Bill Text: IL SB3764 | 2011-2012 | 97th General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Amends the Uniform Commercial Code. Makes a technical change in a Section concerning the short title of the Documents of Title Article.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2012-08-17 - Public Act . . . . . . . . . 97-1034 [SB3764 Detail]

Download: Illinois-2011-SB3764-Amended.html

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Sen. Don Harmon

Filed: 3/2/2012

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AMENDMENT TO SENATE BILL 3764
AMENDMENT NO. ______. Amend Senate Bill 3764 by replacing
everything after the enacting clause with the following:
"Section 5. The Uniform Commercial Code is amended by
changing Sections 2A-103, 9-102, 9-105, 9-307, 9-311, 9-316,
9-317, 9-326, 9-406, 9-408, 9-502, 9-503, 9-507, 9-515, 9-516,
9-518, 9-521, 9-607, and 9-625 and by adding Part 8 to Article
9 as follows:
(810 ILCS 5/2A-103) (from Ch. 26, par. 2A-103)
Sec. 2A-103. 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

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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 acquiring goods or documents of title under a
pre-existing 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 and 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,

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do not exceed $40,000.
(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) one of the following occurs:
(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;
(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

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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; or
(D) if the lease is not a consumer lease, the
lessor, before the lessee signs the lease
contract, informs the lessee in writing (a) of the
identity of the person supplying the goods to the
lessor, unless the lessee has selected that person
and directed the lessor to acquire the goods or the
right to possession and use of the goods from that
person, (b) that the lessee is entitled under this
Article to the promises and warranties, including
those of any third party, 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, and (c) that the lessee may
communicate with the person supplying the goods to
the lessor and receive an accurate and complete
statement of those promises and warranties,
including any disclaimers and limitations of them
or of remedies.
(h) "Goods" means all things that are movable at the
time of identification to the lease contract, or are
fixtures (Section 2A-309), but the term does not include

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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

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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 acquiring goods or documents of title
under a pre-existing 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.

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(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.

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(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 and the
Sections in which they appear are:
"Accessions". Section 2A-310(1).
"Construction mortgage". Section 2A-309(1)(d).
"Encumbrance". Section 2A-309(1)(e).
"Fixtures". Section 2A-309(1)(a).
"Fixture filing". Section 2A-309(1)(b).
"Purchase money lease". Section 2A-309(1)(c).
(3) The following definitions in other Articles apply to
this Article:
"Account". Section 9-102(a)(2).
"Between merchants". Section 2-104(3).
"Buyer". Section 2-103(1)(a).
"Chattel paper". Section 9-102(a)(11).
"Consumer goods". Section 9-102(a)(23).
"Document". Section 9-102(a)(30).
"Entrusting". Section 2-403(3).
"General intangible". Section 9-102(a)(42).
"Good faith". Section 2-103(1)(b).
"Instrument". Section 9-102(a)(47).
"Merchant". Section 2-104(1).

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"Mortgage". Section 9-102(a)(55).
"Pursuant to commitment". Section 9-102(a)(69)
9-102(a)(68).
"Receipt". Section 2-103(1)(c).
"Sale". Section 2-106(1).
"Sale on approval". Section 2-326.
"Sale or return". Section 2-326.
"Seller". Section 2-103(1)(d).
(4) In addition, Article 1 contains general definitions and
principles of construction and interpretation applicable
throughout this Article.
(Source: P.A. 95-895, eff. 1-1-09.)
(810 ILCS 5/9-102) (from Ch. 26, par. 9-102)
Sec. 9-102. Definitions and index of definitions.
(a) Article 9 definitions. In this Article:
(1) "Accession" means goods that are physically united
with other goods in such a manner that the identity of the
original goods is not lost.
(2) "Account", except as used in "account for", means a
right to payment of a monetary obligation, whether or not
earned by performance, (i) for property that has been or is
to be sold, leased, licensed, assigned, or otherwise
disposed of, (ii) for services rendered or to be rendered,
(iii) for a policy of insurance issued or to be issued,
(iv) for a secondary obligation incurred or to be incurred,

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(v) for energy provided or to be provided, (vi) for the use
or hire of a vessel under a charter or other contract,
(vii) arising out of the use of a credit or charge card or
information contained on or for use with the card, or
(viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a
State, or person licensed or authorized to operate the game
by a State or governmental unit of a State. The term
includes health-care-insurance receivables. The term does
not include (i) rights to payment evidenced by chattel
paper or an instrument, (ii) commercial tort claims, (iii)
deposit accounts, (iv) investment property, (v)
letter-of-credit rights or letters of credit, or (vi)
rights to payment for money or funds advanced or sold,
other than rights arising out of the use of a credit or
charge card or information contained on or for use with the
card.
(3) "Account debtor" means a person obligated on an
account, chattel paper, or general intangible. The term
does not include persons obligated to pay a negotiable
instrument, even if the instrument constitutes part of
chattel paper.
(4) "Accounting", except as used in "accounting for",
means a record:
(A) authenticated by a secured party;
(B) indicating the aggregate unpaid secured

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obligations as of a date not more than 35 days earlier
or 35 days later than the date of the record; and
(C) identifying the components of the obligations
in reasonable detail.
(5) "Agricultural lien" means an interest, other than a
security interest, in farm products:
(A) which secures payment or performance of an
obligation for goods or services furnished in
connection with a debtor's farming operation;
(B) which is created by statute in favor of a
person that in the ordinary course of its business
furnished goods or services to a debtor in connection
with a debtor's farming operation; and
(C) whose effectiveness does not depend on the
person's possession of the personal property.
(6) "As-extracted collateral" means:
(A) oil, gas, or other minerals that are subject to
a security interest that:
(i) is created by a debtor having an interest
in the minerals before extraction; and
(ii) attaches to the minerals as extracted; or
(B) accounts arising out of the sale at the
wellhead or minehead of oil, gas, or other minerals in
which the debtor had an interest before extraction.
(7) "Authenticate" means:
(A) to sign; or

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(B) with present intent to adopt or accept a
record, to attach to or logically associate with the
record an electronic sound, symbol, or process to
execute or otherwise adopt a symbol, or encrypt or
similarly process a record in whole or in part, with
the present intent of the authenticating person to
identify the person and adopt or accept a record.
(8) "Bank" means an organization that is engaged in the
business of banking. The term includes savings banks,
savings and loan associations, credit unions, and trust
companies.
(9) "Cash proceeds" means proceeds that are money,
checks, deposit accounts, or the like.
(10) "Certificate of title" means a certificate of
title with respect to which a statute provides for the
security interest in question to be indicated on the
certificate as a condition or result of the security
interest's obtaining priority over the rights of a lien
creditor with respect to the collateral. The term includes
another record maintained as an alternative to a
certificate of title by the governmental unit that issues
certificates of title if a statute permits the security
interest in question to be indicated on the record as a
condition or result of the security interest's obtaining
priority over the rights of a lien creditor with respect to
the collateral.

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(11) "Chattel paper" means a record or records that
evidence both a monetary obligation and a security interest
in specific goods, a security interest in specific goods
and software used in the goods, a security interest in
specific goods and license of software used in the goods, a
lease of specific goods, or a lease of specified goods and
a license of software used in the goods. In this paragraph,
"monetary obligation" means a monetary obligation secured
by the goods or owed under a lease of the goods and
includes a monetary obligation with respect to software
used in the goods. The term does not include (i) charters
or other contracts involving the use or hire of a vessel or
(ii) records that evidence a right to payment arising out
of the use of a credit or charge card or information
contained on or for use with the card. If a transaction is
evidenced by records that include an instrument or series
of instruments, the group of records taken together
constitutes chattel paper.
(12) "Collateral" means the property subject to a
security interest or agricultural lien. The term includes:
(A) proceeds to which a security interest
attaches;
(B) accounts, chattel paper, payment intangibles,
and promissory notes that have been sold; and
(C) goods that are the subject of a consignment.
(13) "Commercial tort claim" means a claim arising in

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tort with respect to which:
(A) the claimant is an organization; or
(B) the claimant is an individual and the claim:
(i) arose in the course of the claimant's
business or profession; and
(ii) does not include damages arising out of
personal injury to or the death of an individual.
(14) "Commodity account" means an account maintained
by a commodity intermediary in which a commodity contract
is carried for a commodity customer.
(15) "Commodity contract" means a commodity futures
contract, an option on a commodity futures contract, a
commodity option, or another contract if the contract or
option is:
(A) traded on or subject to the rules of a board of
trade that has been designated as a contract market for
such a contract pursuant to federal commodities laws;
or
(B) traded on a foreign commodity board of trade,
exchange, or market, and is carried on the books of a
commodity intermediary for a commodity customer.
(16) "Commodity customer" means a person for which a
commodity intermediary carries a commodity contract on its
books.
(17) "Commodity intermediary" means a person that:
(A) is registered as a futures commission merchant

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under federal commodities law; or
(B) in the ordinary course of its business provides
clearance or settlement services for a board of trade
that has been designated as a contract market pursuant
to federal commodities law.
(18) "Communicate" means:
(A) to send a written or other tangible record;
(B) to transmit a record by any means agreed upon
by the persons sending and receiving the record; or
(C) in the case of transmission of a record to or
by a filing office, to transmit a record by any means
prescribed by filing-office rule.
(19) "Consignee" means a merchant to which goods are
delivered in a consignment.
(20) "Consignment" means a transaction, regardless of
its form, in which a person delivers goods to a merchant
for the purpose of sale and:
(A) the merchant:
(i) deals in goods of that kind under a name
other than the name of the person making delivery;
(ii) is not an auctioneer; and
(iii) is not generally known by its creditors
to be substantially engaged in selling the goods of
others;
(B) with respect to each delivery, the aggregate
value of the goods is $1,000 or more at the time of

