Legislative Developments 1-28-22

Legislative Developments 1-28-22

Article 9 and Lien-Related Legislation

Arizona:  House Bill 2645 was introduced on 1/27/2022 to increase the penalty for a person who files a UCC record without authorization that the person knows contains a material misstatement or false claim from a misdemeanor to a class 3 felony.  Committee assignment is pending.

Florida:  SB 336, which would amend UCC Article 9 to exclude a security interest in an ownership interest in a general partnership, limited partnership or LLC from certain provisions of UCC 9-406 and 9-408, passed the Senate on 1/27/2022 and is now pending in the House.    

Indiana: HB 1092, which includes a provision that deletes a non-uniform portion of the state’s UCC § 9-502, passed the House on 1/24/2022 and is pending in the Senate.  The non-uniform provision requires the secured party to send a copy of a financing statement to the debtor within 30 days of filing.  Indiana is the only state that has such a requirement.  It has been in place since Revised Article 9 was took effect in 2001. If enacted, this bill would delete the notice requirement.  Committee assignment in the Senate is pending.

Massachusetts: House Bill 4362 was introduced on 1/26/2022 to establish a uniform statewide system for filing notices of tax liens, which shall be called the State Tax Lien Centralized Registry. The uniform statewide system shall be used for state tax liens on real property and personal property, tangible and intangible. Committee assignment is pending.

Tennessee:  House Bill 11906 was introduced on 1/21/2021 to clarify the priority of a state tax lien relative to a recorded deed or deed of trust.  Committee assignment is pending.  This appears similar to SB 1854, which was included in last week’s update.

Other Uniform Laws Legislation

No developments to report.   

Emerging Technology Legislation (Blockchain, DLT, Cryptocurrency, etc.)

Arizona:  Senate Bill 1341 was introduced on 1/24/2022 to define Bitcoin as legal tender in Arizona.  The bill was assigned to the Senate Finance Committee.

Hawaii:  Senate Bill 2695 was introduced on 1/21/2022 to establish a blockchain and cryptocurrency task force that will review the scope of blockchain and cryptocurrency across the country and then report any findings, recommendations and proposed legislation  to the legislature.  The bill was assigned to the Senate Ways and Means Committee.

Hawaii:  Senate Bill 2696 was introduced on 1/21/2022 to authorize state agencies to accept convertible virtual currency as a means of payment after entering into virtual currency agreements with persons or issuers.  The bill was assigned to multiple committees.

Hawaii:  Senate Bill 2697 was introduced on 1/21/2022 to exclude the electronic transfer of virtual currency through virtual currency companies and cryptocurrency companies  from application of the state’s Money Transmitters Act.  The bill was assigned to multiple Senate committees. A similar bill, HB 2287, was introduced in the House on 1/25/2022.  Committee assignment for the House bill is pending. 

Hawaii:  Senate Bill 3025 was introduced on 1/24/2022 to create a digital currency licensing program, which shall be regulated by the department of commerce and consumer affairs’ division of financial institutions.  A similar provision was introduced in the House on 1/26/2022 as SB 2384. Committee assignments for both bills are pending.

Idaho:  House Bill 465 was introduced on 1/26/2022 to enact the “Digital Assets Act,” which would (i) define digital assets; (ii) classify digital assets as personal property and general intangibles;  (iii) define what constitutes possession and control of a digital asset; and (iv) provide for perfection of a possessory security in a digital asset by possession or control. The bill was assigned to the House Business Committee.   

Illinois: House Bill 5287 was introduced on 1/27/2022 to provide that the department of revenue may adopt rules that allow payments in cryptocurrency for any amount due to the department under any Act.  The bill also defines “cryptocurrency” for purposes of the Act.  Committee assignment is pending.

Illinois: Senate Bill 3643 was introduced on 1/21/2022 to exempt certain capital investments by data centers engaged in cryptocurrency mining from application of various taxes.  Committee assignment is pending.

