1-1 By: Swinford (Senate Sponsor - Haywood) H.B. No. 1463 1-2 (In the Senate - Received from the House April 18, 1995; 1-3 April 19, 1995, read first time and referred to Committee on 1-4 Natural Resources; May 5, 1995, reported favorably by the following 1-5 vote: Yeas 8, Nays 2; May 5, 1995, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to a lien in favor of a seller of agricultural chemicals, 1-9 agricultural seeds, or animal feed or of a provider of labor in 1-10 connection with the agricultural chemicals or agricultural seeds; 1-11 providing penalties. 1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-13 SECTION 1. Title 5, Agriculture Code, is amended by adding 1-14 Subtitle H to read as follows: 1-15 SUBTITLE H. HORTICULTURAL LIENS 1-16 CHAPTER 128. AGRICULTURAL CHEMICAL AND SEED LIENS 1-17 SUBCHAPTER A. GENERAL PROVISIONS 1-18 Sec. 128.001. DEFINITIONS. In this chapter: 1-19 (1) "Agricultural chemical" includes fertilizer 1-20 material as defined under Section 63.001, pesticides as defined 1-21 under Section 76.001, plant regulators as defined under Section 1-22 76.001, lime, plant and soil amendments, plant food, herbicides, 1-23 and chemical compounds that are applied to crops or to land used 1-24 for growing crops. 1-25 (2) "Agricultural seed" has the meaning assigned under 1-26 Section 61.001. 1-27 (3) "Labor" means labor or services performed in the 1-28 application, delivery, or preparation of an agricultural chemical 1-29 or agricultural seed. 1-30 (4) "Reasonable or agreed charges" means: 1-31 (A) any agreed price for agricultural chemicals, 1-32 agricultural seeds, or labor sold or provided to a lien debtor at 1-33 the lien debtor's request; or 1-34 (B) the reasonable value of agricultural 1-35 chemicals, agricultural seeds, or labor, as of the date of 1-36 application, delivery, or preparation, if there is not an agreed 1-37 price or an agreed method for determining price. 1-38 Sec. 128.002. PROCEEDS. (a) For the purposes of this 1-39 chapter, proceeds are the amounts received by a lien debtor, before 1-40 a deduction for taxes, fees, or assessments or a deduction made 1-41 under a court order, from the sale of: 1-42 (1) the crop that existed at the time of application 1-43 on the land of the agricultural chemical sold by the lien claimant 1-44 or applied, delivered, or prepared by the lien claimant; 1-45 (2) the first crop produced on the land after the 1-46 agricultural chemical sold by the lien claimant or applied, 1-47 delivered, or prepared by the lien claimant was applied, if crops 1-48 did not exist on the land at the time the agricultural chemical was 1-49 applied; or 1-50 (3) the crop produced from the agricultural seed 1-51 supplied by the lien claimant or applied, delivered, or prepared by 1-52 the lien claimant. 1-53 (b) For the purposes of this chapter, the following are not 1-54 included as proceeds: 1-55 (1) amounts due or owing to a cooperative association 1-56 under Chapter 51 or 52; or 1-57 (2) amounts retained by a cooperative association 1-58 under Chapter 51 or 52. 1-59 (Sections 128.003-128.005 reserved for expansion 1-60 SUBCHAPTER B. AGRICULTURAL CHEMICAL AND SEED LIEN 1-61 Sec. 128.006. NOTICE BEFORE PURCHASE; REQUIRED NOTICE BEFORE 1-62 CLAIMING LIEN. (a) A person claiming a lien under this chapter 1-63 must have provided notice of the provisions of this chapter, before 1-64 purchase, either generally to purchasers of agricultural chemicals, 1-65 agricultural seeds, or labor as part of the lien claimant's normal 1-66 business practices or specifically to the lien debtor. Notice 1-67 provided under this subsection must read, to the extent applicable, 1-68 substantially as follows: "The sale of agricultural chemicals or 2-1 agricultural seed on credit and the provision of labor related to 2-2 agricultural chemicals or agricultural seed is subject to Chapter 2-3 128, Agriculture Code. Failure to pay the agreed or reasonable 2-4 charges for the chemicals, seed, or labor may result in the 2-5 attachment of a lien to the proceeds of the agricultural products 2-6 produced with the aid of the chemicals, seed, or labor." A 2-7 potential lien claimant may satisfy the requirements of this 2-8 subsection: 2-9 (1) by printing or stamping the notice on credit 2-10 applications filled out by purchasers; and 2-11 (2) for future purchases by purchasers who are not 2-12 notified on the credit application, by printing or stamping the 2-13 notice on an invoice or on a statement sent by separate cover. 