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House Study Bill 500 - IntroducedA Bill ForAn Act 1relating to credit transactions involving grain
2by providing for a grain warehouse lien, and including
3applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2GRAIN WAREHOUSE LIEN
3 Section 1. NEW SECTION. 571A.1 Definitions.
4As used in this chapter, unless the context otherwise
5requires:
61. “Grain” means the same as defined in section 203.1.
72. “Grain depositor” means a person having a legal interest
8in grain who delivers that grain to a licensed grain warehouse.
93. “Grain warehouse lien” or “lien” means the lien created
10pursuant to section 571A.4.
114. “Licensed grain warehouse” means any of the following:
12a. A licensed warehouse as defined in section 203C.1.
13b. A warehouse operator licensed by the United States
14department of agriculture as provided by 7 U.S.C. §241 et seq.
15 Sec. 2. NEW SECTION. 571A.2 Applicable law.
161. Unless expressly superseded by a provision of this
17chapter, chapter 554, article 9, shall govern parties and
18transactions described in this chapter. For purposes of
19chapter 554, article 9, all of the following apply:
20a. A grain warehouse lien is an agricultural lien.
21b. Grain subject to a grain warehouse lien is a farm
22product. The grain is a fungible good.
23c. A licensed grain warehouse is a secured party.
24d. A licensed grain warehouse shall act in the ordinary
25course of business and in a commercially reasonable manner.
26e. (1) A grain depositor who incurs an obligation for
27obtaining a service furnished by a licensed grain warehouse
28pursuant to section 571A.3 is a debtor. Notwithstanding
29section 554.9102, a grain depositor is deemed a debtor even if
30the grain depositor’s legal interest is a security interest,
31agricultural lien, or other lien in grain.
32(2) For purposes of section 554.9606, a default occurs when
33a grain depositor fails to satisfy the incurred obligation as
34described in section 571A.3.
352. This chapter does not create a possessory lien as
-1-1provided in section 554.9333 and does not affect a lien held by
2a licensed grain warehouse under section 554.7209.
3 Sec. 3. NEW SECTION. 571A.3 Obligation incurred.
41. A grain depositor incurs an obligation when delivering
5grain to a licensed grain warehouse and the licensed grain
6warehouse furnishes a service with respect to storing, drying,
7conditioning, processing, or transporting grain for the benefit
8of the grain depositor. The service may include any act
9performed by the licensed grain warehouse that preserves the
10grain or its value as provided in section 554.9207.
112. The obligation may be incurred by written agreement or
12as required by law. Notwithstanding section 554.2201, the
13obligation may be incurred by oral agreement. Evidence of the
14obligation may include but is not limited to the licensed grain
15warehouse’s issuance of a warehouse receipt, scale ticket, or
16any other confirmatory memoranda or expression recognized under
17chapter 554, article 2.
18 Sec. 4. NEW SECTION. 571A.4 Lien created.
191. A grain warehouse lien is created. The lien secures the
20satisfaction of an obligation incurred by a grain depositor as
21provided in section 571A.3.
222. The lien is effective and attaches to the grain when the
23licensed grain warehouse takes possession of the grain.
243. The lien attaches to both the grain and any identifiable
25cash proceeds, as described in section 554.9315, subsection 2,
26from the sale of the grain.
274. The amount of the lien is the entire amount of the
28outstanding obligation owed by the grain depositor to the
29licensed grain warehouse pursuant to section 571A.3.
30 Sec. 5. NEW SECTION. 571A.5 Automatic perfection —
31priority.
321. a. A grain warehouse lien is automatically perfected at
33the time the lien becomes effective pursuant to section 571A.4.
34b. The lien is no longer perfected under this section when
35the licensed grain warehouse relinquishes possession of the
-2-1grain.
22. The perfected lien has priority over a conflicting
3security interest, agricultural lien, or other lien in the same
4grain, including a security interest or lien that was perfected
5prior to the effective date of the grain warehouse lien.
