BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2667|
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CONSENT
Bill No: AB 2667
Author: Assembly Banking and Finance Committee
Amended: As introduced
Vote: 21
SENATE JUDICIARY COMMITTEE : 4-0, 6/12/12
AYES: Evans, Harman, Corbett, Leno
NO VOTE RECORDED: Blakeslee
ASSEMBLY FLOOR : 75-0, 5/7/12 - See last page for vote
SUBJECT : Personal property: fraudulent transfers
SOURCE : Commercial Transactions Committee of the
Business Law
Section of the State Bar of California
DIGEST : This bill allows a transferor of personal
property to file a financing statement, authorized in an
authenticated record, with respect to the property
transferred and does not void such a transfer as against
the transferor's creditors.
ANALYSIS : In an effort to modernize California's statute
governing secured transactions, SB 45 (Sher, Chapter 991,
Statutes of 1999) repealed the current Uniform Commercial
Code Division 9and replaced it with provisions written by
the National Commission of Uniform State Laws. Those
provisions enacted a new comprehensive scheme for the
regulation of security interests in personal property and
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AB 2667
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fixtures. Recognizing then-emerging electronic commerce,
the new Division 9 included references to authentication of
a record as opposed to the signing of a document.
This bill seeks to conform a provision of the Civil Code
relating to the transfer of personal property by replacing
the reference to the signing of a financing statement with
the authorizing of the statement in an authenticated
record. That statement is part of an exception to the
general rule that every transfer of personal property that
is not accompanied by delivery and change of possession is
void against the transferor's creditors.
Existing law provides that every transfer of personal
property made by a person having possession of the property
that is not accompanied by delivery and change of
possession is void against the transferor's creditors, as
specified. (Civil (Civ.) Code Sec. 3440.)
Existing law exempts certain transfers from the above
provision, including a transferor transfer evidenced by a
financing statement filed by the transferor or transferee
with the office of the Secretary of State that is signed by
the transferor, as specified, and notice of the intended
transfer is published at least 10 days before the date the
transfer occurs. (Civ. Code Sec. 3440.1.)
Existing law provides that a financing statement is
sufficient if it satisfies specified conditions, including
that the debtor authorizes the filing in an authenticated
record or as provided. (U. Com. Code Secs. 9501, 9509.)
Existing law defines "authenticate" as either of the
following: (1) to sign; or (2) to execute or otherwise
adopt a symbol, or encrypt or similarly process a record in
whole or in part, with the present intent of the
authenticating person to identify the person and adopt or
accept a record. (U. Com. Code Sec. 9102.)
Existing law defines "record" as information that is
inscribed on a tangible medium or which is stored in an
electronic or other medium and is retrievable in
perceivable form. (U. Com. Code Sec. 9102.)
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AB 2667
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This bill, with respect to the above exemption for
transfers of personal property where a financing statement
is filed with the office of Secretary of State, requires
that statement to be "authorized in an authenticated
record" instead of signed.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/12/12)
Commercial Transactions Committee of the Business Law
Section of the
State Bar of California (source)
ARGUMENTS IN SUPPORT : According to the author:
This legislative proposal would amend subdivision (h)
of Section 3440.1 of the Civil Code to eliminate the
requirement that a financing statement be signed by
the transferor, and instead require that the
transferor authorize the filing in an "authenticated
record."
This legislative proposal is needed to conform Section
3440.1(h) of the Civil Code to Division 9 of the
�Uniform Commercial Code (UCC)], which eliminated,
under the 2001 amendments, the requirement that a
financing statement be signed. Under Sections 9502(a)
and 9509(a) of the Commercial Code, records filed with
the office of the Secretary of State do not require
signatures for their effectiveness. Instead, a person
is entitled to file a financing statement if the
debtor "authorizes the filing in an authenticated
record."
The Commercial Transactions Committee of the Business Law
Section of the State Bar, further states:
As explained in Official Comment 3 to Section 9502 of
the UCC, "�t]he elimination of the signature
requirement facilitates paperless filing." As a
result of this change to the UCC, the form of National
UCC Financing Statement (Form UCC1), available on the
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California Secretary of State website ?was revised so
there is no longer a signature line for the debtor.
In contrast, the financing statement form under former
Division 9 did have a signature line for the debtor.
Since the UCC financing statement form no longer
provides a signature line for the debtor/transferor,
parties need to manually add a signature block for the
transferor to comply with Civil Code Section
3440.1(h)(1).
ASSEMBLY FLOOR : 75-0, 5/7/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Buchanan, Butler, Charles Calderon, Campos, Carter,
Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Beth Gaines,
Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman,
Halderman, Harkey, Hayashi, Roger Hern�ndez, Hill, Huber,
Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue,
Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Silva, Skinner, Smyth, Solorio,
Swanson, Torres, Valadao, Wagner, Wieckowski, Williams,
Yamada, John A. P�rez
NO VOTE RECORDED: Brownley, Fletcher, Furutani, Hall,
Portantino
RJG:nl 6/14/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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