2-14 (b) Before a person may claim a lien under this chapter, the 2-15 person must send to the debtor by certified mail written notice 2-16 that states: 2-17 (1) that the payment of the reasonable or agreed 2-18 charges is more than 30 days overdue; 2-19 (2) the amount that is overdue; 2-20 (3) that the debtor has the following three 2-21 alternatives: 2-22 (A) to allow the lien to be filed; 2-23 (B) to enter into an agreement granting a 2-24 security interest in the proceeds described by Section 128.002 2-25 under the Business & Commerce Code; or 2-26 (C) to pay the reasonable or agreed charges; and 2-27 (4) in at least 10-point type, that: 2-28 (A) the debtor has until the 10th day after the 2-29 date on which the notice is received to select an alternative under 2-30 Subdivision (3), notify the claimant of the alternative selected, 2-31 and satisfy all the requirements of the selected alternative; and 2-32 (B) the claimant may file the notice of claim of 2-33 lien at any time after the 10th day after the date on which the 2-34 debtor receives the notice if the debtor does not comply with the 2-35 requirements of Paragraph (A). 2-36 Sec. 128.007. ATTACHMENT OF LIEN. A lien established under 2-37 this chapter attaches to the proceeds described by Section 2-38 128.002. 2-39 Sec. 128.008. AMOUNT OF LIEN. The amount of a lien under 2-40 this chapter is equal to the sum of: 2-41 (1) the amount of the unpaid reasonable or agreed 2-42 charges for: 2-43 (A) agricultural chemicals, labor, or both, as 2-44 appropriate, furnished within the 60-day period ending on the day 2-45 the lien attaches; and 2-46 (B) agricultural seeds, labor, or both, as 2-47 appropriate, furnished within the 45-day period ending on the day 2-48 the lien attaches; and 2-49 (2) the filing fees for the lien as provided by this 2-50 chapter. 2-51 Sec. 128.009. PERSON ENTITLED TO FILE; EXCEPTION. (a) 2-52 Except as provided by Subsection (b) or by Section 128.047, a 2-53 person who provides an agricultural chemical, agricultural seed, or 2-54 labor may file a notice of claim of lien as provided by this 2-55 chapter. 2-56 (b) A claimant may not file a notice of claim of lien if the 2-57 arbitration of a dispute between the claimant and the debtor is 2-58 pending or has not been resolved under Chapter 64. A claimant may 2-59 not file a notice of claim of lien if the settlement of a dispute 2-60 between the claimant and the debtor is pending or has not been 2-61 resolved under Section 128.012. 2-62 Sec. 128.010. PERFECTION OF LIEN. A lien created under this 2-63 chapter is perfected on the filing of a notice of claim of lien 2-64 with the secretary of state as provided by this chapter. 2-65 Sec. 128.011. DURATION OF NOTICE OF CLAIM OF LIEN. (a) 2-66 Except as otherwise provided by this chapter, the notice of claim 2-67 of lien is effective, and a new notice of claim of lien is not 2-68 required to maintain the lien, as long as the person who provides 2-69 the agricultural chemical, agricultural seed, or labor either: 2-70 (1) remains unpaid for the amount secured by the lien; 3-1 or 3-2 (2) continues to provide an agricultural chemical, 3-3 agricultural seed, or labor on a regular basis to the lien debtor. 3-4 (b) For purposes of this section, providing an agricultural 3-5 chemical, agricultural seed, or labor is not considered to be made 3-6 on a regular basis if a period of more than 45 days elapses between 3-7 applications, deliveries, or preparations. 3-8 Sec. 128.012. PROCEDURES FOR SETTLEMENT OF DISPUTES. (a) 3-9 The commissioner of agriculture by rule shall establish a procedure 3-10 to settle a dispute between a claimant supplying agricultural 3-11 chemicals or labor in the application, delivery, or preparation of 3-12 agricultural chemicals and a debtor. The procedures must provide: 3-13 (1) a time requirement for submitting the dispute to 3-14 the department; 3-15 (2) a time requirement within which a notice of the 3-16 dispute must be submitted to each party; and 3-17 (3) a process for evaluating the dispute. 