Indicates Matter Stricken
Indicates New Matter

The Senate assembled at 10:00 A.M., the hour to which it stood adjourned, and was called to order by the PRESIDENT.

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

Beloved, hear the Word from Hebrews, Chapter 11:8:

"By faith Abraham obeyed when he was called to set out for a place that he was to receive as an inheritance; and he set out, not knowing where he was going."
Let us pray.

Father, that is an interesting passage: Abraham "obeyed when he was called," then "he set out" even not knowing where he was going.

These are days freighted with destiny for our State and our world. The big question is "Who calls?" And in what direction are we called to this place for this time... by You?

Show us the way... not our way... but Yours! We will obey!

Thank You!
Amen!

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

At 10:06 A.M., on motion of Senator LAND, the Senate receded from business pending the presence of a quorum.

At 10:20 A.M., the Senate resumed.

The following appointments were transmitted by the Honorable Mark C. Sanford:

Initial Appointment, Beaufort County Magistrate, with term to commence April 30, 2002, and to expire April 30, 2006

Terry Allen Finger, P. O. Box 24005, Hilton Head, S.C. 29925

Reappointment, Chester County Magistrate, with term to commence April 30, 2003, and to expire April 30, 2007

Dianne Hitt Moore, P. O. Box 580, Chester, S.C. 29706

Reappointment, Fairfield County Magistrate, with term to commence April 30, 2003, and to expire April 30, 2007

Robert F. Williams, P. O. Box 264, Great Falls, S.C. 29055

Reappointment, Fairfield County Magistrate, with term to commence April 30, 2003, and to expire April 30, 2007

William F. Pope, Sr., 115-B South Congress Street, Winnsboro, S.C. 29180

Reappointment, Greenwood County Magistrate, with term to commence April 30, 1999, and to expire April 30, 2003

Leisa R. Hotchkiss, 528 Monument Street, Greenwood, S.C. 29646

Reappointment, Laurens County Magistrate, with term to commence April 30, 2003, and to expire April 30, 2007

Glynda L. Tucker, 10470 Highway 14, Gray Court, S.C. 29645

Reappointment, Laurens County Magistrate, with term to commence April 30, 2003, and to expire April 30, 2007

James A. Davis, 9320 Highway 221-S, Waterloo, S.C. 29384

Senator LEATHERMAN introduced Dr. Thomas L Stoughton of Florence, S.C., Doctor of the Day.

At 10:30 A.M., Senator LEVENTIS requested a leave of absence from 5:30 - 8:30 P.M.

At 10:30 A.M., Senator CROMER requested a leave of absence from 6:00 - 9:00 P.M.

At 10:30 A.M., Senator HUTTO requested a leave of absence from 5:30 - 8:00 P.M.

At 10:30 A.M., Senator FORD requested a leave of absence from 6:00 - 10:00 P.M.

At 1:30 P.M., Senator JACKSON requested a leave of absence from 8:00 A.M. - 1:00 P.M. today.

At 1:30 P.M., Senator KUHN requested a leave of absence beginning at 4:00 P.M. today and lasting until 10:00 A.M. in the morning.

On motion of Senator KUHN, the leave of absence granted to him earlier today, was rescinded.

On motion of Senator GREGORY, at 5:20 P.M., Senator COURSON was granted a leave of absence from 5:00 P.M - 8:00 P.M.

At 5:58 P.M., Senator PATTERSON requested a leave of absence beginning at 6:00 P.M. today and lasting until 9:00 A.M. in the morning.

The following were introduced:

S. 714 (Word version) -- Senator McConnell: A JOINT RESOLUTION PROPOSING AN AMENDMENT TO SECTION 7, ARTICLE VI OF THE CONSTITUTION OF SOUTH CAROLINA, 1895, RELATING TO THE CONSTITUTIONAL OFFICERS OF THIS STATE, SO AS TO DELETE THE ADJUTANT GENERAL FROM THE LIST OF STATE OFFICERS WHICH THE CONSTITUTION REQUIRES TO BE ELECTED AND PROVIDE THAT, UPON THE EXPIRATION OF THE TERM OF THE ADJUTANT GENERAL SERVING IN OFFICE ON THE DATE OF THE 2006 GENERAL ELECTION, HE MUST BE APPOINTED BY THE GOVERNOR FOR A TERM COTERMINOUS WITH THAT OF THE GOVERNOR WITH THOSE QUALIFICATIONS AND UNDER THOSE PROCEDURES THE GENERAL ASSEMBLY SHALL PROVIDE BY LAW; AND PROPOSING AN AMENDMENT TO SECTION 4, ARTICLE XIII, RELATING TO THE ADJUTANT GENERAL AND HIS STAFF OFFICERS, SO AS TO UPDATE REFERENCES TO HIS TITLE AND MILITARY RANK, AND TO PROVIDE THAT, UPON THE EXPIRATION OF THE TERM OF THE ADJUTANT GENERAL SERVING IN OFFICE ON THE DATE OF THE 2006 GENERAL ELECTION, HE MUST BE APPOINTED BY THE GOVERNOR.
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Read the first time and referred to the Committee on Judiciary.

S. 715 (Word version) -- Senator Moore: A SENATE RESOLUTION TO EXTEND THE CONGRATULATIONS OF THE MEMBERS OF THE SOUTH CAROLINA SENATE TO MR. JASON FULMER OF AIKEN FOR HIS MANY ACCOMPLISHMENTS IN EDUCATION AND, ESPECIALLY, ON BEING NAMED THE 2003 SOUTH CAROLINA TEACHER OF THE YEAR.
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The Senate Resolution was adopted.

S. 716 (Word version) -- Senators Matthews and Hutto: A BILL TO AMEND ACT 526 OF 1996, AS AMENDED, RELATING TO THE ORANGEBURG COUNTY CONSOLIDATED SCHOOL DISTRICTS, THE ELECTIONS OF BOARDS OF TRUSTEES OF THESE DISTRICTS AND OF THE COUNTY BOARD OF EDUCATION AND THE POWERS AND DUTIES OF THESE BOARDS, SO AS TO AUTHORIZE THE COUNTY BOARD OF EDUCATION TO MEET MORE FREQUENTLY THAN QUARTERLY AND FOR EACH BOARD MEMBER TO RECEIVE COMPENSATION FOR ALL BOARD MEETINGS ATTENDED DURING A FISCAL YEAR, NOT TO EXCEED A TOTAL OF EIGHT HUNDRED DOLLARS; TO PROVIDE THAT THE ANNUAL OPERATING BUDGET OF THE COUNTY BOARD OF EDUCATION MAY NOT EXCEED THE DOLLAR VALUE OF ONE-TENTH MILL; TO REQUIRE THAT FUNDS REMAINING ON THIS ACT'S EFFECTIVE DATE UNDER THE CONTROL OR USE OF THE COUNTY BOARD OF EDUCATION FOR OPERATIONS BE DISTRIBUTED AMONG THE THREE CONSOLIDATED SCHOOL DISTRICTS IN ACCORDANCE WITH THE AVERAGE DAILY MEMBERSHIP FORMULA; AND TO AUTHORIZE THE BOARD TO RETAIN TEN THOUSAND DOLLARS FOR OPERATIONS; TO REVISE THE FORMULA EQUALIZING WEALTH PER STUDENT AMONG THE DISTRICTS BY USING FIVE MILLS RATHER THAN TWENTY-FIVE MILLS AS THE MULTIPLIER IN THIS FORMULA, AND TO REVISE AN ADJUSTMENT IF THE REMIT IS ZERO OR LESS; AND TO DELETE OUTDATED PROVISIONS RELATING TO INITIAL ELECTION OF MEMBERS TO THE CONSOLIDATED SCHOOL DISTRICTS.
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Read the first time and ordered placed on the local and uncontested Calendar.

H. 3355 (Word version) -- Reps. Townsend and Stille: A BILL TO PROVIDE THAT BEGINNING WITH SCHOOL YEAR 2003-2004, THE STARTING DATE AND ENDING DATE FOR THE ANNUAL SCHOOL TERM OF SCHOOL DISTRICT NO. 3 OF ANDERSON COUNTY MUST BE SET BY THE BOARD OF TRUSTEES OF THE DISTRICT IN ITS SOLE DISCRETION PROVIDED THAT THE ANNUAL SCHOOL TERM MUST COMPLY WITH ALL REQUIREMENTS OF SECTION 59-1-420 RELATING TO LENGTH OF THE SCHOOL TERM.

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

H. 3701 (Word version) -- Reps. Hinson, Merrill, Lloyd, Dantzler, Frye, Gourdine, Koon, Neilson, Parks, M. A. Pitts, Toole, Altman, Umphlett and Walker: A BILL TO AMEND SECTION 59-17-135, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CHARACTER EDUCATION IN SCHOOLS, SO AS TO PROVIDE THAT A TEACHER IN A PUBLIC SCHOOL OF THIS STATE SHALL INDICATE A LETTER GRADE AND COMMENTS ON A STUDENT'S REPORT CARD UNDER THE SUBJECT HEADING OF "CONDUCT" AS AN ASSESSMENT OF HOW THE STUDENT EXPRESSES CERTAIN CHARACTERISTICS.

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

H. 3909 (Word version) -- Reps. Lucas and Cotty: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 4 TO CHAPTER 19, TITLE 56 SO AS TO PROVIDE A UNIFORM PROCEDURE TO RETIRE THE TITLE CERTIFICATE TO CERTAIN MANUFACTURED HOMES AFFIXED TO REAL PROPERTY AND TO PROVIDE FOR THE CREATION OF A PROCEDURE BY WHICH A MANUFACTURED HOME AFFIXED TO REAL PROPERTY MAY BE SUBJECT TO A MORTGAGE ON THE REAL PROPERTY TO WHICH THE MANUFACTURED HOME IS AFFIXED.

Read the first time and, on motion of Senator RICHARDSON, with unanimous consent, S. 3909 was ordered placed on the Calendar without reference.

H. 4120 (Word version) -- Reps. Neilson, Bales, Emory, Freeman, Hagood, Harrell, Kirsh, Koon, Mahaffey, Snow and Toole: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 8-11-191 SO AS TO PROVIDE THAT ALL STATE AGENCIES SENDING MAIL TO OTHER STATE AGENCIES OR TO STATE EMPLOYEES OUTSIDE THAT AGENCY ARE REQUIRED TO USE INTERAGENCY MAIL DELIVERY SERVICES OF THE AGENCY MAIL PROGRAM ADMINISTERED BY THE BUDGET AND CONTROL BOARD, AND TO PROVIDE EXCEPTIONS.

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

H. 4220 (Word version) -- Reps. Clemmons, Barfield, Keegan, Viers and Witherspoon: A BILL TO ALLOW THE GOVERNING BODY OF HORRY COUNTY BY ORDINANCE TO REQUIRE THE LISTING OF STRUCTURAL IMPROVEMENTS AND ANY RESULTING CHANGES IN USE FOR REAL PROPERTY WITHIN THIRTY DAYS FOLLOWING THE DAY ON WHICH THE IMPROVEMENTS ARE COMPLETED AND FIT FOR THE INTENDED USE AND PROVIDE EXCEPTIONS, AND TO MAKE TAXES ATTRIBUTABLE TO IMPROVEMENTS LISTED AFTER JUNE 30 OF THE PROPERTY TAX YEAR DUE AND PAYABLE WHEN TAXES ARE DUE AND PAYABLE ON THE PROPERTY FOR THE SUCCEEDING PROPERTY TAX YEAR.

Read the first time and ordered placed on the local and uncontested Calendar.

H. 4243 (Word version) -- Reps. Huggins and McLeod: A CONCURRENT RESOLUTION TO EXTEND THE CONGRATULATIONS OF THE MEMBERS OF THE SOUTH CAROLINA GENERAL ASSEMBLY TO THE CHAPIN HIGH SCHOOL "EAGLES" AND THEIR COACH, DICK HILLER, ON WINNING THE 2003 CLASS AA BOYS' SOCCER CHAMPIONSHIP AND TO COMMEND THEM FOR THEIR HARD WORK, COMPETITIVE SPIRIT, AND DEDICATION TO BECOME A CHAMPIONSHIP TEAM.

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

H. 4252 (Word version) -- Reps. Huggins, E. H. Pitts and Quinn: A CONCURRENT RESOLUTION TO COMMEND AND CONGRATULATE THE IRMO HIGH SCHOOL YELLOW JACKETS BOYS' VARSITY SOCCER TEAM FOR WINNING THE 2003 CLASS AAAA STATE CHAMPIONSHIP, AND TO WISH THEM CONTINUED ATHLETIC AND ACADEMIC SUCCESS.

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

H. 4255 (Word version) -- Rep. Richardson: A CONCURRENT RESOLUTION TO EXPRESS THE PROFOUND SORROW OF THE MEMBERS OF THE GENERAL ASSEMBLY UPON THE DEATH OF STEPHEN RICHARDS MCCRAE, SR., OF ROCK HILL, A DISTINGUISHED ARTIST AND DESIGNER AND A RENOWNED PATRON OF THE ARTS AND TO CONVEY DEEPEST SYMPATHY TO HIS FAMILY AND MANY FRIENDS.

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

H. 4256 (Word version) -- Rep. Lucas: A CONCURRENT RESOLUTION TO RECOGNIZE AND COMMEND MRS. JEANETTE M. RAMBO FOR HER OUTSTANDING SERVICE AS A MEMBER AND PAST CHAIRMAN OF THE DARLINGTON COUNTY DISABILITIES AND SPECIAL NEEDS BOARD AND FOR HER DISTINGUISHED SERVICE TO HER COMMUNITY, COUNTY, AND STATE ON BEHALF OF THOSE CITIZENS LESS ABLE TO DO FOR THEMSELVES.

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

H. 4257 (Word version) -- Reps. Young, Govan, Kirsh and Richardson: A CONCURRENT RESOLUTION TO EXTEND THE APPRECIATION OF THE MEMBERS OF THE GENERAL ASSEMBLY OF THE STATE OF SOUTH CAROLINA TO THE SOUTH CAROLINA CHIROPRACTIC ASSOCIATION FOR THE SERVICES ITS MEMBERS PROVIDED TO THE GENERAL ASSEMBLY DURING THE 2003 LEGISLATIVE SESSION THROUGH THE "CHIROPRACTOR OF THE WEEK" PROGRAM.

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

H. 4264 (Word version) -- Rep. Rhoad: A CONCURRENT RESOLUTION TO CONGRATULATE THE ANDREW JACKSON ACADEMY LADY CONFEDERATES SOFTBALL TEAM ON WINNING THE SOUTH CAROLINA INDEPENDENT SCHOOLS ASSOCIATION CLASS A STATE CHAMPIONSHIP TITLE AND TO COMMEND THE HARD WORK AND DETERMINATION OF THE PLAYERS, COACHES, STAFF, AND OTHER SCHOOL OFFICIALS FOR THEIR 2003 CLASS A STATE CHAMPIONSHIP WIN.

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

H. 4266 (Word version) -- Reps. Bailey, Chellis, Harrell and Young: A CONCURRENT RESOLUTION TO CONGRATULATE THE DORCHESTER ACADEMY RAIDERS BASEBALL TEAM ON WINNING THE SOUTH CAROLINA INDEPENDENT SCHOOLS ASSOCIATION CLASS AAA CHAMPIONSHIP TITLE AND TO COMMEND THE HARD WORK AND DETERMINATION OF THE PLAYERS, COACHES, STAFF, AND OTHER SCHOOL OFFICIALS FOR THEIR 2003 CLASS AAA CHAMPIONSHIP WIN.

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

H. 4267 (Word version) -- Rep. Davenport: A CONCURRENT RESOLUTION TO EXTEND THE APPRECIATION OF THE MEMBERS OF THE SOUTH CAROLINA GENERAL ASSEMBLY TO MR. C. WAYNE CROCKER, AIA, OF SPARTANBURG FOR HIS YEARS OF SERVICE TO HIS COMMUNITY AND TO THIS STATE THROUGH HIS EXPERTISE IN ARCHITECTURE, AND TO WISH HIM MUCH SUCCESS AND HAPPINESS IN HIS FUTURE ENDEAVORS.

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

H. 4274 (Word version) -- Reps. J. Hines and M. Hines: A CONCURRENT RESOLUTION TO EXTEND THE CONGRATULATIONS OF THE MEMBERS OF THE SOUTH CAROLINA GENERAL ASSEMBLY TO MR. DAVID LUCAS OF FLORENCE FOR GRADUATING CUM LAUDE FROM SOUTH CAROLINA STATE UNIVERSITY WITH A DEGREE IN NURSING AT THE AGE OF SEVENTY-TWO.

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

H. 4278 (Word version) -- Reps. White, Allen, Altman, Anthony, Bailey, Bales, Barfield, Battle, Bingham, Bowers, Branham, Breeland, G. Brown, J. Brown, R. Brown, Cato, Ceips, Chellis, Clark, Clemmons, Clyburn, Coates, Cobb-Hunter, Coleman, Cooper, Cotty, Dantzler, Davenport, Delleney, Duncan, Edge, Emory, Freeman, Frye, Gilham, Gourdine, Govan, Hagood, Hamilton, Harrell, Harrison, Harvin, Haskins, Hayes, Herbkersman, J. Hines, M. Hines, Hinson, Hosey, Howard, Huggins, Jennings, Keegan, Kennedy, Kirsh, Koon, Leach, Lee, Limehouse, Littlejohn, Lloyd, Loftis, Lourie, Lucas, Mack, Mahaffey, Martin, McCraw, McGee, McLeod, Merrill, Miller, Moody-Lawrence, J. H. Neal, J. M. Neal, Neilson, Ott, Owens, Parks, Perry, Phillips, Pinson, E. H. Pitts, M. A. Pitts, Quinn, Rhoad, Rice, Richardson, Rivers, Rutherford, Sandifer, Scarborough, Scott, Sheheen, Simrill, Sinclair, Skelton, D. C. Smith, F. N. Smith, G. M. Smith, J. E. Smith, J. R. Smith, W. D. Smith, Snow, Stewart, Stille, Talley, Taylor, Thompson, Toole, Townsend, Tripp, Trotter, Umphlett, Vaughn, Viers, Walker, Weeks, Whipper, Whitmire, Wilkins, Witherspoon and Young: A CONCURRENT RESOLUTION TO EXPRESS THE SINCERE GRATITUDE OF THE MEMBERS OF THE SOUTH CAROLINA GENERAL ASSEMBLY TO DORIS D. COLE, PH. D. OF WILLIAMSTON, SOUTH CAROLINA, IN ANDERSON COUNTY, ON THE OCCASION OF HER RETIREMENT AS PRINCIPAL OF WHITEHALL ELEMENTARY SCHOOL, FOR HER MANY YEARS OF SERVICE TO THIS STATE THROUGH HER WORK IN EDUCATION AND TO WISH HER MUCH SUCCESS AND HAPPINESS IN HER FUTURE ENDEAVORS.

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

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

S. 576 (Word version) -- Senator Martin: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 4 TO CHAPTER 19, TITLE 56 SO AS TO PROVIDE A UNIFORM PROCEDURE TO RETIRE THE TITLE CERTIFICATE TO CERTAIN MANUFACTURED HOMES AFFIXED TO REAL PROPERTY AND TO PROVIDE FOR THE CREATION OF A PROCEDURE BY WHICH A MANUFACTURED HOME AFFIXED TO REAL PROPERTY MAY BE SUBJECT TO A MORTGAGE ON THE REAL PROPERTY TO WHICH THE MANUFACTURED HOME IS AFFIXED.