Indiana:  HB 1211, which would direct the department of administration to gather information on how blockchain technology could be used by a state agency, passed the House on 1/20/2022.  The purpose of the information gathering would be to: (i) achieve greater cost efficiency and cost effectiveness; and (ii) improve consumer convenience, experience, data security, and data privacy.  The bill is now pending in the Senate.

Minnesota:  House Bill 2730 was pre-filed on 1/24/2022 to authorize a corporation to issue all or a portion of its shares as certificate tokens instead of stock.  The bill was assigned to the House Commerce Finance and Policy Committee.     

Mississippi:  House Bill 1154 was introduced on 1/17/2022 to create an exemption from certain state securities laws for open blockchain tokens.  Committee assignment is pending.  This appears to be similar to SB 2633, which was included in last week’s update.   

New Jersey:  Assembly Bill 385 was introduced on 1/11/2022 to require the department of treasury to create a digital payment platform  to be used by legal businesses that do not have access to traditional financial services and must operate in cash heavy or cash only environments. The bill also provides the platform must process virtual currency on a one-to-one value with the U.S. Dollar.  The bill was assigned to the Assembly Science, Innovation and Technology Committee.   

New Jersey:  Assembly Bill 1975 was introduced on 1/11/2022 to enact the “Virtual Currency and Blockchain Regulation Act.” This bill would establish a regulatory framework for virtual currency businesses to operate in NJ, create provisions governing the use of blockchain with certain business entities, and create certain incentives for virtual currency businesses to locate in the State. The bill provisions include (i) perfection of a security interest in digital assets by control; (ii) authorization for banks to provide custodial services for digital assets; (iii) provides for the formation of decentralized autonomous organizations (DAOs) under the state’s LLC laws; (iv) authorization for the Department of Revenue and Enterprise Services (the state’s central UCC filing office) to create a blockchain filing system; and (v) create incentives for virtual currency businesses.  The bill would also allow payment of state taxes using virtual currency.  The bill was assigned to the Assembly Judiciary Committee.   

New York:  Assembly Bill 9028 was introduced on 1/21/2022 to require certain disclosures in advertisements involving “security tokens,” as that term is defined in the bill..  The bill was assigned to the Assembly Science and Technology Committee.   

New York:  Assembly Bill 9029 was introduced on 1/21/2022 to require certain disclosures in advertisements involving “virtual tokens,” as that term is defined in the bill..  The bill was assigned to the Assembly Science and Technology Committee.   

Oklahoma:  House Bill 4046 was pre-filed on 1/20/2022 to add commercial cryptocurrency mining operations to the definition of “manufacturing facility” for purposes of the tax code.  Committee assignment is pending introduction.   

Utah:  House Bill 243 was introduced on 1/26/2022 to extend the state’s Regulatory Sandbox program to innovative use of new and emerging technology, including blockchain..  Committee assignment is pending.   

Virginia: Senate Bill 712 was introduced on 1/21/2022 to create the department of regulatory innovation to administer the Virginia Regulatory Sandbox program, which would authorize the testing of innovative offerings without the need to obtain a license or other authorization that would otherwise be required.  The bill was assigned to the Senate General Laws and Technology Committee.  This appears similar to HB 208, which was introduced earlier in January.

Business Organization Legislation

Minnesota:  House Bill 2730  – See listing under Emerging Technology Legislation above.

Notary Legislation

California:  AB 1093 (2021), which would authorize remote online notarization and provide for the commissioning of remote notaries, passed the Assembly on 1/27/2022.  The bill is now pending in the Senate. 

Georgia:  HB 334, which would provide for remote online notaries and notarization, was taken off the table in the Senate on 1/26/2022.  The bill passed both chambers last year with amendments.  The Senate tabled the bill before the 2021 session ended before considering whether to concur in the House amendments.  If enacted, the bill would; (i) direct the GSCCCA to establish standards for remote notarization; (ii) create an electronic notary journal requirement; (iii) clarify that clerks have no duty to examine the circumstances or methods of witnessing on documents submitted for recording; and (iv) provide that witness signatures can be electronic and performed using remote online technology.  The Senate refused to concur in the House amendments on 1/26/2022 so the bill will likely have to go to conference committee.   

