S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  7244--A
     Cal. No. 1094
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               May 19, 2023
                                ___________
 
 Introduced  by Sen. HOYLMAN-SIGAL -- read twice and ordered printed, and
   when printed to be committed to the Committee on Judiciary  --  recom-
   mitted to the Committee on Judiciary in accordance with Senate Rule 6,
   sec.  8  --  reported  favorably from said committee, ordered to first
   report, amended on first  report,  ordered  to  a  second  report  and
   ordered reprinted, retaining its place in the order of second report
 
 AN ACT to amend the uniform commercial code, in relation to controllable
   electronic records
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraphs 10, 15, 21, 24, 27, 36 and 37 of subsection  (b)
 of  section  1--201  of the uniform commercial code, as added by chapter
 505 of the laws of 2014, are amended and a new paragraph 16-a  is  added
 to read as follows:
   (10)  "Conspicuous",  with  reference  to  a  term,  means so written,
 displayed, or presented that, BASED  ON  THE  TOTALITY  OF  THE  CIRCUM-
 STANCES,  a  reasonable  person  against which it is to operate ought to
 have noticed it. Whether a term is "conspicuous" or not  is  a  decision
 for the court.
   (15) "Delivery", with respect to an electronic document of title means
 voluntary  transfer  of  control  and  with  respect to an instrument, a
 tangible document of title, or  AN  AUTHORITATIVE  TANGIBLE  COPY  OF  A
 RECORD EVIDENCING chattel paper, means voluntary transfer of possession.
   (16-A)  "ELECTRONIC"  MEANS  RELATING TO TECHNOLOGY HAVING ELECTRICAL,
 DIGITAL, MAGNETIC, WIRELESS, OPTICAL, ELECTROMAGNETIC, OR SIMILAR  CAPA-
 BILITIES.
   (21) "Holder" means:
   (A)  the person in possession of a negotiable instrument that is paya-
 ble either to bearer or to an identified person that is  the  person  in
 possession; or
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11556-02-4
              

 S. 7244--A                          2
 
   (B)  the  person  in  possession  of a negotiable tangible document of
 title if the goods are deliverable either to bearer or to the  order  of
 the person in possession; or
   (C)  the  person in control, OTHER THAN PURSUANT TO SECTION 7--106(G),
 of a negotiable electronic document of title.
   (24) "Money" means a medium of exchange THAT IS  currently  authorized
 or  adopted  by  a  domestic  or foreign government. The term includes a
 monetary unit of account established by an  intergovernmental  organiza-
 tion  or  by agreement between two or more countries.  THE TERM DOES NOT
 INCLUDE AN ELECTRONIC RECORD THAT IS A MEDIUM OF EXCHANGE  RECORDED  AND
 TRANSFERABLE  IN  A  SYSTEM  THAT EXISTED AND OPERATED FOR THE MEDIUM OF
 EXCHANGE BEFORE THE MEDIUM OF EXCHANGE WAS AUTHORIZED OR ADOPTED BY  THE
 GOVERNMENT.
   (27)  "Person"  means  an  individual,  corporation,  business  trust,
 estate, trust,  partnership,  limited  liability  company,  association,
 joint venture, government, governmental subdivision, agency, [or instru-
 mentality, public corporation,] or any other legal or commercial entity.
 THE  TERM INCLUDES A PROTECTED SERIES, HOWEVER DENOMINATED, OF AN ENTITY
 IF THE PROTECTED SERIES IS ESTABLISHED UNDER LAW  OTHER  THAN  THIS  ACT
 THAT  LIMITS, OR LIMITS IF CONDITIONS SPECIFIED UNDER THE LAW ARE SATIS-
 FIED, THE ABILITY OF A CREDITOR OF THE ENTITY OR OF ANY OTHER  PROTECTED
 SERIES  OF  THE  ENTITY  TO SATISFY A CLAIM FROM ASSETS OF THE PROTECTED
 SERIES.
   (36) "Send", in connection with a [writing,] record[,  or  notice]  OR
 NOTIFICATION means:
   (A) to deposit in the mail [or], deliver for transmission, OR TRANSMIT
 by any other usual means of communication with postage or cost of trans-
 mission  provided  for [and properly], addressed [and, in the case of an
 instrument, to an address specified thereon or otherwise agreed,  or  if
 there be none] to any address reasonable under the circumstances; or
   (B)  [in  any  other  way]  to  cause THE RECORD OR NOTIFICATION to be
 received [any record or notice] within the time it would have  [arrived]
 BEEN RECEIVED if properly sent PURSUANT TO SUBPARAGRAPH (A).
   (37)  ["Signed"  includes  using  any  symbol executed or adopted with
 present intention to adopt or accept  a  writing.]  "SIGN"  MEANS,  WITH
 PRESENT INTENT TO AUTHENTICATE OR ADOPT A RECORD:
   (A) EXECUTE OR ADOPT A TANGIBLE SYMBOL; OR
   (B)  ATTACH  TO  OR  LOGICALLY ASSOCIATE WITH THE RECORD AN ELECTRONIC
 SYMBOL, SOUND, OR PROCESS.
   "SIGNED, "SIGNING", AND "SIGNATURE" HAVE CORRESPONDING MEANINGS.
   § 2. Section 1--204 of the uniform commercial code, as added by  chap-
 ter 505 of the laws of 2014, is amended to read as follows:
 Section 1--204. Value.
   Except as otherwise provided in articles 3, 4, [and] 5, AND 12 OF THIS
 ACT a person gives value for rights if the person acquires them:
   (a)  in  return  for  a binding commitment to extend credit or for the
 extension of immediately available credit, whether or not drawn upon and
 whether or not a charge-back is provided for in the event  of  difficul-
 ties in collection;
   (b)  as security for, or in total or partial satisfaction of, a preex-
 isting claim;
   (c) by accepting delivery under a preexisting contract  for  purchase;
 or
   (d)  in  return  for  any consideration sufficient to support a simple
 contract.
 S. 7244--A                          3

   § 3. Subsection (c) of section 1--301 of the uniform commercial  code,
 as  added  by  chapter  505  of  the laws of 2014, is amended to read as
 follows:
   (c)  If  one  of  the  following  provisions of this act specifies the
 applicable law, that provision  governs  and  a  contrary  agreement  is
 effective only to the extent permitted by the law so specified:
   (1) Section 2--402;
   (2) Sections 2-A--105 and 2-A--106;
   (3) Section 4--102;
   (4) Section 4-A--507;
   (5) Section 5--116;
   (6) Section 8--110; [and]
   (7) Sections 9--301 through 9--307; AND
   (8) SECTION 12--107.
   §  4. Section 1--306 of the uniform commercial code, as added by chap-
 ter 505 of the laws of 2014, is amended to read as follows:
 Section 1--306. Waiver or Renunciation of Claim or Right After Breach.
   A claim or right arising out of an alleged breach may be discharged in
 whole or in part without consideration by  agreement  of  the  aggrieved
 party in [an authenticated] A SIGNED record.
   §  5. Section 2--102 of the uniform commercial code is amended to read
 as follows:
 Section 2--102. Scope; Certain Security and Other Transactions  Excluded
                   From This Article.
   (1)  Unless  the context otherwise requires, AND EXCEPT AS PROVIDED IN
 SUBSECTION (3), this Article applies to transactions in goods[; it  does
 not  apply  to any transaction which although in the form of an uncondi-
 tional contract to sell or present sale is intended to operate only as a
 security transaction nor does this Article impair or repeal any  statute
 regulating  sales  to  consumers,  farmers or other specified classes of
 buyers], IT APPLIES TO THE EXTENT PROVIDED IN SUBSECTION (2).
   (2) IN A HYBRID TRANSACTION:
   (A)  IF  THE  SALE-OF-GOODS  ASPECTS  DO  NOT  PREDOMINATE,  ONLY  THE
 PROVISIONS  OF  THIS ARTICLE WHICH RELATE PRIMARILY TO THE SALE-OF-GOODS
 ASPECTS OF THE TRANSACTION APPLY, AND THE PROVISIONS THAT RELATE  PRIMA-
 RILY TO THE TRANSACTION AS A WHOLE DO NOT APPLY.
   (B)  IF THE SALE-OF-GOODS ASPECTS PREDOMINATE, THIS ARTICLE APPLIES TO
 THE TRANSACTION BUT DOES NOT PRECLUDE APPLICATION IN APPROPRIATE CIRCUM-
 STANCES OF OTHER LAW TO ASPECTS OF THE TRANSACTION WHICH DO  NOT  RELATE
 TO THE SALE OF GOODS.
   (3) THIS ARTICLE DOES NOT:
   (A)  APPLY TO A TRANSACTION THAT, EVEN THOUGH IN THE FORM OF AN UNCON-
 DITIONAL CONTRACT TO SELL OR PRESENT SALE, OPERATES  ONLY  TO  CREATE  A
 SECURITY INTEREST; OR
   (B) IMPAIR OR REPEAL A STATUTE REGULATING SALES TO CONSUMERS, FARMERS,
 OR OTHER SPECIFIED CLASSES OF BUYERS.
   §  6. Section 2--106 of the uniform commercial code is amended to read
 as follows:
 Section 2--106. Definitions.  "Contract";  "Agreement";  "Contract   for
                   Sale";   "Sale";   "Present   Sale";  "Conforming"  to
                   Contract; "Termination"; "Cancellation"; "HYBRID TRAN-
                   SACTION".
   (1) In this Article, unless the context otherwise requires, "contract"
 and "agreement" are limited to those relating to the present  or  future
 sale of goods. "Contract for sale" includes both a present sale of goods
 and  a contract to sell goods at a future time. A "sale" consists in the
 S. 7244--A                          4
 
 passing of title from the seller to  the  buyer  for  a  price  (Section
 2--401).  A  "present  sale"  means  a sale which is accomplished by the
 making of the contract.
   (2) Goods or conduct including any part of a performance are "conform-
 ing"  or  conform  to  the contract when they are in accordance with the
 obligations under the contract.
   (3) "Termination" occurs when either party pursuant to a power created
 by agreement or law puts an end to the contract otherwise than  for  its
 breach.  On  "termination"  all obligations which are still executory on
 both sides are discharged  but  any  right  based  on  prior  breach  or
 performance survives.
   (4)  "Cancellation"  occurs  when  either  party  puts  an  end to the
 contract for breach by the other and its effect is the same as  that  of
 "termination"  except  that the cancelling party also retains any remedy
 for breach of the whole contract or any unperformed balance.
   (5) "HYBRID TRANSACTION" MEANS A SINGLE TRANSACTION INVOLVING  A  SALE
 OF GOODS AND:
   (A) THE PROVISION OF SERVICES;
   (B) A LEASE OF OTHER GOODS; OR
   (C) A SALE, LEASE, OR LICENSE OF PROPERTY OTHER THAN GOODS.
   §  7.  Subsections 1 and 2 of section 2--201 of the uniform commercial
 code are amended to read as follows:
   (1) Except as otherwise provided in this section a  contract  for  the
 sale of goods for the price of $500 or more is not enforceable by way of
 action  or defense unless there is [some writing] A RECORD sufficient to
 indicate that a contract for sale has been made between the parties  and
 signed  by  the party against whom enforcement is sought or by [his] THE
 PARTY'S authorized agent  or  broker.  A  writing  is  not  insufficient
 because  it  omits  or  incorrectly  states  a  term agreed upon but the
 contract is not enforceable under this [paragraph] SUBSECTION beyond the
 quantity of goods shown in [such writing] THE RECORD.
   (2) Between merchants if within a reasonable time a  [writing]  RECORD
 in  confirmation  of  the  contract and sufficient against the sender is
 received and the party receiving it has reason to know its contents,  it
 satisfies  the  requirements  of subsection (1) against [such] THE party
 unless written notice IN A RECORD of objection to its contents is  given
 within ten days after it is received.
   §  8.  Section  2--202  of  the uniform commercial code, as amended by
 chapter 505 of the laws of 2014, is amended to read as follows:
 Section 2--202. Final Written Expression: Parol or Extrinsic Evidence.
   Terms with respect to which the confirmatory memoranda of the  parties
 agree or which are otherwise set forth in a [writing] RECORD intended by
 the  parties  as  a  final expression of their agreement with respect to
 such terms as are included therein may not be contradicted  by  evidence
 of any prior agreement or of a contemporaneous oral agreement but may be
 explained or supplemented
   (a)  by  course  of  performance, course of dealing, or usage of trade
 (Section 1--303); and
   (b) by evidence of consistent additional terms unless the court  finds
 the [writing] RECORD to have been intended also as a complete and exclu-
 sive statement of the terms of the agreement.
   §  9. Section 2--203 of the uniform commercial code is amended to read
 as follows:
 Section 2--203. Seals Inoperative.
   The affixing of a seal to a [writing] RECORD evidencing a contract for
 sale or an offer to buy or sell goods does not constitute the  [writing]
 S. 7244--A                          5
 
 RECORD  a  sealed  instrument and the law with respect to sealed instru-
 ments does not apply to such a contract or offer.
   § 10. Section 2--205 of the uniform commercial code is amended to read
 as follows:
 Section 2--205. Firm Offers.
   An  offer  by  a  merchant  to buy or sell goods in a signed [writing]
 RECORD which by its terms gives assurance that it will be held  open  is
 not  revocable,  for lack of consideration, during the time stated or if
 no time is stated for a reasonable time, but in no event may such period
 of irrevocability exceed three months; but any such term of assurance on
 a form supplied by the offeree must be separately signed by the offeror.
   § 11. Subsection 2 of section 2--209 of the uniform commercial code is
 amended to read as follows:
   (2) A signed  agreement  which  excludes  modification  or  rescission
 except  by  a  signed writing OR OTHER SIGNED RECORD cannot be otherwise
 modified or rescinded, but except as between merchants such  a  require-
 ment on a form supplied by the merchant must be separately signed by the
 other party.
   §  12.  Section  2-A-102  of  the uniform commercial code, as added by
 chapter 114 of the laws of 1994, is amended to read as follows:
 Section 2-A-102. Scope.
   (1) This Article applies to any transaction, regardless of form,  that
 creates  a  lease  AND, IN THE CASE OF A HYBRID LEASE, IT APPLIES TO THE
 EXTENT PROVIDED IN SUBSECTION (2).
   (2) IN A HYBRID LEASE:
   (A) IF THE LEASE-OF-GOODS ASPECTS DO NOT PREDOMINATE:
   (I) ONLY THE PROVISIONS OF THIS ARTICLE WHICH RELATE PRIMARILY TO  THE
 LEASE-OF-GOODS ASPECTS OF THE TRANSACTION APPLY, AND THE PROVISIONS THAT
 RELATE PRIMARILY TO THE TRANSACTION AS A WHOLE DO NOT APPLY;
   (II) SECTION 2-A-209 APPLIES IF THE LEASE IS A FINANCE LEASE; AND
   (III)  SECTION  2-A-407  APPLIES  TO  THE  PROMISES OF THE LESSEE IN A
 FINANCE LEASE TO THE EXTENT THE PROMISES ARE CONSIDERATION FOR THE RIGHT
 TO POSSESSION AND USE OF THE LEASED GOODS; AND
   (B) IF THE LEASE-OF-GOODS ASPECTS PREDOMINATE, THIS ARTICLE APPLIES TO
 THE TRANSACTION,  BUT  DOES  NOT  PRECLUDE  APPLICATION  IN  APPROPRIATE
 CIRCUMSTANCES  OF  OTHER LAW TO ASPECTS OF THE LEASE WHICH DO NOT RELATE
 TO THE LEASE OF GOODS.
   § 13. Subsection 1 of section 2-A-103 of the uniform  commercial  code
 is amended by adding a new paragraph (h-1) to read as follows:
   (H-1) "HYBRID  LEASE"  MEANS A SINGLE TRANSACTION INVOLVING A LEASE OF
 GOODS AND:
   (I) THE PROVISION OF SERVICES;
   (II) A SALE OF OTHER GOODS; OR
   (III) A SALE, LEASE, OR LICENSE OF PROPERTY OTHER THAN GOODS.
   § 14. Section 2-A-107 of the uniform  commercial  code,  as  added  by
 chapter 114 of the laws of 1994, is amended to read as follows:
 Section 2-A-107. Waiver or Renunciation of Claim or Right After Default.
   Any  claim  or  right  arising  out of an alleged default or breach of
 warranty may be discharged in whole or in part without consideration  by
 a [written] waiver or renunciation IN A signed [and] RECORD delivered by
 the aggrieved party.
   § 15. Subsections 1, 3 and 5 of section 2-A-201 of the uniform commer-
 cial  code,  as added by chapter 114 of the laws of 1994, are amended to
 read as follows:
   (1) A lease contract is not enforceable by way of  action  or  defense
 unless:
 S. 7244--A                          6
 
        (a) the  total  payments  to  be  made  under the lease contract,
            excluding payments for options to renew or buy, are less than
            $1,000; or
        (b) there is a [writing] RECORD, signed by the party against whom
            enforcement  is  sought  or by that party's authorized agent,
            sufficient to indicate that a lease contract  has  been  made
            between  the parties and to describe the goods leased and the
            lease term.
   (3) A [writing] RECORD is not insufficient because it omits or  incor-
 rectly states a term agreed upon, but the lease contract is not enforce-
 able  under  subsection (1)(b) beyond the lease term and the quantity of
 goods shown in the [writing] RECORD.
   (5) The lease term under a lease contract referred  to  in  subsection
 (4) is:
        (a) if  there  is  a [writing] RECORD signed by the party against
            whom enforcement is sought  or  by  that  party's  authorized
            agent specifying the lease term, the term so specified;
        (b) if  the  party  against  whom enforcement is sought admits in
            that party's pleading, testimony, or  otherwise  in  court  a
            lease term, the term so admitted; or
        (c) a reasonable lease term.
   §  16.  Section  2-A-202  of  the uniform commercial code, as added by
 chapter 114 of the laws of 1994, is amended to read as follows:
 Section 2-A-202. Final Written Expression: Parol or Extrinsic Evidence.
   Terms with respect to which the confirmatory memoranda of the  parties
 agree or which are otherwise set forth in a [writing] RECORD intended by
 the  parties  as  a  final expression of their agreement with respect to
 such terms as are included therein may not be contradicted  by  evidence
 of any prior agreement or of a contemporaneous oral agreement but may be
 explained or supplemented:
        (a) by  course  of  dealing  or  usage  of  trade or by course of
            performance; and
        (b) by evidence of consistent additional terms unless  the  court
            finds  the  [writing]  RECORD to have been intended also as a
            complete and exclusive statement of the terms of  the  agree-
            ment.
   §  17.  Section  2-A-203  of  the uniform commercial code, as added by
 chapter 114 of the laws of 1994, is amended to read as follows:
 Section 2-A-203. Seals Inoperative.
   The affixing of a seal  to  a  [writing]  RECORD  evidencing  a  lease
 contract  or an offer to enter into a lease contract does not render the
 [writing] RECORD a sealed instrument and the law with respect to  sealed
 instruments does not apply to the lease contract or offer.
   §  18.  Section  2-A-205  of  the uniform commercial code, as added by
 chapter 114 of the laws of 1994, is amended to read as follows:
 Section 2-A-205. Firm Offers.
   An offer by a merchant to lease goods to or from another person  in  a
 signed  [writing]  RECORD  that  by its terms gives assurance it will be
 held open is not revocable, for lack of consideration, during  the  time
 stated  or, if no time is stated, for a reasonable time, but in no event
 may the period of irrevocability exceed three months. Any such  term  of
 assurance on a form supplied by the offeree must be separately signed by
 the offeror.
   §  19. Subsection 2 of section 2-A-208 of the uniform commercial code,
 as added by chapter 114 of the laws of  1994,  is  amended  to  read  as
 follows:
 S. 7244--A                          7
 
   (2)  A signed lease agreement that excludes modification or rescission
 except by a signed [writing] RECORD may not  be  otherwise  modified  or
 rescinded,  but,  except  as  between merchants, such a requirement on a
 form supplied by a merchant must  be  separately  signed  by  the  other
 party.
   §  20.  Paragraph (a) of subsection 1 of section 3--102 of the uniform
 commercial code is amended to read as follows:
        (a) "Issue" means:
              (I) the first delivery of an instrument to a  holder  or  a
            remitter; OR
              (II)  IF AGREED BY THE PAYEE, THE FIRST TRANSMISSION BY THE
            DRAWER TO THE PAYEE OF AN IMAGE OF AN  ITEM  AND  INFORMATION
            DERIVED  FROM  THE  ITEM  THAT ENABLES THE DEPOSITARY BANK TO
            COLLECT THE ITEM BY TRANSFERRING OR PRESENTING UNDER  FEDERAL
            LAW AN ELECTRONIC CHECK.
   §  21.  Paragraph (g) of subsection 1 of section 3--112 of the uniform
 commercial code is amended and two new paragraphs (h) and (i) are  added
 to read as follows:
        (g) a  statement  in  a  draft  drawn  in a set of parts (Section
            3--801) to the effect that the order is effective only if  no
            other part has been honored[.]; OR
        (H)  A  TERM  THAT  SPECIFIES THE LAW THAT GOVERNS THE PROMISE OR
            ORDER; OR
        (I) AN UNDERTAKING TO RESOLVE IN  A  SPECIFIED  FORUM  A  DISPUTE
            CONCERNING THE PROMISE OR ORDER.
   §  22.  Section  3--605  of  the uniform commercial code is amended by
 adding a new subsection 3 to read as follows:
   (3) THE OBLIGATION OF A PARTY TO PAY A CHECK IS NOT DISCHARGED  SOLELY
 BY DESTRUCTION OF THE CHECK IN CONNECTION WITH A PROCESS IN WHICH INFOR-
 MATION  IS  EXTRACTED  FROM  THE CHECK AND AN IMAGE OF THE CHECK IS MADE
 AND,  SUBSEQUENTLY,  THE  INFORMATION  AND  IMAGE  ARE  TRANSMITTED  FOR
 PAYMENT.
   §  23. Paragraph (a) of subsection 1 of section 4-A-103 of the uniform
 commercial code, as amended by chapter 208  of  the  laws  of  1990,  is
 amended to read as follows:
        (a) "Payment order" means an instruction of a sender to a receiv-
            ing  bank, transmitted orally[, electronically,] or in [writ-
            ing] A RECORD, to pay, or to cause another  bank  to  pay,  a
            fixed or determinable amount of money to a beneficiary if:
            (i) the  instruction does not state a condition to payment to
                the beneficiary other than time of payment,
           (ii) the receiving bank is to be  reimbursed  by  debiting  an
                account  of,  or  otherwise  receiving  payment from, the
                sender, and
          (iii) the instruction is transmitted by the sender directly  to
                the receiving bank or to an agent, funds transfer system,
                or  communication system for transmittal to the receiving
                bank.
   § 24. Section 4-A-201 of the uniform  commercial  code,  as  added  by
 chapter 208 of the laws of 1990, is amended to read as follows:
 Section 4-A-201. Security Procedure.
   "Security  procedure"  means a procedure established by agreement of a
 customer and a receiving bank for the purpose of (1)  verifying  that  a
 payment order or communication amending or cancelling a payment order is
 that  of the customer, or (2) detecting error in the transmission or the
 content of the payment order or communication. A security procedure  may
 S. 7244--A                          8
 
