UNIFORM COMMERCIAL CODE REVISIONS H.B. 5081 (H-1), 5082 (H-1), & 5083 (S-1):
FLOOR SUMMARY
[Please see the PDF version of this analysis, if available, to view this image.]
House Bill 5081 (Substitute H-1 as reported without amendment)
House Bill 5082 (Substitute H-1 as reported without amendment)
House Bill 5083 (Substitute S-1 as reported)
Sponsor: Representative Matt Huuki (H.B. 5081)
Representative Kevin Cotter (H.B. 5082)
Representative Ellen Cogen Lipton (H.B. 5083)
House Committee: Banking and Financial Services
Senate Committee: Banking and Financial Institutions
CONTENT
House Bill 5081 (H-1) would amend Article 1 (General Provisions) and other articles of the Uniform Commercial Code (UCC) to do the following:
-- State that Article 1 would apply to a transaction to the extent that it was governed by another article of the UCC.
-- Delete a requirement that a contract for the sale of personal property over $5,000 be in writing, in order to be enforceable.
-- Allow a course of performance between the parties, in addition to a course of dealing and usage of the trade, to be used to an interpret an agreement.
-- Add a new Part 3 to Article 1, "Territorial Applicability and General Rules", containing default choice of law rules.
House Bill 5082 (H-1) would amend Article 7 (Documents of Title) and other articles of the UCC to do the following:
-- Recognize electronic documents of title, defining "electronic document of title" and modifying the definitions of other terms to treat electronic records and signatures as the equivalent of tangible documents.
-- Adopt the concept of "control" as an alternative to the system of transferring tangible documents.
-- Specify rules that would apply to a negotiable electronic document of title.
-- Refer to electronic documents and control in various provisions of Article 9 (Secured Transactions).
-- State that the UCC would modify, limit, and supersede the Electronic Signatures in the Global and National Commerce Act, subject to certain exceptions.
-- Define "good faith" in Article 1 as honesty in fact and the observance of reasonable commercial standards of fair dealing, except as otherwise provided in Article 5 (Letters of Credit).
House Bill 5083 (S-1) would amend Article 9 (Secured Transactions) of the UCC to:
-- Add specificity regarding the name of the debtor to be included in a financing statement, depending on whether the debtor was an individual or a registered organization, whether the collateral was held in a trust that was or was not a registered organization, or whether the collateral was being administered by the personal representative of a decedent.
--
-- Prescribe rules that would govern the perfection of a security interest in collateral acquired after the debtor moved into another jurisdiction, giving the person filing a financing statement perfection for four months in such collateral.
-- Allow a person to file an "information statement" rather than a "correction statement" when the person believes that a filed record is inaccurate or was wrongfully filed.
-- Allow a secured party to file an information statement if the secured party believed that an amendment to its financing statement was filed by a person who was not entitled to do so.
MCL 440.1101 et al. (H.B. 5081) Legislative Analyst: Suzanne Lowe
440.1201 et al. (H.B. 5082)
440.9105 et al. (H.B. 5083)
FISCAL IMPACT
The bills would have no fiscal impact on State or local government.
Date Completed: 3-13-12 Fiscal Analyst: Josh Sefton
Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent. hb5081-5083/1112