3a. the electronic money, a record attached to or logically
4associated with the electronic money, or a system in which the
5electronic money is recorded gives the person:
6(1) the power to avail itself of substantially all the
7benefit from the electronic money; and
8(2) exclusive power, subject to subsection 2, to:
9(a) prevent others from availing themselves of
10substantially all the benefit from the electronic money; and
11(b) transfer control of the electronic money to another
12person or cause another person to obtain control of other
13electronic money as a result of the transfer of the electronic
14money; and
15b. the electronic money, a record attached to or logically
16associated with the electronic money, or a system in which
17the electronic money is recorded enables the person readily
18to identify itself in any way, including by name, identifying
19number, cryptographic key, office, or account number, as having
20the powers under paragraph “a”.
212. Meaning of exclusive. Subject to subsection 3, a power
22is exclusive under subsection 1, paragraph “a”, subparagraph
23(2), subparagraph divisions (a) and (b) even if:
24a. the electronic money, a record attached to or logically
25associated with the electronic money, or a system in which the
26electronic money is recorded limits the use of the electronic
27money or has a protocol programmed to cause a change, including
28a transfer or loss of control; or
29b. the power is shared with another person.
303. When power not shared with another person. A power of a
31person is not shared with another person under subsection 2,
32paragraph “b” and the person’s power is not exclusive if:
33a. the person can exercise the power only if the power also
34is exercised by the other person; and
35b. the other person:
-20- 1(1) can exercise the power without exercise of the power by
2the person; or
3(2) is the transferor to the person of an interest in the
4electronic money.
54. Presumption of exclusivity of certain powers. If a
6person has the powers specified in subsection 1, paragraph “a”,
7subparagraph (2), subparagraph divisions (a) and (b) the powers
8are presumed to be exclusive.
92. 5. Control through another person. A person has
10control of electronic money if another person, other than the
11transferor of an interest in the electronic money:
12a. has control of the electronic money and acknowledges that
13it has control on behalf of the person, or
14b. obtains control of the electronic money after having
15acknowledged that it will obtain control of the electronic
16money on behalf of the person.
173. Meaning of exclusive. A power is exclusive under
18subsection 1, paragraph “a”, subparagraph (2), even if:
19a. the electronic money or a system in which the electronic
20money is recorded limits the use of the electronic money or has
21a protocol programmed to transfer control; or
22b. the person has agreed to share the power with another
23person.
24 Sec. 22. NEW SECTION. 554.9107B No requirement to
25acknowledge or confirm; no duties.
261. No requirement to acknowledge. A person that has control
27under section 554.9104, 554.9105, or 554.9105A is not required
28to acknowledge that it has control on behalf of another person.
292. No duties or confirmation. If a person acknowledges
30that it has or will obtain control on behalf of another
31person, unless the person otherwise agrees or law other than
32this Article otherwise provides, the person does not owe any
33duty to the other person and is not required to confirm the
34acknowledgment to any other person.
35 Sec. 23. Section 554.9203, subsection 2, Code 2023, is
-21-1amended to read as follows:
22. Enforceability. Except as otherwise provided in
3subsections 3 through 10 9, a security interest is enforceable
4against the debtor and third parties with respect to the
5collateral only if:
6a. value has been given;
7b. the debtor has rights in the collateral or the power to
8transfer rights in the collateral to a secured party; and
9c. one of the following conditions is met:
10(1) the debtor has authenticated signed a security
11agreement that provides a description of the collateral and, if
12the security interest covers timber to be cut, a description
13of the land concerned;
14(2) the collateral is not a certificated security and is
15in the possession of the secured party under section 554.9313
16pursuant to the debtor’s security agreement;
17(3) the collateral is a certificated security in registered
18form and the security certificate has been delivered to the
19secured party under section 554.8301 pursuant to the debtor’s
20security agreement; or
21(4) the collateral is controllable accounts, controllable
22electronic records, controllable payment intangibles, deposit
23accounts, electronic chattel paper, electronic documents,
24electronic money, investment property, or letter-of-credit
25rights, and the secured party has control under section
26554.7106, 554.9104, 554.9105, 554.9105A, 554.9106, 554.9107, or
27554.9107A pursuant to the debtor’s security agreement.; or
28(5) the collateral is chattel paper and the secured party
29has possession and control under section 554.9314A pursuant to
30the debtor’s security agreement.
31 Sec. 24. Section 554.9203, subsection 10, Code 2023, is
32amended by striking the subsection.
33 Sec. 25. Section 554.9208, subsection 2, Code 2023, is
34amended to read as follows:
352. Duties of secured party after receiving demand from
-22-1debtor. Within ten days after receiving an authenticated a
2signed demand by the debtor:
3a. a secured party having control of a deposit account
4under section 554.9104, subsection 1, paragraph “b”, shall
5send to the bank with which the deposit account is maintained
6an authenticated statement a signed record that releases the
7bank from any further obligation to comply with instructions
8originated by the secured party;
9b. a secured party having control of a deposit account under
10section 554.9104, subsection 1, paragraph “c”, shall:
11(1) pay the debtor the balance on deposit in the deposit
12account; or
13(2) transfer the balance on deposit into a deposit account
14in the debtor’s name;
15c. a secured party, other than a buyer, having control of
16electronic chattel paper under section 554.9105 shall: of an
17authoritative electronic copy of a record evidencing chattel
18paper shall transfer control of the electronic copy to the
19debtor or a person designated by the debtor;
20(1) communicate the authoritative copy of the electronic
21chattel paper to the debtor or its designated custodian;
22(2) if the debtor designates a custodian that is the
23designated custodian with which the authoritative copy of
24the electronic chattel paper is maintained for the secured
25party, communicate to the custodian an authenticated record
26releasing the designated custodian from any further obligation
27to comply with instructions originated by the secured party
28and instructing the custodian to comply with instructions
29originated by the debtor; and
30(3) take appropriate action to enable the debtor or its
31designated custodian to make copies of or revisions to the
32authoritative copy which add or change an identified assignee
33of the authoritative copy without the consent of the secured
34party;
35d. a secured party having control of investment property
-23-1under section 554.8106, subsection 4, paragraph “b”, or
2section 554.9106, subsection 2, shall send to the securities
3intermediary or commodity intermediary with which the
4security entitlement or commodity contract is maintained an
5authenticated a signed record that releases the securities
6intermediary or commodity intermediary from any further
7obligation to comply with entitlement orders or directions
8originated by the secured party;
9e. a secured party having control of a letter-of-credit
10right under section 554.9107 shall send to each person having
11an unfulfilled obligation to pay or deliver proceeds of the
12letter of credit to the secured party an authenticated a signed
13 release from any further obligation to pay or deliver proceeds
14of the letter of credit to the secured party;
15f. a secured party having control under section 554.7106
16 of an authoritative electronic copy of an electronic document
17shall: transfer control of the electronic copy to the debtor or
18a person designated by the debtor;
19(1) give control of the electronic document to the debtor or
20its designated custodian;
21(2) if the debtor designates a custodian that is the
22designated custodian with which the authoritative copy of
23the electronic document is maintained for the secured party,
24communicate to the custodian an authenticated record releasing
25the designated custodian from any further obligation to
26comply with instructions originated by the secured party
27and instructing the custodian to comply with instructions
28originated by the debtor; and
29(3) take appropriate action to enable the debtor or its
30designated custodian to make copies of or revisions to the
31authoritative copy which add or change an identified assignee
32of the authoritative copy without the consent of the secured
33party; and
34g. a secured party having control under section 554.9105A of
35electronic money shall transfer control of the electronic money
-24-1to the debtor or a person designated by the debtor; and
2h. a secured party having control under section 554.14105
3of a controllable electronic record, other than a buyer of
4a controllable account or controllable payment intangible
5evidenced by the controllable electronic record, shall transfer
6control of the controllable electronic record to the debtor or
7a person designated by the debtor.
