Hayes for Senate, South Carolina District 15, York County

SUMMER NEWSLETTER 2011
2011 LEGISLATIVE REVIEW
Senator Wes Hayes District #15

The first regular session of the 119th General Assembly ended on June 2, but the House and Senate will continue to meet pursuant to the sine die resolution to redraw the boundary lines for congressional districts to encompass South Carolina’s new seventh congressional district. Overall, I am pleased that the General Assembly was able to pass some key legislation this year pertaining to voter ID, immigration, tort reform, point of sale reform, and unemployment tax relief. However, I am disappointed that other key bills, such as the charter school bill and the bill creating the Department of Administration, were delayed from passage because of a dispute over early voting. While there is a hint from recent revenue collections that the economy may be looking slightly better, many challenges remain. I look forward to these challenges and remain committed to providing sound, efficient government services to insure a good quality of life for all of South Carolina's citizens. This Newsletter summarizes the key points of several bills that were pending before the General Assembly this year.

THE BUDGET. After four consecutive years of declining state revenues, the FY11/12 budget is based on a revenue forecast that trends in a positive direction with the Recurring General Fund projected at $350 million higher. Although this additional revenue raises the base General Fund budget to $5.45 billion for FY11/12, this amount is $1.3 billion less than the FY07/08 General Fund budget. Initially, budget writers faced a $1.4 billion gap, which included $260 million in agency deficits, the loss of $700 million in federal stimulus/enhanced Medicaid funds, and DHHS’s request for an additional $370 million to maintain Medicaid at its existing level. This gap was bridged with a $244 million year-end surplus, $157 million from the cigarette tax increase, $60 million from enforced DOR collections, and budget reductions for 57 of the 86 state agencies. Plus, $340 million in federal stimulus/enhanced Medicaid funds were not annualized, and DHHS reduced its original budget request by $200 million. This budget provides over $760 million in tax relief to business and individuals, including $600 million of property tax relief and $146 million to lessen the burden from the employment tax increase. On a positive note for K-12 funding, this budget increases the base student cost by $265 per pupil to $1,880, but this amount remains short of the EFA mandated amount of $2,700 per pupil. A budget Proviso requires the DOR to impute an index value for owner-occupied residential property to eliminate issues with ITA caused by Act 388.

ARIZONA-STYLE IMMIGRATION BILL. Legislation similar to the Arizona immigration laws passed this year. It allows law enforcement officers, during a lawful stop or arrest, to determine the immigration status of the person detained if the officer has a reasonable suspicion that the person is an alien or unlawfully present in the United States. The person’s immigration status must be verified by a law enforcement officer authorized by the federal government to ascertain an alien’s status, the United States Immigration and Customs Enforcement, or the United States Customs and Border Protection. A person is presumed to be lawfully present in the United States if the person provides to the officer a valid South Carolina driver’s license or Department of Motor Vehicle’s identification card, tribal identification, or any valid federal, state or local government issued identification. The legislation also prohibits a person unlawfully present in the United States from knowingly applying for work, soliciting work in a public place, or performing any work as an employee or independent contractor. Additionally, language was added to the Bill to comport a 2008 immigration law, which penalizes businesses for hiring illegal workers, with a recent United States Supreme Court ruling. The 2008 law was amended to eliminate a business’ ability to use a driver’s license for purposes of verifying citizenship. Consequently, for all private employers, E-Verify is now the only acceptable means to verify citizenship.

ETHICS REFORM. As Chairman of the Senate Ethics Committee (the “Committee”), I sponsored legislation this year to amend South Carolina’s ethics laws applicable to Senate members to make these rules more consistent with the ethics rules applicable to members of the executive branch and local officials. I am pleased to report that this legislation became effective in the form of a change to the Senate Rules. As a result, upon a finding of probable cause by the Committee that a violation has occurred, all ethics investigations of Senate members and candidates now become public information, and any hearing on a matter after such a finding must be conducted in open session. Previously, Senate ethics matters remained confidential unless the Committee took public action, and all hearings were conducted in executive session. Additionally, the Committee now has the authority to impose fines up to $2,000 for ethics violations.

TORT REFORM. In an effort to improve South Carolina’s business environment and to stimulate more private investment and jobs, the General Assembly passed legislation this year that caps punitive damages in most instances at three times the amount of compensatory damages awarded but not greater than $500,000. However, if it is found that the defendant was motivated primarily by financial gain, or the defendant’s action rises to the level of felony charges, then the award of punitive damages can be increased to four times the amount of compensatory damages but not greater than $2 million. If it is proven that the defendant actually intended to harm the plaintiff, was convicted of a felony arising out of the same act, or acted or failed to act while under the influence of drugs or alcohol, then there is no cap for punitive damages. The Act also requires automobile insurers in South Carolina to provide, within 30 days after receiving a written request from a claimant’s attorney, a statement under oath identifying the name of the insurer, the name of each insured, and the limits of coverage for each known policy of non-fleet private passenger insurance for which the insurer may be liable for a claim.