 IMPOSE  AN  OBLIGATION  ON  THE  RECEIVING  BANK OR THE CUSTOMER AND MAY
 require the use of algorithms or other codes,  identifying  words  [or],
 numbers,  SYMBOLS,  SOUNDS, BIOMETRICS, encryption, callback procedures,
 or  similar  security  devices.   Comparison of a signature on a payment
 order or communication with an  authorized  specimen  signature  of  the
 customer  OR  REQUIRING  A  PAYMENT  ORDER TO BE SENT FROM A KNOWN EMAIL
 ADDRESS, IP ADDRESS, OR TELEPHONE NUMBER is not  by  itself  a  security
 procedure.
   § 25. Subsections 2 and 3 of section 4-A-202 of the uniform commercial
 code,  as  added by chapter 208 of the laws of 1990, are amended to read
 as follows:
   (2) If a bank and its customer have agreed that  the  authenticity  of
 payment  orders issued to the bank in the name of the customer as sender
 will be verified pursuant to  a  security  procedure,  a  payment  order
 received  by the receiving bank is effective as the order of the custom-
 er, whether or not authorized,  if  (a)  the  security  procedure  is  a
 commercially  reasonable  method of providing security against unauthor-
 ized payment orders, and (b)  the  bank  proves  that  it  accepted  the
 payment  order  in  good  faith  and in compliance with the BANK'S OBLI-
 GATIONS UNDER THE security procedure  and  any  [written]  agreement  or
 instruction  of the customer, EVIDENCED BY A RECORD, restricting accept-
 ance of payment orders issued in the name of the customer. The  bank  is
 not  required  to  follow  an  instruction  that violates [a written] AN
 agreement with the customer, EVIDENCED BY A RECORD, or notice  of  which
 is  not  received at a time and in a manner affording the bank a reason-
 able opportunity to act on it before the payment order is accepted.
   (3) Commercial reasonableness of a security procedure is a question of
 law to be determined by considering the wishes of the customer expressed
 to the bank, the circumstances  of  the  customer  known  to  the  bank,
 including  the  size,  type,  and  frequency  of payment orders normally
 issued by the customer to  the  bank,  alternative  security  procedures
 offered  to  the  customer,  and  security  procedures in general use by
 customers and receiving banks similarly situated. A  security  procedure
 is  deemed  to  be commercially reasonable if (a) the security procedure
 was chosen by the customer after the  bank  offered,  and  the  customer
 refused,  a security procedure that was commercially reasonable for that
 customer, and (b) the customer expressly agreed in [writing] A RECORD to
 be bound by any payment order, whether or not authorized, issued in  its
 name  and accepted by the bank in compliance with the BANK'S OBLIGATIONS
 UNDER THE security procedure chosen by the customer.
   § 26. Subsection 1 of section 4-A-203 of the uniform commercial  code,
 as  added  by  chapter  208  of  the laws of 1990, is amended to read as
 follows:
   (1) If an accepted payment order  is  not,  under  subsection  (1)  of
 Section 4-A-202, an authorized order of a customer identified as sender,
 but  is effective as an order of the customer pursuant to subsection (2)
 of Section 4-A-202, the following rules apply:
        (a) By express [written] agreement EVIDENCED  BY  A  RECORD,  the
            receiving  bank  may limit the extent to which it is entitled
            to enforce or retain payment of the payment order.
        (b) The receiving bank is  not  entitled  to  enforce  or  retain
            payment  of the payment order if the customer proves that the
            order was not caused, directly or indirectly, by a person (i)
            entrusted at any time with duties to  act  for  the  customer
            with  respect to payment orders or the security procedure, or
            (ii) who obtained access to transmitting  facilities  of  the
 S. 7244--A                          9
 
            customer  or  who  obtained,  from a source controlled by the
            customer and without authority of the receiving bank,  infor-
            mation facilitating breach of the security procedure, regard-
            less  of  how  the  information  was  obtained or whether the
            customer was at  fault.    Information  includes  any  access
            device, computer software, or the like.
   §  27. Subsection 3 of section 4-A-207 of the uniform commercial code,
 as added by chapter 208 of the laws of  1990,  is  amended  to  read  as
 follows:
   (3)  If  (i)  a payment order described in subsection (2) is accepted,
 (ii) the originator's payment order described the beneficiary inconsist-
 ently by name and number, and (iii)  the  beneficiary's  bank  pays  the
 person  identified by number as permitted by paragraph (a) of subsection
 (2), the following rules apply:
        (a) If the originator is a bank, the originator is obliged to pay
            its order.
        (b) If the originator is not a bank and proves  that  the  person
            identified by number was not entitled to receive payment from
            the  originator,  the  originator  is  not obliged to pay its
            order unless the originator's bank proves that  the  origina-
            tor,  before acceptance of the originator's order, had notice
            that payment of a payment  order  issued  by  the  originator
            might  be  made  by the beneficiary's bank on the basis of an
            identifying or bank account number even if  it  identifies  a
            person  different from the named beneficiary. Proof of notice
            may be made by any admissible evidence. The originator's bank
            satisfies the burden of proof if it proves that the  origina-
            tor,  before  the payment order was accepted, signed a [writ-
            ing] RECORD stating  the  information  to  which  the  notice
            relates.
   §  28. Paragraph (b) of subsection 2 of section 4-A-208 of the uniform
 commercial code, as added by chapter 208 of the laws of 1990, is amended
 to read as follows:
        (b) If the sender is not a bank and  the  receiving  bank  proves
            that  the  sender, before the payment order was accepted, had
            notice that the receiving bank might rely on  the  number  as
            the  proper  identification  of the intermediary or benefici-
            ary's bank even if it identifies a person different from  the
            bank  identified  by  name, the rights and obligations of the
            sender and the receiving bank are governed by  paragraph  (a)
            of subsection (2), as though the sender were a bank. Proof of
            notice  may be made by any admissible evidence. The receiving
            bank satisfies the burden of proof  if  it  proves  that  the
            sender,  before  the  payment  order  was  accepted, signed a
            [writing] RECORD stating the information to which the  notice
            relates.
   §  29. Subsection 1 of section 4-A-210 of the uniform commercial code,
 as added by chapter 208 of the laws of  1990,  is  amended  to  read  as
 follows:
   (1)  A  payment order is rejected by the receiving bank by a notice of
 rejection transmitted to the  sender  orally,  [electronically,]  or  in
 [writing]  A  RECORD.  A notice of rejection need not use any particular
 words and is sufficient if it  indicates  that  the  receiving  bank  is
 rejecting  the  order or will not execute or pay the order. Rejection is
 effective when the notice is given if transmission is by a means that is
 reasonable in the circumstances. If notice of rejection is  given  by  a
 S. 7244--A                         10
 
 means  that is not reasonable, rejection is effective when the notice is
 received. If an agreement of the sender and receiving  bank  establishes
 the  means to be used to reject a payment order, (i) any means complying
 with the agreement is reasonable and (ii) any means not complying is not
 reasonable unless no significant delay in receipt of the notice resulted
 from the use of the noncomplying means.
   §  30. Subsection 1 of section 4-A-211 of the uniform commercial code,
 as added by chapter 208 of the laws of  1990,  is  amended  to  read  as
 follows:
   (1)  A  communication  of  the sender of a payment order cancelling or
 amending the order may be transmitted to  the  receiving  bank  orally[,
 electronically,] or in [writing] A RECORD. If a security procedure is in
 effect  between  the sender and the receiving bank, the communication is
 not effective to cancel or amend the order unless the  communication  is
 verified  pursuant  to  the security procedure or the bank agrees to the
 cancellation or amendment.
   § 31. Subsections 3 and 4 of section 4-A-305 of the uniform commercial
 code, as added by chapter 208 of the laws of 1990, are amended  to  read
 as follows:
   (3)  In addition to the amounts payable under subsections (1) and (2),
 damages, including consequential damages, are recoverable to the  extent
 provided  in  an  express  [written]  agreement  of  the receiving bank,
 EVIDENCED BY A RECORD.
   (4) If a receiving bank fails  to  execute  a  payment  order  it  was
 obliged by express agreement to execute, the receiving bank is liable to
 the  sender  for  its  expenses  in  the  transaction and for incidental
 expenses and interest losses resulting  from  the  failure  to  execute.
 Additional  damages, including consequential damages, are recoverable to
 the extent provided in an express [written] agreement of  the  receiving
 bank, EVIDENCED BY A RECORD, but are not otherwise recoverable.
   § 32. Section 5--104 of the uniform commercial code, as added by chap-
 ter 471 of the laws of 2000, is amended to read as follows:
 Section 5--104. Formal requirements.
   A  letter  of  credit,  confirmation,  advice, transfer, amendment, or
 cancellation may be issued in any form that is a SIGNED record  [and  is
 authenticated:
   (a) by a signature, or
   (b) in  accordance  with  the agreement of the parties or the standard
 practice referred to in subsection (e) of section 5--108].
   § 33. Section 5--116 of the uniform commercial code, as added by chap-
 ter 471 of the laws of 2000, is amended to read as follows:
 Section 5--116. Choice of law and forum.
   (a) The liability of an  issuer,  nominated  person,  or  adviser  for
 action  or omission is governed by the law of the jurisdiction chosen by
 an agreement in the form of a record signed [or otherwise authenticated]
 by the affected parties [in the manner provided in section 5--104] or by
 a provision in the person's letter of  credit,  confirmation,  or  other
 undertaking.  The  jurisdiction  whose  law  is chosen need not bear any
 relation to the transaction.
   (b) Unless subsection (a) of this section applies, the liability of an
 issuer, nominated person, or adviser for action or omission is  governed
 by  the  law  of  the  jurisdiction  in which the person is located. The
 person is considered to be located  at  the  address  indicated  in  the
 person's  undertaking. If more than one address is indicated, the person
 is considered to be located at  the  address  from  which  the  person's
 undertaking  was issued. For the purpose of jurisdiction, choice of law,
 S. 7244--A                         11
 
 and recognition of interbranch letters of credit, but not enforcement of
 a judgement, all branches of a bank are  considered  separate  juridical
 entities  and  a bank is considered to be located at the place where its
 relevant branch is considered to be located under [this] subsection (C).
   (c) A  BRANCH  OF  A  BANK  IS CONSIDERED TO BE LOCATED AT THE ADDRESS
 INDICATED IN THE BRANCH'S UNDERTAKING.   IF MORE  THAN  ONE  ADDRESS  IS
 INDICATED,  THE  BRANCH  IS CONSIDERED TO BE LOCATED AT THE ADDRESS FROM
 WHICH THE UNDERTAKING WAS ISSUED.
   (D) Except as otherwise provided in this subsection, the liability  of
 an  issuer,  nominated  person,  or  adviser is governed by any rules of
 custom or practice, such as the uniform customs and practice  for  docu-
 mentary  credits,  to which the letter of credit, confirmation, or other
 undertaking is expressly made subject. If (1) this article would  govern
 the   liability  of  an  issuer,  nominated  person,  or  adviser  under
 subsection (a) or (b) of  this  section,  (2) the  relevant  undertaking
 incorporates  rules  of  custom  or  practice, and (3) there is conflict
 between this article and those rules as  applied  to  that  undertaking,
 those rules govern except to the extent of any conflict with the nonvar-
 iable provisions specified in subsection (c) of section 5--103.
   [(d)]  (E) If there is conflict between this article and article 3, 4,
 4-A or 9, this article governs.
   [(e)] (F) The forum for settling disputes arising out of an  undertak-
 ing within this article may be chosen in the manner and with the binding
 effect  that  governing  law may be chosen in accordance with subsection
 (a) of this section.
   § 34. Paragraph 11 of subsection (a) of section 7--102 of the  uniform
 commercial code, as added by chapter 505 of the laws of 2014, is amended
 to read as follows:
   (11)  ["Sign"  means,  with  present intent to authenticate or adopt a
 record:
   (A) to execute or adopt a tangible symbol; or
   (B) to attach to or logically associate with the record an  electronic
 sound, symbol, or process] RESERVED.
   § 35. Section 7--106 of the uniform commercial code, as added by chap-
 ter 505 of the laws of 2014, is amended to read as follows:
 Section 7--106. Control of Electronic Document of Title.
   (a)  A  person  has  control  of  an electronic document of title if a
 system employed for evidencing the transfer of interests  in  the  elec-
 tronic  document reliably establishes that person as the person to which
 the electronic document was issued or transferred.
   (b) A system satisfies subsection (a), and  a  person  [is  deemed  to
 have] HAS control of an electronic document of title, if the document is
 created, stored and [assigned] TRANSFERRED in [such] a manner that:
   (1)  a  single  authoritative  copy  of  the  document exists which is
 unique, identifiable, and, except as otherwise  provided  in  paragraphs
 (4), (5), and (6), unalterable;
   (2) the authoritative copy identifies the person asserting control as:
   (A) the person to which the document was issued; or
   (B)  if  the  authoritative  copy indicates that the document has been
 transferred, the person to which the document was most  recently  trans-
 ferred;
   (3)  the  authoritative  copy is communicated to and maintained by the
 person asserting control or its designated custodian;
   (4) copies or amendments that add or change an  identified  [assignee]
 TRANSFEREE  of  the authoritative copy can be made only with the consent
 of the person asserting control;
 S. 7244--A                         12
 
   (5) each copy of the authoritative copy and any  copy  of  a  copy  is
 readily identifiable as a copy that is not the authoritative copy; and
   (6) any amendment of the authoritative copy is readily identifiable as
 authorized or unauthorized.
   (C)  A SYSTEM SATISFIES SUBSECTION (A), AND A PERSON HAS CONTROL OF AN
 ELECTRONIC DOCUMENT OF TITLE, IF AN AUTHORITATIVE ELECTRONIC COPY OF THE
 DOCUMENT, A RECORD ATTACHED TO OR LOGICALLY ASSOCIATED  WITH  THE  ELEC-
 TRONIC COPY, OR A SYSTEM IN WHICH THE ELECTRONIC COPY IS RECORDED:
   (1)  ENABLES  THE  PERSON  READILY TO IDENTIFY EACH ELECTRONIC COPY AS
 EITHER AN AUTHORITATIVE COPY OR A NONAUTHORITATIVE COPY;
   (2) ENABLES THE PERSON READILY TO IDENTIFY ITSELF IN ANY WAY,  INCLUD-
 ING  BY  NAME, IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY, OFFICE, OR ACCOUNT
 NUMBER, AS THE PERSON TO WHICH EACH AUTHORITATIVE  ELECTRONIC  COPY  WAS
 ISSUED OR TRANSFERRED; AND
   (3) GIVES THE PERSON EXCLUSIVE POWER, SUBJECT TO SUBSECTION (D), TO:
   (A)  PREVENT  OTHERS  FROM ADDING OR CHANGING THE PERSON TO WHICH EACH
 AUTHORITATIVE ELECTRONIC COPY HAS BEEN ISSUED OR TRANSFERRED; AND
   (B) TRANSFER CONTROL OF EACH AUTHORITATIVE ELECTRONIC COPY.
   (D) SUBJECT TO SUBSECTION (E), A POWER IS EXCLUSIVE  UNDER  SUBSECTION
 (C) (3) (A) EVEN IF:
   (1)  THE  AUTHORITATIVE  ELECTRONIC  COPY,  A  RECORD  ATTACHED  TO OR
 LOGICALLY ASSOCIATED WITH THE AUTHORITATIVE ELECTRONIC COPY, OR A SYSTEM
 IN WHICH THE AUTHORITATIVE ELECTRONIC COPY IS RECORDED LIMITS THE USE OF
 THE DOCUMENT OF TITLE OR HAS A PROTOCOL THAT IS PROGRAMMED  TO  CAUSE  A
 CHANGE, INCLUDING A TRANSFER OR LOSS OF CONTROL; OR
   (2) THE POWER IS SHARED WITH ANOTHER PERSON.
   (E)  A  POWER  OF  A  PERSON  IS  NOT SHARED WITH ANOTHER PERSON UNDER
 SUBSECTION (D) (2) AND THE PERSON'S POWER IS NOT EXCLUSIVE IF:
   (1) THE PERSON CAN EXERCISE THE POWER ONLY IF THE POWER ALSO IS  EXER-
 CISED BY THE OTHER PERSON; AND
   (2) THE OTHER PERSON:
   (A)  CAN  EXERCISE  THE  POWER  WITHOUT  EXERCISE  OF THE POWER BY THE
 PERSON; OR
   (B) IS THE TRANSFEROR TO THE PERSON OF AN INTEREST IN THE DOCUMENT  OF
 TITLE.
   (F) IF A PERSON HAS THE POWERS SPECIFIED IN SUBSECTION (C) (3) (A) AND
 (B), THE POWERS ARE PRESUMED TO BE EXCLUSIVE.
   (G) A PERSON HAS CONTROL OF AN ELECTRONIC DOCUMENT OF TITLE IF ANOTHER
 PERSON,  OTHER  THAN  THE TRANSFEROR TO THE PERSON OF AN INTEREST IN THE
 DOCUMENT:
   (1) HAS CONTROL OF THE DOCUMENT AND ACKNOWLEDGES THAT IT  HAS  CONTROL
 ON BEHALF OF THE PERSON; OR
   (2)  OBTAINS CONTROL OF THE DOCUMENT AFTER HAVING ACKNOWLEDGED THAT IT
 WILL OBTAIN CONTROL OF THE DOCUMENT ON BEHALF OF THE PERSON.
   (H) A PERSON THAT HAS CONTROL UNDER THIS SECTION IS  NOT  REQUIRED  TO
 ACKNOWLEDGE THAT IT HAS CONTROL ON BEHALF OF ANOTHER PERSON.
   (I)  IF  A  PERSON  ACKNOWLEDGES THAT IT HAS OR WILL OBTAIN CONTROL ON
 BEHALF OF ANOTHER PERSON, UNLESS THE  PERSON  OTHERWISE  AGREES  OR  LAW
 OTHER THAN THIS ARTICLE OR ARTICLE 9 OTHERWISE PROVIDES, THE PERSON DOES
 NOT  OWE ANY DUTY TO THE OTHER PERSON AND IS NOT REQUIRED TO CONFIRM THE
 ACKNOWLEDGMENT TO ANY OTHER PERSON.
   § 36. Paragraph 6 of subsection (a) of section 8--102 of  the  uniform
 commercial code, as added by chapter 566 of the laws of 1997, is amended
 to read as follows:
        (6) "Communicate" means to:
              (i) send a signed [writing] RECORD; or
 S. 7244--A                         13
 
             (ii) transmit  information  by  any mechanism agreed upon by
                  the persons transmitting and receiving the information.
   § 37. Subsections (b) and (e) of section 8--102 of the uniform commer-
 cial  code,  subsection  (b) as added by chapter 566 of the laws of 1997
 and subsection (e) as added by chapter 84  of  the  laws  of  2001,  are
 amended to read as follows:
   (b) Other  definitions  applying  to  this Article and the sections in
 which they appear are:
       "Appropriate person".                     Section 8--107.
       "Control".                                Section 8--106.
       "CONTROLLABLE ACCOUNT".                   SECTION 9--102.
       "CONTROLLABLE ELECTRONIC RECORD".         SECTION 12--102.
       "CONTROLLABLE PAYMENT INTANGIBLE".        SECTION 9--102.
       "Delivery".                               Section 8--301.
       "Investment company security".            Section 8--103.
       "Issuer".                                 Section 8--201.
       "Overissue".                              Section 8--210.
       "Protected purchaser".                    Section 8--303.
       "Securities account".                     Section 8--501.
   (e) The following definitions in Article 9 apply to this article:
 Cooperative interest                    Section [9--102(a)(27-b)]
                                                  9--102(A)(27-D)
 Cooperative organization                Section [9--102(a)(27-c)]
                                                  9--102(A)(27-E)
 Cooperative record                      Section [9--102(a)(27-e)]
                                                  9--102(A)(27-G)
   § 38. Section 8--103 of the uniform  commercial  code  is  amended  by
 adding a new subsection (i) to read as follows:
   (I)   A  CONTROLLABLE  ACCOUNT,  CONTROLLABLE  ELECTRONIC  RECORD,  OR
 CONTROLLABLE PAYMENT INTANGIBLE IS NOT A FINANCIAL ASSET UNLESS  SECTION
 8--102(A)(9)(III) APPLIES.
   § 39. Subsection (d) of section 8--106 of the uniform commercial code,
 as  amended  by  chapter  84 of the laws of 2001, is amended and two new
 subsections (j) and (k) are added to read as follows:
   (d) A purchaser has "control" of a security entitlement if:
        (1) the purchaser becomes the entitlement holder;
        (2) the securities intermediary has agreed that  it  will  comply
            with  entitlement  orders originated by the purchaser without
            further consent by the entitlement holder; or
        (3) another person, OTHER THAN THE TRANSFEROR TO THE PURCHASER OF
            AN INTEREST IN THE SECURITY ENTITLEMENT:
        (A) has control of the security  entitlement  on  behalf  of  the
            purchaser or, having previously acquired control of the secu-
            rity  entitlement, acknowledges that it has control on behalf
            of the purchaser[.];
        (B) HAS CONTROL OF THE SECURITY ENTITLEMENT AND ACKNOWLEDGES THAT
            IT HAS CONTROL ON BEHALF OF THE PURCHASER; OR
        (C) OBTAINS CONTROL OF  THE  SECURITY  ENTITLEMENT  AFTER  HAVING
            ACKNOWLEDGED  THAT  IT  WILL  OBTAIN  CONTROL OF THE SECURITY
            ENTITLEMENT ON BEHALF OF THE PURCHASER.
   (J) A PERSON THAT HAS CONTROL UNDER THIS SECTION IS  NOT  REQUIRED  TO
 ACKNOWLEDGE THAT IT HAS CONTROL ON BEHALF OF A PURCHASER.
   (K)  IF  A  PERSON  ACKNOWLEDGES THAT IT HAS OR WILL OBTAIN CONTROL ON
 BEHALF OF A PURCHASER, UNLESS THE PERSON OTHERWISE AGREES OR  LAW  OTHER
 THAN  THIS  ARTICLE OR ARTICLE 9 OTHERWISE PROVIDES, THE PERSON DOES NOT
 S. 7244--A                         14

 OWE ANY DUTY TO THE  PURCHASER  AND  IS  NOT  REQUIRED  TO  CONFIRM  THE
 ACKNOWLEDGMENT TO ANY OTHER PERSON.
   §  40.  Section  8--110  of  the uniform commercial code is amended by
 adding a new subsection (g) to read as follows:
   (G) THE LOCAL LAW OF  THE  ISSUER'S  JURISDICTION  OR  THE  SECURITIES
 INTERMEDIARY'S JURISDICTION GOVERNS A MATTER OR TRANSACTION SPECIFIED IN
 SUBSECTION  (A)  OR (B)  EVEN IF THE MATTER OR TRANSACTION DOES NOT BEAR
 ANY RELATION TO THE JURISDICTION.
   § 41. Subsection (b) of section 8--303 of the uniform commercial code,
 as added by chapter 566 of the laws of  1997,  is  amended  to  read  as
 follows:
   (b) [In  addition  to  acquiring  the  rights  of  a  purchaser,  a] A
 protected purchaser also acquires its interest in the security  free  of
 any adverse claim.
   §  42.  Paragraphs 2, 3, 4, 7, 11, 27-a, 27-b, 27-c, 27-d, 27-e, 27-f,
 31, 42, 47, 61, 66, 66-a, 75 and 79 of subsection (a) of section  9--102
 of the uniform commercial code, as amended by chapter 505 of the laws of
 2014, are amended, and five new paragraphs 7-a, 7-b, 31-a, 54-a and 79-a
 are added to read as follows:
        (2) "Account",  except as used in "account for", means a right to
            payment of a monetary obligation, whether or  not  earned  by
            performance, (i) for property that has been or is to be sold,
            leased,  licensed,  assigned,  or otherwise disposed of, (ii)
            for services rendered or to be rendered, (iii) for  a  policy
            of  insurance  issued  or  to be issued, (iv) for a secondary
            obligation  incurred  or  to  be  incurred,  (v)  for  energy
            provided  or  to  be  provided, (vi) for the use or hire of a
            vessel under a charter or other contract, (vii)  arising  out
            of  the  use  of  a  credit  or  charge  card  or information
            contained on or for use with the card, or (viii) as  winnings
            in a lottery or other game of chance operated or sponsored by
            a  state, governmental unit of a State, or person licensed or
            authorized to operate the game by  a  State  or  governmental
            unit  of  a  State.  The  term includes health-care-insurance
            receivables. The term does not include (i) [rights to payment
            evidenced by] chattel paper [or an instrument], (ii)  commer-
            cial  tort  claims,  (iii) deposit  accounts, (iv) investment
            property, (v) letter-of-credit rights or letters  of  credit,
            or  (vi)  rights  to  payment  for money or funds advanced or
            sold, other than rights arising out of the use of a credit or
            charge card or information contained on or for use  with  the
            card.
        (3) "Account  debtor"  means  a  person  obligated on an account,
            chattel paper, or  general  intangible.  The  term  does  not
            include  persons  obligated  to  pay a negotiable instrument,
            even if the instrument [constitutes part of] EVIDENCES  chat-
            tel paper.
        (4) "Accounting",  except  as  used  in "accounting for", means a
            record:
            (A) [authenticated] SIGNED by a secured party;
            (B) indicating the aggregate unpaid secured obligations as of
                a date not more than 35 days earlier  or  35  days  later
                than the date of the record; and
            (C) identifying  the components of the obligations in reason-
                able detail.
        (7) ["Authenticate" means:
 S. 7244--A                         15

