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 9, 2021
Both chambers spent considerable time on the floor working to clear their calendars and move as many bills as possible to the opposite chamber prior to the April 10 crossover deadline in order for bills to be considered this session.
The effort to conform SC’s tax code to the many federal changes took a significant step forward this week with the third and final reading of House Bill 4017 on Wednesday, and it now goes to the Senate. H.4017 includes multiple provisions regarding conformity, including the exclusion of unemployment benefits from South Carolina income tax (subject to income limits). SCACPA will continue to keep you informed of progress.
The Board of Economic Advisors met Thursday and raised the state budget estimate by more than $200 million.
Robbie Kerr, CPA, was appointed by Gov. Henry McMaster to lead the SC Department of Health and Human Services (DHHS). If confirmed by the Senate, he would return to his role of running the state’s Medicaid agency, which he did from 2003-2007 under Gov. Mark Sanford.
All South Carolinians age 16 and older can get their COVID-19 vaccine. For more details from DHEC on the virus, click here and stay SAFE!
- The following bills were adopted by the House and have been sent to the Senate for consideration:
H.4017 (Reps. Simrill and Pope) tax conformity – relating to the application of the Internal Revenue Code to state income tax laws. The bill was amended to decouple with 10 federal provisions and also to exempt the first $10,000 of federal unemployment payments from income tax.
H.3948 (Reps. Stavrinakis and Murphy) provides that a county that has imposed by ordinance a sales and use tax in an amount not to exceed 1% within its jurisdiction may impose an additional sales and use tax in an amount not to exceed 1% within its jurisdiction.
H.3354 (Rep. Ballentine) provides a property tax exemption of a renewable energy resource property having a nameplate capacity of and operating at no greater than 20 kilowatts.
H.4064 (Reps. G. M. Smith and Sandifer) relating to property tax exemptions for manufacturers clarifying property owned or leased by a public utility. The bill was amended in subcommittee to require any utility that gets a tax exemption via this bill must use the savings to effectuate lower rates for ratepayers.
The House recommitted H.4106 (Reps. Finlay and G. M. Smith), a Joint Resolution to extend the income tax filing deadline from April 15 until May 17, 2021. Ways and Means Chairman Murrell Smith told the body since SCDOR has already extended the deadline, the Joint Resolution is not necessary.
- The following bills were adopted by the Senate and have been sent to the House for consideration:
S.527 (Senator Alexander) defines “legally separated” for the purposes of imposition of the property tax so that each spouse can claim the 4% assessment ratio. The bill now goes to the House for consideration.
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.
The Senate also approved H.3726 (Reps. West, G. M. Smith, W. Cox, M. M. Smith, Pope, Simrill and others) that would exclude amounts received from a buydown relating to the definition of “gross proceeds of sale.” This bill is now enrolled for ratification and on its way to the governor.
TAX INTRODUCTIONS OF INTEREST
H.4146 (Reps. Herbkersman, Pendarvis and Henegan) enacts the “Livable Homes Tax Credit Act,” which provides an individual income tax credit for retrofitting a residence to improve accessibility. Referred to Committee on Ways and Means.
S.726 (Senator Hutto) Includes an agribusiness processor as a manufacturing facility for the purpose of sales tax exemption on construction materials. Referred to the Committee on Finance.
BOARD OF ECONOMIC ADVISORS
Legislators will have $385 million in new recurring revenue to appropriate for the next fiscal year beginning July 1.
The state Board of Economic Advisors met Thursday and raised the revenue estimates for FY20-21 and FY21-22. New recurring revenue for FY21-22 was increased by $203 million to $385 million. One-time surplus revenue is now estimated to be $1.334 billion.
Tax collections for the current fiscal year have been running well above the previous estimate but the BEA was hesitant to act due to uncertainty in the economy. However, due to federal intervention, combined with changing consumer behavior revenue, collections continue to increase. Through March, total General Fund revenue grew 8.5% and is $844.9 million above estimated revenue, though delayed tax filings and refunds have inflated this excess.
To read the BEA’s 54-page General Fund Revenue review, click here. The BEA is statutorily charged to provide the General Assembly with the official revenue estimate for lawmakers to draft the annual state budget.
The Senate Finance Subcommittees concluded hearing agency budget requests this week as they craft their 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).
The $31 billion budget includes $9.9 billion in general fund revenues.
Among those appearing before the Higher Education Subcommittee was the State Board for Technical and Comprehensive Education. System President Dr. Tim Hardee told the subcommittee on Wednesday the request includes $28 million in recurring base funding, $18 million for high-demand job skills training equipment and $51.1 million for Lottery Tuition Assistance. The state’s 16 technical colleges are also seeking $20 million for maintenance and repair projects and funding for ongoing initiatives like ReadySC, SC Wins scholarship funding and workforce grants and scholarships. Hardee urged the subcommittee to devote more resources to one-time maintenance and equipment needs, noting that the technical colleges serve 50% of the state’s higher education student population yet received 12% of the one-time surplus funds. The full Senate Finance Committee is expected to debate the budget beginning next week.
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.
Gov. Henry McMaster announced on Wednesday that he has appointed Robbie Kerr, CPA, as his choice to lead the SC Department of Health and Human Services (DHHS). Kerr previously ran the state’s Medicaid agency from 2003-2007, during Gov. Mark Sanford’s administration. Before becoming director of DHHS, Kerr worked at the agency for 18 years. A graduate of the University of South Carolina, he is a certified management accountant in addition to being a CPA. A native of Lexington, Kerr has run his own consulting practice since leaving the agency in March 2007 and is in the process of ceasing operations of that firm. If confirmed by the Senate, Kerr would replace Thomas “Clark” Phillip, Jr., who has been serving as acting director since Josh Baker stepped down in January after three years on the job.
