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