1 STATE OF OKLAHOMA
2 1st Session of the 59th Legislature (2023)
3 HOUSE BILL 2776 By: McCall
4
5
6 AS INTRODUCED
7 An Act relating to the Uniform Commercial Code;
amending 12A O.S. 2021, Sections 1-201, 1-204, 1-301
8 and 1-306, which relate to General Provisions of the
Uniform Commercial Code; clarifying scope of certain
9 definitions; adding definitions; providing statutory
references; replacing certain term with new term;
10 amending 12A O.S. 2021, Sections 2-102, 2-106, 2-201,
2-202, 2-203, 2-205 and 2-209, which relate to sales;
11 deleting exception to the applicability of
transactions in goods; providing for the
12 applicability of hybrid transactions; providing
exceptions to applicability provision; defining term;
13 replacing certain term with new term; adding signed
records to certain exception; amending 12A O.S. 2021,
14 Sections 2A-102, 2A-103, 2A-107, 2A-201, 2A-202, 2A-
203, 2A-205 and 2A-208, which relate to leases;
15 expanding scope of leases to include hybrid leases;
providing guidelines for hybrid leases; making
16 Article 2A applicable if lease-of-goods aspects
predominate; adding definition; replacing certain
17 term with new term; amending 12A O.S. 2021, Sections
3-104, 3-105, 3-401 and 3-604, which relate to
18 negotiable instruments; expanding scope of certain
definitions; deleting certain requirements for when a
19 signature may be made; affirming obligation of party
to pay check despite its destruction; deleting
20 certain defined term; amending 12A O.S. 2021,
Sections 4A-103, 4A-201, 4A-202, 4A-203, 4A-207, 4A-
21 208, 4A-210, 4A-211 and 4A-305, which relate to funds
transfers; modifying scope of certain definitions;
22 clarifying bank's obligations concerning security
procedures; requiring express agreement be evidenced
23 by a record; replacing certain term with new term;
deleting references to electronically transmitted
24 notices or communications; amending 12A O.S. 2021,
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1 Sections 5-104 and 5-116, which relate to letters of
credit; providing for the issuance of letter of
2 credit by signed record; deleting authentication
requirements; deleting statutory reference;
3 clarifying jurisdiction of bank's branches; amending
12A O.S. 2021, Sections 7-102 and 7-106, which relate
4 to documents of title; deleting certain defined term;
clarifying requirements for controlling electronic
5 documents of title; providing for exclusivity of
power; making power nonshareable and nonexclusive
6 under certain circumstances; providing circumstances
when a person has control of an electronic document
7 of title; providing for the acknowledgment of control
of electronic documents of title; amending 12A O.S.
8 2021, Sections 8-102, 8-103, 8-106, 8-110 and 8-303,
which relate to investment securities; modifying
9 scope of certain definitions; providing statutory
references; declaring certain accounts and records as
10 not a financial asset; providing an exception;
stating circumstances when a purchaser has control of
11 a security entitlement; providing for the
acknowledgment of control on behalf of a purchaser;
12 declaring the law that governs jurisdiction;
modifying scope of certain definition; amending 12A
13 O.S. 2021, Sections 1-9-102, 1-9-104, 1-9-105, 1-9-
203, 1-9-204, 1-9-207, 1-9-208, 1-9-209, 1-9-210, 1-
14 9-301, 1-9-304, 1-9-305, 1-9-310, 1-9-312, 1-9-313,
1-9-314, 1-9-316, 1-9-317, 1-9-323, 1-9-324, 1-9-330,
15 1-9-331, 1-9-332, 1-9-334, 1-9-341, 1-9-404, 1-9-406,
1-9-408, 1-9-509, 1-9-513, 1-9-601, 1-9-605, 1-9-608,
16 1-9-611, 1-9-613, 1-9-614, 1-9-615, 1-9-616, 1-9-619,
1-9-620, 1-9-621, 1-9-624 and 1-9-628, which relate
17 to secured transactions; modifying scope of certain
definitions; deleting and adding definitions;
18 providing statutory references; replacing certain
term with new term; expanding requirements for
19 secured parties to control deposit accounts;
clarifying requirements for establishing control of
20 electronic chattel paper; stating manner by which a
system may satisfy certain requirements; providing
21 for the exclusivity of power under certain
circumstances; providing exceptions; presuming powers
22 to be exclusive under certain circumstance; providing
control to purchaser if certain conditions are met;
23 providing circumstances where a person has control of
electronic money; providing for exclusivity of powers
24 under certain circumstances; providing exceptions;
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1 presuming powers to be exclusive under certain
circumstances; stating when a secured party has
2 control of a controllable electronic record,
controllable account or controllable payment
3 intangible; allowing person with specific control to
deny acknowledgment of said control; modifying
4 certain conditions to include controllable accounts,
controllable electronic records, controllable payment
