Journal of the House of Representatives
of the Second Session of the 111th General Assembly
of the State of South Carolina
being the Regular Session Beginning Tuesday, January 9, 1996

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Printed Page 3160 . . . . . Wednesday, May 1, 1996
H. 4545--AMENDED AND ORDERED TO THIRD READING

The following Bill was taken up.

H. 4545 -- Reps. Klauber, Simrill, Askins, Chamblee, Mason, R. Smith, Limehouse, Young-Brickell, Koon, Wright, Herdklotz, Sharpe, Knotts, Tripp, Elliott, Fulmer, D. Smith, Gamble, Quinn, Kennedy, Vaughn, Rice, Cato, Bailey, Wofford, Davenport, Whatley, Haskins, Worley, J. Young, Littlejohn, Law, Allison, Riser, Witherspoon, Lanford and Carnell: A BILL TO AMEND SECTION 58-27-865, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ELECTRIC UTILITIES AND ELECTRIC COOPERATIVES, RATES AND CHARGES, ESTIMATES OF FUEL COSTS, REPORTS, AND ADJUSTMENT OF DIFFERENCE BETWEEN ACTUAL AND ESTIMATED COSTS, SO AS TO DEFINE "COST" FOR THE PURPOSES OF THIS SECTION, DELETE CERTAIN LANGUAGE, PROVIDE THAT IT MUST BE CONCLUSIVELY PRESUMED THAT AN ELECTRICAL UTILITY MADE EVERY REASONABLE EFFORT TO MINIMIZE COST ASSOCIATED WITH THE OPERATION OF ITS NUCLEAR GENERATION FACILITY OR SYSTEM, AS APPLICABLE, IF THE UTILITY ACHIEVED A NET CAPACITY FACTOR OF NINETY PERCENT OR HIGHER DURING THE PERIOD UNDER REVIEW.

The Committee on Labor, Commerce and Industry proposed the following Amendment No. 1 (Doc Name P:\amend\BBM\10800JM.96), which was adopted.

Amend the bill, as and if amended, by striking SECTION 1 and inserting:

/SECTION 1. Section 58-27-865 of the 1976 Code is amended to read:

"Section 58-27-865. (A) The words `fuel cost' as used in this section shall include the cost of fuel, fuel costs related to purchased power, and the cost of SO2 emission allowances as used and shall be reduced by the net proceeds of any sales of SO2 emission allowances by the utility.

(B) The commission shall direct each electrical utility which purchases fuel incurs fuel cost for the generation sale of electricity to submit to the commission, within such time and in such form as the commission may designate, its estimates of fuel costs, including cost of purchased power, for the next six twelve months. The commission may hold a public hearing at any time between the twelve-month reviews to determine whether an increase or decrease in the base rate amount designed to

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recover fuel cost should be granted. Upon investigation of the estimate and conducting public hearings in accordance with law, the commission shall direct each company to place in effect in its base rate an amount designed to recover, during the succeeding six twelve months, the fuel costs determined by the commission to be appropriate for that period, adjusted for the over-recovery or under-recovery from the preceding six-month twelve-month period. The commission shall direct the electrical utilities to send notice to the utility customers with the antecedent billing of the time and place of the public hearings to be held every six twelve months, and the commission shall again direct the electrical utilities to send notice to the utility customers with the next billing if the utility is granted a rate increase by the commission.

(B)(C) The commission shall direct the electrical utilities to account monthly for the differences between the recovery of fuel costs through base rates and the actual fuel costs experienced, by booking the difference to unbilled revenues with a corresponding deferred debit or credit, the balance of which will be included in the projected fuel cost component of the base rates for the succeeding period. The commission shall direct the electrical utilities to submit monthly reports of fuel costs, and monthly reports of all scheduled and unscheduled outages of generating units with a capacity of one hundred megawatts or greater.

(C)(D) Upon request by the commission staff, the electrical utilities, or the Consumer Advocate, a public hearing must be held by the commission at any time between the six-month twelve-month reviews to determine whether an increase or decrease in the base rate amount designed to recover fuel costs should be granted. If the request is by an electrical utility for a rate increase, the commission shall direct the utility to send notice of the request and hearing to all customers with the next billing, and if the commission grants the rate request subsequent to the request and hearing, the commission shall direct the utility to send notice of the amount of the increase or decrease to all customers with the next billing.

(D)(E) The commission may offset, to the extent considered appropriate, offset the cost of fuel recovered through sales of power pursuant to interconnection agreements with neighboring electrical utilities against fuel costs and purchased power costs to be recovered.

