The budget continued to be the focus of debate this year as we faced continued revenue shortfalls due to the recession.  The Republican controlled House managed to pass a budget this year that contained no tax increases. Though every effort was made to minimize the impact to the various state agencies and educational institutions, we understood that government needed to follow the lead of individuals and businesses that have been forced to cut spending. Raising taxes during a recession only weakens our chances for a quick economic recovery.

You will find listed below the major bills that will become law. It must be noted that there are two bills listed below that I did not vote for – the cigarette tax and the surface water bill.

After listening to the debate on the cigarette tax, I concluded that the tax represents all that is wrong in Columbia. Instead of proactively pursuing a plan to solve our budget problems, Republicans reacted out of fear that they would actually have to live up to their campaign promises of reducing the size of government. The majority would rather fund state health services with a consumption tax than come up with solutions to reduce the need for those services.

The surface water bill was presented as legislation that had grandfathered existing permit holders such as the Greenville Water System. Upon closer examination, this was not the case and I attempted to amend the bill in my Agriculture Committee and on the House floor to correct the problem. The amendment was defeated which will result in Greenville Water System having less access to water coming from Lake Keowee.

The following are bills that were passed into law:

H. 3442 – Department of Workforce/Employment Security Commission

This legislation 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 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.

S. 391 – Employment Security Commission Reform

The legislation provides solvency targets for the state’s Unemployment Insurance Trust Fund used to provide unemployment compensation benefits and establishes new requirements for the contributions that the state’s employers make to the fund. 

H. 3066 – Campaign Disclosure

This legislation provides that electronic filing of campaign disclosure and reports provisions are applicable to all persons subject to the state’s Ethics and lobbying laws, including candidates for local government offices, lobbyists, and lobbyist principals.

H. 4352 – Microenterprises Study Committee

This legislation establishes a microenterprises study committee to review and make recommendations concerning the need to foster the development of microenterprises and micro-businesses, 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. 

H. 4478 – Economic Development Competitiveness Act

The legislation implements numerous private sector recommendations for fostering an economic development climate in the state.  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 also revises provisions for fee in lieu of property taxes agreements.  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 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 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. 

H. 4299 – Help School Districts Handle Budget Reductions

This joint resolution authorizes certain teacher contract and salary provisions effective for the upcoming school year.  The legislation provides that the boards of trustees of the several school districts shall decide and provide the required written notification to the teachers in their employ concerning their employment for the 2010‑2011 school year by May 15, 2010.  Any teacher who is reemployed by this written notification shall notify the board of trustees in writing of his acceptance of the contract for the 2010‑2011 school year no later than ten days following receipt of written notification.  Failure on the part of the teacher to notify the board of acceptance within the specified time limit shall be conclusive evidence of the teacher’s rejection of the contract.  The legislation also provides that school districts may uniformly negotiate salaries below the school district salary schedule for the 2010‑2011 school year for retired teachers who are not participants in the Teacher and Employee Retention Incentive Program.

S. 1154 – Omnibus Crime Reduction Act

The stated purpose of this comprehensive legislation is to reduce recidivism, provide fair and effective sentencing options, employ evidence-based practices for smarter use of correctional funding, and improve public safety.  Part I of the legislation makes numerous and various revisions to criminal offenses.  Many of the changes add levels to the various degrees of an offense, increase maximum penalties, or allow discretion to judges with regards to probation and parole for offenses.  Part II of the legislation focuses on evidence-based practices in order to use proven methods that can make smarter use of the Department of Probation, Parole and Pardon Services.  Among numerous other things, the legislation provides incentives to persons under supervision to comply with conditions.  Part III provides oversight revisions to fiscal impact statements and also a committee to continue oversight of the implementations of the Sentencing Reform Commission recommendations.

S. 452 – Surface Water Withdrawal Act

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 non-consumptive 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. 

H. 3305 – Secret Ballot in Union Elections

This joint resolution proposes to amend the South Carolina Constitution to provide that the fundamental right of an individual to vote by secret ballot is guaranteed for a designation, a selection, or an authorization for employee representation by a labor organization.  This proposed constitutional amendment will be submitted to the voters at the next general election.

H. 3509/S. 424 10^th Amendment Bill and State’s Rights

The resolution provides that the General Assembly claims for the State of South Carolina sovereignty under the Tenth Amendment to the Constitution over all powers not otherwise enumerated and granted to the federal government.  The resolution provides that it is the policy of the state that: no law shall interfere with the right of a person to be treated by or receive services from a health care provider of that person’s choice; restrict a person’s freedom of choice of private health care systems or private health care plans of any type; interfere with a person’s or an entity’s right to pay directly for lawful medical services; and impose a tax, penalty, or fine, of any type, for choosing a health care provider, to obtain or decline health care coverage or for participation in any particular health care system or plan.  The resolution claims freedom from all laws and mandates that violate the rights granted under the Second, Ninth, and Tenth Amendments to the United States Constitution and serves as notice and demand to the federal government, as South Carolina’s agent, to cease and desist immediately all mandates that are beyond the scope of the federal government’s constitutionally delegated powers.

