AN ACT Relating to security interests in livestock; amending RCW 62A.9-307; adding a new chapter to Title 16 RCW; prescribing penalties; and providing an effective date.

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

Sec. 1. Section 9-307, chapter 157, Laws of 1965 ex. sess. as amended by section 20, chapter 41, Laws of 1981 and RCW 62A.9-307 are each amended to read as follows:

(1) A buyer in ordinary course of business (subsection (9) of RCW 62A.1-201) other than a person buying farm products from a person engaged in farming operations takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence.

(2) In the case of consumer goods, a buyer takes free of a security interest even though perfected if he buys without knowledge of the security interest, for value and for his own personal, family or household purposes unless prior to the purchase the secured party has filed a financing statement covering such goods.

(3) A buyer other than a buyer in ordinary course of business (subsection (1) of this section) takes free of a security interest to the extent that it secures future advances made after the secured party acquires knowledge of the purchase, unless made pursuant to a commitment entered into without knowledge of the purchase.

(4) Notwithstanding subsection (1) of this section, any person registered under the Federal Packers and Stockyard Act, 7 U.S.C. 181, who sells livestock for another for a fee or commission or who purchases livestock or livestock byproducts with the intent to resell takes free of a security interest created by the seller, even though the security interest is perfected, when such person is without knowledge of the security interest. For the purposes of this subsection, a person has "knowledge" if:

(a) Notice is furnished by the seller as provided in RCW 16.57.240; or

(b) A statement of the security interest is filed pursuant to chapter 16.-- RCW (sections 2 through 8 of this 1985 act).

NEW SECTION. Sec. 2. For the purposes of this chapter:

(1) "Department" means the department of agriculture of the state of Washington.

(2) "Director" means the director of the department or a duly authorized representative.

(3) "Secured party" means a lender, seller or other person in whose favor there is a security interest, including a person to whom accounts or chattel paper have been sold. When the holders of obligations issued under an indenture of trust, equipment trust agreement or the like are represented by a trustee or other person, the representative is the secured party.

NEW SECTION. Sec. 3. Any secured party who obtains or maintains a security interest in cattle situated in this state may file copies of an effective financing statement with the department. The provisions of chapter 62A.9 RCW apply to the filing of statements under this section as that chapter relates to the form, content, duration, and times for filing of the statements.

NEW SECTION. Sec. 4. A secured party who has filed a statement of security interest in cattle with the department shall, upon the termination of the security interest, promptly file a notice of termination with the department. If, after termination of the security interest, the secured party fails to file a statement of discharge within ten days following a request to do so, the secured party shall be liable to the debtor in the sum of one hundred dollars plus actual damages caused by the failure.

NEW SECTION. Sec. 5. A statement filed under section 3 of this act shall be accompanied by a filing fee from the secured party in an amount established by the director in accordance with chapter 34.04 RCW. The fee may differ by the type of statement and an additional fee may be required for each separate name or trade name under which the statement is filed or indexed.

NEW SECTION. Sec. 6. Upon receiving a statement and filing fee, the department shall index the statement according to the name and trade name, if any, of the debtor. The department shall regularly publish a listing of the filings of effective financing statements and statements of assignment. The department shall furnish the listings on a subscription basis.

NEW SECTION. Sec. 7. Neither the director nor any employee of the department is personally liable to any secured party, debtor, public livestock market operator, livestock dealer, or any other person for the administration of this chapter.

NEW SECTION. Sec. 8. The livestock security interest fund is hereby established in the custody of the state treasurer. The department shall deposit in the fund all moneys received from livestock security interest filing fees. Moneys in the fund shall be spent only for carrying out the purpose and provisions of this chapter. The fund is subject to the allotment procedure provided under chapter 43.88 RCW and an appropriation is required for disbursements.

NEW SECTION. Sec. 9. Sections 2 through 8 of this act shall constitute a new chapter in Title 16 RCW.

NEW SECTION. Sec. 10. This act shall take effect on October 1, 1985, and shall apply to any then existing or future security interests.