AB 231 — Revises various provisions of the Uniform Commercial Code. (BDR 8-604)

Section 69 of this bill revises the circumstances under which a purchaser of chattel paper has priority over a security interest in the chattel paper.

Section 80 of this bill provides that a secured party that obtains control of a controllable account, controllable electronic record or controllable payment intangible owes a duty to a debtor or obligor under certain circumstances.

Sections 83 and 84 of dispositionthis ofbill make certain collateral.orevisions to the content and form of notification before the Existingdisposition law provides that, with certain exceptions, any rule of law, statute, regulation or term in an agreement between an account debtor and an assignor or in a promissory note that imposes certain restrictionscollateral. on the assignment of a security interest in certain collateral is ineffective.

(NRSExisting 104.9406,law 104.9408)provides Sectionsthat, 75with certain exceptions, any rule of law, statute, regulation or term in an agreement between an account debtor and an assignor or in a promissory note that imposes certain restrictions on the assignment of a security and 76, which enact the 2018 amendments to Article 9, provide that thosethoseSections 75 provisions do not apply to a security interest in an ownership interest in a general partnership, limited partnership or limited-liability company.

Existing law contains Article 2A of the Code, the uniform law governing “hybridleases. lease” to mean a single transaction involving a lease of goods and the provision of services or the sale, lease or license of certain property.

(NRS 104A.2101-104A.2532) Section 93 of this bill defines the term “hybrid lease” to mean a single transaction involving a lease of goods and the provision of services or the sale, lease or license of certain property.

Existing law contains Article 4A of the Code, the uniform law governing funds transfers.imposition of certain obligations in a security procedure established by agreement between a customer and a receiving bank.

(NRS 104A.4101-104A.4507) Section 101 of this bill authorizes the imposition of certain obligations in a security procedure established by agreement between a customer and a receiving bank.

-EXPLANATION *AB231_R1* – 4Matter –in THEbolded PEOPLEitalics OFis THEnew; STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

matter between brackets [omitted material] is material to be omitted.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

A secured party has control of a controllable account or controllable payment intangible if the secured party has control of the- controllable82nd electronicSession record(2023) that– evidences4 the– controllable account or controllable payment intangible.intangible.dences the controllable Sec.

Sec.

Except as provided in subsection 4, if chattel paper is evidenced only by an authoritative electronic copy of the chattel paper or is evidenced by an authoritative electronic copy and an authoritative tangible copy, the law of the chattel paper’s jurisdiction governs perfection, the effect of perfection or nonperfection and the priority of a security interest in the chattel paper, even if a transaction does not bear any relation to the cha2.el The following rules determine the chattel paper’s jurisdiction.jurisdiction under this section:

2.(a) If the authoritative electronic copy of the record evidencing chattel paper, or a record attached to or logically associated with the electronic copy and readily available for review, expressly provides that a particular jurisdiction is the chattel paper’s jurisdiction for purposes of this part, this Article or the Uniform Commercial Code, that jurisdiction is the chattel paper’s jurisdiction.

The following rules determine the chattel paper’s jurisdiction under this section:

chattel paper, or a record attached to or logically associated withg the electronic copy and readily available for review, expressly provides that a particular jurisdiction is the chattel paper’s jurisdiction for purposes of this part, this Article or the Uniform Commercial Code, that jurisdiction is the chattel paper’s jurisdiction.

- *AB231_R1* – 5 – (c) If paragraphs (a) and (b) do not apply and the authoritative electronic copy, or a record attached to or logically associated with the electronic copy and readily available for review, expressly provides that the chattel paper is governed by the law of a particular jurisdiction, that jurisdiction is the chattel paper’s jurisdiction.

(d) If paragraphs (a), (b) and (c) do not apply and the rules of the system in which the authoritative electronic copy is recorded are readily available for review and expressly provide that the - 82nd Session (2023) – 5 – chattel paper or the system is governed by the law of a particular jurisdiction, that jurisdiction is the chattel paper’s jurisdiction.

(e) If paragraphs (a) to (d), inclusive, do not apply, the chattel paper’s jurisdiction is the jurisdiction in which the debtor is located.loc3.ed.If an authoritative tangible copy of a record evidences chattel paper and the chattel paper is not evidenced by an authoritative electronic copy, while the authoritative tangible copy of the record evidencing chattel paper is located in a jurisdiction, the law of that jurisdiction governs:

3.

If an authoritative tangible copy of a record evidences chattel paper and the chattel paper is not evidenced by an authoritative electronic copy, while the authoritative tangible copy of the record evidencing chattel paper is located in a jurisdiction, the law of that jurisdiction governs:

(a) Perfection of a security interest in a controllable account, controllable electronic record or controllable payment intangible by filing;(b) Automatic perfection of a security interest in a controllable payment intangible created by a sale of the controllable payment intangible.

and (b) Automatic perfection of a security interest in a controllable payment intangible created by a sale of the controllable payment intangible.

- *AB231_R1* – 6 – 2.

- 82nd Session (2023) – 6 – Sec.

A security interest in a controllable account, controllable electronic record or controllable payment intangible held by a secured party having control of the account, electronic record or payment intangible has priority over a conflicting securitysecSec. interest held by a secured party that does not have control.

9.nteThis Article may be cited as the Uniform Commercialtrol.

Code—Controllable Electronic Records.

9.

This Article may be cited as the Uniform Commercial Code—Controllable Electronic Records.

Sec.

(1) Section 201(a)(1) of the Electronic Signatures in Global andord National Commerce Act, 15 U.S.C.

or (2) Subsection 1 of NRS 719.330.

- *AB231_R1* – 7 – “Account debtor.” NRS 104.9102.

8- 82nd Session (2023) – 7 – 3.

2.

A transaction subject to this Article is subject to:

A purchaser of a controllable electronic record acquires all rights in the controllable electronic record that the transferor had or had power to transfer, except that a purchaser of a limitedlimitedor had interest in a controllable electronic record acquires rights only to the extent of the interest purchased.

Except as provided in subsections 1 and 5 for a controllable account and a controllable payment intangible or law other than this Article, a qualifying purchaser takes a right to payment, right to performance or other interest in property - *AB231_R1* – 8 – evidenced by the controllable electronic record subject to a claim of a property right in the right to payment, right to performance or other interest in property.

An action may not be asserted against a qualifying purchaser based on both a purchase by the qualifying purchaser - 82nd Session (2023) – 8 – of a controllable electronic record and a claim of a property right in another controllable electronic record, whether the action is framed in conversion, replevin, constructive trust, equitable lien or other theory.

8.notice of a claim of a property right in a controllable electronic record.

Filing of a financing statement under Article 9 is not notice of a claim of a property right in a controllable electronic record.

Subject to subsection 3, a power is exclusive under sub- subparagraphs (I) and (II) of subparagraph (2) of paragraph (a) of subsection(a) 1,The evencontrollable if:electronic record, a record attached to or logically associated with the electronic record or a system in which the electronic record is recorded limits the use of the electronic record or has a protocol programmed to cause a change, including a transfer or loss of control or a modification of benefits afforded by the electronic record;

(a) The controllable electronic record, a record attached to or logically associated with the electronic record or a system in which the electronic record is recorded limits the use of the electronic record or has a protocol programmed to cause a change, including a transfer or loss of control or a modification of benefits afforded by the electronic record;

and - *AB231_R1* – 9 – (b) The other person:

or - 82nd Session (2023) – 9 – (2) Is the transferor to the person of an interest in the controllable electronic record or a controllable account or controllable payment intangible evidenced by the controllable electronic record.

4.(I) and (II) of subparagraph (2) of paragraph (a) of subsection 1, the powers are presumed to be exclusive.

If a person has the powers specified in sub-subparagraphs (I) and (II) of subparagraph (2) of paragraph (a) of subsection 1, the powers are presumed to be exclusive.

(a) The person having control of the controllable electronic record that evidences the controllable account or controllablecontrollablec payment intangible;

- *AB231_R1* – 10 – (c) Notifies the account debtor that control of the controllable electronic record that evidences the controllable account or controllable payment intangible was transferred;

- 82nd Session (2023) – 10 – (d) Identifies the transferee, in any reasonable way, including by name, identifying number, cryptographic key, office or account number;

and (e) Provides a commercially reasonable method by which the acc3.nt After receipt of a notification that complies with subsection 2, the account debtor ismay todischarge payits obligation by paying in accordance with the transferee.notification and may not discharge the obligation by paying a person that formerly had control.

3.