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delivery;
(C) the goods are not consumer goods immediately
before delivery; and
(D) the transaction does not create a security
interest that secures an obligation.
(21) "Consignor" means a person that delivers goods to
a consignee in a consignment.
(22) "Consumer debtor" means a debtor in a consumer
transaction.
(23) "Consumer goods" means goods that are used or
bought for use primarily for personal, family, or household
purposes.
(24) "Consumer-goods transaction" means a consumer
transaction in which:
(A) an individual incurs an obligation primarily
for personal, family, or household purposes; and
(B) a security interest in consumer goods secures
the obligation.
(25) "Consumer obligor" means an obligor who is an
individual and who incurred the obligation as part of a
transaction entered into primarily for personal, family,
or household purposes.
(26) "Consumer transaction" means a transaction in
which (i) an individual incurs an obligation primarily for
personal, family, or household purposes, (ii) a security
interest secures the obligation, and (iii) the collateral

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is held or acquired primarily for personal, family, or
household purposes. The term includes consumer-goods
transactions.
(27) "Continuation statement" means an amendment of a
financing statement which:
(A) identifies, by its file number, the initial
financing statement to which it relates; and
(B) indicates that it is a continuation statement
for, or that it is filed to continue the effectiveness
of, the identified financing statement.
(28) "Debtor" means:
(A) a person having an interest, other than a
security interest or other lien, in the collateral,
whether or not the person is an obligor;
(B) a seller of accounts, chattel paper, payment
intangibles, or promissory notes; or
(C) a consignee.
(29) "Deposit account" means a demand, time, savings,
passbook, nonnegotiable certificates of deposit,
uncertificated certificates of deposit, nontransferrable
certificates of deposit, or similar account maintained
with a bank. The term does not include investment property
or accounts evidenced by an instrument.
(30) "Document" means a document of title or a receipt
of the type described in Section 7-201(b).
(31) "Electronic chattel paper" means chattel paper

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evidenced by a record or records consisting of information
stored in an electronic medium.
(32) "Encumbrance" means a right, other than an
ownership interest, in real property. The term includes
mortgages and other liens on real property.
(33) "Equipment" means goods other than inventory,
farm products, or consumer goods.
(34) "Farm products" means goods, other than standing
timber, with respect to which the debtor is engaged in a
farming operation and which are:
(A) crops grown, growing, or to be grown,
including:
(i) crops produced on trees, vines, and
bushes; and
(ii) aquatic goods produced in aquacultural
operations;
(B) livestock, born or unborn, including aquatic
goods produced in aquacultural operations;
(C) supplies used or produced in a farming
operation; or
(D) products of crops or livestock in their
unmanufactured states.
(35) "Farming operation" means raising, cultivating,
propagating, fattening, grazing, or any other farming,
livestock, or aquacultural operation.
(36) "File number" means the number assigned to an

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initial financing statement pursuant to Section 9-519(a).
(37) "Filing office" means an office designated in
Section 9-501 as the place to file a financing statement.
(38) "Filing-office rule" means a rule adopted
pursuant to Section 9-526.
(39) "Financing statement" means a record or records
composed of an initial financing statement and any filed
record relating to the initial financing statement.
(40) "Fixture filing" means the filing of a financing
statement covering goods that are or are to become fixtures
and satisfying Section 9-502(a) and (b). The term includes
the filing of a financing statement covering goods of a
transmitting utility which are or are to become fixtures.
(41) "Fixtures" means goods that have become so related
to particular real property that an interest in them arises
under real property law.
(42) "General intangible" means any personal property,
including things in action, other than accounts, chattel
paper, commercial tort claims, deposit accounts,
documents, goods, instruments, investment property,
letter-of-credit rights, letters of credit, money, and
oil, gas, or other minerals before extraction. The term
includes payment intangibles and software.
(43) "Good faith" means honesty in fact and the
observance of reasonable commercial standards of fair
dealing.

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(44) "Goods" means all things that are movable when a
security interest attaches. The term includes (i)
fixtures, (ii) standing timber that is to be cut and
removed under a conveyance or contract for sale, (iii) the
unborn young of animals, (iv) crops grown, growing, or to
be grown, even if the crops are produced on trees, vines,
or bushes, and (v) manufactured homes. The term also
includes a computer program embedded in goods and any
supporting information provided in connection with a
transaction relating to the program if (i) the program is
associated with the goods in such a manner that it
customarily is considered part of the goods, or (ii) by
becoming the owner of the goods, a person acquires a right
to use the program in connection with the goods. The term
does not include a computer program embedded in goods that
consist solely of the medium in which the program is
embedded. The term also does not include accounts, chattel
paper, commercial tort claims, deposit accounts,
documents, general intangibles, instruments, investment
property, letter-of-credit rights, letters of credit,
money, or oil, gas, or other minerals before extraction.
(45) "Governmental unit" means a subdivision, agency,
department, county, parish, municipality, or other unit of
the government of the United States, a State, or a foreign
country. The term includes an organization having a
separate corporate existence if the organization is

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eligible to issue debt on which interest is exempt from
income taxation under the laws of the United States.
(46) "Health-care-insurance receivable" means an
interest in or claim under a policy of insurance which is a
right to payment of a monetary obligation for health-care
goods or services provided.
(47) "Instrument" means a negotiable instrument or any
other writing that evidences a right to the payment of a
monetary obligation, is not itself a security agreement or
lease, and is of a type that in ordinary course of business
is transferred by delivery with any necessary indorsement
or assignment. The term does not include (i) investment
property, (ii) letters of credit, (iii) nonnegotiable
certificates of deposit, (iv) uncertificated certificates
of deposit, (v) nontransferrable certificates of deposit,
or (vi) writings that evidence a right to payment arising
out of the use of a credit or charge card or information
contained on or for use with the card.
(48) "Inventory" means goods, other than farm
products, which:
(A) are leased by a person as lessor;
(B) are held by a person for sale or lease or to be
furnished under a contract of service;
(C) are furnished by a person under a contract of
service; or
(D) consist of raw materials, work in process, or

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materials used or consumed in a business.
(49) "Investment property" means a security, whether
certificated or uncertificated, security entitlement,
securities account, commodity contract, or commodity
account.
(50) "Jurisdiction of organization", with respect to a
registered organization, means the jurisdiction under
whose law the organization is formed or organized.
(51) "Letter-of-credit right" means a right to payment
or performance under a letter of credit, whether or not the
beneficiary has demanded or is at the time entitled to
demand payment or performance. The term does not include
the right of a beneficiary to demand payment or performance
under a letter of credit.
(52) "Lien creditor" means:
(A) a creditor that has acquired a lien on the
property involved by attachment, levy, or the like;
(B) an assignee for benefit of creditors from the
time of assignment;
(C) a trustee in bankruptcy from the date of the
filing of the petition; or
(D) a receiver in equity from the time of
appointment.
(53) "Manufactured home" means a factory-assembled,
completely integrated structure designed for permanent
habitation, with a permanent chassis, and so constructed as

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to permit its transport, on wheels temporarily or
permanently attached to its frame, and is a movable or
portable unit that is (i) 8 body feet or more in width,
(ii) 40 body feet or more in length, and (iii) 320 or more
square feet, constructed to be towed on its own chassis
(comprised of frame and wheels) from the place of its
construction to the location, or subsequent locations, at
which it is installed and set up according to the
manufacturer's instructions and connected to utilities for
year-round occupancy for use as a permanent habitation, and
designed and situated so as to permit its occupancy as a
dwelling place for one or more persons. The term shall
include units containing parts that may be folded,
collapsed, or telescoped when being towed and that may be
expected to provide additional cubic capacity, and that are
designed to be joined into one integral unit capable of
being separated again into the components for repeated
towing. The term shall exclude campers and recreational
vehicles.
(54) "Manufactured-home transaction" means a secured
transaction:
(A) that creates a purchase-money security
interest in a manufactured home, other than a
manufactured home held as inventory; or
(B) in which a manufactured home, other than a
manufactured home held as inventory, is the primary

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collateral.
(55) "Mortgage" means a consensual interest in real
property, including fixtures, which secures payment or
performance of an obligation.
(56) "New debtor" means a person that becomes bound as
debtor under Section 9-203(d) by a security agreement
previously entered into by another person.
(57) "New value" means (i) money, (ii) money's worth in
property, services, or new credit, or (iii) release by a
transferee of an interest in property previously
transferred to the transferee. The term does not include an
obligation substituted for another obligation.
(58) "Noncash proceeds" means proceeds other than cash
proceeds.
(59) "Obligor" means a person that, with respect to an
obligation secured by a security interest in or an
agricultural lien on the collateral, (i) owes payment or
other performance of the obligation, (ii) has provided
property other than the collateral to secure payment or
other performance of the obligation, or (iii) is otherwise
accountable in whole or in part for payment or other
performance of the obligation. The term does not include
issuers or nominated persons under a letter of credit.
(60) "Original debtor", except as used in Section
9-310(c), means a person that, as debtor, entered into a
security agreement to which a new debtor has become bound

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under Section 9-203(d).
(61) "Payment intangible" means a general intangible
under which the account debtor's principal obligation is a
monetary obligation.
(62) "Person related to", with respect to an
individual, means:
(A) the spouse of the individual;
(B) a brother, brother-in-law, sister, or
sister-in-law of the individual;
(C) an ancestor or lineal descendant of the
individual or the individual's spouse; or
(D) any other relative, by blood or marriage, of
the individual or the individual's spouse who shares
the same home with the individual.
(63) "Person related to", with respect to an
organization, means:
(A) a person directly or indirectly controlling,
controlled by, or under common control with the
organization;
(B) an officer or director of, or a person
performing similar functions with respect to, the
organization;
(C) an officer or director of, or a person
performing similar functions with respect to, a person
described in subparagraph (A);
(D) the spouse of an individual described in

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subparagraph (A), (B), or (C); or
(E) an individual who is related by blood or
marriage to an individual described in subparagraph
(A), (B), (C), or (D) and shares the same home with the
individual.
(64) "Proceeds", except as used in Section 9-609(b),
means the following property:
(A) whatever is acquired upon the sale, lease,
license, exchange, or other disposition of collateral;
(B) whatever is collected on, or distributed on
account of, collateral;
(C) rights arising out of collateral;
(D) to the extent of the value of collateral,
claims arising out of the loss, nonconformity, or
interference with the use of, defects or infringement
of rights in, or damage to, the collateral; or
(E) to the extent of the value of collateral and to
the extent payable to the debtor or the secured party,
insurance payable by reason of the loss or
nonconformity of, defects or infringement of rights
in, or damage to, the collateral.
(65) "Promissory note" means an instrument that
evidences a promise to pay a monetary obligation, does not
evidence an order to pay, and does not contain an
acknowledgment by a bank that the bank has received for
deposit a sum of money or funds.

