State of Illinois
90th General Assembly
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[ Engrossed ]

90_HB3472

      810 ILCS 5/9-105          from Ch. 26, par. 9-105
      810 ILCS 5/9-106          from Ch. 26, par. 9-106
      810 ILCS 5/9-302          from Ch. 26, par. 9-302
          Amends the Secured Transactions Article  of  the  Uniform
      Commercial  Code.    Provides that "deposit account" includes
      certain accounts maintained with a bank as bank is defined in
      the Article  on  bank  deposits  and  collections.    Defines
      "non-negotiable certificate of deposit" and "non-transferable
      certificate  of  deposit" and includes them in the definition
      of "instrument".    Defines  "uncertificated  certificate  of
      deposit"  as  an obligation of a bank to repay a sum of money
      represented only by a writing in the books  of  the  bank  or
      documentation given to a customer, and provides that a filing
      is  not  required  to  perfect  a  security  interest  in  an
      uncertificated  certificate  of deposit, but such interest is
      perfected when the security agreement is signed, or when  the
      issuer  acknowledges  and consents to notice of perfection by
      the secured party.  Effective immediately.
                                                     LRB9009411SMdv
                                               LRB9009411SMdv
 1        AN ACT to amend the Uniform Commercial Code  by  changing
 2    Sections 9-105, 9-106, and 9-302.
 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 Sections 9-105, 9-106, and 9-302 as follows:
 7        (810 ILCS 5/9-105) (from Ch. 26, par. 9-105)
 8        Sec. 9-105.  Definitions and index of definitions.
 9        (1)  In   this   Article  unless  the  context  otherwise
10    requires:
11             (a)  "Account  debtor"  means  the  person  who   is
12        obligated   on  an  account,  chattel  paper  or  general
13        intangible;
14             (b)  "Chattel paper" means  a  writing  or  writings
15        which  evidence both a monetary obligation and a security
16        interest in or a lease of specific goods, but  a  charter
17        or  other  contract involving the use or hire of a vessel
18        is not chattel paper. When  a  transaction  is  evidenced
19        both  by  such  a security agreement or a lease and by an
20        instrument or a  series  of  instruments,  the  group  of
21        writings taken together constitutes chattel paper;
22             (c)  "Collateral"  means  the  property subject to a
23        security interest,  and  includes  accounts  and  chattel
24        paper which have been sold;
25             (d)  "Debtor"  means  the person who owes payment or
26        other performance of the obligation secured,  whether  or
27        not he owns or has rights in the collateral, and includes
28        the seller of accounts or chattel paper. Where the debtor
29        and  the owner of the collateral are not the same person,
30        the term "debtor" means the owner of  the  collateral  in
31        any provision of the Article dealing with the collateral,
                            -2-                LRB9009411SMdv
 1        the obligor in any provision dealing with the obligation,
 2        and may include both where the context so requires;
 3             (e)  "Deposit   account"   means   a  demand,  time,
 4        savings, passbook or like account maintained with a bank,
 5        as defined in subsection (1) of Section 4-105 savings and
 6        loan association,  credit  union  or  like  organization,
 7        other  than  an  account  evidenced  by  a certificate of
 8        deposit;
 9             (f)  "Document" means document of title  as  defined
10        in  the general definitions of Article 1 (Section 1-201),
11        and a receipt of the kind described in subsection (2)  of
12        Section 7-201;
13             (g)  "Encumbrance"  includes  real  estate mortgages
14        and other liens on real estate and all  other  rights  in
15        real estate that are not ownership interests;
16             (h)  "Goods"  includes  all things which are movable
17        at the time the security interest attaches or  which  are
18        fixtures  (Section  9-313),  but  does not include money,
19        documents, instruments,  investment  property,  commodity
20        contracts,  accounts, chattel paper, general intangibles,
21        or minerals or the like (including oil  and  gas)  before
22        extraction.  "Goods"  also includes standing timber which
23        is to be cut and removed under a conveyance  or  contract
24        for sale, the unborn young of animals, and growing crops;
25             (i)  "Instrument"   means  a  negotiable  instrument
26        (defined   in   Section   3-104),   a    non-transferable
27        certificate  of  deposit, a non-negotiable certificate of
28        deposit, or any other writing which evidences a right  to
29        the  payment  of  money  and  is  not  itself  a security
30        agreement or lease and is of a type which is in  ordinary
31        course  of  business  transferred  by  delivery  with any
32        necessary indorsement or assignment.  The term  does  not
33        include investment property;
34             (j)  "Mortgage"  means a consensual interest created
                            -3-                LRB9009411SMdv
 1        by a real estate mortgage, a trust deed on  real  estate,
 2        or the like;
 3             (j-5)  "Non-negotiable certificate of deposit" means
