Legislative Developments 4-1-22

Article 9 and Lien-Related Legislation

Kentucky: HB 523, which would provide that a purchase-money mortgage or deed of trust granted by a purchaser shall have priority over a prior lien against the purchaser, passed the Senate on 3/30/2022 and is pending consideration by the governor. 

Tennessee:  The governor signed HB 1906 on 3/28/2022 to clarify the priority of a state tax lien relative to a recorded deed or deed of trust.  The new law took effect immediately. 

Other Uniform Laws Legislation

No developments to report this week.

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

Connecticut:  Senate Bill 482 was introduced on 3/25/2022 to establish a Fintech Regulatory Sandbox program that will allow companies to make an innovative product or service, including products or services related to cryptocurrency, available to consumers temporarily without such companies obtaining a license or other authorization that may otherwise be required. The bill was assigned to the Joint Finance, Revenue and Bonding Committee.

Idaho:  The governor signed HB 583 on 3/28/2022 to enact the “Digital Assets Act.”  This bill (i) defines digital assets; (ii) classifies digital assets as personal property and general intangibles;  (iii) defines what constitutes possession and control of a digital asset; and (iv) provides for perfection of a possessory security in a digital asset by possession or control.  The new law takes effect on 7/1/2022.   

Tennessee:  SB 535 was amended on 3/31/2022 to prohibit a government agency from transferring funds in the form of certain digital assets to an individual, corporation or other entity without permission of the state treasurer.  The bill passed the Senate the same day and was then substituted in the House for HB 653, which also passed the same day.  The bill is now awaiting delivery to the governor. 

Tennessee:  HB 2645 and SB 2854 were amended on 3/30/2022 to provide for the formation, conversion or qualification of an LLC as a decentralized organization.  The bills also provide that a membership interest in such an organization may be a digital asset.  Both bills are pending further action. 

Washington:  The governor signed SB 5544 on 3/30/2022 to establish the Washington blockchain work group for the purpose of examining various potential applications for blockchain technology.  The scope of the work group’s inquiry includes, but is not limited to, applications in computing, banking and other financial services, the real estate transaction process, health care, supply chain management, higher education, and public recordkeeping.  The new law takes effect 90 days after the legislature adjourns.

Wyoming: The governor vetoed SB 55 on 3/25/2022.  This bill would have established an insurance sandbox program for the use of emerging technology with innovative insurance products or services.  The governor’s veto message encouraged the legislature to rework the bill so it does not exempt consumer protection regulations from the program. 

Business Organization Legislation

Tennessee:  See HB 2645 and SB 2854 in Emerging Technology above. 

Notary Legislation

Rhode Island:  Senate Bill 2802 was introduced on 3/24/2022 to amend state notary law to permit remote notarization and recognize notarial acts performed under the law of a federally-recognized Indian tribe.  The bill was assigned to the Senate Judiciary Committee.   This bill appears similar to HB 7363, which was introduced last month, HB 7731, which was introduced on 3/2/2022 and SB 2705, which was introduced on 3/17/2022.

Real-Estate-Recording-Related Legislation

Mississippi:  HB 1351 passed out of conference committee on 3/30/2022 and was promptly adopted by both chambers.  This bill would specify requirements for an affidavit of scrivener’s error related to a document affecting the title to real property.  The bill is awaiting delivery to the governor.     

Rhode Island:  Senate Bill 2759 was introduced on 3/24/2022 to tax deeds and other instruments used to convey non-residential property valued at over $200k at a flat 5% of the assessed value.  The bill was assigned to the Senate Finance Committee.   

Other Items/Legislation of Interest

No developments to report this week.

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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.