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.