Legislation That Updates Ohio’s Uniform Commercial Code Heads Now Heading To Governor

WARREN COUNTY, OH — State Representative Adam Mathews (R-Lebanon) today announced that House Bill 195 – legislation that updates Ohio’s Uniform Commercial Code – was concurred upon by the Ohio House and is on its way to the Governor.

House Bill 195 revises Ohio’s Uniform Commercial Code (UCC) to reflect new technologies in contract law, including digital assets such as cryptocurrency and non-fungible tokens (NFTs).

“When the technology of business changes, it is the duty of the legislature to evaluate the best way to update the laws,” Mathews said. “With this bill, our contracts and related jurisprudence are clarified for judges, attorneys, lending institutions, and everyday Ohioans.”

House Bill 195 modernizes the law through multiple provisions, including:

• Establishing a new Uniform Commercial Code Article 12 to provide rules for transactions involving certain new types of digital assets named controllable electronic records (CERs).
• Adding protections to parties who accept in good faith digital assets in exchange for value without knowledge of any other property claim to the assets.
• Expanding the definition of “money” to include government-issued virtual currencies, but pre-existing virtual currencies, such as Bitcoin, while they may be CERs, are not “money” for purposes of the UCC.
• Authorizing parties to a transaction involving digital assets to choose the law that applies to their transaction for commercial law purposes and incorporate the choice into their CER or the system in which the CER is recorded.
• Modifying the definition of “chattel paper” to focus on the right to payment rather than the physical record. Rules for electronic chattel paper align with those for CERs.
• Clarifying the UCC rules that preside over transactions involving both goods and services.

The UCC serves as a comprehensive set of laws governing all commercial transactions. The laws are drafted by the nonpartisan Uniform Law Commission, which publishes model laws for states to adopt. House Bill 195 works to reflect the 2022 amendments to the UCC, which adds a new Article 12 addressing digital assets. The UCC has been continuously updated since 1952 when it was first published to reflect modern times, ensure uniformity and respond to innovative technologies.

The bill, as amended in the Senate, further simplifies the billing process for retired judges continuing to serve. House Bill 195 works to provide clarity in the law for businesses, consumers and financial institutions as it relates to new digital technologies.

The bill now goes to the Governor for his signature.

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