            (A) to sign; or
            (B) with  present  intent  to  adopt  or  accept a record, to
                attach to or logically associate with the record an elec-
                tronic sound, symbol, or process] RESERVED.
        (7-a)  "Assignee",  except  as used in "assignee for  benefit  of
             creditors", means a person (A)  in  whose  favor  a  securi-
             ty    interest  that  secures  an  obligation  is created or
             provided for under a security agreement,  whether   or   not
             the  obligation  is  outstanding or (B) to which an account,
             chattel paper, payment intangible, or  promissory  note  has
             been  sold.  The  term includes a person to which a security
             interest has been transferred by a secured party.
        (7-b) "Assignor" means a person that  (A)  under    a    security
            agreement  creates  or  provides for a security interest that
            secures an obligation or (B) sells an account, chattel paper,
            payment intangible, or promissory note.  The term includes  a
            secured  party  that  has  transferred a security interest to
            another person.
        (11) "Chattel paper" means [a record  or  records  that  evidence
            both a monetary obligation and a security interest in specif-
            ic  goods, a security interest in specific goods and software
            used in the goods, a security interest in specific goods  and
            license  of  software  used in the goods, a lease of specific
            goods, or a lease of specific goods and license  of  software
            used  in  the goods. In this paragraph, "monetary obligation"
            means a monetary obligation secured  by  the  goods  or  owed
            under a lease of the goods and includes a monetary obligation
            with respect to software used in the goods. The term does not
            include  (i) charters or other contracts involving the use or
            hire of a vessel or (ii) records that  evidence  a  right  to
            payment  arising out of the use of a credit or charge card or
            information contained on or for use with the card. If a tran-
            saction is evidenced by records that include an instrument or
            series of instruments, the group of  records  taken  together
            constitutes chattel paper.];
            (A)  A  RIGHT  TO PAYMENT OF A MONETARY OBLIGATION SECURED BY
                SPECIFIC GOODS, IF THE  RIGHT  TO  PAYMENT  AND  SECURITY
                AGREEMENT ARE EVIDENCED BY A RECORD; OR
            (B)  A  RIGHT  TO  PAYMENT OF A MONETARY OBLIGATION OWED BY A
                LESSEE UNDER A LEASE AGREEMENT WITH RESPECT  TO  SPECIFIC
                GOODS  AND  A  MONETARY  OBLIGATION OWED BY THE LESSEE IN
                CONNECTION WITH THE TRANSACTION GIVING RISE TO THE LEASE,
                IF:
            (I) THE RIGHT TO PAYMENT AND LEASE AGREEMENT ARE EVIDENCED BY
                A RECORD; AND
            (II) THE PREDOMINANT PURPOSE OF THE TRANSACTION  GIVING  RISE
                TO  THE  LEASE  WAS  TO  GIVE  THE  LESSEE  THE  RIGHT TO
                POSSESSION AND USE OF THE GOODS; BUT
            (C) DOES NOT INCLUDE A RIGHT TO  PAYMENT  ARISING  OUT  OF  A
                CHARTER  OR OTHER CONTRACT INVOLVING THE USE OR HIRE OF A
                VESSEL OR A RIGHT TO PAYMENT ARISING OUT OF THE USE OF  A
                CREDIT  OR CHARGE CARD OR INFORMATION CONTAINED ON OR FOR
                USE WITH THE CARD.
        (27-a) "CONTROLLABLE ACCOUNT" MEANS AN  ACCOUNT  EVIDENCED  BY  A
               CONTROLLABLE  ELECTRONIC  RECORD  THAT  PROVIDES  THAT THE
               ACCOUNT DEBTOR UNDERTAKES  TO  PAY  THE  PERSON  THAT  HAS
 S. 7244--A                         16
 
               CONTROL  UNDER  SECTION  12--105 OF THE CONTROLLABLE ELEC-
               TRONIC RECORD.
        (27-B) "CONTROLLABLE PAYMENT INTANGIBLE" MEANS A PAYMENT INTANGI-
               BLE  EVIDENCED  BY  A  CONTROLLABLE ELECTRONIC RECORD THAT
               PROVIDES THAT THE ACCOUNT DEBTOR  UNDERTAKES  TO  PAY  THE
               PERSON  THAT  HAS  CONTROL  UNDER  SECTION  12--105 OF THE
               CONTROLLABLE ELECTRONIC RECORD.
        (27-C) "Cooperative  addendum"  means  a  record  that  satisfies
               Section 9--502(e).
        [(27-b)]  (27-D) "Cooperative interest" means an ownership inter-
               est in a cooperative organization,  which  interest,  when
               created,  is  coupled with possessory rights of a proprie-
               tary nature in identified physical space belonging to  the
               cooperative  organization. A subsequent termination of the
               possessory rights shall not cause an ownership interest to
               cease being a cooperative interest.
        [(27-c)] (27-E) "Cooperative organization" means an  organization
               which has as its principal asset an interest in real prop-
               erty in this state and in which organization all ownership
               interests are cooperative interests.
        [(27-d)]   (27-F) "Cooperative  organization  security  interest"
               means a security interest which is in a cooperative inter-
               est, is in  favor  of  the  cooperative  organization,  is
               created  by the cooperative record, and secures only obli-
               gations incident to ownership of that  cooperative  inter-
               est.
        [(27-e)]  (27-G) "Cooperative  record" means those records which,
               as a whole, evidence cooperative interests and define  the
               mutual rights and obligations of the owners of the cooper-
               ative interests and the cooperative organization.
        [(27-f)] (27-H) "Cooperative unit" means the physical space asso-
               ciated with a cooperative interest.
        (31) ["Electronic chattel paper" means chattel paper evidenced by
             a  record  or records consisting of information stored in an
             electronic medium.] RESERVED
        (31-A) "ELECTRONIC MONEY" MEANS MONEY IN AN ELECTRONIC FORM.
        (42) "General intangible" means any personal property,  including
             things  in  action,  other  than  accounts,  chattel  paper,
             commercial tort claims, deposit accounts, documents,  goods,
             instruments,  investment  property, letter-of-credit rights,
             letters of credit, money, and oil, gas,  or  other  minerals
             before extraction. The term includes CONTROLLABLE ELECTRONIC
             RECORDS, payment intangibles and software.
        (47) "Instrument"  means  a  negotiable  instrument  or any other
             writing that evidences a right to the payment of a  monetary
             obligation, is not itself a security agreement or lease, and
             is  of  a type that in ordinary course of business is trans-
             ferred by delivery with any necessary indorsement or assign-
             ment. The term does not  include  (i)  investment  property,
             (ii)  letters of credit, [or] (iii) writings that evidence a
             right to payment arising out of  the  use  of  a  credit  or
             charge  card or information contained on or for use with the
             card, OR (IV) WRITINGS THAT EVIDENCE CHATTEL PAPER.
        (54-A) "MONEY" HAS THE SAME MEANING AS IN SECTION  1--201(B)(24),
             BUT  DOES  NOT INCLUDE (A) A DEPOSIT ACCOUNT OR (B) MONEY IN
 S. 7244--A                         17
 
             AN ELECTRONIC FORM THAT CANNOT BE SUBJECTED TO CONTROL UNDER
             SECTION 9-105A.
        (61) "Payment  intangible" means a general intangible under which
             the account debtor's  principal  obligation  is  a  monetary
             obligation.  THE TERM INCLUDES A CONTROLLABLE PAYMENT INTAN-
             GIBLE.
        (66) "Proposal"  means  a  record  [authenticated]  SIGNED  by  a
             secured  party which includes the terms on which the secured
             party is willing to accept collateral  in  full  or  partial
             satisfaction  of  the  obligation  it  secures  pursuant  to
             Sections 9--620, 9--621, and 9--622.
        (66-a) "Prove" with respect to a fact means to meet the burden of
               establishing the fact (Section [1-201(8)] 1--201(B)(8)).
         (75) ["Send", in  connection  with  a  record  or  notification,
             means:
            (A) to  deposit  in  the  mail,  deliver for transmission, or
                transmit by any other usual means of communication,  with
                postage  or  cost of transmission provided for, addressed
                to any address reasonable under the circumstances; or
            (B) to cause the record or notification to be received within
                the time that it would have  been  received  if  properly
                sent under subparagraph (A).] RESERVED.
         (79)  ["Tangible chattel paper" means chattel paper evidenced by
             a record  or  records  consisting  of  information  that  is
             inscribed on a tangible medium.] RESERVED.
        (79-A) "TANGIBLE MONEY" MEANS MONEY IN A TANGIBLE FORM.
   §  43. Subsection (b) of section 9--102 of the uniform commercial code
 is amended by  adding  three  new  definitions  Controllable  electronic
 record,  Protected  purchaser  and  Qualifying purchaser in alphabetical
 order to read as follows:
 
      "CONTROLLABLE ELECTRONIC RECORD"             SECTION 12--102.
      "PROTECTED PURCHASER"                        SECTION 8--303.
      "QUALIFYING PURCHASER"                       SECTION 12--102.
 
   § 44. Paragraphs 2 and 5 of subsection (a) of section  9--104  of  the
 uniform  commercial code, as amended by chapter 505 of the laws of 2014,
 are amended to read as follows:
        (2) the debtor, secured  party,  and  bank  have  agreed  in  [an
            authenticated] A SIGNED record that the bank will comply with
            instructions originated by the secured party directing dispo-
            sition  of  the  funds in the deposit account without further
            consent by the debtor;
        (5) another person, OTHER THAN THE DEBTOR:
   (A) has control of the deposit account AND ACKNOWLEDGES  THAT  IT  HAS
 CONTROL on behalf of the secured party [or, having previously acquired];
 OR
   (B)  OBTAINS  control  of  the  deposit  account[, acknowledges] AFTER
 HAVING ACKNOWLEDGED that it [has] WILL OBTAIN  control  OF  THE  DEPOSIT
 ACCOUNT on behalf of the secured party.
   § 45. Section 9--105 of the uniform commercial code, as added by chap-
 ter 84 of the laws of 2001, is amended to read as follows:
 Section 9--105. Control  of Electronic COPY OF RECORD EVIDENCING Chattel
                   Paper.
 S. 7244--A                         18
 
   [A secured party has control of electronic chattel paper if the record
 or records  comprising  the  chattel  paper  are  created,  stored,  and
 assigned in such a manner that:]
   (A)  GENERAL  RULE:  CONTROL  OF  ELECTRONIC COPY OF RECORD EVIDENCING
 CHATTEL PAPER. A PURCHASER HAS CONTROL OF  AN  AUTHORITATIVE  ELECTRONIC
 COPY  OF  A  RECORD  EVIDENCING  CHATTEL  PAPER IF A SYSTEM EMPLOYED FOR
 EVIDENCING THE ASSIGNMENT OF INTERESTS IN  THE  CHATTEL  PAPER  RELIABLY
 ESTABLISHES THE PURCHASER AS THE PERSON TO WHICH THE AUTHORITATIVE ELEC-
 TRONIC COPY WAS ASSIGNED.
   (B)  SINGLE  AUTHORITATIVE COPY.  A SYSTEM SATISFIES SUBSECTION (A) IF
 THE RECORD OR RECORDS EVIDENCING THE CHATTEL PAPER ARE CREATED,  STORED,
 AND ASSIGNED IN A MANNER THAT:
        (1) a  single  authoritative copy of the record or records exists
            which  is  unique,  identifiable  and,  except  as  otherwise
            provided in paragraphs (4), (5), and (6), unalterable;
        (2) the  authoritative  copy  identifies the secured party as the
            assignee of the record or records;
        (3) the authoritative copy is communicated to and  maintained  by
            the secured party or its designated custodian;
        (4) copies or revisions that add or change an identified assignee
            of  the  authoritative copy can be made only with the partic-
            ipation of the secured party;
        (5) each copy of the authoritative copy and any copy of a copy is
            readily identifiable as a copy that is not the  authoritative
            copy; and
        (6) any  revision  of the authoritative copy is readily identifi-
            able as an authorized or unauthorized revision.
   (C) ONE OR MORE AUTHORITATIVE COPIES.  A SYSTEM  SATISFIES  SUBSECTION
 (A),  AND A PURCHASER HAS CONTROL OF AN AUTHORITATIVE ELECTRONIC COPY OF
 A RECORD EVIDENCING CHATTEL PAPER, IF  THE  ELECTRONIC  COPY,  A  RECORD
 ATTACHED  TO  OR  LOGICALLY  ASSOCIATED  WITH  THE ELECTRONIC COPY, OR A
 SYSTEM IN WHICH THE ELECTRONIC COPY IS RECORDED:
   (1) ENABLES THE PURCHASER READILY TO IDENTIFY EACH ELECTRONIC COPY  AS
 EITHER AN AUTHORITATIVE COPY OR A NONAUTHORITATIVE COPY;
   (2)  ENABLES  THE  PURCHASER  READILY  TO  IDENTIFY ITSELF IN ANY WAY,
 INCLUDING BY NAME, IDENTIFYING NUMBER,  CRYPTOGRAPHIC  KEY,  OFFICE,  OR
 ACCOUNT  NUMBER,  AS  THE ASSIGNEE OF THE AUTHORITATIVE ELECTRONIC COPY;
 AND
   (3) GIVES THE PURCHASER EXCLUSIVE POWER, SUBJECT  TO  SUBSECTION  (D),
 TO:
   (A)  PREVENT  OTHERS FROM ADDING OR CHANGING AN IDENTIFIED ASSIGNEE OF
 THE AUTHORITATIVE ELECTRONIC COPY; AND
   (B) TRANSFER CONTROL OF THE AUTHORITATIVE ELECTRONIC COPY.
   (D) MEANING OF EXCLUSIVE. SUBJECT TO SUBSECTION (E), A POWER IS EXCLU-
 SIVE UNDER SUBSECTION (C)(3)(A) AND (B) EVEN IF:
   (1) THE  AUTHORITATIVE  ELECTRONIC  COPY,  A  RECORD  ATTACHED  TO  OR
 LOGICALLY ASSOCIATED WITH THE AUTHORITATIVE ELECTRONIC COPY, OR A SYSTEM
 IN WHICH THE AUTHORITATIVE ELECTRONIC COPY IS RECORDED LIMITS THE USE OF
 THE  AUTHORITATIVE ELECTRONIC COPY OR HAS A PROTOCOL PROGRAMMED TO CAUSE
 A CHANGE, INCLUDING A TRANSFER OR LOSS OF CONTROL; OR
   (2) THE POWER IS SHARED WITH ANOTHER PERSON.
   (E) WHEN POWER NOT SHARED WITH ANOTHER PERSON.  A POWER OF A PURCHASER
 IS NOT SHARED WITH  ANOTHER  PERSON  UNDER  SUBSECTION  (D)(2)  AND  THE
 PURCHASER'S POWER IS NOT EXCLUSIVE IF:
   (1)  THE  PURCHASER  CAN  EXERCISE THE POWER ONLY IF THE POWER ALSO IS
 EXERCISED BY THE OTHER PERSON; AND
 S. 7244--A                         19
 
   (2) THE OTHER PERSON:
   (A)  CAN  EXERCISE  THE  POWER  WITHOUT  EXERCISE  OF THE POWER BY THE
 PURCHASER; OR
   (B) IS THE TRANSFEROR TO THE PURCHASER OF AN INTEREST IN  THE  CHATTEL
 PAPER.
   (F)  PRESUMPTION OF EXCLUSIVITY OF CERTAIN POWERS.  IF A PURCHASER HAS
 THE POWERS SPECIFIED IN SUBSECTION (C)(3)(A) AND  (B),  THE  POWERS  ARE
 PRESUMED TO BE EXCLUSIVE.
   (G) OBTAINING CONTROL THROUGH ANOTHER PERSON.  A PURCHASER HAS CONTROL
 OF AN AUTHORITATIVE ELECTRONIC COPY OF A RECORD EVIDENCING CHATTEL PAPER
 IF  ANOTHER  PERSON,  OTHER  THAN  THE TRANSFEROR TO THE PURCHASER OF AN
 INTEREST IN THE CHATTEL PAPER:
   (1) HAS CONTROL OF THE AUTHORITATIVE ELECTRONIC COPY AND  ACKNOWLEDGES
 THAT IT HAS CONTROL ON BEHALF OF THE PURCHASER; OR
   (2)  OBTAINS CONTROL OF THE AUTHORITATIVE ELECTRONIC COPY AFTER HAVING
 ACKNOWLEDGED THAT IT WILL OBTAIN  CONTROL  OF  THE  ELECTRONIC  COPY  ON
 BEHALF OF THE PURCHASER.
   §  46.  The  uniform  commercial  code  is amended by adding three new
 sections 9--105A, 9--107A and 9--107B to read as follows:
 SECTION 9--105A. CONTROL OF ELECTRONIC MONEY.
   (A) GENERAL RULE:  CONTROL OF ELECTRONIC MONEY.  A PERSON HAS  CONTROL
 OF ELECTRONIC MONEY IF:
   (1) THE ELECTRONIC MONEY, A RECORD ATTACHED TO OR LOGICALLY ASSOCIATED
 WITH  THE ELECTRONIC MONEY, OR A SYSTEM IN WHICH THE ELECTRONIC MONEY IS
 RECORDED GIVES THE PERSON:
   (A) POWER TO AVAIL ITSELF OF SUBSTANTIALLY ALL THE  BENEFIT  FROM  THE
 ELECTRONIC MONEY; AND
   (B) EXCLUSIVE POWER, SUBJECT TO SUBSECTION (B), TO:
   (I)  PREVENT  OTHERS FROM AVAILING THEMSELVES OF SUBSTANTIALLY ALL THE
 BENEFIT FROM THE ELECTRONIC MONEY; AND
   (II) TRANSFER CONTROL OF THE ELECTRONIC MONEY  TO  ANOTHER  PERSON  OR
 CAUSE  ANOTHER  PERSON  TO OBTAIN CONTROL OF OTHER ELECTRONIC MONEY AS A
 RESULT OF THE TRANSFER OF THE ELECTRONIC MONEY; AND
   (2) THE ELECTRONIC MONEY, A RECORD ATTACHED TO OR LOGICALLY ASSOCIATED
 WITH THE ELECTRONIC MONEY, OR A SYSTEM IN WHICH THE ELECTRONIC MONEY  IS
 RECORDED  ENABLES  THE  PERSON  READILY  TO  IDENTIFY ITSELF IN ANY WAY,
 INCLUDING BY NAME, IDENTIFYING NUMBER,  CRYPTOGRAPHIC  KEY,  OFFICE,  OR
 ACCOUNT NUMBER, AS HAVING THE POWERS UNDER PARAGRAPH (1).
   (B)  MEANING  OF  EXCLUSIVE.    SUBJECT  TO SUBSECTION (C), A POWER IS
 EXCLUSIVE UNDER SUBSECTION (A)(1)(B)(I) AND (II) EVEN IF:
   (1) THE ELECTRONIC MONEY, A RECORD ATTACHED TO OR LOGICALLY ASSOCIATED
 WITH THE ELECTRONIC MONEY, OR A SYSTEM IN WHICH THE ELECTRONIC MONEY  IS
 RECORDED  LIMITS  THE  USE  OF  THE  ELECTRONIC  MONEY OR HAS A PROTOCOL
 PROGRAMMED TO CAUSE A CHANGE, INCLUDING A TRANSFER OR LOSS  OF  CONTROL;
 OR
   (2) THE POWER IS SHARED WITH ANOTHER PERSON.
   (C)  WHEN POWER NOT SHARED WITH ANOTHER PERSON. A POWER OF A PERSON IS
 NOT SHARED WITH ANOTHER PERSON UNDER SUBSECTION (B)(2) AND THE  PERSON'S
 POWER IS NOT EXCLUSIVE IF:
   (1)  THE PERSON CAN EXERCISE THE POWER ONLY IF THE POWER ALSO IS EXER-
 CISED BY THE OTHER PERSON; AND
   (2) THE OTHER PERSON:
   (A) CAN EXERCISE THE POWER  WITHOUT  EXERCISE  OF  THE  POWER  BY  THE
 PERSON; OR
   (B)  IS  THE TRANSFEROR TO THE PERSON OF AN INTEREST IN THE ELECTRONIC
 MONEY.
 S. 7244--A                         20
 
   (D) PRESUMPTION OF EXCLUSIVITY OF CERTAIN POWERS.  IF A PERSON HAS THE
 POWERS SPECIFIED IN SUBSECTION (A)(1)(B)(I) AND  (II),  THE  POWERS  ARE
 PRESUMED TO BE EXCLUSIVE.
   (E) CONTROL THROUGH ANOTHER PERSON.  A PERSON HAS CONTROL OF ELECTRON-
 IC  MONEY  IF ANOTHER PERSON, OTHER THAN THE TRANSFEROR TO THE PERSON OF
 AN INTEREST IN THE ELECTRONIC MONEY:
   (1) HAS CONTROL OF THE ELECTRONIC MONEY AND ACKNOWLEDGES THAT  IT  HAS
 CONTROL ON BEHALF OF THE PERSON; OR
   (2)  OBTAINS CONTROL OF THE ELECTRONIC MONEY AFTER HAVING ACKNOWLEDGED
 THAT IT WILL OBTAIN CONTROL OF THE ELECTRONIC MONEY  ON  BEHALF  OF  THE
 PERSON.
 SECTION 9--107A. CONTROL OF CONTROLLABLE ELECTRONIC RECORD, CONTROLLABLE
                   ACCOUNT, OR CONTROLLABLE PAYMENT INTANGIBLE.
   (A)  CONTROL  UNDER SECTION 12--105.  A SECURED PARTY HAS CONTROL OF A
 CONTROLLABLE ELECTRONIC RECORD AS PROVIDED IN SECTION 12--105.
   (B) CONTROL OF CONTROLLABLE ACCOUNT AND CONTROLLABLE PAYMENT  INTANGI-
 BLE.   A SECURED PARTY HAS CONTROL OF A CONTROLLABLE ACCOUNT OR CONTROL-
 LABLE PAYMENT INTANGIBLE  IF  THE  SECURED  PARTY  HAS  CONTROL  OF  THE
 CONTROLLABLE  ELECTRONIC  RECORD THAT EVIDENCES THE CONTROLLABLE ACCOUNT
 OR CONTROLLABLE PAYMENT INTANGIBLE.
 SECTION 9--107B. NO REQUIREMENT TO ACKNOWLEDGE OR CONFIRM; NO DUTIES.
   (A) NO REQUIREMENT TO ACKNOWLEDGE.  A PERSON THAT  HAS  CONTROL  UNDER
 SECTION  9--104,  9--105, OR 9--105A IS NOT REQUIRED TO ACKNOWLEDGE THAT
 IT HAS CONTROL ON BEHALF OF ANOTHER PERSON.
   (B) NO DUTIES OR CONFIRMATION. IF A PERSON ACKNOWLEDGES THAT IT HAS OR
 WILL OBTAIN CONTROL ON BEHALF  OF  ANOTHER  PERSON,  UNLESS  THE  PERSON
 OTHERWISE  AGREES OR LAW OTHER THAN THIS ARTICLE OTHERWISE PROVIDES, THE
 PERSON DOES NOT OWE ANY DUTY TO THE OTHER PERSON AND IS NOT REQUIRED  TO
 CONFIRM THE ACKNOWLEDGMENT TO ANY OTHER PERSON.
   § 47. Subsection (b) of section 9--203 of the uniform commercial code,
 as added by chapter 84 of the laws of 2001 and subparagraph (D) of para-
 graph  3  as  amended  by chapter 505 of the laws of 2014, is amended to
 read as follows:
   (b) Enforceability. Except as otherwise provided  in  subsections  (c)
 through  (i),  a security interest is enforceable against the debtor and
 third parties with respect to the collateral only if:
        (1) value has been given;
        (2) the debtor has rights in  the  collateral  or  the  power  to
            transfer rights in the collateral to a secured party; and
        (3) one of the following conditions is met:
            (A) the  debtor  has [authenticated] SIGNED a security agree-
                ment that provides a description of the  collateral  and,
                if  the  security  interest  covers  timber  to be cut, a
                description of the land concerned;
            (B) the collateral is not a certificated security and  is  in
                the  possession of the secured party under Section 9--313
                pursuant to the debtor's security agreement;
            (C) the collateral is a certificated security  in  registered
                form  and  the security certificate has been delivered to
                the secured party under Section 8--301  pursuant  to  the
                debtor's security agreement; [or]
            (D) the  collateral  is  CONTROLLABLE  ACCOUNTS, CONTROLLABLE
                ELECTRONIC  RECORDS,  CONTROLLABLE  PAYMENT  INTANGIBLES,
                deposit  accounts,  electronic [chattel paper] DOCUMENTS,
                ELECTRONIC MONEY, investment  property[,]  OR  letter-of-
                credit rights, [or electronic documents,] and the secured
 S. 7244--A                         21
 
