Senate File 2333 S-5056 Amend Senate File 2333 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < DIVISION I 4 CONTROLLABLE ELECTRONIC RECORDS 5 Section 1. NEW SECTION . 554.14101 Short title. 6 This Article may be cited as the Uniform Commercial Code —— 7 Controllable Electronic Records. 8 Sec. 2. NEW SECTION . 554.14102 Definitions. 9 1. Article 14 definitions. In this Article: 10 a. “Controllable electronic record” means a record stored 11 in an electronic medium that can be subjected to control 12 under section 554.14105. The term does not include a deposit 13 account, electronic chattel paper, electronic copy of a 14 record evidencing chattel paper, electronic document of title, 15 electronic money, investment property, or a transferable 16 record. 17 b. “Qualifying purchaser” means a purchaser of a 18 controllable electronic record or an interest in the 19 controllable electronic record that obtains control of the 20 controllable electronic record for value, in good faith, 21 and without notice of a claim of a property right in the 22 controllable electronic record. 23 c. “Transferable record” means: 24 (1) “Transferable record” , as defined in the federal 25 Electronic Signatures in Global and National Commerce Act, 15 26 U.S.C. §7021(a)(1), as amended. 27 (2) “Transferable record” as defined in the uniform 28 electronic transactions Act, section 554D.118, subsection 1. 29 d. “Value” has the meaning provided in section 554.3303, 30 subsection 1. 31 2. Definitions in Article 9. The definitions in Article 32 9 of “account debtor” , “authenticate” , “controllable account” , 33 “controllable payment intangible” , “chattel paper” , “deposit 34 account” , “electronic chattel paper” , “electronic money” , and 35 -1- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 1/ 22 #1.

“investment property” apply to this Article. 1 Sec. 3. NEW SECTION . 554.14103 Scope. 2 1. Article 9 governs in case of conflict. If there is 3 conflict between this Article and Article 9, Article 9 governs. 4 2. Applicable consumer law and other laws. A transaction 5 subject to this Article is subject to: 6 a. any applicable rule of law that establishes a different 7 rule for consumers, including as provided in chapter 537 and 8 any other consumer protection statute or regulation of this 9 state; and 10 b. any other statute or regulation of this state that 11 regulates the rates, charges, agreements, and practices for 12 loans, credit sales, or other extensions of credit or credit 13 transactions, including as provided in chapter 535. 14 Sec. 4. NEW SECTION . 554.14104 Rights in controllable 15 account, controllable electronic record, and controllable payment 16 intangible. 17 1. Applicability of section to controllable account and 18 controllable payment intangible. This section applies to the 19 acquisition and purchase of rights in a controllable account 20 or controllable payment intangible, including the rights of 21 a purchaser and a qualifying purchaser and under subsections 22 3, 4, and 6, and in the same manner this section applies to a 23 controllable electronic record. 24 2. Applicability of other law to acquisition of 25 rights. Except as provided in this section, law other than 26 this Article determines whether a person acquires a right in 27 a controllable electronic record and the right the person 28 acquires. 29 3. Shelter principle and purchase of limited interest. A 30 purchaser of a controllable electronic record acquires 31 all rights in the controllable electronic record that the 32 transferor had or had power to transfer, except that a 33 purchaser of a limited interest in a controllable electronic 34 record acquires rights only to the extent of the interest 35 -2- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 2/ 22

