PRINTER'S NO. 1440
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 1084
Session of
2024
INTRODUCED BY ROTHMAN, DUSH AND PENNYCUICK, MARCH 22, 2024
REFERRED TO BANKING AND INSURANCE, MARCH 22, 2024
AN ACT
1 Amending Titles 13 (Commercial Code) and 20 (Decedents, Estates
2 and Fiduciaries) of the Pennsylvania Consolidated Statutes,
3 extensively revising the Uniform Commercial Code to
4 accommodate emerging technologies utilized in commercial
5 transactions:
6 In general provisions:
7 Further providing for general definitions, for value,
8 for territorial applicability and parties' power to
9 choose applicable law and for waiver or renunciation of
10 claim or right after breach.
11 In sales:
12 Further providing for scope and certain security and
13 other transactions excluded from division, for
14 definitions of "contract," "agreement," "contract for
15 sale," "sale," "present sale," "conforming" to contract,
16 "termination" and "cancellation," for formal requirements
17 and statute of frauds, for final written expression and
18 parol or extrinsic evidence, for seals inoperative, for
19 firm offers and for modification, rescission and waiver.
20 In leases:
21 Further providing for scope, for definitions and
22 index of definitions, for waiver or renunciation of claim
23 or right after default, for statute of frauds, for final
24 written expression and parol or extrinsic evidence, for
25 seals inoperative, for firm offers, for modification,
26 rescission and waiver and for exclusion or modification
27 of warranties.
28 In negotiable instruments:
29 Further providing for negotiable instrument, for
30 issue of instrument, for signature and for discharge by
31 cancellation or renunciation.
 1 In funds transfers:
2 Further providing for payment order and definitions,
3 for security procedure, for authorized and verified
4 payment orders, for unenforceability of certain verified
5 payment orders, for misdescription of beneficiary, for
6 misdescription of intermediary bank or beneficiary's
7 bank, for rejection of payment order, for cancellation
8 and amendment of payment order and for liability for late
9 or improper execution or failure to execute payment
10 order.
11 In letters of credit:
12 Further providing for formal requirements and for
13 choice of law and forum.
14 In warehouse receipts, bills of lading and other
15 documents of title:
16 Further providing for definitions and index of
17 definitions and for control of electronic document of
18 title.
19 In investment securities:
20 Further providing for definitions, for rules for
21 determining whether certain obligations and interests are
22 securities or financial assets, for control, for
23 applicability and choice of law and for protected
24 purchaser.
25 In secured transactions:
26 Further providing for definitions and index of
27 definitions, for control of deposit account and for
28 control of electronic chattel paper.
29 Providing for control of controllable electronic
30 record, controllable account or controllable payment
31 intangible.
32 Further providing for attachment and enforceability
33 of security interest, proceeds, supporting obligations
34 and formal requisites, for after-acquired property and
35 future advances, for rights and duties of secured party
36 having possession or control of collateral, for
37 additional duties of secured party having control of
38 collateral, for duties of secured party if account debtor
39 has been notified of assignment, for request for
40 accounting and request regarding list of collateral or
41 statement of account, for law governing perfection and
42 priority of security interests, for law governing
43 perfection and priority of security interests in deposit
44 accounts and for law governing perfection and priority of
45 security interests in investment property.
46 Providing for law governing perfection and priority
47 of security interests in chattel paper and for law
48 governing perfection and priority of security interests
49 in controllable accounts, controllable electronic records
50 and controllable payment intangibles.
51 Further providing for when filing required to perfect
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 1 security interest or agricultural lien and security
2 interests and agricultural liens to which filing
3 provisions do not apply, for perfection of security
4 interests in chattel paper, deposit accounts, documents,
5 goods covered by documents, instruments, investment
6 property, letter-of-credit rights and money, perfection
7 by permissive filing and temporary perfection without
8 filing or transfer of possession, for when possession by
9 or delivery to secured party perfects security interest
10 without filing and for perfection by control.
11 Providing for perfection by possession and control of
12 chattel paper.
13 Further providing for effect of change in governing
14 law, for interests which take priority over or take free
15 of security interest or agricultural lien, for priorities
16 among conflicting security interests in and agricultural
17 liens on same collateral, for future advances and for
18 priority of purchase-money security interests.
19 Providing for priority of security interest in
20 controllable account, controllable electronic record and
21 controllable payment intangible.