                party  has  control under Section 7--106, 9--104, 9--105,
                9--105A, 9--106, [or] 9--107, OR 9--107A pursuant to  the
                debtor's security agreement; OR
            (E) THE COLLATERAL IS CHATTEL PAPER AND THE SECURED PARTY HAS
                POSSESSION  AND CONTROL UNDER SECTION 9--314A PURSUANT TO
                THE DEBTOR'S SECURITY AGREEMENT.
   § 48. Subsection (b) of section 9--204 of the uniform commercial code,
 as added by chapter 84 of the  laws  of  2001,  is  amended  and  a  new
 subsection (b-1) is added to read as follows:
   (b) When  after-acquired property clause not effective. [A] SUBJECT TO
 SUBSECTION (B-1), A security interest  does  not  attach  under  a  term
 constituting an after-acquired property clause to:
        (1) consumer  goods,  other than an accession when given as addi-
            tional security, unless the debtor acquires  rights  in  them
            within 10 days after the secured party gives value; or
        (2) a commercial tort claim.
   (B-1) LIMITATION ON SUBSECTION (B).  SUBSECTION (B) DOES NOT PREVENT A
 SECURITY INTEREST FROM ATTACHING:
        (1) TO  CONSUMER  GOODS  AS  PROCEEDS  UNDER SECTION 9--315(A) OR
            COMMINGLED GOODS UNDER SECTION 9--336(C);
        (2) TO  A  COMMERCIAL  TORT  CLAIM  AS  PROCEEDS  UNDER   SECTION
            9--315(A); OR
        (3) UNDER  AN  AFTER-ACQUIRED PROPERTY CLAUSE TO PROPERTY THAT IS
            PROCEEDS OF CONSUMER GOODS OR A COMMERCIAL TORT CLAIM.
   § 49. Subsection (c) of section 9--207 of the uniform commercial code,
 as amended by chapter 505 of the laws of 2014, is  amended  to  read  as
 follows:
   (c) Duties  and  rights  when  secured party in possession or control.
 Except as otherwise provided in subsection (d), a secured  party  having
 possession  of collateral or control of collateral under Section 7--106,
 9--104, 9--105, 9--105A, 9--106, [or] 9--107, OR 9--107A:
        (1) may hold as additional security any proceeds, except money or
            funds, received from the collateral;
        (2) shall apply money or funds received from  the  collateral  to
            reduce the secured obligation, unless remitted to the debtor;
            and
        (3) may create a security interest in the collateral.
   § 50. Subsection (b) of section 9--208 of the uniform commercial code,
 as  added  by  chapter  84  of  the  laws of 2001, paragraphs 4 and 5 as
 amended and paragraph 6 as added by chapter 505 of the laws of 2014,  is
 amended to read as follows:
   (b) Duties of secured party after receiving demand from debtor. Within
 10  days  after  receiving  [an  authenticated]  A  SIGNED demand by the
 debtor:
        (1) a secured party having control of  a  deposit  account  under
            Section  9--104(a)(2)  shall  send to the bank with which the
            deposit account is maintained [an authenticated statement]  A
            SIGNED  RECORD  that releases the bank from any further obli-
            gation to comply with instructions originated by the  secured
            party;
        (2) a  secured  party  having  control of a deposit account under
            Section 9--104(a)(3) shall:
            (A) pay the debtor the balance  on  deposit  in  the  deposit
                account; or
            (B) transfer the balance on deposit into a deposit account in
                the debtor's name;
 S. 7244--A                         22
 
        (3) a secured party, other than a buyer, having control [of elec-
            tronic chattel paper] under Section 9--105 [shall:
            (A) communicate  the  authoritative  copy  of  the electronic
                chattel paper to the debtor or its designated custodian;
            (B) if the debtor designates a custodian that is  the  desig-
                nated  custodian with which the authoritative copy of the
                electronic chattel paper is maintained  for  the  secured
                party,  communicate  to  the  custodian  an authenticated
                record  releasing  the  designated  custodian  from   any
                further obligation to comply with instructions originated
                by  the  secured  party  and instructing the custodian to
                comply with instructions originated by the debtor; and
            (C) take appropriate action  to  enable  the  debtor  or  its
                designated  custodian  to  make copies of or revisions to
                the authoritative copy which add or change an  identified
                assignee of the authoritative copy without the consent of
                the secured party] OF AN AUTHORITATIVE ELECTRONIC COPY OF
                A  RECORD EVIDENCING CHATTEL PAPER SHALL TRANSFER CONTROL
                OF THE ELECTRONIC COPY TO DEBTOR OR A  PERSON  DESIGNATED
                BY THE DEBTOR;
        (4) a  secured  party having control of investment property under
            Section 8--106(d)(2) or 9--106(b) shall send to  the  securi-
            ties  intermediary  or  commodity intermediary with which the
            security entitlement or commodity contract is maintained  [an
            authenticated]  A  SIGNED record that releases the securities
            intermediary or commodity intermediary from any further obli-
            gation to comply with entitlement orders or directions origi-
            nated by the secured party;
        (5) a secured party having control of  a  letter-of-credit  right
            under  Section  9--107  shall  send  to each person having an
            unfulfilled obligation to pay  or  deliver  proceeds  of  the
            letter-of-credit  to  the  secured party [an authenticated] A
            SIGNED release from any further obligation to pay or  deliver
            proceeds of the letter-of-credit to the secured party; [and]
        (6) a  secured  party  having  control [of an electronic document
            shall:
            (A) give control of the electronic document to the debtor  or
                its designated custodian;
            (B) if  the  debtor designates a custodian that is the desig-
                nated custodian with which the authoritative copy of  the
                electronic  document is maintained for the secured party,
                communicate to  the  custodian  an  authenticated  record
                releasing the designated custodian from any further obli-
                gation  to  comply  with  instructions  originated by the
                secured party and instructing  the  custodian  to  comply
                with instructions originated by the debtor; and
            (C)  take  appropriate  action  to  enable  the debtor or its
                designated custodian to make copies of  or  revisions  to
                the  authoritative copy which add or change an identified
                assignee of the authoritative copy without the consent of
                the secured party] UNDER SECTION 7--106  OF  AN  AUTHORI-
                TATIVE ELECTRONIC COPY OF AN ELECTRONIC DOCUMENT OF TITLE
                SHALL    TRANSFER  CONTROL  OF THE ELECTRONIC COPY TO THE
                DEBTOR OR A PERSON DESIGNATED BY THE DEBTOR;
            (7) A SECURED PARTY HAVING CONTROL UNDER SECTION  9--105A  OF
                ELECTRONIC MONEY SHALL TRANSFER CONTROL OF THE ELECTRONIC
 S. 7244--A                         23
 
                MONEY TO THE DEBTOR OR A PERSON DESIGNATED BY THE DEBTOR;
                AND
            (8) A SECURED PARTY HAVING CONTROL UNDER SECTION 12--105 OF A
                CONTROLLABLE  ELECTRONIC  RECORD, OTHER THAN A BUYER OF A
                CONTROLLABLE ACCOUNT OR CONTROLLABLE  PAYMENT  INTANGIBLE
                EVIDENCED  BY  THE  CONTROLLABLE ELECTRONIC RECORD, SHALL
                TRANSFER CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD TO
                THE DEBTOR OR A PERSON DESIGNATED BY THE DEBTOR.
   § 51. Subsection (b) of section 9--209 of the uniform commercial code,
 as added by chapter 84 of the laws  of  2001,  is  amended  to  read  as
 follows:
   (b) Duties of secured party after receiving demand from debtor. Within
 10  days  after  receiving  [an  authenticated]  A  SIGNED demand by the
 debtor, a secured party  shall  send  to  an  account  debtor  that  has
 received  notification  UNDER  SECTION  9--406(A)  OR  12--106(B)  of an
 assignment to the secured party as assignee [under Section 9--406(a)  an
 authenticated] A SIGNED record that releases the account debtor from any
 further obligation to the secured party.
   § 52. Section 9--210 of the uniform commercial code, as added by chap-
 ter 84 of the laws of 2001, is amended to read as follows:
 Section 9--210. Request for Accounting; Request Regarding List of Colla-
                   teral or Statement of Account.
   (a) Definitions in this section:
        (1) "Request"  means  a  record  of a type described in paragraph
            (2), (3), or (4).
        (2) "Request for an accounting" means  a  record  [authenticated]
            SIGNED  by  a debtor requesting that the recipient provide an
            accounting of the unpaid obligations  secured  by  collateral
            and  reasonably  identifying  the transaction or relationship
            that is the subject of the request.
        (3) "Request regarding a  list  of  collateral"  means  a  record
            [authenticated] SIGNED by a debtor requesting that the recip-
            ient approve or correct a list of what the debtor believes to
            be the collateral securing an obligation and reasonably iden-
            tifying  the  transaction or relationship that is the subject
            of the request.
        (4) "Request regarding a statement of  account"  means  a  record
            [authenticated] SIGNED by a debtor requesting that the recip-
            ient  approve  or  correct  a  statement  indicating what the
            debtor believes to be the aggregate amount  of  unpaid  obli-
            gations  secured  by  collateral  as  of a specified date and
            reasonably identifying the transaction or  relationship  that
            is the subject of the request.
   (b) Duty to respond to requests. Subject to subsections (c), (d), (e),
 and (f), a secured party, other than a buyer of accounts, chattel paper,
 payment  intangibles,  or  promissory notes or a consignor, shall comply
 with a request within 14 days after receipt:
        (1) in the case of a request for an accounting, by  [authenticat-
            ing] SIGNING and sending to the debtor an accounting; and
        (2) in  the case of a request regarding a list of collateral or a
            request regarding a statement of account, by [authenticating]
            SIGNING and sending to the debtor an approval or correction.
   (c) Request regarding list of collateral; statement concerning type of
 collateral. A secured party that claims a security interest in all of  a
 particular  type  of  collateral  owned  by the debtor may comply with a
 request regarding a list of collateral by  sending  to  the  debtor  [an
 S. 7244--A                         24

 authenticated]  A  SIGNED  record  including  a statement to that effect
 within 14 days after receipt.
   (d) Request  regarding  list  of  collateral;  no  interest claimed. A
 person that receives a request regarding a list of collateral, claims no
 interest in the collateral when it receives the request, and claimed  an
 interest  in  the  collateral  at  an earlier time shall comply with the
 request within 14 days after  receipt  by  sending  to  the  debtor  [an
 authenticated] A SIGNED record:
        (1) disclaiming any interest in the collateral; and
        (2) if  known  to  the  recipient, providing the name and mailing
            address of any assignee of or successor  to  the  recipient's
            interest in the collateral.
   (e) Request  for  accounting  or  regarding  statement  of account; no
 interest in obligation claimed. A person that receives a request for  an
 accounting  or  a  request  regarding  a statement of account, claims no
 interest in the obligations when it receives the request, and claimed an
 interest in the obligations at an earlier time  shall  comply  with  the
 request  within  14  days  after  receipt  by  sending to the debtor [an
 authenticated] A SIGNED record:
        (1) disclaiming any interest in the obligations; and
        (2) if known to the recipient, providing  the  name  and  mailing
            address  of  any  assignee of or successor to the recipient's
            interest in the obligations.
   (f) Charges for responses. A debtor is entitled without charge to  one
 response  to  a  request under this section during any six-month period.
 The secured party may require payment of a charge not exceeding $25  for
 each additional response.
   §  53.  The  opening paragraph and subsection (c) of section 9--301 of
 the uniform commercial code, the opening paragraph as added  by  chapter
 84  of  the laws of 2001 and subsection (c) as amended by chapter 505 of
 the laws of 2014, are amended to read as follows:
   Except as otherwise  provided  in  Sections  9--303  through  [9--306]
 9-306B,  the following rules determine the law governing perfection, the
 effect of perfection or nonperfection, and the priority  of  a  security
 interest in collateral:
   (c) Except  as  otherwise provided in subsection (d), while [tangible]
 negotiable TANGIBLE documents, goods, instruments, [money,] or  tangible
 [chattel  paper]  MONEY  is  located in a jurisdiction, the local law of
 that jurisdiction governs:
        (1) perfection of a security interest in the goods  by  filing  a
            fixture filing;
        (2) perfection of a security interest in timber to be cut; and
        (3) the effect of perfection or nonperfection and the priority of
            a nonpossessory security interest in the collateral.
   § 54. Subsection (a) of section 9--304 of the uniform commercial code,
 as  added  by  chapter  84  of  the  laws of 2001, is amended to read as
 follows:
   (a) Law of bank's jurisdiction governs. The  local  law  of  a  bank's
 jurisdiction  governs  perfection,  the  effect of perfection or nonper-
 fection, and the priority of a security interest in  a  deposit  account
 maintained  with  that  bank  EVEN  IF THE TRANSACTION DOES NOT BEAR ANY
 RELATION TO THE BANK'S JURISDICTION.
   § 55. Subsection (a) of section 9--305 of the uniform commercial  code
 is amended by adding a new paragraph 5 to read as follows:
   (5)  PARAGRAPHS  (2),  (3), AND (4) APPLY EVEN IF THE TRANSACTION DOES
 NOT BEAR ANY RELATION TO THE JURISDICTION.
 S. 7244--A                         25
 
   § 56. The uniform  commercial  code  is  amended  by  adding  two  new
 sections 9-306A and 9-306B to read as follows:
 SECTION 9-306A. LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTER-
                    ESTS IN CHATTEL PAPER.
   (A)  CHATTEL  PAPER EVIDENCED BY AUTHORITATIVE ELECTRONIC COPY. EXCEPT
 AS PROVIDED IN SUBSECTION (D), IF CHATTEL PAPER IS EVIDENCED ONLY BY  AN
 AUTHORITATIVE ELECTRONIC COPY OF THE CHATTEL PAPER OR IS EVIDENCED BY AN
 AUTHORITATIVE  ELECTRONIC  COPY  AND AN AUTHORITATIVE TANGIBLE COPY, THE
 LOCAL LAW OF THE CHATTEL PAPER'S JURISDICTION  GOVERNS  PERFECTION,  THE
 EFFECT  OF  PERFECTION  OR NONPERFECTION, AND THE PRIORITY OF A SECURITY
 INTEREST IN THE CHATTEL PAPER, EVEN IF THE TRANSACTION DOES NOT BEAR ANY
 RELATION TO THE CHATTEL PAPER'S JURISDICTION.
   (B) CHATTEL PAPER'S JURISDICTION. THE FOLLOWING  RULES  DETERMINE  THE
 CHATTEL PAPER'S JURISDICTION UNDER THIS SECTION:
   (1)  IF  THE  AUTHORITATIVE  ELECTRONIC  COPY OF THE RECORD EVIDENCING
 CHATTEL PAPER, OR A RECORD ATTACHED TO OR LOGICALLY ASSOCIATED WITH  THE
 ELECTRONIC  COPY  AND  READILY  AVAILABLE FOR REVIEW, EXPRESSLY PROVIDES
 THAT A PARTICULAR JURISDICTION IS THE CHATTEL PAPER'S  JURISDICTION  FOR
 PURPOSES  OF THIS PART, THIS ARTICLE, OR THIS CODE, THAT JURISDICTION IS
 THE CHATTEL PAPER'S JURISDICTION.
   (2) IF PARAGRAPH (1) DOES NOT APPLY AND THE RULES  OF  THE  SYSTEM  IN
 WHICH  THE  AUTHORITATIVE ELECTRONIC COPY IS RECORDED ARE READILY AVAIL-
 ABLE FOR REVIEW AND EXPRESSLY PROVIDE THAT A PARTICULAR JURISDICTION  IS
 THE  CHATTEL  PAPER'S JURISDICTION FOR PURPOSES OF THIS PART, THIS ARTI-
 CLE, OR THIS CODE, THAT JURISDICTION IS THE  CHATTEL  PAPER'S  JURISDIC-
 TION.
   (3) IF PARAGRAPHS (1) AND (2) DO NOT APPLY AND THE AUTHORITATIVE ELEC-
 TRONIC  COPY,  OR  A RECORD ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE
 ELECTRONIC COPY AND READILY AVAILABLE  FOR  REVIEW,  EXPRESSLY  PROVIDES
 THAT  THE CHATTEL PAPER IS GOVERNED BY THE LAW OF A PARTICULAR JURISDIC-
 TION, THAT JURISDICTION IS THE CHATTEL PAPER'S JURISDICTION.
   (4) IF PARAGRAPHS (1), (2) AND (3) DO NOT APPLY AND THE RULES  OF  THE
 SYSTEM IN WHICH THE AUTHORITATIVE ELECTRONIC COPY IS RECORDED ARE READI-
 LY  AVAILABLE FOR REVIEW AND EXPRESSLY PROVIDE THAT THE CHATTEL PAPER OR
 THE SYSTEM IS GOVERNED BY THE LAW OF  A  PARTICULAR  JURISDICTION,  THAT
 JURISDICTION IS THE CHATTEL PAPER'S JURISDICTION.
   (5)  IF  PARAGRAPHS  (1) THROUGH (4) DO NOT APPLY, THE CHATTEL PAPER'S
 JURISDICTION IS THE JURISDICTION IN WHICH THE DEBTOR IS LOCATED.
   (C) CHATTEL PAPER EVIDENCED BY  AUTHORITATIVE  TANGIBLE  COPY.  IF  AN
 AUTHORITATIVE  TANGIBLE COPY OF A RECORD EVIDENCES CHATTEL PAPER AND THE
 CHATTEL PAPER IS NOT EVIDENCED  BY  AN  AUTHORITATIVE  ELECTRONIC  COPY,
 WHILE  THE  AUTHORITATIVE TANGIBLE COPY OF THE RECORD EVIDENCING CHATTEL
 PAPER IS LOCATED IN A JURISDICTION, THE LOCAL LAW OF  THAT  JURISDICTION
 GOVERNS:
   (1)  PERFECTION  OF  A  SECURITY  INTEREST  IN  THE  CHATTEL  PAPER BY
 POSSESSION UNDER SECTION 9--314A; AND
   (2) THE EFFECT OF PERFECTION OR NONPERFECTION AND THE  PRIORITY  OF  A
 SECURITY INTEREST IN THE CHATTEL PAPER.
   (D)  WHEN  PERFECTION  GOVERNED  BY  LAW  OF JURISDICTION WHERE DEBTOR
 LOCATED.   THE LOCAL LAW OF THE JURISDICTION  IN  WHICH  THE  DEBTOR  IS
 LOCATED  GOVERNS  PERFECTION  OF A SECURITY INTEREST IN CHATTEL PAPER BY
 FILING.
 SECTION 9-306B. LAW GOVERNING PERFECTION AND PRIORITY OF SECURITY INTER-
                    ESTS IN CONTROLLABLE ACCOUNTS, CONTROLLABLE ELECTRON-
                    IC RECORDS, AND CONTROLLABLE PAYMENT INTANGIBLES.
 S. 7244--A                         26
 
   (A) GOVERNING LAW: GENERAL RULES. EXCEPT  AS  PROVIDED  IN  SUBSECTION
 (B),  THE LOCAL LAW OF THE CONTROLLABLE ELECTRONIC RECORD'S JURISDICTION
 SPECIFIED IN SECTION 12--107(C) AND (D) GOVERNS PERFECTION,  THE  EFFECT
 OF  PERFECTION OR NONPERFECTION, AND THE PRIORITY OF A SECURITY INTEREST
 IN  A  CONTROLLABLE  ELECTRONIC  RECORD  AND  A  SECURITY  INTEREST IN A
 CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE EVIDENCED BY THE
 CONTROLLABLE ELECTRONIC RECORD.
   (B) WHEN PERFECTION GOVERNED  BY  LAW  OF  JURISDICTION  WHERE  DEBTOR
 LOCATED.    THE  LOCAL  LAW  OF  THE JURISDICTION IN WHICH THE DEBTOR IS
 LOCATED GOVERNS:
   (1) PERFECTION OF A  SECURITY  INTEREST  IN  A  CONTROLLABLE  ACCOUNT,
 CONTROLLABLE  ELECTRONIC  RECORD,  OR CONTROLLABLE PAYMENT INTANGIBLE BY
 FILING; AND
   (2) AUTOMATIC PERFECTION OF A  SECURITY  INTEREST  IN  A  CONTROLLABLE
 PAYMENT  INTANGIBLE CREATED BY A SALE OF THE CONTROLLABLE PAYMENT INTAN-
 GIBLE.
   § 57. Paragraph 8 of subsection (b) of section 9--310 of  the  uniform
 commercial  code,  as  amended  by  chapter  505 of the laws of 2014, is
 amended and a new paragraph 8-a is added to read as follows:
        (8) in CONTROLLABLE ACCOUNTS,  CONTROLLABLE  ELECTRONIC  RECORDS,
            CONTROLLABLE  PAYMENT  INTANGIBLES,  deposit accounts, [elec-
            tronic chattel paper,] electronic documents, investment prop-
            erty,  or  letter-of-credit  rights  which  is  perfected  by
            control under Section 9--314;
        (8-A)  IN  CHATTEL  PAPER  WHICH  IS  PERFECTED BY POSSESSION AND
            CONTROL UNDER SECTION 9--314A;
   § 58. The section heading and subsections (a), (b) and (e) of  section
 9--312   of  the  uniform  commercial  code,  the  section  heading  and
 subsections (a) and (b) as added by chapter 84 of the laws of 2001,  and
 subsection  (e)  as  amended  by  chapter  505  of the laws of 2014, are
 amended to read as follows:
   Perfection  of  Security  Interests  in  Chattel  Paper,  CONTROLLABLE
                   ACCOUNTS,  CONTROLLABLE ELECTRONIC RECORDS, CONTROLLA-
                   BLE PAYMENT INTANGIBLES, Deposit Accounts,  Documents,
                   Goods  Covered  by  Documents, Instruments, Investment
                   Property,   Letter-of-credit   Rights,   and    Money;
                   Perfection  by Permissive Filing; Temporary Perfection
                   Without Filing or Transfer of Possession.
   (a) Perfection by filing permitted. A  security  interest  in  chattel
 paper, [negotiable documents,] CONTROLLABLE ACCOUNTS, CONTROLLABLE ELEC-
 TRONIC  RECORDS,  CONTROLLABLE  PAYMENT  INTANGIBLES,  instruments, [or]
 investment property, OR NEGOTIABLE DOCUMENTS may be perfected by filing.
   (b) Control or possession of certain collateral. Except  as  otherwise
 provided in Section 9--315(c) and (d) for proceeds:
        (1) a  security  interest  in  a deposit account may be perfected
            only by control under Section 9--314;
        (2) and except as otherwise  provided  in  Section  9--308(d),  a
            security   interest   in  a  letter-of-credit  right  may  be
            perfected only by control under Section 9--314; [and]
        (3) a security interest in TANGIBLE money may be  perfected  only
            by  the  secured  party's  taking  possession  under  Section
            9--313; AND
              (4)  A  SECURITY  INTEREST  IN  ELECTRONIC  MONEY  MAY   BE
            PERFECTED ONLY BY CONTROL UNDER SECTION 9--314.
   (e) Temporary  perfection:  new  value. A security interest in certif-
 icated securities, negotiable documents,  or  instruments  is  perfected
 S. 7244--A                         27
 
 without filing or the taking of possession or control for a period of 20
 days  from  the  time  it  attaches to the extent that it arises for new
 value given under [an authenticated] A SIGNED security agreement.
   §  59.  Subsections  (a), (c) and (d) of section 9--313 of the uniform
 commercial code, subsection (a) as amended by chapter 505 of the laws of
 2014, and subsections (c) and (d) as added by chapter 84 of the laws  of
 2001, are amended to read as follows:
   (a) Perfection by possession or delivery. Except as otherwise provided
 in  subsection  (b),  a secured party may perfect a security interest in
 [tangible] GOODS, INSTRUMENTS, negotiable  TANGIBLE  documents,  [goods,
 instruments,  money,]  or  tangible  [chattel  paper]  MONEY  by  taking
 possession of the collateral. A secured party  may  perfect  a  security
 interest  in  certificated  securities by taking delivery of the certif-
 icated securities under Section 8--301.
   (c) Collateral in possession of person other than debtor. With respect
 to collateral other than certificated securities and goods covered by  a
 document,  a  secured  party  takes  possession  of  collateral  in  the
 possession of a person other than the debtor, the secured  party,  or  a
 lessee  of  the collateral from the debtor in the ordinary course of the
 debtor's business, when:
        (1) the person  in  possession  [authenticates]  SIGNS  a  record
            acknowledging  that it holds possession of the collateral for
            the secured party's benefit; or
        (2) the person takes possession of the  collateral  after  having
            [authenticated]  SIGNED  a  record acknowledging that it will
            hold possession of THE collateral  for  the  secured  party's
            benefit.
   (d) Time  of  perfection by possession; continuation of perfection. If
 perfection of a security interest depends upon possession of the collat-
 eral by a secured party, perfection occurs [no]  NOT  earlier  than  the
 time  the  secured  party  takes possession and continues only while the
 secured party retains possession.
   § 60. Section 9--314 of the uniform commercial code, as added by chap-
 ter 84 of the laws of 2001, subsections (a) and (b) as amended by  chap-
 ter 505 of the laws of 2014, is amended to read as follows:
 Section 9--314. Perfection by Control.
   (a) Perfection   by  control.  A  security  interest  in  CONTROLLABLE
 ACCOUNTS, CONTROLLABLE ELECTRONIC RECORDS, CONTROLLABLE PAYMENT INTANGI-
 BLES, DEPOSIT ACCOUNTS, ELECTRONIC DOCUMENTS, ELECTRONIC MONEY,  invest-
 ment  property,  [deposit  accounts,] OR letter-of-credit rights, [elec-
 tronic chattel paper, or  electronic  documents]  may  be  perfected  by
 control  of  the  collateral  under  Section  7--106,  9--104,  [9--105]
 9--105A, 9--106, [or] 9--107 OR 9--107A.
   (b) Specified collateral: time of perfection by control;  continuation
 of  perfection. A security interest in CONTROLLABLE ACCOUNTS, CONTROLLA-
 BLE  ELECTRONIC  RECORDS,  CONTROLLABLE  PAYMENT  INTANGIBLES,   deposit
 accounts,  electronic  [chattel  paper]  DOCUMENTS, ELECTRONIC MONEY, OR
 letter-of-credit rights[,  or  electronic  documents]  is  perfected  by
 control  under Section 7--106, 9--104, [9--105] 9--105A, [or] 9--107, OR
 9--107A NOT EARLIER THAN THE TIME when the secured party obtains control
 and remains perfected by control only while the  secured  party  retains
 control.
   (c) Investment  property:  time of perfection by control; continuation
 of perfection. A security interest in investment property  is  perfected
 by  control  under  Section  9--106 [from] NOT EARLIER THAN the time the
 secured party obtains control and remains perfected by control until:
 S. 7244--A                         28
 