purchased. 1 4. Rights of qualifying purchaser. A qualifying purchaser 2 acquires its rights in the controllable electronic record free 3 of a claim of a property right in the controllable electronic 4 record. 5 5. Limitation of rights of qualifying purchaser in other 6 property. Except as provided in subsections 1 and 4 for 7 controllable accounts and controllable payment intangibles or 8 law other than this Article, a qualifying purchaser takes a 9 right to payment, right to performance, or interest in property 10 evidenced by the controllable electronic record subject to a 11 claim of a property right in the right to payment, right to 12 performance, or other interest in property. 13 6. No-action protection for qualifying purchaser. An action 14 shall not be asserted against a qualifying purchaser based on 15 both a purchase by the qualifying purchaser of a controllable 16 electronic record and a claim of a property right in another 17 controllable electronic record, whether framed in conversion, 18 replevin, constructive trust, equitable lien, or other theory. 19 7. Filing notice. Filing of a financing statement under 20 Article 9 is not notice of a claim of a property right in a 21 controllable electronic record. 22 Sec. 5. NEW SECTION . 554.14105 Control of controllable 23 electronic record. 24 1. General rule —— control of controllable electronic 25 record. A person has control of a controllable electronic 26 record if: 27 a. the electronic record, a record attached to or logically 28 associated with the electronic record, or a system in which the 29 electronic record is recorded gives the person: 30 (1) the power to avail itself of substantially all the 31 benefit from the electronic record; and 32 (2) exclusive power, subject to subsection 2, to: 33 (a) prevent others from availing themselves of 34 substantially all the benefit from the electronic record; and 35 -3- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 3/ 22

(b) transfer control of the electronic record to another 1 person or cause another person to obtain control of another 2 controllable electronic record as a result of the transfer of 3 the electronic record; and 4 b. the electronic record, a record attached to or logically 5 associated with the electronic record, or a system in which 6 the electronic record is recorded enables the person readily 7 to identify itself in any way, including by name, identifying 8 number, cryptographic key, office, or account number, as having 9 the powers specified in paragraph “a” . 10 2. Control through another person. A person has control of 11 a controllable electronic record if another person, other than 12 the transferor of an interest in the electronic record: 13 a. has control of the electronic record and acknowledges 14 that it has control on behalf of the person, or 15 b. obtains control of the electronic record after having 16 acknowledged that it will obtain control of the electronic 17 record on behalf of the person. 18 3. Meaning of exclusive. A power specified in subsection 1, 19 paragraph “a” , subparagraph (2), is exclusive, even if: 20 a. the controllable electronic record or a system in 21 which the electronic record is recorded limits the use of 22 the electronic record or has a protocol programmed to cause 23 a change, including a transfer or loss of control or a 24 modification of benefits afforded by the electronic record; or 25 b. the person has agreed to share the power with another 26 person. 27 Sec. 6. NEW SECTION . 554.14106 Discharge of account debtor 28 on controllable account or controllable payment intangible. 29 1. Discharge of account debtor. An account debtor on a 30 controllable account or controllable payment intangible may 31 discharge its obligation by paying: 32 a. the person having control of the controllable electronic 33 record that evidences the controllable account or controllable 34 payment intangible; or 35 -4- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 4/ 22

b. except as provided in subsection 2, a person that 1 formerly had control of the controllable electronic record. 2 2. Effect of notification. Subject to subsection 4, an 3 account debtor shall not discharge its obligation by paying a 4 person that formerly had control of the controllable electronic 5 record if the account debtor receives a notification that: 6 a. is authenticated by a person that formerly had control or 7 the person to which control was transferred; 8 b. reasonably identifies the controllable account or 9 controllable payment intangible; 10 c. notifies the account debtor that control of the 11 controllable electronic record that evidences the controllable 12 account or controllable payment intangible was transferred; 13 d. identifies the transferee, in any reasonable way, 14 including by name, identifying number, cryptographic key, 15 office, or account number; and 16 e. provides a commercially reasonable method by which the 17 account debtor is to pay the transferee. 18 3. Discharge following effective notification. After 19 receipt of a notification that complies with subsection 2, the 20 account debtor may discharge its obligation only by paying in 21 accordance with the notification and shall not discharge the 22 obligation by paying a person that formerly had control. 23 4. When notification ineffective. Notification is 24 ineffective under subsection 2: 25 a. unless, before the notification is sent, an account 26 debtor and the person that, at that time, had control of the 27 controllable electronic record that evidences the controllable 28 account or controllable payment intangible agree in an 29 authenticated record to a commercially reasonable method by 30 which a person must furnish reasonable proof that control has 31 been transferred; 32 b. to the extent an agreement between an account debtor and 33 seller of a payment intangible limits the account debtor’s duty 34 to pay a person other than the seller and the limitation is 35 -5- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 5/ 22

