2000 Minnesota Statutes

CHAPTER 336A. Farm product liens and financing statements

     336A.01 Definitions. 

    Subdivision 1.    Applicability.  The definitions in 
 this section apply to this chapter. 

    Subd. 2.    Buyer in the ordinary course of business.  
 "Buyer in the ordinary course of business" means a person who, 
 in the ordinary course of business, buys farm products from a 
 person engaged in farming operations who is in the business of 
 selling farm products. 

    Subd. 3.    Commission merchant.  "Commission merchant" 
 means a person engaged in the business of receiving a farm 
 product for sale on commission or for or on behalf of another 
 person. 

    Subd. 4.    Computerized filing system.  "Computerized 
 filing system" means the system created under section 336.9-411 
 with separate programs for filing and giving notice of effective 
 financing statements and farm products statutory liens.  

    Subd. 5.    Effective financing statement.  "Effective 
 financing statement" means an original or reproduced copy of an 
 original statement that meets the requirements of section 
 336A.03. 

    Subd. 6.    Farm product.  "Farm product" means an 
 agricultural commodity, a species of livestock used or produced 
 in farming operations, or a product of a crop or the livestock 
 in its unmanufactured state, that is in the possession of a 
 person engaged in farming operations.  

    Subd. 7.    Farm product dealer.  "Farm product dealer" 
 means a buyer in the ordinary course of business, a commission 
 merchant, or a selling agent.  

    Subd. 8.    Farm products statutory lien.  "Farm 
 products statutory lien" means a lien on farm products which is 
 given by statute or other rule of law for services or materials. 

    Subd. 9.    Filing office.  "Filing office" means the 
 office of the county recorder or the office of the secretary of 
 state. 

    Subd. 10.    Filing officer.  "Filing officer" means a 
 county recorder, the secretary of state, or an agent of a county 
 recorder or the secretary of state authorized to accept filings. 

    Subd. 11.    Lien notice.  "Lien notice" means an 
 original or reproduced copy of an original statement that meets 
 the requirements of section 336A.03. 

    Subd. 12.    Person.  "Person" means an individual, 
 partnership, corporation, trust, or other business entity. 

    Subd. 13.    Security interest.  "Security interest" 
 means an interest in farm products that secures payment or 
 performance of an obligation.  

    Subd. 14.    Selling agent.  "Selling agent" means a 
 person, other than a commission merchant, who is engaged in the 
 business of negotiating the sale and purchase of a farm product 
 on behalf of a person engaged in farming operations.  

    HIST: 1992 c 525 s 2 

     336A.02 Specification of farm products. 

    The secretary of state shall, by rule, determine which 
 specific farm products will be included in the computerized 
 filing and notification system.  Consideration shall be given to 
 the value of the product sold within the state and its marketing 
 system. 

    HIST: 1992 c 525 s 3 

     336A.03 Contents of financing statement or lien notice. 

    Subdivision 1.    Substantial compliance.  An effective 
 financing statement or lien notice must substantially comply 
 with this section but may contain minor errors that are not 
 seriously misleading.  

    Subd. 2.    Contents.  (a) An effective financing 
 statement or lien notice must contain: 

    (1) a description of the farm products subject to the 
 security interest or farm products statutory lien, including the 
 amount of the farm products, if applicable, and a reasonable 
 description of the location of the property, including the 
 county, where the farm products are located; 

    (2) the name and address of the secured party or the person 
 entitled to the farm products statutory lien; 

    (3) the name and address of the debtor; 

    (4) in the case of an effective financing statement, the 
 social security number of the debtor, or, if the debtor is doing 
 business other than as an individual, the United States Internal 
 Revenue Service taxpayer identification number of the debtor; 

    (5) in the case of an effective financing statement, the 
 following statement with the appropriate blank checked: 

    "THIS EFFECTIVE FINANCING STATEMENT .... WILL ..... WILL 
 NOT BE TERMINATED WITHIN 30 DAYS OF THE DATE ON WHICH THE 
 OBLIGATION(S) IT SECURES NO LONGER EXIST."; and 

    (6) in the case of a lien notice, any payment obligations 
 imposed on the buyer, commission merchant, or selling agent as a 
 condition for waiver or release of the farm products statutory 
 lien. 

