The “South Carolina Taxpayer Protection and Relief Act,” the Senate version of tax Conformity (S. 1258), was introduced by Senate President Pro Tem and Finance Committee Chairman Hugh Leatherman (R-Florence) on Thursday, May 10, the final day of the session.
The bill, in addition to conforming to the Federal Tax Code through Feb. 9, 2018, offers a South Carolina standard deduction for taxpayers who claim the standard deduction on their Federal return in amounts of $7,570 for those single or married filing separately, $11,355 for head of household and $15,140 if married filing jointly or qualifying widow(er).
A week earlier, the House adopted and sent to the Senate H. 5341 (Reps. Lucas, White, Simrill and Rutherford), which was their version of tax Conformity. The bill, which passed unanimously, conforms to the Federal code and is revenue neutral since it restores the $1,525 personal exemption for taxpayers and dependents and adopts additional non-conforming items.
Historically, changes made to the Federal tax code are adopted by state law each year, usually starting in the Senate. Failure to conform this year will wreak havoc on tax filers moving forward and may cause a tax increase of about $200 million if no action is taken. Both bills may still be considered this year as they were included in the Sine Die resolution.
View from the Dome
ISSUE: MAY 11, 2018
The 122nd Session of the South Carolina General Assembly concluded at 5 p.m. on Thursday, May 10, 2018. A Joint Resolution to allow the General Assembly to continue past the mandatory May 10 Sine Die deadline was adopted since the state budget has not yet been finalized. The budget Conference Committee began meeting this week and will continue meeting next week with a goal of adopting a compromise budget plan by next Friday. The General Assembly will likely return to Columbia on two more occasions, to adopt the budget Conference Report and again at a later date, if necessary, to deal with gubernatorial vetoes on the budget. As this was the second year of the two-year legislative session, all bills not becoming law will need to be introduced again next year.
H. 3619/S. 841 (Rep. Atwater) received third reading in the Senate on Wednesday. The original bill deals with tattooing of companion animals. S. 841 the Omnibus animal welfare bill was amended to the bill in the Senate. In the rush of the last couple days of the regular session it almost made it across the finish line but fell short in the House. The Omnibus bill will need to be reintroduced next year.
On Tuesday, the Senate confirmed two of the governor’s appointments to the South Carolina Commission on Higher Education. Confirmed to a four-year term representing the four-year institutions is Linda Dolny, of Clinton. Confirmed to a four-year term representing the public research institutions is James A. Battle Jr., of Nichols.
On Thursday, the Senate Judiciary Committee continued screening the governor’s appointment of Mr. Charles M. Condon to serve as Chairman of the Board of the State Public Service Commission (aka Santee Cooper). The committee ran out of time due to session and agreed to continue the hearing at a later date. The committee approved the governor’s appointment of Mr. Charles H. Leaird of Sumter to the SC Public Service Authority Board of Directors. His appointment now goes to the full Senate for confirmation.
The Conference Committee working to resolve differences in the FY 2018-19 General Appropriations Act H. 4950 (Ways and Means Committee) met this past Monday for an organizational session. Members are Senators Leatherman, Matthews and Bennett and Representatives White, Cole and Clyburn. After adopting the provisos that were in both versions of the budget, the committee decided there was too much other work to do in the last week of the legislative session and agreed to return to Columbia to work out their budget differences next week. The committee will wrestle to resolve differences in the two versions with an emphasis on additional funding for school resource officers and whether or not to remove the cap on earnings for retired state employees. Many argue the cap must be removed to allow retired teachers to help fill the growing void of available public school teachers. Both bodies also adopted a Joint Resolution S. 671 (Senator Leatherman) that would allow state government to continue operating at current funding levels for the next fiscal year beginning July 1 if the legislature fails to pass a state budget.
The Capital Reserve Fund appropriations bill H. 4951 (Ways and Means Committee) was signed into law by the governor this past Monday.
Budget Conference Committee information can be found here.
The governor’s Executive Budget can be found here.
Individual state agency budget requests can be found here.
