Senate Bill No. 88–Senators Rhoads and
McGinness
February 8, 2001
____________
Referred to Committee on Judiciary
SUMMARY—Provides for creation and foreclosure of
liens for farm products. (BDR 9‑643)
FISCAL NOTE: Effect on Local Government: Yes.
~
EXPLANATION
– Matter in bolded italics is new; matter
between brackets [omitted material] is material to be omitted.
Green numbers along
left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).
AN ACT relating to statutory liens; providing for the creation and foreclosure of a lien
for farm products; prohibiting the removal from the state of farm products
subject to certain liens; providing a penalty; and providing other matters
properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
1-1 Section 1. Chapter 108
of NRS is hereby amended by adding thereto
1-2 the provisions set forth as
sections 2 to 20, inclusive, of this act.
1-3 Sec. 2. As used in sections 2
to 20, inclusive, of this act, unless the
1-4 context otherwise requires, the words and terms defined in sections
3 to
1-5 7, inclusive, of this act have the meanings ascribed to them in
those
1-6 sections.
1-7 Sec. 3. “Cash” means coin or currency of the
United States. The
1-8 term does not include a check or money order.
1-9 Sec. 4. “Farm product” includes every
agricultural, horticultural,
1-10 viticultural or vegetable product grown and harvested in this state.
The
1-11 term does not include timber or a timber product.
1-12 Sec. 5. “Processed farm product” includes,
without limitation, a
1-13 farm product in a preserved, manufactured or processed form.
1-14 Sec. 6. 1. “Processor” means a person who:
1-15 (a) Is engaged in the
business of processing or manufacturing farm
1-16 products; and
1-17 (b) Solicits, buys,
contracts to buy or otherwise takes title to, or
1-18 possession or control of, farm products from the producer for the
1-19 purposes of processing, manufacturing, selling, reselling or
redelivering
1-20 the farm product.
1-21 2. The term does not include a retail merchant
who:
1-22 (a) Has a fixed or
established place of business in this state; and
2-1 (b) Does not sell at
wholesale a farm product that is processed or
2-2 manufactured by him.
2-3 Sec. 7. “Producer” means a
person who is engaged in the business
2-4 of growing or producing a farm product in this state.
2-5 Sec. 8. 1. In addition to all other rights and remedies which are
2-6 provided by law, a producer that delivers or sells a farm product
which is
2-7 grown by him to a processor pursuant to a contract, express or
implied,
2-8 has a perfected lien by operation of law for the labor, care and
expense
2-9 in growing and harvesting the farm product upon:
2-10 (a) The farm product;
2-11 (b) The processed farm
product derived from the farm product; and
2-12 (c) The proceeds of a sale
of the farm product or the processed farm
2-13 product.
2-14 2. A lien on a farm product, processed farm
product, or proceeds
2-15 from the sale of a farm product or processed farm product extends
to an
2-16 amount of the farm product, processed farm product or proceeds
equal in
2-17 value to the agreed price or an agreed method for determining the
price
2-18 for the farm product. For purposes of determining the extent of the
lien,
2-19 the value of the farm product is the market value of the farm
product on
2-20 the date of delivery of the farm product to the processor.
2-21 3. Any portion of the farm product, processed
farm product or
2-22 proceeds in excess of the amount necessary to satisfy the total
amount
2-23 owed to a producer pursuant to a contract is free of the lien
provided by
2-24 this section.
2-25 Sec. 9. 1. Unless released by payment or by security which is given
2-26 for payment before attachment of a lien, the lien of a producer
pursuant
2-27 to section 8 of this act:
2-28 (a) Attaches on the date of
delivery of the farm product by a producer
2-29 to a processor; and
2-30 (b) Is a preferred lien and
superior to all other liens, claims or
2-31 encumbrances, except:
2-32 (1) Claims for wages and
salaries for personal services and labor
2-33 which are rendered by a person to a processor in connection with
the
2-34 processing of the farm product after the delivery of the farm
product to
2-35 the processor; or
2-36 (2) The lien of a
warehouseman pursuant to chapter 104 of NRS.
2-37 2. The lien of a producer for a series of
deliveries of a farm product
2-38 attaches on the date of the last delivery.
2-39 Sec. 10. 1. The lien provided for in section 8 of this act applies to
2-40 any farm product and any processed farm product in the possession
of
2-41 the processor that has not been segregated.
2-42 2. For the purposes of this section, a farm
product or a processed
2-43 farm product deposited by a processor with a warehouse, whether or
not
2-44 warehouse receipts are given as security to a lender, shall be
deemed to
2-45 be in the possession of the processor and subject to the lien of
the
2-46 producer.
2-47 3. As used in this section:
2-48 (a) “Lender” includes any
person who advances new value to a
2-49 processor.
3-1 (b) “New value” includes a
new advance or loan, whether in money or
3-2 property, that is made by a lender to a processor. The term does
not
3-3 include an:
3-4 (1) Extension or renewal
of an existing obligation of the processor;
3-5 or
3-6 (2) Obligation that is
substituted for an existing obligation of the
3-7 processor.
