CT HB06970

Establishes a new UCC article for Controllable Electronic Records (Sections 86–92), creating a legal framework for electronic assets with defined rules for control, transfer, purchaser protections, and account debtor discharge; a qualifying purchaser who obtains control for value in good faith acquires rights free of competing property claims, and filing a financing statement does not constitute notice of such claims.

Introduces "electronic money" (money in electronic form) and "controllable accounts" and "controllable payment intangibles" as new categories of collateral under Article 9, with specific rules for perfection, priority, and enforcement; a secured party with control of these assets has priority over one without control.

Redefines "money" to require current authorization or adoption by a domestic or foreign government, explicitly excluding electronic records functioning as media of exchange in systems predating government authorization—effectively excluding most cryptocurrencies from the UCC definition of money.

Creates a hybrid transaction framework for Articles 2 (Sales) and 2A (Leases), establishing rules for transactions involving both goods and non-goods elements: if the sale/lease of goods predominates, the full article applies to the entire transaction; if not, only goods-specific provisions apply.

Modernizes terminology throughout the UCC by systematically replacing "writing" with "record" and "authenticated" with "signed", with updated definitions of "sign" encompassing electronic symbols, sounds, and processes, and "conspicuous" now evaluated under a totality-of-the-circumstances standard.

Overhauls the chattel paper definition and priority rules, requiring purchasers to both take possession of all authoritative tangible copies and obtain control of all authoritative electronic copies to claim priority, and comprehensively revises how chattel paper is created, evidenced, and transferred.

Establishes detailed control rules for electronic documents of title (Article 7), controllable electronic records (Section 90), and security entitlements (Article 8), including a uniform framework for control through acknowledgment by a third party and a presumption that qualifying powers are exclusive.

Adopts a choice-of-law framework for controllable electronic records using a hierarchical determination: first the record's express designation, then system rules, then the record's governing-law statement, then system rules' governing-law statement, with the District of Columbia as the default jurisdiction.

Provides transitional rules with an effective date of January 1, 2026, and an adjustment date of January 1, 2027: pre-existing security interests remain enforceable, but parties must satisfy new perfection and enforceability requirements by the adjustment date or risk losing perfected status.

Updates cross-references in over 20 Connecticut statutes—spanning tax liens, motor vehicles, vessels, retail installment sales, rent-to-own agreements, landlord-tenant security deposits, receivership, and criminal law—to conform to the renumbered and amended UCC provisions.