After receipt of a notification that complies with subsection 2, the account debtor may discharge its obligation by paying in accordance with the notification and may not discharge the obligation by paying a person that formerly had control.

or (3) Pay any part of a payment by more than one method or to more5.re thanSubject oneto person.subsection 8, if requested by the account debtor, the person giving the notification under subsection 2 seasonably shall furnish reasonable proof, using the method in the agreement referred to in paragraph (a) of subsection 4, that control of the controllable electronic record has been transferred.

5.

Subject to subsection 8, if requested by the account debtor, the person giving the notification under subsection 2 seasonably shall furnish reasonable proof, using the method in the agreement referred to in paragraph (a) of subsection 4, that control of the controllable electronic record has been transferred.

- *AB231_R1* – 11 – (a) Avail itself of substantially all the benefit from the controllable electronic record;

- 82nd Session (2023) – 11 – (b) Prevent others from availing themselves of substantially all the benefit from the controllable electronic record;

7.or vary its rights under paragraph (a) of subsection 4 and waive subsection 5, or its option under paragraph (c) of subsection 4.

Subject to subsection 8, an account debtor may not waive or vary its rights under paragraph (a) of subsection 4 and subsection 5, or its option under paragraph (c) of subsection 4.

(b) If paragraph (a) does not apply and the rules of the system in which the controllable electronic record is recorded are readily available for review and expressly provide that a particular jurisdiction is the controllable electronic record’s jurisdiction for purposes of this Article or the Uniform Commercial Code, that jurisdiction is the controllable electronic record’s jurisdiction.

(d) If paragraphs (a), (b) and (c) do not apply and the rules of the system in which the controllable electronic record is recorded are readily available for review and expressly provide that the controllable electronic record or the system is governed by the law - *AB231_R1*82nd Session (2023) – 12 – ofelectronic arecord’s particularjurisdiction.t jurisdiction, that jurisdiction is the controllable (e) If paragraphs (a) to (d), inclusive, do not apply, the controllable electronic record’s jurisdiction.jurisdiction is the District of Columbia.

(e) If paragraphs (a) to (d), inclusive, do not apply, the controllable electronic record’s jurisdiction is the District of Columbia.

6.purchaser or qualifying purchaser are governed by the lawy a applicable under this section at the time of purchase.

The rights acquired under section 12 of this act by a purchaser or qualifying purchaser are governed by the law applicable under this section at the time of purchase.

Except as provided in Part 3, a transaction validly entered into before October 1, 2023, and the rights, duties and interests flowing from the transaction remain valid thereafter and may be terminated, completed, consummated or enforced as required or permitted by law other than the Uniform Commercial - 82nd Session (2023) – 13 – Code or, if applicable, the Uniform Commercial Code, as though this act had not taken effect.

- *AB231_R1* – 13 – Sec.

Except as provided in this Part, Article 9, as amended by this act and Article 12, apply to a transaction, lien or other interest in property, even if the transaction, lien or interest was entered into, created or acquired before October 1, 2023.2023.interest 2.

2.

2.immediately before October 1, 2023, but the requirements for enforceability or perfection under this act are not satisfied on October 1, 2023, the security interest:

If a security interest is enforceable and perfected immediately before October 1, 2023, but the requirements for enforceability or perfection under this act are not satisfied on October 1, 2023, the security interest:

- 82nd Session (2023) – 14 – 1.

Remains enforceable thereafter if the security interest becomes enforceable under NRS 104.9203, as amended by section 523. of this act, on October 1, 2023, or before July 1, 2025;

andthBecomes -perfected: *AB231_R1* – 14 – 3.

Becomes1, perfected:2023, or before July 1, 2025;

and (a) Without further action, on October 1, 2023, if the requirements for perfection under this act are satisfied before or at that time;

An attached security interest becomes unperfected on July 1, 20252025, unless the security interest becomes a perfected security interest under this act before July 1, 2025.

Sec.determines the priority of conflicting claims to collateral.

23.

1.

Subject to subsections 2 and 3, this act determines the priority of conflicting claims to collateral.

Subject to subsection 3, when the priority rules of Article 9, as amended by this act, do not apply and the priorities of claims to Article- 1282nd propertySession were(2023) established– before15 October– 1, 2023, law other than Article 12 determines priority.priority.e October 1, 2023, law 3.

3.

- *AB231_R1* – 15 – Sec.

(a) “Action,” in the sense of a judicial proceeding, includes recoupment, counterclaim, set off, suit in equity and any other proceeding in which rights are determined.

equity and any other (b) “Aggrieved party” means a party entitled to pursue a remedy.

(f) “Bill of lading” means a document of title evidencing the receipt of goods for shipment issued by a person engaged in the business of directly or indirectly transporting or forwarding goods.

(i) “Buyer in ordinary course of business” means a person that buys goods in good faith, without knowledge that the sale violates the- rights82nd ofSession another(2023) person– in16 the– goods, and in the ordinary course from a person, other than a pawnbroker, in the business of sellingsellingrse goods of that kind.

A buyer in ordinary course of business may buy for cash, by exchange of other property, or on - *AB231_R1* – 16 – secured or unsecured credit, and may acquire goods or documents of title under a preexisting contract for sale.

(j) “Conspicuous,” with reference to a term, means so written, displayed or presented that , based on the totality of the circumstances, a reasonable person against which it is to operate ought to have noticed it.

(l) “Contract,” as distinguished from “agreement,” means the total legal obligation that results from the parties’ agreement as determinedany byother theapplicable Uniformlaws.Commercial Commercial Code as supplemented by (m) “Creditor” includes a general creditor, a secured creditor, a lien creditor and any otherrepresentative applicableof laws.creditors, including an assignee for the benefit of creditors, a trustee in bankruptcy, a receiver in equity, and an executor or administrator of an insolvent debtor’s or assignor’s estate.

(m) “Creditor” includes a general creditor, a secured creditor, a lien creditor and any representative of creditors, including an assignee for the benefit of creditors, a trustee in bankruptcy, a receiver in equity, and an executor or administrator of an insolvent debtor’s or assignor’s estate.

(o)- “Delivery,”82nd withSession respect(2023) to– an17 electronic– document of title , means voluntary transfer of control and , with respect to an title , instrument, a tangible document of title or an authoritative tangible copy of a record evidencing chattel paper, means voluntary transfer of possession.

and - *AB231_R1* – 17 – (2) That purports to be issued by or addressed to a bailee and to cover goods in the bailee’s possession which are either identified or are fungible portions of an identified mass.

An electronic document of title means a document of title evidenced by a record consisting of information stored in an electronicof title evidenced by a record consisting of information that is inscribed on a tangible medium.

A tangible document of title means a document of title evidenced by a record consisting of information that is inscribed on a tangible medium.

(1) The person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is thethet person in possession;

or (3) The person in control , other than pursuant to subsection 7 of NRS 104.7106, of a negotiable electronic document of title.

- 82nd Session (2023) – 18 – [(v)] (w) “Insolvency proceeding” includes an assignment for the benefit of creditors or other proceeding intended to liquidate or rehabilitate the estate of the person involved.

(1) Having generally ceased to pay debts in the ordinary course of business other than as a result of bona fide dispute;

[(x)] (y) “Money” means a medium of exchange that is currently authorized or adopted by a domestic or foreign government [.] and is not ina ancentral electronicbank form.digital currency.

-As *AB231_R1*used –in 18this –paragraph, [(y)]“central (z)bank “Organization”digital meanscurrency”: a person other than a natural person.

[(z)](1) (aa)Means “Party,”a asdigital distinguishedcurrency, froma “thirddigital party,”medium meansof exchange or a persondigital thatmonetary hasunit engagedof inaccount issued by the United States Federal Reserve System, a transactionfederal agency, a foreign government, a foreign central bank or madea anforeign agreementreserve subjectsystem that is made directly available to thea Uniformconsumer Commercialby Code.such entities;

and (2) Includes a digital currency, a digital medium of exchange or a digital monetary unit of account issued by the United States Federal Reserve System, a federal agency, a foreign government, a foreign central bank or a foreign reserve system that is processed or validated directly by such entities.

[(y)] (z) “Organization” means a person other than a natural per[(z)] (aa) “Party,” as distinguished from “third party,” means a person that has engaged in a transaction or made an agreement subject to the Uniform Commercial Code.

