CHAPTER 188. LIENS FOR ANIMAL FEED - Texas Statutes

AGRICULTURE CODE

TITLE 6. PRODUCTION, PROCESSING, AND SALE OF ANIMAL PRODUCTS

SUBTITLE E. LIENS ON ANIMAL PRODUCTS

CHAPTER 188. LIENS FOR ANIMAL FEED

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 188.001. DEFINITIONS. In this chapter:

(1) "Animal feed" includes:

(A) commercial feed as described by Section 141.002(a),

including a substance listed by Section 141.002(c) if used as a

feed for animals; or

(B) customer-formula feed as defined under Section 141.001.

(2) "Labor" means labor or services performed in the delivery or

preparation of animal feed provided by the seller of the animal

feed.

(3) "Livestock" means beef cattle, dairy cattle, sheep, goats,

hogs, horses, poultry, and ratites.

(4) "Reasonable or agreed charges" means:

(A) any agreed price for animal feed, including labor, sold to a

lien debtor at the lien debtor's request; or

(B) the reasonable value of animal feed, including labor, as of

the date of delivery or preparation, if there is not an agreed

price or an agreed method for determining price.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Sec. 188.002. PROCEEDS. (a) For the purposes of this chapter,

proceeds are the amounts received by a lien debtor, before a

deduction for taxes, fees, or assessments or a deduction made

under a court order, from the sale of:

(1) the livestock for which the animal feed was used;

(2) meat, milk, skins, wool, or other products derived from that

livestock; or

(3) issue born to that livestock.

(b) For the purposes of this chapter, proceeds do not include

amounts:

(1) due or owing to a cooperative association under Chapter 51

or 52; or

(2) retained by a cooperative association under Chapter 51 or

52.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

SUBCHAPTER B. ANIMAL FEED LIEN

Sec. 188.006. NOTICE BEFORE PURCHASE; REQUIRED NOTICE BEFORE

CLAIMING LIEN. (a) A person claiming a lien under this chapter

must have provided notice of the provisions of this chapter,

before purchase, either generally to purchasers of animal feed as

part of the lien claimant's normal business practices or

specifically to the lien debtor. Notice provided under this

subsection must read, to the extent applicable, substantially as

follows: "The sale of animal feed on credit is subject to Chapter

188, Agriculture Code. Failure to pay the agreed or reasonable

charges for the feed may result in the attachment of a lien to

the proceeds of the livestock for which the feed is used or the

proceeds of the animal products produced from the livestock." A

potential lien claimant may satisfy the requirements of this

subsection:

(1) by printing or stamping the notice on credit applications

filled out by purchasers; and

(2) for future purchases by purchasers who are not notified on

the credit application, by printing or stamping the notice on an

invoice or on a statement sent by separate cover.

(b) Before a person may claim a lien under this chapter, the

person must send to the debtor by certified mail written notice

that states:

(1) that the payment of the reasonable or agreed charges is more

than 30 days overdue;

(2) the amount that is overdue;

(3) that the debtor has the following three alternatives:

(A) to allow the lien to be filed;

(B) to enter into an agreement granting a security interest in

the proceeds described by Section 188.002 under the Business

& Commerce Code; or

(C) to pay the reasonable or agreed charges; and

(4) in at least 10-point type, that:

(A) the debtor has until the 10th day after the date on which

the notice is received to select an alternative under Subdivision

(3), notify the claimant of the alternative selected, and satisfy

all the requirements of the selected alternative; and

(B) the claimant may file the notice of claim of lien at any

time after the 10th day after the date on which the debtor

receives the notice if the debtor does not comply with the

requirements of Paragraph (A).

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Sec. 188.007. ATTACHMENT OF LIEN. (a) A lien established under

this chapter attaches to the proceeds described by Section

188.002.

(b) A lien established under this chapter attaches on the first

day that animal feed is furnished to the lien debtor. A lien that

has attached under this section is removed if the lien claimant

does not satisfy the notice and filing requirements of this

chapter.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 292, Sec. 4, eff.

Sept. 1, 1997.

Sec. 188.008. AMOUNT OF LIEN. The amount of a lien under this

chapter is equal to the sum of:

(1) the amount of the unpaid reasonable or agreed charges for

animal feed furnished within the 180-day period immediately

preceding the day the notice of claim of lien is filed with the

secretary of state as provided by this chapter; and

(2) the filing fees for the lien as provided by this chapter.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 292, Sec. 5, eff.

Sept. 1, 1997.

Sec. 188.009. PERSON ENTITLED TO FILE; EXCEPTION. (a) Except

as provided by Subsection (b) or by Section 188.047, a person who

provides animal feed may file a notice of claim of lien as

provided by this chapter.

