House commerce committee reviews H.206 to adopt 2022 UCC amendments on digital assets and secured transactions

The Lamar House Committee on Commerce & Economic Development on March 11, 2025, received a technical walkthrough of H.206, the bill to adopt the 2022 amendments to the Uniform Commercial Code, and agreed to pause final action until a small amendment can be drafted and circulated.

The matter matters because the 2022 amendments add an Article 12 to the UCC to treat certain digital assets — including some virtual currencies and nonfungible tokens — as "controllable electronic records," and they update definitional rules and secured-transaction law that businesses, banks and courts use to decide who has ownership or priority in intangible assets.

Carl Lisman, a long-serving Uniform Law Commissioner who presented the bill, told the committee that the 2022 package responds to three trends: the growth of electronic commerce and digital assets, the rise of hybrid transactions that mix sales of goods with services, and the need to clarify definitions after recent court decisions. "For the record, my name is Carl Lisman," he said, and later explained that "I am here as a uniform law commissioner." He summarized the core change: "What this really says is that controllable electronic record is a record that is information that's retrievable in perceivable form. It's a controllable electronic record if it is stored in an electronic medium and can be subjected to control under 12 1 0 5."

Under the draft amendments, controllable electronic records are a limited subset of digital records to which special rules apply for buyers and secured parties. Lisman said the amendments pair Article 12 with conforming changes to Article 9 (secured transactions) so lenders and purchasers can use filing, possession or a new notion of "control" to perfect security interests in intangible assets. He described the policy aim this way: if a transferee can show exclusive power to transfer and that the transfer occurred, "the law will protect that someone else from the claims of your creditors."

Committee members pressed for concrete examples and legal analogies. Lisman drew parallels to existing UCC mechanisms — promissory notes, negotiable instruments and the holder-in-due-course concept — and said the electronic rules will not alter federal definitions of fiat currency: "If Bitcoin becomes the national a national currency of The United States, Congress will deal with that." He also described an intentionally broader, technology-neutral drafting approach, noting that Article 12 distinguishes between records and the rights those records may evidence so the law can accommodate future record forms.

The presenter emphasized other definitional updates in the bill: replacing some uses of the term "writing" with "record" to accommodate electronic documents, and replacing type-size rules for making notices "conspicuous" with a "totality of the circumstances" test that fits web and mobile interfaces. Lisman also explained why Article 9’s filing system (the UCC-1 financing statement filed with the secretary of state) remains important for perfecting security interests in personal property.

James (Jim) Knapp, co-chair of the Vermont Bar Association property law section, supported the draft and stressed the practical importance of uniform rules across states: "adopting these amendments is an excellent idea," he said, describing how complex multi‑state commercial transactions depend on a common legal platform.

Committee members discussed several implementation items raised by the presenters. Lisman noted a ULC map showing 25 states had already enacted the 2022 amendments and 13 states were actively considering them in the current session; the amendments have also been circulated to the District of Columbia and several territories. The committee asked staff whether the official comments that accompany the ULC text could be included in the bill materials distributed in the Legislature (the "green book"). Lisman asked the committee to include the official comments, and a member of the committee asked staff to check drafting and formatting procedures.

A short procedural exchange followed with no recorded roll-call vote. One committee member told staff "Can you check that out?" after asking about printing the comments, and later stated, "I would like to move this." The chair closed the session by saying the committee would take a break and reconvene after staff (referred to as Rick in the meeting) had prepared the small amendment: "So I think we will break, and we'll come back as soon as we hear from Rick and he has that, small amendment done. And we'll, hopefully pass." The transcript records no further motion text, second or vote tally.

What the bill would change: the 2022 UCC amendments in H.206 would - Create Article 12 establishing legal rules for "controllable electronic records," covering some virtual currencies, nonfungible tokens and other digital assets that can be subjected to legal control; - Update Article 9 (secured transactions) and other articles for consistency with Article 12 so lenders, buyers and other parties can perfect interests in intangible assets by filing, possession or control; - Replace some references to "writing" with the more technology‑neutral term "record," and change the "conspicuous" standard to a totality-of-the-circumstances test appropriate for electronic notices.

Next steps: Committee staff will draft a short amendment to require that the official ULC comments to the 2022 amendments be included in the printed legislative materials (green book) if that drafting approach is permissible. The committee intends to reconvene, consider the staff amendment and then proceed to vote on H.206; no final committee vote was recorded during the March 11 session.

Background: Lisman described the UCC as a decades-old uniform law project (initial UCC work completed in 1951) that the Uniform Law Commission and the American Law Institute have supervised; Vermont has enacted prior uniform laws and has been an early adopter on earlier UCC updates. The presenters and committee members repeatedly framed the proposal as technical and foundational legal drafting designed to reduce litigation over when courts should apply sale-of-goods rules, contract law, or secured-transaction priorities in digital-era disputes.

Audience and impact: If enacted, the amendments would affect businesses, banks, title and trust practitioners, technology firms that issue or hold digital assets in Vermont, and any party that extends credit resting on intangible collateral. Because the UCC is a model code used across states, the committee heard that Vermont's choice affects multistate predictability for commercial actors.