22 Further providing for priority of purchaser of
23 chattel paper or instrument, for priority of rights of
24 purchasers of instruments, documents and securities under
25 other divisions, priority of interests in financial
26 assets and security entitlements under Division 8, for
27 transfer of money and transfer of funds from deposit
28 account, for priority of security interests in fixtures
29 and crops, for bank's rights and duties with respect to
30 deposit account, for rights acquired by assignee and
31 claims and defenses against assignee, for discharge of
32 account debtor, notification of assignment,
33 identification and proof of assignment, restrictions on
34 assignment of accounts, chattel paper, payment
35 intangibles and promissory notes ineffective, for
36 restrictions on assignment of promissory notes, health-
37 care-insurance receivables and certain general
38 intangibles ineffective, for persons entitled to file a
39 record, for termination statement, for rights after
40 default, judicial enforcement and consignor or buyer of
41 accounts, chattel paper, payment intangibles or
42 promissory notes, for unknown debtor or secondary
43 obligor, for application of proceeds of collection or
44 enforcement and liability for deficiency and right to
45 surplus, for notification before disposition of
46 collateral, for contents and form of notification before
47 disposition of collateral, general, for contents and form
48 of notification before disposition of collateral,
49 consumer-goods transaction, for application of proceeds
50 of disposition and liability for deficiency and right to
51 surplus, for explanation of calculation of surplus or
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 1 deficiency, for transfer of record or legal title, for
2 acceptance of collateral in full or partial satisfaction
3 of obligation and compulsory disposition of collateral,
4 for notification of proposal to accept collateral, for
5 waiver and for nonliability and limitation on liability
6 of secured party and liability of secondary obligor.
7 In controllable electronic records:
8 Providing for short title of division, for
9 definitions, for relation to Division 9 and consumer
10 laws, for rights in controllable account, controllable
11 electronic record and controllable payment intangible,
12 for control of controllable electronic record, for
13 discharge of account debtor on controllable account or
14 controllable payment intangible and for governing law.
15 Providing for transition.
16 In decedents, estates and fiduciaries, in powers of
17 attorney:
18 Further providing for authority that requires
19 specific and general grant of authority.
20 Making editorial changes.
21 The General Assembly of the Commonwealth of Pennsylvania
22 hereby enacts as follows:
23 Section 1. The General Assembly finds and declares as
24 follows:
25 (1) It is necessary to expand Title 13 of the
26 Pennsylvania Consolidated Statutes to accommodate emerging
27 technologies which affect commercial transactions.
28 (2) Expansion under paragraph (1) necessitates
29 conforming amendments.
30 (3) Expansion under paragraph (1) requires coordinated
31 transition into the complex statutory regulation of
32 commercial law by the Commonwealth and other jurisdictions.
33 Section 2. Section 1201(b)(10), (15), (16.1), (21)(iii),
34 (24), (27), (36) and (37) of Title 13 of the Pennsylvania
35 Consolidated Statutes are amended and the subsection is amended
36 by adding paragraphs to read:
37 § 1201. General definitions.
38 * * *
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 1 (b) Definitions.--Subject to additional definitions
2 contained in subsequent provisions of this title which are
3 applicable to specific provisions of this title, the following
4 words and phrases when used in this title shall have, unless the
5 context clearly indicates otherwise, the meanings given to them
6 in this subsection:
7 * * *
8 (10) "Conspicuous." With reference to a term, means so
9 written, displayed or presented that, based on the totality
10 of the circumstances, a reasonable person against which it is
11 to operate ought to have noticed it. Whether a term is
12 "conspicuous" or not is a decision for the court.
13 [Conspicuous terms include the following:
14 (i) A heading in capitals equal to or greater in
15 size than the surrounding text, or in contrasting type,
16 font or color to the surrounding text of the same or
17 lesser size.
18 (ii) Language in the body of a record or display in
19 larger type than the surrounding text, in contrasting
20 type, font or color to the surrounding text of the same
21 size, or set off from surrounding text of the same size
22 by symbols or other marks that call attention to the
23 language.]
24 * * *
25 (15) "Delivery." With respect to an electronic document
26 of title, means voluntary transfer of control and with
27 respect to an instrument, a tangible document of title or an
28 authoritative tangible copy of a record evidencing chattel
29 paper, means voluntary transfer of possession.
