Legislative Developments 5-6-2022

Legislative Developments 5-6-2022

Article 9 and Lien-Related Legislation

Kansas: The Senate voted on 5/2/2022 to override the governor’s veto of SB 58 (2021), which would address fraudulent liens and UCC financing statements.  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.   The bill is now pending action in the House to override the veto.  

Minnesota: SB 4091, a large bill that addressed a wide range of state government issues, was amended and then passed by the House on 5/4/2022.  Among the amendments were provisions that address fraudulent UCC filing.  The fraudulent filing provisions were based on the hip-pocket amendments to UCC Article 9.  However, the Senate refused to concur in the House amendments so the bill is now in conference committee. 

Oklahoma:  The governor signed HB 3811 on 4/29/2022 to amend the law with respect to the central filing system for farm products under the federal Food Security Act. The new law authorizes distribution of the master list via internet download and eliminate fees for those who access the list via internet download.   The new law takes effect on 11/1/2022.

Other Uniform Laws Legislation

No developments to report this week.

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

Colorado: HB 1053, which would have adopted UCC Article 12 but was amended to simply instruct the commissioner of agriculture to create and deploy an online program that educates agricultural producers about blockchain technology, passed the Senate on 5/5/2022.  The bill is now pending delivery to the governor.

Connecticut:  SB 99, which would establish a working group to examine and make recommendations regarding whether to adopt the Revised Uniform Law on Notarial Acts, passed the Senate on 5/2/2022 and is now pending in the House.  

Hawaii:  SB 2695, which would establish a blockchain and cryptocurrency task force, passed out of conference committee on 5/3/2022 and is pending delivery to the governor.  If enacted, the task force will review the scope of blockchain and cryptocurrency across the country and then report any findings, recommendations and proposed legislation to the legislature. 

Iowa: HB 2443, which would provide that a record or signature shall not be denied legal effect because it is created or stored by means of distributed ledger technology or smart contract, passed the Senate on 5/3/2022. The bill provides in a new code section that the ownership of the secure information remains with the person who provided the signature, not the distributed ledger technology owner, and repeals a similar provision.  The bill is pending delivery to the governor.

Louisiana:  House Concurrent Resolution 103 was introduced on 5/3/2022 to direct the Cash Management Review Board to meet, establish, and function as the Louisiana Digital Assets Working Group to research, report, and make recommendations relative to the use of digital assets in this state and submit its findings to the state treasurer.  The bill was assigned to the House Appropriations Committee.

Louisiana:  House Concurrent Resolution 104 was introduced on 5/5/2022 to direct the Department of Revenue to study the feasibility of accepting virtual currency as a form of payment of taxes, licenses, fees, penalties, and interest.  Committee assignment is pending.

New Hampshire:  HB 1503, which would exempt a developer, seller, or facilitator of the exchange of an open blockchain token from certain securities laws, passed the Senate with amendments on 5/5/2022 and was returned to the House for concurrence. The bill also includes House amendments to adopt UCC Article 12; Controllable Electronic Records, which has been drafted by Joint Committee on the UCC and Emerging Technologies of the ULC to govern controllable electronic records. 

United States:  Senate Bill 4109 was introduced on 4/28/2022 to authorize the development of a national strategy for the research and development of distributed ledger technologies and their applications, to authorize awards to support research on distributed ledger technologies and their applications, and to authorize an applied research project on distributed ledger technologies in commerce. The bill was assigned to the Senate Commerce, Science and Transportation Committee.

Business Organization Legislation

No developments to report this week.    

Notary Legislation

Arizona:  HB 2645, which was enacted and is referenced in the Article 9 and Lien-Related Legislation Section above, also includes provisions for notice to the secretary of state following a change of a notary public’s mailing, business or home address and that specify a notary public’s obligations following the loss, theft or compromise of a notary’s official journal or stamping device.  A notary public that fails to report as required could be subject to fines.  The new law also establishes a presumption when identity of a party to a notarized document is at issue and the official journal is lost, stolen or compromised.    

South Carolina: House Bill 5338 was introduced on 5/3/2022 to approve regulations promulgated by the secretary of state regarding electronic notarization, including the procedures and requirements for a person to become an electronic notary.  The bill appears similar to SB 1297, which was introduced last week.  The House bill is pending committee assignment.

Real-Estate-Recording-Related Legislation

New York:  AB 4277 (2021), which would require notaries public to maintain certain information after performing a notarial act on a document of conveyance, passed the Assembly on 5/4/2022 and is pending in the Senate.  

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.