By Haywood S.B. No. 941
74R3646 JRD-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a lien in favor of a seller of agricultural chemicals
1-3 or agricultural seeds; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 5, Agriculture Code, is amended by adding
1-6 Subtitle H to read as follows:
1-7 SUBTITLE H. HORTICULTURAL LIENS
1-8 CHAPTER 128. AGRICULTURAL CHEMICAL AND SEED LIENS
1-9 SUBCHAPTER A. GENERAL PROVISIONS
1-10 Sec. 128.001. DEFINITIONS. In this chapter:
1-11 (1) "Agricultural chemical" includes fertilizer
1-12 material as defined under Section 63.001, pesticides as defined
1-13 under Section 76.001, plant regulators as defined under Section
1-14 76.001, lime, plant and soil amendments, plant food, herbicides,
1-15 and chemical compounds that are applied to crops or to land used
1-16 for growing crops.
1-17 (2) "Agricultural seed" has the meaning assigned under
1-18 Section 61.001.
1-19 (3) "Equipment" means machinery or equipment used by
1-20 the seller of the agricultural chemical or agricultural seed in the
1-21 application of the chemical or seed. The term does not include
1-22 machinery or equipment furnished by the buyer of the chemical or
1-23 seed.
1-24 (4) "Labor" means labor or services performed in the
2-1 application, delivery, or preparation of an agricultural chemical
2-2 or agricultural seed provided by the seller of the agricultural
2-3 chemical or agricultural seed.
2-4 (5) "Reasonable or agreed charges" means:
2-5 (A) any agreed price for agricultural chemicals
2-6 or agricultural seeds, including labor and the use of equipment,
2-7 sold to a lien debtor at the lien debtor's request; or
2-8 (B) the reasonable value of agricultural
2-9 chemicals or agricultural seeds, including labor and the use of
2-10 equipment, as of the date of application, delivery, or preparation,
2-11 if there is not an agreed price or an agreed method for determining
2-12 price.
2-13 Sec. 128.002. PROCEEDS. (a) For the purposes of this
2-14 chapter, proceeds are the amounts received by a lien debtor, before
2-15 a deduction for taxes, fees, or assessments or a deduction made
2-16 under a court order, from the sale of:
2-17 (1) the crop that existed at the time of application
2-18 on the land of the agricultural chemical sold by the lien
2-19 claimant;
2-20 (2) the first crop produced on the land after the
2-21 agricultural chemical sold by the lien claimant was applied, if
2-22 crops did not exist on the land at the time the agricultural
2-23 chemical was applied; or
2-24 (3) the crop produced from the agricultural seed
2-25 supplied by the lien claimant.
2-26 (b) For the purposes of this chapter, the following are not
2-27 included as proceeds:
3-1 (1) amounts due or owing to a cooperative association
3-2 under Chapter 51 or 52; or
3-3 (2) amounts retained by a cooperative association
3-4 under Chapter 51 or 52.
3-5 (Sections 128.003-128.005 reserved for expansion
3-6 SUBCHAPTER B. AGRICULTURAL CHEMICAL AND SEED LIEN
3-7 Sec. 128.006. REQUIRED NOTICE. Before a person may claim a
3-8 lien under this chapter, the person must send to the debtor by
3-9 certified mail written notice that states:
3-10 (1) that the payment of the reasonable or agreed
3-11 charges is more than 30 days overdue;
3-12 (2) the amount that is overdue;
3-13 (3) that the debtor has the following three
3-14 alternatives:
3-15 (A) to allow the lien to be filed;
3-16 (B) to enter into an agreement granting a
3-17 security interest in the proceeds described by Section 128.002
3-18 under the Business & Commerce Code; or
3-19 (C) to pay the reasonable or agreed charges; and
3-20 (4) in at least 10-point type, that:
3-21 (A) the debtor has until the 10th day after the
3-22 date on which the notice is received to select an alternative under
3-23 Subdivision (3), notify the claimant of the alternative selected,
3-24 and satisfy all the requirements of the selected alternative; and
3-25 (B) the claimant may file the notice of claim of
3-26 lien at any time after the 10th day after the date on which the
3-27 debtor receives the notice if the debtor does not comply with the
4-1 requirements of Paragraph (A).
