Bill 2909

                    Current Status

Bill Number:               2909
Ratification Number:       194
Act Number                 112
Introducing Body:          House
Subject:                   State warehouse system and dealers,
                           revenues

(A112, R194, H2909)

AN ACT TO AMEND SECTIONS 39-21-310, AS AMENDED, 39-21-350, 46-41-20, 46-41-90, 46-41-220, ALL AS AMENDED, AND SECTION 46-42-30, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE STATE WAREHOUSE SYSTEM AND DEALERS AND HANDLERS OF AGRICULTURAL PRODUCTS, SO AS TO PROVIDE THAT PAYMENTS TO THE SPECIAL WAREHOUSE ACCOUNT SHALL BE DISCONTINUED AT SEVEN HUNDRED FIFTY THOUSAND DOLLARS INSTEAD OF THREE MILLION DOLLARS; TO AUTHORIZE THE USE OF FORMS APPROVED BY THE STATE DEPARTMENT OF AGRICULTURE AND TO EXEMPT PERSONS WHO PAY CASH AT TIME OF DELIVERY FROM DEALERS AND HANDLERS REGULATION; TO DELETE A PROVISION WHICH ALLOWED A REFUND OF ASSESSMENTS; TO REQUIRE ONE-HALF OF GRAIN OR OILSEED SAMPLED, TESTED, OR GRADED TO BE RETURNED TO THE DELIVERER IF REQUESTED; TO AMEND THE 1976 CODE BY ADDING SECTION 46-41-250, SO AS TO PROVIDE FOR EXEMPTION FROM PARTICIPATION IN THE DEALERS AND HANDLERS GUARANTY FUND FOR ANY PRODUCER WHO DOES NOT WISH TO PAY THE ASSESSMENT NOR RECEIVE THE PROTECTION OF THE FUND.

Be it enacted by the General Assembly of the State of South Carolina:

Revenues

SECTION 1. Section 39-21-310 of the 1976 Code, as last amended by Section 11 of Act 156 of 1981, is further amended to read:

"Section 39-21-310. All net revenues derived from operation of the state warehouse system, over and above the amounts necessary to pay insurance premiums and premiums on the bonds of warehousemen, must be transferred annually to a special account in the State Treasury until the sum of three million dollars accrues and the sum must be maintained at three million dollars by annual transfers to the account, from excess warehouse revenues, of whatever amount is necessary to restore the fund to the sum of three million dollars. In order to support the increase of this fund to the sum of three million dollars, the funds must be invested at interest by the State Treasurer who shall credit any interest earned thereon to the increase of the fund. In addition to the interest, the Commissioner must also assess an amount ratably against each warehouseman in South Carolina issuing warehouse receipts a special additional fee not to exceed ten cents per bale of cotton or one cent per bushel of soybeans and one-half cent per bushel of any other stored feed grains or oil seeds for which warehouse receipts have been issued commencing July 1, 1967. The additional assessment may be charged not more than once for each receipt issued on any bale of cotton or bushel of grain. When the fund has reached the total sum of seven hundred fifty thousand dollars, the special additional assessment must be discontinued. The funds must be used to guarantee state warehouse receipts in excess of any amount recovered from the bonds required hereunder. In no event may the funds be available for the reimbursement of any 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 hereunder. All income, interest or otherwise, derived from this guaranty fund must be reinvested in such 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."

Current and complete records required

SECTION 2. Section 39-21-350, added to the 1976 Code by Section 12 of Act 156 of 1981, is amended to read:

"Section 39-21-350. The manager of the warehouse shall, on forms approved by the Department of Agriculture pursuant to regulations promulgated by the Department, maintain current and complete records at all times with respect to all feed grains and oil seeds, including grain owned by him as well as other feed grains or oil seeds not subject to the terms of the state warehouse system, stored in or handled through the warehouse. Such records must include, but not be limited to a daily record showing:

(a) The total quantity of each kind and class of feed grains or oil seeds received and delivered and the quantity of each kind and class of feed grains or oil seeds remaining in the warehouse as of the close of each business day.

(b) The warehouseman's total storage obligations for each kind and class of feed grains or oil seeds as of the close of each business day.

Incoming feed grains or oil seeds must be documented as to ownership and as to whether such feed grains or oil seeds are owned by the warehouseman or someone else. Feed grains or oil seeds received may be purchased by the warehouse before or upon arrival at the elevator or warehouse and after they have been in storage for a time. All operations must be properly documented to reflect ownership, quantity of feed grains, or oil seeds received, quantity delivered, and quantity in storage in the warehouse."

Affidavit

SECTION 3. Item (2) of Section 46-41-20 of the 1976 Code, as last amended by Section 15 of Act 156 of 1981, is further amended to read:

"(2) All persons who buy for cash and pay at the time of delivery with United States currency and maintain on file in the office of the Commissioner an affidavit of this fact which shall be renewed on an annual basis."

Record required

SECTION 4. Section 46-41-90 of the 1976 Code, as last amended by Section 22 of Act 156 of 1981, is further amended to read:

"Section 46-41-90. Every dealer in agricultural products must upon the receipt of agricultural products on consignment basis and as he handles and disposes of them, make and preserve for at least one year a record, specifying the name and address of the producer consigning the agricultural products, the date of receipt, and the kind and quality of such produce. Such consignment sales must be substantiated by a written contract on forms approved by the Department of Agriculture. The dealer must make payment in settlement for such shipment to the producer within ten days after the sale of such agricultural products, unless otherwise agreed in writing."

Application for exemption

SECTION 5. The 1976 Code is amended by adding:

"Section 46-41-250. 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 1 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. Such certificate, when presented to the grain dealer upon delivery of the grain, 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 grain 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."

Assessment

SECTION 6. Section 46-41-220 of the 1976 Code, as last amended by Act 468 of 1982, is further amended to read:

"Section 46-41-220. An assessment of one cent per bushel must be imposed on all soybeans and one-half cent per bushel on all other grain delivered by producers to grain dealers, licensed under this chapter, other than grain 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 assessment must be collected by the grain dealer from the producer and must be remitted to the Department by the grain dealer. The Department shall remit the assessment to the State Treasurer to be credited to the fund.

If grain is held by a grain dealer for more than one year or if a contract on grain is not fulfilled within one year a further assessment equal to the first must be paid."

One-half of grain returned to dealer if requested

SECTION 7. Section 46-42-30 of the 1976 Code is amended to read:

"Section 46-42-30. If requested by the deliverer of grain or oilseed on which a discount or weight deduction is assessed, one-half must be placed and sealed in a tamper-proof container provided by the Department of Agriculture and the container must be returned to the deliverer of the grain or oilseed sampled, tested or graded. Records shall be maintained for a period of one year on each lot of grain or oilseed for which a grade is determined by the dealer and handler in order to assist the Commissioner in evaluation grading performance. The Commissioner may suspend or revoke a grader's certificate when he deems the grader incapable of competent performance."

Time effective

SECTION 8. This act shall take effect upon approval by the Governor.