By Copper Dome Strategies

Friday, Feb. 21, 2020

The potential sale of state-owned utility Santee Cooper has taken center stage at the State House, with hearings occurring through the week and continuing next week.

The House Ways and Means Committee passed their version of the state budget on Thursday.

BUDGET

The House Ways and Means Committee adopted its version of the FY 20-21 state budget on Thursday. Committee Chairman Murrell Smith (R-Sumter) noted that the House and Senate leadership again worked in partnership with the governor’s office on the spending priorities. The budget focused on improving education and included significant new funding for improvements in public safety at the Department of Corrections, new funding for rural road improvements and tax relief.

The committee’s plan includes:

  • $213 million to provide a $3,000 across-the-board pay raise for all of South Carolina’s 52,733 teachers
  • $42 million recurring for recruitment and retention — equivalent to 2% state employee pay increase
  • $100 million for paving rural farm to market roads
  • $53 million to expand full-day 4K offerings statewide
  • $26.1 million for tuition mitigation at our institutions of higher education
  • $69 million for the Department of Social Services to better provide services to children and families
  • $10 million for additional Circuit and Family Court Judges
  • $7.8 million for the Department of Health and Human Services for provider rate increases

For Technical Colleges:

  • $10 million for instructional program support (recurring base funding)
  • $51 million for Lottery Tuition Assistance
  • $10.2 million nonrecurring for readySC Direct Training
  • $12.5 million nonrecurring for equipment for high demand job skill training
  • $17 million for SC WINS
  • $11 million for workforce scholarships
  • $43 million from the Capital Reserve Fund for Maintenance and Care of State-Owned building assets at the 16 technical colleges

The budget will now be printed and placed on House members’ desks for one week as required. Full House floor debate is expected to take place the week of March 9.

With the state’s economy seeing record-level unemployment combined with rising wages and new residents, the state’s General Fund budget now tops $10 billion with a budget surplus projected of over $1.1 billion.

Subcommittee budget spreadsheets can be found here.

The governor’s executive budget can be found here.

Individual state agency budget requests can be found here.

ENERGY

Now that the Department of Administration has issued the recommendations regarding the future of state-owned utility Santee Cooper, the House Ways and Means Committee and the Senate Finance Committee have 30 days to recommend a path forward. Legislators have three options for deciding the fate of Santee Cooper:

  1. Sell Santee Cooper to privately-owned utility NextEra Energy
  2. Contract with privately-owned Dominion Energy to manage Santee Cooper
  3. Reform Santee Cooper while keeping state ownership and management

The full Senate Finance Committee met Tuesday asking questions of the Department of Administration and the private entities that developed the recommendation. On Wednesday, the committee heard from NextEra Energy Chairman and Chief Executive Officer James L. Robo, and on Thursday, the committee heard from Dominion Energy regarding the management plan. Next week the committee plans to hear from Santee Cooper on its reform plan. Meanwhile, the House Ways and Means Ad Hoc Santee Cooper Committee will hold similar meetings all next week.

Lawmakers have been debating whether to sell Santee Cooper since 2017, when the utility and its partner, SCE&G, announced it was pulling the plug on a $9 billion plan to build two nuclear reactors at the V.C. Summer nuclear plant in Fairfield County. After the DOA report was released, Governor McMaster stated that he believes the state must act quickly to sell Santee Cooper.

The report can be found here.

BUSINESS LICENSE TAX REFORM

The House Labor Commerce and Industry Committee unanimously gave approval, as amended, to H.4431 (Reps. Jordan, Fry, Rose, Atkinson and others), the “South Carolina Business License Tax Standardization Act,” on Tuesday, Feb. 18.

This follows the activity of Thursday, Feb. 13, when the House Labor Commerce and Industry Business License Fees Ad Hoc Subcommittee unanimously gave favorable approval to H.4431. The bill as it appeared Feb. 13 can be read here.

The bill now goes to the full House of Representatives for consideration.

The business community has long argued that South Carolina’s current system is complex, costly and lacks transparency. In South Carolina, 231 municipalities and nine counties have a business license tax, which creates confusion and adds costs to small businesses trying to comply. While most states assess flat license fees, South Carolina business tax laws allow cities to assess the tax based on a business’ gross receipts instead of net income. Filing in multiple jurisdictions has also created problems.

After five years of discussions, stakeholders are finalizing a compromise agreement. Businesses will still pay based on gross receipts. However, businesses operating in multiple jurisdictions will pay the tax based on the gross income within that jurisdiction, but the tax must be reduced by the amount of the gross income tax in other counties or municipalities. Each taxing jurisdiction must accept a standard business license application as established by the state Revenue and Fiscal Affairs Office (RFA).

The South Carolina Municipal Association will transfer the business license portal it has developed to the state RFA Office, which will oversee the standardized portal through a contract with the vendor. Businesses will renew their license annually by May 1 through the portal based on the gross income for the calendar year. Businesses not wanting to utilize the portal may file in person, by telephone or by mail. The portal offering will be subject to the availability of funding to the RFA.

Private third-party entities are prohibited from assessing or collecting taxes and are restricted from accessing business financial information. The bill also provides a mechanism for appeals, and the taxpayer may request a hearing before the Administrative Law Court.

The bill would take effect Jan. 1, 2021.

GENERAL BUSINESS

A House/Senate Conference Committee on Thursday adopted a Conference Report on S.455 (Senators Alexander, Climer and Davis). The bill provides for temporary professional licenses to the spouse of an active duty member of the U. S.Armed Forces under certain circumstances. The House and Senate must now agree to adopt the Conference Report.

