| Printed Page 1850, Apr. 19 | Printed Page 1870, Apr. 19 |

1. Funds transfers are typically interstate or international in character. If part of a funds transfer is governed by Article 4A and another part is governed by other law, the rights and obligations of parties to the funds transfer may be unclear because there is no clear consensus in various jurisdictions concerning the juridical nature of the transaction. Unless all of a funds transfer is governed by a single law it may be very difficult to predict the result if something goes wrong in the transfer. Section 4A-507 deals with this problem. Subsection (b) allows parties to a funds transfer to make a choice-of-law agreement. Subsection (c) allows a funds transfer system to select the law of a particular jurisdiction to govern funds transfers carried out by means of the system. Subsection (a) states residual rules if no choice of law has occurred under subsection (b) or subsection (c).

2. Subsection (a) deals with three sets of relationships. Rights and obligations between the sender of a payment order and the receiving bank are governed by the law of the jurisdiction in which the receiving bank is located. If the receiving bank is the beneficiary's bank the rights and obligations of the beneficiary are also governed by the law of the jurisdiction in which the receiving bank is located. Suppose Originator, located in Canada, sends a payment order to Originator's Bank located in a state in which Article 4A has been enacted. The order is for payment to an account of Beneficiary in a bank in England. Under subsection (a)(1), the rights and obligations of Originator and Originator's Bank toward each other are governed by Article 4A if an action is brought in a court in the Article 4A state. If an action is brought in a Canadian court, the conflict of laws issue will be determined by Canadian law which might or might not apply the law of the state in which Originator's Bank is located. If that law is applied, the execution of Originator's order will be governed by Article 4A, but with respect to the payment order of Originator's Bank to the English bank, Article 4A may or may not be applied with respect to the rights and obligations between the two banks. The result may depend upon whether action is brought in a court in the state in which Originator's Bank is located or in an English court. Article 4A is binding only on a court in a state that enacts it. It can have extraterritorial effect only to the extent courts of another jurisdiction are

Under Section 4A-406 payment by the originator to the beneficiary of the funds transfer occurs when the beneficiary's bank accepts a payment order for the benefit of the beneficiary. A jurisdiction in which Article 4A is not in effect may follow a different rule or it may not have a clear rule. Under Section 4A-507(a)(3) the issue is governed by the law of the jurisdiction in which the beneficiary's bank is located. Since the payment to the beneficiary is made through the beneficiary's bank it is reasonable that the issue of when payment occurs be governed by the law of the jurisdiction in which the bank is located. Since it is difficult in many cases to determine where a beneficiary is located, the location of the beneficiary's bank provides a more certain rule.

3. Subsection (b) deals with choice-of-law agreements and it gives maximum freedom of choice. Since the law of funds transfers is not highly developed in the case law there may be a strong incentive to choose the law of a jurisdiction in which Article 4A is in effect because it provides a greater degree of certainly with respect to the rights of various parties. With respect to commercial transactions, it is often said that "[u]niformity and predictability based upon commercial convenience are the prime considerations in making the choice of governing law . . . ." R. Leflar, American Conflicts Law, Section 185 (1977). Subsection (b) is derived in part from recently enacted choice-of-law rules in the States of New York and California. N.Y. Gen. Obligations Law 5-1401 (McKinney's 1989 Supp.) and California Civil Code Section 1646.5. This broad endorsement of freedom of contract is an enhancement of the approach taken by Restatement (Second) of Conflict of Laws Section 187(b) (1971). The Restatement recognizes the basic right of freedom of contract, but the freedom granted the parties may be more limited than the freedom granted here. Under the formulation of the Restatement, if there is no substantial relationship to the jurisdiction whose law is selected and there is no "other" reasonable basis for the parties' choice, then the selection of the parties need not be honored by a court. Further, if the choice is violative of a fundamental policy of a state which has a materially greater interest than the chosen state, the selection could be disregarded by a court. Those limitations are not found in subsection (b).

4. Subsection (c) may be the most important provision in regard to creating uniformity of law in funds transfers. Most rights stated in Article 4A regard parties who are in privity of contract such as originator and beneficiary, sender and receiving bank, and beneficiary's bank and beneficiary. Since they are in privity they can make a choice of law by

Subsection (c) has broad application. A system choice of law applies not only to rights and obligations between banks that use the system, but may also apply to other parties to the funds transfer so long as some part of the transfer was carried out over the system. The originator and any other sender or receiving bank in the funds transfer is bound if at the time it issues or accepts a payment order it had notice that the funds transfer involved use of the system and that the system chose the law of a particular jurisdiction. Under Section 4A-107, the Federal Reserve by regulation could make a similar choice of law to govern funds transfers carried out by use of Federal Reserve Banks. Subsection (d) is a limitation on subsection (c). If parties have made a choice-of-law agreement that conflicts with a choice of law made under subsection (c), the agreement prevails.

