End of Session Report – What Passed and What Didn’t
H. 4996 – Small Business Tax Reform – Passed by House. Bill died in Senate. Passed as part of 2012 Continuing Resolution.
This legislation slashes the business income entrepreneurs report on their personal tax forms from 5 percent to 3 percent so they can invest in, and grow, their businesses. This should lower the tax paid on these returns by about $1,000. This directly helps thousands of South Carolina families who either own small business or are self-employed. This reform will be implemented over 4 years. The final compromise brings the rate down over 3 years for a total impact of $60 million.
H. 4997 – Personal Income Tax Reform – Passed by House. Died in Senate.
We collapse our five tax brackets (3, 4, 5, 6, and 7 percent) to two (3.75 percent and 7 percent), which makes the tax code more coherent while giving all South Carolinians a tax cut or no change in their liability. Those in the current 3 percent bracket will be held harmless so their taxes do not increase.
H. 4995 – Sales Tax Exemption Reform – Passed by House. Died in Senate.
Eliminate nearly two dozen special interest sales tax exemptions while preserving the ones that benefit families (gasoline, food, electricity, water, medicine). This is achieved with a corresponding sales tax rate decrease to offset the increased revenue collections.
H. 4652 – Strengthening Right to Work Freedoms – Signed by Governor (6/7/12).
The legislation requires employers to display a poster that informs workers of our state’s Right to Work protections, and clarifies language that the Right to Work must not be denied because of membership, or non-membership, in a labor organization. The legislation also increases labor organization transparency, increases civil penalties for violations, and requires written authorization for any union dues to be deducted from a worker’s paycheck.
H. 4967 – Retirement System Strengthening – Signed by Governor (6/26/12).
This legislation dramatically reduces the unfunded liability to the state retirement system, resulting in a 100 percent funded ratio in the year 2043. Highlights of the bill include:
- Retirement Age – SCRS, Rule of 90 (age plus service years must equal 90); PORS, 27 years – new employees only; current employees stay at 28/SCRS and 25/PORS
- Average Final Compensation – still 3 years for current employees, 5 years for new hires
- Annual and Sick Leave – current employees can still apply it their calculation, new hires cannot
- Employee Contribution Rates – increase 0.5%/year for three years (1.5% total increase), both SCRS and PORS. Any necessary future increases will require that both the employee and employer rates increase at a proportional rate.
- TERI – closed to new hires and phases out for current employees
- GARS – closes GARS for newly elected officials in the 2012 General and 1% increase in contribution rates for existing GARS participants; newly elected folks will participate in either SCRS or ORP
- Vesting – increase to 8 years for new employees
- Service Purchase – makes purchase of time actuarially neutral
- Return to Work – places a $10,000 earnings limitation on retirees who return to work, if they exceed that limit their monthly annuity will end for that year. This does not apply to those who retire after 62 years of age in SCRS and 57 years of age in PORS. This applies to no one retired before Jan 1, 2013; the break in service between employment and re-employment increases from 15 days to 30 days.
- Disability – conforms state disability standards to Social Security
H. 3779 – “Bill Wylie Entrepreneurship Act” – Passed the House (4/14/11). Died in Senate.
The House opened new avenues for funding for our state’s small businesses by passing new tax credits for “Angel” investors. The bill was one of the final projects former Greenville Rep. Bill Wylie was working on before his passing last fall, and the bill was renamed in his honor. The bill provides a tax credit for people who provide capital to specific types of small businesses in our state – including manufacturing, warehousing, wholesaling, and technology, among others. It specifically excludes investments in other businesses, such as construction, from claiming the credit. Angel investors can claim up to a $100,000 tax credit over 10 years, and only $5 million can be credited by the state each year to all Angel investors.
H. 3185 – Higher Education Transparency – Passed by House (2/2/11). Died in Senate.
The legislation requires all state Colleges and Universities to post a monthly registry of all expenditures and dollar amounts online, and prominently display the registry on their websites for the public to examine.
H. 3375 – Lawsuit Abuse Reform – Signed by Governor (6/14/11)
Tort Reform is a top priority to further protect our state’s businesses from the threat of unjustified, debilitating lawsuits while preserving everyone’s access to our legal system. Highlights of this legislation:
- Burden of Proof: Codifies that punitive damages must be proven by clear and convincing evidence that the harm was the result of willful, wanton, or reckless conduct.
