View From the Dome (April 23, 2021): House is Signaling its Approval of Senate’s COVID-19 Liability Safe Harbor Act

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 23, 2021

The Senate Finance Committee adopted its version of the FY21-22 state budget this week and the full Senate debated the fate of state-owned utility Santee Cooper. The House met in subcommittee and committee meetings.

Three weeks remain in the legislative session, although it appears likely the General Assembly will return following adjournment May 13 for unfinished business.

All South Carolinians age 16 and older can get their COVID-19 vaccine. For more information from DHEC on the virus, click here.

TAX

The Senate adopted on Tuesday H.4064 (Reps. G. M. Smith and Sandifer), which clarifies that manufacturing property owned or leased by a public utility regulated by the Public Service Commission does not qualify for a 14.2% exemption. The bill also requires any utility that gets a tax exemption via this bill must use the savings to effectuate lower rates for ratepayers. The bill was amended to add there is appropriated $67,055,000 from the Fiscal Year 2019-20 Contingency Reserve Fund to the Trust Fund for Tax Relief.

The Board of Economic Advisors is directed to make any necessary adjustments among its forecasts for recurring and non-recurring revenue resulting from the appropriation contained herein. The bill now goes back to the House for concurrence in the Senate amendment.

TAX INTRODUCTIONS OF INTEREST

HOUSE

H.4222 (Reps. W. Cox and Dillard) Allows for an additional homestead tax exemption for any increase in value attributable to the periodic countywide appraisal equalization program. Referred to Committee on Ways and Means.

BUDGET

The Senate Finance Committee adopted 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) on Tuesday. Chairman Hugh Leatherman (R-Florence) returned to lead the committee after missing last week recovering from a medical procedure. The $31 billion budget includes $9.9 billion in general fund revenues and one-time surplus revenue of $1.3 billion. The budget adopted is $522 million above the base from the previous budget and includes:

$254 million – Mid-Year Reduction Reserve Fund
$47 million – 2% state employee pay raise
$72 million – $1,000 teacher pay increase
$65 million – raises K-12 base student cost to $2,516
$36 million – full-day 4-year-old kindergarten
$10 million – broadband expansion
$16.7 million – DHHS – Medicaid Management Information System (MMIS)
$60 million – DHHS – Medicaid Maintenance of effort
$1.5 million – DJJ – Marine and wilderness programs

For the Technical Colleges:

$10 million – recurring base increase (tuition mitigation)
$51 million – Lottery Tuition Assistance
$10.3 million – Maintenance, renovation and replacement
$2.5 million – ReadySC
$16 million – Workforce Scholarships and Grants
$17 million – SC WINS
$18 million – High-demand job skill training equipment

A total of $134 million was appropriated individually to the 16 colleges for maintenance, renovation and replacement costs. The full Senate is expected to begin floor debate next Tuesday. Once the Senate adopts its version, it will be returned to the House. The House Ways and Means Committee is planning additional committee meetings in late May to address the additional new revenue recently added to the state budget estimate. It is likely the House will return in June to pass its revised version back to the Senate, setting up a Conference Committee to work through the differences. The Senate Finance Committee budget spreadsheet can be found here.

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. Those decisions are likely to occur sometime in late summer or early fall of this year.

The governor’s executive budget can be found here.

Individual state agency budget requests can be found here.

Video archives of the meetings can be found here.

JUDICIAL/LEGAL

The House Judiciary Committee on Tuesday favorably approved S.147 (Senators Massey, Rice, Hembree, Adams and Peeler), the COVID-19 Liability Safe Harbor Act. The bill provides health care providers and businesses liability protection from Coronavirus claims. There are 22 states that have enacted COVID-19 liability protection and 21 states are considering it. The House voted Thursday to give the bill second reading. A unanimous consent request was adopted to give the bill third and final reading.

The committee also approved H.3939 (Reps. Pope, Hyde, McCravy, McGarry and Bryant) relating to the definitions of “injury” and “personal injury” in workers’ compensation. The bill exempts injuries sustained by law enforcement in the line of duty from certain limitations on claims for injury caused by stress, mental injury or mental illness (Post Traumatic Stress Disorder). The bill now goes to the full House for consideration. A similar Senate bill S.94 (Senator Malloy) remains on the Senate calendar with an objection.

