View From the Dome (April 30, 2021): With Two Weeks Left in Legislative Session, Here are 10 Tax Bills About to be Considered by the Full SC House Ways and Means Committee

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 124th Legislative Session, prepared in cooperation with our lobbying partner, Copper Dome Strategies.

Friday, April 30, 2021

The full Senate adopted its version of the FY21-22 state budget this week. The House spent considerable time in floor debate working through bills on the calendar. Two weeks remain in the legislative session, although the General Assembly will return following adjournment May 13 for unfinished business, including finalizing the state budget.

Gov. Henry McMaster signed into law the COVID-19 Liability Safe Harbor Act.

A bill relating to electric vehicle charging stations requires the Department of Revenue to study the effects of electric vehicles on the collection of the state’s motor fuel tax.

Also in the news: SC Senate’s Budget Includes Funds for SLED to Hire Forensic Auditor to Pursue Public Corruption Cases. The vote comes after a newspaper investigation series showed that the state’s top law enforcement agency does not employ any white-collar crime investigators. The head of the agency asked lawmakers earlier this year for $159,000 to hire a forensic auditor. (Post and Courier, April 29)

According to new U.S.Census Bureau data, South Carolina’s population grew by double-digit percentage points for the fifth decade in a row, but it was not enough for the state to add another U.S.House seat. South Carolina had 5,118,425 residents as of April 1, 2020. The state grew by 10.7% from 2010, adding 493,041 people.

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

TAX

Numerous bills were approved by subcommittees of the House Ways and Means Committee this week, including:

S.463 (Senators Alexander, Cromer, Grooms, Scott and Loftis) that removes the expiration date for tax credits for the purchase of geothermal machinery and equipment.

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.

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.627 (Senators Bennett, Adams, Kimbrell, M. Johnson, Davis and others) relating to income tax rates for pass-through trade and business income and “S” corporations at the entity level (SALT Limitations). The bill creates an election for the business to pay the tax at the entity level, making it a direct tax and circumventing the current $10,000 limit on state and local taxes on the personal return. The bill was amended by the subcommittee to clean up some language, including changing electing entity to “qualified” entity.

S.689 (Senators Leatherman, Massey, Malloy and others), a Joint Resolution to extend the income tax filing due date for individuals to the same date as federal returns are due.

H.3348 (Reps. Daning, Robinson and Pope) allows a tax credit to any taxpayer who hires a formerly incarcerated individual or veteran in an apprenticeship program.

S.527 (Senator Alexander) that defines “legally separated” for the purposes of imposition of the property tax so that each spouse can claim the four percent assessment ratio.

S.609 (Senator Alexander) would authorize state agencies and political subdivisions to conduct criminal background checks on their employees and contractors who have access to federal tax information.

H.3669 (Rep. Hart) provides for property tax exemption for a disabled veteran in the year in which the disability occurs.

H.4243 (Reps. Crawford, McGinnis, Hardee, J. E. Johnson and Brittain) provides for an adjustment in valuation and assessment of property taxes due to flood or hurricane damage.

All of these bills will be on the agenda of the full Ways and Means Committee next week.

The House concurred Tuesday in Senate amendments H.4064 (Reps. G. M. Smith and Sandifer) that 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 is now enrolled for ratification.

TAX INTRODUCTIONS OF INTEREST

SENATE

S.774 (Senator Talley) Income tax credit to a property owner who encumbers his property with a perpetual recreational trail easement. Referred to the Committee on Finance.

JUDICIAL/LEGAL

Gov. Henry McMaster signed into law S.147 (Senators Massey, Rice, Hembree, Adams and Peeler), the COVID-19 Liability Safe Harbor Act on Wednesday. The bill provides health care providers and businesses liability protection from Coronavirus claims.

The House on Wednesday voted 95-19 to give second reading approval to 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 received third and final reading yesterday and now goes to the Senate for consideration. A similar Senate bill S.94 (Senator Malloy) remains on the Senate calendar with an objection.

