CONFERENCE COMMITTEE REPORT NO. 30

                            Honolulu, Hawaii
                                            , 2000

                            RE:   H.B. No. 1938
                                  H.D. 1
                                  S.D. 1
                                  C.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Conference on the disagreeing vote of the
House of Representatives to the amendments proposed by the Senate
in H.B. No. 1938, H.D. 1, S.D. 1, entitled:

    "A BILL FOR AN ACT RELATING TO REVISED UNIFORM COMMERCIAL
    CODE ARTICLE 9--SECURED TRANSACTIONS,"

having met, and after full and free discussion, has agreed to
recommend and does recommend to the respective Houses the final
passage of this bill in an amended form.

     The purpose of this bill is to adopt the 1999 National
Conference of Commissioners on Uniform State Laws (NCCUSL)
revisions to Article 9 of the Uniform Commercial Code (Article
9), which governs secured transactions.  As received by your
Committee on Conference, this bill amends the NCCUSL version of
Article 9 by excluding government from the scope of the article,
as is the case under current law.

     Your Committee on Conference finds that Article 9 is perhaps
the most important of all of the articles in the Uniform
Commercial Code, because it is relied upon every day in every

 
 
                            CONFERENCE COMMITTEE REPORT NO. 30
                            Page 2



commercial and consumer transaction that involves the granting of
credit with a security interest in collateral.  Article 9 was
last amended by NCCUSL in 1972, and Hawaii enacted these
amendments in 1978.  The 1999 NCCUSL amendments make major
revisions to Article 9 to bring the article into the 21st
Century.  Some of the most important changes made by this bill
include:

     (1) Anticipating the transition from paper-based to
         electronic transactions by, among other things,
         providing for one central place in the State for filing
         financing statements, and making filing office
         operations more ministerial, thereby allowing financing
         statements to be considerably simplified;

     (2) Expanding the scope of Article 9 to encompass new kinds
         of property and transactions that have developed since
         Article 9 was last amended in 1972, and to include new
         statutory, non-possessory liens that have been created
         since the article was originally drafted;

     (3) Overcoming uncertainties about where to perfect a
         security interest under existing Article 9 through the
         new basic rule that the location of the debtor, rather
         than the collateral (which more easily shifts location),
         is the place where the security interest will need to be
         perfected;

     (4) Addressing and resolving ambiguities in the
         interpretation of Article 9 rules that have occurred
         over time; and

     (5) More clearly recognizing transactions in which the
         debtor is a consumer, and providing for greater consumer
         protections in these transactions.

     Your Committee on Conference has amended this bill by:

     (1) Broadening the provision in section 490:9-109(b)(14),
         that excludes government from Article 9, to address
         county concerns that the existing exclusionary language
         is too narrow, as well as to preserve applicability of
         existing precedent and interpretation; and

     (2) Making a technical, nonsubstantive amendments for
         clarity, consistency, and style.

     As affirmed by the record of votes of the managers of your
Committee on Conference that is attached to this report, your

 
                            CONFERENCE COMMITTEE REPORT NO. 30
                            Page 3



Committee on Conference is in accord with the intent and purpose
of H.B. No. 1938, H.D. 1, S.D. 1, as amended herein, and
recommends that it pass Final Reading in the form attached hereto
as H.B. No. 1938, H.D. 1, S.D. 1, C.D. 1.

                                   Respectfully submitted on
                                   behalf of the managers:

  ON THE PART OF THE SENATE          ON THE PART OF THE HOUSE
                                   
                                   
                                   
                                   
______________________________     ______________________________
BRIAN T. TANIGUCHI, Co-Chair       RON MENOR, Co-Chair
                                   
                                   
                                   
                                   
______________________________     ______________________________
BRIAN KANNO, Co-Chair              SCOTT K. SAIKI, Co-Chair