70A-9a-324 - Priority of purchase-money security interests.
70A-9a-324. Priority of purchase-money security interests.
(1) Except as otherwise provided in Subsection (7), a perfected purchase-money securityinterest in goods other than inventory or livestock has priority over a conflicting security interestin the same goods, and, except as otherwise provided in Section 70A-9a-327, a perfected securityinterest in its identifiable proceeds also has priority, if the purchase-money security interest isperfected when the debtor receives possession of the collateral or within 20 days thereafter.
(2) Subject to Subsection (3) and except as otherwise provided in Subsection (7), aperfected purchase-money security interest in inventory has priority over a conflicting securityinterest in the same inventory, has priority over a conflicting security interest in chattel paper oran instrument constituting proceeds of the inventory and in proceeds of the chattel paper, if soprovided in Section 70A-9a-330, and, except as otherwise provided in Section 70A-9a-327, alsohas priority in identifiable cash proceeds of the inventory to the extent the identifiable cashproceeds are received on or before the delivery of the inventory to a buyer, if:
(a) the purchase-money security interest is perfected when the debtor receives possessionof the inventory;
(b) the purchase-money secured party sends an authenticated notification to the holder ofthe conflicting security interest;
(c) the holder of the conflicting security interest receives the notification within five yearsbefore the debtor receives possession of the inventory; and
(d) the notification states that the person sending the notification has or expects to acquirea purchase-money security interest in inventory of the debtor and describes the inventory.
(3) Subsections (2)(b) through (d) apply only if the holder of the conflicting securityinterest had filed a financing statement covering the same types of inventory:
(a) if the purchase-money security interest is perfected by filing, before the date of thefiling; or
(b) if the purchase-money security interest is temporarily perfected without filing orpossession under Subsection 70A-9a-312(6), before the beginning of the 20-day periodthereunder.
(4) Subject to Subsection (5) and except as otherwise provided in Subsection (7), aperfected purchase-money security interest in livestock that are farm products has priority over aconflicting security interest in the same livestock, and, except as otherwise provided in Section70A-9a-327, a perfected security interest in their identifiable proceeds and identifiable products intheir unmanufactured states also has priority, if:
(a) the purchase-money security interest is perfected when the debtor receives possessionof the livestock;
(b) the purchase-money secured party sends an authenticated notification to the holder ofthe conflicting security interest;
(c) the holder of the conflicting security interest receives the notification within sixmonths before the debtor receives possession of the livestock; and
(d) the notification states that the person sending the notification has or expects to acquirea purchase-money security interest in livestock of the debtor and describes the livestock.
(5) Subsections (4)(b) through (d) apply only if the holder of the conflicting securityinterest had filed a financing statement covering the same types of livestock:
(a) if the purchase-money security interest is perfected by filing, before the date of thefiling; or
(b) if the purchase-money security interest is temporarily perfected without filing orpossession under Subsection 70A-9a-312(6), before the beginning of the 20-day periodthereunder.
(6) Except as otherwise provided in Subsection (7), a perfected purchase-money securityinterest in software has priority over a conflicting security interest in the same collateral, and,except as otherwise provided in Section 70A-9a-327, a perfected security interest in itsidentifiable proceeds also has priority, to the extent that the purchase-money security interest inthe goods in which the software was acquired for use has priority in the goods and proceeds ofthe goods under this section.
(7) If more than one security interest qualifies for priority in the same collateral underSubsection (1), (2), (4), or (6):
(a) a security interest securing an obligation incurred as all or part of the price of thecollateral has priority over a security interest securing an obligation incurred for value given toenable the debtor to acquire rights in or the use of collateral; and
(b) in all other cases, Subsection 70A-9a-322(1) applies to the qualifying securityinterests.
Enacted by Chapter 252, 2000 General Session