Indicates Matter Stricken
Indicates New Matter

The Senate assembled at 10:30 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, St. Paul wrote to the Ephesians (4:23) about being "renewed in the Spirit of your minds." He wrote to the Colossians (3:10) "... you have stripped off the old-self... and have clothed yourselves with the new-self, which is being renewed in knowledge according to the image of its Creator. In that renewal there is no longer Greek and Jew..."
Let us pray.

Forgive us, Lord, if we pray wrongly!

But, in chemistry the formation of a complex compound is achieved by the combining of two or more simpler compounds, elements, or radicals.

In Hegalian philosophy a unified whole is achieved when opposites (thesis and antithesis) are reconciled.

So, Father, in our deliberations at this time we do not pray for compromise in which nobody is happy, but we do make bold to pray for a synthesis of our thinking and feeling that will bring us together on a plane in which we can all live in relative harmony.

Our fervent prayer is that You will make of us a beloved community!
Amen.

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

The following appointment was transmitted by the Honorable James H. Hodges:

Initial Appointment, Berkeley County Magistrate, with term to commence April 30, 1999, and to expire April 30, 2003

Ava Bryant Hawkins, 14 Basilica Avenue North, Hanahan, S.C. 29406

Senator SETZLER introduced Dr. Gregory T. Squires of Marion, S.C., Doctor of the Day.

The following were introduced:

S. 685 (Word version) -- Senator Rankin: A BILL TO AMEND SECTION 58-25-40, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE GOVERNING BOARDS OF REGIONAL TRANSPORTATION AUTHORITIES, SO AS TO AUTHORIZE MEMBERS OF THESE BOARDS TO RECEIVE SUCH COMPENSATION AS MAY BE SET BY THE GOVERNING BOARD BY RESOLUTION.
l:\s-res\lar\004regi.mrh.doc

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

S. 686 (Word version) -- Senators J. Verne Smith, Alexander, Anderson, Bauer, Branton, Courson, Drummond, Elliott, Fair, Ford, Giese, Glover, Gregory, Grooms, Hawkins, Hayes, Holland, Hutto, Jackson, Land, Leatherman, Leventis, Martin, Matthews, McConnell, McGill, Mescher, Moore, O'Dell, Passailaigue, Patterson, Peeler, Pinckney, Rankin, Ravenel, Reese, Richardson, Ritchie, Ryberg, Saleeby, Setzler, Short, Thomas, Verdin, Waldrep and Wilson: A CONCURRENT RESOLUTION EXPRESSING THE SINCERE CONGRATULATIONS AND GRATITUDE OF THE MEMBERS OF THE GENERAL ASSEMBLY OF THE STATE OF SOUTH CAROLINA TO THE HIGHLY ESTEEMED DR. VIRGINIA ULDRICK OF GREENVILLE ON THE OCCASION OF COMPLETING HER FIFTIETH YEAR OF PUBLIC SERVICE IN ARTS EDUCATION IN THE PALMETTO STATE AND WISHING HER MANY MORE YEARS OF DEVELOPING INNOVATIVE CONCEPTS AND PROGRAMS IN THE ARTS, HUMANITIES, AND OTHER ACADEMIC STUDIES.
l:\council\bills\pt\1517dw01.doc

The Concurrent Resolution was adopted, ordered sent to the House.

S. 687 (Word version) -- Senator Ford: A BILL TO AMEND CHAPTER 3, TITLE 22, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO JURISDICTION AND PROCEDURE IN MAGISTRATES COURT, SO AS TO ADD SECTION 22-3-115 PROVIDING THAT

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

S. 688 (Word version) -- Senator Matthews: A SENATE RESOLUTION TO CONGRATULATE MR. VIRGIL NICHOLS OF ORANGEBURG COUNTY ON BEING NAMED 2000 OUTSTANDING YOUNG AGRICULTURAL EDUCATOR IN SOUTH CAROLINA BY THE SOUTH CAROLINA AGRICULTURAL EDUCATORS ASSOCIATION.
l:\council\bills\ggs\22109cm01.doc

The Senate Resolution was adopted.

Senator RYBERG from the Committee on Corrections and Penology submitted a favorable report on:

S. 654 (Word version) -- Senators Patterson and Giese: A CONCURRENT RESOLUTION TO REQUEST THE SOUTH CAROLINA DEPARTMENT OF CORRECTIONS TO NAME THE DEPARTMENT OF CORRECTIONS HEADQUARTERS BUILDING THE "WILLIAM D. LEEKE BUILDING" AND TO ERECT APPROPRIATE MARKERS OR SIGNS TO THAT EFFECT.

Ordered for consideration tomorrow.

Senator WILSON from the Committee on Transportation submitted a favorable with amendment report on:

H. 3272 (Word version) -- Reps. Neilson, Jennings, Cato, Riser, Altman, Askins, Bales, Barfield, Barrett, Bingham, J. Brown, Chellis, Coates, Davenport, Delleney, Easterday, Edge, Emory, Freeman, Gilham, Gourdine, Harrison, Harvin, Hayes, J. Hines, Hosey, Littlejohn, Lloyd, Lucas, McCraw, McGee, J.M. Neal, Owens, Phillips, Scarborough, Scott, F.N. Smith, J.R. Smith, Stuart, Taylor, Vaughn, Webb, Weeks, White, Witherspoon and Simrill: A BILL TO AMEND CHAPTER 3, TITLE 56, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO MOTOR VEHICLE REGISTRATION AND LICENSING, BY ADDING ARTICLE 87 SO AS TO PROVIDE FOR THE ISSUANCE OF NASCAR SPECIAL LICENSE PLATES, AND PROVIDE FOR THE DISTRIBUTION OF FEES COLLECTED FOR THESE SPECIAL LICENSE PLATES.

Ordered for consideration tomorrow.

Senator PEELER from the Committee on Medical Affairs polled out H. 3290 favorable with amendment:

H. 3290 (Word version) -- Reps. Walker, Allen, Allison, Bales, Barfield, Barrett, Battle, Breeland, G. Brown, J. Brown, R. Brown, Cato, Clyburn, Cobb-Hunter, Cooper, Davenport, Delleney, Easterday, Edge, Emory, Freeman, Frye, Gilham, Gourdine, Govan, Harrison, Harvin, Haskins, Hayes, J. Hines, M. Hines, Hosey, Howard, Jennings, Keegan, Kelley, Kennedy, Kirsh, Leach, Lee, Littlejohn, Lloyd, Lucas, Mack, Martin, McCraw, McLeod, Meacham-Richardson, Merrill, Miller, Moody-Lawrence, J.H. Neal, J.M. Neal, Neilson, Ott, Phillips, Quinn, Rhoad, Riser, Rivers, Rutherford, Sandifer, Scott, Sharpe, Sheheen, Simrill, Sinclair, F.N. Smith, G.M. Smith, J.E. Smith, J.R. Smith, W.D. Smith, Snow, Stille, Stuart, Talley, Taylor, Townsend, Trotter, Vaughn, Webb, Weeks, Whatley, Whipper, White, Wilder, Witherspoon, A. Young, J. Young, Loftis and Askins: A BILL TO AMEND SECTION 40-37-10, CODE OF LAWS OF SOUTH

Peeler                    J. Verne Smith            Moore
Courson                   Giese                     Thomas
Hayes                     Jackson                   Short
Fair                      Hutto                     Anderson
Branton                   Ravenel                   Passailaigue
Ford                      Pinckney

Ordered for consideration tomorrow.

Senator PEELER from the Committee on Medical Affairs submitted a favorable with amendment report on:

H. 3379 (Word version) -- Rep. J. Brown: A JOINT RESOLUTION TO ESTABLISH THE NEWBORN EYE SCREENING TASK FORCE TO STUDY AND MAKE RECOMMENDATIONS CONCERNING SCREENING NEWBORN CHILDREN FOR CERTAIN OCULAR DISEASES AND ABNORMALITIES.

Ordered for consideration tomorrow.

Senator WILSON from the Committee on Transportation submitted a favorable with amendment report on:

H. 3480 (Word version) -- Reps. J.E. Smith and Miller: A BILL TO AMEND SECTION 56-5-2360, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DRIVER OF A VEHICLE YIELDING THE RIGHT-OF-WAY TO AN EMERGENCY OR POLICE VEHICLE WHEN AN EMERGENCY OR POLICE VEHICLE MAKES USE OF CERTAIN SIGNALS, SO AS TO PROVIDE THAT WHEN A POLICE VEHICLE MAKES USE OF A VISUAL AS WELL AS AUDIBLE SIGNAL, THE DRIVER OF EVERY OTHER VEHICLE MUST YIELD THE RIGHT-OF-WAY TO THE POLICE VEHICLE.

Ordered for consideration tomorrow.

Senator LEATHERMAN from the Committee on Finance submitted a majority favorable with amendment and Senator REESE a minority unfavorable report on:

H. 3777 (Word version) -- Rep. Robinson: A BILL TO AMEND CHAPTER 10, TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE ENTERPRISE ZONE ACT, BY ADDING SECTION 12-10-95 SO AS TO PROVIDE FOR A WITHHOLDING CREDIT FOR RETRAINING OF A PRODUCTION OR TECHNOLOGY EMPLOYEE; TO AMEND SECTION 12-2-25, RELATING TO TREATMENT OF A SINGLE-MEMBER LIABILITY COMPANY AND A GRANTOR TRUST FOR PURPOSES OF SOUTH CAROLINA INCOME TAX, SO AS TO INCLUDE A "QUALIFIED SUBCHAPTER 'S' SUBSIDIARY" AS AN ENTITY THAT IS NOT REGARDED SEPARATELY FROM ITS OWNER OR GRANTOR; TO AMEND SECTIONS 12-6-40, AS AMENDED, AND 12-6-50, BOTH RELATING TO APPLICATION

Ordered for consideration tomorrow.

Columbia, S.C., May 15, 2001

Mr. President and Senators:

The House respectfully informs your Honorable Body that it refuses to concur in the amendments proposed by the Senate to:
S. 496 (Word version) -- Judiciary Committee: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 57 TO TITLE 33, SO AS TO ENACT THE "SOUTH CAROLINA EDUCATION LOTTERY ACT"; TO PROVIDE FOR A STATE LOTTERY AND TO CREATE THE SOUTH CAROLINA EDUCATION LOTTERY CORPORATION TO CONDUCT THE STATE LOTTERY; TO PROVIDE FOR THE CORPORATION'S BOARD MEMBERSHIP, DUTIES, AND POWERS; TO PROVIDE FOR THE CREATION OF A LOTTERY RETAILERS ADVISORY COMMITTEE; TO PROVIDE FOR THE METHOD OF CONTRACTING WITH VENDORS AND RETAILERS; TO PROVIDE FOR THE SALE OF LOTTERY GAME TICKETS AND THE DISTRIBUTION OF PRIZES; TO PROVIDE FOR ALLOCATION OF LOTTERY PROCEEDS WHICH MUST BE USED FOR EDUCATIONAL PURPOSES AND PROGRAMS; TO PROVIDE CRIMINAL PENALTIES FOR SELLING A LOTTERY TICKET TO A MINOR, PURCHASING A LOTTERY TICKET AS A MINOR, AND DEFRAUDING OR OTHERWISE TAMPERING WITH THE LOTTERY OR MAKING

Received as information.

