HB348 Alabama 2023 Session

Summary

Primary Sponsor

David FaulknerRepresentative

Republican

Session

Regular Session 2023

Title

Relating to the Uniform Commercial Code; to add Article 12 to the Uniform Commercial Code to govern the property rights of certain intangible digital assets (controllable electronic records), including electronic rights to payment, to provide for a manner to establish the transfer and control of those assets, to provide a mechanism for evidencing certain rights of payment, and to adopt special rules with regard to the payment obligations and conditions of discharge of account debtors on controllable accounts and controllable payment intangibles; to amend Sections 7-1-201, 7-1-204, 7-1-301, 7-1-306, 7-2-102, 7-2-106, 7-2-201, 7-2-202, 7-2-203, 7-2-205, 7-2-209, 7-2A-102, 7-2A-103, 7-2A-107, 7-2A-201, 7-2A-202, 7-2A-203, 7-2A-205, 7-2A-208, 7-3-104, 7-3-105, 7-3-401, 7-3-604, 7-4A-103, 7-4A-201, 7-4A-202, 7-4A-203, 7-4A-207, 7-4A-208, 7-4A-210, 7-4A-211, 7-4A-305, 7-5-104, 7-5-116, 7-7-102, 7-7-106, 7-8-102, 7-8-103, 7-8-106, 7-8-110, 7-8-303, 7-9A-102, 7-9A-104, 7-9A-105, 7-9A-203, 7-9A-204, 7-9A-207, 7-9A-208, 7-9A-209, 7-9A-210, 7-9A-301, 7-9A-304, 7-9A-305, 7-9A-310, 7-9A-312, 7-9A-313, 7-9A-314, 7-9A-316, 7-9A-317, 7-9A-323, 7-9A-324, 7-9A-330, 7-9A-331, 7-9A-332, 7-9A-334, 7-9A-341, 7-9A-404, 7-9A-406, 7-9A-408, 7-9A-509, 7-9A-513, 7-9A-601, 7-9A-605, 7-9A-608, 7-9A-611, 7-9A-613, 7-9A-614, 7-9A-615, 7-9A-616, 7-9A-619, 7-9A-620, 7-9A-621, 7-9A-624, and 7-9A-628, Code of Alabama 1975, and to add Sections 7-9A-107A, 7-9A-107B, 7-9A-306A, 7-9A-306B, 7-9A-314A, and 7-9A-326A to the Code of Alabama 1975, to provide a substantial revision to the Uniform Commercial Code in conformity with a substantial portion of the Uniform Commercial Code Amendments (2022), to clarify the meaning of the term chattel paper and other definitions, to define and provide for hybrid transactions, and to provide extensive amendments to the Uniform Commercial Code providing for the perfection of security interests in controllable electronic records, documents of title, chattel paper, and other assets; and to add Article 12A to the Uniform Commercial Code to provide transitional provisions for the Uniform Commercial Code Amendments (2022).

Summary

HB348 updates Alabama's Uniform Commercial Code to adopt the Uniform Commercial Code Amendments (2022), creating a new framework for controllable electronic records and related assets with transitional provisions to align existing law.

What This Bill Does

It adds Article 12 to govern property rights in intangible digital assets called controllable electronic records, including electronic rights to payment, and sets out how to establish control and evidencing rights. It amends Article 9 and adds Article 12A to address perfection, priority, and transition for security interests in controllable electronic records, controllable accounts, and other controllable assets. It defines terms like controllable accounts, controllable electronic records, and controllable payment intangibles, and outlines how security interests can be perfected by control or filing, plus new rules on priorities and related duties. It includes transitional provisions to reflect Uniform Commercial Code Amendments (2022) and to provide for orderly implementation.

Who It Affects

• Creditors and lenders (secured parties, banks, finance companies) who hold or seek security interests in controllable electronic records and related assets; they gain new methods to perfect interests by control, receive priority rules, and face new disclosure and enforcement rules.
• Debtors, account debtors, and consumers who owe or grant security interests in controllable assets; they face new control-based perfection, notification and accounting requirements, and new rights and limits on waivers and on disposition of collateral.

Key Provisions

• Adds Article 12 to govern controllable electronic records and related property rights, including transfer, control, and evidencing rights of payment.
• Amends Article 9, expands rules on perfection and priority for security interests in controllable electronic records, controllable accounts, control-based perfection, and related obligations; includes transitional provisions under Article 12A.
• Adds Article 12A with transitional provisions to implement Uniform Commercial Code Amendments (2022), including saving clauses, pre-effective-date rules, and adjustment dates for transitional governance.
• Defines key terms (controllable electronic record, controllable account, controllable payment intangible, security interest, etc.), clarifies jurisdiction and governing law for these assets, and standardizes treatment of chattel paper, documents of title, and other assets within the new framework.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Uniform Commercial Code Amendments (2022), adopted