effective under law other than this Article; or 1 c. at the option of an account debtor, if the notification 2 notifies the account debtor to: 3 (1) divide a payment; 4 (2) make less than the full amount of any installment or 5 other periodic payment; or 6 (3) pay any part of a payment by more than one method or to 7 more than one person. 8 5. Proof of transfer of control. If requested by the 9 account debtor, the person giving the notification seasonably 10 shall furnish reasonable proof, using the agreed method, 11 that control of the controllable electronic record has been 12 transferred. Unless the person complies with the request, the 13 account debtor may discharge its obligation by paying a person 14 that formerly had control, even if the account debtor has 15 received a notification under subsection 2. 16 6. What constitutes reasonable proof. A person furnishes 17 reasonable proof that control has been transferred if the 18 person demonstrates, using the agreed method, that the 19 transferee has the power to: 20 a. avail itself of substantially all the benefit from the 21 controllable electronic record; 22 b. prevent others from availing themselves of substantially 23 all the benefit from the controllable electronic record; and 24 c. transfer the powers mentioned in paragraphs “a” and “b” 25 to another person. 26 7. Rights not waivable. An account debtor shall not waive 27 or vary its rights under subsection 4, paragraph “a” , and 28 subsection 5 or its option under subsection 4, paragraph “c” . 29 Sec. 7. NEW SECTION . 554.14107 Governing law. 30 Unless otherwise agreed to by the parties, the laws of this 31 state shall govern any actions taken pursuant to this Article. 32 This Article and the local law of this state shall apply to 33 any transaction involving a controllable account, controllable 34 electronic record, or controllable payment intangible if 35 -6- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 6/ 22

under section 554.9306A, the local law of this state governs 1 perfection, the effect of perfection or nonperfection, and the 2 priority of a security interest in such controllable account, 3 controllable electronic record, or controllable payment 4 intangible. 5 Sec. 8. NEW SECTION . 554.14108 Applicability. 6 This Article applies to any transaction involving a 7 controllable electronic record that arises on or after the 8 effective date of this Article. This Article does not apply to 9 any transaction involving a controllable electronic record that 10 arises before the effective date of this Article even if the 11 transaction would be subject to this Article if the transaction 12 had arisen on or after the effective date of this Article. 13 This Article does not apply to a right of action with regard to 14 any transaction involving a controllable electronic record that 15 has accrued before the effective date of this Article. 16 Sec. 9. NEW SECTION . 554.14109 Savings clause. 17 Any transaction involving a controllable electronic record 18 that arose before the effective date of this Article and 19 the rights, obligations, and interests flowing from that 20 transaction are governed by any statute or other rule amended 21 or repealed by this Article as if such amendment or repeal had 22 not occurred and may be terminated, completed, consummated, or 23 enforced under that statute or other rule. 24 DIVISION II 25 CORRESPONDING CHANGES 26 PART A 27 GENERAL PROVISIONS 28 Sec. 10. Section 554.1201, subsection 2, Code 2022, is 29 amended by adding the following new paragraph: 30 NEW PARAGRAPH . 0q. “Electronic” means relating to 31 technology having electrical, digital, magnetic, wireless, 32 optical, electromagnetic, or similar capabilities. 33 Sec. 11. Section 554.1201, subsection 2, paragraph x, Code 34 2022, is amended to read as follows: 35 -7- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 7/ 22

