House File 2188 - Introduced HOUSE FILE BY SHOULTZ Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act establishing a tool and die lien Act. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5116HH 81 4 rh/sh/8 PAG LIN 1 1 Section 1. NEW SECTION. 572A.1 SHORT TITLE. 1 2 This chapter shall be known and may be cited as the "Tool 1 3 and Die Lien Act". 1 4 Sec. 2. NEW SECTION. 572A.2 DEFINITIONS. 1 5 For the purposes of this chapter, the following definitions 1 6 shall have the following meanings: 1 7 1. "Customer" means any person or entity who contracted 1 8 with or caused a plastic or metal processor to use a tool, 1 9 die, mold, jig, fixture, form, or pattern to manufacture, 1 10 assemble, or otherwise make plastic or metal components or 1 11 products. 1 12 2. "Processor" means any person or entity including, but 1 13 not limited to, a tool or die maker, who uses a tool, die, 1 14 mold, jig, fixture, form, or pattern to manufacture, assemble, 1 15 or otherwise make a plastic or metal product or products for a 1 16 customer, pursuant to a contract or otherwise. 1 17 3. "Special tool" means a tool, die, mold, jig, fixture, 1 18 form, pattern, or part used to manufacture, assemble, or 1 19 otherwise make plastic or metal components or products. 1 20 4. "Toolmaker" means a person including, but not limited 1 21 to, a mold builder, model maker, patternmaker, molder, die 1 22 maker, metal former, jig and fixture builder, die sinker, die 1 23 caster, mold designer, mold programmer, die designer, die 1 24 programmer, and mold or die engineer who fabricates, cuts, 1 25 casts, forms, or designs molds for the plastic industry or 1 26 dies for the metal forming industry. 1 27 Sec. 3. NEW SECTION. 572A.3 LIEN. 1 28 1. A processor shall have a lien on the tools, dies, 1 29 molds, jigs, fixtures, forms, or patterns in the processor's 1 30 possession belonging to a customer, for the balance due the 1 31 processor or person from such customer for plastic or metal 1 32 processing work, and for all materials related to such work. 1 33 The processor may retain possession of the tool, die, mold, 1 34 jig, fixture, form, or pattern until such balance is paid, 1 35 subject only to a security interest properly perfected 2 1 pursuant to article 9 of the uniform commercial code as 2 2 provided in chapter 554. 2 3 2. A toolmaker has a lien on all special tools produced by 2 4 the toolmaker and on all proceeds from the assignment, sale, 2 5 transfer, exchange, or other disposition of the special tool 2 6 produced by the toolmaker until the toolmaker is paid in full 2 7 all amounts due the toolmaker for the production of the 2 8 special tool. 2 9 3. For the purposes of subsection 2, all of the following 2 10 shall apply: 2 11 a. The lien attaches when the special tool is delivered 2 12 from the toolmaker to the customer. 2 13 b. The amount of the lien is the amount that a customer or 2 14 processor owes the toolmaker for the fabrication, repair, or 2 15 modification of the special tool. 2 16 c. The toolmaker retains the lien even if the toolmaker is 2 17 not in possession of the special tool for which the lien is 2 18 claimed. 2 19 Sec. 4. NEW SECTION. 572A.4 NOTICE. 2 20 1. Before enforcing a lien as provided for in section 2 21 572A.3, subsection 1, an initial notice in writing shall be 2 22 given to the customer, either delivered personally or sent by 2 23 registered mail to the last known address of the customer. 2 24 The notice shall state that a lien is claimed in the amount 2 25 set forth in or in an attachment to the notice for processing 2 26 work contracted or performed for the customer. The notice 2 27 shall also include a demand for payment. 2 28 2. Before enforcing a lien as provided in section 572A.3, 2 29 subsection 2, an initial notice in writing shall be given to 2 30 the customer and processor, either delivered personally or 2 31 sent by registered mail to the last known address of the 2 32 customer and the processor. The notice shall state that a 2 33 lien is claimed in the amount set forth in or in an attachment 2 34 to the notice for the fabrication, repair, or modification of 2 35 the special tool. The notice shall also include a demand for 3 1 payment. 