 4        a  written  document  issued  by  a  bank,  as defined in
 5        subsection  (1)  of  Section  4-105,  that  contains   an
 6        acknowledgement  that a sum of money has been received by
 7        the issuer and a promise by the issuer to repay  the  sum
 8        of  money,  and is not a negotiable instrument as defined
 9        in Section 3-104;
10             (j-7)  "Non-transferable  certificate  of   deposit"
11        means  a  non-negotiable certificate of deposit which may
12        not be transferred except on the  books  of  the  issuer,
13        with  the  consent  of the issuer, or is subject to other
14        restrictions or conditions of the issuer on transfer;
15             (k)  An advance is made "pursuant to commitment"  if
16        the  secured  party has bound himself to make it, whether
17        or not a subsequent event of default or other  event  not
18        within  his  control has relieved or may relieve him from
19        his obligation;
20             (l)  "Security agreement" means an  agreement  which
21        creates or provides for a security interest;
22             (m)  "Secured party" means a lender, seller or other
23        person  in  whose  favor  there  is  a security interest,
24        including a person to whom accounts or chattel paper have
25        been sold. When the holders of obligations  issued  under
26        an  indenture  of trust, equipment trust agreement or the
27        like are represented by a trustee or  other  person,  the
28        representative is the secured party;
29             (n)  "Transmitting   utility"   means   any   person
30        primarily  engaged  in  the  railroad,  street railway or
31        trolley  bus  business,  the  electric   or   electronics
32        communications transmission business, the transmission of
33        goods  by pipeline, or the distribution, transmission, or
34        the production and transmission  of  electricity,  steam,
                            -4-                LRB9009411SMdv
 1        gas or water, or the provision of sewer service.
 2        (o)  "Uncertificated  certificate  of  deposit"  means an
 3    obligation of a bank, as defined in subsection (1) of Section
 4    4-105, to repay a sum of money it has received, that is not a
 5    deposit account and is not represented by a writing, but only
 6    by an entry on the books of the bank  and  any  documentation
 7    given to the customer by the bank.
 8        (2)  Other  definitions  applying to this Article and the
 9    Sections in which they appear are:
10        "Account". Section 9-106.
11        "Attach". Section 9-203.
12        "Commodity contract". Section 9-115.
13        "Commodity customer". Section 9-115.
14        "Commodity intermediary". Section 9-115.
15        "Construction mortgage". Section 9-313 (1).
16        "Consumer goods". Section 9-109 (1).
17        "Control". Section 9-115.
18        "Equipment". Section 9-109 (2).
19        "Farm products". Section 9-109 (3).
20        "Fixture". Section 9-313 (1).
21        "Fixture filing". Section 9-313 (1).
22        "General intangibles". Section 9-106.
23        "Inventory". Section 9-109 (4).
24        "Investment property". Section 9-115.
25        "Lien creditor". Section 9-301 (3).
26        "Proceeds". Section 9-306 (1).
27        "Purchase money security interest". Section 9-107.
28        "United States". Section 9-103.
29        (3)  The following definitions in other Articles apply to
30    this Article:
31        "Bank".  Section 4-105.
32        "Broker".  Section 8-102.
33        "Certificated security".  Section 8-102.
34        "Check". Section 3-104.
                            -5-                LRB9009411SMdv
 1        "Clearing corporation". Section 8-102.
 2        "Contract for sale". Section 2-106.
 3        "Control". Section 8-106.
 4        "Delivery". Section 8-301.
 5        "Entitlement holder". Section 8-102.
 6        "Financial asset". Section 8-102.
 7        "Holder in due course". Section 3-302.
 8        "Letter of credit". Section 5-102.
 9        "Note". Section 3-104.
10        "Proceeds of a letter of credit". Section 5-114(a).
11        "Sale". Section 2-106.
12        "Securities intermediary". Section 8-102.
13        "Security". Section 8-102.
14        "Security certificate". Section 8-102.
15        "Security entitlement". Section 8-102.
16        "Uncertificated security". Section 8-102.
17        (4)  In addition Article 1 contains  general  definitions
18    and  principles of construction and interpretation applicable
19    throughout this Article.
20    (Source: P.A. 89-364, eff. 1-1-96; 89-534, eff. 1-1-97.)
21        (810 ILCS 5/9-106) (from Ch. 26, par. 9-106)
22        Sec.     9-106.  Definitions:     "account";     "general
23    intangibles". "Account" means any right to payment for  goods
24    sold  or  leased  or  for  services  rendered  which  is  not
25    evidenced  by  an instrument or chattel paper, whether or not
26    it has been  earned  by  performance.  "General  intangibles"
27    means  any  personal  property  (including  things in action)
28    other  than  goods,  accounts,  chattel   paper,   documents,
29    instruments,  investment  property,  rights  to  proceeds  of
30    written  letters  of credit, deposit accounts, uncertificated
31    certificates of deposit, and money.  All  rights  to  payment
32    earned   or  unearned  under  a  charter  or  other  contract
33    involving the use or hire of a vessel and all rights incident
                            -6-                LRB9009411SMdv
 1    to the charter or contract are accounts.