[(bb)] (cc) “Present value” means the amount as of a date certain of one or more sums payable in the future, discounted to the - 82nd Session (2023) – 19 – date certain by use of either an interest rate specified by the parties if that rate is not manifestly unreasonable at the time the transaction is entered into or, if an interest rate is not so specified, a commercially reasonable rate that takes into account the facts and circumstancescir[(cc)] at(dd) the“Purchase” timemeans thetaking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift or any other voluntary transaction iscreating enteredan into.interest in property.

[(cc)] (dd) “Purchase” means taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift or any other voluntary transaction creating an interest in property.

“Security interest” does not include the special property interest of a buyer of goods on identification of those goods to a contract for sale under NRS 104.2401, but a buyer may also acquire a “security in NRS 104.2505, the right of a seller or lessor of goods underided Article 2 or 2A to retain or acquire possession of the goods is not a “security interest,” but a seller or lessor may also acquire a “security interest” by complying with Article 9.

Except as otherwise provided - *AB231_R1* – 19 – in NRS 104.2505, the right of a seller or lessor of goods under Article 2 or 2A to retain or acquire possession of the goods is not a “security interest,” but a seller or lessor may also acquire a “security interest” by complying with Article 9.

(1) To deposit in the mail , [or] deliver for transmission or transmit by any other usual means of communication , with postage or cost of transmission provided for and [properly] addressed [and, - 82nd Session (2023) – 20 – in the case of an instrument, to an address specified thereon or otherwise agreed, or if there be none] to any address reasonable under the circumstances;

or (2) [In any other way to] To cause the record or notification to[arrived] bebeen received [anyif recordproperly orsent notice][.n within the time it would have [arrived](kk) been“Signed” receivedincludes ifusing properlyany sentsymbol [.executed or adopted with present intention to adopt or accept a writing.] under subparagraph (1).

(kk) “Signed” includes using any symbol executed or adopted with present intention to adopt or accept a writing.] under subparagraph (1).

[(pp)] (qq) “Warehouse receipt” means a document of title issued by a person engaged in the business of storing goods for hire.

- *AB231_R1* – 20 – [(qq)] (rr) “Writing” includes printing, typewriting or any other intentional reduction to tangible form.

- 82nd Session (2023) – 21 – 3.

Sec.

27.

NRS 104.1301 is hereby amended to read as follows:

Except as otherwise provided in this section,section,s: when a transaction bears a reasonable relation to this State and also to another state or nation the parties may agree that the law either of this State or of such other state or nation shall govern their rights and duties.

when a transaction bears a reasonable relation to this State and also to another state or nation the parties may agree that the law either of this State or of such other state or nation shall govern their rights and duties.

104.1306 A claim or right arising out of an alleged breach may be discharged in whole or in part without consideration bybyach may agreement of the aggrieved party in [an authenticated] a signed record.

- *AB231_R1* – 21 – Sec.

(a) If the sale-of-goods aspects do not predominate, only the provisions of this Article which relate primarily to the sale-of-- goods82nd Session (2023) – 22 – sale-of-goods aspects of the transactions apply, and the provisions that relate primarily to the transaction as a whole do not apply.

(b) If the sale-of-goods aspects predominate, this Article applies to the transaction but does not preclude application in appropriate circumstances of other law to the aspects of the transaction which do not relate to the sale of goods.

of the 3.

On “termination” all obligations which are still executory on both sides are discharged but any right based on prior bre4.h o“Cancellation” occurs when either party puts an end to the contract for breach by the other and its effect is the same as that of “termination” except that the cancelling party also retains any remedy for breach of the whole contract or performanceany survives.unperformed balance.

4.5.

“Cancellation” occurs when either party puts an end to the contract for breach by the other and its effect is the same as that of “termination” except that the cancelling party also retains any remedy for breach of the whole contract or any unperformed balance.

- *AB231_R1* – 22 – 5.

Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is [some writing] a record sufficient to indicate that a contract for sale has - 82nd Session (2023) – 23 – been made between the parties and signed by the party against whom enforcement is sought or by [his or her] the party’s authorized agent or broker.

A [writing] record is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this subsection beyond the quantity of goods shown in [such writing.] the record.record.tion beyond the quantity 2.

2.

Sec.104.2202 Terms with respect to which the confirmatoryllows:

32.memoranda of the parties agree or which are otherwise set forth in [writing] a record intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented:

NRS1. 104.2202 is hereby amended to read as follows:

104.2202 Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in [writing] a record intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented:

- *AB231_R1* – 23 – 1.

104.2203 The affixing of a seal to a [writing] record evidencing a contract for sale or an offer to buy or sell goods does not- constitute82nd theSession [writing](2023) record– a24 sealed– instrument and the law with respect to sealed instruments does not apply to such contract or offer.

A signed agreement which excludes modification or rescission except by a signed writing or other signed record cannot be otherwise modified or rescinded, but except as between merchantsmust suchbe aseparately requirementsigned on a form supplied by the merchantother mustparty.ed be separately signed by the othermerchant party.3.

3.

Except as otherwise provided in subsections 3 and 4, “negotiable instrument” means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:

- *AB231_R1* – 24 – (a) Is payable to bearer or to order at the time it is issued or first comes into possession of a holder;

- 82nd Session (2023) – 25 – (1) An undertaking or power to give, maintain or protect collateral to secure payment;

[or] (3)advantage Aor waiverprotection of thean benefitobligor of[.] any;aw law intended for the advantage(4) orA protectionterm ofthat anspecifies obligorthe [.]law ;that governs the promise or order;

(4) A term that specifies the law that governs the promise or order;

face Anby instrumentanother mayterm, besuch aas check“money evenorder.”t though it is described on its face by another term, such as “money order.” 7.

and - *AB231_R1* – 25 – (d) Requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the instrument.

“Certificate of deposit” means an instrument containing an acknowledgment by a bank that a sum of money has been received - 82nd Session (2023) – 26 – by the bank and a promise by the bank to repay the sum of money.

(a) The first delivery of an instrument by the maker or drawer, whether to a holder or nonholder, for the purpose of giving rights on the instrument to any person [.] ;

A signature may be made manually or by means of a device or machine, and by the use of any name, including a trade or assumed name, or by a word, mark, or symbol executed or adopted by a person with present intention to authenticate a writing.] Sec.

- *AB231_R1* – 26 –  The obligation of a party to pay a check is not discharged solely by destruction of the check in connection with a process in which information is extracted from the check and an image of the check - 82nd Session (2023) – 27 – is made and, subsequently, the information and image are transmitted for payment.

Cancellation or striking out of an endorsement pursuant to subsection 1 does not affect the status and rights of a party derived fromfro[3.he As used in this section, “signed,” with respect to a record that is not a writing, includes the endorsement.attachment to or logical association with the record of an electronic symbol, sound, or process with the present intent to adopt or accept the record.] Sec.

[3.

As used in this section, “signed,” with respect to a record that is not a writing, includes the attachment to or logical association with the record of an electronic symbol, sound, or process with the present intent to adopt or accept the record.] Sec.

The issuer, nominated person or adviser for action or omission is considered to than one address is indicated, he or she is considered to be located at the address indicatedfrom inwhich his or her undertaking.undertaking was issued.

If more than one address is indicated, he or she is considered to be located at the address from which his or her undertaking was issued.

Except as otherwise provided in this subsection, the liability of an issuer, nominated person or adviser is governed by any rules - *AB231_R1* – 27 – of custom or practice, such as the Uniform Customs and Practice for Documentary- Credits,82nd toSession which(2023) the– letter28 of– credit, confirmation or other undertaking is expressly made subject.

If:If:it, confirmation or (a) This article would govern the liability of an issuer, nominated person or adviser under subsection 1 or 2;

(a) This article would govern the liability of an issuer, nominated person or adviser under subsection 1 or 2;

104.7102requires:02 1.

In this Article, unless the context otherwise requires:(a) “Bailee” means a person that by a warehouse receipt, bill of lading or other document of title acknowledges possession of goods and contracts to deliver them.

(a) “Bailee” means a person that by a warehouse receipt, bill of lading or other document of title acknowledges possession of goods and contracts to deliver them.

(g) “Issuer” means a bailee that issues a document of title or, in the case of an unaccepted delivery order, the person that orders thethen possessor of goods to deliver.

(h) “Person entitled under the document” means the holder, in the case of a negotiable document of title, or the person to whom - *AB231_R1*82nd Session (2023) – 2829 – delivery of the goods is to be made by the terms of, or pursuant to instructions in a record under, a nonnegotiable document of title.

(1)(2) To executeattach to or adoptlogically aassociate tangiblewith symbol;the record an electronic sound, symbol or process.

or (2) To attach to or logically associate with the record an electronic sound, symbol or process.