8 Sec. 26. Section 554.9209, subsection 2, Code 2023, is
9amended to read as follows:
102. Duties of secured party after receiving demand from
11debtor. Within ten days after receiving an authenticated a
12signed demand by the debtor, a secured party shall send to
13an account debtor under section 554.9406, subsection 1 or
14554.14106, subsection 2, that has received notification of
15an assignment to the secured party as assignee under section
16554.9406, subsection 1, an authenticated a signed record that
17releases the account debtor from any further obligation to the
18secured party.
19 Sec. 27. Section 554.9210, subsections 1, 2, 3, 4, and 5,
20Code 2023, are amended to read as follows:
211. Definitions. In this section:
22a. “Request” means a record of a type described in paragraph
23“b”, “c”, or “d”.
24b. “Request for an accounting” means a record authenticated
25 signed by a debtor requesting that the recipient provide an
26accounting of the unpaid obligations secured by collateral and
27reasonably identifying the transaction or relationship that is
28the subject of the request.
29c. “Request regarding a list of collateral” means a record
30authenticated signed by a debtor requesting that the recipient
31approve or correct a list of what the debtor believes to be the
32collateral securing an obligation and reasonably identifying
33the transaction or relationship that is the subject of the
34request.
35d. “Request regarding a statement of account” means a record
-25-1authenticated signed by a debtor requesting that the recipient
2approve or correct a statement indicating what the debtor
3believes to be the aggregate amount of unpaid obligations
4secured by collateral as of a specified date and reasonably
5identifying the transaction or relationship that is the subject
6of the request.
72. Duty to respond to requests. Subject to subsections 3,
84, 5, and 6, a secured party, other than a buyer of accounts,
9chattel paper, payment intangibles, or promissory notes or a
10consignor, shall comply with a request within fourteen days
11after receipt:
12a. in the case of a request for an accounting, by
13authenticating signing and sending to the debtor an accounting;
14and
15b. in the case of a request regarding a list of
16collateral or a request regarding a statement of account, by
17authenticating signing and sending to the debtor an approval
18or correction.
193. Request regarding list of collateral — statement
20concerning type of collateral. A secured party that claims a
21security interest in all of a particular type of collateral
22owned by the debtor may comply with a request regarding a
23list of collateral by sending to the debtor an authenticated
24 a signed record including a statement to that effect within
25fourteen days after receipt.
264. Request regarding list of collateral — no interest
27claimed. A person that receives a request regarding a list
28of collateral, claims no interest in the collateral when
29it receives the request, and claimed an interest in the
30collateral at an earlier time shall comply with the request
31within fourteen days after receipt by sending to the debtor an
32authenticated a signed record:
33a. disclaiming any interest in the collateral; and
34b. if known to the recipient, providing the name and mailing
35address of any assignee of or successor to the recipient’s
-26-1interest in the collateral.
25. Request for accounting or regarding statement of account
3— no interest in obligation claimed. A person that receives a
4request for an accounting or a request regarding a statement of
5account, claims no interest in the obligations when it receives
6the request, and claimed an interest in the obligations at an
7earlier time shall comply with the request within fourteen
8days after receipt by sending to the debtor an authenticated a
9signed record:
10a. disclaiming any interest in the obligations; and
11b. if known to the recipient, providing the name and mailing
12address of any assignee of or successor to the recipient’s
13interest in the obligations.
14 Sec. 28. Section 554.9301, unnumbered paragraph 1, Code
152023, is amended to read as follows:
16Except as otherwise provided in sections 554.9303, 554.9304,
17554.9305, and 554.9306 through 554.9306B, the following
18rules determine the law governing perfection, the effect of
19perfection or nonperfection, and the priority of a security
20interest in collateral:
21 Sec. 29. Section 554.9301, subsection 3, unnumbered
22paragraph 1, Code 2023, is amended to read as follows:
23Except as otherwise provided in subsection 4, while tangible
24 negotiable tangible documents, goods, instruments, or tangible
25money, or tangible chattel paper is located in a jurisdiction,
26the local law of that jurisdiction governs:
27 Sec. 30. Section 554.9305, subsection 1, Code 2023, is
28amended by adding the following new paragraph:
29 NEW PARAGRAPH. e. Paragraphs “b”, “c”, and “d” apply
30even if the transaction does not bear any relation to the
31jurisdiction.
32 Sec. 31. Section 554.9306A, Code 2023, is amended by
33striking the section and inserting in lieu thereof the
34following:
35554.9306A Law governing perfection and priority of security
-27-1interests in chattel paper.
21. Chattel paper evidenced by authoritative electronic
3copy. Except as provided in subsection 4, if chattel paper
4is evidenced only by an authoritative electronic copy of the
5chattel paper or is evidenced by an authoritative electronic
6copy and an authoritative tangible copy, the local law of the
7chattel paper’s jurisdiction governs perfection, the effect of
8perfection or nonperfection, and the priority of a security
9interest in the chattel paper, even if the transaction does not
10bear any relation to the chattel paper’s jurisdiction.
112. Chattel paper’s jurisdiction. The following rules
12determine the chattel paper’s jurisdiction under this section:
13a. If the authoritative electronic copy of the record
14evidencing chattel paper, or a record attached to or logically
15associated with the electronic copy and readily available for
16review, expressly provides that a particular jurisdiction is
17the chattel paper’s jurisdiction for purposes of this section,
18this part, this Article, or this chapter, that jurisdiction is
19the chattel paper’s jurisdiction.
20b. If paragraph “a” does not apply and the rules of the
21system in which the authoritative electronic copy is recorded
22are readily available for review and expressly provide that a
23particular jurisdiction is the chattel paper’s jurisdiction
24for purposes of this section, this part, this Article, or this
25chapter that jurisdiction is the chattel paper’s jurisdiction.
26c. If paragraphs “a” and “b” do not apply and the
27authoritative electronic copy, or a record attached to or
28logically associated with the electronic copy and readily
29available for review, expressly provides that the chattel paper
30is governed by the law of a particular jurisdiction, that
31jurisdiction is the chattel paper’s jurisdiction.
32d. If paragraphs “a”, “b”, and “c” do not apply and the
33rules of the system in which the authoritative electronic copy
34is recorded are readily available for review and expressly
35provide that the chattel paper or the system is governed by
-28-1the law of a particular jurisdiction, that jurisdiction is the
2chattel paper’s jurisdiction.
3e. If paragraphs “a” through “d” do not apply, the chattel
4paper’s jurisdiction is the jurisdiction in which the debtor
5is located.
63. Chattel paper evidenced by authoritative tangible
7copy. If an authoritative tangible copy of a record evidences
8chattel paper and the chattel paper is not evidenced by an
9authoritative electronic copy, while the authoritative tangible
10copy of the record evidencing chattel paper is located in a
11jurisdiction, the local law of that jurisdiction governs:
12a. perfection of a security interest in the chattel paper by
13possession under section 554.9314A; and
14b. the effect of perfection or nonperfection and the
15priority of a security interest in the chattel paper.
164. When perfection governed by law of jurisdiction where
17debtor located. The local law of the jurisdiction in which the
18debtor is located governs perfection of a security interest in
19chattel paper by filing.
