The House was called to order at 10:00 a.m. by the Speaker (Representative Moeller presiding). The Clerk called the roll and a quorum was present.

The flags were escorted to the rostrum by a Sergeant at Arms Color Guard, Pages Michael Hoffman and Sarah Simon. The Speaker (Representative Moeller presiding) led the Chamber in the Pledge of Allegiance. The prayer was offered by Representative Phyllis Kenney, 46th District, Washington.

Reading of the Journal of the previous day was dispensed with and it was ordered to stand approved.

The Speaker (Representative Moeller presiding) called upon Representative Roberts to preside.

INTRODUCTION & FIRST READING

SB 5950 by Senators Roach and Conway

AN ACT Relating to nonstate pension plans offered by towns; and amending RCW 35.27.130.

Referred to Committee on Ways & Means.

SSB 6598 by Senate Committee on Ways & Means (originally sponsored by Senators Ericksen, Haugen, Holmquist Newbry, Harper, Rolfes, King, Becker, Hatfield, Morton, Litzow, Schoesler and Hewitt)

AN ACT Relating to property tax exemptions for nonprofit fair associations in rural counties; amending RCW 84.36.480; reenacting and amending RCW 84.36.805; creating a new section; and providing an expiration date.

Referred to Committee on Ways & Means.

SSB 6600 by Senate Committee on Ways & Means (originally sponsored by Senator Eide)

AN ACT Relating to extending property tax exemptions to property used exclusively by certain nonprofit organizations that is leased from an entity that acquired the property from a previously exempt nonprofit organization; and amending RCW 84.36.031.

Referred to Committee on Ways & Means.

There being no objection, the bills listed on the day’s introduction sheet under the fourth order of business were referred to the committees so designated.

There being no objection, the House advanced to the seventh order of business.

MESSAGE FROM THE SENATE

February 28, 2012

Mr. Speaker:

The Senate has passed SUBSTITUTE HOUSE BILL NO. 1700 with the following amendment:

0) Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. It is the intent of the legislature that the Washington state department of transportation shall provide for the needs of drivers, public transportation vehicles and patrons, bicyclists, and pedestrians of all ages and abilities in all planning, programming, design, construction, reconstruction, retrofit, operations, and maintenance activities and products.

It is also the intent of the legislature that the department shall view all transportation improvements as opportunities to improve safety, access, and mobility for all travelers in Washington and recognize bicycle, pedestrian, and transit modes as integral elements of the transportation system.

The increase in Washington's older adult population, which is up to forty percent of total population in some counties, increases the need for locally based transportation options and a statewide transportation system less reliant on the automobile.

Washington is committed to providing community-based options for individuals with disabilities who require access to a broader range of transportation options.

Washington believes the full integration of all modes in the design of streets and roadways will increase the capacity and efficiency of the road network, reduce traffic congestion, improve mobility options, and limit greenhouse gas emissions.

Washington believes regular walking and bicycling improves physical health, increases mental well-being, and helps reduce the risk of cardiovascular disease, Type 2 diabetes, some cancers, and other chronic diseases. Increased physical activity is also critical to combating the obesity crisis in Washington.

Sec. 2. RCW 35.75.060 and 1982 c 55 s 1 are each amended to read as follows:

Any city or town may use any funds available for street or road construction, maintenance, or improvement for building, improving, and maintaining bicycle paths, lanes, roadways, and routes, and for improvements to make existing streets and roads more suitable and safe for bicycle traffic: PROVIDED, That any such paths, lanes, roadways, routes, or streets for which any such street or road funds are expended shall be suitable for bicycle transportation purposes and not solely for recreation purposes. Bicycle facilities constructed or modified after ((~~June 10, 1982~~)) December 31, 2012, shall meet or exceed the standards ((~~of the state department of transportation~~)) adopted by the design standards committee under RCW 35.78.030.

NEW SECTION. Sec. 3. A new section is added to chapter 35.78 RCW to read as follows:

Any city or town may use any funds available for street or road construction, maintenance, or improvement for building, improving, and maintaining a pedestrian right-of-way and for improvements to make existing streets and roads more suitable and safe for pedestrian travel. Any such paths, lanes, roadways, routes, or streets for which any such street or road funds are expended must be suitable for pedestrian travel purposes and not solely for recreation purposes. A pedestrian right-of-way constructed or modified after December 31, 2012, must meet or exceed the standards adopted by the design standards committee under RCW 35.78.030.

Sec. 4. RCW 35.78.030 and 1965 c 7 s 35.78.030 are each amended to read as follows:

(1) The design standards committee shall from time to time adopt uniform design standards for major arterial and secondary arterial streets.

(2) By July 1, 2012, and from time to time thereafter, the design standards committee shall adopt standards for bicycle and pedestrian facilities.

Sec. 5. RCW 36.82.145 and 1982 c 55 s 3 are each amended to read as follows:

Any funds deposited in the county road fund may be used for the construction, maintenance, or improvement of bicycle paths, lanes, routes, and roadways, and for improvements to make existing streets and roads more suitable and safe for bicycle traffic. Bicycle facilities constructed or modified after ((~~June 10, 1982~~)) December 31, 2012, shall meet or exceed the standards ((~~of the state department of transportation~~)) adopted by the design standards committee under RCW 43.32.020.

NEW SECTION. Sec. 6. A new section is added to chapter 36.82 RCW to read as follows:

Any county may use any funds available for street or road construction, maintenance, or improvement for building, improving, and maintaining a pedestrian right-of-way and for improvements to make existing streets and roads more suitable and safe for pedestrian travel. Any such paths, lanes, roadways, routes, or streets for which any such street or road funds are expended must be suitable for pedestrian travel purposes and not solely for recreation purposes. A pedestrian right-of-way constructed or modified after December 31, 2012, must meet or exceed the standards adopted by the design standards committee under RCW 43.32.020.

Sec. 7. RCW 43.32.020 and 1965 c 8 s 43.32.020 are each amended to read as follows:

(1) On or before January 1, 1950, and from time to time thereafter, the design standards committee shall adopt uniform design standards for the county primary road systems.

(2) By July 1, 2012, and from time to time thereafter, the design standards committee shall adopt standards for bicycle and pedestrian facilities."

On page 1, line 2 of the title, after "projects;" strike the remainder of the title and insert "amending RCW 35.75.060, 35.78.030, 36.82.145, and 43.32.020; adding a new section to chapter 35.78 RCW; adding a new section to chapter 36.82 RCW; and creating a new section."

and the same is herewith transmitted.

Brad Hendrickson, Deputy, Secretary

SENATE AMENDMENT TO HOUSE BILL

There being no objection, the House concurred in the Senate amendment to SUBSTITUTE HOUSE BILL NO. 1700 and advanced the bill as amended by the Senate to final passage.

FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED

Representatives Fitzgibbon and Shea spoke in favor of the passage of the bill.

The Speaker (Representative Roberts presiding) stated the question before the House to be the final passage of Substitute House Bill No. 1700, as amended by the Senate.

MOTION

On motion of Representative Hinkle, Representatives Ahern, Klippert and Rodne were excused.

ROLL CALL

The Clerk called the roll on the final passage of Substitute House Bill No. 1700, as amended by the Senate, and the bill passed the House by the following vote: Yeas, 62; Nays, 33; Absent, 0; Excused, 3.

Voting yea: Representatives Anderson, Angel, Appleton, Armstrong, Asay, Billig, Blake, Carlyle, Clibborn, Cody, Darneille, Dickerson, Dunshee, Eddy, Finn, Fitzgibbon, Goodman, Green, Haigh, Hansen, Hasegawa, Hope, Hudgins, Hunt, Hunter, Hurst, Jinkins, Kagi, Kelley, Kenney, Kirby, Ladenburg, Liias, Lytton, Maxwell, McCoy, Miloscia, Moeller, Morris, Moscoso, Ormsby, Orwall, Pedersen, Pettigrew, Pollet, Probst, Reykdal, Roberts, Ryu, Santos, Seaquist, Sells, Springer, Stanford, Sullivan, Takko, Tharinger, Upthegrove, Van De Wege, Wylie, Zeiger and Mr. Speaker.

Voting nay: Representatives Alexander, Bailey, Buys, Chandler, Condotta, Crouse, Dahlquist, Dammeier, DeBolt, Fagan, Haler, Hargrove, Harris, Hinkle, Johnson, Kretz, Kristiansen, McCune, Nealey, Orcutt, Overstreet, Parker, Pearson, Rivers, Ross, Schmick, Shea, Short, Smith, Taylor, Walsh, Warnick and Wilcox.

Excused: Representatives Ahern, Klippert and Rodne.

SUBSTITUTE HOUSE BILL NO. 1700, as amended by the Senate, having received the necessary constitutional majority, was declared passed.

STATEMENT FOR THE JOURNAL

I intended to vote YEA on Substitute House Bill No. 1700.

Representative Dammeier, 25th District

MESSAGE FROM THE SENATE

March 1, 2012

Mr. Speaker:

The Senate has passed ENGROSSED HOUSE BILL NO. 2152 with the following amendment:

0) Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 58.17.140 and 2010 c 79 s 1 are each amended to read as follows:

(1) Preliminary plats of any proposed subdivision and dedication shall be approved, disapproved, or returned to the applicant for modification or correction within ninety days from date of filing thereof unless the applicant consents to an extension of such time period or the ninety day limitation is extended to include up to twenty-one days as specified under RCW 58.17.095(3): PROVIDED, That if an environmental impact statement is required as provided in RCW 43.21C.030, the ninety day period shall not include the time spent preparing and circulating the environmental impact statement by the local government agency.

(2) Final plats and short plats shall be approved, disapproved, or returned to the applicant within thirty days from the date of filing thereof, unless the applicant consents to an extension of such time period.

(3)(a) Except as provided by (b) of this subsection, a final plat meeting all requirements of this chapter shall be submitted to the legislative body of the city, town, or county for approval within seven years of the date of preliminary plat approval if the date of preliminary plat approval is on or before December 31, 2014, and within five years of the date of preliminary plat approval if the date of preliminary plat approval is on or after January 1, 2015.
(b) A final plat meeting all requirements of this chapter shall be submitted to the legislative body of the city for approval within nine years of the date of preliminary plat approval if the project is within city limits, not subject to requirements adopted under chapter 90.58 RCW, and the date of preliminary plat approval is on or before December 31, 2007.

(4) Nothing contained in this section shall act to prevent any city, town, or county from adopting by ordinance procedures which would allow extensions of time that may or may not contain additional or altered conditions and requirements.

Sec. 2. RCW 58.17.170 and 2010 c 79 s 2 are each amended to read as follows:

(1) When the legislative body of the city, town or county finds that the subdivision proposed for final plat approval conforms to all terms of the preliminary plat approval, and that said subdivision meets the requirements of this chapter, other applicable state laws, and any local ordinances adopted under this chapter which were in effect at the time of preliminary plat approval, it shall suitably inscribe and execute its written approval on the face of the plat. The original of said final plat shall be filed for record with the county auditor. One reproducible copy shall be furnished to the city, town or county engineer. One paper copy shall be filed with the county assessor. Paper copies shall be provided to such other agencies as may be required by ordinance.

(2)(a) Except as provided by (b) of this subsection, any lots in a final plat filed for record shall be a valid land use notwithstanding any change in zoning laws for a period of seven years from the date of filing if the date of filing is on or before December 31, 2014, and for a period of five years from the date of filing if the date of filing is on or after January 1, 2015.
(b) Any lots in a final plat filed for record shall be a valid land use notwithstanding any change in zoning laws for a period of nine years from the date of filing if the project is within city limits, not subject to requirements adopted under chapter 90.58 RCW, and the date of filing is on or before December 31, 2007.

(3)(a) Except as provided by (b) of this subsection, a subdivision shall be governed by the terms of approval of the final plat, and the statutes, ordinances, and regulations in effect at the time of approval under RCW 58.17.150 (1) and (3) for a period of seven years after final plat approval if the date of final plat approval is on or before December 31, 2014, and for a period of five years after final plat approval if the date of final plat approval is on or after January 1, 2015, unless the legislative body finds that a change in conditions creates a serious threat to the public health or safety in the subdivision.

(b) A subdivision shall be governed by the terms of approval of the final plat, and the statutes, ordinances, and regulations in effect at the time of approval under RCW 58.17.150 (1) and (3) for a period of nine years after final plat approval if the project is within city limits, not subject to requirements adopted under chapter 90.58 RCW, and the date of final plat approval is on or before December 31, 2007, unless the legislative body finds that a change in conditions creates a serious threat to the public health or safety in the subdivision.

NEW SECTION. Sec. 3. 2010 c 79 s 3 (uncodified) is hereby repealed."

On page 1, line 1 of the title, after "plats;" strike the remainder of the title and insert "amending RCW 58.17.140 and 58.17.170; and repealing 2010 c 79 s 3 (uncodified)."

and the same is herewith transmitted.

Brad Hendrickson, Deputy, Secretary

SENATE AMENDMENT TO HOUSE BILL

There being no objection, the House concurred in the Senate amendment to ENGROSSED HOUSE BILL NO. 2152 and advanced the bill as amended by the Senate to final passage.

FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED

Representatives Takko and Angel spoke in favor of the passage of the bill.

The Speaker (Representative Roberts presiding) stated the question before the House to be the final passage of Engrossed House Bill No. 2152, as amended by the Senate.

ROLL CALL

The Clerk called the roll on the final passage of Engrossed House Bill No. 2152, as amended by the Senate, and the bill passed the House by the following vote: Yeas, 95; Nays, 0; Absent, 0; Excused, 3.

Voting yea: Representatives Alexander, Anderson, Angel, Appleton, Armstrong, Asay, Bailey, Billig, Blake, Buys, Carlyle, Chandler, Clibborn, Cody, Condotta, Crouse, Dahlquist, Dammeier, Darneille, DeBolt, Dickerson, Dunshee, Eddy, Fagan, Finn, Fitzgibbon, Goodman, Green, Haigh, Haler, Hansen, Hargrove, Harris, Hasegawa, Hinkle, Hope, Hudgins, Hunt, Hunter, Hurst, Jinkins, Johnson, Kagi, Kelley, Kenney, Kirby, Kretz, Kristiansen, Ladenburg, Liias, Lytton, Maxwell, McCoy, McCune, Miloscia, Moeller, Morris, Moscoso, Nealey, Orcutt, Ormsby, Orwall, Overstreet, Parker, Pearson, Pedersen, Pettigrew, Pollet, Probst, Reykdal, Rivers, Roberts, Ross, Ryu, Santos, Schmick, Seaquist, Sells, Shea, Short, Smith, Springer, Stanford, Sullivan, Takko, Taylor, Tharinger, Upthegrove, Van De Wege, Walsh, Warnick, Wilcox, Wylie, Zeiger and Mr. Speaker.

Excused: Representatives Ahern, Klippert and Rodne.

ENGROSSED HOUSE BILL NO. 2152, as amended by the Senate, having received the necessary constitutional majority, was declared passed.

MESSAGE FROM THE SENATE

March 1, 2012

Mr. Speaker:

The Senate has passed SECOND SUBSTITUTE HOUSE BILL NO. 2156 with the following amendment:

0) On page 3, after line 34, insert the following:

"Sec. 4. RCW 28B.122.010 and 2011 c 8 s 1 are each amended to read as follows:

The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Aerospace training or educational program" means a course in the aerospace industry offered ((~~either~~)) by the Washington aerospace training and research center ((or)), the Spokane aerospace technology center, or Renton technical college.

(2) ((~~"Board" means the higher education coordinating board.~~
~~(3)~~)) "Eligible student" means a student who is registered for an aerospace training or educational program, is making satisfactory progress as defined by the program, and has a declared intention to work in the aerospace industry in the state of Washington.

(3) "Office" means the office of student financial assistance.

(4) "Participant" means an eligible student who has received an aerospace training student loan.

(5) "Student loan" means a loan that is approved by the ((~~board~~)) office and awarded to an eligible student.

Sec. 5. RCW 28B.122.020 and 2011 c 8 s 2 are each amended to read as follows:

(1) The aerospace training student loan program is established.

(2) The program shall be designed in consultation with representatives of aerospace employers, aerospace workers, and aerospace training or educational programs.

(3) The program shall be administered by the ((~~board~~)) office. In administering the program, the ((~~board~~)) office has the following powers and duties:

(a) To screen and select, in coordination with representatives of aerospace training or educational programs, eligible students to receive an aerospace training student loan;

(b) To consider an eligible student's financial inability to meet the total cost of the aerospace training or educational program in the selection process;

(d) To establish an annual loan limit equal to the cost of attendance minus any other financial aid received;

(e) To define the terms of repayment, including applicable interest rates, fees, and deferments;

(f) To collect and manage repayments from students who do not meet their obligations under this chapter;

(g) To solicit and accept grants and donations from public and private sources for the program; and

(h) To adopt necessary rules.

Sec. 6. RCW 28B.122.040 and 2011 c 8 s 4 are each amended to read as follows:

The ((~~board~~)) office may award aerospace training student loans to eligible students from the funds available in the aerospace training student loan account for this program. The amount of the student loan awarded an individual may not exceed tuition and fees for the program of study.

Sec. 7. RCW 28B.122.050 and 2011 c 8 s 5 are each amended to read as follows:

(1) The aerospace training student loan account is created in the custody of the state treasurer. No appropriation is required for expenditures of funds from the account for student loans. An appropriation is required for expenditures of funds from the account for costs associated with program administration by the ((~~board~~)) office. The account is not subject to allotment procedures under chapter 43.88 RCW.

(2) The ((~~board~~)) office shall deposit into the account all moneys received for the program. The account shall be self-sustaining and consist of moneys received for the program by the ((~~board~~)) office, and receipts from participant repayments, including principal and interest.

(3) Expenditures from the account may be used solely for student loans to participants in the program established by this chapter and costs associated with program administration by the ((~~board~~)) office.

(4) Disbursements from the account may be made only on the authorization of the ((~~board~~)) office.

Sec. 8. RCW 28B.122.060 and 2011 c 8 s 6 are each amended to read as follows:

(1) The ((~~board~~)) office, in collaboration with aerospace training or educational programs, shall submit an annual report regarding the aerospace training student loan program to the governor and to the appropriate committees of the legislature.

(2) The annual report shall describe the design and implementation of the aerospace training student loan program, and shall include the following:

(a) The number of applicants for loans;

(b) The number of participants in the loan program;

(d) The number of participants in the loan program who are placed in employment;

(e) The nature of that employment, including: (i) The type of job; (ii) whether the job is full-time, part-time, or temporary; (iii) whether the job pays annual wages that are: (A) Less than thirty thousand dollars; (B) thirty thousand dollars or greater, but less than sixty thousand dollars; or (C) sixty thousand dollars or more; and

(f) Demographic profiles of applicants for loans and participants in the loan programs.

(3) The annual report shall be submitted by December 1st of each year after July 22, 2011.

NEW SECTION. Sec. 9. Sections 4 through 8 of this act take effect July 1, 2012."

On page 1, line 2 of the title, after "manufacturing;" insert "amending RCW 28B.122.010, 28B.122.020, 28B.122.040, 28B.122.050, and 28B.122.060;"

On page 1, line 4 of the title, after "RCW;" strike the remainder of the title and insert "creating a new section; and providing an effective date."

and the same is herewith transmitted.

Brad Hendrickson, Deputy, Secretary

SENATE AMENDMENT TO HOUSE BILL

There being no objection, the House concurred in the Senate amendment to SECOND SUBSTITUTE HOUSE BILL NO. 2156 and advanced the bill as amended by the Senate to final passage.

FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED

Representatives Sells and Anderson spoke in favor of the passage of the bill.

The Speaker (Representative Roberts presiding) stated the question before the House to be the final passage of Second Substitute House Bill No. 2156, as amended by the Senate.

ROLL CALL

The Clerk called the roll on the final passage of Second Substitute House Bill No. 2156, as amended by the Senate, and the bill passed the House by the following vote: Yeas, 94; Nays, 1; Absent, 0; Excused, 3.

Voting yea: Representatives Alexander, Anderson, Angel, Appleton, Armstrong, Asay, Bailey, Billig, Blake, Buys, Carlyle, Chandler, Clibborn, Cody, Condotta, Crouse, Dahlquist, Dammeier, Darneille, DeBolt, Dickerson, Dunshee, Eddy, Fagan, Finn, Fitzgibbon, Goodman, Green, Haigh, Haler, Hansen, Hargrove, Harris, Hasegawa, Hinkle, Hope, Hudgins, Hunt, Hunter, Hurst, Jinkins, Johnson, Kagi, Kelley, Kenney, Kirby, Kretz, Kristiansen, Ladenburg, Liias, Lytton, Maxwell, McCoy, McCune, Miloscia, Moeller, Morris, Moscoso, Nealey, Orcutt, Ormsby, Orwall, Parker, Pearson, Pedersen, Pettigrew, Pollet, Probst, Reykdal, Rivers, Roberts, Ross, Ryu, Santos, Schmick, Seaquist, Sells, Shea, Short, Smith, Springer, Stanford, Sullivan, Takko, Taylor, Tharinger, Upthegrove, Van De Wege, Walsh, Warnick, Wilcox, Wylie, Zeiger and Mr. Speaker.

Voting nay: Representative Overstreet.

Excused: Representatives Ahern, Klippert and Rodne.

SECOND SUBSTITUTE HOUSE BILL NO. 2156, as amended by the Senate, having received the necessary constitutional majority, was declared passed.

MESSAGE FROM THE SENATE

March 1, 2012

Mr. Speaker:

The Senate has passed SUBSTITUTE HOUSE BILL NO. 2177 with the following amendment:

0)Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 9.68A.001 and 2010 c 227 s 1 are each amended to read as follows:

The legislature finds that the prevention of sexual exploitation and abuse of children constitutes a government objective of surpassing importance. The care of children is a sacred trust and should not be abused by those who seek commercial gain or personal gratification based on the exploitation of children.

The legislature further finds that the protection of children from sexual exploitation can be accomplished without infringing on a constitutionally protected activity. The definition of "sexually explicit conduct" and other operative definitions demarcate a line between protected and prohibited conduct and should not inhibit legitimate scientific, medical, or educational activities.

The legislature further finds that children engaged in sexual conduct for financial compensation are frequently the victims of sexual abuse. Approximately eighty to ninety percent of children engaged in sexual activity for financial compensation have a history of sexual abuse victimization. It is the intent of the legislature to encourage these children to engage in prevention and intervention services and to hold those who pay to engage in the sexual abuse of children accountable for the trauma they inflict on children.

The legislature further finds that due to the changing nature of technology, offenders are now able to access child pornography in different ways and in increasing quantities. By amending current statutes governing depictions of a minor engaged in sexually explicit conduct, it is the intent of the legislature to ensure that intentional viewing of and dealing in child pornography over the internet is subject to a criminal penalty without limiting the scope of existing prohibitions on the possession of or dealing in child pornography, including the possession of electronic depictions of a minor engaged in sexually explicit conduct. It is also the intent of the legislature to clarify, in response to State v. Sutherby, 204 P.3d 916 (2009), the unit of prosecution for the statutes governing possession of and dealing in depictions of a minor engaged in sexually explicit conduct. It is the intent of the legislature that the first degree offenses under RCW 9.68A.050, 9.68A.060, and 9.68A.070 have a per depiction or image unit of prosecution, while the second degree offenses under RCW 9.68A.050, 9.68A.060, and 9.68A.070 have a per incident unit of prosecution as established in State v. Sutherby, 204 P.3d 916 (2009). Furthermore, it is the intent of the legislature to set a different unit of prosecution for the new offense of viewing of depictions of a minor engaged in sexually explicit conduct such that each separate session of intentionally viewing over the internet of visual depictions or images of a minor engaged in sexually explicit conduct constitutes a separate offense.

The decisions of the Washington supreme court in State v. Boyd, 160 W.2d 424, 158 P.3d 54 (2007), and State v. Grenning, 169 Wn.2d 47, 234 P.3d 169 (2010), require prosecutors to duplicate and distribute depictions of a minor engaged in sexually explicit conduct ("child pornography") as part of the discovery process in a criminal prosecution. The legislature finds that the importance of protecting children from repeat exploitation in child pornography is not being given sufficient weight under these decisions. The importance of protecting children from repeat exploitation in child pornography is based upon the following findings:
      (1) Child pornography is not entitled to protection under the First Amendment and thus may be prohibited;
      (2) The state has a compelling interest in protecting children from those who sexually exploit them, and this interest extends to stamping out the vice of child pornography at all levels in the distribution chain;
      (3) Every instance of viewing images of child pornography represents a renewed violation of the privacy of the victims and a repetition of their abuse;
      (4) Child pornography constitutes prima facie contraband, and as such should not be distributed to, or copied by, child pornography defendants or their attorneys;
      (5) It is imperative to prohibit the reproduction of child pornography in criminal cases so as to avoid repeated violation and abuse of victims, so long as the government makes reasonable accommodations for the inspection, viewing, and examination of such material for the purposes of mounting a criminal defense. The legislature is also aware that the Adam Walsh child protection and safety act, P.L. 109–248, 120 Stat. 587 (2006), codified at 18 U.S.C. Sec. 3509(m), prohibits the duplication and distribution of child pornography as part of the discovery process in federal prosecutions. This federal law has been in effect since 2006, and upheld repeatedly as constitutional. Courts interpreting the Walsh act have found that such limitations can be employed while still providing the defendant due process. The legislature joins congress, and the legislatures of other states that have passed similar provisions, in protecting these child victims so that our justice system does not cause repeat exploitation, while still providing due process to criminal defendants.

NEW SECTION. Sec. 2. A new section is added to chapter 9.68A RCW to read as follows:

(1) In any criminal proceeding, any property or material that constitutes a depiction of a minor engaged in sexually explicit conduct shall remain in the care, custody, and control of either a law enforcement agency or the court.

(2) Despite any request by the defendant or prosecution, any property or material that constitutes a depiction of a minor engaged in sexually explicit conduct shall not be copied, photographed, duplicated, or otherwise reproduced, so long as the property or material is made reasonably available to the parties. Such property or material shall be deemed to be reasonably available to the parties if the prosecution, defense counsel, or any individual sought to be qualified to furnish expert testimony at trial has ample opportunity for inspection, viewing, and examination of the property or material at a law enforcement facility or a neutral facility approved by the court upon petition by the defense.

(3) The defendant may view and examine the property and materials only while in the presence of his or her attorney. If the defendant is proceeding pro se, the court will appoint an individual to supervise the defendant while he or she examines the materials.

(4) The court may direct that a mirror image of a computer hard drive containing such depictions be produced for use by an expert only upon a showing that an expert has been retained and is prepared to conduct a forensic examination while the mirror imaged hard drive remains in the care, custody, and control of a law enforcement agency or the court. Upon a substantial showing that the expert's analysis cannot be accomplished while the mirror imaged hard drive is kept within the care, custody, and control of a law enforcement agency or the court, the court may order its release to the expert for analysis for a limited time. If release is granted, the court shall issue a protective order setting forth such terms and conditions as are necessary to protect the rights of the victims, to document the chain of custody, and to protect physical evidence.

NEW SECTION. Sec. 3. A new section is added to chapter 9.68A RCW to read as follows:

(1) Whenever a depiction of a minor engaged in sexually explicit conduct, regardless of its format, is marked as an exhibit in a criminal proceeding, the prosecutor shall seek an order sealing the exhibit at the close of the trial. Any exhibits sealed under this section shall be sealed with evidence tape in a manner that prevents access to, or viewing of, the depiction of a minor engaged in sexually explicit conduct and shall be labeled so as to identify its contents. Anyone seeking to view such an exhibit must obtain permission from the superior court after providing at least ten days notice to the prosecuting attorney. Appellate attorneys for the defendant and the state shall be given access to the exhibit, which must remain in the care and custody of either a law enforcement agency or the court. Any other person moving to view such an exhibit must demonstrate to the court that his or her reason for viewing the exhibit is of sufficient importance to justify another violation of the victim's privacy.

(2) Whenever the clerk of the court receives an exhibit of a depiction of a minor engaged in sexually explicit conduct, he or she shall store the exhibit in a secure location, such as a safe. The clerk may arrange for the transfer of such exhibits to a law enforcement agency evidence room for safekeeping provided the agency agrees not to destroy or dispose of the exhibits without an order of the court.

(3) If the criminal proceeding ends in a conviction, the clerk of the court shall destroy any exhibit containing a depiction of a minor engaged in sexually explicit conduct five years after the judgment is final, as determined by the provisions of RCW 10.73.090(3). Before any destruction, the clerk shall contact the prosecuting attorney and verify that there is no collateral attack on the judgment pending in any court. If the criminal proceeding ends in a mistrial, the clerk shall either maintain the exhibit or return it to the law enforcement agency that investigated the criminal charges for safekeeping until the matter is set for retrial. If the criminal proceeding ends in an acquittal, the clerk shall return the exhibit to the law enforcement agency that investigated the criminal charges for either safekeeping or destruction.

NEW SECTION. Sec. 4. A new section is added to chapter 9.68A RCW to read as follows:

Any depiction of a minor engaged in sexually explicit conduct, in any format, distributed as discovery to defense counsel or an expert witness prior to the effective date of this section shall either be returned to the law enforcement agency that investigated the criminal charges or destroyed, if the case is no longer pending in superior court. If the case is still pending, the depiction shall be returned to the superior court judge assigned to the case or the presiding judge. The court shall order either the destruction of the depiction or the safekeeping of the depiction if it will be used at trial. It is not a defense to violations of this chapter for crimes committed after December 31, 2012, that the initial receipt of the depictions was done under the color of law through the discovery process."

On page 1, line 1 of the title, after "exploitation;" strike the remainder of the title and insert "amending RCW 9.68A.001; and adding new sections to chapter 9.68A RCW."

and the same is herewith transmitted.

Brad Hendrickson, Deputy, Secretary

SENATE AMENDMENT TO HOUSE BILL

There being no objection, the House concurred in the Senate amendment to SUBSTITUTE HOUSE BILL NO. 2177 and advanced the bill as amended by the Senate to final passage.

FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED

Representatives Ladenburg and Pearson spoke in favor of the passage of the bill.

The Speaker (Representative Roberts presiding) stated the question before the House to be the final passage of Substitute House Bill No. 2177, as amended by the Senate.

ROLL CALL

The Clerk called the roll on the final passage of Substitute House Bill No. 2177, as amended by the Senate, and the bill passed the House by the following vote: Yeas, 95; Nays, 0; Absent, 0; Excused, 3.

Excused: Representatives Ahern, Klippert and Rodne.

SUBSTITUTE HOUSE BILL NO. 2177, as amended by the Senate, having received the necessary constitutional majority, was declared passed.

MESSAGE FROM THE SENATE

February 28, 2012

Mr. Speaker:

The Senate has passed SUBSTITUTE HOUSE BILL NO. 2191 with the following amendment:

0)Strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 16.08.040 and 1941 c 77 s 1 are each amended to read as follows:

(1) The owner of any dog which shall bite any person while such person is in or on a public place or lawfully in or on a private place including the property of the owner of such dog, shall be liable for such damages as may be suffered by the person bitten, regardless of the former viciousness of such dog or the owner's knowledge of such viciousness.

(2) This section does not apply to the lawful application of a police dog, as defined in RCW 4.24.410.

Sec. 2. RCW 9A.76.200 and 2003 c 269 s 1 are each amended to read as follows:

(1) A person is guilty of harming a police dog, accelerant detection dog, or police horse, if he or she maliciously injures, disables, shoots, or kills by any means any dog or horse that the person knows or has reason to know to be a police dog or accelerant detection dog, as defined in RCW 4.24.410, or police horse, as defined in subsection (2) of this section, whether or not the dog or horse is actually engaged in police or accelerant detection work at the time of the injury.

(2) "Police horse" means any horse used or kept for use by a law enforcement officer in discharging any legal duty or power of his or her office.

(3) Harming a police dog, accelerant detection dog, or police horse is a class C felony.

(4)(a) In addition to the criminal penalty provided in this section for harming a police dog:
      (i) The court may impose a civil penalty of up to five thousand dollars for harming a police dog.
      (ii) The court shall impose a civil penalty of at least five thousand dollars and may increase the penalty up to a maximum of ten thousand dollars for killing a police dog.
      (b) Moneys collected must be distributed to the jurisdiction that owns the police dog."

On page 1, line 1 of the title, after "dogs;" strike the remainder of the title and insert "amending RCW 16.08.040 and 9A.76.200; and prescribing penalties."

and the same is herewith transmitted.

Brad Hendrickson, Deputy, Secretary

SENATE AMENDMENT TO HOUSE BILL

There being no objection, the House concurred in the Senate amendment to SUBSTITUTE HOUSE BILL NO. 2191 and advanced the bill as amended by the Senate to final passage.

FINAL PASSAGE OF HOUSE BILL

AS SENATE AMENDED

Representatives Rivers and Hurst spoke in favor of the passage of the bill.

The Speaker (Representative Roberts presiding) stated the question before the House to be the final passage of Substitute House Bill No. 2191, as amended by the Senate.

ROLL CALL

The Clerk called the roll on the final passage of Substitute House Bill No. 2191, as amended by the Senate, and the bill passed the House by the following vote: Yeas, 95; Nays, 0; Absent, 0; Excused, 3.

Excused: Representatives Ahern, Klippert and Rodne.

SUBSTITUTE HOUSE BILL NO. 2191, as amended by the Senate, having received the necessary constitutional majority, was declared passed.

MESSAGE FROM THE SENATE

February 29, 2012

Mr. Speaker:

The Senate has passed ENGROSSED SUBSTITUTE HOUSE BILL NO. 2197 with the following amendment:

0)Strike everything after the enacting clause and insert the following:

"PART I
AMENDMENTS TO UNIFORM COMMERCIAL CODE ARTICLE 1

Sec. 101. RCW 62A.1-101 and 1965 ex.s. c 157 s 1-101 are each amended to read as follows:

SHORT TITLES. (a) This title ((~~shall be known and~~)) may be cited as the Uniform Commercial Code.

(b) This Article may be cited as Uniform Commercial Code--General Provisions.

Sec. 102. RCW 62A.1-102 and 1965 ex.s. c 157 s 1-102 are each amended to read as follows:

      ((PURPOSES; RULES OF CONSTRUCTION; VARIATION BY AGREEMENT.)) SCOPE OF ARTICLE.(((1) This Title shall be liberally construed and applied to promote its underlying purposes and policies.
      (2) Underlying purposes and policies of this Title are
      (a) to simplify, clarify and modernize the law governing commercial transactions;
      (b) to permit the continued expansion of commercial practices through custom, usage and agreement of the parties;
      (c) to make uniform the law among the various jurisdictions.
      (3) The effect of provisions of this Title may be varied by agreement, except as otherwise provided in this Title and except that the obligations of good faith, diligence, reasonableness and care prescribed by this Title may not be disclaimed by agreement but the parties may by agreement determine the standards by which the performance of such obligations is to be measured if such standards are not manifestly unreasonable.
      (4) The presence in certain provisions of this Title of the words "unless otherwise agreed" or words of similar import does not imply that the effect of other provisions may not be varied by agreement under subsection (3).
      (5) In this Title unless the context otherwise requires
      (a) words in the singular number include the plural, and in the plural include the singular;
      (b) words of the masculine gender include the feminine and the neuter, and when the sense so indicates words of the neuter gender may refer to any gender.)) This Article applies to a transaction to the extent that it is governed by another article of this title.

Sec. 103. RCW 62A.1-103 and 1965 ex.s. c 157 s 1-103 are each amended to read as follows:

      ((~~SUPPLEMENTARY GENERAL PRINCIPLES OF LAW APPLICABLE.~~)) CONSTRUCTION OF UNIFORM COMMERCIAL CODE TO PROMOTE ITS PURPOSES AND POLICIES; APPLICABILITY OF SUPPLEMENTAL PRINCIPLES OF LAW. (a) This title must be liberally construed and applied to promote its underlying purposes and policies, which are:
      (1) To simplify, clarify, and modernize the law governing commercial transactions;
      (2) To permit the continued expansion of commercial practices through custom, usage, and agreement of the parties; and
      (3) To make uniform the law among the various jurisdictions.
      (b) Unless displaced by the particular provisions of this title, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, ((or)) and other validating or invalidating cause ((~~shall~~)) supplement its provisions.

Sec. 104. RCW 62A.1-104 and 1965 ex.s. c 157 s 1-104 are each amended to read as follows:

CONSTRUCTION AGAINST ((~~IMPLICIT~~)) IMPLIED REPEAL. This title being a general act intended as a unified coverage of its subject matter, no part of it shall be deemed to be impliedly repealed by subsequent legislation if such construction can reasonably be avoided.

Sec. 105. RCW 62A.1-105 and 2001 c 32 s 8 are each amended to read as follows:

      ((TERRITORIAL APPLICATION OF THE TITLE; PARTIES' POWER TO CHOOSE APPLICABLE LAW.)) SEVERABILITY.(((1) Except as provided hereafter in this section, when a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties. Failing such agreement this Title applies to transactions bearing an appropriate relation to this state.
      (2) Where one of the following provisions of this Title specifies the applicable law, that provision governs and a contrary agreement is effective only to the extent permitted by the law (including the conflict of laws rules) so specified:
      Rights of creditors against sold goods. RCW 62A.2-402.
      Applicability of the Article on Leases. RCW 62A.2A-105 and 62A.2A‑106.
      Applicability of the Article on Bank Deposits and Collections. RCW 62A.4-102.
      Governing law in the Article on Funds Transfers. RCW 62A.4A‑507.
      Letters of Credit. RCW 62A.5-116.
      Applicability of the Article on Investment Securities. RCW 62A.8‑110.
      Law governing perfection, the effect of perfection or nonperfection, and the priority of security interests and agricultural liens. RCW 62A.9A‑301 through 62A.9A‑307.)) If any provision or clause of this title or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this title which can be given effect without the invalid provision or application, and to this end the provisions of this title are severable.

Sec. 106. RCW 62A.1-106 and 1965 ex.s. c 157 s 1-106 are each amended to read as follows:

      ((REMEDIES TO BE LIBERALLY ADMINISTERED.)) USE OF SINGULAR AND PLURAL; GENDER.(((1) The remedies provided by this Title shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed but neither consequential or special nor penal damages may be had except as specifically provided in this Title or by other rule of law.
      (2) Any right or obligation declared by this Title is enforceable by action unless the provision declaring it specifies a different and limited effect.)) In this title, unless the statutory context otherwise requires:
      (1) Words in the singular number include the plural, and those in the plural include the singular; and
      (2) Words of any gender also refer to any other gender.

Sec. 107. RCW 62A.1-107 and 1965 ex.s. c 157 s 1-107. Cf. former RCW sections: (i) RCW 62.01.119(3) are each amended to read as follows:

((WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER BREACH.)) SECTION CAPTIONS.((Any claim or right arising out of an alleged breach can be discharged in whole or in part without consideration by a written waiver or renunciation signed and delivered by the aggrieved party.)) Section captions are part of this title.