Ordered for consideration tomorrow.

Senator GREGORY from the Committee on Judiciary submitted a majority favorable with amendment and Senator HUTTO a minority unfavorable report on:

H. 3082 (Word version) -- Reps. Scarborough, Simrill, Hinson, Merrill, White, Trotter, Thompson, M.A. Pitts, Duncan, Barfield, Edge, Clemmons, Viers and Bailey: A BILL TO AMEND SECTIONS 1-23-120 AND 1-23-125, BOTH AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, BOTH RELATING TO GENERAL ASSEMBLY REVIEW OF REGULATIONS AND REQUESTS TO WITHDRAW REGULATIONS, SO AS TO REQUIRE AFFIRMATIVE APPROVAL OF REGULATIONS RATHER THAN ALLOWING THEM TO BECOME EFFECTIVE AFTER ONE HUNDRED TWENTY DAYS, TO DELETE REFERENCES TO THE ONE-HUNDRED-TWENTY-DAY PERIOD AND TO PROVIDE THAT IF A RESOLUTION TO APPROVE OR DISAPPROVE A REGULATION HAS NOT BEEN ENACTED BY THE END OF THE SECOND YEAR OF THE LEGISLATIVE SESSION, THE REGULATION MUST BE PROMULGATED AS A NEW REGULATION BEFORE SUBMITTING FOR SUBSEQUENT APPROVAL.

Ordered for consideration tomorrow.

Senator RYBERG from the Committee on Transportation submitted a favorable report on:

H. 3333 (Word version) -- Rep. G.M. Smith: A BILL TO AMEND SECTION 56-5-2770, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SIGNALS AND MARKINGS ON SCHOOL BUSES, AND PROCEDURES RELATING TO THE LEGAL PASSING OF A BUS, SO AS TO REVISE THE CIRCUMSTANCES UPON WHICH THE DRIVER OF A VEHICLE NEED NOT STOP UPON MEETING A STOPPED SCHOOL BUS, AND THE CIRCUMSTANCES UPON WHICH THE DRIVER OF A VEHICLE MUST STOP UPON MEETING OR PASSING A STOPPED SCHOOL BUS, AND TO PROVIDE THAT A SCHOOL BUS ROUTE THAT REQUIRES PASSENGERS TO BE OFF-LOADED ALONG A MULTI-LANE HIGHWAY MUST BE DESIGNED TO ENSURE THAT A STUDENT IS NOT REQUIRED TO CROSS A FOUR OR MULTI-LANE HIGHWAY.

Ordered for consideration tomorrow.

Senator RYBERG from the Committee on Transportation submitted a favorable report on:

H. 3684 (Word version) -- Rep. Lucas: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 56-5-4495 SO AS TO PROVIDE THAT IT IS UNLAWFUL FOR PERSONS TO DISPLAY ON THEIR PERSONALLY OWNED VEHICLES CERTAIN COLORED LIGHTS, TO PROVIDE EXCEPTIONS, AND TO PROVIDE A PENALTY FOR PERSONS WHO VIOLATE A PROVISION CONTAINED IN THIS SECTION.

Ordered for consideration tomorrow.

Senator THOMAS from the Committee on Banking and Insurance submitted a favorable with amendment report on:

H. 4076 (Word version) -- Reps. Cato and Tripp: A BILL TO AMEND SECTION 38-1-20, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS USED IN TITLE 38 PERTAINING TO INSURANCE, SO AS TO CHANGE THE DEFINITION OF "EXEMPT COMMERCIAL POLICIES" TO DELETE THE REQUIREMENT THAT THE DEFINITION INCLUDE POLICIES FOR WHICH PREMIUMS FOR ONE INSURED IS GREATER THAN FIFTY THOUSAND DOLLARS ANNUALLY; TO AMEND SECTION 38-7-20, RELATING TO INSURANCE PREMIUM TAXES, SO AS TO CHANGE THE BASIS ON WHICH THESE TAXES ARE ASSESSED ON PREMIUMS FROM WRITTEN RATHER THAN COLLECTED; TO AMEND SECTION 38-21-170, AS AMENDED, RELATING TO REPORTING DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS TO THE DEPARTMENT, SO AS TO INCREASE FROM TEN TO FIFTEEN THE NUMBER OF DAYS BEFORE PAYMENT THE REPORT MUST BE GIVEN; TO AMEND SECTION 38-21-270, AS AMENDED, RELATING TO THE PAYMENT OF AN EXTRAORDINARY DIVIDEND OR DISTRIBUTION TO THE SHAREHOLDERS OF A DOMESTIC INSURER, SO AS TO CLARIFY THE DEPARTMENT OF INSURANCE REVIEW OF THIS TYPE OF DISTRIBUTION; TO AMEND SECTION 38-41-60, RELATING TO HOLDING IN TRUST FUNDS COLLECTED FROM PARTICIPATING EMPLOYERS UNDER MULTIPLE EMPLOYER SELF-INSURED HEALTH PLANS, SO AS TO CORRECT AN INTERNAL CODE CITATION; TO AMEND SECTION 38-43-10, AS AMENDED, RELATING TO PERSONS CONSIDERED AS INSURANCE AGENTS, SO AS TO CORRECT AN INTERNAL CODE CITATION; TO AMEND SECTION 38-43-40, AS AMENDED, RELATING TO THE RIGHT TO APPOINT PRODUCERS BY A LICENSED INSURER, SO AS TO REMOVE PROVISIONS WHICH REQUIRE THE DIRECTOR OF THE DEPARTMENT OF INSURANCE TO APPROVE THE APPOINTMENT OF PRODUCERS BEFORE THEY TAKE RISK OR TRANSACT BUSINESS; TO AMEND SECTION 38-43-50, AS AMENDED, RELATING TO THE REQUIREMENT THAT APPLICANTS FOR A LIMITED LINE OR SPECIAL PRODUCER'S LICENSE MUST BE VOUCHED FOR BY AN OFFICIAL OR LICENSED REPRESENTATIVE OF THE INSURER FOR WHICH THE APPLICANT PROPOSES TO ACT, SO AS TO DELETE PROVISIONS REQUIRING THE APPLICANT TO BE APPOINTED BY AN OFFICIAL OR AUTHORIZED REPRESENTATIVE OF THE INSURER BEFORE THE APPLICANT CAN ACT AS A PRODUCER; TO AMEND SECTION 38-43-70, AS AMENDED, RELATING TO LICENSING OF A NONRESIDENT PRODUCER BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE, SO AS TO CORRECT AN INTERNAL CODE CITATION; TO AMEND SECTION 38-43-100, AS AMENDED, RELATING TO THE APPLICATION FOR AND ISSUANCE OF A PRODUCERS' LICENSE BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE, SO AS TO DELETE CONFLICTING PROVISIONS WHICH AUTHORIZE THE DIRECTOR TO WAIVE THE EXAMINATION AND ISSUE TEMPORARY LICENSES FOR A PERIOD NOT TO EXCEED NINETY DAYS; TO AMEND SECTION 38-43-105, AS AMENDED, RELATING TO EDUCATION REQUIREMENTS FOR LOCAL AND GENERAL INSURANCE AGENTS, SO AS TO DELETE CONFLICTING PROVISIONS AND CLARIFY WHO MUST COMPLY WITH PRE-LICENSING REQUIREMENTS; TO AMEND SECTION 38-43-106, AS AMENDED, RELATING TO CONTINUING EDUCATION REQUIREMENTS FOR INSURANCE AGENTS, SO AS TO SUBSTITUTE HOME STATE FOR RESIDENT STATE AS THE REQUIREMENT FOR SATISFYING RECIPROCAL CONTINUING INSURANCE EDUCATION REQUIREMENTS FOR NONRESIDENT PRODUCERS; TO AMEND SECTION 38-45-20, RELATING TO REQUIREMENTS FOR A RESIDENT TO BE LICENSED AS AN INSURANCE BROKER, SO AS TO DELETE THE TWO-YEAR WAITING PERIOD FOR RESIDENT SURPLUS LINES INSURANCE BROKERS; TO AMEND SECTION 38-45-30, RELATING TO REQUIREMENTS FOR A NONRESIDENT INSURANCE BROKER, SO AS TO DELETE THE REQUIREMENT FOR NONRESIDENT BROKERS TO FURNISH A TEN THOUSAND DOLLAR SURETY BOND; TO AMEND SECTION 38-71-880, AS AMENDED, RELATING TO MEDICAL, SURGICAL, AND MENTAL HEALTH BENEFITS OFFERED IN CONNECTION WITH A GROUP HEALTH INSURANCE PLAN, SO AS TO EXTEND THE SUNSET PROVISION TO DECEMBER 31, 2003, TO COMPLY WITH FEDERAL LAW; TO AMEND SECTION 38-77-870, RELATING TO THE AVAILABILITY OF ASSIGNMENT OF RISKS TO NONRESIDENTS, SO AS TO PROVIDE AN EXCEPTION FOR MILITARY RISKS THAT ARE PRINCIPALLY GARAGED IN THIS STATE TO BE ASSIGNED BY THE PLAN; TO AMEND SECTION 38-79-420, RELATING TO THE CREATION OF THE SOUTH CAROLINA PATIENTS' COMPENSATION FUND, SO AS TO INCREASE FROM ONE TO TWO HUNDRED THOUSAND DOLLARS THE AMOUNT THE FUND PAYS IN EXCESS OF FOR EACH INCIDENT AND INCREASES FROM THREE TO SIX HUNDRED THOUSAND DOLLARS THE AMOUNT THE FUND PAYS IN EXCESS OF IN THE AGGREGATE FOR ONE YEAR; AND TO AMEND SECTION 56-9-20, AS AMENDED, RELATING TO DEFINITIONS USED IN CONNECTION WITH MOTOR VEHICLE FINANCIAL RESPONSIBILITY ACT, SO AS TO INCREASE THE MINIMUM LIMITS FOR PROPERTY DAMAGE FROM FIVE TO TEN THOUSAND DOLLARS.

Ordered for consideration tomorrow.

Senator RYBERG from the Committee on Transportation submitted a favorable report on:

H. 4158 (Word version) -- Education and Public Works Committee: A JOINT RESOLUTION TO APPROVE REGULATIONS OF THE DEPARTMENT OF PUBLIC SAFETY, RELATING TO HIGHWAY PATROL, SUBARTICLE 1 WRECKER REGULATIONS, DESIGNATED AS REGULATION DOCUMENT NUMBER 2821, PURSUANT TO THE PROVISIONS OF ARTICLE 1, CHAPTER 23, TITLE 1 OF THE 1976 CODE.

Ordered for consideration tomorrow.

Columbia, S.C., May 21, 2003

Mr. President and Senators:

The House respectfully informs your Honorable Body that it concurs in the amendments proposed by the Senate to:
H. 3673 (Word version) -- Rep. Harrison: A BILL TO AMEND SECTION 20-7-776, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PERMANENCY PLANNING HEARINGS FOR CHILDREN IN FOSTER CARE, SO AS TO FURTHER SPECIFY PROCEDURES FOR THESE HEARINGS; TO REQUIRE THE DEPARTMENT OF SOCIAL SERVICES TO SHOW COMPELLING REASONS FOR A PERMANENCY PLAN THAT DOES NOT REUNITE A CHILD WITH HIS PARENTS OR A RELATIVE AND DOES NOT TERMINATE PARENTAL RIGHTS AND TO REQUIRE THE COURT TO FIND COMPELLING REASONS FOR APPROVING SUCH A PLAN; AND TO FURTHER SPECIFY THE COURT'S AUTHORITY AND STANDARDS THAT MUST BE MET AFTER ADOPTION VIABILITY IS CONSIDERED, FOSTER CARE IS CONTINUED, AND TERMINATION OF PARENTAL RIGHTS IS NOT INITIATED; TO AMEND SECTION 20-7-768, RELATING TO STANDARDS FOR TERMINATION OF PARENTAL RIGHTS, SO AS TO REQUIRE THE COURT TO FIND COMPELLING REASONS FOR NOT INITIATING TERMINATION OF PARENTAL RIGHTS UNDER CERTAIN CIRCUMSTANCES, RATHER THAN PRESUMING THAT SUCH CIRCUMSTANCES IN AND OF THEMSELVES ARE COMPELLING REASONS; AND TO AMEND SECTION 20-7-1640, AS AMENDED, RELATING TO FINGERPRINT REVIEWS OF FOSTER CARE LICENSE APPLICANTS, SO AS TO DELETE PROVISIONS AUTHORIZING THE DEPARTMENT TO ISSUE TEMPORARY LICENSES PENDING RECEIPT OF THE RESULTS OF THE FEDERAL BUREAU OF INVESTIGATION REVIEW.
and has ordered the Bill enrolled for Ratification.

Very respectfully,

Speaker of the House

Received as information.

Columbia, S.C., May 21, 2003

Mr. President and Senators:

The House respectfully informs your Honorable Body that it concurs in the amendments proposed by the Senate to:
H. 3990 (Word version) -- Reps. Limehouse, Hagood, Breeland, Ceips, Hamilton, Harrell, Mack and Scarborough: A BILL TO AMEND ARTICLE 62, CHAPTER 3, TITLE 56, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE ARTIFICIAL REEF SPECIAL LICENSE PLATE, SO AS TO RENAME IT THE 'SALTWATER FISHING' SPECIAL LICENSE PLATE, AND PROVIDE THAT THE PORTION OF THE PROCEEDS COLLECTED FROM THE ISSUANCE OF THIS SPECIAL LICENSE PLATE THAT WAS USED TO SUPPORT ARTIFICIAL REEF DEVELOPMENT, MAINTENANCE, AND MANAGEMENT MUST BE USED TO MANAGE AND CONSERVE THE MARINE RESOURCES OF THIS STATE.
and has ordered the Bill enrolled for Ratification.

Very respectfully,

Speaker of the House

Received as information.

Columbia, S.C., May 21, 2003

Mr. President and Senators:

The House respectfully informs your Honorable Body that it concurs in the amendments proposed by the Senate to:
S. 228 (Word version) -- Senator McConnell: A BILL TO AMEND CHAPTER 6, TITLE 61, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE ALCOHOL BEVERAGE CONTROL ACT, SO AS TO ADD SECTION 61-6-710, ESTABLISHING A SPECIAL FOOD MANUFACTURER'S LICENSE TO BE ISSUED BY THE DEPARTMENT OF REVENUE FOR A PERSON WHO MANUFACTURES FOOD ITEMS SUCH AS SAUCES AND MARINADES IN WHICH THERE IS AN ALCOHOLIC BEVERAGE INGREDIENT AND WHO DOES SO UNDER AN AGREEMENT WITH THE ALCOHOLIC BEVERAGE MANUFACTURER, AND TO ALLOW THE PURCHASE OF THE ALCOHOLIC BEVERAGE IN CONTAINERS HOLDING QUANTITIES GREATER THAN THE QUANTITIES SOLD TO THE CONSUMER, AND TO PROVIDE THAT THE DEPARTMENT MUST ESTABLISH THE FORM OF APPLICATION AND CONDITIONS FOR ISSUANCE OF THE LICENSE; TO AMEND SECTION 12-33-210, AS AMENDED, RELATING TO THE TAXES ON LICENSES ISSUED UNDER TITLE 61, SO AS TO INCLUDE A TAX FOR THE SPECIAL FOOD MANUFACTURER'S LICENSE; TO AMEND SECTION 61-2-175, RELATING TO SHIPPING ALCOHOLIC BEVERAGES INTO THE STATE, SO AS TO PROVIDE THAT ALCOHOLIC BEVERAGES MAY BE SHIPPED DIRECTLY TO A RESIDENT WHO HOLDS A SPECIAL FOOD MANUFACTURER'S LICENSE; TO AMEND SECTION 61-6-2900, RELATING TO THE SHIPMENT OR TRANSFER OF IMPORTED ALCOHOLIC BEVERAGES, SO AS TO PROVIDE THE ALCOHOLIC BEVERAGES MAY BE SHIPPED TO A PERSON HOLDING A SPECIAL FOOD MANUFACTURER'S LICENSE; AND TO AMEND SECTION 61-6-4050, RELATING TO THE PURCHASE OF ALCOHOLIC LIQUORS FROM LICENSED RETAIL DEALERS SO AS TO ADD ALCOHOLIC LIQUORS PURCHASED PURSUANT TO A SPECIAL FOOD MANUFACTURER'S LICENSE.
and has ordered the Bill enrolled for Ratification.

Very respectfully,

Speaker of the House

Received as information.

H. 3713 (Word version) -- Reps. Wilkins, W.D. Smith, Harrell, Harrison, Cato, Witherspoon, Chellis, Townsend, J. Brown and Keegan: A BILL TO AMEND SECTION 23-3-15, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE EXCLUSIVE JURISDICTION AND STATEWIDE AUTHORITY OF THE SOUTH CAROLINA LAW ENFORCEMENT DIVISION, SO AS TO PROVIDE THAT THIS JURISDICTION AND AUTHORITY INCLUDES ESTABLISHING AND OPERATING TACTICAL RESPONSE LAW ENFORCEMENT UNITS, COORDINATING COUNTER TERRORISM EFFORTS IN OR AFFECTING THIS STATE, COORDINATING FEDERAL GRANTS ASSOCIATED WITH HOMELAND SECURITY, CREATING COUNCILS ASSOCIATED WITH ITS MISSION, AND SERVING AS THE GOVERNOR'S REPRESENTATIVE TO THE UNITED STATES DEPARTMENT OF HOMELAND SECURITY.

The House returned the Bill with amendments.

Senator McCONNELL spoke on the House amendments.

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

S. 712 (Word version) -- Senators Pinckney and Richardson: A CONCURRENT RESOLUTION TO EXTEND THE CONGRATULATIONS OF THE MEMBERS OF THE SOUTH CAROLINA GENERAL ASSEMBLY TO REVEREND KENNETH HODGES AND THE MEMBERS OF TABERNACLE BAPTIST CHURCH IN BEAUFORT ON THE OCCASION OF THE CELEBRATION OF THE CHURCH'S 140th ANNIVERSARY.

Returned with concurrence.

Received as information.

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

The following Bills were read the third time and, having received three readings in both Houses, it was ordered that the titles be changed to that of Acts and enrolled for Ratification:

H. 3436 (Word version) -- Reps. Young, Chellis, Bailey and Harrell: A BILL TO ESTABLISH THE DORCHESTER COUNTY BOARD OF ELECTIONS AND REGISTRATION AND PROVIDE FOR ITS MEMBERSHIP AND GOVERNANCE, AND TO ABOLISH THE DORCHESTER COUNTY ELECTION COMMISSION AND THE DORCHESTER COUNTY BOARD OF VOTER REGISTRATION AND DEVOLVE ITS POWERS AND DUTIES IN THE BOARD ESTABLISHED BY THIS ACT.

H. 3945 (Word version) -- Rep. G. Brown: A BILL TO AUTHORIZE THE BOARD OF TRUSTEES FOR THE SCHOOL DISTRICT OF LEE COUNTY TO ISSUE GENERAL OBLIGATION BONDS OF THE DISTRICT UP TO ITS CONSTITUTIONAL DEBT LIMIT TO FUND AN OPERATING DEFICIT AND CURRENT OPERATING EXPENDITURES; TO PRESCRIBE THE CONDITIONS UNDER WHICH THE BONDS MAY BE ISSUED AND THE PURPOSES FOR WHICH THE PROCEEDS MAY BE EXPENDED; AND TO MAKE PROVISION FOR THE PAYMENT OF THE BONDS.