20 Sec. 32. NEW SECTION. 554.9306B Law governing perfection
21and priority of security interests in controllable accounts,
22controllable electronic records, and controllable payment
23intangibles.
241. Governing law: general rules. Except as provided in
25subsection 2, the local law of the controllable electronic
26record’s jurisdiction specified in section 554.14107,
27subsections 3 and 4 governs perfection, the effect of
28perfection or nonperfection, and the priority of a security
29interest in a controllable electronic record and a security
30interest in a controllable account or controllable payment
31intangible evidenced by the controllable electronic record.
322. When perfection governed by law of jurisdiction where
33debtor located. The local law of the jurisdiction in which the
34debtor is located governs:
35a. perfection of a security interest in a controllable
-29-1account, controllable electronic record, or controllable
2payment intangible by filing; and
3b. automatic perfection of a security interest in a
4controllable payment intangible created by a sale of the
5controllable payment intangible.
6 Sec. 33. Section 554.9308, subsection 8, Code 2023, is
7amended by striking the subsection.
8 Sec. 34. Section 554.9310, subsection 2, paragraph h, Code
92023, is amended to read as follows:
10h. in controllable accounts, controllable electronic
11records, controllable payment intangibles, deposit accounts,
12electronic chattel paper, electronic documents, investment
13property, or letter-of-credit rights which is are perfected by
14control under section 554.9314;
15 Sec. 35. Section 554.9310, subsection 2, Code 2023, is
16amended by adding the following new paragraph:
17 NEW PARAGRAPH. 0i. in chattel paper which is perfected by
18possession and control under section 554.9314A;
19 Sec. 36. Section 554.9312, Code 2023, is amended to read as
20follows:
21554.9312 Perfection of security interests in chattel
22paper, controllable accounts, controllable electronic records,
23controllable payment intangibles, chattel paper, deposit
24accounts, negotiable documents, goods covered by documents,
25instruments, investment property, letter-of-credit rights, and
26money — perfection by permissive filing — temporary perfection
27without filing or transfer of possession.
281. Perfection by filing permitted. A security interest in
29chattel paper, controllable accounts, controllable electronic
30records, controllable payment intangibles, chattel paper,
31negotiable documents, instruments, or investment property, or
32negotiable documents may be perfected by filing.
332. Control or possession of certain collateral. Except as
34otherwise provided in section 554.9315, subsections 3 and 4,
35for proceeds:
-30- 1a. a security interest in a deposit account may be perfected
2only by control under section 554.9314;
3b. and except as otherwise provided in section 554.9308,
4subsection 4, a security interest in a letter-of-credit right
5may be perfected only by control under section 554.9314;
6c. a security interest in tangible money may be perfected
7only by the secured party’s taking possession under section
8554.9313; and
9d. a security interest in electronic money may be perfected
10only by control under section 554.9314.
113. Goods covered by negotiable document. While goods are
12in the possession of a bailee that has issued a negotiable
13document covering the goods:
14a. a security interest in the goods may be perfected by
15perfecting a security interest in the document; and
16b. a security interest perfected in the document has
17priority over any security interest that becomes perfected in
18the goods by another method during that time.
194. Goods covered by nonnegotiable document. While goods are
20in the possession of a bailee that has issued a nonnegotiable
21document covering the goods, a security interest in the goods
22may be perfected by:
23a. issuance of a document in the name of the secured party;
24b. the bailee’s receipt of notification of the secured
25party’s interest; or
26c. filing as to the goods.
275. Temporary perfection — new value. A security
28interest in certificated securities, negotiable documents,
29or instruments is perfected without filing or the taking of
30possession or control for a period of twenty days from the time
31it attaches to the extent that it arises for new value given
32under an authenticated a signed security agreement.
336. Temporary perfection — goods or documents made available
34to debtor. A perfected security interest in a negotiable
35document or goods in possession of a bailee, other than one
-31-1that has issued a negotiable document for the goods, remains
2perfected for twenty days without filing if the secured
3party makes available to the debtor the goods or documents
4representing the goods for the purpose of:
5a. ultimate sale or exchange; or
6b. loading, unloading, storing, shipping, transshipping,
7manufacturing, processing, or otherwise dealing with them in a
8manner preliminary to their sale or exchange.
97. Temporary perfection — delivery of security certificate
10or instrument to debtor. A perfected security interest in
11a certificated security or instrument remains perfected for
12twenty days without filing if the secured party delivers the
13security certificate or instrument to the debtor for the
14purpose of:
15a. ultimate sale or exchange; or
16b. presentation, collection, enforcement, renewal, or
17registration of transfer.
188. Expiration of temporary perfection. After the twenty-day
19period specified in subsection 5, 6, or 7 expires, perfection
20depends upon compliance with this Article.
21 Sec. 37. Section 554.9313, subsections 1, 3, and 4, Code
222023, are amended to read as follows:
231. Perfection by possession or delivery. Except as otherwise
24provided in subsection 2, a secured party may perfect a
25security interest in tangible negotiable documents, goods,
26instruments, negotiable tangible documents, or tangible
27money, or tangible chattel paper by taking possession of the
28collateral. A secured party may perfect a security interest in
29certificated securities by taking delivery of the certificated
30securities under section 554.8301.
313. Collateral in possession of person other than
32debtor. With respect to collateral other than certificated
33securities and goods covered by a document, a secured party
34takes possession of collateral in the possession of a person
35other than the debtor, the secured party, or a lessee of
-32-1the collateral from the debtor in the ordinary course of the
2debtor’s business, when:
3a. the person in possession authenticates signs a record
4acknowledging that it holds possession of the collateral for
5the secured party’s benefit; or
6b. the person takes possession of the collateral after
7having authenticated signed a record acknowledging that it
8will hold possession of the collateral for the secured party’s
9benefit.
104. Time of perfection by possession — continuation of
11perfection. If perfection of a security interest depends upon
12possession of the collateral by a secured party, perfection
13occurs no not earlier than the time the secured party takes
14possession and continues only while the secured party retains
15possession.
16 Sec. 38. Section 554.9314, subsections 1, 2, and 3, Code
172023, are amended to read as follows:
181. Perfection by control. A security interest in
19controllable accounts, controllable electronic records,
20controllable payment intangibles, deposit accounts, electronic
21chattel paper, electronic documents, electronic money,
22investment property, or letter-of-credit rights may be
23perfected by control of the collateral under section 554.7106,
24554.9104, 554.9105, 554.9105A, 554.9106, 554.9107, or
25554.9107A.
262. Specified collateral — time of perfection by control —
27continuation of perfection. A security interest in controllable
28accounts, controllable electronic records, controllable payment
29intangibles, deposit accounts, electronic chattel paper,
30 electronic documents, electronic money, or letter-of-credit
31rights is perfected by control under section 554.7106,
32554.9104, 554.9105, 554.9105A, 554.9107, or 554.9107A when
33 not earlier than the time the secured party obtains control
34and remains perfected by control only while the secured party
35retains control.
-33- 13. Investment property — time of perfection by control —
2continuation of perfection. A security interest in investment
3property is perfected by control under section 554.9106 from
4 not earlier than the time the secured party obtains control and
5remains perfected by control until:
6a. the secured party does not have control; and
7b. one of the following occurs:
8(1) if the collateral is a certificated security, the debtor
9has or acquires possession of the security certificate;
10(2) if the collateral is an uncertificated security, the
11issuer has registered or registers the debtor as the registered
12owner; or
13(3) if the collateral is a security entitlement, the debtor
14is or becomes the entitlement holder.
15 Sec. 39. NEW SECTION. 554.9314A Perfection by possession
16and control of chattel paper.