A system satisfies subsection 1, and a person [is deemed to have] has control of an electronic document of title, if the document is created,(a) storedA andsingle [assigned]authoritative transferredcopy inof suchthe adocument mannerexists that:which ist:

(a) A single authoritative copy of the document exists which is unique, identifiable and, except as otherwise provided in paragraphs (d), (e) and (f), unalterable;

(e)- Each82nd copySession of(2023) the– authoritative30 copy– and any copy of a copy is readily identifiable as a copy that is not the authoritative copy;

and - *AB231_R1* – 29 – (f) Any amendment of the authoritative copy is readily identifiable as authorized or unauthorized.

A power of a person is not shared with another person underexclusive paragraphif:ph (b) of subsection 4 and the person’s power is not exclusive(a) if:The person can exercise a power only if the power also is exercised by the other person;

(a) The person can exercise a power only if the power also is exercised by the other person;

- 82nd Session (2023) – 31 – 6.

A person has control of an electronic document of title if anotherinterest person,in otherthe thandocument:n the transferor to the person of an interest(a) inHas control of the document:document and acknowledges that it has control on behalf of the person;

- *AB231_R1* – 30 – (a) Has control of the document and acknowledges that it has control on behalf of the person;

(b) “Bearer form,” as applied to a certificated security, means a form in which the security is payable to the bearer of the security certificate according to its terms but not by reason of an endorsement.end(c) “Broker” means a person defined as a broker or dealer under the federal securities laws, but without excluding a bank acting in that capacity.

(c) “Broker” means a person defined as a broker or dealer under the federal securities laws, but without excluding a bank acting in that capacity.

or (3) Any other person that provides clearance or settlement with respect to financial assets that would require it to register as a clearing agency under the federal securities laws but for an exclusion or exemption from the requirement of registration, if its activities as a clearing corporation, including promulgation of rules, are- subject82nd Session (2023) – 32 – authority.t to regulation by a federal or state governmental authority.(f) “Communicate” means to:

(f) “Communicate” means to:

(g) “Endorsement” means a signature that alone or accompanied by other words is made on a security certificate in registered form or on a separate document for the purpose of assigning, transferring - *AB231_R1* – 31 – or redeeming the security or granting a power to assign, transfer or redeem it.

(i) “Entitlement order” means a notification communicated to a securities intermediary directing transfer or redemption of a financial asset to which the entitlement holder has a security entitlement.

 As context requires, the term means the interest itself or the means by which a person’s claim to it is evidenced, including a certificated or uncertificated security, a security certificate or a security entitlement.

and (2)- A82nd transferSession of(2023) the– security33 may– be registered upon books maintained for that purpose by or on behalf of the issuer, or thethes security certificate so states.

- *AB231_R1* – 32 – (1) Which is represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer;

and (3)(3)(I) Which:Is, or is of a type, dealt in or traded on securities exchanges or securities markets;

(I) Is, or is of a type, dealt in or traded on securities exchanges or securities markets;

“Appropriate“Control.” person.” NRS 104.8106.S 104.8107.

“Control.” NRS 104.8106.

- 82nd Session (2023) – 34 – “Securities account.” NRS 104.8501.

In addition, Article 1 contains general definitions and principles of construction and interpretation applicable throughout thisthi4. Article.

4.

- *AB231_R1* – 33 – 2.

4.Article and not by Article 3, even though it also meets thed by this requirements of that Article.

A writing that is a security certificate is governed by this Article and not by Article 3, even though it also meets the requirements of that Article.

A controllable account, controllable electronic record or controllable payment intangible is not a financial asset unless - 82nd Session (2023) – 35 – subparagraph (3) of paragraph (j) of subsection 1 of NRS 104.8102 applies.

A purchaser has “control” of a certificated sec2.ityA purchaser has “control” of a certificated security in bearerregistered form if it is delivered to the purchaser.purchaser and:

2.

A purchaser has “control” of a certificated security in registered form if it is delivered to the purchaser and:

- *AB231_R1* – 34 – 4.

or (2) Obtains control of the security entitlement after having acknowledged that it will obtain control of the security entitlement on behalf of the purchaser.

An issuer or a securities intermediary may not enter into an agreement of the kind described in paragraph (b) of subsection 3 or paragraph (b) of subsection 4 without the consent of the registered owner- or82nd entitlementSession holder,(2023) but– an36 issuer– or a securities intermediary is not required to enter into such an agreement even if the registered owner or entitlement holder so directs.

If a person acknowledges that it has or will obtain control on behalf of a purchaser, unless the person otherwise agrees or law other than this Article or Article 9 otherwise provides, the person does not owe any duty to the purchaser and is not required to confirm the acknowledgementacknowledgment to any other person.

(a)(b) The validityrights and duties of athe security;issuer with respect to registration of transfer;

- *AB231_R1* – 35 – (b) The rights and duties of the issuer with respect to registration of transfer;

(c) Whether the securities intermediary owes any duties to an adverse claimant to a security entitlement;

and any duties to an (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.

4.- 82nd Session (2023) – 37 – 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.

“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.

(b) If paragraph (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 sec(c) If neither paragraph (a) nor paragraph (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.

(c) If neither paragraph (a) nor paragraph (b) applies and an agreement between the securities intermediary and its entitlement - *AB231_R1* – 36 – 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.

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 securitysecurityncial entitlement or by the location of facilities for data processing or other recordkeeping concerning the account.

Sec.- 82nd Session (2023) – 38 – 104.8303 1.

48.“Protected purchaser” means a purchaser of aws:

NRScertificated 104.8303or isuncertificated herebysecurity, amendedor toof readan asinterest follows:therein, who:

104.8303 1.

“Protected purchaser” means a purchaser of a certificated or uncertificated security, or of an interest therein, who:

(b) “Account,” except as used in “account for,” “account statement,” “account to,” “commodity account” in paragraph (o), “customer’s account,” “deposit account” in paragraph (ff), “on account of” and “statement of account” means a right to payment of a monetary obligation, whether or not earned by performance, for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of;

for - *AB231_R1* – 37 – the use or hire of a vessel under a charter or other contract;

investment property;payment for money or funds advanced or sold, other than rightsights to arising out of the use of a credit or charge card or information contained on or for use with the card [.] ;

letter-of-credit rights or letters of credit;

[or] rights to payment for money or funds advanced or sold, other than rights arising out of the use of a credit or charge card or information contained on or for use with the card [.] ;

(d)- “Accounting,”82nd Session (2023) – 39 – record:“Accounting,” except as used in “accounting for,” means a record:(1) [Authenticated] Signed by a secured party;

(1) [Authenticated] Signed by a secured party;

(I) In the ordinary course of its business furnished goods or services to a debtor in connection with his or her farmingfarmingd goods operation;

- *AB231_R1* – 38 – (I) Is created by a debtor having an interest in the minerals before extraction;

(g) [“Authenticate”(1) means:To sign;

(1)or Tomeans: sign;

or (2) With present intent to adopt or accept a record, to attach to or logically associate with the record an electronic sound, symbol or process.] “Assignee,” except as used in “assignee for benefit of creditors,” means a person:

or (2)- To82nd whichSession an(2023) account,– chattel40 – or promissory note has been sold.hattel paper, payment intangible or promissoryThe noteterm includes a person to which a security interest has been sold.transferred by a secured party.

 The term includes a person to which a security interest has been transferred by a secured party.

[(j)] (k) “Certificate of title” means a certificate of title with respect to which a statute provides for the security interest in question to be indicated on the certificate as a condition or result of the security interest’s obtaining priority over the rights of a lien creditor with respect to the collateral.

[(k)] (l) “Chattel paper” means [a record or records that evidence both a monetary obligation and a security interest in or a lease of specific goods or of specific goods and software used in the goods, or a security interest in or a lease of specific goods and a - *AB231_R1* – 39 – license of software used in the goods.

The term does not include charters or other contracts involving the use or hire of a vessel, or records that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card.

If a transaction is evidenced by records that include ananith the instrument or series of instruments, the group of records taken together constitutes chattel paper.

or (2)- A82nd rightSession to(2023) payment– of41 a– monetary obligation owed by a lessee under a lease agreement with respect to specific goods and a monetary obligation owed by the lessee in connection with the transaction giving rise to the lease, if:

(2) Accounts, chattel paper, payment intangibles and promissorypromiss(3) notesGoods that haveare beenthe sold;subject of a consignment.

and (3) Goods that are the subject of a consignment.

