S*1186 Session 112 (1997-1998)
S*1186(Rat #0369, Act #0375 of 1998) General Bill, By Hutto and Lander
Similar(H 5001)
A BILL TO AMEND CHAPTER 22, TITLE 39, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO THE STATE WAREHOUSE SYSTEM, BY ADDING SECTION 39-22-15 SO AS TO
DEFINE LOSS OVER THE AMOUNT PROTECTED BY A WAREHOUSEMAN'S BOND AND TO PROVIDE
THAT DEPOSITORS MAY RECOVER LOSSES OVER THE AMOUNT PROTECTED BY A
WAREHOUSEMAN'S BOND; TO AMEND SECTION 39-22-80, AS AMENDED, RELATING TO
EXEMPTION OF ELECTRONIC WAREHOUSE RECEIPTS, SO AS TO PROVIDE FOR WRITTEN
NOTICE AND CONSENT IN CONNECTION WITH THE USE OF ELECTRONIC WAREHOUSE
RECEIPTS, TO AMEND SECTION 39-22-90, AS AMENDED, RELATING TO PROHIBITED ACTS
AND PENALTIES IN CONNECTION WITH WAREHOUSE RECEIPTS, SO AS TO PROHIBIT ISSUING
OR TRANSFER OF AN ELECTRONIC WAREHOUSE RECEIPT WITHOUT WRITTEN NOTICE TO OR
THE CONSENT OF THE DEPOSITOR, TO AMEND SECTION 39-22-150, RELATING TO CLAIMS
AGAINST THE STATE WAREHOUSE SYSTEM GUARANTY FUND, SO AS TO PROTECT DEPOSITORS
AGAINST LOSSES OVER THE AMOUNT PROTECTED BY A WAREHOUSEMAN'S BOND, TO PROVIDE
FOR PENALTIES, AND TO PROVIDE THAT CERTAIN PROVISIONS OF THE ACT APPLY
RETROACTIVELY.
04/14/98 Senate Introduced and read first time SJ-3
04/14/98 Senate Referred to Committee on Agriculture and Natural
Resources SJ-3
04/14/98 Senate Recalled from Committee on Agriculture and
Natural Resources SJ-3
04/15/98 Senate Read second time SJ-39
04/15/98 Senate Ordered to third reading with notice of
amendments SJ-39
04/22/98 Senate Read third time and sent to House SJ-18
04/23/98 House Introduced, read first time, placed on calendar
without reference HJ-9
04/29/98 House Debate adjourned until Thursday, April 30, 1998 HJ-36
04/30/98 House Debate adjourned until Tuesday, May 5, 1998 HJ-13
05/05/98 House Debate adjourned until Wednesday, May 6, 1998 HJ-17
05/06/98 House Debate adjourned until Thursday, May 7, 1998 HJ-10
05/07/98 House Debate adjourned until Tuesday, May 12, 1998 HJ-9
05/12/98 House Debate adjourned until Wednesday, May 13, 1998 HJ-15
05/13/98 House Read second time HJ-16
05/14/98 House Read third time and enrolled HJ-19
05/21/98 Ratified R 369
05/26/98 Signed By Governor
05/26/98 Effective date 05/26/98-The provisions of Secs. 1
& 5 are remedial & apply retroactively to
07/01/97, so as to permit reimbursement of
losses suffered or incurred by depositors on &
after 07/01/97
06/23/98 Copies available
06/30/98 Act No. 375
(A375, R369, S1186)
AN ACT TO AMEND CHAPTER 22, TITLE 39, CODE OF LAWS
OF SOUTH CAROLINA, 1976, RELATING TO THE STATE
WAREHOUSE SYSTEM, BY ADDING SECTION 39-22-15 SO AS TO
DEFINE LOSS OVER THE AMOUNT PROTECTED BY A
WAREHOUSEMAN'S BOND AND TO PROVIDE THAT
DEPOSITORS MAY RECOVER LOSSES OVER THE AMOUNT
PROTECTED BY A WAREHOUSEMAN'S BOND; TO AMEND
SECTION 39-22-80, AS AMENDED, RELATING TO EXEMPTION OF
ELECTRONIC WAREHOUSE RECEIPTS, SO AS TO PROVIDE FOR
WRITTEN NOTICE AND CONSENT IN CONNECTION WITH THE
USE OF ELECTRONIC WAREHOUSE RECEIPTS, TO AMEND
SECTION 39-22-90, AS AMENDED, RELATING TO PROHIBITED
ACTS AND PENALTIES IN CONNECTION WITH WAREHOUSE
RECEIPTS, SO AS TO PROHIBIT ISSUING OR TRANSFER OF AN
ELECTRONIC WAREHOUSE RECEIPT WITHOUT WRITTEN
NOTICE TO OR THE CONSENT OF THE DEPOSITOR, TO AMEND
SECTION 39-22-150, RELATING TO CLAIMS AGAINST THE
STATE WAREHOUSE SYSTEM GUARANTY FUND, SO AS TO
PROTECT DEPOSITORS AGAINST LOSSES OVER THE AMOUNT
PROTECTED BY A WAREHOUSEMAN'S BOND, TO PROVIDE FOR
PENALTIES, AND TO PROVIDE THAT CERTAIN PROVISIONS OF
THE ACT APPLY RETROACTIVELY.
Be it enacted by the General Assembly of the State of South Carolina:
Defines loss
SECTION 1. Chapter 22, Title 39 of the 1976 Code is amended by
adding:
"Section 39-22-15. For purposes of this chapter, 'loss' means any
monetary loss over and beyond the amount protected by a
warehouseman's bond sustained as a result of storing a commodity in a
state-licensed warehouse including, but not limited to, any monetary loss
over and beyond the amount protected by a warehouseman's bond
sustained as a result of the warehouseman's bankruptcy, embezzlement,
or fraud."
