Chapter 3 - Perfection and Priority

California Commercial Code — §§ 9301-9342

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Sections (47)

Amended by Stats. 2023, Ch. 210, Sec. 36. (SB 95) Effective January 1, 2024.

Except as otherwise provided in Sections 9303 to 9306.2, inclusive, the following rules determine the law governing perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral:

(1)Except as otherwise provided in this section, while a debtor is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral.

(2)While collateral is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection,

and the priority of a possessory security interest in that collateral.

(3)Except as otherwise provided in paragraph (4), while negotiable tangible documents, goods, instruments, or tangible money is located in a jurisdiction, the local law of that jurisdiction governs all of the following:

(A)Perfection of a security interest in the goods by filing a fixture filing.

(B)Perfection of a security interest in timber to be cut.

(C)The effect of perfection or nonperfection and the priority of a nonpossessory security interest in the collateral.

(4)The local law of the jurisdiction in which the

wellhead or minehead is located governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in as-extracted collateral.

§ 9302

Repealed and added by Stats. 1999, Ch. 991, Sec. 35. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991 and Section 9701.

While farm products are located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of an agricultural lien on the farm products.

§ 9303

Repealed and added by Stats. 1999, Ch. 991, Sec. 35. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991 and Section 9701.

(a)This section applies to goods covered by a certificate of title, even if there is no other relationship between the jurisdiction under whose certificate of title the goods are covered and the goods or the debtor.

(b)Goods become covered by a certificate of title when a valid application for the certificate of title and the applicable fee are delivered to the appropriate authority. Goods cease to be covered by a certificate of title at the earlier of the time the certificate of title ceases to be effective under the law of the issuing jurisdiction or the time the goods become covered subsequently by a certificate of title issued by another jurisdiction.

(c)The local law of the jurisdiction under whose certificate of title the goods are covered governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in goods covered by a certificate of title from the time the

goods become covered by the certificate of title until the goods cease to be covered by the certificate of title.

§ 9304

Amended by Stats. 2023, Ch. 210, Sec. 37. (SB 95) Effective January 1, 2024.

(a)The local law of a bank’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a deposit account maintained with that bank even if the transaction does not bear any relation to the bank’s jurisdiction.

(b)The following rules determine a bank’s jurisdiction for purposes of this chapter:

(1)If an agreement between the bank and its customer governing the deposit account expressly provides that a particular jurisdiction is the bank’s jurisdiction for purposes of this chapter, this division, or this code, that

jurisdiction is the bank’s jurisdiction.

(2)If paragraph (1) does not apply and an agreement between the bank and its customer governing the deposit account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the bank’s jurisdiction.

(3)If neither paragraph (1) nor paragraph (2) applies and an agreement between the bank and its customer governing the deposit account expressly provides that the deposit account is maintained at an office in a particular jurisdiction, that jurisdiction is the bank’s jurisdiction.

(4)If none of the preceding paragraphs applies, the bank’s jurisdiction is the jurisdiction in which the office identified in an

account statement as the office serving the customer’s account is located.

(5)If none of the preceding paragraphs applies, the bank’s jurisdiction is the jurisdiction in which the chief executive office of the bank is located.

§ 9305

Amended by Stats. 2023, Ch. 210, Sec. 38. (SB 95) Effective January 1, 2024.

(a)Except as otherwise provided in subdivision (c), the following rules apply:

(1)While a security certificate is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in the certificated security represented thereby.

(2)The local law of the issuer’s jurisdiction as specified in subdivision (d) of Section 8110 governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in an uncertificated security.

(3)The local law of the securities intermediary’s jurisdiction as specified in subdivision (e) of Section 8110 governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a security entitlement or securities account.

(4)The local law of the commodity intermediary’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a commodity contract or commodity account.

(5)Paragraphs (2) to (4), inclusive, apply even if the transaction does not bear any relation to the jurisdiction.

(b)The following rules determine a commodity intermediary’s jurisdiction for

purposes of this chapter:

(1)If an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that a particular jurisdiction is the commodity intermediary’s jurisdiction for purposes of this chapter, this division, or this code, that jurisdiction is the commodity intermediary’s jurisdiction.

