Article 9 and Lien-Related Legislation
Kansas: SB 58, which would address fraudulent liens and UCC financing statements, passed the House as amended on 3/25/2021. The House refused to concur in the Senate amendments and the bill is now in conference 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.
Minnesota: SB 2106 was amended in committee on 3/22/2021 to delete the provisions designed to address fraudulent UCC filing that were based on the hip-pocket amendments to UCC Article 9. The provisions were deleted from the House companion bill, HB 1869, earlier this month.
Nebraska: LB 177, which would extend the filing deadline for certain agricultural liens under UCC Article 9 from 60 to 120 days, passed the legislature on 3/25/2021 and is awaiting action by the governor.
New Mexico: HB 66, which would add definitions for “good faith” and “public-finance transaction” to the state’s UCC § 9-102, passed the Senate on 3/19/2021. The bill also contains a provision that would exclude public-finance transactions from the scope of Article 9 in § 9-109. The bill is awaiting transmission to the governor.
New York: AB 164, which originally added new UCC Article 12 to address discontinuance of LIBOR, passed both the Assembly and Senate as amended on 3/24/2021. The amendments moved the LIBOR provisions to new Section 18-C of the general obligations law instead of putting them in the UCC. The bill is awaiting transmission to the governor.
Other Uniform Laws Legislation
New Jersey: AB 3384, which would adopt the Uniform Voidable Transfers Act, passed the Senate as amended on 3/25/2021. The Assembly concurred the same day and the bill is now awaiting transmission to the governor.
Emerging Technology Legislation (Blockchain, DLT, Cryptocurrency, etc.)
Kentucky: The governor signed HB 230 on 3/25/2021 to add a new section to state law that provides tax breaks for commercial mining of cryptocurrency. The purpose of the bill is to take advantage of the state’s affordable electricity supply to become a national leader in commercial mining of cryptocurrency. The new law takes effect on 7/1/2021.
Kentucky: The governor also signed SB 255 on 3/25/2021, which, like HB 230, provides incentives for commercial mining of cryptocurrency. The new law takes effect on 7/1/2021.
New Jersey: AB 2891, which would adopt the Digital Assets and Blockchain Technology Act, passed the Assembly on 3/25/2021. This bill would require licensing of persons engaged in digital asset business activity. The bill is now pending in the Senate.
Utah: The governor signed HB 217 on 3/22/2021 to create a regulatory sandbox program for innovative services. The new law takes effect 60 days after the legislature adjourns.
Wyoming: HB 142, which would require the secretary of state to implement a filing system for all records required by law to be filed with the secretary of state, passed the House on 3/23/2021 and is now pending in the Senate Appropriations Committee. Under this bill, the filing system shall include an application programming interface, security measures, authenticated digital corporate identity and other components determined by the secretary of state to be best practices or likely to increase the effective and efficient administration of the laws. The bill authorizes the secretary of state to use blockchain or other distributed ledger technology.
Business Organization Legislation
Arkansas: Senate Bill 601 was introduced on 3/23/2021 to adopt the Uniform Limited Liability Company Act and repeal the Small Business Entity Tax Pass Through Act. Committee assignment is pending.
Montana: House Bill 668 was introduced on 3/23/2021 to clarify that foreign business entities include federally-recognized Indian tribes and to set the UCC filing fee when collateral is within the boundaries of an Indian reservation. The bill was assigned to the House Business and Labor Committee.
North Carolina: House Bill 320, which would authorize business organizations to hold meetings remotely under certain conditions, passed the House on 3/25/2021 and is pending in the Senate.
Illinois: The Senate concurred in House amendments to SB 72 on 3/25/2021. This bill would adopt the Electronic Wills and Remote Witnessing Act. Among other provisions, the bill provides that an electronic will is a digital asset. In addition, it authorizes and establishes the requirements for remote witnessing of a document using AV technology. The bill is now awaiting consideration by the governor.
Maryland: SB 735, which would address remote online notarization, passed the Senate on 3/19/2021. 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 is now in the House Health and Government Operations Committee.
Nebraska: LB 94, which would prohibit the invalidation of certain notarial acts performed online under the governor’s emergency order, passed the legislature on 3/25/2021 and is awaiting action by the governor.
New York: SB 1780, which would provide for electronic and remote notarization, passed the Senate on 3/24/2021 and was assigned to the Assembly Governmental Operations Committee.
South Carolina: SB 631, which would enact the South Carolina Electronic Notary Act, passed the Senate on 3/23/2021. The bill would (i) set qualifications for electronic notaries; (ii) provide procedures for electronic notarization; and (iii) require the electronic notary to keep a journal. The bill was now pending in the House.
West Virginia: SB 182, which would authorize the Secretary of State to promulgate a legislative rule relating to guidelines and standards for electronic notarization, passed the House as amended on 3/22/2021. The Senate concurred on 3/23/2021 and the bill is now awaiting transmission to the governor.
West Virginia: SB 469, which would permit the personal appearance before a notary by video technology, passed the House on 3/19/2021 and is now awaiting consideration by the governor.
Arkansas: House Bill 1824 was introduced on 3/23/2021 to clarify when a county recorder may charge additional fees for multiple references to previously recorded documents. The bill was assigned to the House Insurance and Commerce Committee.
Indiana: HB 1255, which would amend various provisions of state law related to electronic wills, notarial act requirements and requirements for recordation of documents, passed the Senate as amended on 3/23/2021 and was returned to the House for concurrence. If enacted, the bill would allow for proof of various documents by witnessing remotely using audio-visual technology.
Iowa: HB 837 (formerly HB 520), which would authorize the governing board of the county land record information system to collect a $3 fee per recorded document for using the system to process electronic documents for recording, passed the House on 3/25/2021 and is now pending in the Senate.
New Jersey: SB 2861 (2020), which would prohibit the recording of a deed with a restrictive covenant purporting to restrict the ownership of use of real property prohibited by the state Law Against Discrimination, passed the Senate on 3/25/2021 and was assigned to the Assembly Housing Committee.
New York: Assembly Bill 6574 was introduced on 3/19/2021 to impose an additional tax on each deed, instrument or transaction for the transfer of one to three unit residential property if made within 2 years from the prior conveyance of the property. The tax imposed could be up to 65% of the difference between the current sale price and the prior sale price. The bill also imposes additional taxes on one to three unit residential properties valued at $1 million or more. The bill was assigned to the Assembly Ways and Means Committee. This bill appears to be the Assembly companion bill to SB 5376, which was introduced earlier this month.
Tennessee: HB 633, which would require that an electronic document must be certified by either a licensed attorney or the custodian of the original version of the electronic document, passed the House on 3/22/2021. The bill would also require that 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. The bill is now pending in the Senate.
Other Items/Legislation of Interest
No developments to report.
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.