        (1) the secured party does not have control; and
        (2) one of the following occurs:
            (A) if  the collateral is a certificated security, the debtor
                has or acquires possession of the security certificate;
            (B) if the collateral  is  an  uncertificated  security,  the
                issuer  has  registered  or  registers  the debtor as the
                registered owner; or
            (C) if the collateral is a security entitlement,  the  debtor
                is or becomes the entitlement holder.
   (d) Cooperative interests. Subsections (a) through (c) do not apply to
 cooperative interests.
   §  61.  The uniform commercial code is amended by adding a new section
 9-314A to read as follows:
 SECTION 9-314A. PERFECTION BY POSSESSION AND CONTROL OF CHATTEL PAPER.
   (A) PERFECTION BY POSSESSION AND CONTROL.  A SECURED PARTY MAY PERFECT
 A SECURITY INTEREST IN  CHATTEL  PAPER  BY  TAKING  POSSESSION  OF  EACH
 AUTHORITATIVE  TANGIBLE  COPY OF THE RECORD EVIDENCING THE CHATTEL PAPER
 AND OBTAINING CONTROL OF EACH AUTHORITATIVE ELECTRONIC COPY OF THE ELEC-
 TRONIC RECORD EVIDENCING THE CHATTEL PAPER.
   (B) TIME OF PERFECTION; CONTINUATION OF PERFECTION.  A SECURITY INTER-
 EST IS PERFECTED UNDER SUBSECTION (A) NOT  EARLIER  THAN  THE  TIME  THE
 SECURED PARTY TAKES POSSESSION AND OBTAINS CONTROL AND REMAINS PERFECTED
 UNDER SUBSECTION (A) ONLY WHILE THE SECURED PARTY RETAINS POSSESSION AND
 CONTROL.
   (C) APPLICATION OF SECTION 9--313 TO PERFECTION BY POSSESSION OF CHAT-
 TEL  PAPER.  SECTION 9--313(C) AND (F) THROUGH (I) APPLIES TO PERFECTION
 BY POSSESSION OF AN AUTHORITATIVE TANGIBLE COPY OF A  RECORD  EVIDENCING
 CHATTEL PAPER.
   § 62. Subsections (a) and (f) of section 9--316 of the uniform commer-
 cial  code,  as  added by chapter 84 of the laws of 2001, are amended to
 read as follows:
   (a) General rule: effect on perfection of change in governing  law.  A
 security  interest  perfected  pursuant  to  the law of the jurisdiction
 designated in Section 9--301(a) [or], 9--305(c), 9-306A(D), OR 9-306B(B)
 remains perfected until the earliest of:
        (1) the time perfection would have ceased under the law  of  that
            jurisdiction;
        (2) the  expiration of four months after a change of the debtor's
            location to another jurisdiction; or
        (3) the expiration of one year after a transfer of collateral  to
            a  person  that  thereby  becomes  a debtor and is located in
            another jurisdiction.
   (f) Change in jurisdiction of CHATTEL PAPER,  CONTROLLABLE  ELECTRONIC
 RECORD,  bank,  issuer,  nominated  person,  securities intermediary, or
 commodity intermediary. A security interest in CHATTEL PAPER, CONTROLLA-
 BLE ACCOUNTS,  CONTROLLABLE  ELECTRONIC  RECORDS,  CONTROLLABLE  PAYMENT
 INTANGIBLES,  deposit  accounts,  letter-of-credit rights, or investment
 property which is perfected under the law of THE CHATTEL PAPER'S  JURIS-
 DICTION,  THE  CONTROLLABLE ELECTRONIC RECORD'S JURISDICTION, the bank's
 jurisdiction, the issuer's jurisdiction, a nominated person's  jurisdic-
 tion,  the  securities  intermediary's  jurisdiction,  or  the commodity
 intermediary's jurisdiction, as applicable, remains perfected until  the
 earlier of:
        (1) the  time the security interest would have become unperfected
            under the law of that jurisdiction; or
 S. 7244--A                         29
 
        (2) the expiration of four months after a change of the  applica-
            ble jurisdiction to another jurisdiction.
   § 63. Subsections (b) and (d) of section 9--317 of the uniform commer-
 cial  code,  as  amended by chapter 505 of the laws of 2014, are amended
 and four new subsections (f), (g), (h) and (i)  are  added  to  read  as
 follows:
   (b) Buyers  that  receive  delivery.  Except  as otherwise provided in
 subsection (e), a buyer, other than a secured party, of [tangible  chat-
 tel paper] GOODS, INSTRUMENTS, tangible documents, [goods, instruments,]
 or a certificated security takes free of a security interest or agricul-
 tural lien if the buyer gives value and receives delivery of the collat-
 eral without knowledge of the security interest or agricultural lien and
 before it is perfected.
   (d) Licensees  and  buyers  of  certain  collateral.  [A]  SUBJECT  TO
 SUBSECTIONS (F) THROUGH (I), A licensee of a  general  intangible  or  a
 buyer,  other than a secured party, of [accounts,] COLLATERAL OTHER THAN
 electronic [chattel paper] MONEY, [electronic documents, general  intan-
 gibles,  or investment property other than] GOODS, INSTRUMENTS, INTANGI-
 BLE DOCUMENTS OR a certificated security takes free of a security inter-
 est if the licensee or  buyer  gives  value  without  knowledge  of  the
 security interest and before it is perfected.
   (F)  BUYERS OF CHATTEL PAPER.  A BUYER, OTHER THAN A SECURED PARTY, OF
 CHATTEL PAPER TAKES FREE OF A SECURITY INTEREST IF, WITHOUT KNOWLEDGE OF
 THE SECURITY INTEREST AND BEFORE IT IS PERFECTED, THE BUYER GIVES  VALUE
 AND:
   (1)  RECEIVES  DELIVERY  OF  EACH  AUTHORITATIVE  TANGIBLE COPY OF THE
 RECORD EVIDENCING THE CHATTEL PAPER; AND
   (2) IF EACH AUTHORITATIVE ELECTRONIC COPY OF THE RECORD EVIDENCING THE
 CHATTEL PAPER CAN BE SUBJECTED TO CONTROL UNDER SECTION 9--105,  OBTAINS
 CONTROL OF EACH AUTHORITATIVE ELECTRONIC COPY.
   (G) BUYERS OF ELECTRONIC DOCUMENTS.  A BUYER OF AN ELECTRONIC DOCUMENT
 TAKES  FREE OF A SECURITY INTEREST IF, WITHOUT KNOWLEDGE OF THE SECURITY
 INTEREST AND BEFORE IT IS PERFECTED, THE BUYER GIVES VALUE AND, IF  EACH
 AUTHORITATIVE  ELECTRONIC  COPY  OF  THE  DOCUMENT  CAN  BE SUBJECTED TO
 CONTROL UNDER SECTION 7--106,  OBTAINS  CONTROL  OF  EACH  AUTHORITATIVE
 ELECTRONIC COPY.
   (H)  BUYERS OF CONTROLLABLE ELECTRONIC RECORDS.  A BUYER OF A CONTROL-
 LABLE ELECTRONIC RECORD TAKES FREE OF A SECURITY  INTEREST  IF,  WITHOUT
 KNOWLEDGE OF THE SECURITY INTEREST AND BEFORE IT IS PERFECTED, THE BUYER
 GIVES VALUE AND OBTAINS CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD.
   (I)  BUYERS OF CONTROLLABLE ACCOUNTS AND CONTROLLABLE PAYMENT INTANGI-
 BLES.  A BUYER, OTHER THAN A SECURED PARTY, OF A CONTROLLABLE ACCOUNT OR
 A CONTROLLABLE PAYMENT INTANGIBLE TAKES FREE OF A SECURITY INTEREST  IF,
 WITHOUT  KNOWLEDGE  OF THE SECURITY INTEREST AND BEFORE IT IS PERFECTED,
 THE BUYER GIVES VALUE AND OBTAINS CONTROL OF THE CONTROLLABLE ACCOUNT OR
 CONTROLLABLE PAYMENT INTANGIBLE.
   § 64. Subsections (d) and (f) of section 9--323 of the uniform commer-
 cial code, as added by chapter 84 of the laws of 2001,  are  amended  to
 read as follows:
   (d) Buyer  of goods. Except as otherwise provided in subsection (e), a
 buyer of goods [other than a buyer in ordinary course of business] takes
 free of a security interest to the extent that it secures advances  made
 after the earlier of:
        (1) the  time the secured party acquires knowledge of the buyer's
            purchase; or
        (2) 45 days after the purchase.
 S. 7244--A                         30

   (f) Lessee of goods. Except as otherwise provided in subsection (g), a
 lessee of goods[, other than a lessee in ordinary course  of  business,]
 takes  the  leasehold interest free of a security interest to the extent
 that it secures advances made after the earlier of:
        (1) the  time  the secured party acquires knowledge of the lease;
            or
        (2) 45 days after the lease contract becomes enforceable.
   § 65. Subsections (b) and (d) of section 9--324 of the uniform commer-
 cial code, as added by chapter 84 of the laws of 2001,  are  amended  to
 read as follows:
   (b) Inventory  purchase-money  priority. Subject to subsection (c) and
 except as otherwise provided in subsection (g), a perfected purchase-mo-
 ney security interest in inventory has priority over a conflicting secu-
 rity interest in the same inventory, has  priority  over  a  conflicting
 security  interest  in  chattel  paper  or  an  instrument  constituting
 proceeds of the inventory and in proceeds of the chattel  paper,  if  so
 provided in Section 9--330, and, except as otherwise provided in Section
 9--327, also has priority in identifiable cash proceeds of the inventory
 to  the  extent the identifiable cash proceeds are received on or before
 the delivery of the inventory to a buyer, if:
        (1) the purchase-money security interest is  perfected  when  the
            debtor receives possession of the inventory;
        (2) the  purchase-money  secured party sends [an authenticated] A
            SIGNED notification to the holder of the conflicting security
            interest;
        (3) the holder of the conflicting security interest receives  the
            notification  within  five  years  before the debtor receives
            possession of the inventory; and
        (4) the notification states that the person sending the notifica-
            tion has or expects  to  acquire  a  purchase-money  security
            interest  in inventory of the debtor and describes the inven-
            tory.
   (d) Livestock purchase-money priority. Subject to subsection  (e)  and
 except as otherwise provided in subsection (g), a perfected purchase-mo-
 ney  security  interest in livestock that are farm products has priority
 over a conflicting security interest in the same livestock, and,  except
 as  otherwise  provided in Section 9--327, a perfected security interest
 in their identifiable proceeds and identifiable products in their unman-
 ufactured states also has priority, if:
        (1) the purchase-money security interest is  perfected  when  the
            debtor receives possession of the livestock;
        (2) the  purchase-money  secured party sends [an authenticated] A
            SIGNED notification to the holder of the conflicting security
            interest;
        (3) the holder of the conflicting security interest receives  the
            notification  within  six  months  before the debtor receives
            possession of the livestock; and
        (4) the notification states that the person sending the notifica-
            tion has or expects  to  acquire  a  purchase-money  security
            interest  in  livestock of the debtor and describes the live-
            stock.
   § 66. The uniform commercial code is amended by adding a  new  section
 9-326A to read as follows:
 SECTION 9-326A. PRIORITY  OF  SECURITY INTEREST IN CONTROLLABLE ACCOUNT,
                    CONTROLLABLE  ELECTRONIC  RECORD,  AND   CONTROLLABLE
                    PAYMENT INTANGIBLE.
 S. 7244--A                         31
 
   A SECURITY INTEREST IN A CONTROLLABLE ACCOUNT, CONTROLLABLE ELECTRONIC
 RECORD,  OR  CONTROLLABLE  PAYMENT  INTANGIBLE  HELD  BY A SECURED PARTY
 HAVING CONTROL OF THE ACCOUNT, ELECTRONIC RECORD, OR PAYMENT  INTANGIBLE
 HAS  PRIORITY  OVER  A  CONFLICTING  SECURITY INTEREST HELD BY A SECURED
 PARTY THAT DOES NOT HAVE CONTROL.
   §  67.  Subsections  (a), (b) and (f) of section 9--330 of the uniform
 commercial code, as added by chapter 84 of the laws of 2001, are amended
 to read as follows:
   (a) Purchaser's  priority:  security  interest   claimed   merely   as
 proceeds.    A  purchaser  of chattel paper has priority over a security
 interest in the chattel paper which is claimed  merely  as  proceeds  of
 inventory subject to a security interest if:
        (1) in  good  faith and in the ordinary course of the purchaser's
            business,  the  purchaser  gives  new  value   [and],   takes
            possession  of [the chattel paper or obtains control of] EACH
            AUTHORITATIVE TANGIBLE COPY  OF  THE  RECORD  EVIDENCING  the
            chattel  paper,  AND  OBTAINS CONTROL under Section 9--105 OF
            EACH AUTHORITATIVE ELECTRONIC COPY OF THE  RECORD  EVIDENCING
            THE CHATTEL PAPER; and
        (2) THE AUTHORITATIVE COPIES OF THE RECORD EVIDENCING the chattel
            paper  [does] DO not indicate that [it] THE CHATTEL PAPER has
            been assigned  to  an  identified  assignee  other  than  the
            purchaser.
   (b) Purchaser's  priority:  other  security  interests. A purchaser of
 chattel paper has priority over a security interest in the chattel paper
 which is claimed other than merely as proceeds of inventory subject to a
 security  interest  if  the  purchaser  gives  new  value  [and],  takes
 possession  of EACH AUTHORITATIVE TANGIBLE COPY OF THE RECORD EVIDENCING
 the chattel paper [or], AND obtains control [of the chattel paper] under
 Section 9--105 OF EACH  AUTHORITATIVE  ELECTRONIC  COPY  OF  THE  RECORD
 EVIDENCING  THE  CHATTEL  PAPER in good faith, in the ordinary course of
 the purchaser's  business,  and  without  knowledge  that  the  purchase
 violates the rights of the secured party.
   (f) Indication   of   assignment  gives  knowledge.  For  purposes  of
 subsections (b) and (d), if  THE  AUTHORITATIVE  COPIES  OF  THE  RECORD
 EVIDENCING chattel paper or an instrument [indicates] INDICATE that [it]
 THE  CHATTEL  PAPER  OR  INSTRUMENT  has  been assigned to an identified
 secured party other than the purchaser, a purchaser of the chattel paper
 or instrument has knowledge that the purchase violates the rights of the
 secured party.
   § 68. Section 9--331 of the uniform commercial code, as added by chap-
 ter 84 of the laws of 2001, is amended to read as follows:
 Section 9--331. Priority  of  Rights  of  Purchasers   of   CONTROLLABLE
                   ACCOUNTS,  CONTROLLABLE ELECTRONIC RECORDS, CONTROLLA-
                   BLE  PAYMENT  INTANGIBLES,   DOCUMENTS,   Instruments,
                   [Documents,]  and  Securities  under  Other  Articles;
                   Priority of Interests in Financial Assets and Security
                   Entitlements AND PROTECTION AGAINST ASSERTION OF CLAIM
                   under [Article] ARTICLES 8 AND 12.
   (a) Rights under Articles 3, 7, [and] 8,  AND  12  not  limited.  This
 article does not limit the rights of a holder in due course of a negoti-
 able  instrument,  a  holder to which a negotiable document of title has
 been duly negotiated, [or a] protected purchaser of  a  security,  OR  A
 QUALIFYING  PURCHASER OF A CONTROLLABLE ACCOUNT, CONTROLLABLE ELECTRONIC
 RECORD, OR CONTROLLABLE PAYMENT INTANGIBLE. These holders or  purchasers
 S. 7244--A                         32
 
 take  priority  over an earlier security interest, even if perfected, to
 the extent provided in Articles 3, 7, [and] 8, AND 12.
   (b) Protection  under  [Article]  ARTICLES 8 AND 12. This article does
 not limit the rights of or impose liability on a person  to  the  extent
 that  the  person  is  protected  against the assertion of a claim under
 Article 8 OR 12.
   (c) Filing not notice. Filing under this article does  not  constitute
 notice  of  a claim or defense to the holders, or purchasers, or persons
 described in subsections (a) and (b).
   (d) Section not applicable to cooperative interests. Subsections  (a),
 (b), and (c) do not apply to cooperative interests.
   §  69.  Section  9--332  of  the uniform commercial code, as  added by
 chapter 84 of the laws of 2001, is amended  to read as follows:
 Section 9--332. Transfer  of  Money;  Transfer  of  Funds  from  Deposit
                   Account.
   (a) Transferee  of  TANGIBLE  money.    A transferee of TANGIBLE money
 takes the money free of a security interest [unless] IF  the  transferee
 [acts] RECEIVES POSSESSION OF THE MONEY WITHOUT ACTING in collusion with
 the debtor in violating the rights of the secured party.
   (b) Transferee  of  funds  from deposit account. A transferee of funds
 from a deposit account takes the funds free of a  security  interest  in
 the deposit account [unless] IF the transferee [acts] RECEIVES THE FUNDS
 WITHOUT  ACTING  in collusion with the debtor in violating the rights of
 the secured party.
   (C) TRANSFEREE OF ELECTRONIC MONEY.  A TRANSFEREE OF ELECTRONIC  MONEY
 TAKES  THE  MONEY  FREE OF A SECURITY INTEREST IF THE TRANSFEREE OBTAINS
 CONTROL OF THE MONEY WITHOUT ACTING IN  COLLUSION  WITH  THE  DEBTOR  IN
 VIOLATING THE RIGHTS OF THE SECURED PARTY.
   § 70. Subsection (f) of section 9--334 of the uniform commercial code,
 as  added  by  chapter  84  of  the laws of 2001, is amended  to read as
 follows:
   (f) Priority based on consent, disclaimer, or right to remove. A secu-
 rity interest in fixtures, whether or not perfected, has priority over a
 conflicting interest of an encumbrancer or owner of  the  real  property
 if:
        (1) the encumbrancer or owner has, in [an authenticated] A SIGNED
            record,  consented  to the security interest or disclaimed an
            interest in the goods as fixtures; or
        (2) the debtor has a right to remove the  goods  as  against  the
            encumbrancer or owner.
   § 71. Section 9--341 of the uniform commercial code, as added by chap-
 ter 84 of the laws of 2001, is amended  to read as follows:
 Section 9--341. Bank's   Rights  and  Duties  with  Respect  to  Deposit
                   Account.
   Except as otherwise provided in Section 9--340  (c),  and  unless  the
 bank  otherwise  agrees  in [an authenticated] A SIGNED record, a bank's
 rights and duties with respect to a deposit account maintained with  the
 bank are not terminated, suspended, or modified by:
        (a) the  creation, attachment, or perfection of a security inter-
            est in the deposit account;
        (b) the bank's knowledge of the security interest; or
        (c) the bank's receipt of instructions from the secured party.
   § 72. Paragraph 2 of subsection (a) of section 9--404 of  the  uniform
 commercial  code, as added by chapter 84 of the laws of 2001, is amended
 to read as follows:
 S. 7244--A                         33
 