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(66) "Proposal" means a record authenticated by a
secured party which includes the terms on which the secured
party is willing to accept collateral in full or partial
satisfaction of the obligation it secures pursuant to
Sections 9-620, 9-621, and 9-622.
(67) "Public-finance transaction" means a secured
transaction in connection with which:
(A) debt securities are issued;
(B) all or a portion of the securities issued have
an initial stated maturity of at least 20 years; and
(C) the debtor, obligor, secured party, account
debtor or other person obligated on collateral,
assignor or assignee of a secured obligation, or
assignor or assignee of a security interest is a State
or a governmental unit of a State.
(68) "Public organic record" means a record that is
available to the public for inspection and is:
(A) a record consisting of the record initially
filed with or issued by a State or the United States to
form or organize an organization and any record filed
with or issued by the State or the United States which
amends or restates the initial record;
(B) an organic record of a business trust
consisting of the record initially filed with a State
and any record filed with the State which amends or
restates the initial record, if a statute of the State

09700SB3764sam001 - 28 - LRB097 19386 JLS 67033 a
governing business trusts requires that the record be
filed with the State; or
(C) a record consisting of legislation enacted by
the legislature of a State or the Congress of the
United States which forms or organizes an
organization, any record amending the legislation, and
any record filed with or issued by the State or the
United States which amends or restates the name of the
organization.
(69) (68) "Pursuant to commitment", with respect to an
advance made or other value given by a secured party, means
pursuant to the secured party's obligation, whether or not
a subsequent event of default or other event not within the
secured party's control has relieved or may relieve the
secured party from its obligation.
(70) (69) "Record", except as used in "for record", "of
record", "record or legal title", and "record owner", means
information that is inscribed on a tangible medium or which
is stored in an electronic or other medium and is
retrievable in perceivable form.
(71) (70) "Registered organization" means an
organization formed or organized solely under the law of a
single State or the United States by the filing of a public
organic record with, the issuance of a public organic
record by, or the enactment of legislation by the State or
the United States. The term includes a business trust that

09700SB3764sam001 - 29 - LRB097 19386 JLS 67033 a
is formed or organized under the law of a single State if a
statute of the State governing business trusts requires
that the business trust's organic record be filed with the
State and as to which the State or the United States must
maintain a public record showing the organization to have
been organized.
(72) (71) "Secondary obligor" means an obligor to the
extent that:
(A) the obligor's obligation is secondary; or
(B) the obligor has a right of recourse with
respect to an obligation secured by collateral against
the debtor, another obligor, or property of either.
(73) (72) "Secured party" means:
(A) a person in whose favor a security interest is
created or provided for under a security agreement,
whether or not any obligation to be secured is
outstanding;
(B) a person that holds an agricultural lien;
(C) a consignor;
(D) a person to which accounts, chattel paper,
payment intangibles, or promissory notes have been
sold;
(E) a trustee, indenture trustee, agent,
collateral agent, or other representative in whose
favor a security interest or agricultural lien is
created or provided for; or

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(F) a person that holds a security interest arising
under Section 2-401, 2-505, 2-711(3), 2A-508(5),
4-210, or 5-118.
(74) (73) "Security agreement" means an agreement that
creates or provides for a security interest.
(75) (74) "Send", in connection with a record or
notification, means:
(A) to deposit in the mail, deliver for
transmission, or transmit by any other usual means of
communication, with postage or cost of transmission
provided for, addressed to any address reasonable
under the circumstances; or
(B) to cause the record or notification to be
received within the time that it would have been
received if properly sent under subparagraph (A).
(76) (75) "Software" means a computer program and any
supporting information provided in connection with a
transaction relating to the program. The term does not
include a computer program that is included in the
definition of goods.
(77) (76) "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.
(78) (77) "Supporting obligation" means a
letter-of-credit right or secondary obligation that

09700SB3764sam001 - 31 - LRB097 19386 JLS 67033 a
supports the payment or performance of an account, chattel
paper, a document, a general intangible, an instrument, or
investment property.
(79) (78) "Tangible chattel paper" means chattel paper
evidenced by a record or records consisting of information
that is inscribed on a tangible medium.
(80) (79) "Termination statement" means an amendment
of a financing statement which:
(A) identifies, by its file number, the initial
financing statement to which it relates; and
(B) indicates either that it is a termination
statement or that the identified financing statement
is no longer effective.
(81) (80) "Transmitting utility" means a person
primarily engaged in the business of:
(A) operating a railroad, subway, street railway,
or trolley bus;
(B) transmitting communications electrically,
electromagnetically, or by light;
(C) transmitting goods by pipeline or sewer; or
(D) transmitting or producing and transmitting
electricity, steam, gas, or water.
(b) Definitions in other Articles. "Control" as provided in
Section 7-106 and the following definitions in other Articles
apply to this Article:
"Applicant". Section 5-102.

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"Beneficiary". Section 5-102.
"Broker". Section 8-102.
"Certificated security". Section 8-102.
"Check". Section 3-104.
"Clearing corporation". Section 8-102.
"Contract for sale". Section 2-106.
"Customer". Section 4-104.
"Entitlement holder". Section 8-102.
"Financial asset". Section 8-102.
"Holder in due course". Section 3-302.
"Issuer" (with respect to a letter of credit or
letter-of-credit right). Section 5-102.
"Issuer" (with respect to a security). Section 8-201.
"Issuer" (with respect to documents of title). Section
7-102.
"Lease". Section 2A-103.
"Lease agreement". Section 2A-103.
"Lease contract". Section 2A-103.
"Leasehold interest". Section 2A-103.
"Lessee". Section 2A-103.
"Lessee in ordinary course of business". Section 2A-103.
"Lessor". Section 2A-103.
"Lessor's residual interest". Section 2A-103.
"Letter of credit". Section 5-102.
"Merchant". Section 2-104.
"Negotiable instrument". Section 3-104.

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"Nominated person". Section 5-102.
"Note". Section 3-104.
"Proceeds of a letter of credit". Section 5-114.
"Prove". Section 3-103.
"Sale". Section 2-106.
"Securities account". Section 8-501.
"Securities intermediary". Section 8-102.
"Security". Section 8-102.
"Security certificate". Section 8-102.
"Security entitlement". Section 8-102.
"Uncertificated security". Section 8-102.
(c) Article 1 definitions and principles. Article 1
contains general definitions and principles of construction
and interpretation applicable throughout this Article.
(Source: P.A. 95-895, eff. 1-1-09; 96-1477, eff. 1-1-11.)
(810 ILCS 5/9-105) (from Ch. 26, par. 9-105)
Sec. 9-105. Control of electronic chattel paper.
(a) A secured party has control of electronic chattel paper
if a system employed for evidencing the transfer of interests
in the chattel paper reliably establishes the secured party as
the person to which the chattel paper was assigned.
(b) A system satisfies subsection (a) if the record or
records comprising the chattel paper are created, stored, and
assigned in such a manner that:
(1) a single authoritative copy of the record or

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records exists which is unique, identifiable and, except as
otherwise provided in paragraphs (4), (5), and (6),
unalterable;
(2) the authoritative copy identifies the secured
party as the assignee of the record or records;
(3) the authoritative copy is communicated to and
maintained by the secured party or its designated
custodian;
(4) copies or amendments revisions that add or change
an identified assignee of the authoritative copy can be
made only with the consent participation of the secured
party;
(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 revision of the authoritative copy is
readily identifiable as an authorized or unauthorized
revision.
(Source: P.A. 90-665, eff. 7-30-98; 91-893, eff. 7-1-01.)
(810 ILCS 5/9-307) (from Ch. 26, par. 9-307)
Sec. 9-307. Location of debtor.
(a) "Place of business." In this Section, "place of
business" means a place where a debtor conducts its affairs.
(b) Debtor's location: general rules. Except as otherwise
provided in this Section, the following rules determine a

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debtor's location:
(1) A debtor who is an individual is located at the
individual's principal residence.
(2) A debtor that is an organization and has only one
place of business is located at its place of business.
(3) A debtor that is an organization and has more than
one place of business is located at its chief executive
office.
(c) Limitation of applicability of subsection (b).
Subsection (b) applies only if a debtor's residence, place of
business, or chief executive office, as applicable, is located
in a jurisdiction whose law generally requires information
concerning the existence of a nonpossessory security interest
to be made generally available in a filing, recording, or
registration system as a condition or result of the security
interest's obtaining priority over the rights of a lien
creditor with respect to the collateral. If subsection (b) does
not apply, the debtor is located in the District of Columbia.
(d) Continuation of location: cessation of existence, etc.
A person that ceases to exist, have a residence, or have a
place of business continues to be located in the jurisdiction
specified by subsections (b) and (c).
(e) Location of registered organization organized under
State law. A registered organization that is organized under
the law of a State is located in that State.
(f) Location of registered organization organized under

09700SB3764sam001 - 36 - LRB097 19386 JLS 67033 a
federal law; bank branches and agencies. Except as otherwise
provided in subsection (i), a registered organization that is
organized under the law of the United States and a branch or
agency of a bank that is not organized under the law of the
United States or a State are located:
(1) in the State that the law of the United States
designates, if the law designates a State of location;
(2) in the State that the registered organization,
branch, or agency designates, if the law of the United
States authorizes the registered organization, branch, or
agency to designate its State of location, including by
designating its main office, home office, or other
comparable office; or
(3) in the District of Columbia, if neither paragraph
(1) nor paragraph (2) applies.
(g) Continuation of location: change in status of
registered organization. A registered organization continues
to be located in the jurisdiction specified by subsection (e)
or (f) notwithstanding:
(1) the suspension, revocation, forfeiture, or lapse
of the registered organization's status as such in its
jurisdiction of organization; or
(2) the dissolution, winding up, or cancellation of the
existence of the registered organization.
(h) Location of United States. The United States is located
in the District of Columbia.