    (b) An effective financing statement or lien notice for one 
 or more debtors may cover more than one farm product located in 
 more than one county.  

    (c) The effective financing statement form and lien notice 
 may not be combined with a Uniform Commercial Code financing 
 statement form. 

    (d) An effective financing statement must contain the 
 following statement, all in capital letters:  

    "THE INFORMATION CONTAINED IN THIS EFFECTIVE FINANCING 
    STATEMENT WILL BE SENT TO FARM PRODUCT BUYERS REGISTERED IN 
    MINNESOTA.  SALE OF FARM PRODUCTS TO THOSE BUYERS MAY 
    RESULT IN A CHECK BEING ISSUED PAYABLE JOINTLY TO BOTH THE 
    SELLER AND THE SECURED PARTY." 

    Subd. 3.    Signatures.  A lien notice must be signed by 
 the lienholder.  An effective financing statement must be signed 
 by: 

    (1) the secured party; and 

    (2) the debtor.  

    Subd. 4.    Required amendments.  An effective financing 
 statement or lien notice must be amended in writing within three 
 months after material changes occur to reflect the material 
 changes.  The amendment to an effective financing statement or a 
 lien statement must be signed and filed in the same manner 
 required for the original document. 

    Subd. 5.    Effective period.  (a) An effective 
 financing statement is effective for five years from the date of 
 filing. The effective period may be extended for additional 
 periods of five years as provided in section 336A.06. 

    (b) An effective financing statement is not effective after:

    (1) the effective financing statement lapses on the 
 expiration of the effective period; or 

    (2) a notice that the effective financing statement is 
 terminated is signed by the secured party and filed in the 
 filing office where the original effective financing statement 
 is filed. 

    (c) A lien notice is not effective after:  

    (1) five years from the date of filing; 

    (2) expiration of the period for commencing an action to 
 enforce the lien under applicable Minnesota law; or 

    (3) the obligation secured by the statutory lien no longer 
 exists. 

    HIST: 1992 c 525 s 4 

     336A.04 Filing effective financing statement or lien 
  notice. 

    Subdivision 1.    Filing location.  An effective 
 financing statement or lien notice must be filed in the office 
 of the secretary of state or the county recorder in the county 
 of the debtor's residence if the debtor is an individual or 
 organization with residence in this state.  If the debtor is not 
 a resident of this state, the effective financing statement or 
 lien notice must be filed in the office of the secretary of 
 state. 

    Subd. 2.    Effective filing.  Presentation of an 
 effective financing statement or lien notice with the 
 appropriate filing fee to a filing officer or acceptance of the 
 statement by a filing officer constitutes filing under this 
 chapter.  

    Subd. 3.    Fees.  (a) The fee for filing and indexing a 
 standard form for a lien notice, effective financing statement, 
 or continuation statement, and stamping the date and place of 
 filing on a copy of the filed document furnished by the filing 
 party is $15 for up to two debtor names and $15 for each 
 additional name thereafter. 

    (b) A fee may not be charged for filing a termination 
 statement if the termination is filed within 30 days after 
 satisfaction of the lien or security interest.  Otherwise, the 
 fee is $10.  

    (c) A county recorder shall forward $5 of each filing fee 
 collected under this subdivision to the secretary of state.  
 Surcharge amounts shall be collected quarterly by the secretary 
 of state from each county recorder.  The secretary of state 
 shall send each county recorder an invoice at the end of each 
 fiscal quarter and each county recorder shall forward payment to 
 the secretary of state within 30 days of the date of the 
 invoice.  The surcharge amounts received from county recorders 
 and the surcharge amounts collected by the secretary of state's 
 office must be deposited in the state treasury and credited to 
 the general fund.  The balance of the filing fees collected by a 
 county recorder must be deposited in the general fund of the 
 county.  

    Subd. 4.    Filing procedure.  (a) The filing officer 
 shall mark the effective financing statement or lien notice with 
 a consecutive file number and the date and hour of filing.  