Notice and consent required when utilizing electronic warehouse
receipts
SECTION 2. Section 39-22-80 of the 1976 Code, as amended by Act
29 of 1997, is further amended to read:
"Section 39-22-80. The warehouse receipt forms must be designed
or otherwise approved by the commissioner. All orders for the printing
of warehouse receipts and bale tags must be preapproved by the
department. The receipts must be numbered and the warehouse receiving
the forms shall account for each receipt. The receipts may have the
lithographed or engraved signature of the commissioner but they must be
signed with pen and ink, indelible pencil, or mechanical device approved
by the commissioner, by the authorized manager of the licensed
warehouse. However, the Commissioner of Agriculture is authorized to
accept and process Electronic Warehouse Receipts (EWR) from qualified
providers, as defined by pertinent federal regulations governing EWR,
and in so doing, is further authorized to exempt EWR from the provisions
of this chapter to the extent these provisions are in conflict with pertinent
federal regulations governing EWR, or to the extent that application of the
provisions of this chapter renders acceptance and processing of EWR by
the department impracticable. If a warehouseman elects to utilize
electronic warehouse receipts, he must provide written notice to the
depositor that the EWR have been issued to the depositor, the numbers of
the EWR so issued and that the receipts are being held on his behalf and
cannot be transferred to any other party without the depositor's written
consent. The consent must be on a form approved by the commissioner
and it must be signed in the presence of the warehouseman, and attested
to by him. Provided, however, that a warehouseman may accept a
notarized copy of the written notice form."
Issuing electronic warehouse receipt without consent prohibited
SECTION 3. Section 39-22-90(A) of the 1976 Code, as added by Act
436 of 1990, is amended by adding:
"(9) a warehouseman to issue an electronic warehouse receipt without
providing written notice to the depositor of such issuance, or for a
warehouseman to transfer any such electronic warehouse receipt without
the depositor having consented thereto in writing on a form provided by
the commissioner."
Penalty for issuing electronic warehouse receipt without consent
SECTION 4. Section 39-22-90(B) of the 1976 Code, as last amended
by Act 184 of 1993, is further amended to read:
"(B) A person who violates the provisions of item (1), (2), (3), (4),
or (9) of subsection (A) of this section is guilty of a felony and, upon
conviction, must be fined not more than five thousand dollars or
imprisoned not more than five years, or both. Each transfer of an
electronic warehouse receipt in violation of item (9) is a separate offense.
A person who violates the provisions of item (5) or (6) of this section
is guilty of a misdemeanor and, upon conviction, must be fined not more
than five thousand dollars or imprisoned not more than one year, or both.
A person who violates the provisions of item (7) of this section is guilty
of a misdemeanor and, upon conviction, must be fined not more than one
thousand dollars or imprisoned not more than one year, or both, for each
violation.
A person who violates the provisions of item (8) of this section is guilty
of forgery and, upon conviction, must receive the penalty provided for a
conviction of that crime."
Reimbursement of depositors against losses
SECTION 5. Section 39-22-150 of the 1976 Code, as added by Act
436 of 1990, is amended to read:
"Section 39-22-150. All net revenues derived from operation of the
state warehouse system must be transferred annually to a special account
in the State Treasury until the sum of three million dollars accrues. When
the fund reaches three million dollars, these transfers shall cease;
however, all interest and investment revenue shall accrue solely to the
fund and be returned annually to the fund. In order to support the increase
of this fund, the funds must be invested at interest by the State Treasurer
who shall credit the interest earned on the funds to the increase of the fund
up to and above three million dollars. In addition to the interest, the
commissioner shall assess an amount ratably against each warehouseman
in this State issuing warehouse receipts a special additional fee not to
exceed ten cents a bale of cotton or one cent a bushel of soybeans and
one-half cent a bushel of any other stored feed grains or oil seeds for
which warehouse receipts have been issued. The additional assessment
may be charged not more than once for each receipt issued on a bale of
cotton or bushel of grain. When the fund has reached the total sum of one
million five hundred thousand dollars, the special additional assessment
must be discontinued. If the fund is reduced to below one million dollars,
the assessment must be resumed. The funds must be used to guarantee
state warehouse receipts in excess of an amount recovered from the bonds
required by this chapter, and to protect and reimburse depositors against
losses as defined in Section 39-22-15. If there is an insufficient amount
of money in the fund to cover all claims against the fund, payments must
be made on a pro rata basis up to one hundred percent of the total loss of
each claimant. If payment is not received in the amount of one hundred
percent, then additional amounts must be paid as funds become available
until payment of one hundred percent of the total is attained. The state's
guarantee of warehouse receipts is based on monies available through the
required bonds and the fund. Upon approval of a claim to the fund and
before payment from the fund, the claimant shall subrogate his interest,
if any, to the department in a cause of action against all parties relating to
the claim. In no event may the funds be available for the reimbursement
of an insurer or surety on the bonds required by this chapter, Chapter 19
of this title, or Chapter 7 of Title 36, who has paid a loss under this
chapter. All income, interest, or otherwise, derived from this guaranty
fund must be reinvested in the fund. Fifty thousand dollars of the income
must be paid into the general fund of the State. Any of the funds not
appropriated for the employment of additional auditors for the
warehousemen and Dealers and Handlers Division of the Department of
Agriculture must be returned to the fund."
Time effective
SECTION 6. This act takes effect upon approval by the Governor.
The provisions of Sections 1 and 5 are remedial and apply retroactively
to July 1, 1997, so as to permit reimbursement of losses suffered or
incurred by depositors on and after July 1, 1997.
Approved the 26th day of May, 1998. |