 2    (Source: P.A. 89-364, eff. 1-1-96; 89-534, eff. 1-1-97.)
 3        (810 ILCS 5/9-302) (from Ch. 26, par. 9-302)
 4        Sec. 9-302. When filing is required to  perfect  security
 5    interest;  security  interests  to which filing provisions of
 6    this Article do not apply.
 7        (1) A financing statement must be filed  to  perfect  all
 8    security interests except the following:
 9             (a)  a security interest in collateral in possession
10        of the secured party under Section 9-305;
11             (b)  a  security  interest  temporarily perfected in
12        instruments,  certificated   securities,   or   documents
13        without delivery under Section 9-304 or in proceeds for a
14        20 day period under Section 9-306;
15             (c)  a security interest created by an assignment of
16        a beneficial interest in a trust or a decedent's estate;
17             (d)  a  purchase money security interest in consumer
18        goods;  but  filing  is  required  for  a  motor  vehicle
19        required to be registered; and fixture filing is required
20        for priority over conflicting interests  in  fixtures  to
21        the extent provided in Section 9-313;
22             (e)  an  assignment of accounts which does not alone
23        or in conjunction with  other  assignments  to  the  same
24        assignee  transfer  a significant part of the outstanding
25        accounts of the assignor;
26             (f)  a  security  interest  of  a  collecting   bank
27        (Section  4-208)  or  arising  under the Article on Sales
28        (see Section 9-113) or covered in subsection (3) of  this
29        Section;
30             (g)  an  assignment for the benefit of all creditors
31        of  the  transferor,  and  subsequent  transfers  by  the
32        assignee thereunder;
33             (h)  a  security  interest  in  investment  property
                            -7-                LRB9009411SMdv
 1        which is perfected without filing under Section 9-115  or
 2        Section 9-116;
 3             (i)  a security interest in a deposit account.  Such
 4        a security interest is perfected:
 5                  (i)  as  to  a  deposit account maintained with
 6             the secured party, when the  security  agreement  is
 7             executed;
 8                  (ii)  as  to  a deposit account maintained with
 9             any organization other than the secured party,  when
10             notice   thereof   is   given   in  writing  to  the
11             organization  with  whom  the  deposit  account   is
12             maintained  and  that  organization provides written
13             acknowledgement of and consent to the notice of  the
14             secured party.
15             (j)  a   security   interest  in  an  uncertificated
16        certificate of deposit.   Such  a  security  interest  is
17        perfected;
18                  (i)  as  to  an  uncertificated  certificate of
19             deposit  issued  by  the  secured  party,  when  the
20             security agreement is executed;
21                  (ii)  as to an  uncertificated  certificate  of
22             deposit  issued  by  any organization other than the
23             secured party,  when  notice  thereof  is  given  in
24             writing   to   the   issuer  of  the  uncertificated
25             certificate  of  deposit  and  the  issuer  provides
26             written acknowledgement of and consent to the notice
27             of the secured party.
28        (2)  If a secured  party  assigns  a  perfected  security
29    interest,  no  filing under this Article is required in order
30    to continue the perfected status  of  the  security  interest
31    against  creditors  of  and  transferees  from  the  original
32    debtor.
33        (3)  The   filing  of  a  financing  statement  otherwise
34    required by this Article is not  necessary  or  effective  to
                            -8-                LRB9009411SMdv
 1    perfect a security interest in property subject to
 2             (a)  a  statute or treaty of the United States which
 3        provides for a national or international registration  or
 4        a national or international certificate of title or which
 5        specifies a place of filing different from that specified
 6        in this Article for filing of the security interest; or
 7             (b)  the  following  statutes  of  this  State:  the
 8        Illinois  Vehicle  Code; the Boat Registration and Safety
 9        Act;  but  during  any  period  in  which  collateral  is
10        inventory held for  sale  by  a  person  who  is  in  the
11        business  of  selling  goods  of  that  kind,  the filing
12        provisions of this Article (Part 4) apply to  a  security
13        interest in that collateral created by him as debtor; or
14             (c)  a  certificate  of  title  statute  of  another
15        jurisdiction  under  the  law  of  which  indication of a
16        security interest on the certificate  is  required  as  a
17        condition   of  perfection  (subsection  (2)  of  Section
18        9-103).
19        (4)  Compliance with a statute  or  treaty  described  in
20    subsection  (3)  is  equivalent  to the filing of a financing
21    statement under this Article,  and  a  security  interest  in
22    property  subject  to  the statute or treaty can be perfected
23    only by compliance therewith except as  provided  in  Section
24    9-103 on multiple state transactions. Duration and renewal of
25    perfection  of  a  security  interest perfected by compliance
26    with the statute or treaty are governed by the provisions  of
27    the  statute  or  treaty;  in  other  respects  the  security
28    interest is subject to this Article.
29    (Source: P.A. 89-364, eff. 1-1-96.)
30        Section  99.  Effective date.  This Act takes effect upon
31    becoming law.

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