4-2 Sec. 128.007. ATTACHMENT OF LIEN. A lien established under
4-3 this chapter attaches to the proceeds described by Section
4-4 128.002.
4-5 Sec. 128.008. AMOUNT OF LIEN. The amount of a lien under
4-6 this chapter is equal to the sum of:
4-7 (1) the amount of the unpaid reasonable or agreed
4-8 charges for:
4-9 (A) agricultural chemicals furnished within the
4-10 60-day period ending on the day the lien attaches; and
4-11 (B) agricultural seeds furnished within the
4-12 45-day period ending on the day the lien attaches; and
4-13 (2) the costs of enforcing the lien as provided by
4-14 this chapter.
4-15 Sec. 128.009. PERSON ENTITLED TO FILE; EXCEPTION. (a)
4-16 Except as provided by Subsection (b) or by Section 128.047, a
4-17 person who provides an agricultural chemical or agricultural seed
4-18 may file a notice of claim of lien as provided by this chapter.
4-19 (b) A claimant may not file a notice of claim of lien if the
4-20 arbitration of a dispute between the claimant and the debtor is
4-21 pending or has not been resolved under Chapter 64. A claimant may
4-22 not file a notice of claim of lien if the settlement of a dispute
4-23 between the claimant and the debtor is pending or has not been
4-24 resolved under Section 128.012.
4-25 Sec. 128.010. PERFECTION OF LIEN. A lien created under this
4-26 chapter is perfected on the filing of a notice of claim of lien
4-27 with the secretary of state as provided by this chapter.
5-1 Sec. 128.011. DURATION OF NOTICE OF CLAIM OF LIEN. (a)
5-2 Except as otherwise provided by this chapter, the notice of claim
5-3 of lien is effective, and a new notice of claim of lien is not
5-4 required to maintain the lien, as long as the person who provides
5-5 the agricultural chemical or agricultural seed, including labor and
5-6 equipment, either:
5-7 (1) remains unpaid for the amount secured by the lien;
5-8 or
5-9 (2) continues to provide an agricultural chemical or
5-10 agricultural seed on a regular basis to the lien debtor.
5-11 (b) For purposes of this section, providing an agricultural
5-12 chemical or agricultural seed, including labor and equipment, is
5-13 not considered to be made on a regular basis if a period of more
5-14 than 45 days elapses between applications, deliveries, or
5-15 preparations.
5-16 Sec. 128.012. PROCEDURES FOR SETTLEMENT OF DISPUTES. (a)
5-17 The commissioner of agriculture by rule shall establish a procedure
5-18 to settle a dispute between a claimant supplying agricultural
5-19 chemicals and labor or the use of equipment and a debtor. The
5-20 procedures must provide:
5-21 (1) a time requirement for submitting the dispute to
5-22 the department;
5-23 (2) a time requirement within which a notice of the
5-24 dispute must be submitted to each party; and
5-25 (3) a process for evaluating the dispute.
5-26 (b) Each party to the dispute is equally liable for the
5-27 reasonable costs incurred by the department in carrying out this
6-1 section.
6-2 Sec. 128.013. CONTENTS OF NOTICE OF CLAIM OF LIEN. The
6-3 notice of claim of lien must include:
6-4 (1) the name and address of the lien claimant;
6-5 (2) the name and address of the lien debtor;
6-6 (3) the location of the property to which the
6-7 agricultural chemical or agricultural seed was provided;
6-8 (4) a statement that the payment of the reasonable or
6-9 agreed charges is more than 30 days overdue;
6-10 (5) the amount that is overdue;
6-11 (6) a statement, signed under penalty of perjury,
6-12 that:
6-13 (A) the lien claimant sent to the lien debtor
6-14 the notice required by Section 128.006;
6-15 (B) more than 10 days have elapsed since the
6-16 date on which the notice was received by the lien debtor; and
6-17 (C) the lien debtor has not complied with the
6-18 requirements of an alternative set out by Section 128.006; and
6-19 (7) a statement that the lien claimant has an
6-20 agricultural chemical or agricultural seed lien under this chapter.