Columbia, S.C., May 10, 2001

Mr. President and Senators:

The House respectfully informs your Honorable Body that it refuses to concur in the amendments proposed by the Senate to:
H. 3117 (Word version) -- Reps. Kirsh, Witherspoon and Walker: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-37-2740 SO AS TO REQUIRE THE DEPARTMENT OF PUBLIC SAFETY UPON WRITTEN OR ELECTRONIC NOTIFICATION FROM THE COUNTY

Received as information.

H. 3117 (Word version) -- Reps. Kirsh, Witherspoon and Walker: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 12-37-2740 SO AS TO REQUIRE THE DEPARTMENT OF PUBLIC SAFETY UPON WRITTEN OR ELECTRONIC NOTIFICATION FROM THE COUNTY TREASURER TO SUSPEND THE DRIVER'S LICENSE AND MOTOR VEHICLE REGISTRATION OF PERSONS WHO ARE DELINQUENT IN PAYING PERSONAL PROPERTY TAXES ON A MOTOR VEHICLE; TO AMEND SECTION 12-37-2675, RELATING TO THE PROHIBITION OF ADDITIONAL TAXES WHEN A MOTOR VEHICLE LICENSE PLATE IS TRANSFERRED, SO AS TO PROVIDE THAT THE PROHIBITION APPLIES IF THE TITLE AND REGISTRATION TO THE VEHICLE FROM WHICH THE TAG WAS REMOVED IS TRANSFERRED TO A NEW OWNER; AND TO AMEND SECTION 56-3-1290, RELATING TO THE TRANSFER OF LICENSE PLATES AND THE APPLICABLE FEE, SO AS TO ALLOW A TRANSFER ONLY IF THE TITLE AND REGISTRATION TO THE VEHICLE FROM WHICH THE LICENSE WAS REMOVED IS TRANSFERRED TO A NEW OWNER.

On motion of Senator LEATHERMAN, the Senate insisted upon its amendments to H. 3117 and asked for a Committee of Conference.

Whereupon, Senators RYBERG, GREGORY and SHORT were appointed to the Committee of Conference on the part of the Senate and a message was sent to the House accordingly.

THE SENATE PROCEEDED TO A CALL OF THE UNCONTESTED LOCAL AND STATEWIDE CALENDAR.

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. 3639 (Word version) -- Reps. Wilkins, Keegan and Kelley: A BILL TO AMEND SECTION 59-111-75, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE MILITARY DEPARTMENT AND THE DEVELOPMENT OF A LOAN REPAYMENT PROGRAM TO ENABLE QUALIFIED STATE RESIDENTS TO ATTEND COLLEGE AS AN ENLISTMENT OR RETENTION INCENTIVE FOR THE NATIONAL GUARD, SO AS TO AUTHORIZE THE COMMISSION ON HIGHER EDUCATION TO DEVELOP AND MANAGE THE PROGRAM INSTEAD OF THE ADJUTANT GENERAL AND TO FURTHER PROVIDE FOR THE PROCEDURES, CONDITIONS, AND REQUIREMENTS OF THE PROGRAM; BY ADDING SECTION 59-114-75 SO AS TO PROVIDE THAT NATIONAL GUARD TUITION ASSISTANCE GRANTS MAY NOT BE MADE AFTER JUNE 30, 2001, AND TO PROVIDE FOR TRANSITIONAL PROVISIONS TO EFFECTUATE THE ABOVE INCLUDING A PROVISION THAT THE COMMISSION ON HIGHER EDUCATION SHALL BE RESPONSIBLE FOR ADMINISTERING TUITION ASSISTANCE GRANTS MADE BEFORE JULY 1, 2001.

The following House Bill was read the third time and ordered returned to the House with amendments:

H. 4018 (Word version) -- Reps. Stille, Carnell, Townsend and Klauber: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,

By prior motion of Senator DRUMMOND, with unanimous consent.

H. 3529 (Word version) -- Reps. Stille, Townsend, Carnell, Allison, Littlejohn, Sandifer and Walker: A BILL TO AMEND SECTIONS 59-4-20 AND 59-4-40, BOTH AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS AND FUND ADMINISTRATION FOR PURPOSES OF THE SOUTH CAROLINA TUITION PREPAYMENT PROGRAM ACT, SO AS TO FURTHER DEFINE "TUITION" AND TO PROVIDE THAT THE CONTENTS OF THE REVOLVING FUND, INCLUDING ANY RIGHT OF REFUND OR ANY OTHER RIGHT ACCRUED BY A PERSON IN THE FUND IS EXEMPT FROM LEGAL PROCESS AND IS UNASSIGNABLE.

The Senate proceeded to a consideration of the Bill, the question being the adoption of the amendment proposed on May 15, 2001.

Senator RANKIN explained the Bill.

Senator RANKIN asked unanimous consent to withdraw the previously proposed amendment.

There was no objection.

The amendment was withdrawn.

Senators RANKIN, MOORE, REESE, WILSON, HUTTO, SETZLER and RITCHIE proposed the following amendment (3529R004.LAR), which was adopted:

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

/ SECTION   1.   Section 59-4-20(10) of the 1976 Code, as amended by Act 410 of 2000, is further amended to read:

"(10)   'Tuition', for purposes of this chapter only, means the credit-hour charges imposed by a public higher education institution in this State and all mandatory fees required as a condition of enrollment of all students registration or matriculation, credit-hour charges, and

SECTION   2.   Section 59-4-40 of the 1976 Code, as amended by Act 410 of 2000, is further amended to read:

"Section 59-4-40.   (A)   The fund is a nonpublic special, revolving fund established and maintained by the State of South Carolina. The fund consists of monies received from contributors, other monies acquired from governmental and private sources, and proceeds from the investments of the fund. The fund may expend funds for the purposes of this chapter only and may not be considered public funds. There must be a separate accounting for each designated beneficiary.

(B)   The fund must be invested as directed by the treasurer. However, earnings in the fund or a portion of the fund may not be used as security for a loan. An attempt to use the fund, a contract, or a portion of either as security for a loan is void. The fund may receive amounts transferred from a Uniform Gift to Minors Act, Uniform Trust to Minors Act, or other account established for the benefit of a minor provided that the beneficiary of such an account is identified as the legal owner of the South Carolina Tuition Prepayment Program contract upon attaining majority age. The fund, contributions to the fund, and the right of a person to a refund of contributions or any other right accrued or accruing to any person under the provisions of this chapter are exempt from attachment, garnishment, levy, and sale under any means or final process issued by any court or bankruptcy proceeding and are unassignable except as specifically otherwise provided in this chapter. The fund may be invested in a manner authorized by law. The funds may be invested and reinvested in any of the following:

(1)   securities authorized pursuant to Article 7, Chapter 9, Title 11;

(2)   equity securities of a corporation that is registered on a national securities exchange, as provided in the Securities Exchange Act, 1934, or a successor act, or quoted through the National

(3)   securities issued by an investment company registered under the Investment Company Act of 1940, or a successor act.

(C)   The custody and management of the fund is must be directed by the treasurer and invested in accordance with the written investment policies approved by the treasurer. The earnings from fund investments become a part of the fund and may be expended for the purposes of this chapter only."

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

Section 59-2-10.   This chapter may be cited as the 'South Carolina Tuition Savings Program Act' (SCTSP).

Section 59-2-20.   The General Assembly finds and declares as follows:

(1)   Education costs at institutions of higher learning are difficult for many to afford and difficult to predict. As a result, the ability of individuals and families to plan for future educational expenses has been adversely affected.

(2)   It is in the best interest of the citizens of this State to foster higher education in order to provide well-educated citizens.

(3)   It is in the best interest of the citizens of this State to encourage state residents to enroll in institutions of higher learning.

(4)   Providing a mechanism to help assure the higher education of the citizens of this State is necessary and desirable for the public health, safety, and welfare.

(5)   The purposes of this chapter are to:

(a)   provide wide and affordable access to the public institutions of higher learning for the residents of this State;

(b)   encourage attendance at institutions of higher learning and help individuals plan for educational expenses;

(c)   provide a program of savings trust agreements to apply distributions toward qualified higher education expenses at eligible educational institutions, as defined in Section 529 of the Internal Revenue Code, as amended, or other applicable federal law;

(d)   provide for the creation of a trust fund, as an instrumentality of the State of South Carolina, to assist qualified students in financing costs of attending institutions of higher education;

(e)   encourage timely financial planning for higher education by the creation of savings trust accounts;

(f)   provide a choice of programs to persons who determine that the overall educational needs of their families are best suited to a prepaid tuition contract under the South Carolina Tuition Prepayment Program, or a savings trust agreement under this chapter, or both;

(g)   provide a savings program for those who wish to save to meet postsecondary educational needs beyond the traditional baccalaureate curriculum.

Section 59-2-30.   The following terms have the meanings below unless the context clearly indicates otherwise:

(1)   'SCTSP Trust Fund' means the special fund designated as the 'South Carolina College Investment Trust Fund' and administered by the Office of State Treasurer.

(2)   'Account owner' means a person, corporation, trust, charitable organization, or other such entity who contributes to or invests money in a savings trust account under SCTSP established pursuant to this chapter on behalf of a beneficiary and who is listed as the owner of the savings trust account.

(3)   'Beneficiary' means a beneficiary of a savings trust agreement who meets the requirements of Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law, as well as any regulations established by the Office of State Treasurer.

(4)   'Contributor' means any person, corporation, trust, charitable organization, or other such entity who contributes money or makes a payment to a savings trust account established pursuant to this chapter on behalf of a beneficiary.

(5)   'Director' means the head of the South Carolina Tuition Prepayment Program and SCTSP who is appointed and supervised by the State Treasurer.

(6)   'Institution of higher learning' means any institution of higher learning which is an eligible education institution as defined in Section 529 of the Internal Revenue Code of 1986, as amended, or any other applicable federal law.

(7)   'Tuition' means the quarter, semester, or term charges and all required fees imposed by an institution of higher learning as a condition of enrollment by all students.

(8)   'Savings trust account' means an account established by an account owner pursuant to this chapter on behalf of a beneficiary in order to apply distributions from the account toward qualified higher education expenses at eligible educational institutions, as defined in Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law.

(9)   'Savings trust agreement' means the agreement entered into between the Office of State Treasurer and the account owner establishing a savings trust account.

(10)   'State Treasurer' means the South Carolina State Treasurer.

(11)   'Qualified higher education expense' means any higher education expense as defined in Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law.

(12)   'Qualified withdrawal' means a withdrawal by an account owner or beneficiary for qualified higher education expenses or as otherwise permitted under Section 529 of the Internal Revenue Code of 1986, as amended, without a penalty required thereunder.

Section 59-2-40.   The Office of State Treasurer shall have responsibility over both SCTSP and the South Carolina Tuition Prepayment Program (SCTPP) established under Chapter 4 of this title.