H. 4149 (Word version) -- Rep. Anthony: A BILL TO AMEND SECTION 7-7-510, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DESIGNATION OF VOTING PRECINCTS IN UNION COUNTY, SO AS TO REVISE AND RENAME CERTAIN VOTING PRECINCTS IN UNION COUNTY AND REDESIGNATE A MAP NUMBER FOR THE MAP ON WHICH LINES OF THESE PRECINCTS ARE DELINEATED AND MAINTAINED BY THE OFFICE OF RESEARCH AND STATISTICAL SERVICES OF THE STATE BUDGET AND CONTROL BOARD.

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

H. 4118 (Word version) -- Rep. Hayes: A JOINT RESOLUTION TO PROVIDE FOR AN ELEVEN MILL INCREASE IN THE LEVY OF TAXES FOR SCHOOL PURPOSES IN DILLON COUNTY FOR THE FISCAL YEAR BEGINNING JULY 1, 2003, AND ENDING JUNE 30, 2004.

By prior motion of Senator ELLIOTT

H. 3939 (Word version) -- Reps. Sandifer, Bales, Barfield, Bingham, G. Brown, Cato, Dantzler, Edge, Hamilton, Huggins, Thompson and Tripp: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 14 TO CHAPTER 55, TITLE 44 SO AS TO ESTABLISH PROVISIONS REGULATING THE INSTALLATION AND USE OF PASSIVE SOIL-BASED ON-SITE DISPOSAL SYSTEMS USED TO COLLECT, TREAT, DISCHARGE, OR RECLAIM WASTEWATER OR SEWAGE FROM DWELLING UNITS WITHOUT THE USE OF COMMUNITY-WIDE SERVERS OR A CENTRALIZED TREATMENT FACILITY; TO REQUIRE MANUFACTURERS TO PROVIDE A WARRANTY TO EACH PROPERTY OWNER AND TO PROVIDE FINANCIAL ASSURANCE AND SYSTEM DESIGN AND INSTALLATION DOCUMENTATION TO THE DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL; TO REQUIRE SYSTEM INSTALLATION BY CERTIFIED INSTALLERS AND TO PROVIDE INSTALLATION STANDARDS AND PROCEDURES; AND TO PROVIDE PENALTIES; AND TO PROVIDE THAT WHEN REGULATIONS PROMULGATED BY THE DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL RELATING TO INSTALLATION STANDARDS AND FINANCIAL ASSURANCES ARE APPROVED BY THE GENERAL ASSEMBLY, SECTIONS 44-55-1320 AND 44-55-1330, RELATING TO THESE MATTERS ARE REPEALED.

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

Senators SHORT, O'DELL and GIESE proposed the following amendment (NBD\11839AC03), which was adopted:

Amend the bill, as and if amended, by deleting Section 44-55-1330(3)(a) on page 3 and inserting:

/   (a)   The storage capacity of the system must be at least that available in a conventional gravel system below the invert. Each manufacturer shall provide its product's storage capacity as determined by a recognized third party testing company./

Amend the bill, further, by deleting Section 44-55-1340(B) and inserting:

/   (B)   The department may require an amount of financial assurance in excess of the amount calculated pursuant to the formula in subsection (A) if the department documents excessive, unsatisfied warranty claims which make the amount of financial assurance as calculated inadequate. The department may rescind approval of any product which the department documents as having a failure rate greater than that of a conventional gravel trench. The department must waive the financial assurance requirements calculated pursuant to the formula in subsection (A) if the failure rates do not exceed those of conventional gravel systems as set forth in subsection (D).

(C)   Licensed septic tank contractors and manufacturers shall file monthly reports of all repairs of on-site wastewater systems with the department's Division of On-site Wastewater Management on a form provided by the department.

(D)   The department shall conduct a review of all documented failures of on-site wastewater systems beginning five years after this act's effective date. Subsequent reviews may be conducted at more frequent intervals thereafter. If at any time after five years from this act's effective date, the department determines that the documented failure rates of any specific manufactured brand of passive soil-based on-site disposal system exceeds that of conventional gravel on-site wastewater systems, the department shall eliminate allowances for reduction in sizing as set forth in Section 44-55-1330(3)(b) for that specific system or product. A failing system must be defined as a passive on-site disposal system or conventional gravel system where wastewater has discharged to the surface of the ground or backed up into the dwelling. /

Renumber sections to conform.

Amend title to conform.

Senator SHORT 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 Bills, having been read the second time, were ordered placed on the third reading Calendar:

H. 3410 (Word version) -- Rep. Harvin: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY AMENDING SECTION 30-1-90, RELATING TO THE SOUTH CAROLINA DEPARTMENT OF ARCHIVES AND HISTORY ASSISTING IN CREATING, FILING, AND PRESERVING RECORDS, SO AS TO ELIMINATE THE BUDGET AND CONTROL BOARD FROM THE RECORDS RETENTION SCHEDULE APPROVAL PROCESS AND ELIMINATE THE REQUIREMENT THAT THE GENERAL SCHEDULES BE DEVELOPED AS STATE REGULATIONS.

H. 3575 (Word version) -- Rep. Cooper: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 27-18-85 SO AS TO PROVIDE FOR TREATMENT OF UNCLAIMED PROPERTY PAYABLE OR DISTRIBUTABLE IN THE COURSE OF THE DEMUTUALIZATION OF AN INSURANCE COMPANY AS ABANDONED IN FIVE YEARS; AND TO AMEND SECTION 27-18-180, AS AMENDED, RELATING TO REPORTS OF UNCLAIMED PROPERTY, SO AS TO REQUIRE THE FILING OF A REPORT OF UNCLAIMED DEMUTUALIZATION PROCEEDS BEFORE MAY FIRST.

H. 3592 (Word version) -- Reps. Delleney and Lucas: A BILL TO AMEND SECTION 62-7-403, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ALLOCATION OF RECEIPTS AND DISBURSEMENTS BETWEEN PRINCIPAL AND INCOME FOR PURPOSES OF A TRUST OR ESTATE, SO AS TO EXPAND THE SCOPE OF THE SECTION BY MAKING A CHANGE IN A CROSS-REFERENCE.

H. 4007 (Word version) -- Rep. Bingham: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 40-15-82 SO AS TO SPECIFY CERTAIN FUNCTIONS AND PROCEDURES THAT MAY NOT BE DELEGATED TO DENTAL HYGIENISTS; TO AMEND SECTION 40-15-85, AS AMENDED, RELATING TO DEFINITIONS OF TERMS USED IN THE LICENSURE AND REGULATION OF DENTISTS AND DENTAL HYGIENISTS, SO AS TO REVISE THE DEFINITION OF "GENERAL SUPERVISION" AND TO DEFINE "AUTHORIZED"; BY ADDING SECTION 40-15-102 SO AS TO SPECIFY CERTAIN FUNCTIONS THAT A DENTAL HYGIENIST MAY ONLY PERFORM UNDER GENERAL SUPERVISION; AND TO AMEND SECTION 40-15-110, RELATING TO CERTAIN EXEMPTIONS FROM THE REQUIREMENTS OF CHAPTER 15, TITLE 40 REGULATING DENTISTS AND DENTAL HYGIENISTS, SO AS TO REVISE PROVISIONS PERTAINING TO DENTAL HYGIENISTS PROVIDING SERVICES IN A PUBLIC HEALTH SETTING.

Senator PEELER explained the Bill.

On motion of Senator PEELER, with unanimous consent, H. 4007 was ordered to receive a third reading on Friday, May 23, 2003.

S. 710 (Word version) -- Senator Reese: A BILL TO AMEND SECTION 50-25-1330, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO WATERCRAFT RESTRICTIONS ON LAKE H. TAYLOR BLALOCK, SO AS TO INCREASE THE HORSEPOWER OF AN ENGINE FROM FIFTEEN HORSEPOWER TO THIRTY HORSEPOWER AND TO ESTABLISH A MAXIMUM LENGTH FOR WATERCRAFT OF TWENTY-FIVE FEET AND TO INCREASE THE LENGTH FOR PONTOON BOATS TO TWENTY-FIVE FEET; TO PROHIBIT ON LAKE BLALOCK THE OPERATION OF PERSONAL WATERCRAFT, OPERATION OF WATERCRAFT AFTER MIDNIGHT OR IN VIOLATION OF COAST GUARD REGULATIONS, AND OPERATION OF WATERCRAFT NEAR PUMP STATIONS AND PIERS; TO LIMIT THE HEIGHT OF SAILBOAT MASTS; TO PROHIBIT SWIMMING IN CERTAIN AREAS; AND TO AUTHORIZE LAKE WARDENS TO RESTRICT ACCESS TO THE LAKE UNDER CERTAIN CONDITIONS.

On motion of Senator REESE, with unanimous consent

H. 3199 (Word version) -- Reps. J.E. Smith, Harrison, Cobb-Hunter, Altman, Bailey, Richardson and Cotty: A BILL TO AMEND SECTION 20-7-510, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PERSONS REQUIRED TO REPORT CHILD ABUSE AND NEGLECT, SO AS TO INCLUDE A MEMBER OF THE CLERGY; AND TO AMEND SECTION 20-7-550, AS AMENDED, RELATING TO PRIVILEGED COMMUNICATIONS WHICH APPLY AND DO NOT APPLY WITH REGARD TO REPORTING CHILD ABUSE OR NEGLECT, SO AS TO REQUIRE A PRIEST TO REPORT EXCEPT IF THE COMMUNICATION IS PROTECTED BY THE STATUTORILY PRESCRIBED PRIEST-PENITENT PRIVILEGE IN SECTION 19-11-90.

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

There was no objection.

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

The Committee on Judiciary proposed the following amendment (JUD3199.001), which was adopted:

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

/   SECTION   1.   Section 20-7-510(A) of the 1976 Code, as amended by Act 81 of 2001, is further amended to read:

"(A)   A physician, nurse, dentist, optometrist, medical examiner, or coroner, or an employee of a county medical examiner's or coroner's office, or any other medical, emergency medical services, mental health, or allied health professional or Christian Science practitioner, religious healer, member of the clergy including a Christian Science Practitioner or religious healer, school teacher, counselor, principal, assistant principal, social or public assistance worker, substance abuse treatment staff, or childcare worker in any a daycare center or foster care facility, police or law enforcement officer, undertaker, funeral home director or employee of a funeral home, persons responsible for processing of films, computer technician, or any a judge shall must report in accordance with this section when in the person's professional capacity the person has received information which gives the person reason to believe that a child's physical or mental health or welfare has been or may be adversely affected by abuse or neglect child has been or may be abused or neglected as defined in Section 20-7-490."

SECTION   2.   Section 20-7-550 of the 1976 Code, as amended by Act 450 of 1996, is further amended to read:

"Section 20-7-550.   The privileged quality of communication between husband and wife and any professional person and his patient or client, except that between attorney and client or priest clergy member, including Christian Science Practitioner or religious healer, and penitent, is abrogated and does not constitute grounds for failure to report or the exclusion of evidence in a civil protective proceeding resulting from a report pursuant to this article. However, a clergy member, including Christian Science Practitioner or religious healer, must report in accordance with this subarticle except when information is received during a communication that is protected by the clergy and penitent privilege as defined in Section 19-11-90."

SECTION   3.   This act takes effect upon approval by the Governor and applies to any communication made pursuant to Section 20-7-550 on or after the effective date.     /

Renumber sections to conform.

Amend title to conform.

Senator RITCHIE explained the committee amendment.

The committee amendment was adopted.

Senator RITCHIE proposed the following amendment (JUD3199.002), which was adopted:

Amend the bill, as and if amended, page 2, beginning on line 8, by striking SECTION 2 in its entirety and inserting therein the following:

/   SECTION   2.   Section 20-7-550 of the 1976 Code, as amended by Act 450 of 1996, is further amended to read:

"Section 20-7-550.   The privileged quality of communication between husband and wife and any professional person and his patient or client, except that between attorney and client or priest clergy member, including Christian Science Practitioner or religious healer, and penitent, is abrogated and does not constitute grounds for failure to report or the exclusion of evidence in a civil protective proceeding resulting from a report pursuant to this article. However, a clergy member, including Christian Science Practitioner or religious healer, must report in accordance with this subarticle except when information is received by the alleged perpetrator of the abuse and neglect during a communication that is protected by the clergy and penitent privilege as defined in Section 19-11-90."     /

Renumber sections to conform.

Amend title to conform.

Senator RITCHIE 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.

H. 3867 (Word version) -- Rep. Harrison: A BILL TO AMEND SECTION 14-25-165, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DRAWING AND COMPOSING A JURY IN MUNICIPAL COURT, SO AS TO INCREASE THE SIZE OF THE POOL FROM WHICH JURORS ARE SELECTED, AND TO DELETE A PROVISION FOR DRAWING A JURY FOR A SINGLE TRIAL WHICH REQUIRES PEREMPTORY CHALLENGES IN ADVANCE OF THE TRIAL DATE; TO AMEND SECTIONS 22-2-80 AND 22-2-90, BOTH AS AMENDED, RELATING TO SELECTION OF A JURY IN MAGISTRATES COURT, SO AS TO INCREASE THE SIZE OF THE JURY POOL FROM WHICH A JURY IS SELECTED; TO AMEND SECTION 22-2-100, RELATING TO THE PROCEDURE FOR SELECTING PRIMARY AND ALTERNATE JURORS IN MAGISTRATES COURT, SO AS TO CHANGE LANGUAGE CONSISTENT WITH OTHER CHANGES MADE IN SECTION 14-25-165; AND TO AMEND SECTION 22-2-120, RELATING TO THE SELECTION OF ADDITIONAL JURORS IN MAGISTRATES COURT AT THE TIME OF TRIAL, SO AS TO DELETE ARCHAIC LANGUAGE.

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

The Committee on Judiciary proposed the following amendment (JUD3867.002), which was adopted:

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

/   SECTION   1.   Section 14-25-165 of the 1976 Code, as last amended by Act 257 of 2000, is further amended to read:

"Section 14-25-165.   (a)(1)   The drawing and composing of juries for single trials or terms of court must be conducted, mutatis mutandis with necessary changes, according to the statutes relating to the drawing and composing of juries in magistrates courts, except as otherwise specifically provided by this chapter.

(2)   A person appointed by the municipal judge who is not connected with the trial of the case for either party shall must draw out of Compartment 'A' of the jury box at least thirty but not more than one hundred names, and the list of names so drawn must be delivered to each party or to the attorney for each party.

(3)   If a court has experienced difficulty in drawing a sufficient number of jurors from the qualified electors of the area, and, prior to before implementing a process pursuant to this item, seeks and receives the approval of South Carolina Court Administration, the person selected by the presiding municipal judge may draw not less than thirty at least one hundred names, but not more than a number determined sufficient by court administration for the jury list, and shall must deliver this list to each party or the attorney for each party.

(b)(1)   In addition to the procedure for drawing a jury list as provided for in subsection (a), in those courts which schedule terms for jury trials, the judge may select a jury list in the manner provided by this subsection.

(2)   Not less than At least ten nor but not more than twenty forty-five days before a scheduled term of jury trials, a person selected by the presiding judge shall must draw at least forty but not more than one hundred jurors to serve one week only.

(3)   If a court has experienced difficulty in drawing a sufficient number of jurors from the qualified electors of the area, and, prior to before implementing a process pursuant to this item, seeks and receives the approval of South Carolina Court Administration, the person selected by the presiding municipal judge may draw not less than forty at least one hundred names, but not more than a number determined sufficient by court administration to serve one week only.

(4)   Immediately after the jurors are drawn, the judge shall must issue his a writ of venire facias for the jurors requiring their attendance on the first day of the week for which they have been drawn. This writ must be delivered to the chief of police or may be served by regular mail by the clerk of court.

(c)   The names drawn pursuant to either subsection (a) or (b) shall must be placed in a box or hat and individual names randomly drawn out one at a time until six jurors and four alternates are selected. Each party shall have has a maximum of six peremptory challenges as to primary jurors and four peremptory challenges as to alternate jurors and such any other challenges for cause as the court may permit permits. If for any reason it is impossible to select sufficient jurors and alternates from the names drawn, names shall must be randomly drawn randomly from Compartment 'A' until sufficient jurors and alternates are selected.

(d)   Where a jury is drawn and composed for a single trial, as provided in subsection (a) above, the parties shall exercise peremptory challenges in advance of the trial date, and only persons selected to serve and alternates shall be summoned for the trial."

SECTION   2.   Section 22-2-50 of the 1976 Code is amended to read:

"Section 22-2-50.   The In October of each year, the State Election Commission shall annually must provide to the chief magistrate for administration of each county, at no cost, a precinct-by-precinct list of qualified electors residing within the county jury list compiled in accordance with the provisions of Section 14-7-130. The chief magistrate for administration of the county shall must use such these lists in preparing, for each Jury Area jury area, a list of the qualified electors therein in these jury areas, and shall must forward these lists to the respective magistrates."

SECTION   3.   Section 22-2-80 of the 1976 Code, as last amended by Act 257 of 2000, is further amended to read:

"Section 22-2-80.   (A)   In all cases except as provided in Section 22-2-90 in a magistrates court in which a jury is required, a jury list must be selected in the following manner:

A person appointed by the magistrate who is not connected with the trial of the case for either party shall must draw out of Compartment 'A' of the jury box at least thirty but not more than one hundred names, and this list of names must be delivered to each party or to the attorney for each party.

(B)   If a court has experienced difficulty in drawing a sufficient number of jurors from the qualified electors of the area, and, prior to before implementing a process pursuant to this subsection, seeks and receives the approval of South Carolina Court Administration, the person selected by the presiding magistrate may draw not less than thirty at least one hundred names, but not more than a number determined sufficient by court administration for the jury list, and shall must deliver this list to each party or the attorney for each party."

SECTION   4.   Section 22-2-90 of the 1976 Code, as last amended by Act 257 of 2000, is further amended to read:

"Section 22-2-90.   (A)   In addition to the procedure for drawing a jury list as provided for in Section 22-2-80, in a magistrates court which schedules terms for jury trials, the magistrate may select a jury list in the manner provided by this section.

(B)   Not less than At least ten nor but not more than twenty forty-five days before a scheduled term of jury trials, a person selected by the presiding magistrate shall must draw at least forty but not more than one hundred jurors to serve one week only.

(C)   If a court has experienced difficulty in drawing a sufficient number of jurors from the qualified electors of the area, and, prior to before implementing a process pursuant to this subsection, seeks and receives the approval of South Carolina Court Administration, the person selected by the presiding magistrate may draw not less than forty at least one hundred names, but not more than a number determined sufficient by court administration to serve one week only.

(D)   Immediately after the jurors are drawn, the magistrate shall must issue his a writ of venire facias for the jurors requiring their attendance on the first day of the week for which they have been drawn. This writ must be delivered to the magistrates constable or the sheriff of the county concerned."