The Senate this week approved to H. 5156 (Regulations and Administrative Procedures Committee) a Joint Resolution to approve regulations of the Department of Social Services relating to licensing of child care centers. The Joint Resolution now goes to the governor.
After years of discussion and several trips back and forth between the House and Senate on the last day of session, the Expungement bill (H. 3209) was adopted and will be sent to the governor.
The Senate on Thursday gave final passage to H. 4375 (Reps. McCoy, Ott, Lucas, and others) which will prohibit other electric utilities from using the Base Load Review Act, which enabled SCE&G to continue to charge its electric customers for the failed expansion at Fairfield County. Prior to 2007, utilities had to finish work before they could pass on the cost to customers. The Senate amended the bill to include the provision related to the new Division of Consumer Advocacy. It now goes to a conference committee to address the differing versions.
On Wednesday, a Conference Committee met for the second time to address the differences in Joint Resolution S. 954 (Senators Leatherman, Setzler) which would temporarily lower utility rates for customers of SCE&G. The original underlying bill prohibits the Public Service Commission (PSC) from making a decision on any SCANA-Dominion Energy merger until December. Last month, the House unanimously voted to amend the bill so that it also decreases SCE&G power bills temporarily by about 18%, the amount SCE&G is currently charging its customers for the failed V.C. Summer nuclear project. The Senate previously adopted an amendment, offered by Senator Shane Massey (R-Edgefield) that would roll back the nuclear surcharge from 18% to 5% immediately. Massey argued he wanted to completely eliminate the surcharge but wanted to make sure any decrease could withstand a court challenge. Prior to the debate, Dominion Energy released a statement saying that if the Senate acted, they might withdraw their merger proposal. For ratepayers to see their utility bills reduced this year, the Conference Committee must work through their differences. Senate conferees are Senators Setzler, Rankin and Massey. House conferees are Representatives McCoy, Finlay and Rutherford. The conferees once again did not reach an agreement and adjourned to meet at a later date. Governor Henry McMaster joined the House in calling for an immediate end to the surcharge payments and has threatened to veto the proposal if it does not fully eliminate the surcharge. The PSC is scheduled to rule in December on whether or not SCE&G can continue charging customers for the failed nuclear reactor project and on the proposed merger.
Fallout from the decision to cease all construction on two new nuclear reactors being built at the V.C. Summer Nuclear Generating Station in Jenkinsville by SCANA and state-owned utility Santee Cooper remain one of the most costly, complex and politically explosive issues to hit our state in decades.
The following bills and or conference reports were adopted this week:
S. 345 (Senator Davis) expands the role of Advanced Practice Registered Nurses (APRN’s) which would, among other things, allow prescribing of schedule II drugs pursuant to a practice agreement in certain circumstances, including hospice and palliative care settings.
S. 918 (Senators Peeler, Malloy, Hembree and M. B. Matthews) establishes certain prescribing limitations when prescribing narcotics to minors and requires DHEC to provide prescription reports to practitioners.
H. 3622 (Reps. Ryhal, Burns, Duckworth, and others) relating to podiatric surgery.
H. 3819 (Reps. Bedingfield, Fry, Henderson and others) which establishes requirements for prescribing opioid analgesics to minors.
H. 4116 (Reps. Ridgeway, Douglas, Spires, G. M. Smith, and others) which prohibits hospitals and insurance companies from enjoining physicians to secure a maintenance of certification as a condition for licensure or admitting privileges at a hospital in this state. The bill was amended by the Senate to include Federally Qualified Health Centers.
H. 4117 (Reps. Henderson, Bedingfield and Fry) would add an exception to the confidentiality of data in the prescription monitoring program for drug courts.
H. 4698 (Rep. G. M. Smith) waive’s state examination requirements for physicians who practice administrative medicine relating to Social Security disability determinations within a state agency.
H. 5159 (Regulations and Administrative Procedures Committee) a Joint Resolution to approve regulations of the Department of Health and Environmental Control relating to standards for licensing Hospices.
All of these bills now go to the governor.
The following bill was adopted this week:
S. 648 (Senators Scott, Setzler, McLeod, Jackson and McElveen) relating to the disposal of surplus properties by the Midlands Technical College Enterprise Campus Authority.