Section 59-2-50.   In addition to the powers granted by any other provision of this chapter, the Office of State Treasurer shall have the powers necessary to carry out the purposes and provisions of this chapter and the purposes and objectives of the trust fund including, but not limited to, the following:

(1)   adopt those regulations as are necessary to implement the provisions of this chapter, subject to applicable federal laws and regulations, including regulations regarding transfers of funds between accounts established under prepaid tuition contracts and savings trust agreements;

(2)   execute contracts and other necessary instruments;

(3)   impose reasonable limits on the number of contract participants in the trust fund at any given period of time;

(4)   contract for necessary goods and services, to employ necessary personnel, and to engage the services of consultants and other qualified persons and entities for administrative and technical assistance in carrying out the responsibilities of the trust funds under terms and conditions that the State Treasurer deems reasonable, to include contract terms for periods of up to ten years which contract may be terminated, extended, or renewed with these entities for a term determined by the State Treasurer, but in no event shall such contract exceed a term of ten years at any one time;

(5)   solicit and accept gifts, as defined in Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law, as well as any regulations established by the Office of State Treasurer, and to participate in any other way in any federal, state, or local governmental programs in carrying out the purposes of this chapter;

(6)   define the terms and conditions under which payments may be withdrawn or refunded from the trust fund and impose reasonable charges for such withdrawal or refund;

(7)   impose reasonable time limits on the use of savings trust account distributions provided by the program;

(8)   regulate the receipt of contributions or payments to the trust fund;

(9) establish agreements or other transactions with federal, state, and local agencies, including state institutions of higher learning;

(10)   segregate contributions and payments to the fund into various accounts and funds;

(11)   require and collect administrative fees and impose reasonable penalties, not to exceed the minimum penalties required under Section 529 of the Internal Revenue Service Code of 1986, as amended, for withdrawal of funds for nonqualified higher educational expenses or for entering into a savings trust agreement on a fraudulent basis;

(12)   require that account owners of savings trust agreements verify, under oath, any requests for contract conversions, substitutions, transfers, cancellations, or refund requests;

(13)   solicit proposals and contract for the marketing of the SCTSP Program, provided that any materials produced by a marketing contractor for the purpose of marketing the program must be approved by the State Treasurer prior to being made available to the public, and neither the State nor the Office of State Treasurer shall be liable for misrepresentation of the program by a marketing contractor;

(14)   delegate responsibility for administration of the comprehensive investment plan to contractors or consultants the State Treasurer determines to be qualified;

(15)   create as a part of the comprehensive investment plan various age-based investment options for the contributor to choose among on an annual basis, given that the investment options meet the requirements of Section 529 of the Internal Revenue Code of 1986, as amended, and neither a contributor or beneficiary is directly or indirectly directing the investment of any contribution to the program;

(16)   establish procedures to allow for transfer of funds from an existing South Carolina Tuition Prepayment Program account for any other college savings account as allowable under Section 529 of the Internal Revenue Code of 1986, as amended;

(17)   to make all necessary and appropriate arrangements with colleges and universities or other entities in order to fulfill its obligations under savings trust agreements; and

(18)   establish other policies, procedures, and criteria necessary to implement and administer the provisions of this chapter in compliance with Section 529 of the Internal Revenue Code of 1986, as amended, and other applicable federal and state law.

Section 59-2-60.   (A)   The Office of State Treasurer shall make savings trust agreements available to the public, under which account owners or other contributors may make contributions on behalf of beneficiaries. These contributions and investment earnings on these contributions may be used for any qualified higher educational expenses of a designated beneficiary. There is no guarantee by the State that the Contributions, together with the investment return on the contributions, if any, will be adequate to pay for qualified education expenses in full.

(B)   Each savings trust agreement made pursuant to this chapter must include the following terms and provisions:

(1)   the maximum and minimum contributions allowed on behalf of each beneficiary for the payment of qualified higher education expenses at eligible institutions, both as defined in Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law, so that in no case shall the maximum allowable contribution be less than the amount allowable for gift tax exclusion under Section 529 of the Internal Revenue Code of 1986, as amended;

(2)   provisions for withdrawals, refunds, transfers, and any penalties;

(3)   the name, address, and date of birth of the beneficiary on whose behalf the savings trust account is opened;

(4)   terms and conditions for a substitution of the beneficiary originally named;

(5)   terms and conditions for termination of the account, including any refunds, withdrawals, or transfers, applicable penalties, and the name of the person entitled to terminate the account;

(6)   the time period during which the beneficiary must use benefits from the savings trust account;

(7)   all other rights and obligations of the account owner and the SCTSP Trust Fund; and

(8)   any other terms and conditions which the State Treasurer deems necessary or appropriate, including those necessary to conform the savings trust account with the requirements of Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law or regulations.

Section 59-2-70.   (A)   There is created a South Carolina Tuition Savings Trust Fund separate and distinct from the state general fund, the SCTSP Trust Fund, to be administered by the Office of State Treasurer. The SCTSP Trust Fund shall consist of money remitted in accordance with savings trust agreements. The trust fund shall receive and hold all payments, contributions, and deposits intended for it as well as all earnings thereon until disbursed as provided hereunder.

(B)   The amounts on deposit in the trust fund do not constitute property of the State. Amounts on deposit in the trust fund must not be commingled with other state funds and the State shall have no claim to or interest in such funds. Savings trust agreements or any other contract entered into by or on behalf of the trust fund do not constitute a debt or obligation of the State and no account owner shall be entitled to any amounts except for those amounts on deposit in or accrued to their account.

(C)   The SCTSP Trust Fund shall continue in existence as long as it holds any funds belonging to an account owner or otherwise has any obligations to any person or entity until its existence is terminated by law and remaining assets on deposit are returned to account owners or transferred to the State as provided by law.

(D)   The Office of State Treasurer shall administer the fund, including, without limitation, the keeping of records, the management of bank accounts and other investments, the transfer of funds and the safekeeping of securities evidencing investments. These functions may be administered pursuant to a management agreement with a qualified entity or entities.

(E)   Payments received by the Office of State Treasurer on behalf of beneficiaries from account owners and other contributors shall be placed in the trust fund.

(F)   The State Treasurer shall cause there to be maintained separate records and accounts for individual beneficiaries as may be required under Section 529 of the Internal Revenue Code of 1986, as amended, and any other applicable federal law.

(G)   Account owners and any other contributors shall only be permitted to contribute cash or any other form of payment or contribution as may be permitted under Section 529 of the Internal Revenue Code of 1986, as amended, and approved by the State Treasurer. The director shall cause the program to maintain adequate safeguards against contributions in excess of what may be required for Qualified Higher Education Expenses. The trust fund is specifically authorized to receive and deposit into the trust fund any monetary gift

(H)   The account owner retains ownership of all amounts on deposit in his or her account with the program up to the date of distribution on behalf of a designated beneficiary unless otherwise provided herein. Earnings derived from investment of the contributions shall be considered to be held in trust in the same manner as contributions, except as applied for purposes of the designated beneficiary. Amounts on deposit therein shall be available for expenses and penalties imposed by the Office of State Treasurer for the program as disclosed in the savings trust agreement.

(I)   The assets of the SCTSP Trust Fund shall be preserved, invested, and expended solely pursuant to and for the purposes of this chapter and shall not be loaned or otherwise transferred or used by the State of South Carolina for any other purpose.

Section 59-2-80.   (A)   All property and income of the SCTSP Trust Fund, as an instrumentality of the State, shall be exempt from all taxation by the State and by its political subdivisions.

(B)   Any interest, dividends, gains, or income accruing on the payments made pursuant to a savings trust agreement under the terms of this chapter or on any account in the SCTSP Trust Fund shall be excluded from the gross income of any such account owner, contributor, or beneficiary for purposes of South Carolina income taxes, to the extent such amounts remain on deposit in the SCTSP Trust Fund or are withdrawn pursuant to a qualified withdrawal. The SCTSP Trust Fund and Tuition Prepayment Program under Chapter 4 of this title shall constitute the only programs established pursuant to Section 529 of the Internal Revenue Code of 1986, as amended.

(C)   The earnings portion of any withdrawals from an account that are not qualified withdrawals shall be included in the gross income of the resident recipient of the withdrawal for purposes of South Carolina income taxes in the year of the withdrawal.

(D)   Contributions to a savings trust account created under this chapter by a resident of this State or a nonresident required to file a State of South Carolina income tax return for any year are deductible

Section 59-2-90.   (A)   The Office of State Treasurer has authority to establish a comprehensive investment plan for the purposes of this chapter, to invest any funds of the trust fund in any instrument, obligation, security, or property that constitutes legal investments and to name and use depositories for its investments and holdings. The comprehensive investment plan shall specify the investment policies to be utilized by the State Treasurer in its administration of the funds.

Notwithstanding any provisions of law, the Office of State Treasurer shall invest or cause to be invested amounts on deposit in the trust fund in a manner reasonable and appropriate to achieve the objectives of the program, exercising the discretion and care of a prudent person in similar circumstances with similar objectives. The Office of State Treasurer shall give due consideration to the risk, expected rate of return, term or maturity, diversification of total investments, liquidity and anticipated investments in and withdrawals from the trust fund.

(B)   All investments shall be acquired at prices not exceeding the prevailing market values for such securities.

(C)   Any limitations herein set forth shall be applicable only at the time of purchase and shall not require the liquidation of any investment at any time. All investments shall be clearly marked to indicate ownership by the trust fund and to the extent possible shall be registered in the name of the trust fund.

(D)   Subject to the above terms, conditions, limitations, and restrictions, the Office of State Treasurer shall have power to sell, assign, transfer, and dispose of any of the securities and investments of the trust fund. The State Treasurer may employ or contract with investment managers, evaluation services, or other such services as determined by the Office of State Treasurer to be necessary for the effective and efficient operation of the trust fund.

(E)   Except as otherwise provided herein, no employee of the trust fund shall have any direct or indirect interest in the income, gains, or profits of any investment made by the trust fund, nor shall any such

(F)   Under the authority granted in Section 59-2-50, the State Treasurer may establish criteria for investment managers, mutual funds, or other entities to act as contractors or consultants to the Office of State Treasurer. The State Treasurer may contract, either directly or through these contractors or consultants, to provide such services as may be a part of the comprehensive investment plan or as may be deemed necessary or proper by the State Treasurer including, but not limited to, providing consolidated billing, individual and collective record keeping and accounting, and asset purchase, control, and safekeeping.

(G)   No account owner, contributor, contributors, or beneficiary may directly or indirectly direct the investment of any account except as may be permitted under Section 529 of the Internal Revenue Code of 1986, as amended.

(H)   The Office of State Treasurer may approve different investment plans and options to be offered to participants to the extent permitted under Section 529 of the Internal Revenue Code of 1986, as amended, and consistent with the objectives of this chapter and may require the assistance of investment counseling prior to participation in different options.