3 2 Sec. 5. NEW SECTION. 572A.5 SALE OF SPECIAL TOOL == 3 3 PROCESSOR. 3 4 If a processor has not been paid the amount due within 3 5 ninety days after the initial written notice has been received 3 6 by the customer as provided in section 572A.4, subsection 1, 3 7 the processor may sell the special tool at a public auction if 3 8 both of the following occur: 3 9 1. The special tool is still in the processor's 3 10 possession. 3 11 2. The processor complies with section 572A.7. 3 12 Sec. 6. NEW SECTION. 572A.6 POSSESSION OF SPECIAL TOOL 3 13 == TOOLMAKER. 3 14 1. If a toolmaker has not been paid the amount due within 3 15 ninety days after the initial notice is received by the 3 16 customer and by the processor, the toolmaker has a right to 3 17 possession of the special tool and may do any of the 3 18 following: 3 19 a. Enforce the right to possession of the special tool by 3 20 judgment, foreclosure, or any available judicial procedure. 3 21 b. Commence a civil action in district court to enforce 3 22 the lien, including by obtaining a judgment for the amount 3 23 owed and a judgment permitting the special tool to be sold at 3 24 an execution sale. 3 25 c. Take possession of the special tool, if possession 3 26 without judicial process can be taken without breach of the 3 27 peace. 3 28 d. Sell the special tool in a public auction if the 3 29 toolmaker complies with section 572A.8. 3 30 2. A toolmaker that suffers damages under this chapter may 3 31 obtain appropriate legal and equitable relief, including 3 32 damages, in a civil action. The court shall award a toolmaker 3 33 that is the prevailing party reasonable attorney fees, court 3 34 costs, and expenses related to enforcement of the lien. 3 35 Sec. 7. NEW SECTION. 572A.7 SECOND NOTICE == PUBLICATION 4 1 == SALE BY PROCESSOR. 4 2 1. Before a processor sells the special tool, the 4 3 processor shall provide a second written notice to the 4 4 customer, by registered mail, return receipt requested. The 4 5 second notice shall include all of the following information: 4 6 a. The processor's intention to sell the special tool. 4 7 b. A description of the special tool to be sold. 4 8 c. The time and place of the sale. 4 9 d. An itemized statement for the amount due. 4 10 2. In addition to the notice by mail provided pursuant to 4 11 subsection 1, the processor shall publish in a newspaper of 4 12 general circulation in the location where the special tool is 4 13 being held for sale by the processor, notice of the 4 14 processor's intention to sell the special tool. The notice 4 15 shall include a description of the special tool and name of 4 16 the customer. 4 17 Sec. 8. NEW SECTION. 572A.8 SECOND NOTICE == PUBLICATION 4 18 == SALE BY TOOLMAKER. 4 19 1. Before a toolmaker may sell the special tool, the 4 20 toolmaker shall provide a second written notice to the 4 21 customer and processor, by registered mail, return receipt 4 22 requested. The second notice shall include all of the 4 23 following information: 4 24 a. The toolmaker's intention to sell the special tool. 4 25 b. A description of the special tool to be sold. 4 26 c. The time and place of the sale. 4 27 d. An itemized statement for the amount due. 4 28 2. In addition to the notice by mail provided pursuant to 4 29 subsection 1, the toolmaker shall publish in a newspaper of 4 30 general circulation in the location where the special tool is 4 31 being held for sale by the toolmaker, notice of the 4 32 toolmaker's intention to sell the special tool. The notice 4 33 shall include a description of the special tool and name of 4 34 the customer and processor. 4 35 Sec. 9. NEW SECTION. 572A.9 INSPECTION == SALE FOR 5 1 AMOUNT EXCEEDING LIEN == FEDERAL PREEMPTION. 