x. “Money” means a medium of exchange that: 1 (1) is currently authorized or adopted by a domestic or 2 foreign government , by an intergovernmental organization, or 3 pursuant to an agreement between two or more governments; and 4 (2) was initially issued, created, or distributed by 5 a domestic or foreign government, by an intergovernmental 6 organization, or pursuant to an agreement between two or 7 more governments . The term includes a monetary unit of 8 account established by an intergovernmental organization or by 9 agreement between two or more countries. 10 Sec. 12. Section 554.1204, unnumbered paragraph 1, Code 11 2022, is amended to read as follows: 12 Except as otherwise provided in Articles 3 , 4 , and 5 , and 14 , 13 a person gives value for rights if the person acquires them: 14 PART B 15 SECURED TRANSACTIONS 16 Sec. 13. Section 554.9102, subsection 1, paragraphs b and 17 bi, Code 2022, are amended to read as follows: 18 b. “Account” , except as used in “account for” , “on account 19 of” , and paragraph “ac” , means a right to payment of a monetary 20 obligation, whether or not earned by performance, (i) for 21 property that has been or is to be sold, leased, licensed, 22 assigned, or otherwise disposed of; (ii) for services rendered 23 or to be rendered; (iii) for a policy of insurance issued or to 24 be issued; (iv) for a secondary obligation incurred or to be 25 incurred; (v) for energy provided or to be provided; (vi) for 26 the use or hire of a vessel under a charter or other contract; 27 (vii) arising out of the use of a credit or charge card or 28 information contained on or for use with the card; or (viii) 29 as winnings in a lottery or other game of chance operated or 30 sponsored by a state, governmental unit of a state, or person 31 licensed or authorized to operate the game by a state or 32 governmental unit of a state. The term includes controllable 33 accounts and health care insurance receivables. The term 34 does not include rights to payment evidenced by chattel paper 35 -8- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 8/ 22

or an instrument, (i) chattel paper, (ii) commercial tort 1 claims, (iii) deposit accounts, (iv) investment property, (v) 2 letter-of-credit rights or letters of credit, or (vi) rights 3 to payment for money or funds advanced or sold, other than 4 rights arising out of the use of a credit or charge card or 5 information contained on or for use with the card , or (vii) 6 rights to payment evidenced by an instrument . 7 bi. “Payment intangible” means a general intangible 8 under which the account debtor’s principal obligation is a 9 monetary obligation. The term includes a controllable payment 10 intangible. 11 Sec. 14. Section 554.9102, subsection 1, Code 2022, is 12 amended by adding the following new paragraphs: 13 NEW PARAGRAPH . 0ab. “Controllable account” means an account 14 evidenced by a controllable electronic record that provides 15 that the account debtor undertakes to pay the person that under 16 section 554.14105 has control of the controllable electronic 17 record. 18 NEW PARAGRAPH . 00ab. “Controllable payment intangible” means 19 a payment intangible evidenced by a controllable electronic 20 record that provides that the account debtor undertakes to pay 21 the person that under section 554.14105 has control of the 22 controllable electronic record. 23 NEW PARAGRAPH . 0af. “Electronic money” means money that is 24 in an electronic form. 25 NEW PARAGRAPH . 0bc. “Money” has the meaning provided in 26 section 554.1201, subsection 2, paragraph “x” , but does not 27 include a deposit account. 28 NEW PARAGRAPH . 0cb. “Tangible money” means money in a 29 tangible form. 30 Sec. 15. Section 554.9102, subsection 2, Code 2022, is 31 amended by adding the following new paragraphs: 32 NEW PARAGRAPH . 0i. “Controllable electronic 33 record” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 554.14102. 34 NEW PARAGRAPH . 0ae. “Qualifying 35 -9- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 9/ 22

purchaser” . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 554.14102. 1 Sec. 16. NEW SECTION . 554.9105A Control of electronic 2 money. 3 1. General rule —— control of electronic money. A person has 4 control of electronic money if: 5 a. the electronic money or a system in which the electronic 6 money is recorded gives the person: 7 (1) the power to avail itself of substantially all the 8 benefit from the electronic money; and 9 (2) exclusive power, subject to subsection 2, to: 10 (a) prevent others from availing themselves of 11 substantially all the benefit from the electronic money; and 12 (b) transfer control of the electronic money to another 13 person or cause another person to obtain control of other 14 electronic money as a result of the transfer of the electronic 15 money; and 16 b. the electronic money, a record attached to or logically 17 associated with the electronic money, or a system in which 18 the electronic money is recorded enables the person readily 19 to identify itself in any way, including by name, identifying 20 number, cryptographic key, office, or account number, as having 21 the powers under paragraph “a” . 22 2. Control through another person. A person has control of 23 electronic money if another person, other than the transferor 24 of an interest in the electronic money: 25 a. has control of the electronic money and acknowledges that 26 it has control on behalf of the person, or 27 b. obtains control of the electronic money after having 28 acknowledged that it will obtain control of the electronic 29 money on behalf of the person. 30 3. Meaning of exclusive. A power is exclusive under 31 subsection 1, paragraph “a” , subparagraph (2), even if: 32 a. the electronic money or a system in which the electronic 33 money is recorded limits the use of the electronic money or has 34 a protocol programmed to transfer control; or 35 -10- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 10/ 22

