Indicates Matter Stricken
Indicates New Matter

The Senate assembled at 11:00 A.M., the hour to which it stood adjourned and was called to order by the PRESIDENT.

A quorum being present the proceedings were opened with a devotion by the Chaplain as follows:

Beloved, hear the words of the Psalmist in Psalm 105 (v.8):
"He hath remembered His Covenant forever,
The word which He commanded
To a thousand generations... "
Let us pray.

O God, our Help in ages past, our Hope for years to come, as Memorial Days come, we make a special pause to reflect and give thanks for the lives of those who have lived and served in days gone by.

For the enduring hopes for a new and better world bought by the sacrifices of those who have lived nobly, died bravely, and kept the faith, we give Thee thanks.

We pray for the consolations of the Spirit upon the families who remember and see on television the misery and the multitude of white crosses on foreign lands.

Have mercy, and through Your servants support those who live in Veteran's hospitals throughout our land, weakened in body, mind and spirit by the ravages of war.

Bless the peacemakers and folk of goodwill everywhere as we continue to pray for the coming of Thy Kingdom... in the Name of the Prince of Peace.

Amen.

Senator GIESE made the point that a quorum was not present. It was ascertained that a quorum was not present.

Senator GIESE moved that a call of the Senate be made. The following Senators answered the call:
Bryan Cork Courson
Courtney Drummond Elliott
Ford Giese Glover
Gregory Hayes Holland
Jackson Land Lander
Leatherman Leventis Macaulay
Martin Matthews McConnell
McGill Mescher Mitchell
Moore O'Dell Passailaigue
Patterson Peeler Rankin
Reese Richter Rose
Russell Ryberg Saleeby
Setzler Short Smith, G.
Smith, J.V. Stilwell Thomas
Waldrep Washington Williams
Wilson

The Senate resumed.

The PRESIDENT called for Petitions, Memorials, Presentments of Grand Juries and such like papers.

February 10, 1994
Mr. President and Members of the Senate:

I am transmitting herewith an appointment for confirmation. This appointment is made with the "advice and consent of the Senate," and is, therefore, submitted for your consideration.

Respectfully,
Carroll A. Campbell, Jr.

Reappointment, Member, Interagency Council on Hunger and Nutrition, with term to commence April 1, 1993, and to expire April 1, 1997:

6th Congressional District:

Ms. Pamela M. Dorman, 2110 Walden's Pond Court, Florence, S.C. 29505

Referred to the General Committee.

May 19, 1994
Mr. President and Members of the Senate:

I am transmitting herewith an appointment for confirmation. This appointment is made with the "advice and consent of the Senate," and is, therefore, submitted for your consideration.

Respectfully,
Carroll A. Campbell, Jr.

Initial Appointment, Member, South Carolina Commission for the Blind, with term to commence May 19, 1994, and to expire May 19, 1998:

1st Congressional District:

William J. Fogle, III, M.D., 48 Courtnay Drive, Charleston, S.C. 29403 VICE Clay W. Evatt, Jr.

Referred to the General Committee.

May 20, 1994
Mr. President and Members of the Senate:

I am transmitting herewith an appointment for confirmation. This appointment is made with the "advice and consent of the Senate," and is, therefore, submitted for your consideration.

Respectfully,
Carroll A. Campbell, Jr.

Initial Appointment, Member, South Carolina Foster Care Review Board, with term to commence June 30, 1992, and to expire June 30, 1996:

3rd Congressional District:

Mrs. Elizabeth B. Weaver, 200 Perry Hill Road, Easley, S.C. 29640 VICE Lucy W. Wilkerson (resigned)

Referred to the General Committee.

May 26, 1994
Mr. President and Members of the Senate:

I am transmitting herewith an appointment for confirmation. This appointment is made with the "advice and consent of the Senate," and is, therefore, submitted for your consideration.

Respectfully,
Carroll A. Campbell, Jr.

Initial Appointment, Member, State Commission on Higher Education, with term to commence July 26, 1994, and to expire July 26, 1998:

At-Large:

Mr. William H. Stern, 2134 Bermuda Hills Road, Columbia, S.C. 29223 VICE Marvin C. Jones

Referred to the Committee on Education.

The following was received and referred to the appropriate committee for consideration:

Document No. 1772
Promulgated by Department of Transportation
Disqualification and Suspension of SCDOT Contractors
Received by Lt. Governor May 31, 1994
Referred to Senate Committee on Transportation
120 day review expiration date May 7, 1995

Columbia, S.C., May 31, 1994

Mr. President and Senators:

The House respectfully informs your Honorable Body that it insists upon the amendments proposed by the House to:
S. 506 -- Senators Rose and Leventis: A BILL TO REPEAL SECTION 22-5-120, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ARREST FOR CRIMES COMMITTED IN MAGISTRATE'S PRESENCE.
asks for a Committee of Conference, and has appointed Reps. Delleney, Jennings and A. Young of the committee on the part of the House.

Very respectfully,
Speaker of the House

Whereupon, the PRESIDENT appointed Senators ROSE, JACKSON and RICHTER of the Committee of Conference on the part of the Senate and a message was sent to the House accordingly.

Columbia, S.C., May 31, 1994

Mr. President and Senators:

The House respectfully informs your Honorable Body that it insists upon the amendments proposed by the House to:
S. 861 -- Senator Greg Smith: A BILL TO AMEND SECTION 38-75-310(5), CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO WINDSTORM AND HAIL INSURANCE, SO AS TO INCLUDE THE MURRELLS INLET PORTION OF GEORGETOWN COUNTY IN THE DEFINITION OF COASTAL AREA.
asks for a Committee of Conference, and has appointed Reps. Richardson, Thomas and Keegan of the committee on the part of the House.

Very respectfully,
Speaker of the House

Whereupon, the PRESIDENT appointed Senators SALEEBY, GREG SMITH and COURTNEY of the Committee of Conference on the part of the Senate and a message was sent to the House accordingly.

Senator WALDREP introduced Dr. James R. Buehler of Anderson, S.C., Doctor of the Day.

H. 4475 -- Reps. Snow and Law: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 57-5-135 SO AS TO PROVIDE THAT THE DEPARTMENT OF TRANSPORTATION MUST NOTIFY IN WRITING EACH MEMBER OF THE GENERAL ASSEMBLY IN WHOSE HOUSE OR SENATORIAL DISTRICT A HIGHWAY PROJECT IS OR IS TO BE LOCATED WHEN A PUBLIC HEARING OR PUBLIC MEETING CONCERNING THE PROJECT IS TO BE CONDUCTED AT LEAST TEN DAYS PRIOR TO THE HEARING OR MEETING.

Senator LAND asked unanimous consent to make a motion to recall the Bill from the Committee on Transportation.

There was no objection.

The Senate proceeded to a consideration of the Bill. The question being the second reading of the Bill.

The Bill was read the second time and ordered placed on the third reading Calendar.

On motion of Senator LAND, H. 4475 was ordered to receive a third reading on Wednesday, June 1, 1994.

The following were introduced:

S. 1442 -- Senator Rose: A BILL TO AMEND SECTION 56-3-251 OF THE 1976 CODE, RELATING TO THE ISSUANCE OF BIENNIAL LICENSE PLATES AND REVALIDATION DECALS UPON PAYMENT OF PERSONAL PROPERTY TAXES, SO AS TO CHANGE THE REFERENCES TO DEPARTMENT TO CONFORM TO THE RESTRUCTURING ACT AND PROVIDE FOR APPROPRIATIONS TO FUND THE ELECTRONIC NOTIFICATION REQUIREMENTS OF THE SECTION.

Read the first time and referred to the Committee on Transportation.

H. 5251 -- Rep. Boan: A CONCURRENT RESOLUTION EXPRESSING THE CONGRATULATIONS AND BEST WISHES OF THE MEMBERS OF THE GENERAL ASSEMBLY TO MR. STACY SEEGARS, ONE OF THE MOST OUTSTANDING OFFENSIVE LINEMEN IN CLEMSON FOOTBALL HISTORY.

On immediate consideration, the Concurrent Resolution was adopted, ordered returned to the House.

H. 5252 -- Rep. R. Young: A CONCURRENT RESOLUTION TO CONGRATULATE BETTY JOAN REVELISE VARNER ON THE OCCASION OF HER RETIREMENT FROM THE CHARLESTON COUNTY SCHOOL DISTRICT.

On immediate consideration, the Concurrent Resolution was adopted, ordered returned to the House.

H. 5253 -- Rep. R. Young: A CONCURRENT RESOLUTION TO CONGRATULATE LOIS RIVERS WYLOT ON THE OCCASION OF HER RETIREMENT FROM THE CHARLESTON COUNTY SCHOOL DISTRICT.

On immediate consideration, the Concurrent Resolution was adopted, ordered returned to the House.

H. 5254 -- Rep. Walker: A CONCURRENT RESOLUTION CONGRATULATING THE LANDRUM HIGH SCHOOL LADY CARDINALS OF SPARTANBURG COUNTY ON WINNING THE CLASS A SOFTBALL STATE CHAMPIONSHIP FOR 1994.

On immediate consideration, the Concurrent Resolution was adopted, ordered returned to the House.

H. 4010 -- Rep. Shissias: A BILL TO AMEND SECTION 20-7-1315, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO INCOME WITHHOLDING FOR THE ENFORCEMENT OF CHILD SUPPORT, SO AS TO REVISE THE DEFINITION OF "ORDER FOR SUPPORT"; TO REVISE THE THRESHOLD FOR INITIATING INCOME WITHHOLDING; AND TO REVISE OTHER PROCEDURAL AND NOTICE REQUIREMENTS FOR INCOME WITHHOLDING, INCLUDING THE REQUIREMENT THAT EMPLOYERS AND PARENTS PAYING CHILD SUPPORT MUST NOTIFY THE CLERK OF COURT IF HEALTH INSURANCE IS AVAILABLE FOR CHILDREN ON WHOSE BEHALF THE CHILD SUPPORT IS PAID.

Read the first time and referred to the General Committee.

H. 5193 -- Labor, Commerce and Industry Committee: A JOINT RESOLUTION TO APPROVE REGULATIONS OF THE REAL ESTATE COMMISSION, DEPARTMENT OF LABOR, LICENSING AND REGULATION, RELATING TO PROVIDERS OF CONTINUING EDUCATION COURSES, DESIGNATED AS REGULATION DOCUMENT NUMBER 1759, PURSUANT TO THE PROVISIONS OF ARTICLE 1, CHAPTER 23, TITLE 1 OF THE 1976 CODE.

Read the first time and on motion of Senator McCONNELL, with unanimous consent, ordered placed on the Calendar without reference.

H. 5210 -- Reps. Lanford, Walker, Littlejohn, Davenport, Vaughn, D. Wilder and Beatty: A BILL TO DEVOLVE THE POWERS AND DUTIES OF THE COUNTY BOARD OF EDUCATION OF SPARTANBURG COUNTY UPON THE SEVEN BOARDS OF TRUSTEES OF THE LOCAL SCHOOL DISTRICTS OF THAT COUNTY, AND TO ABOLISH THE COUNTY BOARD; TO ESTABLISH THE SPARTANBURG COUNTY EDUCATION OVERSIGHT COMMITTEE, PROVIDE FOR ITS COMPOSITION AND CHAIRMAN, AND PROVIDE FOR ITS POWERS, FUNCTIONS, AND DUTIES; TO PROVIDE THAT EACH OF THE SEVEN BOARDS OF TRUSTEES OF SPARTANBURG COUNTY SHALL HAVE TOTAL FISCAL AUTONOMY AND THAT FUNDING DERIVED FROM MINIMUM FOUNDATION MONIES MUST BE DISTRIBUTED ANNUALLY TO EACH OF THE SEVEN SCHOOL DISTRICTS OF THE COUNTY BY THE COUNTY TREASURER'S OFFICE IN ACCORDANCE WITH THE FORMULA GUIDELINES AS DIRECTED BY THE OVERSIGHT COMMITTEE; AND TO REQUIRE THAT ALL ASSETS OF THE COUNTY BOARD OF EDUCATION OF SPARTANBURG COUNTY BE SOLD AND THE PROCEEDS FROM THE SALE DISTRIBUTED EQUALLY BASED ON AVERAGE DAILY ATTENDANCE IN EACH OF THE SEVEN SCHOOL DISTRICTS IN THE COUNTY.

Read the first time and ordered placed on the local and uncontested Calendar without reference.

H. 5218 -- Rep. McAbee: A BILL TO DIRECT THE DEPARTMENT OF TRANSPORTATION TO REMOVE FROM THE STATE HIGHWAY SYSTEM S33-266 IN McCORMICK COUNTY.

Read the first time and referred to the Committee on Transportation.

Senator COURSON from the Committee on Invitations polled out H. 5221 favorable with amendment:

H. 5221 -- Rep. Wells: A CONCURRENT RESOLUTION TO AUTHORIZE THE SOUTH CAROLINA STUDENT LEGISLATURE TO USE THE COMMITTEE AND CONFERENCE ROOMS OF THE GRESSETTE AND BLATT BUILDINGS ON OCTOBER 19 - 22, 1994, FOR ITS ANNUAL MEETING.

Courson Peeler Wilson
Matthews Thomas Patterson
Stilwell Passailaigue

Russell O'Dell

Ordered for consideration tomorrow.

S. 665 -- Senator Leventis: A BILL TO AMEND SECTION 35-1-440, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO APPLICATIONS FOR REGISTRATION OF A SECURITIES BROKER-DEALER, AGENT, INVESTMENT ADVISOR, OR INVESTMENT ADVISOR REPRESENTATIVE, SO AS TO REQUIRE A SOUTH CAROLINA LAW ENFORCEMENT DIVISION CRIMINAL RECORD HISTORY TO BE OBTAINED FOR EACH INITIAL APPLICANT AND ALL CONVICTIONS RECORDED WITHIN SEVEN YEARS OF THE DATE OF THE APPLICATION TO BE NOTED ON THE REGISTRATION, TO REQUIRE A SEARCH OF BANKRUPTCY RECORDS FOR INITIAL APPLICANTS AND ANY ADJUDICATION OF PERSONAL BANKRUPTCY TO BE NOTED ON THE REGISTRATION, AND TO IMPOSE AN ADDITIONAL INITIAL REGISTRATION FEE IN AN AMOUNT SUFFICIENT TO COVER THE COST OF THESE ADDITIONAL REQUIREMENTS.

The House returned the Bill with amendments.

On motion of Senator WILLIAMS, the Senate concurred in the House amendments and a message was sent to the House accordingly. Ordered that the title be changed to that of an Act and the Act enrolled for Ratification.

S. 492 -- Senators Wilson, Thomas and Ryberg: A BILL TO AMEND SECTION 17-5-110, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE AUTHORITY OF A CORONER TO CARRY A PISTOL OR OTHER HANDGUN WHILE ENGAGED IN HIS OFFICIAL DUTIES, SO AS TO EXTEND THE AUTHORITY TO DEPUTY CORONERS.

The House returned the Bill with amendments.

On motion of Senator WILSON, the Senate nonconcurred in the House amendments and a message was sent to the House accordingly.

S. 506 -- Senators Rose and Leventis: A BILL TO REPEAL SECTION 22-5-120, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ARREST FOR CRIMES COMMITTED IN MAGISTRATE'S PRESENCE.

The House returned the Bill with amendments.

On motion of Senator ROSE, the Senate nonconcurred in the House amendments and a message was sent to the House accordingly.

S. 1040 -- Senator Bryan: A BILL TO AMEND SECTION 2-15-10 OF THE CODE OF LAWS OF SOUTH CAROLINA, 1976, SO AS TO INCREASE THE NUMBER OF PUBLIC MEMBERS OF THE LEGISLATIVE AUDIT COUNCIL FROM THREE TO FIVE AND TO PROVIDE THAT ONE MUST BE A LICENSED ATTORNEY.

The House returned the Bill with amendments.

On motion of Senator PASSAILAIGUE, the Senate nonconcurred in the House amendments and a message was sent to the House accordingly.

S. 1429 -- Senator Drummond: A CONCURRENT RESOLUTION TO COMMEMORATE THE NAMING BY THE SOUTH CAROLINA FORESTRY COMMISSION OF AN AREA DEDICATED TO RECREATION AND SPORTING DOG FIELD TRIAL EVENTS, TO BE LOCATED ON SAND HILLS STATE FOREST IN CHESTERFIELD COUNTY, FOR THE HONORABLE DR. H. COOPER BLACK, JR.

Returned with concurrence.

Received as information.

S. 699 -- Senator Land: A BILL TO AMEND SECTION 12-7-1220, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE TARGETED JOBS TAX CREDIT, SO AS TO PROVIDE TERMS AND CONDITIONS UNDER WHICH THE CREDITS MAY BE USED BY A SUCCESSOR CORPORATION FOLLOWING A MERGER, CONSOLIDATION, OR REORGANIZATION WHERE TAX ATTRIBUTES SURVIVE; AND TO AMEND THE 1976 CODE BY ADDING SECTION 12-7-1645 SO AS TO AUTHORIZE THE FILING OF A CONSOLIDATED CORPORATE INCOME TAX RETURN AND TO PROVIDE THE TERMS AND CONDITIONS UNDER WHICH SUCH RETURNS MAY BE FILED.

The House returned the Bill with amendments.

Senator PASSAILAIGUE proposed the following amendment (699R003.ELP), which was adopted:

Amend the bill, as and if amended, page 4, by striking lines 15 through 17 and inserting the following:

/SECTION 3. Section 12-7-430 of the 1976 Code is amended by adding:

"(i) Notwithstanding Section 12 of Act 101 of 1985, Internal Revenue Code Section 7518 applies retroactively to taxable years beginning after 1986 and applies to any taxpayer."

SECTION 4. Upon approval of the Governor, SECTIONS 1 and 2 of this act are effective for tax years beginning after 1993. SECTION 3 of this act takes effect upon approval of the Governor./

Amend title to conform.

Senator PASSAILAIGUE explained the amendment.

There being no further amendments, the Bill was amended and ordered returned to the House with amendments.

THE SENATE PROCEEDED TO A CALL OF THE UNCONTESTED LOCAL AND STATEWIDE CALENDAR, AND THERE BEING NO BILLS ON THE UNCONTESTED CALENDAR, THE SENATE PROCEEDED TO THE INTERRUPTED DEBATE.

At 11:30 A.M., Senator MARTIN assumed the Chair.

H. 4566 -- Reps. Jennings, Askins, Baxley, Fulmer, P. Harris, Harrison, Hines, McAbee, Shissias, Snow, Spearman, Tucker, J. Wilder, Harwell, G. Brown, Neilson, Kinon, Beatty, Cobb-Hunter, Richardson, Keyserling, H. Brown, A. Young, Waldrop, Huff, T.C. Alexander, Stuart, Sturkie, R. Smith, Chamblee, Moody-Lawrence, Corning, Harrell, Thomas, Inabinett, Wilkins and Boan: A BILL TO AMEND CHAPTER 24 OF TITLE 34, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE SOUTH CAROLINA BANK HOLDING COMPANY ACT, SO AS TO REVISE AND FURTHER PROVIDE FOR DEFINITIONS AND REGULATORY PROVISIONS AND PROCEDURES IN ORDER TO PERMIT AFTER A SPECIFIED DATE AN OUT-OF-STATE BANK HOLDING COMPANY TO OPERATE AND MAKE ACQUISITIONS IN THIS STATE IN THE SAME MANNER THAT A SOUTHERN REGION BANK HOLDING COMPANY IS PERMITTED TO OPERATE AND MAKE ACQUISITIONS.

The Senate proceeded to a consideration of the Bill. The question being the third reading of the Bill.

Senator MACAULAY argued contra to the third reading of the Bill.

Senator WILLIAMS asked unanimous consent, with Senator MACAULAY retaining the floor, to make a motion that the Senate go into Executive Session.

There was no objection.

At 11:45 A.M., on motion of Senator WILLIAMS, the Senate agreed to go into Executive Session.

On motion of Senator WILLIAMS, the seal of secrecy was removed and the Senate resumed.

Senator LEATHERMAN rose to a Point of Personal Interest.

Senator MACAULAY resumed arguing contra to the third reading of H. 4566.

At 1:15 P.M., Senator WILLIAMS moved under Rule 15A to set a time certain of 1:40 P.M. today to vote on the entire matter of H. 4566.

The "ayes" and "nays" were demanded and taken, resulting as follows:

Bryan Courson Courtney
Giese Glover Hayes
Holland Jackson Lander
Leatherman Martin Matthews
McGill Mescher Moore
O'Dell Patterson Peeler
Rankin Reese Rose
Russell Ryberg Saleeby
Setzler Short Smith, G.
Smith, J.V. Stilwell Waldrep
Washington Williams Wilson

Cork Elliott Ford
Land Leventis Macaulay
McConnell Mitchell Passailaigue
Richter

The PRESIDENT announced in accordance with Rule 15A that the requisite number of votes had been given and the motion to set 1:40 P.M. today as a time certain to vote on the entire matter of H. 4566 was adopted.

Senator MACAULAY continued arguing contra to the third reading of the Bill.

