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Current Status Bill Number:View additional legislative information at the LPITS web site.4013 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19990429 Primary Sponsor:Bowers All Sponsors:Bowers, Limehouse Drafted Document Number:l:\council\bills\gjk\20617djc99.doc Residing Body:House Current Committee:Agriculture, Natural Resources and Environmental Affairs Com 20 HANR Subject:Grain and Cotton Dealers and Handlers Fund renamed, Agriculture History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ House 20000328 Co-Sponsor added (Rule 5.2) by Rep. Limehouse House 19990429 Introduced, read first time, 20 HANR referred to Committee Versions of This Bill
TO AMEND SECTION 46-41-10, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO AGRICULTURAL PRODUCTS DEFINITIONS, SO AS TO REDEFINE "AGRICULTURAL PRODUCTS"; TO AMEND SECTION 46-41-200, RELATING TO THE NAME OF THE SOUTH CAROLINA DEALERS AND HANDLERS GUARANTY FUND, SO AS TO RENAME THE FUND THE "SOUTH CAROLINA GRAIN AND COTTON DEALERS AND HANDLERS FUND"; TO AMEND SECTION 46-41-210, AS AMENDED, RELATING TO DEALERS AND HANDLERS GUARANTY FUND DEFINITIONS, SO AS TO REDEFINE "FAIR MARKET VALUE" AND TO PROVIDE DEFINITIONS FOR "COTTON" AND "COTTON DEALERS"; TO AMEND ARTICLE 2, CHAPTER 41 OF TITLE 46, RELATING TO THE SOUTH CAROLINA DEALERS AND HANDLERS GUARANTY FUND, BY ADDING SECTION 46-41-225 SO AS TO PROVIDE FOR AN INITIAL ASSESSMENT TO BE IMPOSED ON COTTON DELIVERED TO COTTON GINS LICENSED UNDER THIS CHAPTER; BY ADDING SECTION 46-41-235 SO AS TO PROVIDE FOR COLLECTION, ADMINISTRATION, AND INVESTMENT OF ASSESSMENTS, FOR AUDITS TO VERIFY LOSS, FOR PRESENTATION AND PAYMENT OF CLAIMS, AND FOR REDUCTION IN THE AMOUNTS AND REINSTITUTION OF ASSESSMENTS, FOR PRO RATA PAYMENTS IF THERE ARE INSUFFICIENT FUNDS TO COVER ALL CLAIMS, AND FOR SUBROGATION UPON PAYMENT OF CLAIMS; BY ADDING SECTION 46-41-245 SO AS TO PROVIDE FOR REMITTANCE AND REPORTING OF ASSESSMENTS AND FOR PENALTIES FOR FAILURE TO REMIT OR REPORT ASSESSMENTS; AND BY ADDING SECTION 46-41-255, RELATING TO THE APPLICABILITY OF SECTION 46-41-250, SO AS TO PROVIDE THAT SECTION 46-41-250 DOES NOT APPLY TO PRODUCERS AND DEALERS OF COTTON.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 46-41-10(3) of the 1976 code is amended to read:
"(3) 'Agricultural products' shall mean and include the natural products of the farm, orchard, vineyard, garden and apiary, raw and manufactured; livestock and poultry products but shall not include tobacco, cotton, dairy products, and timber products."
SECTION 2. Section 46-41-200 of the 1976 Code is amended to read:
"Section 46-41-200. There is created within the State Treasury a fund to be known as the 'South Carolina Grain and Cotton Dealers and Handlers Guaranty Fund' (fund)."
SECTION 3. Section 46-41-210 of the 1976 Code, as last amended by Act 435 of 1988, is further amended to read:
"Section 46-41-210. As used in this article:
(1) 'Department' means the South Carolina Department of Agriculture.
(2) 'Fair market value' means the value based on the average market price being paid to producers on a specified date by the three licensed grain or cotton dealers nearest the grain or cotton dealer involved in the loss.
(3) 'Grain' means any feed grains or oil seeds, except cotton seeds 'Cotton' means the commodity cotton and includes cotton seed.
(4) 'Cotton dealer' means a person engaged in this State in buying, receiving, selling, exchanging, negotiating, processing for resale or soliciting the sale, resale, exchange, or transfer of cotton purchased from the producer or his agent or representative or received to be handled on a net return basis from the producer.
(5) 'Grain' means any feed grains or oil seeds, except cotton seed.
(4)(6) 'Grain dealer' means any person engaged in this State in buying, receiving, selling, exchanging, negotiating, processing for resale, or soliciting the sale, resale, exchange, or transfer of grain purchased from the producer or his agent or representative or received to be handled on a net return basis from the producer.
(5)(7) 'Loss' means any monetary loss over and beyond the amount protected by the dealer's bond as a result of doing business with a dealer which includes, but is not limited to, bankruptcy, embezzlement, or fraud.
(6)(8) 'Producer' means any producer of grain.
(7)(9) 'Date of loss' means the date the grain dealer filed a petition for bankruptcy; or, if bankruptcy is not declared, the date a check was returned for insufficient funds, or the date otherwise determined by the department."
SECTION 4. Chapter 41, Title 46 of the 1976 Code is amended by adding:
"Section 46-41-225. (A) Subject to the provisions of Section 46-41-235, an initial assessment of one dollar for each bale must be imposed on all cotton delivered by producers to cotton gins licensed under this chapter. This assessment shall continue until as otherwise provided for in Section 46-41-235. The cotton ginner shall collect the assessment from the producer at the time of settlement with the producer. The assessment must be reported and remitted to the department by the ginner as of the month the cotton was delivered to the ginner, except as provided by Section 46-41-245.
