Three legislative days remain in this session, and a bill that would grant Tax Conformity for South Carolina to the Federal code is on its way to the Senate for debate. This is in large part because House Speaker Jay Lucas broke convention and explained to the body that without Conformity state taxpayers could see an increase in their rates that approaches $200 million. The House moved quickly to approve H. 5341, which is revenue neutral since it restores the $1,525 personal exemption for taxpayers and dependents and adopts additional non-conforming items.

Historically, the Senate takes the lead when changes made to the Federal tax code need to be adopted by state law each year. This year is dramatically different, not only because of the Tax Cuts and Jobs Act, nit because the Senate had yet to act on Conformity,

H. 5341 now goes to the Senate for consideration.

View from the Dome

By Copper Dome Strategies

ISSUE: MAY 4, 2018

Tempers flared and the debate was at times heated as both bodies worked late into the evening this past Wednesday. The House was debating amendments to the state budget before they return it to the Senate, and the Senate was locked down debating abortion. 

After a marathon filibuster on a bill banning abortions, the Senate voted early Friday morning to recommit the bill, effectively killing it and clearing the way for other bills to be debated in the last week of the session.

Three more legislative days remain before adjournment on Thursday, May 10, at 5 p.m.

BUDGET

The House worked past midnight on Wednesday debating the FY 2018-19 General Appropriations Act H. 4950 (Ways and Means Committee). In most years, after the Senate amends the budget and returns it back to the House, the House amends it back to their original version and sends it back to the Senate to set up a conference committee that would work out the differences between the two versions. However, many in the minority party were upset when they learned last week the committee amendment included additional funding that was not originally in the House-passed version of the budget. After four hours of debate last week and nine hours of debate on Wednesday, the House debated more than 60 new amendments before returning the budget back to the Senate. The budget will now go to a Conference Committee for the differences to be addressed.

The Capital Reserve Fund appropriations H. 4951 (Ways and Means Committee) has been adopted by both bodies and will soon be on its way to the governor.

The Senate Finance Committee version of the bill can be found here.

The governor’s Executive Budget can be found here.

Individual state agency budget requests can be found here.

CHILDCARE

On Tuesday, the Senate gave second reading approval 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 remains on the Senate calendar awaiting third and final reading.

ENERGY

On Tuesday, the Senate Judiciary amended and approved H. 4379 (Reps. McCoy, Ott, Lucas, and others) that creates a new consumer advocate to represent utility customers and gives the Office of Regulatory Staff the ability to subpoena documents from utilities. The new consumer advocate would intervene on behalf of customers amid disputes between them and any utility. The consumer advocate would also represent ratepayers if a utility made a request for a rate increase. The committee also advanced a bill 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 the Fairfield County. Prior to 2007, utilities had to finish work before they could pass on the cost to customers. Both bills are now on the Senate calendar.

On Wednesday, a Conference Committee met 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 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 eighteen percent to five percent 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. In order 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. After meeting for approximately 30 minutes, the conferees 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.

HEALTHCARE

After passing the Senate, the House this week concurred in Senate amendments to H. 3826 (Reps. Huggins, Bedingfield, Fry, and others). The bill requires the Department of Health and Environmental Control (DHEC) to develop a counterfeit-resistant prescription blank which must be used by practitioners for prescribing controlled substances. This bill is now enrolled for ratification and on its way to the governor. Also on its way to the governor is H. 4600 (Reps. Huggins, Bedingfield, and others) which would authorize certain community organizations to distribute opioid antidotes to a person at risk of experiencing an opioid-related overdose or to a caregiver of such a person.

On Thursday, immediately following a subcommittee meeting of the Senate Medical Affairs Committee, the full committee adopted H. 4698 (Rep. G. M. Smith). The bill would waive state examination requirements for physicians who practice administrative medicine relating to Social Security disability determinations within a state agency. The committee also adopted 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. Both bills now go to the full Senate for consideration.

Also on Thursday, the House amended and returned to the Senate S. 345 (Senator Davis). The bill as amended was a compromise agreement between the physician and nursing communities that would expand, under certain circumstances, the role of Advanced Practice Registered Nurses (APRN). Under the compromise, the bill would allow APRNs and physicians to enter into practice agreements 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. It would also allow for prescribing of non-controlled drugs while working at clinics for indigent patients. The bill removes the 45 mile radius requirement for APRNs under current law. The agreements must contain mechanisms that allow physicians to continue to ensure quality of care and patient safety. The bill now goes to the Senate for concurrence.

INSURANCE 

On Tuesday, the Senate approved H. 4675 (Reps. Sandifer and Spires) by a vote of 41-0 relating to captive reinsurance companies. The bill establishes reporting requirements and removes certain provisions for captive insurance companies. The bill remains on the Senate calendar awaiting third and final reading.

NEW MEMBER

The last of the vacant House seats was filled this past Tuesday in a Special Election in Lexington County. Chris Wooten won the seat in House District 69 that was vacated when former Representative Rick Quinn pleaded guilty in the State House corruption probe earlier this year. Wooten owns a fitness center in Lexington where he works alongside his wife and other longtime friends. He is a former Marine and retired State Trooper.

TAX

On Tuesday, House Speaker Jay Lucas (R-Darlington) took the unusual step to address the body about the dire need to move forward with legislation on tax Conformity. Lucas pointed out to the body that tax filers in South Carolina, like six other states nationally, use the federal tax code as the starting point for filing returns. 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. However, Lucas noted that since the Senate has yet to act on Conformity, the House can no longer sit idly by. 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. For these reasons, Lucas urged the body to recall H. 5341 (Reps. Lucas, White, Simrill and Rutherford) from the Ways and Means Committee which the House did by a vote of 113-0. The bill 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. On Thursday, the House adopted the measure by a vote of 100-0 and unanimously agreed to give the bill third reading Friday in perfunctory session. The bill now goes to the Senate for consideration.

INTRODUCTIONS OF INTEREST

HOUSE

H. 5341 Reps. Lucas, White, Simrill and Rutherford: Relating to the application of the Internal Revenue Code to state income tax laws (tax conformity). Referred to Committee on Ways and Means.

NEXT WEEK

The second session of the 122nd General Assembly will adjourn Sine Die at 5 p.m. Thursday, May 10.