View from the Dome – March 22, 2019
By Copper Dome Strategies, LLC

There was action on several major legislative initiatives, including education reform, medical marijuana, an update to the procurement code, and the potential sale of state-owned utility Santee Cooper. Seven weeks remain in the legislative session.

TAX

The SC House Tax Policy Review Committee on Thursday heard from Gov. Henry McMaster, who applauded the committee for its work and then introduced special guest speaker economist Dr. Art Laffer.

Laffer is the founder and Chairman of Laffer Associates, an economic research and consulting firm in Nashville, Tennessee, that provides global investment-research services. He is best known as President Ronald Reagan’s chief economist and earned the nickname “The Father of Supply-Side Economics” due to his economic insight and influence that triggered a worldwide tax-cutting movement in the 1980s.

Laffer told the committee that South Carolina is poised for a huge take-off in prosperity, but only if it can flatten and simplify the state’s archaic tax structure. He encouraged the committee to work toward a plan that collects taxes in the least damaging manner, spends taxes in the most beneficial manner and stops when the trade-offs end.

Following his remarks, the committee discussed ways to find consensus among the members to send a bill to the House Ways and Means Committee for continued debate. The committee will have two plans drafted in bill form to discuss at next week’s meeting.

  • One plan will be to 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.
  • The other plan will be to lower sales taxes by removing most sales tax exemptions and include taxing some services.

Committee Chairman Tommy Pope (R-York) has told the committee his goal is to get the bills adopted by the committee and introduced in the House as soon as possible. Once introduced, it will be assigned to the Ways and Means Tax Subcommittee, where the tax subcommittee will begin debate and taking testimony.

This 14-member ad hoc committee was created in 2016 by Speaker of the House Jay Lucas and is responsible for reviewing South Carolina’s current tax code and submitting suggestions for reform to the Speaker.

The SC House Tax Policy Review Committee’s meeting agenda and video archives dating to August 2016 can be found here.

ENERGY

Senate President Harvey Peeler (R-Gaffney) on Wednesday introduced a Joint Resolution S.678 that would give the governor the authority to utilize the Department of Administration to conduct a competitive bidding process for the sale of state owned utility Santee Cooper. The department would be required to procure professional services, including financial institutions, legal counsel and industry consultants, as are necessary to conduct the sale, the evaluation of bids received and related activities. Following the evaluations of the bids, the department would present to the governor its full evaluation of each bid, and the governor would then execute the sale to the bidder who best safeguards the interests of Santee Cooper’s ratepayers and the State’s taxpayers. The net proceeds of the sale would be deposited in the State’s general fund.

On Wednesday afternoon, the full Senate Finance Committee met and debated the Joint Resolution. While they did not adopt the resolution at the meeting, Chairman Leatherman made it clear he intended to take it up again next week and keep it moving.

The introduction and swift action came one day after the leadership of Santee Cooper appeared before the newly formed Senate Select Committee on Santee Cooper and failed to answer basic questions regarding their debt and rates.

On Thursday, Sen. Luke Rankin (R-Horry) introduced a variation of a Santee Cooper Joint Resolution S.697, which was referred to his committee, Senate Judiciary. House leadership also introduced their version of a Santee Cooper Resolution H.4287, which was referred to the Ways and Means Committee.

PROCUREMENT

A Senate Finance Procurement Code Special Subcommittee favorably approved S.530 (Sen. Leatherman), which makes changes to the Consolidated Procurement Code. The next day, the full Senate Finance Committee approved the bill. 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 while improving and shortening processes in government procurement. Many of the changes are the result of a review mandated by the restructuring act in 2014. The bill now goes to the full Senate for consideration.

BUDGET

The Senate Finance budget subcommittees will finish its work next week on the state budget, and debate in full committee will begin the week after next. Total state spending this year is $29.4 billion. That includes $8.7 billion in general funds, $11.9 billion in “other funds” and $8.8 billion in federal funds. Budget writers have an additional $498 million in new recurring revenue and $479 million in one-time revenue.

Highlights of the House-passed budget can be found here.

Budget spreadsheets from each subcommittee can be found here.

House Ways and Means Committee Budget Provisos can be found here.

The governor’s Executive Budget can be found here.

Individual state agency budget requests can be found here.

HEALTHCARE

A Senate Medical Affairs Subcommittee favorably approved S.366 (Senators Davis, Hutto, McLeod and Kimpson) the “Compassionate Care Act” relating to medical marijuana after adopting an amendment aimed to address some of the concerns heard during recent testimony. Subcommittee Chairman Senator Tom Davis (R-Beaufort) had previously assigned members of the subcommittee to begin researching sections of the bill and the potential impacts of the legislation on business, medical and patient communities. The state’s law enforcement community remains in opposition of the proposed legislation. Gov. McMaster has indicated he will follow law enforcement’s lead on the bill, suggesting a veto should legislation reach his desk. The bill now goes to full Senate Medical Affairs Committee for consideration.

The House Ways and Means Revenue Policy Legislative Subcommittee of the House Ways and Means Committee met on H.3823 (Reps. Mace, G.M. Smith, Taylor, G.R. Smith and others) that would eliminate 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. He said the subcommittee plans to meet again in the coming weeks.

The House approved 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. The bill now goes to the Senate for consideration.

The Senate gave third and final reading approval to S.132 (Senator Davis, Nicholson, Hutto, M.B. Matthews, Kimpson and Alexander) that 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. The bill now goes to the House for consideration.