Section 59-2-100.   (A)   The State Treasurer shall furnish without charge to each account owner an annual statement of:

(1)   the amount contributed by the account owner under the savings trust agreement;

(2)   the annual earnings and accumulated earnings on the savings trust account; and

(3)   any other terms and conditions which the State Treasurer deems necessary or appropriate, including those necessary to conform the savings trust account with the requirements of Section 529 of the Internal Revenue Code of 1986, as amended, or other applicable federal law or regulations.

(B)   The State Treasurer shall furnish an additional statement complying with subsection (A) to an account owner or beneficiary on written request. The State Treasurer may charge a reasonable fee for each statement furnished under this subsection.

(C)   The Office of State Treasurer shall prepare or cause to be prepared an annual report setting forth in appropriate detail an accounting of the funds and a description of the financial condition of the program at the close of each fiscal year. Such report shall be

Section 59-2-110.   This chapter is not a promise or guarantee that the beneficiary will be:

(a)   admitted to any institution of higher learning;

(b)   allowed to continue enrollment at an institution of higher learning; or

(c)   graduated from an institution of higher learning.

Section 59-2-120.   Nothing in this chapter or in any savings trust agreement entered into pursuant to this chapter shall be construed as a promise or guarantee by the State or any agency thereof that either qualified higher education expenses in general or any specific qualified higher education expense shall be covered in full by contributions or earnings on any savings trust account. Savings trust accounts and agreements entered into pursuant to this chapter are not guaranteed by the full faith and credit of the State of South Carolina.

Section 59-2-130.   Notwithstanding any provision of law, no moneys on deposit in the SCTSP Trust Fund shall be considered an asset of either the parent, guardian, or student for purposes of determining an individual's eligibility for a need based grant, a need based scholarship, or a need based work opportunity offered or administered by any state agency except as may be required by the funding source of such financial aid.

Section 59-2-140.   The SCTSP Trust Fund, contributions to the SCTSP Trust Fund, and the right of a person to a refund of contributions or any other right accrued or accruing to any person under the provisions of this chapter are exempt from attachment, garnishment, levy, and sale under any means or final process issued by any court or bankruptcy proceeding and are unassignable except as specifically otherwise provided in this chapter.

Section 59-2-150.   The provisions of this chapter are severable. If any part of this chapter is declared invalid or unconstitutional, such declaration shall not affect the parts which remain. Any fees charged by and any reimbursement of expenses to any managing entity may not exceed one and one-half percent of the annual contributions to each savings trust account.

Section 59-2-160.   In no event shall the aggregate annual fees or expense reimbursements, including, but not limited to transactional fees and sales commissions, charged by the treasurer and a managing entity

SECTION   4.   Section 59-4-100 of the 1976 Code is amended to read:

"Section 59-4-100.   Notwithstanding any other provision of law, neither the program nor the fund is liable for income taxes, and neither the program nor the fund is liable for local taxes, fees, or assessments. In addition, contributions to the fund credited to a beneficiary's account do not entitle the contributor to a deduction for purposes of the state individual income tax, nor must and these contributions must not be included in the South Carolina gross income of the beneficiary or anyone required to support the beneficiary. Furthermore, earnings on the account, tuition waivers, credits or payments for tuition, or any money or payout that the designated beneficiary receives or from which he benefits to the extent that the payments are used for tuition expenses during the same calendar year in which they are received shall not be included in the South Carolina gross income of the beneficiary or anyone required to support the beneficiary."

SECTION   5.   Section 12-6-1140 of the 1976 Code is amended by adding an appropriately numbered new subsection to read:

"( )     a contribution to the South Carolina Tuition Prepayment Program as provided in Section 59-4-100."

SECTION   6.   This act takes effect upon approval by the Governor. /

Renumber sections to conform.

Amend title to conform.

Senator RANKIN explained the amendment.

The amendment was adopted.

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

The following Bill was read the third time and ordered sent to the House of Representatives:

S. 627 (Word version) -- Senator Saleeby: A BILL TO PROVIDE FOR THE BUDGET AND TAX LEVIES OF FLORENCE COUNTY SCHOOL

By prior motion of Senator SALEEBY

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

H. 3672 (Word version) -- Reps. J.R. Smith, Clyburn, Perry, Sharpe and D.C. Smith: A BILL TO DEVOLVE THE AUTHORITY FOR APPOINTMENTS AND RECOMMENDATIONS FOR APPOINTMENTS FOR BOARDS AND COMMISSIONS FROM THE LEGISLATIVE DELEGATION REPRESENTING AIKEN COUNTY TO THE GOVERNING BODY OF AIKEN COUNTY AND TO PROVIDE EXCEPTIONS.

H. 3837 (Word version) -- Reps. J.R. Smith, Clyburn, Sharpe and D.C. Smith: A BILL TO AMEND SECTION 7-7-40, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO VOTING PRECINCTS IN AIKEN COUNTY, SO AS TO REDESIGNATE THE NEW PRECINCTS, PROVIDE THAT PRECINCTS ARE AS SHOWN ON AN OFFICIAL MAP ON FILE WITH THE DIVISION OF RESEARCH AND STATISTICAL SERVICES OF THE STATE BUDGET AND CONTROL BOARD.

S. 601 (Word version) -- Senator Thomas: A BILL TO AMEND SECTION 37-17-10, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO REGULATION OF PERSONS WHO SELL PRESCRIPTION DRUG DISCOUNT CARDS, SO AS TO PROVIDE THAT SUCH PERSONS MUST REGISTER AND REPORT TO THE

The Senate proceeded to a consideration of the Bill, the question being the adoption of the amendment proposed by the Committee on Banking and Insurance.

The Banking and Insurance Committee proposed the following amendment (NBD\11740AC01), which was adopted:

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

/SECTION   1.   Section 37-1-109(4) of the 1976 Code is amended to read:

"(4)   The administrator, as defined in Section 37-1-301, shall by regulation announce publish a notice in the State Register:

(a)   On or before April thirtieth of each year in which dollar amounts are to change, the changes in dollar amounts required by subsection (2); and

(b)   Promptly after the changes occur, changes in the index required by subsection (3) including, if applicable, the numerical equivalent of the Reference Base Index under a revised Reference Base Index and the designation or title of any index superseding the index."

SECTION   2.   Section 37-6-108(1) of the 1976 Code is amended to read:

"(1)   After notice and hearing, the administrator may order a creditor or, a person acting in his behalf, or a person subject to this title to cease and desist from engaging in violations of this title. A respondent aggrieved by an order of the administrator may obtain judicial review of the order and the administrator may obtain an order of the court for enforcement of its order in the court of common pleas. The proceeding for review or enforcement is initiated by filing a petition in the court. Copies of the petition shall must be served upon all parties of record."

SECTION   3.   Section 37-6-111(1) of the 1976 Code is amended to read:

"(1)   The administrator may bring a civil action to restrain a person to whom this part title applies from engaging in a course of:

(a)   making or enforcing unconscionable terms or provisions of consumer credit transactions;

(b)   fraudulent or unconscionable conduct in inducing consumers to enter into consumer credit transactions;

(c)   conduct of any of the types specified in paragraph item (a) or (b) with respect to transactions that give rise to or that lead persons to believe will give rise to consumer credit transactions; or

(d)   fraudulent or unconscionable conduct in the collection of debts arising from consumer credit transactions."

SECTION   4.   Section 37-6-113(1) of the 1976 Code is amended to read:

"(1)   After demand, the administrator may bring a civil action against a creditor or a person subject to this title to recover actual damages sustained and excess charges paid by one or more consumers who have a right to recover explicitly granted by this title. In a civil action under this subsection, penalties may not be recovered by the administrator. The court shall order amounts recovered under this subsection to be paid to each consumer or set off against his obligation. A consumer's action, except a class action, takes precedence over a prior or subsequent action by the administrator with respect to the claim of that consumer. A consumer's class action takes precedence over a subsequent action by the administrator with respect to claims common to both actions, but the administrator may intervene. An Administrator's action on behalf of a class of consumers takes precedence over a consumer's subsequent class action with respect to claims common to both actions. Whenever an action takes precedence over another action under this subsection, the latter action may be stayed to the extent appropriate while the precedent action is pending and dismissed if the precedent action is dismissed with prejudice or results in a final judgment granting or denying the claim asserted in the precedent action. A defense available to a creditor in a civil action brought by a consumer is available to him in a civil action brought under this subsection."

SECTION   5.   Section 37-6-113(2) of the 1976 Code, as amended by Act 142 of 1991, is further amended to read:

"(2)   The administrator may bring a civil action against a creditor or, a person acting in his behalf, or a person subject to this title to recover a civil penalty of no more than five thousand dollars for repeatedly and intentionally violating this title. A civil penalty pursuant to this

SECTION   6.   Section 37-17-10 of the 1976 Code, as added by Act 400 of 2000, is amended to read:

"Section 37-17-10.   (A)   It is unlawful for a person to sell, market, promote, advertise, or distribute a card or other purchasing mechanism or device which is not insurance that purports to offer discounts or access to discounts from pharmacies for prescription drug purchases unless:

(1)   the person is registered with the Department of Insurance Consumer Affairs for this express purpose;

(2)   the card or other purchasing mechanism or device expressly states in bold and prominent type, prominently placed, that the discounts are not insurance;

(3)   documentation is provided to the Department of Insurance Consumer Affairs that the discounts are specifically authorized and the person has a separate contract with each pharmacy or pharmacy chain listed in conjunction with the card or other purchasing mechanism or device; and

(4)   the discounts or access to discounts offered, or the range of discounts or access to the range of discounts offered, are not misleading, deceptive, or fraudulent.

(B)(1)   A person who sells, markets, promotes, advertises, or distributes a card or other purchasing mechanism or device which is not insurance that purports to offer discounts or access to discounts from pharmacies for prescription drug purchases in this State shall designate a resident of this State as an agent for service of process and register the agent with the Secretary of State.

(2)   In the absence of proper registration under subsection (B)(1), the Secretary of State is designated as an agent upon whom process may be served. Service of any process on the Secretary of State may be made by delivering to and leaving with the Secretary of State, or with any person designated by him to receive such service, duplicate copies of the process, notice, or demand. The Secretary of State shall forward one of the copies by registered or certified mail, return receipt requested, to the person required to register under subsection (B)(1) at the last known physical address to the party serving process. Refusal to sign the return receipt does not affect the validity of the service. Service is effective under this subsection as of the date shown on the return receipt or five days after its deposit in the mail, whichever is earlier. The Secretary of State may charge a fee of ten dollars for the

(C)(1)   A person who violates subsection (A) is guilty of a misdemeanor and, upon conviction, must be imprisoned for not more than six months or fined not more than one thousand dollars, or both; for a second or subsequent violation a person must be imprisoned for not more than two years or fined not more than five thousand dollars, or both.

(2)   Notwithstanding subsection (C)(1), a person who violates this chapter is subject to all civil and administrative remedies available in this title.

(D)   This section does not apply to:

(1)   a pharmacy holding a permit issued pursuant to Title 40, Chapter 43;

(2)   eye or vision care services or glasses or contact lenses provided by an optometrist or ophthalmologist;

(3)   an insured Any benefit or program offered in conjunction with a health insurance plan administered by a health insurer, health care service contractor, or health maintenance organization regulated under Title 38; or

(4)   an insured benefit administered by, or under contract with, the State of South Carolina.