30 * * *
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 1 [(16.1) "Electronic document of title." A document of
2 title evidenced by a record consisting of information stored
3 in an electronic medium.]
4 (16.2) "Electronic." Relating to technology having
5 electrical, digital, magnetic, wireless, optical,
6 electromagnetic or similar capabilities.
7 (16.3) "Electronic document of title." A document of
8 title evidenced by a record consisting of information stored
9 in an electronic medium.
10 * * *
11 (21) "Holder." As follows:
12 * * *
13 (iii) the person in control, other than under
14 section 7106(g) (relating to control of electronic
15 document of title), of a negotiable electronic document
16 of title.
17 * * *
18 (24) "Money." A medium of exchange that is currently
19 authorized or adopted by a domestic or foreign government.
20 The term includes a monetary unit of account established by
21 an intergovernmental organization or by agreement between two
22 or more countries. The term does not include a medium of
23 exchange in an electronic form.
24 * * *
25 (27) "Person." Any individual; corporation; business
26 trust; estate; trust; partnership; limited liability company;
27 association; joint venture; government; governmental
28 subdivision, agency or instrumentality, [public corporation;]
29 or other legal or commercial entity. The term includes a
30 protected series, however denominated, of an entity if the
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 1 protected series is established under law other than this
2 title which limits, or limits if conditions specified under
3 that law are satisfied, the ability of a creditor of the
4 entity or of any other protected series of the entity to
5 satisfy a claim from assets of the protected series.
6 * * *
7 (36) "Send." In connection with a [writing,] record or
8 [notice] notification:
9 (i) to deposit in the mail [or], deliver for
10 transmission or transmit by any other usual means of
11 communication,[:
12 (A)] with postage or cost of transmission
13 provided for[;
14 (B) properly addressed; and
15 (C) in the case of an instrument:
16 (I) to an address specified thereon or
17 otherwise agreed upon; or
18 (II) if no address is specified or agreed
19 upon], and addressed to any address reasonable
20 under the circumstances; or
21 (ii) [in any other way to cause to be received any
22 record or notice within the time it would have arrived if
23 properly sent.] to cause the record or notification to be
24 received within the time it would have been received if
25 properly sent under subparagraph (i).
26 (37) "Signed." [Includes using any symbol executed or
27 adopted with present intention to adopt or accept a writing.]
28 Means, with present intent to authenticate or adopt a record:
29 (i) execute or adopt a tangible symbol; or
30 (ii) attach to or logically associate with the
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 1 record an electronic symbol, sound or process.
2 * * *
3 Section 3. Section 1204 introductory paragraph of Title 13
4 is amended to read:
5 § 1204. Value.
6 Except as otherwise provided in Divisions 3 (relating to
7 negotiable instruments), 4 (relating to bank deposits and
8 collections) [and], 5 (relating to letters of credit) and 12
9 (relating to controllable electronic records), a person gives
10 value for rights if the person acquires them:
11 * * *
12 Section 4. Section 1301(c) of Title 13 is amended by adding
13 a paragraph to read:
14 § 1301. Territorial applicability; parties' power to choose
15 applicable law.
16 * * *
17 (c) Mandatory applicability of title.--If one of the
18 following provisions of this title specifies the applicable law,
19 that provision governs, and a contrary agreement is effective
20 only to the extent permitted by the law so specified:
21 * * *
22 (8) Section 12107 (relating to governing law).
23 Section 5. Sections 1306 and 2102 of Title 13 are amended to
24 read:
25 § 1306. Waiver or renunciation of claim or right after breach.
26 A claim or right arising out of an alleged breach may be
27 discharged in whole or in part without consideration by
28 agreement of the aggrieved party in [an authenticated] a signed
29 record.
30 § 2102. Scope; certain security and other transactions excluded
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 1 from division.
2 [Unless the context otherwise requires, this division applies
3 to transactions in goods; it does not apply to any transaction
4 which although in the form of an unconditional contract to sell
5 or present sale is intended to operate only as a security
6 transaction, nor does this division impair or repeal any statute
7 regulating sales to consumers, farmers or other specified
8 classes of buyers.]
9 (a) Scope.--Unless the context otherwise requires, and
10 except as provided in subsection (c), this division applies to
11 transactions in goods and, in the case of a hybrid transaction,
12 this division applies to the extent