Sec. 108. RCW 62A.1-108 and 1965 ex.s. c 157 s 1-108 are each amended to read as follows:

((SEVERABILITY.)) RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.((If any provision or clause of this Title or application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the Title which can be given effect without the invalid provision or application, and to this end the provisions of this Title are declared to be severable.)) Except as provided in this section, this Article modifies, limits, and supersedes the federal electronic signatures in global and national commerce act, 15 U.S.C. Sec. 7001 et seq., except that nothing in this Article modifies, limits, or supersedes section 7001(c) of that act, and nothing in this section either authorizes or prohibits electronic delivery of any of the notices described in section 7003(b) of that act. This section does not modify, limit, or supersede application of the federal electronic signatures in global and national commerce act, 15 U.S.C. Sec. 7001 et seq., to transactions governed by Article 2 or 2A of this title.

Sec. 109. RCW 62A.1-201 and 2001 c 32 s 9 are each amended to read as follows:

GENERAL DEFINITIONS. (a) Unless the context otherwise requires, words or phrases defined in this section, or in the additional definitions contained in other articles of this title that apply to particular articles or parts thereof, have the meanings stated.
(b) Subject to ((~~additional~~)) definitions contained in ((~~the subsequent~~)) other articles of this title ((~~which are applicable to specific~~)) that apply to particular articles or parts thereof((~~, and unless the context otherwise requires, in this Title~~)):

(1) "Action," in the sense of a judicial proceeding, includes recoupment, counterclaim, set-off, suit in equity, and any other proceeding((s)) in which rights are determined.

(2) "Aggrieved party" means a party entitled to ((~~resort to~~)) pursue a remedy.

(3) "Agreement," as distinguished from "contract," means the bargain of the parties in fact, as found in their language or ((~~by implication~~)) inferred from other circumstances, including course of performance, course of dealing, or usage of trade ((~~or course of performance~~)) as provided in ((this Title (RCW 62A.1-205, RCW 62A.2- 208, and RCW 62A.2A-207). Whether an agreement has legal consequences is determined by the provisions of this Title, if applicable; otherwise by the law of contracts (RCW 62A.1-103))) RCW 62A.1-303. ((~~(Compare "Contract".)~~))

(4) "Bank" means ((~~any~~)) a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, and trust company.

(5) "Bearer" means ((~~the~~)) a person in control of a negotiable electronic document of title or a person in possession of ((an)) a negotiable instrument, negotiable tangible document of title, or certificated security that is payable to bearer or indorsed in blank.

(6) "Bill of lading" means a document of title evidencing the receipt of goods for shipment issued by a person engaged in the business of directly or indirectly transporting or forwarding goods((~~, and includes an airbill. "Airbill" means a document serving for air transportation as a bill of lading does for marine or rail transportation, and includes an air consignment note or air waybill~~)). The term does not include a warehouse receipt.

(7) "Branch" includes a separately incorporated foreign branch of a bank.

(8) "Burden of establishing" a fact means the burden of persuading the trier((s)) of fact that the existence of the fact is more probable than its nonexistence.

(9) "Buyer in ordinary course of business" means a person that buys goods in good faith, without knowledge that the sale violates the rights of another person in the goods, and in the ordinary course from a person, other than a pawnbroker, in the business of selling goods of that kind. A person buys goods in the ordinary course if the sale to the person comports with the usual or customary practices in the kind of business in which the seller is engaged or with the seller's own usual or customary practices. A person that sells oil, gas, or other minerals at the wellhead or minehead is a person in the business of selling goods of that kind. A buyer in ordinary course of business may buy for cash, by exchange of other property, or on secured or unsecured credit, and may acquire goods or documents of title under a ((~~pre- existing~~)) preexisting contract for sale. Only a buyer that takes possession of the goods or has a right to recover the goods from the seller under Article ((~~62A.2 RCW~~)) 2 of this title may be a buyer in ordinary course of business. "Buyer in ordinary course of business" does not include a person that acquires goods in a transfer in bulk or as security for or in total or partial satisfaction of a money debt ((~~is not a buyer in ordinary course of business~~)).

      (10) "Conspicuous,"((:)) with reference to a term ((~~or clause is conspicuous when it is~~)), means so written, displayed, or presented that a reasonable person against ((~~whom~~)) which it is to operate ought to have noticed it. ((A printed heading in capitals (as: NON- NEGOTIABLE BILL OF LADING) is conspicuous. Language in the body of a form is "conspicuous" if it is in larger or other contrasting type or color. But in a telegram any stated term is "conspicuous".)) Whether a term ((~~or clause~~)) is "conspicuous" or not is ((~~for~~)) a decision ((by)) for the court. Conspicuous terms include the following:
      (A) A heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same or lesser size; and
      (B) Language in the body of a record or display in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call attention to the language.

      (11) "Consumer" means an individual who enters into a transaction primarily for personal, family, or household purposes.
      (12) "Contract," as distinguished from "agreement," means the total legal obligation ((~~which~~)) that results from the parties' agreement as ((~~affected~~)) determined by this title ((~~and~~)) as supplemented by any other applicable ((~~rules of~~)) laws. ((~~(Compare "Agreement".)~~
      ~~(12)~~)) (13) "Creditor" includes a general creditor, a secured creditor, a lien creditor, and any representative of creditors, including an assignee for the benefit of creditors, a trustee in bankruptcy, a receiver in equity, and an executor or administrator of an insolvent debtor's or assignor's estate.

((~~(13)~~)) (14) "Defendant" includes a person in the position of defendant in a ((~~cross-action or~~)) counterclaim, cross-claim, or third- party claim.

((~~(14)~~)) (15) "Delivery," with respect to an electronic document of title means voluntary transfer of control and with respect to an instrument((s)), a tangible document((s)) of title, or chattel paper, ((~~or certificated securities~~)) means voluntary transfer of possession.

(((15))) (16) "Document of title" ((includes bill of lading, dock warrant, dock receipt, warehouse receipt or order for the delivery of goods, and also any other document which)) means a record (i) that in the regular course of business or financing is treated as adequately evidencing that the person in possession or control of ((it)) the record is entitled to receive, control, hold, and dispose of the ((document)) record and the goods ((it)) the record covers((. To be a document of title a document must purport to be issued by or addressed to a bailee and purport to cover goods in the bailee's possession which are either identified or are fungible portions of an identified mass)) and (ii) that purports to be issued by or addressed to a bailee and to cover goods in the bailee's possession which are either identified or are fungible portions of an identified mass. The term includes a bill of lading, transport document, dock warrant, dock receipt, warehouse receipt, and order for delivery of goods. An electronic document of title means a document of title evidenced by a record consisting of information stored in an electronic medium. A tangible document of title means a document of title evidenced by a record consisting of information that is inscribed on a tangible medium.

((~~(16)~~)) (17) "Fault" means a default, breach, or wrongful act((,)) or omission ((~~or breach~~)).

      ((~~(17)~~)) (18) "Fungible goods" ((~~with respect to goods or securities~~)) means:
      (A) Goods ((~~or securities~~)) of which any unit ((is)), by nature or usage of trade, is the equivalent of any other like unit((.)); or
      (B) Goods ((~~which are not fungible shall be deemed fungible for the purposes of this Title to the extent~~)) that ((~~under a particular~~)) by agreement ((~~or document unlike units~~)) are treated as equivalent((s)).

((~~(18)~~)) (19) "Genuine" means free of forgery or counterfeiting.

((~~(19)~~)) (20) "Good faith," except as otherwise provided in Article 5 of this title, means honesty in fact ((~~in the conduct or transaction concerned~~)) and the observance of reasonable commercial standards of fair dealing.

      ((~~(20)~~)) (21) "Holder" with respect to a negotiable instrument, means:
      (A) The person in possession ((~~if the~~)) of a negotiable instrument that is payable either to bearer or((~~, in the case of an instrument payable to an identified person, if the~~)) to an identified person that is the person in possession((~~. "Holder" with respect to~~));
      (B) The person in possession of a negotiable tangible document of title ((~~means the person in possession~~)) if the goods are deliverable either to bearer or to the order of the person in possession; or
      (C) The person in control of a negotiable electronic document of title.

(((21) To "honor" is to pay or to accept and pay, or where a credit so engages to purchase or discount a draft complying with the terms of the credit.))

(22) "Insolvency proceeding((s))" includes ((~~any~~)) an assignment for the benefit of creditors or other proceeding((s)) intended to liquidate or rehabilitate the estate of the person involved.

      (23) ((~~A person is~~)) "Insolvent" ((~~who either has~~)) means:
      (A) Having generally ceased to pay ((~~his or her~~)) debts in the ordinary course of business ((~~or cannot~~)) other than as a result of bona fide dispute;
      (B) Being unable to pay ((~~his or her~~)) debts as they become due; or ((is))

(24) "Money" means a medium of exchange currently authorized or adopted by a domestic or foreign government ((~~and~~)). The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more ((~~nations~~)) countries.

      (25) ((A person has "notice" of a fact when
      (a) he or she has actual knowledge of it; or
      (b) he or she has received a notice or notification of it; or
      (c) from all the facts and circumstances known to him or her at the time in question he or she has reason to know that it exists.
A person "knows" or has "knowledge" of a fact when he or she has actual knowledge of it. "Discover" or "learn" or a word or phrase of similar import refers to knowledge rather than to reason to know. The time and circumstances under which a notice or notification may cease to be effective are not determined by this Title.
      (26) A person "notifies" or "gives" a notice or notification to another by taking such steps as may be reasonably required to inform the other in ordinary course whether or not such other actually comes to know of it. A person "receives" a notice or notification when
      (a) it comes to his or her attention; or
      (b) it is duly delivered at the place of business through which the contract was made or at any other place held out by him or her as the place for receipt of such communications.
      (27) Notice, knowledge or a notice or notification received by an organization is effective for a particular transaction from the time when it is brought to the attention of the individual conducting that transaction, and in any event from the time when it would have been brought to his or her attention if the organization had exercised due diligence. An organization exercises due diligence if it maintains reasonable routines for communicating significant information to the person conducting the transaction and there is reasonable compliance with the routines. Due diligence does not require an individual acting for the organization to communicate information unless such communication is part of his or her regular duties or unless he or she has reason to know of the transaction and that the transaction would be materially affected by the information.
      (28))) "Organization" ((includes a corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, two or more persons having a joint or common interest, or any other legal or commercial entity)) means a person other than an individual.

((~~(29)~~)) (26) "Party,"((,)) as ((~~distinct~~)) distinguished from "third party,"((,)) means a person ((~~who~~)) that has engaged in a transaction or made an agreement ((~~within~~)) subject to this title .

      (((30))) (27) "Person" ((includes)) means an individual ((or an organization (See RCW 62A.1-102).
      (31) "Presumption" or "presumed" means that the trier of fact must find the existence of the fact presumed unless and until evidence is introduced which would support a finding of its nonexistence.
      (32))), corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, public corporation, or any other legal or commercial entity.
      (28) "Present value" means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain by use of either an interest rate specified by the parties if that rate is not manifestly unreasonable at the time the transaction is entered into or, if an interest rate is not so specified, a commercially reasonable rate that takes into account the facts and circumstances at the time the transaction is entered into.
      (29) "Purchase" ((includes)) means taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or ((re- issue)) reissue, gift, or any other voluntary transaction creating an interest in property.

((~~(33)~~)) (30) "Purchaser" means a person ((~~who~~)) that takes by purchase.

((~~(34)~~)) (31) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
(32) "Remedy" means any remedial right to which an aggrieved party is entitled with or without resort to a tribunal.

((~~(35)~~)) (33) "Representative" ((~~includes~~)) means a person empowered to act for another, including an agent, an officer of a corporation or association, and a trustee, executor, or administrator of an estate((~~, or any other person empowered to act for another~~)).

((~~(36)~~)) (34) "Right((s))" includes ((~~remedies~~)) remedy.

      ((~~(37)~~)) (35) "Security interest" means an interest in personal property or fixtures which secures payment or performance of an obligation((~~, except for lease-purchase agreements under chapter 63.19 RCW. The term also~~)). "Security interest" includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to Article 9A of this title. "Security interest" does not include the special property interest of a buyer of goods on identification of ((~~such~~)) those goods to a contract for sale under RCW 62A.2-401 ((~~is not a "security interest"~~)), but a buyer may also acquire a "security interest" by complying with Article 9A of this title. Except as otherwise provided in RCW 62A.2-505, the right of a seller or lessor of goods under Article 2 or 2A of this title to retain or acquire possession of the goods is not a "security interest," but a seller or lessor may also acquire a "security interest" by complying with Article 9A of this title. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer ((()) under RCW 62A.2-401(())) is limited in effect to a reservation of a "security interest." Whether a transaction in the form of a lease creates a ((~~lease or~~)) "security interest" is determined ((by the facts of each case. However, a transaction creates a security interest if the consideration the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease not subject to termination by the lessee, and:
      ~~(a) The original term of the lease is equal to or greater than the remaining economic life of the goods;~~
      ~~(b) The lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods;~~
      (c) The lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement; or
      ~~(d) The lessee has an option to become the owner of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement.~~
      ~~A transaction does not create a security interest merely because it provides that:~~
      (a) The present value of the consideration the lessee is obligated to pay the lessor for the right to possession and use of the goods is substantially equal to or is greater than the fair market value of the goods at the time the lease is entered into;
      ~~(b) The lessee assumes risk of loss of the goods, or agrees to pay taxes, insurance, filing, recording, or registration fees, or service or maintenance costs with respect to the goods;~~
      ~~(c) The lessee has an option to renew the lease or to become the owner of the goods;~~
      (d) The lessee has an option to renew the lease for a fixed rent that is equal to or greater than the reasonably predictable fair market rent for the use of the goods for the term of the renewal at the time the option is to be performed;
      (e) The lessee has an option to become the owner of the goods for a fixed price that is equal to or greater than the reasonably predictable fair market value of the goods at the time the option is to be performed; or
      ~~(f) The amount of rental payments may or will be increased or decreased by reference to the amount realized by the lessor upon sale or disposition of the goods.~~
      ~~For purposes of this subsection (37):~~
      (a) Additional consideration is not nominal if (i) when the option to renew the lease is granted to the lessee the rent is stated to be the fair market rent for the use of the goods for the term of the renewal determined at the time the option is to be performed, or (ii) when the option to become the owner of the goods is granted to the lessee the price is stated to be the fair market value of the goods determined at the time the option is to be performed. Additional consideration is nominal if it is less than the lessee's reasonably predictable cost of performing under the lease agreement if the option is not exercised;
      ~~(b) "Reasonably predictable" and "remaining economic life of the goods" are to be determined with reference to the facts and circumstances at the time the transaction is entered into; and~~
      (c) "Present value" means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain. The discount is determined by the interest rate specified by the parties if the rate is not manifestly unreasonable at the time the transaction is entered into; otherwise, the discount is determined by a commercially reasonable rate that takes into account the facts and circumstances of each case at the time the transaction was entered into)) pursuant to RCW 62A.1-203.

      ((~~(38)~~)) (36) "Send" in connection with ((~~any~~)) a writing, record, or notice means:
      (A) To deposit in the mail or deliver for transmission by any other usual means of communication with postage or cost of transmission provided for and properly addressed and, in the case of an instrument, to an address specified thereon or otherwise agreed, or if there be none to any address reasonable under the circumstances((~~. The receipt of any writing~~)); or
      (B) In any other way to cause to be received any record or notice within the time ((~~at which~~)) it would have arrived if properly sent ((~~has the effect of a proper sending~~)).

((~~(39)~~)) (37) "Signed" includes using any symbol executed or adopted ((~~by a party~~)) with present intention to ((~~authenticate~~)) adopt or accept a writing.

((~~(40)~~)) (38) "State" means a State of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.
(39) "Surety" includes a guarantor or other secondary obligor.

(((41) "Telegram" includes a message transmitted by radio, teletype, cable, any mechanical method of transmission, or the like.
(42))) (40) "Term" means ((that)) a portion of an agreement ((which)) that relates to a particular matter.

((~~(43)~~)) (41) "Unauthorized((")) signature" means ((~~one~~)) a signature made without actual, implied, or apparent authority ((~~and~~)). The term includes a forgery.

      (((44) "Value". Except as otherwise provided with respect to negotiable instruments and bank collections (RCW 62A.3-303, RCW 62A.4- 210, and RCW 62A.4-211) a person gives "value" for rights if he or she acquires them
      (a) in return for a binding commitment to extend credit or for the extension of immediately available credit whether or not drawn upon and whether or not a charge-back is provided for in the event of difficulties in collection; or
      (b) as security for or in total or partial satisfaction of a preexisting claim; or
      (c) by accepting delivery pursuant to a pre-existing contract for purchase; or
      (d) generally, in return for any consideration sufficient to support a simple contract.
      (45))) (42) "Warehouse receipt" means a ((receipt)) document of title issued by a person engaged in the business of storing goods for hire.

((~~(46) "Written" or~~)) (43) "Writing" includes printing, typewriting, or any other intentional reduction to tangible form. "Written" has a corresponding meaning.

Sec. 110. RCW 62A.1-202 and 1965 ex.s. c 157 s 1-202 are each amended to read as follows:

      ((PRIMA FACIE EVIDENCE BY THIRD PARTY DOCUMENTS.)) NOTICE; KNOWLEDGE.((A document in due form purporting to be a bill of lading, policy or certificate of insurance, official weigher's or inspector's certificate, consular invoice, or any other document authorized or required by the contract to be issued by a third party shall be prima facie evidence of its own authenticity and genuineness and of the facts stated in the document by the third party.)) (a) Subject to subsection (f) of this section, a person has "notice" of a fact if the person:
      (1) Has actual knowledge of it;
      (2) Has received a notice or notification of it; or
      (3) From all the facts and circumstances known to the person at the time in question, has reason to know that it exists.
      (b) "Knowledge" means actual knowledge. "Knows" has a corresponding meaning.
      (c) "Discover," "learn," or words of similar import refer to knowledge rather than to reason to know.
      (d) A person "notifies" or "gives" a notice or notification to another person by taking such steps as may be reasonably required to inform the other person in ordinary course, whether or not the other person actually comes to know of it.
      (e) Subject to subsection (f) of this section, a person "receives" a notice or notification when:
      (1) It comes to that person's attention; or
      (2) It is duly delivered in a form reasonable under the circumstances at the place of business through which the contract was made or at another location held out by that person as the place for receipt of such communications.
      (f) Notice, knowledge, or a notice or notification received by an organization is effective for a particular transaction from the time it is brought to the attention of the individual conducting that transaction and, in any event, from the time it would have been brought to the individual's attention if the organization had exercised due diligence. An organization exercises due diligence if it maintains reasonable routines for communicating significant information to the person conducting the transaction and there is reasonable compliance with the routines. Due diligence does not require an individual acting for the organization to communicate information unless the communication is part of the individual's regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information.