At 1:30 P.M., Senator SETZLER assumed the Chair.

Senators FORD and GLOVER proposed the following Amendment No. 1 (GJK\20780SD.94), which was adopted:

Amend the bill, as and if amended, in Section 34-24-50 of the 1976 Code, as contained in SECTION 1, by adding at the end of subsection (a) the following: /The board in considering an application shall receive and must consider community input through public hearings to be heard concurrently with the hearings held by the Federal Reserve Board./

Renumber sections to conform.

Amend totals and title to conform.

Senator MITCHELL moved that the amendment be adopted.

The amendment was adopted.

At 1:35 P.M., the PRESIDENT assumed the Chair.

Senator RICHTER proposed the following Amendment No. 3 (4566R006.LER), which was tabled:

Amend the bill, as and if amended, page 3, by striking line 43, and page 4, by striking line 1 and inserting the following:

/and South Carolina bank subsidiaries that exceed eighty seventy-five percent of the total deposits of all bank subsidiaries of the bank/

Amend title to conform.

Senator RICHTER explained the amendment.

Senator RICHTER moved that the amendment be adopted.

Senator PASSAILAIGUE moved to lay the amendment on the table.

The amendment was laid on the table.

Senator MACAULAY proposed the following Amendment No. 4 (4566R007.ASM), which was tabled:

Amend the bill, as and if amended, page 3, by striking line 43, and page 4, by striking line 1 and inserting the following:

/and South Carolina bank subsidiaries that exceed eighty percent of the total deposits of all bank subsidiaries of the bank/

Amend title to conform.

Senator MACAULAY explained the amendment.

Senator PASSAILAIGUE moved to lay the amendment on the table.

The amendment was laid on the table.

There being no further amendments, the Bill was read the third time, passed and ordered returned to the House of Representatives with amendments.

Senators McCONNELL and RICHTER desired to be recorded as voting against the third reading of the Bill.

H. 5027 -- Reps. Breeland, Waldrop, Holt, Hallman, Inabinett, Fulmer, Jaskwhich, J. Bailey, Spearman, Govan, McMahand, Scott, Whipper, White, Kennedy, Law, Anderson, Williams, G. Bailey, Hines, Phillips, Harrell, Byrd, Keyserling, J. Brown and Canty: A BILL TO AMEND SECTION 59-30-10, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE STATE BASIC SKILLS ASSESSMENT PROGRAM, SO AS TO FURTHER PROVIDE FOR CERTAIN OPTIONS WHICH MUST BE OFFERED TO A STUDENT WHO HAS EXITED THE SCHOOL SYSTEM AT THE END OF THE TWELFTH GRADE WITHOUT HAVING PASSED THE EXIT EXAM, INCLUDING A REQUIREMENT THAT A SUMMER TESTING OF THE EXIT EXAM FOLLOWING A SUMMER REMEDIATION PROGRAM MUST BE OFFERED TO THESE STUDENTS.

Senator ROSE asked unanimous consent to make a motion to take the Bill up for immediate consideration.

There was no objection.

The Senate proceeded to a consideration of the Bill. The question being the third reading of the Bill.

Senator ROSE proposed the following Amendment No. 1 (5027R001.MTR), which was tabled:

Amend the bill, as and if amended, by adding appropriately numbered SECTIONS to read:

/SECTION . The following sections in this act may be cited as the "Textbook Excellence Act".

SECTION . Section 59-31-40 of the 1976 Code is amended to read:

"Section 59-31-40. The meetings of the State Board of Education in any year at which an adoption is made shall must be public. New textbooks adopted by the State Board of Education in any year shall must not be used in the free public schools of this State until the next school session begins. The State Board of Education may not approve for adoption a textbook or other instructional material which contains any clear substantive error."

SECTION . Section 59-31-510 of the 1976 Code is amended to read:

"Section 59-31-510. The State Board of Education may negotiate and execute contracts with the publishers of schoolbooks whereby publishers and vendors of school textbooks that allow the State will to rent from the publishers or buy outright the books to be used in the public schools, with discretion in the State Board of Education to make rental contracts or purchase contracts as it may be to the best advantage of the State. Any A contract made with a publisher of textbooks may be made so as to divide the payment to the publisher for rental or purchase over a period of three years, but nothing herein shall it must not be construed to prevent the State Board of Education from purchasing or renting additional books as the necessity shall or may arise necessary. If the State Board of Education should decide decides to purchase outright the books to be used in the schools of this State, they shall must be purchased at the lowest possible prices and, so far as existing contracts for State-adopted state-adopted books will permit, pursuant to competitive bidding.

Each contract between the State Board of Education and a publisher or vendor of any school textbook or other instructional material must require that all textbooks or other instructional material rented or purchased by the State be free of any clear, substantive factual or grammatical error and that the State Board of Education will require reasonable remedies if an error is found."

SECTION . Section 59-31-600 of the 1976 Code is amended to read:

"Section 59-31-600. When the State Board of Education determines that a textbook or instructional material adoptions are adoption is needed in a specific field, the board shall direct evaluating and rating committees to assess the textbooks textbook or instructional material for the presentation of instructional materials which develop development of higher-order thinking skills and problem solving. Each evaluation and rating committee must have at least one layperson and the Board is encouraged to have as many laypeople on the committee as is appropriate. A majority of the membership of the committee must have expertise in the areas under consideration. In addition to monitoring the accuracy of facts and grammar, the committee shall include in its rating and evaluating criteria, where applicable, satisfaction of state mandates for graduation criteria, and support for the benefits of the American economic and political system. The results of each evaluating and rating committee's assessment must be included in its written report to the State Board of Education. Where otherwise satisfactory, the evaluating and rating committee shall recommend and the State Board of Education shall adopt textbooks and other instructional materials which develop higher-order thinking skills."

SECTION . Chapter 31, Title 59 of the 1976 Code is amended by adding:

"Section 59-31-700. Before final adoption, the state board shall make all textbook and instructional material available for public inspection for not less than thirty days at display centers geographically dispersed throughout the State as designated by the State Superintendent of Education.

The state board shall hold a public hearing before adopting any textbook or instructional material for use in the schools of this State."/

Amend title to conform.

Senator ROSE explained the amendment.

Senator PATTERSON raised the Point of Order that the amendment was out of order inasmuch as it was not germane to the Bill.

Senator ROSE spoke on the Point of Order.

The PRESIDENT overruled the Point of Order.

Senator ROSE moved that the amendment be adopted.

Senator PATTERSON moved to lay the amendment on the table.

The amendment was laid on the table.

Senator ROSE objected to further consideration of the Bill.

S. 492 -- Senators Wilson, Thomas and Ryberg: A BILL TO AMEND SECTION 17-5-110, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE AUTHORITY OF A CORONER TO CARRY A PISTOL OR OTHER HANDGUN WHILE ENGAGED IN HIS OFFICIAL DUTIES, SO AS TO EXTEND THE AUTHORITY TO DEPUTY CORONERS.

Having voted on the prevailing side, Senator LAND asked unanimous consent to make a motion to reconsider the vote whereby the Senate nonconcurred in the House amendments.

The motion to reconsider was adopted.

On motion of Senator LAND, the Senate concurred in the House amendments and a message was sent to the House accordingly, ordered that the title be changed to that of an Act, and the Act enrolled for Ratification.

THE SENATE PROCEEDED TO THE MOTION PERIOD.

H. 5027 -- Reps. Breeland, Waldrop, Holt, Hallman, Inabinett, Fulmer, Jaskwhich, J. Bailey, Spearman, Govan, McMahand, Scott, Whipper, White, Kennedy, Law, Anderson, Williams, G. Bailey, Hines, Phillips, Harrell, Byrd, Keyserling, J. Brown and Canty: A BILL TO AMEND SECTION 59-30-10, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE STATE BASIC SKILLS ASSESSMENT PROGRAM, SO AS TO FURTHER PROVIDE FOR CERTAIN OPTIONS WHICH MUST BE OFFERED TO A STUDENT WHO HAS EXITED THE SCHOOL SYSTEM AT THE END OF THE TWELFTH GRADE WITHOUT HAVING PASSED THE EXIT EXAM, INCLUDING A REQUIREMENT THAT A SUMMER TESTING OF THE EXIT EXAM FOLLOWING A SUMMER REMEDIATION PROGRAM MUST BE OFFERED TO THESE STUDENTS.

Senator PATTERSON moved that the Bill be made a Special Order.

Senator ROSE raised a Point of Order under Rule 34B that the motion was out of order inasmuch as the Bill had not been on the Calendar for a minimum of six statewide legislative days.

The PRESIDENT sustained the Point of Order.

On motion of Senator BRYAN, the Senate agreed to dispense with the Motion Period.

H. 3742 -- Reps. McLeod, Baxley, Simrill, Scott, Rudnick, Holt, J. Brown, Moody-Lawrence, Byrd, Shissias, Davenport, Cooper, Littlejohn, Stille, Cato, Vaughn, D. Wilder and J. Bailey: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 40-59-85 SO AS TO REQUIRE THE SOUTH CAROLINA RESIDENTIAL BUILDERS COMMISSION TO ASCERTAIN WHETHER OR NOT THE PAST PERFORMANCE RECORD OF ANY APPLICANT FOR LICENSING AS A RESIDENTIAL BUILDER OR FOR REGISTRATION OR CERTIFICATION AS A RESIDENTIAL SPECIALTY CONTRACTOR IS GOOD AND TO ASCERTAIN CERTAIN OTHER INFORMATION ABOUT SUCH APPLICANT, AND PROVIDE THAT THE APPLICATION AND RENEWAL FORMS FOR ALL LICENSES, CERTIFICATIONS, AND REGISTRATIONS ISSUED BY THE COMMISSION SHALL REQUIRE THE APPLICANT TO LIST ANY OUTSTANDING JUDGMENTS AGAINST HIM.

On motion of Senator LEATHERMAN, with unanimous consent, the Report of the Committee of Conference was taken up for immediate consideration.

Senator LEATHERMAN spoke on the report.

On motion of Senator LEATHERMAN, with unanimous consent, Free Conference Powers were granted.

Whereupon, the PRESIDENT appointed Senators McCONNELL, LEATHERMAN and FORD to the Committee of Free Conference on the part of the Senate and a message was sent to the House accordingly.

On motion of Senator LEATHERMAN, the Report of the Committee of Free Conference to H. 3742 was adopted as follows:

The COMMITTEE OF FREE CONFERENCE, to whom was referred:
H. 3742 -- Reps. McLeod, Baxley, Simrill, Scott, Rudnick, Holt, J. Brown, Moody-Lawrence, Byrd, Shissias, Davenport, Cooper, Littlejohn, Stille, Cato, Vaughn, D. Wilder and J. Bailey: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 40-59-85 SO AS TO REQUIRE THE SOUTH CAROLINA RESIDENTIAL BUILDERS COMMISSION TO ASCERTAIN WHETHER OR NOT THE PAST PERFORMANCE RECORD OF ANY APPLICANT FOR LICENSING AS A RESIDENTIAL BUILDER OR FOR REGISTRATION OR CERTIFICATION AS A RESIDENTIAL SPECIALTY CONTRACTOR IS GOOD AND TO ASCERTAIN CERTAIN OTHER INFORMATION ABOUT SUCH APPLICANT, AND PROVIDE THAT THE APPLICATION AND RENEWAL FORMS FOR ALL LICENSES, CERTIFICATIONS, AND REGISTRATIONS ISSUED BY THE COMMISSION SHALL REQUIRE THE APPLICANT TO LIST ANY OUTSTANDING JUDGMENTS AGAINST HIM.
Beg leave to report that they have duly and carefully considered the same and recommend:

That the same do pass with the following amendments:

Amend the bill, as and if amended, by striking all after the enacting words and inserting:

/SECTION 1. The 1976 Code is amended by adding:

"Section 40-59-85. (A) Any person making an initial application to the commission for licensure as a residential builder or registration as a residential specialty contractor shall first submit to a credit report. In addition to the information provided by the credit report, the commission may determine from the written application, the personal references provided by the applicant, written communications or complaints to the commission, and from any other reliable, documented sources whether an applicant for licensure as a residential builder or an applicant for registration as a residential specialty contractor has a reputation for the prompt payment of his labor or material bills and for the timely completion of other contracts into which the applicant may have entered.

(B) The application and renewal forms for all licenses and registrations issued by the commission shall require the applicant to list any outstanding judgments issued against him for the past five years.

(C) The term `misconduct' as used in Section 40-59-90 includes a pattern of repeated failure by a residential builder or residential specialty contractor to pay his labor or material bills."

SECTION 2. Sections 40-59-10 through 40-59-160 of the 1976 Code are designated as Article 1 of Chapter 59, Title 40, and entitled "Residential Home Builders Generally".

SECTION 3. Chapter 59 of Title 40 of the 1976 Code is amended by adding:

Section 40-59-200. When used in this article:

(1) `Administrator' means the executive director for the South Carolina Residential Builders Commission provided for under Section 40-59-50.

(2) `Commission' means the South Carolina Residential Builders Commission.

(3) `Director' means the Director of the Department of Labor, Licensing, and Regulation.

(4) `Home Inspection' means the rendering of a written or oral report in exchange for compensation of any sort, regarding the condition of the construction or improvements to a residence, including, but not limited to, structural problems or conditions, damage, safety problems or deterioration, equipment, and systems that are visible and readily accessible. Home inspection does not include a contract or proposal for repair, renovation, or remodeling of the improvements to a residence. The parties to a home inspection may limit or expand the scope of the inspection by agreement.

(5) `Home inspector' means a natural person who, for compensation of any sort, engages in the business of home inspection.

(6) `Residence' means a structure, including, but not limited to, condominiums and town houses, intended to be used or in fact used primarily for living quarters which is not over three floors in height and which does not have more than sixteen units.

Section 40-59-210. The administrator is authorized to administer the provisions of this article. The administrator shall keep a register of all applicants for a license, including the date of application, the name, qualifications, place of business, and place of residence of the applicant, and the status of the license application. The administrator also shall maintain a roster listing the name, place of business, residence, and business telephone number of each licensed home inspector. A copy of the roster must be available to anyone upon a written request to the commission. The commission may charge a reasonable fee for complying with a request for a roster. The amount of the fee must be established by regulation of the commission.

Section 40-59-220. (A) No person may engage in or transact any home inspection business, or hold himself out to the public as a home inspector, or offer to engage in or transact any home inspection business in this State unless the person is licensed by the commission.

(B) A person already engaged in the business of performing home inspections on the date this article becomes effective is allowed ninety days from such effective date to comply with the provisions of this article for the purpose of qualifying to perform home inspections.

(C) No license shall be issued under the provisions of this article to a partnership, association, corporation, firm, or group. However, nothing in this article precludes a licensed home inspector from performing home inspections for or on behalf of a partnership, association, corporation, firm, or group or from entering into contracts or enforcing contracts as a partnership, association, corporation, firm, or group.

Section 40-59-230. The provisions of this article do not apply to:

(A) a person employed by the State of South Carolina or any political subdivision of the State as a code enforcement official when acting within the scope of that employment;

(B) a person inspecting a home exclusively for the use of a bank, savings and loan association, or credit union, unless otherwise required by federal law or regulation;

(C) a person duly licensed, registered, or certified pursuant to Chapter 3 of this title or a person duly licensed as a general contractor pursuant to Chapter 11 of this title or a person duly licensed pursuant to Article 1 of Chapter 59 of this title or a person duly licensed or registered as a professional engineer pursuant to Chapter 22 of this title. Notwithstanding the exemption from licensure under this article, the provisions of this article relating to the conduct of the person in the performance of a home inspection shall apply to such person. Any violation of this article is considered a violation against the person's license and subjects the person to disciplinary action by the licensing board under which the person is duly licensed.

Section 40-59-240. (A) A person desiring to be licensed as a home inspector shall make a written application to the commission on forms as the commission prescribes. Upon the submission of a completed application form and the payment of the fee required by the commission, the applicant is entitled to take the home inspector licensing examination as prescribed by the commission. Upon successful completion of the examination, the commission shall issue the applicant a license authorizing the applicant to engage in the business of home inspection in this State. The issuance of a license is evidence that the person named therein is entitled to all the rights and privileges of a licensed home inspector while the license remains active.

(B) The commission shall promulgate regulations to establish the minimum qualifications and uniform criteria for the granting of a home inspector license.

Section 40-59-250. (A) The licensee shall display the license in the manner prescribed by the commission.

(B) The licensee shall inform the commission of any change in his business or home address.

(C) The license must be renewed before July first of each year for a period of one year upon payment of the renewal fee and upon compliance with the provisions of this article. If the home inspector has not complied with any provisions of this article during the year, the licensee shall make a new application as in the case of the issuance of an original license.

(D) The commission may provide for the late renewal of a license upon payment of a late fee in an amount established by regulation of the commission.

(E) A licensee who does not intend to engage in the business of home inspection for at least one year may request upon written notice to the commission that his license be placed in inactive status. While in inactive status, the person is not subject to payment of any renewal fees and shall not perform home inspections in this State. When the person desires to resume the performance of home inspections, he shall file an application for license renewal, pay the renewal fee, and demonstrate continuing competence as defined by regulation of the commission. If a license has been in inactive status for more than three years, the person is required to make a new application as in the case of the issuance of an original license and is required to take and successfully complete the examination.

Section 40-59-260. (A) The commission may deny, refuse to renew, or temporarily suspend or revoke a license, or issue a civil penalty under this section, if the licensee or applicant for licensure engages in any of the following conduct:

(1) making a false or misleading statement in that portion of a written report that deals with professional qualification or in any testimony concerning professional qualifications;

(2) any act or omission involving dishonesty, fraud, or misrepresentation with the intent to substantially benefit a home inspector or other person or with the intent to substantially injure another person;

(3) any act of fraud, misrepresentation, or deceit in the making of a home inspection;

(4) payment of a finder's fee or a referral fee to any person in connection with an inspection of a residence;

(5) failure or refusal without good cause to exercise reasonable diligence in developing a home inspection report, preparing a report, or communicating a report;

(6) accepting a home inspection assignment when the employment itself is contingent upon the home inspector reporting a predetermined estimate, analysis, or opinion or when the fee to be paid is contingent upon the opinion, the conclusions, analysis, or report reached or upon the consequences resulting from such assignment;

(7) the performing of any work or improvement to a residence upon which the home inspector performed a home inspection within the previous twelve months;

(8) employment of fraud, deceit, or misrepresentation in obtaining or attempting to obtain a license, or renewal of it;

(9) committing an act or acts of malpractice, gross negligence, or incompetence in the performance of home inspections;

(10) practicing as a licensed home inspector without a current license;

(11) engaging in conduct that could result in harm or injury to the public;

(12) engaging in any act or practice violative of any of the provisions of this article or any regulation promulgated by the commission under this article, or aiding, abetting, or assisting a person in such violation.

(B) The commission may impose a civil penalty for violations of any provision of this article, or the regulations promulgated by the board, as follows: for a first violation, a penalty in an amount not to exceed one hundred dollars; for a second violation, a penalty in an amount not to exceed two hundred dollars; and for a third and any subsequent violation, a penalty in an amount not to exceed one thousand dollars. Any civil penalties collected by the commission must be remitted to the State Treasurer for deposit by him in the State's general fund.

(C) The denial, refusal to renew, or temporary suspension or revocation of a license, or the issuance of a civil penalty under this section, may be ordered by a decision of a majority of the commission after a hearing held in accordance with Article 3, Chapter 23, of Title 1, the Administrative Procedures Act. A decision of the commission to deny, refuse to renew, temporarily suspend a license, revoke a license, or impose a civil penalty is subject to review by an administrative law judge as provided under Article 5, Chapter 23, of Title 1.

(D) An application may be made to the commission for reinstatement of a revoked license if the revocation has been in effect for at least one year. The license may be granted upon an affirmative vote by a majority of the commission.

Section 40-59-265. A home inspector is prohibited from engaging in real estate appraisal activity unless the inspector meets the requirements of Chapter 60 of this title. Further, a home inspector is prohibited from engaging in any real estate activity regulated under Chapter 57 of this title unless the inspector meets the requirements of that chapter.

Section 40-59-270. The administrator is authorized to use the powers granted to him pursuant to this chapter to enforce the provisions of this article. A home inspector who is not otherwise exempt from this article who undertakes or attempts to undertake the business of home inspection without first obtaining a valid license or who knowingly presents to, or files with, the commission false information for the purpose of obtaining a license is guilty of a misdemeanor and for the first offense, upon conviction, must be fined not more than one hundred dollars or imprisoned for not more than thirty days, or both. For a second offense, the person, upon conviction, must be fined not more than two hundred dollars or imprisoned for not more than ninety days, or both. For a third and subsequent offense, upon conviction, the person must be fined not more than one thousand dollars or imprisoned not more than one hundred eighty days, or both.

A home inspector who does not have a license as required by this article may not bring any action either at law or in equity to enforce the provisions of any contract for home inspection which he entered into in violation of this article.