b. the person has agreed to share the power with another 1 person. 2 Sec. 17. NEW SECTION . 554.9107A Control of controllable 3 account, controllable electronic record, or controllable payment 4 intangible. 5 1. Control under section 554.14105. A secured party has 6 control of a controllable electronic record as provided in 7 section 554.14105. 8 2. Control of controllable account and controllable payment 9 intangible. A secured party has control of a controllable 10 account or controllable payment intangible if the secured 11 party has control of the controllable electronic record that 12 evidences the controllable account or controllable payment 13 intangible. 14 Sec. 18. Section 554.9203, subsection 2, Code 2022, is 15 amended to read as follows: 16 2. Enforceability. Except as otherwise provided in 17 subsections 3 through 9 10 , a security interest is enforceable 18 against the debtor and third parties with respect to the 19 collateral only if: 20 a. value has been given; 21 b. the debtor has rights in the collateral or the power to 22 transfer rights in the collateral to a secured party; and 23 c. one of the following conditions is met: 24 (1) the debtor has authenticated a security agreement that 25 provides a description of the collateral and, if the security 26 interest covers timber to be cut, a description of the land 27 concerned; 28 (2) the collateral is not a certificated security and is 29 in the possession of the secured party under section 554.9313 30 pursuant to the debtor’s security agreement; 31 (3) the collateral is a certificated security in registered 32 form and the security certificate has been delivered to the 33 secured party under section 554.8301 pursuant to the debtor’s 34 security agreement; or 35 -11- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 11/ 22

(4) the collateral is controllable accounts, controllable 1 electronic records, controllable payment intangibles, deposit 2 accounts, electronic chattel paper, electronic documents, 3 electronic money, investment property, or letter-of-credit 4 rights, or electronic documents, and the secured party has 5 control under section 554.7106 , 554.9104 , 554.9105 , 554.9105A, 6 554.9106 , or 554.9107 , or 554.9107A pursuant to the debtor’s 7 security agreement. 8 Sec. 19. Section 554.9203, Code 2022, is amended by adding 9 the following new subsection: 10 NEW SUBSECTION . 10. Controllable account or controllable 11 payment intangible. The attachment of a security interest in a 12 controllable electronic record that evidences a controllable 13 account or controllable payment intangible is also attachment 14 of a security interest in the controllable account or 15 controllable payment intangible. 16 Sec. 20. Section 554.9207, subsection 3, Code 2022, is 17 amended to read as follows: 18 3. Duties and rights when secured party in possession or 19 control. Except as otherwise provided in subsection 4 , a 20 secured party having possession of collateral or control 21 of collateral under section 554.7106 , 554.9104 , 554.9105 , 22 554.9105A, 554.9106 , or 554.9107 , or 554.9107A : 23 a. may hold as additional security any proceeds, except 24 money or funds, received from the collateral; 25 b. shall apply money or funds received from the collateral 26 to reduce the secured obligation, unless remitted to the 27 debtor; and 28 c. may create a security interest in the collateral. 29 Sec. 21. Section 554.9208, subsection 2, paragraphs e and f, 30 Code 2022, are amended to read as follows: 31 e. a secured party having control of a letter-of-credit 32 right under section 554.9107 shall send to each person having 33 an unfulfilled obligation to pay or deliver proceeds of the 34 letter of credit to the secured party an authenticated release 35 -12- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 12/ 22

