View from the Dome

May 1, 2017

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The Senate worked late into the evening on both Tuesday and Wednesday in order to finally get an agreement and pass the long-awaited highway infrastructure funding plan. Just six legislative days remain before the mandatory adjournment date of May 11.

APPOINTMENT

The Senate Agriculture and Natural Resources Committee on Thursday approved the appointment of Dr. Mitch Lowrey of Estill, South Carolina to the State Board of Veterinary Examiners representing the 6th Congressional District. The appointment now goes before the full Senate.

BUDGET

The House of Representatives on Wednesday amended their version of the FY 2017-18 state budget (H. 3720) and the Capital Reserve Fund (H. 3721), and sent it back to the Senate. Once the Senate insists on its version of the budget, a budget Conference Committee will meet to sort out the differences between the two versions of the budget and return to each chamber with a signed Conference Report. Three House members and three senators will work to resolve the differences before adjournment on May 11. The Senate version changed much of what was in the House-passed version of the budget that relates to funding for the technical colleges. They eliminated the majority of the funding for workforce training and added $4.5 million in recurring base funding to the state's 16 technical colleges. Frustrated by what Speaker Jay Lucas (R-Darlington) called a nonsensical approach by the Senate in addressing the state's greatest economic and safety issue, highway infrastructure funding, the House amended the state budget to include their version of the highway funding plan on Wednesday. Just a few hours later, the Senate passed their version of the highway funding plan. It is expected the Conference Committee will begin meeting next week.

Both versions of the state budget can be found here.

Individual state agency budget requests can be found here.

CHILD CARE

The Senate Education Committee met this past Wednesday and gave favorable approval to H. 3591 (Reps. Govan, J. E. Smith, Allison, Erickson, G. R. Smith and Felder) relating to benchmarks and objectives required as part of the First Steps to School Readiness comprehensive long-range initiative. The bill would also make the Office of First Steps to School Readiness permanent. The bill now goes to the full Senate for consideration.

HEALTH CARE

H. 3438 (Reps. Henderson, G.M. Smith, Sandifer and Hiott) dealing with interchangeable biological products was signed into law by Governor Henry McMaster on Tuesday. The bill updates the Pharmacy Practice Act and requires pharmacists to notify the prescriber in the event of an interchangeable biological product substitution.

The Senate Medical Affairs Committee met on Tuesday and gave favorable approval to a number of bills. H. 3885 (Reps. Bannister, Bedingfield, G. R. Smith, Loftis and Hamilton) is an expansion of the Lewis Blackman Hospital Patients Safety Act, adding to the definitions of "health care practitioner" and "health care facility," and requiring health care practitioners to wear identification badges displaying certain information. H. 3487 (Reps. Ridgeway, Govan, Duckworth and others) would allow a parent or legal guardian of a patient who is a child to request and revoke a Do Not Resuscitate order for emergency services for the child. H. 3817 (Reps. Bedingfield, Fry, Henderson, Huggins, and others) allows pharmacies and other entities to register as a collector to receive controlled substances as part of a law enforcement controlled substance take-back event and mail-back programs. H. 3824 (Reps. Henderson, Bedingfield, Fry and others) requires health care practitioners to review a patient's controlled substance prescription history before prescribing a Schedule II controlled substance and establishes a penalty for failure to do so. H.3132(Rep. G. M. Smith), relating to licensing requirements for hospice programs, was also approved. All of these bills now go to the full Senate for consideration.

HIGHER EDUCATION

The House of Representatives on Wednesday recalled S. 480 (Senators Hutto and M. B. Matthews) from the Ways and Means Committee and placed it on the House calendar. The bill abolishes the Denmark Technical College Area Commission and makes the State Board for Technical and Comprehensive Education the governing body for DTC. On Thursday, the House amended the bill to reinstate the Commission on November 1. The bill then passed the House by a vote of 86-0. Enrollment at the two-year college has dropped from 1,800 to 600 students and the college will reach a deficit of nearly $2 million by the end of the fiscal year. The bill also requires the State Board to commission a study of the most effective and efficient delivery of technical college opportunities in Allendale, Bamberg and Barnwell counties and report its findings and recommendations not later than February 1, 2018. The bill should receive third reading next week and return to the Senate as amended.

The Senate Education Committee met Wednesday and approved H.3220 (Rep. Allison) which reestablishes the SC Education and Economic Development Coordinating Council and provides for its membership, duties and functions. The council, disbanded in 2012 due to budget restraints, will advise the Department of Education and the Department Commerce on career pathways and workforce development. The bill now goes to the full Senate for consideration.

H. 3722 (Ways and Means Committee) the bond bill for higher education maintenance and renovations remains on the House contested calendar. The contested calendar is where bills that will require considerable debate are placed. Governor Henry McMaster recently announced he would veto any increase to the gas tax and urged lawmakers to instead take the proposed bond bill for higher education maintenance and renovations and use that money instead for highway infrastructure. His announcement considerably softened support for the bond bill among some House members. The $498 million plan is aimed exclusively at providing funding for maintenance and renovation projects. Approximately half of the plan funds higher education institutions with $87 million set aside for technical colleges. The state has not approved a borrowing plan for its colleges and state agencies since 2001. Governors Mark Sanford and Nikki Haley both previously threatened to veto a bond bill. House Ways and Means Chairman Brian White said that with such great needs, coupled with low interest rates, he felt the bond bill was long overdue. White also said he would like to get back to passing a bond bill every two or three years. SC colleges and universities asked lawmakers for a total of $1.1 billion, including $194 million for maintenance needs of the state's 16 technical colleges. With just six legislative days remaining, it now seems unlikely the House will debate the proposal this year.