SECTION   5.   Section 22-2-100 of the 1976 Code is amended to read:

"Section 22-2-100.   The names drawn pursuant to either Section 22-2-80 or Section 22-2-90 shall must be placed in a box or hat and individual names randomly drawn out one at a time until six jurors and four alternates are selected. Each party shall have has a maximum of six peremptory challenges as to primary jurors and four peremptory challenges as to alternate jurors and such any other challenges for cause as the court may permit permits. If for any reason it is impossible to select sufficient jurors and alternates from the names drawn, names shall must be randomly drawn randomly from Compartment 'A' until sufficient jurors and alternates are selected."

SECTION   6.   Section 22-2-120 of the 1976 Code is amended to read:

"Section 22-2-120.   If at the time set for the trial there are not sufficient jurors to proceed for the reason that because one or more have failed to attend, or have not been summoned, or have been excused or disqualified by the court, additional jurors shall must be selected from the remainder of the thirty remaining names or in the manner as provided in Section 22-2-80 or in the manner as further provided in Section 22-2-100."

SECTION   7.   This act takes effect upon approval by the Governor./

Renumber sections to conform.

Amend title to conform.

Senator RITCHIE explained the committee amendment.

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.

H. 3950 (Word version) -- Rep. Witherspoon: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 2 TO CHAPTER 18, TITLE 50, SO AS TO ENACT THE AQUACULTURE ENABLING ACT; TO AMEND VARIOUS SECTIONS OF TITLE 50 AND TO REPEAL VARIOUS SECTIONS OF TITLE 50. (ABBREVIATED TITLE)

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

Senator McGILL proposed the following amendment (NBD\ 11796AC03), which was adopted:

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

/SECTION __.   Section 50-5-1335 of the 1976 Code, as amended by Act 247 of 2002, is further amended to read:

"Section 50-5-1335.   (A) It is unlawful to set or use a blue crab trap or basket commonly termed a "crab pot" to catch crab for commercial purposes within these waters of the State:

(1)   Pawley's Island Creek and Midway Creek on Pawley's Island in Georgetown County. Individuals may set two crab pots to catch crabs for personal consumption and not for sale.;

(B) It is unlawful to set or use a trap or basket commonly termed a "crab pot" to catch crab in the Atlantic Ocean within

(2)   one hundred fifty feet of the mean low tide watermark on Atlantic Ocean shoreline of Pawley's Island in Georgetown County. Individuals may catch crabs in the Atlantic Ocean within one hundred fifty feet of the mean low tide watermark on Pawley's Island by means other than the use of a "crab pot" for personal consumption and not for sale.;

(3)   DeBordieu Creek and its tributaries and distributaries above the entrance to Bass Hole Creek and seaward of the causeways of Luvan Boulevard in Georgetown County;

(4)   the Sampit River above a line connecting the point on the eastern shoreline of Sampit River at its confluence with Winyah Bay at latitude 33°21.08' N, longitude 79º16.71' W and the point on the western shoreline of Winyah Bay generally south of its confluence with Sampit River at latitude 33º20.68' N, longitude 79º16.90' W in Georgetown County; and

(5)   Little Chechesse Creek in Beaufort County."/

Renumber sections to conform.

Amend title to conform.

Senator McGILL 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.

THE CALL OF THE UNCONTESTED CALENDAR HAVING BEEN COMPLETED, THE SENATE PROCEEDED TO THE INTERRUPTED DEBATE.

H. 3598 (Word version) -- Reps. Richardson, Bailey, Bowers, Clark, Clyburn, Edge, Hamilton, Herbkersman, Hosey, Kirsh, Limehouse, Mahaffey, Neilson, Owens, Quinn, Rivers, Sandifer, Simrill, Snow, Vaughn and Whipper: A BILL TO AMEND SECTION 12-36-2120, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SALES AND USE TAX EXEMPTIONS, SO AS TO PROVIDE THAT READING GLASSES ARE EXEMPT ITEMS DURING THE AUGUST SALES TAX HOLIDAY.

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

Senator LEATHERMAN spoke on the Bill.

At 10:50 A.M., Senator McCONNELL assumed the Chair.

Senator LEATHERMAN spoke on the Bill.

At 11:23 A.M., the PRESIDENT assumed the Chair.

Senator LEATHERMAN spoke on the Bill.

We have spent the better part of three weeks and don't have much to show for it here in the Senate other than the fact we did finally pass the Appropriation Bill late yesterday evening.

Some in the body have insisted on passing the largest tax increase in the history of South Carolina. I think it was ironic, as we debated this proposal, that headlines informed us that we have a record number of bankruptcies in our State. Our people are hurting; some counties have unemployment in the double digits. Yet, we have spent days debating a billion dollar tax increase knowing full well, that even if it passed, the House wouldn't buy it; that even if the House bought it, the Governor would veto it. We tried to find areas of compromise only to be met with demands that a tax increase be passed or nothing would. The Governor's plan to fund Medicaid was defeated as were many other proposals. We did not adopt Senator THOMAS' proposal to raise the sales tax to eliminate personal property taxes and provide additional EFA funding. We may see it again, and I don't think we have heard the last of sales tax reform. I intend to get the Joint Tax Study Committee to work over the summer to see if the problems we discussed can be ironed out, and I intend to bring it back up to the body next year if, indeed, Senator SETZLER, we can come up with something. I know you share my concerns regarding the tax structure of our State. Amendments have been floated and shot down, and we have what we passed yesterday, Senator LAND--a draconian budget, one that you don't like and one that I don't like. This is one of the most horrible budgets I think I have seen in my twenty-three years, and I am sure that you would concur.

The plain, simple truth is that, if the budget as we passed yesterday, prevails -- and I hope it does not -- it will unleash untold pain and suffering on thousands, maybe tens of thousands, of our most vulnerable citizens. I will talk about those numbers in just a moment.

We talk about $500 million in the Medicaid program -- $170 million from the State and the balance from the federal government. If these dollars turn four times in the community -- I keep hearing numbers four, five, six; whatever, let's assume four times in the community -- that is about a $2 billion hit to our economy. Now ladies and gentleman of the Senate, if we pull $2 billion out of our economy for the year we are in, think of what that's going to do to the revenue of next year. It is going to really hurt. We add to that the hidden tax increases we will force upon businesses and individuals who pay for private health insurance. A study earlier this year found that, if we adjust the cost from hospitals alone, we are looking at raising health care costs as much as nine percent. For those who go to the hospital, get that care and cannot pay, we -- you, businesses and I, the taxpayers of this State -- are going to pay $500 hundred million rather than $170 million. Doesn't make sense does it, Senator? Sure does not. I urge you to give me your attention for a moment please. I want to lay out some numbers for you that my staff and I have generated. Let's look at the people who will be most affected -- the poor, the elderly, the blind, the disabled and the little children. The optional services that will be gutted will result in 6,000 nursing home recipients without care. 12,000 people in Community Long-Term Care will not be served. Ladies and gentlemen of the Senate, 66,000 seniors in the Silver Card program -- and I applaud Governor Hodges for creating this program; it has been a wonderful program for our elderly people -- 66,000 seniors will not have those pharmaceutical products that they are getting today. 250,000 people who receive pharmaceutical benefits will be denied. The optional groups who could be devastated include 49,780 blind and disabled and 43,000 in the CHIPS program. We wanted to expand the CHIPS program and still want to expand it. I am not talking about the expansion; I am talking about those currently served in the Medicaid program. If you want a real picture of what we are about to do, our Community Long-Term Care Program is designed to keep people out of nursing homes -- the most cost effective thing I know. Not only would this budget gut that program but it guts the nursing home beds as well. Tell me ladies and gentlemen what will we tell these seniors and their families when they can't get that nursing home care? What will we tell the parents of the children whose teeth will decay because they cannot afford a dentist. Seniors, children and their families are being held hostage by this all-or-none strategy. I am afraid that, if we do not pass the tobacco tax increase, they will get nothing. I don't see any other way we can possibly fund Medicaid. I don't think its worthy of this Senate and it's certainly not worthy of the people of South Carolina. We are very close and maybe at the threshold of now getting nothing -- not for ourselves but for the most vulnerable people among us. If we leave here this year without somehow funding Medicaid, the blood of the poor and the weak, in my opinion, will be on our hands. I don't want to be a party to that and I don't think there is a member in this Chamber who wants to be a party to that.

As Senator LAND told us yesterday, there is another chance to redeem this program. I tell you that there is another chance to redeem it. We all know that there are a few amendments to H. 3598 on the Desk, and that one is the tobacco tax. I suspect that there are others for us to vote on. I ask you to join me in voting to pass a 53¢ tax increase on tobacco. Believe me, ladies and gentlemen of the Senate, it's tough for me to stand here at this podium and urge you put 53¢ tax on cigarettes. Senator LAND, I come from tobacco land just like you do and it is extremely tough to stand up here and propose this. But when I look at the numbers I just presented -- those seniors, elderly, children, those poor, those blind and disabled -- and know that they will not get care, I simply cannot be a party to that. The Governor said the only way that he will accept a tax increase of any kind -- whether it is a sales tax or a cigarette tax -- is to have a comparable tax rollback. That is not my desire, but I take the Governor at his word and I believe he would veto any tax increase we send down without some type of rollback. All I do is ask us -- you and I -- to do the right thing on this most important issue that will affect the lives of thousands and thousands of people throughout this State.

Thank you, Mr. PRESIDENT.

On motion of Senator MARTIN, with unanimous consent, Senator LEATHERMAN's remarks were ordered printed in the Journal.

Senator MOORE spoke on the Bill.

Thank you, Mr. PRESIDENT and members of the Senate.

For the life of me, I guess I should tune you out sometimes because when you say something like you said a while ago, it sort of raises my hackles a little bit higher than they ought to be. This whole thing is absolutely amazing to me. The Chairman has laid out the severity and the problems. I am going to vote for the cigarette tax straight up. I have said that. In fact, if this Senate and this public will remember, I put an amendment up here to increase the sales tax 2 cents and the cigarette tax funding Medicaid at $232 million. I have an amendment up here to raise the sales tax 1 cent and the cigarette tax.

My good friend from Pickens, to frame this and say anything that we say is rhetoric, while all wisdom and righteousness rests with some others, is not a way to get this off the dime this morning. I realize that political and party zealotry gets to dancing in our heads at times, and we go crazy. But I would ask you to let the demons of partisan politics out of your head for a while.

My good friend from Spartanburg, I know that you do not mean to do that, but you say that the Lord only requires 10 percent when he is talking about the income tax plan. Senator from Charleston, you are absolutely right, there will not be enough votes for it until we come to our senses and people realize it. Hopefully, sometime today, somebody in this Senate is going to explain that plan because, thus far, not a soul has. I do not consider anyone in here less than very intelligent. I do not believe anyone can explain it adequately. I sure cannot, and I guess it is because I cannot understand it adequately.

But the deal today is that we are willing to give $171 million to Medicaid. But if this plan were in statute -- right now net costs to this State -- net costs if we were having to write this Appropriation Bill under the plan that the Senator from Spartanburg and all said that this is hopefully not petty politics -- if this proposed plan that you are going to link to the cigarettes were in place this day you would have an additional $755 million hole to plug. In the Horse Creek Valley District some of the mill hands who have not even had a day of formal education are going to say to me, "You mean to tell me that in order to get $171 million in Medicaid that the General Assembly had to give up $755 million?" That is about the dumbest thing that I have ever heard in my life. Higher math, nothing. I want to make sure that no one thinks that I was casting aspersions in any way to any mill worker or labor worker. I was just trying to say that there is a better solution.

Then we are told, only the Lord requires 10 percent. No, sir. That might be in tithes, but the Lord also requires 100 percent in honesty and compassion. No one can come to this podium and no one can cast a vote in here, this day, and try to lay any self-righteous guilt trip on me or on those who have taken a hard vote to fund Medicaid at $232 million -- not $171 million -- and not have it tied to the proposed income tax relief plan.

Senator from Clarendon, I got a letter yesterday that absolutely floored me. A good friend of mine who is a doctor sent me a letter stating that he was absolutely astounded and could not believe my vote to not fund Medicaid. I told you, Senator, just as soon as that amendment was put up and the vote was taken that the spinmeisters and the zealots started getting cocky and handing them out. This is the same crowd that you are trying to help who now calls the doctors and says that I voted against the cigarette tax for Medicaid. We are good enough friends that I called him and told him what this was about and sent him copies of the journal and showed him what little shenanigans were forced. He may be willing to change lobbyists because he said that that is an outright lie.

So, this day as we vote on any cigarette tax tied to the proposed income tax relief plan -- to say that we are not for helping Medicaid is an outright lie. There is no way to gussy it up or to package it with all the ribbon. If you say that, you are an outright liar.

I believe that, if you will search the journal there is an amendment that we voted on that with the 2 cents tax increase, we would give tax relief to individuals in this State who make $15,000 or less. That is only 48% of last year's returns in South Carolina. I believe that, when you look at it, you might have a different opinion as to what we are trying to do.

I do want to follow up. I have heard comments about petty politics, practical politics. I appreciate the Governor coming up and talking to me yesterday, and as I told you and told him, there is nothing personal about this. First of all, I did not quite understand it all and even the more someone explains it to me, I guess the tougher I am for it to sink in. But, this is not about that. I would say to the point about what the Governor -- that this is not this Governor, but any Governor. I came here when Dick Riley was Governor. I served under him, under Governor Campbell, under Governor Beasley, under Governor Hodges, and now under Governor Sanford. I cannot be too worried about what that body over there may or may not be doing with legislation. I cannot be too worried about whether the cigarette tax will be vetoed or not. Obviously, common sense dictates that you have to think about it. But issues of passionate concern, if I were to listen to that argument -- we would temper our concern with practical politics. There is nothing practical about the pride and people that the Senator from Florence just talked about. There is nothing practical about saying in order to take care of the needs and the human problems that we have here, we will have to tie it to some income tax relief. There is nothing practical about that. And I will reiterate, I will not vote for a cigarette tax that is coupled with the current proposed income tax plan.

Senator from Charleston I told you earlier this morning, I have an amendment up to put it with another sales tax, and I will vote for it straight up. But ladies and gentleman, do not think that we are not astute enough to understand that, if the cigarette tax passes straight up, that another amendment to then take up the proposed income tax relief plan separately might be forthcoming with a majority vote prevailing again. Give us a little more credit than that. Now, Senator from Charleston, if we are going to get to that, then the guineas may be dead and gone before you see them again. We are ready to make that stand. That is not a threat of a filibuster. That is practical politics.

Now, if this State is going to say that we have all this concern about the Medicaid thing, but it has to be tied to the proposed income tax relief plan -- which should be debated on its own -- that's going to be a problem.

Can some of the spinmeisters and some of the practical politicians tell me what happened to the argument about schoolteachers, school children and the educational system in this State? Our compassion cup flows over here this morning. But, all week it looked like, as the Bible says, "The bowels of compassion were closed." Shut down "the bowels of compassion" when it comes to that. We are beyond that.

But, do understand that with whatever cigarette tax plan we have here today, if it is tied to or has to be coupled with some impractical other plan, this is not trying to play petty politics with anyone. That is my assurance to you -- that we are ready to make you vote to sit us down. You may have the votes to do that. I have no idea and have not asked a soul one way or the other. But, if we come to where we say our compassion and our desire to help people is predicated upon some coupling of the proposed income tax relief plan, which has not had one day of consideration except briefly in the Senator from Greenville's amendment -- and, I know that he has another amendment coming up.

Senator, this is not disrespectful to you. I know that you have been a passionate supporter and believer of Medicaid and children in this State. But, I cannot find it anywhere in me to vote for that, coupled with an income tax that, if it were in place right now, would cost the State $755 million. The income tax is 42 percent of our budget. They say that it may not kick in for 2 years, and it will not kick in fully until whatever year. Well, I am afraid of the kick. It is kicking our head in before we even get out of the shoot.

This is not about taking the hard vote. Anyone with conventional and political wisdom would recognize, my friend from Richland County who had some fiery comments about the largest tax increase in history, that, if it was our intention to give $232 million to Medicaid, you would think that we would be no less supportive of the cigarette tax for $171 million.

Sen. GREGORY: Senator, the Governor's plan has not been considered.

Sen. MOORE: The Governor's plan has not been considered on the floor. Granted, it did go through the Senate Finance Committee, and I do not have any idea of how much discussion it has had. Other than the Senator from Greenville's amendment last week, I do not believe that it has been discussed or coupled with anything else. I will stand corrected if that is not accurate.

Sen. MARTIN: Wouldn't the Governor's income tax plan cost the State $755 million this year?

Sen. MOORE: If this plan were fully in place this year, I am told, that is what the figure would be.

Sen. MARTIN: Where would the starting point be?

Sen. MOORE: If it were fully implemented in this current budget, the impact would be $850 million. But, when you back out the disposable income that would be projected to be spent on income and sales tax, you would reduce that by $95 million for a total net loss of $755 million. That is, if we assume that the 2-point schedule made several years ago and the full 2 percent rate reduction was implemented today, I predicted that, if it were fully implemented today, it would be a net loss of $755 million dollars.

Sen. MARTIN:   There has been no growth in income taxes, and it comes out of the growth. It is my confusion, and I hope to be better educated on this.

Sen. MOORE:   The individual income tax collections grew at an annual average rate of over 5 percent from 1992 to 2002 -- an annual average since 1992 to 2002, which is 10 years -- that is the 10-year period that I am talking about.

Sen. MARTIN: Was this plugged in over 10 years ago?

Sen. MOORE: We have not completed the information for 2003.

Sen. MARTIN: I have never heard of a 10-year reference point when you speak of the $755 million.

Sen. MOORE: I said, "If it were fully implemented today." Income tax has not grown, but I am telling you from 1992 to 2002, income tax collections grew at an annual average of over 5 percent.

Which begs another point. I know that there are people who talk about how South Carolina taxes people. Someone said that we are ninth in the nation in income tax. But, if you look at the full tax load in South Carolina, a recent study released this year by the United States Tax Foundation ranked South Carolina at 37th out of 50 states in terms of total state and local taxes as a percent of total income. That is number one being the heaviest and 50th the least, and we are number 37. For South Carolina, on that same study, state and local taxes were nine percent of total income. The national average is 9.7 percent. Georgia ranked 15th at 9.9 percent. North Carolina ranked 25th at 9.5 percent. Therefore, when we have all these gurus spinning out a lot of information, I wish that they would be a little more accurate in saying South Carolina is ninth in the nation at taxing its citizens. That is not accurate. South Carolina's rank in total tax, local and state, is 37 out of 50.

In addition, I have heard the arguments that South Carolina should have more money in our pockets and less taxes. That is why I put in the amendment that says that "S" corporations would be changed from seven percent to five percent at $76 million. Income tax on $15,000 or less would be $0 at $120 some odd million. Change the homestead exemption from $50,000 to $55,000 at $6 or $7 million dollars. So, to all those who are making the next round of spin concoctions, please be accurate and say the tax relief measures were over $200 million.

I did not want to get up here and spend too much time. If I understand it correctly, based on estimates from staff, I hear that under the Governor's plan it is two years out before it kicks in. Then, I heard that it will be six years before it kicks in. I do not know and I guess that it is somewhere between two and six years.

Sen. MARTIN: Would you safely represent that there would be no impact to the revenue next year?

Sen. MOORE: Being the conservative stewards that we are of the revenues of South Carolina, to say that it has no impact next year -- but it has an $850 million impact, somewhere I hear -- to me that is not being exactly above water.

Sen. MARTIN: I don't disagree that there is going to be an impact down the road.

