85R11330 BEE-F
 
  By: Kacal H.B. No. 3063
 
 
 
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 Subdivisions (1) and (4) and adding Subdivisions (3-a),
  (5), (6), and (7) to read as follows:
               (1)  "Agricultural crop" means a plant product that is
  grown, produced, or harvested as a result of an agricultural
  producer's farm operation and includes a processed product of an
  agricultural crop.
               (3-a)  "Company-owned crop" means an agricultural
  crop:
                     (A)  that is received for storage by a warehouse
  or delivered or transferred to a contract purchaser located in this
  state;
                     (B)  that is not an open storage crop; and
                     (C)  for which the agricultural producer has been
  fully and finally paid.
               (4)  "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 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.).]
               (5)  "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 negotiable or
  nonnegotiable 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.
               (6)  "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.).
               (7)  "Warehouse operator" means a person engaged in the
  business of operating a warehouse.
         SECTION 2.  Section 70.402, Property Code, is amended by
  amending Subsections (b) and (c) and adding Subsection (d) to read
  as follows:
         (b)  An agricultural producer who delivers or transfers an
  agricultural crop grown, produced, or harvested by the producer to
  a warehouse has a lien for the reasonable value of the crop on the
  date of delivery or transfer:
               (1)  whether or not a negotiable or nonnegotiable
  warehouse receipt is issued by the warehouse; and
               (2)  whether or not the crop is placed in open storage.
         (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 contract purchaser, and if the
  warehouse or 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
  contract purchaser after the crop has been transferred or
  delivered, a lien created under this subchapter applies only to
  that portion of the contract 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)  This subchapter does not diminish or abridge any
  protections afforded to an agricultural producer by:
               (1)  Chapter 14, Agriculture Code;
               (2)  Chapter 7, Business & Commerce Code; or
               (3)  the United States Warehouse Act (7 U.S.C. Section
  241 et seq.). 
         SECTION 5.  Sections 70.4045(a) and (c), Property Code, are
  amended to read as follows:
         (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].
         (c)  Notwithstanding Chapter 9, Business & Commerce Code, 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
  operator or contract purchaser in favor of a third party, other than
  a cotton ginner's lien created under Section 70.003(d) or a
  marketing pool contract agreement with an agricultural producer,
  regardless of the date the security interest or lien created by the
  warehouse operator or contract purchaser attached.  This
  subsection does not affect a security interest or lien created and
  perfected to secure a loan directly to the agricultural producer.
         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 operator or 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 operator or 
  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 operator or
  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 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 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.