View from the Dome – June 7, 2019
By Copper Dome Strategies, LLC
The first session of the 123rd General Assembly adjourned Sine Die on May 10, but the General Assembly returned two weeks later to complete unfinished business. Legislators began the year with education reform at the top of the priority list as well as the potential sale of state-owned utility Santee Cooper. Gov. Henry McMaster and legislative leaders worked cooperatively to craft a state budget focusing on education, workforce development and higher education funding to ease rising tuition costs. As this was the first year of a two-year legislative session, all bills will retain their place in committee or on the calendar.
Here is a look back at this past legislative session.
LEGISLATION SIGNED INTO LAW
H.3985 (Reps. Lucas, G. M. Smith and Stavrinakis) the annual tax conformity legislation. The bill updates the reference to the Internal Revenue Code (IRS) to state income tax laws and provides that if the IRS Code sections adopted by the state are extended, then these sections are also extended for South Carolina income tax purposes. Signed into law March 28, 2019, and takes effect immediately.
H.3785 (Reps. Sandifer, Howard, Thayer, West and Weeks) relating to the Board of Accountancy. This act amends some key operating procedures for the South Carolina Board of Accountancy. Of particular note is revised criteria for reciprocity. It expands application eligibility to those who hold a valid out-of-state CPA license issued before Jan. 1, 2012, and have engaged in four years of out-of-state professional practice as a CPA within the ten years immediately preceding the South Carolina application. Signed into law May 15, 2019, and takes effect immediately.
H.4243 (Reps. Simrill, Lucas, Pope, G.M. Smith, Rutherford and others) legislation aimed at bringing the Carolina Panthers corporate headquarters and training facilities to South Carolina will provide $115 million in tax incentives for the relocation. The Panthers plan to invest more than $200 million and purchase up to 200 acres in York County for the project. The bill includes increased tax credits for future businesses that move to South Carolina’s poorest counties. Signed into law May 22, 2019, and takes effect immediately.
S.530 (Sen. Leatherman) makes changes to the Consolidated Procurement Code. This is the first major update to the state procurement code since 2006. The bill’s aim is to update the procurement code by deleting obsolete language and also improving and shortening processes in government procurement. Many of the changes are the result of a review which was mandated by the restructuring act in 2014. This act took effect upon approval by the Governor and applies to solicitations issued after May 13, 2019.
H.4287 (Reps. Simrill, Lucas, Pope, G.M. Smith, Rutherford and others) which deals with the future of state-owned utility Santee Cooper. The plan calls for the Department of Administration to hire an entity to seek not only bids from qualified offerers to purchase Santee Cooper, but also to seek offers for potential management contracts of the state-owned utility as well as a reform plan from the utility regarding its future. The timeline for the process ends Jan. 15, 2020. Conferees agreed the timeline was necessary so that the General Assembly could act on a recommendation during the next legislative session. Signed into law May 22 and takes effect immediately.
S.408 (Sens. Reese and Turner) provides tax parity for the cable industry with regards to the corporate income tax. This act applies to all open tax periods excluding assessments under judicial review as of the date of the Governor’s approval. Signed into law May 16, 2019.
H.3639 (Reps. Taylor, Allison and Felder), relating to in-state tuition for military personnel and their dependents. The bill expands the categories of individuals covered by these provisions to conform with certain changes in federal law. Signed into law March 20, 2019, and takes effect immediately.
S.228 (Sen. Gambrell) which creates the Tri-County Technical College Enterprise Campus Authority. Signed into law Feb. 21.
S.132 (Sens. Davis, Nicholson, Hutto, M.B. Matthews, Kimpson and Alexander) enacts the “PA Act of 2019” relating to physicians assistants. The bill intends to increase access to care, particularly in rural areas, without putting the public at risk as it relates to competency of care with physician assistants by expanding their duties. The bill requires a written or electronic agreement developed by a PA and a physician or medical staff who agrees to work with and support the PA. The scope of practice establishes the medical aspects of care to be provided by the PA, including the prescribing of medications, and must contain mechanisms that allow the physician to ensure that quality of care and patient safety is maintained in accordance with state and federal laws, as well as all applicable rules and regulations of the Board of Medical Examiners. Signed into law May 13 and takes effect immediately.
H.3760 (Rep. Sandifer) an act that merges the Patients’ Compensation Fund with the South Carolina Medical Malpractice Joint Underwriting Association. Signed into law May 16, 2019, and takes effect immediately.
H.3821 (Rep. Clary) which enacts the “Advanced Practice Registered Nurse (APRN) Act.” The bill expands the role of APRN’s relating to death certificates by allowing them to authorize crematories, sign death certificates, certify the manner of death and execute “do not resuscitate” orders, among other things. Signed into law May 24, 2019, and takes effect immediately.
