Bill Text: CA SB592 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Dairy cattle supply liens.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2012-09-13 - Chaptered by Secretary of State. Chapter 309, Statutes of 2012. [SB592 Detail]

Download: California-2011-SB592-Amended.html

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BILL NUMBER: SB 592	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 15, 2012
	AMENDED IN SENATE  JANUARY 23, 2012
	AMENDED IN SENATE  MAY 17, 2011
	AMENDED IN SENATE  MAY 2, 2011

INTRODUCED BY   Senator Harman

                        FEBRUARY 17, 2011

   An act to amend Sections 57402,  57403,  57405,
57406, and 57413 of  , and to repeal Section 57412 of,  the
Food and Agricultural Code, relating to dairy cattle supply liens.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 592, as amended, Harman. Dairy cattle supply liens.
   (1) Existing law provides that a person who provides feed or
materials to aid the raising or maintaining of dairy cattle has a
lien upon the proceeds of the milk or milk products produced from the
dairy cattle, for the reasonable or agreed charges for the feed or
materials provided and for the costs of enforcing the lien  , not
to exceed an amount equal to charges for feed or material provided
within a 45-day period  .
   This bill would, in addition, provide that a person who provides
feed or materials to aid the offspring of the dairy cattle has a lien
on the proceeds of milk or milk products produced from the dairy
cattle  , and would   increase the limit of a lien to an
amount equal to charges for feed or material provided within a
60-day period  .  The bill would specify that the lien
attaches to dairy products proceeds.   The bill would
establish a limit of one lien per dairy producer per affiliated
business entity. 
   (2) Existing law provides that the lien shall be perfected and
shall be effective upon the filing of a notice of claim of lien with
the Secretary of State, as specified. Existing law requires the
notice of claim of lien, among other things, to state the name and
address of the lien debtor. The notice of claim of lien is required
to be signed by the lien claimant or by a person authorized to sign
documents of a similar kind on behalf of the claimant.
   This bill would delete the requirement that the lien be effective
upon filing a notice of claim of lien with the Secretary of State,
and would instead require the lien to be perfected by filing a notice
of claim of lien with the Secretary of State, as specified. The bill
would require the notice of claim of lien to state the last known
name and address of the lien debtor. The bill would also delete the
language providing that 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.
   (3) Existing law requires the lien claimant to provide written
notice of the claim of the lien to the lien debtor within 10 days of
the date of filing with the Secretary of State.
   This bill would require notice to be served, as specified,
depending on whether the lien debtor is an entity, individual, or
general partnership. The bill would also provide that failure to give
written notice of the claim would not affect the validity or
priority of the lien.
   (4) Existing law requires these liens to have a certain priority,
as specified.
   This bill would delete the requirement that the lien have priority
in accordance with the time the notice of claim of lien is filed.

   (5) Existing law requires a lien claimant to provide written
notice to secured creditors, as defined, at least 30 days prior to
enforcing a claim of lien.  
   This bill would delete those provisions.  
   (5) 
    (6)  Existing law requires the lien claimant to
foreclose on a lien only in an action to recover the reasonable or
agreed charges for feed and materials delivered and enforce a final
judgment as provided.
   This bill would instead authorize the lien claimant to foreclose
on a lien in an action to recover the reasonable or agreed charges
for feed and materials delivered and authorize the lien claimant to
enforce a final judgment, as provided, and apply for a right to
attach order or writ of attachment through the court in which the
action is brought.  The bill would authorize a lien claimant to
take certain actions after payment default by the lien debtor,
including notifying any person obligated on any proceeds subject to
the lien to make payment to the lien claimant. The bill would
authorize a lien debtor to secure a release of a lien in one of 3
ways, including by   depositing with the Secretary of State
a cash sum that is expressly set apart by a written instrument in
which the Secretary of State is named as trustee, as specified. 

