Article 9 and Lien-Related Legislation
Kansas: SB 58, which would address fraudulent liens and UCC financing statements, passed the Senate on 2/8/2021 and was assigned to the House Judiciary Committee. The bill prohibits the filing of liens on real or personal property where (i) the claimant knows or reasonably should know is false; (ii) the lien is not expressly provided for by state or federal law; (iii) in the case of a UCC financing statement, the record was not based on a bona fide security agreement or was not authorized or authenticated by the debtor; (iv) the record is filed to harass a public official or obstruct government proceedings and the filer knows or reasonably should know the record contains false information; or (v) files a record in violation of a court order. A violation of the foregoing would be a felony.
Maryland: House Bill 1090 was introduced on 2/5/2021 to provide for a $50 surcharge on UCC filing fees. For more information see the bill description under the Real-Estate-Recording-Legislation section below.
Mississippi: HB 277, which would amend several state laws to recognize tribal identification cards as the equivalent of a state-issued driver’s license or ID card, passed the House on 2/9/2021 and is now pending in the Senate. The bill includes an amendment to the individual debtor name requirements for purposes of a financing statement in the state’s version of UCC § 9-503(a)(4). The amendment provides that if the debtor furnishes a valid identification card issued by a federally recognized Indian tribe or band that contains a color photograph and the card holder’s legal name (note – it is not clear from the text how a lender could make that determination), residence address and date of birth that has not expired, then the financing statement is sufficient if it provides the name of the individual indicated on such tribal identification card.
Ohio: Senate Bill 49 was introduced on 2/4/2021 to create a statutory lien against commercial real estate in favor of a registered architect, landscape architect, professional surveyor or professional engineer for services provided under contract. The bill was assigned to the Senate Judiciary Committee.
South Carolina: House Bill 3884 was introduced on 2/11/2021 to provide for electronic submission of certificate of title for watercraft and outboard motors; require use of the electronic titling system for dealers and lenders involved in the sale of watercraft and outboards; and allow for the electronic retention and discharge of a lien. The bill was assigned to the House Agricultural, Natural Resources and Environmental Affairs Committee.
Other Uniform Laws Legislation
California: Senate Bill 361 was introduced on 2/10/2021 to delete certain exceptions from the state’s Uniform Electronic Transactions Act so that the act applies to conditional sales and lease contracts for motor vehicles. Committee assignment is pending.
Tennessee: House Bill 1109 was introduced on 2/10/2021 to make a non-uniform amendment to the state’s UCC § 3-415(e) that extends the time during which a check must be presented for payment or the endorser’s liability is discharged from 30 to 35 days. A companion bill, SB 1007, was introduced in the Senate the same day. Committee assignment is pending for both bills.
Emerging Technology Legislation (Blockchain, DLT, Cryptocurrency, etc.)
Alabama: House Bill 372 was introduced on 2/9/2021 to exempt virtual currency from ad valorem taxation. The bill was assigned to the House Ways and Means Committee.
Illinois: House Bill 854 was introduced on 2/10/2021 to amend the definition of “virtual currency” for purposes of the Uniform Unclaimed Property Act and requires the holder to liquidate unclaimed virtual currency within 30 days prior to filing the report required under the act and to remit the proceeds to the Treasury Dept. Committee assignment is pending.
Iowa: Senate Bill 303 was introduced on 2/10/2021 to amend the Uniform Electronic Transactions Act to clarify (i) that “contract” includes a smart contract or contract using distributed ledger technology; (ii) that “electronic record” includes a record secured using distributed ledger technology; and (iii) that “electronic signature” includes a signature secured using distributed ledger technology. The bill was assigned to the Senate Government Committee.
Kentucky: Senate Bill 178 was introduced on 2/4/2021 to establish a special purpose depository institution to provide specialized banking services to blockchain innovators to emphasize the state’s partnership with the technology and financial industries with the goal to grow the state’s financial sector. Committee assignment is pending.
New York: SB 1801, which would amend state technology law, passed the Senate on 2/10/2021 and was assigned to the Assembly Governmental Operations Committee. This bill would add definitions of “blockchain technology” and “smart contracts” and provide that a signature obtained through blockchain technology is an electronic signature and that a record or smart contract obtained through blockchain technology is an electronic record.
Nevada: Senate Bill 110 was introduced on 2/9/2021 to establish an Emerging Technologies Task Force within the Department of Business and Industry. The task force would be charged with attracting emerging technology businesses to the state and encouraging the growth of such businesses. The bill was assigned to the Senate Government Affairs Committee.
Rhode Island: House Bill 5425 was introduced on 2/8/2021 to adopt the Rhode Island Economic Growth Blockchain Act. This bill would (i) define and categorizes various types of digital assets; (ii) provide for perfection of a security interest in digital assets by control or possession; (iii) define what constitutes control of a digital asset; and (iv) establish special purpose depository institutions to provide digital asset custodial services. The bill also includes a sandbox program for innovative financial products and services using blockchain. The bill was assigned to the House Corporations Committee.
Utah: HB 217, which provides for a regulatory sandbox program for innovative services, passed the House on 2/5/2021 and is now pending in the Senate Governmental Operations and Political Subdivisions Committee.
