AN ACT Relating to agricultural liens; adding a new chapter to Title 60 RCW; and repealing RCW 20.01.620, 20.01.630, 20.01.640, 20.01.650, 20.01.660, and 20.01.670.

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

NEW SECTION. Sec. 1. As used in this chapter, the terms defined in this section have the meanings indicated unless the context clearly requires otherwise.

(1) "Account debtor" means a person whose obligation to a processor, conditioner, or preparer gives rise to an account receivable of the processor, conditioner, or preparer, to which account receivable a lien created under this chapter attaches.

(2) "Agricultural product," "conditioner," "consignor," "person," "processor," and "producer" have the meanings defined in RCW 20.01.010.

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

NEW SECTION. Sec. 2. Starting on the date a producer delivers any agricultural product to a processor or conditioner, the producer has a first priority statutory lien, referred to as a "processor lien." This processor lien shall continue until twenty days after payment for the product is due and remains unpaid, without filing any notice of lien, for the contract price, if any, or the fair market value of the products delivered. The processor lien attaches to the agricultural products delivered, to the processor's or conditioner's inventory, and to the processor's or conditioner's accounts receivable. However, no processor lien may attach to agricultural products delivered by a producer, or on the producer's behalf, to a processor who is organized and operated on a cooperative basis, nor may such lien attach to such processor's inventory or accounts receivable.

NEW SECTION. Sec. 3. Starting on the date a producer delivers grain, hay, or straw to a preparer, the producer has a first priority statutory lien, referred to as a "preparer lien." This preparer lien shall continue twenty days after payment for the product is due and remains unpaid, without filing any notice of lien, for the contract price, if any, or the fair market value of the products delivered. The preparer lien attaches to the agricultural products delivered by the producer to the preparer, and to the preparer's accounts receivable.

NEW SECTION. Sec. 4. An account debtor shall not be obligated to pay a producer amounts to which the producer's processor lien or preparer lien has attached, until the account debtor receives written notice of such lien from the producer, and the account debtor shall not be liable to the producer for any amounts paid to the processor, conditioner, or preparer, or any other person, prior to the receipt of the notice. The notice required herein shall be verified and shall contain the information described in section 5(2) of this act. If requested by the account debtor, the producer must seasonably furnish reasonable proof that the processor lien or preparer lien has attached, and unless such proof is so furnished, the account debtor may continue to pay the processor, conditioner, preparer, or other person.

NEW SECTION. Sec. 5. (1) A producer claiming a processor or preparer lien may file a statement evidencing the lien with the department of licensing after payment from the processor, conditioner, or preparer to the producer is due and remains unpaid. For purposes of this subsection and section 6 of this act, payment is due on the date specified in the contract, or if not specified, then within thirty days from time of delivery.

(2) The statement shall be in writing, verified by the producer, and shall contain in substance the following information:

(a) A true statement of the amount demanded after deducting all credits and offsets;

(b) The name of the processor, conditioner, or preparer who received the agricultural product to be charged with the lien;

(d) A statement that the amount claimed is a true and bona fide existing debt as of the date of the filing of the notice evidencing the lien; and

(e) The date on which payment was due for the agricultural product to be charged with the lien.

NEW SECTION. Sec. 6. (1) (a) If a statement is filed pursuant to section 5 of this act within twenty days of the date upon which payment from the processor, conditioner, or preparer to the producer is due and remains unpaid, the processor or preparer lien evidenced by the statement continues its priority over all other liens or security interests upon agricultural products, inventory, and accounts receivable, except as provided in (b) of this subsection. Such priority is without regard to whether the other liens or security interests attached before or after the date on which the processor or preparer lien attached.

(b) The processor or preparer lien shall be subordinate to liens for taxes or labor perfected before filing of the processor or preparer lien.

(2) If the statement provided for in section 5 of this act is not filed within twenty days of the date payment is due and remains unpaid, the processor or preparer lien shall thereupon become subordinate to:

(a) A lien that has attached to the agricultural product, inventory, or accounts receivable before the date on which the processor or preparer lien attaches; and

(b) A perfected security interest in the agricultural product, inventory, or accounts receivable.

NEW SECTION. Sec. 7. (1) The processor lien shall terminate six months after, and the preparer lien shall terminate fifty days after, the later of the date of attachment or filing, unless a suit to foreclose the lien has been filed before that time as provided in section 8 of this act.

(2) If a statement has been filed as provided in section 5 of this act and the producer has received payment for the obligation secured by the lien, the producer shall promptly file with the department of licensing a statement declaring that full payment has been received and that the lien is discharged. If, after payment, the producer fails to file such statement of discharge within ten days following a request to do so, the producer shall be liable to the processor, conditioner, or preparer in the sum of one hundred dollars plus actual damages caused by the failure.

NEW SECTION. Sec. 8. (1) The processor or preparer liens may be foreclosed and enforced by civil action in superior court.

(2) In all suits to enforce processor or preparer liens, the court shall, upon entering judgment, allow to the prevailing party as a part of the costs, all moneys paid for the filing and recording of the lien and reasonable attorney fees.

NEW SECTION. Sec. 9. The following acts or parts of acts are each repealed:

(1) Section 9, chapter 305, Laws of 1983 and RCW 20.01.620;

(2) Section 10, chapter 305, Laws of 1983 and RCW 20.01.630;

(3) Section 11, chapter 305, Laws of 1983 and RCW 20.01.640;

(4) Section 12, chapter 305, Laws of 1983 and RCW 20.01.650;

(5) Section 13, chapter 305, Laws of 1983 and RCW 20.01.660; and

(6) Section 14, chapter 305, Laws of 1983 and RCW 20.01.670.

NEW SECTION. Sec. 10. Sections 1 through 8 of this act shall constitute a new chapter in Title 60 RCW.