SRC-HRD H.B. 2602 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 2602
By: Swinford (Haywood)
Agriculture
4-21-97
Engrossed


DIGEST 

Currently, Texas law provides a notice and sale procedure for statutory
lien holders to obtain payment for services or supplies provided on
property other than motor vehicles.  In addition, the law requires that a
person holding a lien for service or supplies provided on property must
still have the property in possession and must wait 60 days after the
charges accrue to request payment from the owner.  If the owner does not
pay within 11 days of the request, the lien holder may provide 20 days
public notice, and then sell the property at public or private sale and
apply the proceeds of the sale to the debt. 

Cattle fed for slaughter must meet specific quality standards which are
realized during an approximate 14-day time following a feeding period of
120 to 150 days.  Cattle fed for too few or too many days will not meet
the desired quality grade and may be subject to significant discounts and
from penalties from buyers.  Some say it is impractical for feedyards
supplying feed and services to follow the provisions of Section 70.005,
Property Code.  The possessory requirements and 91-day waiting period
prior to sale and debt collection required may result in cattle with
excess fat, lower quality grades and significant price discounts.  This
may cause economic harm to all parties involved: the owner, lender, and
feeder. 

Section 9.504, Business & Commerce Code, authorizes a procedure for the
timely sale of fed cattle by providing that the "sale or other disposition
may be as a unit or in parcels and at any time and place and on any terms
but every aspect of the disposition including the method, manner, time,
place and terms must be commercially reasonable."  Authorization to use
Section 9.504 should allow a more realistic procedure for selling fed
cattle and applying the proceeds to the debt by persons supplying feed and
services to cattle fed in confinement for slaughter.  

This bill would authorize a person providing feed services to owners of
animals fed in confinement for slaughter to enforce the statutory lien
under procedures authorized in Section 9.504, Business & Commerce Code.

PURPOSE

As proposed, H.B. 2602 authorizes a person providing feed services to
owners of animals fed in confinement for slaughter to enforce the
statutory lien under procedures authorized in Section 9.504, Business &
Commerce Code. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 70.005, Property Code, to require, except as
provided by Subsection (c), a person holding a lien under this subchapter
on property other than a motor vehicle subject to Chapter 501,
Transportation Code, who retains possession of the property for 60 days
after the day that the charges accrue, to request the owner to pay the
unpaid charges due if the owner's residence is in this state and known.
Authorizes a person holding a lien under Section 70.003(a) on an animal
fed in confinement for slaughter to enforce that lien in any manner
authorized by Section 9.504,  

 Business & Commerce Code.  Makes conforming changes.

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.