5. Subsection (e) addresses the case in which a funds transfer involves more than one funds transfer system and the systems adopt conflicting choice-of-law rules. The rule that has the most significant relationship to the matter at issue prevails. For example, each system should be able to make a choice of law governing payment orders transmitted over that system without regard to a choice of law made by another system."

SECTION 2. Section 36-1-105(2) is amended to read:

"(2) Where one of the following provisions of this title specifies the applicable law, that provision governs and a contrary agreement is effective only to the extent permitted by the law (including the conflict of laws rules) so specified:

Rights of seller's creditors

against sold goods. Section 36-2-402.

Applicability of the Chapter on

Bank Deposits and Collections. Section 36-4-102.

the Chapter on Bulk Transfers. Section 36-6-102.

Applicability of the Chapter

on Investment Securities. Section 36-8-106.

Perfection provisions of the

Chapter on Secured Transactions. Section 36-9-103.

Governing law in the Chapter

on Funds Transfers. Section 36-4A-507."

SECTION 3. This act takes effect upon approval by the Governor./

Amend title to conform.

There being no further amendments, the Bill was read the second time and ordered placed on the third reading Calendar with notice of general amendments.

S. 397 -- Senator Ryberg: A BILL TO AMEND SECTION 61-1-105, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CIRCUMSTANCES UNDER WHICH A PARTIAL REFUND IS ALLOWED OF A LICENSED BEER, WINE, OR ALCOHOLIC LIQUOR LICENSE OR PERMIT FEE, SO AS TO PROVIDE A PARTIAL REFUND FOR ANY REASON WHICH RESULTED IN THE CLOSE OF THE LICENSED OR PERMITTED ESTABLISHMENT DURING THE FIRST YEAR OF THE BIENNIAL PERIOD AND TO PROVIDE FOR SUCH REFUNDS FOR BIENNIAL LICENSES OR PERMITS ISSUED AFTER JUNE 30, 1992.

The Senate proceeded to a consideration of the Bill. The question being the adoption of the amendment proposed by the Committee on Judiciary.

The Judiciary Committee proposed the following amendment (JUD0397.001), which was adopted:

Amend the bill, as and if amended, page 1, line 33, in Section 61-1-105, as contained in SECTION 1, by inserting after the word /period./ the following:

/No licensee or permittee is eligible for a refund under the provisions of this section if the license or permit has been canceled, relinquished, or revoked as a result of an enforcement action or a failure to adhere to the conditions of the license or permit./

Amend title to conform.

There being no further amendments, the Bill was read the second time and ordered placed on the third reading Calendar with notice of general amendments.

The following Bills and Joint Resolutions having been read the second time were ordered placed on the third reading Calendar:

S. 599 -- Senator Thomas: A BILL TO AMEND SECTION 43-33-330, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE BOARD OF THE SOUTH CAROLINA PROTECTION AND ADVOCACY SYSTEM FOR THE HANDICAPPED, INC., SO AS TO AUTHORIZE THE BOARD TO CHANGE ITS CORPORATE NAME IN THE SAME MANNER AS ANY OTHER NONPROFIT CORPORATION AND TO PROVIDE THAT THE POWERS AND DUTIES OF THE SYSTEM ARE CONSIDERED THE POWERS AND DUTIES OF A SUCCESSOR CORPORATION.

H. 3906 -- Reps. Harrison and Scott: A BILL TO AMEND SECTION 38-53-270, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE REQUIREMENT THAT A BONDSMAN ACTING AS SURETY ON BAIL BONDS MAINTAINS DEPOSITS WITH THE CLERK OF COURT IN CERTAIN AMOUNTS, SO AS TO CHANGE FROM ASSESSED TO FAIR MARKET THE VALUE WHICH MUST BE PLEDGED IF THE DEPOSITS ARE REAL PROPERTY AND TO PROVIDE FOR THE MANNER IN WHICH THIS VALUE IS DETERMINED.

S. 72 -- Senators McConnell and Hayes: A BILL TO AMEND SECTION 20-3-10, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO GROUNDS FOR DIVORCE, SO AS TO PROVIDE THAT A HUSBAND AND WIFE LIVING SEPARATE AND APART WITHOUT COHABITATION FOR A PERIOD OF ONE YEAR MEANS A VOLUNTARY OR INVOLUNTARY SEPARATION.

S. 90 -- Senators Wilson, Rose, Giese and Elliott: A BILL TO AMEND SECTION 16-11-330, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE CRIMES OF ARMED

S. 210 -- Senator Land: A BILL TO AMEND SECTION 16-13-425, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE CRIME OF FAILING TO RETURN RENTED VIDEO OR CASSETTE TAPES, SO AS TO PROVIDE THAT A COURT MAY DISMISS ANY PROSECUTION INITIATED PURSUANT TO THE PROVISIONS OF THIS SECTION FOR FIRST OFFENSE ON SATISFACTORY PROOF OF RESTITUTION AND PAYMENT OF AN ADMINISTRATIVE COST, AND PROVIDE THAT NO WARRANT FOR A VIOLATION OF THIS SECTION MAY BE OBTAINED MORE THAN THIRTY DAYS AFTER THE DATE THE RENTAL AGREEMENT HAS EXPIRED.

S. 224 -- Senator Rose: A BILL TO AMEND SECTION 33-2-102, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ARTICLES OF INCORPORATION, SO AS TO DELETE THE REQUIREMENT THAT A LICENSED ATTORNEY FILE A CERTIFICATE CERTIFYING THAT THE REQUIREMENTS FOR INCORPORATION HAVE BEEN MET.

S. 468 -- Senator Hayes: A BILL TO AMEND SECTION 8-21-310(11), CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO A SCHEDULE OF FEES AND COSTS TO BE COLLECTED, SO AS TO PROVIDE FOR A FEE FOR FILING A JUDGMENT BY CONFESSION WITH A CLERK OF COURT; AND TO AMEND SECTION 15-35-370, RELATING TO JUDGMENT BY CONFESSION, SO AS TO CLARIFY THE PROCEDURE FOR FILING A JUDGMENT BY CONFESSION AND TO DELETE OBSOLETE REFERENCES.

S. 669 -- Senators J. Verne Smith and Leatherman: A BILL TO AMEND SECTION 44-6-50, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE HEALTH AND HUMAN SERVICES FINANCE COMMISSION ENTERING INTO CONTRACTS WITH OTHER AGENCIES, SO AS TO EXPAND WITH

H. 3441 -- Labor, Commerce and Industry Committee: A JOINT RESOLUTION TO APPROVE REGULATIONS OF THE WORKERS' COMPENSATION COMMISSION, RELATING TO ADMINISTRATIVE CHANGES IN PROCEDURE, DESIGNATED AS REGULATION DOCUMENT NUMBER 1780, PURSUANT TO THE PROVISIONS OF ARTICLE 1, CHAPTER 23, TITLE 1 OF THE 1976 CODE.

Senator COURTNEY explained the Resolution.

H. 3574 -- Medical, Military, Public and Municipal Affairs Committee: A JOINT RESOLUTION TO APPROVE REGULATIONS OF THE DEPARTMENT OF SOCIAL SERVICES, RELATING TO FOOD STAMP ISSUANCE, DESIGNATED AS REGULATION DOCUMENT NUMBER 1769, PURSUANT TO THE PROVISIONS OF ARTICLE 1, CHAPTER 23, TITLE 1 OF THE 1976 CODE.

S. 73 -- Senators McConnell and Hayes: A JOINT RESOLUTION PROPOSING AN AMENDMENT TO SECTION 3, ARTICLE XVII OF THE CONSTITUTION OF SOUTH CAROLINA, 1895, RELATING TO THE GROUNDS FOR DIVORCE, SO AS TO PROVIDE THAT THE GROUND OF CONTINUOUS SEPARATION FOR A PERIOD OF ONE YEAR MAY BE A VOLUNTARY OR INVOLUNTARY SEPARATION.

The Senate proceeded to a consideration of the Joint Resolution. The question being the second reading of the Joint Resolution.

Senator McCONNELL spoke on the Joint Resolution.

The Joint Resolution was read in full as follows:

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

SECTION 1. It is proposed that Section 3, Article XVII of the Constitution of this State be amended to read:

"Section 3. Divorces from the bonds of matrimony shall be are allowed on the grounds of adultery, desertion, physical cruelty, continuous voluntary or involuntary separation for a period of at least one year, or habitual drunkenness."

SECTION 2. The proposed amendment must be submitted to the qualified electors at the next general election for representatives. Ballots

"Must Section 3, Article XVII of the Constitution of this State be amended so as to provide that, as a ground for divorce, continuous separation for a period of at least one year may be a voluntary or involuntary separation?

Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word `Yes', and those voting against the question shall deposit a ballot with a check or cross mark in the square after the word `No'."

