SB 2364 — A BILL for an Act to provide for a legislative management study relating to the property rights of entitlement holders in Uniform Commercial Code transactions.
Last action — Second reading, failed to pass, yeas 20 nays 27
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✓Introduced
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2In Committee
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3Passed Senate
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4Passed House
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5To Executive
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6Enacted
This bill died with 69th Legislative Assembly (2025-26). It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
This bill is no longer active — its legislative session has ended, so there are no live odds of enactment. It would have to be reintroduced in the current session to move again.
Summary
Relating to the property rights of entitlement holders in Uniform Commercial Code transactions.
Bill Text
What changed in the latest version
17 added · 112 removedPlain-language change summary
The recently revised version of SB 2364 removes detailed amendments to several sections of the North Dakota Century Code regarding property rights and security interests in financial transactions. Instead, it now focuses on initiating a study during the 2025-26 interim that will examine the property rights of entitlement holders under the Uniform Commercial Code and how these relate to state and federal law. This change matters because it aims to gather comprehensive insights and feedback before making legal adjustments, ensuring that any new legislation is well-informed and addresses the needs of all stakeholders involved.
25.0840.0200025.0840.03000 Sixty-ninth Legislative Assembly of North Dakota FIRST ENGROSSMENT ENGROSSED SENATE BILL NO.
2364 of North Dakota Introduced by Senators Enget, Boehm, Paulson, Clemens Representatives Hendrix, S.
Olson A BILL for an Act to amendprovide andfor reenacta sectionlegislative 41-08-10,management subsectionstudy 1 of section 41-08-43, section 41-08-51, and subsection 1 of section 41-09-25 of the North Dakota Century Code, relating to choice of law, the property interestrights inof a financial asset held by a securities intermediary, priority among security interests and entitlement holders,holders andin theUniform lawCommercial governingCode perfectiontransactions. and priority of security interests in investment property.
AMENDMENT.LEGISLATIVE MANAGEMENT STUDY - UNIFORM COMMERCIAL CODE PROPERTY RIGHTS.
SectionDuring 41-08-10the of2025-26 interim, the Northlegislative Dakotamanagement Centuryshall consider studying the property rights of entitlement holders in Uniform Commercial Code istransactions, amendedalong andwith reenactedthe asjurisdiction follows:for disputes between entitlement holders and securities intermediaries.
41-08-10.The study must review the provisions of the Uniform Commercial Code, including a review of article 8, in relation to state law, federal law, and the law's interaction as it relates to ownership of personal property.
(8-110)The Applicabilitystudy -must Choiceseek ofinput law.from relevant stakeholders, including securities intermediaries.
1.The legislative management shall report its findings and recommendations, together with any legislation necessary to implement the recommendations, to the seventieth legislative assembly.
The local law of the issuer's jurisdiction, as specified in subsection 4, governs:
a.
The validity of a security;
b.
The rights and duties of the issuer with respect to registration of transfer;
c.
The effectiveness of registration of transfer by the issuer;
d.
Whether the issuer owes any duties to an adverse claimant to a security;
and e.
Whether an adverse claim can be asserted against a person to whom transfer of a certificated or uncertificated security is registered or a person who obtains control of an uncertificated security.
2.
The local law of the securities intermediary's jurisdiction, as specified in subsection 5,law of this state governs:
a.
Acquisition of a security entitlement from the securities intermediary;
b.
The rights and duties of the securities intermediary and entitlement holder arising out of a security entitlement;
c.
Whether the securities intermediary owes any duties to an adverse claimant to a security entitlement;
and Page No.
1 25.0840.02000 Sixty-ninth Legislative Assembly d.
Whether an adverse claim can be asserted against a person who acquires a security entitlement from the securities intermediary or a person who purchases a security entitlement or interest therein from an entitlement holder.
3.
The local law of the jurisdiction in which a security certificate is located at the time of delivery governs whether an adverse claim can be asserted against a person to whom the security certificate is delivered.
4.
"Issuer's jurisdiction" means the jurisdiction under which the issuer of the security is organized or, if permitted by the law of that jurisdiction, the law of another jurisdiction specified by the issuer.