5 2 1. Prior to the sale of any special tool in accordance 5 3 with this chapter, such item must be available for inspection, 5 4 upon request, by members of the public during normal business 5 5 hours for a period of at least two weeks prior to the sale. 5 6 2. If the sale is for a sum greater than the amount of the 5 7 lien, the excess shall be paid to any prior lienholder and any 5 8 remainder to the customer and the processor. 5 9 3. A sale shall not be made or a possession shall not be 5 10 obtained under this chapter if it would be in violation of any 5 11 right of a customer or a processor under federal patent, 5 12 bankruptcy, or copyright law. 5 13 EXPLANATION 5 14 This bill creates the tool and die lien Act. 5 15 The bill creates a lien for a plastic or metal processor on 5 16 the tools, dies, molds, jigs, fixtures, forms, or patterns in 5 17 the plastic or metal processor's possession belonging to a 5 18 customer for the balance due from such customer for plastic or 5 19 metal processing work and for all materials related to such 5 20 work. The bill also creates a lien for a toolmaker on all 5 21 special tools produced by the toolmaker and on all proceeds 5 22 from the sale of the special tools. The bill provides that a 5 23 toolmaker must deliver the special tool to the customer to 5 24 create the lien. 5 25 The bill provides that prior to enforcing a lien under the 5 26 bill, the processor shall give an initial notice to the 5 27 customer. Such notice shall be delivered either personally or 5 28 by registered mail and shall state the amount owed and include 5 29 a demand for payment. The bill provides that if the processor 5 30 has not been paid within 90 days after receipt of the initial 5 31 notice, the processor may sell the special tool at a public 5 32 auction if the processor is in possession of the tool, has 5 33 sent a second notice to the customer informing the customer of 5 34 the sale, has published notice of the sale in a newspaper, and 5 35 has made the special tool available for public inspection. 6 1 The bill provides that prior to enforcing a lien under the 6 2 bill, a toolmaker shall give an initial notice to the 6 3 customer. Such notice shall be delivered either personally or 6 4 by registered mail and shall state the amount owed and include 6 5 a demand for payment. The bill provides that if a toolmaker 6 6 has not been paid within 90 days after receipt of the initial 6 7 notice, the toolmaker may enforce the right to possession of 6 8 the special tool through court action, take possession of the 6 9 special tool, or sell the special tool at a public auction if 6 10 the processor is in possession of the tool, has sent a second 6 11 notice to the customer informing the customer of the sale, has 6 12 published notice of the sale in a newspaper, and has made the 6 13 special tool available for public inspection. The bill also 6 14 provides that a toolmaker who suffers damages under the bill 6 15 may obtain appropriate legal and equitable relief, including 6 16 damages and reasonable attorney fees and court costs. 6 17 A "processor" is defined as a person or entity including, 6 18 but not limited to, a tool or die maker, who uses a tool, die, 6 19 mold, jig, fixture, form, or pattern to manufacture, assemble, 6 20 or otherwise make a plastic or metal product or products for a 6 21 customer, pursuant to a contract or otherwise. A "toolmaker" 6 22 is defined as a person including, but not limited to, a mold 6 23 builder, model maker, patternmaker, molder, die maker, metal 6 24 former, jig and fixture builder, die sinker, die caster, mold 6 25 designer, mold programmer, die designer, die programmer, and 6 26 mold or die engineer who fabricates, cuts, casts, forms, or 6 27 designs molds for the plastic industry or dies for the metal 6 28 forming industry. A "special tool" is defined as a tool, die, 6 29 mold, jig, fixture, form, pattern, or part used to 6 30 manufacture, assemble, or otherwise make plastic or metal 6 31 components or products. 6 32 LSB 5116HH 81 6 33 rh:nh/sh/8