    (b) The filing office shall maintain the original filed 
 document or a copy of the filed document in a format that meets 
 archival standards for public inspection as provided in rule by 
 the secretary of state.  

    (c) The filing office shall index filed documents according 
 to the file number of the document.  

    Subd. 5.    Entering filing information into computerized 
 filing system.  Each filing office shall enter the information 
 from the filed documents into the computerized filing system as 
 prescribed by the secretary of state.  

    The secretary of state shall record lien notices in the 
 computerized filing system in a manner that separately 
 identifies all farm products statutory liens, and shall ensure 
 that the computerized filing and notification system 
 distinguishes security interests covered by effective financing 
 statements from liens covered by lien notices to the extent 
 required by United States Code, title 7, section 1631, et seq., 
 and regulations adopted under those sections.  

    Subd. 6.    Verification of information.  A person who 
 has filed an effective financing statement or lien notice may 
 verify the accuracy of the information entered into the 
 computerized filing system and compiled into the master list by 
 making an inquiry under section 336A.09.  The secretary of state 
 shall establish a procedure for requesting an inquiry to verify 
 the accuracy of the information at the time of filing. 

    HIST: 1992 c 525 s 5; 1993 c 369 s 124; 1994 c 438 s 14; 1997 
 c 137 s 17 

     336A.05 Effect of filing on perfection and priority. 

    Filing under this chapter does not affect the perfection or 
 priority of security interests filed under the Uniform 
 Commercial Code or a farm products statutory lien filed in 
 accordance with the provisions of law under which it was created.

    HIST: 1992 c 525 s 6 

     336A.06 Continuation statement. 

    Subdivision 1.    Filing period.  A secured party may 
 file a continuation statement for an effective financing 
 statement within six months before a five-year effective period 
 expires.  

    Subd. 2.    Contents.  A continuation statement must: 

    (1) be signed by the secured party and the debtor; 

    (2) identify the original effective financing statement by 
 file number; and 

    (3) state that the original effective financing statement 
 is still effective.  

    Subd. 3.    Effective period.  If a continuation 
 statement is filed within six months before a five-year 
 effective period expires, the effectiveness of the original 
 effective financing statement continues for an additional five 
 years after the original five-year effective period.  Additional 
 continuation statements filed within six months before an 
 effective period expires continue the effectiveness of the 
 original effective financing statement for additional five-year 
 periods.  

    Subd. 4.    Filing.  The continuation statement must be 
 filed in the filing office where the original effective 
 financing statement is filed.  

    HIST: 1992 c 525 s 7 

     336A.07 Termination statements. 

    Subdivision 1.    Requirement.  (a) If required in an 
 effective financing statement, a secured party shall within 30 
 days file a lien termination statement and termination statement 
 for the effective financing statement when:  

    (1) an outstanding secured obligation does not exist; and 

    (2) a written commitment to make advances, incur 
 obligations, or otherwise give value does not exist.  

    (b) A lienholder shall file a termination statement with 
 respect to a lien notice within 30 days after an outstanding 
 lien notice obligation no longer exists.  

    Subd. 2.    Contents.  A lien termination statement and 
 termination statement for the effective financing statement must:

    (1) state the file number of the effective financing 
 statement or lien notice; 

    (2) state the date on which the lien or security interest 
 was satisfied; 

    (3) state that the secured party does not claim a security 
 interest under the effective financing statement or that the 
 lienholder does not claim a lien under the lien notice; and 

    (4) be signed by the secured party or lienholder. 

    Subd. 3.    Filing.  A termination statement for an 
 effective financing statement must be filed by the secured party 
 in the filing office where the original effective financing 
 statement is filed.  A termination statement for the lien notice 
 must be filed by the lienholder in the same manner required for 
 filing the lien notice.  

    Subd. 4.    Failure to file.  If the secured party or 
 lienholder fails to file a termination statement as required by 
 subdivision 1, or within ten days after a debtor serves a 
 written demand for the termination statement if the conditions 
 in subdivision 1 exist, the secured party or lienholder is 
 liable to the debtor for $100 plus any loss caused to the debtor 
 by failing to file the termination statement.  For the second 
 and each subsequent time a secured party or lienholder is found 
 liable to a debtor under this subdivision in any one calendar 
 year, the secured party or lienholder is liable to the debtor 
 for $250 plus any loss caused to the debtor. 

