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 legislative session, prepared in cooperation with our lobbying partner, Copper Dome Strategies
Friday, March 26, 2021
TRENDING THIS WEEK
The House of Representatives adopted its version of the FY21-22 state budget and adjourned to begin Easter furlough.
The Senate continued subcommittee and committee hearings and announced that after two regular days of session next week, they would meet in perfunctory session only on Thursday.
TAX
The Senate on Wednesday gave third and final reading approval to 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. The Senate also gave final reading to 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. 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. Both bills now go to the House for consideration. The SCACPA Advocacy Team is in favor of both bills.
This week the Senate adopted 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. The Joint Resolution now goes to the House for consideration.
Please note: SCACPA is aware of and monitoring the SC Senate’s proposal to extend tax deadlines. We realize that such an action sets a new precedent. Read more.
The Senate Finance Sales and Income Tax Subcommittee favorably approved the following Thursday:
S.436 (Senator Cromer) that deletes an aggregate credit provision and sets an annual limit for community development tax credits.
S.609 (Senator Alexander) that would authorize state agencies and political subdivisions to conduct criminal background checks on their employees and contractors that have access to federal tax information.
S.677 (Senator Davis) that 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.
H.3726 (Reps. West, G. M. Smith, W. Cox, M. M. Smith, Pope, Simrill and others) that would exclude amounts received from a buydown relating to the definition of “gross proceeds of sale.”
A Senate Labor, Commerce and Industry Subcommittee on Thursday favorably approved S.232 (Senator Turner) relating to mergers under the Nonprofit Corporation Act. The bill would allow a nonprofit to convert to a Limited Liability Corporation without having to apply for a new Federal tax ID number and other related entity updates that require them to cease operations in the meantime. The bill now goes to the full Labor, Commerce and Industry Committee.
TAX INTRODUCTIONS OF INTEREST
SENATE
S.689 (Senators Leatherman, Massey and others) Joint Resolution to extend the income tax filing due date for individuals to the same date as federal returns are due. Read the first time and ordered placed on the Calendar without reference.
S.703 (Senators M. Johnson, Kimbrell, Garrett, Young and Climer) Provides that an assessor may not require copies of an owner-occupant’s federal or state income tax return to claim the 4% assessment ratio. Referred to the Committee on Finance.
BUDGET
The House this week voted 112-6 and passed 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) appropriating one-time surplus revenues. The $31.1 billion budget, which includes $9.8 billion in general fund revenues, remained intact as passed by the committee. Ways and Means Committee Chairman Murrell Smith (R-Sumter) told the body their primary goal was to avoid agency budget cuts and proceed with prudence due to the economy’s uncertainty. The budget sets aside $500 million in a Pandemic Stabilization Reserve Fund, bringing the state’s total reserves to $1.1 billion. Except for K-12 funding and public safety, state agencies did not receive a recurring base increase.
The budget includes:
- $50 million – raises K-12 base student cost to $2,500
- $10.2 million – full-day 4-year-old kindergarten
- $30 million – broadband expansion
- $16.7 million – DHHS – Medicaid Management Information System (MMIS)
- $16.5 – DHHS – Maintenance of effort
- $7.6 million – Judicial Department for hybrid virtual courtroom project
- $1.5 million – DJJ – Marine and wilderness programs.
For the Technical Colleges:
- $10.3 million – Maintenance, renovation and replacement
- $2.5 million – ReadySC
- $16 million – Workforce Scholarships and Grants
- $17 million – SC WINS scholarships
- $18 million – High-demand job skill training equipment
Chairman Smith noted this is only the first step in the process. Once the Senate has adopted its plan and the state’s economists receive additional data related to April tax filings, the budget will likely be amended further in May. He said state employee pay raises will be a top priority for the House if budget estimates increase. A presentation of the House-passed plan can be found here.
The Senate Finance Subcommittees continued hearing agency budget requests this week. Agencies appearing this week included the Department of Health and Environmental Control, the Department of Social Services and the Department of Commerce. The full Senate Finance Committee is expected to debate the budget beginning April 13.
The governor’s executive budget can be found here.
Individual state agency budget requests can be found here.
Video archives of the subcommittee meetings can be found here.
COVID-19 – VACCINES
House Ways and Means Committee Chairman Murrell Smith (R-Sumter) plans to create a committee later this month to look at how the state should spend the $2.1 billion state share of the latest federal COVID-19 relief. The state could look at tax rebates, again replenishing the unemployment benefits accounts with federal money instead of charging businesses or offering small businesses grants.
The state began Phase 1b of the state’s COVID-19 vaccination plan on Monday, March 8. The state is now receiving approximately 140,000 doses per week, including the Johnson & Johnson vaccine, and has 572 providers activated.
For more details from DHEC on the virus, click here.
JUDICIAL/LEGAL
The Senate on Tuesday gave third and final reading approval to S.631 (Senator Talley) that enacts the “South Carolina Electronic Notary Public Act.” The bill establishes procedures for electronic notaries public and establishes fees and training requirements. The bill now goes to the House for consideration.