3-18 (b) Each party to the dispute is equally liable for the 3-19 reasonable costs incurred by the department in carrying out this 3-20 section. 3-21 Sec. 128.013. CONTENTS OF NOTICE OF CLAIM OF LIEN. The 3-22 notice of claim of lien must include: 3-23 (1) the name and address of the lien claimant; 3-24 (2) the name and address of the lien debtor; 3-25 (3) the location of the property to which the 3-26 agricultural chemical, agricultural seed, or labor was provided; 3-27 (4) a statement that the payment of the reasonable or 3-28 agreed charges is more than 30 days overdue; 3-29 (5) the amount that is overdue; 3-30 (6) a statement, signed under penalty of perjury, 3-31 that: 3-32 (A) the lien claimant provided notice of the 3-33 provisions of this chapter, before purchase, either generally to 3-34 purchasers of agricultural chemicals, agricultural seeds, or labor 3-35 as part of the lien claimant's normal business practices or 3-36 specifically to the lien debtor, in the manner required by Section 3-37 128.006(a); 3-38 (B) the lien claimant sent to the lien debtor 3-39 the notice required by Section 128.006(b); 3-40 (C) more than 10 days have elapsed since the 3-41 date on which the notice was received by the lien debtor; and 3-42 (D) the lien debtor has not complied with the 3-43 requirements of an alternative set out by Section 128.006(b); and 3-44 (7) a statement that the lien claimant has an 3-45 agricultural chemical or agricultural seed lien under this chapter. 3-46 Sec. 128.014. SIGNATURE. The notice of claim of lien shall 3-47 be signed by the lien claimant or by a person authorized to sign 3-48 documents of a similar kind on behalf of the claimant. 3-49 Sec. 128.015. FORM. (a) The notice of claim of lien must 3-50 be filed on a form that satisfies the requirements of a financing 3-51 statement under Section 9.402, Business & Commerce Code, except 3-52 that: 3-53 (1) the lien claimant may be identified either as a 3-54 lien claimant or as a secured party; 3-55 (2) the form must be signed by the lien claimant and 3-56 is not required to be signed by the lien debtor; and 3-57 (3) in the space for the description of the 3-58 collateral, the information specified in Sections 128.013(3), (4), 3-59 (5), and (7) must be entered. 3-60 (b) A separately signed statement containing the information 3-61 specified in Section 128.013(6) shall be attached to the form 3-62 required under Subsection (a). 3-63 Sec. 128.016. FILING AND MARKING IN OFFICE OF SECRETARY OF 3-64 STATE; FEE. (a) The notice of claim of lien shall be filed and 3-65 marked in the office of the secretary of state in the same manner 3-66 as a financing statement is filed and marked under Section 9.403, 3-67 Business & Commerce Code. 3-68 (b) The uniform fee for filing and indexing and for stamping 3-69 a copy furnished by the secured party is the same as the fee 3-70 assessed under Section 9.403, Business & Commerce Code. 4-1 Sec. 128.017. TIME OF WRITTEN NOTICE. The lien claimant 4-2 shall provide written notice of the claim of lien to the lien 4-3 debtor not later than the 10th day after the date the notice of 4-4 claim of lien is filed with the office of the secretary of state. 4-5 Sec. 128.018. RECOGNITION OF NOTICE AS FINANCING STATEMENT. 4-6 The secretary of state shall recognize a notice of claim of lien 4-7 under this subchapter as a financing statement under Section 9.402, 4-8 Business & Commerce Code. 4-9 (Sections 128.019-128.025 reserved for expansion 4-10 SUBCHAPTER C. PRIORITY OF LIEN 4-11 Sec. 128.026. TIME OF FILING. (a) A lien created under 4-12 this chapter has the same priority as a security interest perfected 4-13 by the filing of a financing statement on the date the notice of 4-14 claim of lien was filed. 4-15 (b) A lien created under this chapter does not have priority 4-16 over labor claims for wages and salaries for personal services that 4-17 are provided by an employee to a lien debtor in connection with the 4-18 production of agricultural products, the proceeds of which are 4-19 subject to the lien. 4-20 (Sections 128.027-128.030 reserved for expansion 4-21 SUBCHAPTER D. INFORMATION CONCERNING LIEN 4-22 Sec. 128.031. ISSUANCE OF CERTIFICATE TO MEMBER OF PUBLIC; 4-23 FEE. (a) A person may obtain a certificate identifying any lien 4-24 on file and any notice of claim of lien naming a particular debtor 4-25 and stating the date and time of filing of each notice and the 4-26 names and addresses of each lienholder in the certificate. 