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INTRODUCED
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HOUSE COMMITTEE
SUBSTITUTE
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SECTION 1. Section 9.302,
Business & Commerce Code, is amended to read as follows:
Sec. 9.302. LAW GOVERNING
PERFECTION AND PRIORITY OF AGRICULTURAL LIENS. (a) Subject to Chapter
606, while [While] farm products are located in a jurisdiction,
the local law of that jurisdiction governs perfection, the effect of
perfection or nonperfection, and the priority of an agricultural lien on
the farm products.
(b) Notwithstanding any
law to the contrary, to the extent of any conflict between this chapter and
Chapter 606, Chapter 606 controls.
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No
equivalent provision.
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SECTION 2. Section 9.501,
Business & Commerce Code, is amended by amending Subsection (a) and
adding Subsection (c) to read as follows:
(a) Except as otherwise
provided in Subsection (b) or (c), if the local law of this state
governs perfection of a security interest [or agricultural lien],
the office in which to file a financing statement to perfect the security
interest [or agricultural lien] is:
(1) the office designated
for the filing or recording of a record of a mortgage on the related real
property, if:
(A) the collateral is
as-extracted collateral or timber to be cut; or
(B) the financing statement
is filed as a fixture filing and the collateral is goods that are or are to
become fixtures; or
(2) the office of the
Secretary of State, in all other cases, including a case in which the
collateral is goods that are or are to become fixtures and the financing
statement is not filed as a fixture filing.
(c) Notwithstanding any
other law to the contrary, the office in which to file a financing
statement to perfect an agricultural lien is the office of the Secretary of
State as provided by Chapter 606.
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No
equivalent provision.
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SECTION 3. Title 12,
Business & Commerce Code, is amended by adding Chapter 606 to read as
follows:
CHAPTER 606. CENTRAL
FILING SYSTEM FOR AGRICULTURAL LIENS
Sec. 606.001.
DEFINITIONS. In this chapter:
(1) "Agricultural
lien" has the meaning assigned by Section 9.102.
(2) "Buyer"
means a person who, in the ordinary course of business, buys farm products
from another person who is engaged in farming operations and who is in the
business of selling farm products.
(3) "Central filing
system" means a statewide system that is developed by the secretary of
state and certified by the secretary of the United States Department of
Agriculture to be used for the filing of an effective financing statement.
(4) "Commission
merchant" means a person engaged in the business of receiving a farm
product for the purpose of selling the farm product on commission or on
behalf of another person.
(5) "Debtor"
means a person having an interest, other than a security interest or other
lien, in a farm product, whether or not the person is an obligor.
(6) "Effective
financing statement" means a financing statement, as defined by
Section 9.102, that covers a farm product and that is filed in compliance
with this chapter.
(7) "Farm
products" has the meaning assigned by Section 9.102.
(8) "Selling
agent" means a person, other than a commission merchant, who is
engaged in the business of negotiating the sale or purchase of a farm
product on behalf of a person engaged in farming operations.
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No
equivalent provision. (But see the following notations.)
No
equivalent provision. (But see SECTION 1 below.)
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Sec. 606.002. RULES. The
secretary of state shall adopt rules as necessary to implement this
chapter.
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No
equivalent provision.
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Sec. 606.003. FORMS. The
secretary of state shall develop and maintain standard forms for an
effective financing statement, a statement of continuation, a statement of
amendment, and a statement of termination that are consistent with this
chapter.
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No
equivalent provision.
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Sec. 606.004. EFFECTIVE
FINANCING STATEMENT. (a) An effective financing statement must:
(1) be signed by the
secured party and filed by the secured party with the office of the
secretary of state in the central filing system under Section 606.007;
(2) be signed by the
debtor; and
(3) provide:
(A) the name and address
of the secured party;
(B) the name and address
of the debtor;
(C) the social security
number of the debtor or, if the debtor is not an individual, the tax
identification number of the debtor;
(D) the farm product
covered by the effective financing statement;
(E) each county in this
state where the farm product is produced or will be produced;
(F) a description of the
farm product that is subject to an agricultural lien only if a description
is needed to distinguish that farm product from other farm products owned
by the same person but not subject to the agricultural lien; and
(G) the crop year, unless
for the duration of the effective financing statement every crop of the
farm product that is subject to an agricultural lien is to be subject to
the lien.
(b) A secured party may
use one effective financing statement to reflect multiple farm products or
farm products in multiple counties.
(c) An effective
financing statement may be modified to reflect material changes. An
amendment to an effective financing statement must be:
(1) made in writing;
(2) signed by the secured
party and the debtor; and
(3) filed not later than
the 90th day after the original filing date.