    Subd. 5.    Filing procedures.  (a) When a termination 
 statement is filed, each filing office must delete the 
 information from the active files as prescribed by the secretary 
 of state.  

    (b) If the termination statement is filed in duplicate, the 
 filing office shall return one copy of the termination 
 statement, stamped to show the time of receipt, to the secured 
 party or lienholder.  

    HIST: 1992 c 525 s 8 

     336A.08 Master list. 

    Subdivision 1.    Compilation.  (a) The secretary of 
 state shall compile the information on effective financing 
 statements in the computerized filing system into a master list: 

    (1) organized according to farm product; 

    (2) arranged within each product: 

    (i) in alphabetical order according to the last name of the 
 individual debtor or, in the case of debtors doing business 
 other than as individuals, the first word in the name of the 
 debtors; 

    (ii) in numerical order according to the social security 
 number of the individual debtor or, in the case of debtors doing 
 business other than as individuals, the Internal Revenue Service 
 taxpayer identification number of the debtors; 

    (iii) geographically by county; and 

    (iv) by crop year; and 

    (3) containing the information provided on an effective 
 financing statement.  

    (b) The secretary of state shall compile information from 
 lien notices recorded in the computerized filing system into a 
 statutory lien master list in alphabetical order according to 
 the last name of the individual debtor or, in the case of 
 debtors doing business other than as individuals, the first word 
 in the name of the debtors.  The secretary of state may also 
 organize the statutory lien master list according to one or more 
 of the categories of information established in paragraph (a). 

    Subd. 2.    Removal of effective financing statements and 
 lien notices.  The secretary of state shall remove lapsed and 
 terminated effective financing statements and lien notices from 
 the computerized filing system before preparing master lists.  

    Subd. 3.    Request for partial master list.  If 
 requested by a buyer registered under section 336A.11, the 
 secretary of state shall distribute partial master lists to the 
 buyer that are limited to one or more of the categories in 
 subdivision 1, paragraph (a). 

    Subd. 4.    Distribution of master and partial lists.  
 (a) The secretary of state shall maintain the information on the 
 effective financing statement master list: 

    (1) by farm product arranged alphabetically by debtor; and 

    (2) by farm product arranged numerically by the debtor's 
 social security number for an individual debtor or, in the case 
 of debtors doing business other than as individuals, the 
 Internal Revenue Service taxpayer identification number of the 
 debtors. 

    (b) The secretary of state shall maintain the information 
 in the farm products statutory lien master list by county 
 arranged alphabetically by debtor. 

    (c) The secretary of state shall distribute the requested 
 master and partial master lists on a monthly basis to farm 
 product dealers registered under section 336A.11.  The secretary 
 of state may, by rule, establish that lists of certain farm 
 products must be distributed more frequently.  

    (d) The secretary of state shall, by rule, establish: 

    (1) dates when the distribution of lists will be made; 

    (2) dates after which a filing of an effective financing 
 statement or lien notice will not be reflected on the next lists 
 distributed; and 

    (3) dates by which a registrant must complete a 
 registration to receive the next list distributed.  

    (e) The secretary of state shall make the master and 
 partial master lists available as written or printed paper 
 documents and may make lists available in other forms or media, 
 including: 

    (1) microfiche; 

    (2) magnetic tape; 

    (3) electronically transmitted medium; or 

    (4) computer disk.  

    (f) There shall be no fee for partial or master lists 
 distributed on microfiche, magnetic tape, electronically 
 transmitted medium, computer disk, or comparable media. 

    (g) At the request of a farm product dealer registered 
 under section 336A.11, the secretary of state shall deliver 
 lists at cost by certified or registered mail, return receipt 
 requested.  

    HIST: 1992 c 525 s 9 

     336A.09 Inquiries. 

    Subdivision 1.    Procedure.  (a) Oral and written 
 inquiries regarding information provided by the filing of 
 effective financing statements or lien notices may be made at 
 any filing office during regular business hours. 

