H 3945 Session 109 (1991-1992)
H 3945 General Bill, By L.M. Martin and K.S. Corbett
A Bill to amend Title 29, Code of Laws of South Carolina, 1976, by adding
Chapter 14 so as to require mediation between farm debtors and creditors, to
implement restructuring of debt payments to avoid foreclosures, and to enable
farmers to continue operating or to reach other mutually beneficial
agreements.
04/24/91 House Introduced and read first time HJ-7
04/24/91 House Referred to Committee on Labor, Commerce and
Industry HJ-7
A BILL
TO AMEND TITLE 29, CODE OF LAWS OF SOUTH CAROLINA,
1976, BY ADDING CHAPTER 14 SO AS TO REQUIRE MEDIATION
BETWEEN FARM DEBTORS AND CREDITORS, TO IMPLEMENT
RESTRUCTURING OF DEBT PAYMENTS TO AVOID
FORECLOSURES, AND TO ENABLE FARMERS TO CONTINUE
OPERATING OR TO REACH OTHER MUTUALLY BENEFICIAL
AGREEMENTS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. This act may be cited as the "Farm Debt
Mediation Act of 1991".
SECTION 2. Title 29 of the 1976 Code is amended by adding:
"CHAPTER 14
Farm Debt Mediation
Section 29-14-10. For purposes of this chapter:
(1) `Agricultural property' means land that is used primarily for
farming and personal property that is used as security to finance a farm
operation or used as part of a farm operation including equipment, crops,
livestock, and proceeds of the security.
(2) `Coordinator' means the farm crisis program coordinator
provided in Section 29-14-20.
(3) `Creditor' means the holder of a mortgage or deed of trust on
agricultural property, a person with a lien or security interest in
agricultural property, or a judgment creditor with a judgment against a
debtor with agricultural property.
(4) `Mediation release' means an agreement or statement signed
by all parties or by less than all the parties and the mediator pursuant to
Section 29-14-110.
Section 29-14-20. The Attorney General or the Attorney General's
designee shall serve as the farm crisis program coordinator. The
coordinator has the powers and duties specified in this chapter.
Section 29-14-30. The farm crisis coordinator shall contract with
a nonprofit organization chartered in this State to provide
farmer-creditor mediation services. The contract may be terminated by
the coordinator upon written notice and for good cause. The
organization awarded the contract is designated as the farm mediation
service for the duration of the contract. The farm mediation service is
not a state agency for any other purposes than mediating farm debts.
Section 29-14-40. This chapter applies to all actions and
proceedings subject to Sections 29-14-50 and 29-14-60 in which the
creditor has a secured debt of twenty thousand dollars or more against
agricultural property of the debtor.
Section 29-14-50. A borrower who owns agricultural property or
a creditor of that borrower may request mediation of the indebtedness by
applying to the farm mediation service. The farm mediation service
shall make voluntary mediation application forms available. The farm
mediation service shall evaluate each request and may direct a mediator
to meet with the borrower and creditor to assist in mediation.
Section 29-14-60. (A) A creditor subject to this chapter desiring
to initiate a proceeding to enforce a debt against agricultural property
which is real estate under Article 7, Chapter 3 of Title 29, to enforce a
secured interest in agricultural property, or to otherwise garnish, levy on,
execute on, seize, or attach agricultural property, shall file a request for
mediation with the farm mediation service. The creditor may not begin
the proceeding subject to this chapter until the creditor receives a
mediation release, or until the court determines after notice and hearing
that the time delay required for the mediation would cause the creditor
to suffer irreparable harm.
(B) Upon the receipt of a request for mediation, the farm
mediation service shall conduct an initial consultation with the borrower
without charge. The borrower may waive mediation after the initial
consultation.
Section 29-14-70. (A) After receiving a mediation request, the
farm mediation service shall refer the borrower to a financial analyst
associated with the Clemson Extension Service QMAP program. The
financial analyst shall assist the borrower in the preparation of
information relative to the finances of the borrower for the initial
mediation meeting.
(B) After receiving the mediation request, the farm mediation
service shall notify the borrower that legal assistance may be available.
(C) The coordinator shall contract with a nonprofit organization
or the Department of Mental Health to provide rural stress counselling
to farm families who are involved in the mediation process. After
receiving a mediation request, the farm mediation service shall notify the
borrower that a rural stress counselling service is available through the
mediation board.
Section 29-14-80. (A) Unless the borrower waives mediation,
within twenty-one days after receiving a mediation request the farm
mediation service shall send a mediation meeting notice to the borrower
and to all known creditors of the borrower setting a time and place for
an initial mediation meeting between the borrower, the creditors, and a
mediator directed by the farm mediation service to assist in mediation.
An initial mediation meeting must be held within twenty-one days of the
issuance of the mediation meeting notice.
(B) If a creditor subject to this chapter receives a mediation meeting
notice under subsection (A), the creditor and the creditor's successors in
interest may not begin or continue any proceeding subject to this chapter
against agricultural property of the borrower. Time periods under and
affecting those procedures stop running until the farm mediation service
issues a mediation release to the creditor.
Section 29-14-90. At the initial mediation meeting and subsequent
meetings, the mediator shall:
(1) listen to the borrower and the creditors desiring to be heard;
(2) attempt to mediate between the borrower and the creditors;
(3) advise the borrower and the creditors as to the existence of
available assistance programs;
(4) encourage the parties to adjust, refinance, or provide for
payment of the debts;
(5) advise, counsel, and assist the borrower and creditors in
attempting to arrive at an agreement for the future conduct of financial
relations among them.
Section 29-14-100. The mediator may call mediation meetings during
the mediation period, which is up to forty-two days after the farm
mediation service received the mediation request. If all parties consent,
mediation may continue after the end of the mediation period.
Section 29-14-110. (A) If an agreement is reached between the
borrower and the creditors, the mediator shall draft a written mediation
agreement, have it signed by the creditors and submit the agreement to
the farm mediation service.
(B) The borrower and the creditors who are parties to the mediation
agreement may enforce the mediation agreement as a legal contract. The
agreement constitutes a mediation release.
(C) If the borrower waives mediation, or if a mediation agreement
is not reached, the borrower and the creditors may sign a statement
prepared by the mediator that mediation was waived or that the parties
did not reach an agreement. If any party does not sign the statement, the
mediator shall sign the statement. The statement constitutes a mediation
release. Unless the borrower waives mediation, a creditor must not
receive a mediation release until the creditor has participated in at least
one mediation meeting.
Section 29-14-120. Upon petition by the borrower and all known
creditors, the farm mediation service may, for good cause, extend a
deadline imposed by Section 29-14-80 or 29-14-100 for up to thirty
days.
Section 29-14-130. (A) All data regarding the finances of
individual borrowers and creditors which is created, collected, and
maintained by the farm mediation service are not public records under
the Freedom of Information Act.
(B) Meetings of the farm mediation service are closed meetings and
are not subject to the Freedom of Information Act.
Section 29-14-140. The farm mediation service shall recommend
regulations to the coordinator. The coordinator shall adopt regulations
pursuant to the Administrative Procedures Act, to set the compensation
of mediators and to implement this chapter. The compensation of the
mediators is no more than twenty-five dollars an hour, and all parties
shall contribute an equal amount of the cost. The coordinator shall
adopt voluntary mediation application and mediation request
forms."
SECTION 3. The contract required by Section 29-14-10 of the 1976
Code must be awarded within forty-four days after the effective date of
this act.
SECTION 4. This act takes effect upon approval by the Governor.
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