        (2) any other defense or claim of the account debtor against  the
            assignor  which  accrues before the account debtor receives a
            notification of the assignment [authenticated] SIGNED by  the
            assignor or the assignee.
   § 73. Section 9--406 of the uniform commercial code, as added by chap-
 ter 84 of the laws of 2001, is amended to read as follows:
 Section 9--406. Discharge of Account Debtor; Notification of Assignment;
                   Identification  and  Proof of Assignment; Restrictions
                   on Assignment  of  Accounts,  Chattel  Paper,  Payment
                   Intangibles, and Promissory Notes Ineffective.
   (a) Discharge  of  account  debtor; effect of notification. Subject to
 subsections (b) through [(h)] (I), an  account  debtor  on  an  account,
 chattel  paper,  or a payment intangible may discharge its obligation by
 paying the assignor until, but not after, the account debtor receives  a
 notification,  [authenticated]  SIGNED  by the assignor or the assignee,
 that the amount due or to become due has been assigned and that  payment
 is  to  be  made to the assignee. After receipt of the notification, the
 account debtor may discharge its obligation by paying the  assignee  and
 may not discharge the obligation by paying the assignor.
   (b) When notification ineffective. Subject to [subsection] SUBSECTIONS
 (g) AND (I), notification is ineffective under subsection (a):
        (1) if it does not reasonably identify the rights assigned;
        (2) to the extent that an agreement between an account debtor and
            a  seller of a payment intangible limits the account debtor's
            duty to pay a person other than the seller and the limitation
            is effective under law other than this article; or
        (3) at the option of an account debtor, if the notification noti-
            fies the account debtor to make less than the full amount  of
            any  installment  or  other periodic payment to the assignee,
            even if:
            (A) only a portion of the account, chattel paper, or  payment
                intangible has been assigned to that assignee;
            (B) a portion has been assigned to another assignee; or
            (C) the  account  debtor  knows  that  the assignment to that
                assignee is limited.
   (c) Proof of assignment. Subject to [subsection] SUBSECTIONS  (g)  AND
 (I),  if  requested  by the account debtor, an assignee shall seasonably
 furnish reasonable proof that the assignment has been made.  Unless  the
 assignee  complies,  the  account debtor may discharge its obligation by
 paying the assignor, even if the account debtor has received a notifica-
 tion under subsection (a).
   (d) Term restricting assignment generally ineffective. FOR PURPOSES OF
 THIS SUBSECTION, "PROMISSORY NOTE" INCLUDES A NEGOTIABLE INSTRUMENT THAT
 EVIDENCES CHATTEL PAPER. Except as otherwise provided in subsection  (e)
 and  Sections  2-A-303 and 9--407, and subject to subsection (g), a term
 in an agreement between an account debtor and an assignor or in a  prom-
 issory note is ineffective to the extent that it:
        (1) prohibits,  restricts, or requires the consent of the account
            debtor or person obligated on  the  promissory  note  to  the
            assignment  or  transfer  of,  or  the  creation, attachment,
            perfection, or enforcement of a  security  interest  in,  the
            account,  chattel  paper,  payment  intangible, or promissory
            note; or
        (2) provides that the assignment or  transfer  or  the  creation,
            attachment, perfection, or enforcement of the security inter-
            est  may give rise to a default, breach, right of recoupment,
 S. 7244--A                         34
 
            claim, defense, termination, right of termination, or  remedy
            under  the  account,  chattel  paper,  payment intangible, or
            promissory note.
   (e) Inapplicability of subsection (d) to certain sales. Subsection (d)
 does not apply to the sale of a payment intangible or promissory note.
   (f) Subsection   (b)(3)   not   waivable.   Subject   to  [subsection]
 SUBSECTIONS (g) AND (I), an account debtor may not  waive  or  vary  its
 option under subsection (b)(3).
   (g) Rule  for individual under other law. This section is subject to a
 rule of law, statute, rule or regulation other than this  article  which
 establishes  a different rule for an account debtor who is an individual
 and who incurred the  obligation  primarily  for  personal,  family,  or
 household purposes.
   (h) Inapplicability. This section does not apply to:
        (1) an  assignment  of  a health care insurance receivable to the
            extent such  assignment  conflicts  with  other  law  or  the
            parties have otherwise agreed in writing that such receivable
            is non-assignable,
        (2) a  claim  or  right  to  receive compensation for injuries or
            sickness as described in 26 U.S.C. § 104(a)(1)  and  (2),  as
            amended from time to time, or
        (3) a  claim  or  right to receive benefits under a special needs
            trust as described in 42 U.S.C. § 1396p  (d)(4),  as  amended
            from time to time.
          (i)  Inapplicability  of  certain subsections. Subsections (a),
        (b), (c) and (f) do  not  apply  to  a  controllable  account  or
        controllable payment intandible.
   §  74.  Section  9--408  of  the uniform commercial code is amended by
 adding a new subsection (e) to read as follows:
   (E) "PROMISSORY NOTE".  IN THIS SECTION, "PROMISSORY NOTE" INCLUDES  A
 NEGOTIABLE INSTRUMENT THAT EVIDENCES CHATTEL PAPER.
   §  75.  Paragraph  1  of  subsection  (a) and the opening paragraph of
 subsection (b) of section 9--509 of  the  uniform  commercial  code,  as
 added by chapter 84 of the laws of 2001, are amended to read as follows:
        (1) the  debtor  authorizes  the  filing  in [an authenticated] A
            SIGNED record or pursuant to subsection (b) or (c); or
   By [authenticating] SIGNING or becoming bound as debtor by a  security
 agreement,  a  debtor  or new debtor authorizes the filing of an initial
 financing statement, and an amendment, covering:
   § 76. Paragraph 2 of subsection  (b)  and  the  opening  paragraph  of
 subsection  (c)  of  section  9--513  of the uniform commercial code, as
 added by chapter 84 of the laws of 2001, are amended to read as follows:
        (2) if earlier, within 20 days after the secured  party  receives
            [an authenticated] A SIGNED demand from a debtor.
   In  cases  not  governed  by  subsection  (a),  within 20 days after a
 secured party receives [an authenticated] A SIGNED demand from a debtor,
 the secured party shall cause the secured party of record for a  financ-
 ing  statement  to  send  to  the debtor a termination statement for the
 financing statement or file the  termination  statement  in  the  filing
 office if:
   § 77. Subsection (b) of section 9--601 of the uniform commercial code,
 as  amended  by  chapter  505 of the laws of 2014, is amended to read as
 follows:
   (b) Rights and duties of secured party in  possession  or  control.  A
 secured party in possession of collateral or control of collateral under
 S. 7244--A                         35

 Section 7--106, 9--104, 9--105, 9--105A, 9--106, [or] 9--107, OR 9--107A
 has the rights and duties provided in Section 9--207.
   § 78. Section 9--605 of the uniform commercial code, as added by chap-
 ter 84 of the laws of 2001, is amended to read as follows:
 Section 9--605. Unknown Debtor or Secondary Obligor.
   [A]  (A)  IN  GENERAL:    NO  DUTY  OWED BY SECURED PARTY.   EXCEPT AS
 PROVIDED IN SUBSECTION (B), A secured party does not owe a duty based on
 its status as secured party:
   [(a)] (1) to a person that is a debtor or obligor, unless the  secured
 party knows:
        [(1)] (A) that the person is a debtor or obligor;
        [(2)] (B) the identity of the person; and
        [(3)] (C)  how to communicate with the person; or
   [(b)]  (2) to a secured party or lienholder that has filed a financing
 statement against a person, unless the secured party knows:
        [(1)] (A) that the person is a debtor; and
        [(2)] (B) the identity of the person.
   (B) EXCEPTION:   SECURED PARTY OWES DUTY TO  DEBTOR  OR  OBLIGOR.    A
 SECURED  PARTY  OWES  A DUTY BASED ON ITS STATUS AS A SECURED PARTY TO A
 PERSON IF, AT THE TIME THE SECURED PARTY OBTAINS CONTROL  OF  COLLATERAL
 THAT  IS  A  CONTROLLABLE  ACCOUNT,  CONTROLLABLE  ELECTRONIC RECORD, OR
 CONTROLLABLE PAYMENT INTANGIBLE OR AT THE  TIME  THE  SECURITY  INTEREST
 ATTACHES TO THE COLLATERAL, WHICHEVER IS LATER:
   (1) THE PERSON IS A DEBTOR OR OBLIGOR; AND
   (2)  THE  SECURED  PARTY  KNOWS  THAT  THE  INFORMATION  IN SUBSECTION
 (A)(1)(A), (B), OR (C) RELATING TO THE PERSON IS  NOT  PROVIDED  BY  THE
 COLLATERAL, A RECORD ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE COLLA-
 TERAL, OR THE SYSTEM IN WHICH THE COLLATERAL IS RECORDED.
   §  79.  Subparagraph  (C)  of paragraph 1 of subsection (a) of section
 9--608 of the uniform commercial code, as added by  chapter  84  of  the
 laws of 2001, is amended to read as follows:
            (C) the  satisfaction  of obligations secured by any subordi-
                nate security interest in or other lien on the collateral
                subject to the security  interest  or  agricultural  lien
                under  which the collection or enforcement is made if the
                secured party receives [an authenticated] A SIGNED demand
                for proceeds  before  distribution  of  the  proceeds  is
                completed.
   §  80.  Subsections  (a),  (b),  (c)  and (e) of section 9--611 of the
 uniform commercial code, as added by chapter 84 of the laws of 2001, are
 amended to read as follows:
   (a) "Notification date." In this section,  "notification  date"  means
 the earlier of the date on which:
        (1) a secured party sends to the debtor and any secondary obligor
            [an authenticated] A SIGNED notification of disposition; or
        (2) the  debtor  and  any  secondary  obligor  waive the right to
            notification.
   (b) Notification of disposition required. Except as otherwise provided
 in subsection (d), a secured party that  disposes  of  collateral  under
 Section  9--610  shall send to the persons specified in subsection (c) a
 reasonable [authenticated] SIGNED notification of disposition.
   (c) Persons to be notified. To comply with subsection (b), the secured
 party shall send [an authenticated] A SIGNED notification of disposition
 to:
        (1) the debtor;
        (2) any secondary obligor; and
 S. 7244--A                         36
 
        (3) if the collateral is other than consumer goods:
            (A) any  other  person  from  which  the  secured  party  has
                received, before the notification date, [an  authenticat-
                ed]  A  SIGNED  notification of a claim of an interest in
                the collateral;
            (B) any other secured  party  or  lienholder  that,  10  days
                before the notification date, held a security interest in
                or  other  lien on the collateral perfected by the filing
                of a financing statement that:
                (i) identified the collateral;
                (ii) was indexed under the debtor's name as of that date;
                     and
                (iii) was filed in the office in which to file a  financ-
                      ing  statement  against  the  debtor  covering  the
                      collateral as of that date; and
            (C) any other secured party that, 10 days before the  notifi-
                cation  date,  held a security interest in the collateral
                perfected by compliance with a  statute,  regulation,  or
                treaty described in Section 9--311(a).
   (e) Compliance  with  subsection (c) (3) (B). A secured party complies
 with the requirement  for  notification  prescribed  by  subsection  (c)
 (3) (B) if:
        (1) not later than twenty days or earlier than thirty days before
            the  notification  date,  the  secured  party  requests, in a
            commercially  reasonable   manner,   information   concerning
            financing  statements  indexed under the debtor's name in the
            office indicated in subsection (c) (3) (B); and
        (2) before the notification date, the secured party:
            (A) did not receive a response to the  request  for  informa-
                tion; or
            (B)  received  a  response to the request for information and
                sent [an authenticated] A SIGNED notification of disposi-
                tion to each secured party or other lienholder  named  in
                that  response  whose  financing  statement  covered  the
                collateral.
   § 81. Section 9--613 of the uniform commercial code, as added by chap-
 ter 84 of the laws of 2001, is amended to read as follows:
 Section 9--613. Contents and Form of Notification Before Disposition  of
                   Collateral: General.
   (A)  CONTENTS  AND  FORM  OF  NOTIFICATION. Except in a consumer-goods
 transaction, the following rules apply:
   [(a)] (1)  The contents of a notification of  disposition  are  suffi-
 cient if the notification:
        [(1)] (A)  describes the debtor and the secured party;
        [(2)]  (B)   describes  the collateral that is the subject of the
            intended disposition;
        [(3)] (C)  states the method of intended disposition;
        [(4)] (D)  states that the debtor is entitled to an accounting of
            the unpaid indebtedness and states the charge, if any, for an
            accounting; and
        [(5)] (E)  states the time and place of a public  disposition  or
            the time after which any other disposition is to be made.
   [(b)]  (2)   Whether  the contents of a notification that lacks any of
 the information specified in subsection (a) are nevertheless  sufficient
 is a question of fact.
 S. 7244--A                         37

   [(c)]  (3)  The contents of a notification providing substantially the
 information specified in subsection (a)  are  sufficient,  even  if  the
 notification includes:
        [(1)] (A)  information not specified by subsection (a); or
        [(2)] (B)  minor errors that are not seriously misleading.
   [(d)] (4)  A particular phrasing of the notification is not required.
   [(e)]  (5)   The following form of notification and the form appearing
 in Section [9--614(c)] 9--614(A)(3), when completed IN  ACCORDANCE  WITH
 THE  INSTRUCTIONS IN SUBSECTION (B) AND SECTION 9--614(B), each provides
 sufficient information:
                 NOTIFICATION OF DISPOSITION OF COLLATERAL
   To:  (Name of debtor, obligor, or other person to which the  notifica-
 tion is sent)
   From:  (Name, address, and telephone number of secured party)
   [Name  of Debtor(s):  (Include only if debtor(s) are not an addressee)
 (For a public disposition:)
   We will sell (or lease or license, as applicable) the (describe colla-
 teral) (to the highest qualified bidder) in public as follows:
   Day and Date:  ____________________
   Time:          ____________________
   Place:         ____________________
   (For a private disposition:)
   We will sell (or lease or license, as applicable) the (describe colla-
 teral) privately sometime after (day and date).
   You are entitled to an accounting of the unpaid  indebtedness  secured
 by the property that we intend to sell (or lease or license, as applica-
 ble)  (for a charge of $  ). You may request an accounting by calling us
 at (telephone number).]
   {1} NAME OF ANY DEBTOR THAT IS  NOT  AN  ADDRESSEE:    (NAME  OF  EACH
 DEBTOR)
 
   {2}  WE  WILL  SELL  (DESCRIBE  COLLATERAL)  (TO THE HIGHEST QUALIFIED
 BIDDER) AT PUBLIC SALE. A SALE COULD INCLUDE A LEASE OR  LICENSE.    THE
 SALE WILL BE HELD AS FOLLOWS:
 
   (DATE)
 
   (TIME)
 
   (PLACE)
 
   {3}  WE WILL SELL (DESCRIBE COLLATERAL) AT PRIVATE SALE SOMETIME AFTER
 (DATE). A SALE COULD INCLUDE A LEASE OR LICENSE.
 
   {4} YOU ARE ENTITLED TO  AN  ACCOUNTING  OF  THE  UNPAID  INDEBTEDNESS
 SECURED  BY THE PROPERTY THAT WE INTEND TO SELL OR, AS APPLICABLE, LEASE
 OR LICENSE.
 
   {5} IF YOU REQUEST AN ACCOUNTING YOU MUST PAY A CHARGE OF $ (AMOUNT).
 
   {6} YOU MAY REQUEST AN ACCOUNTING BY CALLING US AT (TELEPHONE NUMBER).
 
                               (END OF FORM)
   (B) INSTRUCTIONS FOR FORM OF NOTIFICATION. THE FOLLOWING  INSTRUCTIONS
 APPLY TO THE FORM OF NOTIFICATION IN SUBSECTION (A)(5):
 S. 7244--A                         38
 
   (1) THE INSTRUCTIONS IN THIS SUBSECTION REFER TO THE NUMBERS IN BRACES
 BEFORE  ITEMS  IN  THE FORM OF NOTIFICATION IN SUBSECTION (A)(5). DO NOT
 INCLUDE THE NUMBERS OR BRACES IN THE  NOTIFICATION.    THE  NUMBERS  AND
 BRACES ARE USED ONLY FOR THE PURPOSE OF THESE INSTRUCTIONS.
   (2) INCLUDE AND COMPLETE SUBSECTION (A)(5) ITEM {1} ONLY IF THERE IS A
 DEBTOR THAT IS NOT AN ADDRESSEE OF THE NOTIFICATION AND LIST THE NAME OR
 NAMES.
   (3)  INCLUDE AND COMPLETE EITHER ITEM {2}, IF THE NOTIFICATION RELATES
 TO A PUBLIC DISPOSITION OF THE COLLATERAL, OR ITEM {3}, IF THE NOTIFICA-
 TION RELATES TO A PRIVATE DISPOSITION OF THE COLLATERAL. IF ITEM {2}  IS
 INCLUDED,  INCLUDE  THE  WORDS "TO THE HIGHEST QUALIFIED BIDDER" ONLY IF
 APPLICABLE.
   (4) INCLUDE AND COMPLETE ITEMS {4} AND {6}.
   (5) INCLUDE AND COMPLETE ITEM {5} ONLY IF THE SENDER WILL  CHARGE  THE
 RECIPIENT FOR AN ACCOUNTING.
   § 82. Section 9--614 of the uniform commercial code, as added by chap-
 ter 84 of the laws of 2001, is amended to read as follows:
 Section 9--614. Contents  and Form of Notification Before Disposition of
                   Collateral: Consumer-goods Transaction.
   (A) CONTENTS AND FORM OF  NOTIFICATION.  In  a  consumer-goods  trans-
 action, the following rules apply:
   [(a)](1) A  notification  of  disposition  must  provide the following
 information:
        [(1)](A) the information specified in Section 9--613(a);
        [(2)](B) a description of any liability for a deficiency  of  the
            person to which the notification is sent;
        [(3)](C) a  telephone  number  from which the amount that must be
            paid to the secured party  to  redeem  the  collateral  under
            Section 9--623 is available; and
        [(4)](D) a  telephone  number or mailing address from which addi-
            tional information concerning the disposition and  the  obli-
            gation secured is available.
   [(b)](2) A particular phrasing of the notification is not required.
   [(c)](3) The following form of notification, when completed IN ACCORD-
 ANCE WITH THE INSTRUCTIONS IN SUBSECTION (B), provides sufficient infor-
 mation:
   (Name and address of secured party)
   (Date)
                    NOTICE OF OUR PLAN TO SELL PROPERTY
   (Name and address of any obligor who is also a debtor)
 Subject: (Identification of Transaction)
 We  have  your  (describe collateral), because you broke promises in our
 agreement.
 [(For a public disposition:)]
   {1} We will sell (describe collateral) at public sale.  A  sale  could
 include a lease or license. The sale will be held as follows:
   Date:          ____________________
   Time:          ____________________
   Place:         ____________________
 You may attend the sale and bring bidders if you want.
 [(For a private disposition:)]
   {2}  We will sell (describe collateral) at private sale sometime after
 (date). A sale could include a lease or license.
   {3} The money that  we  get  from  the  sale  [(],  after  paying  our
 costs[)],  will reduce the amount you owe. If we get less money than you
 owe, you (will or will not, as applicable) still owe us the  difference.
 S. 7244--A                         39
 
 If  we get more money than you owe, you will get the extra money, unless
 we must pay it to someone else.
   {4}  You  can  get  the property back at any time before we sell it by
 paying  us  the  full  amount  you  owe  [(],  not  just  the  past  due
 payments[)],  including our expenses. To learn the exact amount you must
 pay, call us at (telephone number).
   {5} If you want us to explain to you in writing OR IN (DESCRIPTION  OF
 ELECTRONIC  RECORD)  (DESCRIPTION  OF  ELECTRONIC  RECORD)  how  we have
 figured the amount that you owe us, [you may] {6} call us at  (telephone
 number)  [(]or write us at (secured party's address)[)] OR CONTACT US BY
 (DESCRIPTION OF ELECTRONIC COMMUNICATION METHOD) {7} and request a writ-
 ten explanation OR AN EXPLANATION IN (DESCRIPTION OF ELECTRONIC  RECORD)
 AN EXPLANATION IN (DESCRIPTION OF ELECTRONIC RECORD).
   [(]{8}  We  will  charge you $ (AMOUNT) for the explanation if we sent
 you another written explanation of the amount you owe us within the last
 six months.[)]
   {9} If you need more information about the sale call us at  (telephone
 number)  [(]or write us at (secured party's address)[,] OR CONTACT US BY
 (DESCRIPTION OF ELECTRONIC COMMUNICATION METHOD).
   {10} We are sending this notice to the following other people who have
 an interest in (describe collateral) or who owe money under your  agree-
 ment:
   (Names of all other debtors and obligors, if any)
 
                               (END OF FORM)
 
   [(d)](4) A  notification in the form of [subsection (c)] PARAGRAPH (3)
 is sufficient, even if additional information appears at the end of  the
 form.
   [(e)](5) A  notification in the form of [subsection (c)] PARAGRAPH (3)
 is sufficient, even if it includes errors in information not required by
 [subsection (a)] PARAGRAPH (3), unless  the  error  is  misleading  with
 respect to rights arising under this article.
   [(f)](6) If  a  notification  under this section is not in the form of
 [subsection (c)] PARAGRAPH (3), law other than this  article  determines
 the  effect  of  including  information not required by [subsection (a)]
 PARAGRAPH (3).
   (B) INSTRUCTIONS FOR FORM OF NOTIFICATION.  THE FOLLOWING INSTRUCTIONS
 APPLY TO THE FORM OF NOTIFICATION IN SUBSECTION (A)(3):
   (1) THE INSTRUCTIONS IN THIS SUBSECTION REFER TO THE NUMBERS IN BRACES
 BEFORE ITEMS IN THE FORM OF NOTIFICATION IN SUBSECTION  (A)(3).  DO  NOT
 INCLUDE THE NUMBERS OR BRACES IN THE NOTIFICATION. THE NUMBERS AND BRAC-
 ES ARE USED ONLY FOR THE PURPOSE OF THESE INSTRUCTIONS.
   (2)  INCLUDE AND COMPLETE EITHER ITEM {1}, IF THE NOTIFICATION RELATES
 TO A PUBLIC DISPOSITION OF THE COLLATERAL, OR ITEM {2}, IF THE NOTIFICA-
 TION RELATES TO A PRIVATE DISPOSITION OF THE COLLATERAL.
   (3) INCLUDE AND COMPLETE ITEMS {3}, {4}, {5}, {6}, AND {7}.
   (4) IN ITEM {5}, INCLUDE AND COMPLETE ANY ONE OF THE THREE ALTERNATIVE
 METHODS FOR THE EXPLANATION--WRITING, WRITING OR ELECTRONIC  RECORD,  OR
 ELECTRONIC RECORD.
   (5) IN ITEM {6}, INCLUDE THE TELEPHONE NUMBER. IN ADDITION, THE SENDER
 MAY  INCLUDE  AND COMPLETE EITHER OR BOTH OF THE TWO ADDITIONAL ALTERNA-
 TIVE METHODS OF COMMUNICATION--WRITING OR  ELECTRONIC  COMMUNICATION-FOR
 THE  RECIPIENT  OF  THE  NOTIFICATION  TO  COMMUNICATE  WITH THE SENDER.
 NEITHER OF THE TWO ADDITIONAL METHODS OF COMMUNICATION IS REQUIRED TO BE
 INCLUDED.
 S. 7244--A                         40
 
   (6) IN ITEM {7}, INCLUDE AND COMPLETE THE METHOD OR  METHODS  FOR  THE
 EXPLANATION--WRITING,   WRITING  OR  ELECTRONIC  RECORD,  OR  ELECTRONIC
 RECORD--INCLUDED IN ITEM {5}.
   (7)  INCLUDE  AND  COMPLETE  ITEM {8} ONLY IF A WRITTEN EXPLANATION IS
 INCLUDED IN ITEM {5} AS A METHOD FOR COMMUNICATING THE  EXPLANATION  AND
 THE SENDER WILL CHARGE THE RECIPIENT FOR ANOTHER WRITTEN EXPLANATION.
   (8) IN ITEM {9}, INCLUDE EITHER THE TELEPHONE NUMBER OR THE ADDRESS OR
 BOTH  THE  TELEPHONE NUMBER AND THE ADDRESS. IN ADDITION, THE SENDER MAY
 INCLUDE AND COMPLETE THE ADDITIONAL METHOD OF  COMMUNICATION--ELECTRONIC
 COMMUNICATION--FOR THE RECIPIENT OF THE NOTIFICATION TO COMMUNICATE WITH
 THE  SENDER.  THE  ADDITIONAL  METHOD OF ELECTRONIC COMMUNICATION IS NOT
 REQUIRED TO BE INCLUDED.
   (9) IF ITEM {10} DOES NOT APPLY, INSERT "NONE" AFTER "AGREEMENT:".
   § 83. Paragraphs 3 and 4 of subsection (a) of section  9--615  of  the
 uniform commercial code, as added by chapter 84 of the laws of 2001, are
 amended to read as follows:
        (3) the  satisfaction  of  obligations secured by any subordinate
            security interest in or other subordinate lien on the collat-
            eral if:
            (A) the secured party receives from the holder of the  subor-
                dinate security interest or other lien [an authenticated]
                A  SIGNED  demand for proceeds before distribution of the
                proceeds is completed; and
            (B) in a case in which a consignor has  an  interest  in  the
                collateral,  the  subordinate  security interest or other
                lien is senior to the interest of the consignor; and
        (4) a secured party that is a consignor of the collateral if  the
            secured  party receives from the consignor [an authenticated]
            A SIGNED demand  for  proceeds  before  distribution  of  the
            proceeds is completed.
   §  84. Subsections (a) and (b) and the opening paragraph of subsection
 (c) of section 9--616 of the uniform commercial code, as added by  chap-
 ter 84 of the laws of 2001, are amended to read as follows:
   (a) Definitions. In this section:
        (1) "Explanation" means a [writing] RECORD that:
            (A) states the amount of the surplus or deficiency;
            (B) provides an explanation in accordance with subsection (c)
                of  how the secured party calculated the surplus or defi-
                ciency;
            (C) states,  if  applicable,  that  future  debits,  credits,
                charges,  including  additional credit service charges or
                interest, rebates, and expenses may affect the amount  of
                the surplus or deficiency; and
            (D) provides a telephone number or mailing address from which
                additional  information  concerning  the  transaction  is
                available.
        (2) "Request" means a record:
            (A) [authenticated] SIGNED by a debtor or consumer obligor;
            (B) requesting that the recipient provide an explanation; and
            (C) sent after disposition of the  collateral  under  Section
                9--610.
   (b) Explanation  of  calculation.  In  a consumer-goods transaction in
 which the debtor is entitled to a  surplus  or  a  consumer  obligor  is
 liable for a deficiency under Section 9--615, the secured party shall:
        (1) send  an  explanation  to  the debtor or consumer obligor, as
            applicable, after the disposition and:
 S. 7244--A                         41
 