6 Sec. 6. NEW SECTION. 571A.6 Perfection by filing —
7priority.
81. A grain warehouse lien that is effective may also be
9perfected by filing a financing statement in the office of the
10secretary of state as provided in section 554.9308.
112. a. The financing statement must substantially meet the
12requirements of section 554.9502, subsection 1, and include
13all applicable information described in section 554.9516. In
14addition, the collateral description in the financing statement
15must at least include the type and number of bushels of grain
16subject to the lien and each crop year in which the licensed
17grain warehouse furnished a service in respect to the grain
18subject to the lien.
19b. Filing a financing statement as provided in paragraph
20“a” satisfies all requirements for the perfection of an
21agricultural lien as provided in chapter 554, article 9.
223. a. A financing statement may be filed during the period
23that the grain warehouse lien is automatically perfected under
24section 571A.5. The lien perfected by filing under this
25paragraph has priority over a conflicting security interest,
26agricultural lien, or other lien, including a security interest
27or lien that was perfected prior to the effective date of the
28grain warehouse lien.
29b. A financing statement may be filed after the period
30that the grain warehouse lien is automatically perfected under
31section 571A.5. The lien perfected by filing under this
32paragraph has priority over a conflicting security interest,
33agricultural lien, or other lien in the grain as provided in
34section 554.9322 in the same manner as if the grain warehouse
35lien had never been automatically perfected.
-3- 1c. If the licensed grain warehouse relinquishes possession
2of the grain and no financing statement is filed, the lien
3is unperfected until a financing statement is filed. An
4unperfected lien has priority over a conflicting security
5interest, agricultural lien, or other lien in the grain as
6provided in section 554.9322 in the same manner as if the grain
7warehouse lien had never been automatically perfected.
8 Sec. 7. NEW SECTION. 571A.7 Enforcement.
91. After a grain depositor’s default, the licensed grain
10warehouse may enforce a grain warehouse lien in the same manner
11provided for agricultural liens pursuant to chapter 554,
12article 9, part 6.
132. After the grain depositor’s default, and during the
14period that the grain is automatically perfected under section
15571A.5, the licensed grain warehouse may dispose of the grain
16as if the licensed grain warehouse were taking possession and
17disposing of the grain pursuant to chapter 554, article 9, part
186.
19DIVISION II
20CONFORMING PROVISIONS
21 Sec. 8. Section 554.7209, Code 2020, is amended by adding
22the following new subsection:
23 NEW SUBSECTION. 6. A warehouse that is a lienholder under
24this section may enforce a grain warehouse lien as provided in
25chapter 571A to the extent allowed in that chapter and in lieu
26of the lien created pursuant to this section.
27 Sec. 9. Section 570.1, subsection 2, unnumbered paragraph
281, Code 2020, is amended to read as follows:
29In order to perfect a lien in farm products as defined
30in section 554.9102, which is created under this section, a
31landlord must file a financing statement as required by section
32554.9308, subsection 2. Except as provided in chapters 571,
33571A, 572, 579A, 579B, and 581, a perfected lien in the farm
34products has priority over a conflicting security interest or
35lien, including a security interest or lien that was perfected
-4-1prior to the creation of the lien under this section, if the
2lien created in this section is perfected on either of the
3following dates:
4 Sec. 10. Section 570A.5, subsection 2, Code 2020, is amended
5to read as follows:
62. Except as provided in section 570A.2, subsection 3, the
7lien shall have equal priority to a lien or security interest
8which is perfected prior to the time that the agricultural
9supply dealer lien is perfected. However, a all of the
10following exceptions apply:
11a. Alandlord’s lien that is perfected pursuant to section
12570.1 shall have priority over a conflicting agricultural
13supply dealer lien as provided in section 570.1, and a that
14section.
15b. Aharvester’s lien that is perfected pursuant to section
16571.3 shall have priority over a conflicting agricultural
17supply dealer lien as provided in section 571.3A.