(E)   For purposes of this section, 'person' means an individual, corporation, partnership or any other business entity, including, but not limited to, a health maintenance organization, an insurance company, or a third party payor. Representatives of corporations, partnerships, or other business entities must be registered before they shall offer services under this section.

(F)   The department may promulgate regulations as necessary to assist in administering this chapter, including, but not limited to, regulations concerning assessment of registration fees and standards for corporate and individual representative registration."

SECTION   7.   Section 38-5-80(k) of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"(k)   The insurer's principal place of business and primary executive, administrative, and home offices and all original books and records of the insurer are located and maintained in this State. The provisions of this subsection apply to domestic health maintenance organizations. For purposes of this section, original books and records mean corporate bylaws, charters, articles of incorporation, and any other records deemed to constitute original records by the director or his designee.

SECTION 8.   Section 38-21-10(2) of the 1976 Code, as amended by Act 181 of 1993, is further amended to read:

"(2)   The term 'control' (including the terms 'controlling', 'controlled by', and 'under common control with') means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by Section 38-21-220 that control does not exist in fact. The director or his designee may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support his determination, that control exists in fact, notwithstanding the absence of a presumption to that effect."

SECTION   9.   Section 38-31-20 of the 1976 Code, as last amended by Act 97 of 1995, is further amended to read:

"Section 38-31-20.   As used in this chapter:

(1)   'Account' means any one of the four accounts created by Section 38-31-40.

(2)   'Affiliate' means a person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with an insolvent insurer on December thirty-first of the year next preceding the date the insurer becomes an insolvent insurer.

(3)   'Affiliate of the insolvent insurer' means a person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with an insolvent insurer on December thirty-first of the year next preceding the date the insurer becomes an insolvent insurer.

(4)   'Association' means the South Carolina Property and Casualty Insurance Guaranty Association created under Section 38-31-40.

(5)   'Association similar to the association' means any guaranty association, security fund, or other insolvency mechanism which affords protection similar to that of the association. The term also includes any property/casualty insolvency mechanism which obtains assessments or other contributions from insurers on a pre-insolvency basis.

(4)(6)   'Claimant' means any insured making a first party claim or any person instituting a liability claim. However, no person who is an affiliate of the insolvent insurer may be a claimant.

(5)(7)   'Control' means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if any person directly or indirectly owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing that control does not exist in fact.

(6)(8)   'Covered claim' means an unpaid claim, including one of unearned premiums, which arises out of and is within the coverage and is subject to the applicable limits of an insurance policy to which this chapter applies issued by an insurer, if the insurer is an insolvent insurer and (a) the claimant or insured is a resident of this State at the time of the insured event, if for entities other than an individual, the residence of a claimant or insured is the state in which its principal place of business is located at the time of the insured event or (b) the claim is for first-party benefits for damage to property permanently located in this State. 'Covered claim' does not include:

(a)   any amount awarded as extra-contractual damages unless awarded against the association;

(b)   any amount sought as a return of premium under any retrospective rating plan; or

(c)   any amount due any reinsurer, insurer, insurance pool, or underwriting association as subrogation recoveries, reinsurance recoveries, contribution, indemnification, or otherwise. No such claim for any amount due any reinsurer, insurer, insurance pool, or underwriting association may be asserted against a claimant or a person insured under a policy issued by an insolvent insurer other than to the extent such a claim exceeds the association obligation limitations set forth in Section 38-31-60;

(d)   any first party claim by an insured whose net worth exceeds ten million dollars on December thirty-first of the year next preceding the date the insurer becomes an insolvent insurer; provided, that an insured's net worth on such date must be deemed to include the aggregate net worth of the insured and all of its subsidiaries as calculated on a consolidated basis;

(e)   any first party claims by an insured which is an affiliate of the insolvent insurer;

(f)   any fee or other amount relating to goods or services sought by or on behalf of any attorney or other provider of goods or services retained by the insolvent insurer or an insured prior to the date it was determined to be insolvent;

(g)   any fee or other amount sought by or on behalf of any attorney or other provider of goods or services retained by any insured or claimant in connection with the assertion or prosecution of any claim, covered or otherwise, against the association; or

(h)   any claims for interest.

(7)(9)   'Insolvent insurer' means an insurer (a) licensed to transact insurance in this State either at the time the policy was issued or when the insured event occurred and (b) determined to be insolvent by a court of competent jurisdiction in the insurer's state of domicile or of this State and which the director or his designee has found fails to meet its obligation to policyholders in this State.

(10)   'Insured' means any named insured, any additional insured, any vendor, lessor, or any other party identified as an insured under the policy.

(8)(11)   'Member insurer' means any person who (a) writes any kind of insurance to which this chapter applies under Section 38-31-30, including the exchange of reciprocal or interinsurance contracts, and

(9)(12)   'Net direct written premiums' means direct gross premiums written in this State on insurance policies to which this chapter applies, less return premiums on the policies and dividends paid or credited to policyholders on the direct business. It does not include premiums on contracts between insurers or reinsurers.

(13)   'Person' means an individual, corporation, partnership, association, voluntary organization, or governmental entity."

SECTION   10.   Section 38-31-60(a) of the 1976 Code, as last amended by Act 517 of 1994, is amended by adding at the end:

"(iv)   Notwithstanding any other provisions of this chapter, except in the case of a claim for benefits under worker's compensation coverage, any obligation of the association to or on behalf of an insured and its affiliates on all covered claims combined shall cease when ten million dollars shall have been paid in the aggregate by the association and any one or more associations similar to the association of any other state or states, to or on behalf of that insured, its affiliates, and additional insureds on covered claims or allowed claims arising under the policy or policies of any one insolvent insurer. If the association determines that there may be more than one claimant having a covered claim or allowed claim against the association, or any associations similar to the association in other states, under the policy or policies of any one insolvent insurer, the association may establish a plan to allocate amounts payable by the association in such manner as the association in its discretion considers equitable."

SECTION   11.   Section 38-31-70(3)(d) of the 1976 Code, as amended by Act 181 of 1993, is further amended to read:

"(d)   Establish procedures by which claims may be filed with the association and establish acceptable forms of proof of covered claims. Notice of claims to the receiver or liquidator of the insolvent insurer is considered notice to the association or its agent and a list of these claims must be periodically submitted to the association or similar

SECTION   12.   Section 38-31-70(4) of the 1976 Code, as amended by Act 181 of 1993, is further amended to read:

"(4)   The plan of operation may provide that any or all powers and duties of the association, except those under items (c) and (i) of Section 38-31-60, are delegated to a corporation, an association similar to the association, or other another organization which performs or will perform functions similar to those of this association, or its equivalent, in two or more states. This corporation, association, or organization must be reimbursed as a servicing facility would be reimbursed and must be paid for its performance of any other functions of the association. A delegation under this subsection (4) takes effect only with the approval of both the board of directors and the director or his designee and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this chapter."

SECTION   13.   Section 38-31-90 of the 1976 Code, as amended by Act 181 of 1993, is further amended to read:

"Section 38-31-90.   (1)   Any A person recovering under this chapter is considered to have assigned his rights under the policy to the association to the extent of his recovery from the association. Every insured or claimant seeking the protection of this chapter shall cooperate with the association to the same extent as he would have been required to cooperate with the insolvent insurer. The association has no cause of action against the insured of the insolvent insurer for any sums it has paid out except the causes of action the insolvent insurer would have had if the sums had been paid by the insolvent insurer and except as provided in subsection (2). In the case of an insolvent insurer operating on a plan with assessment liability, payments of claims of the association do not operate to reduce the liability of insureds to the receiver, liquidator, or statutory successor for unpaid assessments.

(2)   The association has the right to recover from the following persons the amount of any 'covered claim' paid on behalf of such person pursuant to this chapter;

(a)   an insured whose net worth on December thirty-one of the year immediately preceding the date the insurer becomes an insolvent insurer exceeds twenty-five million dollars and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter; and

(b)   a person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter.

(3)   The receiver, liquidator, or statutory successor of an insolvent insurer is bound by settlements of covered claims by the association or a similar organization an association similar to the association in another state. The court having jurisdiction shall grant these claims priority equal to that to which the claimant would have been entitled in the absence of this chapter against the assets of the insolvent insurer. The expenses of the association or similar organization an association similar to the association in handling claims must be accorded the same priority as the liquidator's expenses.

(3)(4)   The association shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the association and estimates of anticipated claims on the association which shall preserve the rights of the association against the assets of the insolvent insurer."

SECTION   14.   Section 38-31-100 of the 1976 Code, as last amended by Act 235 of 2000, is further amended to read:

"Section 38-31-100.   (1)   Any A person, having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer which is also a covered claim, is under an insurance policy, whether or not it is a policy issued by a member insurer, and the claim under such other policy arises from the same facts, injury, or loss that gave rise to the covered claim against the association, is required to exhaust first exhaust his right under that all coverage and limits provided by any such policy. Any amount payable on a covered claim under this chapter must be reduced by the amount of any recovery under that insurance policy full limits of such other coverage as set forth on the declarations page and the association shall receive a full credit for such limits, or, where there are no applicable limits, the claim must be reduced by the total recovery. Notwithstanding the foregoing, no person may be required to exhaust all coverage and limits under the policy of an insolvent insurer.

(a)   A claim under a policy providing liability coverage to a person who may be jointly and severally liable with or a joint tortfeasor with the person covered under the policy of the insolvent insurer that gives rise to the covered claim must be considered to be a claim arising from the same facts, injury, or loss that gave rise to the covered claim against the association. Any amount payable on a covered claim under

(b)   To the extent that the association's obligation is reduced by the application of this section, the liability of the person insured by the insolvent insurer's policy for the claim must be reduced in the same amount.

(2)   Any A person having a claim which may be recovered under more than one insurance guaranty association or its equivalent shall seek recovery first associations similar to the association must be required first to exhaust all coverage and limits in recovery from the association of the place of residence of the insured except that, if it is a first-party claim for damage to property with a permanent location, he shall seek recovery be required first to exhaust all coverage and limits in recovery from the association of the location of the property, and, if it is a workers' compensation claim, he shall seek recovery be required first to exhaust all coverage and limits in recovery from the association of the residence of the claimant. Any recovery under this chapter must be reduced by the amount payable on a covered claim under this chapter must be reduced by the full amount of recovery from any other insurance guaranty association or its equivalent associations similar to the association, and the association shall receive full credit for such recovery.

(3)   Any A person having a claim or legal right of recovery under any governmental insurance or guaranty program which is also a covered claim is shall be required first to exhaust first his right all coverage and limits in recovery under the program. Any amount payable on a covered claim under this chapter must be reduced by the full amount of any recovery under the governmental insurance or guaranty program.

(4)   No claim held by an insurer, reinsurer, insurance pool, or underwriting association, based on an assignment or on rights of subrogation, or otherwise, may be recovered from a claimant or asserted in any legal action against a person insured under a policy issued by an insolvent insurer or the association except to the extent the amount of the claim exceeds the obligation of the association under this chapter.