            (A) before or when the secured party accounts to  the  debtor
                and pays any surplus or first makes [written] demand IN A
                RECORD  on the consumer obligor after the disposition for
                payment of the deficiency; and
            (B) within fourteen days after receipt of a request; or
        (2) in  the  case of a consumer obligor who is liable for a defi-
            ciency, within fourteen days after receipt of a request, send
            to the consumer obligor a record waiving the secured  party's
            right to a deficiency.
        To  comply  with subsection (a)(1)(B), [a writing] AN EXPLANATION
            must provide  the  following  information  in  the  following
            order:
   § 85. The opening paragraph of subsection (a) of section 9--619 of the
 uniform  commercial code, as added by chapter 84 of the laws of 2001, is
 amended to read as follows:
   In this section, "transfer statement" means a  record  [authenticated]
 SIGNED by a secured party stating:
   §  86.  The uniform commercial code is amended by adding a new article
 12 to read as follows:
                                ARTICLE 12
                      CONTROLLABLE ELECTRONIC RECORDS
 
 SECTION 12--101. SHORT TITLE.
   THIS ARTICLE MAY BE CITED  AS  UNIFORM  COMMERCIAL  CODE--CONTROLLABLE
 ELECTRONIC RECORDS.
 SECTION 12--102. DEFINITIONS.
   (A) IN THIS ARTICLE:
   (1) "CONTROLLABLE ELECTRONIC RECORD" MEANS A RECORD STORED IN AN ELEC-
 TRONIC MEDIUM THAT CAN BE SUBJECTED TO CONTROL UNDER SECTION 12-105. THE
 TERM  DOES  NOT  INCLUDE  A CONTROLLABLE ACCOUNT, A CONTROLLABLE PAYMENT
 INTANGIBLE, A DEPOSIT ACCOUNT, AN ELECTRONIC COPY OF A RECORD EVIDENCING
 CHATTEL PAPER,  AN  ELECTRONIC  DOCUMENT  OF  TITLE,  ELECTRONIC  MONEY,
 INVESTMENT PROPERTY, OR A TRANSFERABLE RECORD.
   (2)  "QUALIFYING  PURCHASER" MEANS A PURCHASER OF A CONTROLLABLE ELEC-
 TRONIC RECORD OR AN INTEREST IN A CONTROLLABLE  ELECTRONIC  RECORD  THAT
 OBTAINS CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD FOR VALUE, IN GOOD
 FAITH, AND WITHOUT NOTICE OF A CLAIM OF A PROPERTY RIGHT IN THE CONTROL-
 LABLE ELECTRONIC RECORD. IN THE CASE OF A CONTROLLABLE ELECTRONIC RECORD
 THAT  WOULD  BE  A  "DRAFT"  OR  A "NOTE", AS THOSE TERMS ARE DEFINED IN
 SECTION 3--104, IF THE CONTROLLABLE  ELECTRONIC  RECORD  WERE  A  SIGNED
 WRITING,  SECTION  3--304(7)  APPLIES  TO THE DETERMINATION OF WHETHER A
 PURCHASER OBTAINS CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD  WITHOUT
 NOTICE  OF A CLAIM OF A PROPERTY RIGHT IN IT AS IF THE REFERENCE IN THAT
 SUBSECTION TO "THE INSTRUMENT" REFERRED TO THE  CONTROLLABLE  ELECTRONIC
 RECORD.  THE  PRECEDING  SENTENCE APPLIES EVEN IF THE CONTROLLABLE ELEC-
 TRONIC RECORD CONTAINS A TERM BY WHICH AN OBLIGOR OR ACCOUNT  DEBTOR  ON
 THE CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE EVIDENCED BY
 THE  CONTROLLABLE  ELECTRONIC  RECORD  WAIVES  OR  AGREES  NOT TO ASSERT
 AGAINST AN ASSIGNEE OF THE CONTROLLABLE ELECTRONIC RECORD ANY  CLAIM  OR
 DEFENSE  THAT  THE OBLIGOR OR ACCOUNT DEBTOR MAY HAVE AGAINST THE ASSIG-
 NOR.
   (3) "TRANSFERABLE RECORD" MEANS AN ELECTRONIC RECORD THAT EITHER:
   (A) IS A "TRANSFERABLE RECORD" UNDER SECTION 201(A)(1)  OF  THE  ELEC-
 TRONIC  SIGNATURES  IN  GLOBAL  AND  NATIONAL  COMMERCE  ACT,  15 U.S.C.
 SECTION 7021(A)(1), AS AMENDED; OR,
 S. 7244--A                         42
 
   (B) IS GOVERNED BY THE LAW OF ANY STATE THAT HAS  ENACTED  OR  ADOPTED
 THE  UNIFORM  ELECTRONIC  TRANSACTIONS ACT SUBSTANTIALLY AS APPROVED AND
 RECOMMENDED FOR ENACTMENT IN ALL THE STATES BY THE  NATIONAL  CONFERENCE
 OF  COMMISSIONERS  ON  UNIFORM STATE LAWS IN 1999 AND IS A "TRANSFERABLE
 RECORD" UNDER SECTION 16(A) OF THAT ACT.
   (4) "VALUE" HAS THE MEANING PROVIDED IN SECTION 3-303(A), AS IF REFER-
 ENCES  IN  THAT  SUBSECTION  TO  AN  "INSTRUMENT"  WERE  REFERENCES TO A
 CONTROLLABLE ACCOUNT, CONTROLLABLE ELECTRONIC  RECORD,  OR  CONTROLLABLE
 PAYMENT INTANGIBLE.
   (B)  DEFINITIONS IN OTHER ARTICLES. THE FOLLOWING DEFINITIONS IN OTHER
 ARTICLES APPLY TO THIS ARTICLE:
   (1) THE DEFINITIONS IN ARTICLE 9 OF  "ACCOUNT  DEBTOR",  "CONTROLLABLE
 ACCOUNT",  "CONTROLLABLE  PAYMENT INTANGIBLE", "CHATTEL PAPER", "DEPOSIT
 ACCOUNT", "ELECTRONIC MONEY", AND "INVESTMENT PROPERTY"  APPLY  TO  THIS
 ARTICLE.
   (2)   ARTICLE   1  CONTAINS  GENERAL  DEFINITIONS  AND  PRINCIPLES  OF
 CONSTRUCTION AND INTERPRETATION APPLICABLE THROUGHOUT THIS ARTICLE.
 SECTION 12--103. RELATION TO ARTICLE 9 AND CONSUMER LAWS.
   (A) ARTICLE 9 GOVERNS IN  CASE  OF  CONFLICT.  IF  THERE  IS  CONFLICT
 BETWEEN THIS ARTICLE AND ARTICLE 9, ARTICLE 9 GOVERNS.
   (B)  APPLICABLE  CONSUMER LAW AND OTHER LAWS. A TRANSACTION SUBJECT TO
 THIS ARTICLE IS SUBJECT TO ANY APPLICABLE RULE OF LAW THAT ESTABLISHES A
 DIFFERENT RULE FOR CONSUMERS, INCLUDING  ARTICLE  22-A  OF  THE  GENERAL
 BUSINESS  LAW AND CHAPTER 5 OF TITLE 20 OF THE NEW YORK CITY ADMINISTRA-
 TIVE CODE.
   (C) ENFORCEABILITY OR EFFECTIVENESS.   IF AN ELECTRONIC  RECORD  IS  A
 CONTROLLABLE  ELECTRONIC RECORD UNDER THIS ARTICLE, SECTION 307.2 OF THE
 ELECTRONIC SIGNATURES AND RECORDS ACT (STATE TECHNOLOGY LAW 301 ET SEQ.)
 SHALL NOT IMPAIR THE ENFORCEABILITY OR EFFECTIVENESS OF SUCH  ELECTRONIC
 RECORD  UNDER  THIS  ARTICLE  NOR SHALL SUCH ACT CAUSE SUCH CONTROLLABLE
 ELECTRONIC RECORD TO BE GOVERNED BY ARTICLE 3 RATHER THAN THIS  ARTICLE,
 EXCEPT  TO THE EXTENT THE ELECTRONIC RECORD EXPRESSLY PROVIDES OTHERWISE
 OR WAS CREATED PRIOR TO THE EFFECTIVE DATE OF THIS ARTICLE.
 SECTION 12--104. RIGHTS IN CONTROLLABLE ACCOUNT, CONTROLLABLE ELECTRONIC
                    RECORD, AND CONTROLLABLE PAYMENT INTANGIBLE.
   (A) APPLICABILITY OF SECTION TO CONTROLLABLE ACCOUNT AND  CONTROLLABLE
 PAYMENT  INTANGIBLE.    THIS  SECTION  APPLIES  TO  THE  ACQUISITION AND
 PURCHASE OF RIGHTS IN A CONTROLLABLE  ACCOUNT  OR  CONTROLLABLE  PAYMENT
 INTANGIBLE,  INCLUDING  THE  RIGHTS  AND BENEFITS UNDER SUBSECTIONS (C),
 (D), (E), (G), AND (H) OF A PURCHASER AND QUALIFYING PURCHASER,  IN  THE
 SAME MANNER THIS SECTION APPLIES TO A CONTROLLABLE ELECTRONIC RECORD.
   (B)  CONTROL OF CONTROLLABLE ACCOUNT AND CONTROLLABLE PAYMENT INTANGI-
 BLE. TO DETERMINE WHETHER A PURCHASER OF A  CONTROLLABLE  ACCOUNT  OR  A
 CONTROLLABLE PAYMENT INTANGIBLE IS A QUALIFYING PURCHASER, THE PURCHASER
 OBTAINS  CONTROL  OF  THE  ACCOUNT  OR  PAYMENT INTANGIBLE IF IT OBTAINS
 CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD THAT EVIDENCES THE ACCOUNT
 OR PAYMENT INTANGIBLE.
   (C) APPLICABILITY OF OTHER LAW TO ACQUISITION  OF  RIGHTS.  EXCEPT  AS
 PROVIDED IN THIS SECTION, LAW OTHER THAN THIS ARTICLE DETERMINES WHETHER
 A  PERSON  ACQUIRES  A RIGHT IN A CONTROLLABLE ELECTRONIC RECORD AND THE
 RIGHT THE PERSON ACQUIRES.
   (D) SHELTER PRINCIPLE AND PURCHASE OF LIMITED INTEREST. A PURCHASER OF
 A CONTROLLABLE ELECTRONIC RECORD ACQUIRES ALL RIGHTS IN THE CONTROLLABLE
 ELECTRONIC RECORD THAT THE TRANSFEROR HAD  OR  HAD  POWER  TO  TRANSFER,
 EXCEPT  THAT  A  PURCHASER OF A LIMITED INTEREST IN A CONTROLLABLE ELEC-
 S. 7244--A                         43
 
 TRONIC RECORD ACQUIRES  RIGHTS  ONLY  TO  THE  EXTENT  OF  THE  INTEREST
 PURCHASED.
   (E)  RIGHTS  OF  QUALIFYING PURCHASER. A QUALIFYING PURCHASER ACQUIRES
 ITS RIGHTS IN THE CONTROLLABLE ELECTRONIC RECORD FREE OF A  CLAIM  OF  A
 PROPERTY RIGHT IN THE CONTROLLABLE ELECTRONIC RECORD.
   (F)  LIMITATION  OF  RIGHTS OF QUALIFYING PURCHASER IN OTHER PROPERTY.
 EXCEPT AS PROVIDED IN SUBSECTIONS (A) AND (E) FOR A CONTROLLABLE ACCOUNT
 AND A CONTROLLABLE PAYMENT INTANGIBLE OR LAW OTHER THAN THIS ARTICLE,  A
 QUALIFYING  PURCHASER TAKES A RIGHT TO PAYMENT, RIGHT TO PERFORMANCE, OR
 OTHER INTEREST IN PROPERTY  EVIDENCED  BY  THE  CONTROLLABLE  ELECTRONIC
 RECORD  SUBJECT  TO A CLAIM OF A PROPERTY RIGHT IN THE RIGHT TO PAYMENT,
 RIGHT TO PERFORMANCE, OR OTHER INTEREST IN PROPERTY.
   (G) NO-ACTION PROTECTION FOR QUALIFYING PURCHASER. AN ACTION  MAY  NOT
 BE  ASSERTED  AGAINST A QUALIFYING PURCHASER BASED ON BOTH A PURCHASE BY
 THE QUALIFYING PURCHASER OF A CONTROLLABLE ELECTRONIC RECORD AND A CLAIM
 OF A PROPERTY RIGHT IN ANOTHER CONTROLLABLE ELECTRONIC  RECORD,  WHETHER
 THE  ACTION IS FRAMED IN CONVERSION, REPLEVIN, CONSTRUCTIVE TRUST, EQUI-
 TABLE LIEN, OR OTHER THEORY.
   (H) FILING NOT NOTICE. FILING OF A FINANCING STATEMENT UNDER ARTICLE 9
 IS NOT NOTICE OF A CLAIM OF A PROPERTY RIGHT IN A CONTROLLABLE ELECTRON-
 IC RECORD.
 SECTION 12--105. CONTROL OF CONTROLLABLE ELECTRONIC RECORD.
   (A) GENERAL RULE: CONTROL OF CONTROLLABLE ELECTRONIC RECORD. A  PERSON
 HAS  CONTROL  OF  A  CONTROLLABLE  ELECTRONIC  RECORD  IF THE ELECTRONIC
 RECORD, A RECORD ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE ELECTRONIC
 RECORD, OR A SYSTEM IN WHICH THE ELECTRONIC RECORD IS RECORDED:
   (1) GIVES THE PERSON:
   (A) POWER TO AVAIL ITSELF OF SUBSTANTIALLY ALL THE  BENEFIT  FROM  THE
 ELECTRONIC RECORD; AND
   (B) EXCLUSIVE POWER, SUBJECT TO SUBSECTION (B), TO:
   (I)  PREVENT  OTHERS FROM AVAILING THEMSELVES OF SUBSTANTIALLY ALL THE
 BENEFIT FROM THE ELECTRONIC RECORD; AND
   (II) TRANSFER CONTROL OF THE ELECTRONIC RECORD TO  ANOTHER  PERSON  OR
 CAUSE ANOTHER PERSON TO OBTAIN CONTROL OF ANOTHER CONTROLLABLE ELECTRON-
 IC RECORD AS A RESULT OF THE TRANSFER OF THE ELECTRONIC RECORD; AND
   (2)  ENABLES THE PERSON READILY TO IDENTIFY ITSELF IN ANY WAY, INCLUD-
 ING BY NAME, IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY, OFFICE,  OR  ACCOUNT
 NUMBER, AS HAVING THE POWERS SPECIFIED IN PARAGRAPH (1).
   (B) MEANING OF EXCLUSIVE. SUBJECT TO SUBSECTION (C), A POWER IS EXCLU-
 SIVE UNDER SUBSECTION (A)(1)(B)(I) AND (II) EVEN IF:
   (1)  THE  CONTROLLABLE  ELECTRONIC  RECORD,  A  RECORD  ATTACHED TO OR
 LOGICALLY ASSOCIATED WITH THE ELECTRONIC RECORD, OR A  SYSTEM  IN  WHICH
 THE  ELECTRONIC  RECORD  IS  RECORDED  LIMITS  THE USE OF THE ELECTRONIC
 RECORD OR HAS A PROTOCOL PROGRAMMED  TO  CAUSE  A  CHANGE,  INCLUDING  A
 TRANSFER  OR  LOSS  OF CONTROL OR A MODIFICATION OF BENEFITS AFFORDED BY
 THE ELECTRONIC RECORD; OR
   (2) THE POWER IS SHARED WITH ANOTHER PERSON.
   (C) WHEN POWER NOT SHARED WITH ANOTHER PERSON. A POWER OF A PERSON  IS
 NOT  SHARED WITH ANOTHER PERSON UNDER SUBSECTION (B)(2) AND THE PERSON'S
 POWER IS NOT EXCLUSIVE IF:
   (1) THE PERSON CAN EXERCISE THE POWER ONLY IF THE POWER ALSO IS  EXER-
 CISED BY THE OTHER PERSON; AND
   (2) THE OTHER PERSON:
   (A)  CAN  EXERCISE  THE  POWER  WITHOUT  EXERCISE  OF THE POWER BY THE
 PERSON; OR
 S. 7244--A                         44
 
   (B) IS THE TRANSFEROR TO THE PERSON OF AN INTEREST IN THE CONTROLLABLE
 ELECTRONIC RECORD OR A  CONTROLLABLE  ACCOUNT  OR  CONTROLLABLE  PAYMENT
 INTANGIBLE EVIDENCED BY THE CONTROLLABLE ELECTRONIC RECORD.
   (D)  PRESUMPTION OF EXCLUSIVITY OF CERTAIN POWERS. IF A PERSON HAS THE
 POWERS SPECIFIED IN SUBSECTION (A)(1)(B)(I) AND  (II),  THE  POWERS  ARE
 PRESUMED TO BE EXCLUSIVE.
   (E) CONTROL THROUGH ANOTHER PERSON. A PERSON HAS CONTROL OF A CONTROL-
 LABLE  ELECTRONIC RECORD IF ANOTHER PERSON, OTHER THAN THE TRANSFEROR TO
 THE PERSON OF AN INTEREST IN THE CONTROLLABLE  ELECTRONIC  RECORD  OR  A
 CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE EVIDENCED BY THE
 CONTROLLABLE ELECTRONIC RECORD:
   (1)  HAS CONTROL OF THE ELECTRONIC RECORD AND ACKNOWLEDGES THAT IT HAS
 CONTROL ON BEHALF OF THE PERSON; OR
   (2) OBTAINS CONTROL OF THE ELECTRONIC RECORD AFTER HAVING ACKNOWLEDGED
 THAT IT WILL OBTAIN CONTROL OF THE ELECTRONIC RECORD ON  BEHALF  OF  THE
 PERSON.
   (F)  NO  REQUIREMENT  TO  ACKNOWLEDGE. A PERSON THAT HAS CONTROL UNDER
 THIS SECTION IS NOT REQUIRED TO  ACKNOWLEDGE  THAT  IT  HAS  CONTROL  ON
 BEHALF OF ANOTHER PERSON.
   (G) NO DUTIES OR CONFIRMATION. IF A PERSON ACKNOWLEDGES THAT IT HAS OR
 WILL  OBTAIN  CONTROL  ON  BEHALF  OF  ANOTHER PERSON, UNLESS THE PERSON
 OTHERWISE AGREES OR LAW OTHER THAN THIS ARTICLE OR ARTICLE  9  OTHERWISE
 PROVIDES,  THE  PERSON  DOES NOT OWE ANY DUTY TO THE OTHER PERSON AND IS
 NOT REQUIRED TO CONFIRM THE ACKNOWLEDGMENT TO ANY OTHER PERSON.
 SECTION 12--106. DISCHARGE OF ACCOUNT DEBTOR ON CONTROLLABLE ACCOUNT  OR
 CONTROLLABLE PAYMENT INTANGIBLE.
   (A)  DISCHARGE  OF ACCOUNT DEBTOR. AN ACCOUNT DEBTOR ON A CONTROLLABLE
 ACCOUNT OR CONTROLLABLE PAYMENT INTANGIBLE MAY DISCHARGE ITS  OBLIGATION
 BY PAYING:
   (1)  THE  PERSON  HAVING CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD
 THAT EVIDENCES THE CONTROLLABLE ACCOUNT OR CONTROLLABLE PAYMENT INTANGI-
 BLE; OR
   (2) EXCEPT AS PROVIDED IN SUBSECTION (B), A PERSON THAT  FORMERLY  HAD
 CONTROL OF THE CONTROLLABLE ELECTRONIC RECORD.
   (B) CONTENT AND EFFECT OF NOTIFICATION. SUBJECT TO SUBSECTION (D), THE
 ACCOUNT  DEBTOR MAY NOT DISCHARGE ITS OBLIGATION BY PAYING A PERSON THAT
 FORMERLY HAD CONTROL  OF  THE  CONTROLLABLE  ELECTRONIC  RECORD  IF  THE
 ACCOUNT DEBTOR RECEIVES A NOTIFICATION THAT:
   (1)  IS  SIGNED BY A PERSON THAT FORMERLY HAD CONTROL OR THE PERSON TO
 WHICH CONTROL WAS TRANSFERRED;
   (2) REASONABLY IDENTIFIES THE  CONTROLLABLE  ACCOUNT  OR  CONTROLLABLE
 PAYMENT INTANGIBLE;
   (3) NOTIFIES THE ACCOUNT DEBTOR THAT CONTROL OF THE CONTROLLABLE ELEC-
 TRONIC  RECORD  THAT  EVIDENCES THE CONTROLLABLE ACCOUNT OR CONTROLLABLE
 PAYMENT INTANGIBLE WAS TRANSFERRED;
   (4) IDENTIFIES THE TRANSFEREE, IN ANY  REASONABLE  WAY,  INCLUDING  BY
 NAME,  IDENTIFYING NUMBER, CRYPTOGRAPHIC KEY, OFFICE, OR ACCOUNT NUMBER;
 AND
   (5) PROVIDES A COMMERCIALLY REASONABLE METHOD  BY  WHICH  THE  ACCOUNT
 DEBTOR IS TO PAY THE TRANSFEREE.
   (C)  DISCHARGE  FOLLOWING  EFFECTIVE  NOTIFICATION. AFTER RECEIPT OF A
 NOTIFICATION THAT COMPLIES WITH SUBSECTION (B), THE ACCOUNT  DEBTOR  MAY
 DISCHARGE  ITS  OBLIGATION BY PAYING IN ACCORDANCE WITH THE NOTIFICATION
 AND MAY NOT DISCHARGE THE OBLIGATION BY PAYING A  PERSON  THAT  FORMERLY
 HAD CONTROL.
 S. 7244--A                         45
 