An issuer organized under the law of this state may specify the law of another jurisdiction as the law governing the matters specified in subdivisions b through e of subsection 1.
5.
The following rules determine a "securities intermediary's jurisdiction" for purposes of this section:
a.
If an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that a particular jurisdiction is the securities intermediary's jurisdiction for purposes of this part, this chapter, or this title, that jurisdiction is the securities intermediary's jurisdiction.
b.
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If subdivision a does not apply and an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction.
c.
If neither subdivision a nor b applies and an agreement between the securities intermediary and its entitlement holder governing the securities account expressly provides that the securities account is maintained at an office in a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction.
d.
If none of the preceding subdivisions applies, the securities intermediary's jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the entitlement holder's account is located.
e.
If none of the preceding subdivisions applies, the securities intermediary's jurisdiction is the jurisdiction in which the chief executive office of the securities intermediary is located.
21 25.0840.0200025.0840.03000 Sixty-ninth Legislative Assembly 6.
A securities intermediary's jurisdiction is not determined by the physical location of certificates representing financial assets, or by the jurisdiction in which is organized the issuer of the financial asset with respect to which an entitlement holder has a security entitlement, or by the location of facilities for data processing or other recordkeeping concerning the account.
7.
The local law of the issuer's jurisdiction or the securities intermediary's jurisdiction governs a matter or transaction specified in subsection 1 or 2 even if the matter or transaction does not bear any relation to the jurisdiction.
SECTION 2.
AMENDMENT.
Subsection 1 of section 41-08-43 of the North Dakota Century Code is amended and reenacted as follows:
1.
To the extent necessary for a securities intermediary to satisfy all security entitlements with respect to a particular financial asset, all interests in that financial asset held by the securities intermediary are held by the securities intermediary for the entitlement holders, are not property of the securities intermediary, and are not subject to claims of creditors of the securities intermediary, except as otherwise provided in section 41-08-51.
SECTION 3.
AMENDMENT.
Section 41-08-51 of the North Dakota Century Code is amended and reenacted as follows:
41-08-51.
(8-511) Priority among security interests and entitlement holders.
1.
Except as otherwise provided in subsections 2 and 3, ifIf a securities intermediary does not have sufficient interests in a particular financial asset to satisfy both its obligations to entitlement holders who have security entitlements to that financial asset and its obligation to a creditor of the securities intermediary who has a security interest in that financial asset, the claims of entitlement holders, other than the creditor, have priority over the claim of the creditor.
2.
A claim of a creditor of a securities intermediary who has a security interest in a financial asset held by a securities intermediary has priority over claims of the securities intermediary's entitlement holders who have security entitlements with respect to that financial asset if the creditor has control over the financial asset.
3.
If a clearing corporation does not have sufficient financial assets to satisfy both its obligations to entitlement holders who have security entitlements with respect to a financial asset and its obligation to a creditor of the clearing corporation who has a Page No.
3 25.0840.02000 Sixty-ninth Legislative Assembly security interest in that financial asset, the claim of the creditor has priority over the claims of entitlement holders.
SECTION 4.
AMENDMENT.
Subsection 1 of section 41-09-25 of the North Dakota Century Code is amended and reenacted as follows:
1.
Except as otherwise provided in subsection 3, the following rules apply:
a.
While a security certificate is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in the certificated security represented thereby.
b.
The local law of the issuer's jurisdiction as specified in subsection 4 of section 41-08-10 governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security.
c.
The local law of the securities intermediary's jurisdiction as specified in subsection 5 of section 41-08-10this state governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account.
d.
The local law of the commodity intermediary's jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a commodity contract or commodity account.
e.
Subdivisions b, c, and d apply even if the transaction does not bear any relation to the jurisdiction.
