DME C.S.H.B. 963 75(R) BILL ANALYSIS AGRICULTURE & LIVESTOCK C.S.H.B. 963 By: Swinford 2-18-97 Committee Report (Substituted) BACKGROUND H.B. 1463 that was passed during the 74th Session gave suppliers of agricultural inputs the ability to perfect a lien with the Secretary of State's Office, without the debtor's signature. In the event that an account is 30 days past due, a supplier must provide notice to the debtor that unless certain requirements are met, a notice of claim of lien will be filed with the Secretary of State's Office in order to perfect the lien on the proceeds of crops and livestock produced with the inputs furnished by the supplier. H.B. 1463 specified that a lien applies to all chemicals furnished during the 60 day period prior to the date the lien was attached, and it applies to all animal feed and seed furnished during the 45 day period prior to the date the lien was attached. The Uniform Commercial Code states that a lien is attached at the time the services are provided, and if a lien is later perfected, it applies to goods furnished for a certain period of time following the date of attachment. Since H.B. 1463 stated that the amount of a lien applies to the unpaid charges of inputs furnished prior to the date of attachment, confusion arose over what is the definition of date of attachment. PURPOSE This legislation clarifies the date on which a lien on agricultural inputs is attached and allows for the amount of the lien to include the unpaid reasonable or agreed charges on chemicals, animal feed and agricultural seed furnished within a 180 day period immediately preceding the perfection of the lien with the secretary of state. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 128.007, Agriculture Code, to specify that a lien on agricultural chemicals is attached on the day they are furnished. The attached lien is removed if the claimant does not fulfill the notice and filing requirements. SECTION 2. Amends Section 128.008, Agriculture Code, to extend the effective period of the lien on agricultural chemicals from 60 days prior to the attachment of the lien and on seed from 45 days prior to the attachment of the lien to 180 days immediately preceding perfection of the lien with the secretary of state. SECTION 3. Amends Section 128.009(b), Agriculture Code, to specify that a claimant may not file a notice of claim of lien if a dispute between claimant and debtor has been submitted to the Texas Department of Agriculture and is pending. SECTION 4. Amends Section 188.007, Agriculture Code, to specify that a lien on animal feed is attached on the day it is furnished. The attached lien is removed if the claimant does not fulfill the notice and filing requirements. SECTION 5. Amends Section 188.008, Agriculture Code, to extend the effective period of the lien on animal feed from 45 days prior to the attachment of the lien to 180 days immediately preceding the perfection of the lien with the secretary of state. SECTION 6. Amends Section 188.009(b), Agriculture Code, to specify that a claimant may not file a notice of claim of lien if a dispute between the parties has been submitted to the Texas Department of Agriculture and is pending. SECTION 7. Effective date: September 1, 1997. SECTION 8. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The original bill specified that the amount of a lien is equal to the amount of unpaid reasonable or agreed charges for agricultural chemicals, animal feed or labor furnished within 180 days immediately following attachment of the lien. The substitute removes the unpaid charges for labor as part of a lien. It references 180 days prior to the perfection of the lien with the secretary of state rather than 180 days following the attachment of the lien. The effective period of a lien on agricultural seed is extended from 45 days prior to the attachment of the lien to 180 immediately preceding the perfection of the lien with the secretary of state. The substitute specifies that a notice of claim of lien cannot be filed if a settlement between the claimant and debtor has been submitted to the Texas Department of Agriculture and is pending.