4-27 (b) The fee for a certificate under Subsection (a) shall be 4-28 established by the secretary of state in an amount necessary to 4-29 cover the cost of administering this section. 4-30 Sec. 128.032. COPIES OF NOTICES OF CLAIM OF LIEN AND OTHER 4-31 NOTICES; FEE. (a) A person may obtain a copy of any notice of 4-32 claim of an agricultural chemical or seed lien filed. 4-33 (b) The fee for a copy of a notice of claim of lien obtained 4-34 under Subsection (a) shall be established by the secretary of 4-35 state in an amount necessary to cover the cost of administering 4-36 this section. 4-37 (Sections 128.033-128.035 reserved for expansion 4-38 SUBCHAPTER E. ENFORCEMENT OF LIEN 4-39 Sec. 128.036. WRITTEN NOTICE TO SECURED CREDITORS BY LIEN 4-40 CLAIMANT. (a) A lien claimant shall provide written notice to any 4-41 secured creditor at least 30 days before the date the lien claimant 4-42 enforces a claim of lien. 4-43 (b) For purposes of this section, "secured creditor" means 4-44 any entity named as a secured party in a financing statement that 4-45 is filed regarding the debtor and that covers: 4-46 (1) a farm product, an account, or a crop subject to 4-47 the lien; 4-48 (2) a crop growing or grown on the land on which the 4-49 agricultural chemical was applied or for which the agricultural 4-50 seed was supplied; or 4-51 (3) the next crop to be grown on that land, if a crop 4-52 is not planted. 4-53 Sec. 128.037. FORECLOSURE IN ACTION TO RECOVER REASONABLE OR 4-54 AGREED CHARGES. The lien claimant may foreclose on a lien under 4-55 this chapter only in an action to recover the reasonable or agreed 4-56 charges. 4-57 Sec. 128.038. TERMINATION STATEMENT. (a) If a lien 4-58 claimant receives payment for the total amount secured by a lien 4-59 under this chapter and the lien claimant has not furnished an 4-60 agricultural chemical, agricultural seed, or labor during the 4-61 45-day period before the date on which payment is received, the 4-62 lien claimant shall file a termination statement with the secretary 4-63 of state and shall send the lien debtor a copy of the statement as 4-64 provided by this section. The statement shall state that the lien 4-65 claimant no longer claims a security interest under the notice of 4-66 claim of lien. 4-67 (b) The notice of claim of lien must be identified in the 4-68 statement under Subsection (a) by the date, names of parties to the 4-69 agreement, and file number of the original lien. 4-70 (c) If the lien claimant does not send the termination 5-1 statement required by this section before the 11th day after the 5-2 date on which the lien claimant received payment, the lien claimant 5-3 is liable to the lien debtor for actual damages suffered by the 5-4 lien debtor as a result of the failure. If the lien claimant acts 5-5 in bad faith in failing to send the statement, the lien claimant is 5-6 liable for an additional penalty of $100. 5-7 (d) The filing officer in the secretary of state's office 5-8 shall mark each termination statement with the date and time of 5-9 filing and shall index the statement under the name of the lien 5-10 debtor and under the file number of the original lien. If the 5-11 filing officer has a microfilm or other photographic record of the 5-12 lien and related filings, the filing officer may destroy the filed 5-13 notice of claim of lien at any time after receiving the termination 5-14 statement. If the filing officer does not have a photographic 5-15 record, the filing officer may destroy the filed notice of claim of 5-16 lien at any time after the first anniversary of the date on which 5-17 the filing officer received the termination statement. 5-18 (e) The uniform filing fee for filing and indexing the 5-19 termination statement is the same as the fee assessed under Section 5-20 9.404(c), Business & Commerce Code. 5-21 Sec. 128.039. RIGHT OF ASSIGNMENT OR TRANSFER; FILING OF 5-22 STATEMENT. (a) A lien created under this chapter may be assigned 5-23 by the holder of the lien, with full rights of enforcement. 