Wyoming: House Bill 43 was introduced on 2/5/2021 to make certain amendments to state law regarding digital assets. The bill would (i) amend the definition of “digital assets”; (ii) amend provisions for perfection of a security interest in digital assets; and (iii) establish what constitutes possession of a digital asset. The bill was assigned to the House Judiciary Committee.
Business Organization Legislation
Indiana: HB 1464, which would prohibit the use of an entity name or assumed name that suggests the entity is affiliated with any state or federal government agency, passed the House on 2/8/2021. The bill would also amend provisions related to emergency by-laws and authorize a corporation to hold annual meeting of members by remote communications. The bill is pending Committee assignment in the Senate.
Arizona: House Bill 2828 was introduced on 2/5/2021 to set a maximum fee of $25 that a notary may charge for a remote online notarial act. The bill was assigned to the House Commerce Committee.
Georgia: House Bill 334 was introduced on 2/8/2021 to provide for remote online notaries and notarization. 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 bill was assigned to the House Judiciary Committee.
Georgia: Senate Bill 96 was introduced on 2/4/2021 to provide that that a veterans health identification card constitutes satisfactory evidence of identity for a document signer. The bill was assigned to the Senate Veterans, Military, and Homeland Security Committee.
Maryland: Senate Bill 735 was introduced on 2/5/2021 to address remote online notarization. This bill would (i) expand the availability of remote notarial acts to include certain will and trust documents; (ii) clarify the law regarding identity proofing and credential analysis; and (iii) affirm the validity of the notarization of certain documents in conformance with certain executive orders. The bill was assigned to the Senate Judicial Proceedings Committee. An identical bill was introduced in the House on 2/8/2021 as HB 1265, which was assigned to the House Health and Government Operations Committee.
Minnesota: Senate Bill 734 was introduced on 2/8/2021 to authorize notaries public to perform civil marriages. This appears the same as HB 575, which was introduced last week. The bill was assigned to the Senate Civil Law and Data Practices Policy Committee.
Tennessee: Senate Bill 509 was introduced on 2/8/2021 to amend existing law so that a notary public is authorized to solemnize a marriage. Committee assignment is pending.
Wyoming: The governor signed SB 29 on 2/9/2021 to enact RULONA, including remote notarization provisions. The new law takes effect on 7/1/2021.
Arkansas: HB 1183, which would authorize county clerks to accept payment of recording and other fees by credit card and allow the clerk to assess a transaction fee to cover the costs, passed the Senate as amended on 2/9/2021. The bill was returned to the House for concurrence.
Maryland: House Bill 1090 was introduced on 2/5/2021 to provide for a $50 surcharge for recording an instrument. The surcharge would be used for the Partnership Rental Housing Fund. It appears that the surcharge would also apply to UCC records filed with the State Department of Assessments and Taxation. The bill was assigned to the House Environment and Transportation Committee.
Mississippi: SB 2638, which would provide a procedure for recording a tangible copy of an electronic document in counties that lack eRecording capability, passed the Senate on 2/9/2021. Committee assignment in the House is pending.
New Mexico: House Bill 19 was introduced on 2/9/2020 to impose an excise tax on all instruments evidencing a transfer of any interest in real property priced over $500k. The tax is payable by the grantee or transferee to the county clerk at the rate of .0075% for property priced between $500k and $750, and .0125% for property priced over $750. The bill was assigned to multiple House Committees.
New York: Senate Bill 4592 was introduced on 2/5/2021 to prohibit a county recorder from accepting a deed where an LLC is the grantor or grantee unless the deed is accompanied by a document that provides the names and business addresses of all members and managers. If any member or manager is itself an LLC, the report must include that LLC’s member and manager information up the line until the members and managers listed are all natural persons. The bill was assigned to the Senate Judiciary Committee.
Tennessee: House Bill 633 was introduced on 2/8/2021 to require that an electronic document must be certified by either a licensed attorney or the custodian of the original version of the electronic document and the signature of that person must be acknowledged by a notary public. The certification must be transmitted with the electronic document and recorded by the county register as a part of the document being recorded. A similar bill was introduced in the Senate on 2/11/2021 as SB 1263. Committee assignment is pending for both bills.
Utah: HB 107, which would amend the requirements for the recording of a subdivision plat, passed the House on 2/11/2021 and is pending in the Senate.
Vermont: House Bill 199 was introduced on 2/5/2021 to provide that a power of attorney made for the purpose of conveying, leasing, mortgaging, or affecting any interest in real property that has been acknowledged and signed in the presence of at least one witness shall be valid, notwithstanding its failure to comply with certain statutory requirements or the Emergency Administrative Rules for Remote Notarial Acts adopted by the Vermont Secretary of State, unless within three years after recording, an action challenging its validity is commenced and a copy of the complaint is recorded in the land records of the town where the power of attorney is recorded. If enacted, the provision would not apply to a power of attorney obtained by fraud or forgery. The bill was assigned to the House Judiciary Committee.
Vermont: House Bill 253 was introduced on 2/11/2021 to require that a deed conveying an interest in real estate must be acknowledged in writing by the grantee in order to be valid. Committee assignment is pending.
Other Items/Legislation of Interest
No developments to report this week.
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.