18c. (1) A grain warehouse lien that is perfected pursuant
19to section 571A.5 shall have priority over a conflicting
20agricultural supply dealer lien.
21(2) A grain warehouse lien that is perfected pursuant
22to section 571A.6 shall have priority over a conflicting
23agricultural supply dealer lien only as provided in that
24section.
25 Sec. 11. Section 571.3A, subsection 2, Code 2020, is amended
26to read as follows:
272. a. A harvester’s lien that is perfected under section
28571.3 shall have priority over a conflicting security interest
29in harvested crops regardless of when such security interest
30is perfected.
31b. A perfected harvester’s lien shall have priority over
32a conflicting landlord’s lien as provided in chapter 570,
33regardless of when such landlord’s lien is perfected.
34c. (1) A grain warehouse lien that is perfected pursuant to
35section 571A.5 shall have priority over a conflicting perfected
-5-1harvester’s lien.
2(2) A grain warehouse lien that is perfected pursuant to
3section 571A.6 shall have priority over a conflicting perfected
4harvester’s lien only as provided in that section.
5 Sec. 12. Section 579B.4, subsection 4, paragraph a,
6subparagraph (2), Code 2020, is amended to read as follows:
7(2) Notwithstanding subparagraph (1), a commodity
8production contract lien shall not be superior to a any of the
9following:
10(a) Acourt-ordered lien provided in section 717.4 or a.
11(b) Aveterinarian’s lien created under chapter 581, if such
12lien is perfected as an agricultural lien.
13(c) (1) A grain warehouse lien that is perfected pursuant
14to section 571A.5.
15(2) A grain warehouse lien that is perfected pursuant to
16section 571A.6, but only as provided in that section.
17DIVISION III
18APPLICABILITY
19 Sec. 13. APPLICABILITY. This Act applies to grain first
20delivered by a grain depositor on or after the effective date
21of this Act.
22EXPLANATION
23The inclusion of this explanation does not constitute agreement with
24the explanation’s substance by the members of the general assembly.
25GENERAL. This bill creates new Code chapter 571A which
26provides for a special lien referred to as a “grain warehouse
27lien”. The lien is imposed pursuant to a financial obligation
28incurred by a debtor for certain services performed by a
29creditor who is delivered possession of grain. For purposes
30of the uniform commercial code (UCC), article 9, the lien is
31considered an agricultural lien. The lien also attaches to
32any identifiable cash proceeds resulting from the sale of the
33grain. The grain is considered a fungible good meaning that
34it may be comingled with other equivalent grain stored in bulk
35and the creditor is not required to provide for its special
-6-1identification or segregation.
2PARTIES. Under the bill, the debtor is a grain depositor
3(e.g., farmer) who has a legal interest in the grain and
4relinquishes possession of the grain to a grain warehouse. The
5creditor is a grain warehouse licensed by either the department
6of agriculture and land stewardship under Code chapter 203C or
7by the United States department of agriculture under the United
8States Warehouse Act, codified in 7 U.S.C. ch.10.
9OBLIGATION SUBJECT TO THE LIEN. The financial obligation
10incurred by the grain depositor is limited to those services
11related to storing, drying, conditioning, processing, or
12transporting the grain performed by the licensed grain
13warehouse. The services may also include any act performed by
14the licensed grain warehouse that preserves the grain or its
15value (see Code section 554.9207).
16PERFECTING THE LIEN — PRIORITY. The warehouse lien is
17perfected in two ways. First, the lien is automatically
18perfected at the time the licensed grain warehouse takes
19possession of the grain. During the period of possession,
20the lien enjoys a super-priority status over any competing
21creditor’s interest. Thus, a licensed warehouse could enforce
22the lien before all other competing security interests and
23statutory liens, including agricultural liens, and common law
24liens regardless of when the competing security interest or
25lien was perfected. The automatic perfection terminates when
26the licensed grain dealer relinquishes possession of the grain.