BUDGET

After three days of floor debate, the Senate 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 Thursday. The $31 billion budget includes $9.9 billion in general fund revenues and one-time surplus revenue of $1.3 billion. The approved plan remains largely intact from the version that passed the Senate Finance Committee. 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

$134 million was appropriated individually to the 16 technical colleges for maintenance, renovation and replacement costs. The bill will now 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. They will then 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 the 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.

ENERGY/UTILITIES

The House 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 requires the Department of Revenue to study the effects of electric vehicles on the collection of the state’s motor fuel tax. The bill received third reading the next day and returns to the Senate for concurrence in the House amendment.

The House 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). The bill received third reading yesterday and now goes to the Senate for consideration.

SOUTH CAROLINA AND CENSUS DATA

The U.S.Census Bureau announced Monday that the 2020 Census shows the resident population of the United States on April 1, 2020, was 331,449,281. The U.S.resident population represents the total number of people living in the 50 states and the District of Columbia. The resident population increased by 22,703,743 or 7.4% from 308,745,538 in 2010. In addition to these newly released statistics, the population counts will be used for apportioning the seats in the U.S.House of Representatives. In accordance with Title 2 of the U.S.Code, a congressionally defined formula is applied to the apportionment population to distribute the 435 seats in the U.S.House of Representatives among the states. States losing a congressional seat are California, Illinois, Michigan, New York, Pennsylvania and West Virginia. States gaining a congressional seat are Texas, Colorado, Florida, Montana, North Carolina and Oregon.

South Carolina’s population grew by double-digit percentage points for the fifth decade in a row, but that wasn’t enough for the state to add another U.S.House seat. South Carolina had 5,118,425 people as of April 1, 2020. The state grew by 10.7% from 2010, adding 493,041 people, according to the census data. South Carolina added its seventh U.S.House seat in 2010 but was not one of the six states to gain an additional seat in Congress in 2020. Over the past 10 years, estimates indicate much of South Carolina’s growth has come from people moving into the state, especially older residents who are retired or close to retirement. The U.S.Census is conducted every 10 years, and South Carolina has added people in every decade since the first count in 1790. South Carolina’s population has increased by at least 10% in each decade since 1980 when the state grew by 20.5% and topped 3 million people for the first time.

In addition to congressional seats, census data will be used to redraw district lines for state Senate, state House and local districts. Public hearings will take place this summer across the state, and the General Assembly is likely to adopt legislation redrawing district lines later this year. For more details on the census, click here.

HEALTHCARE

The House Medical, Military and Municipal Affairs Committee unanimously approved S.503 (Senator Hutto) that would allow Physician’s Assistants (PAs) and Advanced Practice Registered Nurses (APRNs) to issue orders for certain home health services on Wednesday. The committee also approved S.455 (Senator Davis) to create an additional category for temporary licensure for graduate nurses. Both bills now go to the full House consideration.

By unanimous consent request, the Senate on Wednesday placed S.290 (Senator Climer) on the calendar, thereby bypassing the committee process. The bill repeals the Certificate of Need (CON) requirements regarding the regulation of health care facilities.

A Select Subcommittee of the Senate Medical Affairs Committee met again on Wednesday and took testimony on S.2 (Senators Peeler, Malloy, McElveen and Hembree), which would restructure the Department of Health and Environmental Control (DHEC) and create the Department of Behavioral and Public Health. The new agency would include the current DHEC Division of Public Health, the Department of Alcohol and Other Drug Abuse Services and the Department of Mental Health. A new state agency, the Department of Environmental Services, would incorporate all environmental functions currently at DHEC, the Office of Coastal Resource Management and the Division of Water currently housed at the Department of Natural Resources. Lastly, all food establishment inspections would be transferred to the Department of Agriculture. The subcommittee heard from those agencies that would be affected by the change and plans to continue meeting and take public testimony moving forward.

