SUMMER NEWSLETTER
2003 STATE LEGISLATURE
YEAR IN REVIEW

The most noted characteristic of the 115th Session of the South Carolina General Assembly was lack of money to fund programs and services.

After having two additional “across the board cuts” within a very lean 2002-2003 budget, legislators faced the expectation of continued declining revenues for 2003-2004. The greatest portion of the limited funds projected to be available for appropriation during the coming year were applied to the task of fully funding Medicaid and the Education Finance Act. South Carolina was fortunate to receive federal funds from the Jobs and Growth Tax Relief Reconciliation Act of 2003. This allowed the General Assembly to fund education and health care at close to the same levels as last year.

Even though the issue of money (or lack of it) overshadowed the General Assembly, a great deal of significant legislation did pass this year.

LOCAL SCHOOL CALENDARS
The General Assembly gave school trustees the authority to establish their own annual school calendar to include starting dates, ending dates, holidays, make-up days, in-service days, and professional development days. Senator Hayes chaired the Conference Committee. Within the state budget they also gave the school district boards discretion as to the disbursement of designated funds when teacher salaries are in jeopardy.

.08 & DUI
A Bill sponsored by Senator Martin of Pickens with Senator Hayes co-sponsoring was passed reducing the blood alcohol content limits in “Driving Under the Influence” provisions from 0.10 percent to 0.08 percent. This new law also enhances penalties for a second “DUI” offense and allows for automobiles of repeat “DUI” offenders to be made unable to start.

PREDATORY LENDING
A very significant law protecting consumers from practices commonly referred to as “predatory lending” was passed by the General Assembly. Prior to this new law predatory lending practices were particularly difficult for the elderly, low-income individuals, and borrowers with few lending options or limited knowledge about personal finance. This law establishes criteria for loans to be considered “high cost” and requires credit counseling for those seeking to borrow money at interest rates designated as high. It regulates certain fees and charges. It prohibits lending practices such as balloon payments and the pattern of rapid refinancing known as “flipping”. This bill provides penalties for violations as well as remedies for consumers adversely affected by unlawful lending practices. Senator Hayes co-sponsored this bill and chaired the subcommittee that prepared the bill for approval by the State Senate and the House of Representatives. When the Bill passed both bodies of the General Assembly with amendments, a “Conference Committee” was appointed to work out the differences. Senator Hayes also chaired the Conference which established the final draft that was passed into law.

CAMPAIGN REFORM
Legislation reflecting one of Senator Hayes’ major efforts was the Campaign Finance Reform Bill. The first major revision of campaign finance law since 1992 was signed into law by Governor Sanford in June 2003. The effort to initiate this reform began in 1998 with a bill co-sponsored by Senator Leatherman and Senator Hayes that passed the General Assembly but was vetoed by Governor Hodges. Since that time several campaign reform initiatives were combined to form the bill that passed this year. The primary reason for this new reform bill is to cause the disclosure of contributions that fall into the category of “soft money.” This is money contributed or expended by individuals, companies, special interest groups, and political parties to affect the outcome of an election without contributing directly to a candidate. This legislation provides for a broad range of revisions including enhanced penalties for campaign finance violations, procedures governing ballot measure committees, new disclosure requirements for certain campaign contributions and expenditures, and restrictions imposed on a lobbyist for the remainder of the calendar year in which he deregisters. It also expands the authority of the General Assembly’s Ethics Committees.

HOMELAND SECURITY
Homeland Security Duties were assigned to SLED, the South Carolina Law Enforcement Division. The General Assembly also passed the Maritime Security Act which provides for the South Carolina Naval Militia as an organized, trained, and certified volunteer state maritime force to augment port and coastal security.

GOVERNMENT REFORM
Government reform also received significant legislative attention this year. The General Assembly approved the “Department of Motor Vehicles Reform Act of 2003.” This bill removes the Division of Motor Vehicles and the Motor Carrier Services unit from the Department of Public Safety and establishes these divisions as the Department of Motor Vehicles. The Governor will appoint the agency director, and the agency will be a part of the Governor’s Cabinet. Legislators also passed a bill requiring the Department of Commerce and other public bodies to disclose the cost to the public of economic development incentives that are offered to attract business investments.

DOMESTIC VIOLENCE PREVENTION
Passed by the General Assembly, the Domestic Violence Prevention Act enhances penalties for various domestic violence offenses and directs participation by offenders in programs designed to treat batterers. Criminal domestic violence of a high and aggravated nature is now considered a violent crime. Now law enforcement must complete an investigation of an alleged violation even if the law enforcement was not notified at the time the violation occurred. The Department of Social Services must set up Domestic Violence Coordinating Councils in each county. Every state agency must now have a workplace domestic violence policy that must include a zero tolerance policy statement regarding acts or threats of domestic violence in their safety and security procedures. This legislation also provides for training on domestic and family violence to teachers and operators of childcare facilities.

Senator Hayes successfully sponsored legislation that had direct, positive influence on York County and on the State as a whole.

The Joint Agency Act introduced by Senator Hayes provided the York County Gas Authority and other like non-profit agencies a mechanism for the joint exercise of their functions and the sharing of related costs to ensure the residents, businesses, and industries located in their service areas natural gas services as efficiently and inexpensively as possible.
Sponsored by Senator Hayes, an Aviation Aircraft Property Tax Reduction Bill was passed into law giving York County the local option to reduce property taxes on aircraft when it will encourage economic development for the county. In South Carolina property tax on aircraft is set at 12% of market value. In surrounding states such as North Carolina, these taxes are set as low as 3%. This new law allows counties the local option to reduce these taxes to as low as 4% making the rates more competitive.
A local bill changing the date when York County School District #1 Board Members take office was introduced by Senator Hayes at the request of the School District. Formerly, Board Members had to wait until January following election to take office, but now they may take office immediately after election.
Under a bill sponsored by Senator Hayes, the Tourism Expenditure Review Committee Membership was expanded to include a representative from the State Arts Commission. This committee reviews programs utilizing Accommodations Tax Funds. Having representation from the Arts Commission on this committee will better ensure local Arts Councils will not be left out of the equation when these funds are distributed.
The Technologies Grant Program Bill would ensure that 35% of Lottery Funds designated for Information Technology Programs would be distributed equally to smaller colleges in the state like Winthrop University. While the Bill has not yet passed, the significant aspects stated above were passed in the budget as a temporary proviso.

Many important bills are pending consideration for the second part of the 115th session of the General Assembly next year. A sampling of these is as follows.

MINIBOTTLE REFORM
The use of “Minibottles” filled with 1.7 ounces of liquor has been for many years the designated legal method for serving alcoholic beverages in restaurants and bars in South Carolina. If given the option to pour freely from a larger bottle, these businesses would use only 1.25 ounces of liquor. Senator Hayes sponsored this legislation for health and safety reasons. Less alcohol per drink means less opportunity and incentive for intoxication. With the legal limit dropping to .08 blood level, it is logical to reduce the content of alcohol in each drink giving the consumer less capacity to “drive under the influence.”
The South Carolina Hospitality Association has joined Senator Hayes in this effort for the same reasons of health and safety which create less liability for the businesses. Also, the free pour method is less costly, and allows for greater profit without greater volume which increases the industry’s tax contribution.
This legislation is in two parts. In that the use of minibottles is prescribed by the State Constitution, the first bill calls for a statewide referendum to amend the Constitution. The second bill is the enabling legislation that provides the mechanism by which the state will implement this change upon approval of the people. Those who distribute the minibottle oppose this legislation, but there is strong momentum in both houses of the General Assembly for passage. There is optimism that the bills will pass next year.

ENVIRONMENT AND CONSERVATION
Legislation introduced by Senator Hayes would establish The Catawba-Wateree River Basin Commission to study and review the growing use of the Catawba River as it flows from North Carolina through Mecklenburg County and York County traveling further into South Carolina. In so many ways, York County is dependent upon this primary source of water. This commission will be charged with the responsibility to study the impact of use by both states of this natural resource and make recommendations to ensure its quality is sustained.
Large, mass production hog farms that produce quantities of waste is an issue being debated. Approved by the House, legislation prohibiting a county from imposing livestock or poultry standards that are more stringent than those established by the General Assembly has been amended by the Senate and is pending further consideration next year.

CIGARETTE TAX
A major source of debate this past session was whether or not to increase the tax on cigarettes and use the revenue to fund Medicaid and to reduce State Income Taxes. None of the proposed measures to impose such a tax were approved by the General Assembly, but the issue is likely to be considered again next year. Many senators and representatives are committed to no tax increase of any kind, but a growing number of them feel this tax increase is justified because tobacco use is harmful to the health of our society. Therefore, many legislators, including Senator Hayes, feel an increased tax on cigarettes to help pay for Medicaid coverage is acceptable.

GOVERNMENT REFORM CONTINUED
The Governor will continue to push for government restructuring with legislation such as the “South Carolina Health and Human Services Reorganization and Accountability Act.” Having passed the House, this bill now resides in the Senate Medical Affairs Committee. The intent of this legislation is to reform the State’s Medicaid system and reorganize state health and human services agencies.
The Public Service Commission regulates the State’s public utilities, and its members are elected by the General Assembly. This year the House and Senate approved different versions of legislation which generally establishes new qualifications for Public Service Commission candidates. Both versions would expand the restrictions on certain activities and relations of Commissioners and PSC officials. Also, revisions in the way public interests are represented in matters before the Commission are included. A conference committee has been appointed to address the differences. A conference report with compromise legislation is expected to be presented next year.

AT WILL EMPLOYMENT DOCTRINE
Legislation revising South Carolina’s At-Will Employment Doctrine passed the House and awaits approval in the Senate. In light of recent court rulings, employers who use employee handbooks, even with disclaimers and employee acknowledgment, have been determined to create a contract of employment that replaces the intended at-will employment relationship. This led to the introduction of the “At-Will” bill, which states no handbook, policy, procedure, or other document issued by an employer may form a contract of employment, unless it is specified as such. If passed, the legislation will apply to both private and public employment. After much debate, the Senate amended the legislation and gave it second reading approval prior to adjournment.

ECONOMIC DEVELOPMENT INITIATIVES
Several bills designed to aid in developing the State’s economy are pending. The Research Universities Restructuring and Infrastructure Act revises current provisions by setting apart the University of South Carolina, Clemson University, and the Medical University of South Carolina as semi-autonomous institutions as they focus on research and development in a “knowledge-based economy.” It is important that this action does not trap funding that would be otherwise intended for institution of higher education like Winthrop University.
The Venture Capital Investment Act, which directs the Department of Commerce to establish a fund to promote investment in knowledge-based technology companies, is pending approval by the Senate.
The House and Senate approved differing versions of the South Carolina Life Sciences Act, which is a bill offering incentives for businesses engaged in pharmaceutical, medicine, and related laboratory instrument manufacturing and development activities.
Additional legislation to be considered is the Prohibition of Human Cloning, Tort Reform, and Primary enforcement of Seat Belt Laws. All of this and another difficult year for the State Budget provides the General Assembly with many interesting challenges to face.

YOUR INPUT IS NEEDED
Senator Hayes needs your input when there is an issue pending that you have knowledge of or which will have an impact on you. As your State Senator, he presently serves you as Chairman of the York County Legislative Delegation, Chairman of the Senate Ethics Committee, and as a member of the Senate Finance, Education, Banking & Insurance, Medical Affairs, and General Committees. Without your input, the General Assembly may make decisions based on inadequate information.
As your State Senator, his ongoing goal is to give the citizens of York County the best possible representation in State Government. As a means to keep you better informed, this District 15 Report is a quarterly newsletter concerning events occurring in the General Assembly. Due to the cost of mailing, he will not be able to mail a copy to everyone in the District; however, you may find copies of this report placed in various public locations.
Also, this report along with all others may be viewed on the senator’s website, (www.weshayes.com). A public meeting is held every quarter when possible at an accessible location, and you are encouraged to come, express your opinion, and ask any questions which you might have.

Any ideas you may have as to how this newsletter could be improved are most welcome.

If you need assistance or information or want to discuss an issue, you can contact me at:

Disclosure:
This newsletter utilizes printed information provided by the State’s Legislative Council and the State House of Representatives, Department of Research.

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