27However, the licensed warehouse may retain its super-priority
28status by filing a financing statement (UCC-1) with the
29secretary of state during the period that the possessory lien
30is perfected. If the financing statement is filed after
31the period that the grain warehouse lien is automatically
32perfected, or the lien is never perfected after that period,
33the lien has priority over a conflicting security interest,
34agricultural lien, or other lien in the grain in the same
35manner as provided for other agricultural liens as if the lien
-7-1had never been automatically perfected.
2BACKGROUND. Under Iowa’s version of the UCC, article 9,
3a security interest is created by a contract referred to as
4a security agreement executed by a creditor and debtor that
5creates a financial obligation (Code section 554.9201). The
6security interest attaches to the debtor’s collateral (Code
7section 554.9203) and based on that agreement the creditor
8may perfect the security interest by filing a financing
9statement with the secretary of state (Code section 554.9310).
10Possession is also a means to perfect a security interest,
11including general warehouse lien allowed under the UCC,
12article 7 (Code section 554.7209). In addition, various Code
13chapters existing outside the UCC create agricultural liens in
14commodities produced by a farming operation. An agricultural
15lien is a statutory lien that may secure the payment of a
16financial obligation associated with commodity production, and
17is not necessarily possessory, meaning that it may continue to
18cover the commodity after harvest and delivery (Code section
19554.9102(1)(e)). However, an agricultural lien must be
20perfected by filing a financing statement with the secretary
21of state (Code section 554.9310). Once a lien is created, it
22receives a degree of priority over the covered collateral among
23competing creditors seeking to enforce a debt. Generally,
24under the UCC, article 9, the status of a creditor’s priority
25is based on the date of the security interest’s perfection.
26However, certain statutes outside the UCC, article 9, provide
27a special status to lienholders, including those holding
28agricultural liens.
29APPLICABILITY. The bill applies to grain first delivered by
30a grain depositor on or after the effective date of this Act.
-8-da/ns
2by providing for a grain warehouse lien, and including
3applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2GRAIN WAREHOUSE LIEN
3 Section 1. NEW SECTION. 571A.1 Definitions.
4As used in this chapter, unless the context otherwise
5requires:
61. “Grain” means the same as defined in section 203.1.
72. “Grain depositor” means a person having a legal interest
8in grain who delivers that grain to a licensed grain warehouse.
93. “Grain warehouse lien” or “lien” means the lien created
10pursuant to section 571A.4.
114. “Licensed grain warehouse” means any of the following:
12a. A licensed warehouse as defined in section 203C.1.
13b. A warehouse operator licensed by the United States
14department of agriculture as provided by 7 U.S.C. §241 et seq.
15 Sec. 2. NEW SECTION. 571A.2 Applicable law.
161. Unless expressly superseded by a provision of this
17chapter, chapter 554, article 9, shall govern parties and
18transactions described in this chapter. For purposes of
19chapter 554, article 9, all of the following apply:
20a. A grain warehouse lien is an agricultural lien.
21b. Grain subject to a grain warehouse lien is a farm
22product. The grain is a fungible good.
23c. A licensed grain warehouse is a secured party.
24d. A licensed grain warehouse shall act in the ordinary
25course of business and in a commercially reasonable manner.
26e. (1) A grain depositor who incurs an obligation for
27obtaining a service furnished by a licensed grain warehouse
28pursuant to section 571A.3 is a debtor. Notwithstanding
29section 554.9102, a grain depositor is deemed a debtor even if
30the grain depositor’s legal interest is a security interest,
31agricultural lien, or other lien in grain.
32(2) For purposes of section 554.9606, a default occurs when
33a grain depositor fails to satisfy the incurred obligation as
34described in section 571A.3.
352. This chapter does not create a possessory lien as
-1-1provided in section 554.9333 and does not affect a lien held by
2a licensed grain warehouse under section 554.7209.
