View from the Dome: 2019 Legislative Preview

View from the Dome: 2019 Legislative Preview

View from the Dome – Jan. 4, 2019

By Copper Dome Strategies, LLC

The first session of the 123rd General Assembly will convene on Tuesday, Jan. 8. This will be the first year of a two-year legislative session.

Due to the economy’s growth over the past two years, state General Fund revenue will include over $1 billion in new recurring and one-time revenue from two years of a budget surplus.

Fallout from the V.C. Summer nuclear debacle will again be a top issue, including the sale of state-owned utility Santee Cooper. Reforming our state’s tax code, retirement system and public school funding are also at the top of the agenda.

With recent legislation passed to shorten the legislative session, Sine Die adjournment is scheduled for May 9.

NEW MEMBERS

As a result of retirements and election losses, there will be 16 new members in the House of Representatives. One new senator was elected to fill a vacancy created by a senator who resigned following a guilty plea of misconduct in office. Click here for a full list of House members and click here for a full list of Senate members.

BUDGET

The state’s General Fund revenue will include over $1 billion in new recurring and one-time revenue from two years of a budget surplus, with almost half of that in new recurring funds. Legislators have begun work on the $9 billion FY 2018-19 General Fund state budget. The total state budget, including federal funds, fines and fees will top $28 billion next year. Budget writers will have an additional $457 million in recurring revenue.

Raising teacher and state employee pay, addressing the state’s underfunded pension system, K-12 education and tax cuts are at the top of the list for the new recurring revenue. Legislators will also have some $600 million in one-time revenue. State agencies and colleges will seek to get a large portion of that for one-time capital projects and maintenance and repair needs. The state also needs approximately $70 million to replace outdated voting machines.

Governor McMaster is expected to release his Executive Budget next week which outlines, his recommendations to the General Assembly for his funding priorities for the next fiscal year. The Executive Budget can be found here.

Individual state agency budget requests can be found here.

TAX 

Look to see lots of talk regarding reforming our state’s tax code in this session.

Legislation to conform our state’s tax code to the Federal IRS code will again be required due to changes by Congress. In addition, the recently formed Senate Finance Tax Reform Subcommittee will continue meeting to seek ways to reform our state’s code. A similar House study committee last year adopted a proposed plan, to be phased in over 5 to 7 years, which would flatten the income tax rate to 5% and include standard deductions.

STATE RETIREMENT SYSTEM

Two years ago, the legislature passed into law some of the recommendations from the Joint Pension Review Committee to address a $20 billion plus deficit in the state retirement system for public employees. Both employers and employees saw increases in their contributions, and state general fund revenue was shifted to ease the deficit. This year will see more debate on how to manage the issue.

In signing the previous bill into law, Gov. 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 that 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.

HEALTHCARE

Medical marijuana is expected to be debated in both the Senate and House of Representatives. Bills in both legislative chambers were debated in subcommittee last session and are expected to receive hearings again this year. The bills would allow individuals with debilitating or chronic diseases to buy up to 2 ounces of marijuana from a licensed dispensary if their physician certifies in writing that their patients could benefit from the use of marijuana. State Law Enforcement Division Chief Mark Keels has testified in opposition to the bills noting marijuana is not medicine and described the difficulties associated with monitoring an illegal drug once it is in the hands of those who receive it.

Recommendations from the House Opioid Abuse Prevention Study Committee are again expected to become part of the legislative agenda this session. A number of the recommendations were signed into law, but others are being debated that seek solutions to the opioid crisis.

JUDICIAL/LEGAL

There will be extensive conversation and debate about amending the SC Tort Claims Act. A senate bill was pre-filed by Senator Malloy and others. The focus of the bill is raising the limits of a personal recovery from $300,000 in a single occurrence to $1 million. The limit for the total sum recovered in a single occurrence would be raised from $600,000 to $2 million. There is bipartisan support, and the topic should be the subject of hearings early in the session. There has also been discussion about the need to look at the definition of the term “occurrence” and exceptions to the limits.