- *AB231_R1* – 40 – [(o)] (p) “Commodity contract” means a commodity futures contract, an option on a commodity futures contract, a commodity option or another contract if the contract or option is:

(1) Traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contractcontractrade that pursuant to federal commodities laws;

(1)- Is82nd registeredSession as(2023) a– futures42 commission– merchant under federal commodities law;

or a futures commission merchant under (2) In the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to federal commodities law.

(1)(1)(I) TheDeals merchant:in goods of that kind under a name other than the name of the person making delivery;

(I) Deals in goods of that kind under a name other than the name of the person making delivery;

- *AB231_R1* – 41 – [(w)] (x) “Consumer goods” means goods that are used or bought for use primarily for personal, family or household purposes.

[(y)]- (z)82nd “ConsumerSession obligor”(2023) means– an43 obligor– who is a natural person and who incurred the obligation as part of a transactiontransactional entered into primarily for personal, family or household purposes.

[(bb)] (cc) “Controllable account” means an account evidenced by a controllable electronic record that provides that the account debtor undertakes to pay the person that has controlcontrolthat the under section 13 of this act of the controllable electronic record.

[(cc)] (ff) “Deposit account” means a demand, time, savings, passbooknot include investment property or similaraccounts accountevidenced maintainedby withanm adoes bank.instrument.

The[(dd)] term(gg) does“Document” notmeans includea investmentdocument propertyof title or accountsa evidencedreceipt byof anthe instrument.type described in subsection 2 of NRS 104.7201.

-[(ee) *AB231_R1*“Electronic –chattel 42paper” –means [(dd)]chattel (gg)paper “Document”evidenced meansby a documentrecord of title or arecords receiptconsisting of theinformation typestored described in subsectionan 2electronic ofmedium. NRS 104.7201.

[(ee)]- (hh)82nd [“ElectronicSession chattel(2023) paper”– means44 chattel– paper(ff)] evidenced(hh) by“Encumbrance” means a recordright, orother recordsthan consistingan ofownership informationinterest, stored in anreal electronicproperty. medium.

(ff)] “Encumbrance” means a right, other than an ownership interest, in real property.

[(gg)] (ii) “Equipment” means goods other than inventory, farm productspro[(hh)] or(jj) consumer“Farm goods.products” means goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and which are:

[(hh)] (jj) “Farm products” means goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and which are:

[(mm)] (oo) “Financing statement” means a record or records composedrelating ofto anthe initial financing statementstatement.nd and any filed record relating[(nn)] to(pp) “Fixture filing” means the initialfiling of a financing statement.statement covering goods that are or are to become fixtures and satisfying subsections 1 and 2 of NRS 104.9502.

[(nn)] (pp) “Fixture filing” means the filing of a financing statement covering goods that are or are to become fixtures and satisfying subsections 1 and 2 of NRS 104.9502.

[(pp)] (rr) “General intangible” means any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, - *AB231_R1* – 43 – instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas or other minerals before extraction.

The term- includes82nd controllableSession electronic(2023) records,– payment45 intangibles– and software.

controllable electronic records, payment intangibles [(qq)] (ss) “Goods” means all things that are movable when a security interest attaches.

The term also does not include accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments, investment property, letter-of-credit rights, letters of credit, money, or oil, gas or other minerals before extraction.

[(tt)] (vv) “Instrument” means a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in ordinary course of business is transferred by delivery with anyinclude necessaryinvestment endorsementproperty, letters of credit , [or] writings that evidence a right to payment arising out of the use of a credit or assignment.charge card or information contained on or for use with the card [.] or writings that evidence chattel paper.

The term does not include investment property, letters of credit , [or] writings that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card [.] or writings that evidence chattel paper.

- *AB231_R1*82nd Session (2023) – 4446 – (3) Are furnished by a person under a contract of service;

[(vv)] (xx) “Investment property” means a security, whether certificatedaccount, orcommodity uncertificated,contract, securityor entitlement,commodity account.nt, securities account,[(ww)] commodity(yy) contract,“Jurisdiction orof commodityorganization,” account.with respect to a registered organization, means the jurisdiction under whose law the organization is formed or organized.

[(ww)] (yy) “Jurisdiction of organization,” with respect to a registered organization, means the jurisdiction under whose law the organization is formed or organized.

[(zz)] (bbb) “Manufactured home” means a structure, transportable in one or more sections, which in the traveling mode, is 8 feet or more in body width or 40 feet or more in body length, or, when erected on-site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning and electrical systems contained therein.

- 82nd Session (2023) – 47 – [(bbb)] (ddd) “Money” has the meaning in paragraph (y) of subsection 2 of NRS 104.1201, but does not include a deposit account.

- *AB231_R1* – 45 – (eee) “Mortgage” means a consensual interest in real property, includingsimilar fixtures,transaction.which which is created by a mortgage, deed of trust, or similar[(ccc)] transaction.(fff) “New debtor” means a person that becomes bound as debtor under subsection 4 of NRS 104.9203 by a security agreement previously entered into by another person.

[(ccc)] (fff) “New debtor” means a person that becomes bound as debtor under subsection 4 of NRS 104.9203 by a security agreement previously entered into by another person.

[(hhh)] (kkk) “Payment intangible” means a general intangible under which the account debtor’s principal obligation is a monetary obligation.

(2)- 82nd Session (2023) – 48 – functions with respect to, the organization;erson performing similar (3) An officer or director of, or a person performing similar functions with respect to, thea organization;person described in subparagraph (1);

(3)(4) AnThe officerspouse orof director of, or a personnatural performing similar functions with respect to, a person described in subparagraph (1);(1), (2) or (3);

- *AB231_R1* – 46 – (4) The spouse of a natural person described in subparagraph (1), (2) or (3);

(4) To the extent of the value of collateral, claims arising out of the loss, nonconformity, or interference with the use of, defects or infringement of rights in, or damage to, the collateral;

and defects or (5) To the extent of the value of collateral and to the extent payable to the debtor or the secured party, insurance payable by reason of the loss or nonconformity of, defects or infringement of rights in, or damage to, the collateral.

[(nnn)] (qqq) “Public-finance transaction” means a secured transactiontransac(1) inDebt connectionsecurities withare which:issued;

(1) Debt securities are issued;

(1)- A82nd recordSession consisting(2023) of– the49 record– initially filed with or issued by a state or the United States to form or organize ananith or organization and any record filed with or issued by the state or the United States which amends or restates the initial record;

(2) An organic record of a business trust consisting of the record initially filed with a state and any record filed with the state - *AB231_R1* – 47 – which amends or restates the initial record, if a statute of the state governing business trusts requires that the record be filed with the state;

[(ppp)] (sss) “ Pursuant to commitment,” with respect to an advance made or other value given by a secured party, means pursuant to the secured party’s obligation, whether or not a subsequent event of default or other event not within the secured party’s control has relieved or may relieve the secured party from its obligation.

The term includes a business trust that is formed or organized under the law of a single state if a statute of the state governing business trusts requires that thethe[(sss)] business(vvv) trust’s“Secondary organicobligor” recordmeans bean filedobligor withto the state.extent that:

[(sss)] (vvv) “Secondary obligor” means an obligor to the extent that:

(1)- A82nd personSession in(2023) whose– favor50 a– security interest is created or provided for under a security agreement, whether or not anyanyreated or obligation to be secured is outstanding;

or - *AB231_R1* – 48 – (6) A person that holds a security interest arising under NRS 104.2401, 104.2505, subsection 3 of NRS 104.2711, NRS 104.4210, 104.5118 or subsection 5 of NRS 104A.2508.

(1) To deposit in the mail, deliver for transmission or transmit by any other usual means of communication, with postage or cost of transmission provided for, addressed to any address reasonable under the circumstances;

[(yyy)] (aaaa) “Supporting obligation” means a letter-of-credit right or secondary obligation that supports the payment ororf-credit performance of an account, chattel paper, document, general intangible, instrument or investment property.

(1)- Identifies,82nd bySession its(2023) file– number,51 the– initial financing statement to which it relates;

andandnumber, the initial financing (2) Indicates either that it is a termination statement or that the identified financing statement is no longer effective.

or - *AB231_R1* – 49 – (5) Transmitting or producing and transmitting electricity, steam, gas or water.

6 “Applicant.” NRS 104.5102.

“Lease.” NRS 104A.2103.

“Negotiable- instrument.”82nd Session (2023) – 52 – “Nominated person.” NRS 104.3104.104.5102.3104.