Whenever it appears to the commission that any home inspector has violated, or is about to violate, the provisions of this article, the commission may in its own name petition an administrative law judge as provided under Article 5 of Chapter 23 of Title 1 to issue a temporary restraining order enjoining the violation of this article, pending a full hearing to determine whether or not the injunction must be made permanent.

Section 40-59-280. The commission is authorized to promulgate regulations to administer the provisions of this article and to establish fees reasonably necessary to cover the costs of administering this article.

Section 40-59-290. When an inspection report includes a deficiency that is alleged to be a building codes violation, the inspector is responsible for determining the construction dates and building codes in effect at the time of construction and must conduct the inspection using the building codes in effect at the time of construction."

SECTION 4. Title 40 of the 1976 Code is amended by adding:

Section 40-26-10. When used in this chapter:

(1) `Board' means the State Licensing Board for Contractors (excluding mechanical contractors), the State Board of Architectural Examiners, or the State Board of Registration for Professional Engineers (excluding land surveyors), as is applicable to the person performing a commercial inspection.

(2) `Commercial inspection' means the rendering of a written or oral report, for compensation of any sort, as to the condition of the construction or improvements to a commercial structure, including, but not limited to, structural problems and conditions, visible damage, safety problems or deterioration, and equipment and systems that are visible and readily accessible. Commercial inspection does not include a contract or proposal for design, repair, renovation, or remodeling of the improvements to a commercial structure. The parties to an agreement for a commercial inspection may limit or expand the scope of the inspection by agreement.

(3) `Commercial inspector' means a natural person licensed, registered, or certified pursuant to Chapter 3 of this title or a natural person licensed as a general contractor pursuant to Chapter 11 of this title or a natural person licensed or registered as a professional engineer pursuant to Chapter 22 of this title, and who, for compensation of any sort, performs a commercial inspection.

(4) `Commercial structure' means a building, highway, sewer, improvement, reimprovement, or structure, or part thereof, which is not a residence as defined in Article 3 of Chapter 59 of Title 40.

Section 40-26-20. (A) No person may engage in or transact any commercial inspection business, or hold himself out to the public as a commercial inspector, or offer to engage in or transact any commercial inspection business in this State, unless the person is licensed, registered, or certified pursuant to Chapter 3 of this title or is licensed as a general contractor pursuant to Chapter 11 of this title or is licensed or registered as a professional engineer pursuant to Chapter 22 of this title.

(B) A person engaged in the business of performing commercial inspections on the date this chapter becomes effective who is not, on that date, qualified under the terms of this chapter to perform commercial inspections is allowed ninety days from such effective date to comply with the provisions of this chapter for the purpose of qualifying to perform commercial inspections.

(C) No license shall be issued under the provisions of this chapter to a partnership, association, corporation, firm, or group. However, nothing in this chapter precludes a person licensed pursuant to Chapter 3 of this title or licensed as a general contractor pursuant to Chapter 11 of this title or licensed or registered as a professional engineer pursuant to Chapter 22 of this title from performing commercial inspections for or on behalf of a partnership, association, corporation, firm, or group or from entering into contracts or enforcing contracts as a partnership, association, corporation, firm, or group.

Section 40-26-30. The provisions of this chapter do not apply to:

(A) a person employed by the State of South Carolina or any political subdivision of the State as a code enforcement official when acting within the scope of that employment;

(B) a person inspecting a commercial structure exclusively for the use of a bank, savings and loan association, or credit union, unless otherwise required by federal law or regulation.

Section 40-26-40. A violation of this chapter is considered a violation against the person's license, registration, or certification and subjects the person to disciplinary action by the board under which the person is licensed, registered, or certified.

Section 40-26-50. (A) Any person who is licensed, registered, or certified pursuant to Chapter 3 of this title or who is licensed as a general contractor pursuant to Chapter 11 of this title or who is licensed or registered as a professional engineer pursuant to Chapter 22 of this title and who performs a commercial inspection is prohibited from engaging in any of the following conduct:

(1) making a false or misleading statement in that portion of a written report that deals with professional qualifications or in any testimony concerning professional qualifications;

(2) any act or omission involving dishonesty, fraud, or misrepresentation with the intent to substantially benefit a commercial inspector or other person or with the intent to substantially injure another person;

(3) any act of fraud, misrepresentation, or deceit in the making of a commercial inspection;

(4) payment of a finder's fee or a referral fee to any person in connection with an inspection of a commercial structure;

(5) failure or refusal without good cause to exercise reasonable diligence in developing a commercial inspection report, preparing a report, or communicating a report;

(6) accepting a commercial inspection assignment when the employment itself is contingent upon the commercial inspector reporting a predetermined estimate, analysis, or opinion or when the fee to be paid is contingent upon the opinion, the conclusions, analysis, or report reached or upon the consequences resulting from such assignment;

(7) the performing of any improvement to a commercial structure upon which the commercial inspector performed a commercial inspection within the previous twelve months;

(8) committing an act, or acts, of malpractice, gross negligence, or incompetence in the performance of commercial inspections;

(9) practicing as a commercial inspector without a current license, registration, or certification issued pursuant to Chapter 3 of this title or issued pursuant to Chapter 11 of this title for a general contractor or issued pursuant to Chapter 22 of this title for a professional engineer;

(10) engaging in conduct that could result in harm or injury to the public.

(B) A commercial inspector who is not duly licensed, certified, or registered as required by this chapter may not bring any action either at law or in equity to enforce the provisions of any contract for a commercial inspection which he entered into in violation of this chapter.

Section 40-26-60. When an inspection report includes a deficiency that is alleged to be a building codes violation, the inspector is responsible for determining the construction dates and building codes in effect at the time of construction and must conduct the inspection using the building codes in effect at the time of construction."

SECTION 5. Section 1 of this act takes effect upon approval by the Governor. Sections 2, 3, and 4 of this act take effect one hundred eighty days after approval by the Governor./

Amend title to conform.

/s/Senator Glenn F. McConnell /s/Rep. George H. Bailey
/s/Senator Hugh K. Leatherman /s/Rep. Lewis R. Vaughn
/s/Senator Robert Ford /s/Rep. E.B. McLeod, Jr.

On Part of the Senate. On Part of the House.

, and a message was sent to the House accordingly.

The following Bill was read the third time and having received three readings in both Houses, it was ordered that the title be changed to that of an Act and enrolled for Ratification:

H. 4800 -- Reps. R. Smith, Sharpe, Stone, Huff and Rudnick: A BILL TO AMEND ACT 476 OF 1969, AS AMENDED, RELATING TO CREATION OF THE VALLEY PUBLIC SERVICE AUTHORITY, SO AS TO PROVIDE THAT AIKEN COUNTY COUNCIL SHALL DRAW THE BOUNDARIES FOR THE AUTHORITY'S SERVICE AREA.

H. 4330 -- Reps. Fair, Corning, Snow and Harvin: A BILL TO AMEND SECTION 56-5-2530, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO STOPPING, STANDING, OR PARKING IN PROHIBITED SPECIFIED AREAS, SO AS TO PROVIDE AN EXCEPTION FOR POSTAL SERVICE CARRIERS OR BUSINESSES PROVIDING MAIL, PARCEL, OR PACKAGE DELIVERY THAT MAKE FREQUENT STOPS FOR SHORT PERIODS OF TIME.

Senator LAND asked unanimous consent to take the Bill up for immediate consideration.

There was no objection.

The Senate proceeded to a consideration of the Bill. The question being the third reading of the Bill.

Senator LAND proposed the following amendment (N05\7950BDW.94), which was adopted:

Amend the bill, as and if amended, by adding an appropriately numbered SECTION to read:

/SECTION ___. Section 56-5-4070 of the 1976 Code, as last amended by Section 1430, Act 181 of 1993, is further amended to read:

"Section 56-5-4070. (1)(A) Two or three unit vehicle combinations may be operated on the National System of Interstate and Defense Highways, on those qualifying federal-aid highways so designated by the United States Secretary of Transportation, and on other highways as designated by the Department of Public Safety Transportation in accordance with Section 56-5-4075. The department may require warning devices which may be necessary to protect public safety. When in use on the National System of Interstate and Defense Highways and `other qualifying highways':

(a)(1) a No trailer or semitrailer may be operated in a two unit truck tractor-trailer or truck tractor-semitrailer combination in excess of a length of forty-eight feet but no longer than fifty-three feet, inclusive of the load carried on it. A fifty-three foot long trailer must be equipped with a rear underride guard, and the distance between the kingpin of the vehicle and the center of the rear axle assembly or to the center of the tandem axle assembly if equipped with two axles must may be no greater than forty-one feet;.

(b)(2) A trailer or semitrailer, operating in a three unit combination, may not exceed a length of twenty-eight and one-half feet, inclusive of the load carried on it;.

(c)(3) Auto and boat transporters may not have an overall length in excess of seventy-five feet, exclusive of front and rear overhang;. However, front overhang must may not exceed three feet, and rear overhang must may not exceed four feet;.

(d)(4) Saddle mounts and full mounts may not have an overall length in excess of seventy-five feet.

(2)(B) No motor vehicle, exclusive of truck tractors being used in two or three unit combinations on the National System of Interstate and Defense Highways, on those qualifying federal-aid highways so designated by the United States Secretary of Transportation, and on other highways as designated by the Department of Public Safety Transportation in accordance with Section 56-5-4075, may exceed a length of forty feet extreme overall dimension, inclusive of front and rear bumpers and load carried on it, and a motor vehicle, other than a motor home, in excess of thirty-five feet may have not less than three axles, except buses with two axles approved by the Department of Public Safety.

(3)(C) A combination of vehicles coupled together or especially constructed to transport motor vehicles in a truckaway or driveaway service may tow up to three saddle mounts. No other combination of vehicles coupled together may consist of more than two units, except as permitted by subsection (1) of this section (A).

(4)(D) Except as permitted by subsection (1) of this section (A), trailers or semitrailers used within combinations may not exceed a length of forty-eight fifty-three feet, and auto transporters are excluded from trailer length limitations. A fifty-three foot long trailer must be equipped with a rear underride guard, and the distance between the kingpin of the vehicle and the center of the rear axle assembly or to the center of the tandem axle assembly if equipped with two axles may be no greater than forty-one feet. Auto transporters may be allowed an upper level overhang not to exceed three feet on the front and four feet on the rear.

(5)(E) Except where specifically prohibited in this article, there is no overall length limit on combination vehicles.

(6)(F) Appropriate safety and energy conservation devices and compressors and fuel saving equipment on the front or loading devices on the rear of trailers or semitrailers may must not be considered when determining their length for purposes of this section if the overall length limitations of combinations of vehicles is not exceeded."/

Renumber sections to conform.

Amend title to conform.

Senator LAND explained the amendment.

There being no further amendments, the Bill was read the third time and ordered returned to the House of Representatives with amendments.

The following Bills having been read the second time with notice of general amendments were ordered placed on the third reading Calendar:

H. 4836 -- Reps. McElveen, Neal, Shissias, Cobb-Hunter, Cromer, Mattos, Govan, Inabinett, Wofford, Hutson, Wells, Boan, Hodges and Waldrop: A BILL TO ENACT THE OMNIBUS CHILD SUPPORT ENFORCEMENT ACT OF 1994 BY AMENDING THE CODE OF LAWS OF SOUTH CAROLINA, 1976; TO AMEND SECTION 20-7-955, RELATING TO SETTLEMENTS AND VOLUNTARY AGREEMENTS IN PATERNITY AND CHILD SUPPORT CASES SO AS TO REQUIRE THE COURT TO APPROVE THESE AGREEMENTS UPON A FINDING OF FAIRNESS AND TO REQUIRE THAT A SUMMONS AND COMPLAINT BE FILED WITH THESE AGREEMENTS; TO AMEND SECTION 20-7-956, RELATING TO ADMISSIBLE EVIDENCE AT A PATERNITY HEARING, SO AS TO INCLUDE VOLUNTARY ACKNOWLEDGMENTS OF PATERNITY, FOREIGN PATERNITY DETERMINATIONS, PATERNITY INDICATED ON BIRTH CERTIFICATES AND TO CREATE CERTAIN PRESUMPTIONS AND REBUTTABLE PRESUMPTIONS WITH REGARD TO THIS EVIDENCE; TO AMEND TITLE 20, CHAPTER 7, ARTICLE 9, SUBARTICLE 5, RELATING TO THE UNIFORM RECIPROCAL ENFORCEMENT OF SUPPORT ACT, SO AS TO REPLACE THIS ACT WITH THE UNIFORM INTERSTATE FAMILY SUPPORT ACT, TO PROVIDE UNIFORM LEGISLATION TO ASSIST WITH THE INTERSTATE ENFORCEMENT OF SUPPORT AND TO PROVIDE CIVIL AND CRIMINAL ENFORCEMENT PROCEDURES; TO AMEND SECTION 15-35-910, RELATING TO DEFINITIONS IN THE UNIFORM ENFORCEMENT OF FOREIGN JUDGMENTS ACT, SO AS TO REVISE A CROSS REFERENCE; TO PROVIDE FOR THE CONTINUED FORCE AND EFFECT OF LAWS AMENDED OR REPEALED BY THE UNIFORM INTERSTATE FAMILY SUPPORT ACT FOR CERTAIN PURPOSES; TO AMEND SECTION 43-5-220, AS AMENDED, RELATING TO OBTAINING SUPPORT PAYMENTS FROM ABSENT PARENTS, SO AS TO PROVIDE THAT PAST DUE SUPPORT OWED THAT IS SUBJECT TO COLLECTION AND SETOFF BY THE DEPARTMENT OF REVENUE AND TAXATION INCLUDES HEALTH CARE EXPENSES; TO AMEND SECTION 43-5-590, AS AMENDED, RELATING TO POWERS AND DUTIES OF THE DEPARTMENT OF SOCIAL SERVICES WITH REGARD TO ITS CHILD SUPPORT PLAN, SO AS TO PROVIDE THAT THE ASSIGNMENT OF THE RIGHT TO SUPPORT INCLUDES THE RIGHT TO HEALTH CARE EXPENSES, THAT RECEIVING MEDICAID IS CONSIDERED TO BE AN ASSIGNMENT OF THE RIGHT TO SUPPORT, AND TO PROVIDE THAT THE DEPARTMENT SHALL DEVELOP AND DISTRIBUTE MATERIALS AND PROCEDURES TO HOSPITALS FOR USE IN OBTAINING VOLUNTARY PATERNITY ACKNOWLEDGMENTS ON NEWBORNS; TO AMEND SECTION 44-7-320, AS AMENDED, RELATING TO GROUNDS FOR DENYING, REVOKING, OR SUSPENDING HOSPITAL LICENSES, SO AS TO PROVIDE AS AN ADDITIONAL GROUND THE FAILURE TO COMPLY WITH PROCEDURES FOR OBTAINING VOLUNTARY PATERNITY ACKNOWLEDGMENTS; TO AMEND THE CODE BY ADDING SECTION 44-63-75 SO AS TO REQUIRE SOCIAL SECURITY NUMBERS ON BIRTH CERTIFICATES, MARRIAGE LICENSES, AND MARRIAGE CERTIFICATES; TO AMEND SECTION 44-63-165, RELATING TO AMENDMENTS TO BIRTH CERTIFICATES AFTER AN ACKNOWLEDGMENT OF PATERNITY, SO AS TO REQUIRE THE ACKNOWLEDGMENT TO BE RELEASED TO THE DEPARTMENT OF SOCIAL SERVICES FOR THE PURPOSE OF ESTABLISHING PATERNITY AND A CHILD SUPPORT ORDER AND TO FURTHER PROVIDE THAT THESE ACKNOWLEDGMENTS MUST BE PROVIDED TO THE DEPARTMENT WITHOUT CHARGE; TO PROVIDE THAT THE DEPARTMENT OF SOCIAL SERVICES SHALL RECEIVE ALL FEDERAL MATCHING FUNDS AVAILABLE FOR THE CHILD SUPPORT PROGRAM; TO DIRECT THE DEPARTMENT TO DEVELOP, IN CONJUNCTION WITH THE DEPARTMENT OF INSURANCE, A PROCEDURE FOR ATTACHING INSURANCE SETTLEMENTS FOR COLLECTING CHILD SUPPORT ARREARAGES; TO REQUIRE THE DEPARTMENT TO COLLABORATE WITH THE SOUTH CAROLINA EMPLOYMENT SECURITY COMMISSION TO UTILIZE THE COMMISSION BENEFIT INTERCEPT PROGRAM FOR WITHHOLDING CHILD SUPPORT PAYMENTS; TO REQUIRE THE DEPARTMENT IN CONJUNCTION WITH THE DEPARTMENT OF REVENUE AND TAXATION TO REVISE THE W-4 FORM TO CONTAIN INFORMATION RELATIVE TO CHILD SUPPORT OBLIGATIONS AND TO DEVELOP RECORD RETENTION PROCEDURES FOR CERTAIN INFORMATION; AND TO PRESERVE RIGHTS AND DUTIES UNDER THE FORMER UNIFORM RECIPROCAL ENFORCEMENT OF SUPPORT ACT.

Senator MOORE asked unanimous consent to take the Bill up for immediate consideration.

There was no objection.

H. 5053 -- Rep. M.O. Alexander: A BILL TO AMEND SECTION 42-7-200, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE WORKERS' COMPENSATION UNINSURED EMPLOYERS' FUND, SO AS TO, AMONG OTHER THINGS, DELETE CERTAIN PROVISIONS AND PROVIDE THAT WHEN AN EMPLOYEE MAKES A CLAIM FOR BENEFITS PURSUANT TO TITLE 42 AND THE RECORDS OF THE WORKERS' COMPENSATION COMMISSION INDICATE THAT THE EMPLOYER IS OPERATING WITHOUT INSURANCE, THE WORKERS' COMPENSATION UNINSURED EMPLOYERS' FUND OR ANY PERSON DESIGNATED BY THE DIRECTOR MAY SUBPOENA THE EMPLOYER OR ITS AGENTS AND REQUIRE THE PRODUCTION OF ANY DOCUMENTS OR RECORDS WHICH THE FUND CONSIDERS RELEVANT TO ITS INVESTIGATION OF THE CLAIM.

Senator MARTIN asked unanimous consent to take the Bill up for immediate consideration.

There was no objection.

H. 4975 -- Rep. Rogers: A BILL TO AMEND SECTION 37-2-207, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE REQUIREMENT THAT WITH CERTAIN EXCEPTIONS FORTY PERCENT OF THE SCHEDULED MINIMUM PAYMENT FOR REVOLVING CHARGE ACCOUNTS ON CONSUMER CREDIT SALES MUST BE APPLIED TO PRINCIPAL REDUCTION, SO AS TO SPECIFY CERTAIN SITUATIONS WHICH ARE NOT CONSIDERED VIOLATIONS OF THIS REQUIREMENT.

Senator HOLLAND asked unanimous consent to make a motion to recall the Bill from the Committee on Banking and Insurance.

There was no objection.

On motion of Senator HOLLAND, with unanimous consent, the Bill was ordered placed on the Calendar without reference.

H. 4283 -- Reps. Barber, Jennings, Gonzales, Quinn, Harvin, Wells, Wright, Harrison, R. Smith, Fulmer, D. Wilder, Klauber, A. Young and Corning: A BILL TO AMEND TITLE 33, CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 43 RELATING TO CORPORATIONS SO AS TO ENACT THE "SOUTH CAROLINA LIMITED LIABILITY COMPANY ACT" WHICH PERMITS A LIMITED LIABILITY COMPANY (LLC) FORMED PURSUANT TO THIS ACT TO BE TREATED AS A PARTNERSHIP FOR TAX PURPOSES TOGETHER WITH THE ABSENCE OF INDIVIDUAL LIABILITY OF THE MEMBERS OF THE LIMITED LIABILITY COMPANY FOR ITS OBLIGATIONS, WHICH PROVIDES FOR THE MANNER IN WHICH LIMITED LIABILITY COMPANIES ARE FORMED, FOR RELATIONS BETWEEN MEMBERS AND MANAGERS TO PERSONS DEALING WITH THE LIMITED LIABILITY COMPANIES, FOR THE RIGHTS AND DUTIES OF MEMBERS AND MANAGERS, FOR FINANCE MATTERS, FOR DISTRIBUTIONS AND WITHDRAWALS, FOR THE OWNERSHIP AND TRANSFER OF PROPERTY, FOR ADMISSION AND WITHDRAWAL OF MEMBERS, FOR DISSOLUTION, FOR THE MANNER IN WHICH FOREIGN LIMITED LIABILITY COMPANIES MAY OPERATE AND ARE GOVERNED, FOR PROFESSIONAL SERVICES LIMITED LIABILITY COMPANIES, FOR SUITS BY AND AGAINST THE LIMITED LIABILITY COMPANIES, FOR THE MERGER OF DOMESTIC OR FOREIGN LIMITED LIABILITY COMPANIES, AND FOR MISCELLANEOUS PROVISIONS AFFECTING THE LIMITED LIABILITY COMPANIES INCLUDING FILING AND OTHER FEES; AND TO AMEND THE 1976 CODE BY ADDING SECTION 12-2-25 SO AS TO PROVIDE FOR CERTAIN DEFINITIONS FOR TAXATION PURPOSES INCORPORATING REFERENCES TO LIMITED LIABILITY COMPANIES.

