Minnesota Session Laws - 1984, Regular Session

  

                         Laws of Minnesota 1984 

                        CHAPTER 467-S.F.No. 1451
           An act relating to commerce; including all liens on 
          file in abstract by the county recorder; providing a 
          lien for agricultural production inputs; establishing 
          a procedure for priority and foreclosure requirements; 
          amending Minnesota Statutes 1982, section 386.42; 
          proposing new law coded in Minnesota Statutes, chapter 
          514. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:  
    Section 1.  Minnesota Statutes 1982, section 386.42, is 
amended to read: 
    386.42 [ABSTRACT OF MORTGAGES AND LIENS ON GRAIN CROPS FOR 
ELEVATOR COMPANIES.] 
    Any elevator company or grain buyer doing business in this 
state may annually make written application to the county 
recorder for an abstract of all designated mortgages and liens 
upon grains grown during the year within the filed with the 
county recorder.  The application shall state the name and the 
post office address of the company and be accompanied by a fee.  
The fee shall be determined by resolution of the county board 
upon the recommendation of the county recorder based upon the 
estimated cost of providing the service. 
    Sec. 2.  [514.950] [DEFINITIONS.] 
    Subdivision 1.  [APPLICABILITY.] The definitions in this 
section apply to sections 2 to 7.  
    Subd. 2.  [AGRICULTURAL CHEMICAL.] "Agricultural chemical" 
means fertilizers or agricultural chemicals that are applied to 
crops or to land that is used for raising crops, including 
fertilizer material, plant amendment, plant food, and soil 
amendment as defined in section 17.713, and pesticide and plant 
regulator as defined in section 18A.21.  
    Subd. 3.  [AGRICULTURAL PRODUCTION INPUT.] "Agricultural 
production input" means crop production inputs and livestock 
production inputs.  
    Subd. 4.  [CROP PRODUCTION INPUT.] "Crop production input" 
means agricultural chemicals, seeds, petroleum products, the 
custom application of agricultural chemicals and seeds, and 
labor used in preparing the land for planting, cultivating, 
growing, producing, harvesting, drying, and storing crops or 
crop products.  
    Subd. 5.  [FEED.] "Feed" means commercial feeds, feed 
ingredients, mineral feeds, drugs, animal health products, or 
customer-formula feeds that are used for feeding livestock, 
including commercial feed as defined in section 25.33.  
     Subd. 6.  [LENDER.] "Lender" means a person in the business 
of lending money identified in a lien-notification statement.  
    Subd. 7.  [LETTER OF COMMITMENT.] "Letter of commitment" 
means a binding, irrevocable and unconditional agreement by a 
lender to honor drafts or other demands for payment upon the 
supplier presenting invoices signed by the purchaser or other 
proof of delivery.  
    Subd. 8.  [LIVESTOCK PRODUCTION INPUT.] "Livestock 
production input" means feed and labor used in raising livestock.
    Subd. 9.  [PERSON.] "Person" means an individual or an 
organization as defined in section 336.1-201, paragraph (30).  
    Subd. 10.  [PETROLEUM PRODUCT.] "Petroleum product" means 
motor fuels and special fuels that are used in the production of 
crops and livestock, including petroleum products as defined in 
section 296.01, alcohol fuels, propane, lubes, and oils.  
    Subd. 11.  [PROCEEDS.] "Proceeds" means proceeds as defined 
in section 336.9-306 except that if rights or duties are 
contingent upon express language in a financing statement, the 
requisite language may exist in a lien-notification statement 
under section 3, and includes farm products, inventory, 
warehouse receipts, and documents of title.  
    Subd. 12.  [SEED.] "Seed" means agricultural seeds that are 
used to produce crops, including agricultural seed as defined in 
section 21.47.  
    Subd. 13.  [SUPPLIER.] "Supplier" means a person who 
furnishes agricultural production inputs.  
    Sec. 3.  [514.952] [NOTIFICATION; LIEN-NOTIFICATION 
STATEMENT; EFFECT OF NOTIFICATION.] 
    Subdivision 1.  [NOTIFICATION TO LENDER.] A supplier may 
notify a lender of an agricultural production input lien by 
providing a lien-notification statement to the lender in an 
envelope marked "IMPORTANT-LEGAL NOTICE".  Delivery of the 
notice must be made by certified mail or another verifiable 
method.  
    Subd. 2.  [LIEN-NOTIFICATION STATEMENT.] The 
lien-notification statement must be in a form approved by the 
secretary of state and disclose the following:  
    (1) the name and business address of any lender;  
    (2) the name and address of the supplier claiming the lien; 
    (3) a description and the date or anticipated date or dates 
of the transaction and the retail cost or anticipated costs of 
the agricultural production input;  
    (4) the name, residential address, and signature of the 
person to whom the agricultural production input was furnished;  
    (5) the name and residential address of the owner and a 
description of the real estate where the crops to which the lien 
attaches are growing or are to be grown; or for a lien attaching 
to livestock, the name and residential address of the owner of 
the livestock, the location where the livestock will be raised, 
and a description of the livestock; and 
    (6) a statement that products and proceeds of the crops or 
livestock are covered by the agricultural input lien.  
    Subd. 3.  [RESPONSE OF LENDER TO NOTIFICATION.] Within ten 
calendar days after receiving a lien-notification statement, the 
lender must respond to the supplier with either:  