S. 191 – Warrantless Searches

In order to reduce recidivism rates and protect potential victims from criminal enterprises, the legislation authorizes law enforcement officers to conduct warrantless searches and seizures on those who are on probation or parole.  The legislation provides that, before an individual may be placed on probation, supervised furlough, or parole, he must agree in writing to be subject to a search or seizure, without a search warrant, based on reasonable suspicions, of his person, any vehicle he owns or is driving, and any of his possessions by any probation agent employed by the Department of Probation, Parole and Pardon Services or any other law enforcement officer.  The legislation also includes provisions that make written agreement to such warrantless searches and seizures a condition for the release from custody of juveniles and youthful offenders.  Officers are required to make reports of all warrantless searches or seizures to their law enforcement agencies that include the name, address, age, gender, and race or ethnicity of the person that is the subject of the search or seizure.  Law enforcement agencies must submit the reported information at the end of each month to the Department of Probation, Parole and Pardon Services for review of abuse. 

H. 3584 – Cigarette Tax

The cigarette tax legislation increases the state’s current seven-cents-per-pack cigarette tax, devoting the majority of the revenue generated by the increase to a newly-created Medicaid Reserve Fund and authorizing funding for cancer research, smoking prevention and cessation, and state agricultural assistance.  Effective July 1, 2010, the legislation imposes a tax totaling 57 cents per pack of cigarettes. The legislation provides for the distribution of the additional revenue generated by: crediting five million dollars annually to the Medical University of South Carolina Hollings Cancer Center to be used for tobacco‑related cancer research; devoting five million dollars annually to a newly-created trust fund that the Department of Health and Environmental Control is to use in administering a statewide smoking prevention and cessation program; and, depositing the remaining annual revenue in a newly-created South Carolina Medicaid Reserve Fund.  The Medicaid Reserve Fund may only be used for the restoration and maintenance of effort of the Medicaid program as it is currently structured.  The fund must not be used to expand any component of the existing Medicaid program.

In addition, the following pieces of reform legislation passed the House but died in the Senate:

Charter School Reform

Tort Reform

Establishing a Dept. of Administration

Establishing a Sunset Commission

Joint Election of Governor and Lt. Governor

Point of Sale Reform

Higher Education Efficiency Act

Voter ID

Spending Accountability Act

We spent from 9am Wednesday morning to 1am Thursday morning debating Gov. Sanford’s 107 vetoes of the state budget. A complete list of his vetoes can be found at http://www.scstatehouse.gov/sess118_2009-2010/appropriations2010/gmbvto10.pdf

 A complete voting record can be found in the House Journal at http://www.scstatehouse.gov/sess118_2009-2010/hj10/20100616.htm

The South Carolina Policy Council published an analysis of the veto vote at http://www.scpolicycouncil.com/research-and-publications-/fact-sheets/939-making-sense-of-the-governors-budget-vetoes

Since I voted to sustain the majority of the vetoes, I will only list below the 24 ones that I voted to override and an explanation for doing so.

 Veto 3 – Greenville Higher Education Center – $67,967

 This is the rent that the university center pays to Greenville Tech for the old McAlister Square.  If this amount is cut, then Greenville Tech students would end up paying higher fees. The House sustained the veto.

 Veto 19 – State Technical College System – Administration – $3,012,760

Veto 20 – State Technical College System – HR Services – $624,717

Veto 21 – State Technical College System – System Wide Programs – $367,724

 These amounts represent services that the state technical education board provides for each technical college. By eliminating these amounts, then Greenville Tech students would end up paying higher fees. The House overrode the vetoes.

 Veto 25 – Vocational Rehabilitation Programs – $58,479 

This small amount allows the state to draw down a much larger Federal grant to provide employment training to those with disabilities. The House overrode the veto.

 Veto 29 – Dept. of Archives and History – $635,445

 As a cultural conservative, I believe that we must protect and know about our past in order to see our future. The House overrode the veto.

 Veto 31 – Aid to County Libraries – $4,653,933

 The county libraries are a valuable resource for the unemployed especially in rural areas. The House overrode the veto.

 Veto 33 – State Museum – $1,643,893

 As a cultural conservative, I believe that we must protect and know about our past in order to see our future. The House overrode the veto.

 Veto 34 – Forestry Commission – $1,086,210

Included in these funds are monies that aid in the prevention and protection from forest fires. The House overrode the veto.

 Veto 35 – Dept. of Agriculture – $376,500

 These funds are used to test the accuracy of gas pumps. The House overrode the veto.

 Veto 36 – Dept. of Agriculture – $562,905

 These funds are used to market the “Grown in SC” effort to encourage South Carolinians to buy local. The House overrode this veto.

 Veto 37 – Clemson PSA – Public Services – $478,736

Veto 38 – Clemson PSA – Livestock/Poultry Inspection – $1,598,679

 Since agriculture remains our number one industry, I did not support cutting services available to farmers. The House overrode the veto.

