Senate File 2215 - Introduced SENATE FILE BY COMMITTEE ON JUDICIARY (SUCCESSOR TO SF 2022) Passed Senate, Date Passed House, 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 5741SV 82 4 rh/nh/24 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 to 1 21 a mold builder, model maker, patternmaker, molder, die maker, 1 22 metal former, jig and fixture builder, die sinker, die caster, 1 23 mold designer, mold programmer, die designer, die programmer, 1 24 and mold or die engineer who fabricates, cuts, casts, forms, 1 25 or designs molds for the plastic industry or dies for the 1 26 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, subject only to a security interest properly 1 33 perfected pursuant to article 9 of the uniform commercial code 1 34 as provided in chapter 554. 1 35 2. A toolmaker has a lien on all special tools produced by 2 1 the toolmaker for the balance due for production of the 2 2 special tool, subject only to a security interest properly 2 3 perfected pursuant to article 9 of the uniform commercial code 2 4 as provided in chapter 554. 2 5 3. For the purposes of subsection 2, all of the following 2 6 shall apply: 2 7 a. The lien attaches when the special tool is delivered 2 8 from the toolmaker to the customer. 2 9 b. The amount of the lien is the amount that a customer or 2 10 processor owes the toolmaker for the fabrication, repair, or 2 11 modification of the special tool. 2 12 c. The toolmaker retains the lien even if the toolmaker is 2 13 not in possession of the special tool for which the lien is 2 14 claimed. 2 15 Sec. 4. NEW SECTION. 572A.4 NOTICE. 2 16 1. Before enforcing a lien as provided for in section 2 17 572A.3, subsection 1, an initial notice in writing shall be 2 18 given to the customer, either delivered personally or sent by 2 19 registered mail to the last known address of the customer. 2 20 The notice shall state that a lien is claimed in the amount 2 21 set forth in or in an attachment to the notice for processing 2 22 work contracted or performed for the customer. The notice 2 23 shall also include a demand for payment. 2 24 2. Before enforcing a lien as provided in section 572A.3, 2 25 subsection 2, an initial notice in writing shall be given to 2 26 the customer and processor, either delivered personally or 2 27 sent by registered mail to the last known address of the 2 28 customer and the processor. The notice shall state that a 2 29 lien is claimed in the amount set forth in or in an attachment 2 30 to the notice for the fabrication, repair, or modification of 2 31 the special tool. The notice shall also include a demand for 2 32 payment. 2 33 Sec. 5. NEW SECTION. 572A.5 SALE OF SPECIAL TOOL == 2 34 PROCESSOR. 2 35 If a processor has not been paid the amount due within 3 1 ninety days after the initial written notice has been received 3 2 by the customer as provided in section 572A.4, subsection 1, 3 3 the processor may sell the special tool at a public auction if 3 4 both of the following occur: 3 5 1. The special tool is still in the processor's 3 6 possession. 3 7 2. The processor complies with section 572A.7. 3 8 Sec. 6. NEW SECTION. 572A.6 POSSESSION OF SPECIAL TOOL 3 9 == TOOLMAKER. 3 10 1. If a toolmaker has not been paid the amount due within 3 11 ninety days after the initial notice is received by the 3 12 customer and by the processor, the toolmaker has a right to 3 13 possession of the special tool and may do any of the 3 14 following: 3 15 a. Enforce the right to possession of the special tool by 3 16 judgment, foreclosure, or any available judicial procedure. 3 17 b. Commence a civil action in district court to enforce 3 18 the lien, including by obtaining a judgment for the amount 3 19 owed and a judgment permitting the special tool to be sold at 3 20 an execution sale. 3 21 c. Take possession of the special tool, if possession 3 22 without judicial process can be taken without breach of the 3 23 peace. 3 24 d. Sell the special tool in a public auction if the 3 25 toolmaker complies with section 572A.8. 3 26 2. A toolmaker that suffers damages under this chapter may 3 27 obtain appropriate legal and equitable relief, including 3 28 damages, in a civil action. The court shall award a toolmaker 3 29 that is the prevailing party reasonable attorney fees, court 3 30 costs, and expenses related to enforcement of the lien. 3 31 Sec. 7. NEW SECTION. 572A.7 SECOND NOTICE == PUBLICATION 3 32 == SALE BY PROCESSOR. 3 33 1. Before a processor sells the special tool, the 3 34 processor shall provide a second written notice to the 3 35 customer, by registered mail, return receipt requested. The 4 1 second notice shall include all of the following information: 4 2 a. The processor's intention to sell the special tool. 4 3 b. A description of the special tool to be sold. 4 4 c. The time and place of the sale. 4 5 d. An itemized statement for the amount due. 4 6 2. In addition to the notice by mail provided pursuant to 4 7 subsection 1, the processor shall publish in a newspaper of 4 8 general circulation in the location where the special tool is 4 9 being held for sale by the processor, notice of the 4 10 processor's intention to sell the special tool. The notice 4 11 shall include a description of the special tool and name of 4 12 the customer. 