Sen. MOORE: 42 percent is the largest part of the pie we have, the largest part dedicated to taxes funding the budget. We say we are going to do better. In 10 years or whatever, we are going to flush that, and we are going to depend on growth.

I remember the arguments on doing the property tax relief. We will depend on growth to make sure that we never have any problems. We will depend on growth, and we will fund it $195 million. But now, guess what? It is $270 million. We will depend on the growth. If you want, get some of the economic professionals, experts and political minds together and tell me who has had the income or luxury from $195 to $270, which is 54, 55, 56 percent? Who has had 55 percent, step forward. But, no, it would be nice if we could say to the school children and Medicaid recipients that we will fund you and make sure that you have 55 percent growth. No, we will beat our chests if we are going to dedicate the first two percent in growth. What in the world are we talking about in here? We are in a conundrum.

Sen. ANDERSON: Senator, do you have any idea of the percentage of people that smoke. Do you have any kind of projection? The figures that I have received indicate it is around 20 percent.

Sen. MOORE: I do not know that for sure but, I feel, thankfully, that it is a lot less than what it was 10 to 15 years ago. I can hazard a wild guess of 20 percent.

Sen. ANDERSON: Based on that estimate, 20 percent of the population, rich and poor, will be paying for the roll back of this tax. When fully implemented, one percent of the population in the high income brackets will receive from people that are poor and paying for the cigarette taxes. Senator MOORE, do you think this is fair?

Sen. MOORE: While we increase the cigarette tax by 53 cents and give 15 percent income tax free, maybe we helped people to buy the more expensive cigarettes -- if I were going to play some legal mind game. But, the time for games has been way over.

Sen. ANDERSON: Do you think those in the higher income brackets will be making more money for the roll back than anyone else?

Sen. MOORE: I have heard that number. Every time you try to point out something like that everyone wants to jump up and holler "rhetoric." Then they say that you are into class warfare if you point out that 5 percent of the people will enjoy 55 percent of the benefits. That IS class warfare. But, we can send children to school at less than what they are going to be funded and we can say to people that need Medicaid services that we are gong to have to tighten their belts for income tax relief. But, that is not class warfare. That is practical politics.

Sen. ANDERSON: Would you call this Robin Hood in reverse?

Sen. MOORE: This is worse than the movie, Robin Hood: Men in Tights. We are in tights now, and those tights are up around our necks.

Sen. KNOTTS: How long have you served in the Senate?

Sen. MOORE: I was elected to the Senate in 1980 and started in 1981 and I previously served two years in the House.

Sen. KNOTTS: Senator, have you seen a constant outcry about the income tax being too high?

Sen. MOORE: When I file my income tax and have to pay the extra, I have noticed what has been sent to the state government compared to what has been sent to the federal government. It is almost like I am glad that I am charged that amount in South Carolina.

Sen. KNOTTS: Are you getting complaints from constituents about income tax?

Sen. MOORE: Some people say that we need to live within our means and run government like a business. I do have in my district -- Edgefield, McCormick and Horse Creek Valley. I will tell you that I have not had too many people speak to me about income taxes in South Carolina.

Sen. KNOTTS: I wonder if those who would be hurt by income tax should be complaining?

Sen. MOORE: One of my best friends is a very wealthy person. He is a very wealthy person who does not have a college education. He has a high school degree, and he is a very wealthy and nice person. He has never said anything to me about paying too much income tax. He says that he is glad that he made that much money so he could pay taxes. He says that until this State commits to public education, we are destined to wallow at the bottom forever. He does not miss a chance to tell me that, and I cannot tell you how much money he has returned to public schools, to colleges and to foundations. He has returned money because he says that God has blessed him. It is only right for him to share it with others. But, he never misses a point in telling me that, when you have a child in the prenatal to 3 or 4 years old, if you do not do what needs to be done mentally, physically and collectively, when they get to kindergarten, you will end up doing it many times two-fold. That is what I hear from him often.

Is the income tax too high in South Carolina? I will be glad to listen to the argument. I will be glad to listen to the people who say that we should be like Florida. Florida has no income tax, but look at both sides of the column. Florida's sales tax is comprised of taxes, local options, etc.

Sen. KNOTTS: Are those all fair taxes that everyone pays?

Sen. MOORE: It must not be, because he put up a sales tax issue and the majority said, "No."

Sen. KNOTTS: If the majority said, "No" to that, it is due to the fact that we would also add that to the existing property tax which everyone is suffering from.

Sen. MOORE: That argument will probably ring hollow in Aiken County because the school board is going to raise the largest property tax in the history of the county as a result of what we are doing in here.

Sen. KNOTTS: Should we be giving tax relief back to those who are hurt the hardest -- the homeowners?

Sen. MOORE: Senator KNOTTS, I wish you would join me on the amendment that has the homestead exemption going to $55,000 and no income tax on $15,000. There are only 15 of us on the bus, and if you will get on the bus, we have a seat open for you.

Sen. PINCKNEY: I am wondering about the reference to scripture and theological pandering. I want to weigh in and ask if you know that the concept of tithing is not a ceiling? It is one of a floor, and it is only a part of a greater concept called stewardship. When we talk about tithing, we talk about a giving of a tenth, which is a very Old Testament concept. Tithing really speaks to the larger issues of Judea/Christian stewardship.

Sen. MOORE: I am aware of that and I have always heard the preacher say that you are not precluded from giving more than ten percent.

Sen. PINCKNEY: The giving of tithes is only a part of what God requires. In Micah, the prophet asked what God requires of humanity? God answers that, "He asked that you would do justly and love with mercy and walk humbly with your God." I am not trying to convert anyone but want to talk about stewardship. Since most of us talk about the idea that we are Christians, the idea of Christian stewardship is not one of just giving a tenth or not one of doing what is adequate. Stewardship refers to a person or group who is really interested in using our limited resources. In fact, using our abundant resources given by God for the whole and not just for selfish gains and to look out for those who cannot look out for themselves and to give voices to those who are the voices in the margin. Would you agree that we in the Senate are the stewards of South Carolina and have been looked upon as being the stewards of people's resources?

Sen. MOORE: I agree.

Sen. PINCKNEY: How do we relegate our own proceedings to do what is only adequate?

Sen. MOORE: We forget about the man in the New Testament who asked Christ which commandment is most important. Maybe we forget that we are charged to love the Lord with your heart, your soul, your mind and to love your neighbor as yourself. If this is loving our neighbor as ourselves, then I think we have transgressed every commandment.

Sen. PINCKNEY: The theological discussion was only a basis and I want to now put it into action. We have talked about tax rates, tax cuts, the working man and taxation. You have mentioned some of those, and Senator KNOTTS is a strong populist, who I applaud, regarding how he talks about the common man. But, I think that we need to add the tax rates as they compare to other states. My friend from Horry County has a book on the 50 state comparisons. Taxation, economic, demographic, government and education are compared in the 2002 edition from The Taxpayers Network, Inc. It says in the first table that state and local taxes as a percent of income in 2001 with one being the lowest tax burden and with number 50 being the highest tax burden. We have heard a lot about the tax burden on the common man. I question where you think that we rate?

Sen. MOORE: The U.S. Tax Foundation Study says that we are 37th out of 50.

Sen. PINCKNEY: According to this, we are actually ranked ninth.

Sen. MOORE: The lower number is the better number, and said that, if this were tossed out without qualifying, it would be suspicious.

Sen. PINCKNEY: I refer to the mill worker conversation and I have a lot of farmers and common service industry persons in my district. These individuals will know that, if you talk about our being ninth from the bottom, we are no where near the highest in the country as far as taxes in South Carolina. I am not against tax cuts. I don't believe you are against tax cuts and in the amendment is the push for the tax cut for the common working person.

Sen. MOORE: It is over $200 million.

Sen. PINCKNEY: In over $200 million, is it correct that the first $15,000 would be exempt from everyone's income -- even those of us who are for tax cuts and came here running on tax cuts? There are many people who actually voted against your amendment to give tax cuts to everybody. Maybe you can give me a comparison between the two plans that have been put out. There is a plan that has been introduced by the Governor -- and this is not a slap on the Governor. The Governor asked me about the tax plan and talked about your proposal. I am trying to determine from the plan that has been put up, if we are looking out for the average man who, according to this study, makes about $23,000 a year on the average. Does the average working person in South Carolina benefit more from your plan or from the Governor's plan that has been put on the table?

Sen. MOORE: I don't want this to be a class warfare issue. But, if 48 percent of South Carolinians who filed last year's returns make $15,000 or less, we are going to give tax relief there. If 53,000 shareholders are going to have their income tax rate change from seven percent to five percent and the homestead exemption for those over 65, those blind and those disabled would get an additional $5,000 in homestead exemption tax relief. Looks to me that we will touch 75 to 80 percent of the people in South Carolina.

Sen. PINCKNEY: I call your attention to a book that we got in the mail, Who Pays, which is a distributional analysis of the tax system in all 50 states. Pages 96 and 97 are dedicated specifically to South Carolina. It gives a breakdown on South Carolina tax trends. It has a scale of progressive and regressive features in the tax structure. The one progressive feature this institute says that is in the South Carolina tax system is the index tax brackets in our State. That is the only thing that is progressive and is fair to all people. If we institute your plan or other plans, what will be the impact on the index tax brackets since this is the only "progressive" thing about our tax system?

Sen. MOORE: I am not sure.

Sen. PINCKNEY: I bring this back to taxes and fairness. You talk about Florida and the fact that they have no income taxes. In the referenced book, it talks about tax burdens. Florida has an overall tax burden of 9.7 percent. South Carolina's tax burden is less than Florida's. State and local combined tax burden in Florida is 9.7 percent and South Carolina's is 9.3 percent. Florida does not even have an income tax, and our tax burden is lower then theirs.

Sen. MOORE: This has to be close because the United States Tax Foundation, in their latest statement, said that our state and local taxes now constitute 9 percent of the total income. So, taxes must be going down as far as total income per capita.

Mr. PRESIDENT, I know others want to be heard, and I want to summarize. The fervor and passion that I am hearing in here is that I wish we would have seen in other areas. But, be that as it may, I do not know how we say that we feel this strongly about all the problems that have been brought to our attention. If, in fact, we have to look at practical politics and temper our fervor with what the House or the Governor may or may not do, what the Senate may or may not do if we have to override or sustain, it looks to me that we better check that fervor and passion and say we are for a straight up cigarette tax without any coupling under any circumstance regardless of the outcome. To me, that is what South Carolina citizens want to hear. Not, what if the House or Governor or if the Senate does afterwards.

I challenge you today to answer "yes" or "no," if you are for the cigarette tax -- uncoupled, unencumbered, without impractical games or speculation or playing, "what if?" You are either "yes" or "no." That is what South Carolina wants to know this day.

Thank you.

On motion of Senator PATTERSON, with unanimous consent, Senator MOORE's remarks were ordered printed in the Journal.

Senator KUHN spoke on the Bill.

I support the federal Medicaid Program for its original purpose: to aid the physically disabled and mentally handicapped and to aid those in true medical crisis. It was formed to be government support for catastrophic illness and catastrophic human disability.

I do not support the portion of Medicaid that goes beyond its original intent - the part of Medicaid that is expanding at an alarming rate - the part of Medicaid that has become a welfare program.

From the beginning of this session, I have asked for true Medicaid reform in the eligibility requirements. I have not seen the Medicaid reform that has been promoted by some in the General Assembly and by the Governor's Office.

If we do not reform the eligibility requirements of the Medicaid program and we pass a tax increase to fund the current program, at the program's current rate of growth, in 18 short months we will be right back here in the same position! This tax increase will not solve our gigantic Medicaid funding problem. Why don't we seriously consider fixing a broken program before considering a tax increase to fund the program? I request that we do so before funding a program that we know will bankrupt the State in 10 years at its current rate of growth.

The federal government is requiring our hospitals to take all people and children who come into the hospitals. This is fine and I do not disagree with the federal government's mandate to medical facilities. However, the federal government is the entity that needs to fully fund its mandate - not just 3/4ths of the mandate - all of the mandate.

Our State has a total annual budget of $5.1 billion. The federal government spends that much money in 41 hours. The federal government is the entity that should pay for its medical mandate instead of financially breaking the State of South Carolina. We are not even in a position to pay for one-quarter of the costs. And, we are finding that most of the other states are not able to fund this overwhelming financial mandate.

We need to reform Medicaid's eligibility requirements and we need to ask the federal government to fully fund its health care mandate.

On motion of Senator VERDIN, with unanimous consent, Senator KUHN's remarks were ordered printed in the Journal.

Senator RAVENEL spoke on the Bill.

Mr. PRESIDENT and fellow members of the Senate.

Let me lay a few words on you about a situation we find ourselves in with the Medicaid program. First, let me say this. I don't know how many of you take the Wall Street Journal or read the Wall Street Journal, but a week ago Friday there was an article in the Journal, which said, listen to this: "Twenty-five point six percent of our industrial capacity is idle." In the same paper -- you know, that's incredible -- "twenty-five point six percent of the industrial capacity of our nation is idle."

By 1934, it was seventy-five percent of the industrial cap that was idle. In the same paper they touched on deflation, which is the opposite of inflation. They tried to sugarcoat the article just a little bit, which said a little bit of deflation is not bad. Well, in this morning's Post and Courier, I was reading an article -- some of you may have read it -- might have been in the State paper, that was talking about deflation and the bad effects that can come from deflation. That's where everything starts being worth less and less and less. There's less economic activity and, of course, less revenue for the State.

My spies tell me that last month, thankfully, if the information is correct, there was a slight increase in the revenues of the State -- personal income tax and sales tax. And, as we all know, the principal generator of revenue to our general fund is the personal income tax. Number two is the sales tax. Personal income tax has been off significantly, and why is that? Well, they're not buying those stocks, you know, anymore at five dollars and seven hundred and fifty dollars. They're not making the overtime in various businesses across the State. And, if there were bonuses paid, they're not paying taxes on those bonuses. So, naturally, the personal income tax is off, and we don't know what's going to happen. We don't know what's going to happen.

You know, the whole nation and the whole world now are nervous about this international war that, not only the United States, but the whole world finds itself involved in. And, it is, without a doubt, affecting economic activity. Okay. Let's come on home to South Carolina and the situation we find ourselves in right now here today. Twenty percent of four million South Carolinians -- our current population -- twenty percent depend on their very existence, in some way, on Medicaid. Well, I was raised in a little country school, and I don't do it on a computer -- I can't do it in my head; I'm not that smart. I do it with pencil and paper. Twenty percent of four million is eight hundred thousand. Isn't that right? Eight hundred thousand South Carolinians in some way depend on Medicaid. All right, where is all that? Well, it's in the Department of Mental Health, principally, which has been -- as those that are close to Mental Health know -- severely cut. That fellow they've got there, Gintoli -- great guy -- thank goodness we've got that man. But, he's doing a superb job of doing the best he can with his money.

Then you've got this Department of Disabilities and Special Needs. That's Whitten Village. It's the Pee Dee Center. It's the Midlands Center. It's the Coastal Center down there where we come from, down there on the coast in Dorchester County. Their principal source of income is Medicaid.

Senator from Florence, I think you gave us a figure. Isn't it six thousand? Is it six thousand Medicaid beds--twelve thousand long-term care--sixty-six thousand are on the Silver Card. That all depends on Medicaid.

Gentlemen and ladies, one thing only do we know -- and, that is, our General Assembly will fund Medicaid. Can ya'll imagine? Can ya'll imagine what would happen if the Medicaid dollars that fund those nursing homes that have a percentage -- a large percentage -- of Medicaid beds don't get paid? Or, if they cut off the money to the Pee Dee Center or Whitten Village? Or, that the Medicaid funds that flow into all the mental health facilities here in Columbia and around the State, that those funds don't come in? That all those providers who provide services to the Medicaid beds and facilities are cut off? And, we would try to adjourn and go home without funding Medicaid and all that money dries up and runs out? We wouldn't come back to Columbia, ladies and gentlemen. We would be summoned back to Columbia. We would be run back to Columbia by our constituents.

Now, we all know that a situation like that is not going to happen. But, where is the money going to come from to fund Medicaid? There's only one available, continuing source and that is by taxing tobacco. We've got one of the lowest tobacco taxes in the nation, and what is the matter with taxing a killer? And as we all know, the largest single cause of death in South Carolina is tobacco-related illnesses. Isn't that right, Senator from Greenville? That's what it is. That's what it is, all right.

The two states in the South that are doing the best economically are Texas and Florida. And a lot of people believe that the reason for that is there is no personal income tax. But, wouldn't it be wonderful if we did not have to depend on the personal income tax in South Carolina? It would be great! And so you have to applaud the Governor's effort to do away with the personal income tax over a long period of time -- fifteen years before it would be fully implemented. But, there is great reluctance here in this Senate to couple a tax on tobacco with this gradual reduction of the personal income tax. But, apparently, apparently, there is sufficient support in this Senate to pass a tobacco tax freestanding. What is our responsibility? What is our responsibility, ladies and gentlemen? The responsibility of this Senate, and this Senate only, is to provide sufficient funds to match federal funds for Medicaid. That is our responsibility. It is not our responsibility to influence the Governor's actions one way or the other. That is his responsibility. But our responsibility -- the responsibility that we have -- in what really is a desperate situation. It's not a bad situation. It's not a situation that's not good. But, our reluctance or our refusal to discharge our responsibilities to provide the funding for Medicaid, that is a desperate thing at this moment.

Just hold off just one minute, please. I think we should discharge our responsibilities. We should find out, so it will send a signal to the Governor and to the House. We should find out with a vote if we have the votes here and if we have the strength to accede to the Governor's desires and ambitions in this matter. If we don't, then certainly, certainly, at the very least, we should go ahead and pass the freestanding tax on tobacco and send it back to the House. And, I believe that they will go along with us and then the ball is in the Governor's court. He can either veto it or sign it. The responsibility will have been shifted from us because we will have done our duty, and then it will be his responsibility to assess the terrible fall-out that would occur if he were to veto the measure and we were unable to override it. Of course, if he vetoes it, then, of course, the responsibility comes back to us and to the House. And, if given that situation and given the terrible alternative, of course, we would override the Governor. Of course, we would do it. We have no option but to override it.

Thank you.

On motion of Senator ANDERSON, with unanimous consent, Senator RAVENEL's remarks were ordered printed in the Journal.

Senator LEVENTIS spoke on the Bill.

Thank you, Mr. PRESIDENT.

Ladies and gentlemen of the Senate, we have heard a great deal about where we are. The one myth I would like to dispel is that we should be compelled to think by what the House thinks or that we should be compelled by what our Governor thinks. We need to be compelled to think by our constitutional obligation -- which is to the people of South Carolina. It is not to any group that has exacted a pledge from us. It is not to any special interest organization. It is solely to the people of South Carolina.

The House sent us a budget that was millions of dollars out of balance. They sent us a budget that has no provisions for the elections in 2004. That body meets their obligations and responsibilities very differently than we meet ours. I will not be critical of them, but I will certainly not feel compelled to act based on what they may or may not do. If the words of the Senator from Florence today were compelling to us, then they should be compelling to the members of the House and to the Governor. If we meet our obligations to the people of South Carolina, we should win the day. We heard that the Governor would veto this Bill if there is not an offset. I will respect the Governor if he tells us where he wants the cuts. He cannot tell us that we have to have less revenue, then not offer to us or to the people of South Carolina precisely from where he wants these cuts to come. Leadership from the Governor's Office would have been forthcoming this year if he would have offered us guidance earlier regarding his position on taxes and what he wants us to do without in state government. You just cannot have it both ways. You cannot say that you want to do away with income taxes -- but not tell us or the people of South Carolina what services provided by state government you will do away with.