H.4004 (Reps. Clary, G.M. Smith, Lucas and Ridgeway) enacts the “Physician Orders for Scope of Treatment (POST) Act.” The bill enables certain persons to execute a POST form signed by a physician that sets forth the patient’s wishes for life-sustaining care and requires health care providers and facilities to accept the form as a valid medical order. Signed into law May 24, 2019, and takes effect immediately.
- 3602 (Reps. Rose, Caskey and Weeks) adds acategory relating to persons who make health care decisions for a patient who is unable to consent. Signed into lawMay 24, 2019, and takes effect immediately.
S.105 (Sens. Campbell and Sheheen) the animal welfare bill which was developed from recommendations of the Animal Welfare Task Force last year. Signed into law May 16, 2019, and takes effect immediately.
- 281(Sens. Talley and Campbell) relating to the protection of guide dogs. The bill makes it a misdemeanor and establishes penalties for the intentional misrepresentation of a service animal. Signed into lawMay 13, 2019, and takes effect immediately.
Education, workforce development and higher education funding to ease rising tuition costs were the key priorities in this year’s state budget H. 4000. For the first time in years, legislative leaders worked closely with the governor on developing the budget priorities. In addition to increased revenue for K-12, the budget adds $44 million to fund public higher education institutions in an attempt to control tuition increases. Highlights of the budget include:
- Over $300 million additional dollars to education
- $159 million for a 4% teacher pay increase
- $41 million for a 2% state employee pay increase
- $500 bonus for state employees making $50,000 or less
- $49.5 million for the state Medicaid maintenance of effort and annualization
- $49.7 million to cover 100% of the state employee health and dental insurance increases
- $11.2 million for judicial salary increases
- $40 million for new voting machines
- $65 million for a one-time tax rebate of $50 per person for those filing a tax return
For the technical colleges, the budget includes:
- $6 million base recurring funding
- $51 million Lottery Tuition Assistance
- $17 million SC Workforce Industry Needs Scholarships (SCWINS)
- $11 million for workforce scholarships and grants
- $19.2 million ReadySC
- $12.5 million high demand job skills training equipment
- $4.1 million technology funding
Gov. McMaster issued 28 budget vetoes totaling $40.7 million. McMaster noted the small number of vetoes was due to a successful partnership working in cooperation with legislative leadership on the front end of the budget process and looked forward to continuing a cordial working relationship with the General Assembly. In his veto message, McMaster described a number of his vetoes as pass-thru earmarks void of necessary transparency.
The General Assembly could return to Columbia at any time to address the governor’s vetoes, or they could wait and address them when session convenes again in January.
Read the governor’s veto message here.
Information on the budget can be found here.
Individual state agency budget requests can be found here.
Both Gov. McMaster and legislative leadership had said the 2019 legislative session would produce long-overdue reforms in K-12 education. The House passed its version of education reform H. 3759 (Reps. Lucas, Allison, Felder, Pope, Simrill, Rutherford and others) in early March. However, after hearing complaints from teachers and others about the legislation, the Senate did not pass S. 419 (Sens. Hembree, Malloy, Turner, Setzler, Sheheen and Alexander) known as “The South Carolina Career Opportunity and Access for All Act.” Instead, the committee held numerous subcommittee and committee meetings in an effort to bring more stakeholders to the table. Senate Education Committee Chairman Greg Hembree (R-Horry) has said they will continue work on the bill during the off session and plan to take it up again in January. McMaster has urged the Senate to return to Columbia and finish the job before the year ends.
The fallout from the V.C. Summer nuclear debacle continued to be a major issue at the State House this past session. With ratepayers being forced to pay billions for the project that may never be completed, plans to sell the state-owned utility Santee Cooper once again dominated the discussion. In the end, legislators agreed on a plan that calls for the Department of Administration to hire an entity to seek not only bids from qualified offerers to purchase Santee Cooper, but also to seek offers for potential management contracts of the state-owned utility as well as a reform plan from the utility regarding its future. The timeline for the process ends January 15, 2020. Conferees agreed the timeline was necessary so that the General Assembly could act on a recommendation during the next legislative session.
LEGISLATION OF INTEREST STILL PENDING
H.4532 (Reps. Pope, Clemmons, Daning, Taylor, and others), is similar to a plan first proposed by the TRAC Commission a decade ago, to basically eliminate all sales tax exemptions, and begin taxing electricity, food and medicine at 25% of the gross proceeds of sales, which would roughly equate to a sales tax rate of 1.25%. The plan would also lower the current state sales tax from 6% to 3%. The House Ways and Means Tax Subcommittee Chairman Alan Clemmons (R-Myrtle Beach) has said he plans to hold public hearings around the state this summer and fall on the proposed plan in preparation for debate in the legislature next year.
H.4334 (Reps. Pope, Clemmons, Stringer, Daning and others) Enacts the “South Carolina Income Tax Act for Individuals, Trusts and Estates” that would lower the state’s income tax rate from 7% to 4.5% funded by state growth and includes a trigger mechanism in the event of decreasing tax revenues to the state.
