Current Status Bill Number:1186 Ratification Number:369 Act Number:375 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:19980414 Primary Sponsor:Hutto All Sponsors:Hutto and Lander Drafted Document Number:egm\18722djc.98 Companion Bill Number:5001 Date Bill Passed both Bodies:19980514 Governor's Action:S Date of Governor's Action:19980526 Subject:Warehouse receipts, electronic; warehouseman's bond; Agriculture
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
------ 19980624 Act No. A375
------ 19980526 Signed by Governor
------ 19980521 Ratified R369
House 19980514 Read third time, enrolled for
ratification
House 19980513 Read second time
House 19980512 Debate adjourned until
Wednesday, 19980513
House 19980507 Debate adjourned until
Tuesday, 19980512
House 19980506 Debate adjourned until
Thursday, 19980507
House 19980505 Debate adjourned until
Wednesday, 19980506
House 19980430 Debate adjourned until
Tuesday, 19980505
House 19980429 Debate adjourned until
Thursday, 19980430
House 19980423 Introduced, read first time,
placed on Calendar without reference
Senate 19980422 Read third time, sent to House
Senate 19980415 Read second time, notice of
general amendments
Senate 19980414 Recalled from Committee, 01 SANR
placed on the Calendar
Senate 19980414 Introduced, read first time, 01 SANR
referred to Committee
View additional legislative information at the LPITS web site.
(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.