    (1) a letter of commitment for part of all of the amount in 
the lien-notification statement; or 
    (2) a written refusal to issue a letter of commitment.  
    Subd. 4.  [EFFECT OF RESPONSE.] (a) If a lender responds 
with a letter of commitment for part or all of the amount in the 
lien-notification statement, the supplier may not obtain a lien 
for the amount stated in the letter of credit.  
    (b) If a lender responds with a refusal to provide a letter 
of credit the rights of the lender and the supplier are not 
affected.  
    Subd. 5.  [EFFECT OF NO RESPONSE.] If a lender does not 
respond to the supplier within ten calendar days after receiving 
the lien-notification statement, an agricultural production 
input lien corresponding to the lien-notification statement has 
priority over any security interest of the lender in the same 
crops or livestock or their proceeds for the lesser of:  
    (1) the amount stated in the lien-notification statement;  
    (2) the unpaid retail cost of the agricultural production 
input identified in the lien-notification statement; or 
    (3) for livestock any limitation in section 4, subdivision 
2.  
    Subd. 6.  [LIEN PRIORITY.] An agricultural production input 
lien does not have priority over liens that arise under chapter 
395 or 514, or over perfected security interests for unpaid rent 
for the land where the crops were grown.  Agricultural 
production input liens are a security interest and have priority 
according to chapter 336, the uniform commercial code, except as 
provided in subdivision 5.  
    Sec. 4.  [514.954] [LIEN ATTACHMENT.] 
    Subdivision 1.  [LIEN ON CROPS.] A supplier who furnishes 
crop production inputs has an agricultural input lien for the 
unpaid retail cost of the crop production inputs.  The lien 
attaches to:  (1) the existing crops upon the land where a 
furnished agricultural chemical was applied, or if crops are not 
planted, to the next production crop within 16 months following 
the last date on which the agricultural chemical was applied; 
(2) the crops produced from furnished seed; or (3) the crops 
produced, harvested, or processed using a furnished petroleum 
product.  If the crops are grown on leased land and the lease 
provides for payment in crops, the lien does not attach to the 
lessor's portion of the crops.  The lien continues in crop 
products and proceeds, except that the lien does not continue in 
grain after a cash sale under section 223.16.  
    Subd. 2.  [LIEN ON LIVESTOCK.] A supplier who furnishes 
livestock production inputs has an agricultural production input 
lien for the unpaid retail cost of the livestock production 
input.  The lien attaches to all livestock consuming the feed 
and continues in livestock products and proceeds.  A perfected 
agricultural production input lien that attaches to livestock 
may not exceed the amount, if any, that the sales price of the 
livestock exceeds the greater of the fair market value of the 
livestock at the time the lien attaches or the acquisition price 
of the livestock.  
    Subd. 3.  [TIME OF ATTACHMENT.] An agricultural input lien 
attaches when the agricultural production inputs are furnished 
by the supplier to the purchaser.  
    Sec. 5.  [514.956] [PERFECTION OF LIEN; FILING.] 
    Subdivision 1.  [PERFECTION.] To perfect an agricultural 
production input lien, the lien must attach and the supplier 
entitled to the lien must file a lien-notification statement 
with the appropriate filing office under section 336.9-401 by 
six months after the last date that the agricultural production 
input was furnished.  
    Subd. 2.  [FAILURE TO PERFECT.] An agricultural production 
input lien that is not perfected has the priority of an 
unperfected security interest under section 336.9-312.  
    Subd. 3.  [DUTIES OF FILING OFFICER.] The filing officer 
shall enter on the lien-notification statement the time of day 
and date of filing.  The filing officer shall file and note the 
filing of a lien-notification statement under this section in 
the manner provided by section 336.9-403 for a financing 
statement.  
    Sec. 6.  [514.958] [ENFORCEMENT OF LIEN.] 
    The holder of an agricultural production input lien may 
enforce the lien in the manner provided in sections 336.9-501 to 
336.9-508 subject to section 550.17.  For enforcement of the 
lien, the lienholder is the secured party and the person for 
whom the agricultural production input was furnished is the 
debtor, and each has the respective rights and duties of a 
secured party and a debtor under sections 336.9-501 to 
336.9-508.  If a right or duty under sections 336.9-501 to 
336.9-508 is contingent upon the existence of express language 
in a security agreement or may be waived by express language in 
a security agreement, the requisite language does not exist.  
    Sec. 7.  [514.959] [ENFORCEMENT ACTIONS; LIEN 
EXTINGUISHED.] 
    An action to enforce an agricultural production input lien 
may be brought in district court in a county where some part of 
the crop or livestock is located after the lien is perfected.  A 
lien-notification statement may be amended, except the amount 
demanded, by leave of the court in the furtherance of justice. 
An agricultural production input lien is extinguished if an 
action to enforce the lien is not brought within 18 months after 
the date the lien-notification statement is filed.  
    Sec. 8.  [EFFECTIVE DATE.] 
    This act is effective July 1, 1984, except that an 
agricultural input lien may not attach to crops planted before 
December 1, 1984. 
    Approved April 25, 1984