|
|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to agricultural liens. |
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
SECTION 1. Section 70.401, Property Code, is amended by |
|
amending Subdivision (4) and adding Subdivisions (5), (6), (7), and |
|
(8) to read as follows: |
|
(4) "Company-owned crop" means an agricultural crop: |
|
(A) that is in the possession of a warehouse or |
|
contract purchaser located in this state and for which the |
|
agricultural producer has received full payment; |
|
(B) that is not an open storage crop; or |
|
(C) for which the warehouse or the contract |
|
purchaser tenders payment and the agricultural producer, without |
|
coercion, defers payment. |
|
(5) "Contract purchaser" means a person who has agreed |
|
under a contract to purchase an agricultural crop or otherwise pay |
|
the agricultural producer for growing, producing, or harvesting the |
|
agricultural crop. The term includes [does not include] a person |
|
who, as to the transaction in question, is licensed and bonded under |
|
Chapter 14, Agriculture Code, or the United States Warehouse Act (7 |
|
U.S.C. Section 241 et seq.). |
|
(6) "Open storage crop" means an agricultural crop |
|
that: |
|
(A) an agricultural producer delivers or |
|
transfers to: |
|
(i) a warehouse for storage; or |
|
(ii) a contract purchaser located in this |
|
state; |
|
(B) is not covered by a warehouse receipt; and |
|
(C) is not owned by the lessee, owner, or |
|
operator of the warehouse in which the crop is stored or the |
|
contract purchaser to which the crop is delivered or transferred. |
|
(7) "Secured lender" means a person that: |
|
(A) has loaned money to a warehouse or a contract |
|
purchaser; and |
|
(B) holds a perfected secured lien against a |
|
company-owned crop. |
|
(8) "Warehouse" means a facility that stores or |
|
handles any agricultural crop after the crop is harvested, |
|
including a facility operated by a person who, as to the transaction |
|
in question, is licensed and bonded under Chapter 14, Agriculture |
|
Code, or the United States Warehouse Act (7 U.S.C. Section 241 et |
|
seq.). The term includes a person engaged in the business of |
|
operating a warehouse. |
|
SECTION 2. Section 70.402, Property Code, is amended to |
|
read as follows: |
|
Sec. 70.402. LIEN CREATED. (a) An agricultural producer |
|
who, under a contract with a contract purchaser, is to receive |
|
consideration for selling an agricultural crop grown, produced, or |
|
harvested by the producer has a lien against that crop for the |
|
amount owed under the contract, or for the market [reasonable] |
|
value of the crop on the date of transfer or delivery if there is no |
|
agreement concerning the amount owed under the contract. |
|
(b) An agricultural producer who delivers or transfers an |
|
agricultural crop grown, produced, or harvested by the producer to |
|
a warehouse has a lien against that agricultural crop for the market |
|
value of the agricultural crop: |
|
(1) on the date of delivery or transfer; or |
|
(2) if there is to be a series of deliveries to the |
|
warehouse, on the date of the first delivery of the agricultural |
|
crop to the warehouse. |
|
(c) A lien created under this subchapter is on every |
|
agricultural crop, either in raw or processed form, that has been |
|
transferred or delivered by the agricultural producer and is in the |
|
possession of the warehouse or the contract purchaser, and if the |
|
warehouse or the contract purchaser sells all or part of the crop, |
|
on the proceeds of the sale. If an open storage [the agricultural] |
|
crop is commingled with a company-owned crop by a warehouse or a |
|
contract purchaser after the crop has been transferred or |
|
delivered, a lien created under this subchapter applies only to |
|
that portion of the agricultural crop in the possession of the |
|
warehouse or the contract purchaser [purchaser's inventory] in an |
|
amount that is equal to the amount of the crop transferred or |
|
delivered by the agricultural producer. |
|
(d) [(c)] For purposes of this subchapter, an agricultural |
|
crop or processed form of an agricultural crop deposited by a |
|
contract purchaser with a warehouse, whether or not a warehouse |
|
receipt is given as security, is considered to be in the possession |
|
of the contract purchaser and subject to the lien created by this |
|
subchapter. |
|
SECTION 3. Section 70.403, Property Code, is amended to |
|
read as follows: |
|
Sec. 70.403. WHEN LIEN ATTACHES. A lien created under this |
|
subchapter attaches on the date on which physical possession of the |
|
agricultural crop is delivered or transferred by the agricultural |
|
producer to the warehouse or to the contract purchaser or the |
|
purchaser's agent, or if there is to be a series of deliveries [to
|
|
the contract purchaser or purchaser's agent], on the date of the |
|
first delivery of the agricultural crop [to the contract purchaser
|
|
or purchaser's agent]. |
|
SECTION 4. Section 70.404, Property Code, is amended to |
|
read as follows: |
|
Sec. 70.404. APPLICABILITY OF OTHER LAW; EFFECT ON OTHER |
|
LAW. (a) Except as provided by Section 70.4045 of this code, |