(5)   Any A person who has liquidated by settlement or judgment a claim against an insured under a policy issued by an insolvent insurer, and the claim is a covered claim and is also a claim within the coverage of any policy issued by a solvent insurer, is must be required to exhaust first to exhaust his rights all coverage and limits provided under the

(6)   A person having a claim against an insolvent insurer under any provision in an insurance policy is limited to ten million dollars aggregate payout from the association.

(7)   A person having a net worth of greater than twenty-five million dollars and having a claim against an insolvent insurer under any provision in an insurance policy may not make a claim against the association."

SECTION   15.   Section 38-33-80(A)(2) and (C) of the 1976 Code, as last amended by Act 181 of 1993, are further amended to read:

"(2)   No Evidence of coverage, or an amendment thereto to it, may not be issued or delivered to any a person in this State until a copy of the form of the evidence of coverage, or amendment thereto to it, has been filed with and approved by the director or his designee pursuant to Section 38-71-310(A) or 38-71-720(A).

(C)   The director or his designee shall approve, within a reasonable period, approve thirty days any form if the requirements of subsection (A) are met and. The director or his designee, in his discretion, may extend for up to an additional sixty days the period within which he shall approve or disapprove the form. The director or his designee shall approve, within a reasonable period, any schedule of charges if the requirements of subsection (B) are met. It is unlawful to issue a form or to use a schedule of charges until approved. If the director or his designee disapproves the filing, he shall notify the filer. The notice must contain the reasons for disapproval, and the filer, upon request in writing, is entitled to a public hearing thereon on it. If no action is not taken to approve or disapprove any form or schedule of charges within ninety thirty days of the filing of the forms or charges form, if the period is not extended, or at the expiration of the extended period, if any, the filing is deemed approved. If action is not taken to approve or disapprove any schedule of charges within ninety days of the filing of the charges, the filing is deemed approved. An organization may not use a form or schedule of charges deemed approved pursuant to the default provision of this section until the organization has filed with the director or his designee a written notice of its intent to use the form or

SECTION   16.   Section 38-39-90(f) of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"(f)   If the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the premium service company shall hold the surplus in a fiduciary capacity and promptly refund the excess to the insured or the agent of record. No refund is required if it amounts to less than three five dollars."

SECTION   17.   Section 38-43-80(B) of the 1976 Code, as amended by Section 11H, Part II, Act 501 of 1992, is further amended to read:

"(B)   The fees must be paid in advance. License fees for local, state, or special agents must be paid by the insurer for whom the agent proposes to act or by which the proposed agent is vouched for in the application for license. The department shall promulgate regulations specifying the time and manner of payment of these fees."

SECTION   18.   Section 38-55-30 of the 1976 Code, as amended by Act 13 of 1991, is further amended to read:

"Section 38-55-30.   Except as otherwise provided in this title, no insurer or captive doing business in this State may expose itself to a loss on one risk in an amount exceeding ten percent of its surplus to policyholders. A risk or portion of it which has been reinsured must be deducted in determining the limitation of risk prescribed in this section. As used in this section, "captive" means an insurance company owned by another organization whose exclusive purpose is to insure risks of the parent organization and affiliated companies, or for groups and associations, an insurance organization owned by the insureds whose exclusive purpose is to insure risks of member organizations or group members and their affiliates, or both. This section does not apply to captive insurers."

SECTION   19.   The 1976 Code is amended by adding:

"Section 38-55-75.   The Department of Insurance may receive and shall maintain as confidential any documents or information furnished to the department by the National Association of Insurance Commissioners or insurance departments of other states which is classified as confidential by that association or state. The Department of Insurance may share documents or information, including confidential documents or information, with the National Association of Insurance Commissioners or insurance departments of other states if the association or other state agrees to maintain the same level of

SECTION   20.   Section 38-61-20 of the 1976 Code, as last amended by Act 312 of 2000, is further amended to read:

"Section 38-61-20.   (A)   It is unlawful for an insurer doing business in this State to issue or sell in this State any a policy, contract, or certificate until it has been filed with and approved by the director or his designee. The director or his designee may disapprove the form if it:

(1)   does not meet the requirements of law,;

(2)   contains any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory,; or

(3)   is going to be solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading.

However, this subsection does not apply to surety contracts or fidelity bonds, except as required in Section 38-15-10, or to insurance contracts, riders, or endorsements prepared to meet special, unusual, peculiar, or extraordinary conditions applying to an individual risk or exempt commercial policies.

(B)   Within thirty days after the filing of a form requiring approval, the director or his designee shall notify the organization filing the form of the approval or disapproval of the form, and the reason if the form is disapproved. The director or his designee, in his discretion, may extend for up to an additional sixty days the period within which he shall approve or disapprove the form. A form received, but neither approved nor disapproved by the director or his designee, is deemed approved at the expiration of the thirty days if the period is not extended, or at the expiration of the extended period, if any. An organization may not use a form deemed approved pursuant to the default provision of this section until the organization has filed with the director or his designee a written notice of its intent to use the form. The notice must be filed in the office of the director at least ten days before the organization uses the form.

(C)   At any time after having given written approval, and after an opportunity for a hearing for which at least thirty days' written notice has been given, the director or his designee may withdraw approval if he finds that the forms form:

(1)   do does not meet the requirements of law,;

(2)   contain any contains provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory,; or

(3)   are being is solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading.

(C)(D)   The director or his designee may exempt from the requirements of subsection (A) as long as he considers proper any type of insurance policy, contract, or certificate to which in his opinion subsection (A) practically must not be applied, or the filing and approval of which, in his opinion, is not necessary for the protection of the public. However, every each insurer at least annually shall list the types and form numbers of all policies it issues or sells in this State which the director or his designee has exempted from being filed and approved, and an officer of the insurer shall certify that all of these policies comply fully with the laws of this State. If a policy, contract, or certificate is certified to be in compliance with the laws of this State and the director or his designee finds it violates a law of this State, he may disqualify that insurer from certifying policies, contracts, or certificates allowed under this subsection.

(D)(E)   Nothing in this chapter precludes the issuance of a life insurance contract that includes an optional accident, health, or accident and health insurance rider. However, the optional accident, health, or accident and health insurance rider must be filed with and approved by the director or his designee pursuant to Section 38-71-310, 38-71-720, or 38-71-740, as appropriate, and comply with all applicable sections of Chapter 71 of this title and, in addition, in the case of long term care insurance, Chapter 72 of this title."

SECTION   21.   Section 38-61-40 of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"Section 38-61-40.   All insurers licensed to transact insurance business in this State shall comply with the standards prescribed by regulation of the department. The director or his designee is empowered to recall withdraw approval or certification on all existing policies of commonly purchased insurance that do not comply with Section 38-61-30."

SECTION   22.   Section 38-65-60(3) of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"(3)   Upon request of the director or his designee, copies of policies and certificates under a policy of group life insurance issued outside this State and covering residents of this State must be made available on an informational basis only. However, mass-marketed life insurance

SECTION   23.   Section 38-71-310(A) and (F) of the 1976 Code, as last amended by Act 411 of 1998, are further amended to read:

"(A)   No A policy or certificate of accident, health, or accident and health insurance may not be issued or delivered in this State, nor may any application, endorsement, or rider which becomes a part of the policy be used, until a copy of its form has been filed with and approved by the director or his designee, except as exempted by regulation of the department the director or his designee as permitted by Section 38-61-20. The director or his designee may disapprove the form if the form:

(1)   does not meet the requirements of law,;

(2)   contains any provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory,; or

(3)   is going to be solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading.

The director or his designee shall notify in writing, as soon as is practicable, the insurer which that has filed the form of his approval or disapproval. In the event of disapproval If the form is disapproved, the notice must contain the reasons for disapproval, and the insurer is entitled to a public hearing thereon on that decision. If no action has been is not taken to approve or disapprove a policy or certificate, application, endorsement, or rider after the documents have document has been filed for ninety thirty days, they are it is deemed to be approved. The director or his designee, in his discretion, may extend for up to an additional sixty days the period for approval or disapproval of the form. An organization may not use a form deemed approved pursuant to the default provision of this section until the organization has filed with the director or his designee a written notice of its intent to use the form. The notice must be filed in the office of the director at least ten days before the organization uses the form.

(F)   Nothing in this chapter precludes the issuance of an individual accident, health, or accident and health insurance policy that includes an optional life insurance rider. However, the optional life insurance rider must be filed with and approved by the director or his designee pursuant to Section 38-61-20 and comply with all applicable sections of Chapter 63 and, in addition, in the case of a life insurance rider with accelerated long term care benefits, Chapter 72 of this title."

SECTION   24.   Section 38-71-720 of the 1976 Code, as last amended by Act 411 of 1998, is further amended to read:

"Section 38-71-720.   (A)   A policy or contract of group accident, group health, or group accident and health insurance may not be issued or delivered in this State, nor may any application, endorsement, or rider which becomes a part of the policy be used, until a copy of the form has been filed with and approved by the director or his designee except as exempted by regulation of the department the director or his designee as permitted by Section 38-61-20. The director or his designee may disapprove the form if the form:

(1)   does not meet the requirements of law;

(2)   contains provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory; or

(3)   is going to be solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading.

However, If no action has been is not taken to approve or disapprove a policy, contract, certificate, application, endorsement, or rider after the documents have document has been filed for ninety thirty days, the it may be issued and delivered until or unless subsequently disapproved by the director or his designee is deemed to be approved. This time period may be extended thirty days if the director or his designee gives written notice to the filer that he needs additional time to review the filing. The director or his designee, in his discretion, may extend for up to an additional sixty days the time period for approval or disapproval of the form. An organization may not use a form deemed approved pursuant to the default provision of this section until the organization has filed with the director or his designee a written notice of its intent to use the form. The notice must be filed in the office of the director at least ten days before the organization uses the form. The director or his designee, as soon as is practicable, shall notify in writing the insurer which has filed the form of his approval or disapproval. If the form is disapproved, the notice must contain the reasons for disapproval and the insurer is entitled to a public hearing on it that decision. At any time after having given written approval, the director or his designee, after a public hearing of which at least thirty days' written notice has been given, may withdraw approval if he finds that the forms form:

(1)   do does not meet the requirements of law;

(2)   contain contains provisions which are unfair, deceptive, ambiguous, misleading, or unfairly discriminatory; or

(3)   are being is solicited by means of advertising, communication, or dissemination of information which is deceptive or misleading.

The withdrawal of approval must be effected by written notice to the insurer and the insurer is entitled to a public hearing on it that decision. Any action or decision of the director or his designee to withdraw approval may be appealed to the Administrative Law Judge Division in accordance with Section 38-3-210.

(B)   Nothing in this chapter precludes the issuance of a policy or contract of group accident, group health, or group accident and health insurance that includes an optional life insurance rider. However, the optional life insurance rider must be filed with and approved by the director or his designee pursuant to Section 38-61-20 and comply with all applicable sections of Chapter 65 and, in addition, in the case of a life insurance rider with accelerated long term care benefits, Chapter 72 of this title."

