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The first year
of the 116th Session of the South Carolina General Assembly brought many
challenges and opportunities. The State’s improved economy provided
increased tax revenues. As a result we were able to replace funds for
services that in past years had to be reduced or eliminated. I believe
more needs to be done, but I am pleased that this session leaves the state
on a sounder footing than previous years. This past Legislative Session
was one of the most productive in my twenty-one years in the General
Assembly. A more cooperative spirit between factions existed. There was a
greater willingness to set personal and partisan agendas aside when the
common good was at stake. This led to the passage of many important laws
that languished in disagreement during past years. Within this newsletter,
I have attempted to summarize a sampling of important legislation that
managed to pass this term. The upcoming fall newsletter will preview
current and new legislation that will be taken up during the final term of
the 116th Session.
STATE BUDGET HIGHLIGHTS
> The General Reserve Fund is fully restored ($78 million).
> Surplus funds will be used first to cover any negative GAAP fund
balance that might occur.
> Forty trust funds that were borrowed from during the recent fiscal
crisis are fully restored, and two trust funds are partially restored.
> An increase of $315 million fully funds the Education Finance Act at
a base student cost of $2,290.
> Teachers’ annual salaries are funded at $300 above the Southeastern
Average.
> $22 million in new funding is provided for school buses, fuel, and
repairs.
> Medicaid growth receives $67,562,394.
> $11.5 million is appropriated to DSS for the Child Support
Enforcement Computer System.
> Certain law enforcement officers receive a pay increase of 10%.
> State employees receive a pay increase of 4%.
SOUTH CAROLINA EDUCATION AND ECONOMIC DEVELOPMENT ACT
Serving as chairman of the Subcommittee and the subsequent Conference
Committee for this Bill, I was able to assist in the passage of this
important legislation. When fully implemented, this Act will help students
better prepare for educational opportunities after high school, as well as
for productive careers. This Act mandates that high school course work be
customized to match students individual career interest. This law also
adds high school guidance and counseling services aimed at helping
students in career preparation, and it establishes alternatives for
students at risk of dropping out of school.
MINIBOTTLE REFORM (ALCOHOL BY THE DRINK)
Over the past several years I have advocated for change in the way South
Carolina serves liquor in restaurant and bars. Because of archaic laws
requiring the use of mini-bottles, South Carolina’s restaurants and bars
serve the strongest alcoholic beverage in the nation. These minibottles
contain 1.7 ounces of liquor when an average mixed drink elsewhere
contains a little more than an ounce. Last year voters approved changing
the state constitution to eliminate this process. The vote deleted the
constitutional provision requiring restaurants and bars to use minibottles
when selling liquor by the drink.
On this issue I am happy to report that the General Assembly agreed to
enabling legislation that establishes how liquor will now be taxed and
distributed to restaurants and bars. Many conditions are present in the
Act. These are the ones drawing the most attention.
> Beginning January 1, 2006, in addition to sales tax, a 5% excise tax
will be placed on liquor by the drink. This replaces the .25 cent
wholesale tax on minibottles.
> Retail liquor stores with “Class B Wholesale” permits may deliver
liquor to restaurants and bars. (Not mandatory)
> “Class B’s” can sell and deliver any size except for 1.75
liters. Restaurants and bars cannot use the larger bottles.
> “Class A” wholesale distributors (Manufacturer’s
representatives) must offer the same discounts to all “Class B’s”.
> Wines containing up to 16% alcohol may be sold in places other than
liquor stores.
> A study committee comprised of Senate and House member is formed to
examine the delivery and distribution system. (Report to be given by
January 2007.)
MENTAL HEALTH INSURANCE PARITY
This Act for which I was the primary sponsor requires health insurers to
provide coverage for treatment of certain mental health conditions. Under
this new law, health insurance plans now must provide at least one choice
for treatment of certain mental conditions with rates, terms, and
conditions that place no greater financial burden on the insured than for
access to treatment of physical conditions in similar settings and for
similar types of treatment. Mental health conditions covered by this Act
are bipolar disorder, major depressive disorder, obsessive compulsive
disorder, paranoia and other psychotic disorder, schizoaffective disorder,
shcizophrenia, anxiety disorder, post-traumatic stress disorder, and
depression in children and adolescents. This Act does not apply to health
insurance plans that are individually underwritten or provided by
employers with less than 50 employees.
TORT REFORM (LIMITS ON LAWSUITS)
This Act has many aspects. The key provisions are:
> Regarding claims against health care providers, damages for pain and
suffering are now capped at $350,000.00 against a single health care
institution. It does not restrict punitive damages except for certain
conditions or compensation for economic damages.
> Where there are multiple defendants, fault now can be calculated by
the degree of responsibility, whereas before one defendant (deep pockets)
among many could be held responsible for the total claim.
> This Act lowers the statue of limitations for filing an action for a
construction defect from 13 years to 8 years.
> Venue refers to the place a jury is drawn, and the place in which the
trial is held. Under the new law, civil action against a nonresident
individual defendant must be tried in the county where the most
substantial part of the alleged act occurred. Prior to this a defendant
could be tried anywhere that defendant did business.
SMALL BUSINESS INCOME TAX REDUCTION
A State Income Tax reduction is given to small businesses defined as sole
proprietorships, partnerships, or “S” corporations. This Act reduces
the state income tax rate for these business by 0.5% a year over the
course of four years beginning in 2006 so that, after 2008, such
businesses are to be taxed at a rate of 5%. This is the rate at which we
currently tax larger corporation.
STATE RETIREMENT SYSTEMS REFORM
Over the last few years, it has become apparent that adjustments had to be
made to insure that the financial base of this system remains strong and
stable. If the State Retirement Fund falls short, the State is obligated
to pay State Pensions from the State Budget. Adjustments were made to
principle benefits in order to keep increases in employee contributions to
a minimum. Conditions for retirees presently on TERI are affected in one
specific way. As all retired employees, TERI plan participants who
continue to work will pay active employee contributions to the retirement
system. However, the cap on income earned by all retired employees still
in state government is eliminated.
New participants in TERI after June 30, 2005 will find the unused annual
leave payout eliminated. Otherwise, the same conditions shown above
applies.
There is an increase of 1% for the employer, and a contribution increase
of .5% for all employees in the State Retirement System.
SEAT BELT LAW REVISITED
Due to a previous Act, not wearing a seat belt was already illegal,
however the old law would not allow a motorist to be stopped if the only
violation was an unbuckled seat belt. Under this new revision, police can
now stop a motorist for not wearing a seat belt even when it is the only
offense.
This new law does have limitations. Police cannot write seat belt tickets
at checkpoints or road blocks. Also, violation cannot be reported to
insurance companies and are not to be used in civil court. The fine for an
unbuckled seat belt remains at $25.00.
CRIMINAL DOMESTIC VIOLENCE
This Act increases penalties for domestic violence offenses. The most
significant penalty being that 3rd and subsequent offenses are felonies
punishable by imprisonment.
This new law expands the definition of felony offenses to include assault
and battery in the physical presence of a child (minor). A conviction for
domestic violence of a high and aggravated nature requires a mandatory
sentence of one year imprisonment.
South Carolina has the highest death rate due to domestic violence in the
nation. It is my hope that this new law will save lives.
HISTORICAL PROPERTIES REVITALIZATION TAX CREDIT
Last year I sponsored the Textile Revitalization Act that gives tax
credits to investors who redevelop abandoned textile property such as Rock
Hill’s “Bleachery”. That legislation passed. This year I
complimented this past legislation by sponsoring a bill that would allow
financial institutions to receive a share of these credits. The passage of
this new legislation gives more incentives to investors and to the banks
that lend the money for revitalization to participate in recreating
blighted areas diminished by old abandoned textile mills.
SAME SEX MARRIAGE REFERENDUM
This joint resolution approved by the General Assembly calls for a vote to
amend the State Constitution. This referendum will be to decide whether or
not the State Constitution should be amended to provide that marriage is
exclusively defined as the union between one man and one woman. It would
further determine that all other attempted unions, including those
recognized by other jurisdictions, are void.
NURSE LICENSURE COMPACT ACT
Shortages of Registered Nurses in hospitals and health care facilities is
a major problem in South Carolina. This is especially true for
metropolitan areas like Rock Hill that must compete with larger cities for
health care services. Representative Brian White and I sponsored
legislation that directs the South Carolina’s Department of Labor,
License, and Regulation to join a multi-state compact. This Compact
accepts the credentials of registered nurses from different cooperative
states with mutual certification requirements. Having become law, this Act
will provide hospitals and health care providers with a greater number of
certified nurses to recruit.
SPEAKER OF THE HOUSE
Representative Bobby Harrell of Charleston is now the Speaker of the House
of Representatives in South Carolina. Formally the Chairman of the
powerful House Ways and Means Committee, Representative Harrell was
elected to replace Representative David Wilkins from Greenville.
Representative Wilkins has been appointed by President Bush to be the
United States Ambassador to Canada.
THIS NEWSLETTER, concerning events occurring in the General Assembly, is
provided to keep you better informed. Due to cost of mailing, I will not
be able to mail a copy to everyone in Senate District #15. You may find
the newsletter placed in public places, or you may view it on my website.
(WWW.WESHAYES.COM) A public meeting is usually held twice a year at an
accessible location. You are encouraged to come, express your opinions,
and ask any questions.
Disclosure:
This newsletter utilizes printed information provided by the State’s
Legislative Council, the State House of Representatives, Department of
Research, and the Senate Judiciary Committee.
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