New York state senator Hugh Farley has introduced Senate Bill 5502, which “makes technical corrections” related to New York’s 2014 adoption of the 2010 Amendments to Article 9 of the Uniform Commercial Code. As you may remember, Assembly Bill 9903, which became Chapter 505, Session Laws of 2014, was signed by Governor Andrew Cuomo and became effective Dec. 17, 2014. That bill, however, lacked a number of important elements recommended for adoption by the Uniform Law Commission.
In addition to updating and renumbering other statutes affected by Chapter 505, the current bill would also replace the existing UCC-5 “Correction Statement” with an “Information Statement” which can be filed by either a debtor or a secured party in certain instances. The proposed bill also eliminates the current law’s failure to provide organization type and state of incorporation for organizational debtors as a reason for rejection under 9-516. (Prior to 2013, all states had a provision that required two or more of the following items be provided on the UCC form when the debtor was an organization: state of incorporation, entity type, and state-issued entity ID or charter number. All states that adopted the 2010 amendments removed this as a basis for rejection EXCEPT New York. Senate Bill 5502 will bring New York in line with the other states.) This change, along with amendments to 9-521, will effectively clear the way for New York to accept the most recent versions (Rev. Date 4/20/2011) of the UCC forms approved and maintained by the International Association of Commercial Administrators (IACA).
Finally, the current bill also contains so-called “transition” language regarding the effectiveness of financing statements and transactions entered into before or after Chapter 505 became law last year. This bill, which has been referred to Farley’s Senate Judiciary Committee, has not yet been scheduled for a public hearing.