5-24 (b) The lienholder shall file a statement of assignment with 5-25 the secretary of state as provided by Section 9.405, Business & 5-26 Commerce Code. 5-27 (Sections 128.040-128.045 reserved for expansion 5-28 SUBCHAPTER F. MISCELLANEOUS 5-29 Sec. 128.046. RULES. The secretary of state may adopt rules 5-30 necessary to carry out the secretary's duties under this chapter, 5-31 including prescribing necessary forms. 5-32 Sec. 128.047. MAXIMUM NUMBER OF LIENS. Not more than four 5-33 liens may be enforced under this chapter against the same proceeds 5-34 of a lien debtor even if the liens are filed by different lien 5-35 claimants. 5-36 Sec. 128.048. APPLICABILITY OF OTHER LAW. Chapter 9, 5-37 Business & Commerce Code, applies to a lien created under this 5-38 chapter to the extent Chapter 9 is consistent with this chapter. 5-39 SECTION 2. Title 6, Agriculture Code, is amended by adding 5-40 Subtitle E to read as follows: 5-41 SUBTITLE E. LIENS ON ANIMAL PRODUCTS 5-42 CHAPTER 188. LIENS FOR ANIMAL FEED 5-43 SUBCHAPTER A. GENERAL PROVISIONS 5-44 Sec. 188.001. DEFINITIONS. In this chapter: 5-45 (1) "Animal feed" includes: 5-46 (A) commercial feed as described by Section 5-47 141.002(a), including a substance listed by Section 141.002(c) if 5-48 used as a feed for animals; or 5-49 (B) customer-formula feed as defined under 5-50 Section 141.001. 5-51 (2) "Labor" means labor or services performed in the 5-52 delivery or preparation of animal feed provided by the seller of 5-53 the animal feed. 5-54 (3) "Livestock" means beef cattle, dairy cattle, 5-55 sheep, goats, hogs, horses, poultry, and ratites. 5-56 (4) "Reasonable or agreed charges" means: 5-57 (A) any agreed price for animal feed, including 5-58 labor, sold to a lien debtor at the lien debtor's request; or 5-59 (B) the reasonable value of animal feed, 5-60 including labor, as of the date of delivery or preparation, if 5-61 there is not an agreed price or an agreed method for determining 5-62 price. 5-63 Sec. 188.002. PROCEEDS. (a) For the purposes of this 5-64 chapter, proceeds are the amounts received by a lien debtor, before 5-65 a deduction for taxes, fees, or assessments or a deduction made 5-66 under a court order, from the sale of: 5-67 (1) the livestock for which the animal feed was used; 5-68 (2) meat, milk, skins, wool, or other products derived 5-69 from that livestock; or 5-70 (3) issue born to that livestock. 6-1 (b) For the purposes of this chapter, proceeds do not 6-2 include amounts: 6-3 (1) due or owing to a cooperative association under 6-4 Chapter 51 or 52; or 6-5 (2) retained by a cooperative association under 6-6 Chapter 51 or 52. 6-7 (Sections 188.003-188.005 reserved for expansion 6-8 SUBCHAPTER B. ANIMAL FEED LIEN 6-9 Sec. 188.006. NOTICE BEFORE PURCHASE; REQUIRED NOTICE BEFORE 6-10 CLAIMING LIEN. (a) A person claiming a lien under this chapter 6-11 must have provided notice of the provisions of this chapter, before 6-12 purchase, either generally to purchasers of animal feed as part of 6-13 the lien claimant's normal business practices or specifically to 6-14 the lien debtor. Notice provided under this subsection must read, 6-15 to the extent applicable, substantially as follows: "The sale of 6-16 animal feed on credit is subject to Chapter 188, Agriculture Code. 6-17 Failure to pay the agreed or reasonable charges for the feed may 6-18 result in the attachment of a lien to the proceeds of the livestock 6-19 for which the feed is used or the proceeds of the animal products 6-20 produced from the livestock." A potential lien claimant may 6-21 satisfy the requirements of this subsection: 6-22 (1) by printing or stamping the notice on credit 6-23 applications filled out by purchasers; and 6-24 (2) for future purchases by purchasers who are not 6-25 notified on the credit application, by printing or stamping the 6-26 notice on an invoice or on a statement sent by separate cover. 