(B) As to the cotton ginned outside of South Carolina but delivered to a dealer licensed in South Carolina for disposition as described in Section 46-41-210(4), said dealer shall collect the assessment either directly from the producer, or by deduction of the amount assessed from the sum realized from the sale of the cotton, at the option of the producer. The assessment must be reported and remitted to the department by the dealer at the time it is collected from the producer, or, if the producer elects to have the assessment deducted from the proceeds of the sale of the cotton, at the time payment is received by the dealer from the buyer, except as provided by Section 46-41-245.
(C) The department shall remit the assessment to the State Treasurer to be credited to the fund established pursuant to Section 46-41-235."
SECTION 5. Chapter 41, Title 46 of the 1976 Code is amended by adding:
"Section 46-41-235. The State Treasurer shall administer the investment of the fund by assessments on cotton. The department shall administer the collection of assessments and investigate losses for which payment is requested. Unless the cotton dealer who allegedly occasioned the loss has filed for bankruptcy or is audited pursuant to other judicial proceedings, the department, in conjunction with the State Auditor, shall conduct a financial audit of the cotton dealer to verify the loss before it may request payment from the fund. The fund must bear all expenses incurred in conducting the audit. After verification, the department shall request that payment for verified losses be made by the State Treasurer to the person incurring a loss. The fund must be established for the benefit of producers who have delivered cotton to cotton dealers licensed under this chapter and compensate producers for losses relative to cotton delivered to a cotton dealer licensed under this chapter, except losses covered by the cotton dealer's surety bond. When the fund reaches one million dollars the assessment levied pursuant to Section 46-41-225 must be decreased to fifty cents for each bale, which assessment shall continue until the fund reaches the sum of three million dollars, at which time the assessment shall cease. Provided, however, that payment of a claim for losses incurred before the fund reaches five hundred thousand dollars must be deferred until such time as the fund reaches that figure. When the fund reaches three million dollars the assessment ceases. If the three million dollars is attained before the end of a harvest season, the assessment continues until the end of that season. The assessment must be reinstituted as necessary to maintain a balance of three million dollars in the fund. The first one hundred thousand dollars collected in assessment must be paid into the general fund of the State. Any of these funds not appropriated for the employment of additional auditors for the Warehouse and Dealers and Handlers Division of the Department of Agriculture must be returned to the fund. All income and interest derived from this fund must be reinvested in the fund.
When a loss is incurred for cotton which has been delivered to a cotton dealer licensed under this chapter, the producer shall within ninety days present his claim, which must be under oath, to the department on a form supplied by the department. To verify his claim, the producer shall present any evidence of loss the department considers necessary. The price for each pound of cotton must be established on the day of the loss and must be for the fair market value on that day at the location of loss. The price for each pound may not be higher than the contract price, if a price has been established. All persons filing claims under this section are bound by the value determined by the department and there is no appeal therefrom pursuant to the Administrative Procedures Act.
The department within thirty days from verification of loss shall request payment of one hundred percent of the approved claim. At no time may the fund be reduced to less than one hundred thousand dollars.
If there is an insufficient amount of money in the fund to cover all claims, payments must be made on a pro rata basis up to one hundred percent of the total loss of each producer. If payment is not received in the amount of one hundred percent of total loss then additional amounts must be paid as funds become available until payment of one hundred percent of the total loss is attained. Claims against the fund must be paid in the order in which they have been verified and approved.
Upon payment of a producer's claim from the fund, the fund is subrogated to the rights of the claimant against all persons liable for the loss sustained by the claimant in the amount paid to the claimant for the loss. The department may hire attorneys and accountants to investigate and adjust claims made by the producers and shall institute proceedings for collection of funds paid out in claims against all persons liable for the loss sustained. The department may pay attorney and accounting fees and the costs and disbursements of investigations, claims adjustments, and collections from the fund."
SECTION 6. Chapter 41, Title 46 of the 1976 Code is amended by adding:
"Section 46-41-245. (A) The cotton ginner shall remit assessment and file with the department a report of such assessments on or before January fifteenth for all cotton received and ginned by him through December thirty-first of that crop year. The assessment on all cotton ginned from January first through March thirty-first must be reported and remitted on or before the following April fifteenth. If any cotton from the preceding harvest is ginned after March thirty-first, the assessment must be reported and remitted no later than June fifteenth of that calendar year.
(B) In case a person subject to this section fails to make a report and remittance when required, the department shall determine the amount of the assessment according to its best judgment and information and the amount must be prima facie correct, and the person who failed to make the report within ten days after notice of the amount of the assessment is mailed to him shall pay the assessment, together with a penalty of ten percent, or dispute the assessment and request a hearing to determine its amount and the penalty to be imposed. No payment may be made until the department enters its order determining the amount of the payment, but the payment must be made within ten days notice of the order. On failure to remit payment within ten days of the receipt of notice of the order, the department may suspend the dealer's license under the provisions of Section 46-41-130."
SECTION 7. Chapter 41, Title 46 of the 1976 Code is amended by adding:
"Section 46-41-255. The provisions of Section 46-41-250 shall not apply to the producers and dealers of cotton."
SECTION 8. This act takes effect upon the approval by the Governor.
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