Senate Study Bill 3169 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON DAWSON) A BILL FOR An Act relating to a landlord’s lien on farm products and 1 including applicability provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 6328SC (3) 88 da/jh

S.F. _____ Section 1. Section 554.7209, Code 2020, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 2A. A warehouse’s lien created in 3 subsection 1 is not effective against a landlord perfecting an 4 agricultural lien as provided in section 570.1. 5 Sec. 2. Section 570.1, subsections 1 and 2, Code 2020, are 6 amended to read as follows: 7 1. A landlord shall have a lien for the rent upon all crops 8 grown farm products as defined in section 554.9102, produced 9 upon the leased premises, and upon any other personal property 10 of the tenant which has been used or kept thereon during the 11 term and which is not exempt from execution. 12 2. In order to perfect a lien in farm products as defined 13 in section 554.9102 , which is created under this section , a 14 landlord must file a financing statement as required by section 15 554.9308, subsection 2 . Except as provided in chapters 571 , 16 chapter 572 , 579A , 579B , and 581 , a perfected lien in the 17 farm products has priority over a any conflicting security 18 interest or lien, including a security interest or lien that 19 was perfected prior to the creation of the lien under this 20 section, if the lien created in this section is perfected on 21 either of the following dates: 22 a. Prior to July 1, 2001. 23 b. When when the debtor takes possession of the leased 24 premises or within twenty days after the debtor takes 25 possession of the leased premises. 26 Sec. 3. Section 571.3A, subsection 2, Code 2020, is amended 27 to read as follows: 28 2. A harvester’s lien that is perfected under section 571.3 29 shall have priority over a conflicting security interest in 30 harvested crops regardless of when such security interest is 31 perfected. A However, a perfected harvester’s lien shall not 32 have priority over a conflicting landlord’s lien as provided 33 in chapter 570 , regardless of when such landlord’s lien is 34 perfected . 35 -1- LSB 6328SC (3) 88 da/jh 1/ 4

S.F. _____ Sec. 4. Section 579A.2, subsection 5, paragraph b, Code 1 2020, is amended to read as follows: 2 b. Notwithstanding paragraph “a” , a custom cattle feedlot 3 lien shall not be superior to a any of the following: 4 (1) A court-ordered lien provided in section 717.4 . 5 (2) A landlord’s lien created under chapter 570 or a 6 veterinarian’s lien created under chapter 581 , if such lien is 7 perfected as an agricultural lien as provided in chapter 554, 8 article 9 . 9 Sec. 5. Section 579B.4, subsection 4, paragraph a, 10 subparagraph (2), Code 2020, is amended to read as follows: 11 (2) Notwithstanding subparagraph (1), a commodity 12 production contract lien shall not be superior to a any of the 13 following: 14 (a) A court-ordered lien provided in section 717.4 . 15 (b) A landlord’s lien created under chapter 570 or a 16 veterinarian’s lien created under chapter 581 , if such lien is 17 perfected as an agricultural lien. 18 Sec. 6. Section 581.2, subsection 2, paragraph b, Code 2020, 19 is amended to read as follows: 20 b. Notwithstanding paragraph “a” , a veterinarian’s lien 21 shall not be superior to a any of the following: 22 (1) A court-ordered lien provided in section 717.4 , if such 23 lien is perfected as an agricultural lien. 24 (2) A landlord’s lien created under chapter 570, if such 25 lien is perfected as an agricultural lien. 26 Sec. 7. APPLICABILITY. This Act applies to leases entered 27 into on and after July 1, 2020. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 GENERAL. This bill provides that a landlord’s lien has 32 priority over security interests and other agricultural 33 liens covering farm products produced on the leased farmland, 34 including a security interest perfected under Iowa’s version 35 -2- LSB 6328SC (3) 88 da/jh 2/ 4

S.F. _____ of the uniform commercial code (UCC) (Code chapter 554, 1 article 9), a warehouse lien under the uniform commercial code 2 (Code section 554.7209), and an agricultural lien including a 3 harvester’s lien (Code chapter 571), a custom cattle feedlot 4 lien (Code chapter 579A), a commodity production contract lien 5 (Code chapter 579B), and a veterinarian’s lien (Code chapter 6 581). 7 BACKGROUND. Under Iowa’s version of the UCC, article 9, 8 a security interest is created by a contract referred to as 9 a security agreement executed by a creditor and debtor that 10 creates a financial obligation (Code section 554.9201). The 11 security interest attaches to the debtor’s collateral (Code 12 section 554.9203) and based on that agreement the creditor 13 may perfect the security interest by filing a financing 14 statement with the secretary of state (Code section 554.9310). 15 Possession is also a means to perfect a security interest, 16 including general warehouse lien allowed under the UCC, 17 article 7 (Code section 554.7209). In addition, various Code 18 chapters existing outside the UCC create agricultural liens in 19 commodities produced by a farming operation. An agricultural 20 lien is a statutory lien that may secure the payment of a 21 financial obligation associated with commodity production, and 22 is not necessarily possessory, meaning that it may continue to 23 cover the commodity after harvest and delivery (Code section 24 554.9102(1)(e)). However, an agricultural lien must be 25 perfected by filing a financing statement with the secretary 26 of state (Code section 554.9310). Once a lien is created, it 27 receives a degree of priority over the covered collateral among 28 competing creditors seeking to enforce a debt. Generally, 29 under the UCC, article 9, the status of a creditor’s priority 30 is based on the date of the security interest’s perfection. 31 However, certain statutes outside the UCC, article 9, provide 32 a special status to lienholders, including those holding 33 agricultural liens. 34 APPLICABILITY. The bill applies to leases entered into, 35 -3- LSB 6328SC (3) 88 da/jh 3/ 4

S.F. _____ renewed, or otherwise continued on and after July 1, 2020. 1 -4- LSB 6328SC (3) 88 da/jh 4/ 4