(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.
Note: WV Code updated with legislation passed through the 2015 Regular Session
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