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View plain text versions (2)
- Engrossed FIRST ENGROSSMENT Current pdf
- Introduced View text pdf
Action History
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Second reading, failed to pass, yeas 20 nays 27
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Amendment adopted, placed on calendar
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Reported back amended, do pass, amendment placed on calendar 7 0 0
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Committee Hearing 09:00
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Introduced, first reading, referred Judiciary Committee
Sponsors
- Bob Paulson · Cosponsor
- Jeremy Olson · Cosponsor
- Jared Hendrix · Cosponsor
- David A. Clemens · Cosponsor
- Keith Boehm · Cosponsor
- Mark Enget · Primary
Sponsorship breakdown
Export CSV (upgrade) →1 sponsors · 5 co-sponsors · 142 not signed on · 27 voted No
Sponsors (1)
- Enget, Mark Republican
Co-sponsors (5)
- Paulson, Bob Republican
- Olson, Jeremy Republican
- Hendrix, Jared Republican
- Clemens, David A. Republican
- Boehm, Keith Republican
Not signed on (142)
142 members have not signed on to this bill.
Show all 142 →"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.
Votes
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Republican | 17 | 25 | 0 | 0 |
| Democratic | 3 | 2 | 0 | 0 |
| Total | 20 | 27 | 0 | 0 |
| % of votes cast | 43% | 57% | 0% | 0% |
How each member voted (47)
| Member | Party | Vote |
|---|---|---|
| Boschee, Josh | Democratic | Nay |
| Braunberger, Ryan | Democratic | Yea |
| Hogan, Kathy | Democratic | Nay |
| Marcellais, Richard | Democratic | Yea |
| Mathern, Tim | Democratic | Yea |
| Axtman, Michelle | Republican | Nay |
| Barta, Jeff | Republican | Nay |
| Beard, Todd | Republican | Yea |
| Bekkedahl, Brad | Republican | Nay |
| Boehm, Keith | Republican | Yea |
| Burckhard, Randy A. | Republican | Nay |
| Castaneda, Jose L. | Republican | Yea |
| Cleary, Sean | Republican | Nay |
| Clemens, David A. | Republican | Yea |
| Conley, Cole | Republican | Nay |
| Cory, Claire | Republican | Yea |
| Davison, Kyle | Republican | Nay |
| Dever, Dick | Republican | Nay |
| Dwyer, Michael | Republican | Nay |
| Enget, Mark | Republican | Yea |
| Erbele, Robert | Republican | Nay |
| Gerhardt, Justin | Republican | Nay |
| Hogue, David | Republican | Yea |
| Kessel, Greg | Republican | Nay |
| Klein, Jerry | Republican | Nay |
| Larson, Diane | Republican | Yea |
| Lee, Judy | Republican | Nay |
| Lemm, Randy D. | Republican | Yea |
| Luick, Larry | Republican | Yea |
| Magrum, Jeffery J. | Republican | Yea |
| Meyer, Scott | Republican | Nay |
| Myrdal, Janne | Republican | Nay |
| Patten, Dale | Republican | Nay |
| Paulson, Bob | Republican | Yea |
| Powers, Michelle | Republican | Yea |
| Roers, Kristin | Republican | Nay |
| Rummel, Dean | Republican | Nay |
| Schaible, Donald | Republican | Nay |
| Sickler, Jonathan | Republican | Nay |
| Sorvaag, Ronald | Republican | Nay |
| Thomas, Paul J. | Republican | Nay |
| Walen, Chuck | Republican | Yea |
| Wanzek, Terry M. | Republican | Nay |
| Weber, Mark F. | Republican | Nay |
| Weston, Kent | Republican | Yea |
| Wobbema, Mike | Republican | Yea |
| van Oosting, Desiree | Republican | Yea |
Subjects
Frequently asked questions
- What does SB 2364 do?
- Relating to the property rights of entitlement holders in Uniform Commercial Code transactions.
- Who sponsors SB 2364?
- SB 2364 is sponsored by Paulson, Bob (Republican), Olson, Jeremy (Republican), Hendrix, Jared (Republican), Clemens, David A. (Republican), Boehm, Keith (Republican), and Enget, Mark (Republican).
- What is the current status of SB 2364?
- This bill died with 69th Legislative Assembly (2025-26). It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
- Where can I track SB 2364?
- Track SB 2364 free on One Click Politics — get push/email alerts when it moves.
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