Massachusetts: HB 4345, originally HB 4340, which would temporarily provide for remote notarization of physical documents, passed the House on 1/19/2022 and then passed the Senate on 1/26/2022.  The bill would have retroactive effect to 12/15/2021 and permit remote notarization until 7/15/2022. It was renumbered on 1/19/2022 as HB 4345 and then substituted in the Senate for SB 2622 for further action.  The bill was modified in the Senate and was returned to the House for concurrence.

Mississippi:  House Bill 1322 was introduced on 1/17/2022 to adopt the “Remote Online Notarization Act.”  The bill authorizes remote notarization using audio-visual technology and sets legal requirements for such notarial acts.  It authorizes the secretary of state to establish rules for the methods and procedures of remote notarization. The bill also provides that a county recorder shall accept a tangible copy of an electronic record containing a notarial certificate to satisfy any requirement for recording an original. Committee assignment is pending.  This appears similar to SB 2622, which was included in last week’s update.   

New Jersey:  Assembly Bill 1157 was introduced on 1/11/2022 to permit notaries with valid commissions on March 9, 2020 to continue serving until end of COVID-19 pandemic; permits continuation following end with timely completion of application to renew.  The bill was assigned to the Assembly Judiciary Committee.   

New York:  Senate Bill 8071 was introduced on 1/24/2022 to further regulate the conduct of remote notarization.  The bill was assigned to the Senate Banks Committee.   

Virginia: Senate Bill 765 was introduced on 1/21/2022 to make numerous changes to state notary law regarding fees; application for commission; education requirements; journal requirements; and prohibitions applicable to notaries.  The bill was assigned to the Senate Judiciary Committee. 

Real-Estate-Recording-Related Legislation

Georgia:  House Bill 974 was introduced on 1/24/2022 to require that all deeds, mortgages and liens of all kinds shall be electronically filed with the clerk of the superior court.  The bill also changes the first page content requirements for a deed to secure debt.  The bill was assigned to the House Judiciary Committee.   

Indiana:  SB 357, which would provide that a county recorder may not refuse a record simply because it is in electronic form, passed the Senate on 1/25/2022. There are exceptions for certain documents, such as military discharge papers.  The bill is now pending in the House.

Kentucky:  House Bill 377 was introduced on 1/26/2022 to require that county clerks to establish a portal that will enable the public to electronically file and search county records online, including real estate records. Committee assignment is pending.   

Mississippi:  House Bill 1351 was introduced on 1/17/2022 to specify requirements for an affidavit of scrivener’s error related to a document affecting the title to real property.  Committee assignment is pending.   

New Jersey:  Assembly Bill 106 was introduced on 1/11/2022 to eliminate the supplemental realty transfer fee and 1% fee on sale of certain commercial property and the tax on sale of controlling interests in certain commercial property.  The bill was assigned to the Community Development and Affairs Committee.   

Washington:  House Bill 2072 was introduced on 1/20/2022 to clarify when a manufactured home becomes real property.  The bill was assigned to the Senate Civil Rights and Judiciary Committee.   

Other Items/Legislation of Interest

New Jersey:  Assembly Bill 1122 was introduced on 1/11/2022 to establish a business court with jurisdiction to hear a wide variety of business and commercial disputes, including contract, UCC, business entity matters, and certain employment matters.  Similar measures have been introduced in prior years but did not advance beyond committee.  The bill was assigned to the Assembly Judiciary Committee.   

New Jersey:  Senate Bill 514 was introduced on 1/11/2022 to authorize local governments to charge an additional “convenience fee” for accepting electronic payment of any obligation or service charge owed by a person.  This would presumably include real estate recording fees and any other local government filing or search fees.  The bill was assigned to the Community and Urban Affairs Committee.   

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Note that this update provides only a short summary of the listed bills, which are often lengthy and complex. It is not intended to include all potentially relevant provisions of each bill.  For full details, please review the bill on the applicable state legislative web site.