On motion of Senator STILWELL, with unanimous consent, the Report of the Committee of Conference was taken up for immediate consideration.

Senator STILWELL spoke on the report.

On motion of Senator STILWELL, with unanimous consent, Free Conference Powers were granted.

Whereupon, the PRESIDENT appointed Senators STILWELL, McCONNELL and PASSAILAIGUE to the Committee of Free Conference on the part of the Senate and a message was sent to the House accordingly.

On motion of Senator STILWELL, the Report of the Committee of Free Conference to H. 4283 was adopted as follows:

The COMMITTEE OF FREE CONFERENCE, to whom was referred:
H. 4283 -- Reps. Barber, Jennings, Gonzales, Quinn, Harvin, Wells, Wright, Harrison, R. Smith, Fulmer, D. Wilder, Klauber, A. Young and Corning: A BILL TO AMEND TITLE 33, CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 43 RELATING TO CORPORATIONS SO AS TO ENACT THE "SOUTH CAROLINA LIMITED LIABILITY COMPANY ACT" WHICH PERMITS A LIMITED LIABILITY COMPANY (LLC) FORMED PURSUANT TO THIS ACT TO BE TREATED AS A PARTNERSHIP FOR TAX PURPOSES TOGETHER WITH THE ABSENCE OF INDIVIDUAL LIABILITY OF THE MEMBERS OF THE LIMITED LIABILITY COMPANY FOR ITS OBLIGATIONS, WHICH PROVIDES FOR THE MANNER IN WHICH LIMITED LIABILITY COMPANIES ARE FORMED, FOR RELATIONS BETWEEN MEMBERS AND MANAGERS TO PERSONS DEALING WITH THE LIMITED LIABILITY COMPANIES, FOR THE RIGHTS AND DUTIES OF MEMBERS AND MANAGERS, FOR FINANCE MATTERS, FOR DISTRIBUTIONS AND WITHDRAWALS, FOR THE OWNERSHIP AND TRANSFER OF PROPERTY, FOR ADMISSION AND WITHDRAWAL OF MEMBERS, FOR DISSOLUTION, FOR THE MANNER IN WHICH FOREIGN LIMITED LIABILITY COMPANIES MAY OPERATE AND ARE GOVERNED, FOR PROFESSIONAL SERVICES LIMITED LIABILITY COMPANIES, FOR SUITS BY AND AGAINST THE LIMITED LIABILITY COMPANIES, FOR THE MERGER OF DOMESTIC OR FOREIGN LIMITED LIABILITY COMPANIES, AND FOR MISCELLANEOUS PROVISIONS AFFECTING THE LIMITED LIABILITY COMPANIES INCLUDING FILING AND OTHER FEES; AND TO AMEND THE 1976 CODE BY ADDING SECTION 12-2-25 SO AS TO PROVIDE FOR CERTAIN DEFINITIONS FOR TAXATION PURPOSES INCORPORATING REFERENCES TO LIMITED LIABILITY COMPANIES.
Beg leave to report that they have duly and carefully considered the same and recommend:

That the same do pass with the following amendments:

Amend the bill, as and if amended, by striking all after the enacting words and inserting therein the following:

SECTION 1. Title 33 of the 1976 Code is amended by adding:

Section 33-43-101. Short Title.

This chapter shall be known and may be cited as the South Carolina Limited Liability Company Act.

The provisions for the South Carolina Limited Liability Company Act have been derived in part from:

(a) The November 19, 1992, draft version of the "prototype" Limited Liability Company Act drafted by the Working Group on the Prototype Limited Liability Company Act Subcommittee on Limited Liability Companies, Committee on Partnerships and Unincorporated Business Organizations, Section of Business Law, American Bar Association. Versions of this "prototype" statute, with explanatory commentary have been published in Larry E. Ribstein & Robert R. Keatinge, Ribstein & Keatinge on Limited Liability Companies, (Shepard's/McGraw-Hill, Inc. 1992); and

(b) The July 30, 1993, draft Limited Liability Company Act considered by the National Conference of Commissioners On Uniform State Laws. Subsequent versions of this act, with explanatory commentary, may be obtained from the National Conference of Commissioners on Uniform State Laws, 676 North St. Clair Street, Suite 1700, Chicago, Illinois, 60611. (312) 915-0195.

Both of these draft statutes contain valuable commentary which may be of assistance in interpreting and understanding the meaning of some of the sections of this South Carolina Limited Liability Company Act.

Section 33-43-102. Definitions.

As used in this chapter, unless the context otherwise requires:

(A) `Articles of organization' means articles filed under Section 33-43-201, and those articles as amended or restated.

(B) `Corporation' means a corporation formed under the laws of any state or foreign country.

(C) `Court' includes every court having jurisdiction in the case.

(D) `Deliver' includes mail.

(E) `Event of dissociation' means an event that causes a person to cease to be a member as provided in Section 33-43-802.

(F) `Foreign limited liability company' means an organization that is:

(1) an unincorporated association;

(2) organized under laws of a state other than the laws of this State, or under the laws of any foreign country;

(3) organized under a statute pursuant to which an association may be formed that affords to each of its members limited liability with respect to the liabilities of the entity; and

(4) not required to be registered or organized under any statute of this State other than this chapter.

(G) `Limited liability company' or `domestic limited liability company' means an organization formed under this chapter.

(H) `Limited liability company interest' or `interest in the limited liability company' means the member's right to share in profits and losses, and right to share in distributions.

(I) `Limited partnership' means a limited partnership formed under the laws of any state or foreign country.

(J) `Manager' or `managers' means, with respect to a limited liability company that has set forth in its articles of organization that it is to be managed by managers, the person or persons designated in accordance with Section 33-43-401.

(K) `Member' or `members' means a person or persons who have been admitted to membership in a limited liability company as provided in Section 33-43-801 and who have not ceased to be members as provided in Section 33-43-802.

(L) `Operating agreement' means any written agreement, originally unanimously adopted by all the members of the limited liability company, as to the conduct of the business and affairs of the limited liability company. Provided, however, the failure of any limited liability company to adopt an operating agreement shall not effect the legal existence of such limited liability company.

(M) `Person' means an individual, a general partnership, a limited partnership, a domestic or foreign limited liability company, a trust, an estate, an association, a corporation, or any other legal entity.

(N) `Professional service' means a service that may be rendered lawfully only by a person licensed or otherwise authorized by a licensing authority in this State to render the service and that may not be lawfully rendered by a business corporation under Chapters 1 through 17 of Title 33.

(O) `State' means a state, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico.

Section 33-43-103. Name.

(A) The name of each limited liability company must contain the words `limited liability company' or `limited company' or the abbreviation `L.L.C.', `L.C.', `LLC', `LC'. The word `limited' may be abbreviated as `LTD.' and the word `company' may be abbreviated as `CO.'

(B) A limited liability company name may not be the same as or deceptively similar to:

(1) the name filed with the Secretary of State of any limited liability company, limited partnership, professional corporation, or corporation existing under the laws of this State or foreign limited liability company, foreign corporation, or foreign professional corporation authorized to transact business in this State; or

(2) any name reserved or registered under Section 33-43-104, or any reserved name for a corporation or professional corporation existing under the laws of this State, or any registered name of either a foreign corporation or foreign professional corporation authorized to transact business in this State.

(C) The provisions of subsection (B) shall not apply if the applicant files with the Secretary of State either of the following:

(1) the written consent of the holder of a reserved or registered name or filed name to use a deceptively similar name if one or more words are added, altered, or deleted to make the name distinguishable from the reserved or registered or filed name; or

(2) a certified copy of a final decree of a court of competent jurisdiction establishing the prior right of the applicant to the use of the name of this State.

Section 33-43-104. Reservation and Registration of Name.

(A) A person may reserve the exclusive use of a `limited liability company' name, including a designated name provided for in Section 33-43-1004 for a foreign limited liability company whose name is not available, by delivering an application to the Secretary of State for filing. The application must set forth the name and address of the applicant and the name proposed to be reserved. If the Secretary of State finds that the limited liability company name applied for is available, he shall reserve the name for the applicant's exclusive use for a nonrenewable one hundred twenty-day period.

(B) The owner of a reserved limited liability company name may transfer the reservation to another person by delivering to the Secretary of State a signed notice of the transfer that states the name and address of the transferee.

(C) A foreign limited liability company may register its name that satisfies the requirements of Section 33-43-103.

(D) A foreign limited liability company registers its name or a designated name as provided in Section 33-43-1004 by delivering to the Secretary of State for filing an application:

(1) setting forth its limited liability company name or a designated name as provided in Section 33-43-1004, the state or country and date of its organization, and a brief description of the nature of the business in which it is engaged; and

(2) accompanied by a certificate of existence (or a document of similar import) from the state or country of organization.

(E) The name is registered for the applicant's exclusive use upon the effective date of the application.

(F) A foreign limited liability company whose registration is effective may renew it for successive years by delivering to the Secretary of State for filing a renewal application, which complies with the requirements of subsection (D), between October first and December thirty-first of the preceding year. The renewal application, when filed, renews the registration for the following calendar year.

(G) A foreign limited liability company whose registration is effective may qualify thereafter as a foreign limited liability company under the registered name or consent in writing to the use of that name by a limited liability company thereafter incorporated under this chapter or by another foreign limited liability company thereafter authorized to transact business in this State. The registration terminates when the domestic limited liability company is incorporated or the foreign limited liability company qualifies or consents to the qualification of another foreign limited liability company under the registered name.

Section 33-43-105. Registered office and registered agent.

(A) A limited liability company and a foreign limited liability company authorized to do business in South Carolina shall continuously maintain in this State:

(1) a registered office that may, but need not, be the same as its place of business; and

(2) a registered agent for service or process on the limited liability company that is an individual resident of this State, a limited liability company, a foreign limited liability company authorized to transact business in this State, or a corporation formed under the laws of or authorized to transact business in this State having a business office identical with the registered office.

(B) A limited liability company or a foreign limited liability company may change its registered office or registered agent by delivering to the Secretary of State for filing a statement of change that sets forth:

(1) the name of the limited liability company;

(2) the street address of its current registered office;

(3) if the current registered office is to be changed, the street address of the new registered office;

(4) the name of its current registered agent;

(5) if the current registered agent is to be changed, the name of the new registered agent and the new agent's written consent (either on the statement or attached to it) to the appointment; and

(6) that after the change or changes are made, the street addresses of its registered office and the business office of its registered agent will be identical.

(C) If a registered agent changes the street address of his business office, he may change the street address of the registered office of any limited liability company or foreign limited liability company for which he is the registered agent by notifying the domestic or foreign limited liability company in writing of the change and signing (either manually or in facsimile) and delivering to the Secretary of State for filing a statement that complies with the requirements of subsection (A) and recites that the domestic or foreign limited liability company has been notified of the change.

(D) A registered agent may resign his agency appointment by signing and delivering to the Secretary of State for filing the signed original and two exact or conformed copies of a statement or resignation. The statement may include a statement that the registered office is also discontinued.

(1) After filing the statement, the Secretary of State shall mail one copy to the registered office (if not discontinued) and the other copy to the domestic or foreign limited liability company at its principal office.

(2) The agency appointment is terminated, and the registered office discontinued if so provided, on the thirty-first day after the date on which the statement was filed.

Section 33-43-106. Nature of business.

A limited liability company may be organized under this chapter for any lawful purpose. If the purpose for which a limited liability company is organized or its activities make it subject to a special provision of law, the limited liability company shall also comply with that provision.

A limited liability company shall possess and may exercise all the powers and privileges as an individual that are either necessary or convenient including, but not limited to, those granted by this Chapter 43, any other law, the articles of organization, and its operating agreement.

Section 33-43-201. Formation.

Two or more persons may form a limited liability company by signing articles of organization and delivering the signed articles to the Secretary of State for filing. The persons who form a limited liability company must be members of the limited liability company at the time of formation.

A copy of the articles of organization which is filed with the Secretary of State and which is stamped `filed' and marked with the filing date is conclusive evidence that all conditions precedent required to be performed by the organizers have been satisfied and that the limited liability company has been legally organized under this chapter.

Section 33-43-202. Articles of organization.

(A) The articles of organization shall set forth:

(1) a name for the limited liability company that satisfies the requirements of Section 33-43-103;

(2) the street address of the initial registered office and the name of the initial registered agent at that office as required by Section 33-43-105;

(3) the latest date upon which the limited liability company is to dissolve;

(4) if management of the limited liability company is vested in a manager or managers, a statement to that effect; and

(5) the name and signature of each person who is forming the limited liability company and who will be an initial member.

(B) The articles of organization may set forth any other provision the organizers determine to include, including any provisions that are required or permitted to be set forth in the operating agreement.

(C) All provisions of the articles of organization shall be binding upon the limited liability company, its members, and managers. Provided, however, as among (or between) the members, the managers, and among the members and managers, if an optional provision of the articles of organization as permitted under subsection (B) of this section is inconsistent with the operating agreement for the limited liability company, the operating agreement shall control.

Section 33-43-203. Amendment of articles of organization; restatement.

(A) The articles of organization of a limited liability company may be amended by filing articles of amendment with the Secretary of State. The articles of amendment shall set forth:

(1) the name of the limited liability company;

(2) the date the articles of organization were filed; and

(3) the amendment to the articles of organization.

(B) The articles of organization may be amended so long as the articles, as amended, contain only provisions that may be lawfully contained in articles of organization at the time of making the amendment.

(C) The articles of organization of a limited liability company must be amended when:

(1) there is a change in the name of the limited liability company;

(2) there is a false or erroneous statement in the articles of organization;

(3) there is a change in the time, as stated in the articles of organization, for the dissolution of the limited liability company;

(4) a limited liability company which is authorized to be managed by managers is no longer managed by managers;

(5) a limited liability company managed by members elects to be managed by managers; and

(6) the members desire to make a change in any other statement in the articles of organization in order for the articles to accurately represent the agreement among them.

(D) Articles of organization may be restated at any time. Restated articles of organization shall be filed with the Secretary of State and shall be specifically designated as such in the heading and shall state either in the heading or in an introductory paragraph the limited liability company's present name, and, if it has been changed, all of its former names and the date of the filing of its articles of organization.

Section 33-43-204. Execution of documents.

(A) Unless otherwise provided in any other section of this chapter, any document required by this chapter to be filed with the Secretary of State shall be executed:

(1) if management of the limited liability company is vested in one or more managers by any manager;

(2) if management of the limited liability company is reserved to the members by any member;

(3) if the limited liability company has not been formed by the persons forming the limited liability company; or

(4) if the limited liability company is in the hands of a receiver, trustee, or other court-appointed fiduciary by that fiduciary.

(B) The person executing the document shall sign it and state beneath or opposite his signature the person's name and the capacity in which he signs.

(C) The person executing the document may do so as an attorney-in-fact. Powers of attorney relating to the execution of the document need not be filed with the Secretary of State, but shall be retained by the limited liability company.

Section 33-43-205. Filing with the Secretary of State.

Articles of incorporation or any other document to be filed pursuant to this chapter shall be delivered to the office of the Secretary of State, duly executed and accompanied by one exact or conformed copy. Should the Secretary of State determine that a document conforms to the filing provisions of this chapter, including the payment of all required fees, the Secretary of State shall:

(1) endorse on each signed original and duplicate copy the word `filed' and the date and time of the document's acceptance for filing;

(2) retain the signed original in the Secretary of State's files; and

(3) return the duplicate copy to the person who filed it or the person's representative.

Section 33-43-206. Effect of delivery or filing of articles of organization.

(A) A limited liability company is formed when the articles of organization are filed by the Secretary of State.

(B) Each copy of the articles of organization stamped `filed' and marked with the filing date is conclusive proof that all conditions precedent required to be performed by the organizers have been complied with and that the limited liability company has been legally organized and formed under this chapter.

Section 33-43-301. Agency power of members and managers.

(A) Except as provided in subsection (B), every member is an agent of the limited liability company for the purpose of its business or affairs, and the act of any member including, but not limited to, the execution in the name of the limited liability company of any instrument, for apparently carrying on in the usual way the limited liability company business or businesses of the kind carried on by the limited liability company binds the limited liability company, unless the member so acting has, in fact, no authority to act for the limited liability company in the particular matter, and the person with whom the member is dealing has knowledge of the fact that the member has no such authority.

(B) If the articles of organization provide that management of the limited liability company is vested in a manager or managers:

(1) no member, solely by reason of being a member, is an agent of the limited liability company; and

(2) every manager is an agent of the limited liability company for the purpose of its business or affairs, and the act of any manager including, but not limited to, the execution in the name of the limited liability company of any instrument, for apparently carrying on in the usual way the limited liability company business or businesses of the kind carried on by the limited liability company binds the limited liability company, unless the manager so acting has, in fact, no authority to act for the limited liability company in the particular matter, and the person with whom the manager is dealing has knowledge of the fact that the manager has no such authority.

(C) An act of a manager or a member which is not apparently for the carrying on in the usual way the limited liability company business or business of the kind carried on by the limited liability company does not bind the limited liability company unless authorized in accordance with an operating agreement or the articles of organization.

Section 33-43-303. Limited liability company charged with knowledge of or notice to member or manager.

(A) Except as provided in subsection (B), notice to any member of any matter relating to the business or affairs of the limited liability company, and the knowledge of the member acting in the particular matter, acquired while a member or known at the time of becoming a member, and the knowledge of any other member who reasonably could and should have communicated the knowledge to the acting member, operate as notice to or knowledge of the limited liability company. However, (1) if any member has knowledge of a matter and acts fraudulently toward the limited liability company in respect to such information, the knowledge of the member shall not be imputed to the limited liability company; and (2) if notice is given to any member who is acting adversely to the limited liability company and the notifier has knowledge of such adversity, such information shall not be imputed to the limited liability company.

(B) If the articles of organization provide that management of the limited liability company is vested in a manager or managers:

(1) notice to any manger of any matter relating to the business or affairs of the limited liability company, and the knowledge of the manager acting in the particular matter acquired while a manager known at the time of becoming a manager, and the knowledge of any other manager who reasonably could and should have communicated the knowledge to the acting manager, operate as notice to or knowledge of the limited liability company. However, (a) if any manager has knowledge of a matter and acts fraudulently toward the limited liability company in respect to such information, the knowledge of the manager shall not be imputed to the limited liability company; and (b) if notice is given to any manager who is acting adversely to the limited liability company and the notifier has knowledge of such adversity, such information shall not be imputed to the limited liability company; and

(2) notice to or knowledge of any member of a limited liability company while the member is acting solely in the capacity of a member is not notice to or knowledge of the limited liability company.

Section 33-43-304. Liability of members and managers to third parties.

(A) A person who is a member or a manager of a limited liability company is not liable, solely by reason of being a member or being a manager, under a judgment, decree, or order of a court, or in any other manner for a debt, obligation, or liability of the limited liability company, whether arising in contract, tort, or otherwise or for the acts or omission of any other member, manager, agent, or employee of the limited liability company.

(B) Each individual who renders professional services on behalf of a domestic or foreign limited liability company is liable for a negligent or wrongful act or omission in which he personally participates to the same extent as if he rendered the services as a sole practitioner. A member of a domestic or foreign limited liability company which renders professional services, as defined in Section 33-43-102(N), is not liable; however, for the conduct of other members, managers, agents, or employees of the limited liability company unless he is at fault in appointing, supervising, or cooperating with them.

(C) A domestic or foreign limited liability company which renders professional services, as defined in Section 33-43-102(N), whose members, managers, agents, or employees perform professional services within the scope of their employment or of their apparent authority to act for the limited liability company is liable to the same extent those members, managers, agents, or employees who render professional services on behalf of the domestic or foreign limited liability company.

Section 33-43-305. Limited Liability Company Bound by Member's Wrongful Act.

Where, by a wrongful act or omission or other actionable conduct of any member, whether or not a manager, or any manager, acting in the ordinary course of the business of the limited liability company, or otherwise with authority, loss or injury is caused to any person, or any penalty is incurred, the limited liability company is liable therefor to the same extent as the member so acting or omitting to act.

Section 33-43-306. Limited Liability Company Bound by Member's Breach of Trust.

(A) The limited liability company is bound to make good the loss where a member, whether or not a manager, or any manager, acting within the scope of his apparent authority, receives money or property of a person who is not a member or manager of the limited liability company and misapplies it.

(B) The limited liability company is bound to make good the loss where in the course of its business it receives money or property of a third person and the money or property so received is misapplied while it is in the custody of the limited liability company.

Section 33-43-401. Management.

(A) Unless the articles of organization vests management of the limited liability company in a manager or managers, management of the business or affairs of the limited liability company is vested in the members.

(B) If the articles of organization vest management of the limited liability company in one or more managers, then the manager or managers shall have exclusive power to manage the business and affairs of the limited liability company except to the extent otherwise provided in an operating agreement. Unless otherwise provided in an operating agreement, managers:

(1) shall be designated, appointed, elected, removed, or replaced by a vote, approval, or consent of more than one-half by number of the members;

(2) except as provided in subsection (C) of this section need not be members of the limited liability company or natural persons; and

(3) unless they are sooner removed or sooner resign, shall hold office until their successors shall have been elected and qualified.

