Public Act 90-0696 of the 90th General Assembly
Public Act 90-0696
HB2474 Enrolled LRB9008845KDks
AN ACT to amend the Uniform Commercial Code by changing
Section 9-301.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Uniform Commercial Code is amended by
changing Section 9-301 as follows:
(810 ILCS 5/9-301) (from Ch. 26, par. 9-301)
Sec. 9-301. Persons Who Take Priority Over Unperfected
Security Interests; Rights of "Lien Creditor".
(1) Except as otherwise provided in subsection (2), an
unperfected security interest is subordinate to the rights of
(a) persons entitled to priority under Section
9-312;
(b) a person who becomes a lien creditor before the
security interest is perfected;
(c) in the case of goods, instruments, documents,
and chattel paper, a person who is not a secured party
and who is a transferee in bulk or other buyer not in
ordinary course of business or is a buyer of farm
products in ordinary course of business, to the extent
that he gives value and receives delivery of the
collateral without knowledge of the security interest and
before it is perfected;
(d) in the case of accounts, general intangibles,
and investment property, a person who is not a secured
party and who is a transferee to the extent that he gives
value without knowledge of the security interest and
before it is perfected;.
provided, however, that an unperfected security interest
shall take priority over the rights of a lien creditor if (i)
the lien creditor is a trustee or receiver of a state or
federally chartered financial institution acting in
furtherance of its supervisory authority over the financial
institution and (ii) a security interest is granted by the
financial institution to secure a deposit of public funds
with the financial institution or a repurchase agreement with
the financial institution pursuant to the Government
Securities Act of 1986, as amended.
(2) If the secured party files with respect to a
purchase money security interest before or within 20 days
after the debtor receives possession of the collateral, he
takes priority over the rights of a transferee in bulk or of
a lien creditor which arise between the time the security
interest attaches and the time of filing.
(3) A "lien creditor" means a creditor who has acquired
a lien on the property involved by attachment, levy or the
like and includes an assignee for benefit of creditors from
the time of assignment, and a trustee in bankruptcy from the
date of the filing of the petition or a receiver in equity
from the time of appointment.
(4) A person who becomes a lien creditor while a
security interest is perfected takes subject to the security
interest only to the extent that it secures advances made
before he becomes a lien creditor or within 45 days
thereafter or made without knowledge of the lien or pursuant
to a commitment entered into without knowledge of the lien.
(Source: P.A. 89-364, eff. 1-1-96.)
Section 99. Effective date. This Act takes effect upon
becoming law.