The compelling arguments that the Senator from Florence gave us, which I think were quite articulate, were unfortunately just a snapshot of the problems we face. I cannot argue with what he has said. But I do raise the question: Why is it more significant that we have 6,000 people who may not be able to be paid for in nursing homes than it is that we have 6,000 teachers who will not be in the classroom doing what is necessary for the students of our State. There is a correlation between the health of the citizenry and the education level of the citizenry. We can, and must, ensure that our children have the education they need to make good decisions, adopt healthy lifestyles, and hopefully ensure less of a need for the medical programs we are faced with today. We cannot fail to recognize the notion that what we were told by the Senator from Florence this morning is a selective, although valid, narrow picture of the problems we are confronted with.

Please do not get the notion that passing this cigarette tax will bring money rolling into South Carolina. If we pass this tax free-standing, which is what I support, we will fund Medicaid at the level we did in the current budget before the cuts. We accepted across-the-board cuts in this body, which I do not think was responsible. I do not think it was a responsible action on our part because if we fail to adopt this tax increase we will forego hundreds of millions of dollars from Washington. Over the course of the year we were willing to cut millions of dollars from the Medicaid budget and forego $150 million from Washington. We are making a terrible choice if we do not face the full burden of where we are fiscally in this State. Passing this cigarette tax is critically important, but it is only part of the big picture. Please do not forget that there are many of us who are compelled to never vote for any revenue enhancement. So, if we pass this tax with an offset, then next year's argument will be that, if we altered those revenue enhancements that the Governor insisted on, it is a tax increase and cannot be done. We cannot put that in place and then find ourselves in the box. The Senator from Florence wants to lead us forward, but we cannot change any tax reductions. We cannot then reverse any moves we made to reduce taxes. We can only reduce taxes more.

We talk about record collections of income taxes needing to be in place before we can again include the reduction in income taxes the Governor has proposed. I think there is a bit of a misunderstanding here. South Carolina is not a well-defined entity that is stable. It is a vibrant, growing State and while we had our record tax collections two years ago, we have 120,000 to 150,001 more people to service now than we did before. We grow about 1.5 percent a year. That is approximately 60,000 to 70,000 people a year. And even though it is small, there is inflation to consider. So, to say that, when we reach those levels of income tax collection that we had a few years ago, we set some kind of record, please keep in mind that on a per capita basis we are still paying less. And the Governor is insisting that we cut that even more.

The point was made from this podium that the total tax burden on South Carolinians is relatively low. What we forgot to say was that there is absolutely no correlation between tax burdens and the wealth of our citizens. Our focus should not be on tax rates. It must be on creating wealth for our citizens. And, while we cannot do it for our individual citizens, we have to focus clearly on that rather than worrying so much about the tax rate. The fourth highest per capita tax rate in the nation is Connecticut. The highest per capita wealth in the nation is Connecticut. There is no correlation between tax rates and personal wealth. We need to concentrate on developing our wealth. You never know why someone did not come to South Carolina. You never know why that corporate decision was made to move that proposal from South Carolina to Michigan. It is impossible to know. But I do know that, if we do not invest in our State, if we do not invest in education and health care, the sophisticated people who make the decisions at the corporate level will not come to South Carolina. Where are we? We are actually doing fairly well. We are fifteenth in the nation in the year 2000 regarding the number of corporations moving to South Carolina. We were outstripped by North Carolina (which is twice our size), but we beat Georgia. California was among the top states. Number one was Michigan. The "old rust belt" had more corporate locations than any other state in the nation. What is it about Michigan that makes it so attractive? They have high taxes. They don't have the Research Triangle. But the lawmakers of Michigan invest in Michigan!

So that there is no mistake, I am asking you to vote for the cigarette tax without an offset. But I am also asking you to consider other proposals to invest in our State. Of course, we cannot print money. I heard President Reagan applauded for the wonderful recovery in the 1980's. I applaud him too, because we all benefited. And how did he do it? He invested in South Carolina. He invested in Georgia. He invested in California. He invested in the United States of America. He borrowed the money to do it. But the key to the recovery was not taxes. The key to the recovery was investment. And that is precisely what I am asking you to do today. I am asking you to make an investment in South Carolina. I am asking you to not be persuaded by the rhetoric. Let the Governor make his decision. Let the compelling notion that the Senator from Florence gave us be faced by the Governor with his constituency, which is our constituency. And let him make his decision independently of our actions. We have to lead. This Senate led in public education for years. This Senate has historically led in so many positive ways. It was not the Democratic Senate or the Republican Senate; it was the Senate of South Carolina. And now is the time again for all of us to lead as a united body.

I hope you will join me today. There will be a number of amendments here today, and I am going to vote for a cigarette tax unencumbered. I am going to vote for the cigarette tax by moving to reconsider the vote in which it did not pass, after we consider all of the other alternatives that are offered, so that we can have a pure cigarette tax. I made that commitment to my community, but I am not about to vote for a scheme that is supposedly not going to come into place for several years. But I believe it is a scheme we will be shackled by because of the various commitments made by people in this body. If you look at the reality of where South Carolina is, you will see that we are at a point where we have to invest in the real South Carolina, not the imagined South Carolina where we can save ourselves or we can lower our tax rates until we are rich. No one has ever been able to do that. We are responsible for spending that tax money wisely. Ms. Moore, who has sponsored the Palmetto Project and has made a tremendous investment in South Carolina, can choose to live anywhere. She has done the research. Medicaid money does not give any money to poor people; it provides services to poor people. The Senator from Spartanburg told us that, if we failed to pass this tax, there will be a hidden tax through our insurance company mechanism wherein these folks show up at the emergency rooms, and it will cost each paying citizen $200. Why then would you not be willing to make an investment of $100 per citizen instead and fund Medicaid at a higher rate, and also fund education? Ms. Moore's think tank tells us that, if we increased our Medicaid funding $30 million a year for the last 10 years, then we would have had through that mechanism $300 million over 10 years, brought back 900 million additional dollars, and it would have raised our per capita income from the 80th percentile nationally to the 81st percentile nationally. Isn't that an investment? Isn't that more important than tax rates? It would have cost us two cents per person per day for 10 years, and for that we would have increased the per capita income of our citizens on the average of $300 per year.

One last point and I would then beg you to join me to pass the cigarette tax unencumbered by any offset. I asked for leave earlier today because I am going tonight to speak to a graduating class. There are five students graduating from this high school class in Sumter. Why so small a class? It is the Palmetto Academy, which is a school for students who cannot learn in a conventional environment. This is a school for children who would be left behind in a public school setting, and probably in most private school settings as well. There is no place more important for me to be this evening than there. This is precisely the kind of school that will be defunded if we do not meet our obligations to medical care and education in this State.

Thank you, Mr. PRESIDENT.

On motion of Senator MALLOY, with unanimous consent, Senator LEVENTIS' remarks were ordered printed in the Journal.

Senator MOORE proposed the following Amendment No. P1-2A (TLMBSC3598A), which was tabled:

Amend the amendment bearing document number 2A, as and if amended, by adding a new subsection in Section 12-6-517 as contained in the second section of the amendment, to be appropriately lettered to read:

/ ( ) There shall be no funds allocated to, reserved for or transferred to the Trust Fund for Tax Relief, established pursuant to Section 11-11-150, for the operation of or effectuation of this section until:
(1) the revenue necessary to fully fund the Education Finance Act, an amount that shall be projected by the Board of Economic Advisors and approved by the State Department of Education, has been deducted from the individual income tax revenue prior to making the calculation required pursuant to item (B) of this section; and
(2) the revenue necessary to fund the Medicaid Match Fund at a level that will fully fund the Child Health Insurance Program at two hundred percent of the Federal Poverty Level and meet all other ongoing requirements of the state Medicaid program has been deducted from the individual income tax revenue prior to making the calculation required pursuant to item (B) of this section. / (3)

Renumber sections to conform.

Amend title to conform.

Senator MOORE explained the amendment.

Senator McCONNELL argued contra to the adoption of the amendment.

With Senator McCONNELL retaining the floor, on motion of Senator LEATHERMAN, with unanimous consent, debate was interrupted by recess.

At 1:42 P.M., on motion of Senator LEATHERMAN, the Senate receded from business not to exceed thirty minutes.

The Senate reassembled at 2:34 P.M. and was called to order by the PRESIDENT.

H. 3598 (Word version) -- Reps. Richardson, Bailey, Bowers, Clark, Clyburn, Edge, Hamilton, Herbkersman, Hosey, Kirsh, Limehouse, Mahaffey, Neilson, Owens, Quinn, Rivers, Sandifer, Simrill, Snow, Vaughn and Whipper: A BILL TO AMEND SECTION 12-36-2120, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SALES AND USE TAX EXEMPTIONS, SO AS TO PROVIDE THAT READING GLASSES ARE EXEMPT ITEMS DURING THE AUGUST SALES TAX HOLIDAY.

The Senate resumed consideration of the Bill, the question being the adoption of Amendment P1-2A (TLMBSC3598A) proposed by Senator MOORE.

Senator McCONNELL continued to argue contra to the adoption of the amendment.

Mr. PRESIDENT and Ladies and Gentleman of the Senate.

I will try to be brief and direct. I hate to have to be against my friend from Aiken's amendment, but let me tell you why.

The first thing is in the construction of the amendment. Even if you buy into the concept that these things should be funded before we go, the way this amendment is constructed, you are putting the EFA on autopilot sanctioned by the Board of Economic Advisors and the Department of Education. It does not say what the defined minimum set by the General Assembly is, but, rather, now it is determined by what those two say that it is. So, what we have done is delegated over to the executive branch the authority to put us on autopilot as to what will have to be what we fund. I am not prepared to give any executive branch or government agency that kind of authority and that is what it says in how I read this amendment. It says, "and approved by the State Department of Education" and that is my first problem with it.

The second problem with it, as I understand the other, is an optional program which the General Assembly has to make a decision on whether or not to fund. Now the reality is to me, I am not voting for the cigarette tax, and I have been up front with you about that and I am up front right now. I am not voting for it. In my opinion we can all get up here and give all of the speeches that we want to and talk about whether we should have a tax or we shouldn't. The reality of the playing field is that whatever we approve in here has got to go back to the House of Representatives. They did not vote for a cigarette tax. Without some power from downstairs, I don't think that you will get any tax through the House of Representatives. So, this Bill will probably gather dust over there and you will never see it again.

For those of you who want the tax -- and let me just tell you that I have been here long enough to know that tax relief promised in the future has got the life expectancy of a mayfly. It lasts a little over a day. The reason for it is that every year we have the same situation. We have more things to fund than we have revenue. Look at what we have done in this Bill. We have delayed the funding on the tax relief back home because it creates revenue and because times are tight, but if you have any hope of getting it through, the Governor's plan -- like it or not -- is the only hope. Because what you have got to hope is that he can sell it to the House and get them to go through with it. Because if he does not, you are not going to see the Bill and if you send a straight tax over there, I don't think that you are ever going to see it out of the House. If you do and the Governor vetoes it, without his muscle over there, where do you think that you are going to get a 2/3 vote in the House of Representatives in order to override? We don't even get to vote because it is a House Bill.

We just need to look at the realities of where we are with two weeks left. If we don't have a consensus in here to do something, I just think that ultimately we are going to wander around on this Bill. We will have some votes to do this, vote this down, but at the end of the day, the only light the cigarette tax ever got back into it was when the Governor bought into some kind of setoff. That started to give it a glimmer of hope. I hear people and I respect your opinion, if you don't want to vote for the setoff. I just don't know where we think that we are going in here ultimately down the road.

It does take a 2/3 vote in the House to override. How many of you think that you can go over to the House and sit on a body that has spoken very lively -- they are not even going to impose a cigarette tax.

On motion of Senator MARTIN, with unanimous consent, Senator McCONNELL's remarks were ordered printed in the Journal.

Senator LEATHERMAN moved to lay the amendment on the table.

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

Alexander                 Branton                   Cromer
Elliott                   Fair                      Giese
Grooms                    Hawkins                   Hayes
Knotts                    Leatherman                Martin
McConnell                 Mescher                   O'Dell
Peeler                    Ravenel                   Richardson
Ritchie                   Ryberg                    Smith, J. Verne
Thomas                    Verdin                    Waldrep

Anderson                  Drummond                  Ford
Glover                    Holland                   Hutto
Jackson                   Land                      Leventis
Malloy                    Matthews                  McGill
Moore                     Patterson                 Pinckney
Rankin                    Reese                     Setzler
Short

The amendment was laid on the table.

Senator RITCHIE proposed the following Amendment No. P2-2A (PT\1650MM03), which was ruled out of order:

Amend the amendment to H.3598 (Doc. No. GGS\22222HTC03) designated #2A, by adding an appropriately numbered SECTION at the end to read:

SECTION__.   A.   This act may be cited as the "Youth Access to Tobacco Prevention Act of 2003".

B.   Section 16-17-500 of the 1976 Code, as last amended by Act 445 of 1996, is further amended to read:

"Section 16-17-500.   It shall be is unlawful for any a person to sell, furnish, give, distribute, purchase for, or provide any a minor under the age of eighteen years with cigarettes, tobacco, cigarette paper, or any substitute therefore a tobacco product. Any person violating the provisions of this section, either in person, by agent or in any other way, shall be guilty of a misdemeanor and, upon indictment and conviction, therefor shall be punished as follows:

(1)   for a first offense by a fine not exceeding twenty-five dollars;

(2)   for a second offense, by a fine not exceeding fifty dollars; and

(3)   for a third or subsequent offense, by a fine of not less than one hundred dollars or imprisonment for not more than one year nor less than sixty days, or both.

One-half of any fine imposed shall be paid to the informer of the offense and the other half to the treasurer of the county in which such conviction shall be had.

(B)   It is unlawful for a person to sell a tobacco product to an individual who does not present upon demand proper proof of age. Proof of age is not required from an individual who the person reasonably believes to be over twenty-seven years of age. Failure to require identification to verify a person's age shall be used as evidence to the knowing and intentional violation of this provision unless the person knows the individual is at least eighteen years of age. Proof that is demanded, is shown, and reasonably is relied upon for the individual's proof of age is a defense to an action initiated pursuant to this section. To determine whether a person believes an individual is at least twenty-seven years of age, a court may consider, but is not limited to considering, proof of the individual's general appearance, facial characteristics, behavior, and manners. This subsection does not apply to mail order sales.

(C)   A retail distributor of tobacco products must train its retail sales employees regarding the provisions contained in this section. In lieu of the penalties contained in subsection (F), a retail establishment that fails to comply with this provision must be fined not more than one thousand dollars. A retail establishment that provides proof that it has complied with the provisions contained in this section is not subject to this penalty.

(D)   It is unlawful for an individual less than eighteen years of age to purchase, accept receipt, attempt to purchase, or attempt to accept receipt of a tobacco product, or present or offer to a person proof of age which is false or fraudulent for the purpose of purchasing or possessing a tobacco product. However, a person less than eighteen years of age may be enlisted by local law enforcement agencies to test a community's compliance with this section and to reduce the extent to which tobacco products are sold or distributed to individuals less than eighteen years of age when the testing is under the direct supervision of the law enforcement agency and with the individual's parental consent. In addition, a person less than eighteen years of age may be enlisted by the South Carolina Department of Alcohol and Other Drug Abuse Services, or a county alcohol and drug abuse authority to test an outlet's compliance with this section, with the permission of the individual's parent or guardian, to collect data for the federally mandated Youth Access to Tobacco Study.

(E)   It is unlawful for an individual less than eighteen years of age to possess a tobacco product. This subsection does not apply to the possession of tobacco products by an individual less than eighteen years of age who delivers tobacco products pursuant to his employment responsibilities.

(F)   Tobacco products may be accessible only in vending machines located in an establishment:

(1)   which is open only to persons who are eighteen years of age or older; or

(2)   where the vending machine is under continuous control by the owner or licensee of the premises, or an employee of the owner or licensee, can be operated only upon activation by the owner, licensee, or employee before each purchase, and is not accessible to the public when the establishment is closed. The owner, licensee, or employee must demand proof of age from a prospective purchaser if he has reasonable grounds to believe the prospective purchaser is less than twenty-seven years of age. Proof that an owner, licensee, or employee demanded, was shown, and reasonably relied upon an individual's proof of age is a defense to any action brought pursuant to this subsection.

Vending machines which distribute tobacco products in establishments must meet the requirements of this section within one hundred twenty days after the effective date of this section or must be removed.

(G)   A person or individual that intentionally or knowingly violates a provision contained in this section either in person, by agent, or in any other way, is guilty of a misdemeanor and, upon conviction, must be punished as follows:

(1)   for a first offense, by a fine not less than one hundred dollars;

(2)   for a second offense, which occurs within three years of the first offense, by a fine not less than two hundred dollars; and

(3)   for a third or subsequent offense, which occurs within three years of the first offense, by a fine not less than three hundred dollars.

All fines must be placed in the state general fund and distributed in the following manner:

(a)   one-half must be distributed to the treasurer of the county in which the conviction occurred; and

(b)   one-half must be distributed to the county alcohol and drug abuse commission and used for funding youth smoking prevention programs. A violation of this subsection is triable exclusively in either municipal or magistrate court.

A violation of this section is triable exclusively in either municipal or magistrate court.

(H)   In lieu of the penalties contained in subsection (G), a court may require an individual who is less than eighteen years of age who illegally purchases or possesses a tobacco product to perform not less than twenty hours of community service for a first offense and not less than forty hours of community service for a second or subsequent offense.

(I)   As used in this section 'person' means an individual. 'Person' does not mean a firm, partnership, corporation, company, association, club, or commercial entity the person is associated with.

(J)   Notwithstanding any other provision of law, a violation of this section does not violate an establishment's beer and wine permit and is not a ground for revocation or suspension of a beer and wine permit.

(K)   A person who is less than eighteen years of age and who has been convicted of violating a provision of this section may have his record expunged upon becoming eighteen years of age if he has paid any fine imposed upon him and successfully completed any court-ordered community service."

C.   Section 16-17-501 of the 1976 Code, as added by Act 445 of 1996, is amended to read:

"Section 16-17-501.   As used in this Section and Sections 16-17-500, 16-17-502, 16-17-503, and 16-17-504:

(1)   'Distribute' means to sell, furnish, give, or provide tobacco products, including tobacco product samples, cigarette paper, or a substitute for them, to the ultimate consumer.

(2)   'Proof of age' means a driver's license or other documentary or written evidence that the individual is eighteen years of age or older identification card issued by this state, or a United States Armed Services identification card.

(3)   'Sample' means a tobacco product distributed to members of the general public at no cost for the purpose of promoting the products.

(4)   'Sampling' means the distribution of samples to members of the general public in a public place.

(5)   'Tobacco product' means a product that contains tobacco and is intended for human consumption."

D.   This section takes effect upon approval by the Governor. /

Renumber sections to conform.

Amend title to conform.

Senator LEATHERMAN raised a Point of Order that Amendment No. P2-2A was out of order inasmuch as it was not germane to the Bill.