SECTION   25.   Section 38-71-750(3) of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"(3)   Upon request of the director or his designee, copies of policies and certificates under a policy of group accident, group health, or group accident and health insurance issued outside this State and covering residents of this State must be made available on an informational basis only. However, mass-marketed accident, health, or accident and health insurance policies and certificates shall must receive prior approval of the director or his designee pursuant to Section 38-71-720 before they can be offered for sale to residents of this State."

SECTION   26.   Section 38-71-1370 of the 1976 Code, as amended by Act 5 of 1997, is further amended to read:

"SECTION 38-71-1370.(A)   Except to the extent inconsistent with specific provisions of this article, all provisions of Article 5, are applicable to any insurance plans required to be offered by small employer insurers.

(B)   Late enrollees may be excluded from coverage for the greater of eighteen months or an eighteen month preexisting condition exclusion; however, if both a period of exclusion from coverage and a preexisting condition exclusion are applicable to a late enrollee, the combined period may not exceed eighteen months."

SECTION   27.   Section 38-71-1980(F)(3) and (4) of the 1976 Code, as added by Act 380 of 2000, is amended to read:

"(3)   If the notice provided pursuant to subsection (H)(1) (F)(1) was not in writing, within two days after the date of providing that notice, the independent review organization shall:

(a)   provide written confirmation of the decision to the covered person or his authorized representative and the health carrier; and

(b)   include the information set forth in Section 38-71-1970(H)(3).

(4)   As expeditiously as reasonably possible after receipt of the notice of a decision pursuant to subsection (H)(1) (F)(1) reversing the adverse determination or final adverse determination, the health carrier shall approve the covered benefit that was the subject of the adverse determination or final adverse determination, subject to applicable contract exclusions, limitations, or other provisions."

SECTION   28.   Section 38-73-1300 of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"Section 38-73-1300.   Any A member of or subscriber to a rating organization to whom the provisions of Article 3 of this chapter are applicable may make written application to the director or his designee for permission to file a deviation modification from the class rates loss costs, schedules, rating plans, or rules respecting any kind of insurance or class of risk within a kind of insurance or any combination thereof of them. The application shall must specify the basis for the modification. A copy of the application must be sent simultaneously to the rating organization."

SECTION   29.   Section 38-73-1310 of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"Section 38-73-1310.   Any A member of or subscriber to a rating organization to whom the provisions of Article 5 of this chapter are applicable may make written application to the department for permission to file a uniform percentage decrease or increase to be applied to the premiums produced by the rating system so filed for a kind of insurance or for a class of insurance which is found by the director or his designee to be a proper rating unit for the application of such uniform percentage decrease or increase or for a subdivision of a kind of insurance (a) comprised of a group of manual classifications which is treated as a separate unit for rate-making purposes or (b) for which separate expense provisions are included in the filings of the rating organization. The application shall must specify the basis for the modification and must be accompanied by the data upon which the applicant relies. A copy of the application and data must be sent simultaneously to the rating organization."

SECTION   30.   Section 38-87-40(3)(a) of the 1976 Code, as amended by Act 181 of 1993, is further amended to read:

"(a)   Each risk retention group is liable for the payment of premium taxes and taxes on premiums of direct business for risks resident or located within this State and shall report to the director or his designee the net premiums written for risks resident or located within this State. Such risk retention group is subject to taxation, including any applicable fines and penalties related thereto, on the same basis as a foreign an admitted insurer."

SECTION   31.   Section 38-90-60(E) of the 1976 Code, as added by Act 331 of 2000, is amended to read:

"(E)   The articles of incorporation, the certificate issued pursuant to subsection (D), and the organization fees required by Section 38-90-20(D) 33-1-220 must be transmitted to the Secretary of State, who shall record both the articles of incorporation and the certificate."

SECTION   32.   Section 38-90-140(A) and (B) of the 1976 Code, as added by Act 331 of 2000, is amended to read:

"(A)   A captive insurance company shall pay to the director department by March 1 of each year, a tax at the rate of four-tenths of one percent on the first twenty million dollars and three-tenths of one percent on the next twenty million dollars and two-tenths of one percent on the next twenty million dollars and seventy-five thousandths of one percent on each dollar thereafter on the direct premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company during the year ending December 31 next preceding, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums which shall include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders.

(B)   A captive insurance company shall pay to the director department by March 1 of each year, a tax at the rate of two hundred and twenty-five thousandths of one percent on the first twenty million dollars of assumed reinsurance premium, and one hundred fifty thousandths of one percent on the next twenty million dollars and fifty thousandths of one percent on the next twenty million dollars and twenty-five thousandths of one percent of each dollar thereafter. However, no reinsurance tax applies to premiums for risks or portions of risks which are subject to taxation on a direct basis pursuant to subsection (A). A premium tax is not payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of another insurer under common ownership and

SECTION   33.   Section 38-90-180(A) of the 1976 Code, as added by Act 331 of 2000, is amended to read:

"(A)   Except as otherwise provided in this section, the terms and conditions set forth in Chapter Chapters 26 and 27 pertaining to insurance reorganizations, receiverships, and injunctions apply in full to captive insurance companies formed or licensed under this chapter."

SECTION   34.   Section 56-10-240(A) of the 1976 Code, as amended by Act 459 of 1996, is further amended to read:

"(A)   If, during the period for which it is licensed, a motor vehicle is or becomes an uninsured motor vehicle, then the vehicle owner immediately shall obtain insurance on the vehicle or within five days after the effective date of cancellation or expiration of his liability insurance policy surrender the motor vehicle license plates and registration certificates issued for the motor vehicle. If an automobile liability insurance premium is not paid within five working days after the last day to pay an automobile liability insurance the premium, whether it is the premium due date or a grace period that is granted customarily or contractually, a motor vehicle is an uninsured motor vehicle, and the insurer shall give written notice, or notice by magnetic or electronic media in a manner considered satisfactory to the department, within ten days after the five-day period ends, in addition to that notice previously given in accordance with law, by delivery under United States Post Office bulk certified mail, return receipt requested, to the department of the cancellation or refusal to renew under the following circumstances:

(1)   if the lapse or termination of such insurance or security occurs within three months of issuance, provided that this subsection only applies to new policies, and not renewal or replacement policies; or

(2)   the lapse or termination occurs after three months for a resident who fails one or more of the objective standards prescribed in Section 38-73-455."

SECTION   35.   Section 56-10-280 of the 1976 Code, as amended by Act 181 of 1993, is further amended to read:

"Section 56-10-280.   (A)   Contracts or policies of insurance issued to meet the financial responsibility requirements prescribed in this chapter must be issued for not less than six months. A contract or policy of insurance remains in effect at least sixty days notwithstanding

(1)   a check or bank draft tendered by the insured for payment of premium to an agent, an insurance company, or a premium finance company is returned unpaid for insufficient funds or other reason by the insured's financial institution. If the check or draft is an initial payment made by an applicant for insurance or a payment made by an insured to renew a policy, the cancellation is effective as of the policy inception or renewal date.

(2)   the insured produces satisfactory proof from the department that he has sold or otherwise disposed of the insured vehicle or surrendered its tags and registration.

(3)   the insured has secured another policy that meets the financial responsibility requirements prescribed in this chapter.

(B)   This section does not prohibit refunds to the insured for cancellations after sixty days resulting from causes other than nonpayment of premium. Where an insurance company or premium finance company cancels a contract or policy pursuant to this section for nonpayment of premium under the circumstances in subsection (A) which occurs within the first sixty days, the insurance company, premium finance company, or agent may charge and collect a fifteen-dollar penalty in addition to that otherwise provided by law, and the penalty charge is not a premium charge."

SECTION   36.   Section 38-73-1320 of the 1976 Code is repealed.

SECTION   37.   This act takes effect upon approval by the Governor./

Renumber sections to conform.

Amend title to conform.

The committee amendment was adopted.

There being no further amendments, the Bill was read the second time and ordered placed on the third reading Calendar with notice of general amendments.

S. 671 (Word version) -- Senator Ryberg: A BILL TO AMEND ACT 503 OF 1982, AS AMENDED, RELATING TO THE AIKEN COUNTY SCHOOL

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

Senator MOORE proposed the following amendment (671R001.TLM), which was adopted:

Amend the bill, as and if amended, page 2, by striking lines 12-36 and inserting:

/       Section   16.   Each of the administrative areas shall may have an area superintendent appointed by the county board of education upon recommendation of the district superintendent. Each area superintendent shall may be responsible to the district superintendent for the operation of the schools within his area and the annual preparation of a proposed classified budget for the operation of the schools in his administrative area. The area superintendent shall may have supervisory control over the expenditure of funds allocated to his area. Each area superintendent shall may recommend to the district superintendent for nomination to the county board for employment those school personnel whose services are required to his administrative area. The area superintendents shall may be delegated additional authority as deemed necessary in consultation with the district superintendent of schools by the county board of education."/

Renumber sections to conform.

Amend title to conform.

Senator MOORE explained the amendment.

The amendment was adopted.

There being no further amendments, the Bill was read the second time and ordered placed on the third reading Calendar with notice of general amendments.

On motion of Senator MOORE, with unanimous consent, the name of Senator MOORE was added as a co-sponsor of S. 671.

S. 672 (Word version) -- Senator Moore: A BILL TO AMEND ACT 503 OF 1982, RELATING TO THE AIKEN COUNTY SCHOOL DISTRICT AND THE AIKEN COUNTY BOARD OF EDUCATION, SO AS TO REVISE THE BOARD'S AUTHORITY WITH REGARD TO ADMINISTRATIVE AREA OFFICES AND AREA ADVISORY COUNCILS.

On motion of Senator MOORE, the Bill was committed to the Aiken County Delegation.

There was no objection.

S. 419 (Word version) -- Senators Pinckney, Drummond, Matthews, J. Verne Smith, Passailaigue, Ford, Glover, McConnell, Grooms and Jackson: A BILL TO AMEND SECTIONS 4-10-330, AS AMENDED, 4-10-340, AND 4-10-360, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE BALLOT QUESTION AND REVENUE USES, TAX IMPOSITION AND TERMINATION, AND REVENUE DISTRIBUTION UNDER THE CAPITAL PROJECTS SALES TAX ACT, SO AS TO SPECIFICALLY AUTHORIZE THE TAX REVENUE TO BE USED TO PAY DEBT SERVICE ON BONDS ISSUED TO FUND THE APPROVED PROJECTS, TO PROVIDE THAT THE DEPARTMENT OF REVENUE SHALL COLLECT THE TAX THROUGH THE QUARTER IN WHICH THE COUNTY CERTIFIES THAT NO BONDS REMAIN OUTSTANDING, TO PROVIDE THAT THE REFERENDUM QUESTION APPROVING A PROJECT MAY BE REVISED TO INCLUDE THE PRINCIPAL AMOUNT OF THE BONDS TO BE ISSUED FOR THE PROJECT WITH THE SOURCE TO PAY THE BONDS IF THE SALES TAX REVENUE IS INSUFFICIENT, TO PROVIDE THAT A QUESTION SO REVISED CONSTITUTES AN AUTHORIZATION TO ISSUE THE BONDS, TO PROVIDE ADDITIONAL REPORTING REQUIREMENTS ON THE USES OF QUARTERLY DISTRIBUTIONS OF THESE TAX REVENUES, AND TO PROVIDE FOR THE USE OF THESE REVENUES FOR THE REPAYMENT OF BONDS WHEN THE REQUIRED REFERENDUM AND REFERENDUM APPROVAL OCCURRED BEFORE THE EFFECTIVE DATE OF THIS ACT.