    (b) A filing office receiving an oral or written inquiry 
 shall, upon request, provide an oral or facsimile response to 
 the inquiry and must mail a confirmation of the inquiry in 
 writing by the end of the next business day after the inquiry is 
 received.  

    (c) A filing office shall maintain a record of inquiries 
 made under this section including:  

    (1) the date of the inquiry; 

    (2) the name of the debtor inquired about; and 

    (3) identification of the person making the request for 
 inquiry.  

    Subd. 2.    Searches; fees.  (a) If a person makes a 
 request, the filing officer shall conduct a search of the 
 computerized filing system for effective financing statements or 
 lien notices and statements of continuation of a particular 
 debtor.  The filing officer shall report the date, time, and 
 results of the search by issuing: 

    (1) a certificate listing the file number, date, and hour 
 of each effective financing statement found in the search and 
 the names and addresses of each secured party on the effective 
 financing statements or of each lien notice found in the search 
 and the names and address of each lienholder on the lien notice; 

    (2) photocopies of the original effective financing 
 statement or lien notice documents on file; or 

    (3) upon request, both the certificate and photocopies of 
 the effective financing statements or lien notices. 

    (b) The uniform fee for conducting a search and for 
 preparing a certificate is $15 per debtor name if the request is 
 in the standard form prescribed by the secretary of state.  This 
 uniform fee shall include ten photocopies of original documents. 
 If the request for information is made on a form other than the 
 standard form prescribed by the secretary of state, the fee is 
 $20 per debtor name and shall include ten photocopies of 
 original documents.  An additional fee of $1 per page must be 
 charged for each photocopy prepared in excess of the first ten.  
 If an oral or facsimile response is requested, there is an 
 additional fee of $5 per debtor name requested.  

    (c) A county recorder shall forward $5 of each search fee 
 collected under this subdivision to the secretary of state.  
 Surcharge amounts shall be collected quarterly by the secretary 
 of state from each county recorder.  The secretary of state 
 shall send each county recorder an invoice at the end of each 
 fiscal quarter and each county recorder shall forward payment to 
 the secretary of state within 30 days of the date of the invoice.
 The surcharge amounts received from county recorders and the 
 surcharge amounts collected by the secretary of state's office 
 must be deposited in the state treasury and credited to the 
 general fund.  The balance of the search fees collected by a 
 county recorder must be deposited in the general fund of the 
 county. 

    HIST: 1992 c 525 s 10; 1993 c 369 s 125; 1994 c 438 s 15 

     336A.10 Liability for information errors. 

    Except as provided in sections 609.87 to 609.891, the 
 state, the secretary of state, counties, county recorders, and 
 their employees and agents are immune from liability as a result 
 of errors or omissions in information supplied under this 
 chapter. 

    HIST: 1992 c 525 s 11 

     336A.11 Registration of farm product dealers. 

    Subdivision 1.    Requirements.  Farm product dealers 
 may register with the secretary of state to receive master lists 
 of notices of security interests in farm products or farm 
 products statutory liens.  Registration must be made on an 
 annual calendar year basis.  A registration is not complete 
 until the registration form is properly completed and received 
 by the secretary of state and accompanied by the registration 
 fee.  Registration entitles a farm product dealer to receive 
 lists for those farm products specified by the registrant at the 
 time of registration. 

    Subd. 2.    Registration forms.  The secretary of state 
 shall make registration forms available to farm product 
 dealers.  The secretary of state must also make registration 
 information available to the commissioner of agriculture for 
 distribution to applicants for licensure under section 17A.04 or 
 223.17.  The registration form must include provisions for the 
 name and address of the farm product dealer, a request for the 
 master or partial master lists, and the medium on which the farm 
 product dealer desires to receive the master list.  

    Subd. 3.    Registration fee.  The annual registration 
 fee for farm product dealers is $25. 

    Subd. 4.    Record of registered farm product dealers.  
 The secretary of state shall maintain a record of the registered 
 farm product dealers and the lists and contents of the lists 
 received by the registered farm product dealers for a period of 
 five years after the lists are distributed. 