5 intangibles, documents and electronic money;
providing statutory references; declaring chattel
6 paper as collateral; providing for the attachment of
security interests; modifying procedures for
7 responding to signed demand by a debtor; clarifying
jurisdiction requirement; declaring bank's
8 jurisdiction even if transaction bears no relation to
bank's jurisdiction; providing additional exception
9 to certain rules; providing guidelines for
determining the jurisdiction of chattel paper;
10 establishing rules for determining jurisdiction;
providing circumstances when local law governs
11 jurisdiction; stating that filing is required to
perfect security interest; allowing perfection of a
12 security interest by taking possession or control of
collateral; providing time limitations; providing for
13 perfection by possession and control of chattel
paper; providing time limitations for perfected
14 security interests; stating circumstances that allow
buyers of chattel paper, electronic documents,
15 controllable electronic records, controllable
accounts or controllable payment intangibles to take
16 free of security interests; clarifying exceptions for
buyers of goods; specifying when security interests
17 have priority over conflicting security interests;
specifying circumstances when a purchaser of chattel
18 paper has priority over security interests in the
chattel paper; declaring when purchaser of chattel
19 paper or instrument has knowledge that purchase
violates rights of the secured party; stating rights
20 of holders and purchasers; modifying procedures for
transferring money; clarifying references to
21 promissory note; excepting certain provisions from
controllable account or controllable payment
22 intangible; stating duties of secured party; deleting
certain forms; creating Notification of Disposition
23 of Collateral form; providing instructions for form;
creating Notice of Plan to Sell Property form;
24 providing instructions for form; clarifying scope of
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1 certain definitions; making certain provisions
inapplicable to limiting the liability of a secured
2 party; creating new article for the Uniform
Commercial Code to be named Controllable Electronic
3 Records; defining terms; declaring which article
controls if conflict exists; providing applicability
4 provision; stating rights of purchaser of
controllable account, controllable payment intangible
5 and controllable electronic record; stating how
qualifying purchaser acquires its rights; providing
6 limitations on actions against qualified purchaser;
providing restriction on notice of claims; declaring
7 when a person has control of a controllable
electronic record; stating exclusivity of powers
8 under certain circumstances; declaring when powers
are nonexclusive; making powers presumptive under
9 certain circumstances; providing additional
circumstances for when a person has control of a
10 controllable electronic record; providing procedures
for account debtors discharging their obligations;
11 providing restrictions on discharging obligations;
making notifications ineffective under certain
12 circumstances; requiring certain proof if requested
by account debtor; providing circumstances that show
13 reasonable proof has been furnished; prohibiting
waiver or varying of rights; making provisions
14 subject to other laws; providing jurisdiction for
controllable electronic records; stating rules for
15 determining jurisdiction; declaring governing laws
for certain matters; defining term; providing for
16 rights to be governed under certain applicable law;
creating new article for the Uniform Commercial Code
17 to be named Transitional Provisions for Uniform
Commercial Code Amendments (2022); defining terms;
18 providing for the termination of transactions;
providing for the applicability of certain articles
19 to transactions, liens or other interests in
property; declaring the validity of transactions,
20 liens or other interest in property on and after
certain date; making exception to applicability
21 provision; declaring previously perfected security
interest as perfected after certain date; providing
22 guidelines for enforceable and perfected security
interest when requirements therefor are not
23 satisfied; declaring status of enforceable security
interest that is unperfected on certain date; stating
24 certain actions as effective to perfect a security
Req. No. 6221 Page 4
1 interest; providing for the effectiveness of
financing statement for perfecting a security
2 interest; providing for the sufficiency of taking an
action before certain date; providing guidelines for
3 determining priority of claims to collateral;
providing statutory reference for determining
4 priority of conflicting claims; stating which
articles and statutes apply when determining
5 priority; providing for codification; and providing
an effective date.