The House voted 79-29 on Wednesday and favorably approved 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 Judiciary Committee previously amended the bill by adding back protections for gay or transgender people and removing stalking and harassment from the crimes that could add an extra hate crime penalty, leaving the proposal to only deal with violent offenses. The bill now goes to the Senate for consideration. Only three states (Arkansas, South Carolina and Wyoming) do not have such a law on the books.
The House voted 98-5 on Tuesday and approved H.3243 (Reps. Collins, Bernstein, Kimmons, Forrest and others) that allows for people to be eligible for an occupational or professional license if they are lawfully present in the state and are not precluded from establishing residency under federal immigration laws. The bill received third reading Wednesday and now goes to the Senate for consideration.
The House voted 105-1 Tuesday and approved H.3144 (Reps. White, Robinson, Thigpen and V. S.Moss) that establishes the “South Carolina Workforce Industry Needs Scholarships” (SC WINS) for students attending a two-year technical college. The bill’s intent is to benefit thousands of needy students and also serve as an economic development tool to expand a skilled workforce. The bill now goes to the Senate for consideration.
The House voted 112-0 on Tuesday and approved H.3524 (Reps. Hixon and Forrest) that would extend the sunset provision to June 30, 2022, a moratorium on certain rights, powers and privileges of for-profit pipeline companies. That same day, the House voted 86-22 and approved H.4062 (Reps. Sandifer and West) that would allow the Public Service Commission (PSC) to hire qualified, independent third-party experts for review and approval proceedings for electrical utilities.
Both bills received third and final reading the next day and now go to the Senate for consideration.
The House voted 99-10 on Tuesday and favorably approved H.4006 (Reps. G. M. Smith and Weeks) that extends an increased limit for certain off-premise alcohol sales by breweries. The provision was enacted into law last year and this bill extends it until May 31, 2022. The bill received third reading Wednesday and now goes to the Senate for consideration.
A Senate Judiciary Subcommittee favorably approved S.479 (Senators Bennett, McElveen, Turner and others) relating to the regulation of manufacturers and micro-distilleries on Wednesday. The bill was amended to clarify that local micro-distilleries can charge for tours but not tastings, may not serve food and are permitted to sell 6 liters instead of the proposed 9 liters. They can also have a permitted restaurant that can sell liquor by the drink. The bill now goes to the full Senate Judiciary Committee for consideration.
The Senate gave second reading approval Thursday to S.619 (Senators Rankin, Leatherman, Hutto, Fanning and Climer) known as the Gallo Wine Bill. The bill was amended to include the provisions in S.479 (Senators Bennett, McElveen, Turner, Cromer and others), the micro-distillery bill. With a unanimous consent request to give the bill third reading Friday, it will make it to the House before the crossover deadline.
The House on Tuesday concurred in the Senate amendments to H.3071 (Reps. Ott, Ligon, Taylor and others) that creates the “Equine Industry Support Measures Study Committee” to examine the potential for further growth of the equine industry. The bill includes a stipulation that the committee shall study the potential for fees to be imposed on all commercial feed and custom blends labeled for equine for the purpose of promoting the equine industry. Recommendations from the seven-member committee are due to the General Assembly by Feb. 15. The bill is now enrolled for ratification and awaiting action by the governor.
The Senate this week confirmed these appointments to the SC State Board of Veterinary Medical Examiners:
- Tracie Quick of Irmo, term to expire April 6, 2025
- Deloris Mungo of Columbia, term to expire April 6, 2024
- Elizabeth M. Fuller of Charleston, reappointed with term to expire April 6, 2025
- LaDon S.Wallis of Charleston, term to expire April 6, 2027
Legislative rules require that in order for bills to be considered by the opposite chamber this session, all bills must receive third and final reading by April 10. Bills that do not meet this deadline can still be debated but must reach a much higher threshold for debate by receiving a two-thirds vote of the body. As a result, both chambers were busy this week working to clear their calendar of as many bills as possible prior to April 10 in order to be considered this session.
As this is the first year of a two-year legislative session, any bills that do not become law this year will retain their place when the legislature meets in January for the second year of the session.
INTRODUCTIONS OF INTEREST
S.720 (Senator Fanning) Concurrent Resolution to congratulate Dr. Greg Rutherford upon his retirement as President of York Technical College. The Concurrent Resolution was agreed to and ordered returned to the Senate with concurrence.
H.4149 (Reps. Ott and Sandifer) prohibits a public utility from taking adverse action against an employee who made a report of wrongdoing by the public utility to the Public Service Commission. Referred to Committee on Labor, Commerce and Industry.
H.4156 (Rep. R. Williams) allows members of the General Assembly to use athletic clubs or gymnasiums owned or operated by a state or local entity, or institution without charge. Referred to Committee on Judiciary.
H.4164 (Reps. Rivers, King, Henegan, S.Williams, Clyburn, Cobb-Hunter and others) exempts electric or natural gas ratepayers sixty-five and older from paying surcharges related to the collection of payments. Referred to Committee on Labor, Commerce and Industry.
Five weeks remain in the legislative session as Sine Die adjournment is scheduled for Thursday, May 13.
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 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
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