3 Sec. 3. NEW SECTION. 571A.3 Obligation incurred.
41. A grain depositor incurs an obligation when delivering
5grain to a licensed grain warehouse and the licensed grain
6warehouse furnishes a service with respect to storing, drying,
7conditioning, processing, or transporting grain for the benefit
8of the grain depositor. The service may include any act
9performed by the licensed grain warehouse that preserves the
10grain or its value as provided in section 554.9207.
112. The obligation may be incurred by written agreement or
12as required by law. Notwithstanding section 554.2201, the
13obligation may be incurred by oral agreement. Evidence of the
14obligation may include but is not limited to the licensed grain
15warehouse’s issuance of a warehouse receipt, scale ticket, or
16any other confirmatory memoranda or expression recognized under
17chapter 554, article 2.
18 Sec. 4. NEW SECTION. 571A.4 Lien created.
191. A grain warehouse lien is created. The lien secures the
20satisfaction of an obligation incurred by a grain depositor as
21provided in section 571A.3.
222. The lien is effective and attaches to the grain when the
23licensed grain warehouse takes possession of the grain.
243. The lien attaches to both the grain and any identifiable
25cash proceeds, as described in section 554.9315, subsection 2,
26from the sale of the grain.
274. The amount of the lien is the entire amount of the
28outstanding obligation owed by the grain depositor to the
29licensed grain warehouse pursuant to section 571A.3.
30 Sec. 5. NEW SECTION. 571A.5 Automatic perfection —
31priority.
321. a. A grain warehouse lien is automatically perfected at
33the time the lien becomes effective pursuant to section 571A.4.
34b. The lien is no longer perfected under this section when
35the licensed grain warehouse relinquishes possession of the
-2-1grain.
22. The perfected lien has priority over a conflicting
3security interest, agricultural lien, or other lien in the same
4grain, including a security interest or lien that was perfected
5prior to the effective date of the grain warehouse lien.
6 Sec. 6. NEW SECTION. 571A.6 Perfection by filing —
7priority.
81. A grain warehouse lien that is effective may also be
9perfected by filing a financing statement in the office of the
10secretary of state as provided in section 554.9308.
112. a. The financing statement must substantially meet the
12requirements of section 554.9502, subsection 1, and include
13all applicable information described in section 554.9516. In
14addition, the collateral description in the financing statement
15must at least include the type and number of bushels of grain
16subject to the lien and each crop year in which the licensed
17grain warehouse furnished a service in respect to the grain
18subject to the lien.
19b. Filing a financing statement as provided in paragraph
20“a” satisfies all requirements for the perfection of an
21agricultural lien as provided in chapter 554, article 9.
223. a. A financing statement may be filed during the period
23that the grain warehouse lien is automatically perfected under
24section 571A.5. The lien perfected by filing under this
25paragraph has priority over a conflicting security interest,
26agricultural lien, or other lien, including a security interest
27or lien that was perfected prior to the effective date of the
28grain warehouse lien.
29b. A financing statement may be filed after the period
30that the grain warehouse lien is automatically perfected under
31section 571A.5. The lien perfected by filing under this
32paragraph has priority over a conflicting security interest,
33agricultural lien, or other lien in the grain as provided in
34section 554.9322 in the same manner as if the grain warehouse
35lien had never been automatically perfected.
-3- 1c. If the licensed grain warehouse relinquishes possession
2of the grain and no financing statement is filed, the lien
3is unperfected until a financing statement is filed. An
4unperfected lien has priority over a conflicting security
5interest, agricultural lien, or other lien in the grain as
6provided in section 554.9322 in the same manner as if the grain
7warehouse lien had never been automatically perfected.
8 Sec. 7. NEW SECTION. 571A.7 Enforcement.
91. After a grain depositor’s default, the licensed grain
10warehouse may enforce a grain warehouse lien in the same manner
11provided for agricultural liens pursuant to chapter 554,
12article 9, part 6.