(C) All of the managers of a limited liability company which renders a professional service, as defined in Section 33-43-102(N), shall be individuals who are authorized by law in this or another state to render a professional service which is rendered by the limited liability company.

Section 33-43-402. Fiduciary duties of managers and members.

(A) Duties of loyalty.

A member shall:

(1) account to the limited liability company and hold for it as trustee any property, profit, or benefit derived by the member in the conduct and winding up of the limited liability company business or derived from a use by the member of limited liability company property, including the appropriation of a limited liability company opportunity;

(2) refrain from dealing with the limited liability company in the conduct or winding up of the limited liability company business, as or on behalf of a party having an interest adverse to the limited liability company except upon full disclosure and approval in writing by more than one-half by number of the disinterested members or as otherwise provided in the articles of organization or an operating agreement; and,

(3) refrain from competing with the limited liability company in the conduct of the limited liability company business before the dissolution of the limited liability company.

In no event may the members, even by unanimous written consent eliminate any of the duties imposed in paragraphs (1), (2), or (3) of this subsection A, but with the unanimous written consent of all the members, the members may specifically authorize specific types or categories of permitted conduct so long as such are not manifestly unreasonable.

(B) Duty of care.

A member, in conducting and winding up the business of the limited liability company, shall refrain from engaging in grossly negligent conduct, intentional misconduct, and knowing violation of the law. Even with the unanimous written consent of all the members, this duty of care may not be reduced.

(C) Good faith and fair dealing.

A member shall discharge the duties to the limited liability company and the other members under this act or under the operating agreement, and exercise any rights consistent with the obligation of good faith and fair dealing. In no event, even with the unanimous written consent of all the members, may the members eliminate the obligation of good faith and fair dealing, but they may by unanimous written consent determine the standards by which performance of the obligation is to be measured, if such standards are not manifestly unreasonable.

(D) A member does not violate a duty or obligation under this act or under the operating agreement merely because the member's conduct furthers the member's own interest.

(E) This section applies to a person winding up the limited liability company business as the personal or legal representative of the last surviving member as if the person were a member.

(F) The standards of conduct expressed in this Section 33-43-402 are applicable to all members in a member-managed limited liability company. In a manger-managed limited liability company:

(1) the managers shall be held to the same standards of conduct set forth in (A) through (E);

(2) a member who is not a manager shall have no duties to the limited liability company or to other members solely by reason of being a member; and,

(3) only the members shall have the right to specifically authorize conduct as provided in subsections (A), (B), and (C).

Section 33-43-403. Voting.

(A) Unless otherwise provided in an operating agreement or this chapter, and subject to subsection (B), the affirmative vote, approval, or consent of more than one-half by number of the members, if management of the limited liability company is vested in the members, or of the managers if the management of the limited liability company is vested in managers, shall be required to decide any matter connected with the business of the limited liability company.

(B) Unless otherwise provided in writing in an operating agreement, the affirmative vote, approval, or consent of all members shall be required to:

(1) amend an operating agreement or articles of organization; or

(2) authorize a manager or member to do any act on behalf of the limited liability company that contravenes a written operating agreement, including any written provision thereof which expressly limits the purpose, business, or affairs of the limited liability company or the conduct thereof.

Section 33-43-404. Indemnification of members and managers.

An operating agreement or a court may provide for indemnification of a member or manager for judgments, settlements, penalties, fines, or expenses incurred in a proceeding to which a person is a party because the person is or was a member or manager to the same extent, upon the same terms and limitations, and according to the same procedures as is provided for indemnification of directors of business corporations in Article 5, Chapter 8 of Title 33, and as may be amended from time to time.

Section 33-43-405. Records and information.

(A) A limited liability company shall keep at its principal place of business the following:

(1) a current and a past list, setting forth the full name and last known mailing address of each member and manager, if any, set forth in alphabetical order;

(2) a copy of the articles of organization, all amendments thereto, and all other documents filed with the Secretary of State, together with executed copies of any powers of attorney pursuant to which the articles of amendment or any filed document has been executed;

(3) copies of the limited liability company's federal, state, and local tax returns and financial statements, if any, for the six most recent years or, if those returns and statements were not prepared for any reason, copies of the information and statements provided to, or which should have been provided to, the members to enable them to prepare their federal, state, and local tax returns for the period;

(4) copies of any effective written operating agreements, and all amendments thereto, and copies of any written operating agreements no longer in effect;

(5) unless contained in writing in an operating agreement:

(a) a writing setting out the amount of cash, if any, and a statement of the agreed value of other property or services, if any, contributed by each member and the times at which or events upon the happening of which any additional contributions are to be made by each member;

(b) a writing stating events, if any, upon the happening of which the limited liability company is to be dissolved and its affairs wound up; and

(c) other writings prepared pursuant to a requirement, if any, in any operating agreement.

(B) Upon reasonable request, a member or personal representative of any deceased member or of any member under legal disability, at the member's own expense, may inspect and copy during ordinary business hours any limited liability company record, wherever the record is located.

(C) At the request of any member, or the personal representative of any deceased member or of any member under legal disability, the limited liability company shall provide:

(1) to the extent the circumstances render it just and reasonable, true and full information of all things affecting the members, and

(2) in writing, a description of the particular membership rights owned by that member as of the date the limited liability company makes the statement, which statement must describe the member's

(i) right to vote;

(ii) right to share in profits and losses;

(iii) right to share in distributions;

(iv) restrictions on the member's right to assign any or all of his interest in the limited liability company pursuant to Section 33-43-406; and

(v) any assignment of the member's interest then in effect other than a security interest.

(D) Upon reasonable request and for a proper purpose, a former member (including the estate of a deceased member) may at his or her own expense, inspect and copy during ordinary business hours any limited liability company record pertaining to the period during which he was a member.

(E) Failure of the limited liability company to keep or maintain any of the records or information required pursuant to this section shall not be grounds for imposing liability on any member or manager for the debts and obligations of the limited liability company.

Section 33-43-406. Restrictions on the transfer of any rights in the member's interest.

(A) Transfer or assignment of any rights in a member's interest in a limited liability company may be restricted, provided, however, such restriction is not binding unless the member either is a party to the agreement imposing the restriction or voted in favor of the restriction.

(B) A written restriction on the transfer or assignment of all or part of the rights of the member's interest (which may be entered into for any reason) that is noted conspicuously in a requested statement of membership rights may be enforced against the owner of the interest or a successor or transferee of the owner, including a pledgee or legal representative. Unless noted conspicuously in a requested statement of membership interest, a restriction is ineffective against a person without knowledge of the restriction.

(C) A would-be assignee or transferee is entitled to rely on a statement of membership rights issued by the limited liability company under Section 33-43-405(C). A restriction on the assignment or transfer of all or a part of the member's interest, which is otherwise valid and in effect at the time of the issuance of a statement of membership rights but which is not reflected in that statement, is ineffective against an assignee or transferee who takes an assignment or receives a transfer in reliance on the statement of membership rights.

Section 33-43-501. Contributions to capital.

A limited liability company interest may be issued in exchange for anything of value including, cash, property, services rendered, or a promissory note, or other written obligation to contribute cash or property or to perform services.

Section 33-43-502. Liability for contributions.

(A) A promise by a member to contribute to the limited liability company is not enforceable unless set forth in a writing signed by the member.

(B) Unless otherwise provided in an operating agreement, a member is obligated to the limited liability company to perform any enforceable promise to contribute cash or property or to perform services, even if the member is unable to perform because of death, disability, or other reason.

(C) If a member does not make the required contribution of property or services, the member is obligated, at the option of the limited liability company, to contribute cash equal to that portion of value of the stated contribution that has not been made.

(D) Unless otherwise provided in an operating agreement, the obligation of a member to make a contribution may be compromised only with the unanimous consent of the members.

(E) Notwithstanding the compromise, a creditor of a limited liability company who extends credit or otherwise acts in reliance on that obligation after the member signs a writing which reflects the obligation and before the compromise may enforce the original obligation.

Section 33-43-503. Allocation of profits and losses.

Profits and losses of a limited liability company shall be allocated among the members in the manner provided in the operating agreement. If the operating agreement does not so provide, profits and losses shall be allocated on a per capita basis.

Section 33-43-504. Remuneration.

A member is not entitled to remuneration for services performed for the limited liability company, except as provided in an operating agreement and except for reasonable compensation for services rendered in winding up the business of the limited liability company.

Section 33-43-601. Sharing of interim distributions.

Except as otherwise provided in Sections 33-43-602 and 33-43-905, distributions of cash or other assets of a limited liability company shall be shared among the members and among classes of members in the manner provided in writing in an operating agreement. If an operating agreement does not so provide in writing, each member shall share on a per capita basis in any distribution. A member is entitled to receive distributions described in this section from a limited liability company to the extent and at the times or upon the happening of the events specified in an operating agreement or at the times determined by the members or managers pursuant to Section 33-43-403.

Section 33-43-602. Distributions on an event of dissociation.

(A) Upon the occurrence of an event of dissociation under Section 33-43-802 which does not result in winding up, other than an event of dissociation described in Section 33-43-802(A)(3)(b) or Section 33-43-802(A)(2), a dissociating member is entitled to receive any distribution which the member was entitled to receive prior to the event of dissociation. The dissociating member shall also receive any other amount as provided in an operating agreement. If an operating agreement does not provide the amount of, or a method for determining the distribution to a dissociating member, the member shall additionally receive the fair value of the member's interest in the limited liability company as of the date of dissociation determined as provided in subsection (B) and based upon the member's right to share in distributions from the limited liability company.

(B) The `fair value' of the dissociating member's interest shall be determined on the basis of the amount that would be paid by a willing buyer to a willing seller, neither being under any compulsion to buy or sell, and with knowledge of all relevant facts. Interest must be paid from the date of dissociation to the date of payment.

(C) Damages for wrongful dissociation under Section 33-43-803 and all other amounts owing, whether or not presently due, from the dissociated member to the limited liability company, must be offset against the buyout price as determined in subsection (A). If damages and other amounts owing exceed the amount owed under subsection (A), interest must be paid on such excess from the date the amount owed becomes due to the date of payment.

(D) Unless otherwise provided in an operating agreement and subject to the provisions of subsections (E) and (G), if no agreement for the purchase of a dissociated member's interest is reached within one hundred twenty days after a written demand for payment, the limited liability company shall pay, or cause to be paid, in cash to the dissociated member or his personal representative the amount the limited liability company estimates to be the price to be paid according to subsection (B) and accrued interest, reduced by any offsets and accrued interest under subsection (C).

(E) If a deferred payment is authorized under subsection (G)(1), or the limited liability company reasonably and in good faith determines deferred payment may be made pursuant to subsection (G)(2), the limited liability company may tender a written offer to pay the amount it estimates to be the price owed under subsection (B) and accrued interest, reduced by any offsets under subsection (C), stating the amount of payment, the amount and type of security for payment, and the other terms and conditions of the obligation.

(F) The payment or tender required by subsection (D) or (E) must be accompanied by the following:

(1) a statement of limited liability company's assets and liabilities as of the date of dissociation;

(2) the latest available limited liability company balance sheet and income statement, if any;

(3) an explanation of how the estimated amount of payment was calculated; and

(4) a written notice that the payment is in full satisfaction of the obligation to purchase unless, within one hundred twenty days after the written notice, the dissociated member commences an action to determine the price, any offsets under subsection (C), or other terms of the reacquisition obligation.

(G) A deferred payment may be made only according to the following conditions:

(1) A member who wrongfully dissociates before the expiration of the duration of the limited liability company is not entitled to payment for any portion of the buyout price until the expiration of the then stated duration unless the member establishes to the satisfaction of the court that earlier payment will not cause undue hardship to the business of the limited liability company. The court shall determine the extent and manner to which such deferred payment is secured and the amount, if any, of interest to be paid on the deferred payment.

(2) A member who dissociates, but not wrongfully, before the expiration of the limited liability company, is entitled to payment of the buyout price within one hundred twenty days after the member, of his representative, gives written demand to the limited liability company. Provided, however, if the operating agreement does not require immediate payment, the limited liability company may request an order for deferral of payment which the court may only grant if the limited liability company establishes by clear and convincing evidence that deferred payment is necessary in order to prevent undue hardship to the business of the limited liability company. The court shall determine the length of deferral, the extent and manner to which the deferred payment is secured, and a reasonable fixed or variable rate of interest which shall be regularly paid on the deferred amount. Unless the limited liability company demonstrates by clear and convincing evidence that providing adequate security in regard to a deferred payment to a member who does not wrongfully dissociate will cause undue hardship to the business of the limited liability company, such deferred payment shall be adequately secured.

(H) A dissociated member may maintain an action against the limited liability company, pursuant to Section 33-43-1203 to determine the value of that member's interest, any offsets under subsection (C), or other terms. The action must be commenced within one hundred twenty days after the limited liability company has tendered payment or an offer to pay, or within one year after written demand for payment if no payment or offer to pay is tendered. The court shall determine the fair market value using the formula in subsection (B), any offset due under subsection (C), and accrued interest, and enter judgment for any additional payment or refund. If deferred payment is authorized under subsection (G), the court shall also determine the security for payment and other terms of the obligation to purchase. The court may assess reasonable attorney's fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against any other party, if the court finds that the other party acted arbitrarily, vexatiously, or not in good faith, including the limited liability company's failure to tender payment or an offer to pay or to comply with the requirement of subsection (F), or any unsupported or unreasonable request to defer payment pursuant to subsection (G)(2).

Section 33-43-603. Distribution in kind.

Unless otherwise provided in an operating agreement:

(A) A member, regardless of the nature of the member's contribution, has no right to demand and receive any distribution from the limited liability company in any form other than cash.

(B) A member may not be compelled to accept from the limited liability company a distribution of any asset in kind to the extent that the percentage of the asset distributed to the member exceeds the percentage that the member would have shared in a cash distribution equal to the value of the property at the time of distribution.

Section 33-43-604. Restrictions on distributions.

(A) No distribution may be made if, after giving effect to the distribution:

(1) the limited liability company would not be able to pay its debts as they become due in the usual course of business; or

(2) the limited liability company's assets would be less than the sum of its liabilities plus, unless otherwise provided in an operating agreement, the amount that would be needed, if the limited liability company were to be dissolved at the time of the distribution, to satisfy the preferential rights of other members upon dissolution which are superior to the rights of the member receiving the distribution.

(B) The limited liability company may base a determination that a distribution is not prohibited under subsection (A) either on:

(1) financial statements prepared on the basis of accounting practices and principles that are reasonable under the circumstances; or

(2) a fair valuation or other method that is reasonable under the circumstances.

(C) The effect of a distribution under subsection (A) is measured:

(1) in the case of distribution by purchase or other acquisition of the member's interest in the limited liability company, as of the date money or other property is transferred or debt incurred by the limited liability company;

(2) in the case of any other distribution of indebtedness, as of the date the indebtedness is distributed;

(3) in all other cases, as of (i) the date the distribution is authorized if the payment occurs within one hundred twenty days after the date of authorization, or (ii) the date the payment is made if it occurs more than one hundred twenty days after the date of authorization.

(D) A limited liability company's indebtedness to a member incurred by reason of a distribution made in accordance with this section is at parity with the limited liability company's indebtedness to its general, unsecured creditors except to the extent subordinated by agreement.

Section 33-43-605. Liability upon wrongful distribution.

(A) A member or manager who votes for or assents to a distribution in violation of an operating agreement or Section 33-43-604 is personally liable to the limited liability company for the amount of the distribution that exceeds the amount that could have been distributed without violating Section 33-43-604 or an operating agreement if it is established that such member or manager did not comply with Section 33-43-604 or the operating agreement and in so voting or assenting violated the standards imposed by Section 33-43-402.

(B) Each member or manager held liable under subsection (A) for a wrongful distribution is entitled to contribution:

(1) from each other member or manager who could be held liable under subsection (A) for the wrongful distribution; and

(2) from each member for the amount the member received in violation of Section 33-43-604 or an operating agreement.

(C) A proceeding under this section is barred unless it is commenced within two years after the date on which the effect of the distribution is measured under Section 33-43-604.

Section 33-43-701. Ownership of limited liability company property.

(A) Property transferred to or otherwise acquired by a limited liability company is property of the limited liability company and not of the members individually.

(B) Property is limited liability company property if acquired:

(1) in the name of the limited liability company; or

(2) in the name of one or more members or managers with an indication in the instrument transferring title to the property of:

(i) the person's capacity as a member or manager, or

(ii) of the existence of a limited liability company, but without an indication of the name of the limited liability company.

(C) Property is acquired in the name of the limited liability company by a transfer to:

(1) the limited liability company in its name; or

(2) one or more members or managers in their capacity as either members or managers in the limited liability company, if the name of the limited liability company is indicated in the instrument transferring title to the property.

(D) Property is presumed to be limited liability company property if purchased with limited liability company assets, even if not acquired in the name of the limited liability company or of one or more members with an indication in the instrument transferring title to the property of the person's capacity as a member or of the existence of a limited liability company.

(E) Property acquired in the name of one or more of the members, without an indication in the instrument transferring title to the property of the person's capacity as a member or of the existence of a limited liability company and without use of limited liability company assets, is presumed to be separate property, even if used for limited liability company purposes.

Section 33-43-702. Transfer of property.

(A) Except as provided in subsection (D), property of the limited liability company held in the name of the limited liability company, as provided in Section 33-43-701(C), may be transferred by an instrument of transfer executed by any member in the name of the limited liability company.

(B) Property of the limited liability company that is held in the name of one or more members or managers with an indication in the instrument transferring the property to them of their capacity as members or managers of a limited liability company or of the existence of a limited liability company, if the name of the limited liability company is not indicated, may be transferred by an instrument of transfer executed by the persons in whose name title is held.

(C) Property of the limited liability company held in the name of one or more persons other than the limited liability company without an indication in the instrument transferring title to the property to them of their capacity as members or managers of a limited liability company or of the existence of a limited liability company, may be transferred free of any claims of the limited liability company or the other members by the persons in whose name title is held to a transferee who gives value without having notice that it is property of the limited liability company.

(D) If the articles of organization provide that management of the limited liability company is vested in a manager or managers:

(1) title to property of the limited liability company that is held in the name of the limited liability company, as provided in Section 33-43-701(C), may be transferred by an instrument of transfer executed by any manager in the name of the limited liability company; and

(2) a member, solely by reason of being a member, shall not have authority to transfer property of the limited liability company.

Section 33-43-703. Nature of limited liability company interest.

A limited liability company interest is personal property.

Section 33-43-704. Assignment of limited liability company interest.

(A) Unless otherwise provided in writing in an operating agreement:

(1) a limited liability company interest is assignable in whole or in part;

(2) an assignment entitles the assignee to receive, to the extent assigned, only the distributions to which the assignor would be entitled;

(3) an assignment of a limited liability company interest does not dissolve the limited liability company or entitle the assignee to participate in the management and affairs of the limited liability company or to become or exercise any rights of a member;

(4) until the assignee of a limited liability company interest becomes a member, the assignor continues to be a member and to have the power to exercise any rights of a member, subject to the other members' right to remove the assignor pursuant to Section 33-43-802(A)(3)(b);

(5) until an assignee of a limited liability company interest becomes a member, the assignee has no liability as a member solely as a result of the assignment; and

(6) the assignor of a limited liability company interest is not released from his liability as a member solely as a result of the assignment.

(B) Unless otherwise provided in an operating agreement, the pledge of, or granting of a security interest, lien, or other encumbrance in or against, any or all of the limited liability company interest of a member is not an assignment and shall not cause the member to cease to be a member or to cease to have the power to exercise any rights or powers of a member.

Section 33-43-705. Rights of judgment creditor.

On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the member's limited liability company interest with payment of the unsatisfied amount of judgment with interest. To the extent so charged, the judgment creditor has only the rights of an assignee of the member's limited liability company interest. This chapter does not deprive any member of the benefit of any exemption laws applicable to his limited liability company interest.

Section 33-43-706. Right of assignee to become a member.

(A) An assignee of a limited liability company interest may become a member only if the other members unanimously consent at the time of the assignment. A member's consent may be withheld for any reason whatsoever. The consent of a member may be evidenced in any manner specified in writing in an operating agreement, but in the absence of such specification, consent shall be evidenced by a written instrument dated and signed by the member.

(B) An assignee who becomes a member has, to the extent assigned, the rights and powers, and is subject to the restrictions and liabilities, of a member under the articles of organization, any operating agreement, and this chapter. An assignee who becomes a member also is liable for any obligations of the assignor to make contributions under Section 33-43-502. However, the assignee is not obligated for liabilities of which the assignee had no knowledge at the time he became a member and which could not be ascertained from any written records of the limited liability company kept pursuant to Section 33-43-405.

(C) Unless otherwise provided in writing in an operating agreement, an assignor is not released from his liability to the limited liability company under Section 33-43-502, whether or not an assignee of a limited liability company interest becomes a member.

