H 4420 Session 109 (1991-1992)
H 4420 General Bill, By G.A. Brown, J.M. Baxley, L.E. Bennett, B. Council,
Kennedy, McKay, M. McLeod and Riser
A Bill to amend Section 46-41-10, Code of Laws of South Carolina, 1976,
relating to definitions in regard to the regulation of dealers and handlers of
agricultural products, so as to revise the definition of "agricultural
products" to include cotton, thereby making dealers in cotton subject to these
regulatory provisions.
02/13/92 House Introduced and read first time HJ-30
02/13/92 House Referred to Committee on Agriculture, Natural
Resources and Environmental Affairs HJ-30
03/18/92 House Committee report: Favorable Agriculture, Natural
Resources and Environmental Affairs HJ-10
03/26/92 House Debate adjourned until Wednesday, April 8, 1992 HJ-36
04/08/92 House Debate adjourned until Tuesday, April 14, 1992 HJ-1
04/15/92 House Debate adjourned until Tuesday, April 21, 1992 HJ-3
04/21/92 House Debate adjourned until Wednesday, April 22, 1992 HJ-19
04/22/92 House Debate adjourned until Thursday, April 23, 1992 HJ-12
04/23/92 House Amended HJ-19
04/23/92 House Read second time HJ-23
04/23/92 House Unanimous consent for third reading on next
legislative day HJ-23
04/24/92 House Read third time and sent to Senate HJ-1
04/28/92 Senate Introduced and read first time SJ-29
04/28/92 Senate Referred to Committee on Agriculture and Natural
Resources SJ-29
AMENDED
April 23, 1992
H. 4420
Introduced by REPS. G. Brown, Baxley, Riser, Bennett, Kennedy,
Council, McLeod and McKay
S. Printed 4/23/92--H.
Read the first time February 13, 1992.
A BILL
TO AMEND SECTION 46-41-10, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO DEFINITIONS IN REGARD TO
THE REGULATION OF DEALERS AND HANDLERS OF
AGRICULTURAL PRODUCTS, SO AS TO REVISE THE
DEFINITION OF "AGRICULTURAL PRODUCTS" TO
INCLUDE COTTON, THEREBY MAKING DEALERS IN COTTON
SUBJECT TO THESE REGULATORY PROVISIONS.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 41 of Title 46 of the 1976 Code is amended by
adding:
"Article 3
South Carolina Cotton Dealers and
Handlers Guaranty Fund
Section 46-41-300. There is created within the State Treasury a fund
to be known as the `South Carolina Cotton Dealers and Handlers
Guaranty Fund'.
Section 46-41-310. 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 cotton dealers nearest the cotton dealer involved in the loss.
(3) `Cotton' means cotton fiber or cotton seed.
(4) `Cotton 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 cotton
purchased from the producer or his agent or representative or received
to be handled on a net return basis from the producer. A ginner is
included.
(5) `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) `Producer' means any producer of cotton.
(7) `Date of loss' means the date the cotton 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 46-41-320. An assessment of fifty cents a bale must be
imposed on all cotton bales delivered by producers to cotton dealers
licensed under this chapter other than cotton for which a producer has
received payment in currency or cashier's check on delivery, or received
a state warehouse receipt issued in the producer's name or that of his
designee. The cotton dealer 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 cotton dealer as
of the month in which the cotton was delivered to the cotton dealer,
except as provided by Section 46-41-340. The department shall remit
the assessment to the State Treasurer to be credited to the fund.
Section 46-41-330. The State Treasurer shall administer the
investment of the fund. 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 judicial proceedings, the
department, in conjunction with the State Auditor's Office, 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 four million dollars the assessment ceases. If the four million
dollars is attained prior to 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 four 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, interest, or
otherwise, 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 bale 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 bushel 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.
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 total loss is attained. Claims against the fund must be paid in
the order in which they have been verified and approved.
Upon approval of his claim by the department, the producer shall
subrogate his interest, if any, to the department in a cause of action
against any and all parties. An independent law firm may be hired and
paid by the fund for the purpose of collecting losses subrogated to the
department. Payments start when the fund exceeds one hundred
thousand dollars.
Section 46-41-340. (A) The cotton dealer shall remit assessments
and file with the Department a report of such assessments on cotton
received by him by the fifteenth day of each calendar month following
any calendar month in which the cotton dealer has received quantities of
cotton subject to assessments totaling fifty dollars or more. If the cotton
dealer has received quantities of cotton subject to assessments totaling
less than fifty dollars in any calendar month, the assessments may be
reported and remitted with the following month's return. All
assessments must be remitted at least once every three months.
(B) In case any 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 judgement and
information and the amount is deemed prima facie correct, and the
person who failed to make the report shall, within ten days after notice
of the amount of the assessment is mailed to him, 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 must 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 46-41-350. Notwithstanding any other provision of this
chapter, any producer may elect not to participate in the fund for any
calendar year by applying for an exemption with the South Carolina
Department of Agriculture as provided in this section.
The election consists of a written, notarized application upon a form
designed and provided by the Department of Agriculture. The
application must be filed with the department before April first of the
year for which the exemption is desired.
Upon filing of the application, the department must issue the
applicant an exemption certificate specifying the producer, commodity
exempted, and period of exemption. The certificate, when presented to
the cotton dealer upon delivery of the cotton, entitles the specified
producer to an exemption from the dealer's and handler's assessment on
the specified commodity.
When an exemption is granted under this section, the cotton dealer
must retain a copy of the exemption certificate for a period of not less
than two years. Any producer who elects not to participate in the fund
is not eligible to be reimbursed for any loss for the commodity exempted
for that calendar year."
SECTION 2. Notwithstanding any other provision of law, before the
provisions of Article 3, Chapter 41, Title 46 of the 1976 Code shall take
effect or be implemented, the Department of Agriculture shall conduct
a referendum by mail among the State's cotton growers asking them
whether they are in favor of, or opposed to, the creation of the
"South Carolina Cotton Dealers and Handlers Guaranty
Fund" as provided for in Article 3, Chapter 41, Title 46. The
department shall tabulate and publish the results of the referendum, and
the provisions of Article 3, Chapter 41, Title 46 shall take effect only if
a majority of those voting in the referendum vote in favor of the
establishment of the fund.
SECTION 3. Except as otherwise specifically provided in this act,
this act takes effect upon approval by the Governor.
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