132. After the grain depositor’s default, and during the
14period that the grain is automatically perfected under section
15571A.5, the licensed grain warehouse may dispose of the grain
16as if the licensed grain warehouse were taking possession and
17disposing of the grain pursuant to chapter 554, article 9, part
186.
19DIVISION II
20CONFORMING PROVISIONS
21 Sec. 8. Section 554.7209, Code 2020, is amended by adding
22the following new subsection:
23 NEW SUBSECTION. 6. A warehouse that is a lienholder under
24this section may enforce a grain warehouse lien as provided in
25chapter 571A to the extent allowed in that chapter and in lieu
26of the lien created pursuant to this section.
27 Sec. 9. Section 570.1, subsection 2, unnumbered paragraph
281, Code 2020, is amended to read as follows:
29In order to perfect a lien in farm products as defined
30in section 554.9102, which is created under this section, a
31landlord must file a financing statement as required by section
32554.9308, subsection 2. Except as provided in chapters 571,
33571A, 572, 579A, 579B, and 581, a perfected lien in the farm
34products has priority over a conflicting security interest or
35lien, including a security interest or lien that was perfected
-4-1prior to the creation of the lien under this section, if the
2lien created in this section is perfected on either of the
3following dates:
4 Sec. 10. Section 570A.5, subsection 2, Code 2020, is amended
5to read as follows:
62. Except as provided in section 570A.2, subsection 3, the
7lien shall have equal priority to a lien or security interest
8which is perfected prior to the time that the agricultural
9supply dealer lien is perfected. However, a all of the
10following exceptions apply:
11a. Alandlord’s lien that is perfected pursuant to section
12570.1 shall have priority over a conflicting agricultural
13supply dealer lien as provided in section 570.1, and a that
14section.
15b. Aharvester’s lien that is perfected pursuant to section
16571.3 shall have priority over a conflicting agricultural
17supply dealer lien as provided in section 571.3A.
18c. (1) A grain warehouse lien that is perfected pursuant
19to section 571A.5 shall have priority over a conflicting
20agricultural supply dealer lien.
21(2) A grain warehouse lien that is perfected pursuant
22to section 571A.6 shall have priority over a conflicting
23agricultural supply dealer lien only as provided in that
24section.
25 Sec. 11. Section 571.3A, subsection 2, Code 2020, is amended
26to read as follows:
272. a. A harvester’s lien that is perfected under section
28571.3 shall have priority over a conflicting security interest
29in harvested crops regardless of when such security interest
30is perfected.
31b. A perfected harvester’s lien shall have priority over
32a conflicting landlord’s lien as provided in chapter 570,
33regardless of when such landlord’s lien is perfected.
34c. (1) A grain warehouse lien that is perfected pursuant to
35section 571A.5 shall have priority over a conflicting perfected
-5-1harvester’s lien.
2(2) A grain warehouse lien that is perfected pursuant to
3section 571A.6 shall have priority over a conflicting perfected
4harvester’s lien only as provided in that section.
5 Sec. 12. Section 579B.4, subsection 4, paragraph a,
6subparagraph (2), Code 2020, is amended to read as follows:
7(2) Notwithstanding subparagraph (1), a commodity
8production contract lien shall not be superior to a any of the
9following:
10(a) Acourt-ordered lien provided in section 717.4 or a.
11(b) Aveterinarian’s lien created under chapter 581, if such
12lien is perfected as an agricultural lien.
13(c) (1) A grain warehouse lien that is perfected pursuant
14to section 571A.5.
15(2) A grain warehouse lien that is perfected pursuant to
16section 571A.6, but only as provided in that section.
17DIVISION III
18APPLICABILITY
19 Sec. 13. APPLICABILITY. This Act applies to grain first
20delivered by a grain depositor on or after the effective date
21of this Act.