6
7
8
9 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
10 SECTION 1. AMENDATORY 12A O.S. 2021, Section 1-201, is
11 amended to read as follows:
12 Section 1-201.
13 General Definitions and Principles of Interpretation.
14 (a) Unless the context otherwise requires, words or phrases
15 defined in this section, or in the additional definitions contained
16 in other articles of the Uniform Commercial Code that apply to
17 particular articles or parts thereof, have the meanings stated.
18 (b) Subject to definitions contained in other articles of the
19 Uniform Commercial Code that apply to particular articles or parts
20 thereof:
21 (1) "Action" in the sense of a judicial proceeding includes a
22 recoupment, counterclaim, setoff, suit in equity, and any other
23 proceedings in which rights are determined.
24
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1 (2) "Aggrieved party" means a party entitled to pursue a
2 remedy.
3 (3) "Agreement", as distinguished from "contract", means the
4 bargain of the parties in fact as found in their language or
5 inferred from other circumstances including course of performance,
6 course of dealing, or usage of trade as provided in Section 1-303 of
7 this title.
8 (4) "Bank" means a person engaged in the business of banking
9 and includes a savings bank, savings and loan association, credit
10 union, and trust company.
11 (5) "Bearer" means a person in control of a negotiable
12 electronic document of title or a person in possession of an
13 instrument, negotiable tangible document of title, or certificated
14 security payable to bearer or endorsed in blank.
15 (6) "Bill of lading" means a document of title evidencing the
16 receipt of goods for shipment issued by a person engaged in the
17 business of directly or indirectly transporting or forwarding goods.
18 The term does not include a warehouse receipt.
19 (7) "Branch" includes a separately incorporated foreign branch
20 of a bank.
21 (8) "Burden of establishing" means the burden of persuading the
22 trier of fact that the existence of the fact is more probable than
23 its nonexistence.
24
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1 (9) "Buyer in ordinary course of business" means a person that
2 buys goods in good faith, without knowledge that the sale violates
3 the rights of another person in the goods, and in the ordinary
4 course from a person, other than a pawnbroker, in the business of
5 selling goods of that kind. A person buys goods in the ordinary
6 course if the sale to the person comports with the usual or
7 customary practices in the kind of business in which the seller is
8 engaged or with the seller's own usual or customary practices. A
9 person that sells oil, gas, or other minerals at the wellhead or
10 minehead is a person in the business of selling goods of that kind.
11 A buyer in ordinary course of business may buy for cash, by exchange
12 of other property, or on secured or unsecured credit, and may
13 acquire goods or documents of title under a preexisting contract for
14 sale. Only a buyer that takes possession of the goods or has a
15 right to recover the goods from the seller under Article 2 may be a
16 buyer in ordinary course of business. "Buyer in ordinary course of
17 business" does not include a person that acquires goods in a
18 transfer in bulk or as security for or total or partial satisfaction
19 of a money debt.
20 (10) "Conspicuous", with reference to a term means so written,
21 displayed, or presented that, based on the totality of the
22 circumstances, a reasonable person against whom it is to operate
23 ought to have noticed it. Whether a term is "conspicuous" or not is
24 a decision for the court. Conspicuous terms include the following:
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1 (A) a heading in capitals equal to or greater in size than
2 the surrounding text, or in contrasting type, font, or
3 color to the surrounding text of same or lesser size;
4 and
5 (B) language in the body of a record or display in larger
6 type than the surrounding text of the same size, or
7 set off from surrounding text of the same size by
8 symbols or other marks that call attention to the
9 language.
10 (11) "Consumer" means an individual who enters into a
11 transaction primarily for personal, family, or household purposes.
12 (12) "Contract", as distinguished from "agreement", means the
13 total legal obligation that results from the parties' agreement as
14 determined by the provisions of the Uniform Commercial Code as
15 supplemented by any other applicable laws.
16 (13) "Creditor" includes a general creditor, a secured
17 creditor, a lien creditor, and any representative of creditors,
18 including an assignee for the benefit of creditors, a trustee in
19 bankruptcy, a receiver in equity, and an executor or administrator
20 of an insolvent debtor's or assignor's estate.
21 (14) "Defendant" includes a person in the position of defendant
22 in a counterclaim, cross-claim, or third-party claim.
23 (15) "Delivery", with respect to an electronic document of
24 title, means voluntary transfer of control and, with respect to an
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1 instrument, a tangible document of title, or an authoritative
2 tangible copy of a record evidencing chattel paper means voluntary
3 transfer of possession.
4 (16) "Document of title" means a record that in the regular
5 course of business or financing is treated as adequately evidencing
6 that t