View from the Dome – March 29, 2019
By
Copper Dome Strategies, LLC

The session is two-thirds completed (12 weeks down and 6 weeks remaining until the May 9 adjournment).

Gov. Henry McMaster signed into law the annual tax conformity legislation, which takes effect immediately.

The focus in both chambers this week was the potential sale of state owned-utility Santee Cooper.

TAX

Gov. Henry McMaster signed into law H.3985 (Reps. Lucas, G. M. Smith and Stavrinakis), the annual tax conformity legislation, on Thursday. The bill updates the reference to the Internal Revenue Code (IRS) to state income tax laws and provides that if the IRS Code sections adopted by the state are extended, then these sections are also extended for South Carolina income tax purposes.

This act takes effect immediately.

ENERGY

The move to sell state-owned utility Santee Cooper saw substantial momentum in both the House and Senate. It started Tuesday with yet another contentious meeting of the Senate Select Committee on Santee Cooper with the leadership of the state-owned utility regarding their debt and rates. Committee members remained frustrated that the utilities’ leadership was again unable to answer basic questions about its future. Members also grilled the executives on recent news regarding retention bonuses paid to executive staff.

Earlier that day, the House Ways and Means Revenue Policy Legislative Subcommittee favorably approved H.4287 (Reps. Lucas, G. M. Smith, Simrill, Rutherford, McCoy and Ott) that would authorize the Joint Public Service Authority Evaluation and Recommendation Committee to receive and approve a contractual offer to purchase Santee Cooper. Later that afternoon, the bill was approved by the full House Ways and Means Committee and is now on the House calendar for consideration of the full body next week.

On Wednesday afternoon, the Senate Finance Committee voted 20-1 to advance a Joint Resolution S.678 (Sens. Peeler, Climer, Davis and Fanning) 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. Once the Department of Administration concludes its work, the General Assembly would take the recommendation under consideration. The Joint Resolution should be on the Senate calendar for debate next week.

The issue was also debated in a Senate Judiciary Subcommittee on Joint Resolution S.697, which focused on a management contract for Santee Cooper instead of an outright sale. The subcommittee took no action on the resolution.

BUDGET

The Senate Finance budget subcommittees met this week to adopt provisos. Provisos are clauses in the state budget that direct the expenditure of funds and hold the force of law for one year. The full Senate Finance Committee will debate the budget beginning next week. Senate floor debate is expected the week of April 15-18. Total state spending this year is $29.4 billion, which 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

The Senate Banking and Insurance Subcommittee took testimony Wednesday on H.3760 (Sandifer), a bill that would merge the Patients’ Compensation Fund with the South Carolina Medical Malpractice Joint Underwriting Association. The bill proposes to assess a fee on providers and comprehensive insurance companies to cover the deficits. Insurance Commissioner Ray Farmer told the subcommittee it was time to address the mounting deficits and he would support any effort by the General Assembly to do so. An amendment was discussed, but not adopted, that would change the House version dramatically by creating a surcharge instead of an assessment. The bill was carried over by the subcommittee as additional amendments are expected to be offered at the next meeting next Wednesday.

The SC Palliative Care and Quality of Life Study Committee held its second meeting. The committee was created by a Joint Resolution and is 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. By Dec. 31, 2019, the committee shall submit a report to the Governor and General Assembly on its findings. The committee’s goal for the meeting was establish a definition to guide their discussions and for the members to divide topics of study into subgroups and create committees. The committee definition is:

“Palliative care is a collaborative approach which improves the comfort and quality of life of patients and their families facing the issues associated with serious illness through the prevention and relief of suffering by means of comprehensive assessments and treatment of pain and other symptoms including physical, psycho-social and spiritual needs.”

Following a presentation by committee member Dr. Conrad Williams from MUSC on the state of hospice and palliative care for children in SC and how it differs from adults, the committee members then volunteered to serve on the following interest groups that will for now be their focus: Education (clinicians and training), Outreach (consumer) Care settings (private, facility, in-home, etc.). The other interest groups to be addressed at a later date are compensation and reimbursement and regulations. The next meeting is scheduled for Thursday, April 25.

