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Wednesday, August 23, 2006

Revised Article 1 Legislative Roundup

With the 2006 legislative season drawing to a close (indeed, it's been over for months in some states), and the 2006-07 academic year about to being (or having just begun at many law schools), here's a wrap-up of legislative action on Revised Article 1 this year:

Seven states -- Arizona, Colorado, Kentucky, Louisiana, New Hampshire, North Carolina, and West Virginia -- have enacted Revised Article 1 thus far this year.  This is the same number of states that enacted Revised Article 1 in 2005 and the aggregate number of states that enacted Revised Article 1 before 2005.  Bringing the total number of enacting states to 21.

Kentucky's, Louisiana's, and West Virginia's revisions are already in effect.  Colorado's take effect on Sept. 1, 2006.  Arizona's take effect on or about Sept. 21, 2006.  North Carolina's takes effect on Oct. 1, 2006.  New Hampshire's takes effect on Jan. 1, 2007.

California appears poised to become the 22nd enacting state.  Just yesterday, the California Senate approved SB 1481 as amended by the Assembly.  That bill is now set for enrollment and should be sent to Governor Schwarzenegger in relatively short order.  Barring a veto, California will become the 22nd state (out of 22) to reject uniform R1-301 and the 16th state to adopt the uniform R1-201(b)(20) good faith definition.  If enacted California's amendments will take effect Jan. 1, 2007.  One interesting aspect about the California bill is the addition, by amendment, of a new non-UCC statutory provision that will have the essential effect of recodifying pre-revised 1-206 to preserve a statute of frauds for sales of personal property that is not subject one of the UCC's Articles.

The Massachusetts legislature continues to largely ignore HB 3731, which was first introduced in early 2005.  Most recently, the Massachusetts House voted to further extend to January 2, 2007 the relevant committee's deadline to report back to the full legislature the committee's recommendation following public hearings held on October 26, 2005.  While the Senate has yet to concur in this most recent extension, it seems clear that Massachusetts will not enact Revised Article 1 this year.

The Florida legislature considered Revised Article 1 in 2006, but allowed both House and Senate bills to die in committee.  Bills that were introduced in 2005 in Illinois and Kansas and then languished went without further action in 2006.

For those who are interested, California SB 1481 will, if enacted, bring the number of Revised Article 7 enactments to 24.  Meanwhile, five states -- Arkansas, Kentucky, Minnesota, Nevada, and Texas -- have enacted the latest Article 3 and 4 amendments, and Massachusetts appears to be progressing toward becoming the sixth.

The 2003 amendments to Article 2 and 2A continue to go nowhere.  They have only been introduced in three states -- Kansas, Nevada, and Oklahoma -- and have died unceremonious deaths in all three.  Unless NCCUSL and the ALI return to the drawing board and initiate a legislative full court press (neither of which seems likely in the near future), the only amendments to Articles 2 and 2A likely to be of any relevance in the foreseeable future are conforming amendments required by a state's adoption of Revised Article 1 or 7 or amended Articles 3 and 4.

[Keith A. Rowley]

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