   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 57402 of the Food and Agricultural Code is
amended to read:
   57402.  A person who provides feed or materials to aid the raising
or maintaining of dairy cattle or offspring therefrom has a lien
upon the proceeds of the milk or milk products produced from the
dairy cattle, for the reasonable or agreed charges for the feed or
materials provided and for the costs of enforcing the lien. However,
the amount of charges secured by the lien cannot exceed an amount
equal to the reasonable or agreed charges for feed or material
provided within a  45-day   60-day  period,
and only two providers of feed or materials shall have an
enforceable lien at any time according to the priority set forth in
Section 57406.  Only one lien per dairy producer is available per
affiliated business entity.  
  SEC. 2.    Section 57403 of the Food and
Agricultural Code is amended to read:
   57403.  (a) The lien created pursuant to this chapter attaches to
dairy products proceeds.
   (b) Except as otherwise provided in this chapter, the notice of
claim of lien shall remain in effect, and no new notice of claim of
lien shall be required in order to maintain the lien, as long as the
person who provides feed or materials either (1) remains unpaid for
amounts secured by the lien, or (2) continues to provide feed or
materials on a regular basis to the lien debtor. For purposes of this
section, providing feed or materials shall not be deemed to be made
on a regular basis if a period of more than 30 days elapses between
deliveries. 
   SEC. 3.   SEC. 2.   Section 57405 of the
Food and Agricultural Code is amended to read:
   57405.  The lien created by this chapter shall be perfected by the
filing of a notice of claim of lien with the Secretary of State
pursuant to all the provisions of this section.
   (a) The person who provides feed or materials may, at any time,
file in the manner and at the place set forth in this section, the
notice of claim of lien.
   (b) The notice of claim of lien shall, at a minimum, set forth all
of the following information:
   (1) The name and address of the lien claimant.
   (2) The last known name and address of the lien debtor.
   (3) The location of the dairy to which the feed and materials were
provided.
   (4) That the lien claimant has a dairy cattle supply lien pursuant
to Section 57402.
   (c) The notice of claim of lien shall be filed on a form which is
the standard form of original financing statement prescribed by the
Secretary of State pursuant to Section 9521 of the Commercial Code.
The standard form shall be completed with the following changes:
   (1) The lien claimant may be identified either as lien claimant or
as secured party.
   (2) The form shall be signed by the lien claimant and need not be
signed by the debtor.
   (3) In the space for the description of the collateral there shall
instead be entered the statement substantially as set forth in
paragraphs (3) and (4) of subdivision (b).
   (d) The notice of claim of lien shall be filed, indexed, and
marked in the office of the Secretary of State in the same manner as
a financing statement is filed, indexed, and marked pursuant to
Section 9519 of the Commercial Code.
   (e) (1) The lien claimant shall provide written notice of the
claim of lien to the lien debtor within 10 days of the date of the
filing with the office of the Secretary of State.
   (2) If the lien debtor is an entity, notice shall be given to the
lien debtor's registered agent for service of process. If the lien
debtor is an individual or general partnership, the notice shall be
given at any address at which the individual conducts business.
   (3) Failure to give written notice of the claim to the lien debtor
shall have no effect on the validity or priority of the lien.
   (f) For the purpose of the Secretary of State's index pursuant to
Sections 9515, 9516, and 9522 of the Commercial Code and for the
purpose of the issuance of a certificate pursuant to Section 9519 or
9528 of the Commercial Code, the Secretary of State shall identify a
notice pursuant to this section as a financing statement.
   SEC. 4.   SEC. 3.   Section 57406 of the
Food and Agricultural Code is amended to read:
   57406.  Notwithstanding Chapter 6.7 (commencing with Section 3080)
of Title 14 of Part 4 of Division 3 of the Civil Code, the lien
created by this chapter shall have the same priority as a security
interest perfected by the filing of a financing statement as of the
date the notice of claim of lien was filed.
   SEC. 4.   Section 57412 of the   Food and
Agricultural Code   is repealed.  
   57412.  The lien claimant shall provide written notice to secured
creditors at least 30 days prior to enforcing a claim of lien. For
the purposes of this section, "secured creditors" means those
creditors having a perfected security interest in dairy cattle, milk,
milk products, or the proceeds thereof, as of the date the notice of
claim of lien is filed with the Secretary of State. 
  SEC. 5.  Section 57413 of the Food and Agricultural Code is amended
to read:
   57413.   (a)    The lien claimant may foreclose
on a lien created by this chapter in the following manners: 
   (a) 
    (1)  The lien claimant may foreclose in an action to
recover the reasonable or agreed charges for feed and materials
delivered. In such an action, the final judgment may be enforced
pursuant to Title 9 (commencing with Section 680.010) of Part 2 of
the Code of Civil Procedure. 
   (b) 
    (2)  In such an action, the lien claimant may apply
pursuant to Title 6.5 (commencing with Section 481.010) of Part 2 of
the Code of Civil Procedure for a right to attach order and a writ of
attachment by filing an application for the order and writ with the
court in which the action is brought. 
   (b) After payment default by the lien debtor, the lien claimant
may do all of the following, provided that the lien creditor provides
concurrent notice to the lien debtor:  
   (1) Notify any person obligated on any proceeds subject to the
lien created under this chapter to make payment to, or otherwise
render performance to or for the benefit of, the lien claimant,
provided that the lien claimant may not demand that payment or
performance be made at any time prior to 15 calendar days following
the date of notice. Notice of lien shall be given by certified mail.
 
   (2) Enforce the obligations of any person obligated on any
proceeds subject to the lien created under this chapter and exercise
the rights of the lien debtor with respect to the proceeds and any
property that secures the right to the proceeds subject to the lien
created under this chapter.  
   (c) A lien debtor may secure a release of a lien created under
this chapter by doing one of the following:  
   (1) Paying the amount secured by the lien.  
   (2) Depositing with the Secretary of State a surety bond that is
executed by the lien debtor as principal and by a surety company that
is qualified and authorized to do business in this state as a surety
in an amount that equals the current amount secured by the lien. If
the lien debtor fails to pay the claims, up to the amount of the
bond, of the lien creditor within 35 days after entry of final
judgment in favor of the lien creditor, the surety shall be liable to
the lien creditor, and shall pay all lawful claims that are covered
by the amount of the lien and the legal costs if an action is filed
on the bond.  
   (3) Depositing with the Secretary of State a cash sum that is
expressly set apart by a written instrument that is signed by the
lien debtor for the purpose of guaranteeing payment of the full
amount secured by the lien within 35 days from the date of entry of
final judgment in favor of the lien creditor. The Secretary of State
shall be named in the instrument as trustee to carry out the purpose
and intent of the instrument.