H.4431 (Reps. Jordan, Fry, Rose, Atkinson, Daning and Forrest) that enacts business license tax reform.
In addition to the House tax subcommittees meeting in the off-session, the Senate Tax Committee intends to hold meetings during the summer and fall as well.
S.366 (Sens. Davis, Hutto, McLeod and Kimpson) known as the “Compassionate Care Act”the bill deals with medical marijuana. The state’s top two law enforcement officials, Attorney General Alan Wilson and SLED Chief Mark Keels, are in opposition of the proposed legislation along with the South Carolina Sheriff’s Association. The South Carolina Medical Association also opposes sections of the bill that force physicians to be the access point for marijuana in South Carolina. They are calling for lowering marijuana from a Schedule I to a Schedule II drug so that more comprehensive research can be conducted. This issue has been discussed in previous legislative sessions and will surely generate considerable debate again next year. Gov. McMaster has indicated he will follow law enforcement’s lead on the bill suggesting a veto should legislation reach his desk.
- 3823(Reps. Mace, G.M. Smith, Taylor, G.R. Smith and others) that would eliminate the Certificate of Need (CON) requirements relating to the licensure of heath care facilities. The committee took no action on the bill but heard testimony both for and against the bill. Subcommittee Chairman and bill co-sponsor Murrell Smith (R-Sumter) said he is disturbed that five years have passed since the House last passed legislation eliminating CON only to see the bill stall in the Senate. He believes the current system is broken and said the votes are in the House to totally repeal CON but urged those opposed to present their plan to modernize as soon as possible.
S.16 (Sen. Rankin) that increases the amount of a prescription that may be refilled from a ten-day to a fourteen-day supply. The bill would allow for exemptions for drugs like insulin that are pre-packaged for a 30–day supply. The bill has passed both bodies and is now in conference committee to resolve the differences in the two versions.
S.298 (Sens. Sheeheen, Peeler and others) the “Higher Education Opportunity Act of 2019” is an attempt to reign in rising tuition costs while increasing funding for the state’s 33 public colleges and universities. The bill remains in the Senate Education Committee.
H.3757 (Reps. Lucas and Collins) establishes the Workforce and Education Data Oversight Committee (WEDOC) and specifies the responsibilities and objectives of the committee. The WEDOC is to support the mission of the Coordinating Council for Workforce Development and includes the Executive Director of the State Board for Technical and Comprehensive Education and the president of a technical college appointed by the Chairman of the State Board for Technical and Comprehensive Education. The bill passed the House in May and is now in the Senate Labor, Commerce and Industry Committee.
H.3936 (Reps. Davis and Daning) would include eligibility for the Palmetto Fellows Scholarships for students attending technical colleges and two-year institutions of higher learning. The bill passed the House in April and is now before the Senate Education Committee.
H.3576 (Reps. White, Cobb-Hunter and Garvin) establishes the SC Workforce Industry Needs Scholarship (SCWINS) scholarship for students who are attending a two-year public technical college, majoring in a critical workforce area program, as defined and recommended by the State Board for Technical and Comprehensive Education and ratified by the South Carolina Coordinating Council for Workforce Development, and who are receiving a Lottery Tuition Assistance Program Scholarship (LTAP) for the current school year. The critical areas included advanced manufacturing, healthcare, information technology and transportation logistics and distribution. The bill was amended to include provisions for need-based students as well. The bill passed the House in January and is now before the Senate Education Committee. However, a provisos was included in the FY 2019-20 state budget relating to the program.
S.33 (Sens. Grooms and Campsen) that enacts the Campus Free Expression Act. The bill aims to prevent any four–year, two–year or technical college from blocking student-invited speakers from visiting campus and allow for penalties for those who interfere with freedom of speech. The bill also seeks to ensure speakers of all political leanings can speak on campuses without being deterred by administrative issues such as high security costs. The committee agreed the legislation needs more work before advancing.
S.7 (Sens. Malloy, Climer, Goldfinch, Talley, Harpootlian, Kimpson and Allen) related to caps within the Tort Claims Act has passed the Senate and was referred to the House Ways and Means Committee. The bill proposes to raise the caps on the recovery limits. As amended, it would raise the cap on a single person from $300,000 to $500,000 and for an occurrence from $600,000 to $1,000,000. The bill as passed by the Senate also adds new language related to an offer of judgment and the calculation of interest. S. 386 (Senators Malloy, Climer, Goldfinch, Talley, Sabb and Harpootlian) was a related bill with additional reform measures that was recommitted to the Senate Judiciary Committee.
Copper Dome Strategies, LLC hopes you have a safe and enjoyable summer. We will keep you apprised of any activity by the General Assembly during the interim. The second session of the 123rd legislative session will commence in January 2020.