1. Subject to the approval of a producer holding a lien, a processor may obtain a release of the lien by:

(a) Paying the agreed or actual value of any farm product that is delivered to or purchased by the processor within 20 days after the date of delivery of the farm product, unless the date of payment is otherwise agreed upon in writing or payment is secured by an instrument or arrangement other than the lien.

(b) Obtaining a surety bond which is executed by the processor as the principal and by a surety company which is authorized to do business in this state as a surety in an amount equal to the current market value of the farm product or processed farm product that the processor intends to dispose of or sell. The bond must be conditioned that if the processor fails to make payments to producers for the lawful claims of all producers whose liens have been released by the bond in an amount equal to or greater than the amount of the bond within 35 days after the date of the bond, the surety will be liable to and shall pay the claimants all lawful claims that may be covered by the amount of the bond and the costs of suit if an action is filed on the bond.

(c) Depositing cash with a financial institution in this state in an amount that is set apart by an instrument in writing which is signed by the processor for the purpose of guaranteeing, to the extent of the amount deposited, the payment of all existing claims of producers whose liens are released by the deposit within 35 days after the date of the deposit. The financial institution where a deposit is made pursuant to this paragraph must be named as the trustee in the instrument to carry out the provisions of the instrument.

(d) Designating, setting apart and depositing a quantity of a nonproprietary processed farm product in a public warehouse, and endorsing over and delivering the warehouse receipt to the producer for a quantity of nonproprietary processed farm products in an amount that is satisfactory to the producer for the purpose of guaranteeing, to the extent of the value of the deposit, payment of the existing claims of producers and labor claimants whose liens are released by the deposit within 35 days after the date of the deposit.

(e) Securing a release after payment in full for the farm products.

2. If a processor has paid all lawful claims of the producers in compliance with this section, a processor may sell, transport or otherwise dispose of any farm product for which the lien has been released.

3. If a bond, cash deposit, warehouse deposit or other security is given by a processor pursuant to this section, the processor may sell, transport or otherwise dispose of an amount of the farm product or processed farm product not exceeding the current market value represented by the bond, cash deposit, warehouse deposit or other security given by the processor.

4. For the purposes of this section, the current market value of a farm product or processed farm product may be based upon quotations from the Federal-State Market News Service or a similar source agreed to in writing by the parties to be determined, as appropriate, on the date:

(a) Of the bond;

(b) Of the deposit; or

(c) Other security is given.

(Added to NRS by 2001, 1230)