Texas 2017 - 85th Regular

Texas House Bill HB3063 Compare Versions

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Version 2 (New)

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1		-	By: Kacal (Senate Sponsor - Perry) H.B. No. 3063
2		-	(In the Senate - Received from the House May 3, 2017;
3		-	May 8, 2017, read first time and referred to Committee on
4		-	Agriculture, Water & Rural Affairs; May 16, 2017, reported
5		-	favorably by the following vote: Yeas 7, Nays 0; May 16, 2017,
6		-	sent to printer.)
7		-	Click here to see the committee vote
	1	+	H.B. No. 3063
8	2
9	3
10		-	A BILL TO BE ENTITLED
11	4		AN ACT
12	5		relating to agricultural liens.
13	6		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	7		SECTION 1. Section 70.401, Property Code, is amended by
15	8		amending Subdivision (4) and adding Subdivisions (5), (6), (7), and
16	9		(8) to read as follows:
17	10		(4) "Company-owned crop" means an agricultural crop:
18	11		(A) that is in the possession of a warehouse or
19	12		contract purchaser located in this state and for which the
20	13		agricultural producer has received full payment;
21	14		(B) that is not an open storage crop; or
22	15		(C) for which the warehouse or the contract
23	16		purchaser tenders payment and the agricultural producer, without
24	17		coercion, defers payment.
25	18		(5) "Contract purchaser" means a person who has agreed
26	19		under a contract to purchase an agricultural crop or otherwise pay
27	20		the agricultural producer for growing, producing, or harvesting the
28	21		agricultural crop. The term includes [does not include] a person
29	22		who, as to the transaction in question, is licensed and bonded under
30	23		Chapter 14, Agriculture Code, or the United States Warehouse Act (7
31	24		U.S.C. Section 241 et seq.).
32	25		(6) "Open storage crop" means an agricultural crop
33	26		that:
34	27		(A) an agricultural producer delivers or
35	28		transfers to:
36	29		(i) a warehouse for storage; or
37	30		(ii) a contract purchaser located in this
38	31		state;
39	32		(B) is not covered by a warehouse receipt; and
40	33		(C) is not owned by the lessee, owner, or
41	34		operator of the warehouse in which the crop is stored or the
42	35		contract purchaser to which the crop is delivered or transferred.
43	36		(7) "Secured lender" means a person that:
44	37		(A) has loaned money to a warehouse or a contract
45	38		purchaser; and
46	39		(B) holds a perfected secured lien against a
47	40		company-owned crop.
48	41		(8) "Warehouse" means a facility that stores or
49	42		handles any agricultural crop after the crop is harvested,
50	43		including a facility operated by a person who, as to the transaction
51	44		in question, is licensed and bonded under Chapter 14, Agriculture
52	45		Code, or the United States Warehouse Act (7 U.S.C. Section 241 et
53	46		seq.). The term includes a person engaged in the business of
54	47		operating a warehouse.
55	48		SECTION 2. Section 70.402, Property Code, is amended to
56	49		read as follows:
57	50		Sec. 70.402. LIEN CREATED. (a) An agricultural producer
58	51		who, under a contract with a contract purchaser, is to receive
59	52		consideration for selling an agricultural crop grown, produced, or
60	53		harvested by the producer has a lien against that crop for the
61	54		amount owed under the contract, or for the market [reasonable]
62	55		value of the crop on the date of transfer or delivery if there is no
63	56		agreement concerning the amount owed under the contract.
64	57		(b) An agricultural producer who delivers or transfers an
65	58		agricultural crop grown, produced, or harvested by the producer to
66	59		a warehouse has a lien against that agricultural crop for the market
67	60		value of the agricultural crop:
68	61		(1) on the date of delivery or transfer; or
69	62		(2) if there is to be a series of deliveries to the
70	63		warehouse, on the date of the first delivery of the agricultural
71	64		crop to the warehouse.