6-27 (b) Before a person may claim a lien under this chapter, the 6-28 person must send to the debtor by certified mail written notice 6-29 that states: 6-30 (1) that the payment of the reasonable or agreed 6-31 charges is more than 30 days overdue; 6-32 (2) the amount that is overdue; 6-33 (3) that the debtor has the following three 6-34 alternatives: 6-35 (A) to allow the lien to be filed; 6-36 (B) to enter into an agreement granting a 6-37 security interest in the proceeds described by Section 188.002 6-38 under the Business & Commerce Code; or 6-39 (C) to pay the reasonable or agreed charges; and 6-40 (4) in at least 10-point type, that: 6-41 (A) the debtor has until the 10th day after the 6-42 date on which the notice is received to select an alternative under 6-43 Subdivision (3), notify the claimant of the alternative selected, 6-44 and satisfy all the requirements of the selected alternative; and 6-45 (B) the claimant may file the notice of claim of 6-46 lien at any time after the 10th day after the date on which the 6-47 debtor receives the notice if the debtor does not comply with the 6-48 requirements of Paragraph (A). 6-49 Sec. 188.007. ATTACHMENT OF LIEN. A lien established under 6-50 this chapter attaches to the proceeds described by Section 188.002. 6-51 Sec. 188.008. AMOUNT OF LIEN. The amount of a lien under 6-52 this chapter is equal to the sum of: 6-53 (1) the amount of the unpaid reasonable or agreed 6-54 charges for animal feed furnished within the 45-day period ending 6-55 on the day the lien attaches; and 6-56 (2) the filing fees for the lien as provided by this 6-57 chapter. 6-58 Sec. 188.009. PERSON ENTITLED TO FILE; EXCEPTION. (a) 6-59 Except as provided by Subsection (b) or by Section 188.047, a 6-60 person who provides animal feed may file a notice of claim of lien 6-61 as provided by this chapter. 6-62 (b) The claimant may not file a notice of claim of lien if 6-63 the settlement of a dispute between the claimant and the debtor is 6-64 pending or has not been resolved under Section 188.012. 6-65 Sec. 188.010. PERFECTION OF LIEN. A lien created under this 6-66 chapter is perfected on the filing of a notice of claim of lien 6-67 with the secretary of state as provided by this chapter. 6-68 Sec. 188.011. DURATION OF NOTICE OF CLAIM OF LIEN. (a) 6-69 Except as otherwise provided by this chapter, the notice of claim 6-70 of lien is effective, and a new notice of claim of lien is not 7-1 required to maintain the lien, as long as the person who provides 7-2 the animal feed, including labor, either: 7-3 (1) remains unpaid for the amount secured by the lien; 7-4 or 7-5 (2) continues to provide animal feed on a regular 7-6 basis to the lien debtor. 7-7 (b) For purposes of this section, providing animal feed, 7-8 including labor, is not considered to be made on a regular basis if 7-9 a period of more than 45 days elapses between deliveries or 7-10 preparations. 7-11 Sec. 188.012. PROCEDURES FOR SETTLEMENT OF DISPUTES. (a) 7-12 The commissioner of agriculture by rule shall establish a procedure 7-13 to settle a dispute between a claimant supplying animal feed and 7-14 labor and a debtor. The procedures must provide: 7-15 (1) a time requirement for submitting the dispute to 7-16 the department; 7-17 (2) a time requirement within which a notice of the 7-18 dispute must be submitted to each party; and 7-19 (3) a process for evaluating the dispute. 7-20 (b) Each party to the dispute is equally liable for the 7-21 reasonable costs incurred by the department in carrying out this 7-22 section. 7-23 Sec. 188.013. CONTENTS OF NOTICE OF CLAIM OF LIEN. The 7-24 notice of claim of lien must include: 7-25 (1) the name and address of the lien claimant; 7-26 (2) the name and address of the lien debtor; 7-27 (3) the location of the livestock for which the animal 7-28 feed was provided; 7-29 (4) a statement that the payment of the reasonable or 7-30 agreed charges is more than 30 days overdue; 7-31 (5) the amount that is overdue; 7-32 (6) a statement, signed under penalty of perjury, 7-33 that: 7-34 (A) the lien claimant provided notice of the 7-35 provisions of this chapter, before purchase, either generally to 7-36 purchasers of animal feed as part of the lien claimant's normal 7-37 business practices or specifically to the lien debtor, in the 7-38 manner required by Section 188.006(a); 7-39 (B) the lien claimant sent to the lien debtor 7-40 the notice required by Section 188.006(b); 7-41 (C) more than 10 days have elapsed since the 7-42 date on which the notice was received by the lien debtor; and 7-43 (D) the lien debtor has not complied with the 7-44 requirements of an alternative set out by Section 188.006(b); and 7-45 (7) a statement that the lien claimant has an animal 7-46 feed lien under this chapter. 