(E)(F) The commission shall disallow recovery of any fuel costs that it finds without just cause to be the result of failure of the utility to make every reasonable effort to minimize fuel costs or any decision of the utility resulting in unreasonable fuel costs, giving due regard to reliability of service, economical generation mix, generating experience of comparable facilities, and minimization of the total cost of providing service. There

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shall be a rebuttable presumption that an electrical utility made every reasonable effort to minimize cost associated with the operation of its nuclear generation facility or system, as applicable, if the utility achieved a net capacity factor of ninety-two and one-half percent or higher during the period under review. The calculation of the net capacity factor shall exclude reasonable outage time associated with reasonable refueling, reasonable maintenance, reasonable repair, and reasonable equipment replacement outages; the reasonable reduced power generation experienced by nuclear units as they approach a refueling outage; the reasonable reduced power generation experienced by nuclear units associated with bringing a unit back to full power after an outage; Nuclear Regulatory Commission required testing outages unless due to the unreasonable acts of the utility; outages found by the commission not to be within the reasonable control of the utility; and acts of God. The calculation also shall exclude reasonable reduced power operations resulting from the demand for electricity being less than the full power output of the utility's nuclear generation system. If the net capacity factor is below ninety-two and one-half percent after reflecting the above specified outage time, then the utility shall have the burden of demonstrating the reasonableness of its nuclear operations during the period under review.

(F)(G) The commission is authorized to promulgate, in accordance with the provisions of this section, all regulations necessary to allow the recovery by electrical utilities of all their prudently incurred fuel costs, including the cost of purchased power, as precisely and promptly as possible, in a manner that tends to assure public confidence and minimize abrupt changes in charges to consumers."/

Amend title to conform.

Rep. YOUNG-BRICKELL explained the amendment.

The amendment was then adopted.

The Bill, as amended, was read the second time and ordered to third reading.

H. 4861--AMENDED AND ORDERED TO THIRD READING

The following Bill was taken up.

H. 4861 -- Rep. Boan: A BILL TO AMEND CHAPTER 57, TITLE 40, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE LICENSURE AND REGULATION OF REAL ESTATE BROKERS, COUNSELORS, SALESMEN, APPRAISERS,

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AUCTIONEERS, AND PROPERTY MANAGERS, SO AS TO REVISE THE CHAPTER TO CONFORM TO A UNIFORM FRAMEWORK FOR THE ORGANIZATION AND OPERATION OF PROFESSIONAL AND OCCUPATIONAL BOARDS.

AMENDMENT NO. 1--ADOPTED

Debate was resumed on Amendment No. 1, which was proposed on Thursday, April 25, by the Committee on Labor, Commerce and Industry.

Rep. YOUNG-BRICKELL explained the amendment.

The amendment was then adopted.

The Bill, as amended, was read the second time and ordered to third reading.

H. 4686--AMENDED AND ORDERED TO THIRD READING

The following Bill was taken up.

H. 4686 -- Rep. Hodges: A BILL TO AMEND TITLE 34, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO BANKING AND FINANCIAL INSTITUTIONS BY ADDING CHAPTER 26 SO AS TO ENACT THE "SOUTH CAROLINA CREDIT UNION ACT OF 1996", WHICH PROVIDES FOR THE ORGANIZATION, OPERATION, AND SUPERVISION OF COOPERATIVE NONPROFIT THRIFT AND CREDIT ASSOCIATIONS KNOWN AS CREDIT UNIONS, AND TO PROVIDE FOR THEIR DUTIES, POWERS, AND FUNCTIONS; AND TO REPEAL CHAPTER 27 OF TITLE 34 RELATING TO COOPERATIVE CREDIT UNIONS.

The Labor, Commerce and Industry Committee proposed the following Amendment No. 1 (Doc Name P:\amend\GJK\22727SD.96), which was adopted.

Amend the bill, as and if amended, by striking Section 34-26-240(1) of the 1976 Code as contained in SECTION 1, which begins on line 35, page 6, and inserting:

/(1) The board at periodic intervals not to exceed twenty-four months shall examine or cause to be examined each credit union. A credit union and any of its officers and agents shall be required to give the board or the board's representatives full access to all books, papers, securities, records, and other sources of information under their control./

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Amend the bill further, as and if amended, by striking Section 34-26-370(3)(d) of the 1976 Code, as contained in SECTION 1, which begins on line 5, page 11, and inserting:

/(d) continued operation by the credit union is likely to have a substantially adverse impact on the financial, economic, or other interests of residents of this State./

Amend the bill further, as and if amended, by striking Section 34-26-420 of the 1976 Code, as contained in SECTION 1, which begins on line 21, page 12, and inserting:

/Section 34-26-420. A credit union may exercise incidental powers to enable it to carry out its purposes. However, the powers granted by state law or regulation to a state-chartered credit union shall not exceed those provided by federal law or regulation./

Amend the bill further, as and if amended, by striking Section 34-26-500(2) of the 1976 Code, as contained in SECTION 1, which begins on line 34, page 12, and inserting:

/(2) Credit union membership may include persons within one or more groups having a common bond or bonds of similar occupation, association, or to persons employed within a defined business district, building, industrial park or shopping center, and members of the family of such persons who are related by either blood or marriage./

Amend the bill further, as and if amended, by striking the fourth paragraph of Section 34-26-860 of the 1976 Code, as contained in SECTION 1, which begins on line 7, page 22, and inserting:

/Loans of fifty thousand dollars or more shall require a certified appraisal. Loans of less than fifty thousand dollars shall require an inspection by a credit union-appointed individual and evidence of value in the file. Loan application, notes, and security instruments may be executed on current versions of FHA, VA, FHLMC, FNMA, or FHLMC/FMNA approved forms./

When amended Section 34-26-860 of the 1976 Code shall read:

"Section 34-26-860. Credit unions are authorized to make loans secured by real estate. The real estate collateral may consist of improved or unimproved property including, but not limited to, mobile homes, modular homes, property under construction, condominiums, or single family dwellings which shall be the borrower's primary residence.

Loan terms for unimproved real estate may not exceed fifteen years. Loan terms for residential dwellings may not exceed thirty years.

No loans shall be made in excess of eighty-five percent of the appraised value unless such excess amount is insured or similarly guaranteed.

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Loans of fifty thousand dollars or more shall require a certified appraisal. Loans of less than fifty thousand dollars shall require an inspection by a credit union-appointed individual and evidence of value in the file. Loan application, notes, and security instruments may be executed on current versions of FHA, VA, FHLMC, FNMA, or FHLMC/FMNA approved forms.

Loans may not be made on real estate located beyond the continental United States of America."

Amend the bill further, as and if amended, by striking Section 34-26-890(1)(b) of the 1976 Code, as contained in SECTION 1, which begins on line 1, page 23, and inserting:

/(b) the aggregate of loans to such officials, excepting those secured by shares or deposits, may not exceed fifteen percent of the credit union's reserves and undivided earnings./

Amend the bill further, as and if amended, by striking Section 34-26-1380(1)(a) of the 1976 Code, as contained in SECTION 1, which begins on line 32, page 30, and inserting:

/(a) When the credit union's corporate reserve and undivided earnings are less than four percent of assets at the end of the transfer period, the credit union shall set aside an amount equal to .0015 times the credit union's average daily assets for the transfer period times the number of days in the transfer period, divided by three hundred sixty-five./

Renumber sections to conform.

Amend totals and title to conform.

Rep. GAMBLE explained the amendment.

The amendment was then adopted.

The Bill, as amended, was read the second time and ordered to third reading.

H. 4795--AMENDED AND ORDERED TO THIRD READING

The following Bill was taken up.

H. 4795 -- Rep. Gamble: A BILL TO AMEND SECTION 37-10-102, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ATTORNEY'S FEES AND OTHER CHARGES ON MORTGAGE LOANS FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES, SO AS TO PROVIDE THAT THE ATTORNEY'S PREFERENCE AND THE INSURANCE AGENT'S PREFERENCE OF THE BORROWER REQUIRED TO BE ASCERTAINED BY THE

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CREDITOR IN CONNECTION WITH THESE LOANS ARE INDEPENDENT OF EACH OTHER AND TO FURTHER PROVIDE FOR THE MANNER IN WHICH THE CREDITOR SHALL COMPLY WITH THIS REQUIREMENT; TO AMEND SECTION 37-10-105, RELATING TO PENALTIES FOR CERTAIN VIOLATIONS OF THE CONSUMER PROTECTION CODE, SO AS TO PROVIDE THAT VIOLATIONS OF SECTION 37-10-102 ABOVE RELATING TO THE ASCERTAINING OF THE ATTORNEY'S PREFERENCE AND THE INSURANCE AGENT'S PREFERENCE OF A BORROWER SHALL BE PUNISHED AS PROVIDED IN SECTION 37-5-202 BELOW; AND TO AMEND SECTION 37-5-202, RELATING TO VIOLATIONS OF THE CONSUMER PROTECTION CODE AND THE RIGHTS OF THE PARTIES IN REGARD THERETO INCLUDING THE RIGHT TO RECOVER DAMAGES, SO AS TO INCLUDE THEREIN VIOLATIONS OF SECTION 37-10-102 IN REGARD TO ATTORNEY AND INSURANCE AGENT PREFERENCES.