171. Perfection by possession and control. A secured party
18may perfect a security interest in chattel paper by taking
19possession of each authoritative tangible copy of the record
20evidencing the chattel paper and obtaining control of each
21authoritative electronic copy of the electronic record
22evidencing the chattel paper.
232. Time of perfection; continuation of perfection. A
24security interest is perfected under subsection 1 not earlier
25than the time the secured party takes possession and obtains
26control and remains perfected under subsection 1 only while the
27secured party retains possession and control.
283. Application of section 554.9313 to perfection by
29possession of chattel paper. Section 554.9313, subsections
303 and 6 through 9, apply to perfection by possession of an
31authoritative tangible copy of a record evidencing chattel
32paper.
33 Sec. 40. Section 554.9316, subsections 1 and 6, Code 2023,
34are amended to read as follows:
351. General rule — effect on perfection of change in
-34-1governing law. A security interest perfected pursuant to
2the law of the jurisdiction designated in section 554.9301,
3subsection 1, or section 554.9305, subsection 3, section
4554.9306A, subsection 4, or section 554.9306B, subsection 2,
5 remains perfected until the earliest of:
6a. the time perfection would have ceased under the law of
7that jurisdiction;
8b. the expiration of four months after a change of the
9debtor’s location to another jurisdiction; or
10c. the expiration of one year after a transfer of collateral
11to a person that thereby becomes a debtor and is located in
12another jurisdiction.
136. Change in jurisdiction of chattel paper, controllable
14electronic record, bank, issuer, nominated person, securities
15intermediary, or commodity intermediary. A security interest in
16chattel paper, controllable accounts, controllable electronic
17records, controllable payment intangibles, deposit accounts,
18letter-of-credit rights, or investment property which is
19perfected under the law of the chattel paper’s jurisdiction,
20the controllable electronic record’s jurisdiction, the bank’s
21jurisdiction, the issuer’s jurisdiction, a nominated person’s
22jurisdiction, the securities intermediary’s jurisdiction, or
23the commodity intermediary’s jurisdiction, as applicable,
24remains perfected until the earlier of:
25a. the time the security interest would have become
26unperfected under the law of that jurisdiction; or
27b. the expiration of four months after a change of the
28applicable jurisdiction to another jurisdiction.
29 Sec. 41. Section 554.9317, subsections 2 and 4, Code 2023,
30are amended to read as follows:
312. Buyers that receive delivery. Except as otherwise
32provided in subsection 5, a buyer, other than a secured
33party, of tangible chattel paper, tangible documents, goods,
34instruments, tangible documents, or a certificated security
35certificate takes free of a security interest or agricultural
-35-1lien if the buyer gives value and receives delivery of the
2collateral without knowledge of the security interest or
3agricultural lien and before it is perfected.
44. Licensees and buyers of certain collateral. A Subject to
5subsections 6 through 9, a licensee of a general intangible or
6a buyer, other than a secured party, of collateral other than
7tangible chattel paper, tangible documents, electronic money,
8 goods, instruments, tangible documents, or a certificated
9security takes free of a security interest if the licensee or
10buyer gives value without knowledge of the security interest
11and before it is perfected.
12 Sec. 42. Section 554.9317, Code 2023, is amended by adding
13the following new subsections:
14 NEW SUBSECTION. 6. Buyers of chattel paper. A buyer, other
15than a secured party, of chattel paper takes free of a security
16interest if, without knowledge of the security interest and
17before it is perfected, the buyer gives value and:
18a. receives delivery of each authoritative tangible copy of
19the record evidencing the chattel paper; and
20b. if each authoritative electronic copy of the record
21evidencing the chattel paper can be subjected to control
22under section 554.9105, obtains control of each authoritative
23electronic copy.
24 NEW SUBSECTION. 7. Buyers of electronic documents. A buyer
25of an electronic document takes free of a security interest
26if, without knowledge of the security interest and before it
27is perfected, the buyer gives value and, if each authoritative
28electronic copy of the document can be subjected to control
29under section 554.7106, obtains control of each authoritative
30electronic copy.
31 NEW SUBSECTION. 8. Buyers of controllable electronic
32records. A buyer of a controllable electronic record takes free
33of a security interest if, without knowledge of the security
34interest and before it is perfected, the buyer gives value and
35obtains control of the controllable electronic record.
-36-1 NEW SUBSECTION. 9. Buyers of controllable accounts and
2controllable payment intangibles. A buyer, other than a secured
3party, of a controllable account or a controllable payment
4intangible takes free of a security interest if, without
5knowledge of the security interest and before it is perfected,
6the buyer gives value and obtains control of the controllable
7account or controllable payment intangible.
8 Sec. 43. Section 554.9324, subsection 2, paragraph b, Code
92023, is amended to read as follows:
10b. the purchase-money secured party sends an authenticated
11 signed notification to the holder of the conflicting security
12interest;
13 Sec. 44. Section 554.9324, subsection 4, paragraph b, Code
142023, is amended to read as follows:
15b. the purchase-money secured party sends an authenticated
16 a signed notification to the holder of the conflicting security
17interest;
18 Sec. 45. Section 554.9330, subsections 1, 2, and 6, Code
192023, are amended to read as follows:
201. Purchaser’s priority — security interest claimed merely
21as proceeds. A purchaser of chattel paper has priority over a
22security interest in the chattel paper which is claimed merely
23as proceeds of inventory subject to a security interest if:
24a. in good faith and in the ordinary course of the
25purchaser’s business, the purchaser gives new value, and takes
26possession of each authoritative tangible copy of the record
27evidencing the chattel paper or, and obtains control of under
28section 554.9105 of each authoritative electronic copy of the
29record evidencing the chattel paper under section 554.9105; and
30b. the chattel paper does authoritative copies of the
31record evidencing the chattel paper do not indicate that it the
32chattel paper has been assigned to an identified assignee other
33than the purchaser.
342. Purchaser’s priority — other security interests. A
35purchaser of chattel paper has priority over a security
-37-1interest in the chattel paper which is claimed other than
2merely as proceeds of inventory subject to a security interest
3if the purchaser gives new value, and takes possession of
4each authoritative tangible copy of the record evidencing the
5chattel paper or, and obtains control of under section 554.9105
6of each authoritative electronic copy of the record evidencing
7 the chattel paper under section 554.9105 in good faith, in
8the ordinary course of the purchaser’s business, and without
9knowledge that the purchase violates the rights of the secured
10party.
116. Indication of assignment gives knowledge. For purposes of
12subsections 2 and 4, if the authoritative copies of the record
13evidencing chattel paper or an instrument indicates indicate
14 that it the chattel paper or instrument has been assigned to an
15identified secured party other than the purchaser, a purchaser
16of the chattel paper or instrument has knowledge that the
17purchase violates the rights of the secured party.
18 Sec. 46. Section 554.9331, Code 2023, is amended to read as
19follows:
20554.9331 Priority of rights of purchasers of controllable
21accounts, controllable electronic records, controllable payment
22intangibles, documents, instruments, and securities under
23other Articles — priority of interests in financial assets
24and security entitlements and protections protection against
25assertions assertion of claims under Articles 8 and 14.
261. Rights under Articles 3, 7, 8, and 14 not limited. This
27Article does not limit the rights of a holder in due course of a
28negotiable instrument, a holder to which a negotiable document
29of title has been duly negotiated, a protected purchaser of a
30security, or a qualifying purchaser of a controllable account,
31controllable electronic record, or controllable payment
32intangible. These holders or purchasers take priority over an
33earlier security interest, even if perfected, to the extent
34provided in Articles 3, 7, 8, and 14.