from any further obligation to pay or deliver proceeds of the 1 letter of credit to the secured party; and 2 f. a secured party having control of an electronic document 3 shall: 4 (1) give control of the electronic document to the debtor or 5 its designated custodian; 6 (2) if the debtor designates a custodian that is the 7 designated custodian with which the authoritative copy of 8 the electronic document is maintained for the secured party, 9 communicate to the custodian an authenticated record releasing 10 the designated custodian from any further obligation to 11 comply with instructions originated by the secured party 12 and instructing the custodian to comply with instructions 13 originated by the debtor; and 14 (3) take appropriate action to enable the debtor or its 15 designated custodian to make copies of or revisions to the 16 authoritative copy which add or change an identified assignee 17 of the authoritative copy without the consent of the secured 18 party . ; and 19 Sec. 22. Section 554.9208, subsection 2, Code 2022, is 20 amended by adding the following new paragraphs: 21 NEW PARAGRAPH . g. a secured party having control under 22 section 554.9105A of electronic money shall transfer control 23 of the electronic money to the debtor or a person designated 24 by the debtor; and 25 NEW PARAGRAPH . h. a secured party having control under 26 section 554.14105 of a controllable electronic record shall 27 transfer control of the controllable electronic record to the 28 debtor or a person designated by the debtor. 29 Sec. 23. Section 554.9301, subsection 3, Code 2022, is 30 amended to read as follows: 31 3. Except as otherwise provided in subsection 4 , while 32 tangible negotiable documents, goods, instruments, tangible 33 money, or tangible chattel paper is located in a jurisdiction, 34 the local law of that jurisdiction governs: 35 -13- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 13/ 22

a. perfection of a security interest in the goods by filing 1 a fixture filing; 2 b. perfection of a security interest in timber to be cut; 3 and 4 c. the effect of perfection or nonperfection and the 5 priority of a nonpossessory security interest in the 6 collateral. 7 Sec. 24. NEW SECTION . 554.9306A Law governing perfection 8 and priority of security interests in controllable accounts, 9 controllable electronic records, and controllable payment 10 intangibles. 11 The local law of this state governs perfection, the effect 12 of perfection or nonperfection, and the priority of a security 13 interest in a controllable account, controllable electronic 14 record, or controllable payment intangible granted by a debtor 15 located in this state at the time the security interest becomes 16 enforceable against the debtor with respect to the collateral 17 under section 554.9203. 18 Sec. 25. Section 554.9308, Code 2022, is amended by adding 19 the following new subsection: 20 NEW SUBSECTION . 8. Controllable account or payment 21 intangible. Perfection of a security interest in a controllable 22 electronic record that evidences a controllable account or 23 controllable payment intangible also perfects a security 24 interest in the controllable account or controllable payment 25 intangible. 26 Sec. 26. Section 554.9310, subsection 2, paragraph h, Code 27 2022, is amended to read as follows: 28 h. in controllable accounts, controllable electronic 29 records, controllable payment intangibles, deposit accounts, 30 electronic chattel paper, electronic documents, investment 31 property, or letter-of-credit rights which is perfected by 32 control under section 554.9314 ; 33 Sec. 27. Section 554.9312, Code 2022, is amended to read as 34 follows: 35 -14- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 14/ 22