The Labor, Commerce and Industry Committee proposed the following Amendment No. 1 (Doc Name P:\amend\GJK\22749SD.96), which was adopted.

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

/SECTION 1. Section 37-10-102(a) of the 1976 Code is amended to read:

"(a) The creditor must ascertain prior to closing the preference of the borrower as to the legal counsel that is employed to represent the debtor in all matters of the transaction relating to the closing of the transaction and except in the case of a loan on property that is subject to the South Carolina Horizontal Property Act (Section 27-31-10 et seq.) the insurance agent to furnish required hazard and flood property insurance in connection with the mortgage and comply with such preference, and the credit application on the first page thereof must contain information as is necessary to ascertain these preferences of the borrower.

The creditor may comply with this section by:

(1) including the preference information on or with the credit application so that this information shall be provided on a form substantially similar to a form distributed by the administrator; or

(2) providing written notice to the borrower of the preference information with the notice being delivered or mailed no later than three business days after the application is received or prepared. If a creditor

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uses a preference notice form substantially similar to a form distributed by the administrator, the form is in compliance with this section.

The creditor may require that the attorney or agent so chosen be able to provide reasonable security to the creditor by way of mortgage title insurance in a company acceptable to the creditor and other insurance in a company acceptable to the creditor and to comply with reasonable closing procedures. If title insurance is made a condition of the loan at any point during the negotiations, it must remain a condition all the time thereafter regardless of which attorney ultimately closes the transaction. Any legal fees other than for examination and certification of the title, the preparation of all required documents, and the closing of the transaction required or incurred by the creditor in connection with the transaction is the responsibility of the creditor regardless of which party pays for the title work, document preparation, and closing."

SECTION 2. This act takes effect upon approval by the Governor. However, nothing in this act shall affect any cause of action, right, or remedy accruing prior to the effective date of this act. Any such cause of action, right, or remedy accruing prior to the effective date of this act shall be governed by the law applicable at the time the cause of action, right, or remedy accrued./

Renumber sections to conform.

Amend totals and title to conform.

Rep. GAMBLE explained the amendment.

The amendment was then adopted.

The Bill, as amended, was read the second time and ordered to third reading.

SPEAKER IN CHAIR

H. 4782--AMENDED AND ORDERED TO THIRD READING

The following Bill was taken up.

H. 4782 -- Rep. Easterday: A BILL TO AMEND SECTION 37-5-203, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE CONSUMER PROTECTION CODE, DEBTORS' REMEDIES, AND CIVIL LIABILITY FOR VIOLATION OF DISCLOSURE PROVISIONS, SO AS TO PROVIDE THAT CERTAIN PROVISIONS OF THIS SUBSECTION SHALL NOT BE CONSTRUED TO IMPOSE CIVIL LIABILITY OR PENALTIES ON AN ARRANGER OF CREDIT WHEN