 Veto 56 – Rural Hospital Funding Flexibility Provisions 39-45 – No Dollar Amount

Veto 57 – Rural Hospital Funding Flexibility Provisions 1-2 – No Dollar Amount

Veto 58 – Rural Hospital Funding Flexibility Provisions 14-15 – No Dollar Amount

 The flexibility provisions allow rural hospitals to redirect Federal funds to make up for cuts in various areas. The House overrode these vetoes.

 Veto 64 – Dept. of Tourism – Motion Picture Rebate – No Dollar Amount

 This provision allows localities to attract film producers by offering incentives. It is currently being used to attract the Disney produced Army Wives. The House voted to override the veto.

 Veto 65 – Urban Search and Rescue – No Dollar Amount

 This provision allows funds to be used from the Dept. of Labor to aid in search and rescue operations. The House overrode the veto.

 Veto 73 – Senate Budget for Reapportionment – $1,000,000

Veto 74 – House Budget for Reapportionment – $1,000,000

 After the Census, we are required by law to redraw all of the voting districts for both the House and the Senate. The House overrode Veto 73 and sustained Veto 74.

 Veto 78 – Dept. of Education – $900,000

 This is the funding to pay for school bus fuel. The House overrode the veto.

 Veto 79 – Governor’s School for the Arts – $500,000

Veto 80 – Governor’s School for Math/Science – $500,000

 These cuts would have shut down both schools. The House overrode both vetoes.

 Veto 87 – Statewide Accounting System – $1,000,000

Veto 88 – Statewide Accounting System – $1,158,284

 Several agencies have faced embezzlement problems over the past several years and the installation of a new accounting system is well underway. It seemed more cost effective to continue funding the project. The House sustained both vetoes.

We will be taking up the vetos next week. This release from the Governor explains it better than I could -

Columbia, S.C. – June 9, 2010 – Gov. Mark Sanford today announced his decision to veto 107 line-items and provisos in the legislative budget, including the entire section of the budget depending on Medicaid money that may or may not come from Washington D.C. The Governor’s vetoes were made after productive meetings with legislative leaders and a growing recognition that tough budget decisions must be made this year, and not pushed off until next year.

 “The fact remains that while this year may be difficult from a budget standpoint,” Gov. Sanford said, “next year will be cataclysmic. With the Obama Administration’s stimulus funds running dry next summer, South Carolina will be forced off a one billion dollar budget cliff at the very time the state and nation’s economy struggles to regain its footing.

 “Yet I believe that in this approaching financial crisis there lies opportunity. So while the current budget represents an indeed devastating reality for state agencies and those most served by government, there is also a unique opportunity to reorder our state’s budget priorities and restructure government, if we adhere to three basic principles.

 “First, stop spending money we don’t have. Last year’s so-called stimulus bill borrowed taxpayers’ money to fix a problem created by too much borrowing, and this year’s state budget perpetuated that mistake by spending $200 million in Medicaid dollars from Washington, D.C. that Congress has not even passed yet. We’re refusing to sign off on this $200 million today because it’s financially reckless to balance a budget based on merely the hope of Congressional action. We said as much in a letter to legislators three months ago: “this budget simply spends money that we don’t have… We believe a more fiscally prudent step would be to set aside [$200] million to help alleviate the pain caused by the loss of $1 billion in stimulus funds next year.”

 “I’d give real credit to many in the House and Senate who now agree that caution is the better part of valor with regard to the budget, and that our state absolutely needs this $200 million cushion going into next year. Setting aside this $200 million will effectively reduce next year’s budget shortfall from roughly $1 billion to a still challenging $800 million. And by making this fiscally sound decision that will ultimately benefit taxpayers, South Carolina will join Republican and Democratic states alike – including Delaware, Indiana, Louisiana, Nebraska, Virginia, West Virginia and Wyoming – who have not included this speculative Medicaid money from Washington D.C. in their budgets.

 “Second, not making the hard choices now makes them that much harder the next time around. The roughly $100 million in line-item and proviso vetoes this year represent exceedingly difficult choices, whether they are areas our administration has targeted in past Executive Budgets, or areas where legislative leaders have identified potential savings. But it must not be forgotten that this year’s decreases will be miniscule compared to forced cuts next year when the budget faces a billion dollar hole and whole state agencies may in fact have to be zeroed out.  

 “Finally, I’d recall Benjamin Franklin’s revolutionary warning that if we don’t hang together, we’re bound to hang separately. That is why I’d be remiss if I didn’t thank legislative leadership and commonsense members of the House and Senate for sitting down with me and my team over the past few weeks and coming to an understanding with regard to our administration’s ongoing concerns about the state’s budget. For too long the budget process in South Carolina has resembled a choose-your-own-adventure book with budget-writers deciding every time to spend every dime sent to Columbia by the state’s taxpayers. Today marks a welcome shift in that attitude, and I’d encourage legislators to both store up reserves for what will be a devastating budget next year and finally agree that state government cannot grow faster than the underlying economy.”

 Governor Sanford has vetoed 107 line-items and budget provisos totaling just over $100 million dollars, as well as ‘Part Four’ of the budget in its entirety, totaling another $214 million. The General Assembly will take up these vetoes – which, along with the Governor’s budget veto letter, are online at scgovernor.com – when it convenes next week.