Sec. 111. RCW 62A.1-203 and 1965 ex.s. c 157 s 1-203 are each amended to read as follows:

      ((OBLIGATION OF GOOD FAITH.)) LEASE DISTINGUISHED FROM SECURITY INTEREST.((Every contract or duty within this Title imposes an obligation of good faith in its performance or enforcement.)) (a) Whether a transaction in the form of a lease creates a lease or security interest is determined by the facts of each case.
      (b) A transaction in the form of a lease creates a security interest if the consideration that the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease and is not subject to termination by the lessee, and:
      (1) The original term of the lease is equal to or greater than the remaining economic life of the goods;
      (2) The lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods;
      (3) The lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement; or
      (4) The lessee has an option to become the owner of the goods for no additional consideration or for nominal additional consideration upon compliance with the lease agreement.
      (c) A transaction in the form of a lease does not create a security interest merely because:
      (1) The present value of the consideration the lessee is obligated to pay the lessor for the right to possession and use of the goods is substantially equal to or is greater than the fair market value of the goods at the time the lease is entered into;
      (2) The lessee assumes risk of loss of the goods;
      (3) The lessee agrees to pay, with respect to the goods, taxes, insurance, filing, recording, or registration fees, or service or maintenance costs;
      (4) The lessee has an option to renew the lease or to become the owner of the goods;
      (5) The lessee has an option to renew the lease for a fixed rent that is equal to or greater than the reasonably predictable fair market rent for the use of the goods for the term of the renewal at the time the option is to be performed; or
      (6) The lessee has an option to become the owner of the goods for a fixed price that is equal to or greater than the reasonably predictable fair market value of the goods at the time the option is to be performed.
      (d) Additional consideration is nominal if it is less than the lessee's reasonably predictable cost of performing under the lease agreement if the option is not exercised. Additional consideration is not nominal if:
      (1) When the option to renew the lease is granted to the lessee, the rent is stated to be the fair market rent for the use of the goods for the term of the renewal determined at the time the option is to be performed; or
      (2) When the option to become the owner of the goods is granted to the lessee, the price is stated to be the fair market value of the goods determined at the time the option is to be performed.
      (e) The "remaining economic life of the goods" and "reasonably predictable" fair market rent, fair market value, or cost of performing under the lease agreement must be determined with reference to the facts and circumstances at the time the transaction is entered into.

Sec. 112. RCW 62A.1-204 and 1965 ex.s. c 157 s 1-204 are each amended to read as follows:

      ((TIME; REASONABLE TIME; "SEASONABLY".)) VALUE.(((1) Whenever this Title requires any action to be taken within a reasonable time, any time which is not manifestly unreasonable may be fixed by agreement.
      (2) What is a reasonable time for taking any action depends on the nature, purpose and circumstances of such action.
      (3) An action is taken "seasonably" when it is taken at or within the time agreed or if no time is agreed at or within a reasonable time.)) Except as otherwise provided in Articles 3, 4, and 5 of this title, a person gives value for rights if the person acquires them:
      (1) In return for a binding commitment to extend credit or for the extension of immediately available credit, whether or not drawn upon and whether or not a charge-back is provided for in the event of difficulties in collection;
      (2) As security for, or in total or partial satisfaction of, a preexisting claim;
      (3) By accepting delivery under a preexisting contract for purchase; or
      (4) In return for any consideration sufficient to support a simple contract.

Sec. 113. RCW 62A.1-205 and 1965 ex.s. c 157 s 1-205 are each amended to read as follows:

      ((COURSE OF DEALING AND USAGE OF TRADE.)) REASONABLE TIME; SEASONABLENESS.(((1) A course of dealing is a sequence of previous conduct between the parties to a particular transaction which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.
      (2) A usage of trade is any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage are to be proved as facts. If it is established that such a usage is embodied in a written trade code or similar writing the interpretation of the writing is for the court.
      (3) A course of dealing between parties and any usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware give particular meaning to and supplement or qualify terms of an agreement.
      (4) The express terms of an agreement and an applicable course of dealing or usage of trade shall be construed wherever reasonable as consistent with each other; but when such construction is unreasonable express terms control both course of dealing and usage of trade and course of dealing controls usage of trade.
      (5) An applicable usage of trade in the place where any part of performance is to occur shall be used in interpreting the agreement as to that part of the performance.
      (6) Evidence of a relevant usage of trade offered by one party is not admissible unless and until he has given the other party such notice as the court finds sufficient to prevent unfair surprise to the latter.)) (a) Whether a time for taking an action required by this title is reasonable depends on the nature, purpose, and circumstances of the action.
      (b) An action is taken seasonably if it is taken at or within the time agreed or, if no time is agreed, at or within a reasonable time.

Sec. 114. RCW 62A.1-206 and 1995 c 48 s 55 are each amended to read as follows:

((STATUTE OF FRAUDS FOR KINDS OF PERSONAL PROPERTY NOT OTHERWISE COVERED.)) PRESUMPTIONS.(((1) Except in the cases described in subsection (2) of this section a contract for the sale of personal property is not enforceable by way of action or defense beyond five thousand dollars in amount or value of remedy unless there is some writing which indicates that a contract for sale has been made between the parties at a defined or stated price, reasonably identifies the subject matter, and is signed by the party against whom enforcement is sought or by his authorized agent.
(2) Subsection (1) of this section does not apply to contracts for the sale of goods (RCW 62A.2-201) nor of securities (RCW 62A.8-113) nor to security agreements (RCW 62A.9-203).)) Whenever this title creates a "presumption" with respect to a fact, or provides that a fact is "presumed," the trier of fact must find the existence of the fact unless and until evidence is introduced that supports a finding of its nonexistence.

NEW SECTION. Sec. 115. A new section is added to chapter 62A.1 RCW, to be codified as RCW 62A.1-301, to read as follows:

TERRITORIAL APPLICABILITY; PARTIES' POWER TO CHOOSE APPLICABLE LAW. (a) Except as otherwise provided in this section, when a transaction bears a reasonable relation to this state and also to another state or nation the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties.

(b) In the absence of an agreement effective under subsection (a) of this section, and except as provided in subsection (c) of this section, this title applies to transactions bearing an appropriate relation to this state.

(c) If one of the following provisions of this title specifies the applicable law, that provision governs and a contrary agreement is effective only to the extent permitted by the law so specified:

(1) RCW 62A.2-402;

(2) RCW 62A.2A-105 and 62A.2A-106;

(3) RCW 62A.4-102;

(4) RCW 62A.4A-507;

(5) RCW 62A.5-116;

(6) RCW 62A.8-110;

(7) RCW 62A.9A-301 through 62A.9A-307.

NEW SECTION. Sec. 116. A new section is added to chapter 62A.1 RCW, to be codified as RCW 62A.1-302, to read as follows:

VARIATION BY AGREEMENT. (a) Except as otherwise provided in subsection (b) of this section or elsewhere in this title, the effect of provisions of this title may be varied by agreement.

(b) The obligations of good faith, diligence, reasonableness, and care prescribed by this title may not be disclaimed by agreement. The parties, by agreement, may determine the standards by which the performance of those obligations is to be measured if those standards are not manifestly unreasonable. Whenever this title requires an action to be taken within a reasonable time, a time that is not manifestly unreasonable may be fixed by agreement.

(c) The presence in certain provisions of this title of the phrase "unless otherwise agreed," or words of similar import, does not imply that the effect of other provisions may not be varied by agreement under this section.

NEW SECTION. Sec. 117. A new section is added to chapter 62A.1 RCW, to be codified as RCW 62A.1-303, to read as follows:

COURSE OF PERFORMANCE, COURSE OF DEALING, AND USAGE OF TRADE. (a) A "course of performance" is a sequence of conduct between the parties to a particular transaction that exists if:

(1) The agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and

(2) The other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.

(b) A "course of dealing" is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.

(c) A "usage of trade" is any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage must be proved as facts. If it is established that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law.

(d) A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining the meaning of the parties' agreement, may give particular meaning to specific terms of the agreement, and may supplement or qualify the terms of the agreement. A usage of trade applicable in the place in which part of the performance under the agreement is to occur may be so utilized as to that part of the performance.

(e) Except as otherwise provided in subsection (f) of this section, the express terms of an agreement and any applicable course of performance, course of dealing, or usage of trade must be construed whenever reasonable as consistent with each other. If such a construction is unreasonable:

(1) Express terms prevail over course of performance, course of dealing, and usage of trade;

(2) Course of performance prevails over course of dealing and usage of trade; and

(3) Course of dealing prevails over usage of trade.

(f) Subject to RCW 62A.2-209 and 62A.2A-208, a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance.

(g) Evidence of a relevant usage of trade offered by one party is not admissible unless that party has given the other party notice that the court finds sufficient to prevent unfair surprise to the other party.

NEW SECTION. Sec. 118. A new section is added to chapter 62A.1 RCW, to be codified as RCW 62A.1-304, to read as follows:

OBLIGATION OF GOOD FAITH. Every contract or duty within this title imposes an obligation of good faith in its performance and enforcement.

NEW SECTION. Sec. 119. A new section is added to chapter 62A.1 RCW, to be codified as RCW 62A.1-305, to read as follows:

REMEDIES TO BE LIBERALLY ADMINISTERED. (a) The remedies provided by this title must be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed but neither consequential or special damages nor penal damages may be had except as specifically provided in this title or by other rule of law.

(b) Any right or obligation declared by this title is enforceable by action unless the provision declaring it specifies a different and limited effect.

NEW SECTION. Sec. 120. A new section is added to chapter 62A.1 RCW, to be codified as RCW 62A.1-306, to read as follows:

WAIVER OR RENUNCIATION OF CLAIM OR RIGHT AFTER BREACH. A claim or right arising out of an alleged breach may be discharged in whole or in part without consideration by agreement of the aggrieved party in an authenticated record.

NEW SECTION. Sec. 121. A new section is added to chapter 62A.1 RCW, to be codified as RCW 62A.1-307, to read as follows:

PRIMA FACIE EVIDENCE BY THIRD-PARTY DOCUMENTS. A document in due form purporting to be a bill of lading, policy or certificate of insurance, official weigher's or inspector's certificate, consular invoice, or any other document authorized or required by the contract to be issued by a third party is prima facie evidence of its own authenticity and genuineness and of the facts stated in the document by the third party.

NEW SECTION. Sec. 122. A new section is added to chapter 62A.1 RCW, to be codified as RCW 62A.1-308, to read as follows:

PERFORMANCE OR ACCEPTANCE UNDER RESERVATION OF RIGHTS. (a) A party that with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as "without prejudice," "under protest," or the like are sufficient.

(b) Subsection (a) of this section does not apply to an accord and satisfaction.

NEW SECTION. Sec. 123. A new section is added to chapter 62A.1 RCW, to be codified as RCW 62A.1-309, to read as follows:

OPTION TO ACCELERATE AT WILL. A term providing that one party or that party's successor in interest may accelerate payment or performance or require collateral or additional collateral "at will" or when the party "deems itself insecure," or words of similar import, means that the party has power to do so only if that party in good faith believes that the prospect of payment or performance is impaired. The burden of establishing lack of good faith is on the party against which the power has been exercised.

NEW SECTION. Sec. 124. A new section is added to chapter 62A.1 RCW, to be codified as RCW 62A.1-310, to read as follows:

SUBORDINATED OBLIGATIONS. An obligation may be issued as subordinated to performance of another obligation of the person obligated, or a creditor may subordinate its right to performance of an obligation by agreement with either the person obligated or another creditor of the person obligated. Subordination does not create a security interest as against either the common debtor or a subordinated creditor.

PART II
AMENDMENTS TO UNIFORM COMMERCIAL CODE ARTICLE 7
GENERAL

Sec. 201. RCW 62A.7-101 and 1965 ex.s. c 157 s 7-101 are each amended to read as follows:

SHORT TITLE. This Article ((~~shall be known and~~)) may be cited as Uniform Commercial Code--Documents of Title.

Sec. 202. RCW 62A.7-102 and 2011 c 336 s 825 are each amended to read as follows:

DEFINITIONS AND INDEX OF DEFINITIONS. ((~~(1)~~)) (a) In this Article, unless the context otherwise requires:

((~~(a)~~)) (1) "Bailee" means ((~~the~~)) a person ((~~who~~)) that by a warehouse receipt, bill of lading, or other document of title acknowledges possession of goods and contracts to deliver them.

((~~(b)~~)) (2) "Carrier" means a person that issues a bill of lading.
(3) "Consignee" means ((~~the~~)) a person named in a bill of lading to ((~~whom~~)) which or to whose order the bill promises delivery.

((~~(c)~~)) (4) "Consignor" means ((~~the~~)) a person named in a bill of lading as the person from ((~~whom~~)) which the goods have been received for shipment.

((~~(d)~~)) (5) "Delivery order" means a ((~~written~~)) record that contains an order to deliver goods directed to a warehouse ((~~operator~~)), carrier, or other person ((~~who~~)) that in the ordinary course of business issues warehouse receipts or bills of lading.

      ((~~(e) "Document" means document of title as defined in the general definitions in Article 1 (RCW 62A.1-201).~~
      ~~(f)~~)) (6) [Reserved.]
      (7) "Goods" means all things ((~~which~~)) that are treated as movable for the purposes of a contract ((of)) for storage or transportation.

((~~(g)~~)) (8) "Issuer" means a bailee ((~~who~~)) that issues a document ((~~except that~~)) of title or, in ((~~relation to~~)) the case of an unaccepted delivery order ((~~it means~~)), the person ((~~who~~)) that orders the possessor of goods to deliver. ((~~Issuer~~)) The term includes ((~~any~~)) a person for ((~~whom~~)) which an agent or employee purports to act in issuing a document if the agent or employee has real or apparent authority to issue documents, ((~~notwithstanding that~~)) even if the issuer ((~~received no~~)) did not receive any goods ((~~or that~~)), the goods were misdescribed, or ((~~that~~)) in any other respect the agent or employee violated ((~~his or her~~)) the issuer's instructions.

      ((~~(h)~~)) (9) "Person entitled under the document" means the holder, in the case of a negotiable document of title, or the person to which delivery of the goods is to be made by the terms of, or pursuant to instructions in a record under, a nonnegotiable document of title.
      (10) [Reserved.]
      (11) "Sign" means, with present intent to authenticate or adopt a record:
      (A) To execute or adopt a tangible symbol; or
      (B) To attach to or logically associate with the record an electronic sound, symbol, or process.
      (12) "Shipper" means a person that enters into a contract of transportation with a carrier.
      (13) "Warehouse ((~~operator~~))" ((is)) means a person engaged in the business of storing goods for hire.

      (((2) Other definitions applying to this Article or to specified Parts thereof, and the sections in which they appear are:
      "Duly negotiate." RCW 62A.7-501.
      "Person entitled under the document." RCW 62A.7-403(4).
      (3))) (b) Definitions in other articles applying to this Article and the sections in which they appear are:

(1) "Contract for sale((.))", RCW 62A.2-106((.
      ~~"Overseas." RCW 62A.2-323.~~));
      (2) "Lessee in ordinary course of business," RCW 62A.2A-103; and
      (3) "Receipt" of goods((.)), RCW 62A.2-103.

((~~(4)~~)) (c) In addition, Article 1 contains general definitions and principles of construction and interpretation applicable throughout this Article.

Sec. 203. RCW 62A.7-103 and 1965 ex.s. c 157 s 7-103 are each amended to read as follows:

RELATION OF ARTICLE TO TREATY((,)) OR STATUTE((~~, TARIFF, CLASSIFICATION OR REGULATION~~)). ((~~To the extent that~~)) (a) This Article is subject to any treaty or statute of the United States((,)) or regulatory statute of this state ((~~or tariff, classification or regulation filed or issued pursuant thereto~~)) to the extent the treaty, statute, or regulatory statute is applicable((~~, the provisions of this Article are subject thereto~~)).

(b) This Article does not modify or repeal any law prescribing the form or content of a document of title or the services or facilities to be afforded by a bailee, or otherwise regulating a bailee's business in respects not specifically treated in this Article. However, violation of such a law does not affect the status of a document of title that otherwise is within the definition of a document of title.
(c) This act modifies, limits, and supersedes the federal electronic signatures in global and national commerce act (15 U.S.C. Sec. 7001, et seq.) but does not modify, limit, or supersede section 101(c) of that act (15 U.S.C. Sec. 7001(c)) or authorize electronic delivery of any of the notices described in section 103(b) of that act (15 U.S.C. Sec. 7003(b)).
(d) A person in its capacity as an electronic data storage provider or an electronic data transmitter is not subject to this Article.

Sec. 204. RCW 62A.7-104 and 1965 ex.s. c 157 s 7-104 are each amended to read as follows:

NEGOTIABLE AND NONNEGOTIABLE ((WAREHOUSE RECEIPT, BILL OF LADING OR OTHER)) DOCUMENT OF TITLE. (((1) A warehouse receipt, bill of lading or other document of title is negotiable))

      (a) Except as otherwise provided in subsection (c) of this section, a document of title is negotiable if by its terms the goods are to be delivered to bearer or to the order of a named person((~~; or~~
      ~~(b) where recognized in overseas trade, if it runs to a named person or assigns.~~
      ~~(2) Any other document~~)).
      (b) A document of title other than one described in subsection (a) of this section is nonnegotiable. A bill of lading ((~~in which it is stated~~)) that states that the goods are consigned to a named person is not made negotiable by a provision that the goods are to be delivered only against ((~~a written~~)) an order in a record signed by the same or another named person.

(c) A document of title is nonnegotiable if, at the time it is issued, the document has a conspicuous legend, however expressed, that it is nonnegotiable.

Sec. 205. RCW 62A.7-105 and 1965 ex.s. c 157 s 7-105 are each amended to read as follows:

      ((CONSTRUCTION AGAINST NEGATIVE IMPLICATION.)) REISSUANCE IN ALTERNATIVE MEDIUM.((The omission from either Part 2 or Part 3 of this Article of a provision corresponding to a provision made in the other Part does not imply that a corresponding rule of law is not applicable.)) (a) Upon request of a person entitled under an electronic document of title, the issuer of the electronic document may issue a tangible document of title as a substitute for the electronic document if:
      (1) The person entitled under the electronic document surrenders control of the document to the issuer; and
      (2) The tangible document when issued contains a statement that it is issued in substitution for the electronic document.
      (b) Upon issuance of a tangible document of title in substitution for an electronic document of title in accordance with subsection (a) of this section:
      (1) The electronic document ceases to have any effect or validity; and
      (2) The person that procured issuance of the tangible document warrants to all subsequent persons entitled under the tangible document that the warrantor was a person entitled under the electronic document when the warrantor surrendered control of the electronic document to the issuer.
      (c) Upon request of a person entitled under a tangible document of title, the issuer of the tangible document may issue an electronic document of title as a substitute for the tangible document if:
      (1) The person entitled under the tangible document surrenders possession of the document to the issuer; and
      (2) The electronic document when issued contains a statement that it is issued in substitution for the tangible document.
      (d) Upon issuance of an electronic document of title in substitution for a tangible document of title in accordance with subsection (c) of this section:
      (1) The tangible document ceases to have any effect or validity; and
      (2) The person that procured issuance of the electronic document warrants to all subsequent persons entitled under the electronic document that the warrantor was a person entitled under the tangible document when the warrantor surrendered possession of the tangible document to the issuer.

NEW SECTION. Sec. 206. A new section is added to chapter 62A.7 RCW, to be codified as RCW 62A.7-106, to read as follows:

CONTROL OF ELECTRONIC DOCUMENT OF TITLE. (a) A person has control of an electronic document of title if a system employed for evidencing the transfer of interests in the electronic document reliably establishes that person as the person to which the electronic document was issued or transferred.

(b) A system satisfies subsection (a) of this section, and a person is deemed to have control of an electronic document of title, if the document is created, stored, and assigned in such a manner that:

(1) A single authoritative copy of the document exists which is unique, identifiable, and, except as otherwise provided in (4), (5), and (6) of this subsection, unalterable;

(2) The authoritative copy identifies the person asserting control as:

(A) The person to which the document was issued; or

(B) If the authoritative copy indicates that the document has been transferred, the person to which the document was most recently transferred;

(3) The authoritative copy is communicated to and maintained by the person asserting control or its designated custodian;

(4) Copies or amendments that add or change an identified assignee of the authoritative copy can be made only with the consent of the person asserting control;

(5) Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and

(6) Any amendment of the authoritative copy is readily identifiable as authorized or unauthorized.