554.9312 Perfection of security interests in controllable 1 accounts, controllable electronic records, controllable payment 2 intangibles, chattel paper, deposit accounts, documents, 3 goods covered by documents, instruments, investment property, 4 letter-of-credit rights, and money —— perfection by permissive 5 filing —— temporary perfection without filing or transfer of 6 possession. 7 1. Perfection by filing permitted. A security interest 8 in controllable accounts, controllable electronic records, 9 controllable payment intangibles, chattel paper, negotiable 10 documents, instruments, or investment property may be perfected 11 by filing. 12 2. Control or possession of certain collateral. Except as 13 otherwise provided in section 554.9315, subsections 3 and 4 , 14 for proceeds: 15 a. a security interest in a deposit account may be perfected 16 only by control under section 554.9314 ; 17 b. and except as otherwise provided in section 554.9308, 18 subsection 4 , a security interest in a letter-of-credit right 19 may be perfected only by control under section 554.9314 ; and 20 c. a security interest in tangible money may be perfected 21 only by the secured party’s taking possession under section 22 554.9313 ; and 23 d. a security interest in electronic money may be perfected 24 only by control under section 554.9314 . 25 3. Goods covered by negotiable document. While goods are 26 in the possession of a bailee that has issued a negotiable 27 document covering the goods: 28 a. a security interest in the goods may be perfected by 29 perfecting a security interest in the document; and 30 b. a security interest perfected in the document has 31 priority over any security interest that becomes perfected in 32 the goods by another method during that time. 33 4. Goods covered by nonnegotiable document. While goods are 34 in the possession of a bailee that has issued a nonnegotiable 35 -15- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 15/ 22

document covering the goods, a security interest in the goods 1 may be perfected by: 2 a. issuance of a document in the name of the secured party; 3 b. the bailee’s receipt of notification of the secured 4 party’s interest; or 5 c. filing as to the goods. 6 5. Temporary perfection —— new value. A security 7 interest in certificated securities, negotiable documents, 8 or instruments is perfected without filing or the taking of 9 possession or control for a period of twenty days from the time 10 it attaches to the extent that it arises for new value given 11 under an authenticated security agreement. 12 6. Temporary perfection —— goods or documents made available 13 to debtor. A perfected security interest in a negotiable 14 document or goods in possession of a bailee, other than one 15 that has issued a negotiable document for the goods, remains 16 perfected for twenty days without filing if the secured 17 party makes available to the debtor the goods or documents 18 representing the goods for the purpose of: 19 a. ultimate sale or exchange; or 20 b. loading, unloading, storing, shipping, transshipping, 21 manufacturing, processing, or otherwise dealing with them in a 22 manner preliminary to their sale or exchange. 23 7. Temporary perfection —— delivery of security certificate 24 or instrument to debtor. A perfected security interest in 25 a certificated security or instrument remains perfected for 26 twenty days without filing if the secured party delivers the 27 security certificate or instrument to the debtor for the 28 purpose of: 29 a. ultimate sale or exchange; or 30 b. presentation, collection, enforcement, renewal, or 31 registration of transfer. 32 8. Expiration of temporary perfection. After the twenty-day 33 period specified in subsection 5, 6, or 7 expires, perfection 34 depends upon compliance with this Article . 35 -16- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 16/ 22

Sec. 28. Section 554.9313, subsection 1, Code 2022, is 1 amended to read as follows: 2 1. Perfection by possession or delivery. Except as otherwise 3 provided in subsection 2 , a secured party may perfect a 4 security interest in tangible negotiable documents, goods, 5 instruments, tangible money, or tangible chattel paper by 6 taking possession of the collateral. A secured party may 7 perfect a security interest in certificated securities by 8 taking delivery of the certificated securities under section 9 554.8301 . 10 Sec. 29. Section 554.9314, subsections 1 and 2, Code 2022, 11 are amended to read as follows: 12 1. Perfection by control. A security interest in investment 13 property, deposit accounts, letter-of-credit rights, electronic 14 chattel paper, or electronic documents controllable accounts, 15 controllable electronic records, controllable payment 16 intangibles, deposit accounts, electronic chattel paper, 17 electronic documents, electronic money, investment property, 18 or letter-of-credit rights, may be perfected by control of 19 the collateral under section 554.7106 , 554.9104 , 554.9105 , 20 554.9105A, 554.9106 , or 554.9107 , or 554.9107A . 21 2. Specified collateral —— time of perfection by control —— 22 continuation of perfection. A security interest in deposit 23 accounts, electronic chattel paper, letter-of-credit rights, 24 or electronic documents controllable accounts, controllable 25 electronic records, controllable payment intangibles, deposit 26 accounts, electronic chattel paper, electronic documents, 27 electronic money, or letter-of-credit rights, is perfected by 28 control under section 554.7106 , 554.9104 , 554.9105 , 554.9105A 29 or 554.9107 , or 554.9107A when the secured party obtains 30 control and remains perfected by control only while the secured 31 party retains control. 32 Sec. 30. NEW SECTION . 554.9326A Priority of security 33 interests in controllable account, controllable electronic 34 record, and controllable payment intangible. 35 -17- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 17/ 22