72	65		(c) A lien created under this subchapter is on every
73	66		agricultural crop, either in raw or processed form, that has been
74	67		transferred or delivered by the agricultural producer and is in the
75	68		possession of the warehouse or the contract purchaser, and if the
76	69		warehouse or the contract purchaser sells all or part of the crop,
77	70		on the proceeds of the sale. If an open storage [the agricultural]
78	71		crop is commingled with a company-owned crop by a warehouse or a
79	72		contract purchaser after the crop has been transferred or
80	73		delivered, a lien created under this subchapter applies only to
81	74		that portion of the agricultural crop in the possession of the
82	75		warehouse or the contract purchaser [purchaser's inventory] in an
83	76		amount that is equal to the amount of the crop transferred or
84	77		delivered by the agricultural producer.
85	78		(d) [(c)] For purposes of this subchapter, an agricultural
86	79		crop or processed form of an agricultural crop deposited by a
87	80		contract purchaser with a warehouse, whether or not a warehouse
88	81		receipt is given as security, is considered to be in the possession
89	82		of the contract purchaser and subject to the lien created by this
90	83		subchapter.
91	84		SECTION 3. Section 70.403, Property Code, is amended to
92	85		read as follows:
93	86		Sec. 70.403. WHEN LIEN ATTACHES. A lien created under this
94	87		subchapter attaches on the date on which physical possession of the
95	88		agricultural crop is delivered or transferred by the agricultural
96	89		producer to the warehouse or to the contract purchaser or the
97	90		purchaser's agent, or if there is to be a series of deliveries [to
98	91		the contract purchaser or purchaser's agent], on the date of the
99	92		first delivery of the agricultural crop [to the contract purchaser
100	93		or purchaser's agent].
101	94		SECTION 4. Section 70.404, Property Code, is amended to
102	95		read as follows:
103	96		Sec. 70.404. APPLICABILITY OF OTHER LAW; EFFECT ON OTHER
104	97		LAW. (a) Except as provided by Section 70.4045 of this code,
105	98		Chapter 9, Business & Commerce Code, including applicable filing
106	99		and perfection requirements, applies to a lien created under this
107	100		subchapter.
108	101		(b) Except as provided by Subsection (c), to the extent of a
109	102		conflict, this subchapter controls over any other law.
110	103		(c) This subchapter does not abridge the protections
111	104		afforded by any applicable law, including:
112	105		(1) Chapter 14, Agriculture Code;
113	106		(2) Chapter 7, Business & Commerce Code;
114	107		(3) the United States Warehouse Act (7 U.S.C. Section
115	108		241 et seq.); or
116	109		(4) common law, including the law of bailment.
117	110		SECTION 5. Section 70.4045, Property Code, is amended to
118	111		read as follows:
119	112		Sec. 70.4045. PERFECTION AND PRIORITY OF AGRICULTURAL LIEN
120	113		ON CROPS. (a) Notwithstanding Chapter 9, Business & Commerce Code,
121	114		a lien created under this subchapter is perfected at the time the
122	115		lien attaches under Section 70.403 and continues to be perfected if
123	116		a financing statement covering the agricultural crop is filed on or
124	117		before the 90th day after the date:
125	118		(1) the physical possession of the crop is delivered
126	119		or transferred by the agricultural producer to the warehouse or the
127	120		contract purchaser or the purchaser's agent, if there is only one
128	121		delivery [under the contract]; or
129	122		(2) of the last delivery of the crop to the warehouse
130	123		or the contract purchaser or the purchaser's agent, if there is a
131	124		series of deliveries [under the contract].
132	125		(b) If a financing statement covering the agricultural crop
133	126		is not filed within the time prescribed by Subsection (a)(1) or (2),
134	127		as applicable, the lien is considered unperfected [on the date the
135	128		lien attached until the date the financing statement is filed or the
136	129		lien is perfected under Chapter 9, Business & Commerce Code].