- Two Part Trials: Trials where punitive damages are sought are bifurcated. First the jury hears case and determines compensatory damages, and then if compensatory damages are awarded the jury will hear evidence supporting punitive damages in Part 2.
- Limits: Codifies the permitted ratio between punitive damages and compensatory damages
- General Rule – Punitives cannot be more than 3 times compensatory damages awarded or a total of $500,000 (whichever is greater)
- Higher Limit – if the jury came back with an amount higher than the 3 times max and the trial court determines (1) the action was motivated by financial gain while the potential danger was known or (2) the proximate cause was a felonious action THEN: The max becomes 4 times compensatory or a total of $2 million (whichever is greater). With NO CAP if defendant had intent to harm, was found guilty of a felony that was the proximate cause, or was under the influence of drugs or alcohol.
- A circuit solicitor may employee outside counsel for civil forfeiture proceedings connected to criminal proceedings or bail bonds without the AG’s approval, but needs AG’s approval to employee outside counsel for any other case.
- Violation of a building code is NOT per se fraud, gross negligence, or recklessness – standards that void the current eight year statute of repose for construction.
- Note: This legislation initially deleted the statutory prohibition on introducing evidence that a plaintiff was not wearing a seatbelt. This section was removed from the bill and is not part of the new law. (removed by Senate).
H. 3066 – Agency Restructuring – Passed by House (3/2/11). Died in Senate (Never voted on Conference Report).
This legislation creates a Department of Administration under the power of the Governor’s Office and moves many administrative functions from the Budget and Control Board to the new Department. The House version of the legislation moved five divisions of the Budget and Control Board to the new department: general services, employee insurance programs, the State Information Technology Division, procurement services, and the state energy office. These offices provide administrative services, rather than providing services directly to the people of South Carolina. Legislation creating a Department of Administration was approved by the House in 2004, 2008, and 2009.
H. 4145 – Shortening the Legislative Session – Passed by House (5/5/11). Died in Senate.
The House approved legislation that will shorten the legislative session by a week – ending the session from the first Thursday in June to the last Thursday in May. The House has approved similar legislation at least five times since 1994.
H. 3716 – Education Funding Reform – Passed by House (3/9/11). Died in Senate.
This legislation takes important first steps toward reforming our antiquated, 30-year-old funding formula to make education funding more equitable and effective is a priority for our state.
H. 3368 – Spending Caps – Passed by the House (3/10/11). Died in Senate.
House Republicans passed spending caps for the eighth time since 1994. The legislation uses February 15, 2010 as the base and restricts future growth to the lesser of 6 percent growth, or population growth plus the Consumer Price Index. In addition, the bill allows the General Assembly to declare an emergency and suspend the restrictions with a vote of two-thirds of those present. According to the most recent report from the National Conference of State Legislatures, 30 states operate under spending or revenue limits. The bill also creates a “Spending Limits Reserve Fund,” and requires funds in excess of the spending limit to be appropriated for, replenishing the General Reserve Fund, temporary tax reductions, infrastructure, school buildings, school buses, and then expenses for natural disasters.
H. 3003 – Voter ID – Signed by Governor (5/18/11)
For the last two years, the House Republicans have approved Voter ID – one of the top agenda items from the S.C. Republican Party platform. The legislation requires voters to show government-issued picture identification (a driver’s license, passport, or military ID) to prove their identity when they vote. The fee for a state picture ID card is waived until the state can issue free voter registration cards with a photograph on them.
The goal of the House’s Voter ID bill has been to strip out all of the unrelated provisions that have bogged down the debate in the past. This bill is now about one thing and one thing only: showing a picture ID. This year, the House Republican Caucus stripped the legislation of all unrelated voting provisions – eliminating any language about early voting or absentee voting – that have stalled it in previous years. Similar Voter ID laws in Georgia and Indiana have been upheld by the Department of Justice and the United States Supreme Court.
H. 3410 – Higher Education Efficiency Act – Signed by Governor (8/1/11) as S. 172.
This legislation makes many reforms to how our state’s colleges and universities operate to streamline operations and make them more efficient and accountable.
H. 3403 – “Born Alive” Legislation and Obamacare Abortion Opt-Out – Passed by House (3/30/11). Passed as S. 1149 and Signed by Governor (5/25/12).