352. Protection under Articles 8 and 14. This Article does
-38-1not limit the rights of or impose liability on a person to the
2extent that the person is protected against the assertion of
3a claim under Article 8 or 14.
43. Filing not notice. Filing under this Article does
5not constitute notice of a claim or defense to the holders,
6purchasers, or persons described in subsections 1 and 2.
7 Sec. 47. Section 554.9332, Code 2023, is amended to read as
8follows:
9554.9332 Transfer of money — transfer of funds from deposit
10account.
111. Transferee of tangible money. A transferee of tangible
12money takes the money free of a security interest in the money
13 if the transferee when receiving delivery receives possession
14 of the money does not act without acting in collusion with the
15debtor in violating the rights of the secured party.
162. Transferee of electronic money. A transferee of
17electronic money takes the money free of a security interest
18in the money if the transferee when obtaining control of the
19money does not act in collusion with the debtor in violating
20the rights of the secured party.
213. 2. Transferee of funds from deposit account. A
22transferee of funds from a deposit account takes the funds free
23of a security interest in the deposit account if the transferee
24when receiving receives the funds does not act without acting
25 in collusion with the debtor in violating the rights of the
26secured party.
273. Transferee of electronic money. A transferee of
28electronic money takes the money free of a security interest
29if the transferee obtains control of the money without acting
30in collusion with the debtor in violating the rights of the
31secured party.
32 Sec. 48. Section 554.9334, subsection 6, paragraph a, Code
332023, is amended to read as follows:
34a. the encumbrancer or owner has, in an authenticated a
35signed record, consented to the security interest or disclaimed
-39-1an interest in the goods as fixtures; or
2 Sec. 49. Section 554.9341, unnumbered paragraph 1, Code
32023, is amended to read as follows:
4Except as otherwise provided in section 554.9340, subsection
53, and unless the bank otherwise agrees in an authenticated a
6signed record, a bank’s rights and duties with respect to a
7deposit account maintained with the bank are not terminated,
8suspended, or modified by:
9 Sec. 50. Section 554.9404, subsection 1, paragraph b, Code
102023, is amended to read as follows:
11b. any other defense or claim of the account debtor against
12the assignor which accrues before the account debtor receives
13a notification of the assignment authenticated signed by the
14assignor or the assignee.
15 Sec. 51. Section 554.9406, subsections 1, 4, 7, and 11, Code
162023, are amended to read as follows:
171. Discharge of account debtor — effect of
18notification. Subject to subsections 2 through 9 and
1911, an account debtor on an account, chattel paper, or a
20payment intangible may discharge its obligation by paying the
21assignor until, but not after, the account debtor receives
22a notification, authenticated signed by the assignor or
23the assignee, that the amount due or to become due has been
24assigned and that payment is to be made to the assignee. After
25receipt of the notification, the account debtor may discharge
26its obligation by paying the assignee and may not discharge the
27obligation by paying the assignor.
284. Term restricting assignment generally ineffective. In
29this subsection, “promissory note” includes a negotiable
30instrument that evidences chattel paper.Except as otherwise
31provided in subsection subsections 5 and 11 and sections
32554.9407 and 554.13303, and subject to subsection 8, a term in
33an agreement between an account debtor and an assignor or in a
34promissory note is ineffective to the extent that it:
35a. prohibits, restricts, or requires the consent of the
-40-1account debtor or person obligated on the promissory note to
2the assignment or transfer of, or the creation, attachment,
3perfection, or enforcement of a security interest in, the
4account, chattel paper, payment intangible, or promissory note;
5or
6b. provides that the assignment or transfer or the creation,
7attachment, perfection, or enforcement of the security interest
8may give rise to a default, breach, right of recoupment, claim,
9defense, termination, right of termination, or remedy under the
10account, chattel paper, payment intangible, or promissory note.
117. Subsection 2, paragraph “c”, not waivable. Subject to
12subsection subsections 8 and 11, an account debtor may shall
13 not waive or vary its option under subsection 2, paragraph “c”.
1411. Inapplicability of certain subsections. Subsections 1
15through, 2, 3, and 7 do not apply to a controllable account or
16controllable payment intangible.
17 Sec. 52. Section 554.9509, subsections 1 and 2, Code 2023,
18are amended to read as follows:
191. Person entitled to file record. A person may file an
20initial financing statement, amendment that adds collateral
21covered by a financing statement, or amendment that adds a
22debtor to a financing statement only if:
23a. the debtor authorizes the filing in an authenticated a
24signed record or pursuant to subsection 2 or 3; or
25b. the person holds an agricultural lien that has
26become effective at the time of filing and the financing
27statement covers only collateral in which the person holds an
28agricultural lien.
292. Security agreement as authorization. By authenticating
30 signing or becoming bound as debtor by a security agreement,
31a debtor or new debtor authorizes the filing of an initial
32financing statement, and an amendment, covering:
33a. the collateral described in the security agreement; and
34b. property that becomes collateral under section 554.9315,
35subsection 1, paragraph “b”, whether or not the security
-41-1agreement expressly covers proceeds.
2 Sec. 53. Section 554.9513, subsections 2 and 3, Code 2023,
3are amended to read as follows:
42. Time for compliance with subsection 1. To comply with
5subsection 1, a secured party shall cause the secured party of
6record to file the termination statement:
7a. within one month after there is no obligation secured
8by the collateral covered by the financing statement and
9no commitment to make an advance, incur an obligation, or
10otherwise give value; or
11b. if earlier, within twenty days after the secured party
12receives an authenticated a signed demand from a debtor.
133. Other collateral. In cases not governed by subsection
141, within twenty days after a secured party receives an
15authenticated a signed demand from a debtor, the secured
16party shall cause the secured party of record for a financing
17statement to send to the debtor a termination statement for the
18financing statement or file the termination statement in the
19filing office if:
20a. except in the case of a financing statement covering
21accounts or chattel paper that has been sold or goods that
22are the subject of a consignment, there is no obligation
23secured by the collateral covered by the financing statement
24and no commitment to make an advance, incur an obligation, or
25otherwise give value;
26b. the financing statement covers accounts or chattel paper
27that has been sold but as to which the account debtor or other
28person obligated has discharged its obligation;
29c. the financing statement covers goods that were the
30subject of a consignment to the debtor but are not in the
31debtor’s possession; or
32d. the debtor did not authorize the filing of the initial
33financing statement.
34 Sec. 54. Section 554.9605, Code 2023, is amended to read as
35follows:
-42- 1554.9605 Unknown debtor or secondary obligor.
21. Duties to unknown persons — general rule In general: no
3duty owed by a secured party. Except as provided in subsection
42, a secured party does not owe a duty based on its status as
5secured party:
6a. to a person that is a debtor or obligor, unless the
7secured party knows:
8(1) that the person is a debtor or obligor;
9(2) the identity of the person; and
10(3) how to communicate with the person; or
11b. to a secured party or lienholder that has filed a
12financing statement against a person, unless the secured party
13knows:
14(1) that the person is a debtor; and
15(2) the identity of the person.
162. When secured party owes duty to debtor notwithstanding
17subsection 1 Exception: secured party owes a duty to debtor
18or obligor. A secured party owes a duty based on its status
19as a secured party to a person that is a debtor if, at the
20time the secured party obtains control of collateral that is
21 a controllable account, controllable electronic record, or
22controllable payment intangible, or at the time the security
23interest attaches to the collateral, whichever is later:
24a. the person is a debtor or obligor; and
25b. the secured party has knowledge knows that the nature
26of the collateral or a system in which the collateral is
27recorded would prevent the secured party from acquiring the
28knowledge specified information in subsection 1, paragraph “a”,
29subparagraph (1), (2), or (3) relating to the person is not
30provided by the collateral, a record attached to or logically
31associated with the collateral, or the system in which the
32collateral is recorded.