(2)If paragraph (1) does not apply and an agreement between the commodity intermediary and commodity customer governing the commodity account expressly provides that the agreement is governed by the law of a particular jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction.

(3)If neither paragraph (1) nor paragraph (2) applies and an agreement

between the commodity intermediary and commodity customer governing the commodity account expressly provides that the commodity account is maintained at an office in a particular jurisdiction, that jurisdiction is the commodity intermediary’s jurisdiction.

(4)If none of the preceding paragraphs applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the office identified in an account statement as the office serving the commodity customer’s account is located.

(5)If none of the preceding paragraphs applies, the commodity intermediary’s jurisdiction is the jurisdiction in which the chief executive office of the commodity intermediary is located.

(c)The local law of the jurisdiction in which the

debtor is located governs all of the following:

(1)Perfection of a security interest in investment property by filing.

(2)Automatic perfection of a security interest in investment property created by a broker or securities intermediary.

(3)Automatic perfection of a security interest in a commodity contract or commodity account created by a commodity intermediary.

§ 9306

Repealed and added by Stats. 1999, Ch. 991, Sec. 35. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991 and Section 9701.

(a)Subject to subdivision (c), the local law of the issuer’s jurisdiction or a nominated person’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a letter-of-credit right if the issuer’s jurisdiction or nominated person’s jurisdiction is a state.

(b)For purposes of this chapter, an issuer’s jurisdiction or nominated person’s jurisdiction is the jurisdiction whose law governs the liability of the issuer or nominated person with respect to the letter-of-credit right as provided in Section 5116.

(c)This section does not apply to a security interest that is perfected only under subdivision (d) of Section 9308.

§ 9306.1

Added by Stats. 2023, Ch. 210, Sec. 39. (SB 95) Effective January 1, 2024.

(a)Except as provided in subdivision (d), if chattel paper is evidenced only by an authoritative electronic copy of the chattel paper or is evidenced by an authoritative electronic copy and an authoritative tangible copy, the local law of the chattel paper’s jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in the chattel paper, even if the transaction does not bear any relation to the chattel paper’s jurisdiction.

(b)The following rules determine the chattel paper’s jurisdiction under this section:

(1)If the authoritative electronic

copy of the record evidencing chattel paper, or a record attached to or logically associated with the electronic copy and readily available for review, expressly provides that a particular jurisdiction is the chattel paper’s jurisdiction for purposes of this chapter, division, or code, that jurisdiction is the chattel paper’s jurisdiction.

(2)If paragraph (1) does not apply and the rules of the system in which the authoritative electronic copy is recorded are readily available for review and expressly provide that a particular jurisdiction is the chattel paper’s jurisdiction for purposes of this chapter, this division, or this code, that jurisdiction is the chattel paper’s jurisdiction.

(3)If paragraphs (1) and (2) do not apply and the authoritative electronic copy, or a

record attached to or logically associated with the electronic copy and readily available for review, expressly provides that the chattel paper is governed by the law of a particular

jurisdiction, that jurisdiction is the chattel paper’s jurisdiction.

(4)If paragraphs (1) to (3), inclusive, do not apply and the rules of the system in which the authoritative electronic copy is recorded are readily available for review and expressly provide that the chattel paper or the system is governed by the law of a particular jurisdiction, that jurisdiction is the chattel paper’s jurisdiction.

(5)If paragraphs (1) to (4), inclusive, do not apply, the chattel paper’s jurisdiction is the jurisdiction in which the debtor is located.

(c)If an authoritative tangible copy of a record evidences chattel paper and the chattel paper is not evidenced by an authoritative electronic copy, while the authoritative tangible copy of

the record evidencing chattel paper is located in a jurisdiction, the local law of that jurisdiction governs both of the following:

(1)Perfection of a security interest in the chattel paper by possession under Section 9314.1.

(2)The effect of perfection or nonperfection and the priority of a security interest in the chattel paper.

(d)The local law of the jurisdiction in which the debtor is located governs perfection of a security interest in chattel paper by filing.

§ 9306.2

Added by Stats. 2023, Ch. 210, Sec. 40. (SB 95) Effective January 1, 2024.