PART III
AMENDMENTS TO UNIFORM COMMERCIAL CODE ARTICLE 7
WAREHOUSE RECEIPTS: SPECIAL PROVISIONS

Sec. 301. RCW 62A.7-201 and 2011 c 336 s 826 are each amended to read as follows:

((~~WHO~~)) PERSON THAT MAY ISSUE A WAREHOUSE RECEIPT; STORAGE UNDER ((~~GOVERNMENT~~)) BOND. ((~~(1)~~)) (a) A warehouse receipt may be issued by any warehouse ((~~operator~~)).

((~~(2) Where~~)) (b) If goods, including distilled spirits and agricultural commodities, are stored under a statute requiring a bond against withdrawal or a license for the issuance of receipts in the nature of warehouse receipts, a receipt issued for the goods ((~~has like effect as~~)) is deemed to be a warehouse receipt even ((~~though~~)) if issued by a person ((~~who~~)) that is the owner of the goods and is not a warehouse ((~~operator~~)).

Sec. 302. RCW 62A.7‑202 and 2011 c 336 s 827 are each amended to read as follows:

FORM OF WAREHOUSE RECEIPT; ((~~ESSENTIAL TERMS; OPTIONAL TERMS~~)) EFFECT OF OMISSION. ((~~(1)~~)) (a) A warehouse receipt need not be in any particular form.

((~~(2)~~)) (b) Unless a warehouse receipt ((~~embodies within its written, printed, or electronic terms~~)) provides for each of the following, the warehouse ((~~operator~~)) is liable for damages caused ((~~by the omission~~)) to a person injured ((~~thereby~~)) by its omission:

((~~(a)~~)) (1) A statement of the location of the warehouse facility where the goods are stored;

((~~(b)~~)) (2) The date of issue of the receipt;

((~~(c)~~)) (3) The ((~~consecutive number~~)) unique identification code of the receipt;

((~~(d)~~)) (4) A statement whether the goods received will be delivered to the bearer, to a ((~~specified~~)) named person, or to a ((~~specified~~)) named person or ((~~his or her~~)) its order;

((~~(e)~~)) (5) The rate of storage and handling charges, ((~~except that where~~)) unless goods are stored under a field warehousing arrangement, in which case a statement of that fact is sufficient on a nonnegotiable receipt;

((~~(f)~~)) (6) A description of the goods or ((of)) the packages containing them;

((~~(g)~~)) (7) The signature of the warehouse ((~~operator, which may be made by his or her authorized~~)) or its agent;

((~~(h)~~)) (8) If the receipt is issued for goods ((~~of which the warehouse operator is owner~~)) that the warehouse owns, either solely ((or)), jointly, or in common with others, a statement of the fact of ((~~such~~)) that ownership; and

((~~(i)~~)) (9) A statement of the amount of advances made and of liabilities incurred for which the warehouse ((~~operator~~)) claims a lien or security interest ((~~(RCW 62A.7-209). If~~)), unless the precise amount of ((~~such~~)) advances made or ((~~of such~~)) liabilities incurred ((is)), at the time of the issue of the receipt, is unknown to the warehouse ((~~operator~~)) or to ((~~his or her~~)) its agent ((~~who issues it,~~)) that issued the receipt, in which case a statement of the fact that advances have been made or liabilities incurred and the purpose ((~~thereof~~)) of the advances or liabilities is sufficient.

((~~(3)~~)) (c) A warehouse ((~~operator~~)) may insert in ((~~his or her~~)) its receipt any ((~~other~~)) terms ((~~which~~)) that are not contrary to the provisions of this title and do not impair ((~~his or her~~)) its obligation of delivery ((()) under RCW 62A.7-403((~~) or his or her~~)) or its duty of care ((()) under RCW 62A.7-204(())). Any contrary provision((~~s shall be~~)) is ineffective.

Sec. 303. RCW 62A.7-203 and 1965 ex.s. c 157 s 7-203 are each amended to read as follows:

LIABILITY FOR NONRECEIPT OR MISDESCRIPTION. A party to or purchaser for value in good faith of a document of title, other than a bill of lading ((~~relying in either case~~)), that relies upon the description ((~~therein~~)) of the goods in the document may recover from the issuer damages caused by the nonreceipt or misdescription of the goods, except to the extent that:
(1) The document conspicuously indicates that the issuer does not know whether ((~~any~~)) all or part ((~~or all~~)) of the goods in fact were received or conform to the description, such as ((~~where~~)) a case in which the description is in terms of marks or labels or kind, quantity, or condition, or the receipt or description is qualified by "contents, condition, and quality unknown," "said to contain," or ((~~the like~~)) words of similar import, if ((~~such~~)) the indication ((be)) is true((,)); or

(2) The party or purchaser otherwise has notice of the nonreceipt or misdescription.

Sec. 304. RCW 62A.7‑204 and 2011 c 336 s 828 are each amended to read as follows:

DUTY OF CARE; CONTRACTUAL LIMITATION OF WAREHOUSE'S ((~~OPERATOR'S~~)) LIABILITY. ((~~(1)~~)) (a) A warehouse ((~~operator~~)) is liable for damages for loss of or injury to the goods caused by ((~~his or her~~)) its failure to exercise ((~~such~~)) care ((in)) with regard to ((~~them as~~)) the goods that a reasonably careful person would exercise under ((~~like~~)) similar circumstances ((~~but~~)). Unless otherwise agreed ((~~he or she~~)), the warehouse is not liable for damages ((~~which~~)) that could not have been avoided by the exercise of ((~~such~~)) that care.

((~~(2)~~)) (b) Damages may be limited by a term in the warehouse receipt or storage agreement limiting the amount of liability in case of loss or damage((~~, and setting forth a specific liability per article or item, or value per unit of weight,~~)) beyond which the warehouse ((~~operator shall not be~~)) is not liable((~~; provided, however, that such liability may on written~~)). Such a limitation is not effective with respect to the warehouse's liability for conversion to its own use. On request of the bailor in a record at the time of signing ((~~such~~)) the storage agreement or within a reasonable time after receipt of the warehouse receipt, the warehouse's liability may be increased on part or all of the goods ((~~thereunder, in which~~)) covered by the storage agreement or the warehouse receipt. In this event, increased rates may be charged based on ((~~such~~)) an increased valuation((, but that no such increase shall be permitted contrary to a lawful limitation of liability contained in the warehouse operator's tariff, if any. No such limitation is effective with respect to the warehouse operator's liability for conversion to his or her own use)) of the goods.

((~~(3)~~)) (c) Reasonable provisions as to the time and manner of presenting claims and ((~~instituting~~)) commencing actions based on the bailment may be included in the warehouse receipt or ((~~tariff~~)) storage agreement.

((~~(4)~~)) (d) This section does not ((~~impair or repeal the duties of care or liabilities or penalties for breach thereof as provided in~~)) modify or repeal the provisions of chapters 22.09 and 22.32 RCW.

Sec. 305. RCW 62A.7‑205 and 2011 c 336 s 829 are each amended to read as follows:

TITLE UNDER WAREHOUSE RECEIPT DEFEATED IN CERTAIN CASES. A buyer in ((~~the~~)) ordinary course of business of fungible goods sold and delivered by a warehouse ((~~operator who~~)) that is also in the business of buying and selling such goods takes the goods free of any claim under a warehouse receipt even ((~~though it~~)) if the receipt is negotiable and has been duly negotiated.

Sec. 306. RCW 62A.7‑206 and 2011 c 336 s 830 are each amended to read as follows:

TERMINATION OF STORAGE AT ((~~WAREHOUSE OPERATOR'S~~)) WAREHOUSE'S OPTION. ((~~(1)~~)) (a) A warehouse ((~~operator may on notifying~~)), by giving notice to the person on whose account the goods are held and any other person known to claim an interest in the goods, may require payment of any charges and removal of the goods from the warehouse at the termination of the period of storage fixed by the document((,)) of title or, if ((no)) a period is not fixed, within a stated period not less than thirty days after the ((~~notification~~)) warehouse gives notice. If the goods are not removed before the date specified in the ((~~notification~~)) notice, the warehouse ((~~operator~~)) may sell them ((~~in accordance with the provisions of the section on enforcement of a warehouse operator's lien (~~)) pursuant to RCW 62A.7-210(())).

((~~(2)~~)) (b) If a warehouse ((~~operator~~)) in good faith believes that ((~~the~~)) goods are about to deteriorate or decline in value to less than the amount of ((~~his or her~~)) its lien within the time ((~~prescribed~~)) provided in subsection ((~~(1)~~)) (a) of this section ((~~for notification, advertisement, and sale~~)) and RCW 62A.7-210, the warehouse ((~~operator~~)) may specify in the ((~~notification~~)) notice given under subsection (a) of this section any reasonable shorter time for removal of the goods and ((~~in case~~)), if the goods are not removed, may sell them at public sale held not less than one week after a single advertisement or posting.

((~~(3)~~)) (c) If, as a result of a quality or condition of the goods of which the warehouse ((~~operator had no~~)) did not have notice at the time of deposit, the goods are a hazard to other property ((~~or to~~)), the warehouse facilities, or ((to)) other persons, the warehouse ((~~operator~~)) may sell the goods at public or private sale without advertisement or posting on reasonable notification to all persons known to claim an interest in the goods. If the warehouse ((~~operator~~)), after a reasonable effort, is unable to sell the goods ((~~he or she~~)), it may dispose of them in any lawful manner and ((~~shall~~)) does not incur ((no)) liability by reason of ((~~such~~)) that disposition.

((~~(4)~~)) (d) The warehouse ((~~operator must~~)) shall deliver the goods to any person entitled to them under this Article upon due demand made at any time ((~~prior to~~)) before sale or other disposition under this section.

((~~(5)~~)) (e) The warehouse ((~~operator~~)) may satisfy ((~~his or her~~)) its lien from the proceeds of any sale or disposition under this section but ((~~must~~)) shall hold the balance for delivery on the demand of any person to ((~~whom he or she~~)) which the warehouse would have been bound to deliver the goods.

Sec. 307. RCW 62A.7‑207 and 2011 c 336 s 831 are each amended to read as follows:

GOODS MUST BE KEPT SEPARATE; FUNGIBLE GOODS. ((~~(1)~~)) (a) Unless the warehouse receipt provides otherwise ((~~provides~~)), a warehouse ((~~operator must~~)) shall keep separate the goods covered by each receipt so as to permit at all times identification and delivery of those goods ((~~except that~~)). However, different lots of fungible goods may be commingled.

((~~(2)~~)) (b) If different lots of fungible goods ((so)) are commingled, the goods are owned in common by the persons entitled thereto and the warehouse ((~~operator~~)) is severally liable to each owner for that owner's share. ((~~Where~~)) If, because of over-issue, a mass of fungible goods is insufficient to meet all the receipts ((~~which~~)) the warehouse ((~~operator~~)) has issued against it, the persons entitled include all holders to ((~~whom~~)) which overissued receipts have been duly negotiated.

Sec. 308. RCW 62A.7-208 and 1965 ex.s. c 157 s 7-208 are each amended to read as follows:

ALTERED WAREHOUSE RECEIPTS. ((~~Where~~)) If a blank in a negotiable tangible warehouse receipt has been filled in without authority, a good-faith purchaser for value and without notice of the ((~~want~~)) lack of authority may treat the insertion as authorized. Any other unauthorized alteration leaves any tangible or electronic warehouse receipt enforceable against the issuer according to its original tenor.

Sec. 309. RCW 62A.7‑209 and 2011 c 336 s 832 are each amended to read as follows:

LIEN OF WAREHOUSE ((~~OPERATOR~~)). ((~~(1)~~)) (a) A warehouse ((~~operator~~)) has a lien against the bailor on the goods covered by a warehouse receipt or storage agreement or on the proceeds thereof in ((~~his or her~~)) its possession for charges for storage or transportation ((()), including demurrage and terminal charges(())), insurance, labor, or other charges, present or future, in relation to the goods, and for expenses necessary for preservation of the goods or reasonably incurred in their sale pursuant to law. If the person on whose account the goods are held is liable for ((~~like~~)) similar charges or expenses in relation to other goods whenever deposited and it is stated in the warehouse receipt or storage agreement that a lien is claimed for charges and expenses in relation to other goods, the warehouse ((~~operator~~)) also has a lien against ((~~him or her~~)) the goods covered by the warehouse receipt or storage agreement or on the proceeds thereof in its possession for ((~~such~~)) those charges and expenses, whether or not the other goods have been delivered by the warehouse ((~~operator~~)). ((~~But~~)) However, as against a person to ((~~whom~~)) which a negotiable warehouse receipt is duly negotiated, a ((~~warehouse operator's~~)) warehouse's lien is limited to charges in an amount or at a rate specified ((on)) in the warehouse receipt or, if no charges are so specified ((~~then~~)), to a reasonable charge for storage of the specific goods covered by the receipt subsequent to the date of the receipt. A ((~~warehouse operator's~~)) warehouse's lien as provided in this chapter takes priority over all other liens and perfected or unperfected security interests.

((~~(2)~~)) (b) The warehouse ((~~operator~~)) may also reserve a security interest against the bailor for ((a)) the maximum amount specified on the receipt for charges other than those specified in subsection ((~~(1)~~)) (a) of this section, such as for money advanced and interest. ((~~Such a~~)) The security interest is governed by ((~~the Article on Secured Transactions (Article 9)~~)) Article 9A of this title.

((~~(3)~~)) (c) A ((~~warehouse operator's~~)) warehouse's lien for charges and expenses under subsection ((~~(1)~~)) (a) of this section or a security interest under subsection ((~~(2)~~)) (b) of this section is also effective against any person ((~~who~~)) that so entrusted the bailor with possession of the goods that a pledge of them by ((~~him or her~~)) the bailor to a good-faith purchaser for value would have been valid ((~~but is not effective against a person as to whom the document confers no right in the goods covered by it under RCW 62A.7-503~~)).

      ((~~(4) A warehouse operator loses his or her lien on any goods which he or she voluntarily delivers or which he or she~~)) However, the lien or security interest is not effective against a person that before issuance of a document of title had a legal interest or a perfected security interest in the goods and that did not:
      (1) Deliver or entrust the goods or any document of title covering the goods to the bailor or the bailor's nominee with:
      (A) Actual or apparent authority to ship, store, or sell;
      (B) Power to obtain delivery under RCW 62A.7-403; or
      (C) Power of disposition under RCW 62A.2-403, 62A.2A-304(2), 62A.2A-305(2), 62A.9A-320, or 62A.9A-321(c) or other statute or rule of law; or
      (2) Acquiesce in the procurement by the bailor or its nominee of any document.
      (d) A warehouse's lien on household goods for charges and expenses in relation to the goods under subsection (a) of this section is also effective against all persons if the depositor was the legal possessor of the goods at the time of deposit. In this subsection, "household goods" means furniture, furnishings, or personal effects used by the depositor in a dwelling.
      (e) A warehouse loses its lien on any goods that it voluntarily delivers or unjustifiably refuses to deliver.

Sec. 310. RCW 62A.7‑210 and 2011 c 336 s 833 are each amended to read as follows:

ENFORCEMENT OF WAREHOUSE ((~~OPERATOR'S~~)) LIEN. ((~~(1)~~)) (a) Except as otherwise provided in subsection ((~~(2)~~)) (b) of this section, a ((~~warehouse operator's~~)) warehouse's lien may be enforced by public or private sale of the goods, in ((~~bloc~~)) bulk or in ((~~parcels~~)) packages, at any time or place and on any terms ((~~which~~)) that are commercially reasonable, after notifying all persons known to claim an interest in the goods. ((~~Such~~)) The notification must include a statement of the amount due, the nature of the proposed sale, and the time and place of any public sale. The fact that a better price could have been obtained by a sale at a different time or in a ((~~different~~)) method different from that selected by the warehouse ((~~operator~~)) is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner. The warehouse sells in a commercially reasonable manner if the warehouse ((~~operator either~~)) sells the goods in the usual manner in any recognized market therefor, ((~~or if he or she~~)) sells at the price current in ((~~such~~)) that market at the time of ((~~his or her~~)) the sale, or ((~~if he or she has~~)) otherwise ((~~sold~~)) sells in conformity with commercially reasonable practices among dealers in the type of goods sold((~~, he or she has sold in a commercially reasonable manner~~)). A sale of more goods than apparently necessary to be offered to ((~~insure~~)) ensure satisfaction of the obligation is not commercially reasonable, except in cases covered by the preceding sentence.

((~~(2)~~)) (b) A warehouse ((~~operator's~~)) may enforce its lien on goods, other than goods stored by a merchant in the course of ((~~his or her~~)) its business ((~~may be enforced~~)), only ((~~as follows~~)) if the following requirements are satisfied:

((~~(a)~~)) (1) All persons known to claim an interest in the goods must be notified.

(((b) The notification must be delivered in person or sent by registered or certified letter to the last known address of any person to be notified.
(c))) (2) The notification must include an itemized statement of the claim, a description of the goods subject to the lien, a demand for payment within a specified time not less than ten days after receipt of the notification, and a conspicuous statement that unless the claim is paid within that time the goods will be advertised for sale and sold by auction at a specified time and place.

((~~(d)~~)) (3) The sale must conform to the terms of the notification.

((~~(e)~~)) (4) The sale must be held at the nearest suitable place to that where the goods are held or stored.

((~~(f)~~)) (5) After the expiration of the time given in the notification, an advertisement of the sale must be published once a week for two weeks consecutively in a newspaper of general circulation where the sale is to be held. The advertisement must include a description of the goods, the name of the person on whose account ((~~they~~)) the goods are being held, and the time and place of the sale. The sale must take place at least fifteen days after the first publication. If there is no newspaper of general circulation where the sale is to be held, the advertisement must be posted at least ten days before the sale in not ((~~less~~)) fewer than six conspicuous places in the neighborhood of the proposed sale.

((~~(3)~~)) (c) Before any sale pursuant to this section, any person claiming a right in the goods may pay the amount necessary to satisfy the lien and the reasonable expenses incurred ((~~under~~)) in complying with this section. In that event, the goods ((~~must~~)) may not be sold, but must be retained by the warehouse ((~~operator~~)) subject to the terms of the receipt and this Article.

((~~(4) The~~)) (d) A warehouse ((~~operator~~)) may buy at any public sale held pursuant to this section.

((~~(5)~~)) (e) A purchaser in good faith of goods sold to enforce a ((~~warehouse operator's~~)) warehouse's lien takes the goods free of any rights of persons against ((~~whom~~)) which the lien was valid, despite the warehouse's noncompliance ((~~by the warehouse operator~~)) with ((~~the requirements of~~)) this section.

((~~(6) The~~)) (f) A warehouse ((~~operator~~)) may satisfy ((~~his or her~~)) its lien from the proceeds of any sale pursuant to this section but must hold the balance, if any, for delivery on demand to any person to ((~~whom he or she~~)) which the warehouse would have been bound to deliver the goods.

((~~(7)~~)) (g) The rights provided by this section ((~~shall be~~)) are in addition to all other rights allowed by law to a creditor against ((~~his or her~~)) a debtor.

((~~(8) Where~~)) (h) If a lien is on goods stored by a merchant in the course of ((~~his or her~~)) its business, the lien may be enforced in accordance with either subsection ((~~(1) or (2)~~)) (a) or (b) of this section.