V.C. SUMMER NUCLEAR FACILITY FALLOUT

This week, Dominion Energy received its final approval with its plan to buy SCANA. A Joint Senate/House committee has hired a private sector firm to value the assets of Santee Cooper, seek proposals from qualified offers and will make a recommendation to the General Assembly in early February regarding selling the state-owned utility. The issue may once again dominate discussions at the State House this session.

One of the most costly, complex and politically explosive issues to hit our state in decades erupted in July 2017 when state-owned utility Santee Cooper’s board voted to cease construction on two new nuclear reactors being built at the V.C. Summer Nuclear Generating Station in Jenkinsville. That move forced their partner, SCANA Corporation, to abandon the project as well when they could not find another partner to take their place. Those decisions, prompted by the bankruptcy of lead partner Westinghouse because of $9 billion in losses from its two U.S. nuclear construction projects, set off a political firestorm that still rages. Ratepayers for both entities are being forced to pay billions for the project that may never be completed. Complicating the issue was legislation passed in 2007 that allowed both entities to begin collecting construction costs from ratepayers, relieving much of the risk from SCANA stockholders. Now, both entities are billions of dollars in debt and ratepayers are crying foul.

Both the House and Senate immediately created study committees to seek solutions. Gov. McMaster worked to find a buyer for the state-owned Santee Cooper. As a result of the study committees, numerous bills were filed to try and address the issue. While the House passed a number of the bills last year, only one was signed into law. Expect similar bills to receive debate this year.

INAUGURATION

Gov. Henry McMaster will be inaugurated at noon on Wednesday, Jan. 9. McMaster ascended to the office upon the resignation of Gov. Nikki Haley who left in January 2017 to join the Trump Administration as UN Ambassador. McMaster, who handily won November’s election, will begin his four-year term in office upon his swearing in. Pamela Evette will be sworn in as Lieutenant Governor.

State of the State Address: Gov. McMaster will deliver his first State of the State address on Wednesday, Jan. 16 at 7 p.m. where he will lay out his legislative and budget priorities.

PRE-FILED LEGISLATION

The following bills of interest were pre-filed in December:

TAX

S.90 (Senator Campsen) State income tax credit for conservation contribution on real property. Referred to the Committee on Finance.

S.91 (Senator Campsen) Enacts the “Long Term Care Tax Credit Act.” Referred to the Committee on Finance.

S.213 (Senator Young) Provides limitations on income tax credits. Referred to the Committee on Finance.

S.217 (Senators Kimpson, Campsen and Senn) Allows accommodations tax to be expended on control of flooding and draining. Referred to the Committee on Finance.

S.266 (Senator Goldfinch) Relating to income tax deductions for members of the state guard. Referred to the Committee on Finance.

S.267 (Senator Goldfinch) Relating to the Uniform Limited Partnership Act. Referred to the Committee on Labor, Commerce and Industry.

S.292 (Senator Talley) Allows a real estate licensee to represent a taxpayer during the administrative tax process. Referred to the Committee on Finance.

H.3128 (Reps. Moore and S. Williams) Provides that the State Auditor approve auditing firms engaged by governmental entities. Referred to Committee on Ways and Means.

H.3135 (Reps. G. M. Smith and Erickson) “Workforce Enhancement and Military Recognition Act” removing certain limits on retirement income deductions. Referred to Committee on Ways and Means.

H.3136 (Reps. G. M. Smith, G. R. Smith and Erickson) Relating to exceptional needs tax credit for military children. Referred to Committee on Ways and Means.

H.3144 (Rep. W. Newton) Constitutional amendment requiring the Comptroller General to be appointed by the governor. Referred to Committee on Judiciary.

H.3186 (Rep. Pendarvis) Income tax credits for companies that invest in opportunity zones. Referred to Committee on Ways and Means.

H.3202 (Rep. Elliott) Income tax credits for scholarship funding organizations for home schools. Referred to Committee on Ways and Means.

H.3207 (Rep. Trantham) Relating to property tax exemptions on owner-occupied homes. Referred to Committee on Ways and Means.

H.3412 (Rep. G. R. Smith) Enacts the “Sales and Use Tax Collection Act.” Referred to Committee on Ways and Means.