33 Sec. 55. Section 554.9608, subsection 1, paragraph a,
34subparagraph (3), Code 2023, is amended to read as follows:
35(3) the satisfaction of obligations secured by any
-43-1subordinate security interest in or other lien on the
2collateral subject to the security interest or agricultural
3lien under which the collection or enforcement is made if the
4secured party receives an authenticated a signed demand for
5proceeds before distribution of the proceeds is completed.
6 Sec. 56. Section 554.9611, subsection 1, paragraph a, Code
72023, is amended to read as follows:
8a. a secured party sends to the debtor and any secondary
9obligor an authenticated a signed notification of disposition;
10or
11 Sec. 57. Section 554.9611, subsections 2 and 3, Code 2023,
12are amended to read as follows:
132. Notification of disposition required. Except as otherwise
14provided in subsection 4, a secured party that disposes of
15collateral under section 554.9610 shall send to the persons
16specified in subsection 3 a reasonable authenticated signed
17 notification of disposition.
183. Persons to be notified. To comply with subsection 2, the
19secured party shall send an authenticated a signed notification
20of disposition to:
21a. the debtor;
22b. any secondary obligor; and
23c. if the collateral is other than consumer goods:
24(1) any other person from which the secured party has
25received, before the notification date, an authenticated
26 a signed notification of a claim of an interest in the
27collateral;
28(2) any other secured party or lienholder that, ten days
29before the notification date, held a security interest in or
30other lien on the collateral perfected by the filing of a
31financing statement that:
32(a) identified the collateral;
33(b) was indexed under the debtor’s name as of that date; and
34(c) was filed in the office in which to file a financing
35statement against the debtor covering the collateral as of that
-44-1date; and
2(3) any other secured party that, ten days before the
3notification date, held a security interest in the collateral
4perfected by compliance with a statute, regulation, or treaty
5described in section 554.9311, subsection 1.
6 Sec. 58. Section 554.9611, subsection 5, paragraph b,
7subparagraph (2), Code 2023, is amended to read as follows:
8(2) received a response to the request for information and
9sent an authenticated a signed notification of disposition to
10each secured party or other lienholder named in that response
11whose financing statement covered the collateral.
12 Sec. 59. Section 554.9615, subsection 1, paragraph c,
13subparagraph (1), Code 2023, is amended to read as follows:
14(1) the secured party receives from the holder of the
15subordinate security interest or other lien an authenticated a
16signed demand for proceeds before distribution of the proceeds
17is completed; and
18 Sec. 60. Section 554.9615, subsection 1, paragraph d, Code
192023, is amended to read as follows:
20d. a secured party that is a consignor of the collateral if
21the secured party receives from the consignor an authenticated
22 a signed demand for proceeds before distribution of the
23proceeds is completed.
24 Sec. 61. Section 554.9616, subsection 1, paragraph b,
25subparagraph (1), Code 2023, is amended to read as follows:
26(1) authenticated signed by a debtor or consumer obligor;
27 Sec. 62. Section 554.9619, subsection 1, unnumbered
28paragraph 1, Code 2023, is amended to read as follows:
29In this section, “transfer statement” means a record
30authenticated signed by a secured party stating:
31 Sec. 63. Section 554.9620, subsection 1, paragraph b,
32unnumbered paragraph 1, Code 2023, is amended to read as
33follows:
34the secured party does not receive, within the time set forth
35in subsection 4, a notification of objection to the proposal
-45-1authenticated signed by:
2 Sec. 64. Section 554.9620, subsection 2, paragraph a, Code
32023, is amended to read as follows:
4a. the secured party consents to the acceptance in an
5authenticated a signed record or sends a proposal to the
6debtor; and
7 Sec. 65. Section 554.9620, subsection 3, Code 2023, is
8amended to read as follows:
93. Debtor’s consent. For purposes of this section:
10a. a debtor consents to an acceptance of collateral in
11partial satisfaction of the obligation it secures only if
12the debtor agrees to the terms of the acceptance in a record
13authenticated signed after default; and
14b. a debtor consents to an acceptance of collateral in full
15satisfaction of the obligation it secures only if the debtor
16agrees to the terms of the acceptance in a record authenticated
17 signed after default or the secured party:
18(1) sends to the debtor after default a proposal that is
19unconditional or subject only to a condition that collateral
20not in the possession of the secured party be preserved or
21maintained;
22(2) in the proposal, proposes to accept collateral in full
23satisfaction of the obligation it secures; and
24(3) does not receive a notification of objection
25authenticated signed by the debtor within twenty days after the
26proposal is sent.
27 Sec. 66. Section 554.9620, subsection 6, paragraph b, Code
282023, is amended to read as follows:
29b. within any longer period to which the debtor and all
30secondary obligors have agreed in an agreement to that effect
31entered into and authenticated signed after default.
32 Sec. 67. Section 554.9621, subsection 1, paragraph a, Code
332023, is amended to read as follows:
34a. any person from which the secured party has received,
35before the debtor consented to the acceptance, an authenticated
-46-1 a signed notification of a claim of an interest in the
2collateral;
3 Sec. 68. Section 554.9624, Code 2023, is amended to read as
4follows:
5554.9624 Waiver.
61. Waiver of disposition notification. A debtor or secondary
7obligor may waive the right to notification of disposition of
8collateral under section 554.9611 only by an agreement to that
9effect entered into and authenticated signed after default.
102. Waiver of mandatory disposition. A debtor may waive
11the right to require disposition of collateral under section
12554.9620, subsection 5, only by an agreement to that effect
13entered into and authenticated signed after default.
143. Waiver of redemption right. Except in a consumer-goods
15transaction, a debtor or secondary obligor may waive the
16right to redeem collateral under section 554.9623 only by an
17agreement to that effect entered into and authenticated signed
18 after default.
19 Sec. 69. Section 554.9628, subsection 1, unnumbered
20paragraph 1, Code 2023, is amended to read as follows:
21Unless Subject to subsection 6, unless a secured party knows
22that a person is a debtor or obligor, knows the identity of the
23person, and knows how to communicate with the person:
24 Sec. 70. Section 554.9628, subsection 6, Code 2023, is
25amended by striking the subsection and inserting in lieu
26thereof the following:
276. Exception: limitation of liability under subsections
281 and 2 does not apply. Subsections 1 and 2 do not apply to
29limit the liability of a secured party to a person if, at the
30time the secured party obtains control of collateral that is
31a controllable account, controllable electronic record, or
32controllable payment intangible or at the time the security
33interest attaches to the collateral, whichever is later:
34a. the person is a debtor or obligor; and
35b. the secured party knows that the information in
-47-1subsection 2, paragraph “a”, subparagraph (1), (2), or (3),
2relating to the person is not provided by the collateral, a
3record attached to or logically associated with the collateral,
4or the system in which the collateral is recorded.
5PART b
6TRANSITIONAL PROVISIONS
7 Sec. 71. NEW SECTION. 554.15101 Short title.
8This Article may be cited as the Transitional Provisions for
9Uniform Commercial Code Amendments (2022).
10 Sec. 72. NEW SECTION. 554.15102 Definitions.
111. Article 15 definitions. In this Article:
12a. “Article 14” means Article 14 of this chapter.
13b. “Article 14 property” means a controllable account,
14controllable electronic record, or controllable payment
15intangible.
