AN ACT Relating to marketer liens; amending RCW 60.11.050, 62A.9-310, and 60.13.050; and adding a new chapter to Title 60 RCW.

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

NEW SECTION. Sec. 1. The legislature finds that an inequity exists between holders of security interests in agricultural products and fish, and marketers which handle and sell such collateral for producers and commercial fishers, thereby adding value thereto. In order to prevent such secured parties from being unjustly enriched at the expense of such marketers and provide a method whereby such marketers can be assured of a source of repayment for the services they perform and the materials and supplies they furnish, a lien is necessary as provided in this chapter.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Agricultural product" means any horticultural, vermicultural and its byproducts, viticultural, berry, poultry, poultry products, livestock, dairy products, fur pelts, 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.

(2) "Fish" means food fish or shellfish or steelhead legally caught pursuant to executive order, treaty right, or state or federal law.

(3) "Person" means any natural person, firm, partnership, exchange, association, trustee, receiver, corporation, and any member, officer, or employee thereof, or assignee for the benefit of creditors.

(4) "Producer" means any person engaged in the business of growing or producing any farm product, whether as the owner of the products, or producing the products for others holding the title thereto.

(5) "Commercial fisher" 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 state or federal law.

(6) "Marketer" means a person engaged in the business of receiving, washing, sorting, processing, handling, packing, storing, marketing, or selling agricultural products or fish for a producer or commercial fisher.

NEW SECTION. Sec. 3. Starting on the date a producer or commercial fisher delivers any agricultural products or fish to a marketer, the marketer has a first priority statutory lien, referred to as a "marketer lien." The marketer lien shall continue twenty days after delivery of the agricultural products or fish to the marketer. The lien commences without filing any notice of lien, for the marketer's charges for receiving, washing, sorting, processing, handling, packing, storing, marketing, or selling the agricultural products or fish, including the materials and supplies used therein. The marketer's lien attaches to the agricultural products or fish delivered by the producer or commercial fisher to the marketer, and to the proceeds therefrom.

NEW SECTION. Sec. 4. (1) A marketer claiming a marketer lien may file a statement evidencing the lien with the department of licensing.

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

(a) The name and address of the marketer claiming the marketer lien;

(b) The name and address of the producer or commercial fisher whose agricultural products or fish are charged with the lien;

(d) A statement of the marketer's charges for which the marketer's lien is claimed.

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

NEW SECTION. Sec. 5. (1) If a statement is filed pursuant to section 4 of this act within twenty days after delivery of the agricultural products or fish to the marketer commences, the marketer lien evidenced by the statement continues its priority over all other liens, including, without limitation, crop liens created pursuant to chapter 60.11 RCW, processor and preparer liens created pursuant to chapter 60.13 RCW, or security interests upon the agricultural products or fish inventory and accounts receivable. Such priority is without regard to whether the other liens or security interests attached before or after the date on which the marketer lien attached.

(2) If the statement provided for in section 4 of this act is not filed within twenty days of the delivery of the agricultural products or fish to the marketer commences, the marketer 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 marketer lien attaches; and

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

NEW SECTION. Sec. 6. (1) The marketer lien shall terminate twelve months 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 7 of this act.

(2) If a statement has been filed as provided in section 4 of this act and the marketer has received payment for the obligation secured by the lien, the marketer 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 marketer fails to file such statement of discharge within ten days following a request to do so, the marketer shall be liable to the producer or commercial fisher in the sum of one hundred dollars plus actual damages caused by the failure.

NEW SECTION. Sec. 7. (1) The marketer lien may be foreclosed and enforced by civil action in superior court.

(2) In all suits to enforce marketer 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 attorneys' fees.

NEW SECTION. Sec. 8. Sections 1 through 7 of this act shall constitute a new chapter in Title 60 RCW.

Sec. 9. Section 5, chapter 242, Laws of 1986 and RCW 60.11.050 are each amended to read as follows:

(1) Except as provided in subsections (2), (3), and (4) of this section, conflicting liens and security interests shall rank in accordance with the time of filing.

(2) The lien created in RCW 60.11.020(2) in favor of any person who furnishes any work or labor upon the land of the grower or landowner shall be preferred and prior to any other lien or security interest upon the crops to which they attach including the liens described in subsections (3) and (4) of this section.

(3) A lien or security interest in crops otherwise entitled to priority pursuant to subsection (1) of this section shall be subordinate to a later filed lien or security interest to the extent that obligations secured by such earlier filed security interest or lien were not incurred to produce such crops.

(4) A lien or security interest in crops otherwise entitled to priority pursuant to subsection (1) of this section shall be subordinate to a properly filed landlord's lien. A landlord's lien shall retain its priority if refiled within six months prior to its expiration.

(5) The marketer lien created in section 3 of this act shall be preferred and prior to any lien created under this chapter.

Sec. 10. Section 9-310, chapter 157, Laws of 1965 ex. sess. as last amended by section 16, chapter 242, Laws of 1986 and RCW 62A.9-310 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 or a marketer lien created pursuant to chapter 60.-- RCW (sections 1 through 7 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 nonpossessory crop liens created under chapter 60.11 RCW and security interests shall be governed by chapter 60.11 RCW.

Sec. 11. Section 5, chapter 412, Laws of 1985 as amended by section 4, chapter 148, Laws of 1987 and RCW 60.13.050 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 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 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 and to the marketer lien created pursuant to chapter 60.-- RCW (sections 1 through 7 of this act).

(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 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 lien attaches; and

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