(a)Except as provided in subdivision (b), the local law of the controllable electronic record’s jurisdiction specified in subdivisions (c) and (d) of Section 12107 governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in a controllable electronic record and a security interest in a controllable account or controllable payment intangible evidenced by the controllable electronic record.

(b)The local law of the jurisdiction in which the debtor is located governs both of the following:

(1)Perfection of a security interest in a controllable account, controllable

electronic record, or controllable payment intangible by filing.

(2)Automatic perfection of a security interest in a controllable payment intangible created by a sale of the controllable payment intangible.

§ 9307

Amended by Stats. 2013, Ch. 531, Sec. 9. (AB 502) Effective January 1, 2014. Operative July 1, 2014, by Sec. 28 of Ch. 531.

(a)In this section, “place of business” means a place where a debtor conducts its affairs.

(b)Except as otherwise provided in this section, the following rules determine a 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)Subdivision (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 subdivision (b) does not apply, the debtor is located in the District of Columbia.

(d)A person that ceases to exist, have a residence, or have a place of business continues to be located in the jurisdiction specified by subdivisions (b) and (c).

(e)A registered organization that is organized under the law of a state is located in that state.

(f)Except as otherwise provided in subdivision (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 in any of the following jurisdictions:

(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.

(3)In the District of Columbia, if neither paragraph (1) nor paragraph (2)

applies.

(g)A registered organization continues to be located in the jurisdiction specified by subdivision (e) or (f) notwithstanding either of the following:

(1)The suspension, revocation, forfeiture, or lapse of the registered organization’s status as such in its jurisdiction of organization.

(2)The dissolution, winding up, or cancellation of the existence of the registered organization.

(h)The United States is located in the District of Columbia.

(i)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)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)This section applies only for purposes of this chapter.

§ 9308

Repealed and added by Stats. 1999, Ch. 991, Sec. 35. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991 and Section 9701.

(a)Except as otherwise provided in this section and in Section 9309, a security interest is perfected if it has attached and all of the applicable requirements for perfection in Sections 9310 to 9316, inclusive, have been satisfied. A security interest is perfected when it attaches if the applicable requirements are satisfied before the security interest attaches.

(b)An agricultural lien is perfected if it has become effective and all of the applicable requirements for perfection in Section 9310 have been satisfied. An agricultural lien is perfected when it becomes effective if the applicable requirements are satisfied before the agricultural lien becomes effective.

(c)A security interest or agricultural lien is perfected continuously if it is originally perfected by one method under this division and is later perfected by another method under this division, without an intermediate period when it was

unperfected.

(d)Perfection of a security interest in collateral also perfects a security interest in a supporting obligation for the collateral.

(e)Perfection of a security interest in a right to payment or performance also perfects a security interest in a security interest, mortgage, or other lien on personal or real property securing the right.

(f)Perfection of a security interest in a securities account also perfects a security interest in the security entitlements carried in the securities account.

(g)Perfection of a security interest in a commodity account also perfects a security interest in the commodity contracts carried in the commodity account.

§ 9309

Amended by Stats. 2003, Ch. 235, Sec. 3. Effective January 1, 2004.

The following security interests are perfected when they attach:

(1)A purchase money security interest in consumer goods, except as otherwise provided in subdivision (b) of Section 9311 with respect to consumer goods that are subject to a statute or treaty described in subdivision (a) of Section 9311.

(2)An assignment of accounts or payment intangibles which does not by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor’s outstanding accounts or payment intangibles.

(3)A sale of a payment intangible.

(4)A sale of a promissory note.

(5)A security interest created by the assignment of a health care insurance receivable to the provider of the health care goods or services.

(6)A security interest arising under Section 2401 or 2505, under subdivision (3) of

Section 2711, or under subdivision (5) of Section 10508, until the debtor obtains possession of the collateral.

(7)A security interest of a collecting bank arising under Section 4210.

(8)A security interest of an issuer or nominated person arising under Section 5118.

(9)A security interest arising in the delivery of a financial asset under subdivision (c) of Section 9206.

(10)A security interest in investment property created by a broker or securities intermediary.

