View From the Dome: House Members Have Upcoming Week to Study Budget Before Floor Debate (Feb. 28)

Friday, Feb. 28, 2020

The future of state-owned utility Santee Cooper was front and center this week as both the House and Senate held hearings Monday through Thursday. The Senate took steps to end its month-long debate on the education reform bill.

BUDGET

The Senate Finance Committee held two subcommittee meetings this week to hear agency budget requests. Among those that appeared were the SC Public Charter School District, the Charter Institute at Erskine and the Department of Labor, Licensing and Regulation.

The House Ways and Means budget that was adopted by the committee last week 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.

Ways and Means 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.

BUSINESS LICENSE TAX REFORM

The House of Representatives gave third and final reading approval to H.4431 (Reps. Jordan, Fry, Rose, Atkinson and others), the “South Carolina Business License Tax Standardization Act” on Thursday, Feb. 27. The House approved the measure on its second reading on Wednesday by a vote of 104-0.

An amendment was added on the House floor stating a charitable organization shall be exempt from the business license tax on its gross income unless it is deemed a business subject to a business license tax on all or part of its gross income as provided by the bill.

The bill now goes to the Senate 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.

ENERGY

Both the House and Senate continued hearings this week on 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 on what to do with the utility. Legislators have three options for deciding the fate of Santee Cooper:

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

This past week the House Ways and Means Ad Hoc Santee Cooper Committee met Monday through Thursday.

Monday: The committee heard from the Department of Administration and the private entities that developed the recommendations.

Tuesday: The committee heard from NextEra Energy on its purchase plan.

Wednesday: The committee heard from Dominion Energy on its management plan.

Thursday: The committee heard from Santee Cooper on its reform plan.

The Senate Finance Committee met Tuesday and Wednesday to hear from Santee Cooper on its reform plan after hearing the other two proposals last week. Chairman Hugh Leatherman (R-Florence) told Santee Cooper he wants them to return next week for additional testimony.

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 Department of Administration report was released, Gov. McMaster stated that he believes the state must act quickly to sell Santee Cooper.

The report can be found here.

JUDICIAL/LEGAL

The House Judiciary Special Laws Subcommittee heard testimony on S.486 (Senators Talley and Reese) that enacts the “South Carolina Remote Online Notarization Act.” After hearing testimony for the Secretary of State’s office and others, the subcommittee adjourned to draft proposed amendments that have not been presented yet. Subcommittee Chairman Jeff Johnson (R-Conway) said the bill would be on the agenda at the next meeting.

EDUCATION REFORM

The Senate voted Tuesday to enact a rarely used rule to limit debate on S.419 (Sens. Hembree, Malloy, Turner, Setzler, Sheheen and Alexander), known as “The South Carolina Career Opportunity and Access for All Act.” After six straight weeks of floor debate, and with more than 200 amendments remaining to be debated, the move is an effort to get to a final vote on the bill without additional delaying tactics. The rule limits debate to 10 minutes to make a case for and 10 minutes against each amendment. Senator Mike Fanning (D-Fairfield) is the author of 194 of the amendments currently waiting to be debated. Fanning has argued that the bill does not go far enough to address teacher’s concerns. Senators have been working on the bill for over a year.

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 their version last year and spent the summer and fall hearing from stakeholders and revising their bill. They have been debating the bill on the Senate floor since the first week of session.

HIGHER EDUCATION

The Senate Education Committee favorably approved S.954 (Senators Scott and Setzler) relating to the disposal of surplus property by the Midlands Technical College Enterprise Campus. The bill now goes to the full Senate for consideration.

HEALTHCARE

A Senate Medical Affairs Subcommittee held an informational meeting relating to three bills dealing with the Certificate of Need (CON) program. Subcommittee Chairman Tom Davis (R-Beaufort) noted at the start of Thursday’s gathering that he intended for the meeting to be informational only and an opportunity for members to become better informed on the CON issue. More than a dozen speakers spoke for and against repeal of the CON program before the committee was forced to adjourn to go into session. The three bills include:

S.990 (Senator Climer) repeals the Certificate of Need statute and renames to the “State Health Facility Licensure Act”

S.1093 (Senators Talley, Hutto, Gambrell, Shealy and Climer) reforms the current Certificate of Need program

S.1077 (Senators Bennett, McElveen, Martin, Sheheen and others) exempts a subspecialty perinatal center with a neonatal intensive care unit from the certificate of need process

Chairman Davis said he anticipated a future meeting to allow those in attendance who did not get to speak to have the opportunity to do so.

