Committee hears H.206 to adopt 2022 Uniform Commercial Code amendments for electronic commerce

The House Committee on Finance heard testimony on H.206 on the Uniform Commercial Code, with presenters saying the bill would incorporate the UCC’s 2022 amendments — chiefly to recognize electronic records, non‑fungible tokens and cryptocurrency as potentially securable commercial assets.

The bill would update Title 9A of Vermont law to reflect model changes developed by the Uniform Law Commission and the American Law Institute. Rick Seigel, Office of Legislative Counsel, told the committee the UCC’s goal “is to facilitate commercial transactions,” so that businesses “have the same guardrails” across states. He described the 2022 package as focused on electronic transactions and said Vermont’s version includes a provision added on the House side (section 11a) at the request of another member.

Carlos, a lawyer and long‑time uniform law commissioner who participated in drafting, told the committee the commercial code is large and covers sales, leases, commercial paper, letters of credit, warehouse receipts, securities and secured transactions. He said the 2022 amendments mainly update article 9 on secured transactions to fit electronic assets into existing rules, add an article on funds transfers and create an article to tie electronic transaction rules together. “Many of us have been doing transactions electronically for years, and you never think about the law that might or might not be there,” he said.

Presenters explained how the amendments address practical problems in secured lending when collateral is intangible. Under current practice for tangible personal property a secured party can protect a loan by taking possession or filing a financing statement with the secretary of state. The 2022 amendments add concepts such as “control” of an electronic record that let lenders and secured sellers obtain enforceable priority in electronic assets when physical possession is not possible.

Committee members asked how quickly Vermont should act and what would happen if the state declined to adopt the model changes. Seigel and Carlos said many other states have already adopted the 2022 amendments and that failing to adopt could make interstate commerce with Vermont businesses more complicated. The presenters gave differing tallies when asked how many states had enacted the amendments (both 23–25 and a later reference to 25 states and 17 pending legislatures were cited in the hearing transcript); the committee discussion did not resolve that discrepancy.

No motion or formal vote on H.206 was recorded in the hearing. Committee members and presenters repeatedly described the package as largely technical and noncontroversial, and the chair said the committee would “let it percolate” and likely take up the bill for a vote later in the week after other pending items were handled.

The discussion also touched on related topics legislators have considered separately, including kiosk regulation for virtual‑currency machines and questions about whether state adoption of UCC electronic‑money definitions intersects with sales‑tax treatment of digital points or timeshare exchange platforms. Presenters said those are separate policy debates and not direct consequences of the UCC amendments.

Why it matters: adopting the 2022 UCC amendments would align Vermont’s secured‑transaction and related commercial rules with the model law adopted by many other states, and would create statutory mechanisms for using intangible electronic assets in ordinary lending and commercial arrangements. The committee did not take a vote and left timing and any technical edits to future consideration.

Ending: Committee staff and the presenters said they would be available to answer detailed drafting questions as the bill moves forward. The committee did not set a final date for a vote during the recorded hearing.