(D) Unless otherwise provided in writing in an operating agreement, a member who assigns his entire limited liability company interest ceases to be a member or to have the power to exercise any rights of a member when the assignee becomes a member with respect to the entire assigned interest.

Section 33-43-801. Admission of members.

(A) Subject to subsections (B) and (C), a person may become a member in a limited liability company:

(1) in the case of a person acquiring a limited liability company interest directly from the limited liability company, upon compliance with an operating agreement or, if an operating agreement does not so provide in writing, upon the written consent of all members; and

(2) in the case of an assignee of a limited liability company interest, as provided in Section 33-43-706.

(B) The effective time of admission of a member to a limited liability company shall be the later of:

(1) the date the limited liability company is formed; or

(2) the time provided in an operating agreement or, if no such time is provided therein, then when the person's admission is reflected in the records of the limited liability company.

(C) A domestic limited liability company formed in South Carolina and which renders professional service, as is defined in Section 33-43-102(N), may only admit as members:

(1) individuals who are authorized by law in this or another state to render a professional service the limited liability company practices;

(2) general partnerships in which all the partners are licensed in one or more states to practice a professional service which the limited liability company practices, and at least one partner is authorized by law in this State to render such professional service;

(3) professional corporations, domestic or foreign, authorized by law in this State to render a professional service which the limited liability company practices; and

(4) another foreign or domestic limited liability company in which all of the members are licensed in one or more states to practice a professional service which the limited liability company practices, and at least one member is authorized by law in this State to render such professional services.

If a licensing authority with jurisdiction over a professional considers it necessary to prevent violations of the ethical standards of the profession, the authority by rule may restrict or condition, or revoke in part, the authority of limited liability companies subject to its jurisdiction to permit persons or organizations to be members of limited liability companies.

Section 33-43-802. Events of dissociation.

(A) A person ceases to be a member of a limited liability company upon the occurrence of one or more of the following events:

(1) the member withdraws by voluntary act from the limited liability company;

(2) the member ceases to be a member of the limited liability company as provided in Section 33-43-706;

(3) the member is removed as a member;

(a) in accordance with an operating agreement or,

(b) unless otherwise provided in writing in the operating agreement, when a member assigns all of his interest in the limited liability company, by an affirmative vote of a majority in interest of the members who have not assigned their interests;

(4) the member;

(a) makes an assignment for the benefit of creditors,

(b) files a voluntary petition in bankruptcy,

(c) is adjudicated a bankrupt or insolvent,

(d) files a petition or answer seeking for the member any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation,

(e) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the member in any proceeding of this nature or,

(f) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the member or of all or any substantial part of the member's properties;

(5) if within one hundred twenty days after the commencement of any proceeding against the member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation, the proceeding has not been dismissed, or if within one hundred twenty days after the appointment without his consent or acquiescence of a trustee, receiver, or liquidator of the member or of all or any substantial part of his properties, the appointment is not vacated or stayed or if within one hundred twenty days after the expiration of any stay, the appointment is not vacated;

(6) in the case of a member who is an individual;

(a) the member's death or,

(b) the entry of an order by a court of competent jurisdiction adjudicating the member to be an incapacitated person so that he lacks sufficient understanding or capacity to make or communicate responsible decisions concerning his person or property.

(7) in the case of a member which is a trust or is acting as a member by virtue of being a trustee of a trust, the termination of the trust, but not merely the substitution of a new trustee;

(8) in the case of a member that is a separate limited liability company, the dissolution and commencement of winding up of the separate limited liability company;

(9) in the case of a member that is a corporation, the filing of a certificate of its dissolution or the equivalent for the corporation, or the lapse of ninety days after notice to the corporation of revocation without a reinstatement of its charter;

(10) in the case of an estate, the distribution by the fiduciary of the estate's entire interest in the limited liability company;

(11) in the case of a member which is a partnership, the dissolution and commencement of winding up of the partnership;

(12) on application by the limited liability company or another member, the member's expulsion by judicial decree because,

(a) the member engaged in wrongful conduct that adversely and materially affected the limited liability company business;

(b) the member wilfully or persistently committed a material breach of the operating agreement or of a duty owed to the limited liability company or the other members under Section 33-43-402 or any other agreement between the member and the limited liability company or other members;

(c) it is unlawful to carry on the limited liability company business with the member; or,

(d) the member engaged in conduct relating to the limited liability company business which makes it not reasonably practicable to carry on the business with that member, or;

(13) if the member is not an individual, partnership, limited liability company, corporation, trust, or estate; upon termination of the member.

(B) The members may provide in writing in an operating agreement for other events the occurrence of which shall result in a person ceasing to be a member of the limited liability company.

Section 33-43-803. Member's wrongful dissociation.

(A) A member's dissociation is wrongful only if:

(1) it is in breach of a written provision of the operating agreement; or

(2) before the expiration of the stated duration of the limited liability company the member withdraws by express will as provided in Section 33-43-802(A)(1), unless either: (i) the withdrawal follows the dissociation of another member which results in a dissolution of the limited liability company under Section 33-43-901, or (ii) the withdrawal is permitted by a written provision of the operating agreement;

(3) the member is expelled by judicial decree;

(4) the member is removed as a member in accordance with an operating agreement as provided in Section 33-43-802(A)(3)(a); or,

(5) in the case of a member who is not an individual, trust, other than a business trust, or estate, the member is expelled or otherwise dissociated because it wilfully dissolved or terminated.

(B) A wrongfully dissociating member is liable to the limited liability company and to the other members for damages caused by the dissociation including the reasonable costs of obtaining replacement of the services the withdrawn member was obligated to perform. The limited liability company may offset the damages against the amount otherwise distributable to the wrongfully dissociating member in addition to pursuing any remedies provided for in an operating agreement or otherwise available under applicable law.

Section 33-43-901. Dissolution.

A limited liability company is dissolved and its affairs shall be wound up only upon the happening of the first to occur of the following:

(A) at the time or upon the occurrence of events specified in writing in the articles of organization or an operating agreement;

(B) the written consent of all members;

(C) an event of dissociation of a member, unless, (1) within ninety days after a member dissociation a majority in interest of the remaining members (or any greater percentage as provided in the operating agreement) agree in writing to continue the business of the limited liability company (`a majority in interest' shall require the majority vote of both those members owning a majority of the capital and also those holding a majority of the profits and losses) and, (2) there are then two or more members of the limited liability company remaining;

(D) entry of a decree of judicial dissolution under Section 33-43-902 or Section 33-43-1105; or,

(E) administrative dissolution pursuant to Section 33-43-901.1.

Section 33-43-901.1. Grounds for administrative dissolution.

(A) The Secretary of State shall commence a proceeding under Section 33-43-901.2 to dissolve a limited liability company administratively if:

(1) the limited liability company does not pay when they are due any taxes, interest, or penalties imposed by law of this State;

(2) the limited liability company is without a registered agent or registered office in this State; or

(3) the limited liability company does not notify the Secretary of State that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued.

(B) The Secretary of State shall dissolve a limited liability company under Section 33-43-901.2(C) if he is notified by the Department of Revenue and Taxation that the limited liability company has failed to file a required tax return within sixty days of the notice they are delinquent.

Section 33-43-901.2. Procedure for and effect of administrative dissolution.

(A) If the Secretary of State determines that grounds exist under Section 33-43-901(A) for dissolving a limited liability company, he shall mail written notice of his determination to the limited liability company.

(B) If the limited liability company does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within sixty days after the notice required by subsection (A) was mailed, the Secretary of State shall dissolve the limited liability company administratively by signing a certificate of dissolution that recites the grounds for dissolution and its effective date. The Secretary of State shall file the original of the certificate and send a copy to the limited liability company by registered or certified mail addressed to its registered agent at its registered office.

(C) If the Secretary of State is notified by the Department of Revenue and Taxation that the limited liability company has failed to file a required tax return within sixty days of the notice they are delinquent, the Secretary of State shall dissolve the limited liability company administratively by signing a certificate of dissolution that recites the grounds for dissolution and its effective date. The Secretary of State shall file the original of the certificate and send a copy to the limited liability company by registered or certified mail addressed to its registered agent at its registered office.

(D) A limited liability company dissolved administratively may wind up its business and affairs pursuant to the provisions of Section 33-43-904, distribute its assets as provided in Section 33-43-905, file articles of dissolution pursuant to Section 33-43-906, and notify claimants pursuant to Section 33-43-907 and Section 33-43-908.

(E) The administrative dissolution of a limited liability company does not terminate the authority of its registered agent.

Section 33-43-901.3. Reinstatement following administrative dissolution.

(A) A limited liability company dissolved administratively under Section 33-43-901.2 may apply to the Secretary of State for reinstatement at any time after the effective date of dissolution and prior to the latest date upon which the limited liability company is to dissolve as set forth in the dissolved limited liability company's articles of organization. The applicant must:

(1) recite the name of the limited liability company and the effective date of its administrative dissolution;

(2) state that the grounds for dissolution either did not exist or have been eliminated;

(3) state that the limited liability company's name satisfies the requirements of Section 33-43-103; and

(4) contain a certificate from the South Carolina Department of Revenue and Taxation reciting that all taxes, penalties, and interest owed by the limited liability company, whether assessed or not, have been paid.

(B) If the Secretary of State determines that the application contains the information required by subsection (A) and that the information is correct, he shall cancel the certificate of dissolution and prepare a certificate of reinstatement that recites his determination and the effective date of reinstatement, file the original of the certificate, and send a copy to the limited liability company.

(C) When the reinstatement is effective, it relates back to and takes effect as of the effective date of the administrative dissolution, and the limited liability company resumes carrying on its business as if the administrative dissolution had never occurred.

Section 33-43-901.4. Appeal from denial of reinstatement.

(A) If the Secretary of State denies a limited liability company's application for reinstatement following administrative dissolution, he shall send a written notice that explains the reasons for denial to the limited liability company by registered or certified mail addressed to its registered agent at its registered office.

(B) The limited liability company may appeal the denial of reinstatement to the court of common pleas for Richland County within thirty days after the notice of denial was received. The limited liability company appeals by petitioning the court to set aside the dissolution and attaching to the petition copies of the Secretary of State's certificate of dissolution, the limited liability company's application for reinstatement, and the Secretary of State's notice of denial.

(C) The court may summarily order the Secretary of State to reinstate the dissolved limited liability company or may take other action the court considers appropriate.

(D) The court's final decision may be appealed as in other civil proceedings.

Section 33-43-902. Judicial dissolution.

On application by or for a member, the court of common pleas in the county of the principal place of business may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business of the limited liability company.

Section 33-43-903. Winding up.

Unless otherwise provided in writing in an operating agreement:

(A) The business or affairs of the limited liability company may be wound up by the members or managers who have authority pursuant to Section 33-43-401 to manage the limited liability company before dissolution, and who have not wrongfully dissociated. Provided, however, that upon the application of any member, a member's legal representative, or assignee, the court of common pleas may order, if one or more of such members or managers has engaged in wrongful conduct or upon other cause shown, judicial supervision of the winding up.

(B) The persons winding up the business or affairs of the limited liability company may, in the name of, and for and on behalf of, the limited liability company:

(1) preserve the limited liability company business or property as a going concern for a reasonable time;

(2) prosecute and defend suits;

(3) settle and close the business of the limited liability company;

(4) dispose of and transfer the property of the limited liability company;

(5) discharge the liabilities of the limited liability company;

(6) distribute to the members any remaining assets of the limited liability company; and,

(7) perform other necessary acts, including settlement of disputes by mediation or arbitration.

Section 33-43-904. Agency power of managers or members after dissolution.

(A) Except as provided in subsections (C), (D), and (E), after dissolution of the limited liability company, each of the members or managers having authority to wind up the limited liability company's business and affairs can bind the limited liability company:

(1) by any act appropriate for winding up the limited liability company's affairs or completing transactions unfinished at dissolution; and

(2) by any transaction that would have bound the limited liability company if it had not been dissolved, if the other party to the transaction does not have notice of the dissolution.

(B) The filing of the articles of dissolution shall be presumed to constitute notice of dissolution for purposes of subsection (A)(2).

(C) An act of a member which is not binding on the limited liability company pursuant to subsection (A) is binding if it is otherwise authorized by the limited liability company.

(D) An act of a member which would be binding under subsection (A) or would be otherwise authorized but which is in contravention of a restriction on authority shall not bind the limited liability company to persons having knowledge of the restriction.

(E) If the articles of organization vest management of the limited liability company in managers, a manager shall have the authority of a member provided for in subsection (A), and no member shall have such authority if the member is acting solely in the capacity of a member.

Section 33-45-905. Distribution of assets.

Upon the winding up of a limited liability company, the assets shall be distributed as follows:

(A) payment, or adequate provision for payment, shall be made to creditors including, to the extent permitted by law, members who are creditors in satisfaction of liabilities of the limited liability company;

(B) unless otherwise provided in writing in an operating agreement, to members or former members in satisfaction of liabilities for distributions under Sections 33-43-601 and 33-43-602; and

(C) unless otherwise provided in writing in an operating agreement, to members and former members first for the return of their contributions and second in proportion to the members' respective rights to share in distributions from the limited liability company prior to dissolution.

Section 33-43-906. Articles of dissolution.

After the dissolution of the limited liability company pursuant to Section 33-43-901, the limited liability company may file articles of dissolution with the Secretary of State which set forth:

(A) the name of the limited liability company;

(B) the date of filing of its articles of organization and all amendments thereto;

(C) the reason for filing the articles of dissolution;

(D) the effective date (which shall be a date certain) of the articles of dissolution if they are not to be effective upon the filing; and

(E) any other information the members or managers filing the certificate shall deem proper.

Section 33-43-907. Known claims against dissolved limited liability.

(A) Upon dissolution, a limited liability company may dispose of the known claims against it by filing articles of dissolution pursuant to Section 33-43-906 and following the procedures described in this section.

(B) The limited liability company shall notify its known claimants in writing of the dissolution at any time after the effective date of dissolution. The written notice must:

(1) describe information that must be included in a claim;

(2) provide a mailing address where a claim may be sent;

(3) state the deadline, which may not be fewer than one hundred twenty days after the later of the date of the written notice or the filing of articles of dissolution pursuant to Section 33-43-906, by which the limited liability company must receive the claim; and

(4) state that the claim will be barred if not received by the deadline.

(C) A claim against the limited liability company is barred:

(1) if a claimant who was given written notice under subsection (B) does not deliver the claim to the limited liability company by the deadline;

(2) if a claimant whose claim was rejected by the limited liability company does not commence a proceeding to enforce the claim within ninety days after the date of the rejection notice.

(D) For purposes of this section, `claim' does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.

Section 33-43-908. Unknown claims against dissolved limited liability company.

(A) A limited liability company may publish notice of its dissolution pursuant to this section which requests that persons with claims against the limited liability company present them in accordance with the notice.

(B) The notice must:

(1) be published once in a newspaper of general circulation in the county where the limited liability company's principal office (or, if none in this State, its registered office) is located;

(2) describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and

(3) state that a claim against the limited liability company will be barred unless a proceeding to enforce the claim is commenced within five years after the publication of the notice.

(C) If the limited liability company publishes a newspaper notice in accordance with subsection (B) and files articles of dissolution pursuant to Section 33-43-906, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the limited liability company within five years after the later of the publication date of the newspaper notice or the filing of the articles of dissolution:

(1) a claimant who did not receive written notice under Section 33-43-907; or

(2) a claimant whose claim was timely sent to the limited liability company but not acted on.

(D) A claim may be enforced under this section:

(1) against the limited liability company to the extent of its undistributed assets; or

(2) if the assets have been distributed in liquidation, against a member of the limited liability company to the extent of his pro rata share of the claim or of the assets of the limited liability company distributed to him in liquidation, whichever is less, but a member's total liability for all claims under this section may not exceed the total amount of assets distributed to him.

Section 33-43-1001. Law governing.

(A) Subject to the Constitution of South Carolina and except as provided in subsection (B), the laws of the State or other jurisdiction under which a foreign limited liability company is organized shall govern the organization and internal affairs, and authority of its managers and members of a foreign limited liability company transacting business in South Carolina.

(B) A foreign limited liability company that has obtained a certificate of authority to transact business in South Carolina pursuant to Chapter 43 of Title 33 and its members and managers have no greater rights and privileges than a domestic limited liability company and its members and managers with respect to transactions and relationship with persons who are not members. The certificate of authority does not authorize the foreign limited liability company to exercise any powers or engage in any business that a domestic limited liability company is forbidden to exercise or engage in by the laws of this State.

Section 33-43-1002. Application for certificate of authority.

(A) A foreign limited liability company may apply for a certificate of authority to transact business in this State by delivering an application to the Secretary of State for filing. The application must set forth:

(1) the name of the foreign limited liability company that satisfies the requirements of Section 33-43-1004;

(2) the name of the state or country under which it is organized;

(3) its date of organization and the latest date upon which the limited liability company is to dissolve;

(4) the street address of its proposed registered office in this State and the name of its proposed registered agent at that office;

(5) if management of the limited liability company is vested in a manager or managers, a statement to that effect.

(B) The foreign limited liability company shall deliver with the completed application a certificate of existence (or a document of similar import) duly authenticated by the Secretary of State or other official having custody of limited liability company records in the state or country under which law it is organized.

(C) If the foreign limited liability company renders `professional services' as defined in Section 33-43-102(N), a statement that all of its members are licensed in one or more states to render the professional services which the foreign limited liability company practices and that one or more of its members is licensed in South Carolina to render such professional services.

Section 33-43-1003. Issuance of registration.

(A) If the Secretary of State finds that an application for registration conforms to the provisions of this article and all requisite fees have been paid, the Secretary shall:

(1) endorse on each signed original and duplicate copy the word `filed' and the date and time of its acceptance for filing;

(2) retain the signed original in the Secretary of State's files; and

(3) return the duplicate copy to the person who filed it or the person's representative.

(B) If the Secretary of State is unable to make the determination required for filing by subsection (A) at the time any documents are delivered for filing, the documents are deemed to have been filed at the time of delivery if the Secretary of State subsequently determines that:

(1) the documents as delivered conform to the filing provisions of this act; or

(2) within twenty days after notification of nonconformance is given by the Secretary of State to the person who delivered the documents for filing for the person's representative, the documents are brought into conformance.

(C) If the filing and determination requirements of this act are not satisfied within the time prescribed in subsection (B)(2), the documents shall not be filed.

Section 33-43-1004. Name.

No certificate of registration shall be issued to a foreign limited liability company unless the name of such company satisfies the requirements of Section 33-43-103. If the name under which a foreign limited liability is registered in the jurisdiction of its formation does not satisfy the requirements of Section 33-43-103, to obtain or maintain a certificate of registration the foreign limited liability company may use a designated name that is available, and which satisfies the requirements of Section 33-43-103.

Section 33-43-1005. Amendments.

(A) The application for registration of a foreign limited liability company is amended by filing articles of amendment with the Secretary of State signed by a person with authority to do so under the laws of the State or other jurisdiction of its formation. The articles of amendment shall set forth:

(1) the name of the foreign limited liability company;

(2) the date the original application for registration was filed; and

(3) the amendment to the application for registration.

(B) the application for registration may be amended in any way, provided that the application for registration, as amended, contains only provisions that may be lawfully contained in an application for registration at the time of the amendment.

(C) A foreign limited liability company authorized to transact business in South Carolina must obtain an amended certificate of authority from the Secretary of State if it changes:

(1) its limited liability company name;

(2) the period of its duration;

(3) the state or country of its organization;

(4) from a member managed limited liability company to a limited liability company managed by managers;

(5) from a limited liability company managed by managers to a limited liability company managed by its members;

An amended certificate of authorization must also be obtained if:

(6) there is a false or erroneous statement in the original filed application for a certificate of authority.

Section 33-43-1006. Cancellation of registration.

(A) A foreign limited liability company authorized to transact business in this State may cancel its registration upon procuring from the Secretary of State a certificate of cancellation. In order to procure such certificate, the foreign limited liability company shall deliver to the Secretary of State an application for cancellation, which shall set forth:

(1) the name of the foreign limited liability company and the state or other jurisdiction under the laws of which it is formed;

(2) that the foreign limited liability company is not transacting business in this State;

(3) that the foreign limited liability company surrenders its certificate of registration to transact business in this State;

(4) that the foreign limited liability company revokes the authority of its registered agent for service of process in this State and consents that service of process in any action, suit, or proceeding based upon any cause of action arising in this State may thereafter be made on such foreign limited liability company by service thereof upon the Secretary of State; and

(5) an address to which a person may mail a copy of any process against the foreign limited liability company.

(B) The application for cancellation shall be in the form and manner designated by the Secretary of State and shall be executed on behalf of the foreign limited liability company by a person with authority to do so under the laws of the State or other jurisdiction of its formation, or, if the foreign limited liability company is in the hands of a receiver, trustee, or other court-appointed fiduciary by that fiduciary.

(C) A cancellation does not terminate the authority of the Secretary of State to accept service of process on the foreign limited liability company with respect to causes of action arising out of the doing of business in this State.

Section 33-43-1007. Transaction of business without registration.