3-8 Sec. 11. 1. A lien on a farm product or processed farm product
3-9 may be released to the extent that the value of the claim upon the
farm
3-10 product or processed farm product is secured by:
3-11 (a) A surety bond;
3-12 (b) A cash deposit; or
3-13 (c) Other security given and
approved by a producer who holds a lien.
3-14 2. A producer holding a lien may release a lien
upon:
3-15 (a) Payment for the agreed
amount or for the reasonable value of the
3-16 farm product that is sold or delivered; or
3-17 (b) Arrangements being made
for payment of the agreed amount or
3-18 for the reasonable value of the farm product that is sold or
delivered that
3-19 are satisfactory to the producer.
3-20 Sec. 12. 1. Except as otherwise provided in this section, a
3-21 processor or an agent of a processor shall not remove from this
state, or
3-22 beyond his ownership or control, a farm product that is delivered
to him
3-23 or any processed farm product to which a lien has attached pursuant
to
3-24 section 9 of this act with the intent to defeat, hinder or delay
the claims of
3-25 a producer pursuant to sections 2 to 20, inclusive, of this act. A
person
3-26 who violates this subsection is guilty of a misdemeanor.
3-27 2. A processor or agent of a processor may sell
a farm product or a
3-28 processed farm product to which a lien has attached if the amount
of the
3-29 farm product or processed farm product sold is from a quantity on
hand
3-30 in excess of an amount that is sufficient in value to satisfy all
existing
3-31 liens of a producer or producers.
3-32 3. This section does not prohibit the sale of a
farm product or a
3-33 processed farm product if the total proceeds of the sale are used
to satisfy
3-34 obligations that are secured by a lien pursuant to sections 2 to
20,
3-35 inclusive, of this act.
3-36 4. As used in this section, “agent” means a
person who contracts for
3-37 or solicits a farm product from a producer of the farm product on
behalf
3-38 of a processor.
3-39 Sec. 13. 1. Subject to the approval of a producer holding a lien, a
3-40 processor may obtain a release of the lien by:
3-41 (a) Paying the agreed or
actual value of any farm product that is
3-42 delivered to or purchased by the processor within 20 days after the
date
3-43 of delivery of the farm product, unless the date of payment is
otherwise
3-44 agreed upon in writing or payment is secured by an instrument or
3-45 arrangement other than the lien.
3-46 (b) Obtaining a surety bond
which is executed by the processor as the
3-47 principal and by a surety company which is authorized to do
business in
3-48 this state as a surety in an amount equal to the current market
value of
3-49 the farm product or processed farm product that the processor
intends to
4-1 dispose of or sell. The bond must be conditioned that if the
processor
4-2 fails to make payments to producers for the lawful claims of all
4-3 producers whose liens have been released by the bond in an amount
4-4 equal to or greater than the amount of the bond within 35 days
after the
4-5 date of the bond, the surety will be liable to and shall pay the
claimants
4-6 all lawful claims that may be covered by the amount of the bond and
the
4-7 costs of suit if an action is filed on the bond.
4-8 (c) Depositing cash with a
financial institution in this state in an
4-9 amount that is set apart by an instrument in writing which is
signed by
4-10 the processor for the purpose of guaranteeing, to the extent of the
4-11 amount deposited, the payment of all existing claims of producers
whose
4-12 liens are released by the deposit within 35 days after the date of
the
4-13 deposit. The financial institution where a deposit is made pursuant
to this
4-14 paragraph must be named as the trustee in the instrument to carry
out
4-15 the provisions of the instrument.
4-16 (d) Designating,
setting apart and depositing a quantity of a processed
4-17 farm product in a public warehouse, and endorsing over and
delivering
4-18 the warehouse receipt to the producer for a quantity of processed
farm
4-19 products in an amount that is satisfactory to the producer for the
purpose
4-20 of guaranteeing, to the extent of the value of the deposit, payment
of the
4-21 existing claims of producers and labor claimants whose liens are
4-22 released by the deposit within 35 days after the date of the
deposit.
4-23 (e) Securing a release
after payment in full for the farm products.
4-24 2. If a processor has paid all lawful claims of
the producers in
4-25 compliance with this section, a processor may sell, transport or
otherwise
4-26 dispose of any farm product for which the lien has been released.
4-27 3. If a bond, cash deposit, warehouse deposit or
other security is
4-28 given by a processor pursuant to this section, the processor may
sell,
4-29 transport or otherwise dispose of an amount of the farm product or
4-30 processed farm product not exceeding the current market value
4-31 represented by the bond, cash deposit, warehouse deposit or other
4-32 security given by the processor.
4-33 4. For the purposes of this section, the current
market value of a
4-34 farm product or processed farm product may be based upon quotations
4-35 from the Federal-State Market News Service or a similar source
agreed
4-36 to in writing by the parties to be determined, as appropriate, on
the date:
4-37 (a) Of the bond;
4-38 (b) Of the deposit; or
4-39 (c) Other security is given.