H.3416 (Rep. Stavrinakis) Exempts machinery and tools used in the production from renewable energy from state sales tax. Referred to Committee on Ways and Means.

ANIMAL WELFARE

S.104 (Senator Campbell) Relating to sale of animals at an equine sales facility. Referred to the Committee on Agriculture and Natural Resources.

S.105 (Senator Campbell) Numerous provisions relating to animal cruelty. Referred to the Committee on Agriculture and Natural Resources.

S.281 (Senator Talley) Relating to protection of guide dogs and service animals. Referred to the Committee on Agriculture and Natural Resources.

H.3086 (Rep. Johnson) Establishes standards for commercial dog breeders. Referred to Committee on Agriculture, Natural Resources and Environmental Affairs.

H.3092 (Reps. Pitts and White) Prohibits the propagation of animals other than authorized species and relates to shooting preserves. Referred to Committee on Agriculture, Natural Resources and Environmental Affairs.

AUTOMOTIVE

H.3355 (Reps. Taylor, Allison, Elliott, Tallon, Cogswell and McCravy) Enacts the “Driving Under the Influence of an Electronic Device or DUI-E Law.” Referred to Committee on Education and Public Works.

CABLE/TELECOMMUNICATIONS

H.3012 (Rep. McDaniel) Concurrent Resolution expressing school districts should utilize the Education Rate Program (E-Rate). Referred to Committee on Education and Public Works.

H.3339 (Rep. Stavrinakis) Prohibits telecommunications or internet service providers from collecting personal information without written approval. Referred to Committee on Labor, Commerce and Industry.

H.3342 (Reps. Thigpen and McKnight) Enacts the “Net Neutrality Preservation Act.” Referred to Committee on Labor, Commerce and Industry.

H.3440 (Rep. Norrell) Enacts the “Net Neutrality Protection and Maintenance Act.” Referred to Committee on Labor, Commerce and Industry

CHARTER SCHOOLS

S.243 (Senator Fanning) Relating to withholding state funds from charter schools that fail to comply with state law. Referred to the Committee on Education.

H.3396 (Rep. Brown) Relating to racial composition in reporting requirements for charter schools. Referred to Committee on Education and Public Works.

CHILDCARE

S.291 (Senator Talley) Creates the Department of Early Development and Education. Referred to the General Committee.

ENERGY/UTILITIES

S.137 (Senator Davis) Relating to electric utility performance incentives and penalty mechanisms. Referred to the Committee on Judiciary.

S.186 (Senators Shealy and Massey) Resolution recognizing the negative impact of the sale of SCANA. Referred to the Committee on Judiciary.

S.251 (Senator Fanning) Prohibits members of the General Assembly from soliciting or receiving campaign contributions from a utility. Referred to the Committee on Judiciary.

S.296 (Senator Harpootlian) Prohibits DHEC from entering into leases relating to the exploration of offshore oil or natural gaS. Referred to the Committee on Agriculture and Natural Resources.

H.3145 (Reps. Ott and Clary) Reform of electric cooperative governing boards. Referred to Committee on Labor, Commerce and Industry.

H.3265 (Rep. Caskey) Enacts the “Public Utility Employee Whistleblower Protection Act.” Referred to Committee on Judiciary.

H.3336 (Rep. Cobb-Hunter) Relating to income tax credits and the definition of “solar energy property.” Referred to Committee on Ways and Means.

H.3344 (Rep. Toole) Relating to furnishing of electric service in areas served by another supplier. Referred to Committee on Labor, Commerce and Industry.

H.3443 (Rep. Rutherford) Requires PSC approval before the sale of a retail electric provider. Referred to Committee on Labor, Commerce and Industry.

HEALTHCARE

S.222 (Senator M.B. Matthews) Prohibiting arbitration agreements for persons who make healthcare decisions for a patient unable to consent. Referred to the Committee on Medical Affairs.

S.225 (Senators Gambrell and Nicholson) Requires neonatal testing for certain genetic disorders. Referred to the Committee on Medical Affairs.

S.226 (Senator Gambrell) Relating to billing and insurance coverage practices to out-of-network emergency medical services providers. Referred to the Committee on Medical Affairs.