    HIST: 1992 c 525 s 12; 1995 c 128 art 3 s 26 

     336A.12 Rules. 

    Subdivision 1.    Authority.  (a) The secretary of state 
 may adopt permanent rules to implement this chapter.  

    (b) If necessary to obtain federal certification of the 
 computerized filing system, additional or alternative 
 requirements made in conformity with United States Code, title 
 7, section 1631, may be adopted by the secretary of state by 
 rule.  

    Subd. 2.    Forms.  The secretary of state shall 
 prescribe forms to be used for effective financing statements, 
 lien notices, combined forms, amendments, continuation 
 statements, termination statements, and notices to debtors.  

    HIST: 1992 c 525 s 13 

     336A.13 Receipt of written notice. 

    For purposes of United States Code, title 7, section 1631, 
 and this chapter, receipt of written notice means the date the 
 notice is actually received by a farm product dealer or the 
 first date that delivery is attempted by a carrier.  A farm 
 product dealer must act in good faith.  A farm product dealer is 
 presumed to have received the notice by five business days after 
 it was mailed unless by ten days after it was mailed the farm 
 product dealer notifies the secretary of state in writing that 
 it has not received the notice by that time. 

    HIST: 1992 c 525 s 14 

     336A.14 Restricted use of information. 

    Information obtained from the seller of a farm product 
 relative to the social security number or tax identification 
 number of the true owner of the farm product and all information 
 obtained from the master or limited list may not be used for 
 purposes that are not related to:  (1) purchase of a farm 
 product; (2) taking a security interest against a farm product; 
 or (3) perfecting a farm product statutory lien. 

    HIST: 1992 c 525 s 15 

     336A.15 Buyers taking free of and subject to farm 
  products statutory liens. 

    Subdivision 1.    Taking free of lien.  Except as 
 provided in subdivision 2, and notwithstanding other law or rule 
 to the contrary, a buyer in the ordinary course of business who 
 buys farm products from a seller engaged in farming operations 
 takes free of a farm products statutory lien applicable to the 
 purchased farm products even though the farm products statutory 
 lien is perfected and the buyer knows the lien exists.  

    Subd. 2.    Taking subject to lien.  A buyer in the 
 ordinary course of business of farm products takes subject to a 
 farm products statutory lien applicable to the purchased farm 
 products if the lienholder has perfected the farm products 
 statutory lien and:  

    (1) the buyer has failed to register with the secretary of 
 state as provided in section 336A.11; or 

    (2) the buyer has registered with the secretary of state as 
 provided in section 336A.11, the buyer receives a notice from 
 the secretary of state specifying that the seller and the farm 
 products being sold are subject to a lien notice, and the buyer 
 fails to secure a waiver or release of the farm products 
 statutory lien specified in the lien notice by making a payment, 
 satisfying an obligation, or otherwise.  

    HIST: 1992 c 525 s 16 

     336A.16 Commission merchants and selling agents subject 
  to farm products statutory lien. 

    Subdivision 1.    Selling not subject to lien.  Except 
 as provided in subdivision 2, and notwithstanding other law or 
 rule to the contrary, a commission merchant or selling agent who 
 sells farm products for others is not subject to a farm products 
 statutory lien even though the farm products statutory lien is 
 perfected and the commission merchant or selling agent knows the 
 lien exists.  

    Subd. 2.    Selling subject to lien.  A commission 
 merchant or selling agent selling farm products for another 
 person is subject to a farm product statutory lien applicable to 
 the purchased farm products if the lienholder has perfected the 
 farm products statutory lien and: 

    (1) the commission merchant or selling agent has failed to 
 register with the secretary of state as provided in section 
 336A.11; or 

    (2) the commission merchant or selling agent has registered 
 with the secretary of state as provided in section 336A.11, the 
 commission merchant or selling agent receives a notice from the 
 secretary of state specifying that the seller and the farm 
 products being sold are subject to a lien notice, and the 
 commission merchant or selling agent fails to secure a waiver or 
 release of the farm products statutory lien specified in the 
 lien notice by making a payment, satisfying an obligation, or 
 otherwise. 

    HIST: 1992 c 525 s 17