((~~(9) The~~)) (i) A warehouse ((~~operator~~)) is liable for damages caused by failure to comply with the requirements for sale under this section and, in case of willful violation, is liable for conversion.

PART IV
AMENDMENTS TO UNIFORM COMMERCIAL CODE ARTICLE 7
BILLS OF LADING: SPECIAL PROVISIONS

Sec. 401. RCW 62A.7-301 and 1965 ex.s. c 157 s 7-301 are each amended to read as follows:

LIABILITY FOR NONRECEIPT OR MISDESCRIPTION; "SAID TO CONTAIN"; "SHIPPER'S WEIGHT, LOAD, AND COUNT"; IMPROPER HANDLING. ((~~(1)~~)) (a) A consignee of a nonnegotiable bill ((~~who~~)) of lading which has given value in good faith, or a holder to ((~~whom~~)) which a negotiable bill has been duly negotiated, relying ((~~in either case~~)) upon the description ((~~therein~~)) of the goods((,)) in the bill or upon the date ((~~therein~~)) shown in the bill, may recover from the issuer damages caused by the misdating of the bill or the nonreceipt or misdescription of the goods, except to the extent that the ((~~document~~)) bill indicates that the issuer does not know whether any part or all of the goods in fact were received or conform to the description, such as ((~~where~~)) in a case in which the description is in terms of marks or labels or kind, quantity, or condition or the receipt or description is qualified by "contents or condition of contents of packages unknown,"((,)) "said to contain,"((,)) "shipper's weight, load, and count," or ((~~the like~~)) words of similar import, if ((~~such~~)) that indication ((be)) is true.

      ((~~(2) When~~)) (b) If goods are loaded by ((an)) the issuer ((~~who is a common carrier,~~)) of a bill of lading:
      (1) The issuer ((~~must~~)) shall count the packages of goods if ((~~package freight~~)) shipped in packages and ascertain the kind and quantity if shipped in bulk ((~~freight. In~~)); and
      (2) Words such ((~~cases~~)) as "shipper's weight, load, and count," or ((~~other~~)) words of similar import indicating that the description was made by the shipper are ineffective except as to ((~~freight~~)) goods concealed ((by)) in packages.

((~~(3) When~~)) (c) If bulk ((~~freight is~~)) goods are loaded by a shipper ((~~who~~)) that makes available to the issuer of a bill of lading adequate facilities for weighing ((~~such freight, an~~)) those goods, the issuer ((~~who is a common carrier must~~)) shall ascertain the kind and quantity within a reasonable time after receiving the ((~~written~~)) shipper's request ((~~of the shipper~~)) in a record to do so. ((~~In such cases~~)) In that case, "shipper's weight" or ((~~other~~)) words of ((~~like purport~~)) similar import are ineffective.

((~~(4)~~)) (d) The issuer ((~~may~~)) of a bill of lading, by ((~~inserting~~)) including in the bill the words "shipper's weight, load, and count," or ((~~other~~)) words of ((~~like purport~~)) similar import, may indicate that the goods were loaded by the shipper((;)), and, if ((~~such~~)) that statement ((be)) is true, the issuer ((~~shall~~)) is not ((be)) liable for damages caused by the improper loading. ((~~But their~~)) However, omission of such words does not imply liability for ((~~such~~)) damages caused by improper loading.

((~~(5) The~~)) (e) A shipper ((~~shall be deemed to have guaranteed to the~~)) guarantees to an issuer the accuracy at the time of shipment of the description, marks, labels, number, kind, quantity, condition, and weight, as furnished by ((~~him;~~)) the shipper, and the shipper shall indemnify the issuer against damage caused by inaccuracies in ((~~such~~)) those particulars. ((~~The~~)) This right of ((~~the issuer to such~~)) indemnity ((~~shall in no way~~)) does not limit ((~~his~~)) the issuer's responsibility ((~~and~~)) or liability under the contract of carriage to any person other than the shipper.

Sec. 402. RCW 62A.7-302 and 1965 ex.s. c 157 s 7-302 are each amended to read as follows:

THROUGH BILLS OF LADING AND SIMILAR DOCUMENTS OF TITLE. ((~~(1)~~)) (a) The issuer of a through bill of lading, or other document of title embodying an undertaking to be performed in part by ((~~persons~~)) a person acting as its agent((s)) or by ((~~connecting carriers~~)) a performing carrier, is liable to ((~~anyone~~)) any person entitled to recover on the bill or other document for any breach by ((~~such other persons or by a connecting~~)) the other person or the performing carrier of its obligation under the bill or other document ((~~but~~)). However, to the extent that the bill or other document covers an undertaking to be performed overseas or in territory not contiguous to the continental United States or an undertaking including matters other than transportation, this liability for breach by the other person or the performing carrier may be varied by agreement of the parties.

((~~(2) Where~~)) (b) If goods covered by a through bill of lading or other document of title embodying an undertaking to be performed in part by ((~~persons~~)) a person other than the issuer are received by ((~~any such~~)) that person, ((he)) the person is subject, with respect to ((~~his~~)) its own performance while the goods are in ((~~his~~)) its possession, to the obligation of the issuer. ((~~His~~)) The person's obligation is discharged by delivery of the goods to another ((~~such~~)) person pursuant to the bill or other document((,)) and does not include liability for breach by any other ((~~such~~)) person((s)) or by the issuer.

      ((~~(3)~~)) (c) The issuer of ((~~such~~)) a through bill of lading or other document ((~~shall be~~)) of title described in subsection (a) of this section is entitled to recover from the ((~~connecting~~)) performing carrier, or ((~~such~~)) other person in possession of the goods when the breach of the obligation under the bill or other document occurred((,)):
      (1) The amount it may be required to pay to ((~~anyone~~)) any person entitled to recover on the bill or other document ((~~therefor~~)) for the breach, as may be evidenced by any receipt, judgment, or transcript ((~~thereof, and~~)) of judgment; and
      (2) The amount of any expense reasonably incurred by ((it)) the issuer in defending any action ((~~brought~~)) commenced by ((~~anyone~~)) any person entitled to recover on the bill or other document ((~~therefor~~)) for the breach.

Sec. 403. RCW 62A.7-303 and 1965 ex.s. c 157 s 7-303 are each amended to read as follows:

DIVERSION; RECONSIGNMENT; CHANGE OF INSTRUCTIONS. ((~~(1)~~)) (a) Unless the bill of lading otherwise provides, ((~~the~~)) a carrier may deliver the goods to a person or destination other than that stated in the bill or may otherwise dispose of the goods, without liability for misdelivery, on instructions from:

      ((~~(a)~~)) (1) The holder of a negotiable bill; ((or
      ~~(b)~~)) (2) The consignor on a nonnegotiable bill ((~~notwithstanding~~)), even if the consignee has given contrary instructions ((~~from the consignee~~)); ((or
      ~~(c)~~)) (3) The consignee on a nonnegotiable bill in the absence of contrary instructions from the consignor, if the goods have arrived at the billed destination or if the consignee is in possession of the tangible bill or in control of the electronic bill; or

((~~(d)~~)) (4) The consignee on a nonnegotiable bill, if ((he)) the consignee is entitled as against the consignor to dispose of ((~~them~~)) the goods.

((~~(2)~~)) (b) Unless ((~~such~~)) instructions described in subsection (a) of this section are ((~~noted on~~)) included in a negotiable bill of lading, a person to ((~~whom~~)) which the bill is duly negotiated ((~~can~~)) may hold the bailee according to the original terms.

Sec. 404. RCW 62A.7-304 and 1965 ex.s. c 157 s 7-304 are each amended to read as follows:

TANGIBLE BILLS OF LADING IN A SET. ((~~(1)~~)) (a) Except ((~~where~~)) as customary in ((~~overseas~~)) international transportation, a tangible bill of lading ((~~must~~)) may not be issued in a set of parts. The issuer is liable for damages caused by violation of this subsection.

((~~(2) Where~~)) (b) If a tangible bill of lading is lawfully ((~~drawn~~)) issued in a set of parts, each of which ((~~is numbered~~)) contains an identification code and is expressed to be valid only if the goods have not been delivered against any other part, the whole of the parts constitutes one bill.

((~~(3) Where~~)) (c) If a tangible negotiable bill of lading is lawfully issued in a set of parts and different parts are negotiated to different persons, the title of the holder to ((~~whom~~)) which the first due negotiation is made prevails as to both the document of title and the goods even ((~~though~~)) if any later holder may have received the goods from the carrier in good faith and discharged the carrier's obligation by ((~~surrender of his~~)) surrendering its part.

((~~(4) Any~~)) (d) A person ((~~who~~)) that negotiates or transfers a single part of a tangible bill of lading ((~~drawn~~)) issued in a set is liable to holders of that part as if it were the whole set.

((~~(5)~~)) (e) The bailee ((~~is obliged to~~)) shall deliver in accordance with ((~~Part 4 of this Article~~)) RCW 62A.7-401 through 62A.7- 404 against the first presented part of a tangible bill of lading lawfully ((~~drawn~~)) issued in a set. ((~~Such~~)) Delivery in this manner discharges the bailee's obligation on the whole bill.

Sec. 405. RCW 62A.7-305 and 1965 ex.s. c 157 s 7-305 are each amended to read as follows:

DESTINATION BILLS. ((~~(1)~~)) (a) Instead of issuing a bill of lading to the consignor at the place of shipment, a carrier ((~~may~~)), at the request of the consignor, may procure the bill to be issued at destination or at any other place designated in the request.

((~~(2)~~)) (b) Upon request of ((~~anyone~~)) any person entitled as against ((~~the~~)) a carrier to control the goods while in transit and on surrender of possession or control of any outstanding bill of lading or other receipt covering ((~~such~~)) the goods, the issuer, subject to RCW 62A.7-105, may procure a substitute bill to be issued at any place designated in the request.

Sec. 406. RCW 62A.7-307 and 1965 ex.s. c 157 s 7-307 are each amended to read as follows:

LIEN OF CARRIER. ((~~(1)~~)) (a) A carrier has a lien on the goods covered by a bill of lading or on the proceeds thereof in its possession for charges ((~~subsequent to~~)) after the date of ((~~its~~)) the carrier's receipt of the goods for storage or transportation ((()), including demurrage and terminal charges(())), and for expenses necessary for preservation of the goods incident to their transportation or reasonably incurred in their sale pursuant to law. ((~~But~~)) However, against a purchaser for value of a negotiable bill of lading, a carrier's lien is limited to charges stated in the bill or the applicable tariffs((,)) or, if no charges are stated ((~~then to~~)), a reasonable charge.

((~~(2)~~)) (b) A lien for charges and expenses under subsection ((~~(1)~~)) (a) of this section on goods ((~~which~~)) that the carrier was required by law to receive for transportation is effective against the consignor or any person entitled to the goods unless the carrier had notice that the consignor lacked authority to subject the goods to ((~~such~~)) those charges and expenses. Any other lien under subsection ((~~(1)~~)) (a) of this section is effective against the consignor and any person ((~~who~~)) that permitted the bailor to have control or possession of the goods unless the carrier had notice that the bailor lacked ((~~such~~)) authority.

((~~(3)~~)) (c) A carrier loses ((~~his~~)) its lien on any goods ((~~which he~~)) that it voluntarily delivers or ((~~which he~~)) unjustifiably refuses to deliver.

Sec. 407. RCW 62A.7-308 and 1965 ex.s. c 157 s 7-308 are each amended to read as follows:

ENFORCEMENT OF CARRIER'S LIEN. ((~~(1)~~)) (a) A carrier's lien on goods may be enforced by public or private sale of the goods, in ((~~bloc~~)) bulk or in ((~~parcels~~)) packages, at any time or place and on any terms ((~~which~~)) that are commercially reasonable, after notifying all persons known to claim an interest in the goods. ((~~Such~~)) The notification must include a statement of the amount due, the nature of the proposed sale, and the time and place of any public sale. The fact that a better price could have been obtained by a sale at a different time or in a method different ((~~method~~)) from that selected by the carrier is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner. The carrier sells goods in a commercially reasonable manner if the carrier ((~~either~~)) sells the goods in the usual manner in any recognized market therefor ((~~or if he~~)), sells at the price current in ((~~such~~)) that market at the time of ((~~his~~)) the sale, or ((~~if he has~~)) otherwise ((~~sold~~)) sells in conformity with commercially reasonable practices among dealers in the type of goods sold ((~~he has sold in a commercially reasonable manner~~)). A sale of more goods than apparently necessary to be offered to ensure satisfaction of the obligation is not commercially reasonable, except in cases covered by the preceding sentence.

((~~(2)~~)) (b) Before any sale pursuant to this section, any person claiming a right in the goods may pay the amount necessary to satisfy the lien and the reasonable expenses incurred ((~~under~~)) in complying with this section. In that event, the goods ((~~must~~)) may not be sold((,)) but must be retained by the carrier, subject to the terms of the bill of lading and this Article.

((~~(3) The~~)) (c) A carrier may buy at any public sale pursuant to this section.

((~~(4)~~)) (d) A purchaser in good faith of goods sold to enforce a carrier's lien takes the goods free of any rights of persons against ((~~whom~~)) which the lien was valid, despite the carrier's noncompliance ((~~by the carrier~~)) with ((~~the requirements of~~)) this section.

((~~(5) The~~)) (e) A carrier may satisfy ((~~his~~)) its lien from the proceeds of any sale pursuant to this section but ((~~must~~)) shall hold the balance, if any, for delivery on demand to any person to ((~~whom he~~)) which the carrier would have been bound to deliver the goods.

((~~(6)~~)) (f) The rights provided by this section ((~~shall be~~)) are in addition to all other rights allowed by law to a creditor against ((~~his~~)) a debtor.

((~~(7)~~)) (g) A carrier's lien may be enforced ((~~in accordance with~~)) pursuant to either subsection ((~~(1)~~)) (a) of this section or the procedure set forth in ((~~subsection (2) of~~)) RCW 62A.7-210(b).

((~~(8) The~~)) (h) A carrier is liable for damages caused by failure to comply with the requirements for sale under this section and, in case of willful violation, is liable for conversion.

Sec. 408. RCW 62A.7-309 and 2009 c 549 s 1017 are each amended to read as follows:

DUTY OF CARE; CONTRACTUAL LIMITATION OF CARRIER'S LIABILITY. Save as otherwise provided in RCW 81.29.010 and 81.29.020:

((~~(1)~~)) (a) A carrier ((~~who~~)) that issues a bill of lading, whether negotiable or nonnegotiable, ((~~must~~)) shall exercise the degree of care in relation to the goods which a reasonably careful person would exercise under ((~~like~~)) similar circumstances. This subsection does not affect any statute, regulation, or rule of law that imposes liability upon a common carrier for damages not caused by its negligence.

((~~(2)~~)) (b) Damages may be limited by a ((~~provision~~)) term in the bill of lading or in a transportation agreement that the carrier's liability ((~~shall~~)) may not exceed a value stated in the ((~~document~~)) bill of lading or transportation agreement if the carrier's rates are dependent upon value and the consignor ((~~by the carrier's tariff~~)) is afforded an opportunity to declare a higher value ((~~or a value as lawfully provided in the tariff, or where no tariff~~)) and the consignor is ((~~filed he or she is otherwise~~)) advised of ((~~such~~)) the opportunity((~~; but no~~)). However, such a limitation is not effective with respect to the carrier's liability for conversion to its own use.

((~~(3)~~)) (c) Reasonable provisions as to the time and manner of presenting claims and ((~~instituting~~)) commencing actions based on the shipment may be included in a bill of lading or ((~~tariff~~)) a transportation agreement.

PART V
AMENDMENTS TO UNIFORM COMMERCIAL CODE ARTICLE 7
WAREHOUSE RECEIPTS AND BILLS OF LADING: GENERAL OBLIGATIONS

Sec. 501. RCW 62A.7‑401 and 2011 c 336 s 834 are each amended to read as follows:

IRREGULARITIES IN ISSUE OF RECEIPT OR BILL OR CONDUCT OF ISSUER. The obligations imposed by this Article on an issuer apply to a document of title ((~~regardless of the fact that~~)) even if:

      ((~~(a)~~)) (1) The document ((~~may~~)) does not comply with the requirements of this Article or of any other ((~~law~~)) statute, rule, or regulation regarding its ((~~issue~~)) issuance, form, or content; ((or
      ~~(b)~~)) (2) The issuer ((~~may have~~)) violated laws regulating the conduct of ((~~his or her~~)) its business; ((or
      ~~(c)~~)) (3) The goods covered by the document were owned by the bailee ((~~at the time~~)) when the document was issued; or

((~~(d)~~)) (4) The person issuing the document ((~~does not come within the definition of warehouse operator if it~~)) is not a warehouse but the document purports to be a warehouse receipt.

Sec. 502. RCW 62A.7-402 and 1965 ex.s. c 157 s 7-402 are each amended to read as follows:

DUPLICATE ((~~RECEIPT OR BILL~~)) DOCUMENT OF TITLE; OVERISSUANCE. ((~~Neither~~)) A duplicate ((~~nor~~)) or any other document of title purporting to cover goods already represented by an outstanding document of the same issuer does not confer((s)) any right in the goods, except as provided in the case of tangible bills of lading in a set of parts, overissue of documents for fungible goods ((~~and~~)), substitutes for lost, stolen, or destroyed documents, or substitute documents issued pursuant to RCW 62A.7-105. ((~~But~~)) The issuer is liable for damages caused by ((~~his~~)) its overissue or failure to identify a duplicate document ((~~as such~~)) by a conspicuous notation ((~~on its face~~)).

Sec. 503. RCW 62A.7‑403 and 2011 c 336 s 835 are each amended to read as follows:

OBLIGATION OF ((~~WAREHOUSE OPERATOR OR CARRIER~~)) BAILEE TO DELIVER; EXCUSE. ((~~(1) The~~)) (a) A bailee ((~~must~~)) shall deliver the goods to a person entitled under ((~~the~~)) a document ((~~who~~)) of title if the person complies with subsections ((~~(2) and (3)~~)) (b) and (c) of this section, unless and to the extent that the bailee establishes any of the following:

((~~(a)~~)) (1) Delivery of the goods to a person whose receipt was rightful as against the claimant;

((~~(b)~~)) (2) Damage to or delay, loss, or destruction of the goods for which the bailee is not liable;

((~~(c)~~)) (3) Previous sale or other disposition of the goods in lawful enforcement of a lien or on ((~~warehouse operator's~~)) a warehouse's lawful termination of storage;

((~~(d)~~)) (4) The exercise by a seller of ((~~his or her~~)) its right to stop delivery pursuant to ((~~the provisions of the Article on Sales (~~))RCW 62A.2-705(())) or by a lessor of its right to stop delivery pursuant to RCW 62A.2A-526;

((~~(e)~~)) (5) A diversion, reconsignment, or other disposition pursuant to ((~~the provisions of this Article (~~))RCW 62A.7-303((~~) or tariff regulating such right~~));

((~~(f)~~)) (6) Release, satisfaction, or any other ((~~fact affording a~~)) personal defense against the claimant; or

((~~(g)~~)) (7) Any other lawful excuse.

((~~(2)~~)) (b) A person claiming goods covered by a document of title ((~~must~~)) shall satisfy the bailee's lien ((~~where~~)) if the bailee so requests or ((~~where~~)) if the bailee is prohibited by law from delivering the goods until the charges are paid.

