At its April 4 meeting, the NHBA Board of Governors voted to endorse HB 745, a bill revising Article 9 of the Uniform Commercial Code and related statutes. The following is a letter by attorney James O. Barney received by the Board enumerating reasons for supporting the legislation:

Revised Article 9 is a substantial reworking of the Article on Secured Transactions contained within the Uniform Commercial Code, which governs the way in which lenders obtain, perfect and enforce security interests in personal property that secure many commercial loans. The current version of Article 9, effective nationwide, was adopted in 1972 and has undergone only minor revisions since then. Revised Article 9 constitutes a complete revision of the entire article. It was five years in the drafting, from 1993 to 1998, and was approved in the latter year by the American Law Institute and the National Conference of Commissioners on Uniform State Laws. The final approved draft was given a uniform effective date of July 1, 2001, to allow time for passage in all 50 states. As of this date, the law has been adopted by 29 states and the District of Columbia and is pending in most other states, with adoption expected prior to July 1 of this year.

The New Hampshire version of Revised Article 9 is contained in HB 745, now pending before the Legislature. I have been serving as a Bar representative on a project team organized by the secretary of state’s office to give advice on how the state filing system should be adapted to mesh with the new requirements of Revised Article 9.

Because Revised Article 9 is expected to take effect in most other states as of July 1 of this year, it is important to NH businesses and lenders, and the lawyers that serve them, that Revised Article 9 also be adopted here with the same effective date; otherwise, considerable complications will result in the many financing transactions that involve the laws of more than one state.

With the uniform national effective date less than four months away, the sooner the bill passes the Legislature and is signed into law, the better it will be for the planning and preparation process that will be necessary for all parties and counsel involved in secured transactions.

The NHBA CLE Committee is holding a CLE on Revised Article 9 of the UCC on June 1. Click here for details.

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