4-40 Sec. 14. An action commenced pursuant to sections
2 to 20,
4-41 inclusive, of this act may be filed in a county in this state
where:
4-42 1. The processor received the farm products;
4-43 2. The principal place of business of a producer
is located; or
4-44 3. A violation of a provision of sections 2 to
20, inclusive, of this act
4-45 occurred.
4-46 Sec. 15. 1. The remedies provided in sections 2 to 20, inclusive, of
4-47 this act are cumulative and in addition to any other remedies
provided by
4-48 law.
5-1 2. The provisions of sections 2 to 20,
inclusive, of this act do not
5-2 impair the right of a claimant who holds a lien to maintain a
personal
5-3 action to recover a debt owed by a processor, whether in an action
to
5-4 foreclose a lien or in a separate action. The holder of a lien
pursuant to
5-5 section 8 of this act is not required to allege that his demand is
secured
5-6 by a lien.
5-7 3. The provisions of the Nevada Rules of Civil
Procedure, the
5-8 District Court Rules and the local rules of practice adopted in the
judicial
5-9 district where an action is pending apply to an action commenced
5-10 pursuant to sections 2 to 20, inclusive, of this act.
5-11 4. A nonprofit cooperative association acting as
a bargaining
5-12 association for producers may assert the rights set forth in
sections 2 to
5-13 20, inclusive, of this act for or on behalf of its members.
5-14 Sec. 16. Except as otherwise provided by law, an
action commenced
5-15 by a producer pursuant to sections 2 to 20, inclusive, of this act
to
5-16 enforce a lien must remain in effect until:
5-17 1. The agreed price or the value of the farm
products is paid;
5-18 2. A deposit in the amount of the lien or claim
is made with the clerk
5-19 of the court in which the action is pending; or
5-20 3. The court makes a final determination of the
matter.
5-21 Sec. 17. 1. In an action commenced by a lien claimant, a
5-22 defendant processor may file a surety bond with the court in which
the
5-23 action is pending in an amount that is sufficient to cover the
demand of
5-24 the complaint of the plaintiff producer, including attorneys’ fees
and
5-25 costs.
5-26 2. Upon the filing of the bond described in
subsection 1, the court, in
5-27 its discretion, may order the release of a portion of the farm
product or
5-28 processed farm product upon which the lien of the plaintiff
producer has
5-29 attached.
5-30 3. A processor may move the court for a hearing
to introduce
5-31 evidence to the court to demonstrate that he has sufficient
security or
5-32 money on deposit to protect the lien or other rights of the
plaintiff
5-33 producer.
5-34 4. Upon proof of sufficient security, the court
may order the release
5-35 of a portion or the whole of a farm product upon which the lien of
the
5-36 plaintiff producer is attached and deny the plaintiff any recovery
in the
5-37 action.
5-38 5. The other rights and remedies of a lien
claimant, if any, are not
5-39 prejudiced by an order of the court for dismissal pursuant to
subsection 4.
5-40 Sec. 18. 1. The judgment, if any, obtained by a plaintiff
in a
5-41 personal action against a producer to obtain payment for farm
products
5-42 does not impair or merge the lien rights or claims that are held by
a
5-43 plaintiff.
5-44 2. Any money collected from a personal judgment
must be credited
5-45 against the amount of the lien or claim in an action that is
brought to
5-46 enforce the lien or claim.
6-1 Sec. 19. 1. The plaintiff in an action that is commenced to
6-2 foreclose a lien provided for in section 8 of this act may obtain a
6-3 preliminary injunction against the processor to restrain the
processor
6-4 from removing a processed farm product in his possession or under
his
6-5 control and upon which valid liens exist beyond the jurisdiction of
the
6-6 court to the injury of the plaintiff.
6-7 2. A conclusive presumption of irreparable harm
to a plaintiff
6-8 producer arises when a processor removes or prepares to remove a
farm
6-9 product or processed farm product in his possession or under his
control
6-10 and upon which valid liens exist beyond the jurisdiction of the
court.
6-11 Sec. 20. 1. All actions commenced by a producer or producers
6-12 against a processor for the foreclosure of liens or other security
provided
6-13 for in sections 2 to 20, inclusive, of this act may be consolidated
by the
6-14 court and all persons that are necessary to a determination of the
action
6-15 may be made parties to the action.
6-16 2. All claims in an action in relation to an
obligation of a processor
6-17 for payment secured by a lien pursuant to section 8 of this act
must have
6-18 equal standing and, if applicable, be paid proportionately to the
claim of
6-19 each claimant.
6-20 3. A judgment in favor of a plaintiff producer
to foreclose a lien must
6-21 state the exact amount due on the judgment from the defendant
6-22 processor.
6-23 4. If in a court proceeding to foreclose a lien,
the court finds that
6-24 there is no cash, bond, deposit or other security for the payment
of the
6-25 claims of producers, the judgment of foreclosure must be against a
6-26 sufficient quantity in value of farm products or processed farm
products
6-27 in the possession or under the control of the defendant processor
as may
6-28 be necessary to satisfy the claim or judgment.
6-29 Sec. 21. The amendatory provisions of this act do not apply to
6-30 offenses committed before
the effective date of this act.
6-31 H