(b) The claimant may not file a notice of claim of lien if the

settlement of a dispute between the claimant and the debtor has

been submitted to the department and is pending.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1997, 75th Leg., ch. 292, Sec. 6, eff.

Sept. 1, 1997.

Sec. 188.010. PERFECTION OF LIEN. A lien created under this

chapter is perfected on the filing of a notice of claim of lien

with the secretary of state as provided by this chapter.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Sec. 188.011. DURATION OF NOTICE OF CLAIM OF LIEN. (a) Except

as otherwise provided by this chapter, the notice of claim of

lien is effective, and a new notice of claim of lien is not

required to maintain the lien, as long as the person who provides

the animal feed, including labor, either:

(1) remains unpaid for the amount secured by the lien; or

(2) continues to provide animal feed on a regular basis to the

lien debtor.

(b) For purposes of this section, providing animal feed,

including labor, is not considered to be made on a regular basis

if a period of more than 45 days elapses between deliveries or

preparations.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Sec. 188.012. PROCEDURES FOR SETTLEMENT OF DISPUTES. (a) The

commissioner of agriculture by rule shall establish a procedure

to settle a dispute between a claimant supplying animal feed and

labor and a debtor. The procedures must provide:

(1) a time requirement for submitting the dispute to the

department;

(2) a time requirement within which a notice of the dispute must

be submitted to each party; and

(3) a process for evaluating the dispute.

(b) Each party to the dispute is equally liable for the

reasonable costs incurred by the department in carrying out this

section.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Sec. 188.013. CONTENTS OF NOTICE OF CLAIM OF LIEN. The notice

of claim of lien must include:

(1) the name and address of the lien claimant;

(2) the name and address of the lien debtor;

(3) the location of the livestock for which the animal feed was

provided;

(4) a statement that the payment of the reasonable or agreed

charges is more than 30 days overdue;

(5) the amount that is overdue;

(6) a statement, signed under penalty of perjury, that:

(A) the lien claimant provided notice of the provisions of this

chapter, before purchase, either generally to purchasers of

animal feed as part of the lien claimant's normal business

practices or specifically to the lien debtor, in the manner

required by Section 188.006(a);

(B) the lien claimant sent to the lien debtor the notice

required by Section 188.006(b);

(C) more than 10 days have elapsed since the date on which the

notice was received by the lien debtor; and

(D) the lien debtor has not complied with the requirements of an

alternative set out by Section 188.006(b); and

(7) a statement that the lien claimant has an animal feed lien

under this chapter.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Sec. 188.014. SIGNATURE. The notice of claim of lien shall be

signed by the lien claimant or by a person authorized to sign

documents of a similar kind on behalf of the claimant.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Sec. 188.015. FORM. (a) The notice of claim of lien must be

filed on a form that satisfies the requirements of a financing

statement under Sections 9.502-9.504, Business & Commerce

Code, except that:

(1) the lien claimant may be identified either as a lien

claimant or as a secured party;

(2) the form must be signed by the lien claimant and is not

required to be signed by the lien debtor; and

(3) in the space for the description of the collateral, the

information specified in Sections 188.013(3), (4), (5), and (7)

must be entered.

(b) A separately signed statement containing the information

specified in Section 188.013(6) shall be attached to the form

required under Subsection (a).

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.06, eff.

July 1, 2001.

Sec. 188.016. FILING AND MARKING IN OFFICE OF SECRETARY OF

STATE; FEE. (a) The notice of claim of lien shall be filed and

marked in the office of the secretary of state in the same manner

as a financing statement is filed and marked under Section 9.519,

Business & Commerce Code.

(b) The uniform fee for filing and indexing and for stamping a

copy furnished by the secured party is the same as the fee

assessed under Section 9.525, Business & Commerce Code.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.07, eff.

July 1, 2001.

Sec. 188.017. TIME OF WRITTEN NOTICE. The lien claimant shall

provide written notice of the claim of lien to the lien debtor

not later than the 10th day after the date the notice of claim of

lien is filed with the office of the secretary of state.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Sec. 188.018. RECOGNITION OF NOTICE AS FINANCING STATEMENT. The

secretary of state shall recognize a notice of claim of lien

under this subchapter as a financing statement under Subchapter

E, Chapter 9, Business & Commerce Code.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.08, eff.

July 1, 2001.

SUBCHAPTER C. PRIORITY OF LIEN

Sec. 188.026. TIME OF FILING. (a) A lien created under this

chapter has the same priority as a security interest perfected by

the filing of a financing statement on the date the notice of

claim of lien was filed.

