S-1569               _______________________________________________

                                                   SENATE BILL NO. 4161

                        _______________________________________________

State of Washington                              49th Legislature                              1985 Regular Session

By Senators Barr and Bauer

Read first time 2/8/85 and referred to Committee on Agriculture.

AN ACT Relating to grain security agreements; amending RCW 62A.9-203; and adding new sections to Article 62A.9 RCW.

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

        Sec. 1.  Section 9-203, chapter 157, Laws of 1965 ex. sess as last amended by section 1, chapter 186, Laws of 1982 and RCW 62A.9-203 are each amended to read as follows:

          (1) Subject to the provisions of RCW 62A.4-208 on the security interest of a collecting bank and RCW 62A.9-113 on a security interest arising under the Article on Sales, a security interest is not enforceable against the debtor or third parties with respect to the collateral and does not attach unless

          (a) the collateral is in the possession of the secured party pursuant to agreement, or the debtor has signed a security agreement which contains a description of the collateral and in addition, when the security interest covers timber to be cut, a description of the land concerned; and, for any collateral in grain, the name and address of persons to whom any debtor who produces grain intends to sell such collateral; and

          (b) value has been given; and

          (c) the debtor has rights in the collateral.

          (2) A security interest attaches when it becomes enforceable against the debtor with respect to the collateral.  Attachment occurs as soon as all of the events specified in subsection (1) have taken place unless explicit agreement postpones the time of attaching.

          (3) Unless otherwise agreed a security agreement gives the secured party the rights to proceeds provided by RCW 62A.9-306.

          (4) A transaction, although subject to this Article, is also subject to chapters 31.04, 31.08, 31.12, 31.16, 31.20, and 31.24 RCW, and in the case of conflict between the provisions of this Article and any such statute, the provisions of such statute control.  Failure to comply with any applicable statute has only the effect which is specified therein.

NEW SECTION. Sec. 2.     Any grain producer who sells grain to any person not specified in the security agreement as required in RCW 62A.9-203 shall notify the secured party fifteen days in advance of such sale.  The failure to provide such notice shall constitute a default by the debtor under part five of this Article.

NEW SECTION. Sec. 3.     The provisions of RCW 62A.9-307 shall apply where any grain producer misrepresents his or her debts or creditors in a security agreement and fails to pay his or her debt.

NEW SECTION. Sec. 4.     Notwithstanding the provisions of RCW 62A.9-307, no grain dealer or buyer may be subject to a security interest unless notified by the secured party, by certified mail, of the existence of the security.  The notification shall be on a form prescribed by the department of licensing, and shall specify the name of the debtor and a description of the collateral.

NEW SECTION. Sec. 5.  Section 2 through 4 of this act are each added to Article 62A.9 RCW.