EDUCATION REFORM

The Senate education subcommittee held its final two public hearings in Gaffney and Georgetown to receive testimony on S.419, known as “The South Carolina Career Opportunity and Access for All Act.” The education reform initiative is the Senate’s version of H.3759 (Lucas, Allison, Felder, Pope, Simrill, Rutherford and others) that recently passed the House. The subcommittee, chaired by Senate Education Committee Chairman Greg Hembree (R-Horry), met again Wednesday to continue going through the bill section by section and discussing amendments. After adopting an amendment to raise starting teacher pay from $32,000 to $35,000 annually, this week’s meetings focused on higher education and workforce development. The subcommittee hopes to move the bill to the full Senate Education Committee soon.

A summary of the companion bills can be found here.

HIGHER EDUCATION

A Senate Legislative Oversight Committee heard from Dr. Tim Hardee, System President for the State Board for Technical and Comprehensive Education. Hardee highlighted the accomplishments of the state’s technical college system and noted its value to the state. He noted that 52% of all students in higher education attend a technical college – and at a cost of one-third of the cost of attending a four-year institution. Up to 95% of the students are from South Carolina and, most importantly, 90% of graduates placed in a field they were trained for.

PROFESSIONAL FOOTBALL

Legislation aimed at bringing the Carolina Panthers professional football team’s headquarters and training facilities from North Carolina to South Carolina was approved by the House Ways and Means Economic Development and Natural Resources Subcommittee Tuesday and by the full committee the next day.

H.4243 (Simrill, Lucas, Pope, G.M. Smith, Rutherford and others) would make the team eligible for specific tax incentives and infrastructure improvements. On Wednesday, the Senate adopted the companion bill S.655 (Senators Peeler, Malloy, Climer, Fanning, Gregory and Leatherman). Gov. McMaster and legislative leaders have been working with the team’s ownership on the potential move and will expedite the legislation. If successful, the team would move 150 employees and an estimated $190 million payroll into York or Lancaster counties. Both bills now go to the full chamber for consideration.

APPOINTMENT

The Senate Judiciary Committee held another screening of the governor’s appointment of Mr. Charles M. Condon to serve as Chairman of the Board of the State Public Service Commission (aka Santee Cooper) but took no action to confirm. The committee questioned Condon on several occasions last year but never confirmed the appointment. Gov. Henry McMaster later appointed Condon during the recess, prompting a Senate lawsuit over his authority to do so. McMaster prevailed in that lawsuit. Condon, a former Charleston solicitor, was state attorney general from 1995 to 2003.

INTRODUCTIONS OF INTEREST

HOUSE

H.4260 (Reps. Caskey, Clary, Lucas, Sandifer and Simrill) Enacts the “South Carolina Ratepayer Protection Act of 2019.” Referred to Committee on Labor, Commerce and Industry.

H.4261 (Reps. McCoy, G. M. Smith, Ott, Sandifer, Simrill and Lucas) Creates the “South Carolina Public Service Authority Review and Oversight Commission.” Referred to Committee on Labor, Commerce and Industry.

H.4262 (Reps. Simrill, Rutherford, Sandifer and Forrester) Enacts the “South Carolina Small Wireless Facilities Deployment Act” relating to local governments and control over rights of way. Referred to Committee on Labor, Commerce and Industry.

H.4263 (Rep. Sandifer) Relating to governmental projects and energy standards, including net metering requirements. Referred to Committee on Labor, Commerce and Industry.

H.4264 (Reps. Ridgeway and Wheeler) Exempts tuition at public institutions of higher learning for children of full-time licensed physicians practicing in underserved areas. Referred to Committee on Education and Public Works.

H.4275 (Rep. Finlay) Allows counties and municipalities to enact ordinances to allow animal control officers to carry firearms. Referred to Committee on Judiciary.

H.4278 (Reps. Lowe, Robinson, Bailey, Garvin, and others) Relating to the duties of advanced practice registered nurses. Referred to Committee on Medical, Military, Public and Municipal Affairs.

H.4285 (Reps. Allison, Alexander, Anderson, Atkinson, and others) Concurrent resolution to congratulate the forty-one technical college students named to the 2019 Phi Theta Kappa Honor Society. The Concurrent Resolution was agreed to and ordered sent to the Senate.

H.4287 (Reps. Lucas, G. M. Smith, Simrill, Rutherford, McCoy and Ott) Joint Resolution to authorize the Public Service Authority Evaluation Committee to receive and approve a contractual offer to purchase Santee Cooper. Referred to Committee on Ways and Means.

SENATE

S.672 (Senator Grooms) Authorizes partnerships to create charter schools in the workplace under certain circumstances. Referred to the Committee on Education.

S.678 (Senators Peeler and Climer) Joint Resolution to provide that the governor shall utilize the Department of Administration to conduct a competitive bidding process for the sale of Santee Cooper. Referred to the Committee on Finance.

S.680 (Senators Shealy, Hutto and Jackson) Relating to caregivers and childcare facilities. Referred to the Committee on Family and Veterans’ Services.

S.697 (Senators Rankin, Hutto, Goldfinch, Jackson, Gambrell, and others) Provides that the Public Service Authority (Santee Cooper) may not be sold without the advice and consent of the General Assembly. Referred to the Committee on Judiciary.

UP NEXT

Senate Finance budget subcommittees will meet to complete their work on the state budget prior to sending the bill to the full committee.