      ((~~(3)~~)) (c) Unless ((~~the~~)) a person claiming the goods is ((~~one~~)) a person against ((~~whom~~)) which the document ((~~confers no~~)) of title does not confer a right under RCW 62A.7-503((~~(1), he or she must surrender for cancellation or notation of partial deliveries any outstanding negotiable document covering the goods, and~~)) (a):
      (1) The person claiming under a document shall surrender possession or control of any outstanding negotiable document covering the goods for cancellation or indication of partial deliveries; and
      (2) The bailee ((~~must~~)) shall cancel the document or conspicuously ((~~note~~)) indicate in the document the partial delivery ((~~thereon or be~~)) or the bailee is liable to any person to ((~~whom~~)) which the document is duly negotiated.

(((4) "Person entitled under the document" means holder in the case of a negotiable document, or the person to whom delivery is to be made by the terms of or pursuant to written instructions under a nonnegotiable document.))

Sec. 504. RCW 62A.7-404 and 1965 ex.s. c 157 s 7-404 are each amended to read as follows:

      NO LIABILITY FOR GOOD-FAITH DELIVERY PURSUANT TO ((~~RECEIPT OR BILL~~)) DOCUMENT OF TITLE. A bailee ((~~who in~~)) that in good faith ((~~including observance of reasonable commercial standards~~)) has received goods and delivered or otherwise disposed of ((~~them~~)) the goods according to the terms of ((~~the~~)) a document of title or pursuant to this Article is not liable ((~~therefor. This rule applies even though~~)) for the goods even if:
      (1) The person from ((~~whom he~~)) which the bailee received the goods ((~~had no~~)) did not have authority to procure the document or to dispose of the goods ((~~and even though~~)); or
      (2) The person to ((~~whom he~~)) which the bailee delivered the goods ((~~had no~~)) did not have authority to receive ((~~them~~)) the goods.

PART VI
AMENDMENTS TO UNIFORM COMMERCIAL CODE ARTICLE 7
WAREHOUSE RECEIPTS AND BILLS OF LADING: NEGOTIATION AND TRANSFER

Sec. 601. RCW 62A.7-501 and 1965 ex.s. c 157 s 7-501 are each amended to read as follows:

FORM OF NEGOTIATION AND REQUIREMENTS OF (("))DUE NEGOTIATION((")). ((~~(1)~~)) (a) The following rules apply to a negotiable tangible document of title ((~~running~~)):
(1) If the document's original terms run to the order of a named person, the document is negotiated by ((~~his~~)) the named person's indorsement and delivery. After ((~~his~~)) the named person's indorsement in blank or to bearer, any person ((~~can~~)) may negotiate ((it)) the document by delivery alone.

      (2)(((a) A negotiable document of title is also negotiated by delivery alone when by its original terms it runs to bearer;
      (b) when a document running)) If the document's original terms run to bearer, it is negotiated by delivery alone.
      (3) If the document's original terms run to the order of a named person and it is delivered to ((him)) the named person, the effect is the same as if the document had been negotiated.

((~~(3)~~)) (4) Negotiation of ((~~a negotiable~~)) the document ((~~of title~~)) after it has been indorsed to a ((~~specified~~)) named person requires indorsement by the ((~~special indorsee as well as~~)) named person and delivery.

((~~(4)~~)) (5) A ((~~negotiable~~)) document ((~~of title~~)) is (("))duly negotiated((~~" when~~)) if it is negotiated in the manner stated in this ((~~section~~)) subsection to a holder ((~~who~~)) that purchases it in good faith, without notice of any defense against or claim to it on the part of any person, and for value, unless it is established that the negotiation is not in the regular course of business or financing or involves receiving the document in settlement or payment of a ((~~money~~)) monetary obligation.

      ((~~(5)~~)) (b) The following rules apply to a negotiable electronic document of title:
      (1) If the document's original terms run to the order of a named person or to bearer, the document is negotiated by delivery of the document to another person. Indorsement by the named person is not required to negotiate the document.
      (2) If the document's original terms run to the order of a named person and the named person has control of the document, the effect is the same as if the document had been negotiated.
      (3) A document is duly negotiated if it is negotiated in the manner stated in this subsection to a holder that purchases it in good faith, without notice of any defense against or claim to it on the part of any person, and for value, unless it is established that the negotiation is not in the regular course of business or financing or involves taking delivery of the document in settlement or payment of a monetary obligation.
      (c) Indorsement of a nonnegotiable document of title neither makes it negotiable nor adds to the transferee's rights.

((~~(6)~~)) (d) The naming in a negotiable bill of lading of a person to be notified of the arrival of the goods does not limit the negotiability of the bill ((~~nor~~)) or constitute notice to a purchaser ((~~thereof~~)) of the bill of any interest of ((~~such~~)) that person in the goods.

Sec. 602. RCW 62A.7-502 and 1965 ex.s. c 157 s 7-502 are each amended to read as follows:

RIGHTS ACQUIRED BY DUE NEGOTIATION. ((~~(1)~~)) (a) Subject to ((~~the following section and to the provisions of~~)) RCW 62A.7-205 ((~~on fungible goods~~)) and 62A.7-503, a holder to ((~~whom~~)) which a negotiable document of title has been duly negotiated acquires thereby:

((~~(a)~~)) (1) Title to the document;

((~~(b)~~)) (2) Title to the goods;

((~~(c)~~)) (3) All rights accruing under the law of agency or estoppel, including rights to goods delivered to the bailee after the document was issued; and

((~~(d)~~)) (4) The direct obligation of the issuer to hold or deliver the goods according to the terms of the document free of any defense or claim by ((~~him~~)) the issuer except those arising under the terms of the document or under this Article((.)), but in the case of a delivery order, the bailee's obligation accrues only upon the bailee's acceptance of the delivery order and the obligation acquired by the holder is that the issuer and any indorser will procure the acceptance of the bailee.

      ((~~(2)~~)) (b) Subject to ((~~the following section~~)) RCW 62A.7-503, title and rights ((so)) acquired by due negotiation are not defeated by any stoppage of the goods represented by the document of title or by surrender of ((~~such~~)) the goods by the bailee((,)) and are not impaired even ((~~though~~)) if:
      (1) The due negotiation or any prior due negotiation constituted a breach of duty ((~~or even though~~));
      (2) Any person has been deprived of possession of ((~~the~~)) a negotiable tangible document or control of a negotiable electronic document by misrepresentation, fraud, accident, mistake, duress, loss, theft, or conversion((,)); or ((~~even though~~))

(3) A previous sale or other transfer of the goods or document has been made to a third person.

Sec. 603. RCW 62A.7-503 and 2000 c 250 s 9A-814 are each amended to read as follows:

DOCUMENT OF TITLE TO GOODS DEFEATED IN CERTAIN CASES. ((~~(1)~~)) (a) A document of title confers no right in goods against a person ((~~who~~)) that before issuance of the document had a legal interest or a perfected security interest in ((~~them and who neither~~)) the goods and that did not:

      ((~~(a) delivered or entrusted them~~)) (1) Deliver or entrust the goods or any document of title covering ((~~them~~)) the goods to the bailor or ((~~his~~)) the bailor's nominee with:
      (A) Actual or apparent authority to ship, store, or sell ((~~or with~~));
      (B) Power to obtain delivery under ((~~this Article (~~))RCW 62A.7- 403(())); or ((~~with~~))

(C) Power of disposition under ((~~this Title (~~))RCW 62A.2-403 ((~~and 62A.9A~~‑~~320)~~)), 62A.2A-304(2), 62A.2A-305(2), 62A.9A-320, or 62A.9A- 321(c) or other statute or rule of law; ((~~nor~~)) or

((~~(b) acquiesced~~)) (2) Acquiesce in the procurement by the bailor or ((~~his~~)) its nominee of any document ((~~of title~~)).

((~~(2)~~)) (b) Title to goods based upon an unaccepted delivery order is subject to the rights of ((~~anyone to whom~~)) any person to which a negotiable warehouse receipt or bill of lading covering the goods has been duly negotiated. ((~~Such a~~)) That title may be defeated under ((~~the next section~~)) RCW 62A.7-504 to the same extent as the rights of the issuer or a transferee from the issuer.

((~~(3)~~)) (c) Title to goods based upon a bill of lading issued to a freight forwarder is subject to the rights of ((~~anyone to whom~~)) any person to which a bill issued by the freight forwarder is duly negotiated((~~; but~~)). However, delivery by the carrier in accordance with ((~~Part 4 of this Article~~)) RCW 62A.7-401 through 62A.7-404 pursuant to its own bill of lading discharges the carrier's obligation to deliver.

Sec. 604. RCW 62A.7-504 and 1965 ex.s. c 157 s 7-504 are each amended to read as follows:

RIGHTS ACQUIRED IN ((~~THE~~)) ABSENCE OF DUE NEGOTIATION; EFFECT OF DIVERSION; ((~~SELLER'S~~)) STOPPAGE OF DELIVERY. ((~~(1)~~)) (a) A transferee of a document of title, whether negotiable or nonnegotiable, to ((~~whom~~)) which the document has been delivered but not duly negotiated, acquires the title and rights ((~~which his~~)) that its transferor had or had actual authority to convey.

((~~(2)~~)) (b) In the case of a transfer of a nonnegotiable document of title, until but not after the bailee receives ((~~notification~~)) notice of the transfer, the rights of the transferee may be defeated:

((~~(a)~~)) (1) By those creditors of the transferor ((~~who~~)) which could treat the ((~~sale~~)) transfer as void under RCW ((~~62A.7-402; or~~)) 62A.2-402 or 62A.2A-308;

      ((~~(b)~~)) (2) By a buyer from the transferor in ordinary course of business if the bailee has delivered the goods to the buyer or received notification of ((~~his~~)) the buyer's rights; ((or
      ~~(c)~~)) (3) By a lessee from the transferor in ordinary course of business if the bailee has delivered the goods to the lessee or received notification of the lessee's rights; or
      (4) As against the bailee, by good-faith dealings of the bailee with the transferor.

((~~(3)~~)) (c) A diversion or other change of shipping instructions by the consignor in a nonnegotiable bill of lading which causes the bailee not to deliver the goods to the consignee defeats the consignee's title to the goods if ((~~they~~)) the goods have been delivered to a buyer in ordinary course of business or a lessee in ordinary course of business and, in any event, defeats the consignee's rights against the bailee.

((~~(4)~~)) (d) Delivery of the goods pursuant to a nonnegotiable document of title may be stopped by a seller under RCW 62A.2-705((~~, and~~)) or a lessor under RCW 62A.2A-526, subject to the requirements of due notification ((~~there provided~~)) in those statutes. A bailee ((~~honoring~~)) that honors the seller's or lessor's instructions is entitled to be indemnified by the seller or lessor against any resulting loss or expense.

Sec. 605. RCW 62A.7-505 and 1965 ex.s. c 157 s 7-505 are each amended to read as follows:

INDORSER NOT ((A)) GUARANTOR FOR OTHER PARTIES. The indorsement of a tangible document of title issued by a bailee does not make the indorser liable for any default by the bailee or ((by)) previous indorsers.

Sec. 606. RCW 62A.7-506 and 1965 ex.s. c 157 s 7-506 are each amended to read as follows:

DELIVERY WITHOUT INDORSEMENT: RIGHT TO COMPEL INDORSEMENT. The transferee of a negotiable tangible document of title has a specifically enforceable right to have ((~~his~~)) its transferor supply any necessary indorsement, but the transfer becomes a negotiation only as of the time the indorsement is supplied.

Sec. 607. RCW 62A.7-507 and 1965 ex.s. c 157 s 7-507 are each amended to read as follows:

WARRANTIES ON NEGOTIATION OR ((~~TRANSFER OF RECEIPT OR BILL~~)) DELIVERY OF DOCUMENT OF TITLE. ((~~Where~~)) If a person negotiates or ((~~transfers~~)) delivers a document of title for value, otherwise than as a mere intermediary under ((~~the next following section, then~~)) RCW 62A.7-508, unless otherwise agreed ((~~he warrants to his immediate purchaser only~~)), the transferor, in addition to any warranty made in selling or leasing the goods, warrants to its immediate purchaser only that:

((~~(a) that~~)) (1) The document is genuine; ((~~and~~
~~(b) that he has no~~)) (2) The transferor does not have knowledge of any fact ((~~which~~)) that would impair ((~~its~~)) the document's validity or worth; and

((~~(c) that his~~)) (3) The negotiation or ((~~transfer~~)) delivery is rightful and fully effective with respect to the title to the document and the goods it represents.

Sec. 608. RCW 62A.7-508 and 1965 ex.s. c 157 s 7-508 are each amended to read as follows:

WARRANTIES OF COLLECTING BANK AS TO DOCUMENTS OF TITLE. A collecting bank or other intermediary known to be entrusted with documents of title on behalf of another or with collection of a draft or other claim against delivery of documents warrants by ((~~such~~)) the delivery of the documents only its own good faith and authority((~~. This rule applies~~)) even ((~~though~~)) if the collecting bank or other intermediary has purchased or made advances against the claim or draft to be collected.

Sec. 609. RCW 62A.7-509 and 1965 ex.s. c 157 s 7-509 are each amended to read as follows:

((~~RECEIPT OR BILL: WHEN~~)) ADEQUATE COMPLIANCE WITH COMMERCIAL CONTRACT. ((~~The question~~)) Whether a document of title is adequate to fulfill the obligations of a contract for sale, a contract for lease, or the conditions of a letter of credit is ((~~governed by the Articles on Sales (Article 2) and on Letters of Credit (Article 5)~~)) determined by Article 2, 2A, or 5 of this title.

PART VII
AMENDMENTS TO UNIFORM COMMERCIAL CODE ARTICLE 7
WAREHOUSE RECEIPTS AND BILLS OF LADING: MISCELLANEOUS PROVISIONS

Sec. 701. RCW 62A.7-601 and 1965 ex.s. c 157 s 7-601 are each amended to read as follows:

LOST ((~~AND MISSING~~)), STOLEN, OR DESTROYED DOCUMENTS OF TITLE. ((~~(1)~~)) (a) If a document ((~~has been~~)) of title is lost, stolen, or destroyed, a court may order delivery of the goods or issuance of a substitute document and the bailee may without liability to any person comply with ((~~such~~)) the order. If the document was negotiable ((~~the claimant must post security approved by the~~)), a court ((~~to indemnify~~)) may not order delivery of the goods or issuance of a substitute document without the claimant's posting security unless it finds that any person ((~~who~~)) that may suffer loss as a result of nonsurrender of possession or control of the document is adequately protected against the loss. If the document was ((~~not negotiable, such~~)) nonnegotiable, the court may require security ((~~may be required at the discretion of the court~~)). The court may also ((~~in its discretion~~)) order payment of the bailee's reasonable costs and ((~~counsel~~)) attorneys' fees in any action under this subsection.

((~~(2)~~)) (b) A bailee ((~~who~~)) that, without a court order, delivers goods to a person claiming under a missing negotiable document of title is liable to any person injured thereby((~~, and~~)). If the delivery is not in good faith ((~~becomes~~)), the bailee is liable for conversion. Delivery in good faith is not conversion if ((~~made in accordance with a filed classification or tariff or, where no classification or tariff is filed, if~~)) the claimant posts security with the bailee in an amount at least double the value of the goods at the time of posting to indemnify any person injured by the delivery ((~~who~~)) which files a notice of claim within one year after the delivery.

Sec. 702. RCW 62A.7-602 and 1965 ex.s. c 157 s 7-602 are each amended to read as follows:

((~~ATTACHMENT OF~~)) JUDICIAL PROCESS AGAINST GOODS COVERED BY ((A)) NEGOTIABLE DOCUMENT OF TITLE. ((~~Except where the~~)) Unless a document of title was originally issued upon delivery of the goods by a person ((~~who had no~~)) that did not have power to dispose of them, ((no)) a lien ((~~attaches~~)) does not attach by virtue of any judicial process to goods in the possession of a bailee for which a negotiable document of title is outstanding unless possession or control of the document ((be)) is first surrendered to the bailee or ((~~its~~)) the document's negotiation is enjoined((~~, and~~)). The bailee ((~~shall~~)) may not be compelled to deliver the goods pursuant to process until possession or control of the document is surrendered to ((~~him or impounded by~~)) the bailee or to the court. ((~~One who purchases~~)) A purchaser of the document for value without notice of the process or injunction takes free of the lien imposed by judicial process.

Sec. 703. RCW 62A.7-603 and 1965 ex.s. c 157 s 7-603 are each amended to read as follows:

CONFLICTING CLAIMS; INTERPLEADER. If more than one person claims title to or possession of the goods, the bailee is excused from delivery until ((he)) the bailee has ((~~had~~)) a reasonable time to ascertain the validity of the adverse claims or to ((~~bring an action to compel all claimants to interplead and may compel such~~)) commence an action for interpleader. The bailee may assert an interpleader((,)) either in defending an action for nondelivery of the goods((,)) or by original action((~~, whichever is appropriate~~)).

PART VIII
AMENDMENTS TO UNIFORM COMMERCIAL CODE ARTICLE 2

Sec. 801. RCW 62A.2-103 and 2000 c 250 s 9A-803 are each amended to read as follows:

DEFINITIONS AND INDEX OF DEFINITIONS. (1) In this Article unless the context otherwise requires:

(a) "Buyer" means a person who buys or contracts to buy goods.

(b) (("Good faith" in the case of a merchant means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.)) [Reserved.]

(d) "Seller" means a person who sells or contracts to sell goods.

(2) Other definitions applying to this Article or to specified Parts thereof, and the sections in which they appear are:

	"Acceptance."	RCW 62A.2-606.
	"Banker's credit."	RCW 62A.2-325.
	"Between merchants."	RCW 62A.2-104.
	"Cancellation."	RCW 62A.2-106(4).
	"Commercial unit."	RCW 62A.2-105.
	"Confirmed credit."	RCW 62A.2-325.
	"Conforming to contract."	RCW 62A.2-106.
	"Contract for sale."	RCW 62A.2-106.
	"Cover."	RCW 62A.2-712.
	"Entrusting."	RCW 62A.2-403.
	"Financing agency."	RCW 62A.2-104.
	"Future goods."	RCW 62A.2-105.
	"Goods."	RCW 62A.2-105.
	"Identification."	RCW 62A.2-501.
	"Installment contract."	RCW 62A.2-612.
	"Letter of credit."	RCW 62A.2-325.
	"Lot."	RCW 62A.2-105.
	"Merchant."	RCW 62A.2-104.
	"Overseas."	RCW 62A.2-323.
	"Person in position of seller."	RCW 62A.2-707.
	"Present sale."	RCW 62A.2-106.
	"Sale."	RCW 62A.2-106.
	"Sale on approval."	RCW 62A.2-326.
	"Sale or return."	RCW 62A.2-326.
	"Termination."	RCW 62A.2-106.

(3) "Control" as provided in RCW 62A.7-106 and the following definitions in other articles apply to this Article:

	"Check."	RCW 62A.3-104.
	"Consignee."	RCW 62A.7-102.
	"Consignor."	RCW 62A.7-102.
	"Consumer goods."	RCW 62A.9A-102.
	"Dishonor."	RCW 62A.3-502.
	"Draft."	RCW 62A.3-104.

(4) In addition Article 1 contains general definitions and principles of construction and interpretation applicable throughout this Article.

Sec. 802. RCW 62A.2-104 and 1965 ex.s. c 157 s 2-104 are each amended to read as follows:

DEFINITIONS: "MERCHANT"; "BETWEEN MERCHANTS"; "FINANCING AGENCY."((.)) (1) "Merchant" means a person who deals in goods of the kind or otherwise by his or her occupation holds himself or herself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his or her employment of an agent or broker or other intermediary who by his or her occupation holds himself or herself out as having such knowledge or skill.

