HSB 500

PARTIES., farmer) who has a legal interest in the grain and relinquishes possession of the grain to a grain warehouse. 10. OBLIGATION SUBJECT TO THE LIEN. The financial obligation incurred by the grain depositor is limited to those services related to storing, drying, conditioning, processing, or transporting the grain performed by the licensed grain warehouse.9207). PERFECTING THE LIEN —— PRIORITY. The warehouse lien is perfected in two ways. First, the lien is automatically perfected at the time the licensed grain warehouse takes possession of the grain. During the period of possession, the lien enjoys a super-priority status over any competing creditor’s interest. Thus, a licensed warehouse could enforce the lien before all other competing security interests and statutory liens, including agricultural liens, and common law liens regardless of when the competing security interest or lien was perfected. The automatic perfection terminates when the licensed grain dealer relinquishes possession of the grain. However, the licensed warehouse may retain its super-priority status by filing a financing statement (UCC-1) with the secretary of state during the period that the possessory lien is perfected. _____ had never been automatically perfected. BACKGROUND.9201).9310).7209). In addition, various Code chapters existing outside the UCC create agricultural liens in commodities produced by a farming operation.9102(1)(e)).9310). Once a lien is created, it receives a degree of priority over the covered collateral among competing creditors seeking to enforce a debt. Generally, under the UCC, article 9, the status of a creditor’s priority is based on the date of the security interest’s perfection. However, certain statutes outside the UCC, article 9, provide a special status to lienholders, including those holding agricultural liens. APPLICABILITY. The bill applies to grain first delivered by a grain depositor on or after the effective date of this Act.