   (D)  WHEN NOTIFICATION INEFFECTIVE. SUBJECT TO SUBSECTION (H), NOTIFI-
 CATION IS INEFFECTIVE UNDER SUBSECTION (B):
   (1)  UNLESS,  BEFORE  THE NOTIFICATION IS SENT, THE ACCOUNT DEBTOR AND
 THE PERSON THAT, AT THAT TIME, HAD CONTROL OF THE CONTROLLABLE ELECTRON-
 IC RECORD  THAT  EVIDENCES  THE  CONTROLLABLE  ACCOUNT  OR  CONTROLLABLE
 PAYMENT INTANGIBLE AGREE IN A SIGNED RECORD TO A COMMERCIALLY REASONABLE
 METHOD  BY  WHICH A PERSON MAY FURNISH REASONABLE PROOF THAT CONTROL HAS
 BEEN TRANSFERRED;
   (2) TO THE EXTENT AN AGREEMENT BETWEEN THE ACCOUNT DEBTOR  AND  SELLER
 OF A PAYMENT INTANGIBLE LIMITS THE ACCOUNT DEBTOR'S DUTY TO PAY A PERSON
 OTHER  THAN  THE  SELLER AND THE LIMITATION IS EFFECTIVE UNDER LAW OTHER
 THAN THIS ARTICLE; OR
   (3) AT THE OPTION OF THE ACCOUNT DEBTOR, IF THE NOTIFICATION  NOTIFIES
 THE ACCOUNT DEBTOR TO:
   (A) DIVIDE A PAYMENT;
   (B) MAKE LESS THAN THE FULL AMOUNT OF AN INSTALLMENT OR OTHER PERIODIC
 PAYMENT; OR
   (C)  PAY ANY PART OF A PAYMENT BY MORE THAN ONE METHOD OR TO MORE THAN
 ONE PERSON.
   (E) PROOF OF TRANSFER  OF  CONTROL.  SUBJECT  TO  SUBSECTION  (H),  IF
 REQUESTED  BY  THE  ACCOUNT  DEBTOR,  THE PERSON GIVING THE NOTIFICATION
 UNDER SUBSECTION (B) SEASONABLY SHALL FURNISH  REASONABLE  PROOF,  USING
 THE  METHOD  IN  THE  AGREEMENT  REFERRED  TO IN SUBSECTION (D)(1), THAT
 CONTROL OF THE CONTROLLABLE  ELECTRONIC  RECORD  HAS  BEEN  TRANSFERRED.
 UNLESS  THE  PERSON  COMPLIES  WITH  THE REQUEST, THE ACCOUNT DEBTOR MAY
 DISCHARGE ITS OBLIGATION BY PAYING A PERSON THAT FORMERLY  HAD  CONTROL,
 EVEN  IF THE ACCOUNT DEBTOR HAS RECEIVED A NOTIFICATION UNDER SUBSECTION
 (B).
   (F) WHAT CONSTITUTES REASONABLE PROOF. A PERSON  FURNISHES  REASONABLE
 PROOF  UNDER  SUBSECTION  (E)  THAT  CONTROL HAS BEEN TRANSFERRED IF THE
 PERSON DEMONSTRATES, USING THE METHOD IN THE AGREEMENT  REFERRED  TO  IN
 SUBSECTION (D)(1), THAT THE TRANSFEREE HAS THE POWER TO:
   (1)  AVAIL ITSELF OF SUBSTANTIALLY ALL THE BENEFIT FROM THE CONTROLLA-
 BLE ELECTRONIC RECORD;
   (2) PREVENT OTHERS FROM AVAILING THEMSELVES OF SUBSTANTIALLY  ALL  THE
 BENEFIT FROM THE CONTROLLABLE ELECTRONIC RECORD; AND
   (3) TRANSFER THE POWERS SPECIFIED IN PARAGRAPHS (1) AND (2) TO ANOTHER
 PERSON.
   (G)  RIGHTS NOT WAIVABLE. SUBJECT TO SUBSECTION (H), AN ACCOUNT DEBTOR
 MAY NOT WAIVE OR VARY ITS RIGHTS UNDER SUBSECTIONS (D)(1) AND (E) OR ITS
 OPTION UNDER SUBSECTION (D)(3).
   (H) RULE FOR INDIVIDUAL UNDER OTHER LAW. THIS SECTION  IS  SUBJECT  TO
 LAW  OTHER  THAN  THIS ARTICLE WHICH ESTABLISHES A DIFFERENT RULE FOR AN
 ACCOUNT DEBTOR WHO IS AN INDIVIDUAL  AND  WHO  INCURRED  THE  OBLIGATION
 PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES.
 SECTION 12--107. GOVERNING LAW.
   (A) GOVERNING LAW: GENERAL RULE. EXCEPT AS PROVIDED IN SUBSECTION (B),
 THE LOCAL LAW OF A CONTROLLABLE ELECTRONIC RECORD'S JURISDICTION GOVERNS
 A MATTER COVERED BY THIS ARTICLE.
   (B)  GOVERNING  LAW:  SECTION  12--106.  FOR A CONTROLLABLE ELECTRONIC
 RECORD THAT EVIDENCES A CONTROLLABLE  ACCOUNT  OR  CONTROLLABLE  PAYMENT
 INTANGIBLE, THE LOCAL LAW OF THE CONTROLLABLE ELECTRONIC RECORD'S JURIS-
 DICTION  GOVERNS A MATTER COVERED BY SECTION 12--106 UNLESS AN EFFECTIVE
 AGREEMENT DETERMINES THAT THE LOCAL LAW OF ANOTHER JURISDICTION GOVERNS.
 S. 7244--A                         46
 
   (C) CONTROLLABLE ELECTRONIC RECORD'S JURISDICTION. THE FOLLOWING RULES
 DETERMINE A CONTROLLABLE ELECTRONIC  RECORD'S  JURISDICTION  UNDER  THIS
 SECTION:
   (1)  IF THE CONTROLLABLE ELECTRONIC RECORD, OR A RECORD ATTACHED TO OR
 LOGICALLY ASSOCIATED WITH THE CONTROLLABLE ELECTRONIC RECORD AND READILY
 AVAILABLE FOR REVIEW, EXPRESSLY PROVIDES THAT A PARTICULAR  JURISDICTION
 IS  THE  CONTROLLABLE  ELECTRONIC  RECORD'S JURISDICTION FOR PURPOSES OF
 THIS ARTICLE, THAT JURISDICTION IS THE CONTROLLABLE ELECTRONIC  RECORD'S
 JURISDICTION.
   (2)  IF  PARAGRAPH  (1)  DOES NOT APPLY AND THE RULES OF THE SYSTEM IN
 WHICH THE CONTROLLABLE ELECTRONIC RECORD IS RECORDED ARE READILY  AVAIL-
 ABLE  FOR REVIEW AND EXPRESSLY PROVIDE THAT A PARTICULAR JURISDICTION IS
 THE CONTROLLABLE ELECTRONIC RECORD'S JURISDICTION FOR PURPOSES  OF  THIS
 ARTICLE,  THAT  JURISDICTION  IS  THE  CONTROLLABLE  ELECTRONIC RECORD'S
 JURISDICTION.
   (3) IF PARAGRAPHS (1) AND (2) DO NOT APPLY AND THE CONTROLLABLE  ELEC-
 TRONIC  RECORD, OR A RECORD ATTACHED TO OR LOGICALLY ASSOCIATED WITH THE
 CONTROLLABLE  ELECTRONIC  RECORD  AND  READILY  AVAILABLE  FOR   REVIEW,
 EXPRESSLY  PROVIDES  THAT THE CONTROLLABLE ELECTRONIC RECORD IS GOVERNED
 BY THE LAW OF  A  PARTICULAR  JURISDICTION,  THAT  JURISDICTION  IS  THE
 CONTROLLABLE ELECTRONIC RECORD'S JURISDICTION.
   (4)  IF PARAGRAPHS (1), (2), AND (3) DO NOT APPLY AND THE RULES OF THE
 SYSTEM IN WHICH THE CONTROLLABLE ELECTRONIC RECORD IS RECORDED ARE READ-
 ILY AVAILABLE FOR REVIEW AND EXPRESSLY  PROVIDE  THAT  THE  CONTROLLABLE
 ELECTRONIC  RECORD  OR THE SYSTEM IS GOVERNED BY THE LAW OF A PARTICULAR
 JURISDICTION, THAT JURISDICTION IS THE CONTROLLABLE ELECTRONIC  RECORD'S
 JURISDICTION.
   (5) IF PARAGRAPHS (1) THROUGH (4) DO NOT APPLY, THE CONTROLLABLE ELEC-
 TRONIC RECORD'S JURISDICTION IS THE DISTRICT OF COLUMBIA.
   (D)  APPLICABILITY  OF  ARTICLE  12.  IF SUBSECTION (C)(5) APPLIES AND
 ARTICLE 12 IS NOT IN EFFECT IN THE DISTRICT OF COLUMBIA WITHOUT MATERIAL
 MODIFICATION, THE GOVERNING LAW FOR A MATTER COVERED BY THIS ARTICLE  IS
 THE  LAW OF THE DISTRICT OF COLUMBIA AS THOUGH ARTICLE 12 WERE IN EFFECT
 IN THE DISTRICT OF  COLUMBIA  WITHOUT  MATERIAL  MODIFICATION.  IN  THIS
 SUBSECTION,  "ARTICLE  12"  MEANS  ARTICLE 12 OF UNIFORM COMMERCIAL CODE
 AMENDMENTS (2022).
   (E) RELATION OF  MATTER  OR  TRANSACTION  TO  CONTROLLABLE  ELECTRONIC
 RECORD'S  JURISDICTION  NOT NECESSARY. TO THE EXTENT SUBSECTIONS (A) AND
 (B) PROVIDE THAT THE LOCAL LAW OF THE CONTROLLABLE  ELECTRONIC  RECORD'S
 JURISDICTION  GOVERNS A MATTER COVERED BY THIS ARTICLE, THAT LAW GOVERNS
 EVEN IF THE MATTER OR A TRANSACTION TO WHICH THE MATTER RELATES DOES NOT
 BEAR ANY RELATION TO THE CONTROLLABLE ELECTRONIC RECORD'S JURISDICTION.
   (F) RIGHTS OF PURCHASERS DETERMINED AT TIME OF  PURCHASE.  THE  RIGHTS
 ACQUIRED  UNDER  SECTION  12--104 BY A PURCHASER OR QUALIFYING PURCHASER
 ARE GOVERNED BY THE LAW APPLICABLE UNDER THIS SECTION  AT  THE  TIME  OF
 PURCHASE.
   §  87.  The uniform commercial code is amended by adding a new article
 12-A to read as follows:
                               ARTICLE 12-A
              TRANSITIONAL PROVISIONS FOR UNIFORM COMMERCIAL
                              CODE AMENDMENTS
 
                                  PART 1
                    GENERAL PROVISIONS AND DEFINITIONS
 S. 7244--A                         47
 
 SECTION 12-A-101. TITLE. THIS  ARTICLE  MAY  BE  CITED  AS  TRANSITIONAL
                     PROVISIONS  FOR  THE  2024  UNIFORM  COMMERCIAL CODE
                     AMENDMENTS.
 SECTION 12-A-102. DEFINITIONS.
   (A) ARTICLE A DEFINITIONS. IN THIS ARTICLE:
   (1) "ADJUSTMENT DATE" MEANS JULY 1, 2025, OR THE DATE THAT IS ONE YEAR
 AFTER THE EFFECTIVE DATE OF THIS ARTICLE, WHICHEVER IS LATER.
   (2) "ARTICLE 12" MEANS ARTICLE 12 OF THIS CODE.
   (3)  "ARTICLE  12 PROPERTY" MEANS A CONTROLLABLE ACCOUNT, CONTROLLABLE
 ELECTRONIC RECORD, OR CONTROLLABLE PAYMENT INTANGIBLE.
   (B) DEFINITIONS IN OTHER ARTICLES. THE FOLLOWING DEFINITIONS IN  OTHER
 ARTICLES OF THIS CODE APPLY TO THIS ARTICLE.
 "CONTROLLABLE ACCOUNT".                       SECTION 9--102.
 "CONTROLLABLE ELECTRONIC RECORD".             SECTION 12--102.
 "CONTROLLABLE PAYMENT INTANGIBLE".            SECTION 9--102.
 "ELECTRONIC MONEY".                           SECTION 9--102.
 "FINANCING STATEMENT".                        SECTION 9--102.
   (C)  ARTICLE  1 DEFINITIONS AND PRINCIPLES. ARTICLE 1 CONTAINS GENERAL
 DEFINITIONS AND PRINCIPLES OF CONSTRUCTION AND INTERPRETATION APPLICABLE
 THROUGHOUT THIS ARTICLE.
 
                                  PART 2
                      GENERAL TRANSITIONAL PROVISION
 
 SECTION 12-A-201. SAVING CLAUSE.
   EXCEPT AS PROVIDED IN PART  3,  A  TRANSACTION  VALIDLY  ENTERED  INTO
 BEFORE  THE  EFFECTIVE  DATE OF THIS ARTICLE AND THE RIGHTS, DUTIES, AND
 INTERESTS FLOWING FROM THE TRANSACTION REMAIN VALID THEREAFTER  AND  MAY
 BE  TERMINATED,  COMPLETED,  CONSUMMATED,  OR  ENFORCED  AS  REQUIRED OR
 PERMITTED BY LAW OTHER THAN THIS ARTICLE OR, IF APPLICABLE,  THIS  ARTI-
 CLE, AS THOUGH THIS ARTICLE HAD NOT TAKEN EFFECT.
 
                                  PART 3
               TRANSITIONAL PROVISIONS FOR ARTICLES 9 AND 12
 
 SECTION 12-A-301. SAVING CLAUSE.
   (A)  PRE-EFFECTIVE-DATE  TRANSACTION,  LIEN,  OR  INTEREST.  EXCEPT AS
 PROVIDED IN THIS PART, ARTICLE 9 AS AMENDED BY A CHAPTER OF THE LAWS  OF
 TWO  THOUSAND  TWENTY-FOUR ADDING THIS ARTICLE AND ARTICLE 12 APPLY TO A
 TRANSACTION, LIEN, OR OTHER INTEREST IN PROPERTY,  EVEN  IF  THE  TRANS-
 ACTION,  LIEN, OR INTEREST WAS ENTERED INTO, CREATED, OR ACQUIRED BEFORE
 THE EFFECTIVE DATE OF THIS ARTICLE.
   (B) CONTINUING VALIDITY. EXCEPT AS  PROVIDED  IN  SUBSECTION  (C)  AND
 SECTIONS 12-A-302 THROUGH 12-A-306:
   (1)  A  TRANSACTION,  LIEN,  OR  INTEREST IN PROPERTY THAT WAS VALIDLY
 ENTERED INTO, CREATED, OR TRANSFERRED BEFORE THE EFFECTIVE DATE OF  THIS
 ARTICLE  AND  WAS  NOT GOVERNED BY THIS ARTICLE, BUT WOULD BE SUBJECT TO
 ARTICLE 9 AS AMENDED BY A CHAPTER OF THE LAWS OF  TWO  THOUSAND  TWENTY-
 FOUR  ADDING  THIS  ARTICLE  OR  ARTICLE 12 IF IT HAD BEEN ENTERED INTO,
 CREATED, OR TRANSFERRED ON OR AFTER THE EFFECTIVE DATE OF THIS  ARTICLE,
 INCLUDING  THE  RIGHTS,  DUTIES,  AND  INTERESTS FLOWING FROM THE TRANS-
 ACTION, LIEN, OR INTEREST, REMAINS VALID ON AND AFTER THE EFFECTIVE DATE
 OF THIS ARTICLE; AND
   (2) THE TRANSACTION, LIEN, OR INTEREST MAY BE  TERMINATED,  COMPLETED,
 CONSUMMATED,  AND  ENFORCED  AS REQUIRED OR PERMITTED BY THIS CODE OR BY
 THE LAW THAT WOULD APPLY IF THIS ARTICLE HAD NOT TAKEN EFFECT.
 S. 7244--A                         48
 
   (C) PRE-EFFECTIVE-DATE  PROCEEDING.  THIS  CODE  DOES  NOT  AFFECT  AN
 ACTION,  CASE, OR PROCEEDING COMMENCED BEFORE THE EFFECTIVE DATE OF THIS
 ARTICLE.
 SECTION 12-A-302. SECURITY INTEREST PERFECTED BEFORE EFFECTIVE DATE.
   (A)  CONTINUING PERFECTION: PERFECTION REQUIREMENTS SATISFIED. A SECU-
 RITY INTEREST THAT IS ENFORCEABLE AND PERFECTED IMMEDIATELY  BEFORE  THE
 EFFECTIVE  DATE  OF  THIS ARTICLE IS A PERFECTED SECURITY INTEREST UNDER
 THIS ARTICLE IF, ON THE EFFECTIVE DATE OF THIS ARTICLE, THE REQUIREMENTS
 FOR ENFORCEABILITY AND PERFECTION UNDER THIS ARTICLE ARE SATISFIED WITH-
 OUT FURTHER ACTION.
   (B) CONTINUING PERFECTION: ENFORCEABILITY OR  PERFECTION  REQUIREMENTS
 NOT SATISFIED. IF A SECURITY INTEREST IS ENFORCEABLE AND PERFECTED IMME-
 DIATELY  BEFORE THE EFFECTIVE DATE OF THIS ARTICLE, BUT THE REQUIREMENTS
 FOR ENFORCEABILITY OR PERFECTION UNDER THIS ARTICLE ARE NOT SATISFIED ON
 THE EFFECTIVE DATE OF THIS ARTICLE, THE SECURITY INTEREST:
   (1) IS A PERFECTED SECURITY INTEREST UNTIL THE  EARLIER  OF  THE  TIME
 PERFECTION  WOULD HAVE CEASED UNDER THE LAW IN EFFECT IMMEDIATELY BEFORE
 THE EFFECTIVE DATE OF THIS ARTICLE OR THE ADJUSTMENT DATE;
   (2) REMAINS ENFORCEABLE  THEREAFTER  ONLY  IF  THE  SECURITY  INTEREST
 SATISFIES  THE  REQUIREMENTS FOR ENFORCEABILITY UNDER SECTION 9--203, AS
 AMENDED BY A CHAPTER OF THE LAWS OF TWO THOUSAND TWENTY-FOUR ADDING THIS
 ARTICLE BEFORE THE ADJUSTMENT DATE; AND
   (3)  REMAINS  PERFECTED  THEREAFTER  ONLY  IF  THE  REQUIREMENTS   FOR
 PERFECTION UNDER THIS ARTICLE ARE SATISFIED BEFORE THE TIME SPECIFIED IN
 PARAGRAPH (1).
 SECTION 12-A-303. SECURITY INTEREST UNPERFECTED BEFORE EFFECTIVE DATE.
   A  SECURITY INTEREST THAT IS ENFORCEABLE IMMEDIATELY BEFORE THE EFFEC-
 TIVE DATE OF THIS ARTICLE BUT IS UNPERFECTED AT THAT TIME:
   (1) REMAINS AN ENFORCEABLE  SECURITY  INTEREST  UNTIL  THE  ADJUSTMENT
 DATE;
   (2)  REMAINS  ENFORCEABLE  THEREAFTER IF THE SECURITY INTEREST BECOMES
 ENFORCEABLE UNDER SECTION 9--203, AS AMENDED BY A CHAPTER OF THE LAWS OF
 TWO THOUSAND TWENTY-FOUR THAT ADDED THIS ARTICLE, ON THE EFFECTIVE  DATE
 OF THIS ARTICLE OR BEFORE THE ADJUSTMENT DATE; AND
   (3) BECOMES PERFECTED:
   (A)  WITHOUT  FURTHER ACTION, ON THE EFFECTIVE DATE OF THIS ARTICLE IF
 THE REQUIREMENTS FOR PERFECTION UNDER THIS ARTICLE ARE SATISFIED  BEFORE
 OR AT THAT TIME; OR
   (B) WHEN THE REQUIREMENTS FOR PERFECTION ARE SATISFIED IF THE REQUIRE-
 MENTS ARE SATISFIED AFTER THAT TIME.
 SECTION 12-A-304. EFFECTIVENESS OF ACTIONS TAKEN BEFORE EFFECTIVE DATE.
   (A)   PRE-EFFECTIVE-DATE  ACTION;  ATTACHMENT  AND  PERFECTION  BEFORE
 ADJUSTMENT DATE. IF ACTION, OTHER THAN THE FILING OF A FINANCING  STATE-
 MENT,  IS TAKEN BEFORE THE EFFECTIVE DATE OF THIS ARTICLE AND THE ACTION
 WOULD HAVE RESULTED IN PERFECTION OF THE SECURITY INTEREST HAD THE SECU-
 RITY INTEREST BECOME ENFORCEABLE BEFORE THE EFFECTIVE DATE OF THIS ARTI-
 CLE, THE ACTION  IS  EFFECTIVE  TO  PERFECT  A  SECURITY  INTEREST  THAT
 ATTACHES  UNDER  THIS  ARTICLE  BEFORE  THE ADJUSTMENT DATE. AN ATTACHED
 SECURITY INTEREST BECOMES UNPERFECTED ON THE ADJUSTMENT DATE UNLESS  THE
 SECURITY INTEREST BECOMES A PERFECTED SECURITY INTEREST UNDER THIS ARTI-
 CLE BEFORE THE ADJUSTMENT DATE.
   (B)  PRE-EFFECTIVE-DATE  FILING.  THE  FILING OF A FINANCING STATEMENT
 BEFORE THE EFFECTIVE DATE OF THIS ARTICLE  IS  EFFECTIVE  TO  PERFECT  A
 SECURITY  INTEREST  ON  THE EFFECTIVE DATE OF THIS ARTICLE TO THE EXTENT
 THE FILING WOULD SATISFY THE  REQUIREMENTS  FOR  PERFECTION  UNDER  THIS
 ARTICLE.
 S. 7244--A                         49
 
   (C)  PRE-EFFECTIVE-DATE ENFORCEABILITY ACTION. THE TAKING OF AN ACTION
 BEFORE THE EFFECTIVE DATE OF THIS ARTICLE IS SUFFICIENT FOR THE ENFORCE-
 ABILITY OF A SECURITY INTEREST ON THE EFFECTIVE DATE OF THIS ARTICLE  IF
 THE  ACTION WOULD SATISFY THE REQUIREMENTS FOR ENFORCEABILITY UNDER THIS
 ARTICLE.
 SECTION 12-A-305. PRIORITY.
   (A)  DETERMINATION  OF  PRIORITY.  SUBJECT TO SUBSECTIONS (B) AND (C),
 THIS CODE DETERMINES THE PRIORITY OF CONFLICTING CLAIMS TO COLLATERAL.
   (B) ESTABLISHED PRIORITIES. SUBJECT TO SUBSECTION (C), IF THE  PRIORI-
 TIES  OF CLAIMS TO COLLATERAL WERE ESTABLISHED BEFORE THE EFFECTIVE DATE
 OF THIS ARTICLE, ARTICLE 9 AS IN EFFECT BEFORE THE EFFECTIVE DATE  OF  A
 CHAPTER  OF THE LAWS OF TWO THOUSAND TWENTY-FOUR THAT ADDED THIS ARTICLE
 DETERMINES PRIORITY.
   (C) DETERMINATION OF CERTAIN PRIORITIES ON  ADJUSTMENT  DATE.  ON  THE
 ADJUSTMENT DATE, TO THE EXTENT THE PRIORITIES DETERMINED BY ARTICLE 9 AS
 AMENDED BY THIS CODE MODIFY THE PRIORITIES ESTABLISHED BEFORE THE EFFEC-
 TIVE  DATE  OF  A  CHAPTER  OF THE LAWS OF TWO THOUSAND TWENTY-FOUR THAT
 ADDED THIS ARTICLE, THE PRIORITIES OF CLAIMS TO ARTICLE 12 PROPERTY  AND
 ELECTRONIC  MONEY  ESTABLISHED BEFORE THE EFFECTIVE DATE OF THIS ARTICLE
 CEASE TO APPLY.
 SECTION 12-A-306. PRIORITY OF CLAIMS WHEN PRIORITY RULES OF ARTICLE 9 DO
                     NOT APPLY.
   (A) DETERMINATION OF PRIORITY. SUBJECT TO  SUBSECTIONS  (B)  AND  (C),
 ARTICLE  12  DETERMINES THE PRIORITY OF CONFLICTING CLAIMS TO ARTICLE 12
 PROPERTY WHEN THE PRIORITY RULES OF ARTICLE 9 AS AMENDED BY THIS ARTICLE
 DO NOT APPLY.
   (B) ESTABLISHED PRIORITIES. SUBJECT TO SUBSECTION (C), WHEN THE PRIOR-
 ITY RULES OF ARTICLE 9 AS AMENDED BY A CHAPTER OF THE LAWS OF TWO  THOU-
 SAND TWENTY-FOUR THAT ADDED THIS ARTICLE DO NOT APPLY AND THE PRIORITIES
 OF  CLAIMS  TO ARTICLE 12 PROPERTY WERE ESTABLISHED BEFORE THE EFFECTIVE
 DATE OF THIS ARTICLE, LAW OTHER THAN ARTICLE 12 DETERMINES PRIORITY.
   (C) DETERMINATION OF CERTAIN PRIORITIES ON ADJUSTMENT DATE.  WHEN  THE
 PRIORITY  RULES OF ARTICLE 9 AS AMENDED BY THIS ARTICLE DO NOT APPLY, TO
 THE EXTENT THE PRIORITIES DETERMINED BY THIS CODE MODIFY THE  PRIORITIES
 ESTABLISHED  BEFORE  THE  EFFECTIVE DATE THIS ARTICLE, THE PRIORITIES OF
 CLAIMS TO ARTICLE 12 PROPERTY ESTABLISHED BEFORE THE EFFECTIVE  DATE  OF
 THIS ARTICLE CEASE TO APPLY ON THE ADJUSTMENT DATE.
   §  88.  This  act  shall  take effect on the one hundred eightieth day
 after it shall have become a law.