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(i) Location of foreign bank branch or agency if licensed
in only one State. A branch or agency of a bank that is not
organized under the law of the United States or a State is
located in the State in which the branch or agency is licensed,
if all branches and agencies of the bank are licensed in only
one State.
(j) Location of foreign air carrier. A foreign air carrier
under the Federal Aviation Act of 1958, as amended, is located
at the designated office of the agent upon which service of
process may be made on behalf of the carrier.
(k) Section applies only to this Part. This Section applies
only for purposes of this Part.
(Source: P.A. 91-357, eff. 7-29-99; 91-893, eff. 7-1-01.)
(810 ILCS 5/9-311) (from Ch. 26, par. 9-311)
Sec. 9-311. Perfection of security interests in property
subject to certain statutes, regulations, and treaties.
(a) Security interest subject to other law. Except as
otherwise provided in subsection (d), the filing of a financing
statement is not necessary or effective to perfect a security
interest in property subject to:
(1) a statute, regulation, or treaty of the United
States whose requirements for a security interest's
obtaining priority over the rights of a lien creditor with
respect to the property preempt Section 9-310(a);
(2) the Illinois Vehicle Code or the Boat Registration

09700SB3764sam001 - 38 - LRB097 19386 JLS 67033 a
and Safety Act; or
(3) a certificate-of-title statute of another
jurisdiction which provides for a security interest to be
indicated on a the certificate of title as a condition or
result of the security interest's obtaining priority over
the rights of a lien creditor with respect to the property.
(b) Compliance with other law. Compliance with the
requirements of a statute, regulation, or treaty described in
subsection (a) for obtaining priority over the rights of a lien
creditor is equivalent to the filing of a financing statement
under this Article. Except as otherwise provided in subsection
(d) and Sections 9-313 and 9-316(d) and (e) for goods covered
by a certificate of title, a security interest in property
subject to a statute, regulation, or treaty described in
subsection (a) may be perfected only by compliance with those
requirements, and a security interest so perfected remains
perfected notwithstanding a change in the use or transfer of
possession of the collateral.
(c) Duration and renewal of perfection. Except as otherwise
provided in subsection (d) and Section 9-316(d) and (e),
duration and renewal of perfection of a security interest
perfected by compliance with the requirements prescribed by a
statute, regulation, or treaty described in subsection (a) are
governed by the statute, regulation, or treaty. In other
respects, the security interest is subject to this Article.
(d) Inapplicability to certain inventory. During any

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period in which collateral subject to a statute specified in
subsection (a)(2) is inventory held for sale or lease by a
person or leased by that person as lessor and that person is in
the business of selling or leasing goods of that kind, this
Section does not apply to a security interest in that
collateral created by that person as debtor.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/9-316) (from Ch. 26, par. 9-316)
Sec. 9-316. Effect of Continued perfection of security
interest following change in governing law.
(a) General rule: effect on perfection of change in
governing law. A security interest perfected pursuant to the
law of the jurisdiction designated in Section 9-301(1) or
9-305(c) remains perfected until the earliest of:
(1) the time perfection would have ceased under the law
of that jurisdiction;
(2) the expiration of four months after a change of the
debtor's location to another jurisdiction; or
(3) the expiration of one year after a transfer of
collateral to a person that thereby becomes a debtor and is
located in another jurisdiction.
(b) Security interest perfected or unperfected under law of
new jurisdiction. If a security interest described in
subsection (a) becomes perfected under the law of the other
jurisdiction before the earliest time or event described in

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that subsection, it remains perfected thereafter. If the
security interest does not become perfected under the law of
the other jurisdiction before the earliest time or event, it
becomes unperfected and is deemed never to have been perfected
as against a purchaser of the collateral for value.
(c) Possessory security interest in collateral moved to new
jurisdiction. A possessory security interest in collateral,
other than goods covered by a certificate of title and
as-extracted collateral consisting of goods, remains
continuously perfected if:
(1) the collateral is located in one jurisdiction and
subject to a security interest perfected under the law of
that jurisdiction;
(2) thereafter the collateral is brought into another
jurisdiction; and
(3) upon entry into the other jurisdiction, the
security interest is perfected under the law of the other
jurisdiction.
(d) Goods covered by certificate of title from this State.
Except as otherwise provided in subsection (e), a security
interest in goods covered by a certificate of title which is
perfected by any method under the law of another jurisdiction
when the goods become covered by a certificate of title from
this State remains perfected until the security interest would
have become unperfected under the law of the other jurisdiction
had the goods not become so covered.

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(e) When subsection (d) security interest becomes
unperfected against purchasers. A security interest described
in subsection (d) becomes unperfected as against a purchaser of
the goods for value and is deemed never to have been perfected
as against a purchaser of the goods for value if the applicable
requirements for perfection under Section 9-311(b) or 9-313 are
not satisfied before the earlier of:
(1) the time the security interest would have become
unperfected under the law of the other jurisdiction had the
goods not become covered by a certificate of title from
this State; or
(2) the expiration of four months after the goods had
become so covered.
(f) Change in jurisdiction of bank, issuer, nominated
person, securities intermediary, or commodity intermediary. A
security interest in deposit accounts, letter-of-credit
rights, or investment property which is perfected under the law
of the bank's jurisdiction, the issuer's jurisdiction, a
nominated person's jurisdiction, the securities intermediary's
jurisdiction, or the commodity intermediary's jurisdiction, as
applicable, remains perfected until the earlier of:
(1) the time the security interest would have become
unperfected under the law of that jurisdiction; or
(2) the expiration of four months after a change of the
applicable jurisdiction to another jurisdiction.
(g) Subsection (f) security interest perfected or

09700SB3764sam001 - 42 - LRB097 19386 JLS 67033 a
unperfected under law of new jurisdiction. If a security
interest described in subsection (f) becomes perfected under
the law of the other jurisdiction before the earlier of the
time or the end of the period described in that subsection, it
remains perfected thereafter. If the security interest does not
become perfected under the law of the other jurisdiction before
the earlier of that time or the end of that period, it becomes
unperfected and is deemed never to have been perfected as
against a purchaser of the collateral for value.
(h) Effect on filed financing statement of change in
governing law. The following rules apply to collateral to which
a security interest attaches within four months after the
debtor changes its location to another jurisdiction:
(1) A financing statement filed before the change
pursuant to the law of the jurisdiction designated in
Section 9-301(1) or 9-305(c) is effective to perfect a
security interest in the collateral if the financing
statement would have been effective to perfect a security
interest in the collateral had the debtor not changed its
location.
(2) If a security interest perfected by a financing
statement that is effective under paragraph (1) becomes
perfected under the law of the other jurisdiction before
the earlier of the time the financing statement would have
become ineffective under the law of the jurisdiction
designated in Section 9-301(1) or 9-305(c) or the

09700SB3764sam001 - 43 - LRB097 19386 JLS 67033 a
expiration of the four-month period, it remains perfected
thereafter. If the security interest does not become
perfected under the law of the other jurisdiction before
the earlier time or event, it becomes unperfected and is
deemed never to have been perfected as against a purchaser
of the collateral for value.
(i) Effect of change in governing law on financing
statement filed against original debtor. If a financing
statement naming an original debtor is filed pursuant to the
law of the jurisdiction designated in Section 9-301(1) or
9-305(c) and the new debtor is located in another jurisdiction,
the following rules apply:
(1) The financing statement is effective to perfect a
security interest in collateral acquired by the new debtor
before, and within four months after, the new debtor
becomes bound under Section 9-203(d), if the financing
statement would have been effective to perfect a security
interest in the collateral had the collateral been acquired
by the original debtor.
(2) A security interest perfected by the financing
statement and which becomes perfected under the law of the
other jurisdiction before the earlier of the time the
financing statement would have become ineffective under
the law of the jurisdiction designated in Section 9-301(1)
or 9-305(c) or the expiration of the four-month period
remains perfected thereafter. A security interest that is

09700SB3764sam001 - 44 - LRB097 19386 JLS 67033 a
perfected by the financing statement but which does not
become perfected under the law of the other jurisdiction
before the earlier time or event becomes unperfected and is
deemed never to have been perfected as against a purchaser
of the collateral for value.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/9-317) (from Ch. 26, par. 9-317)
Sec. 9-317. Interests that take priority over or take free
of security interest or agricultural lien.
(a) Conflicting security interests and rights of lien
creditors. A security interest or agricultural lien is
subordinate to the rights of:
(1) a person entitled to priority under Section 9-322;
and
(2) except as otherwise provided in subsection (e) or
(f), a person that becomes a lien creditor before the
earlier of the time:
(A) the security interest or agricultural lien is
perfected; or
(B) one of the conditions specified in Section
9-203(b)(3) is met and a financing statement covering
the collateral is filed.
(b) Buyers that receive delivery. Except as otherwise
provided in subsection (e), a buyer, other than a secured
party, of tangible chattel paper, tangible documents, goods,

09700SB3764sam001 - 45 - LRB097 19386 JLS 67033 a
instruments, or a certificated security security certificate
takes free of a security interest or agricultural lien if the
buyer gives value and receives delivery of the collateral
without knowledge of the security interest or agricultural lien
and before it is perfected.
(c) Lessees that receive delivery. Except as otherwise
provided in subsection (e), a lessee of goods takes free of a
security interest or agricultural lien if the lessee gives
value and receives delivery of the collateral without knowledge
of the security interest or agricultural lien and before it is
perfected.
(d) Licensees and buyers of certain collateral. A licensee
of a general intangible or a buyer, other than a secured party,
of collateral accounts, electronic chattel paper, electronic
documents, general intangibles, or investment property other
than tangible chattel paper, tangible documents, goods,
instruments, or a certificated security takes free of a
security interest if the licensee or buyer gives value without
knowledge of the security interest and before it is perfected.
(e) Purchase-money security interest. Except as otherwise
provided in Sections 9-320 and 9-321, if a person files a
financing statement with respect to a purchase-money security
interest before or within 20 days after the debtor receives
delivery of the collateral, the security interest takes
priority over the rights of a buyer, lessee, or lien creditor
which arise between the time the security interest attaches and