The PRESIDENT sustained the Point of Order.

The amendment was ruled out of order.

Senators J. VERNE SMITH, RICHARDSON, O'DELL, HAYES, MARTIN, THOMAS and ALEXANDER proposed the following Amendment No 2A (GGS\22222HTC03), which was tabled:

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

/ SECTION   1.   A.   Article 25, Chapter 3, Title 12 of the 1976 Code, as amended by adding:

"Section 12-36-2647.   (A)   In addition to all other taxes/ imposed on cigarettes made of tobacco or substitutes for tobacco, there is imposed a special sales tax measured by the cigarette equal to 2.65 cents on each cigarette. This special sales tax on cigarettes is imposed; and must be reported, paid, collected, and enforced in the same manner that the license tax on cigarettes is imposed, reported, paid, enforced, and collected.

(B)   The first two and one-half percent or seven million dollars of revenue, whichever is greater, attributable to increased sales tax revenues resulting from the license tax on cigarettes imposed pursuant to this section must be deposited in a Lost Sales Fund to reimburse cigarette retailers for their losses, attributable to the cigarette tax increase, from theft or other nonsale reasons. For purposes of this subsection, the amount of loss equals the difference between the total product available for sales (beginning inventory plus purchase) and sales (the product left available less ending inventory) and must be reported to the Department of Revenue at the end of the fiscal year to be eligible for reimbursement. Each retailer is entitled to be reimbursed its pro rata share of the funds in the Lost Sales Fund, reflected by its percentage of loss, not to exceed two percent for each reporting period.

(C)   There is created in the state treasury the Medicaid Match Fund. Monies collected pursuant to this section must be credited to the Medicaid Match Fund. This fund must be separate and distinct from the general fund of the State. Monies in the fund must be used by the Department of Health and Human Services solely as the state match for federal Medicaid funding. Monies in the fund are supplementary and may not be used to replace recurring monies appropriated from the general fund of the State or from other funds for the support of the Medicaid program. The fund is exempt from any budgetary cuts or reductions caused by the lack of general fund revenues. Earnings on investments of monies in the fund must be credited to the fund and used for the same purposes as other monies in the fund. Any monies in the fund not expended during a fiscal year must be carried forward to the succeeding fiscal year and used for the same purposes."

B.   Article 25, Chapter 36, Title 12 of the 1976 Code is amended by adding:

"Section 12-36-2648.   (A)   The license taxes imposed on cigarettes by Section 12-36-2647 and by the tax imposed pursuant to Section 12-21-620 must be paid by affixing stamps to each individual package in the manner and at the time set forth in this section. A stamp evidencing the taxes levied in Sections 12-36-2647 and 12-6-620 may not be of a denomination of less than one cent and whenever the tax computed at the rate prescribed in this section is a specified amount plus a fractional part of one cent, the package must be stamped for the next full cent.

(B)   The department may authorize wholesale dealers in cigarettes to store cigarettes intended to be sold and shipped out of this State in separate compartments of their business without affixing revenue stamps. However, a wholesale dealer making shipments of cigarettes to locations out of this State shall apply to the department for a license that allows the wholesale dealer to maintain the separate compartments authorized by this subsection. A wholesale dealer in cigarettes violating the rules and regulations permitting the storage of cigarettes without affixing the stamps is liable for the penalties contained in this title.

(C)   The stamps must be affixed to each individual package by wholesalers within seventy-two hours after the products are received by them and by retailers within twenty-four hours of receipt by them of these products. In any event, these goods must be stamped before being sold. If cigarettes are manufactured within the State and sold directly to consumers, they must be stamped by the manufacturer when and as sold.

(D)   Each person or distributor of cigarettes taxable under Sections 12-36-2647 and 12-21-620, first receiving untaxed cigarettes for sale or distribution in this State, is subject to the taxes imposed in Sections 12-36-2647 and 12-21-620. Each person or distributor required to pay the taxes by affixing stamps must also make a report to the department, in the form the department prescribes, of all cigarettes and cigarette tax stamps in inventory at the beginning and end of the month, all cigarettes and cigarette tax stamps purchased during the month, all cigarettes disposed of in this State during the month, and other information required by law or considered necessary by the department. If the report indicates that the person or distributor did not stamp all cigarettes disposed of, the person or distributor shall pay the additional taxes with the report. The report and taxes, if any additional taxes are due with the report, are due no later than the twentieth day of the month next succeeding the month of the purchase or disposition.

(E)   The department must be reimbursed for the costs of cigarette stamps and the administration of the stamp program out of the revenue of the tax imposed pursuant to Section 12-21-620, but this reimbursement may not exceed three hundred thousand dollars in a fiscal year."

C.     Cigarettes held in inventory on January 1, 2004, by the person or distributor who first received the cigarettes into this State must be stamped as provided in Section 12-36-2648 of the 1976 Code as added by this section. Credit must be allowed for any taxes previously paid on the cigarettes.

D.   Section 12-21-735 of the 1976 Code is repealed.

E.   Notwithstanding the provisions of Section 12-36-2647(C) of the 1976 Code, until fiscal year 2003-2004 revenues of the tax imposed pursuant to Section 12-36-2647(A) of the 1976 Code reach $170,943,342, revenue credited to the Medicaid Match Fund established pursuant to Section 12-36-2647(C) must be allocated among health care service programs as provided in the following schedule:

PERCENTAGE OF FUND

PROGRAM                             REVENUES

(1)   Hospital Services                                 25.87%

(2)   Nursing Home Services                             4.86%

(3)   Pharmaceutical Services                             26.78%

(4)   Physician Services                                 5.99%

(5)   Dental Services                                   8.43%

(6)   Community Long Term Care                         0.95%

(7)   Other Medicaid Services                           10.52%

(8)   Family Planning                                   0.24%

(9)   SMI-Regular -Medicare                             2.19%

(10)   SMI-MAO-Medicare                               1.21%

(11)   Hospice Care Program                             0.34%

(12)   Residential Care Facilities                           1.53%

(13)   Clinical Services                                   3.31%

(14)   Durable Medical Equipment                         1.68%

(15)   Managed Care HMO                               6.09%

F.   Notwithstanding the general effective date of this act, subsection A of this section takes effect on the first day of the second month following approval of this act by the Governor. Subsections B, C, and D take effect January 1, 2004. Subsection E takes effect July 1, 2003.

SECTION   2.   Article 5, Chapter 6, Title 12 of the 1976 Code is amended by adding:

"Section 12-6-517.   (A)   This section may be cited as the Economic Recovery Tax Relief Act.

(B)   For purposes of this section:

(1)   'Board of Economic Advisors' means the Board of Economic Advisors of the State Budget and Control Board established pursuant to Section 11-9-820.

(2)   'Board of Economic Advisors revenue estimate' means a Board of Economic Advisors estimate of revenues made by October tenth of each year as required by this section.

(3)   'Individual income tax revenue' means total state individual income tax revenue for a fiscal year.

(4)   'Individual income tax general fund revenue' means individual income tax revenue reduced by amounts required to be deducted and credited to the Trust Fund for Tax Relief pursuant to Section 11-11-150. In determining individual income tax general fund revenue, the amount deducted from individual income tax revenue for credit to the Trust Fund for Tax Relief must be an amount which bears the same ratio to the total Trust Fund for Tax Relief amount for a fiscal year as individual income tax revenue bears to the sum of individual income tax revenue and corporate income tax revenue for the fiscal year.

(5)   'Base revenue' means $2,092,691,000 adjusted upward by one and one-half percent a fiscal year beginning with the fiscal year immediately succeeding the fiscal year in which individual income tax general fund revenue first equals or exceeds $2,092,691,000.

(6)   'Economic recovery revenue' means the amount by which the Board of Economic Advisors revenue estimate for individual income tax general fund revenue exceeds base revenue.

(7)   'Cigarette tax increase' means a state tax on cigarettes in excess of three and one-half mills a cigarette.

(C)   Beginning with fiscal year 2003-2004, the Comptroller General shall certify to the Board of Economic Advisors by October first following the close of the fiscal year:

(1)   base revenue;

(2)   individual income tax revenue for the fiscal year that just ended; and

(3)   individual income tax general fund revenue for the fiscal year that just ended.

(D)   Beginning with individual income tax liability for taxable years beginning after December 31,2003, and each taxable year thereafter and continuing until the date provided in subsection (H), there is allowed an Economic Recovery Tax Credit allocated among the individual income taxpayers of South Carolina as provided in subsection (E) of this section. The Economic Recovery Tax Credit is nonrefundable for individual income taxpayers. The total Economic Recovery Tax Credit allowed is an amount equal to sixty percent of the economic recovery revenue for the current fiscal year. There is no Economic Recovery Tax Credit allowed in a fiscal year in which there is no economic recovery revenue. The amount of the Economic Recovery Tax Credit allowed for a specific fiscal year is realized by an individual taxpayer for a taxable year ending on or after December thirty-first during that specific fiscal year.

(E)   The Board of Economic Advisors shall calculate and certify the total amount of the Economic Recovery Tax Credit to the Department of Revenue by October tenth of each year. The Department of Revenue shall establish a method to apply the Economic Recovery Tax Credit to individual income tax returns that meets each of the following criteria:

(1)   the amount of the Economic Recovery Tax Credit realized by an individual taxpayer must be an amount which bears the same ratio to the total amount of the Economic Recovery Tax Credit as the income tax due as shown on the taxpayer's income tax return before taking the Economic Recovery Tax Credit bears to the individual income tax revenue for the fiscal year;

(2)   the Economic Recovery Tax Credit realized by individual taxpayers must be determined by a formula that calculates the Economic Recovery Tax Credit in terms of a percentage reduction to the state income tax liability of each individual; and,

(3)   the Economic Recovery Tax Credit does not produce a negative income tax liability for individual income taxpayers.

(F)   The individual income tax rates imposed for each income bracket pursuant to Section 12-6-510 are reduced by one-half of a percentage point effective for taxable years beginning on or after the first day of January immediately following the close of the fiscal year in which a Board of Economic Advisors revenue estimate provides the total Economic Recovery Tax Credit for the current fiscal year is sufficient to offset a one-half percentage point reduction in individual income tax rates for each income bracket during the current calendar year.

(G)   After the income tax rate reduction provided in subsection (F) is implemented, the rates for each income bracket are permanently reduced by one and one-half of a percentage point effective for taxable years beginning on or after the first day of January immediately following the close of the fiscal year in which each of the following conditions are met:

(1)   the current fiscal year Board of Economic Advisors revenue estimate provides that the total Economic Recovery Tax Credit for the current fiscal year is sufficient to offset a one and one-half percentage point reduction in individual income tax rates for each income bracket during the current calendar year; and

(2)   in each of the two fiscal years immediately preceding the current fiscal year, the Economic Recovery Tax Credit was sufficient to offset a one and one-half percentage point reduction in state individual income tax rates for each income bracket based upon actual individual income tax revenue as certified by the Comptroller General.

(H)   The Economic Recovery Tax Credit provided by this section terminates effective the first taxable year in which the permanent reduction to individual income tax rates provided by subsection (G) takes effect.

(I)(1)   The Department of Revenue shall apply the income tax rate reductions provided in subsections (F) and (G) to the then applicable rates, and these rates as reduced, apply in lieu of the former rates.

(2)   After the income tax rate reductions provided for in subsection (F) take effect, the Department of Revenue shall calculate the effective tax rates for each income bracket resulting from the application of the Economic Recovery Tax Credit for each taxable year that the Economic Recovery Tax Credit is allowed. These effective rates must be printed with tax tables and posted on the department's web site."

SECTION   3.   Except where otherwise provided, this act takes effect upon approval by the Governor. /

Renumber sections to conform.

Amend title to conform.

Senator J. VERNE SMITH explained the amendment.

Senator GREGORY argued in favor of the adoption of the amendment.

Senator MARTIN argued in favor of the adoption of the amendment.

Senator ELLIOTT raised a Point of Order that the amendment was out of order inasmuch as it was in violation of Section 11-11-440 of the S. C. Code of Laws, 1976, as amended, which prohibits "any general tax increase... or new general taxes in the permanent provisions of the State General Appropriation Act" and further provides that "such general tax increases or new general taxes must be enacted only by separate act."

The PRESIDENT overruled the Point of Order.

The question then was the adoption of the amendment.

Senator LAND moved to lay the amendment on the table.

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

Anderson                  Branton                   Courson
Drummond                  Elliott                   Ford
Glover                    Grooms                    Hawkins
Holland                   Hutto                     Jackson
Knotts                    Kuhn                      Land
Leventis                  Malloy                    Matthews
McConnell                 McGill                    Mescher
Moore                     Patterson                 Peeler
Pinckney                  Rankin                    Reese
Setzler

Alexander                 Cromer                    Fair
Giese                     Gregory                   Hayes
Leatherman                Martin                    O'Dell
Ravenel                   Richardson                Ritchie
Ryberg *                  Short                     Smith, J. Verne
Thomas                    Verdin                    Waldrep

*This Senator was not present in the Chamber at the time the vote was taken and the vote was recorded by leave of the Senate, with unanimous consent.

The amendment was tabled.

Senator ELLIOTT rose for an Expression of Personal Interest.

Senators THOMAS, KUHN, RAVENEL, CROMER, MESCHER and FAIR proposed the following Amendment No. 8 (GGS\22183HTC03), which was tabled:

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

/ SECTION   _____.   A.   Chapter 36, Title 12 of the 1976 Code is amended by adding:

Section 12-36-1110.   (A)   An additional tax equal to two percent is imposed on amounts taxable pursuant to this chapter, but this tax does not apply to items subject to a maximum tax pursuant to Section 12-36-2110. The Department of Revenue shall prescribe amounts that may be added to sales price as a result of this additional tax.

(B)   Notwithstanding any other provision of law providing for the use of sales and use tax revenue, all revenue of the tax imposed pursuant to this section must be credited to a fund in the State Treasury separate and distinct from the general fund and all other funds styled the Tax Relief and Education Fund. Earnings on this fund must be credited to it and any unexpended balance in this fund at the end of a fiscal year remains in the fund and is carried forward in the fund to the succeeding fiscal year and must be used for the same purposes. Revenue collected pursuant to this section must not be considered in any formula providing for minimum appropriations. Revenue in the fund must be used each fiscal year as follows:

(1)   Fifty-eight million two hundred fifty-five thousand dollars is appropriated each fiscal year to the school districts of the State under the Education Finance Act formula to increase base student cost. This annual appropriation is in addition to and may not supplant other amounts appropriated pursuant to the Education Finance Act in the annual general appropriations act and must be distributed in the manner and at the time other EFA funds are distributed;

(2)   Fifty-five million dollars is allocated for the credits replacing the LOST credits pursuant to Section 12-37-3010(E);

(3)   The remaining revenue must be distributed as follows:

(a)   Fifty-five percent must be paid to county treasurers and used to reimburse local property taxing entities for the credit allowed pursuant to Section 12-37-3010(A);

(b)   Forty-five percent must be paid to county treasurers and used to reimburse local property taxing entities for the credit allowed pursuant to Section 12-37-3010(B).

(4)   The payments pursuant to item (3)(a) of this section must be distributed by the Comptroller General monthly to counties in the proportion that the total of assessed value of private passenger motor vehicles and motorcycles in the county is of the total of such assessed value statewide. The payments pursuant to item (3)(b) of this section must be distributed by the Comptroller General to counties on a per capita basis using the most recent United States Census data. The payments must be scheduled in six equal installments beginning in January of each fiscal year.

(5)   Effective beginning with distributions pursuant to this section after June 30, 2004, twenty percent of projected annual revenue growth of the tax imposed pursuant to subsection (A) of this section must be distributed annually to counties for the account of school districts determined to be inequitably funded by the State Department of Education. This revenue must be distributed on a per pupil basis."

B.1.   Chapter 37, Title 12 of the 1976 Code is amended by adding:

Section 12-37-3010(A)   There is allowed a credit against the property tax due on a private passenger motor vehicle as defined in Section 56-3-630 and a motorcycle, but the credit does not apply to:

(1)   property taxes imposed for bonded indebtedness for capital construction and property taxes imposed to make payments pursuant to a lease-purchase agreement or other financing instruments for capital construction; and

(2)   property tax millage imposed for operating purposes in excess of the amount of such millage imposed by a property taxing entity for property tax year 2002.

(B)   There is allowed a credit as calculated pursuant to this section against any remaining property tax due after the exemptions allowed pursuant to Sections 12-37-250 and 12-37-251 on an owner-occupied residence classified for property tax purposes pursuant to Section 12-43-220(c) but the credit does not apply to:

(1)   property taxes imposed for bonded indebtedness for capital contributions and property tax imposed to payments pursuant to a lease-purchase agreement or other financing instruments for capital construction;

(2)   property tax millage imposed for operating purposes in excess of the amount of such millage imposed by a property taxing entity for property tax year 2002.

(C)   The millage rate that is the subject of the limitation imposed pursuant to subsection (A)(2) and (B)(2) must be adjusted after reassessments to an equivalent millage rate as the Department of Revenue shall prescribe.

(D)(1)   The credit allowed pursuant to subsection (A) of this Section is an amount determined by multiplying the amount received by the county pursuant to Section 12-36-1110(B)(3)(a) in a fiscal year by a fraction in which the assessed value of the vehicle is the numerator and the assessed value of all eligible vehicles in the county is the denominator. This credit and the reimbursement for it is allocated to property taxing entities in the proportion that the tax resulting from the millage against which the credit is allowed is of the total of such tax on the vehicle.

(2)   The credit allowed pursuant to subsection (B) of this section is an amount determined by multiplying the amount received by the county pursuant to Section 12-36-1110(B)(3)(b) by a fraction in which the tax to which to credit applies remaining due on the eligible residence after other exemptions are applied is the numerator and the tax remaining are due on all eligible residences in the county after other exemptions are applied is the denominator. This credit and the reimbursement for it is allocated to property taxing entities in the proportion that the entity's tax eligible for credit remaining due on the residence is of the total of such tax due on the residence.

(E)   In a county area in which is imposed the local option sales tax pursuant to Article 1, Chapter 10, of Title 4 (LOST) on July 1, 2003, where the credits allowed pursuant to this subsection overlap with the credits allowed pursuant to LOST, the credit allowed by this section replaces the credit allowed pursuant to LOST and the amount of the LOST credit is deemed a distribution from the LOST County/Municipal Revenue Fund. If the LOST is imposed in a county after June 30, 2003, the credit allowed by this section applies only to tax liability remaining after applying the LOST credit and the amount of unused credit provided pursuant to this section is credited back to the Tax Relief and Education Fund."

C.1.   Section 6-1-320(A) of the 1976 Code, as added by Act 114 of 1999, is further amended to read:

"(A) Notwithstanding Section 12-37-251(E), A local governing body may not increase the millage rate imposed for general operating purposes above the rate imposed for such purposes for the preceding tax year only to the extent of the increase in the consumer price index for the preceding calendar year. However, in the year in which a reassessment program is implemented, the rollback millage, as calculated pursuant to Section 12-37-251(E), must be used in lieu of the previous year's millage rate."