|
Chapter 9, Business & Commerce Code, including applicable filing |
|
and perfection requirements, applies to a lien created under this |
|
subchapter. |
|
(b) Except as provided by Subsection (c), to the extent of a |
|
conflict, this subchapter controls over any other law. |
|
(c) This subchapter does not abridge the protections |
|
afforded by any applicable law, including: |
|
(1) Chapter 14, Agriculture Code; |
|
(2) Chapter 7, Business & Commerce Code; |
|
(3) the United States Warehouse Act (7 U.S.C. Section |
|
241 et seq.); or |
|
(4) common law, including the law of bailment. |
|
SECTION 5. Section 70.4045, Property Code, is amended to |
|
read as follows: |
|
Sec. 70.4045. PERFECTION AND PRIORITY OF AGRICULTURAL LIEN |
|
ON CROPS. (a) Notwithstanding Chapter 9, Business & Commerce Code, |
|
a lien created under this subchapter is perfected at the time the |
|
lien attaches under Section 70.403 and continues to be perfected if |
|
a financing statement covering the agricultural crop is filed on or |
|
before the 90th day after the date: |
|
(1) the physical possession of the crop is delivered |
|
or transferred by the agricultural producer to the warehouse or the |
|
contract purchaser or the purchaser's agent, if there is only one |
|
delivery [under the contract]; or |
|
(2) of the last delivery of the crop to the warehouse |
|
or the contract purchaser or the purchaser's agent, if there is a |
|
series of deliveries [under the contract]. |
|
(b) If a financing statement covering the agricultural crop |
|
is not filed within the time prescribed by Subsection (a)(1) or (2), |
|
as applicable, the lien is considered unperfected [on the date the
|
|
lien attached until the date the financing statement is filed or the
|
|
lien is perfected under Chapter 9, Business & Commerce Code]. |
|
(c) Notwithstanding Chapter 9, Business & Commerce Code, |
|
and except as provided by Subsection (d), a lien created and |
|
perfected under this subchapter has priority over a conflicting |
|
security interest in or lien on the agricultural crop or the |
|
proceeds from the sale of the crop created by the warehouse or the |
|
contract purchaser in favor of a third party, [other than a cotton
|
|
ginner's lien created under Section 70.003(d),] regardless of the |
|
date the security interest or lien created by the warehouse or the |
|
contract purchaser attached. This subsection does not affect: |
|
(1) the validity or priority of a security interest or |
|
lien: |
|
(A) created and perfected to secure a loan |
|
directly to the agricultural producer; or |
|
(B) created and perfected under Chapter 9, |
|
Business & Commerce Code, to secure a loan to a warehouse or a |
|
contract purchaser on a company-owned crop in favor of a secured |
|
lender; |
|
(2) the validity or priority of a cotton ginner's lien |
|
created under Section 70.003(d); or |
|
(3) the rights of a holder of a negotiable warehouse |
|
receipt. |
|
(d) Subsection (c) does not apply to a contract purchaser |
|
who purchases an agricultural crop from an agricultural producer |
|
under a marketing contract created under: |
|
(1) Section 52.016, Agriculture Code; or |
|
(2) regulations adopted by the United States |
|
Department of Agriculture under Title 7 of the United States Code. |
|
SECTION 6. Section 70.406(a), Property Code, is amended to |
|
read as follows: |
|
(a) A buyer in ordinary course of business of an |
|
agricultural crop, including a person who buys any portion of an |
|
agricultural crop from a warehouse or a contract purchaser, whether |
|
or not the agricultural crop has been commingled, takes the |
|
agricultural crop free of a lien created under this subchapter, and |
|
the lien created by this subchapter does not pass to any subsequent |
|
claimant of the agricultural crop. |
|
SECTION 7. Section 70.407(a), Property Code, is amended to |
|
read as follows: |
|
(a) A lien created under this subchapter is discharged when: |
|
(1) the lienholder receives full payment for the |
|
agricultural crop; or |
|
(2) payment is tendered by the warehouse or the |
|
contract purchaser, as applicable, and the lienholder, without |
|
coercion, defers payment. |
|
SECTION 8. Section 70.410, Property Code, is amended to |
|
read as follows: |
|
Sec. 70.410. WAIVER OF CERTAIN RIGHTS PROHIBITED. An |
|
agricultural producer's agreement with a warehouse or a contract |
|
purchaser to waive the producer's right to seek a remedy provided by |
|
this subchapter is void. |
|
SECTION 9. The changes in law made by this Act apply only to |
|
an agricultural producer who delivers or transfers an agricultural |
|
crop grown, produced, or harvested by the producer to a warehouse or |
|
a contract purchaser on or after the effective date of this Act. An |
|
agricultural producer who delivers or transfers an agricultural |
|
crop grown, produced, or harvested by the producer to a warehouse or |
|
a contract purchaser before the effective date of this Act is |
|
governed by the law as it existed immediately before that date, and |
|
that law is continued in effect for that purpose. |
|
SECTION 10. This Act takes effect September 1, 2017. |