6-21 Sec. 128.014. SIGNATURE. The notice of claim of lien shall
6-22 be signed by the lien claimant or by a person authorized to sign
6-23 documents of a similar kind on behalf of the claimant.
6-24 Sec. 128.015. FORM. (a) The notice of claim of lien must
6-25 be filed on a form that satisfies the requirements of a financing
6-26 statement under Section 9.402, Business & Commerce Code, except
6-27 that:
7-1 (1) the lien claimant may be identified either as a
7-2 lien claimant or as a secured party;
7-3 (2) the form must be signed by the lien claimant and
7-4 is not required to be signed by the lien debtor; and
7-5 (3) in the space for the description of the
7-6 collateral, the information specified in Sections 128.013(3), (4),
7-7 (5), and (7) must be entered.
7-8 (b) A separately signed statement containing the information
7-9 specified in Section 128.013(6) shall be attached to the form
7-10 required under Subsection (a).
7-11 Sec. 128.016. FILING AND MARKING IN OFFICE OF SECRETARY OF
7-12 STATE. The notice of claim of lien shall be filed and marked in
7-13 the office of the secretary of state in the same manner as a
7-14 financing statement is filed and marked under Section 9.403,
7-15 Business & Commerce Code.
7-16 Sec. 128.017. TIME OF WRITTEN NOTICE. The lien claimant
7-17 shall provide written notice of the claim of lien to the lien
7-18 debtor not later than the 10th day after the date the notice of
7-19 claim of lien is filed with the office of the secretary of state.
7-20 Sec. 128.018. RECOGNITION OF NOTICE AS FINANCING STATEMENT.
7-21 The secretary of state shall recognize a notice of claim of lien
7-22 under this subchapter as a financing statement under Section 9.402,
7-23 Business & Commerce Code.
7-24 (Sections 128.019-128.025 reserved for expansion
7-25 SUBCHAPTER C. PRIORITY OF LIEN
7-26 Sec. 128.026. TIME OF FILING. (a) A lien created under
7-27 this chapter has the same priority as a security interest perfected
8-1 by the filing of a financing statement on the date the notice of
8-2 claim of lien was filed.
8-3 (b) A lien created under this chapter does not have priority
8-4 over labor claims for wages and salaries for personal services that
8-5 are provided by an employee to a lien debtor in connection with the
8-6 production of agricultural products, the proceeds of which are
8-7 subject to the lien.
8-8 (Sections 128.027-128.030 reserved for expansion
8-9 SUBCHAPTER D. INFORMATION CONCERNING LIEN
8-10 Sec. 128.031. ISSUANCE OF CERTIFICATE TO MEMBER OF PUBLIC;
8-11 FEE. (a) A person may obtain a certificate identifying any lien
8-12 on file and any notice of claim of lien naming a particular debtor
8-13 and stating the date and time of filing of each notice and the
8-14 names and addresses of each lienholder in the certificate.
8-15 (b) The fee for a certificate under Subsection (a) shall be
8-16 established by the secretary of state in an amount necessary to
8-17 cover the cost of administering this section.
8-18 Sec. 128.032. COPIES OF NOTICES OF CLAIM OF LIEN AND OTHER
8-19 NOTICES; FEE. (a) A person may obtain a copy of any notice of
8-20 claim of an agricultural chemical or seed lien filed.
8-21 (b) The fee for a copy of a notice of claim of lien obtained
8-22 under Subsection (a) shall be established by the secretary of
8-23 state in an amount necessary to cover the cost of administering
8-24 this section.
8-25 (Sections 128.033-128.035 reserved for expansion
8-26 SUBCHAPTER E. ENFORCEMENT OF LIEN
8-27 Sec. 128.036. WRITTEN NOTICE TO SECURED CREDITORS BY LIEN
9-1 CLAIMANT. (a) A lien claimant shall provide written notice to any
9-2 secured creditor at least 30 days before the date the lien claimant
9-3 enforces a claim of lien.