“Nominated person.” NRS 104.5102.

- *AB231_R1* – 50 – 3.

Sec.

50.

NRS 104.9104 is hereby amended to read as follows:

or (2) Obtains control of the deposit account after having acknowledgedbehalf thatof itthe willsecured obtainparty.tain control of the deposit account on behalf2. of the secured party.

2.

A [secured party] purchaser has control of an authoritative electronic copy of a record evidencing chattel paper if a system employed for evidencing the [transfer] assignment of interests in the chattel paper reliably establishes the [secured party] purchaser- as82nd theSession person(2023) to– which53 – electronic copy was assigned.ich the [chattel paper] authoritative electronic2. copy was assigned.

2.

- *AB231_R1* – 51 – (e) Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy;

andand(f) (f) Any amendment of the authoritative copy is readily identifiable as authorized or unauthorized.

(1) Prevent others from adding or changing an identified assignee of the authoritative electronic copy;

andandan identified (2) Transfer control of the authoritative electronic copy.

(a) The authoritative electronic copy, a record attached to or logically associated with the authoritative electronic copy or a system in which the authoritative electronic copy is recorded limits the use of the authoritative electronic copy or has a protocol - 82nd Session (2023) – 54 – programmed to cause a change, including a transfer or loss of control;

A power of a purchaser is not shared with another person undernot paragraphexclusive (b)if:b) of subsection 4 and the purchaser’s power is not(a) exclusiveThe if:purchaser can exercise a power only if the power also is exercised by the other person;

(a) The purchaser can exercise a power only if the power also is exercised by the other person;

- *AB231_R1* – 52 – 7.

A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral, unless an agreement expressly postpones the time of attachment.

unless an agreement expressly postpones the time of 2.

(3)- The82nd collateralSession is(2023) a– certificated55 security– in registered form and the security certificate has been delivered to the secured partypartyorm under NRS 104.8301 pursuant to the debtor’s security agreement;

Subsection 2 is subject to NRS 104.4210 on the security interest of a collecting bank, NRS 104.5118 on the security interest of a letter-of-credit issuer or nominated person, NRS 104.9110 on a -on *AB231_R1* – 53 – security interestinterests arisingin underinvestment Articleproperty.2A, 2 or 2A, and NRS 104.9206 on4. security interests in investment property.

4.

and (b)interest Anotherin agreementthe isproperty notenforceable.sary necessary to make a security interest6. in the property enforceable.

6.

- 82nd Session (2023) – 56 – 8.

The attachment of a security interest in a commodity account iscarried also attachment of a security interest in the commodity contractsaccount.interest carried in the commodity account.contracts Sec.

Sec.

(a) Consumer goods, other than an accession when given as additional security, unless the debtor acquires rights in them within 10 days after the secured party gives value;

- *AB231_R1* – 54 – (a) To consumer goods as proceeds under subsection 1 of NRS 104.9315 or commingled goods under subsection 3 of NRS 104.9336;

A security agreement may provide that collateral secures, or that accounts, chattel paper, payment intangibles or promissory notes are sold in connection with, future advances or other value, whether or not the advances or value are given pursuant totor value, commitment.

- 82nd Session (2023) – 57 – (b) The risk of accidental loss or damage is on the debtor to the extent of a deficiency in any effective insurance coverage;

and (d) The(1) securedFor partythe maypurpose useof orpreserving operate the collateral:collateral or its value;

(1) For the purpose of preserving the collateral or its value;

- *AB231_R1* – 55 – 4.

and (b)Sec. Subsections 2 and 3 do not apply.

Sec.

or - 82nd Session (2023) – 58 – (b) Transfer the balance on deposit into a deposit account in the debtor’s name;

A [secured party,] purchaser, other than a buyer, having control [of electronic chattel paper] under NRS 104.9105 of an authoritativeshall [:ative electronic copy of a record evidencing chattel paper shall(a) [:Communicate the authoritative copy of the electronic chattel paper to the debtor or its designated custodian;

(a) Communicate the authoritative copy of the electronic chattel paper to the debtor or its designated custodian;

- *AB231_R1* – 56 – 4.

A secured party having control of investment property under paragraph (b) of subsection 4 of NRS 104.8106 or under subsection 2 of NRS 104.9106 shall send to the securities intermediary or commodity intermediary with which the security entitlement or commodity contract is maintained [an authenticated] a signed record that releases the securities intermediary or commodity intermediary from any further obligation to comply with entitlement ordersord5.s oA secured party having control of a letter-of-credit right under NRS 104.9107 shall send to each person having an unfulfilled obligation to pay or directionsdeliver originatedproceeds byof the letter of credit to the secured party [an authenticated] a signed release from any further obligation to pay or deliver proceeds of the letter of credit to the secured party;

5.

A secured party having control of a letter-of-credit right under NRS 104.9107 shall send to each person having an unfulfilled obligation to pay or deliver proceeds of the letter of credit to the secured party [an authenticated] a signed release from any further obligation to pay or deliver proceeds of the letter of credit to the secured party;

(b) If the debtor designates a custodian that is the designated custodian with which the authoritative copy of the electronic document is maintained for the secured party, communicate to the custodian an authenticated record releasing the designated custodian from- any82nd furtherSession obligation(2023) to– comply59 with– instructions originated by the secured party and instructing the custodian to comply withwithd instructions originated by the debtor;

(a)(b) ThereThe secured party is nonot outstandingcommitted securedto obligation;make advances, incur obligations or otherwise give value.

and (b) The secured party is not committed to make advances, incur obligations or otherwise give value.

Within 10 days after receiving [an authenticated] a signed demand by the debtor, a secured party shall send to an account - *AB231_R1* – 57 – debtor that has received notification under subsection 1 of NRS 104.9406 or subsection 2 of section 14 of this act of an assignment to the secured party as assignee [under subsection 1 of NRS 104.9406 an authenticated] a signed record that releases the account debtor from any further obligation to the secured party.

(b) “Request for an accounting” means a record [authenticated] signed by a debtor requesting that the recipient provide anancated] accounting of the unpaid obligations secured by collateral and reasonably identifying the transaction or relationship that is the subject of the request.

- 82nd Session (2023) – 60 – (d) “Request regarding a statement of account” means a record [authenticated] signed by a debtor requesting that the recipient approve or correct a statement indicating what the debtor believes to be the aggregate amount of unpaid obligations secured by collateral as of a specified date and reasonably identifying the transaction or relationship that is the subject of the request.request.g the transaction or 2.

2.

A person that receives a request regarding a list of collateral, claims no interest in the collateral when it receives the request, and claimed an interest in the collateral at an earlier time shall comply - *AB231_R1* – 58 – with the request within 14 days after receipt by sending to the debtor [an authenticated] a signed record:

and (b) If known to the recipient, providing the name and mailing addressthe ofcollateral.assignee any assignee of or successor to the recipient’s interest in the5. collateral.

5.

Sec.- 82nd Session (2023) – 61 – 104.9301 Except as otherwise provided in NRS 104.9303 tows:

58.104.9306, inclusive, and section 6 of this act, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral:

NRS 104.9301 is hereby amended to read as follows:

104.9301 Except as otherwise provided in NRS 104.9303 to 104.9306, inclusive, and section 6 of this act, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral:

Except as otherwise provided in subsections 4, 5 and 6, while [tangible] negotiable tangible documents, goods, instruments [,] or money [or tangible chattel paper] is located in a jurisdiction, the law of that jurisdiction governs the effect of perfection or nonperfection,non4.rfeWhile andgoods theare prioritylocated ofin a nonpossessoryjurisdiction, securitythe interest.law of thatst.

4.jurisdiction governs perfection of a security interest in the goods by a fixture filing.

While goods are located in a jurisdiction, the law of that jurisdiction governs perfection of a security interest in the goods by a fixture filing.

The law of the jurisdiction in which the wellhead or minehead is located governs perfection, the effect of perfection or - *AB231_R1* – 59 – nonperfection, and the priority of a security interest in as-extracted collateral.

2.purposes of this part:les determine a bank’s jurisdiction for (a) If an agreement between the bank and the debtor governing the deposit account expressly provides that a particular jurisdiction is the bank’s jurisdiction for purposes of this part, this article or the Uniform Commercial Code, that jurisdiction is the bank’s jurisdiction.

The(b) followingIf rulesparagraph determine(a) adoes bank’snot jurisdictionapply forand purposesan agreement between the bank and its customer governing the deposit account expressly - 82nd Session (2023) – 62 – provides that the agreement is governed by the law of thisa part:particular jurisdiction, that jurisdiction is the bank’s jurisdiction.

