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90_HB2474enr
810 ILCS 5/9-301 from Ch. 26, par. 9-301
Amends the Uniform Commercial Code to provide that an
unperfected security interest has priority over the rights of
a lien creditor if the lien creditor is a trustee or receiver
of a state or federally chartered financial institution and a
security interest is granted by the financial institution.
Effective immediately.
LRB9008845KDks
HB2474 Enrolled LRB9008845KDks
1 AN ACT to amend the Uniform Commercial Code by changing
2 Section 9-301.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Uniform Commercial Code is amended by
6 changing Section 9-301 as follows:
7 (810 ILCS 5/9-301) (from Ch. 26, par. 9-301)
8 Sec. 9-301. Persons Who Take Priority Over Unperfected
9 Security Interests; Rights of "Lien Creditor".
10 (1) Except as otherwise provided in subsection (2), an
11 unperfected security interest is subordinate to the rights of
12 (a) persons entitled to priority under Section
13 9-312;
14 (b) a person who becomes a lien creditor before the
15 security interest is perfected;
16 (c) in the case of goods, instruments, documents,
17 and chattel paper, a person who is not a secured party
18 and who is a transferee in bulk or other buyer not in
19 ordinary course of business or is a buyer of farm
20 products in ordinary course of business, to the extent
21 that he gives value and receives delivery of the
22 collateral without knowledge of the security interest and
23 before it is perfected;
24 (d) in the case of accounts, general intangibles,
25 and investment property, a person who is not a secured
26 party and who is a transferee to the extent that he gives
27 value without knowledge of the security interest and
28 before it is perfected;.
29 provided, however, that an unperfected security interest
30 shall take priority over the rights of a lien creditor if (i)
31 the lien creditor is a trustee or receiver of a state or
HB2474 Enrolled -2- LRB9008845KDks
1 federally chartered financial institution acting in
2 furtherance of its supervisory authority over the financial
3 institution and (ii) a security interest is granted by the
4 financial institution to secure a deposit of public funds
5 with the financial institution or a repurchase agreement with
6 the financial institution pursuant to the Government
7 Securities Act of 1986, as amended.
8 (2) If the secured party files with respect to a
9 purchase money security interest before or within 20 days
10 after the debtor receives possession of the collateral, he
11 takes priority over the rights of a transferee in bulk or of
12 a lien creditor which arise between the time the security
13 interest attaches and the time of filing.
14 (3) A "lien creditor" means a creditor who has acquired
15 a lien on the property involved by attachment, levy or the
16 like and includes an assignee for benefit of creditors from
17 the time of assignment, and a trustee in bankruptcy from the
18 date of the filing of the petition or a receiver in equity
19 from the time of appointment.
20 (4) A person who becomes a lien creditor while a
21 security interest is perfected takes subject to the security
22 interest only to the extent that it secures advances made
23 before he becomes a lien creditor or within 45 days
24 thereafter or made without knowledge of the lien or pursuant
25 to a commitment entered into without knowledge of the lien.
26 (Source: P.A. 89-364, eff. 1-1-96.)
27 Section 99. Effective date. This Act takes effect upon
28 becoming law.