4 13 Sec. 8. NEW SECTION. 572A.8 SECOND NOTICE == PUBLICATION 4 14 == SALE BY TOOLMAKER. 4 15 1. Before a toolmaker may sell the special tool, the 4 16 toolmaker shall provide a second written notice to the 4 17 customer and processor, by registered mail, return receipt 4 18 requested. The second notice shall include all of the 4 19 following information: 4 20 a. The toolmaker's intention to sell the special tool. 4 21 b. A description of the special tool to be sold. 4 22 c. The time and place of the sale. 4 23 d. An itemized statement for the amount due. 4 24 2. In addition to the notice by mail provided pursuant to 4 25 subsection 1, the toolmaker shall publish in a newspaper of 4 26 general circulation in the location where the special tool is 4 27 being held for sale by the toolmaker, notice of the 4 28 toolmaker's intention to sell the special tool. The notice 4 29 shall include a description of the special tool and name of 4 30 the customer and processor. 4 31 Sec. 9. NEW SECTION. 572A.9 INSPECTION == SALE FOR 4 32 AMOUNT EXCEEDING LIEN == FEDERAL PREEMPTION. 4 33 1. Prior to the sale of any special tool in accordance 4 34 with this chapter, such item must be available for inspection, 4 35 upon request, by members of the public during normal business 5 1 hours for a period of at least two weeks prior to the sale. 5 2 2. If the sale is for a sum greater than the amount of the 5 3 lien, the excess shall be paid to any prior lienholder and any 5 4 remainder to the customer and the processor. 5 5 3. A sale shall not be made or a possession shall not be 5 6 obtained under this chapter if it would be in violation of any 5 7 right of a customer or a processor under federal patent, 5 8 bankruptcy, or copyright law. 5 9 EXPLANATION 5 10 This bill creates the tool and die lien Act. 5 11 The bill creates a lien for a plastic or metal processor on 5 12 the tools, dies, molds, jigs, fixtures, forms, or patterns in 5 13 the plastic or metal processor's possession belonging to a 5 14 customer for the balance due from such customer for plastic or 5 15 metal processing work. The bill also creates a lien for a 5 16 toolmaker on all special tools produced by the toolmaker for 5 17 the balance due for production of the special tool. The bill 5 18 provides that a toolmaker must deliver the special tool to the 5 19 customer to create the lien. 5 20 The bill provides that prior to enforcing a lien under the 5 21 bill, the processor shall give an initial notice to the 5 22 customer. Such notice shall be delivered either personally or 5 23 by registered mail and shall state the amount owed and include 5 24 a demand for payment. The bill provides that if the processor 5 25 has not been paid within 90 days after receipt of the initial 5 26 notice, the processor may sell the special tool at a public 5 27 auction if the processor is in possession of the tool, has 5 28 sent a second notice to the customer informing the customer of 5 29 the sale, has published notice of the sale in a newspaper, and 5 30 has made the special tool available for public inspection. 5 31 The bill provides that prior to enforcing a lien under the 5 32 bill, a toolmaker shall give an initial notice to the 5 33 customer. Such notice shall be delivered either personally or 5 34 by registered mail and shall state the amount owed and include 5 35 a demand for payment. The bill provides that if a toolmaker 6 1 has not been paid within 90 days after receipt of the initial 6 2 notice, the toolmaker may enforce the right to possession of 6 3 the special tool through court action, take possession of the 6 4 special tool, or sell the special tool at a public auction if 6 5 the processor is in possession of the tool, has sent a second 6 6 notice to the customer informing the customer of the sale, has 6 7 published notice of the sale in a newspaper, and has made the 6 8 special tool available for public inspection. The bill also 6 9 provides that a toolmaker who suffers damages under the bill 6 10 may obtain appropriate legal and equitable relief, including 6 11 damages and reasonable attorney fees and court costs. 6 12 A "processor" is defined as a person or entity including 6 13 but not limited to a tool or die maker, who uses a tool, die, 6 14 mold, jig, fixture, form, or pattern to manufacture, assemble, 6 15 or otherwise make a plastic or metal product or products for a 6 16 customer, pursuant to a contract or otherwise. A "toolmaker" 6 17 is defined as a person including but not limited to a mold 6 18 builder, model maker, patternmaker, molder, die maker, metal 6 19 former, jig and fixture builder, die sinker, die caster, mold 6 20 designer, mold programmer, die designer, die programmer, and 6 21 mold or die engineer who fabricates, cuts, casts, forms, or 6 22 designs molds for the plastic industry or dies for the metal 6 23 forming industry. A "special tool" is defined as a tool, die, 6 24 mold, jig, fixture, form, pattern, or part used to 6 25 manufacture, assemble, or otherwise make plastic or metal 6 26 components or products. 6 27 LSB 5741SV 82 6 28 rh/nh/24