S-3859.1          _______________________________________________


                            SUBSTITUTE SENATE BILL 6416



State of Washington              52nd Legislature             1992 Regular Session


By Senate Committee on Agriculture & Water Resources (originally sponsored by Senators Barr, Newhouse and Gaspard)


Read first time 02/07/92.Protecting the interests of producers of agricultural products.

     AN ACT Relating to producer liens; amending RCW 60.13.010 and 62A-9.310; and adding a new section to chapter 60.13 RCW.




     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 use and 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, deposits, or otherwise disposes of agricultural products consigned only for sale for the use and 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.  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 which a handler acquires or is entitled to for bona fide advances made in money 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.