As part of SCACPA’s dedication to Advocacy on behalf of the CPA Profession, here is your weekly update of actions being taken during the legislative session, prepared in cooperation with our lobbying partner, Copper Dome Strategies
Friday, April 2, 2021
The Senate continued subcommittee and committee hearings Tuesday and Wednesday and met in perfunctory session only on Thursday.
The House of Representatives took the entire week off for its annual Easter furlough.
Frank Rainwater, the Executive Director of the Revenue and Fiscal Affairs Office, told the Senate Finance Committee that South Carolina has avoided many of the fiscal problems experienced by other states, and the Board of Economic Advisors projects a one-time revenue surplus of $772 million.
The Senate voted 43-0 on Wednesday to give third reading approval to S.154 (Senator Martin) that would allow a taxpayer prevailing in an action levied against the Department of Revenue (DOR) to recover reasonable attorney’s fees and costs associated with the action. The bill was amended to include the individual must be the substantially prevailing party – and allows for attorney’s fees to go to the DOR if the case is deemed frivolous. The court would determine the amount of the attorney fees. The bill now goes to the House for consideration.
The Senate Finance Committee favorably approved the following on Tuesday:
S.436 (Senator Cromer) deletes an aggregate credit provision and sets an annual limit for community development tax credits. The bill sunsets in 2023.
S.609 (Senator Alexander) would authorize state agencies and political subdivisions to conduct criminal background checks on their employees and contractors that have access to federal tax information.
S.677 (Senator Davis) provides for the allocation of a tax credit or unused credit amount carried forward that is earned by a partnership or limited liability company taxed as a partnership.
H.3726 (Reps. West, G. M. Smith, W. Cox, M. M. Smith, Pope, Simrill and others) would exclude amounts received from a buydown relating to the definition of “gross proceeds of sale.”
These bills now go to the full Senate for consideration.
TAX INTRODUCTIONS OF INTEREST IN THE SENATE
S.713 (Senator Williams) Authorizes imposition of the educational capital improvements sales and use tax in certain situations. Referred to the Committee on Finance.
The Senate Finance Committee heard a presentation Tuesday from Frank Rainwater, Executive Director of the Revenue and Fiscal Affairs Office. Rainwater told the committee South Carolina has fared far better than expected during the pandemic and has avoided many of the fiscal problems experienced by other states. The most recent Board of Economic Advisors (BEA) estimate is projecting $182 million in new recurring revenue and $772 million in one-time surplus revenue.
The FY21 revenues are growing and through February are running $400 million ahead of the budget estimate, meaning additional surplus revenue is likely. For FY22, Rainwater noted we are in a better starting position, but the post-pandemic and post-stimulus environment remains unclear. The BEA will next meet on April 8 and might adjust the revenue estimate at that time or may wait until May when the uncertainty regarding individual income tax revenue and tax filings is better known.
The House passed its version of the FY21-22 General Appropriations Act H.4100 (Ways and Means Committee) and the Capital Reserve Fund H.4101 (Ways and Means Committee), appropriating one-time surplus revenues last week. The $31.1 billion budget, which includes $9.8 billion in general fund revenues, remained intact as passed by the committee. A presentation of the House-passed plan can be found here.
The Senate Finance Subcommittees continued hearing agency budget requests this week. Agencies appearing this week included the Secretary of State, the Office of the Inspector General, the Office of the Adjutant General and the Department of Veterans Affairs. The full Senate Finance Committee is expected to debate the budget beginning April 13.
In addition to the annual state budget, the General Assembly must still determine how to appropriate $2.1 billion in federal funds from the American Rescue Plan Act. Also up for debate is the $525 million from the Savannah River Site (SRS) settlement, much of which is likely to be directed to the three-county region primarily impacted by SRS.
The governor’s executive budget can be found here.
Individual state agency budget requests can be found here.
Video archives of the subcommittee meetings can be found here.
COVID-19 – VACCINES
Gov. Henry McMaster and the SC Department of Health and Environmental Control (DHEC) announced on March 26 that all South Carolinians ages 16 and older will be eligible to receive the COVID-19 vaccine beginning March 31 and can start scheduling their appointments.
In all, DHEC and other vaccine providers have administered 1,818,939 doses of vaccine to South Carolina residents, with 1,163,103 South Carolinians having received at least one dose and 617,787 South Carolinians having completed vaccination. As of last Friday, approximately 15% of South Carolina’s population has been fully vaccinated. You can read more here.
For more DHEC information on the virus, click here.
The Senate Judiciary Committee narrowly approved on Tuesday S.464 (Rankin) that would provide some reform to the State Public Service Authority, also known as state-owned utility Santee Cooper. There was extensive debate over the reform measures as well as lengthy discussion of the financial condition of Santee Cooper. The bill now goes to the Senate floor for possible further debate.
The committee did not take action on H.3194 (Reps. Lucas, G. M. Smith, Simrill, Rutherford and others) relating to the sale and reform of state-owned utility Santee Cooper as passed by the House.
The Senate gave third and final reading Tuesday to S.503 (Senator Hutto) that would allow Physician’s Assistants and Advanced Practice Registered Nurses to issue orders for certain home health services. The bill was amended on third reading to take effect 60 days after approval of the governor. Also that day, the Senate voted 42-0 to give second reading to S.455 (Senator Davis) relating to the creation of an additional category for temporary licensure for graduate nurses. The bill received third and final reading on Wednesday. Both bills now go to the House for consideration.
