DME C.S.H.B. 2602 75(R)BILL ANALYSIS AGRICULTURE & LIVESTOCK C.S.H.B. 2602 By: Swinford 3-25-97 Committee Report (Substituted) BACKGROUND Section 70.005, Property Code, creates a notice and sale procedure for statutory lien holders to obtain payment for services or supplies provided on property other than motor vehicles. Section 70.005 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 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 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 91day 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 and 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. PURPOSE This legislation would allow a person providing feed and services to owners of animals fed in confinement for slaughter to enforce the statutory lien under procedures authorized under Section 9.504, Business and Commerce Code. 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 70.005, Property Code, to specify that a person holding a lien on an animal fed in confinement for slaughter may sell the animals as provided under Section 9.504, Business and Commerce Code. SECTION 2. Effective date: September 1, 1997. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute changes the referral in Section 70.005(a) from Article 6687-1, Vernon's Texas Civil Statutes, to Chapter 501, Transportation Code, to agree with recodification of the Transportation Code. The words "fed in confinement for slaughter" were added to Section 70.005(c) to narrow the definition of an animal that the bill will affect.