137	130		(c) Notwithstanding Chapter 9, Business & Commerce Code,
138	131		and except as provided by Subsection (d), a lien created and
139	132		perfected under this subchapter has priority over a conflicting
140	133		security interest in or lien on the agricultural crop or the
141	134		proceeds from the sale of the crop created by the warehouse or the
142	135		contract purchaser in favor of a third party, [other than a cotton
143	136		ginner's lien created under Section 70.003(d),] regardless of the
144	137		date the security interest or lien created by the warehouse or the
145	138		contract purchaser attached. This subsection does not affect:
146	139		(1) the validity or priority of a security interest or
147	140		lien:
148	141		(A) created and perfected to secure a loan
149	142		directly to the agricultural producer; or
150	143		(B) created and perfected under Chapter 9,
151	144		Business & Commerce Code, to secure a loan to a warehouse or a
152	145		contract purchaser on a company-owned crop in favor of a secured
153	146		lender;
154	147		(2) the validity or priority of a cotton ginner's lien
155	148		created under Section 70.003(d); or
156	149		(3) the rights of a holder of a negotiable warehouse
157	150		receipt.
158	151		(d) Subsection (c) does not apply to a contract purchaser
159	152		who purchases an agricultural crop from an agricultural producer
160	153		under a marketing contract created under:
161	154		(1) Section 52.016, Agriculture Code; or
162	155		(2) regulations adopted by the United States
163	156		Department of Agriculture under Title 7 of the United States Code.
164	157		SECTION 6. Section 70.406(a), Property Code, is amended to
165	158		read as follows:
166	159		(a) A buyer in ordinary course of business of an
167	160		agricultural crop, including a person who buys any portion of an
168	161		agricultural crop from a warehouse or a contract purchaser, whether
169	162		or not the agricultural crop has been commingled, takes the
170	163		agricultural crop free of a lien created under this subchapter, and
171	164		the lien created by this subchapter does not pass to any subsequent
172	165		claimant of the agricultural crop.
173	166		SECTION 7. Section 70.407(a), Property Code, is amended to
174	167		read as follows:
175	168		(a) A lien created under this subchapter is discharged when:
176	169		(1) the lienholder receives full payment for the
177	170		agricultural crop; or
178	171		(2) payment is tendered by the warehouse or the
179	172		contract purchaser, as applicable, and the lienholder, without
180	173		coercion, defers payment.
181	174		SECTION 8. Section 70.410, Property Code, is amended to
182	175		read as follows:
183	176		Sec. 70.410. WAIVER OF CERTAIN RIGHTS PROHIBITED. An
184	177		agricultural producer's agreement with a warehouse or a contract
185	178		purchaser to waive the producer's right to seek a remedy provided by
186	179		this subchapter is void.
187	180		SECTION 9. The changes in law made by this Act apply only to
188	181		an agricultural producer who delivers or transfers an agricultural
189	182		crop grown, produced, or harvested by the producer to a warehouse or
190	183		a contract purchaser on or after the effective date of this Act. An
191	184		agricultural producer who delivers or transfers an agricultural
192	185		crop grown, produced, or harvested by the producer to a warehouse or
193	186		a contract purchaser before the effective date of this Act is
194	187		governed by the law as it existed immediately before that date, and
195	188		that law is continued in effect for that purpose.
196	189		SECTION 10. This Act takes effect September 1, 2017.
197		-	* * * * *
	190	+	______________________________ ______________________________
	191	+	President of the Senate Speaker of the House
	192	+	I certify that H.B. No. 3063 was passed by the House on May 3,
	193	+	2017, by the following vote: Yeas 143, Nays 4, 1 present, not
	194	+	voting.
	195	+	______________________________
	196	+	Chief Clerk of the House
	197	+	I certify that H.B. No. 3063 was passed by the Senate on May
	198	+	19, 2017, by the following vote: Yeas 31, Nays 0.
	199	+	______________________________
	200	+	Secretary of the Senate
	201	+	APPROVED: _____________________
	202	+	Date
	203	+	_____________________
	204	+	Governor