A Senate Judiciary Subcommittee on Wednesday voted 3-2 to favorably approve H.3620 (Reps. Gilliard, W. Newton, Bernstein, Hyde, Simrill, Rutherford, Lucas and others), the “Penalty Enhancements For Certain Crimes,” also known as the Hate Crimes bill. The bill provides additional penalties for people who commit a crime when it is beyond a reasonable doubt the victim was selected due to race, color, creed, religion, sex, gender, age, national origin, ancestry, sexual orientation, or physical or mental disability. The bill now goes to the full Senate Judiciary Committee for consideration.

ENERGY/UTILITIES

The Senate spent considerable time this week on the floor debating the fate of state-owned utility Santee Cooper. An amendment was adopted Thursday that would provide reforms to the agency. They then did a strike and insert to H.3194 (Reps. Lucas, G. M. Smith, Simrill, Rutherford and others), the House-passed bill that provided reforms as well as established a process for the sale of assets. The bill makes reforms to the quasi-state agency that would make it operate more like an investor-owned utility. The Office of Regulatory Staff (ORS) would have oversight authority and the ability to audit and inspect and authorize rate increases.

Changes were made to the structure of the governing board, including limiting terms to no more than three consecutive four-year terms. The legislative Joint Bond Review Committee would have oversight of new bond debt. The body voted 44-1 to give the bill second reading and, by unanimous consent, give it third reading Friday. It will then go back to the House for their consideration of the Senate amendment.

The Public Utilities Subcommittee of the House Labor, Commerce and Industry Committee on Wednesday favorably approved S.304 (Senators Climer and Fanning) relating to electric vehicle charging stations when a person or corporation using an electric vehicle charging station is not an electric utility. The bill provides that any increase in customer demand or energy consumption associated with transportation electrification shall not constitute revenues for an electrical utility. The bill was amended to require the Department of Revenue (DOR) to study the effects of electric vehicles on the collection of the state’s motor fuel tax. The subcommittee also approved H.4149 (Reps. Ott and Sandifer) known as the “whistleblower bill” that prohibits a public utility from taking adverse employment action against an employee who made a report of wrongdoing by the public utility to the Office of Regulatory Staff (ORS). Both bills were approved by the full LCI Committee Thursday and now go to the full House for consideration.

WORKFORCE DEVELOPMENT

Gov. McMaster was joined by SC Department of Administration Executive Director Marcia Adams and SC Department of Veterans’ Affairs (SCDVA) Secretary William Grimsley on Monday to announce the Veterans Virtual Career Fair happening on May 4. According to the Bureau of Labor Statistics, the annual average in 2020 for the number of unemployed veterans in South Carolina was 10,000. This virtual career fair will provide those looking to serve in a different capacity the chance to explore career opportunities with over 30 state agencies and higher education institutions. Since Jan. 1, the percentage of veterans who applied to a state agency and were hired has increased from 5.2% to 12%. For more information, click here.

SC Future Makers, a nonprofit workforce and education organization affiliated with the SC Manufacturers Alliance (SCMA), released an economic impact study Tuesday of South Carolina’s manufacturing industry. Prepared by Dr. Joseph Von Nessen, Research Economist with the Darla Moore School of Business at the University of South Carolina, the study documents the uniquely large footprint that manufacturing maintains in the Palmetto State that has an estimated economic impact that totals between $194 billion and $206 billion annually.

This study also documents the ongoing evolution of manufacturing workforce demands in the face of rapid technological innovation. Among the 127 specific manufacturing occupations examined, those likely to be in the highest demand over the next decade are also the ones most likely to require some form of post-secondary education. This highlights a marked shift toward a more high-skilled, experienced workforce. A copy of the Economic Impact of SC Manufacturing can be accessed here.

APPOINTMENTS

The Senate voted 44-0 on Tuesday to confirm the governor’s appointment of Robbie Kerr, CPA, to lead the SC Department of Health and Human Services (DHHS). Kerr previously ran the state’s Medicaid agency from 2003-2007. A graduate of the University of South Carolina, he is a Certified Public Accountant and a Certified Management Accountant. Kerr began work at the agency on Wednesday.

Also Tuesday, the Senate Judiciary Committee confirmed the following reappointments to the Workers’ Compensation Commission: Thomas Scott Beck, Aisha K. Taylor and Avery B. Wilkerson. Those appointments now go to the full Senate for confirmation.

HEALTHCARE

A House Medical, Military and Municipal Affairs Subcommittee on Tuesday favorably approved S.503 (Senator Hutto) that would allow Physician’s Assistants (PA’s) and Advanced Practice Registered Nurses (APRN’s) to issue orders for certain home health services. The subcommittee also approved S.455 (Senator Davis) relating to the creation of an additional category for temporary licensure for graduate nurses. Both bills now go to the full committee for consideration.

