AN ACT Relating to handlers; amending RCW 60.13.010, 62A.9‑310, 60.11.010, 60.11.020, and 60.11.030; and adding a new section to chapter 60.13 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 60.13 RCW to read as follows:

A consignment of agricultural products by a producer to a handler for sale for the benefit of the producer does not vest in the handler any other title or right to the products except to sell and deliver them to a bona fide purchaser for valuable consideration.

If, without the express consent of the producer a handler mortgages, pledges, or otherwise disposes of agricultural products consigned only for sale for the benefit of the producer, the disposition is void and title to the products does not pass but remains in the producer as if no disposition were made until such time as the products are sold by the final handler. Legal title to and interest of the producer in the consigned agricultural products and proceeds thereof shall be considered prior in right to any interest of a third party in such goods or proceeds acquired after the delivery of the products to the handler. Such products and/or proceeds shall not be subject to the claims of the handler's creditors.

Nothing in this section impairs any right of any lien provided to a handler under the provisions of RCW 60.11.020(3), or of any lien that a handler acquires or is entitled to for bona fide advances made in money, services, or goods to the producer on the faith and the security of the consignment.

Sec. 2. RCW 60.13.010 and 1991 c 174 s 2 are each amended to read as follows:

As used in this chapter, the terms defined in this section have the meanings indicated unless the context clearly requires otherwise.

(1) "Agricultural product" means any unprocessed horticultural, vermicultural and its byproducts, viticultural, berry, poultry, poultry product, grain, bee, or other agricultural products, and includes mint or mint oil processed by or for the producer thereof and hay and straw baled or prepared for market in any manner or form and livestock. When used in RCW 60.13.020, "agricultural product" means horticultural, viticultural, aquacultural, or berry products, hay and straw, milk and milk products, or turf and forage seed and applies only when such products are delivered to a processor or conditioner in an unprocessed form.

(2) "Conditioner," "consignor," "person," and "producer" have the meanings defined in RCW 20.01.010.

(3) "Delivers" means that a producer completes the performance of all contractual obligations with reference to the transfer of actual or constructive possession or control of an agricultural product to a processor or conditioner or preparer, regardless of whether the processor or conditioner or preparer takes physical possession.

(4) "Preparer" means a person engaged in the business of feeding livestock or preparing livestock products for market.

(5) "Processor" means any person, firm, company, or other organization that purchases agricultural products except milk and milk products from a consignor and that cans, freezes, dries, dehydrates, cooks, presses, powders, or otherwise processes those crops in any manner whatsoever for eventual resale, or that purchases or markets milk from a dairy producer and is obligated to remit payment to such dairy producer directly.

(6) "Commercial fisherman" means a person licensed to fish commercially for or to take food fish or shellfish or steelhead legally caught pursuant to executive order, treaty right, or federal statute.

(7) "Fish" means food fish or shellfish or steelhead legally caught pursuant to executive order, treaty right, or federal statute.

(8) "Handler" means a person, firm, company, or other organization that prepares an agricultural product for market for the account of, or as agent for, the producer of the agricultural product, the preparation including, but not limited to, receiving, storing, packing, marketing, selling, or delivering the agricultural product, and includes a person, firm, company, or other organization who takes delivery of the agricultural product from the producer of the agricultural product or from another handler. "Handler" does not include a person who solely transports the agricultural product from the producer to another person.

Sec. 3. RCW 62A.9‑310 and 1991 c 286 s 7 are each amended to read as follows:

(1) When a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon goods in the possession of such person given by statute or rule of law for such materials or services takes priority over a perfected security interest only if the lien is statutory and the statute expressly provides for such priority.

(2) A preparer lien or processor lien properly created pursuant to chapter 60.13 RCW, a producer's interest recognized pursuant to section 1 of this act, or a depositor's lien created pursuant to chapter 22.09 RCW takes priority over any perfected or unperfected security interest.

(3) Conflicting priorities between crop liens created under chapter 60.11 RCW and security interests shall be governed by chapter 60.11 RCW.

Sec. 4. RCW 60.11.010 and 1991 c 286 s 1 are each amended to read as follows:

As used in this chapter, the following terms have the meanings indicated unless the context clearly requires otherwise.

(1) "Crop" means all products of the soil either growing or cropped, cut, or gathered which require annual planting, harvesting, or cultivating. A crop does not include vegetation produced by the powers of nature alone, nursery stock, or vegetation intended as a permanent enhancement of the land itself.

(2) "Handler" means a person: Who prepares ((~~an orchard~~)) a crop for market for the account of, or as agent for, the producer of the crop, which preparation includes, but is not limited to, receiving, storing, packing, marketing, selling, or delivering ((~~the orchard~~)) a crop; and who takes delivery of the crop from the producer of the crop or from another handler. "Handler" does not include a person who solely transports the crop from the producer to another person.

(3) "Landlord" means a person who leases or subleases to a tenant real property upon which crops are growing or will be grown.

(4) ((~~"Orchard crop" means cherries, peaches, nectarines, plums or prunes, pears, apricots, and apples.~~

~~(5)~~)) "Secured party" and "security interest" have the same meaning as used in the Uniform Commercial Code, Title 62A RCW.

((~~(6)~~)) (5) "Supplier" includes, but is not limited to, a person who furnishes seed, furnishes and/or applies commercial fertilizer, pesticide, fungicide, weed killer, or herbicide, including spraying and dusting, upon the land of the grower or landowner, or furnishes any work or labor upon the land of the grower or landowner including tilling, preparing for the growing of crops, sowing, planting, cultivating, cutting, digging, picking, pulling, or otherwise harvesting any crop grown thereon, or in gathering, securing, or housing any crop grown thereon, or in threshing any grain or hauling to any warehouse any crop or grain grown thereon.

((~~(7)~~)) (6) "Lien debtor" means the person who is obligated or owes payment or other performance. If the lien debtor and the owner of the collateral are not the same person, "lien debtor" means the owner of the collateral.

((~~(8)~~)) (7) "Lien holder" means a person who, by statute, has acquired a lien on the property of the lien debtor, or such person's successor in interest.

Sec. 5. RCW 60.11.020 and 1991 c 286 s 2 are each amended to read as follows:

(1) A landlord whose lease or other agreement with the tenant provides for cash rental payment shall have a lien upon all crops grown upon the demised land in which the landlord has an interest for no more than one year's rent due or to become due within six months following harvest. A landlord with a crop share agreement has an interest in the growing crop which shall not be encumbered by crop liens except as provided in subsections (2) and (3) of this section.

(2) A supplier shall have a lien upon all crops for which the supplies are used or applied to secure payment of the purchase price of the supplies and/or services performed: PROVIDED, That the landlord's interest in the crop shall only be subject to the lien for the amount obligated to be paid by the landlord if prior written consent of the landlord is obtained or if the landlord has agreed in writing with the tenant to pay or be responsible for a portion of the supplies and/or services provided by the lien holder.

(3) A handler shall have a lien on all ((~~orchard~~)) crops delivered by the lien debtor or another handler to the handler and on all proceeds of the ((~~orchard~~)) crops for: (a) All customary charges for the ordinary and necessary handling of the crop, including but not limited to charges for transporting, receiving, inspecting, materials and supplies furnished, washing, waxing, sorting, packing, storing, promoting, marketing, selling, advertising, insuring, or otherwise handling the lien debtor's crop; and (b) reasonable cooperative per unit retainages, and for all governmental or quasi-governmental assessments imposed by statute, ordinance, or government regulation. Charges shall not include direct or indirect advances or extensions of credit to [a] lien debtor.

Sec. 6. RCW 60.11.030 and 1991 c 286 s 3 are each amended to read as follows:

(1) Upon filing, the liens described in RCW 60.11.020 (1) and (2) shall attach to the crop for all sums then and thereafter due and owing the lien holder and shall continue in all identifiable cash proceeds of the crop.

(2) Upon the delivery of ((~~an orchard~~)) a crop by the lien debtor, without the necessity of filing, the lien for charges as set forth in RCW 60.11.020(3) shall attach to the delivered crop and shall continue in both the crop and all proceeds of the crop.