H 5001 Session 112 (1997-1998)
H 5001 General Bill, By Sharpe, Bowers and Rhoad
Similar(S 1186)
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 House Introduced, read first time, placed on calendar
without reference HJ-14
04/16/98 House Read second time HJ-28
04/16/98 House Unanimous consent for third reading on next
legislative day HJ-31
04/17/98 House Read third time and sent to Senate HJ-2
04/21/98 Senate Introduced and read first time SJ-29
04/21/98 Senate Referred to Committee on Agriculture and Natural
Resources SJ-29
Indicates Matter Stricken
Indicates New Matter
INTRODUCED
April 14, 1998
H. 5001
Introduced by Reps. Sharpe, Bowers and Rhoad
S. Printed 4/14/98--H.
Read the first time April 14, 1998.
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.
Be it enacted by the General Assembly of the State of South
Carolina:
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."
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."
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."
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), or (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."
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."
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.
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