(a)(c) If neither paragraph (a) nor paragraph (b) applies and an agreement between the bank and theits debtorcustomer governing the deposit accountan expresslyoffice providesin that a particular jurisdictionjurisdiction, is the bank’s jurisdiction for purposes of this part, this article or the Uniform Commercial Code, that jurisdiction is the bank’s jurisdiction.

(b) If paragraph (a) does not apply and an agreement between the bank and its customer governing the deposit account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank’s jurisdiction.

(c) If neither paragraph (a) nor paragraph (b) applies and an agreement between the bank and its customer governing the deposit account expressly provides that the deposit account is maintained at an office in a particular jurisdiction, that jurisdiction is the bank’s jurisdiction.

(b) The law of the issuer’s jurisdiction as specified in subsection 4 of NRS 104.8110 governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security.

(c) The law of the securities intermediary’s jurisdiction as specified in subsection 5 of NRS 104.8110 governs perfection, the -interest *AB231_R1*in –a 60security –entitlement or securities account.f a security (d) The law of the commodity intermediary’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a securitycommodity entitlementcontract or securitiescommodity account.

(d) The 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.

(b)- If82nd paragraphSession (a)(2023) does– not63 apply– and an agreement between the commodity intermediary and commodity customer governinggoverningween the commodity account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction.

(e) If none of the preceding paragraphs applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the chief executiveexe3. office of the commodity intermediary is located.

3.

- *AB231_R1* – 61 – Sec.

(a)NRS That104.9308;s is perfected under subsection 4, 5, 6 or 7 of (b) That is perfected under NRS 104.9308;104.9309 when it attaches;

(b) That is perfected under NRS 104.9309 when it attaches;

- 82nd Session (2023) – 64 – (f) In collateral in the secured party’s possession under NRS 104.9313;

(h) In controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, [electronic[electronics, chattel paper,] electronic documents, investment property or letter- of-credit rights which is perfected by control under NRS 104.9314;

(b) A security interest in a letter-of-credit right may be perfected only by control under NRS 104.9314, except as otherwise provided in subsection(c) 4A ofsecurity interest in money may be perfected only by the secured party’s taking possession under NRS 104.9308;104.9313.

and - *AB231_R1* – 62 – (c) A security interest in money may be perfected only by the secured party’s taking possession under NRS 104.9313.

or - 82nd Session (2023) – 65 – (c) Filing as to the goods.

A security interest in certificated securities, negotiable documents or instruments is perfected without filing or the taking of possession or control for a period of 20 days after the time it attachesauthenticated] toa thesigned extentsecurity thatagreement.ew it arises for new value given under [an authenticated]6. a signed security agreement.

6.

Except as otherwise provided in subsection 2, a secured party may perfect a security interest in [tangible negotiable documents,] goods, instruments, negotiable tangible documents or money [or tangible chattel paper] by taking possession of the or collateral.

A secured party may perfect a security interest in - *AB231_R1* – 63 – certificated securities by taking delivery of the certificated securities under NRS 104.8301.

- 82nd Session (2023) – 66 – (a) The person in possession [authenticates] signs a record acknowledging that it holds possession of the collateral for the secured party’s benefit;

or (b) The person takes possession of the collateral after having [authenticated] signed a record acknowledging that it will hold possession of the collateral for the secured party’s benefit.benefit.ld 4.

4.

A secured party having possession of collateral does not relinquish possession by delivering the collateral to a person other than the debtor or a lessee of the collateral from the debtor in the ordinary course of the debtor’s business if he or she was instructed before the delivery or is instructed contemporaneously with the delivery:

or - *AB231_R1* – 64 – (b) To redeliver the collateral to the secured party.

- 82nd Session (2023) – 67 – Sec.

A security interest in [investment property, deposit accounts, letter-of-credit rights, electronic chattel paper or] controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, electronic documents , investment property or letter-of-credit rights may be perfected by control of the collateral under NRS 104.7106, 104.9104, [104.9105,] 104.9106 or 104.9107 [.] or section 3 of this act.

Sec.

65.

NRS 104.9316 is hereby amended to read as follows:

or - *AB231_R1* – 65 – (c) The expiration of 1 year after a transfer of collateral to a person that thereby becomes a debtor and is located in another jurisdiction.

If a security interest described in subsection 1 becomes perfected under the law of the other jurisdiction before the earliest time or event described in that subsection, it remains perfected thereafter.- 82nd Session (2023) – 68 – the law of the other jurisdiction before the earliest time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.

If the security interest does not become perfected under the law of the other jurisdiction before the earliest time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value.

Except as otherwise provided in subsection 5, a security interest in goods covered by a certificate of title which is perfected by any method under the law of another jurisdiction when the goods become covered by a certificate of title from this State remains perfected until the security interest would have become unperfected under the law of the other jurisdiction had the goods not become so covered.

A security interest in chattel paper, controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, letter-of-credit rights or investment property which is perfected under the law of the chattel paper’s jurisdiction, the controllable electronic record’s jurisdiction, the bank’s jurisdiction, the issuer’s jurisdiction, a nominated person’s jurisdiction, the securities intermediary’s jurisdiction or the - *AB231_R1* – 66 – commodity intermediary’s jurisdiction, as applicable, remains perfected until the earlier of:

or (b)- The82nd expirationSession of(2023) 4– months69 after– jurisdiction to another jurisdiction.er a change of the applicable jurisdiction7. to another jurisdiction.

7.

(a) A financing statement filed before the change pursuant to the law of the jurisdiction designated in subsection 1 of NRS 104.9301 or subsection 3 of NRS 104.9305 is effective to perfect a security interest in the collateral if the financing statement would have been effectivehad tonot perfectchanged aits securitylocation.ty interest in the collateral if the debtor had(b) notIf changeda itssecurity location.interest perfected by a financing statement that is effective under paragraph (a) becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in subsection 1 of NRS 104.9301 or subsection 3 of NRS 104.9305 or the expiration of the 4-month period, it remains perfected thereafter.

(b) If a security interest perfected by a financing statement that is effective under paragraph (a) becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in subsection 1 of NRS 104.9301 or subsection 3 of NRS 104.9305 or the expiration of the 4-month period, it remains perfected thereafter.

If a financing statement naming an original debtor is filed pursuant to the law of the jurisdiction designated in subsection 1 of NRS 104.9301 or subsection 3 of NRS 104.9305 and the new debtor is located(a) The financing statement is effective to perfect a security interest in anothercollateral jurisdiction,acquired by the followingnew rulesdebtor apply:before, and within 4 months after, the new debtor becomes bound under subsection 4 of NRS 104.9203, if the financing statement would have been effective to perfect a security interest in the collateral had the collateral been acquired by the original debtor.

(a)(b) TheA financingsecurity statementinterest isperfected effectiveby tothe perfectfinancing astatement securitywhich interestbecomes inperfected collateralunder acquiredthe bylaw of the newother debtorjurisdiction before,before andthe withinearlier 4of monthsthe after,time the newfinancing debtorstatement becomeswould boundhave under- subsection82nd 4Session of(2023) NRS– 104.9203,70 if– thesubsection financing1 statementof wouldNRS have104.9301 beenor effectivesubsection to3 perfectof aNRS security104.9305 interestor in the collateralexpiration hadof the collateral4-month beenperiod acquiredremains byperfected thethereafter. original debtor.

- *AB231_R1* – 67 – (b) A security interest perfected by the financing statement which becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in subsection 1 of NRS 104.9301 or subsection 3 of NRS 104.9305 or the expiration of the 4-month period remains perfected thereafter.

or (2) One of the conditions specified in paragraph (c) of subsection 2 of NRS 104.9203 is met and a financing statement coveringcov2.ingExcept as otherwise provided in subsection 5, a buyer, other than a secured party, of [tangible chattel paper,] tangible documents, goods, instruments, or a certificated security takes free of a security interest or agricultural lien if the buyer gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is filed.perfected.

2.

Except as otherwise provided in subsection 5, a buyer, other than a secured party, of [tangible chattel paper,] tangible documents, goods, instruments, or a certificated security takes free of a security interest or agricultural lien if the buyer gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected.

[A] Subject to subsections 6 to 9, inclusive, a licensee of a general intangible or a buyer, other than a secured party, of collateral other than [tangible chattel paper,] tangible documents, goods, instruments or a certificated security takes free of a security interest if the licensee or buyer gives value without knowledge of the security interest and before it is perfected.perfected.hout knowledge of 5.

