Sec. 74.115. PAYMENT OF ASSESSMENTS; ASSESSMENT LIENS. (a) A cotton grower who fails to pay an assessment levied under this subchapter when due may be subject, after reasonable notice and opportunity for hearing, to a penalty set by the commissioner. In determining the amount of the penalty to be assessed, the commissioner shall consider:

(1) the seriousness of the violation, including the nature, circumstances, and extent of the violation;

(2) the history of previous violations;

(3) the amount necessary to deter future violations;

(4) the economic situation of the cotton grower; and

(5) any other matter that justice may require.

(b) The foundation may develop a compliance certificate program to manage the payment and collection of an assessment levied under this subchapter. Under the program the foundation, subject to department rules, may issue a compliance certificate for cotton for which an assessment has been paid.

(c) In addition to any other remedies for the collection of assessments and penalties, the commissioner may adopt rules relating to the compliance certificate program for eradication assessments. The rules may include:

(1) provisions establishing and relating to the obligations of growers, ginners, and buyers in due course of cotton produced in active eradication zones to ensure that assessments are paid within a prescribed time period;

(2) provisions allowing incentives in the form of discounted assessments for growers who pay assessments within a prescribed time period;

(3) provisions establishing penalties and interest against growers who pay assessments after a prescribed time period; and

(4) other provisions the commissioner may determine are proper.

(d) In addition to any other remedies for the collection of assessments and penalties, an assessment lien in favor of the foundation attaches and is perfected 60 days after the date the foundation mails notice of the assessment on cotton produced and harvested that year from the acreage that is subject to the assessment that is due and unpaid. An assessment lien is not an agricultural lien for the purposes of Chapter 9, Business & Commerce Code, and is not subject to the provisions of that chapter. An assessment lien is subject to and preempted by the Food Security Act of 1985 (7 U.S.C. Section 1631 et seq.) and shall be treated under that Act in the same manner as a security interest created by the seller. A buyer of cotton takes free of the assessment lien if the buyer:

(1) receives a compliance certificate issued by the foundation when the buyer purchases the cotton that certifies that the assessment has been paid to the foundation;

(2) pays for the cotton by a check on which the department is named as a joint payee;

(3) does not receive notice of the assessment lien as required by the Food Security Act of 1985 (7 U.S.C. Section 1631 et seq.); or

(4) buys the cotton from a person other than the producer of the cotton.

(e) The foundation may assign, with the approval of the commissioner, assessments or liens in favor of the foundation as collateral for a loan to the foundation only if the proceeds of the loan are designated for use in the eradication zone from which the assessments or liens originated.

(f) If the department has cause to believe that a violation of this section or rules promulgated under this section has occurred, the department may investigate and, during normal business hours, audit and inspect the records of the person who is the subject of the investigation.

Added by Acts 1993, 73rd Leg., ch. 8, Sec. 1, eff. June 1, 1993. Amended by Acts 1995, 74th Leg., ch. 227, Sec. 11, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 463, Sec. 1.17, eff. May 30, 1997; Acts 1999, 76th Leg., ch. 286, Sec. 4, eff. May 29, 1999; Acts 2001, 77th Leg., ch. 168, Sec. 2, eff. May 18, 2001.