The Senate Medical Affairs Committee favorably approved S.508 (Senators Shealy and Hutto) relating to Do Not Resuscitate orders on Thursday. The bill allows a parent or legal guardian to request and revoke a Do Not Resuscitate order for emergency services for a child. The bill, which was one of the recommendations that came from the Palliative Care Study Committee, now goes to the full Senate for consideration.

HIGHER EDUCATION

The House on Tuesday concurred in the Senate amendments 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 is now enrolled for ratification and will soon be on its way to the governor.

The House favorably approved S.241 (Senator Young) relating to tuition rates for military personnel and their dependents on Wednesday. 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 received third and final reading Thursday and is now enrolled for ratification.

Gov. Henry McMaster signed into law S.38 (Senators Grooms, Rice, Hembree, Verdin and Kimbrell) on Wednesday, 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.

AUTOMOTIVE

The House favorably approved S.510 (Senators Grooms, Verdin, Davis, Adams and others) relating to motor vehicle manufacturers, distributors and dealers and contractual agreements on Wednesday. The bill, which affects numerous clauses in the current contracts between automobile dealers and manufacturers, was returned to the Senate as amended and the Senate concurred in the House amendment. The bill is now enrolled for ratification.

APPOINTMENTS

The Senate confirmed the following appointments on Wednesday:

Commission on Higher Education: Robert Wesley Hayes, Rock Hill, and Charles E. Dalton, Greenville
SC State Board of Veterinary Medical Examiners: Dr. Christine E. White, Rock Hill
Reappointments to the Workers’ Compensation Commission: Thomas Scott Beck, Prosperity, Aisha K. Taylor, Blythewood, and Avery B. Wilkerson, Cayce

ANIMAL WELFARE

The Senate gave third and final reading, as amended, on Thursday 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 now goes back to the House for concurrence in the Senate amendment.

SINE DIE

Adjournment sine die means “without assigning a day for a further meeting or hearing.” This Latin term is used to signify the end of our legislative session. However, as in most recent years, our General Assembly adopts a Sine Die Resolution, allowing them to continue past the mandatory May 13 Sine Die deadline to complete unfinished business. The House on Thursday adopted H.4285 (Reps. Lucas, Simrill and Rutherford) a Concurrent Resolution to allow the bodies to meet at the call of the President Pro Tem of the Senate and the Speaker of the House of Representatives to consider certain specified matters, including the state budget. House Speaker Jay Lucas (R-Hartsville) told the body the Ways and Means Committee will hold subcommittee and committee meetings to address the additional new revenue added to the state budget estimate. The House will then return to adopt the revised plan. The schedule is as follows:

May 24-28 – Ways and Means Budget Subcommittees

June 1-3 – Full Ways and Means Committee deliberations

June 8-10 – House Floor Budget deliberations

June 14-18 – Conference Committee meets

June 21-23 – Conference Report adopted by both chambers

June 29 – Address gubernatorial vetoes

The General Assembly will also meet again in the fall to address redistricting and to appropriate the $2.1 billion in federal funds from the American Rescue Plan Act and the $525 million from the Savannah River Site (SRS) lawsuit settlement.

INTRODUCTIONS OF INTEREST

HOUSE

H.4283 (Reps. Murphy, G. M. Smith, Lucas, Stavrinakis, Bannister and others) Enacts the “Judicial Emergencies Act” and provides circumstances and manner of scope of such declarations, related procedures and appeals process. Referred to Committee on Judiciary

H.4296 (Rep. G. M. Smith) Specifies tasks that may be performed by a Certified Medical Assistant, amends the definition of “unlicensed assistive personnel” and removes the prohibition of licensed physicians from delegating certain tasks. Referred to Committee on Medical, Military, Public and Municipal Affairs.

UP NEXT

The General Assembly will meet in a Joint Session next Wednesday at noon to hold elections for several college boards of trustees.

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 23: House is Signaling its Approval of Senate’s COVID-19 Liability Safe Harbor Act

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