09700SB3764sam001 - 46 - LRB097 19386 JLS 67033 a
the time of filing.
(f) Public deposits. 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 bank or acting
in furtherance of its supervisory authority over such bank and
(ii) a security interest is granted by the bank to secure a
deposit of public funds with the bank or a repurchase agreement
with the bank pursuant to the Government Securities Act of
1986, as amended.
(Source: P.A. 95-895, eff. 1-1-09.)
(810 ILCS 5/9-326)
Sec. 9-326. Priority of security interests created by new
debtor.
(a) Subordination of security interest created by new
debtor. Subject to subsection (b), a security interest that is
created by a new debtor in collateral in which the new debtor
has or acquires rights and is perfected solely by a filed
financing statement that would be ineffective to perfect the
security interest but for the application of Section
9-316(i)(1) or 9-508 is effective solely under Section 9-508 in
collateral in which a new debtor has or acquires rights is
subordinate to a security interest in the same collateral which
is perfected other than by such a filed financing statement
that is effective solely under Section 9-508.
(b) Priority under other provisions; multiple original

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debtors. The other provisions of this Part determine the
priority among conflicting security interests in the same
collateral perfected by filed financing statements that are
effective solely under Section 9-508. However, if the security
agreements to which a new debtor became bound as debtor were
not entered into by the same original debtor, the conflicting
security interests rank according to priority in time of the
new debtor's having become bound.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/9-406) (from Ch. 26, par. 9-406)
Sec. 9-406. Discharge of account debtor; notification of
assignment; identification and proof of assignment;
restrictions on assignment of accounts, chattel paper, payment
intangibles, and promissory notes ineffective.
(a) Discharge of account debtor; effect of notification.
Subject to subsections (b) through (i), an account debtor on an
account, chattel paper, or a payment intangible may discharge
its obligation by paying the assignor until, but not after, the
account debtor receives a notification, authenticated by the
assignor or the assignee, that the amount due or to become due
has been assigned and that payment is to be made to the
assignee. After receipt of the notification, the account debtor
may discharge its obligation by paying the assignee and may not
discharge the obligation by paying the assignor.
(b) When notification ineffective. Subject to subsection

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(h), notification is ineffective under subsection (a):
(1) if it does not reasonably identify the rights
assigned;
(2) to the extent that an agreement between an account
debtor and a seller of a payment intangible limits the
account debtor's duty to pay a person other than the seller
and the limitation is effective under law other than this
Article; or
(3) at the option of an account debtor, if the
notification notifies the account debtor to make less than
the full amount of any installment or other periodic
payment to the assignee, even if:
(A) only a portion of the account, chattel paper,
or payment intangible has been assigned to that
assignee;
(B) a portion has been assigned to another
assignee; or
(C) the account debtor knows that the assignment to
that assignee is limited.
(c) Proof of assignment. Subject to subsection (h), if
requested by the account debtor, an assignee shall seasonably
furnish reasonable proof that the assignment has been made.
Unless the assignee complies, the account debtor may discharge
its obligation by paying the assignor, even if the account
debtor has received a notification under subsection (a).
(d) Term restricting assignment generally ineffective.

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Except as otherwise provided in subsection (e) and Sections
2A-303 and 9-407, and subject to subsection (h), a term in an
agreement between an account debtor and an assignor or in a
promissory note is ineffective to the extent that it:
(1) prohibits, restricts, or requires the consent of
the account debtor or person obligated on the promissory
note to the assignment or transfer of, or the creation,
attachment, perfection, or enforcement of a security
interest in, the account, chattel paper, payment
intangible, or promissory note; or
(2) provides that the assignment or transfer or the
creation, attachment, perfection, or enforcement of the
security interest may give rise to a default, breach, right
of recoupment, claim, defense, termination, right of
termination, or remedy under the account, chattel paper,
payment intangible, or promissory note.
(e) Inapplicability of subsection (d) to certain sales.
Subsection (d) does not apply to the sale of a payment
intangible or promissory note, other than a sale pursuant to a
disposition under Section 9-610 or an acceptance of collateral
under Section 9-620.
(f) Legal restrictions on assignment generally
ineffective. Except as otherwise provided in Sections 2A-303
and 9-407 and subject to subsections (h) and (i), a rule of
law, statute, or regulation that prohibits, restricts, or
requires the consent of a government, governmental body or

09700SB3764sam001 - 50 - LRB097 19386 JLS 67033 a
official, or account debtor to the assignment or transfer of,
or creation of a security interest in, an account or chattel
paper is ineffective to the extent that the rule of law,
statute, or regulation:
(1) prohibits, restricts, or requires the consent of
the government, governmental body or official, or account
debtor to the assignment or transfer of, or the creation,
attachment, perfection, or enforcement of a security
interest in the account or chattel paper; or
(2) provides that the assignment or transfer or the
creation, attachment, perfection, or enforcement of the
security interest may give rise to a default, breach, right
of recoupment, claim, defense, termination, right of
termination, or remedy under the account or chattel paper.
(g) Subsection (b)(3) not waivable. Subject to subsection
(h), an account debtor may not waive or vary its option under
subsection (b)(3).
(h) Rule for individual under other law. This Section is
subject to law other than this Article which establishes a
different rule for an account debtor who is an individual and
who incurred the obligation primarily for personal, family, or
household purposes.
(i) Inapplicability to health-care-insurance receivable.
This Section does not apply to an assignment of a
health-care-insurance receivable.
(Source: P.A. 91-893, eff. 7-1-01.)

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(810 ILCS 5/9-408) (from Ch. 26, par. 9-408)
Sec. 9-408. Restrictions on assignment of promissory
notes, health-care-insurance receivables, and certain general
intangibles ineffective.
(a) Term restricting assignment generally ineffective.
Except as otherwise provided in subsection (b), a term in a
promissory note or in an agreement between an account debtor
and a debtor which relates to a health-care-insurance
receivable or a general intangible, including a contract,
permit, license, or franchise, and which term prohibits,
restricts, or requires the consent of the person obligated on
the promissory note or the account debtor to, the assignment or
transfer of, or creation, attachment, or perfection of a
security interest in, the promissory note,
health-care-insurance receivable, or general intangible, is
ineffective to the extent that the term:
(1) would impair the creation, attachment, or
perfection of a security interest; or
(2) provides that the assignment or transfer or the
creation, attachment, or perfection of the security
interest may give rise to a default, breach, right of
recoupment, claim, defense, termination, right of
termination, or remedy under the promissory note,
health-care-insurance receivable, or general intangible.
(b) Applicability of subsection (a) to sales of certain

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rights to payment. Subsection (a) applies to a security
interest in a payment intangible or promissory note only if the
security interest arises out of a sale of the payment
intangible or promissory note, other than a sale pursuant to a
disposition under Section 9-610 or an acceptance of collateral
under Section 9-620.
(c) Legal restrictions on assignment generally
ineffective. A rule of law, statute, or regulation that
prohibits, restricts, or requires the consent of a government,
governmental body or official, person obligated on a promissory
note, or account debtor to the assignment or transfer of, or
creation of a security interest in, a promissory note,
health-care-insurance receivable, or general intangible,
including a contract, permit, license, or franchise between an
account debtor and a debtor, is ineffective to the extent that
the rule of law, statute, or regulation:
(1) would impair the creation, attachment, or
perfection of a security interest; or
(2) provides that the assignment or transfer or the
creation, attachment, or perfection of the security
interest may give rise to a default, breach, right of
recoupment, claim, defense, termination, right of
termination, or remedy under the promissory note,
health-care-insurance receivable, or general intangible.
(d) Limitation on ineffectiveness under subsections (a)
and (c). To the extent that a term in a promissory note or in an

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agreement between an account debtor and a debtor which relates
to a health-care-insurance receivable or general intangible or
a rule of law, statute, or regulation described in subsection
(c) would be effective under law other than this Article but is
ineffective under subsection (a) or (c), the creation,
attachment, or perfection of a security interest in the
promissory note, health-care-insurance receivable, or general
intangible:
(1) is not enforceable against the person obligated on
the promissory note or the account debtor;
(2) does not impose a duty or obligation on the person
obligated on the promissory note or the account debtor;
(3) does not require the person obligated on the
promissory note or the account debtor to recognize the
security interest, pay or render performance to the secured
party, or accept payment or performance from the secured
party;
(4) does not entitle the secured party to use or assign
the debtor's rights under the promissory note,
health-care-insurance receivable, or general intangible,
including any related information or materials furnished
to the debtor in the transaction giving rise to the
promissory note, health-care-insurance receivable, or
general intangible;
(5) does not entitle the secured party to use, assign,
possess, or have access to any trade secrets or

09700SB3764sam001 - 54 - LRB097 19386 JLS 67033 a
confidential information of the person obligated on the
promissory note or the account debtor; and
(6) does not entitle the secured party to enforce the
security interest in the promissory note,
health-care-insurance receivable, or general intangible.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/9-502) (from Ch. 26, par. 9-502)
Sec. 9-502. Contents of financing statement; record of
mortgage as financing statement; time of filing financing
statement.
(a) Sufficiency of financing statement. Subject to
subsection (b), a financing statement is sufficient only if it:
(1) provides the name of the debtor;
(2) provides the name of the secured party or a
representative of the secured party; and
(3) indicates the collateral covered by the financing
statement.
(b) Real-property-related financing statements. Except as
otherwise provided in Section 9-501(b), to be sufficient, a
financing statement that covers as-extracted collateral or
timber to be cut, or which is filed as a fixture filing and
covers goods that are or are to become fixtures, must satisfy
subsection (a) and also:
(1) indicate that it covers this type of collateral;
(2) indicate that it is to be filed in the real

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property records;
(3) provide a description of the real property to which
the collateral is related sufficient to give constructive
notice of a mortgage under the law of this State if the
description were contained in a record of the mortgage of
the real property; and
(4) if the debtor does not have an interest of record
in the real property, provide the name of a record owner.
(c) Record of mortgage as financing statement. A record of
a mortgage is effective, from the date of recording, as a
financing statement filed as a fixture filing or as a financing
statement covering as-extracted collateral or timber to be cut
only if:
(1) the record indicates the goods or accounts that it
covers;
(2) the goods are or are to become fixtures related to
the real property described in the record or the collateral
is related to the real property described in the record and
is as-extracted collateral or timber to be cut;
(3) the record satisfies the requirements for a
financing statement in this Section, but:
(A) the record need not indicate other than an
indication that it is to be filed in the real property
records; and
(B) the record sufficiently provides the name of a
debtor who is an individual if it provides the

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individual name of the debtor or the surname and first
personal name of the debtor, even if the debtor is an
individual to whom Section 9-503(a)(4) applies; and
(4) the record is recorded.
(d) Filing before security agreement or attachment. A
financing statement may be filed before a security agreement is
made or a security interest otherwise attaches.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/9-503) (from Ch. 26, par. 9-503)
Sec. 9-503. Name of debtor and secured party.
(a) Sufficiency of debtor's name. A financing statement
sufficiently provides the name of the debtor:
(1) except as otherwise provided in paragraph (3), if
the debtor is a registered organization or the collateral
is held in a trust that is a registered organization, only
if the financing statement provides the name that is stated
to be the registered organization's name of the debtor
indicated on the public organic record most recently filed
with or issued or enacted by of the registered
organization's debtor's jurisdiction of organization which
purports to state, amend, or restate the registered
organization's name shows the debtor to have been
organized;
(2) subject to subsection (f), if the collateral is
being administered by the personal representative of a

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decedent debtor is a decedent's estate, only if the
financing statement provides, as the name of the debtor,
the name of the decedent and, in a separate part of the
financing statement, indicates that the collateral is
being administered by a personal representative debtor is
an estate;
(3) if the collateral is held in a trust that is not a
registered organization debtor is a trust or a trustee
acting with respect to property held in trust, only if the
financing statement:
(A) provides, as the name of the debtor:
(i) if the organic record of the trust
specifies a name for the trust, the name specified;
or
(ii) if the organic record of the trust does
not specify a name for the trust, the name of the
settlor or testator the name specified for the
trust in its organic documents or, if no name is
specified, provides the name of the settlor and
additional information sufficient to distinguish
the debtor from other trusts having one or more of
the same settlors; and
(B) in a separate part of the financing statement:
(i) if the name is provided in accordance with
subparagraph (A)(i), indicates that the collateral
is held in a trust; or

09700SB3764sam001 - 58 - LRB097 19386 JLS 67033 a
(ii) if the name is provided in accordance with
subparagraph (A)(ii), provides additional
information sufficient to distinguish the trust
from other trusts having one or more of the same
settlors or the same testator and indicates that
the collateral is held in a trust, unless the
additional information so indicates;
(4) subject to subsection (g), if the debtor is an
individual to whom this State has issued a driver's license
that has not expired, only if the financing statement
provides the name of the individual which is indicated on
the driver's license;
(5) if the debtor is an individual to whom paragraph
(4) does not apply, only if the financing statement
provides the individual name of the debtor or the surname
and first personal name of the debtor indicates, in the
debtor's name or otherwise, that the debtor is a trust or
is a trustee acting with respect to property held in trust;
and
(6) (4) in other cases:
(A) if the debtor has a name, only if the financing
statement it provides the individual or organizational
name of the debtor; and
(B) if the debtor does not have a name, only if it
provides the names of the partners, members,
associates, or other persons comprising the debtor, in

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a manner that each name provided would be sufficient if
the person named were the debtor.
(b) Additional debtor-related information. A financing
statement that provides the name of the debtor in accordance
with subsection (a) is not rendered ineffective by the absence
of:
(1) a trade name or other name of the debtor; or
(2) unless required under subsection (a)(6)(B)
(a)(4)(B), names of partners, members, associates, or
other persons comprising the debtor.
(c) Debtor's trade name insufficient. A financing
statement that provides only the debtor's trade name does not
sufficiently provide the name of the debtor.
(d) Representative capacity. Failure to indicate the
representative capacity of a secured party or representative of
a secured party does not affect the sufficiency of a financing
statement.
(e) Multiple debtors and secured parties. A financing
statement may provide the name of more than one debtor and the
name of more than one secured party.
(f) Name of decedent. The name of the decedent indicated on
the order appointing the personal representative of the
decedent issued by the court having jurisdiction over the
collateral is sufficient as the "name of the decedent" under
subsection (a)(2).
(g) Multiple driver's licenses. If this State has issued to

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an individual more than one driver's license of a kind
described in subsection (a)(4), the one that was issued most
recently is the one to which subsection (a)(4) refers.
(h) Definition. In this Section, the "name of the settlor
or testator" means:
(1) if the settlor is a registered organization, the
name that is stated to be the settlor's name on the public
organic record most recently filed with or issued or
enacted by the settlor's jurisdiction of organization
which purports to state, amend, or restate the settlor's
name; or
(2) in other cases, the name of the settlor or testator
indicated in the trust's organic record.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/9-507) (from Ch. 26, par. 9-507)
Sec. 9-507. Effect of certain events on effectiveness of
financing statement.
(a) Disposition. A filed financing statement remains
effective with respect to collateral that is sold, exchanged,
leased, licensed, or otherwise disposed of and in which a
security interest or agricultural lien continues, even if the
secured party knows of or consents to the disposition.
(b) Information becoming seriously misleading. Except as
otherwise provided in subsection (c) and Section 9-508, a
financing statement is not rendered ineffective if, after the

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financing statement is filed, the information provided in the
financing statement becomes seriously misleading under Section
9-506.
(c) Change in debtor's name. If the a debtor so changes its
name that a filed financing statement provides for a debtor
becomes insufficient as the name of the debtor under Section
9-503(a) so that the financing statement becomes seriously
misleading under Section 9-506:
(1) the financing statement is effective to perfect a
security interest in collateral acquired by the debtor
before, or within four months after, the filed financing
statement becomes seriously misleading change; and
(2) the financing statement is not effective to perfect
a security interest in collateral acquired by the debtor
more than four months after the filed financing statement
becomes seriously misleading change, unless an amendment
to the financing statement which renders the financing
statement not seriously misleading is filed within four
months after the filed financing statement becomes
seriously misleading change.
(Source: P.A. 90-214, eff. 7-25-97; 91-893, eff. 7-1-01.)
(810 ILCS 5/9-515)
Sec. 9-515. Duration and effectiveness of financing
statement; effect of lapsed financing statement.
(a) Five-year effectiveness. Except as otherwise provided

09700SB3764sam001 - 62 - LRB097 19386 JLS 67033 a
in subsections (b), (e), (f), and (g), a filed financing
statement is effective for a period of five years after the
date of filing.
(b) Public-finance or manufactured-home transaction.
Except as otherwise provided in subsections (e), (f), and (g),
an initial financing statement filed in connection with a
public-finance transaction or manufactured-home transaction is
effective for a period of 30 years after the date of filing if
it indicates that it is filed in connection with a
public-finance transaction or manufactured-home transaction.
(c) Lapse and continuation of financing statement. The
effectiveness of a filed financing statement lapses on the
expiration of the period of its effectiveness unless before the
lapse a continuation statement is filed pursuant to subsection
(d). Upon lapse, a financing statement ceases to be effective
and any security interest or agricultural lien that was
perfected by the financing statement becomes unperfected,
unless the security interest is perfected otherwise. If the
security interest or agricultural lien becomes unperfected
upon lapse, it is deemed never to have been perfected as
against a purchaser of the collateral for value.
(d) When continuation statement may be filed. A
continuation statement may be filed only within six months
before the expiration of the five-year period specified in
subsection (a) or the 30-year period specified in subsection
(b), whichever is applicable.

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(e) Effect of filing continuation statement. Except as
otherwise provided in Section 9-510, upon timely filing of a
continuation statement, the effectiveness of the initial
financing statement continues for a period of five years
commencing on the day on which the financing statement would
have become ineffective in the absence of the filing. Upon the
expiration of the five-year period, the financing statement
lapses in the same manner as provided in subsection (c),
unless, before the lapse, another continuation statement is
filed pursuant to subsection (d). Succeeding continuation
statements may be filed in the same manner to continue the
effectiveness of the initial financing statement.
(f) Transmitting utility financing statement. If a debtor
is a transmitting utility and a filed initial financing
statement so indicates, the financing statement is effective
until a termination statement is filed.
(g) Record of mortgage as financing statement. A record of
a mortgage that is effective as a financing statement filed as
a fixture filing under Section 9-502(c) remains effective as a
financing statement filed as a fixture filing until the
mortgage is released or satisfied of record or its
effectiveness otherwise terminates as to the real property.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/9-516)
Sec. 9-516. What constitutes filing; effectiveness of

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filing.
(a) What constitutes filing. Except as otherwise provided
in subsection (b), communication of a record to a filing office
and tender of the filing fee or acceptance of the record by the
filing office constitutes filing.
(b) Refusal to accept record; filing does not occur. Filing
does not occur with respect to a record that a filing office
refuses to accept because:
(1) the record is not communicated by a method or
medium of communication authorized by the filing office;
(2) an amount equal to or greater than the applicable
filing fee is not tendered;
(3) the filing office is unable to index the record
because:
(A) in the case of an initial financing statement,
the record does not provide a name for the debtor;
(B) in the case of an amendment or information
correction statement, the record:
(i) does not identify the initial financing
statement as required by Section 9-512 or 9-518, as
applicable; or
(ii) identifies an initial financing statement
whose effectiveness has lapsed under Section
9-515;
(C) in the case of an initial financing statement
that provides the name of a debtor identified as an

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individual or an amendment that provides a name of a
debtor identified as an individual which was not
previously provided in the financing statement to
which the record relates, the record does not identify
the debtor's surname last name;
(D) in the case of a record filed or recorded in
the filing office described in Section 9-501(a)(1),
the record does not provide a sufficient description of
the real property to which it relates; or
(E) in the case of a record submitted to the filing
office described in Section 9-501(b), the debtor does
not meet the definition of a transmitting utility as
described in Section 9-102(a)(80);
(3.5) in the case of an initial financing statement or
an amendment, if the filing office believes in good faith
that a document submitted for filing is being filed for the
purpose of defrauding any person or harassing any person in
the performance of duties as a public servant;
(4) in the case of an initial financing statement or an
amendment that adds a secured party of record, the record
does not provide a name and mailing address for the secured
party of record;
(5) in the case of an initial financing statement or an
amendment that provides a name of a debtor which was not
previously provided in the financing statement to which the
amendment relates, the record does not:

09700SB3764sam001 - 66 - LRB097 19386 JLS 67033 a
(A) provide a mailing address for the debtor; or
(B) indicate whether the name provided as the name
of the debtor is the name of an individual or an
organization; or
(C) if the financing statement indicates that the
debtor is an organization, provide:
(i) a type of organization for the debtor;
(ii) a jurisdiction of organization for the
debtor; or
(iii) an organizational identification number
for the debtor or indicate that the debtor has
none;
(6) in the case of an assignment reflected in an
initial financing statement under Section 9-514(a) or an
amendment filed under Section 9-514(b), the record does not
provide a name and mailing address for the assignee; or
(7) in the case of a continuation statement, the record
is not filed within the six-month period prescribed by
Section 9-515(d).
(c) Rules applicable to subsection (b). For purposes of
subsection (b):
(1) a record does not provide information if the filing
office is unable to read or decipher the information; and
(2) a record that does not indicate that it is an
amendment or identify an initial financing statement to
which it relates, as required by Section 9-512, 9-514, or

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9-518, is an initial financing statement.
(d) Refusal to accept record; record effective as filed
record. A record that is communicated to the filing office with
tender of the filing fee, but which the filing office refuses
to accept for a reason other than one set forth in subsection
(b), is effective as a filed record except as against a
purchaser of the collateral which gives value in reasonable
reliance upon the absence of the record from the files.
(e) The Secretary of State may refuse to accept a record
for filing under subdivision (b)(3)(E) or (b)(3.5) only if the
refusal is approved by the Department of Business Services of
the Secretary of State and the General Counsel to the Secretary
of State.
(Source: P.A. 95-446, eff. 1-1-08.)
(810 ILCS 5/9-518)
Sec. 9-518. Claim concerning inaccurate or wrongfully
filed record.
(a) Statement with respect to record indexed under a
person's name Correction statement. A person may file in the
filing office an information a correction statement with
respect to a record indexed there under the person's name if
the person believes that the record is inaccurate or was
wrongfully filed.
(b) Contents Sufficiency of correction statement under
subsection (a). An information A correction statement under

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subsection (a) must:
(1) identify the record to which it relates by: (A) the
file number assigned to the initial financing statement to
which the record relates; and
(B) if the correction statement relates to a record
filed or recorded in a filing office described in
Section 9-501(a)(1), the date and time that the initial
financing statement was filed and the information
specified in Section 9-502(b);
(2) indicate that it is an information a correction
statement; and
(3) provide the basis for the person's belief that the
record is inaccurate and indicate the manner in which the
person believes the record should be amended to cure any
inaccuracy or provide the basis for the person's belief
that the record was wrongfully filed.
(c) Statement by secured party of record. A person may file
in the filing office an information statement with respect to a
record filed there if the person is a secured party of record
with respect to the financing statement to which the record
relates and believes that the person that filed the record was
not entitled to do so under Section 9-509(d).
(d) Contents of statement under subsection (c). An
information statement under subsection (c) must:
(1) identify the record to which it relates by the file
number assigned to the initial financing statement to which

09700SB3764sam001 - 69 - LRB097 19386 JLS 67033 a
the record relates;
(2) indicate that it is an information statement; and
(3) provide the basis for the person's belief that the
person that filed the record was not entitled to do so
under Section 9-509(d).
(e) (c) Record not affected by information correction
statement. The filing of an information a correction statement
does not affect the effectiveness of an initial financing
statement or other filed record.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/9-521)
Sec. 9-521. Uniform form of written financing statement and
amendment.
(a) Initial financing statement form. A filing office that
accepts written records may not refuse to accept a written
initial financing statement in the form and format set forth in
the final official text of the 2010 amendments 1999 revisions
to Article 9 of the Uniform Commercial Code promulgated by the
American Law Institute and the National Conference of
Commissioners on Uniform State Laws, except for a reason set
forth in Section 9-516(b).
(b) Amendment form. A filing office that accepts written
records may not refuse to accept a written record in the form
and format set forth as Form UCC3 and Form UCC3Ad in the final
official text of the 2010 amendments 1999 revisions to Article

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9 of the Uniform Commercial Code promulgated by the American
Law Institute and the National Conference of Commissioners on
Uniform State Laws, except for a reason set forth in Section
9-516(b).
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/9-607)
Sec. 9-607. Collection and enforcement by secured party.
(a) Collection and enforcement generally. If so agreed, and
in any event after default, a secured party:
(1) may notify an account debtor or other person
obligated on collateral to make payment or otherwise render
performance to or for the benefit of the secured party;
(2) may take any proceeds to which the secured party is
entitled under Section 9-315;
(3) may enforce the obligations of an account debtor or
other person obligated on collateral and exercise the
rights of the debtor with respect to the obligation of the
account debtor or other person obligated on collateral to
make payment or otherwise render performance to the debtor,
and with respect to any property that secures the
obligations of the account debtor or other person obligated
on the collateral;
(4) if it holds a security interest in a deposit
account perfected by control under Section 9-104(a)(1),
may apply the balance of the deposit account to the

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obligation secured by the deposit account; and
(5) if it holds a security interest in a deposit
account perfected by control under Section 9-104(a)(2) or
(3), may instruct the bank to pay the balance of the
deposit account to or for the benefit of the secured party.
(b) Nonjudicial enforcement of mortgage. If necessary to
enable a secured party to exercise under subsection (a)(3) the
right of a debtor to enforce a mortgage nonjudicially, the
secured party may record in the office in which a record of the
mortgage is recorded:
(1) a copy of the security agreement that creates or
provides for a security interest in the obligation secured
by the mortgage; and
(2) the secured party's sworn affidavit in recordable
form stating that:
(A) a default has occurred with respect to the
obligation secured by the mortgage; and
(B) the secured party is entitled to enforce the
mortgage nonjudicially.
(c) Commercially reasonable collection and enforcement. A
secured party shall proceed in a commercially reasonable manner
if the secured party:
(1) undertakes to collect from or enforce an obligation
of an account debtor or other person obligated on
collateral; and
(2) is entitled to charge back uncollected collateral

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or otherwise to full or limited recourse against the debtor
or a secondary obligor.
(d) Expenses of collection and enforcement. A secured party
may deduct from the collections made pursuant to subsection (c)
reasonable expenses of collection and enforcement, including
reasonable attorney's fees and legal expenses incurred by the
secured party.
(e) Duties to secured party not affected. This Section does
not determine whether an account debtor, bank, or other person
obligated on collateral owes a duty to a secured party.
(Source: P.A. 91-893, eff. 7-1-01.)
(810 ILCS 5/9-625)
Sec. 9-625. Remedies for secured party's failure to comply
with Article.
(a) Judicial orders concerning noncompliance. If it is
established that a secured party is not proceeding in
accordance with this Article, a court may order or restrain
collection, enforcement, or disposition of collateral on
appropriate terms and conditions.
(b) Damages for noncompliance. Subject to subsections (c),
(d), and (f), a person is liable for damages in the amount of
any loss caused by a failure to comply with this Article. Loss
caused by a failure to comply with a request under Section
9-210 may include loss resulting from the debtor's inability to
obtain, or increased costs of, alternative financing.

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(c) Persons entitled to recover damages; statutory damages
if collateral is consumer goods in consumer-goods transaction.
Except as otherwise provided in Section 9-628:
(1) a person that, at the time of the failure, was a
debtor, was an obligor, or held a security interest in or
other lien on the collateral may recover in an individual
action damages under subsection (b) for its loss; and
(2) if the collateral is consumer goods, a person that
was a debtor or a secondary obligor at the time a secured
party failed to comply with this Part may recover in an
individual action for that failure in any event an amount
not less than the credit service charge plus 10 percent of
the principal amount of the obligation or the time-price
differential plus 10 percent of the cash price.
(d) Recovery when deficiency eliminated or reduced. A
debtor whose deficiency is eliminated under Section 9-626 may
recover damages for the loss of any surplus. However, a debtor
or secondary obligor whose deficiency is eliminated or reduced
under Section 9-626 may not otherwise recover under subsection
(b) for noncompliance with the provisions of this Part relating
to collection, enforcement, disposition, or acceptance.
(e) Statutory damages: noncompliance with specified
provisions. In addition to any damages recoverable under
subsection (b), the debtor, consumer obligor, or person named
as a debtor in a filed record, as applicable, may recover in an
individual action $500 for each instance that a person:

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(1) fails to comply with Section 9-208;
(2) fails to comply with Section 9-209;
(3) files a record that the person is not entitled to
file under Section 9-509(a); or
(4) fails to cause the secured party of record to file
or send a termination statement as required by Section
9-513(a) or (c).
(f) Statutory damages: noncompliance with Section 9-210. A
debtor or consumer obligor may recover damages under subsection
(b) and, in addition, may in an individual action recover $500
in each case from a person that, without reasonable cause,
fails to comply with a request under Section 9-210. A recipient
of a request under Section 9-210 which never claimed an
interest in the collateral or obligations that are the subject
of a request under that Section has a reasonable excuse for
failure to comply with the request within the meaning of this
subsection.
(g) Limitation of security interest: noncompliance with
Section 9-210. If a secured party fails to comply with a
request regarding a list of collateral or a statement of
account under Section 9-210, the secured party may claim a
security interest only as shown in the statement included in
the request as against a person that is reasonably misled by
the failure.
(Source: P.A. 91-893, eff. 7-1-01.)

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(810 ILCS 5/Art. 9 Pt. 8 heading new)
PART 8. TRANSITION PROVISIONS FOR 2010 AMENDMENTS
(810 ILCS 5/9-801 new)
Sec. 9-801. Effective date. (See Section 99 of the Public
Act adding this Section to this Act.)
(810 ILCS 5/9-802 new)
Sec. 9-802. Savings clause.
(a) Pre-effective-date transactions or liens. Except as
otherwise provided in this Part, this Act applies to a
transaction or lien within its scope, even if the transaction
or lien was entered into or created before the effective date
of this amendatory Act of the 97th General Assembly.
(b) Pre-effective-date proceedings. This amendatory Act of
the 97th General Assembly does not affect an action, case, or
proceeding commenced before the effective date of this
amendatory Act of the 97th General Assembly.
(810 ILCS 5/9-803 new)
Sec. 9-803. Security interest perfected before effective
date.
(a) Continuing perfection: perfection requirements
satisfied. A security interest that is a perfected security
interest immediately before the effective date of this
amendatory Act of the 97th General Assembly takes effect is a

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perfected security interest under Article 9 as amended by this
amendatory Act of the 97th General Assembly if, on the
effective date of this amendatory Act of the 97th General
Assembly, the applicable requirements for attachment and
perfection under Article 9 as amended by this amendatory Act of
the 97th General Assembly are satisfied without further action.
(b) Continuing perfection: perfection requirements not
satisfied. Except as otherwise provided in Section 9-805, if,
immediately before the effective date of this amendatory Act of
the 97th General Assembly, a security interest is a perfected
security interest, but the applicable requirements for
perfection under Article 9 as amended by this amendatory Act of
the 97th General Assembly are not satisfied when this
amendatory Act of the 97th General Assembly takes effect, the
security interest remains perfected thereafter only if the
applicable requirements for perfection under Article 9 as
amended by this amendatory Act of the 97th General Assembly are
satisfied within one year after the effective date of this
amendatory Act of the 97th General Assembly.
(810 ILCS 5/9-804 new)
Sec. 9-804. Security interest unperfected before the
effective date of this amendatory Act of the 97th General
Assembly. A security interest that is an unperfected security
interest immediately before the effective date of this
amendatory Act of the 97th General Assembly becomes a perfected

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security interest:
(1) without further action, when this amendatory Act of
the 97th General Assembly takes effect if the applicable
requirements for perfection under Article 9 as amended by
this amendatory Act of the 97th General Assembly are
satisfied before or at that time; or
(2) when the applicable requirements for perfection
are satisfied if the requirements are satisfied after that
time.
(810 ILCS 5/9-805 new)
Sec. 9-805. Effectiveness of action taken before the
effective date of this amendatory Act of the 97th General
Assembly.
(a) Pre-effective-date filing effective. The filing of a
financing statement before the effective date of this
amendatory Act of the 97th General Assembly is effective to
perfect a security interest to the extent the filing would
satisfy the applicable requirements for perfection under
Article 9 as amended by this amendatory Act of the 97th General
Assembly.
(b) When pre-effective-date filing becomes ineffective.
This amendatory Act of the 97th General Assembly does not
render ineffective an effective financing statement that,
before the effective date of this amendatory Act of the 97th
General Assembly, is filed and satisfies the applicable

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requirements for perfection under the law of the jurisdiction
governing perfection as provided in Article 9 as it existed
before the effective date of this amendatory Act of the 97th
General Assembly. However, except as otherwise provided in
subsections (c) and (d) and Section 9-806, the financing
statement ceases to be effective:
(1) if the financing statement is filed in this State,
at the time the financing statement would have ceased to be
effective had this amendatory Act of the 97th General
Assembly not taken effect; or
(2) if the financing statement is filed in another
jurisdiction, at the earlier of:
(A) the time the financing statement would have
ceased to be effective under the law of that
jurisdiction; or
(B) June 30, 2018.
(c) Continuation statement. The filing of a continuation
statement after the effective date of this amendatory Act of
the 97th General Assembly does not continue the effectiveness
of a financing statement filed before the effective date of
this amendatory Act of the 97th General Assembly. However, upon
the timely filing of a continuation statement after the
effective date of this amendatory Act of the 97th General
Assembly and in accordance with the law of the jurisdiction
governing perfection as provided in Article 9, the
effectiveness of a financing statement filed in the same office

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in that jurisdiction before the effective date of this
amendatory Act of the 97th General Assembly continues for the
period provided by the law of that jurisdiction.
(d) Application of subsection (b)(2)(B) to transmitting
utility financing statement. Subsection (b)(2)(B) applies to a
financing statement that, before the effective date of this
amendatory Act of the 97th General Assembly, is filed against a
transmitting utility and satisfies the applicable requirements
for perfection under the law of the jurisdiction governing
perfection as provided in Article 9 as it existed before the
effective date of this amendatory Act of the 97th General
Assembly, only to the extent that Article 9 as amended by this
amendatory Act of the 97th General Assembly provides that the
law of a jurisdiction other than the jurisdiction in which the
financing statement is filed governs perfection of a security
interest in collateral covered by the financing statement.
(e) Application of Part 5. A financing statement that
includes a financing statement filed before the effective date
of this amendatory Act of the 97th General Assembly and a
continuation statement filed after the effective date of this
amendatory Act of the 97th General Assembly is effective only
to the extent that it satisfies the requirements of Part 5 as
amended by this amendatory Act of the 97th General Assembly for
an initial financing statement. A financing statement that
indicates that the debtor is a decedent's estate indicates that
the collateral is being administered by a personal

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representative within the meaning of Section 9-503(a)(2) as
amended by this amendatory Act of the 97th General Assembly. A
financing statement that indicates that the debtor is a trust
or is a trustee acting with respect to property held in trust
indicates that the collateral is held in a trust within the
meaning of Section 9-503(a)(3) as amended by this amendatory
Act of the 97th General Assembly.
(810 ILCS 5/9-806 new)
Sec. 9-806. When initial financing statement suffices to
continue effectiveness of financing statement.
(a) Initial financing statement in lieu of continuation
statement. The filing of an initial financing statement in the
office specified in Section 9-501 continues the effectiveness
of a financing statement filed before the effective date of
this amendatory Act of the 97th General Assembly if:
(1) the filing of an initial financing statement in
that office would be effective to perfect a security
interest under Article 9 as amended by this amendatory Act
of the 97th General Assembly;
(2) the pre-effective-date financing statement was
filed in an office in another State; and
(3) the initial financing statement satisfies
subsection (c).
(b) Period of continued effectiveness. The filing of an
initial financing statement under subsection (a) continues the

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effectiveness of the pre-effective-date financing statement:
(1) if the initial financing statement is filed before
the effective date of this amendatory Act of the 97th
General Assembly, for the period provided in Section 9-515
as it existed before the effective date of this amendatory
Act of the 97th General Assembly with respect to an initial
financing statement; and
(2) if the initial financing statement is filed after
the effective date of this amendatory Act of the 97th
General Assembly, for the period provided in Section 9-515
as amended by this amendatory Act of the 97th General
Assembly with respect to an initial financing statement.
(c) Requirements for initial financing statement under
subsection (a). To be effective for purposes of subsection (a),
an initial financing statement must:
(1) satisfy the requirements of Part 5 as amended by
this amendatory Act of the 97th General Assembly for an
initial financing statement;
(2) identify the pre-effective-date financing
statement by indicating the office in which the financing
statement was filed and providing the dates of filing and
file numbers, if any, of the financing statement and of the
most recent continuation statement filed with respect to
the financing statement; and
(3) indicate that the pre-effective-date financing
statement remains effective.

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(810 ILCS 5/9-807 new)
Sec. 9-807. Amendment of pre-effective-date financing
statement.
(a) "Pre-effective-date financing statement". In this
Section, "pre-effective-date financing statement" means a
financing statement filed before the effective date of this
amendatory Act of the 97th General Assembly.
(b) Applicable law. After this amendatory Act of the 97th
General Assembly takes effect, a person may add or delete
collateral covered by, continue or terminate the effectiveness
of, or otherwise amend the information provided in, a
pre-effective-date financing statement only in accordance with
the law of the jurisdiction governing perfection as provided in
Article 9 as amended by this amendatory Act of the 97th General
Assembly. However, the effectiveness of a pre-effective-date
financing statement also may be terminated in accordance with
the law of the jurisdiction in which the financing statement is
filed.
(c) Method of amending: general rule. Except as otherwise
provided in subsection (d), if the law of this State governs
perfection of a security interest, the information in a
pre-effective-date financing statement may be amended after
the effective date of this amendatory Act of the 97th General
Assembly only if:
(1) the pre-effective-date financing statement and an

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amendment are filed in the office specified in Section
9-501;
(2) an amendment is filed in the office specified in
Section 9-501 concurrently with, or after the filing in
that office of, an initial financing statement that
satisfies Section 9-806(c); or
(3) an initial financing statement that provides the
information as amended and satisfies Section 9-806(c) is
filed in the office specified in Section 9-501.
(d) Method of amending: continuation. If the law of this
State governs perfection of a security interest, the
effectiveness of a pre-effective-date financing statement may
be continued only under Section 9-805(c) and (e) or 9-806.
(e) Method of amending: additional termination rule.
Whether or not the law of this State governs perfection of a
security interest, the effectiveness of a pre-effective-date
financing statement filed in this State may be terminated after
the effective date of this amendatory Act of the 97th General
Assembly by filing a termination statement in the office in
which the pre-effective-date financing statement is filed,
unless an initial financing statement that satisfies Section
9-806(c) has been filed in the office specified by the law of
the jurisdiction governing perfection as provided in Article 9
as amended by this amendatory Act of the 97th General Assembly
as the office in which to file a financing statement.

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(810 ILCS 5/9-808 new)
Sec. 9-808. Person entitled to file initial financing
statement or continuation statement. A person may file an
initial financing statement or a continuation statement under
this part if:
(1) the secured party of record authorizes the filing;
and
(2) the filing is necessary under this Part:
(A) to continue the effectiveness of a financing
statement filed before the effective date of this
amendatory Act of the 97th General Assembly; or
(B) to perfect or continue the perfection of a
security interest.
(810 ILCS 5/9-809 new)
Sec. 9-809. Priority. This Act determines the priority of
conflicting claims to collateral. However, if the relative
priorities of the claims were established before the effective
date of this amendatory Act of the 97th General Assembly,
Article 9 as it existed before the effective date of this
amendatory Act of the 97th General Assembly determines
priority.
Section 99. Effective date. This Act takes effect July 1,
2013.".