H.3272 (Rep. Rutherford) enacts the “Put Patients First Act” relating to the medical use of marijuana. Referred to Committee on Judiciary.

H.3273 (Reps. G. R. Smith, Bernstein and Clary) Enacts the “Vulnerable Adult Maltreatment Registry Act.” Referred to Committee on Judiciary.

H.3399 (Reps. Clary, Cobb-Hunter, Herbkersman and Davis) Enacts the “Physician Assistant Act of 2019” relating to acts and duties. Referred to Committee on Medical, Military, Public and Municipal Affairs.

HIGHER EDUCATION

S.25 (Senators Hutto, Setzler, Jackson, and others) Enacts the “South Carolina Promise Scholarship Act.” Referred to the Committee on Finance.

S.33 (Senator Grooms) Enacts the “Campus Free Expression Act.” Referred to the Committee on Education.

S.68 (Senator Malloy) Establishes the South Carolina College and University Board of Regents. Referred to the Committee on Education.

S.87 (Senator Campsen) relating to religious student associations on college campuses. Referred to the Committee on Education.

S.143 (Senator Scott) Relating to scholarships for residents that intend to become teachers and legislative incentives for LIFE and HOPE scholarships. Referred to the Committee on Education.

S.212 (Senator Young) relating to definitions of certain individuals for in-state tuition for veterans and active duty military personnel. Referred to the Committee on Education.

S.228 (Senator Gambrell) Creates the Tri-County Technical College Enterprise Campus Authority. Referred to the Committee on Education.

S.275 (Senator Senn) Relating to threats by a student of a school or college and to provide penalties. Referred to the Committee on Judiciary.

S.276 (Senator Senn) Relating to weapons on the campus of a school or college. Referred to the Committee on Judiciary.

S.283 (Senator Talley) Enacts the “State Institution of Higher Education Enterprise Act.” Referred to the Committee on Education.

S.298 (Senators Sheheen, Peeler, Jackson, and others) Provides increased funding for higher education institutions, regulatory relief and addresses caps on tuition. Referred to the Committee on Finance.

H.3099 (Rep. G. R. Smith) Enacts the “Forming Open and Robust University Minds (Forum) Act” to protect expressions on campus. Referred to Committee on Education and Public Works.

H.3100 (Rep. G. R. Smith) Relating to the requirements of studying the United States Constitution. Referred to Committee on Education and Public Works.

H.3105 (Reps. West and Thayer) Creates the Tri-County Technical College Enterprise Campus Authority. Referred to Committee on Education and Public Works.

H.3140 (Rep. Collins) Relating to revising the purposes of lottery scholarships. Referred to Committee on Education and Public Works.

H.3197 (Rep. Govan) “Student Loan Bill of Rights Act” regulating loan servicers. Referred to Committee on Education and Public Works.

H.3214 (Rep. Pendarvis) Enacts the “South Carolina Promise Scholarship Act” for technical colleges. Referred to Committee on Education and Public Works.

H.3254 (Rep. Hosey) Free tuition for higher learning for wartime veterans spouses. Referred to Committee on Ways and Means.

H.3324 (Rep. King) Enacts the “College Financial and Education Act” relating to financial literacy. Referred to Committee on Education and Public Works.

H.3330 (Rep. King) Requires written notice before terminating or reducing scholarships. Referred to Committee on Education and Public Works.

H.3348 (Rep. Huggins) Enacts the “Title IX Notification Act” concerning violations. Referred to Committee on Education and Public Works.

H.3353 (Rep. King) Requires Legislative Audit Council audits of every public institution of higher education. Referred to Committee on Judiciary.

JUDICIAL – LEGAL

S.7 (Senators Malloy, Climer, Goldfinch, and others) Relating to increases in the limitation of liability. Referred to the Committee on Judiciary.

S.40 (Senators Malloy and Harpootlian) Enacts the “South Carolina False Claims Act.” Referred to the Committee on Judiciary.

S.42 (Senator Malloy) Relating to increasing judicial salaries. Referred to the Committee on Finance.