Pursuant to the provisions of the Constitution, the ayes and nays were taken, resulting as follows:

Alexander         Bryan            Cork

Courson           Courtney         Drummond

Elliott           Ford             Giese

Glover            Hayes            Holland

Jackson           Land             Lander

Leatherman        Leventis         Martin

Matthews          McConnell        McGill

Mescher           Moore            O'Dell

Passailaigue      Patterson        Peeler

Rankin            Reese            Richter

Rose              Russell          Ryberg

Saleeby           Setzler          Short

Smith, G.         Smith, J.V.      Stilwell

Thomas            Waldrep          Washington

Williams          Wilson

S. 266 -- Senators McConnell and Rose: A BILL TO AMEND SECTION 20-7-852, CODE OF LAWS OF SOUTH CAROLINA, 1976, AS AMENDED, RELATING TO CHILD SUPPORT PROCEEDINGS, SO AS TO PROVIDE THAT IN ANY PROCEEDING FOR THE AWARD OF CHILD SUPPORT THERE IS A REBUTTABLE PRESUMPTION THAT THE AMOUNT REQUIRED BY THE CHILD SUPPORT GUIDELINES IS THE CORRECT AMOUNT TO BE AWARDED AND THAT FINDINGS WHICH REBUT THE GUIDELINES MUST STATE THE AMOUNT OF THE AWARD REQUIRED BY THE GUIDELINES AND A JUSTIFICATION OF WHY THE ORDER VARIES FROM THE GUIDELINES; TO PROVIDE THAT APPLICATION OF THE GUIDELINES TO AN EXISTING ORDER IS CONSIDERED A CHANGE OF CIRCUMSTANCES ONLY IN TITLE IV-D CASES; AND TO PROVIDE FACTORS THAT THE COURT SHALL CONSIDER AS POSSIBLE REASONS FOR DEVIATION FROM THE GUIDELINES OR FOR FINDING A CHANGE IN CIRCUMSTANCES.

The Senate proceeded to a consideration of the Bill. The question being the adoption of the amendment proposed by the Committee on Judiciary.

The Judiciary Committee proposed the following amendment (JUD0266.001), which was adopted:

Amend the bill, as and if amended, page 2, beginning on line 9, in Section 20-7-852(C), as contained in SECTION 1, by striking lines 9 and 10 and inserting therein the following:

/(C) The court shall consider the following factors which may be possible reasons for deviation from the guidelines or may be used in/

Amend the bill further, as and if amended, page 2, line 27, in Section 20-7-852(C)(9), as contained in SECTION 1, by striking /court/ and inserting /a court/.

Amend title to conform.

Senators COURTNEY and McCONNELL explained the amendment.

S. 429 -- Senators Lander, Hayes, Wilson and Leventis: A BILL TO AMEND SECTION 1-3-480, CODE OF LAWS OF SOUTH CAROLINA, 1976, SO AS TO AUTHORIZE THE GOVERNOR, WITH THE CONSENT OF CONGRESS, TO ENTER INTO COMPACTS AND AGREEMENTS FOR THE DEPLOYMENT OF THE NATIONAL GUARD WITH GOVERNORS OF OTHER STATES CONCERNING DRUG INTERDICTION AND RELATED ACTIVITIES; AND TO ADD SECTION 1-3-490 SO AS TO ADOPT THE NATIONAL GUARD MUTUAL ASSISTANCE COUNTERDRUG ACTIVITIES COMPACT TO PROVIDE FOR MUTUAL ASSISTANCE AND SUPPORT AMONG THE PARTY STATES IN THE UTILIZATION OF THE NATIONAL GUARD IN DRUG INTERDICTION, COUNTERDRUG AND DEMAND REDUCTION ACTIVITIES.

The Senate proceeded to a consideration of the Bill. The question being the adoption of the amendment proposed by the Committee on Judiciary.

The Judiciary Committee proposed the following amendment (JUD0429.002), which was adopted:

Amend the bill, as and if amended, page 9, beginning on line 41, as contained in SECTION 3, by striking lines 41 through 43 in their entirety and inserting therein the following:

/consent is given./.

Amend title to conform.

There being no further amendments, the Bill was read the second time and ordered placed on the third reading Calendar.

S. 438 -- Senator Alexander: A BILL TO AMEND SECTION 56-5-750, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FAILURE TO STOP FOR A LAW ENFORCEMENT VEHICLE, SO AS TO REVISE THE PENALTIES AND PROVIDE DEFINITIONS.

The Senate proceeded to a consideration of the Bill. The question being the adoption of the amendment proposed by the Committee on Judiciary.

| Printed Page 1850, Apr. 19 | Printed Page 1870, Apr. 19 |

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