(2) "Financing agency" means a bank, finance company or other person who in the ordinary course of business makes advances against goods or documents of title or who by arrangement with either the seller or the buyer intervenes in ordinary course to make or collect payment due or claimed under the contract for sale, as by purchasing or paying the seller's draft or making advances against it or by merely taking it for collection whether or not documents of title accompany or are associated with the draft. "Financing agency" includes also a bank or other person who similarly intervenes between persons who are in the position of seller and buyer in respect to the goods (RCW 62A.2-707).

(3) "Between merchants" means in any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants.

Sec. 803. RCW 62A.2-202 and 1965 ex.s. c 157 s 2-202 are each amended to read as follows:

FINAL WRITTEN EXPRESSION: PAROL OR EXTRINSIC EVIDENCE. Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented:

(a) By course of performance, course of dealing, or usage of trade ((~~(RCW 62A.1-205) or by course of performance (RCW 62A.2-208)~~)) (RCW 62A.1-303); and

(b) By evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement.

Sec. 804. RCW 62A.2-310 and 1965 ex.s. c 157 s 2-310 are each amended to read as follows:

OPEN TIME FOR PAYMENT OR RUNNING OF CREDIT; AUTHORITY TO SHIP UNDER RESERVATION. Unless otherwise agreed:

(a) Payment is due at the time and place at which the buyer is to receive the goods even though the place of shipment is the place of delivery; and

(b) If the seller is authorized to send the goods he or she may ship them under reservation, and may tender the documents of title, but the buyer may inspect the goods after their arrival before payment is due unless such inspection is inconsistent with the terms of the contract (RCW 62A.2-513); and

(c) If delivery is authorized and made by way of documents of title otherwise than by subsection (b) of this section then payment is due regardless of where the goods are to be received (i) at the time and place at which the buyer is to receive delivery of the tangible documents ((~~regardless of where the goods are to be received~~)) or (ii) at the time the buyer is to receive delivery of the electronic documents and at the seller's place of business or if none, the seller's residence; and

(d) Where the seller is required or authorized to ship the goods on credit the credit period runs from the time of shipment but post-dating the invoice or delaying its dispatch will correspondingly delay the starting of the credit period.

Sec. 805. RCW 62A.2-323 and 1965 ex.s. c 157 s 2-323 are each amended to read as follows:

FORM OF BILL OF LADING REQUIRED IN OVERSEAS SHIPMENT; "OVERSEAS." (1) Where the contract contemplates overseas shipment and contains a term C.I.F. or C.&F. or F.O.B. vessel, the seller unless otherwise agreed must obtain a negotiable bill of lading stating that the goods have been loaded on board or, in the case of a term C.I.F. or C.&F., received for shipment.

(2) Where in a case within subsection (1) of this section a tangible bill of lading has been issued in a set of parts, unless otherwise agreed if the documents are not to be sent from abroad the buyer may demand tender of the full set; otherwise only one part of the bill of lading need be tendered. Even if the agreement expressly requires a full set:

(a) Due tender of a single part is acceptable within the provisions of this Article on cure of improper delivery (((~~subsection (1) of~~)) RCW 62A.2-508(1)); and

(b) Even though the full set is demanded, if the documents are sent from abroad the person tendering an incomplete set may nevertheless require payment upon furnishing an indemnity which the buyer in good faith deems adequate.

(3) A shipment by water or by air or a contract contemplating such shipment is "overseas" insofar as by usage of trade or agreement it is subject to the commercial, financing or shipping practices characteristic of international deep water commerce.

Sec. 806. RCW 62A.2-401 and 1965 ex.s. c 157 s 2-401 are each amended to read as follows:

PASSING OF TITLE; RESERVATION FOR SECURITY; LIMITED APPLICATION OF THIS SECTION. Each provision of this Article with regard to the rights, obligations and remedies of the seller, the buyer, purchasers or other third parties applies irrespective of title to the goods except where the provision refers to such title. Insofar as situations are not covered by the other provisions of this Article and matters concerning title become material the following rules apply:

(1) Title to goods cannot pass under a contract for sale prior to their identification to the contract (RCW 62A.2-501), and unless otherwise explicitly agreed the buyer acquires by their identification a special property as limited by this title. Any retention or reservation by the seller of the title (property) in goods shipped or delivered to the buyer is limited in effect to a reservation of a security interest. Subject to these provisions and to the provisions of the Article on Secured Transactions Article 9A, title to goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed on by the parties.

(2) Unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes his or her performance with reference to the physical delivery of the goods, despite any reservation of a security interest and even though a document of title is to be delivered at a different time or place; and in particular and despite any reservation of a security interest by the bill of lading:

(a) If the contract requires or authorizes the seller to send the goods to the buyer but does not require him or her to deliver them at destination, title passes to the buyer at the time and place of shipment; but

(b) If the contract requires delivery at destination, title passes on tender there.

(3) Unless otherwise explicitly agreed where delivery is to be made without moving the goods((,)):

(a) If the seller is to deliver a tangible document of title, title passes at the time when and the place where he or she delivers such documents and if the seller is to deliver an electronic document of title, title passes when the seller delivers the document; or

(b) If the goods are at the time of contracting already identified and no documents of title are to be delivered, title passes at the time and place of contracting.

(4) A rejection or other refusal by the buyer to receive or retain the goods, whether or not justified, or a justified revocation of acceptance revests title to the goods in the seller. Such revesting occurs by operation of law and is not a "sale."((.))

Sec. 807. RCW 62A.2-503 and 1965 ex.s. c 157 s 2-503 are each amended to read as follows:

MANNER OF SELLER'S TENDER OF DELIVERY. (1) Tender of delivery requires that the seller put and hold conforming goods at the buyer's disposition and give the buyer any notification reasonably necessary to enable him or her to take delivery. The manner, time and place for tender are determined by the agreement and this Article, and in particular:

(a) Tender must be at a reasonable hour, and if it is of goods they must be kept available for the period reasonably necessary to enable the buyer to take possession; but

(b) Unless otherwise agreed the buyer must furnish facilities reasonably suited to the receipt of the goods.

(2) Where the case is within the next section respecting shipment tender requires that the seller comply with its provisions.

(3) Where the seller is required to deliver at a particular destination tender requires that he or she comply with subsection (1) of this section and also in any appropriate case tender documents as described in subsections (4) and (5) of this section.

(4) Where goods are in the possession of a bailee and are to be delivered without being moved:

(a) Tender requires that the seller either tender a negotiable document of title covering such goods or procure acknowledgment by the bailee of the buyer's right to possession of the goods; but

(b) Tender to the buyer of a nonnegotiable document of title or of a ((~~written direction to~~)) record directing the bailee to deliver is sufficient tender unless the buyer seasonably objects, and except as otherwise provided in Article 9A of this title, receipt by the bailee of notification of the buyer's rights fixes those rights as against the bailee and all third persons; but risk of loss of the goods and of any failure by the bailee to honor the nonnegotiable document of title or to obey the direction remains on the seller until the buyer has had a reasonable time to present the document or direction, and a refusal by the bailee to honor the document or to obey the direction defeats the tender.

(5) Where the contract requires the seller to deliver documents:

(a) He or she must tender all such documents in correct form, except as provided in this Article with respect to bills of lading in a set (((~~subsection (2) of~~)) RCW 62A.2-323(2)); and

(b) Tender through customary banking channels is sufficient and dishonor of a draft accompanying or associated with the documents constitutes nonacceptance or rejection.

Sec. 808. RCW 62A.2-505 and 1965 ex.s. c 157 s 2-505 are each amended to read as follows:

SELLER'S SHIPMENT UNDER RESERVATION. (1) Where the seller has identified goods to the contract by or before shipment:

(a) His or her procurement of a negotiable bill of lading to his or her own order or otherwise reserves in him or her a security interest in the goods. His or her procurement of the bill to the order of a financing agency or of the buyer indicates in addition only the seller's expectation of transferring that interest to the person named.

(b) A nonnegotiable bill of lading to himself or herself or his or her nominee reserves possession of the goods as security but except in a case of conditional delivery (((~~subsection (2) of~~)) RCW 62A.2-507(2)) a nonnegotiable bill of lading naming the buyer as consignee reserves no security interest even though the seller retains possession or control of the bill of lading.

(2) When shipment by the seller with reservation of a security interest is in violation of the contract for sale it constitutes an improper contract for transportation within the preceding section but impairs neither the rights given to the buyer by shipment and identification of the goods to the contract nor the seller's powers as a holder of a negotiable document of title.

Sec. 809. RCW 62A.2-506 and 1965 ex.s. c 157 s 2-506 are each amended to read as follows:

RIGHTS OF FINANCING AGENCY. (1) A financing agency by paying or purchasing for value a draft which relates to a shipment of goods acquires to the extent of the payment or purchase and in addition to its own rights under the draft and any document of title securing it any rights of the shipper in the goods including the right to stop delivery and the shipper's right to have the draft honored by the buyer.

(2) The right to reimbursement of a financing agency which has in good faith honored or purchased the draft under commitment to or authority from the buyer is not impaired by subsequent discovery of defects with reference to any relevant document which was apparently regular ((~~on its face~~)).

Sec. 810. RCW 62A.2-509 and 1965 ex.s. c 157 s 2-509 are each amended to read as follows:

RISK OF LOSS IN THE ABSENCE OF BREACH. (1) Where the contract requires or authorizes the seller to ship the goods by carrier:

(a) If it does not require him or her to deliver them at a particular destination, the risk of loss passes to the buyer when the goods are duly delivered to the carrier even though the shipment is under reservation (RCW 62A.2-505); but

(b) If it does require him or her to deliver them at a particular destination and the goods are there duly tendered while in the possession of the carrier, the risk of loss passes to the buyer when the goods are there duly so tendered as to enable the buyer to take delivery.

(2) Where the goods are held by a bailee to be delivered without being moved, the risk of loss passes to the buyer:

(a) On his or her receipt of possession or control of a negotiable document of title covering the goods; or

(b) On acknowledgment by the bailee of the buyer's right to possession of the goods; or

(c) After his or her receipt of possession or control of a nonnegotiable document of title or other ((~~written~~)) direction to deliver in a record, as provided in ((~~subsection (4)(b) of~~)) RCW 62A.2- 503(4)(b).

(3) In any case not within subsection (1) or (2) of this section, the risk of loss passes to the buyer on his or her receipt of the goods if the seller is a merchant; otherwise the risk passes to the buyer on tender of delivery.

(4) The provisions of this section are subject to contrary agreement of the parties and to the provisions of this Article on sale on approval (RCW 62A.2-327) and on effect of breach on risk of loss (RCW 62A.2-510).

Sec. 811. RCW 62A.2-605 and 1965 ex.s. c 157 s 2-605 are each amended to read as follows:

WAIVER OF BUYER'S OBJECTIONS BY FAILURE TO PARTICULARIZE. (1) The buyer's failure to state in connection with rejection a particular defect which is ascertainable by reasonable inspection precludes him or her from relying on the unstated defect to justify rejection or to establish breach:

(a) Where the seller could have cured it if stated seasonably; or

(b) Between merchants when the seller has after rejection made a request in writing for a full and final written statement of all defects on which the buyer proposes to rely.

(2) Payment against documents made without reservation of rights precludes recovery of the payment for defects apparent ((~~on the face of~~)) in the documents.

Sec. 812. RCW 62A.2‑705 and 2011 c 336 s 823 are each amended to read as follows:

SELLER'S STOPPAGE OF DELIVERY IN TRANSIT OR OTHERWISE. (1) The seller may stop delivery of goods in the possession of a carrier or other bailee when he or she discovers the buyer to be insolvent (RCW 62A.2-702) and may stop delivery of carload, truckload, planeload((,)) or larger shipments of express or freight when the buyer repudiates or fails to make a payment due before delivery or if for any other reason the seller has a right to withhold or reclaim the goods.

(2) As against such buyer the seller may stop delivery until:

(a) Receipt of the goods by the buyer; or

(b) Acknowledgment to the buyer by any bailee of the goods except a carrier that the bailee holds the goods for the buyer; or

(d) Negotiation to the buyer of any negotiable document of title covering the goods.

(3)(a) To stop delivery the seller must so notify as to enable the bailee by reasonable diligence to prevent delivery of the goods.

(b) After such notification the bailee must hold and deliver the goods according to the directions of the seller but the seller is liable to the bailee for any ensuing charges or damages.

(c) If a negotiable document of title has been issued for goods the bailee is not obliged to obey a notification to stop until surrender of possession or control of the document.

(d) A carrier who has issued a nonnegotiable bill of lading is not obliged to obey a notification to stop received from a person other than the consignor.

PART IX
AMENDMENTS TO UNIFORM COMMERCIAL CODE ARTICLE 2A

Sec. 901. RCW 62A.2A-103 and 2000 c 250 s 9A-808 are each amended to read as follows:

DEFINITIONS AND INDEX OF DEFINITIONS. (1) In this Article unless the context otherwise requires:

(a) "Buyer in ordinary course of business" means a person who in good faith and without knowledge that the sale to him or her is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods buys in ordinary course from a person in the business of selling goods of that kind but does not include a pawnbroker. "Buying" may be for cash, or by exchange of other property, or on secured or unsecured credit, and includes ((~~receiving~~)) acquiring goods or documents of title under a preexisting contract for sale but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt.

(b) "Cancellation" occurs when either party puts an end to the lease contract for default by the other party.

(c) "Commercial unit" means such a unit of goods as by commercial usage is a single whole for purposes of lease and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article, as a machine, or a set of articles, as a suite of furniture or a line of machinery, or a quantity, as a gross or carload, or any other unit treated in use or in the relevant market as a single whole.

(d) "Conforming" goods or performance under a lease contract means goods or performance that are in accordance with the obligations under the lease contract.

(e) "Consumer lease" means a lease that a lessor regularly engaged in the business of leasing or selling makes to a lessee who is an individual who takes under the lease primarily for a personal, family, or household purpose, if the total payments to be made under the lease contract, excluding payments for options to renew or buy, do not exceed twenty-five thousand dollars.

(f) "Fault" means wrongful act, omission, breach, or default.

(g) "Finance lease" means a lease with respect to which:

(i) The lessor does not select, manufacture, or supply the goods;

(ii) The lessor acquires the goods or the right to possession and use of the goods in connection with the lease; and

(iii) Only in the case of a consumer lease, either:

(A) The lessee receives a copy of the contract by which the lessor acquired the goods or the right to possession and use of the goods before signing the lease contract;

(B) The lessee's approval of the contract by which the lessor acquired the goods or the right to possession and use of the goods is a condition to effectiveness of the lease contract; or

(C) The lessee, before signing the lease contract, receives an accurate and complete statement designating the promises and warranties, and any disclaimers of warranties, limitations or modifications of remedies, or liquidated damages, including those of a third party, such as the manufacturer of the goods, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods.

(h) "Goods" means all things that are movable at the time of identification to the lease contract, or are fixtures (RCW 62A.2A-309), but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles, or minerals or the like, including oil and gas, before extraction. The term also includes the unborn young of animals.

(i) "Installment lease contract" means a lease contract that authorizes or requires the delivery of goods in separate lots to be separately accepted, even though the lease contract contains a clause "each delivery is a separate lease" or its equivalent.

(j) "Lease" means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. Unless the context clearly indicates otherwise, the term includes a sublease.

(k) "Lease agreement" means the bargain, with respect to the lease, of the lessor and the lessee in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in this Article. Unless the context clearly indicates otherwise, the term includes a sublease agreement.

(l) "Lease contract" means the total legal obligation that results from the lease agreement as affected by this Article and any other applicable rules of law. Unless the context clearly indicates otherwise, the term includes a sublease contract.

(m) "Leasehold interest" means the interest of the lessor or the lessee under a lease contract.

(n) "Lessee" means a person who acquires the right to possession and use of goods under a lease. Unless the context clearly indicates otherwise, the term includes a sublessee.

(o) "Lessee in ordinary course of business" means a person who in good faith and without knowledge that the lease to him or her is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods, leases in ordinary course from a person in the business of selling or leasing goods of that kind((,)) but does not include a pawnbroker. "Leasing" may be for cash, or by exchange of other property, or on secured or unsecured credit and includes ((~~receiving~~)) acquiring goods or documents of title under a preexisting lease contract but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt.

(p) "Lessor" means a person who transfers the right to possession and use of goods under a lease. Unless the context clearly indicates otherwise, the term includes a sublessor.

(q) "Lessor's residual interest" means the lessor's interest in the goods after expiration, termination, or cancellation of the lease contract.

(r) "Lien" means a charge against or interest in goods to secure payment of a debt or performance of an obligation, but the term does not include a security interest.

(s) "Lot" means a parcel or a single article that is the subject matter of a separate lease or delivery, whether or not it is sufficient to perform the lease contract.

(t) "Merchant lessee" means a lessee that is a merchant with respect to goods of the kind subject to the lease.

(u) "Present value" means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain. The discount is determined by the interest rate specified by the parties if the rate was not manifestly unreasonable at the time the transaction was entered into; otherwise, the discount is determined by a commercially reasonable rate that takes into account the facts and circumstances of each case at the time the transaction was entered into.

(v) "Purchase" includes taking by sale, lease, mortgage, security interest, pledge, gift, or any other voluntary transaction creating an interest in goods.

(w) "Sublease" means a lease of goods the right to possession and use of which was acquired by the lessor as a lessee under an existing lease.

(x) "Supplier" means a person from whom a lessor buys or leases goods to be leased under a finance lease.

(y) "Supply contract" means a contract under which a lessor buys or leases goods to be leased.

(z) "Termination" occurs when either party pursuant to a power created by agreement or law puts an end to the lease contract otherwise than for default.

(2) Other definitions applying to this Article or to specified Parts thereof, and the sections in which they appear are:

	"Accessions."	RCW 62A.2A-310(1).
	"Construction mortgage."	RCW 62A.2A-309(1)(d).
	"Encumbrance."	RCW 62A.2A-309(1)(e).
	"Fixtures."	RCW 62A.2A-309(1)(a).
	"Fixture filing."	RCW 62A.2A-309(1)(b).
	"Purchase money lease."	RCW 62A.2A-309(1)(c).

(3) The following definitions in other articles apply to this Article:

	"Account."	RCW 62A.9A-102(a)(2).
	"Between merchants."	RCW 62A.2-104(3).
	"Buyer."	RCW 62A.2-103(1)(a).
	"Chattel paper."	RCW 62A.9A-102(a)(11).
	"Consumer goods."	RCW 62A.9A-102(a)(23).
	"Document."	RCW 62A.9A-102(a)(30).
	"Entrusting."	RCW 62A.2-403(3).
	"General intangible."	RCW 62A.9A-102(a)(42).
	((~~"Good faith."~~	~~RCW 62A.2-103(1)(b).~~))
	"Instrument."	RCW 62A.9A-102(a)(47).
	"Merchant."	RCW 62A.2-104(1).
	"Mortgage."	RCW 62A.9A-102(a)(55).
	"Pursuant to commitment."	RCW 62A.9A-102(a)(68).
	"Receipt."	RCW 62A.2-103(1)(c).
	"Sale."	RCW 62A.2-106(1).
	"Sale on approval."	RCW 62A.2-326.
	"Sale or return."	RCW 62A.2-326.
	"Seller."	RCW 62A.2-103(1)(d).

(4) In addition, Article ((~~62A.1 RCW~~)) 1 of this title contains general definitions and principles of construction and interpretation applicable throughout this Article.

Sec. 902. RCW 62A.2A‑103 and 2011 c 74 s 701 are each amended to read as follows: