Section 9--316. Effect of 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(a) 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 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.
(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 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(a) 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(a) or 9--305(c) or the 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(a) 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 in which the new debtor has or
acquires rights before or 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 that is perfected by the financing
statement and which becomes perfected under the law of the
other jurisdiction before the earlier of the expiration of
the four month period or the time the financing statement
would have become ineffective under the law of the
jurisdiction designated in Section 9--301(a) or 9--305(c)
remains perfected thereafter. A security interest that is
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.
Last modified: February 3, 2019