On Wednesday, a Senate Judiciary Subcommittee took testimony on S.14 (Senator Jackson) the “Penalty Enhancements For Certain Crimes,” also known as the Hate Crimes bill. The bill provides additional penalties for people who commit a crime when it is beyond a reasonable doubt the victim was selected due to race, color, creed, religion, sex, gender, age, national origin, ancestry, sexual orientation, or physical or mental disability. Numerous organizations spoke in favor of the legislation and while no one spoke in opposition to the bill, the subcommittee seemed in agreement to be cautious of the unintended consequences of the bill, including religious freedom. A similar bill, H.3620 (Reps. Gilliard, W. Newton, Bernstein, Hyde, Simrill, Rutherford, Lucas and others), is awaiting debate by the full House. Only three states (Arkansas, South Carolina and Wyoming) do not have such a law on the books.
A Senate Judiciary Subcommittee on Appellate Court Rules and Administrative Law Court Rules, on Thursday favorably approved H.3696 (Reps. Lucas, G. M. Smith, Murphy, Simrill, Rutherford and others) that would increase the number of circuit and family court judges in certain judicial circuits. The subcommittee had S.366 (Senators Talley and Hutto), a reintroduction of a previously introduced bill that deals with the admissibility of medical records in workers’ compensation cases, on its agenda but did not take up the bill.
ENERGY/UTILITIES
On Monday and again Thursday, a Senate Judiciary Subcommittee debated S.464 (Rankin), which would provide some reforms to the State Public Service Authority, also known as state-owned utility Santee Cooper. The subcommittee amended the bill and reported the bill out favorably. It will be on the agenda for the full Judiciary Committee on Tuesday.
HEALTHCARE
Senator Tom Davis (R-Beaufort) on Tuesday made a motion and received unanimous consent to recall S.503 (Senator Hutto) from the Senate Medical Affairs Committee and place it on the Senate calendar for consideration. The bill would allow Physician’s Assistants and Advanced Practice Registered Nurses to issue orders for certain home health services. The bill received second reading yesterday by a vote of 39-0. It remains on the Senate calendar awaiting third and final reading.
Senator Davis made a motion Wednesday and received unanimous consent to recall S.455 (Senator Davis) relating to the creation of an additional category for temporary licensure for graduate nurses. The bill is on the Senate calendar awaiting second reading.
STATE FLAG
The Senate Family and Veterans’ Services Committee has approved S.101 (Senators Cromer and Hembree) that provides for the design, color and other elements of the official South Carolina State Flag. The bill was introduced because different vendors have produced numerous versions of the flag over the years. A study committee was formed in 2018 to come up with the standard of the state flag that is historically accurate but when lawmakers and the public mocked the flag they submitted last year, they went back to work on a new design. The version approved on Wednesday utilizes elements of the original sketch by Ellen Heyward Jervey that was adopted for the second version of the state flag in 1910. The bill now goes to the full Senate for consideration.
ANIMAL WELFARE
The Senate voted 44-0 on Tuesday to approve H.3071 (Reps. Ott, Ligon, Taylor and others) that creates the “Equine Industry Support Measures Study Committee” to examine the potential for further growth of the equine industry. The bill includes a stipulation that the committee shall study the potential for fees to be imposed on all commercial feed and custom blends labeled for equine for the purpose of promoting the equine industry. Recommendations from the seven-member committee are due to the General Assembly by Feb. 15, 2022. The bill received third and final reading on Wednesday and now goes back to the House with Senate amendments.
The Senate Agriculture and Natural Resources favorably approved on Thursday day 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 to the full Senate for consideration. There was significant debate about the bill and it could have a difficult time passing the full Senate.
ALCOHOL
A Senate Judiciary Subcommittee favorably approved on Wednesday S.619 (Senators Rankin, Leatherman, Hutto, Fanning and Climer) that provides for the sale of wine on winery premises, beer and wine on brewery property and retail sales and tastings of alcoholic liquors at micro-distilleries. California-based E&J Gallo Winery is planning a $400 million economic development deal expected to bring nearly 500 jobs to Chester County and is seeking this legislation to allow for wine tastings at four stand-alone facilities in tourist areas. Opponents of the bill testified the legislation, as written, would give an unfair advantage to Gallo over retailers. The bill now goes to the full Judiciary Committee for consideration. Governor Henry McMaster has urged the legislature to pass this bill.
The Senate gave second reading approval Thursday to S.28 (Senators Hutto, K. Johnson, Climer and McLeod) relating to ignition interlock devices. The bill remains on the Senate calendar awaiting third reading.
INTRODUCTIONS OF INTEREST
HOUSE
There were no introductions this week.
SENATE
S.687 (Senator Kimpson) Joint Resolution requiring businesses to disclose the percentage of fully vaccinated employees upon request. Referred to the Committee on Medical Affairs.
UP NEXT
The House of Representatives is off on Easter furlough.
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.
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. 5: Senate Nears Approval of $200M from Reserve Fund for Vaccine Distribution
Jan. 29: DOR Tells Economic Development Subcommittee That SC’s Tax Revenues are Strong
Jan. 22: Board of Economic Advisors Places State’s Tax Revenue Collections at $336M Above Forecast
Jan. 15: McMaster Delivers State of the State, Recommends $123M More for Small Business Grants
Jan. 8: 2021 Legislative Session “Pre-View from the Dome”
Dec. 18: A First Look at Pre-Filed Tax Legislation of Interest for the 2021 Legislative Session