(b) A lien created under this chapter does not have priority

over:

(1) labor claims for wages and salaries for personal services

that are provided by an employee to a lien debtor in connection

with the livestock, the production of animal products derived

from the livestock, or issue born to the livestock, the proceeds

of which are subject to the lien; or

(2) claims for charges for the care of the livestock, the

proceeds of which are subject to the lien.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

SUBCHAPTER D. INFORMATION CONCERNING LIEN

Sec. 188.031. ISSUANCE OF CERTIFICATE TO MEMBER OF PUBLIC; FEE.

(a) A person may obtain a certificate identifying any lien on

file and any notice of claim of lien naming a particular debtor

and stating the date and time of filing of each notice and the

names and addresses of each lienholder in the certificate.

(b) The amount of the fee for a certificate under Subsection (a)

is the same as the amount of the fee provided by Section

9.525(d), Business & Commerce Code.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

547, Sec. 8, eff. September 1, 2009.

Sec. 188.032. COPIES OF NOTICES OF CLAIM OF LIEN AND OTHER

NOTICES; FEE. (a) A person may obtain a copy of any notice of

claim of an animal feed lien filed.

(b) The fee for a copy of a notice of claim of lien obtained

under Subsection (a) is in the amount provided by Section

405.031, Government Code.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

547, Sec. 9, eff. September 1, 2009.

SUBCHAPTER E. ENFORCEMENT OF LIEN

Sec. 188.036. WRITTEN NOTICE TO SECURED CREDITORS BY LIEN

CLAIMANT. (a) A lien claimant shall provide written notice to

any secured creditor at least 30 days before the date the lien

claimant enforces a claim of lien.

(b) For purposes of this section, "secured creditor" means any

entity named as a secured party in a financing statement that is

filed regarding the debtor and that covers an animal product, an

account, or livestock subject to the lien.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Sec. 188.037. FORECLOSURE IN ACTION TO RECOVER REASONABLE OR

AGREED CHARGES. The lien claimant may foreclose on a lien under

this chapter only in an action to recover the reasonable or

agreed charges.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Sec. 188.038. TERMINATION STATEMENT. (a) If a lien claimant

receives payment for the total amount secured by a lien under

this chapter and the lien claimant has not furnished animal feed

during the 45-day period before the date on which payment is

received, the lien claimant shall file a termination statement

with the secretary of state and shall send the lien debtor a copy

of the statement as provided by this section. The statement shall

state that the lien claimant no longer claims a security interest

under the notice of claim of lien.

(b) The notice of claim of lien must be identified in the

statement under Subsection (a) by the date, names of parties to

the agreement, and file number of the original lien.

(c) If the lien claimant does not send the termination statement

required by this section before the 11th day after the date on

which the lien claimant received payment, the lien claimant is

liable to the lien debtor for actual damages suffered by the lien

debtor as a result of the failure. If the lien claimant acts in

bad faith in failing to send the statement, the lien claimant is

liable for an additional penalty of $100.

(d) The filing officer in the secretary of state's office shall

mark each termination statement with the date and time of filing

and shall index the statement under the name of the lien debtor

and under the file number of the original lien. If the filing

officer has a microfilm or other photographic record of the lien

and related filings, the filing officer may destroy the filed

notice of claim of lien at any time after receiving the

termination statement. If the filing officer does not have a

photographic record, the filing officer may destroy the filed

notice of claim of lien at any time after the first anniversary

of the date on which the filing officer received the termination

statement.

(e) The uniform filing fee for filing and indexing the

termination statement is the same as the fee assessed under

Section 9.525, Business & Commerce Code.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.09, eff.

July 1, 2001.

Sec. 188.039. RIGHT OF ASSIGNMENT OR TRANSFER; FILING OF

STATEMENT. (a) A lien created under this chapter may be

assigned by the holder of the lien, with full rights of

enforcement.

(b) The lienholder shall file a statement of assignment with the

secretary of state as provided by Section 9.514, Business &

Commerce Code.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995. Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.10, eff.

July 1, 2001.

SUBCHAPTER F. MISCELLANEOUS

Sec. 188.046. RULES. The secretary of state may adopt rules

necessary to carry out the secretary's duties under this chapter,

including prescribing necessary forms.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Sec. 188.047. MAXIMUM NUMBER OF LIENS. Not more than four liens

may be enforced under this chapter against the same proceeds of a

lien debtor even if the liens are filed by different lien

claimants.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.

Sec. 188.048. APPLICABILITY OF OTHER LAW. Chapter 9, Business

& Commerce Code, applies to a lien created under this chapter

to the extent Chapter 9 is consistent with this chapter.

Added by Acts 1995, 74th Leg., ch. 197, Sec. 2, eff. Sept. 1,

1995.