SB2476 93RD GENERAL ASSEMBLY

LRB093 16191 RXD 41824 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2476

Introduced 2/3/2004, by Debbie DeFrancesco Halvorson

SYNOPSIS AS INTRODUCED:

810 ILCS 5/9-109

from Ch. 26, par. 9-109

Amends the Uniform Commercial Code. Provides that the Code applies to a transfer by a government or governmental subdivision or agency when the government or governmental subdivision or agency is the account debtor. Effective immediately.

A BILL FOR

AN ACT concerning the commercial code.

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 9-109 as follows:

(810 ILCS 5/9-109) (from Ch. 26, par. 9-109)

Sec. 9-109. Scope.

(a) General scope of Article. Except as otherwise provided in subsections (c) and (d), this Article applies to:

(1) a transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract;

(2) an agricultural lien;

(3) a sale of accounts, chattel paper, payment intangibles, or promissory notes;

(4) a consignment;

(5) a security interest arising under Section 2-401, 2-505, 2-711(3), or 2A-508(5), as provided in Section 9-110; and

(6) a security interest arising under Section 4-210 or 5-118.

(b) Security interest in secured obligation. The application of this Article to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this Article does not apply.

(c) Extent to which Article does not apply. This Article does not apply to the extent that:

(1) a statute, regulation, or treaty of the United States preempts this Article;

(2) another statute of this State expressly governs the creation, perfection, priority, or enforcement of a security interest created by this State or a governmental unit of this State;

(3) a statute of another State, a foreign country, or a governmental unit of another State or a foreign country, other than a statute generally applicable to security interests, expressly governs creation, perfection, priority, or enforcement of a security interest created by the State, country, or governmental unit;

(4) the rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under Section 5-114;

(5) this Article is in conflict with Section 205-410 of the Department of Agriculture Law of the Civil Administrative Code of Illinois or the Grain Code; or

(6) this Article is in conflict with Section 18-107 of the Public Utilities Act.

(d) Inapplicability of Article. This Article does not apply to:

(1) a landlord's lien;

(2) a lien, other than an agricultural lien, given by statute or other rule of law for services or materials, but Section 9-333 applies with respect to priority of the lien;

(3) an assignment of a claim for wages, salary, or other compensation of an employee;

(4) a sale of accounts, chattel paper, payment intangibles, or promissory notes as part of a sale of the business out of which they arose;

(5) an assignment of accounts, chattel paper, payment intangibles, or promissory notes which is for the purpose of collection only;

(6) an assignment of a right to payment under a contract to an assignee that is also obligated to perform under the contract;

(7) an assignment of a single account, payment intangible, or promissory note to an assignee in full or partial satisfaction of a preexisting indebtedness;

(8) a transfer of an interest in or an assignment of a claim under a policy of insurance, other than an assignment by or to a health-care provider of a health-care-insurance receivable and any subsequent assignment of the right to payment, but Sections 9-315 and 9-322 apply with respect to proceeds and priorities in proceeds;

(9) an assignment of a right represented by a judgment, other than a judgment taken on a right to payment that was collateral;

(10) a right of recoupment or set-off, but:

(A) Section 9-340 applies with respect to the effectiveness of rights of recoupment or set-off against deposit accounts; and

(B) Section 9-404 applies with respect to defenses or claims of an account debtor;

(11) the creation or transfer of an interest in or lien on real property, including a lease or rents thereunder, except to the extent that provision is made for:

(A) liens on real property in Sections 9-203 and 9-308;

(B) fixtures in Section 9-334;

(C) fixture filings in Sections 9-501, 9-502, 9-512, 9-516, and 9-519; and

(D) security agreements covering personal and real property in Section 9-604;

(12) an assignment of a claim arising in tort, other than a commercial tort claim, but Sections 9-315 and 9-322 apply with respect to proceeds and priorities in proceeds;

(13) a transfer by a government or governmental subdivision or agency except when the government or governmental subdivision or agency is the account debtor;

(14) a claim or a right to receive compensation for injuries or sickness as described in Section 104(a)(1) or (2) of Title 26 of the United States Code, as amended from time to time; or

(15) a claim or right to receive benefits under a special needs trust as described in Section 1396p(d)(4) of Title 42 of the United States Code, as amended from time to time.

(Source: P.A. 91-893, eff. 7-1-01; 92-819, eff. 8-21-02.)

Section 99. Effective date. This Act takes effect upon becoming law.