5.

- *AB231_R1*82nd Session (2023) – 6871 – 6.

(a) Receives delivery of each authoritative tangible copy of the rec(b) If each authoritative electronic copy of the record evidencing the chattel paper;paper can be subjected to control under NRS 104.9105, obtains control of each authoritative electronic copy.

and (b) If each authoritative electronic copy of the record evidencing the chattel paper can be subjected to control under NRS 104.9105, obtains control of each authoritative electronic copy.

Except as otherwise provided in subsection 3, for purposes of determining the priority of a perfected security interest under subsection 1 of NRS 104.9322, perfection of the security interest dates from the time an advance is made to the extent that the security interest secures an advance that:

or (b)- Pursuant82nd Session (2023) – 72 – of the lien.ant to a commitment entered into without knowledge of3. the lien.

- *AB231_R1* – 69 – 3.

Except as otherwise provided in subsection 7, a lessee of goods [, other than a lessee in ordinary course of business,] takes the leaseholdadvances freemade ofafter athe securityearlier interestof:st to the extent that it secures advances(a) madeThe aftertime the earliersecured of:party acquires knowledge of the lease;

(a) The time the secured party acquires knowledge of the lease;

Subject to subsection 2 and except as otherwise provided in subsection 7, a perfected purchase-money security interest in inventory has priority over a conflicting security interest in the same inventory, has priority over a conflicting security interest in chattel paper or an instrument constituting proceeds of the inventory and in proceeds of the chattel paper, if so provided in NRS 104.9330, and, except as otherwise provided in NRS 104.9327, also has priority in identifiable cash proceeds of the inventory to the extent the identifiable cash proceeds are received on or before the the delivery of the inventory to a buyer, if:

- 82nd Session (2023) – 73 – (c) The holder of the conflicting security interest receives the notification within 5 years before the debtor receives possession of the inventory;

and (d) The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in inventory of the debtor and describes the inventory.

- *AB231_R1* – 70 – 2.

(c) The holder of the conflicting security interest receives the notification within 6 months before the debtor receives possession of the livestock;

and months before the debtor receives possession (d) The notification states that the person sending the notification has or expects to acquire a purchase-money security interest in livestock of the debtor and describes the livestock.

Except as otherwise provided in subsection 7, a perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods,- and,82nd exceptSession as(2023) otherwise– provided74 in– NRS 104.9327, a perfected security interest in its identifiable proceeds also has priority, if the purchase-money security interest is perfected when the debtor receives possession of the collateral or within 20 days thereafter.

Except as otherwise provided in subsection 7, a perfected purchase-money security interest in software has priority over a conflicting security interest in the same collateral, and, except as - *AB231_R1* – 71 – otherwise provided in NRS 104.9327, a perfected security interest in its identifiable proceeds also has priority, to the extent that the purchase-money security interest in the goods in which the software was acquired for use has priority in the goods and proceeds of the goods under this section.

(a) A security interest securing an obligation incurred as all or part of the price of the collateral has priority over a security interest securing an obligation incurred for value given to enable the debtor to acquire rights in or the use of collateral;

and enable the debtor (b) In all other cases, subsection 1 of NRS 104.9322 applies to the qualifying security interests.

[under NRS 104.9105;] and (b) The [chattel paper does] authoritative copies of the record evidencing the chattel paper do not indicate that [it] the chattel paperpurchaser.been has been assigned to an identified assignee other than the purchaser.2.

2.A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed other than merely as proceeds of inventory subject to a security interest if the purchaser gives new value , [and] takes possession of each authoritative tangible copy of the record evidencing the chattel paper [or] and obtains control under NRS 104.9105 of each authoritative electronic copy of the record evidencing the chattel paper [under NRS 104.9105] in good faith, in the ordinary course of the - 82nd Session (2023) – 75 – purchaser’s business, and without knowledge that the purchase violates the rights of the secured party.

A purchaser of chattel paper has priority over a security interest in the chattel paper which is claimed other than merely as proceeds of inventory subject to a security interest if the purchaser gives new value , [and] takes possession of each authoritative tangible copy of the record evidencing the chattel paper [or] and obtains control under NRS 104.9105 of each authoritative electronic copy of the record evidencing the chattel paper [under NRS 104.9105] in good faith, in the ordinary course of the purchaser’s business, and without knowledge that the purchase violates the rights of the secured party.

Except as otherwise provided in NRS 104.9327, a purchaser having priority in chattel paper under subsection 1 or 2 also has prioritypri(a) inNRS proceeds104.9322 ofprovides thefor chattelpriority paperin to the extentproceeds; that:

(a) NRS 104.9322 provides for priority in the proceeds;

- *AB231_R1* – 72 – 4.

This article does not limit the rights of a holder in due course of a negotiable instrument, a holder to which a negotiable document of title has been duly negotiated, [or] a protected purchaser of a security [.] or a qualifying purchaser of a controllable account, controllable electronic record or controllable payment intangible.

A transferee of money takes the money free of a security interest [unless] if the transferee [acts] receives possession of- the82nd moneySession without(2023) acting– in76 collusion– with the debtor in violating the rights of the secured party.party.ith the debtor in 2.

2.

- *AB231_R1* – 73 – 2.

In cases not governed by subsections 4 to 8, inclusive, a security interest in fixtures is subordinate to a conflicting interest of an encumbrancer or owner of the related real property other than the debtor.deb4.r.

4.

(1) Is perfected by a fixture filing before the interest of the encumbrancerencumbr(2) orHas ownerpriority isover any conflicting interest of record;a predecessor in title of the encumbrancer or owner;

and (2) Has priority over any conflicting interest of a predecessor in title of the encumbrancer or owner;

or (3)- Replacements82nd ofSession domestic(2023) appliances– that77 are– consumer goods;

(3) Replacements of domestic appliances that are consumer (c) The conflicting interest is a lien on the real property obtained by legal or equitable proceedings after the security interest was perfected by any method permitted by this article;

- *AB231_R1* – 74 – (a) The encumbrancer or owner has, in [an authenticated] a signed record, consented to the security interest or disclaimed an interest in the goods as fixtures;

or (b) The debtor has a right to remove the goods as against the encumbrancerenc7. or owner.

7.

A perfected security interest in crops growing on real property has priority over a conflicting interest of an encumbrancer in or owneris in possession of the real propertyproperty.has if the debtor has an interest of record inSec. or is in possession of the real property.

Sec.

2.- 82nd Session (2023) – 78 – 3.

The bank’s knowledge of the security interest;

or 3.

- *AB231_R1* – 75 – 2.

Subject to subsection 3 and except as otherwise provided in subsection 4, the claim of an account debtor against an assignor may be asserted against an assignee under subsection 1 only to reduce the amountamo3. the account debtor owes.

3.

Sec.

75.

NRS 104.9406 is hereby amended to read as follows:

- 82nd Session (2023) – 79 – 2.

(b) To the extent that an agreement between an account debtor and a seller of a payment intangible limits the account debtor’s duty to pay a person other than the seller and the limitation is effective under law other than this article;

- *AB231_R1* – 76 – 3.

(a) Prohibits, restricts or requires the consent of the account debtor or person obligated on the promissory note to the assignment or transfer of, or the creation, attachment, perfection or enforcement of a security interest in, the account, chattel paper, paymentpaymentorcement intangible or promissory note;

[Subject] Except as otherwise provided in subsection 10 and NRS 104.9407 and 104A.2303 and subject to subsections 7 and 8,- a82nd ruleSession of(2023) law,– statute,80 or– regulation, that prohibits, restricts, or requires the consent of a government, governmental body or official, or or account debtor to the assignment or transfer of, or creation of a security interest in, an account or chattel paper is ineffective to the extent that the rule of law, statute or regulation:

-establishes *AB231_R1*a –different 77rule –for 8.an account debtor who is a natural person and who incurred the obligation primarily for personal, family or household purposes.

This section is subject to law other than this article which establishes a different rule for an account debtor who is a natural person and who incurred the obligation primarily for personal, family or household purposes.

Except as otherwise provided in [subsection] subsections 2 [,] and 5, a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or a general intangible, including a contract, permit, license or franchise, and prohibits, restricts or requires the consent of the person obligated on the promissory note or the account debtor to, the assignment or transfer of, or creation, attachment, or perfection of a security interest in, the promissory note, health-care-insurance receivable or general intangible, is ineffective to the extent that the term: