Legislative Year in Review - Part 1 09-02-2010 THE 2010 LEGISLATIVE SESSION The General Assembly approved H.4657, the General Appropriations Bill for fiscal year 2010-2011. With the state revenue available for appropriation at around $5 billion, down from a high of over $7 billion two years ago, the state government budget bill necessarily includes significant reductions in appropriations across the entire array of government programs and services. To offset some reductions, the proposed budget incorporates $346 million in federal stimulus funds available under the American Recovery and Reinvestment Act, $239.3 million in federal enhanced Medicaid match rates, and $195.5 million from the Medicaid Maintenance of Effort Fund. The legislation also includes provisions that allow for the use of $213 million in additional federal funds that would become available upon passage of federal legislation extending the enhanced Medicaid Federal Medical Assistance Percentage (FMAP) that states have been receiving for two additional quarters. Anticipated federal funds available under the continuation of the enhanced federal Medicaid match are allocated to avoid proposed cost-saving measures. Regarding Education Finance Act resources available to the state’s school districts, the legislation provides that the Index of Taxpaying Ability as calculated by the Department of Revenue for 2009 applies for the 2010-11 fiscal year. STATUS: Having passed the General Assembly, H.4657 was ratified on June 3, 2010 (R.293). On June 9, the Governor vetoed certain items in the appropriations bill.
BUSINESS, EMPLOYMENT & ECONOMIC DEVELOPMENT DEPARTMENT OF WORKFORCE The General Assembly approved and the Governor signed into law H.3442, a bill that creates the Department of Workforce as a cabinet level agency to perform workforce development functions and replace the Employment Security Commission in the administration of unemployment compensation. The legislation creates the South Carolina Department of Workforce and provides for it to be managed and operated by an executive director nominated by a newly-created Department of Workforce Review Committee and appointed by the Governor with the advice and consent of the Senate. The executive director may be removed from office by the Governor and the executive director as well as the assistant directors and area directors are exempted from state employee grievance procedures so that they will serve in an at will capacity. The executive director’s compensation is to be set by the Agency Head Salary Commission. A nine-member Department of Workforce Review Committee is created to perform oversight duties and to screen and nominate candidates for the positions of department director and members of the Department of Workforce Appellate Panel. The committee is composed of three members of the House of Representatives appointed by the Speaker, at least one of whom must be a member of the minority party; three members of the Senate appointed by the President pro Tempore, at least one of whom must be a member of the minority party; and, three members of the general public appointed by the Governor, one of whom must represent businesses with fewer than fifty employees and one of whom must represent businesses with fewer than five hundred employees. The committee is charged with screening candidates for the position of director to ensure that they meet the legislation’s criteria for educational attainment and expertise and nominating three qualified candidate from whom the Governor is to select in making his appointment. The committee is also charged with oversight duties which include conducting annual performance reviews of the director and the Department of Workforce. The legislation creates a Department of Workforce Appellate Panel with the sole purpose of hearing and deciding appeals from decisions of the Department of Workforce’s divisions. The members of the appellate panel must be elected by the General Assembly, in joint session, for four-year terms with initial elections to be held before May 22, 2010. Before an individual may be elected to the panel, he must be screened by the Department of Workforce Review Committee and found to possess the legislation’s qualifications for educational attainment or pertinent expertise. A member General Assembly may not be elected to the panel while serving as a legislator or for two years following legislative service. Compensation for the panelists is to be set by the Agency Head Salary Commission. The legislation transfers to the Department of Workforce the Workforce Investment Act program that had been assigned to the Department of Commerce through executive order. H.3442 also provides for certain administrative changes to begin to remedy the insolvency of the Unemployment Insurance Trust Fund. The legislation provides that an insured worker is ineligible for unemployment compensation benefits if he has been discharged from work for gross misconduct. Gross misconduct includes such activities as: assault or battery on a fellow employee or customer; abuse of a patient or child under professional care; willful or reckless damage to employer property in excess of fifty dollars; theft of items valued in excess of fifty dollars; failure to comply with applicable state or federal drug and alcohol testing and use regulations; consumption of alcohol or drunkenness on the job in violation of a written workplace policy; insubordination; and willful neglect of duty. The legislation provides new requirements for an individual who has completed a temporary work assignment to contact his temporary employment agency regarding possible reassignment before he can be eligible to receive unemployment benefits. The legislation creates the Workforce Initiative/Economic Development Research Committee to review and make recommendations regarding steps that should be taken to improve the economy of this State, the employment of South Carolinians, and to restore a substantially greater sense of financial security to the citizens of this State. The review must include an inventory of workforce training and recruitment programs and their adequacy towards meeting the needs of South Carolina’s businesses. In addition, the review and recommendations must place emphasis on the goal of matching unemployed citizens with jobs. The committee shall submit its report to the General Assembly and Governor before January 1, 2011, at which time it is abolished. STATUS: Having passed the General Assembly, H.3442 was ratified on March 25, 2010, (R.159) and signed into law by the Governor on March 30 (Act No. 146). The General Assembly approved and the Governor signed into law S.391, a bill relating to the Department of Workforce and unemployment compensation requirements. The legislation provides solvency targets for the state’s Unemployment Insurance Trust Fund that is used to provide unemployment compensation benefits and establishes new requirements for the contributions that the state’s employers make to the fund. The legislation establishes new requirements for the Department of Workforce to calculate an annual contribution rate for each qualified employer that is based upon a ranking system which divides the state’s employers into twenty benefit ratio classes. Each of these twenty classes must contain approximately five percent of the total taxable wages, excluding reimbursable employment wage, paid in covered employment during the four completed calendar quarters immediately preceding the computation date. The income needed to pay unemployment compensation benefits for the calendar year plus any applicable income needed to reach Unemployment Insurance Trust Fund solvency targets must be divided by the estimated taxable wages for the calendar year. The result rounded to the next higher one-hundredth of one percent is the average required rate needed to pay benefits and achieve solvency targets. In any calendar year in which the Unemployment Insurance Trust Fund is insolvent, the state shall impose additional surcharges on all employers to pay interest on the outstanding debt. The estimated amount of interest to be paid in the upcoming year will be divided by the estimated taxable payroll for the calendar year. The result rounded to the next higher one hundredth of one percent is the statewide average surcharge. After the Unemployment Insurance Trust Fund returns to solvency, the department must promulgate regulations concerning the income needed to pay benefits in each year and return the trust fund to an adequate level. The legislation also includes provisions relating to the conduct of Department of Workforce Appellate Panel elections by the General Assembly. The legislation prohibits pledges of support for candidates by members of the General Assembly until after the qualifications of all candidates for that office have been determined by the Department of Workforce Review Committee and the review committee has released formally to the General Assembly its report regarding the qualifications of all candidates for the office. The legislation provides that a member of the General Assembly may not trade a thing of value, including a pledge to vote for legislation or for another candidate, in exchange for another member’s pledge to vote for a candidate for the Department of Workforce Appellate Panel. A violation of these provisions is a misdemeanor subject to a fine of up to one thousand dollars or imprisonment for up to ninety days. The legislation provides that it is mandatory for a member of the Department of Workforce Appellate Panel to retire not later than the end of the fiscal year in which he reaches his seventy-second birthday. STATUS: Having passed the General Assembly, S.391 was ratified on June 1, 2010 (R.250) and signed into law by the Governor on June 3. The House of Representatives and the Senate approved different versions of H.4478, the "South Carolina Economic Development Competitiveness Act of 2010". The legislation implements numerous private sector recommendations for fostering an economic development climate in the state to attract global business and industry investment. Under the version approved by the House, the legislation provides for the gradual elimination of the corporate income tax, such that, beginning with the year 2013, the annual corporate income tax rate of five percent is to be reduced by one-half percent per year until the rate reaches zero for the year 2022 and thereafter. The legislation provides that a corporation establishing a national corporate headquarters in this State or expanding or adding to an existing national corporate headquarters, which adds at least fifty new full-time jobs performing corporate headquarters related functions and services is exempt from paying state corporate income taxes for a period of ten years. The legislation revises provisions for fee in lieu of property taxes agreements so as to: reduce the minimum investment requirement from ten million to five million; allow counties to increase the number of years a fee is available to thirty years (up from the current maximum of twenty years); and allows, with the county’s consent, for a manufacturing real property in a fee in lieu arrangement to be taxed at fair market value. The legislation revises provisions for industrial development projects under fee in lieu of property taxes agreements, so as to accommodate investment in a qualified nuclear plant facility. The legislation allows a small business that has at least five employees at the time a revitalization agreement is initiated to be eligible for a job development credit upon the creation of at least one full-time job within five years. The legislation revises provisions for the Centers of Excellence Matching Endowment that is funded from the South Carolina Education Lottery Account by authorizing the Coordinating Council for Economic Development to award one-third of the endowment. For these awards, the matching requirements do not apply when the Secretary of Commerce certifies to the review board that the endowed professor will directly support a business or industry in South Carolina which will invest within a one-year period at least one hundred million dollars in capital investment at a single site. The legislation establishes the South Carolina Volume Cap Allocation Act to allow the state to make maximum use of two new types of recovery zone bonds added by provisions of the federal American Recovery and Reinvestment Act of 2009 (ARRA). The legislation expands incentives for life sciences facilities so that they also apply to renewable energy manufacturing facilities involved in the production of solar energy technology, wind turbines, or advanced lithium and ion, or other batteries for alternative energy motor vehicles. The legislation enacts the ‘South Carolina Renewable Energy Tax Incentive Program’ to provide tax incentives to companies in the solar, wind, geothermal, and other renewable energy industries that are expanding or locating in South Carolina. The current tax credit for the installation of solar energy technology on residential structures is expanded to include the installation of solar energy technology on commercial buildings. The South Carolina State Ports Authority board is authorized to award annually up to one million dollars of the eight million dollars of job tax credits to a new warehouse or distribution facility which commits to expending at least forty million dollars at a single site and creating one hundred new full-time jobs. The Commissioner of Agriculture and the Secretary of Commerce are required to produce a report with recommendations providing a plan to promote agribusiness economic development projects designed to expand markets for South Carolina-grown crops and produce which must be submitted to the General Assembly by January 1, 2011. Agribusiness operations are added to the list of businesses that can qualify to receive tax credits for the creation of new jobs. The legislation revises jobs tax credits, investment tax credits, revitalization agreements, and numerous other economic development incentive tools. The Senate approved a substantially different version of H.4478. Notably, the Senate version does not include the elimination of the corporate income tax that has been approved by the House. The Senate version includes provisions for corporate income tax credits for businesses that provide employment for individuals who have been receiving unemployment compensation benefits. STATUS: The House of Representatives approved H.4478 on March 5, 2010, and sent the bill to the Senate. On June 3, the Senate returned the bill to the House with amendments. The General Assembly approved and the Governor signed into law H.4352, legislation establishing a microenterprises study committee. This joint resolution establishes a study committee to review and make recommendations concerning the need to foster the development of microenterprises and microbusinesses, which are sole proprietorships, partnerships, or corporations that have fewer than five employees and generally lack access to conventional loans, equity, or other banking services. The study committee must be composed of the following nine members: (1) two members appointed by the Governor; (2) two members appointed by the Speaker of the House of Representatives; (3) two members appointed by the President Pro Tempore of the Senate; (4) one member appointed by the President Pro Tempore of the Senate upon the recommendation of the South Carolina Banker’s Association; (5) one member appointed by the Speaker of the House of Representatives upon the recommendation of the South Carolina Business Initiative; and (6) one member appointed by the Governor upon the recommendation of the Advisory Coordinating Council for Economic Development. The study committee is required to report its findings and recommendations to the General Assembly no later than January 20, 2011, at which time the study committee is abolished. STATUS: Having passed the General Assembly, H.4352 was ratified on May 13, 2010 (R.214) and signed into law by the Governor on May 19. The General Assembly approved H.3707, a bill requiring motor fuel terminals to offer for sale products that are suitable for subsequent blending either with ethanol or biodiesel, a process known as splash blending. Under the legislation, a person or entity is prohibited from taking an action to deny a motor fuel distributor or retailer from being the blender of record. In addition, motor fuel distributors, retailers, and refiners must utilize the renewable identification number (RIN). The legislation may not be construed to imply a market value for the RINs. The legislation also declares a violation to be an unfair trade practice and provides that each violation is to be considered a separate offense. STATUS: Having passed the General Assembly, H.3707 was ratified on March 25, 2010 (R.160). The Governor vetoed the bill on March 31. On April 15, legislators overrode the Governor’s veto to allow the bill to become law (Act No. 147). The General Assembly approved and the Governor signed into law H.4445, the "Permit Extension Joint Resolution of 2010." The joint resolution provides a temporary extension for building permits, air and water quality certifications, and certain other government approvals affecting the development of real property within the state. The measure is offered as a means of preventing the abandonment of development projects in the state during depressed economic conditions. For development approval that is current and valid at any point during the period beginning January 1, 2008, and ending December 31, 2012, the running of the period of the development approval and any associated vested right is suspended during the period beginning January 1, 2008, and ending December 31, 2012. STATUS: Having passed the General Assembly, H.4445 was ratified on May 13, 2010 (R.215) and signed into law by the Governor on May 19.
STATUS: Having passed the House of Representatives and the Senate, H.3305 (R.157) was ratified on March 25, 2010. The General Assembly approved H.4511, the "South Carolina Rural Infrastructure Act" which provides a mechanism for alternative methods of financing infrastructure projects in rural areas that are needed for economic development. The legislation creates a South Carolina Rural Infrastructure Authority to assist municipalities, counties, special purpose districts, public service districts, and public works commissions in constructing and improving rural infrastructure by providing loans and other financial assistance. A distinct Rural Infrastructure Fund is established to receive funds from state, federal, and other sources for financing eligible projects including the acquisition and renewal of land, the construction and renovation of facilities, the furnishing of machinery and equipment, and the provision of water service and other improvements needed to aid the development of trade, commerce, industry, agriculture, aquaculture, and employment opportunities, all of which must be primarily located in a county designated as distressed or least developed. The legislation provides for the powers and duties of the seven-member board of directors of the Rural Infrastructure Authority composed of the Secretary of Commerce, who serves as the board chair and six members who must be residents of counties designated as distressed or least developed one of whom is appointed by the President Pro Tempore of the Senate, one by the Speaker of the House of Representatives, one by the Chairman of the Senate Finance Committee, one by the Chairman of the House Ways and Means Committee, and two by the Governor. Before providing a loan or other financial assistance to a qualified borrower, the authority must obtain the review and approval of the Joint Bond Review Committee. STATUS: Having passed the General Assembly, H.4511 was ratified on May 6, 2010 (R.202). The Governor vetoed the bill on May 12. On May 26, legislators overrode the Governor’s veto to allow the bill to become law (Act No. 171). The legislation provides that persons eighteen or older are authorized to receive a tattoo. STATUS: Having passed the General Assembly, S.188 was ratified on March 25, 2010 (R.139) and signed into law by the Governor on April 13 (Act No. 133).
NATURAL RESOURCES AGRI-TOURISM ACTIVITY LIABILITY Under certain circumstances, this legislation limits the liability that an agri-tourism professional may incur due to an injury or death suffered by a participant in an agri-tourism activity resulting from an inherent risk of an agri-tourism activity. Among other things, the legislation defines the terms ‘agri-tourism activity’ and ‘inherent risks of an agri-tourism activity’. An agri-tourism professional must post a warning notice at the agri-tourism facility, and warning notices must be included in contracts the agri-tourism professional enters into with participants. The agri-tourism professional's liability is not limited if the proper warning notices are not provided to participants. STATUS: Having passed the House of Representatives and the Senate, S. 104 (R.294) was ratified on June 7, 2010. The legislation provides that it is lawful to trap furbearing animals for commercial purposes from December first of each year to March first of the succeeding year. The legislation provides it is lawful to trap coyotes from December first of each year to March first of the succeeding year. It is unlawful to trap coyotes at any other time unless authorized by the Department of Natural Resources. The legislation provides that it is lawful to take coyotes by other lawful means at any time during the year. STATUS: Having passed the General Assembly, S.1294 (R.266) was ratified on June 6, 2010 (R.266) and signed into law by the Governor on June 7. The General Assembly approved and the Governor signed into law S.1096, a bill providing a mechanism for financing residential energy efficiency and conservation measures. This bill provides electricity and natural gas providers the authority to finance the purchase price and installation cost of energy conservation measures for residential customers and recover this financing through charges paid for by the customers benefitting from the installation of the energy conservation measures. Before an electricity provider or natural gas provider may enter into a financing contract on a residence, an energy audit must be performed on the residence to demonstrate that energy savings can be expected from energy efficiency measures, such as weatherization and equipment upgrades. Should the residential customer agree to the installation of the of the efficiency measures, a second audit must be performed after the installation to show that energy savings have been realized. In order for electricity providers and natural gas providers to recover the costs, including financing costs, of the energy efficiency and conservation measures a separate meter conservation charge is placed on a customer’s bill. STATUS: Having passed the General Assembly, S.1096 was ratified on March 25, 2010 (R.148) and signed into law by the Governor on March 31 (Act No. 141). FLOUNDER POPULATION STUDY PROGRAM STATUS: Having passed the General Assembly, S.1043 was ratified on March 25, 2010 (R.147) and signed by into law by the Governor on March 31(Act No. 140). The legislation outlines that it is unlawful to release pigs into the wild. A permit is required to remove a hog from the wild alive; the cost of this permit is $50. The permit will require the captured hogs to be tagged permanently. The tagged hogs can only be moved to a permitted hog hunting enclosure within the county where the hog was caught. Hog hunting enclosures that receive permitted and tagged hogs, removed from the wild, must also obtain a permit issued by the Department of Natural Resources. The permit for the hog hunting enclosures is $50. The legislation also states that hogs may be hunted at night with an artificial light that is attached to the hunter’s helmet or hat or be part of a belt system worn by the hunter. Hogs may not be hunted at night from a vehicle or with a centerfire rifle or shotgun, unless permitted by the department. A person who violates this provision is guilty of a misdemeanor and upon conviction must be fined not more than five hundred dollars or imprisoned for not more than thirty days, or both. STATUS: Having passed the General Assembly, S.932 (R.255) was ratified on June 1, 2010 (R.255) and became law without the Governor’s signature on June 8. "MANUFACTURER RESPONSIBILITY AND CONSUMER CONVENIENCE INFORMATION TECHNOLOGY EQUIPMENT COLLECTION AND RECOVERY ACT" STATUS: Having passed the General Assembly, H.4093 was ratified on May 13, 2010 (R.212) and signed into law by the Governor on May 19 (Act No. 139). The legislation provides that rabies inoculations must be administered to pets by a licensed veterinarian or a licensed veterinary technician or veterinary assistant under a licensed veterinarian’s direct supervision. The fee for rabies inoculation may not exceed ten dollars, including the cost of the vaccine, and this charge must be paid by the pet owner. STATUS: Having passed the General Assembly, S.328 was ratified on May 13, 2010 (R.206) and became law without the Governor’s signature on May 20 (Act No. 173). "RENEGADE HUNTER ACT" STATUS: Having passed the General Assembly, S.1027 was ratified on June 7, 2010 (R.306) and signed into law by the Governor on June 11. This bill makes comprehensive revisions regarding permitting to Surface Water Withdrawals and Reporting Act. The bill provides for new definitions; and provides that all surface water withdrawals, with certain exceptions, must be permitted. A permit may not be issued to a new applicant unless the Department of Health and Environmental Control determines that the applicant’s proposed use is reasonable to the regulations. An existing registered surface water withdrawer already reporting its withdrawals to the department as of January 1, 2011, may maintain its withdrawals at its highest reported level or at the design capacity of the intake structure which will be permanent as of January 2, 1011, and is deemed to be registered with the department. The legislation provides for exemptions for emergencies, farm pond, mining, evaporation, hydropower, wildlife management, and special purpose districts. Registration continues for agricultural operations. Permitting is required for existing users, new users, and inter-basin transfers. The term of permit for a new user is 20 to 40 years and the term of permit for existing users is 30 to 40 years. The bill outlines that public water systems’ term of permit is up to 50 years based on debt recovery. The bill addresses minimum flow based on mean annual daily flows. The bill provides for nonconsumptive surface water withdrawal and its permitting. Among many other things, the bill provides for an application procedure for surface water withdrawers that own and operate a licensed impoundment or new surface water withdrawers that withdraw water from a licensed impoundment. STATUS: Having passed the General Assembly, S.452 was ratified on June 7, 2010 (R.300) and signed into law by the Governor on June 11. TRAINING OF BIRD DOGS STATUS: Having passed the General Assembly, H.975 was ratified on March 25, 2010 (R.146) and signed into law by the Governor on March 31 (Act No. 139).
MANUFACTURING, PROCESSING AND PACKAGING OF FOODS The legislation requires the Department of Agriculture to promulgate regulations regarding good manufacturing practice. It states that a person may not engage in the business of manufacturing, processing, warehousing or packaging food in any manner without first registering for a permit. This provision does not apply to facilities inspected and regulated by the United State Department of Agriculture (USDA) or the Clemson Livestock-Poultry Health Meat Inspection Division. Registration is required beginning January 1, 2011, and must be renewed annually thereafter. The department may perform laboratory services relating to, or having potential impact on, food safety or the compliance of food with the requirements of this chapter for any person or public agency. A person who willfully violates these provisions is subject to a civil penalty of up to one thousand dollars for each violation. Any person violating this section is also guilty of a misdemeanor and, upon conviction, must be fined not more than one thousand dollars or imprisoned for not more than thirty days. STATUS: Having passed the General Assembly, H.4563 was ratified on June 7, 2010 (R.331) and signed into law by the Governor on June 11. The General Assembly approved S.454, a bill revising pyrotechnic safety provisions relating to the licensure and regulation of persons handling fireworks. The legislation increases the State Board of Pyrotechnic Safety from six to seven members, adding a member to represent pyrotechnics wholesalers. The legislation provides licensure requirements for the manufacturing, sale, or storage of fireworks. The Department of Labor, Licensing and Regulation is authorized to investigate complaints. The legislation provides grounds for disciplinary action; requires liability insurance; requires the reporting of fires and explosions; and provides criminal and civil penalties for violations. STATUS: Having passed the General Assembly S.454 was ratified on May 13, 2010 (R.207). The Governor vetoed the bill on May 19. On June 1, legislators overrode the Governor’s veto to allow the bill to become law. The General Assembly approved H.4663, a bill pertaining to automatic residential fire sprinkler system requirements and other building code provisions affecting residential construction. The legislation requires any provision of, or amendment to, any building code that would affect construction requirements for one-family or two-family dwellings to be promulgated as a regulation by the Building Codes Council and submitted to the General Assembly for legislative review in accordance with the Administrative Procedures Act. The legislation provides that a regulation mandating the installation of an automatic residential fire sprinkler system in one-family or two-family dwellings shall not become effective at any time prior to January 1, 2014. A study committee is established to develop new strategies to increase participation in the tax credit program for fire sprinkler installation, and to review and make recommendations for increasing the installation of interconnected hard-wired smoke alarms. The six-member committee is to be composed of three members appointed by the President Pro Tempore of the Senate and three members appointed by the Speaker of the House of Representatives. The study committee must be composed of a representative of the South Carolina Fire Sprinkler Association, a representative of the South Carolina Home Builders Association, a representative of the South Carolina Association of Counties, and a representative of the Municipal Association of South Carolina. The study committee shall make a report of its findings to the General Assembly no later than January 30, 2011. STATUS: Having passed the General Assembly, H.4663 was ratified on June 1, 2010 (R.282) and signed into law by the Governor on June 7. The Senate returned H.4350, a bill requiring certification of functioning smoke detectors for the sale of a previously-owned manufactured home, to the House with amendments. This bill revises criteria required for a manufactured home, so as to provide that, for a sale of a previously owned manufactured home, the buyer must certify he has determined at least two functioning smoke detectors are in the home. STATUS: On April 28, 2010, the House of Representatives approved H.4350 and sent the bill to the Senate. On June 2, the Senate returned the bill to the House with amendments. The General Assembly approved and the Governor signed into law H.4551, a bill incorporating prepaid wireless telecommunications and voice over internet protocol (VoIP) into the state’s 911 emergency calling system provisions. The legislation imposes new fees upon prepaid wireless telecommunications and Voice over Internet Protocol (VoIP) for the support of the 911 emergency calling system that are in keeping with the fees that users of traditional telephone services and mobile telecommunications plans have been paying for the support of the system. STATUS: Having passed the General Assembly, H.4551 was ratified on March 25, 2010 (R.166) and was signed into law by the Governor on March 30 (Act No. 135).
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