EDUCATION REFORM

With a decision on the future of state-owned utility Santee Cooper taking center stage, the Senate spent little time on the floor this week and only debated the education reform bill briefly. With dozens of amendments remaining to be debated, it is expected the Senate will return to debate on the bill next week. More than two dozen amendments have been adopted to S.419 (Sens. Hembree, Malloy, Turner, Setzler, Sheheen and Alexander), known as “The South Carolina Career Opportunity and Access for All Act.”

Both Gov. Henry 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) last March. However, after hearing complaints from teachers and others about the legislation, the Senate did not pass its version last year and spent the summer and fall hearing from stakeholders and revising the bill. They have been debating the bill on the Senate floor since the first week of session.

HIGHER EDUCATION

The House Ways and Means Committee adopted a proviso to the state budget that includes H.3757 (Reps. Lucas, Collins and Calhoon), which establishes the Workforce and Education Data Oversight Committee. The bill passed the House last year but has not yet made it out of a Senate subcommittee. The committee is being created to support the mission of the Coordinating Council for Workforce Development. The goal is to facilitate and coordinate the development of a unified, statewide workforce plan that utilizes longitudinal data and analysis to identify statewide workforce priorities and create measurable, time-sensitive metrics in which all workforce pipeline stakeholders including, but not limited to, education and workforce boards, councils and partner representatives, will participate.

HEALTHCARE

On Tuesday, a subcommittee of the House Medical, Military, Public and Municipal Affairs favorably approved H.4713 (Reps. Gilliard and Robinson). The bill requires office-based practices and health care facilities to conduct an annual risk assessment to identify potential threats to the health and safety of patients, staff and visitors, and to implement plans to provide appropriate security. The risk assessment must include consultation with local law enforcement and local public safety officials about any trends in violent crime or other threats to public safety in the workplace. The bill includes penalties for violations.

The committee also favorably approved H.4355 (Reps. Fry, Yow, Hewitt, Bailey and others). The bill authorizes pharmacists and nurses to administer or dispense methadone or other opioid agonist treatment medications in certain circumstances. Both bills now go to the full committee for consideration.

The Health and Environmental Affairs Subcommittee of the House Medical, Military, Public and Municipal Affairs Committee on Wednesday debated H.3660 (Reps. McCoy, Mace, Taylor, Bennett and others) that enacts the “South Carolina Compassionate Care Act” relating to medical marijuana. The law enforcement community, led by State Law Enforcement Division Chief Mark Keel, firmly opposes the bill, noting that legalizing marijuana in any form could create a “black market” for resale and potential abuse. The subcommittee adjourned debate on the bill after testimony. This issue has been discussed in previous legislative sessions and may continue to receive additional debate later this year.

The SC Palliative Care and Quality of Life Study Committee held a press conference Thursday to announce recommendations to the General Assembly. The committee was created by a Joint Resolution and was tasked with advising the Department on Aging on matters related to the establishment, maintenance, operation and outcome evaluation of palliative care initiatives in our state. The recommendations are included in the categories of education and awareness, technology, workforce, policy/regulation, payment strategies and quality.

Senator Brad Hutto (D-Orangeburg), who served as Co-Chairman of the committee, said that this study has identified key opportunities for enhancing palliative care access but noted the effort will require continuing and ongoing work moving forward. The report can be found here.

JUDICIAL/LEGAL

The House gave third and final reading approval on Tuesday to H.4974 (Reps. Lucas, Simrill, Rutherford, Pope, McCoy, G. M. Smith and Bannister) relating to judges. The bill would increase the number of at-large Circuit Court judges from 16 to 17 and increase the number of at-large Family Court judges from eight to 10. The subcommittee added an amendment to the bill that would add two resident family court seats in Orangeburg and York counties and two resident circuit court seats in Horry and Beaufort counties. The bill now goes to the Senate for consideration.

INTRODUCTIONS OF INTEREST

HOUSE

H.5234 (Reps. Henegan, Cobb-Hunter, McDaniel and others). Requires the Department on Aging to fund a program to provide senior citizens with the ability to purchase a personal emergency response system. Referred to the Committee on Medical, Military, Public and Municipal Affairs.

H.5262 (Reps. G. M. Smith, Felder, B. Newton and others). A concurrent resolution to make a formal application to Congress to call a convention in order to ratify an amendment to the U.S.Constitution that requires a balanced federal budget. Referred to the Committee on Judiciary.

H.5272 (Rep. Toole). Adds a definition for “undue influence” and changes the definition of “exploitation” within the “Omnibus Adult Protection Act.” Referred to the Committee on Judiciary.

SENATE

S.1116 (Senator McLeod). Relating to property exempt from attachment, levy and sale. Referred to the Committee on Judiciary.

UP NEXT

The House Ways and Means Santee Cooper Ad Hoc Committee will meet Monday, Tuesday and Wednesday of next week.

REARVIEWS 2020

Look to SCACPA’s ‘The View from the Dome’ for State House Developments on Tax Issues Through SC’s 2020 Legislative Session. Sine Die adjournment is scheduled for May 14.

Jan. 10: South Carolina’s Pending Tax Bills and Your 2020 Legislative Preview

Jan. 17: Gov. McMaster’s Executive Budget Calls for Tax Cuts, Rebates for Taxpayers

Jan. 24: McMaster’s State of the State Emphasizes Tax Cuts, Rebates, Teacher Raises; Business License Tax Talks Continue

Jan. 31: House Subcommittee Hears Budget Request from SC Chief Justice to Improve Case Management System

Feb. 7: Senate Finance Committee Approves Business Personal Property Bill for DOR Filing

Feb. 14: Board of Economic Advisors Announces Largest Budget Surplus in SC History

To keep up with the latest news of SCACPA Advocacy, turn to the SCACPA Blog and our social media outlets.