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DISCLOSURE CONSTITUTING A VIOLATION OF THE FEDERAL TRUTH IN LENDING ACT IS ACTUALLY COMMITTED BY ANOTHER PERSON AND THE ARRANGER OF THE CREDIT HAS NO KNOWLEDGE OF THE VIOLATION WHEN IT OCCURRED, AND TO REQUIRE THE CREDITOR TO PROVIDE A COPY OF THE FINAL CLOSING DOCUMENTS TO THE ARRANGER OF CREDIT; TO AMEND SECTION 40-58-20, AS AMENDED, RELATING TO DEFINITIONS UNDER THE PROVISIONS OF LAW ON THE REGISTRATION OF MORTGAGE LOAN BROKERS, SO AS TO DEFINE "REGULAR BUSINESS HOURS", "SATELLITE OFFICE", AND "TABLE-FUNDED TRANSACTION", AND TO MAKE CERTAIN CHANGES TO THE DEFINITION OF "EXEMPT PERSON OR ORGANIZATION"; TO AMEND THE 1976 CODE BY ADDING SECTION 40-58-35 SO AS TO PROVIDE THAT A MORTGAGE LOAN BROKER MAY CONTRACT FOR AND RECEIVE A LOAN BROKER'S FEE AS SET FORTH IN THE BROKER'S FEE AGREEMENT WITH THE APPLICANT, AND PERMIT THE AGREEMENT TO INCLUDE A NONREFUNDABLE APPLICATION FEE; TO AMEND SECTION 40-58-65, RELATING TO THE REGISTRATION OF MORTGAGE LOAN BROKERS, RECORDS, CONFIDENTIALITY, THE PHYSICAL PRESENCE OF A MORTGAGE BROKER IN THE STATE, AND OFFICIAL PLACE OF BUSINESS, SO AS TO PROVIDE, AMONG OTHER THINGS, THAT A REGISTERED MORTGAGE LOAN BROKER WITH AN OFFICIAL PLACE OF BUSINESS WITHIN SOUTH CAROLINA ALSO MAY MAINTAIN ONE OR MORE SATELLITE OFFICES UNDER CERTAIN CONDITIONS; TO AMEND SECTION 40-58-110, AS AMENDED, RELATING TO THE REGISTRATION OF MORTGAGE LOAN BROKERS, FIRST TIME REGISTRANTS' PROCESSING FEES, AND ANNUAL RENEWAL OF REGISTRATION, SO AS TO PROVIDE THAT A BROKER SHALL PAY AN INITIAL FEE OF FIFTY DOLLARS WHEN REGISTERING EACH SATELLITE LOCATION AND THAT THERE SHALL BE NO RENEWAL FEE CHARGED A SATELLITE OFFICE, REQUIRE THE BROKER TO GIVE WRITTEN NOTICE OF TEN DAYS BEFORE THE OPENING OF A NEW, OFFICIAL BRANCH OR SATELLITE LOCATION, AND PROVIDE THAT NO FEE IS REQUIRED WHEN THE REGISTRANT GIVES NOTICE OF A CHANGE OF ADDRESS FOR AN OFFICIAL BRANCH OR SATELLITE LOCATION; TO AMEND SECTION 37-10-102, AS AMENDED, RELATING TO THE CONSUMER PROTECTION CODE, MISCELLANEOUS LOAN PROVISIONS, AND ATTORNEY'S FEES
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AND OTHER CHARGES ON MORTGAGE LOANS FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES, SO AS TO DELETE CERTAIN PROVISIONS AND PROVIDE INSTEAD THAT AN ATTORNEY LICENSED TO PRACTICE LAW IN SOUTH CAROLINA MUST BE INVOLVED IN THE CLOSING OF THE LOAN FOR CERTAIN PURPOSES, AND TO PROVIDE THAT THE TITLE INSURANCE MUST BE ISSUED THROUGH A TITLE INSURANCE COMPANY LICENSED TO CONDUCT BUSINESS IN SOUTH CAROLINA AND MUST BE ACCEPTABLE TO THE LENDER; AND TO AMEND SECTION 37-3-201, AS AMENDED, RELATING TO THE CONSUMER PROTECTION CODE, LOANS, MAXIMUM CHARGES, AND THE LOAN FINANCE CHARGE FOR CONSUMER LOANS OTHER THAN SUPERVISED LOANS, SO AS TO PROVIDE THAT THIS SECTION DOES NOT APPLY TO A MORTGAGE LOAN BROKER AS DEFINED IN SECTION 40-58-20.

AMENDMENT NO. 1--ADOPTED

Debated was resumed on Amendment No. 1, which was proposed on Thursday, April 25, by the Committee on Labor, Commerce and Industry.

Rep. GAMBLE explained the amendment.

The amendment was then adopted.

The Bill, as amended, was read the second time and ordered to third reading.

S. 1043--AMENDED AND ORDERED TO THIRD READING

The following Bill was taken up.

S. 1043 -- Senators Short, Rose, Peeler, Richter, Greg Smith, Thomas, Mescher, Moore, J. Verne Smith, Courtney, Elliott, Holland, Reese, Leventis, McGill, Cork, Passailaigue, Rankin, Matthews, Waldrop, Washington, Lander, Jackson, O'Dell and Gregory: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 38-71-135 SO AS TO REQUIRE ALL INDIVIDUAL AND GROUP HEALTH INSURANCE AND HEALTH MAINTENANCE ORGANIZATION POLICIES TO PROVIDE PAYMENT FOR HOSPITALIZATION OF A MOTHER AND HER CHILD, IF AT THE DISCRETION OF THE ATTENDING PHYSICIAN IT IS MEDICALLY NECESSARY, FOR A PERIOD NOT TO EXCEED THE SECOND POSTPARTUM DAY, NOT INCLUDING THE DAY OF DELIVERY, AFTER A VAGINAL DELIVERY, OR THE THIRD POST-OPERATIVE

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DAY, NOT INCLUDING THE DAY OF SURGERY, AFTER A CAESARIAN SECTION, AND TO PROVIDE FOR EXCEPTIONS.

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