On motion of Senator MOORE, with unanimous consent, the Bill was carried over.

H. 3696 (Word version) -- Rep. Harrison: A JOINT RESOLUTION TO AUTHORIZE THE SOUTH CAROLINA EMPLOYMENT SECURITY COMMISSION TO EXPEND UP TO ONE MILLION ONE HUNDRED SEVENTY-TWO THOUSAND SEVEN HUNDRED AND NINETY-FIVE DOLLARS OF THE FUNDS MADE AVAILABLE TO THE STATE UNDER SECTION 903 OF THE SOCIAL SECURITY ACT FOR THE PURPOSE OF DESIGNING AND ACQUIRING AN UNEMPLOYMENT TAX ACCOUNTING SYSTEM FOR USE BY THE SOUTH CAROLINA EMPLOYMENT SECURITY COMMISSION.

On motion of Senator BRANTON, with unanimous consent, the Joint Resolution was carried over.

H. 4015 (Word version) -- Reps. Breeland, Whipper, Harrell, Weeks, Limehouse, Allison, Bowers, R. Brown, Dantzler, Emory, Gourdine, J. Hines, M. Hines, Hosey, Law, Lloyd, Mack, Meacham-Richardson, Miller, J.M. Neal, Rivers, Scarborough, Snow and Stuart: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 1-1-693 SO AS TO DESIGNATE PORGY AND BESS AS THE OFFICIAL OPERA OF THIS STATE AND TO PROVIDE THAT COPYRIGHTED OR PROPRIETARY MATERIAL FROM PORGY AND BESS MAY NOT BE USED WITHOUT THE PERMISSION OF THE OWNERS OF THAT MATERIAL.

On motion of Senator BRANTON, with unanimous consent, the Bill was carried over.

H. 3974 (Word version) -- Rep. Cato: A BILL TO AMEND SECTION 37-17-10, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO REGULATION OF PERSONS WHO SELL PRESCRIPTION DRUG DISCOUNT CARDS, SO AS TO PROVIDE THAT SUCH PERSONS MUST REGISTER AND REPORT TO THE DEPARTMENT OF CONSUMER AFFAIRS, RATHER THAN TO THE DEPARTMENT OF INSURANCE; TO AMEND SECTION 38-5-80, AS AMENDED, RELATING TO REQUIREMENTS TO OBTAIN A LICENSE TO CONDUCT INSURANCE BUSINESS IN THIS STATE, SO AS TO CLARIFY WHAT BOOKS AND RECORDS OF AN INSURER MUST BE MAINTAINED IN THIS STATE; TO AMEND SECTION 38-31-20, AS AMENDED, RELATING TO DEFINITIONS IN THE SOUTH CAROLINA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION ACT, SO AS TO INCLUDE NEW DEFINITIONS AND REVISE CERTAIN EXISTING DEFINITIONS;

Senator ALEXANDER explained the Bill.

On motion of Senator SETZLER, with unanimous consent, the Bill was carried over.

H. 3515 (Word version) -- Reps. Sandifer, Robinson, Allison, Altman, Askins, Barfield, Barrett, Bingham, Carnell, Cato, Chellis, Cobb-Hunter, Cooper, Dantzler, Harrell, Huggins, Keegan, Kelley, Kirsh, Klauber, Law, Leach, Martin, Meacham-Richardson, J.M. Neal, Phillips, Rice, Riser, Simrill, D.C. Smith, W.D. Smith, Snow, Talley, Taylor, Thompson, Trotter, Walker, Whipper, Wilder, A. Young, McLeod, Davenport, Emory, Sinclair and Knotts: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 40-19-235 SO AS TO PROVIDE THAT A NONRESIDENT EMBALMER OR FUNERAL DIRECTOR MAY BE LICENSED IN THIS STATE IF THE LICENSURE REQUIREMENTS OF HIS STATE ARE SUBSTANTIALLY SIMILAR TO REQUIREMENTS OF THIS STATE AND TO REQUIRE FIVE YEARS OF PRACTICE AND PASSAGE OF AN EXAMINATION FOR LICENSURE WHEN THE LICENSURE REQUIREMENTS IN ANOTHER STATE ARE NOT SUBSTANTIALLY SIMILAR TO REQUIREMENTS IN THIS STATE; TO ADD SECTION 40-19-265 SO AS TO ESTABLISH PERMIT REQUIREMENTS FOR FUNERAL HOMES, BRANCH FUNERAL HOMES, RETAIL SALES OUTLETS, AND CREMATORIES; TO AMEND SECTION 40-19-10, AS AMENDED, RELATING TO THE SOUTH CAROLINA STATE BOARD OF FUNERAL SERVICE, SO AS TO REQUIRE ALL FUNERAL DIRECTORS AND EMBALMERS SERVING ON THE BOARD TO BE FULL-TIME EMPLOYEES OF A FUNERAL ESTABLISHMENT; TO AMEND SECTION 40-19-20, AS AMENDED, RELATING TO DEFINITIONS CONCERNING EMBALMERS AND FUNERAL DIRECTORS, SO AS TO REVISE, AMONG OTHER DEFINITIONS, "BRANCH FUNERAL HOME", "DISPOSITION", AND "MANAGER" AND TO DEFINE ADDITIONAL TERMS; TO AMEND SECTION 40-19-110, AS AMENDED, RELATING TO GROUNDS FOR MISCONDUCT, SO AS TO PROHIBIT SOLICITING THE SALE OF FUNERAL MERCHANDISE AND TO CLARIFY OTHER GROUNDS; TO AMEND SECTION 40-19-230, RELATING TO QUALIFICATIONS FOR LICENSURE, SO AS TO CHANGE THE ACCREDITING BODY FOR EMBALMING COLLEGES AND TO CONFORM

On motion of Senator MOORE, with unanimous consent, the following amendments by Senator PINCKNEY were published.

Senator PINCKNEY proposed the following amendment (PINCKNEY-3515-01):

Amend the bill, as and if amended, page 4 by deleting lines 26, 27, and 28 and inserting the following:

/   The South Carolina Funeral Directors Association may recommend five members, the South Carolina Morticians Association may recommend five members, and an individual or   /

Renumber sections to conform.

Amend title to conform.

Senator PINCKNEY proposed the following amendment (PINCKNEY-3515-02):

Amend the bill, as and if amended, page 4 by deleting lines 26, 27, and 28 and inserting the following:

/   The South Carolina Funeral Directors Association may recommend four members, the South Carolina Morticians Association may recommend four members, and an individual or   /

Renumber sections to conform.

Amend title to conform.

Senator PINCKNEY proposed the following amendment (PINCKNEY.3515):

Amend the bill, as and if amended, page 4, by deleting line 28 and inserting the following:

/   Association may recommend 6 members, and an individual or /

Renumber sections to conform.

Amend title to conform.

On motion of Senator PINCKNEY, the Bill was carried over.

THE CALL OF THE UNCONTESTED CALENDAR HAVING BEEN COMPLETED, THE SENATE PROCEEDED TO A CONSIDERATION OF H. 3687, THE GENERAL APPROPRIATION BILL.

The Senate proceeded to a consideration of the Bill, the question being the adoption of the Report proposed by the Senate Finance Committee.

Senator PASSAILAIGUE was recognized.

With unanimous consent, Senator MOORE was granted leave to address brief remarks to the body, with Senator PASSAILAIGUE retaining the floor.

Senator MOORE asked unanimous consent to make a motion to give the Bill a second reading with notice of general amendments on third reading, carrying over the Senate Finance Committee Report and all other amendments on the Desk to third reading, provided, that no member shall be prohibited from offering any amendment on third reading and, provided, further, that all Points of Order are preserved and shall remain timely and no member shall lose any rights to raise Points of Order on third reading.

Senator BRANTON objected.

With unanimous consent, Senator BRANTON was granted leave to address brief remarks to the body, with Senator PASSAILAIGUE retaining the floor.

Senator J. VERNE SMITH asked unanimous consent to make a motion to give the Bill a second reading with notice of general amendments on third reading, carrying over the Senate Finance Committee Report and all other amendments on the Desk to third reading.

Senator BRANTON objected.

At 11:11 A.M., with Senator PASSAILAIGUE retaining the floor, on motion of Senator LEATHERMAN, with unanimous consent, the Senate receded from business not to exceed twenty minutes.

At 11:36 A.M., the Senate resumed.

At 11:36 A.M., with Senator PASSAILAIGUE retaining the floor, on motion of Senator LAND, with unanimous consent, the Senate receded from business not to exceed fifteen minutes.

At 11:50 A.M., the Senate resumed.

With unanimous consent, Senator LEATHERMAN was granted leave to address brief remarks to the body, with Senator PASSAILAIGUE retaining the floor.

Senators LEATHERMAN and MOORE asked unanimous consent to make a motion to give the Bill a second reading with notice of general amendments on third reading, carrying over the Senate Finance Committee Report and all other amendments on the Desk to third reading, provided, that no member shall be prohibited from offering any amendment on third reading and, provided, further, that all Points of Order are preserved and shall remain timely and no member shall lose any rights to raise Points of Order on third reading.

There was no objection and the Bill was given a second reading with notice of general amendments on third reading, carrying over the

Senator DRUMMOND spoke on the Bill.

Senator RYBERG spoke on the Bill.

On motion of Senator MOORE, debate was interrupted by adjournment.

Having received a favorable report from the Berkeley County Delegation, the following appointment was confirmed in open session:

Initial Appointment, Berkeley County Magistrate, with term to commence April 30, 1999, and to expire April 30, 2003

Ava Bryant Hawkins, 14 Basilica Avenue North, Hanahan, S.C. 29406

On motion of Senator LEVENTIS, with unanimous consent, the Senate stood adjourned out of respect to the memory of Mr. Charles Isham "C. I." Thompson, Sr. of Sumter, S.C. Mr. Thompson served for more than 30 years with Sumter School District 17 and Lincoln High School as a teacher, head coach for the football and basketball teams, assistant principal and Adult Education Director until his retirement in 1976. He was a former chairman of the following organizations: Sumter County Historical Commission, Sumter County Office of Economic Opportunity, Sumter County Chamber of Commerce Human Relations Committee, Advisory Board of South Carolina Vocational Rehabilitation Center, Sumter County Retired Teachers Association and the Sumter County Draft Board. He also served on the Sumter County Crime Coalition and was a member of the Sumter County Council on Aging.

At 12:15 P.M., on motion of Senator MOORE, the Senate adjourned to meet tomorrow at 10:00 A.M.

This web page was last updated on Thursday, June 25, 2009 at 1:20 P.M.