(A) A foreign limited liability company transacting business in this State may not maintain an action, suit, or proceeding in a court of this State until it has registered in this State.

(B) The failure of a foreign limited liability company to register in this State does not:

(1) impair the validity of any contract or act of the foreign limited liability company;

(2) affect the right of any other party to the contract to maintain any action, suit, or proceeding on the contract; or

(3) prevent the foreign limited liability company from defending any action, suit, or proceeding in any court of this State.

(C) A foreign limited liability company, by transacting business in this State without registration, appoints the Secretary of State as its agent for service of process with respect to a cause of action arising out of the transaction of business in this State.

(D) A foreign limited liability company which transacts business in this State without registration shall be liable to the State for the years or parts thereof during which it transacted business in this State without registration in an amount equal to all fees which would have been imposed by this chapter upon that foreign limited liability company had it duly registered, and all penalties imposed by this chapter, the Attorney General may bring proceedings to recover all amounts due this State under the provisions of this section.

(E) A foreign limited liability company which transacts business in this State without registration shall be subject to a civil penalty, payable to the State of ten dollars per day, not to exceed one thousand dollars per year.

(F) The civil penalty set forth in subsection (E) may be recovered in an action brought within a court by the Attorney General. Upon a finding by the court that a foreign limited liability company has transacted business in this State in violation of this chapter, the court shall issue, in addition to the imposition of a civil penalty, an injunction restraining further transactions of the business of the foreign limited liability company and the further exercise of any limited liability company's rights and privileges in this State. The foreign limited liability company shall be enjoined from transacting business in this State until all civil penalties plus any interest and court costs which the court may assess have been paid and until the foreign limited liability company has otherwise complied with the provisions of this article.

(G) A member or manager of a foreign limited liability company is not liable for the debts and obligations of the limited liability company solely because the limited liability company transacted business in this State without registration.

Section 33-43-1008. Authority to transact business required.

(A) A foreign limited liability company may not transact business in this State until it obtains a certificate of authority from the Secretary of State.

(B) The following activities, among others, do not constitute transacting business within the meaning of subsection (A):

(1) maintaining, defending, or settling any proceeding;

(2) holding meetings of the members or managers or carrying on other activities concerning internal affairs;

(3) maintaining bank accounts;

(4) selling through independent contractors;

(5) soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this State before they become contracts;

(6) creating or acquiring any indebtedness, mortgages, and security interests in real or personal property;

(7) securing or collecting any debts or enforcing mortgages, security interests, or any other rights in property securing debts;

(8) owning, without more, real or personal property;

(9) conducting an isolated transaction that is completed within thirty days and that is not one in the course of repeated transactions of like nature;

(10) transacting business in interstate commerce;

(11) is a member or manager of a limited liability company or foreign limited liability company that is transacting business within this State.

(C) A foreign limited liability company which renders a professional service is not required to obtain a certificate of authority to transact business in this State unless it maintains or intends to maintain an office in this State for the conduct of business or professional practice.

(D) The list of activities in subsection (B) is not exhaustive.

Section 33-43-1101. Rendering professional services.

(A) A domestic or foreign limited liability company may render professional services in this State only through individuals licensed or otherwise authorized in this State to render the services.

(B) Subsection (A) does not:

(1) require an individual employed by a limited liability company to be licensed to perform services for the limited liability company if a license is not required otherwise;

(2) prohibit a licensed individual from rendering professional services in his individual capacity although he is a member or manager of a domestic or foreign limited liability company which also renders professional services; or,

(3) prohibit an individual licensed in another state from rendering professional services for a domestic or foreign limited liability company in this State if not prohibited by the licensing authority.

Section 33-43-1102. Confidential relationships.

(A) The relationship between an individual rendering professional services as a member, manager, agent, or employee of a domestic or foreign limited liability company which renders professional services, as defined in Section 33-43-102(N), and his client or patient, is the same as if the individual were rendering the services as a sole practitioner.

(B) The relationship between a domestic or foreign limited liability company which renders professional services, as defined in Section 33-43-102(N), and the client or patient for whom its employees, members, managers, or agents are rendering professional services is the same as that between the client or patient and the person providing the service.

Section 33-43-1103. Privileged communications.

A privilege applicable to communications between an individual rendering professional services and the person receiving the services recognized under the statute or common law of this State is not affected by this chapter. The privilege applies to a domestic or foreign professional limited liability company which renders professional services, as defined in Section 33-43-102(N), and to its employees, members, managers, and agents in all situations in which it applies to communications between an individual rendering professional services on behalf of the limited liability company (which renders professional services) and the person receiving the services.

Section 33-43-1104. Purposes.

(A) Except to the extent authorized by subsection (B), a South Carolina limited liability company whose purpose is to render professional services, may only: (i) render professional services within a single profession, and (ii) render services ancillary to the professional services. It may not engage in other business activities except as authorized by subsection (B).

(B) A limited liability company may render professional services in two or more professions and engage in any lawful business authorized by Section 33-43-106, to the extent the combination of professional purposes or of professional and business purposes is authorized by the licensing law of this State applicable to each profession in the combination. A limited liability company whose purpose is to render professional services may invest its funds in real estate, mortgages, securities, or any other type of investment.

Section 33-43-1105. Judicial dissolution.

The Attorney General may commence a proceeding to dissolve a limited liability company which renders professional services if:

(1) the Secretary of State or a licensing authority with jurisdiction over the limited liability company which renders professional services serves written notice on the limited liability company that it has violated or is violating a provision of this chapter (other than the provisions specified in Section 33-43-901.1, a violation of which gives the Secretary of State authority to administratively dissolve the limited liability company);

(2) the limited liability company does not correct each alleged violation, or demonstrate to the reasonable satisfaction of the Secretary of State or licensing authority that this did not occur, within sixty days after service of the notice is perfected; and

(3) the Secretary of State or licensing authority certifies to the Attorney General a description of the violation, that it notified the limited liability company of the violation, and that the limited liability company did not correct it, or demonstrate that it did not occur, within sixty days after service of notice.

Section 33-43-1201. Actions by and against the limited liability company.

(A) A limited liability company may sue and be sued in the name of the limited liability company.

(B) A member or a manager of a limited liability company is not a proper party to a proceeding by or against a limited liability company except when:

(1) the object of the proceeding is to determine or enforce a member or manager's right against, or liability to, the limited liability company as provided in Section 33-43-1203; or

(2) the proceeding involves a claim of personal liability or responsibility of that member or manager and that claim has some basis other than the member or manager's status as a member or manager.

Section 33-43-1202. Service of process.

(A) The registered agent appointed by a limited liability company or a foreign limited liability company shall be an agent of a limited liability company or foreign limited liability company upon whom any process, notice, or demand required or permitted by law to be served upon the limited liability company or foreign limited liability company may be served.

(B) If a limited liability company or foreign limited liability company fails to appoint or maintain a registered agent in this State or its registered agent cannot with reasonable diligence be found at the registered office, the Secretary of State shall be an agent of such limited liability company or foreign limited liability company upon whom any such process, notice, or demand may be served. Service on the Secretary of State of any process, notice, or demand shall be made by delivering to and leaving with the Secretary of State duplicate copies of the process, notice, or demand. If the process, notice, or demand is served on the Secretary of State, the Secretary of State shall immediately forward one of the copies by registered mail to the limited liability company or foreign limited liability company at its registered office. Service on the Secretary of State shall be returnable in not less than thirty days.

(C) The Secretary of State shall keep a record of all process, notices, and demands, served pursuant to this section and record the time and the action taken regarding the services.

(D) This section shall not limit or affect the right to serve any process, notice, or demand required or permitted by law to be served upon a limited liability company or foreign limited liability company in any other manner permitted by law.

Section 33-43-1203. Remedies of the limited liability company and members.

(A) A limited liability company, may maintain an action against a member or manager for a breach of the operating agreement, or for the violation of a duty to the limited liability company causing harm to the limited liability company.

(B) A member may maintain an action against the limited liability company, a manager, or a member for legal or equitable relief, including an accounting as to limited liability company business, for any breach of the operating agreement, or for the violation of a duty to the member or limited liability company causing harm to the member or limited liability company.

Section 33-43-1301. Merger.

(A) Unless otherwise provided in writing in an operating agreement, one or more limited liability companies may merge with another domestic or foreign limited liability company as the merger agreement shall provide.

(B) Interests in a domestic or foreign limited liability company that is a party to the merger may be exchanged for or converted into cash, property, obligations, rights, or interests in the surviving domestic or foreign limited liability company.

Section 33-43-1302. Approval of merger.

(A) Unless otherwise provided in writing in an operating agreement, each domestic or foreign limited liability company that is a party to a proposed merger shall approve the merger agreement by the consent of all the members. In no event shall the agreement be approved by less than fifty-one percent of the members of each domestic and foreign limited liability company.

(B) Each domestic and foreign limited liability company that is a party to the merger shall have such rights to abandon the merger as are provided for in the merger agreement or in the laws applicable to each domestic and foreign limited liability company.

Section 33-43-1303. Plan of merger.

(A) Each domestic and foreign limited liability company shall enter into a written plan of merger, which shall be approved in accordance with Section 33-43-1302.

(B) The plan of merger shall set forth:

(1) the name of each limited liability company that is a party to the merger and the name of the surviving limited liability company into which each limited liability company proposes to merge;

(2) the terms and conditions of the proposed merger;

(3) the manner and basis of converting the interests in each limited liability company into interests of the surviving limited liability company, in whole or part, or into cash or other property;

(4) such amendments to the articles of organization of the surviving limited liability company as are desired to be effected by the merger, or that no such changes are desired;

(5) such other provisions relating to the proposed merger as are considered necessary or desirable.

(C) For purposes of Section 33-43-1303, the term `limited liability company' shall include both domestic and foreign limited liability companies.

Section 33-43-1304. Articles of merger.

(A) The surviving limited liability company shall deliver to the Secretary of State articles of merger executed by each constituent limited liability company setting forth:

(1) the name and jurisdiction of formation or organization of each limited liability company which is to merge;

(2) that an agreement of merger has been approved and executed by each limited liability company which is a party to the merger;

(3) the name of the surviving or resulting limited liability company;

(4) the future effective date of the merger (which shall be a date or time certain) if it is not to be effective upon the filing of the articles of merger;

(5) that the agreement of merger is on file at a place of business of the surviving limited liability company, and the address of that place of business;

(6) that a copy of the agreement of merger will be furnished by the surviving limited liability company, on request and without cost, to any person holding an interest in any limited liability company which is to merge; and

(7) if the surviving or resulting limited liability company is not a limited liability company organized under the laws of this State, a statement that such surviving limited liability company:

(a) agrees that it may be served with process in this State in any proceeding for enforcement of any obligation of any limited liability company party to the merger that was organized under the laws of this State, as well as for enforcement of any obligation of the surviving limited liability company or the new limited liability company arising from the merger; and

(b) appoints the Secretary of State as its agent for service of process in any such proceeding, and the surviving limited liability company or the new limited liability company shall specify the address to which a copy of the process shall be mailed to it by the Secretary of State.

(B) A merger takes effect upon the later of the effective date of the filing of the articles of merger or the date set forth in the articles of merger.

(C) The articles of merger shall be executed by a limited liability company that is a party to the merger in the manner provided for in Section 33-43-204 and shall be filed with the Secretary of State in the manner provided for in Section 33-43-205.

(D) Articles of merger shall constitute articles of dissolution for a limited liability company which is not the surviving limited liability company in the merger.

(E) An agreement of merger approved in accordance with Sections 33-43-1302 and 33-43-1303 may affect any amendment to an operating agreement or affect the adoption of a new operating agreement for a limited liability company if it is the surviving limited liability company in the merger. An approved agreement of merger may also provide that the operating agreement of any constituent limited liability company to the merger (including a limited liability company formed for the purpose of consummating a merger) shall be the operating agreement of the surviving or resulting limited liability company. Any amendment to an operating agreement or adoption of a new operating agreement made pursuant to this subsection (E) shall be effective at the effective time or date of the merger.

(F) For purposes of this section, except with respect to subsections (A)(7) and (D), the term `limited liability company' shall include both domestic and foreign limited liability companies.

Section 33-43-1305. Effects of merger.

A merger has the following effects:

(A) The limited liability companies that are parties to the merger agreement shall be a single entity.

(B) Each limited liability company to the merger agreement, except the surviving limited liability company, shall cease to exist.

(C) All property real, personal, and mixed, and all debts due on whatever account, including promises to make capital contributions, and all other choses in action, and all and every other interest of belonging to or due to each of the constituent limited liability companies shall be vested in the surviving limited liability company without further act or deed.

(D) The title to all real estate and any interest therein, vested in any such constituent limited liability company shall not revert or be in any way impaired by reason of such merger.

(E) The surviving limited liability company shall thenceforth be liable for all liabilities and obligations of each of the constituent limited liability companies so merged and any claim existing or action or proceeding pending by or against any such constituent limited liability company may be prosecuted as if such merger had not taken place, or the surviving limited liability company may be substituted in the action.

(F) Neither the rights of creditors nor any liens on the property of any constituent limited liability company shall be impaired by the merger.

(G) The interests in a limited liability company and the former holders thereof are entitled only to the rights provided in the merger agreement or the rights otherwise provided by law.

For purposes of this section, the term `limited liability company' shall include both domestic and foreign limited liability companies.

Section 33-43-1401. Filing, service, and copying fees.

(A) The Secretary of State shall collect the following fees when the following documents described in this subsection are delivered to him for filing:

(1) Articles of organization of a domestic limited liability company: one hundred and ten dollars.

(2) Articles of amendment to the articles of organization of a domestic limited liability company: one hundred and ten dollars.

(3) Articles of merger involving a domestic or foreign limited liability company: one hundred and ten dollars.

(4) Application by a foreign limited liability company for a certificate of authority to do business in South Carolina: one hundred and ten dollars.

(5) Amendment by a foreign limited liability company of its certificate of authority: one hundred and ten dollars.

(6) Restated articles of organization of a limited liability company filed with an amendment to the articles of organization: ten dollars.

(7) Application for reservation of a limited liability company name: twenty-five dollars.

(8) Notice of transfer of a reserved limited liability company name: ten dollars.

(9) Annual application for registration (or renewal) of a foreign limited liability company name: ten dollars.

(10) Statement of change of registered office or registered agent, or both: Ten dollars.

(11) Articles of dissolution: ten dollars.

(12) Articles of revocation of dissolution: ten dollars.

(13) Application for reinstatement after administrative dissolution: twenty-five dollars.

(14) Application for certificate of withdrawal: ten dollars.

(15) Application for certificate of existence or authorization: ten dollars.

(16) Any other document required or permitted to be filed pursuant to this Chapter 43 of Title 33: two dollars.

(B) The Secretary of State shall collect a fee of ten dollars each time process is served on him under Chapter 43 of this Title 33. The party to a proceeding causing service of process is entitled to recover this fee as costs if he prevails in the proceeding.

(C) The Secretary of State shall collect the following fees for copying and certifying the copy of any filed document relating to a domestic or foreign limited liability company:

(1) for copying, one dollar for the first page and fifty cents for each additional page; and,

(2) two dollars for each certificate.

Section 33-43-1402. Execution by judicial act.

Any person who is adversely affected by the failure or refusal of any person to execute and file any articles or other documents to be filed under this chapter may petition the court of common pleas in the county where the registered office of the limited liability company is located to direct the execution and filing of the articles or other documents. If the court finds that it is proper for the articles or other documents to be executed and filed and that there has been failure or refusal to execute and file such documents, it shall order the Secretary of State to file the appropriate articles or other documents.

Section 33-43-1403. Notice.

(A) Notice under this chapter must be in writing unless oral notice is reasonable under the circumstances.

(B) Notice may be communicated in person; by telephone, telegraph, teletype, facsimile transmission, or other form of wire or wireless communication; or by mail or private carrier. If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area, where published; or by radio, television, or other form of public broadcast communication.

(C) Written notice by a domestic or foreign limited liability company to its members, if in a comprehensible form, is effective when mailed, if mailed postpaid and correctly addressed to the member's address shown in the limited liability company's current record of members.

(D) In addition to Section 33-43-303, written notice to a domestic or foreign limited liability company (authorized to transact business in this State) may be addressed to its registered agent at its registered office.

(E) Except as provided in subsection (C), written notice, if in a comprehensible form, is effective at the earliest of the following:

(1) when received;

(2) five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed;

(3) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee.

(F) Oral notice is effective when communicated if communicated in a comprehensible manner.

(G) If Chapter 43 prescribes notice requirements for particular circumstances, those requirements govern. If the articles of organization or the operating agreement prescribe notice requirements, not inconsistent with this section or other provisions of Chapter 43, those requirements govern.

Section 33-43-1404. Rules of construction.

(A) It is the policy of this chapter to give maximum effect to the principle of freedom of contract and to the enforceability of operating agreements.

(B) Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.

(C) Rules that statutes in derogation of the common law are to be strictly construed shall have no application to this chapter.

Section 33-43-1405. Jurisdiction of the circuit court.

The circuit courts shall have jurisdiction to enforce the provisions of this chapter.

Section 33-43-1406. Severability.

If any provision of this chapter or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application. To this end, the provisions of this chapter are severable.

Section 33-43-1407. Interstate application.

A limited liability organized and existing under this chapter may conduct its business, carry on its operations, and have and exercise the powers granted by this chapter in any state or foreign country.

Section 33-43-1408. The term `partnership' includes the term `limited liability company'.

Except (1) as otherwise required by the context, (2) as inconsistent with the provisions of this chapter, and (3) for this chapter, Chapters 41 and 42 of Title 33, and Title 12, the term `partnership' or `general partnership', when used in any other statute or in any regulation, includes and also means `limited liability company'.

Section 33-43-1409. The General Assembly of South Carolina has power to provide regulations regarding Chapter 43 of this title and to amend or repeal all or any part of Chapter 43 of Title 33 or its regulations at any time; and all domestic and foreign limited liability companies subject to Chapter 43 of this title are governed by the amendment or repeal."

SECTION 2. The 1976 Code is amended by adding:

"Section 12-2-25. Limited liability companies.

(A) As used in this title and unless otherwise required by the context:

(1) `Partnership' includes a limited liability company taxed for South Carolina income tax purposes as a partnership.

(2) `Partner' includes any member of a limited liability company taxed for South Carolina income tax purposes as a partnership.

(3) `Corporation' includes a limited liability company or professional or other association taxed for South Carolina income tax purposes as a corporation.

(4) `Shareholder' includes any member of a limited liability company taxed for South Carolina income tax purposes as a corporation."

SECTION 3. Section 33-41-20 of the 1976 Code is amended to read:

"Section 33-41-20. As used in this chapter:

(1) `Court' includes every court and judge having jurisdiction in the case;

(2) `Business' includes every trade, occupation, or profession;

(3) `Bankrupt' includes a bankrupt under the Federal Bankruptcy Act or an insolvent under any state insolvent act;

(4) `Conveyance' includes every assignment, lease, mortgage, or encumbrance; and

(5) `Real property' includes land and any interest or estate in land.; and

(6) `Registered limited liability partnership' includes a partnership formed pursuant to an agreement governed by the laws of this State, registered under Section 33-41-1110 and complying with Sections 33-41-1120 and 33-41-1130."

SECTION 4. Section 33-41-210 of the 1976 Code is amended to read:

"Section 33-41-210. A `partnership' is an association of two or more persons to carry on as co-owners a business for profit and includes, for all purposes of the laws of this State, a registered limited liability partnership. But However, any association formed under any other statute of this State or any statute adopted by authority, other than the authority of this State, is not a partnership under this chapter unless such the association would have been a partnership in this State prior to before the adoption of this chapter on February 13, 1950.

But this This chapter shall apply to limited partnerships except in so far as the statutes relating to such the partnerships are inconsistent herewith with the provisions of this chapter."

SECTION 5. Section 33-41-370 of the 1976 Code is amended to read:

"Section 33-41-370. (A) Except as provided by subsection (B), All all partners are liable jointly and severally for everything chargeable to the partnership.

(B) Subject to subsections (C) and (D), a partner in a registered limited liability partnership is not liable directly or indirectly, including by way of indemnification, contribution, or otherwise, for debts, obligations, and liabilities chargeable to the partnership arising from negligence, wrongful acts, or misconduct committed while the partnership is a registered limited liability partnership and in the course of the partnership business by another partner or an employee, agent, or representative of the partnership.

(C) Subsection (B) shall not affect the liability of a partner in a registered limited liability partnership for his own negligence, wrongful acts, or misconduct, or that of a person under his direct supervision and control.

(D) Each individual who renders professional services on behalf of a registered limited liability partnership is liable for a negligent or wrongful act or omission in which he personally participates to the same extent as if he rendered the services as a sole practitioner. A partner of a registered limited liability partnership which renders professional services, as defined in Section 33-19-103(7), is not liable for the negligence, wrongful acts, misconduct, or omissions of other partners, agents, or employees of the registered limited liability partnership unless he is at fault in appointing, supervising, or cooperating with them."