(11)A security interest in a commodity contract or a commodity account created by a commodity intermediary.

(12)An assignment for the benefit of all creditors of the transferor and subsequent transfers by the assignee thereunder.

(13)A security interest created by an assignment of a beneficial interest in a decedent’s estate.

(14)A sale by an individual of an account that is a right to payment of winnings in a lottery or other game of chance.

§ 9310

Amended by Stats. 2023, Ch. 210, Sec. 41. (SB 95) Effective January 1, 2024.

(a)Except as otherwise provided in subdivision (b) and in subdivision (b) of Section 9312, a financing statement must be filed to perfect all security interests and agricultural liens.

(b)The filing of a financing statement is not necessary to perfect a security interest that satisfies any of the following conditions:

(1)It is perfected under subdivision (d), (e), (f), or (g) of Section 9308.

(2)It is perfected under Section 9309 when it attaches.

(3)It is a security interest

in property subject to a statute, regulation, or treaty described in subdivision (a) of Section 9311.

(4)It is a security interest in goods in possession of a bailee which is perfected under paragraph (1) or (2) of subdivision (d) of Section 9312.

(5)It is a security interest in certificated securities, documents, goods, or instruments which is perfected without filing, control, or possession under subdivision (e), (f), or (g) of Section 9312.

(6)It is a security interest in collateral in the secured party’s possession under Section 9313.

(7)It is a security interest in a certificated security which is perfected by delivery of the security certificate to the

secured party under Section 9313.

(8)It is a security interest in controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, electronic documents, investment property, or letter-of-credit rights which is perfected by control under Section 9314.

(9)It is a security interest in proceeds which is perfected under Section 9315.

(10)It is perfected under Section 9316.

(11)It is a security interest in, or claim in or under, any policy of insurance including unearned premiums which is perfected by written notice to the insurer under paragraph (4) of subdivision (b) of Section 9312.

(12)It is a security interest in chattel paper which is perfected by possession and control under Section 9314.1.

(c)If a secured party assigns a perfected security interest or agricultural lien, a filing under this division is not required to continue the perfected status of the security interest against creditors of and transferees from the original debtor.

§ 9311

Amended by Stats. 2013, Ch. 531, Sec. 10. (AB 502) Effective January 1, 2014. Operative July 1, 2014, by Sec. 28 of Ch. 531.

(a)Except as otherwise provided in subdivision (d), the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to any of the following:

(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 subdivision (a) of Section 9310.

(2)(A) The provisions of the Vehicle Code which require registration of a vehicle or boat.

(B)The provisions of the

Health and Safety Code which require registration of a mobilehome or commercial coach, except that during any period in which collateral is inventory, the filing provisions of Chapter 5 (commencing with Section 9501) apply to a security interest in that collateral.

(C)The provisions of the Health and Safety Code which require registration of all interests in approved air contaminant emission reductions (Sections 40709 to 40713, inclusive, of the Health and Safety Code).

(3)A statute of another jurisdiction which provides for a security interest to be indicated on a 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 the requirements of a statute, regulation, or treaty described in subdivision

(a)for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under this division. Except as otherwise provided in subdivision (d), in Section 9313, and in subdivisions (d) and (e) of Section 9316 for goods covered by a certificate of title, a security interest in property subject to a statute, regulation, or treaty described in subdivision (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)Except as otherwise provided in subdivision (d) and in subdivisions (d) and (e) of Section 9316, duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation, or treaty described in subdivision (a) are governed by the statute, regulation, or treaty. In other respects, the

security interest is subject to this division.

(d)During any period in which collateral subject to a statute specified in paragraph (2) of subdivision (a) 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 goods of that kind, this section does not apply to a security interest in that collateral created by that person.

§ 9312

Amended by Stats. 2023, Ch. 210, Sec. 42. (SB 95) Effective January 1, 2024.

(a)A security interest in chattel paper, controllable accounts, controllable electronic records, controllable payment intangibles, instruments, investment property, or negotiable documents may be perfected by filing.

(b)Except as otherwise provided in subdivisions (c) and (d) of Section 9315 for proceeds, all of the following apply:

(1)A security interest in a deposit account may be perfected only by control under Section 9314.