PROFESSIONAL FOOTBALL

Legislation aimed at bringing the Carolina Panthers professional football team’s headquarters and training facilities to South Carolina was approved by the House on Tuesday by a vote of 90-25. H.4243 (Simrill, Lucas, Pope, G.M. Smith, Rutherford and others) would make the team eligible for specific tax incentives and infrastructure improvements. The bill received third reading on Wednesday and now goes to the Senate for consideration. Gov. McMaster and legislative leaders have been working with the team’s ownership on the potential move and will expedite the legislation in order to help facilitate the move. If successful, the team would move 150 employees and an estimated $190 million payroll into either York or Lancaster counties.

EDUCATION REFORM

The Senate Education Subcommittee has completed its public hearings on S.419, known as “The South Carolina Career Opportunity and Access for All Act” and continued Wednesday going through the bill section by section and discussing amendments. 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), discussed the higher education and workforce development sections of the bill this week. Hembree told the subcommittee they will meet again next week and will probably have at least one more subcommittee meeting to discuss amendments before sending the bill to the full Senate Education Committee.

A summary of the companion bills can be found here.

Senate proposed changes can be found here.

ANIMAL WELFARE

Wednesday, the Senate approved S105 (Campbell and Sheheen) by a vote of 38-1. This is the animal welfare bill that passed the senate last year and was reintroduced this year. The legislation was developed from recommendations of the Animal Welfare Task Force. The bill received third and final reading and goes to the House for consideration.

SPECIAL ELECTION

Republican House member Dwight Loftis won a special election on Tuesday for the State Senate District 6 seat in Greenville County. Loftis defeated Democrat Tina Belge in the special election to fill the seat vacated when William Timmons was elected to Congress. Loftis has served in the House since 1996. A special election to fill Loftis’ House seat will take place this summer.

APPOINTMENT

Gov. McMaster nominated Michael Leach to be the next director of the South Carolina Department of Social Services. Leach, a trained mental health clinician, has over 10 years of experience in Tennessee’s Department of Children’s Services and most recently served as the Deputy Commissioner for Child Programs at the agency. Leach replaces former SCDSS Director Susan Alford who retired in July 2018. Gov. McMaster formed an advisory panel consisting of members of the General Assembly and various stakeholders to develop a set of qualifications, skills, and experience needed for the next director.  To view the governor’s announcement, click here.The Senate Education Committee approved Benjamin W. Satcher Jr. and Charles E. Dalton as at-large gubernatorial appointees to the Commission on Higher Education. The appointments now go to the full Senate for confirmation.

INTRODUCTIONS OF INTEREST

HOUSE

H.4324 (Reps. Allison, Alexander, Anderson, Atkinson, and others) Concurrent Resolution to recognize and express deep appreciation to the South Carolina Technical College System on “Technical College System Day April 3, 2019”. Introduced, adopted, sent to Senate.

H.4334 (Reps. Pope, Clemmons, Stringer, Daning and others) Enacts the “South Carolina Income Tax Act for Individuals, Trusts and Estates” to provide for a single, flat income rate of 4.85 percent. Referred to Committee on Ways and Means.

H.4343 (Rep. Ballentine) Relating to cable television franchise fees. Referred to Committee on Labor, Commerce and Industry.

H.4348 (Rep. Caskey) Prohibits the approval for marijuana use for medical use until approved safe and effective by the FDA. Referred to Committee on Judiciary.

H.4351 (Reps. Clemmons, G. R. Smith and Garvin) Enacts the “South Carolina Blockchain Industry Empowerment Act of 2019”. Referred to Committee on Ways and Means.

H.4354 (Reps. McCoy, Murphy and Sottile) Relating to workers’ compensation payments under the longshore and harbor workers’ compensation act. Referred to Committee on Judiciary.

H.4355 (Reps. Fry, Yow, Hewitt, Bailey, Wooten, Erickson, and others) Would authorize pharmacists and nurses to administer methadone in certain circumstances. Referred to Committee on Medical, Military, Public and Municipal Affairs.

SENATE

S.720 (Senator Reese) Excludes internet video streaming from the sales tax on communication services. Referred to the Committee on Finance.

S.723 (Senators Young, Davis, Sabb and Rankin) Enacts the “South Carolina Hands-Free Act” relating to texting and driving. Referred to the Committee on Transportation.

UP NEXT

The Senate Finance Committee begins its work on the state budget in full committee on Tuesday.