View from the Dome

March 4, 2017

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The House of Representatives spent considerable time on the floor this week passing three of their top legislative priorities - infrastructure funding, pension reform and Real ID legislation. The Senate also adopted their version of pension reform this week.

APPOINTMENT

On Tuesday, the Senate Finance Committee unanimously approved Governor Henry McMaster's nomination of Mr. W. Hartley Powell as the director of the Department of Revenue. The appointment will now go before the full Senate.

BUDGET

The Ways and Means Committee passed a version of the state budget. It is being printed and, pursuant to the rules of the House, will sit on House members' desks for one week prior to full floor debate. That debate is expected to begin on March 13. The Senate Finance subcommittees continued hearing state agency budget requests this week. The technical college system presented its budget to the Senate Finance Higher Education subcommittee on Wednesday. In addition to addressing the budget request of the technical college system, Dr. Tim Hardee, President of the State Board for Technical and Comprehensive Education, told the subcommittee his goals moving forward are to focus on workforce development, work more closely with the K-12 community, and provide a foundation to insure technical colleges remain affordable and accessible to every student.

Individual state agency budget requests can be found here.

GENERAL BUSINESS

H. 3651, which would prohibit the Municipal Association of South Carolina or any other non-governmental entity from collecting a business license tax levied on the sale of telecommunication services by a municipality, was recommitted to the House Labor, Commerce and Industry Committee. It was reported out of committee on February 15. In addition, H. 3650, known as the Business License Tax Standardization Act, was also recommitted to the House Labor, Commerce and Industry Committee.

HEALTHCARE

On Wednesday, a subcommittee of the Senate Medical Affairs Committee took testimony on S. 345 (Senator Davis). The bill would allow certain nursing professionals to provide non-controlled prescription drugs. The committee adjourned debate on the bill without taking action.

HIGHER EDUCATION

H. 3793 was reported favorably out of the House Education and Public Works Committee and is on the House calendar for debate. The bill authorizes certain doctoral degrees at three additional colleges - Francis Marion University, The College of Charleston and Coastal Carolina University. No state money may be appropriated for the operation of the degree programs.

HIGHWAY INFRASTRUCTURE

On Wednesday, the House of Representatives passed H. 3516 (Reps. Simrill, Lucas, White, G. M. Smith, Pope and others), the highway infrastructure funding proposal, by a vote of 97-18. The plan, which would raise an estimated $600 million annually for road needs, as passed:

  • raises the gas tax by 10 cents, to 26 cents per gallon, over the next five years;
  • increases the sales tax cap on vehicles from $300 to $500 annually;
  • increases the motor vehicle registration fee from $20 to $40;
  • creates a biennial fee of $60 for hybrid vehicles and $120 for electric vehicles;
  • creates a $250 one-time vehicle registration fee for people moving into SC (active duty military are exempt); and
  • creates a "road user fee" for out-of-state truckers based on the miles they drive.

The bill also reforms the governance of the SCDOT Commission by having the governor appoint the commissioners with approval by the General Assembly. Current SCDOT commissioners are appointed by their local legislative delegations. Our state's 16 cent per gallon gas tax, the primary source of funding for infrastructure repairs and improvements, has not been increased since 1987 and has never been adjusted for inflation. Finding a long-term solution for our road needs has been a top priority of the general public, legislative leaders and many in the business community for several years. The House of Representatives passed a similar plan in 2015, but it was filibustered and the Senate never acted on the proposal. After receiving routine third reading on Thursday, the bill now goes to the Senate for consideration.

JUDICIAL / LEGAL

On Wednesday, a subcommittee of the Senate Banking and Insurance Committee took testimony on S. 349 (Senators Gregory, Peeler and Campbell). The bill would modify the exemptions relating to workers' compensation to include the Longshore and Harbor Workers' Compensation Act and the Merchant Marine Act. The subcommittee adjourned debate without taking action on the bill.

Also on Wednesday, another Senate Banking and Insurance subcommittee took testimony on a bill by Senator Kimpson (S. 390) to regulate consumer litigation funding companies. The committee heard from a proponent of the bill and from a lending company who would like significant changes made to the bill to relax the regulation. The committee did not take any action and asked the interested parties to meet and try to work out their differences before the subcommittee takes it up again.

STATE RETIREMENT SYSTEM

On Tuesday, the House of Representatives passed recommendations from the Joint Pension Review Committee by a vote of 99-14. H. 3726 (Reps. Herbkersman, Cobb-Hunter, Anthony, Whitmire, Stringer and others) was the result of a special committee that met throughout last summer and fall to address a $20 billion plus deficit in the retirement investment funds for public employees in South Carolina. The plan is designed to help pay down the retirement system's unfunded obligations, which occurred because its assets have earned less than expected and it is charged exorbitantly high fees for investment management. The legislation includes:

  • raising the employee contribution rate from 8.66% to 9%;
  • capping the employee contribution rate at 9%;
  • raising the employer contribution rate from the current 11.56% to 13.56%, effective July 1, and increasing it annually until it reaches 18.56%;
  • shortening the debt's financing from a 30-year schedule to 20 years; and
  • reducing the expected rate of return for the fund's performance.

Last week, the House Ways and Means Committee added $150 million in next year's state budget to absorb half of the increases to public entities. Many have long argued that finding a fix to the massive problem will not be easy on the state, its political subdivisions or the retirees depending on the plan. The bill received a routine third reading on Wednesday and now goes to the Senate for consideration.

Also on Tuesday, the Senate began debate on their version of the companion legislation S. 394 (Senators Sheheen, Jackson, Nicholson and others). On Wednesday, the Senate approved second reading of the bill by a vote of 41-0. The Senate gave third reading on Thursday and sent their bill to the House.

WORKFORCE DEVELOPMENT

On Wednesday, the Senate Education K-12 subcommittee approved H. 3220 (Rep. Allison), which establishes the "South Carolina Education and Economic Development Coordinating Council." The subcommittee also gave favorable approval to S.462 (Sen. Hembree) relating to uniform high school diplomas and personalized pathways for students. Both bills now go to the full Senate Education Committee.

INTRODUCTIONS OF INTEREST

HOUSE

H. 3867 Reps. Herbkersman, Pitts, Hayes and Anthony: Relating to tax exemptions for low income housing. Referred to Committee on Ways and Means.

H. 3870 Rep. Weeks: Relating to hearsay evidence to a county grand jury. Referred to Committee on Judiciary.

H. 3881 Reps. Pope, D. C. Moss, McCoy, Magnuson, Erickson and others: income tax reductions. Referred to Committee on Ways and Means.

H. 3885 Reps. Bannister, Bedingfield, G. R. Smith, Loftis and Hamilton: Requires healthcare practitioners to display certain information on identification badges. Referred to Committee on Judiciary.

H. 3887 Reps. Burns, Chumley and Thayer: Regulation of pornography on the internet. Referred to Committee on Judiciary.

SENATE

S. 480 Senators Hutto and M. B. Matthews: Provides that the governing board for Denmark Technical College is the State Board for Technical and Comprehensive Education. Referred to the Committee on Education.

S. 482 Senator Davis: Relating to the capital projects sales tax. Referred to the Committee on Finance.

S. 497 Senator Cromer: Relating to compounding pharmacies. Referred to the Committee on Medical Affairs.

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