SB 592

Bill Subjects

Abstract

(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 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 instead require the lien to be perfected by filing a notice of claim of lien with the Secretary of State and service of the notice of claim of lien, 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 the notice to be provided to the lien debtor, to any person from which the lien claimant has received, before the lien claimant files the notice, notification of a claim of interest in the proceeds, and to any other secured party or lienholder that held a security interest in or other lien on the proceeds, as specified, 10 days before the filing of the notice. The 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 require a lien claimant to send to a lien debtor a termination statement for the notice of claim of lien or to file the termination statement in the office of the Secretary of State within 20 days after receiving a demand from a lien debtor if the lien has terminated, as specified. (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. The bill would instead make applicable to dairy cattle supply liens specified statutes governing secured transactions generally, including a provision requiring that conflicting perfected security interests and agricultural liens rank according to priority in time of filing or perfection, as specified. (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. (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, after payment default by the lien debtor, 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 and a writ of attachment, or temporary protective order, 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 define a "person obligated on any proceeds" for purposes of provisions governing dairy cattle supply liens. The bill would authorize a lien debtor to secure a release of a lien by paying the amount secured by the lien or by depositing with the Secretary of Food and Agriculture a bond, as specified. The bill would require a lien claimant that receives proceeds pursuant to a notice that is provided to a person who is obligated on the proceeds to account to, and pay the lien debtor for, any surplus, and would require the lien debtor to be liable for any deficiency. (7) The bill would provide that the provisions described above shall apply prospectively to all contracts entered into on or after January 1, 2013.