22EXPLANATION
23The inclusion of this explanation does not constitute agreement with
24the explanation’s substance by the members of the general assembly.
25GENERAL. This bill creates new Code chapter 571A which
26provides for a special lien referred to as a “grain warehouse
27lien”. The lien is imposed pursuant to a financial obligation
28incurred by a debtor for certain services performed by a
29creditor who is delivered possession of grain. For purposes
30of the uniform commercial code (UCC), article 9, the lien is
31considered an agricultural lien. The lien also attaches to
32any identifiable cash proceeds resulting from the sale of the
33grain. The grain is considered a fungible good meaning that
34it may be comingled with other equivalent grain stored in bulk
35and the creditor is not required to provide for its special
-6-1identification or segregation.
2PARTIES. Under the bill, the debtor is a grain depositor
3(e.g., farmer) who has a legal interest in the grain and
4relinquishes possession of the grain to a grain warehouse. The
5creditor is a grain warehouse licensed by either the department
6of agriculture and land stewardship under Code chapter 203C or
7by the United States department of agriculture under the United
8States Warehouse Act, codified in 7 U.S.C. ch.10.
9OBLIGATION SUBJECT TO THE LIEN. The financial obligation
10incurred by the grain depositor is limited to those services
11related to storing, drying, conditioning, processing, or
12transporting the grain performed by the licensed grain
13warehouse. The services may also include any act performed by
14the licensed grain warehouse that preserves the grain or its
15value (see Code section 554.9207).
16PERFECTING THE LIEN — PRIORITY. The warehouse lien is
17perfected in two ways. First, the lien is automatically
18perfected at the time the licensed grain warehouse takes
19possession of the grain. During the period of possession,
20the lien enjoys a super-priority status over any competing
21creditor’s interest. Thus, a licensed warehouse could enforce
22the lien before all other competing security interests and
23statutory liens, including agricultural liens, and common law
24liens regardless of when the competing security interest or
25lien was perfected. The automatic perfection terminates when
26the licensed grain dealer relinquishes possession of the grain.
27However, the licensed warehouse may retain its super-priority
28status by filing a financing statement (UCC-1) with the
29secretary of state during the period that the possessory lien
30is perfected. If the financing statement is filed after
31the period that the grain warehouse lien is automatically
32perfected, or the lien is never perfected after that period,
33the lien has priority over a conflicting security interest,
34agricultural lien, or other lien in the grain in the same
35manner as provided for other agricultural liens as if the lien
-7-1had never been automatically perfected.
2BACKGROUND. Under Iowa’s version of the UCC, article 9,
3a security interest is created by a contract referred to as
4a security agreement executed by a creditor and debtor that
5creates a financial obligation (Code section 554.9201). The
6security interest attaches to the debtor’s collateral (Code
7section 554.9203) and based on that agreement the creditor
8may perfect the security interest by filing a financing
9statement with the secretary of state (Code section 554.9310).
10Possession is also a means to perfect a security interest,
11including general warehouse lien allowed under the UCC,
12article 7 (Code section 554.7209). In addition, various Code
13chapters existing outside the UCC create agricultural liens in
14commodities produced by a farming operation. An agricultural
15lien is a statutory lien that may secure the payment of a
16financial obligation associated with commodity production, and
17is not necessarily possessory, meaning that it may continue to
18cover the commodity after harvest and delivery (Code section
19554.9102(1)(e)). However, an agricultural lien must be
20perfected by filing a financing statement with the secretary
21of state (Code section 554.9310). Once a lien is created, it
22receives a degree of priority over the covered collateral among
23competing creditors seeking to enforce a debt. Generally,
24under the UCC, article 9, the status of a creditor’s priority
25is based on the date of the security interest’s perfection.
26However, certain statutes outside the UCC, article 9, provide
27a special status to lienholders, including those holding
28agricultural liens.
29APPLICABILITY. The bill applies to grain first delivered by
30a grain depositor on or after the effective date of this Act.
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