(2)Except as otherwise provided in subdivision (d) of Section 9308, a security interest in a

letter-of-credit right may be perfected only by control under Section 9314.

(3)A security interest in tangible money may be perfected only by the secured party’s taking possession under Section 9313.

(4)A security interest in, or claim in or under, any policy of insurance, including unearned premiums, may be perfected only by giving written notice of the security interest or claim to the insurer. This paragraph does not apply to a health care insurance receivable. A security interest in a health care insurance receivable may be perfected only as otherwise provided in this division.

(5)A security interest in electronic money may be perfected only by control under Section 9314.

(c)While goods are in the possession of a bailee that has issued a negotiable document covering the goods, both of the following apply:

(1)A security interest in the goods may be perfected by perfecting a security interest in the document.

(2)A security interest perfected in the document has priority over any security interest that becomes perfected in the goods by another method during that time.

(d)While goods are in the possession of a bailee that has issued a nonnegotiable document covering the goods, a security interest in the goods may be perfected by any of the following methods:

(1)Issuance of a document in the name of the secured party.

(2)The bailee’s receipt of notification of the secured party’s interest.

(3)Filing as to the goods.

(e)A security interest in certificated securities, negotiable documents, or instruments is perfected without filing or the taking of possession or control for a period of 20 days from the time it attaches to the extent that it arises for new value given under a signed security agreement.

(f)A perfected security interest in a negotiable document or goods in possession of a bailee, other than one that has issued a negotiable document for the goods, remains perfected for 20 days without filing if the secured party makes available to the debtor the goods or

documents representing the goods for the purpose of either of the following:

(1)Ultimate sale or exchange.

(2)Loading, unloading, storing, shipping, transshipping,

manufacturing, processing, or otherwise dealing with them in a manner preliminary to their sale or exchange.

(g)A perfected security interest in a certificated security or instrument remains perfected for 20 days without filing if the secured party delivers the security certificate or instrument to the debtor for the purpose of either of the following:

(1)Ultimate sale or exchange.

(2)Presentation, collection, enforcement, renewal, or registration of transfer.

(h)After the 20-day period specified in subdivision (e), (f), or (g) expires, perfection depends upon compliance with this division.

§ 9313

Amended by Stats. 2023, Ch. 210, Sec. 43. (SB 95) Effective January 1, 2024.

(a)Except as otherwise provided in subdivision (b), a secured party may perfect a security interest in goods, instruments, negotiable tangible documents, or tangible money by taking possession of the collateral. A secured party may perfect a security interest in certificated securities by taking delivery of the certificated securities under Section 8301.

(b)With respect to goods covered by a certificate of title issued by this state, a secured party may perfect a security interest in the goods by taking possession of the goods only in the circumstances described in subdivision (d) of Section 9316.

(c)With respect to collateral other than certificated securities and goods covered by a document, a secured party takes possession of collateral in the possession of a person other than the debtor, the secured party, or a lessee of the collateral from the debtor in the ordinary course of the debtor’s business, when either of the following conditions is satisfied:

(1)The person in possession signs a record acknowledging that it holds possession of the collateral for the

secured party’s benefit.

(2)The person takes possession of the collateral after having

signed a record acknowledging that it will hold possession of the collateral for the secured party’s benefit.

(d)If perfection of a security interest depends upon possession of the collateral by a secured party, perfection occurs not earlier than the time the secured party takes possession and continues only while the secured party retains possession.

(e)A security interest in a certificated security in registered form is perfected by delivery when delivery of the certificated security occurs under Section 8301 and remains perfected by

delivery until the debtor obtains possession of the security certificate.

(f)A person in possession of collateral is not required to acknowledge that it holds possession for a secured party’s benefit.

(g)If a person acknowledges that it holds possession for the secured party’s benefit, both of the following apply:

(1)The acknowledgment is effective under subdivision (c) or under subdivision (a) of Section 8301, even if the acknowledgment violates the rights of a debtor.

(2)Unless the person otherwise agrees or law other than this division otherwise provides, the person does not owe any duty to the secured party and is not required to confirm the

acknowledgment to another person.