7-47 Sec. 188.014. SIGNATURE. The notice of claim of lien shall 7-48 be signed by the lien claimant or by a person authorized to sign 7-49 documents of a similar kind on behalf of the claimant. 7-50 Sec. 188.015. FORM. (a) The notice of claim of lien must 7-51 be filed on a form that satisfies the requirements of a financing 7-52 statement under Section 9.402, Business & Commerce Code, except 7-53 that: 7-54 (1) the lien claimant may be identified either as a 7-55 lien claimant or as a secured party; 7-56 (2) the form must be signed by the lien claimant and 7-57 is not required to be signed by the lien debtor; and 7-58 (3) in the space for the description of the 7-59 collateral, the information specified in Sections 188.013(3), (4), 7-60 (5), and (7) must be entered. 7-61 (b) A separately signed statement containing the information 7-62 specified in Section 188.013(6) shall be attached to the form 7-63 required under Subsection (a). 7-64 Sec. 188.016. FILING AND MARKING IN OFFICE OF SECRETARY OF 7-65 STATE; FEE. (a) The notice of claim of lien shall be filed and 7-66 marked in the office of the secretary of state in the same manner 7-67 as a financing statement is filed and marked under Section 9.403, 7-68 Business & Commerce Code. 7-69 (b) The uniform fee for filing and indexing and for stamping 7-70 a copy furnished by the secured party is the same as the fee 8-1 assessed under Section 9.403, Business & Commerce Code. 8-2 Sec. 188.017. TIME OF WRITTEN NOTICE. The lien claimant 8-3 shall provide written notice of the claim of lien to the lien 8-4 debtor not later than the 10th day after the date the notice of 8-5 claim of lien is filed with the office of the secretary of state. 8-6 Sec. 188.018. RECOGNITION OF NOTICE AS FINANCING STATEMENT. 8-7 The secretary of state shall recognize a notice of claim of lien 8-8 under this subchapter as a financing statement under Section 9.402, 8-9 Business & Commerce Code. 8-10 (Sections 188.019-188.025 reserved for expansion 8-11 SUBCHAPTER C. PRIORITY OF LIEN 8-12 Sec. 188.026. TIME OF FILING. (a) A lien created under 8-13 this chapter has the same priority as a security interest perfected 8-14 by the filing of a financing statement on the date the notice of 8-15 claim of lien was filed. 8-16 (b) A lien created under this chapter does not have priority 8-17 over: 8-18 (1) labor claims for wages and salaries for personal 8-19 services that are provided by an employee to a lien debtor in 8-20 connection with the livestock, the production of animal products 8-21 derived from the livestock, or issue born to the livestock, the 8-22 proceeds of which are subject to the lien; or 8-23 (2) claims for charges for the care of the livestock, 8-24 the proceeds of which are subject to the lien. 8-25 (Sections 188.027-188.030 reserved for expansion 8-26 SUBCHAPTER D. INFORMATION CONCERNING LIEN 8-27 Sec. 188.031. ISSUANCE OF CERTIFICATE TO MEMBER OF PUBLIC; 8-28 FEE. (a) A person may obtain a certificate identifying any lien 8-29 on file and any notice of claim of lien naming a particular debtor 8-30 and stating the date and time of filing of each notice and the 8-31 names and addresses of each lienholder in the certificate. 8-32 (b) The fee for a certificate under Subsection (a) shall be 8-33 established by the secretary of state in an amount necessary to 8-34 cover the cost of administering this section. 8-35 Sec. 188.032. COPIES OF NOTICES OF CLAIM OF LIEN AND OTHER 8-36 NOTICES; FEE. (a) A person may obtain a copy of any notice of 8-37 claim of an animal feed lien filed. 8-38 (b) The fee for a copy of a notice of claim of lien obtained 8-39 under Subsection (a) shall be established by the secretary of state 8-40 in an amount necessary to cover the cost of administering this 8-41 section. 8-42 (Sections 188.033-188.035 reserved for expansion 8-43 SUBCHAPTER E. ENFORCEMENT OF LIEN 8-44 Sec. 188.036. WRITTEN NOTICE TO SECURED CREDITORS BY LIEN 8-45 CLAIMANT. (a) A lien claimant shall provide written notice to any 8-46 secured creditor at least 30 days before the date the lien claimant 8-47 enforces a claim of lien. 8-48 (b) For purposes of this section, "secured creditor" means 8-49 any entity named as a secured party in a financing statement that 8-50 is filed regarding the debtor and that covers an animal product, an 8-51 account, or livestock subject to the lien. 8-52 Sec. 188.037. FORECLOSURE IN ACTION TO RECOVER REASONABLE OR 8-53 AGREED CHARGES. The lien claimant may foreclose on a lien under 8-54 this chapter only in an action to recover the reasonable or agreed 8-55 charges. 