162. Definitions in other Articles. The following definitions
17in other Articles of this chapter apply to this Article:
18a. “Controllable account” ... Section 554.9102.
19b. “Controllable electronic record” ... Section 554.14102.
20c. “Controllable payment intangible” ... Section 554.9102.
21d. “Electronic money” ... Section 554.9102.
22e. “Financing statement” ... Section 554.9102.
233. Article 1 definitions and principles. Article 1 contains
24general definitions and principles of construction and
25interpretation applicable throughout this Article.
26 Sec. 73. NEW SECTION. 554.15201 Saving clause.
27Except as provided in part 3, a transaction validly entered
28into before the effective date of this Act and the rights,
29duties, and interests flowing from the transaction remain valid
30thereafter and may be terminated, completed, consummated,
31or enforced as required or permitted by law other than this
32chapter or, if applicable, this chapter, as though this Act had
33not taken effect.
34 Sec. 74. NEW SECTION. 554.15301 Saving clause.
351. Pre-effective-date transaction, lien, or interest. Except
-48-1as provided in this part, Article 9, as amended by this Act,
2and Article 14, as amended by this Act, apply to a transaction,
3lien, or other interest in property, even if the transaction,
4lien, or interest was entered into, created, or acquired before
5the effective date of this Act.
62. Continuing validity. Except as provided in subsection 3
7and sections 554.15302 through 554.15306:
8a. a transaction, lien, or interest in property that
9was validly entered into, created, or transferred before
10the effective date of this Act and was not governed by this
11chapter, but would be subject to Article 9 as amended by this
12Act or Article 14, as amended by this Act, if it had been
13entered into, created, or transferred on or after the effective
14date of this Act, including the rights, duties, and interests
15flowing from the transaction, lien, or interest, remains valid
16on and after the effective date of this Act; and
17b. the transaction, lien, or interest may be terminated,
18completed, consummated, and enforced as required or permitted
19by this Act or by the law that would apply if this Act had not
20taken effect.
213. Pre-effective-date proceeding. This Act does not affect
22an action, case, or proceeding commenced before the effective
23date of this Act.
24 Sec. 75. NEW SECTION. 554.15302 Security interest perfected
25before effective date.
261. Continuing perfection: perfection requirements
27satisfied. A security interest that is enforceable and
28perfected immediately before the effective date of this Act
29is a perfected security interest under this Act if, on the
30effective date of this Act, the requirements for enforceability
31and perfection under this Act are satisfied without further
32action.
332. Continuing perfection: enforceability or perfection
34requirements not satisfied. If a security interest is
35enforceable and perfected immediately before the effective
-49-1date of this Act, but the requirements for enforceability or
2perfection under this Act are not satisfied on the effective
3date of this Act, the security interest:
4a. is a perfected security interest until the earlier of
5the time perfection would have ceased under the law in effect
6immediately before the effective date of this Act or July 1,
72025;
8b. remains enforceable thereafter only if the security
9interest satisfies the requirements for enforceability under
10section 554.9203, as amended by this Act, before July 1, 2025;
11and
12c. remains perfected thereafter only if the requirements
13for perfection under this Act are satisfied before the time
14specified in paragraph “a”.
15 Sec. 76. NEW SECTION. 554.15303 Security interest
16unperfected before effective date.
17A security interest that is enforceable immediately before
18the effective date of this Act but is unperfected at that time:
191. remains an enforceable security interest until July 1,
202025;
212. remains enforceable thereafter if the security interest
22becomes enforceable under section 554.9203, as amended by this
23Act, on the effective date of this Act or before July 1, 2025;
24and
253. becomes perfected:
26a. without further action, on the effective date of this Act
27if the requirements for perfection under this Act are satisfied
28before or at that time; or
29b. when the requirements for perfection are satisfied if the
30requirements are satisfied after that time.
31 Sec. 77. NEW SECTION. 554.15304 Effectiveness of actions
32taken before effective date.
331. Pre-effective-date action; attachment and perfection
34before July 1, 2025. If action, other than the filing of a
35financing statement, is taken before the effective date of this
-50-1Act and this action would have resulted in perfection of the
2security interest had the security interest become enforceable
3before the effective date of this Act, this action is effective
4to perfect a security interest that attaches under this Act
5before July 1, 2025. An attached security interest becomes
6unperfected on July 1, 2025, unless the security interest
7becomes a perfected security interest under this Act before
8July 1, 2025.
92. Pre-effective-date filing. The filing of a financing
10statement before the effective date of this Act is effective
11to perfect a security interest on the effective date of this
12Act to the extent the filing would satisfy the requirements for
13perfection under this Act.
143. Pre-effective-date enforceability action. The taking of
15an action before the effective date of this Act is sufficient
16for the enforceability of a security interest on the effective
17date of this Act if this action would satisfy the requirements
18for enforceability under this Act.
19 Sec. 78. NEW SECTION. 554.15305 Priority.
201. Determination of priority. Subject to subsections 2 and
213, this Act determines the priority of conflicting claims to
22collateral.
232. Established priorities. Subject to subsection 3, if the
24priorities of claims to collateral were established before the
25effective date of this Act, Article 9, as in effect before the
26effective date of this Act, determines priority.
273. Determination of certain priorities on July 1, 2025. On
28July 1, 2025, to the extent the priorities determined by
29Article 9, as amended by this Act, modify the priorities
30established before the effective date of this Act, the
31priorities of claims to Article 14 property and electronic
32money established before the effective date of this Act cease
33to apply.
34 Sec. 79. NEW SECTION. 554.15306 Priority of claims when
35priority rules of Article 9 do not apply.
-51- 11. Determination of priority. Subject to subsections 2 and
23, Article 14 determines the priority of conflicting claims to
3Article 14 property when the priority rules of Article 9, as
4amended by this Act, do not apply.
52. Established priorities. Subject to subsection 3, when
6the priority rules of Article 9, as amended by this Act, do not
7apply and the priorities of claims to Article 14 property were
8established before the effective date of this Act, law other
9than Article 14 determines priority.
103. Determination of certain priorities on July 1, 2025. When
11the priority rules of Article 9, as amended by this Act, do
12not apply, to the extent the priorities determined by this Act
13modify the priorities established before the effective date
14of this Act, the priorities of claims to Article 14 property
15established before the effective date of this Act cease to
16apply on July 1, 2025.
17 Sec. 80. DIRECTIONS TO THE CODE EDITOR — ARTICLE 15
18PARTS. The Code editor is directed to divide the provisions of
19chapter 554, Article 15, as enacted in this division of this
20Act, into parts as follows:
211. Part 1, including sections 554.15101 and 554.15102.
222. Part 2, including section 554.15201.
233. Part 3, including sections 554.15301, 554.15302,
24554.15303, 554.15304, 554.15305, and 554.15306.
25DIVISION III
26DIGITAL ASSETS
27 Sec. 81. Section 554E.1, Code 2023, is amended by striking
28the section and inserting in lieu thereof the following:
29554E.1 Definitions.
30As used in this chapter, unless the context otherwise
31requires:
321. “Contract” means the same as defined in section 554D.103.
332. “Digital asset” means any electronic record that
34represents, evidences, or comprises economic value or economic,
35proprietary, or access rights, is maintained or stored in or
-52-1as an electronic ledger or other record of transactions, or
2is used as a medium of exchange, unit of account, method of
3payment, or store of value.
43. “Distributed ledger technology” means an electronic
5ledger or other record of transactions or other data to which
6all of the following apply:
7a. The electronic ledger is uniformly ordered.