S.43 (Senator Malloy) Relating to a salary schedule for judges. Referred to the Committee on Finance.

S.51 (Senator Malloy) Relating to workers’ compensation and first responders. Referred to the Committee on Judiciary.

S.53 (Senator Malloy) Suspends the requirement of being enrolled as a member of the South Carolina Bar to practice law. Referred to the Committee on Labor, Commerce and Industry.

S.59 (Senator Malloy) Workers’ compensation hearings must be held in the district in which the injuries occurred. Referred to the Committee on Judiciary.

S.60 (Senator Malloy) Relating to audio and video recordings in court proceedings. Referred to the Committee on Judiciary.

S.61 (Senator Malloy) Relating to the terms of members of the Workers’ Compensation commission. Referred to the Committee on Judiciary.

S.69 (Senator Malloy) Increases the civil jurisdiction in magistrates court. Referred to the Committee on Judiciary.

S.73 (Senator Malloy) Relating to salaries of judges, solicitors and public defenders. Referred to the Committee on Finance.

S.95 (Senator Campsen) Relating to judicial candidates seeking pledges from members of the General Assembly. Referred to the Committee on Judiciary.

S.98 (Senator Campsen) Increases the civil jurisdiction in magistrates court. Referred to the Committee on Judiciary.

S.101 (Senator Campsen) Relating to eligibility exams for magistrates. Referred to the Committee on Judiciary.

S.117 (Senator Massey) Relating to reckless vehicular homicide and definition of great bodily injury. Referred to the Committee on Judiciary.

S.120 (Senator Massey) Relating to admissibility as evidence regarding the use of seat belts. Referred to the Committee on Judiciary.

S.128 (Senator Massey) Relating to the earnings of a judgement debtor. Referred to the Committee on Judiciary.

S.170 (Senator Hembree) Relating to the Judicial Merit Selection Commission. Referred to the Committee on Judiciary.

S.265 (Senator Goldfinch) Enacts the “Uniformed Limited Liability Company Act”. Referred to the Committee on Labor, Commerce and Industry

S.267 (Senator Goldfinch) Amends the Uniformed Limited Partnerships Act. Referred to the Committee on Labor, Commerce and Industry.

S.270 (Senator McLeod) Prohibits family members of legislators from being elected or appointed as judges. Referred to the Committee on Judiciary.

S.285 (Senator Talley) Constitutional amendment to allow justices and judges to be appointed by the governor. Referred to the Committee on Judiciary.

H.3062 (Reps. Funderburk and McCoy) “Whistleblower and public Employee Protections Act.” Referred to Committee on Judiciary.

H.3065 (Rep. Huggins) Increases the civil jurisdiction of magistrates court. Referred to Committee on Judiciary.

H.3069 (Rep. Magnuson) Relating to the Judicial Merit Selection Committee. Referred to Committee on Judiciary.

H.3070 (Rep. Magnuson) Constitutional amendment requiring the governor to appoint justices and judges. Referred to Committee on Judiciary.

H.3106 (Reps. Wheeler and Martin) Relating to workers’ compensation. Referred to Committee on Labor, Commerce and Industry.

H.3161 (Rep. Rutherford) Increases salaries for solicitors, judges, constitutional officers and public defenders. Referred to Committee on Ways and Means.

H.3229 (Rep. Rutherford) Relating to exceptions to waiver of immunity in the tort claims act. Referred to Committee on Judiciary.

H.3352 (Rep. Johnson) Relating to workers’ compensation settlement agreements. Referred to Committee on Labor, Commerce and Industry

MEDICAL

S.70 (Senator Malloy) Requires a physician to be a member of the South Carolina Medical Association to practice medicine in this state. Referred to the Committee on Labor, Commerce and Industry.

S.132 (Senators Davis, Nicholson, Hutto, and others) Enacts the “Physicians Assistants Act of 2019.” Referred to the Committee on Medical Affairs.

S.136 (Senators Davis and Shealy) Relating to the use of electronic prescriptions for controlled substances. Referred to the Committee on Medical Affairs.

UP NEXT

Copper Dome Strategies will provide you with a weekly update of legislative activity each Friday during the session.

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