House Co-Sponsorship Memoranda

MEMORANDUM

TO: All House Members

FROM: Representative Glen R. Grell

DATE: December 19, 2012

SUBJECT: Cosponsor Legislation – Uniform Commercial Code (prior HB 2159)

In the near future, I plan to introduce amendments to Pennsylvania’s Uniform Commercial Code (UCC), Article 9, which governs secured transactions. The amendments were jointly recommended to the states by the American Law Institute (ALI) and the Uniform Law Commission (ULC) in 2010.

Article 9 has been in effect in Pennsylvania since 1953 when our Commonwealth became the first state to enact the UCC. Each time the Official Text has been revised, Pennsylvania has enacted the recommended updates.

Article 9 was substantially revised in 1998, and the 1998 revisions are in effect in all states and the District of Columbia. The 2010 amendments to Article 9 modify the existing statute to respond to a variety of technical issues regarding the filing of financing statements and other matters that have arisen in practice following over a decade of experience with the revised Article 9.

The 2010 amendments provide greater guidance as to the name and identity of a debtor to be provided on a financing statement. For business entities and other registered organizations, including business trusts, the amendments clarify that the proper name for perfection purposes is the name filed with the state and provided on the organization’s charter or other constitutive documents. For individual debtors, the amendments require a filer to use the version of the debtor’s name on the debtor's most recently issued and unexpired driver's license, or non-driver’s license identification card issued by the Bureau of Motor Vehicles. If the debtor does not have a driver's license, the filer must use either the individual’s name or the individual’s surname and first personal name. For non-business trusts, the amendments require financing statements to be filed using the name of the trust, or the name of the settler of testator and sufficient information to distinguish the trust from other trusts created by the same person.

The amendments also: