H-3905

AN ACT Relating to producer liens; amending RCW 60.13.010, 60.13.050, 60.13.060, 60.13.070, and 62A-9.310; reenacting and amending RCW 60.13.040; 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:

Starting on the date a producer delivers an agricultural product to a handler, the producer has a first priority statutory lien, referred to as a "producer lien." This producer lien continues twenty days after payment for the product is due and remains unpaid, without filing a notice of lien, for the full value of the products delivered, less the amount subject to a lien provided to a handler of the producer's agricultural products under RCW 60.11.020(3). The producer lien attaches to the agricultural products delivered by the producer to the handler and to the handler's accounts receivable for the producer's agricultural products.

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 60.13.040 and 1987 c 189 s 7 and 1987 c 148 s 3 are each reenacted and amended to read as follows:

(1) A producer or commercial fisherman claiming a processor ((or)), preparer, or producer lien may file a statement evidencing the lien with the department of licensing after payment from the processor, conditioner, or preparer to the producer or fisherman is due and remains unpaid. For purposes of this subsection and RCW 60.13.050, 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 or fisherman, 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 or fish 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;

(e) The date on which payment was due for the agricultural product or fish to be charged with the lien; and

(f) The department of licensing may by rule prescribe standard filing forms, fees, and uniform procedures for filing with, and obtaining information from, filing officers.

Sec. 4. RCW 60.13.050 and 1987 c 148 s 4 are each amended to read as follows:

(1)(a) If a statement is filed pursuant to RCW 60.13.040 within twenty days of the date upon which payment from the processor, conditioner, or preparer to the producer or commercial fisherman is due and remains unpaid, the processor ((or)), preparer, or producer lien evidenced by the statement continues its priority over all other liens or security interests upon agricultural products or fish, 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, or producer lien attached.

(b) The processor ((or)), preparer, or producer lien shall be subordinate to a handler lien under RCW 60.11.020(3), and the liens for taxes or labor perfected before filing of the processor ((or)), preparer, or producer lien.

(2) If the statement provided for in RCW 60.13.040 is not filed within twenty days of the date payment is due and remains unpaid, the processor ((or)), preparer, or producer lien shall thereupon become subordinate to:

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

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

Sec. 5. RCW 60.13.060 and 1987 c 148 s 5 are each amended to read as follows:

(1) The processor lien shall terminate six months after, and the preparer or producer 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 RCW 60.13.070.

(2) If a statement has been filed as provided in RCW 60.13.040 and the producer or commercial fisherman has received payment for the obligation secured by the lien, the producer or fisherman 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 or fisherman fails to file such statement of discharge within ten days following a request to do so, the producer or fisherman shall be liable to the processor, conditioner, or preparer in the sum of one hundred dollars plus actual damages caused by the failure.

Sec. 6. RCW 60.13.070 and 1985 c 412 s 7 are each amended to read as follows:

(1) The processor ((or)), preparer, or producer liens may be foreclosed and enforced by civil action in superior court.

(2) In all suits to enforce processor ((or)), preparer, or producer 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.

Sec. 7. 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, or producer lien properly created pursuant to chapter 60.13 RCW 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.