9102. Application of division; Nonpossessory security interests in inventory of retail merchant

(1) Except as otherwise provided in Section 9104 on excluded transactions, this division applies

(a) To any transaction (regardless of its form) which is intended to create a security interest in personal property or fixtures including goods, documents, instruments, general intangibles, chattel paper or accounts; and also

(b) To any sale of accounts or chattel paper.

(2) This division applies to security interests created by contract including pledge, assignment, chattel mortgage, chattel trust, trust deed, inventory lien, equipment trust, conditional sale, trust receipt, other lien or title retention contract and lease or consignment intended as security. This division does not apply to statutory liens except as provided in Section 9310.

(3) The application of this division to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this division does not apply.

(4) Notwithstanding anything to the contrary contained in this division, but subject to subdivisions (5), (6), and (7), no nonpossessory security interest, other than a purchase money security interest, may be given or taken in or to the inventory of a retail merchant held for sale consisting of beer, wine, or liquor. The phrase "purchase money security interest" as used in this subdivision does not extend to any after-acquired property other than the initial property sold by a secured party or taken by a lender as security as provided in Section 9107.

(5) Except as provided in this subdivision, any nonpossessory security interest in the inventory, other than beer, wine, or liquor, of a retail merchant shall be effective with respect to goods in which the debtor acquires rights before, on, or after July 1, 1985, provided the requirements of subdivision (1) of Section 9203 are met before, on, or after July 1, 1985. Any nonpossessory security interest in the inventory, other than beer, wine, or liquor, of a retail merchant whose sales of goods for personal, family, or household purposes exceeded 75 percent in dollar volume of his or her total sales of all goods during the 12 months preceding the filing of the financing statement perfecting the security interest shall not be valid unless:

(a) The security interest is a purchase money security interest as defined in Section 9107; or

(b) The security interest secures a debt as to which the secured party has made no restrictions as to use of funds, other than those which are commercially reasonable and made in good faith.

(6) Subdivisions (4) and (5) do not apply to the following:

(a) Inventory consisting of durable goods having a unit retail value of at least five hundred dollars ($ 500) or motor vehicles, housetrailers, trailers, semitrailers, farm machinery, construction machinery, or aircraft, or repair parts of any of the foregoing.

(b) Inventory of a debtor which is a cooperative association organized pursuant to Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code (agricultural cooperative associations) or Part 3 (commencing with Section 13200) of Division 3 of Title 1 of the Corporations Code (Fish Marketing Act).

(7) For purposes of this section, a "retail merchant" is a merchant whose sales for resale did not exceed 75 percent in dollar volume of his or her total sales of all goods during the 12 months preceding the filing of the financing statement perfecting the security interest; and for the purpose of this subdivision, a sale of goods to a contractor, who is required to be licensed, for the purpose of incorporating such goods at any time into improvements or repairs to real property, is a sale for resale.

(8) A financing statement or a continuation statement filed on or before July 1, 1985, if otherwise sufficient in accordance with this division (other than Section 9102), shall be effective with respect to a security interest which first becomes permissible under Section 9102 on or after July 1, 1985.

(9) This section shall become effective on July 1, 1985.