SB155: AN ACT relating to the Uniform Commercial Code.

Legislative Summary

Amends sections of Articles 1, 2, 2A, 3, 5, 7, 8, and 9 of KRS Chapter 355 to make definitional revisions and conforming amendments; amends sections of Articles 2, 2A, 4A, and 9 of KRS Chapter 355 to remove writing requirements; repeals and reenacts KRS 355.2-102 to establish transactions subject to provisions of article; amends KRS 355.2A-102 to establish when article applies to hybrid leases; amends definition of “negotiable instrument” in KRS 355.3-104; amends KRS 355.3-105 and 355.3-604 to accommodate electronic transactions; amends KRS 355.3-417 and 355.4-208 to specify that expenses include reasonable attorney’s fees; amends KRS 355.4A-201 to modify security procedure requirements relating to funds transfers; amends KRS 355.5-116 to establish governing law standards for letters of credit; amends KRS 355.7-106 and 355.8-106, repeals and reenacts KRS 355.9-105, and creates new sections of Article 9 of KRS Chapter 355, to establish control requirements for electronic documents of title, security entitlements, records evidencing chattel paper, electronic money, controllable electronic records, controllable accounts, and controllable payment intangibles; amends governing law standards for certain securities transactions in KRS 355.8-110; creates new sections of Article 9 of KRS Chapter 355 to establish certain perfection and priority jurisdictional rules for chattel paper, controllable electronic records, controllable accounts, and controllable payment intangibles; amends KRS 355.9-104 to expand when a secured party has control of a deposit account; amends KRS 355.9-203, 355.9-207, 355.9-208, 355.9-209, 355.9-310, 355.9-312, 355.9-314, 355.9-316, 355.9-317, 355.9-330, 355.9-331, 355.9-332, 355.9-406, 355.9-408, 355.9-605, and 355.9-628, and creates new sections of Article 9 of KRS Chapter 355, to govern security interests in controllable electronic records, electronic money, controllable accounts, controllable payment intangibles, electronic documents, and chattel paper; amends KRS 355.9-204 to establish exception to after-acquired property clause limitation; amends governing law standards for banks and securities and commodity entities in KRS 355.9-304 and 355.9-305; amends KRS 355.9-323 to remove exception for buyers and lessees in the ordinary course of business relating to certain future advances clauses; amends notification of disposition of collateral requirements in KRS 355.9-613 and 355.9-614; creates new sections of Article 11 of KRS Chapter 355, titled “Transitional Provisions for Uniform Commercial Code Amendments (2022),” which establishes definitions and transitional provisions for transactions, liens, and interests entered, created, or acquired before the effective date of this Act; establishes a new Article 12 of KRS Chapter 355, titled “Controllable Electronic Records,” which establishes definitions, scope, purchaser rights, control requirements, debtor discharge obligations, and jurisdictional rules relating to controllable electronic records, controllable accounts, and controllable payment intangibles; amends KRS 367.976 and 369.116 to conform; makes technical corrections; and provides a construction clause relating to a national digital currency; EFFECTIVE January 1, 2025.