This legislation ensures that babies born alive after an attempted abortion procedure must be saved and that S.C. Doctors will not be mandated to perform abortions if required to by Obamacare.
H. 3408 – Freedom of Conscience Act – Passed by House (3/30/11). In Senate Medical Affairs Committee.
This legislation prohibits an employer from discriminating, demoting, suspending, disciplining, or discriminating against an employee who advises the employer that he or she refused to participate in certain research or medical procedures that he or she finds morally objectionable.
H. 3241 – Charter School Reform – Signed by Governor (5/14/12).
The House of Representatives approved new funding for the state’s public charter schools, helping push money to these innovative public schools as they provide choices for our state’s parents. Charter schools are public schools, and the charter schools affected by this bill are part of the state-sponsored charter school district. The district was created in 2005 by Republicans as a way to free charter schools from excessive burdens imposed by some local school districts. Charter schools are funded below the funding level of traditional public schools. The bill approved provides charter school students state funding to fill the funding gap that a lack of local funding leaves – despite the fact that these students move to public charter schools and are not educated by the traditional school districts. The legislation also creates a new ability for school districts to create their own charter schools.
H. 3507 – Repeal Amendment – Passed by House (2/16). Died in Senate.
The Repeal Amendment would allow two-thirds of the legislatures of the states to repeal a federal law. Two-thirds (34) of U.S. states will have to approve similar resolutions to call for a Constitutional Convention and 38 states will have to ratify the amendment once proposed. Only 17 states are currently considering the resolution. Constitutional Amendments are very rare. Since Bill of Rights was ratified in 1791, only 17 amendments to the Constitution have been ratified in the last 220 years.
H. 3419 – S.C. Taxpayer Fairness Act – Passed by the House (3/10). Died in Senate.
This legislation expands and updates our state’s Taxpayer Bill of Rights to ensure law-abiding taxpayers are treated with respect and that government agencies enforce tax law in a fair manner.
S. 20 – Strengthening Illegal Immigration – Signed by Governor (6/27/11)
The bill states that if a South Carolina law enforcement officer has reasonable suspicion that a person stopped, detained, or arrested is an illegal immigrant, the officer or his agency must verify the person’s residency. The bill also makes it illegal for an illegal immigrant to ask for work or attempt to ask for work. The House amended the bill makes it easier for the state to prosecute businesses that violate the 2008 Illegal Immigration reforms.
H. 3152 – Governor/Lt. Governor to Run on Same Ticket - Ratified (5/23/12). No Governor signature required.
This joint resolution will amend the state constitution to allow the Governor and Lieutenant Governor to run on the same ticket. This item has been approved several times by the House in the last decade.
H. 3070 – Superintendent of Education Appointed by Governor – Passed the House (3/3/11). Died in Senate.
This joint resolution will amend the state constitution to allow the Governor to appoint the state Superintendent of Education. This item has also been approved several times by the House in the last decade.
H. 3226 – Regulatory Reform – Passed the House (4/27). Died in Senate.
This legislation requires an automatic vote of the House and the Senate to approve new regulations. Currently agency regulations are automatically approved unless the General Assembly takes specific action.
The final state budget totaled $6.7 Billion for 2012/2013, which falls within the state spending limit propose by the House in H. 3378 (which died in the Senate this year). Highlights of the budget include:
- Nearly $700 million in tax relief to individuals and businesses.
- $300 million for deepening the Port of Charleston channel. This is sufficient to fully fund the entire project should federal funds not materialize.
- Provides $77 million in unemployment tax relief for businesses.
- Funds the base student cost at $2,012 per student and guarantees a 2% state-funded pay raise for all teachers.
- Fully funds state scholarships.
- Increased funding for the Department of Commerce’s Closing Fund.
- Fully funds the Medicaid budget.
- 3 percent employee pay raise with an additional 2 percent for law enforcement officers making less than $50,000/year.
- Adds $30 million to the local government fund.
H. 4894 – School Choice – Passed by House (3.29). Died in Senate.
This legislation provides tax deductions for two groups and tax credits for others:
- Up to a $4,000-a-year tax deduction for each child enrolled in private schools.
- Up to a $2,000 deduction for expenses for families who home-school their children.
- Poor and disabled students would be eligible for private-school scholarships, and those who donate to nonprofits that would provide those scholarships could claim tax credits.