UI TAX RELIEF. A new “array” system was implemented this year that dramatically increased unemployment insurance (UI) tax rates for employers to help cover the $600 million required to fund the unemployment system in 2011. The revenue generated from the rate increases was slated to pay down the debt incurred over the past decade. However, near the end of the legislative year, the General Assembly agreed on legislation to provide some meaningful UI tax relief for employers across the state. As a result, this legislation reduced the total weeks of eligibility for unemployment benefits from 26 to 20 weeks and made adjustments to benefits paid to seasonal workers. Additionally, the General Assembly appropriated $146 million of surplus revenue from FY 2010-11 to help pay down the debt. Collectively, these actions are expected to provide UI tax relief of 24% for businesses in Tiers 2-20.

VOTER ID/EARLY VOTING. I am pleased to report that a Bill passed that requires voters to present photo identification before being allowed to vote in an election. The Bill requires a poll manager to verify that the photograph on the ID is that of the person seeking to vote. If a voter cannot produce photo identification at the polls, then he or she may cast a provisional ballot that will be counted, provided that photo identification is presented to the county board of voter registration before the election is certified. Permissible forms of photo identification include a South Carolina driver’s license or other photo identification issued by the Department of Motor Vehicles, a passport, military identification containing a photograph, and, once available, a South Carolina voter registration card containing a photograph. An exception is provided for persons who object to being photographed for religious reasons or who suffer from a reasonable impediment that prevents them from obtaining photograph identification. In such instances, those persons may submit an affidavit, under penalty of perjury, to affirm their identity. The Bill also requires the Department of Motor Vehicles to issue identification cards to persons aged 17 or older without cost. This Bill does not take effect until approved by the United States Department of Justice.

REDISTRICTING/REAPPORTIONMENT. Every decade, after the census is completed, the General Assembly undergoes redistricting, which is a process to move state House and Senate district lines to match shifting populations so that each district has roughly equal numbers. The 2010 Census revealed that South Carolina’s population grew by 15.3% over the past decade to over 4.6 million residents. The population of my Senate district grew considerably over the past ten years, and, therefore, it was necessary for the boundary lines to be re-drawn such that the district population geographically diminished by approximately 22,000 people. Similarly, at the federal level, reapportionment occurs every decade after the census is complete to reapportion the 435 seats in the U.S. House of Representatives among the fifty states based on population shifts. As a result of the 2010 census, South Carolina will gain one congressional district in 2012, which will give South Carolina a total of seven congressional districts. In addition to redrawing the state House and Senate district lines, the General Assembly also is in the process of redrawing the boundary lines to accommodate the new congressional district. The Justice Department will review the results to ensure compliance with the 1965 Voting Rights Act.

REFORMING K-12 EDUCATION FUNDING. I recently chaired the Select Committee on K-12 Funding to consider changes to how K-12 funds are distributed. Our goal was to develop a revenue neutral funding distribution method that increases funding for impoverished students, students with a limited English proficiency, students in gifted and talented programs, students not meeting state standards, and that recognizes the need to fund basic district operational and fixed costs. I sponsored a Bill to accomplish the Committee’s objectives, and it provides for the following: (1) flexibility and transparency (provide districts with the flexibility to transfer and expend funds from designated revenue sources and require an online check registry to address transparency concerns); (2) deregulation (require the State Board of Education to develop regulations establishing a process for districts to apply for deregulation); (3) teacher pay (require the Board of Education to develop regulations creating a framework for an optional teacher incentive compensation program); (4) the SC Public Charter School District (address additional funding requests and distinguish between brick and mortar and virtual schools); and (5) replacing the Education Finance Act with a simpler system where the money follows the child. This Bill passed favorably out of the Senate Education Committee and now rests with the Senate Finance Committee for fiscal review.

CHARTER SCHOOLS. I am disappointed that the charter school Bill was delayed in the Senate because of a dispute over early voting. The Bill had passed the House and was up for third reading in the Senate when it was delayed. I am hopeful that it will pass early next January. The Bill would allow charter school students to participate in extracurricular activities at their resident public school if those activities are not offered by the charter school. The Bill also would allow for single-gender charter schools and permit higher education institutions to voluntarily sponsor charter schools. The Bill does not specify statewide charter school district funding but provides that the General Assembly shall provide recurring funds for the district. For FY11/12, the General Assembly allocated $25 million in the budget for charter schools. Thus, in addition to the $1,880 per weighted pupil funding received from the state, students enrolled in virtual charter schools shall receive $1,700 per weighted pupil, and students enrolled in brick-and-mortar charter schools shall receive $3,250 per weighted pupil.