Click here to view the full list of projects.

HIGHWAY INFRASTRUCTURE

After failing to pass a plan to fund highway infrastructure for the past three years, the Senate approved and amended H. 3516, the highway infrastructure funding bill, by a veto-proof margin of 33-10 late Wednesday evening. That margin is critical as Governor Henry McMaster has pledged to veto any increase in the gas tax, opting instead to borrow up to a billion dollars for road repairs. The bill, dramatically different than the House version, will now go to a Conference Committee to resolve the differences. While the House plan raised the state's gas tax by ten cents per gallon over five years, the Senate plan raises it twelve cents per gallon over six years, generating $800 million annually for highway repairs. The Senate plan also includes indexing the tax to inflation once the tax is fully implemented. The SC Department of Transportation has said they need $1 billion annually to maintain our roads in good condition. Like the House plan, the Senate plan includes:

  • Increasing the vehicle sales tax from $300 to $600;
  • A $40 fee for an 8-year driver's license;
  • A $16 fee every two years to register a vehicle;
  • $60 in fees every two years for hybrid vehicles;
  • $120 in fees every two years for electric vehicles;
  • A one-time fee of up to $600, phased in, if a buyer purchases a vehicle out of state and, later, registers it in South Carolina.

The Senate plan also includes numerous tax credits and rebates, added to gain support of many members who insisted they would not support a tax increase without some tax relief. These include:

  • A tax rebate of the increased gas tax if citizens properly document on their tax returns;
  • $1500 tuition tax credit for students attending two or four year institutions;
  • An earned income tax credit for lower income workers;
  • Decreasing the manufacturer's depreciation tax rate from 10.5% to 8.5% over two years.

Those additions to the bill are seen by House members as a nonsensical approach to addressing the state's greatest need and signals a potentially difficult conference committee negotiation between the differing versions. The plan also includes some reform of the Department of Transportation Commission and would include certain ethics requirements for commission members.

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. It is expected the Conference Committee will begin meeting next week.

JUDICIAL / LEGAL

On Tuesday, the Senate Judiciary Committee reported out favorably H.3215 which creates the offense of impersonating a lawyer. The committee also approved H.3879 relating to the allowed maximum amount of covered burial expenses in workers' compensation cases. The bill was amended to raise the maximum amount from $10,000 to $12,000. Both bills will now go to the full Senate. Additionally, the committee approved regulations from the Workers' Compensation Commission which updates and clarifies the current Regulation, Document Number 4735. Minor changes were made to the regulation which required them to be withdrawn and resubmitted by the Worker's Compensation Commission. Due to the delay caused by the withdrawal and resubmission, for the regulation to become effective this year, Joint Resolution H. 4131 will need to pass in the next two weeks. It is on track to do so.

SPECIAL ELECTION

Powdersville businessman Richard Cash defeated Pendleton Mayor Carol Burdette on Tuesday in a primary election to fill the vacated Senate seat of Lieutenant Governor Kevin Bryant, who gave up his seat in January to become lieutenant governor. With no Democrats running, Cash is virtually assured of winning the May 30 special election.

STATE RETIREMENT SYSTEM

On Tuesday, Governor Henry McMaster signed into law H. 3726 (Reps. Herbkersman, Cobb-Hunter, Anthony, Whitmire, Stringer and others), which reforms the state retirement system. The new law is the result of a special joint committee that met throughout last summer and fall to address a $22 billion plus deficit in the retirement investment funds for South Carolina's public employees. 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 was charged exorbitantly high fees for investment management. The new law 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; andreducing the expected rate of return for the fund's performance.

Funding of up to $150 million in next year's state budget will absorb half of the increases to public entities. In signing the bill into law, Governor McMaster noted this was "the first step of many which are needed" to secure the future fiscal health and sustainability of the pension systems. He said the new law does not address the single most important measure which would ensure the long term financial stability and viability of the State's retirement systems: a date certain transition from the State's defined benefit pension plans to a defined contribution retirement plan for new state employees.

The governor's signing statement can be found here.

INTRODUCTIONS OF INTEREST

HOUSE

H. 4182 Rep. White: Enacts the "State Institution of Higher Education Enterprise Act". Referred to Committee on Ways and Means.

SENATE

S. 664 Senator Timmons: Joint Resolution clarifying the duties of the Greenville Health System's Board of Trustees. Read the first time and ordered placed on the Local and Uncontested Calendar.

S. 672 Senator Leatherman: Sine Die Resolution to allow the General Assembly to return after May 11 adjournment if necessary. Introduced and referred to the Committee on Finance.

COMING UP NEXT WEEK

Both bodies will see considerable time in floor debate as just six legislative days remain in the session.

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