STAND. COM. REP. NO. 3277

                                   Honolulu, Hawaii
                                                     , 2000

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




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

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred H.B. No. 1938, H.D. 1, entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to facilitate interstate
secured transactions.

     The Hawaii Commission to Promote Uniform Legislation, City
and County of Honolulu, Hawaii Insurers Council, and Hawaii
Bankers Association submitted testimony on the measure.

     In 1998, major changes to the Uniform Commercial Code,
Article 9 - Secured Transactions, were made by the National
Conference of Commissioners on Uniform State Laws.  These
revisions include:

     (1)  Expansion of the article's scope to include different
          types of collateral and transactions;

     (2)  Clarification regarding methods of perfecting a
          security interest;

     (3)  Establishment of new rules that provide that the law of
          the state where the debtor is located governs
          interstate secured transactions, and that where the

 
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                                   STAND. COM. REP. NO. 3277
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          debtor is an entity created by registration in a state,
          the location of the debtor is the location in which the
          entity is created;

     (4)  Improvements in the filing system for financial
          statements that include centralized filing and
          electronic filing;

     (5)  Greater clarification of the requirements governing
          transactions where the debtor is a consumer; and 

     (6)  Establishment of new rules relating to default and
          enforcement that apply to secondary obligors, new forms
          of collateral, and transactions in which the debtor is
          a consumer.

     As of March, 2000, adoption of Revised Article 9 has been
effected in nine states, and is pending in at least twenty-five
other states and the District of Columbia.  By enacting this
measure, Hawaii will join the majority of the states that have
adopted the revised law, thereby facilitating interstate secured
transactions.

     Your Committee has amended this measure by:

     (1)  Adding exemptions from the Article for bond issuances
          and other government transactions, and workers'
          compensation and structured settlement payments; and

     (2)  Making technical, nonsubstantive amendments to
          accurately reflect existing statutory language and for
          purposes of clarity, consistency, and style. 
     
     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 1938, H.D. 1, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 1938, H.D. 1, S.D. 1, and be placed on the
calendar for Third Reading.


 
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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