Weekly Update 4.8.2011

This Week at the Statehouse
April 8th, 2011

Angel Investment

H.3779, the Bill Wylie Entrepreneurship Act, was approved by the full House Ways and Means Committee this week. The bill could come to the House floor for debate as early as next week.

This legislation will allow “Angel Investors” to claim an income tax credit for providing funding to small business start-ups in our state.

Federal Update

This week the U.S. Senate voted to repeal the 1099 reporting requirement, which would have required any business that purchases more than $600 worth of goods or services from another business to submit a 1099 tax form to the Internal Revenue Service (IRS) beginning in 2012, a measure to help pay for the deficit created by the health care reform bill. The repeal was supported by South Carolina’s United States Senators Lindsey Graham and Jim DeMint. The legislation now heads to President Obama’s desk for his signature.

Redistricting

The South Carolina House Redistricting Subcommittee will hold an Upstate public input meeting concerning the 2011 redistricting of the state’s 124 S.C. House Districts and U.S. Congressional Districts next week in Greenville.

To take a closer look at the new Census data for South Carolina, please click here. In addition, the SC House and Senate have set up websites to update the public on the redistricting process. For more information visit http://redistricting.schouse.gov/ or http://redistricting.scsenate.gov/.

Tort Reform

The Senate began debate on H.3375, tort reform legislation, this week. The business community urges the Senate to restore the legislation to versions introduced by Senate Majority Leader Harvey Peeler (Cherokee), Senate Rules Committee Chairman Larry Martin (Pickens) and House Speaker Bobby Harrell (Charleston).

The current bill, which was amended in committee, has several provisions that are opposed by the business community. One specific provision is the amendment to the cap on punitive damages, which renders the cap essentially meaningless. S.C. is the only Southeastern state without a cap on punitive damages. Additionally, the Senate Judiciary Committee’s version of the legislation renders the admissibility of the non-use of seat belts complicated and ineffective in most cases. The legislative repeal of the Branham v. Ford Motor Company decision is also strongly opposed and would place South Carolina in a small minority of states that employs the consumer expectations test.

Unemployment Insurance

This week, both a House and a Senate committee discussed UI reform. While both the House and Senate committees approved legislation, neither bill includes a single amendment that would provide relief to rate classes 1-13. Now, it is apparent that any reform to the UI system that would provide relief to rate classes 13-20 will have to take place during debate on the House and Senate floor. It is important to keep in mind that the Senate still has to take up the budget, has another week-long furlough is approaching and the redistricting process for both Chambers is just getting underway. Timing is becoming an issue. 

Here's a brief recap of what transpired this week in committee:

House Ways and Means Committee

On Tuesday, the Ways and Means Committee took up H. 3762, a bill introduced by Chairman Dan Cooper (Anderson).  Currently, H. 3762 is a skeletal bill that simply extends the payback period for the federal loan to the maximum amount of time allowed.  One major concern that SCDEW officials have with this proposal is that S.C. would have to pay additional interest on the loan and by delaying the loan payback; S.C. will also not be replenishing the UI trust fund during that extension.

The full committee voted the bill out of committee with the understanding that amendments will be offered on the House floor during debate.  Also, the ad hoc subcommittee that was working on the House bill will continue to meet (possibly next week) to hear testimony from employers and discuss existing scenarios and any new proposals.

Rep. Mike Anthony (Union) introduced two amendments during the committee meeting but quickly withdrew them once it was decided that the committee will offer amendments during debate on the House floor.  Rep. Anthony's first amendment was to cap new staffing agencies coming into the state at rate class 12. His second amendment was to charge all employees in S.C. $10 per month out of their paychecks to pay back the federal loan. 

The State Unemployment Trust Fund Authority Ad Hoc Subcommittee of the House Ways and Means Committee will meet Tuesday, April 12, 2011. The following will be reviewed:

  • H. 3762 Unemployment Insurance Trust Fund
  • The Subcommittee is accepting public testimony on the SUTA rate structure and H. 3762

Senate Labor, Commerce, and Industry (LCI) Committee

Today, the Senate LCI committee took up S. 478, a bill introduced by Chairman Greg Ryberg (Aiken).  Among the amendments adopted to S. 478 this morning were:

  • The "anomaly" - 2500+ companies had a positive UI balance, meaning during the past 7 years they had paid more into the UI system than unemployment benefit charges filed against them.  Under this amendment, these companies will be placed in rate class 12.  By doing this, all companies in rate classes 1-12 will have a positive balance history and all companies in rate class 13-20 will have a negative balance history. 
  • Call back provision - temporary workers will continue to call in each week to their temporary staff employers to see if any jobs have become available. 
  • Seasonal workers - employees who are employed by a seasonal employer will only be eligible for unemployment benefits if they lose their job during that particular season. Once the season ends, the employee cannot file for unemployment benefits against the seasonal employer.
  • New Companies - placing new companies relocating to S.C. in rate class 12.  They would be there for one year and could quickly move to a lower rate class depending on year one experience.
Upcoming Events
The South Carolina House Redistricting Subcommittee will hold its Upstate public input meeting on the 2011 redistricting of the state’s 124 House and U.S. Congressional districts beginning at 5:30 p.m. on April 13th in the Greenville County Council Chambers, 301 University Ridge (County Square), Greenville.