§ 9—103A. “Production-money crops”; “production-money obligation”; “production-money security interest”; burden of establishing

249 words·~1 min read·/vt/9-4

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)A security interest in crops is a production-money security interest to the extent that the crops are production-money crops.

(b)If the extent to which a security interest is a production-money security interest depends on the application of a payment to a particular obligation, the payment must be applied:

(1)in accordance with any reasonable method of application to which the parties agree;

(2)in the absence of the parties’ agreement to a reasonable method, in accordance with any intention of the obligor manifested at or before the time of payment; or

(3)in the absence of an agreement to a reasonable method and a timely manifestation of the obligor’s intention, in the following order:

(A)to obligations that are not secured; and

(B)if more than one obligation is secured, to obligations secured by production-money security interests in the order in which those obligations were incurred.

(c)A production-money security interest does not lose its status as such, even if:

(1)the production-money crops also secure an obligation that is not a production-money obligation;

(2)collateral that is not production-money crops also secures the production-money obligation; or

(3)the production-money obligation has been renewed, refinanced, or restructured.

(d)A secured party claiming a production-money security interest has the burden of establishing the extent to which the security interest is a production-money security interest. (Added 1999, No. 106 (Adj. Sess.), § 2, eff. July 1, 2001.)