Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 2147, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to adopt the revised version of Article 7 of the Uniform Commercial Code (UCC) relating to documents of title, and to make conforming amendments throughout the UCC.

The State Commission to Promote Uniform Legislation testified in support of this measure.

Your Committee finds that this measure's proposed revisions to Article 7 of the UCC are intended to provide a framework for the further development of electronic documents of title. This framework includes expanded definitions to recognize electronic documents of title, the extension of statute of fraud requirements to electronic records and signatures, provision for an electronic system of transfer, and the preclusion of federal preemption issues by providing that Article 7 supersedes the federal Electronic Signature in Global and National Commerce Act, as permitted in that Act. Additionally, this measure updates the law consistent with state, federal, and international developments.

Your Committee further finds that Hawaii has consistently been in the forefront in adopting the articles of the UCC and their revisions, and that the approval of this measure is consistent with the State's goal of providing a business-friendly climate.

Your Committee has amended this measure to reflect preferred drafting style and to accurately reflect the language of the Hawaii Revised Statutes.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2147, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2147, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.