9-4 (b) For purposes of this section, "secured creditor" means
9-5 any entity named as a secured party in a financing statement that
9-6 is filed regarding the debtor and that covers:
9-7 (1) a farm product, an account, or a crop subject to
9-8 the lien;
9-9 (2) a crop growing or grown on the land on which the
9-10 agricultural chemical was applied or for which the agricultural
9-11 seed was supplied; or
9-12 (3) the next crop to be grown on that land, if a crop
9-13 is not planted.
9-14 Sec. 128.037. FORECLOSURE IN ACTION TO RECOVER REASONABLE OR
9-15 AGREED CHARGES. The lien claimant may foreclose on a lien under
9-16 this chapter only in an action to recover the reasonable or agreed
9-17 charges.
9-18 Sec. 128.038. TERMINATION STATEMENT. (a) If a lien
9-19 claimant receives payment for the total amount secured by a lien
9-20 under this chapter and the lien claimant has not furnished an
9-21 agricultural chemical or agricultural seed during the 45-day period
9-22 before the date on which payment is received, the lien claimant
9-23 shall file a termination statement with the secretary of state and
9-24 shall send the lien debtor a copy of the statement as provided by
9-25 this section. The statement shall state that the lien claimant no
9-26 longer claims a security interest under the notice of claim of
9-27 lien.
10-1 (b) The notice of claim of lien must be identified in the
10-2 statement under Subsection (a) by the date, names of parties to the
10-3 agreement, and file number of the original lien.
10-4 (c) If the lien claimant does not send the termination
10-5 statement required by this section before the 11th day after the
10-6 date on which the lien claimant received payment, the lien claimant
10-7 is liable to the lien debtor for actual damages suffered by the
10-8 lien debtor as a result of the failure. If the lien claimant acts
10-9 in bad faith in failing to send the statement, the lien claimant is
10-10 liable for an additional penalty of $100.
10-11 (d) The filing officer in the secretary of state's office
10-12 shall mark each termination statement with the date and time of
10-13 filing and shall index the statement under the name of the lien
10-14 debtor and under the file number of the original lien. If the
10-15 filing officer has a microfilm or other photographic record of the
10-16 lien and related filings, the filing officer may destroy the filed
10-17 notice of claim of lien at any time after receiving the termination
10-18 statement. If the filing officer does not have a photographic
10-19 record, the filing officer may destroy the filed notice of claim of
10-20 lien at any time after the first anniversary of the date on which
10-21 the filing officer received the termination statement.
10-22 Sec. 128.039. RIGHT OF ASSIGNMENT OR TRANSFER; FILING OF
10-23 STATEMENT. (a) A lien created under this chapter may be assigned
10-24 by the holder of the lien, with full rights of enforcement.
10-25 (b) The lienholder shall file a statement of assignment with
10-26 the secretary of state as provided by Section 9.405, Business &
10-27 Commerce Code.
11-1 (Sections 128.040-128.045 reserved for expansion
11-2 SUBCHAPTER F. MISCELLANEOUS
11-3 Sec. 128.046. RULES. The secretary of state may adopt rules
11-4 necessary to carry out the secretary's duties under this chapter,
11-5 including prescribing necessary forms.
11-6 Sec. 128.047. MAXIMUM NUMBER OF LIENS. Not more than two
11-7 liens may be enforced under this chapter against the same proceeds
11-8 of a lien debtor even if the liens are filed by different lien
11-9 claimants.
11-10 Sec. 128.048. APPLICABILITY OF OTHER LAW. Chapter 9,
11-11 Business & Commerce Code, applies to a lien created under this
11-12 chapter to the extent Chapter 9 is consistent with this chapter.
11-13 SECTION 2. Chapter 128, Agriculture Code, as added by this
11-14 Act, applies to an agricultural chemical or agricultural seed and
11-15 labor and equipment supplied on or after the effective date of this
11-16 Act.
11-17 SECTION 3. This Act takes effect September 1, 1995.
11-18 SECTION 4. The importance of this legislation and the
11-19 crowded condition of the calendars in both houses create an
11-20 emergency and an imperative public necessity that the
11-21 constitutional rule requiring bills to be read on three several
11-22 days in each house be suspended, and this rule is hereby suspended.