(d) An effective
financing statement remains in effect for a period of five years from the
date of filing and may be extended for an additional period of five years
by filing or refiling a statement of continuation at least 180 days before
the expiration date of the current effective period.
(e) The secretary of
state shall remove an effective financing statement from the central filing
system when the statement expires or when a statement of termination is
received from a secured party, whichever occurs first.
(f) The secretary of
state may collect a fee of $10 for each effective financing statement filed
under this chapter. An effective financing statement is not filed until
the fee authorized by this section is paid.
(g) An effective
financing statement is considered satisfactory if it substantially complies
with the requirements of this section even though the statement might
contain minor errors that are not seriously misleading as determined by the
secretary of state.
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No
equivalent provision.
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Sec. 606.005. PROTECTION
OF BUYERS, COMMISSION MERCHANTS, AND SELLING AGENTS. A buyer, a commission
merchant, or a selling agent who, in the ordinary course of business,
purchases a farm product from a person engaged in farming operations takes
the farm product subject to an agricultural lien on the farm product if:
(1) the buyer, commission
merchant, or selling agent fails to register with the secretary of state as
prescribed by rule before purchasing the farm product and the secured party
has filed an effective financing statement in the central filing system
under Section 606.007 that covers the farm product being purchased; or
(2) the secured party or
the seller of the farm product provides written notice of the agricultural
lien to the buyer, commission merchant, or selling agent.
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No
equivalent provision.
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Sec. 606.006. IMMUNITY
FROM LIABILITY. A buyer, commission merchant, or selling agent who, in the
ordinary course of business, purchases farm products from or sells farm
products for a person engaged in farming operations may not be liable for
errors or inaccuracies generated by the central filing system developed
under Section 606.007 if the buyer, commission merchant, or selling agent
has otherwise complied with this chapter.
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No
equivalent provision.
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Sec. 606.007. CENTRAL
FILING SYSTEM. (a) The office of the secretary of state shall develop and
implement a central filing system for the filing of effective financing
statements that comply with Section 606.004 and shall obtain the necessary
certification for the system from the United States Department of
Agriculture.
(b) The secretary of
state shall adopt rules to implement and operate the central filing system
developed under this section.
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No
equivalent provision. (But see SECTION 2 below.)
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SECTION 4. As soon as
practicable after the effective date of this Act, the office of the
secretary of state shall adopt rules and forms necessary to implement
Chapter 606, Business & Commerce Code, as added by this Act.
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No
equivalent provision.
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No
equivalent provision. (But see SECTION 3, Sec. 606.001 above.)
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SECTION 1. DEFINITIONS. In
this Act:
(1) "Agricultural
lien" has the meaning assigned by Section 9.102, Business &
Commerce Code.
(2) "Buyer" means
a person who, in the ordinary course of business, buys farm products from
another person who is engaged in farming operations and who is in the
business of selling farm products.
(3) "Commission
merchant" means a person engaged in the business of receiving a farm
product for the purpose of selling the farm product on commission or on
behalf of another person.
(4) "Farm
products" has the meaning assigned by Section 9.102, Business &
Commerce Code.
(5) "Financing
statement" has the meaning assigned by Section 9.102, Business &
Commerce Code.
(6) "Selling
agent" means a person, other than a commission merchant, who is
engaged in the business of negotiating the sale or purchase of a farm
product on behalf of a person engaged in farming operations.
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No
equivalent provision. (But see SECTION 3, Sec. 606.007 above.)
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SECTION 2. FEASIBILITY STUDY
ON CENTRAL FILING SYSTEM. (a) The secretary of state shall conduct a study
on the feasibility of developing and implementing a central filing system
to be used for the filing of all financing statements that cover farm
products being sold and purchased in this state that are subject to an
agricultural lien.
(b) The study conducted
under this section must evaluate proposals for a central filing system that
allows:
(1) a secured party to file
a financing statement in the system that covers farm products; and
(2) a buyer, commission
merchant, selling agent, or other person to search the system to determine
whether the farm product is subject to an agricultural lien based on the
information contained in a financing statement that is filed in the system.
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No
equivalent provision.
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SECTION 3. REPORT. Not
later than January 8, 2019, the secretary of state shall report the results
of the study and any recommendations to the legislature. The report must
include any proposed legislation necessary to implement the recommendations
made in the report.
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No
equivalent provision.
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SECTION 4. EXPIRATION. This
Act expires June 1, 2019.
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SECTION 5. This Act takes
effect September 1, 2017.
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SECTION 5. Same as
introduced version.
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