A Select Subcommittee of the Senate Medical Affairs Committee met Tuesday and discussed S.2 (Senators Peeler, Malloy, McElveen and Hembree), which would restructure the Department of Health and Environmental Control (DHEC) and create the Department of Behavioral and Public Health. The new agency would include the current DHEC Division of Public Health, the Department of Alcohol and Other Drug Abuse Services and the Department of Mental Health. A new state agency, the Department of Environmental Services, would incorporate all environmental functions currently at DHEC, the Office of Coastal Resource Management and the Division of Water currently housed at the Department of Natural Resources. Lastly, all food establishment inspections would be transferred to the Department of Agriculture. The subcommittee plans to meet again next week to take public testimony.
The Senate Medical Affairs Committee on Wednesday favorably approved S.150 (Senators Davis, Hutto, Malloy and others) the “South Carolina Compassionate Care Act.” The legislation provides for the sale of medical cannabis products and conditions under which a sale can occur. The bill is now before the full Senate for consideration.
Gov. McMaster announced Tuesday he has awarded $6 million in Governor’s Emergency Education Relief (GEER) funds to the University of South Carolina (UofSC), who, in partnership with Benedict College, will establish eight Apple computer labs statewide. The labs will be strategically located for use by local school districts, Historically Black Colleges and Universities (HBCUs), the South Carolina Technical College System and citizens in the community. The collaboration will build a new network of learning labs that will feature Apple products and curricula. The network will include hubs in Columbia’s BullStreet District and at Benedict College, along with satellite labs at six of UofSC’s Palmetto College and regional campuses. UofSC Palmetto College campuses are all located within 15 miles or less of a broadband desert, according to the South Carolina Broadband Map, providing reliable technology and internet access to these communities.
The one-time grants are funded by monies received through the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress and signed into law by President Trump and allocated directly to each governor. Each state received an allocation for a GEER fund. South Carolina’s share of GEER funds was $48 million.
The Senate Judiciary Committee on Tuesday debated H.3696 (Reps. Lucas, G. M. Smith, Murphy, Simrill, Rutherford and others) that would increase the number of circuit and family court judges in certain judicial circuits. The bill adds three circuit court seats along the coast where most of the state’s population growth has occurred. The bill was amended in subcommittee to add an additional circuit court seat in the second circuit, which currently only has one judge. The committee carried over the bill wanting further information about case numbers in each of the circuits. It will be on the agenda for the next committee meeting.
The Senate Judiciary Committee favorably approved Tuesday, as amended, S.619 (Senators Rankin, Leatherman, Hutto, Fanning and Climer) that provides for the sale of wine on winery premises, beer and wine on brewery property and retail sales and tastings of alcoholic liquors at micro-distilleries.
California-based E&J Gallo Winery is planning a $400 million economic development deal expected to bring nearly 500 jobs to Chester County and is seeking this legislation to allow for wine tastings at four stand-alone facilities in tourist areas. Opponents of the bill testified the legislation, as written, would give an unfair advantage to Gallo over retailers. The bill was amended to reduce the number of satellite tasting rooms from four to three, reduce the number of bottles sold from 12 to six and requires the tasting rooms to be closed at 5:30 pm.
Gov. Henry McMaster has urged the legislature to pass this bill. The bill now goes to the full Senate for consideration.
INTRODUCTIONS OF INTEREST
S.712 (Senator Davis) Establishes the Healthcare Professional Loan Forgiveness Program, provides for eligibility, administration and funding. Referred to the Committee on Education.
S.715 (Senators Shealy, Setzler and Harpootlian) Adds two additional members to the Midlands Technical College Commission. Referred to the Committee on Education.
S.717 (Senators Jackson and Verdin) Adds diabetes screening facilities to institutions exempt from state Certificate of Need. Referred to the Committee on Medical Affairs.
Both chambers will spend considerable time on the floor working through their calendars in order for bills to meet the April 10 crossover deadline.
REAR VIEWS 2021
Look to SCACPA’s “View from the Dome” updates on the SCACPA website and our social media every week during the legislative session. Sine Die adjournment is scheduled for May 13. You can always stay up-to-date with SCACPA’s respective blog pages for Governmental Topics, Legislative Topics and Regulatory Topics.
March 26: House Receives Senate’s Bill for Pass-Through Trade and Business
March 19: Conformity Begins its Journey with Approval from a House Ways and Means Subcommittee
March 12: Senate Finance Committee to Consider a Pass-Through Trade and Business Bill
March 5: House Ways and Means Committee is Cautious With its Version of State Budget
Feb. 26: Senate Approves “COVID-19 Liability Safe Harbor Act,” Bill Now Heads to House
Feb. 19: Senate Sets Priority on COVID-19 Liability Safe Harbor Act as its Debate Continues
Feb. 12: Senate to Consider Personal Finance Courses Requirement to Replace Economics Classes for High Schoolers
Feb. 5: Senate Nears Approval of $200M from Reserve Fund for Vaccine Distribution
Jan. 29: DOR Tells Economic Development Subcommittee That SC’s Tax Revenues are Strong
Jan. 22: Board of Economic Advisors Places State’s Tax Revenue Collections at $336M Above Forecast
Jan. 15: McMaster Delivers State of the State, Recommends $123M More for Small Business Grants
Jan. 8: 2021 Legislative Session “Pre-View from the Dome”
Dec. 18: A First Look at Pre-Filed Tax Legislation of Interest for the 2021 Legislative Session