(h)A secured party having possession of collateral does not relinquish possession by delivering the collateral to a person other than the debtor or a lessee of the collateral from the debtor in the ordinary course of the debtor’s business if the person was instructed before the delivery or is instructed contemporaneously with the delivery to do either of the following:

(1)To hold possession of the collateral for the secured party’s benefit.

(2)To redeliver the collateral to the secured party.

(i)A secured party does not relinquish possession, even if a delivery under subdivision (h) violates the rights of a debtor.

A person to which collateral is delivered under subdivision (h) does not owe any duty to the secured party and is not required to confirm the delivery to another person unless the person otherwise agrees or law other than this division otherwise provides.

§ 9314

Amended by Stats. 2023, Ch. 210, Sec. 44. (SB 95) Effective January 1, 2024.

(a)A security interest in controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, electronic documents, electronic money, investment property, or letter-of-credit rights may be perfected by control of the collateral under Section 7106, 9104, 9105.1, 9106, 9107, or 9107.1.

(b)A security interest in controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, electronic documents, electronic money, or letter-of-credit rights is perfected by control under Section 7106, 9104, 9105.1, 9107, or 9107.1 not earlier than the time the

secured party obtains control and remains perfected by control only while the secured party retains control.

(c)A security interest in investment property is perfected by control under Section 9106 not earlier than the time the secured party obtains control and remains perfected by control until both of the following conditions are satisfied:

(1)The secured party does not have control.

(2)One of the following occurs:

(A)If the collateral is a certificated security, the debtor has or acquires possession of the security certificate.

(B)If the collateral is an uncertificated security, the issuer has registered

or registers the debtor as the registered owner.

(C)If the collateral is a security entitlement, the debtor is or becomes the entitlement holder.

§ 9314.1

Added by Stats. 2023, Ch. 210, Sec. 45. (SB 95) Effective January 1, 2024.

(a)A secured party may perfect a security interest in chattel paper by taking possession of each authoritative tangible copy of the record evidencing the chattel paper and obtaining control of each authoritative electronic copy of the electronic record evidencing the chattel paper.

(b)A security interest is perfected under subdivision (a) not earlier than the time the secured party takes possession and obtains control and remains perfected under subdivision (a) only while the secured party retains possession and control.

(c)Subdivisions (c) and (f) to (i), inclusive, of Section 9313 apply to perfection

by possession of an authoritative tangible copy of a record evidencing chattel paper.

§ 9315

Repealed and added by Stats. 1999, Ch. 991, Sec. 35. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991 and Section 9701.

(a)Except as otherwise provided in this division and in subdivision (2) of Section 2403, both of the following apply:

(1)A security interest or agricultural lien continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest or agricultural lien.

(2)A security interest attaches to any identifiable proceeds of collateral.

(b)Proceeds that are commingled with other property are identifiable proceeds as follows:

(1)If the proceeds are goods, to the extent provided by Section 9336.

(2)If the proceeds are not goods, to the extent that the secured party identifies the proceeds by a method of tracing, including application of equitable principles, that is permitted under law other than this division with

respect to commingled property of the type involved.

(c)A security interest in proceeds is a perfected security interest if the security interest in the original collateral was perfected.

(d)A perfected security interest in proceeds becomes unperfected on the 21st day after the security interest attaches to the proceeds unless any of the following conditions is satisfied:

(1)All of the following are satisfied:

(A)A filed financing statement covers the original collateral.

(B)The proceeds are collateral in which a security interest may be perfected by filing in the office in which the financing statement has been filed.

(C)The proceeds are not acquired with cash proceeds.

(2)The proceeds are identifiable cash proceeds.

(3)The security interest in the proceeds is perfected

other than under subdivision (c) when the security interest attaches to the proceeds or within 20 days thereafter.

(e)If a filed financing statement covers the original collateral, a security interest in proceeds which remains perfected under paragraph (1) of subdivision (d) becomes unperfected at the later of either of the following:

(1)When the effectiveness of the filed financing statement lapses under Section 9515 or is terminated under Section 9513.