8-56 Sec. 188.038. TERMINATION STATEMENT. (a) If a lien 8-57 claimant receives payment for the total amount secured by a lien 8-58 under this chapter and the lien claimant has not furnished animal 8-59 feed during the 45-day period before the date on which payment is 8-60 received, the lien claimant shall file a termination statement with 8-61 the secretary of state and shall send the lien debtor a copy of the 8-62 statement as provided by this section. The statement shall state 8-63 that the lien claimant no longer claims a security interest under 8-64 the notice of claim of lien. 8-65 (b) The notice of claim of lien must be identified in the 8-66 statement under Subsection (a) by the date, names of parties to the 8-67 agreement, and file number of the original lien. 8-68 (c) If the lien claimant does not send the termination 8-69 statement required by this section before the 11th day after the 8-70 date on which the lien claimant received payment, the lien claimant 9-1 is liable to the lien debtor for actual damages suffered by the 9-2 lien debtor as a result of the failure. If the lien claimant acts 9-3 in bad faith in failing to send the statement, the lien claimant is 9-4 liable for an additional penalty of $100. 9-5 (d) The filing officer in the secretary of state's office 9-6 shall mark each termination statement with the date and time of 9-7 filing and shall index the statement under the name of the lien 9-8 debtor and under the file number of the original lien. If the 9-9 filing officer has a microfilm or other photographic record of the 9-10 lien and related filings, the filing officer may destroy the filed 9-11 notice of claim of lien at any time after receiving the termination 9-12 statement. If the filing officer does not have a photographic 9-13 record, the filing officer may destroy the filed notice of claim of 9-14 lien at any time after the first anniversary of the date on which 9-15 the filing officer received the termination statement. 9-16 (e) The uniform filing fee for filing and indexing the 9-17 termination statement is the same as the fee assessed under Section 9-18 9.404(c), Business & Commerce Code. 9-19 Sec. 188.039. RIGHT OF ASSIGNMENT OR TRANSFER; FILING OF 9-20 STATEMENT. (a) A lien created under this chapter may be assigned 9-21 by the holder of the lien, with full rights of enforcement. 9-22 (b) The lienholder shall file a statement of assignment with 9-23 the secretary of state as provided by Section 9.405, Business & 9-24 Commerce Code. 9-25 (Sections 188.040-188.045 reserved for expansion 9-26 SUBCHAPTER F. MISCELLANEOUS 9-27 Sec. 188.046. RULES. The secretary of state may adopt rules 9-28 necessary to carry out the secretary's duties under this chapter, 9-29 including prescribing necessary forms. 9-30 Sec. 188.047. MAXIMUM NUMBER OF LIENS. Not more than four 9-31 liens may be enforced under this chapter against the same proceeds 9-32 of a lien debtor even if the liens are filed by different lien 9-33 claimants. 9-34 Sec. 188.048. APPLICABILITY OF OTHER LAW. Chapter 9, 9-35 Business & Commerce Code, applies to a lien created under this 9-36 chapter to the extent Chapter 9 is consistent with this chapter. 9-37 SECTION 3. (a) Chapter 128, Agriculture Code, as added by 9-38 this Act, applies to an agricultural chemical, agricultural seed, 9-39 or labor supplied on or after the effective date of this Act. 9-40 (b) Chapter 188, Agriculture Code, as added by this Act, 9-41 applies to animal feed and labor supplied on or after the effective 9-42 date of this Act. 9-43 SECTION 4. This Act takes effect September 1, 1995. 9-44 SECTION 5. The importance of this legislation and the 9-45 crowded condition of the calendars in both houses create an 9-46 emergency and an imperative public necessity that the 9-47 constitutional rule requiring bills to be read on three several 9-48 days in each house be suspended, and this rule is hereby suspended. 9-49 * * * * *