Legislative Developments 4-24-2023

Legislative Developments 4-24-2023

Article 9 and lien-related legislation

Florida: House Bill 27, which would adopt the Judgment Lien Improvement Act, passed the House on 4-20-2023 and is pending in the Senate. This bill would specify that payment intangibles, accounts, and the proceeds thereof are subject to judgment liens. The bill also would set the procedures related to judgment liens against titled motor vehicle and vessels and make various other changes to existing law.

Florida: Senate Bill 978, which would amend the state’s version of UCC § 9-108 so that a collateral description only by type is not sufficient for certain accounts related to proceeds from insurance, disability, unemployment, and other benefits, passed the Senate on 4-18-2023 and then passed the House on 4-20-2023. The bill is awaiting delivery to the governor.

Montana: House Bill 118, which would provide that a warrant of distraint for unpaid taxes becomes a statewide lien against all monies of or due to the taxpayer, passed the Senate as amended on 4-18-2023 and was returned to the House for concurrence.   

Montana: House Bill 477, which would allow the secretary of state to charge a $25 fee for filing a UCC financing statement when the collateral is located within the boundaries of an Indian reservation and is subject to the laws of the governing body of the reservation, passed the Senate with amendments on 4-14-2023 and was returned to the House for concurrence. The bill also would treat entities formed under the law of a federally-recognized Indian tribe as foreign entities under business entity law.

Other uniform laws legislation (includes the 2022 Amendments to the UCC with UCC Article 12 – Controllable Electronic Records)

Alabama: Senate Bill 231 was introduced on 4-20-2023 to enact the 2022 Amendments to the UCC, including UCC Article 12, Controllable Electronic Records, and related amendments. Committee assignment is pending.

Indiana: The Senate concurred in House amendments to Senate Bill 468, which would enact the 2022 Amendments to the UCC, on 4-20-2023. The bill is now awaiting delivery to the governor.

Montana: Senate Bill 370, which would enact the 2022 Amendments to the UCC, passed the House with amendments on 4-18-2023 and was returned to the Senate for concurrence.   

Ohio: House Bill 155 was introduced on 4-20-2023 to amend the state’s version of UCC § 1-201 to add a definition for “central bank digital currency” and exclude central bank digital currency from the definition of “money.” Committee assignment is pending.

Emerging technology legislation (blockchain, DLT, cryptocurrency, etc.)

Arkansas: The governor signed House Bill 1799 on 4-13-2023 to enact the Arkansas Data Centers Act of 2023, which will regulate digital mining businesses. This new law will also protect digital mining businesses from discriminatory regulations and taxes. The act takes effect 91 days after adjournment.    

Texas: House Bill 1666, which would regulate digital asset service providers, passed the House on 4-20-2023. The bill would prohibit a digital asset service provider from commingling customer funds with the digital asset service provider’s own funds. It would also require a digital asset service provider to meet certain reserve requirements, develop certain plans and make reports to the department of banking. In addition, the bill would require a digital asset service provider to obtain a money transmission license. Committee assignment is pending in the Senate.

Business organization legislation

Indiana: House Bill 1581, which would amend certain state business organization laws, passed the Senate on 4-20-2023. This bill would (i) apply certain business laws to business trusts and agricultural cooperatives; (ii) remove the requirement that articles of incorporation for agricultural cooperatives be acknowledged before a notary; and (iii) remove requirement for licensure of principal managers. The bill is pending delivery to the governor.

Notary legislation

Colorado: Senate Bill 153, which would extend the sunset provision for the Revised Uniform Law on Notarial Acts by nine years from 9-1-2023 until 9-1-2032, passed the Senate on 4-17-2023. The bill would also make changes to the statutory fees for notarial acts and other changes regarding certificates and interpreters. The bill is now in the House State, Civic, Military, and Veterans Affairs Committee.

Texas: House Bill 255, which would authorize a notary to record the expiration date of identification document and would require the secretary of state to adjust the fees a notary may charge every five years based on the inflation rate, passed the House on 4-14-2023. The bill is now pending in the Senate State Affairs Committee.

United States: Senate Bill 1212 was introduced on 4-19-2023 to authorize notaries public to perform, and to establish minimum standards for, electronic notarizations and remote notarizations that occur in or affect interstate commerce, to require any federal court to recognize notarizations performed by a notarial officer of any state, to require any state to recognize notarizations performed by a notarial officer of any other state when the notarization was performed under or relates to a public act, record, or judicial proceeding of notarial officer’s state, or when the notarization occurs in or affects interstate commerce, and for other purposes. The full text of the bill is not yet available, but the summary suggests it is the SECURE Act or substantially similar to House Bill 1059, which the House passed in February. The bill was assigned to the Senate Judiciary Committee.

Real estate recording-related legislation

Arizona: The governor signed Senate Bill 1110 on 4-18-2023 to require that county recorders provide a system for notifying a person or entity whenever any document is recorded that names the person or entity as a party. The notification system would be voluntary for the person or entity and the notice would be provided by email, text message, or similar means. The new law takes effect 91 days after the legislature adjourns.

Montana: Senate Bill 330, which would provide that a county clerk, in the role of recorder, shall accept electronic notarizations completed in accordance with the state’s version of the Revised Uniform Law on Notarial Acts, passed the House on 4-13-2023. The bill is now awaiting delivery to the governor.

Nevada: Senate Bill 223, which would revise the requirements for recording a notice of lis pendens in relation to foreclosure of a mortgage or deed of trust, passed the Senate on 4-17-2023 and was assigned to the Assembly Judiciary Committee.

Oklahoma: Senate Bill 78, which would authorize county clerks to provide certified copies of real estate records in electronic format, passed the House on 4-19-2023 and is pending consideration by the governor.

Tennessee: The governor signed Senate Bill 368 on 4-17-2023 to prohibit the recording of deceptive service agreements, set statutory damages for a violation, and offer remedies for a person with an interest in the property subject to such agreement. The new law took effect immediately.  

Texas: House Bill 219, which would require a mortgagee or mortgage servicer to release a deed of trust or other lien security a home loan within 60 days of payment or 30 days if followed by written request by the mortgagor, passed the House on 4-19-2023. The bill is now pending in the Senate.

Washington: The governor signed House Bill 1420 on 4-13-2023 to address priority. The act clarifies that any mortgage or deed of trust shall have priority over all liens, mortgages, deeds of trust, and other encumbrances that have not been recorded before the recording of the mortgage or deed of trust to the extent of all sums secured by the mortgage or deed of trust regardless of when the same are disbursed or whether the disbursements are obligatory. The act is not intended to repeal any statute that expressly provides for special priority over mortgages or deeds of trust. The new law took effect immediately.

Other items and legislation of interest

Iowa: House Bill 553, which would create affirmative defenses for entities using cybersecurity programs against tort claims that allege a failure to implement reasonable security controls resulted in a data breach concerning personal information or restricted information, passed the Senate on 4-19-2023 and is awaiting delivery to the governor.

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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 website.