(2)The 21st day after the security interest attaches to the proceeds.

(f)Cash proceeds retain their character as cash proceeds while in the possession of a levying officer pursuant to Title 6.5 (commencing with Section 481.010) or Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure.

§ 9316

Amended by Stats. 2023, Ch. 210, Sec. 46. (SB 95) Effective January 1, 2024.

(a)A security interest perfected pursuant to the law of the jurisdiction designated in subdivision (1) of Section 9301, subdivision (c) of Section 9305, subdivision (d) of Section 9306.1, or subdivision (b) of Section 9306.2 remains perfected until the earliest of any of the following:

(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.

(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)If a security interest described in subdivision (a) becomes perfected under the law of the other jurisdiction before the earliest time or event described in that subdivision, 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)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 all of the following conditions are satisfied:

(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.

(3)Upon entry into the other jurisdiction, the security interest is perfected under the law of the other jurisdiction.

(d)Except as otherwise provided in subdivision (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)A security interest described in subdivision (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 subdivision (b) of Section 9311 or under Section 9313 are not satisfied before the earlier of either of the following:

(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.

(2)The expiration of four months after the goods had become so covered.

(f)A security interest in chattel paper, controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, letter-of-credit rights, or investment property which is perfected under the law of the chattel paper’s jurisdiction, the controllable electronic record’s jurisdiction, 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 the following:

(1)The time the security interest would have become unperfected under the law

of that jurisdiction.

(2)The expiration of four months after a change of the applicable jurisdiction to another jurisdiction.

(g)If a security interest described in subdivision (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 subdivision, 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)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 paragraph (1) of Section 9301 or subdivision (c) of Section 9305 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 paragraph (1) of Section 9301 or subdivision (c) of Section

9305 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)If a financing statement naming an original debtor is filed pursuant to the law of the jurisdiction designated in paragraph (1) of Section 9301 or subdivision (c) of Section 9305 and the new debtor is located in another jurisdiction, each of 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

subdivision (d) of Section 9203, 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 paragraph (1) of Section 9301 or subdivision (c) of Section 9305 or the expiration of the four-month period 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.

§ 9317

Amended by Stats. 2023, Ch. 210, Sec. 47. (SB 95) Effective January 1, 2024.

(a)A security interest or agricultural lien is subordinate to the rights of both of the following:

(1)A person entitled to priority under Section 9322.

(2)Except as otherwise provided in subdivision (e), a person that becomes a lien creditor before the earlier of the time the security interest or agricultural lien is perfected, or one of the conditions specified in paragraph (3) of subdivision (b) of Section 9203 is met and a financing statement covering the collateral is filed.

(b)Except as otherwise provided in subdivision (e), a buyer, other than a secured

party, of

goods, instruments, tangible documents, or a certificated security 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)Except as otherwise provided in subdivision (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)Subject to subdivisions (f) to (i), inclusive, a licensee of a general intangible or a buyer, other than a secured party, of collateral other than

electronic money, goods, instruments, tangible documents, 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)Except as otherwise provided in Sections 9320 and 9321, 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 the time of filing.

(f)A buyer, other than a secured party, of chattel paper takes free of a security interest if, without knowledge of the security interest

and before it is perfected, the buyer gives value and both of the following conditions are satisfied:

(1)The buyer receives delivery of each authoritative tangible copy of the record evidencing the chattel paper.

(2)If each authoritative electronic copy of the record evidencing the chattel paper can be subjected to control under Section 9105, the buyer obtains control of each authoritative electronic copy.

(g)A buyer of an electronic document takes free of a security interest if, without knowledge of the security interest and before it is perfected, the buyer gives value and, if each authoritative electronic copy of the document can be subjected to control under Section 7106, obtains control of each authoritative electronic

copy.

(h)A buyer of a controllable electronic record takes free of a security interest if, without knowledge of the security interest and before it is perfected, the buyer gives value and obtains control of the controllable electronic record.

(i)A buyer, other than a secured party, of a controllable account or a controllable payment intangible takes free of a security interest if, without knowledge of the security interest and before it is perfected, the buyer gives value and obtains control of the controllable account or controllable payment intangible.

§ 9318