A security interest in a controllable account, controllable 1 electronic record, or controllable payment intangible held by a 2 secured party having control of the account, electronic record, 3 or payment intangible has priority over a conflicting security 4 interest held by a secured party that does not have control. 5 Sec. 31. Section 554.9331, Code 2022, is amended to read as 6 follows: 7 554.9331 Priority of rights of purchasers of instruments, 8 controllable accounts, controllable records, controllable payment 9 intangibles, documents, instruments, and securities under other 10 articles Articles —— priority of interests in financial assets 11 and security entitlements and protections against assertions of 12 claims under Article Articles 8 and 14 . 13 1. Rights under Articles 3 , 7 , and 8 , and 14 not 14 limited. This Article does not limit the rights of a holder 15 in due course of a negotiable instrument, a holder to which a 16 negotiable document of title has been duly negotiated, or a 17 protected purchaser of a security , or a qualifying purchaser 18 of a controllable account, controllable electronic record, or 19 controllable payment intangible . These holders or purchasers 20 take priority over an earlier security interest, even if 21 perfected, to the extent provided in Articles 3 , 7 , and 8 , and 22 14 . 23 2. Protection under Article Articles 8 and 14 . This Article 24 does not limit the rights of or impose liability on a person to 25 the extent that the person is protected against the assertion 26 of a claim under Article 8 or 14 . 27 3. Filing not notice. Filing under this Article does not 28 constitute notice of a claim or defense to the holders, or 29 purchasers, or persons described in subsections 1 and 2 . 30 Sec. 32. Section 554.9332, Code 2022, is amended to read as 31 follows: 32 554.9332 Transfer of money —— transfer of funds from deposit 33 account. 34 1. Transferee of tangible money. A transferee of tangible 35 -18- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 18/ 22

money takes the money free of a security interest unless the 1 transferee acts in the money if the transferee when receiving 2 delivery of the money does not act in collusion with the debtor 3 in violating the rights of the secured party. 4 2. Transferee of electronic money. A transferee of 5 electronic money takes the money free of a security interest 6 in the money if the transferee when obtaining control of the 7 money does not act in collusion with the debtor in violating 8 the rights of the secured party. 9 2. 3. Transferee of funds from deposit account. A 10 transferee of funds from a deposit account takes the funds 11 free of a security interest in the deposit account unless the 12 transferee acts if the transferee when receiving the funds does 13 not act in collusion with the debtor in violating the rights of 14 the secured party. 15 Sec. 33. Section 554.9406, subsections 1, 2, and 3, Code 16 2022, are amended to read as follows: 17 1. Discharge of account debtor —— effect of 18 notification. Subject to subsections 2 through 9 and 19 11 , an account debtor on an account, chattel paper, or a 20 payment intangible may discharge its obligation by paying the 21 assignor until, but not after, the account debtor receives a 22 notification, authenticated by the assignor or the assignee, 23 that the amount due or to become due has been assigned and that 24 payment is to be made to the assignee. After receipt of the 25 notification, the account debtor may discharge its obligation 26 by paying the assignee and may not discharge the obligation by 27 paying the assignor. 28 2. When notification ineffective. Subject to subsection 29 subsections 8 and 11 , notification is ineffective under 30 subsection 1 : 31 a. if it does not reasonably identify the rights assigned; 32 b. to the extent that an agreement between an account 33 debtor and a seller of a payment intangible limits the account 34 debtor’s duty to pay a person other than the seller and the 35 -19- SF 2333.3626 (1) 89 (amending this SF 2333 to CONFORM to HF 2445) da/jh 19/ 22