2.   Section 6-1-320(C of the 1976 Code, as added by Act 138 of 1997, is amended to read:

"(C)   The millage rate limitation provided for in subsection (A) of this section may be overridden and the millage rate may be further increased by a positive majority vote of the appropriate governing body. The vote must be taken at a specially-called meeting held solely for the purpose of taking a vote to increase the millage rate. The governing body must provide public notice of the meeting notifying the public that the governing body is meeting to vote to override the limitation and increase the millage rate. Public comment must be received by the governing body prior to the override vote upon a favorable vote of a majority of the qualified electors of the jurisdiction voting in a referendum held for this purpose. An election held pursuant to this subsection may be held only at the time of the general election."

3.   The General Assembly finds that the payments to counties pursuant to the provisions of Section 12-36-1110(B)(2) and (3)of the 1976 Code, as added by this act, considered in combination with amendments to Section 6-1-320 of the 1976 Code as amended in this act, do not reduce the authority of counties to raise revenue in the aggregate and therefore the provisions of this act are not subject to the super majority requirements of Section 4-9-55(B) of the 1976 Code.

D.   With respect to the tax imposed pursuant to Article 11, Chapter 36, Title 12 of the 1976 Code, as added by subsection A of this section, the provisions of Section 4-10-350(F) and (G) of the 1976 Code apply, mutatis mutandis.

E.   Notwithstanding the general effective date of this act, subsection A of this section takes effect July 1, 2003. The provisions of Section 12-37-3010(A) of the 1976 Code, as contained in subsection B of this section, take effect upon approval of this act by the Governor and apply for motor vehicle property tax years beginning after December, 2003. The provisions of Section 12-37-3010(B) of the 1976 Code, as contained in subsection B of this section take effect upon approval of this act by the Governor and apply for property tax years beginning after 2002. The amendments to Section 6-1-320(A) and (C) of the 1976 Code as contained in subsection C of this section are effective upon the approval of this act by the Governor. /

Renumber sections to conform.

Amend title to conform.

Senator THOMAS explained the amendment.

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

The PRESIDENT overruled the Point of Order.

Senator THOMAS continued explaining the amendment.

At 4:21 P.M., Senator CROMER made the point that a quorum was not present. It was ascertained that a quorum was present. The Senate resumed.

Senator THOMAS continued explaining the amendment.

Senator RAVENEL spoke on the amendment.

At 4:28 P.M., Senator McCONNELL assumed the Chair.

Senator RAVENEL spoke on the amendment.

Senator KUHN spoke on the amendment.

Senator LEATHERMAN spoke on the amendment.

Senator LEATHERMAN moved to lay the amendment on the table.

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

Drummond                  Elliott                   Gregory
Hayes                     Land                      Leatherman
Martin                    O'Dell                    Peeler
Rankin

Alexander                 Anderson                  Branton
Cromer                    Fair                      Ford
Giese                     Grooms                    Hawkins
Holland                   Jackson                   Knotts
Kuhn                      Malloy                    McConnell
McGill                    Mescher                   Moore
Patterson                 Ravenel                   Reese
Richardson                Ritchie                   Ryberg *
Setzler                   Short                     Thomas
Verdin                    Waldrep

*This Senator was not present in the Chamber at the time the vote was taken and the vote was recorded by leave of the Senate, with unanimous consent.

The Senate refused to table the amendment. The question then was the adoption of the amendment.

Senator MARTIN argued contra to the adoption of the amendment.

Senator MARTIN moved to lay the amendment on the table.

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

Alexander                 Drummond                  Elliott
Glover                    Gregory                   Hayes
Hutto                     Land                      Leatherman
Malloy                    Martin                    Matthews
McGill                    Moore                     O'Dell
Peeler                    Pinckney                  Rankin
Reese                     Richardson                Short

Anderson                  Branton                   Cromer
Fair                      Ford                      Grooms
Hawkins                   Holland                   Jackson
Knotts                    Kuhn                      McConnell
Mescher                   Ravenel                   Setzler
Thomas                    Verdin                    Waldrep

At 5:47 P.M., the PRESIDENT assumed the Chair.

The amendment was tabled.

Property taxes in the State of South Carolina have been a heavy burden our citizens have endured for too long. They are the most egregious of all taxes the citizens of South Carolina pay. In many cases people who have lived a lifetime in their homes are forced to sell them because they are unable to pay what is, in essence, a lien on their homes. These citizens, many of whom are on fixed incomes, suffer this anxiety each year when the property tax bill comes.

However, as a Senator of the State of South Carolina, I am obligated to evaluate legislation that may have long-term ramifications and could have an unintended, adverse effect on our state's budget and the long-term health of our economy. It is our belief that, if and when we engage in a complete overhaul of the current tax structure, we must proceed judiciously and with great care. For those reasons, we should immediately study property tax relief to accomplish it the right way.

Senator RICHARDSON proposed the following Amendment No. 10C (PT\1653MM03), which was tabled:

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

/ SECTION   __.   A.   Article 25, Chapter 3, Title 12 of the 1976 Code, as amended by adding:

"Section 12-36-2647.   (A)   In addition to all other taxes/ imposed on cigarettes made of tobacco or substitutes for tobacco, there is imposed a special sales tax measured by the cigarette equal to 2.65 cents on each cigarette. This special sales tax on cigarettes is imposed; and must be reported, paid, collected, and enforced in the same manner that the license tax on cigarettes is imposed, reported, paid, enforced, and collected.

(B)   The first two and one-half percent or seven million dollars of revenue, whichever is greater, attributable to increased sales tax revenues resulting from the license tax on cigarettes imposed pursuant to this section must be deposited in a Lost Sales Fund to reimburse cigarette retailers for their losses, attributable to the cigarette tax increase, from theft or other nonsale reasons. For purposes of this subsection, the amount of loss equals the difference between the total product available for sales (beginning inventory plus purchase) and sales (the product left available less ending inventory) and must be reported to the Department of Revenue at the end of the fiscal year to be eligible for reimbursement. Each retailer is entitled to be reimbursed its pro rata share of the funds in the Lost Sales Fund, reflected by its percentage of loss, not to exceed two percent for each reporting period.

(C)   There is created in the state treasury the Medicaid Match Fund. Monies collected pursuant to this section must be credited to the Medicaid Match Fund. This fund must be separate and distinct from the general fund of the State. Monies in the fund must be used by the Department of Health and Human Services solely as the state match for federal Medicaid funding. Monies in the fund are supplementary and may not be used to replace recurring monies appropriated from the general fund of the State or from other funds for the support of the Medicaid program. The fund is exempt from any budgetary cuts or reductions caused by the lack of general fund revenues. Earnings on investments of monies in the fund must be credited to the fund and used for the same purposes as other monies in the fund. Any monies in the fund not expended during a fiscal year must be carried forward to the succeeding fiscal year and used for the same purposes."

B.   Article 25, Chapter 36, Title 12 of the 1976 Code is amended by adding:

"Section 12-36-2648.   (A)   The license taxes imposed on cigarettes by Section 12-36-2647 and by the tax imposed pursuant to Section 12-21-620 must be paid by affixing stamps to each individual package in the manner and at the time set forth in this section. A stamp evidencing the taxes levied in Sections 12-36-2647 and 12-6-620 may not be of a denomination of less than one cent and whenever the tax computed at the rate prescribed in this section is a specified amount plus a fractional part of one cent, the package must be stamped for the next full cent.

(B)   The department may authorize wholesale dealers in cigarettes to store cigarettes intended to be sold and shipped out of this State in separate compartments of their business without affixing revenue stamps. However, a wholesale dealer making shipments of cigarettes to locations out of this State shall apply to the department for a license that allows the wholesale dealer to maintain the separate compartments authorized by this subsection. A wholesale dealer in cigarettes violating the rules and regulations permitting the storage of cigarettes without affixing the stamps is liable for the penalties contained in this title.

(C)   The stamps must be affixed to each individual package by wholesalers within seventy-two hours after the products are received by them and by retailers within twenty-four hours of receipt by them of these products. In any event, these goods must be stamped before being sold. If cigarettes are manufactured within the State and sold directly to consumers, they must be stamped by the manufacturer when and as sold.

(D)   Each person or distributor of cigarettes taxable under Sections 12-36-2647 and 12-21-620, first receiving untaxed cigarettes for sale or distribution in this State, is subject to the taxes imposed in Sections 12-36-2647 and 12-21-620. Each person or distributor required to pay the taxes by affixing stamps must also make a report to the department, in the form the department prescribes, of all cigarettes and cigarette tax stamps in inventory at the beginning and end of the month, all cigarettes and cigarette tax stamps purchased during the month, all cigarettes disposed of in this State during the month, and other information required by law or considered necessary by the department. If the report indicates that the person or distributor did not stamp all cigarettes disposed of, the person or distributor shall pay the additional taxes with the report. The report and taxes, if any additional taxes are due with the report, are due no later than the twentieth day of the month next succeeding the month of the purchase or disposition.

(E)   The department must be reimbursed for the costs of cigarette stamps and the administration of the stamp program out of the revenue of the tax imposed pursuant to Section 12-21-620, but this reimbursement may not exceed three hundred thousand dollars in a fiscal year."

C.     Cigarettes held in inventory on January 1, 2004, by the person or distributor who first received the cigarettes into this State must be stamped as provided in Section 12-36-2648 of the 1976 Code as added by this section. Credit must be allowed for any taxes previously paid on the cigarettes.

D.   Section 12-21-735 of the 1976 Code is repealed.

E.   Notwithstanding the provisions of Section 12-36-2647(C) of the 1976 Code, until fiscal year 2003-2004 revenues of the tax imposed pursuant to Section 12-36-2647(A) of the 1976 Code reach $170,943,342, revenue credited to the Medicaid Match Fund established pursuant to Section 12-36-2647(C) must be allocated among health care service programs as provided in the following schedule:

PERCENTAGE OF FUND

PROGRAM                           REVENUES

(1)   Hospital Services                               25.87%

(2)   Nursing Home Services                           4.86%

(3)   Pharmaceutical Services                           26.78%

(4)   Physician Services                               5.99%

(5)   Dental Services                                 8.43%

(6)   Community Long Term Care                       0.95%

(7)   Other Medicaid Services                         10.52%

(8)   Family Planning                                 0.24%

(9)   SMI-Regular -Medicare                           2.19%

(10)   SMI-MAO-Medicare                             1.21%

(11)   Hospice Care Program                           0.34%

(12)   Residential Care Facilities                         1.53%

(13)   Clinical Services                                 3.31%

(14)   Durable Medical Equipment                       1.68%

(15)   Managed Care HMO                             6.09%"

F.   Notwithstanding the general effective date of this section, subsection A of this section takes effect on the first day of the second month following approval of this act by the Governor. Subsections B, C, and D take effect January 1, 2004. Subsection E takes effect July 1, 2003.

SECTION   ___.   Article 5, Chapter 6, Title 12 of the 1976 Code is amended by adding:

"Section 12-6-517.   (A)   This section may be cited as the Economic Recovery Tax Relief Act.

(B)   For purposes of this section:

(1)   'Board of Economic Advisors' means the Board of Economic Advisors of the State Budget and Control Board established pursuant to Section 11-9-820.

(2)   'Board of Economic Advisors revenue estimate' means a Board of Economic Advisors estimate of revenues made by October tenth of each year as required by this section.

(3)   'Individual income tax revenue' means total state individual income tax revenue for a fiscal year.

(4)     'Individual income tax general fund revenue' means individual income tax revenue reduced by amounts required to be deducted and credited to the Trust Fund for Tax Relief pursuant to Section 11-11-150. In determining individual income tax general fund revenue, the amount deducted from individual income tax revenue for credit to the Trust Fund for Tax Relief must be an amount which bears the same ratio to the total Trust Fund for Tax Relief amount for a fiscal year as individual income tax revenue bears to the sum of individual income tax revenue and corporate income tax revenue for the fiscal year.

(5)   'Base revenue' means $2,092,691,000 adjusted upward by one and one-half percent a fiscal year beginning with the fiscal year immediately succeeding the fiscal year in which individual income tax general fund revenue first equals or exceeds $2,092,691,000.

(6)   'Economic recovery revenue' means the amount by which the Board of Economic Advisors revenue estimate for individual income tax general fund revenue exceeds base revenue.

(7)   'Cigarette tax increase' means a state tax on cigarettes in excess of three and one-half mills a cigarette.

(C)   Beginning with fiscal year 2003-2004, the Comptroller General shall certify to the Board of Economic Advisors by October first following the close of the fiscal year:

(1)   base revenue;

(2)   individual income tax revenue for the fiscal year that just ended; and

(3)   individual income tax general fund revenue for the fiscal year that just ended.

(D)   Beginning with individual income tax liability for taxable years beginning after December 31,2003, and each taxable year thereafter and continuing until the date provided in subsection (H), there is allowed an Economic Recovery Tax Credit allocated among the individual income taxpayers of South Carolina as provided in subsection (E) of this section. The Economic Recovery Tax Credit is nonrefundable for individual income taxpayers. The total Economic Recovery Tax Credit allowed is an amount equal to forty percent of the economic recovery revenue for the current fiscal year. There is no Economic Recovery Tax Credit allowed in a fiscal year in which there is no economic recovery revenue. The amount of the Economic Recovery Tax Credit allowed for a specific fiscal year is realized by an individual taxpayer for a taxable year ending on or after December thirty-first during that specific fiscal year.

(E)   The Board of Economic Advisors shall calculate and certify the total amount of the Economic Recovery Tax Credit to the Department of Revenue by October tenth of each year. The Department of Revenue shall establish a method to apply the Economic Recovery Tax Credit to individual income tax returns that meets each of the following criteria:

(1)   the amount of the Economic Recovery Tax Credit realized by an individual taxpayer must be an amount which bears the same ratio to the total amount of the Economic Recovery Tax Credit as the income tax due as shown on the taxpayer's income tax return before taking the Economic Recovery Tax Credit bears to the individual income tax revenue for the fiscal year;

(2)   the Economic Recovery Tax Credit realized by individual taxpayers must be determined by a formula that calculates the Economic Recovery Tax Credit in terms of a percentage reduction to the state income tax liability of each individual; and,

(3)   the Economic Recovery Tax Credit does not produce a negative income tax liability for individual income taxpayers.

(F)   The individual income tax rates imposed for each income bracket pursuant to Section 12-6-510 are reduced by one-half of a percentage point effective for taxable years beginning on or after the first day of January immediately following the close of the fiscal year in which a Board of Economic Advisors revenue estimate provides the total Economic Recovery Tax Credit for the current fiscal year is sufficient to offset a one-half percentage point reduction in individual income tax rates for each income bracket during the current calendar year.

(G)   After the income tax rate reduction provided in subsection (F) is implemented, the rates for each income bracket are permanently reduced by one and one-half of a percentage point effective for taxable years beginning on or after the first day of January immediately following the close of the fiscal year in which each of the following conditions are met:

(1)   the current fiscal year Board of Economic Advisors revenue estimate provides that the total Economic Recovery Tax Credit for the current fiscal year is sufficient to offset a one and one-half percentage point reduction in individual income tax rates for each income bracket during the current calendar year; and

(2)   in each of the two fiscal years immediately preceding the current fiscal year, the Economic Recovery Tax Credit was sufficient to offset a one and one-half percentage point reduction in state individual income tax rates for each income bracket based upon actual individual income tax revenue as certified by the Comptroller General.

(H)   The Economic Recovery Tax Credit provided by this section terminates effective the first taxable year in which the permanent reduction to individual income tax rates provided by subsection (G) takes effect.

(I)(1)   The Department of Revenue shall apply the income tax rate reductions provided in subsections (F) and (G) to the then applicable rates, and these rates as reduced, apply in lieu of the former rates.

(2)   After the income tax rate reductions provided for in subsection (F) take effect, the Department of Revenue shall calculate the effective tax rates for each income bracket resulting from the application of the Economic Recovery Tax Credit for each taxable year that the Economic Recovery Tax Credit is allowed. These effective rates must be printed with tax tables and posted on the department's web site."

SECTION   __.   Notwithstanding Section 12-36-910 of the 1976 Code, from August 1, 2003, through January 31, 2004, the State shall impose an additional sales tax equal to one percent of the gross proceeds of sale on every person engaged or continuing within this State in the business of selling tangible personal property at retail. During this period only, the additional one percent sales tax imposed pursuant to this section does not apply to food items which may lawfully be purchased with United States Department of Agriculture food coupons. Revenues generated by this additional sales tax must be deposited directly upon collection into a separate and distinct fund in the State Department of Education and distributed in a like manner as funds distributed pursuant to the Education Finance Act.

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

Renumber sections to conform.

Amend title to conform.

Senator RICHARDSON explained the amendment.

Senator McCONNELL moved to lay the amendment on the table.

A roll call vote was ordered.

At 6:30 P.M., on motion of Senator LEATHERMAN, with unanimous consent, the Senate receded from business not to exceed fifteen minutes.

At 7:55 P.M., the Senate resumed.

On motion of Senator McCONNELL, with unanimous consent, the request for a roll call vote was withdrawn.

On motion of Senator McCONNELL, with unanimous consent, the motion to table was withdrawn.

On motion of Senator McCONNELL, with unanimous consent, the motion to reconsider the vote whereby H. 3749, the General Appropriation Bill, was given a third reading, was taken up for immediate consideration.

Senator McCONNELL moved to table the motion to reconsider.

The motion to reconsider the vote whereby H. 3749, the General Appropriation Bill, was given a third reading, was tabled.

The Bill was ordered returned to the House with amendments.

The Senate resumed consideration of H. 3598.

On motion of Senator McCONNELL, debate on H. 3598 was interrupted by adjournment.

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

Initial Appointment, Beaufort County Magistrate, with term to commence April 30, 2002, and to expire April 30, 2006

Terry Allen Finger, P. O. Box 24005, Hilton Head, S.C. 29925

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

Reappointment, Chester County Magistrate, with term to commence April 30, 2003, and to expire April 30, 2007

Dianne Hitt Moore, P. O. Box 580, Chester, S.C. 29706

Having received a favorable report from the Fairfield County Delegation, the following appointments were confirmed in open session:

Reappointment, Fairfield County Magistrate, with term to commence April 30, 2003, and to expire April 30, 2007

Robert F. Williams, P. O. Box 264, Great Falls, S.C. 29055

Reappointment, Fairfield County Magistrate, with term to commence April 30, 2003, and to expire April 30, 2007

William F. Pope, Sr., 115-B South Congress Street, Winnsboro, S.C. 29180

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

Reappointment, Greenwood County Magistrate, with term to commence April 30, 1999, and to expire April 30, 2003

Leisa R. Hotchkiss, 528 Monument Street, Greenwood, S.C. 29646

Having received a favorable report from the Laurens County Delegation, the following appointments were confirmed in open session:

Reappointment, Laurens County Magistrate, with term to commence April 30, 2003, and to expire April 30, 2007

Glynda L. Tucker, 10470 Highway 14, Gray Court, S.C. 29645

Reappointment, Laurens County Magistrate, with term to commence April 30, 2003, and to expire April 30, 2007

James A. Davis, 9320 Highway 221-S, Waterloo, S.C. 29384

Senator McCONNELL moved that, when the Senate adjourns on Friday, May 23, 2003, it stand adjourned to meet next Tuesday, May 27, 2003, at 12:00 Noon, which motion was adopted.

At 8:01 P.M., on motion of Senator McCONNELL, the Senate adjourned to meet tomorrow at 11:00 A.M. under the provisions of Rule 1 for the purpose of taking up local matters and uncontested matters which have previously received unanimous consent to be taken up.

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