HIGHER EDUCATION

The Senate voted 44-0 on Tuesday to give second reading approval to H.3017 (Reps. Davis, Atkinson, B. Newton and others), which would allow eligibility for Palmetto Fellows Scholarships for students attending two-year institutions of higher learning and technical colleges. The bill was amended to add the student may receive a LIFE Scholarship for not more than 10 semesters for a five-year degree program, eight semesters for a four-year degree program, four semesters for a two-year degree program, or six semesters for a three-year degree program. The bill received third reading Thursday and now goes back to the House for concurrence in the Senate amendment.

The Senate voted 43-0 on Wednesday to give second reading to S.231 (Senators Shealy, McLeod and Matthews) that enacts the “Student Identification Card Suicide Prevention Act.” The bill requires public schools and public and private institutions of higher learning to add the telephone number for the National Suicide Prevention Hotline to student identification cards. The bill received third reading Thursday and now goes to the House for consideration.

Also on Wednesday, the House Education Committee favorably approved S.241 (Senator Young) relating to tuition rates for military personnel and their dependents. The bill removes the requirement that a veteran or dependent enroll in a public institution of higher learning within three years of the veteran’s discharge in order to receive educational assistance. The bill aims to bring state law into compliance with federal law by removing the three-year limitation. The bill now goes to the full House for consideration.

The House on Tuesday gave third and final reading approval to S.38 (Senators Grooms, Rice, Hembree, Verdin and Kimbrell) that enacts the “Reinforcing College Education on America’s Constitutional Heritage” (REACH) Act. The bill requires each high school and institution of higher education that provides a baccalaureate program to provide instruction on the United States Constitution, the Federalist Papers, the Declaration of Independence and the Emancipation Proclamation. The House amended the bill to include a minimum of five essays in their entirety from the Federalist Papers as selected by an instructor and one or more documents that are foundational to the African American Freedom struggle. The Senate concurred Thursday in the House amendment and the bill is now enrolled for ratification.

ALCOHOL

The General Laws Subcommittee of the House Judiciary Committee on Thursday favorably approved S.619 (Senators Rankin, Leatherman, Hutto, Fanning and Climer), known as the “Gallo bill.” The bill 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 stand-alone facilities in tourist areas. The bill was amended by the Senate to reduce the number of satellite tasting rooms from four to three, reduce the number of bottles sold from 12 to six and require the tasting rooms to be closed at 5:30 p.m. Gov. Henry McMaster has urged the legislature to pass this bill. The bill now goes to the full House Judiciary Committee for consideration.

AUTOMOTIVE

The Business & Commerce Subcommittee of the House Labor, Commerce and Industry Committee Wednesday favorably approved S.510 (Senators Grooms, Verdin, Davis, Adams and others) relating to motor vehicle manufacturers, distributors and dealers and contractual agreements. The bill, which affects numerous clauses in the current contracts between automobile dealers and manufacturers, was approved by the full LCI Committee Thursday and now goes to the full House for consideration.

ANIMAL WELFARE

The Special Laws Subcommittee of the House Judiciary Committee debated H.4094 (Rep. Huggins), known as “Jayce’s Law,” on Thursday. The bill requires a person to register a fertile pit bull dog they keep, own or harbor, establishes a breed determination procedure, and provides for exemptions from registrations and establishes penalties. After considerable testimony on the bill, the subcommittee agreed to continue discussion at a future meeting.

The Senate voted 45-1 Thursday to give second reading to H.3539 (Reps. Davis and Martin), which requires an official form of identification for the transportation on a public road and the release of live swine. The bill remains on the Senate calendar awaiting third and final reading.

INTRODUCTIONS OF INTEREST

HOUSE

H.4252 (Reps. Bannister, West, Anderson and others) Relating to the legislative intent of the Enterprise Zone Act, agreements with technical colleges, qualifying businesses, etc. Referred to Committee on Ways and Means.

SENATE

S.762 (Senators Kimbrell, Rice, Adams, Turner and Climer) Relating to sanctions for frivolous lawsuits and associated costs. Referred to the Committee on Judiciary.

UP NEXT

The Senate will debate the state budget on the floor beginning Tuesday.

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.

April 16: Crossover Deadline Passes, Senate Finance Committee Starts Draft of New $31B State Budget

April 9: Conformity Moves Through House, with Tax Break for $10,000 in Unemployment Benefits

April 2: Senate Approves Bill Concerning Attorney’s Fees Connected to DOR Actions

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