The House on Thursday amended H. 4931 (Reps. Elliott, Alexander, Simrill and many others) that would authorize an applied baccalaureate in manufacturing if approved first by the State Board for Technical and Comprehensive Education and the Commission on Higher Education. The amendment added to the bill was H. 3311 (Reps. White, G. R. Smith, Clyburn, and others) that implements a career pathways initiative. The Senate non-concurred in the House amendment and the bill now goes to a conference committee to address the differing versions.
The Commission on Higher Education this week announced their “Student Bill of Rights” that its members want to drive future conversations about college tuition, spending and student debt. The “Bill of Rights” includes eight proposals intended to make it easier for in-state students to afford college. The requirements include mandating that any high school graduate who earned the top-tier lottery scholarships, Palmetto Fellows and LIFE, be automatically accepted into any public state college. It would also discourage colleges from expanding or using tuition breaks to specifically draw in more out-of-state students who may have higher SAT scores or grades than South Carolina students. Commissioners also called for colleges to freeze or cap their tuition.
The Student Bill of Rights can be found here.
On Tuesday, State Sen. Vincent Sheheen (D-Kershaw) announced a plan Tuesday to lower higher education costs in South Carolina by introducing the “Higher Education Opportunity Act of 2018”. While the proposal has no chance of becoming law this year, Sheheen wants to start the conversation about the need to reign in tuition costs while increasing funding for the state’s 33 public colleges and universities. Senator Sheheen’s plan can be found here.
The following bills and or conference reports were adopted this week:
H. 4962 (Reps Sandifer and Spires) fixes an unfair application of the retaliatory tax laws as they are applied to domesticated title insurance companies. The bill now goes to the governor.
H. 4675 (Reps. Sandifer and Spires) establishes reporting requirements and removes certain provisions for captive insurance companies. The bill now goes to the governor.
On Thursday, Senate President Pro Tem and Finance Committee Chairman Hugh Leatherman (R-Florence) introduced the “South Carolina Taxpayer Protection and Relief Act”, the Senate version of tax Conformity (S. 1258). In addition to conforming to the Federal Tax Code through Feb. 9, 2018, the bill offers a South Carolina standard deduction for taxpayers who claim the standard deduction on their Federal return in amounts of $7,570 for those single or married filing separately, $11,355 for head of household and $15,140 if married filing jointly or qualifying widow(er). Last week the House adopted and sent to the Senate H. 5341 (Reps. Lucas, White, Simrill and Rutherford), which was their version of tax Conformity. The bill, which passed unanimously, not only conforms to the Federal code, but is revenue neutral since it restores the $1,525 personal exemption for taxpayers and dependents and adopts additional non-conforming items. Historically, changes made to the Federal tax code are adopted by state law each year, usually starting in the Senate. This year is dramatically different due to the first major revamp of our Federal tax code, signed into law this past December, since the Reagan Administration. Failure to conform this year will wreak havoc on tax filers moving forward and may cause a tax increase of about $200 million if no action is taken. Both bills may still be considered this year as they were included in the Sine Die resolution.
SINE DIE RESOLUTION
The General Assembly this week adopted H. 5383 (Rep. Lucas) a Joint Resolution to allow the General Assembly to continue past the mandatory May 10 Sine Die deadline. The resolution specifies what the legislature can debate and allows them to return to Columbia again on Wednesday May 23 for no more than two days and again on June 27 for no more than two days. In addition to the state budget and other outstanding conference committee reports, the resolution allows for discussion on Conformity-related issues to state income tax laws and legislation regarding the V.C. Summer Nuclear issue and related matters. The resolution also allows them to return to Columbia at any time if necessary until final Sine Die adjournment on November 11, 2018.
INTRODUCTIONS OF INTEREST
H. 5404 Rep. Sandifer: Relating to the creation of the SC Medical Malpractice Liability Joint Underwriting Association. Referred to Committee on Labor, Commerce and Industry.
S. 1239 Senators Sheheen and Setzler: Higher education funding reform. Referred to the Committee on Finance.
The Conference Committee working to resolve differences in the state budget will meet.