CHILD CARE

The House Judiciary Committee approved H.4800 (Reps. Collins, Bernstein and Kimmons) that reauthorizes the Joint Citizens and Legislative Committee on Children through Dec. 31, 2030. The bill now goes to the full House for consideration.

ALCOHOL

The House Judiciary Committee favorably approved, as amended, H.4963 (Reps. Tallon, Moore, Bernstein, Caskey, Clary and others), relating to wine samples. The bill would allow producers or wholesalers to furnish or give certain samples of wines to retailers but may not exceed three liters annually. The amendment requires all bottles to be removed from the premises after sampling. The bill now goes to the full House for consideration.

A Senate Judiciary Subcommittee favorably approved S.1099 (Senators Talley, Shealy, Turner, Hutto and others) relating to agreements between alcohol manufacturers and wholesalers. The bill, known as the “Tier Independence Act,” now goes to the full Judiciary Committee for consideration.

ANIMAL WELFARE

The House Judiciary Committee recommitted H.3373 (Reps. Huggins and Wooten) back to subcommittee. The bill provides that a first responder is immune from civil liability resulting from providing first aid services to a domestic animal in the course of responding to an emergency. Subcommittee Chairman Jeff Johnson (R-Conway) stated the bill needed further deliberation.

AUTOMOTIVE

The House Judiciary Criminal Laws Subcommittee favorably approved S.18 (Senators Hutto, Young, Climer and Davis) relating to ignition interlocks. The bill would allow persons under the age of 21 serving a suspension to enroll in the Ignition Interlock Program. The bill now goes to the full Judiciary Committee for consideration.

APPOINTMENT

President Donald Trump announced his intent to nominate Peter McCoy (R-Charleston) to serve as United States Attorney for the District of South Carolina. McCoy currently serves as a member of the South Carolina House of Representatives, representing House District 115, a position he has held since 2010. He also serves as the Chairman of the House Judiciary Committee. He is a partner at McCoy & Stokes LLC in Charleston, where his practice focuses on criminal defense in State and Federal courts. His nomination will require confirmation by the United States Senate.

The Senate Family & Veterans’ Services Committee confirmed the governor’s appointment of retired Army Maj. Gen. William F. Grimsley to lead the new S.C. Department of Veterans Affairs. Grimsley, 62, is a military officer with 33 years of service, completing multiple combat tours in Iraq. He is a recipient of the Distinguished Service Medal, Silver Star, Bronze Star and Purple Heart and retired from active duty in 2013. A Beaufort resident, he is the son of the Citadel’s 16th President, Maj. Gen. James A. Grimsley Jr. The new cabinet agency was created by law last year and is designed to advocate on behalf of veteran needs and to protect the military’s presence in South Carolina. The appointment now goes to the full Senate for consideration.

INTRODUCTIONS OF INTEREST

HOUSE

H.5284 (Reps. Daning, Sottile and Jefferson) requires a wireless telecommunications carrier to provide call location information upon the request of law enforcement agencies in emergency situations. Referred to Committee on Judiciary.

H.5302 (Reps. Allison, Alexander, Anderson and others), a Concurrent Resolution declaring March 25, 2020, as “South Carolina Technical College System Day” and expressing appreciation. Introduced, adopted and sent to the Senate for consideration.

SENATE

S.1129 (Senators Rankin, Grooms, Hutto, McElveen and others) relating to the board of the Public Service Authority. Referred to the Committee on Judiciary.

UP NEXT

The Senate Finance Committee and House Ways and Means Committee will continue hearing testimony regarding the future of Santee Cooper.

The House Business, Commerce and Administration Subcommittee will discuss proposed Board of Accountancy regulations concerning client records on Thursday, March 5, in a meeting beginning at 9 a.m.