SECTION 6. Section 33-41-510(1) of the 1976 Code is amended to read:

"(1) each partner shall be repaid his contributions, whether by way of capital or advances to the partnership property, and share equally in the profits and surplus remaining after all liabilities, including those to partners, are satisfied. And Except as provided in Section 33-41-370(B), each partner must shall contribute toward the losses, whether of capital or otherwise, sustained by the partnership according to his share in the profits;"

SECTION 7. Section 33-41-960 of the 1976 Code is amended to read:

"Section 33-41-960. When the dissolution is caused by the act, death, or bankruptcy of a partner, each partner is liable to his copartners for his share of any liability created by any a partner acting for the partnership as if the partnership had not been dissolved unless:

(1) the dissolution being by act of any a partner, the partner acting for the partnership had knowledge of the dissolution; or

(2) the dissolution being by the death or bankruptcy of a partner, the partner acting for the partnership had knowledge or notice of the death or bankruptcy.; or

(3) the liability is for a debt, obligation, or liability for which the partner is not liable as provided in Section 33-41-370(B)."

SECTION 8. Section 33-41-1010(4) of the 1976 Code is amended to read:

"(4) The individual property of a deceased partner shall must be liable for all those obligations of the partnership incurred while he was a partner and for which he was liable under Section 33-41-370 but subject to the prior payment of his separate debts."

SECTION 9. Section 33-41-1060 of the 1976 Code is amended to read:

"Section 33-41-1060. In settling accounts between the partners after dissolution the following rules shall must be observed, subject to any agreement to the contrary:

(1) the assets of the partnership are:

(a) the partnership property and

(b) the contributions of the partners necessary for the payment of all the liabilities specified in item (2) (4) of this section;

(2) the liabilities of the partnership shall rank in order of payment, as follows:

(a) those owing to creditors other than partners,

(b) those owing to partners other than for capital and profits,

(c) those owing to partners in respect of capital, and

(d) those owing to partners in respect of profits;

(3) the assets shall must be applied in the order of their declaration in item (1) of this section to the satisfaction of the liabilities;

(4) except as provided in Section 33-41-370(B):

(a) the partners shall contribute, as provided by Section 33-41-510, the amount necessary to satisfy the liabilities; but if and

(b) if any, but not all, of the partners are insolvent or, not being subject to process, refuse to contribute, the other partners shall contribute their share of the liabilities and, in the relative proportions in which they share the profits, the additional amount necessary to pay the liabilities;

(5) an assignee for the benefit of creditors or any person appointed by the court shall have the right to enforce the contributions specified in item (4) of this section;

(6) any partner or his legal representative shall have the right to enforce the contributions specified in item (4) of this section to the extent of the amount which he has paid in excess of his share of the liability;

(7) the individual property of a deceased partner shall must be liable for the contributions specified in item (4) of this section;

(8) when partnership property and the individual properties of the partners are in possession of a court for distribution, partnership creditors shall have priority on partnership property and separate creditors on individual property, saving the rights of lien or secured creditors as heretofore provided by law; and

(9) when a partner has become bankrupt or his estate is insolvent the claims against his separate property shall must rank in the following order:

(a) those owing to separate creditors,

(b) those owing to partnership creditors, and

(c) those owing to partners by way of contribution."

SECTION 10. Title 33, Chapter 41 of the 1976 Code is amended by adding:

"Section 33-41-1110. (A) To become and to continue as a registered limited liability partnership, a partnership shall file with the Secretary of State an application or a renewal application, as the case may be, stating the name of the partnership; the address of its principal office, if the partnership's principal office is not located in this State; the address of a registered office, and the name and address of a registered agent for service of process in this State, which the partnership will be required to maintain; the number of partners; a brief statement of the business in which the partnership engages, and that the partnership applies for status or renewal of its status, as the case may be, as a registered limited liability partnership.

(B) The application or renewal application must be executed by a majority in interest of the partners or by one or more partners authorized to execute an application or renewal application.

(C) The application or renewal application must be accompanied by a fee of one hundred dollars.

(D) The Secretary of State shall register as a registered limited liability partnership and shall renew the registration of any registered limited liability partnership, any partnership that submits a completed application or renewal application with the required fee.

(E) Registration is effective for one year after the date an application is filed unless voluntarily withdrawn pursuant to Section 33-41-1190. Registration, whether pursuant to an original application or a renewal application, as a registered limited liability partnership is renewed if during the sixty-day period preceding the date the application or renewal application otherwise would have expired the partnership files with the Secretary of State a renewal application. A renewal application expires one year after the date an original application would have expired if the last renewal of the application had not occurred.

(F) The status of a partnership as a registered limited liability partnership may not be affected by changes after the filing of an application or a renewal application in the information stated in the application or renewal application.

(G) The Secretary of State may provide forms for application for or for renewal of registration.

Section 33-41-1120. The name of a registered limited liability partnership must contain the words `Registered Limited Liability Partnership' or the abbreviation `L.L.P.' as the last words or letters of its name.

Section 33-41-1130. (A)(1) A registered limited liability partnership shall carry at least $100,000 of liability insurance, beyond the amount of any applicable deductible, of a type that is designed to cover the kinds of negligence, wrongful acts, and misconduct for which liability is limited by Section 33-41-370(B) and which insures the partnership and its partners.

(2) A registered liability partnership which renders professional services, as defined in Section 33-19-103(7), shall carry such additional insurance of the type described in item (1) of this subsection as may be required by the appropriate licensing authority. Professional service licensing authorities may prescribe additional insurance only on the profession as a whole, and not only on individual service providers.

(B) If a registered limited liability partnership is in compliance with the requirements of subsection (A), the requirements of this section shall not be admissible or in any way made known to a jury in determining an issue of liability for or extent of the debt or obligation or damages in question.

(C) A registered limited liability partnership is considered to be in compliance with subsection (A) if the partnership provides $100,000, or such higher amount as required by the appropriate licensing authority pursuant to subsection (A)(2), of funds specifically designated and segregated for the satisfaction of judgments against the partnership or its partners based on the kinds of negligence, wrongful acts, and misconduct for which liability is limited by Section 33-41-370(B) by:

(1) deposit in trust or in bank escrow of cash, bank certificates of deposit, or United States Treasury obligations; or

(2) a bank letter of credit or insurance company bond.

(D) Nothing in this section shall be construed to:

(1) limit the amount of damages for which a:

(a) registered limited liability partnership is liable with respect to the kinds of negligence, wrongful acts, or misconduct for which liability is limited by Section 37-41-370(B); or

(b) partner of a registered limited liability partnership is liable under Section 33-41-370; or

(2) constitute a determination of the adequacy of capitalization of a registered limited liability partnership for any purpose.

Section 33-41-1140. A limited liability partnership organized and existing under this chapter may conduct its business, carry on its operations, and have and exercise the powers granted by this chapter in any state or foreign country.

Section 33-41-1150. (A) Subject to the Constitution of South Carolina and except as provided in subsection (B), the laws of the State or other jurisdiction under which a foreign limited liability partnership is organized shall govern the organization and internal affairs, the liability of partners for debts, obligations, and liabilities chargeable to the partnership, and the authority of partners of a foreign limited liability partnership transacting business in South Carolina.

(B) A foreign limited liability partnership that has obtained a certificate of authority to transact business in South Carolina pursuant to Chapter 41 of Title 33 and its partners have no greater rights and privileges than a domestic limited liability partnership and its partners with respect to transactions and relationship with persons who are not members. The certificate of authority does not authorize the foreign limited liability partnership to exercise any powers or engage in any business in which a domestic limited liability partnership is forbidden to exercise or engage by the laws of this State.

(C) An individual who renders professional services in this State on behalf of a foreign limited liability partnership is liable as set forth in Section 33-41-370(D).

Section 33-41-1160. (A) A foreign limited liability partnership may apply for a certificate of authority to transact business in this State by delivering an application to the Secretary of State for filing. The application must set forth:

(1) the name of the foreign limited liability partnership that satisfies the requirements of Section 33-41-1120;

(2) the name of the state or country under which it is organized;

(3) its date of organization;

(4) the street address of its proposed registered office in this State and the name of its proposed registered agent at that office; and

(5) a statement that the foreign limited liability partnership has liability insurance of the amount and type described in Section 33-41-1130(A)(1) or segregated funds as described in Section 33-41-1130(C) in an amount equal to or greater than the amount specified in Section 33-41-1130(A)(1).

(B) The foreign limited liability partnership shall deliver with the completed application a certificate of existence (or a document of similar import) duly authenticated by the Secretary of State or other official having custody of limited liability partnership records in the state or country under which law it is organized.

(C) If the foreign limited liability partnership renders `professional services' as defined in Section 33-19-103(7), the application required by subsection (A) must also contain a statement that:

(1) all of its partners are licensed in one or more states to render the professional services which the foreign limited liability partnership practices and that one or more of its partners is licensed in South Carolina to render such professional services; and

(2) the foreign limited liability partnership is in compliance with the requirements of Section 33-41-1130(A)(2); provided, however, that to the extent any such requirements are determined by reference to the number of licensed partners or individuals, such determination shall be made on the basis of the number of partners or individuals who render professional services in South Carolina.

(D) The Secretary of State shall collect a fee of one hundred dollars when a foreign limited liability partnership delivers to him for filing an annual or renewal application for a certificate to transact business in this State.

Section 33-41-1170. (A) If the Secretary of State finds that an application for a certificate of authority to transact business in this State conforms to the provisions of this article and all requisite fees have been paid, the Secretary shall:

(1) endorse on each signed original and duplicate copy the word `filed' and the date and time of its acceptance for filing;

(2) retain the signed original in the Secretary of State's files; and

(3) return the duplicate copy to the person who filed it or the person's representative.

(B) If the Secretary of State is unable to make the determination required for filing by subsection (A) at the time any documents are delivered for filing, the documents are considered to have been filed at the time of delivery if the Secretary of State subsequently determines that:

(1) the documents as delivered conform to the filing provisions of this act; or

(2) within twenty days after notification of nonconformance is given by the Secretary of State to the person who delivered the documents for filing for the person's representative, the documents are brought into conformance.

(C) If the filing and determination requirements of this act are not satisfied within the time prescribed in subsection (B)(2), the documents shall not be filed.

(D) A certificate of authority to transact business in this State is effective for one year after the date the application is filed unless voluntarily withdrawn pursuant to Section 33-41-1190. Registration, whether pursuant to an original application or a renewal application, as a registered limited liability partnership is renewed if, during the sixty-day period preceding the date the application or renewal application otherwise would have expired, the partnership files with the Secretary of State a renewal application. A renewal application expires one year after the date an original application would have expired if the last renewal of the application had not occurred.

Section 33-41-1180. (A) The application for a foreign limited liability partnership's certificate of authority to transact business in this State is amended by filing articles of amendment with the Secretary of State signed by a person with authority to do so under the laws of the State or other jurisdiction of its formation. The articles of amendment shall set forth:

(1) the name of the foreign limited liability partnership;

(2) the date the original application for registration was filed; and

(3) the amendment to the application for registration.

(B) The application for a certificate to transact business in this State may be amended in any way, provided that the application, as amended, contains only provisions that may be lawfully contained in an application for a certificate to transact business in this State at the time of the amendment.

(C) A foreign limited liability partnership authorized to transact business in South Carolina must obtain an amended certificate of authority from the Secretary of State if it changes:

(1) its limited liability partnership name;

(2) the street address of its registered office in this State or the name of its registered agent at that office; or

(3) the state or country of its organization.

An amended certificate of authorization must also be obtained if there is a false or erroneous statement in the original filed application for a certificate of authority.

(D) The Secretary of State shall collect a fee of one hundred dollars when a foreign limited liability partnership delivers to him for filing an amendment to a certificate to transact business in this State.

Section 33-41-1190. (A) A foreign limited liability partnership authorized to transact business in this State may cancel its registration upon procuring from the Secretary of State a certificate of cancellation. In order to procure such certificate, the foreign limited liability partnership shall deliver to the Secretary of State an application for cancellation, which shall set forth:

(1) the name of the foreign limited liability partnership and the state or other jurisdiction under the laws of which it is formed;

(2) that the foreign limited liability partnership is not transacting business in this State;

(3) that the foreign limited liability partnership surrenders its certificate of authority to transact business in this State;

(4) that the foreign limited liability partnership revokes the authority of its registered agent for service of process in this State and consents that service of process in any action, suit, or proceeding based upon any cause of action arising in this State may thereafter be made on such foreign limited liability partnership by service thereof upon the Secretary of State; and

(5) an address to which a person may mail a copy of any process against the foreign limited liability partnership.

(B) The application for cancellation shall be in the form and manner designated by the Secretary of State and shall be executed on behalf of the foreign limited liability partnership by a person with authority to do so under the laws of the State or other jurisdiction of its formation, or if the foreign limited liability partnership is in the hands of a receiver, trustee, or other court-appointed fiduciary by that fiduciary.

(C) A cancellation does not terminate the authority of the Secretary of State to accept service of process on the foreign limited liability partnership with respect to causes of action arising out of the transaction of business in this State.

Section 33-41-1200. (A) A foreign limited liability partnership transacting business in this State may not maintain an action, suit, or proceeding in a court of this State until the Secretary of State has issued it a certificate of authority to transact business in this State.

(B) The failure of a foreign limited liability partnership to register in this State does not:

(1) impair the validity of any contract or act of the foreign limited liability partnership;

(2) affect the right of any other party to the contract to maintain any action, suit, or proceeding on the contract; or

(3) prevent the foreign limited liability partnership from defending any action, suit, or proceeding in any court of this State.

(C) A foreign limited liability partnership, by transacting business in this State without registration, appoints the Secretary of State as its agent for service of process with respect to a cause of action arising out of the transaction of business in this State.

(D) A foreign limited liability partnership which transacts business in this State without a certificate of authority shall be liable to the State for the years or parts thereof during which it transacted business in this State without a certificate of authority in an amount equal to all fees which would have been imposed by this chapter upon that foreign limited liability partnership had it duly registered, and all penalties imposed by this chapter, the Attorney General may bring proceedings to recover all amounts due this State under the provisions of this section.

(E) A foreign limited liability partnership which transacts business in this State without a certificate of authority shall be subject to a civil penalty, payable to the State of ten dollars per day, not to exceed one thousand dollars per year.

(F) The civil penalty set forth in subsection (E) may be recovered in an action brought within a court by the Attorney General. Upon a finding by the court that a foreign limited liability partnership has transacted business in this State in violation of this chapter, the court shall issue, in addition to the imposition of a civil penalty, an injunction restraining further transactions of the business of the foreign limited liability partnership and the further exercise of any limited liability partnership's rights and privileges in this State. The foreign limited liability partnership shall be enjoined from transacting business in this State until all civil penalties plus any interest and court costs which the court may assess have been paid and until the foreign limited liability partnership has otherwise complied with the provisions of this article.

(G) A partner of a foreign limited liability partnership is not liable for the debts and obligations of the limited liability partnership solely because the limited liability partnership transacted business in this State without registration.

Section 33-41-1210. (A) A foreign limited liability partnership may not transact business in this State until it obtains a certificate of authority from the Secretary of State.

(B) The following activities, among others, do not constitute transacting business within the meaning of subsection (A):

(1) maintaining, defending, or settling any proceeding;

(2) holding meetings of the partners or carrying on other activities concerning internal affairs;

(3) maintaining bank accounts;

(4) selling through independent contractors;

(5) soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this State before they become contracts;

(6) creating or acquiring any indebtedness, mortgages, and security interests in real or personal property;

(7) securing or collecting any debts or enforcing mortgages, security interests, or any other rights in property securing debts;

(8) owning, without more, real or personal property;

(9) conducting an isolated transaction that is completed within thirty days and that is not one in the course of repeated transactions of like nature; and

(10) transacting business in interstate commerce.

(C) A foreign limited liability partnership which renders a professional service is not required to obtain a certificate of authority to transact business in this State unless it maintains or intends to maintain an office in this State for the conduct of business or professional practice.

(D) The list of activities in subsection (B) is not exhaustive.

Section 33-41-1220. The General Assembly of South Carolina has power to provide regulations regarding Chapter 41 of this title and to amend or repeal all or any part of Chapter 41 of Title 33 or its regulations at any time; and all domestic and foreign limited liability partnerships subject to Chapter 41 of this title are governed by the amendment or repeal."

SECTION 11. This act takes effect upon approval by the Governor. /

Amend title to conform.

/s/Glenn F. McConnell /s/Robert A. Barber, Jr.
/s/H. Samuel Stilwell /s/Timothy Wilkes
/s/Ernest Passailaigue /s/James L. Cromer, Jr.

On Part of the Senate. On Part of the House.

, and a message was sent to the House accordingly.

S. 913 -- Senators Lander, J. Verne Smith and Giese: A BILL TO AMEND SECTION 27-40-410, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SECURITY DEPOSITS AND PREPAID RENT PAID BY RESIDENTIAL TENANTS TO LANDLORDS, SO AS TO CLARIFY THE RIGHTS OF A TENANT WHEN A LANDLORD WRONGFULLY WITHHOLDS A SECURITY DEPOSIT.

The House returned the Bill with amendments.

Senator LANDER proposed the following amendment (JUD913.001), which was adopted:

Amend the bill, as and if amended, by striking all after the enacting words and inserting therein the following:

/SECTION 1. Section 27-40-410 of the 1976 Code is amended to read:

"Section 27-40-410. (a) Upon termination of the tenancy, property or money held by the landlord as security may be applied to the payment of must be returned less amounts withheld by the landlord for accrued rent and the amount of damages which the landlord has suffered by reason of the tenant's noncompliance with Section 27-40-510. Any deduction from the security/rental deposit must be itemized by the landlord in a written notice to the tenant together with the amount due, if any, within thirty days after termination of the tenancy and delivery of possession and demand by the tenant, whichever is later. The tenant shall provide the landlord in writing with a forwarding address or new address to which the written notice and amount due from the landlord may be sent. If the tenant fails to provide the landlord with the forwarding or new address, the tenant is not entitled to damages under this subsection provided the landlord (1) had no notice of the tenant's whereabouts and (2) mailed the written notice and amount due, if any, to the tenant's last known address.

(b) If the landlord fails to return to the tenant any prepaid rent or security/rental deposit with the notice required to be sent by the landlord pursuant to subsection (a) required to be paid to the tenants under this chapter, the tenant may recover the property and money in an amount equal to three times the amount wrongfully withheld and reasonable attorney's fees.

(c) If a landlord (1) rents more than four adjoining dwelling units on the premises, and (2) imposes different standards for calculating security/rental deposits required of different tenants on the premises, then, prior to the consummation of the rental agreement, the landlord shall either post in a conspicuous place on the premises, or at the place at which rental is paid a statement clearly indicating the standards by which such security/rental deposits are calculated, or shall provide each prospective tenant with a statement setting forth the standards. If a landlord fails to comply with this subsection as to a tenant, the difference between the security/rental deposit required of the tenant and the lowest security/rental deposit required of any other tenant of a comparable dwelling unit on the premises is not subject to deductions for damages by reason of the tenant's noncompliance with Section 27-40-510.

(d) This section does not preclude the landlord or tenant from recovering other damages to which he may be entitled under this chapter or otherwise.

(e) Subject to the provisions of Section 27-40-450, the holder of the landlord's interest in the premises at the time of the termination of the tenancy is bound by this section."

SECTION 2. The 1976 Code is amended by adding:

"Section 39-20-49. The owner of a self-service storage facility may require of a person laying claim to any of the contents of the self-service storage facility that the claimant pay to the owner all unpaid rents due for the use of the facility before taking possession of the contents. The owner is not responsible for any property taxes that may be due on any contents that have been in storage in the facility."

SECTION 3. This act takes effect upon approval by the Governor./

Amend title to conform.

Senator LANDER explained the amendment.

There being no further amendments, the Bill was amended and ordered returned to the House with amendments.

H. 4966 -- Reps. Barber, Worley, Harrelson, Keyserling, Inabinett, G. Bailey, Richardson, Fulmer, Holt, A. Young, J. Bailey, Witherspoon, Breeland, Waites and Kelley: A JOINT RESOLUTION TO ENACT THE SOUTH CAROLINA COASTAL FUTURES PLANNING ACT OF 1994; TO ESTABLISH THE SOUTH CAROLINA COASTAL FUTURES TASK FORCE AND TO PROVIDE FOR ITS MEMBERSHIP, PURPOSE, POWERS, DUTIES, AND DISSOLUTION.

Senator CORK asked unanimous consent to make a motion to recall the Resolution from the Committee on Agriculture and Natural Resources.

There was no objection.

The Senate proceeded to a consideration of the Resolution. The question being the second reading of the Resolution.

The Resolution was read the second time and ordered placed on the third reading Calendar with notice of general amendments.

Senator McCONNELL, under the provisions of Rule 44, gave notice of a motion to suspend all or a portion of Rule 32.

MOTION ADOPTED
On motion of Senator RICHTER, with unanimous consent, the Senate stood adjourned out of respect to the memory of Mr. Walter M. Epps, Jr. of Mt. Pleasant, S.C.

At 2:05 P.M., on motion of Senator J. VERNE SMITH, the Senate adjourned to meet tomorrow at 11:00 A.M.

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