8b. The electronic ledger is redundantly maintained or
9processed by more than one computer or machine to guarantee the
10consistency or nonrepudiation of the recorded transactions or
11other data.
124. “Electronic” means the same as defined in section
13554D.103.
145. “Electronic record” means the same as defined in section
15554D.103.
166. “Electronic services system” means the county land record
17information system, or electronic services system, created
18under the agreement entered into under chapter 28E between the
19counties and the Iowa county recorders association as required
20by 2005 Iowa Acts, ch.179, §101, as amended by 2021 Iowa Acts,
21ch.126, §2.
227. “Record” means the same as defined in section 554D.103.
238. “Smart contract” means an electronic record that is an
24event-driven program or computerized transaction protocol that
25runs on a distributed, decentralized, shared, and replicated
26ledger that executes the term of a contract, including taking
27custody over and instructing the transfer of assets.
289. “Transaction” means a sale, trade, exchange, transfer,
29payment, or conversion of a digital asset or any other property
30or any other action or set of actions occurring between two or
31more persons relating to the conduct of business, commercial,
32or governmental affairs.
33 Sec. 82. Section 554E.2, Code 2023, is amended to read as
34follows:
35554E.2 Classification of digital assets.
-53- 1Digital assets are intangible personal property.
2EXPLANATION
3The inclusion of this explanation does not constitute agreement with
4the explanation’s substance by the members of the general assembly.
5GENERAL. This bill amends Code chapter 554, Iowa’s version
6of the uniform commercial code (UCC), governing certain
7commercial transactions involving forms of personal electronic
8property that do not derive value from physical attributes
9(sometimes referred to as form of intangible personal
10property). In 2022, the general assembly enacted two bills
11dealing with these types of transactions: (1) new Article 14
12of the UCC (Code chapter 554) and referred to as the “Uniform
13Commercial Code — Controllable Electronic Records” (2022 Iowa
14Acts, chapter 1117) and (2) new Code chapter 554E referring to
15smart contracts, distributed ledger technology, and digital
16assets (2022 Iowa Acts, chapter 1116).
17CONTROLLABLE ELECTRONIC RECORDS — BACKGROUND. The 2022 Act
18creating new Article 14 of the UCC, in part included amendments
19to Article 1 providing general provisions applicable throughout
20the UCC, and amendments to Article 9 governing secured
21transactions, as prepared by a committee appointed jointly by
22the uniform law commission and the American law institute.
23The Act provided for forms of electronic property sometimes
24referred to as digital assets including non-fiat currency
25and blockchain based non-fungible tokens, commonly referred
26to as NFTs, and transactions involving sale to a purchaser
27(qualified purchaser) and associated payment obligations
28(a controllable payment intangible) by an account debtor.
29Note, the UCC does not use the term “intangible property”
30but “personal property” which includes general intangibles,
31including controllable electronic records. Iowa’s new Article
3214 is connected to Article 9, which allows a creditor to
33obtain a security interest attached to a debtor’s personal
34property as collateral and to obtain priority when enforcing
35that security interest over other creditors having a security
-54-1interest in that same collateral. Under Code section 554.9102,
2the term “account” means having a present and future right
3to a payment based on the transfer of services or property
4including by sale or lease, and includes accounts receivable,
5but excludes an item represented by a negotiable instrument
6or chattel paper. The term “payment intangible” (under the
7catchall term “general intangible”) means a debtor’s principal
8obligation is the payment of money and includes a controllable
9payment intangible. An account debtor is a person who owes
10an obligation on an account, chattel paper, or intangible
11property. Chattel paper is a debt obligation supported with a
12security interest in tangible property and includes electronic
13chattel paper evidenced by an electronic record. An electronic
14record cannot include electronic money operating as a medium of
15exchange before being authorized or adopted by a governmental
16entity. Like a controllable electronic record, electronic
17money is perfected by rules of control rather than rules of
18possession traditionally governing forms of tangible personal
19property.
20CONTROLLABLE ELECTRONIC RECORDS — BILL’S PROVISIONS. The
21bill eliminates several terms, including “electronic chattel
22paper” and substitutes the term used to complete a document
23from “authenticate” to “sign”. The bill provides for rights
24in controllable accounts, controllable electronic records,
25and controllable payment intangibles (amended Code section
26554.14104), the control of controllable electronic records
27(amended Code section 554.14105), and what state law controls
28in cases of jurisdictional questions (amended Code section
29554.14107). The bill defines a number of terms used throughout
30the UCC, including “money”. The bill amends a number of
31Article 9 provisions, including the control of an electronic
32copy of a record evidencing chattel paper (amended Code section
33554.9105); the control of electronic money (amended Code
34section 554.9105A); that no duty exists to confirm control on
35behalf of another person (new Code section 554.9107B); the
-55-1duty of a secured party to transfer control of electronic
2document of title to a debtor (amended Code section 554.9208);
3the law governing the perfection and priority of a security
4interest in chattel paper (amended Code section 554.9306A) and
5in controllable accounts, controllable electronic records,
6and controllable payment intangibles (new Code section
7554.9306B); the perfection of chattel paper, including an
8electronic copy of a record evidencing chattel paper (new Code
9section 554.9314A); the right of a buyer of chattel paper,
10electronic document, a controllable electronic record, and
11a controllable account or controllable payment intangible
12to take clear of a security interest prior to perfection
13(amended Code section 554.9317); and the liability of a secured
14party obtaining control of collateral that is a controllable
15account, controllable electronic record, or controllable
16payment intangible (amended Code section 554.9628). The bill
17also includes a number of transitional provisions, including
18a saving clause (new Code sections 554.15201 and 554.15301),
19the enforceability of a security interest that is perfected
20or unperfected before the bill’s effective date (new Code
21sections 554.15302 and 554.15303), the effectiveness of actions
22taken before the bill’s effective date (new Code section
23554.15304), and rules of priority (new Code sections 554.15305
24and 554.15306).
25REGULATION OF DIGITAL ASSETS — BACKGROUND. The 2022 Act
26regulating transactions involving distributed ledger technology
27and smart contracts is connected to Article 14. In both
28cases, the medium of exchange is a digital asset. Distributed
29ledger technology allows different computers to validate
30transactions and update records and a smart contract is a type
31of electronic record that executes the term of a contract,
32including the transfer of assets. A digital asset is a form
33of an electronic record that represents or is used as a medium
34of exchange, unit of account, method of payment, or store of
35value. However, the term expressly excludes certain personal
-56-1property recognized under the UCC, including a deposit account,
2electronic record evidencing chattel paper, electronic chattel
3paper, controllable account, controllable payment intangible,
4money, electronic document of title, investment property, or a
5transferable record (Code section 554E.1). A contract cannot
6be denied legal effect or enforceability solely because it
7is effectuated by distributed ledger technology or a smart
8contract (Code section 554E.3). In addition, the 2022 Act
9provides that a real estate conveyance can be recorded by a
10county if the evidence of conveyance complies with the general
11requirements of Code chapter 558 and is in a format conforming
12with standards established by the electronic services system
13allowing counties and the Iowa county recorders association
14to enter into an agreement under Code chapter 28E for the
15implementation of the county land record information system
16(Code section 554E.4).
17REGULATION OF DIGITAL ASSETS — BILL’S PROVISIONS. The
18bill amends the definition of “digital asset” by eliminating
19exceptions recognized by the UCC including electronic records
20evidencing chattel paper. The bill provides that a digital
21asset is classified simply as personal property rather than
22intangible personal property. Finally, the bill defines
23“electronic services system” by citing its source in the Iowa
24Acts.
-57-da/jh