1 May 2015 – House Week In Review

The following narrative explains legislation passed by the House for the week being reported. This narrative is created by House staff and does not present the information with a partisan view.

The House of Representatives amended, approved, and sent the Senate H.3250, a bill REVISING THE CERTIFICATE OF NEED PROGRAM at the Department of Health and Environmental Control which requires providers of health care services, such as hospitals and nursing homes, to obtain department approval for additions to, or significant expansions of, their facilities and services. The bill includes recommendations of an ad hoc House legislative committee which drew upon recommendations of a CON review panel assembled by DHEC. The legislation provides comprehensive revisions to the Certificate of Need Program, including: authority for a health care facility to expand a service for which a CON has been previously awarded without having to obtain a CON for the expansion; Flexibility for adding new beds in an existing freestanding licensed acute care hospital, nursing home, rehabilitation facility, or psychiatric hospital without obtaining certificates; provisions that accommodate technological upgrades for medical equipment used for diagnosis or treatment; an increase from $2 million to $5 million in the capital expenditure threshold used for determining when a facility must obtain a CON and an annual indexing of this new threshold to a medical care consumer price index; elimination of the State Health Planning Committee; provisions for DHEC to make use of a revamped, statistically-driven State Health Plan that is subject to review by the General Assembly; streamlining provisions for the CON application, approval, and appeals process; limitation of CON challenges to affected parties and other changes to discourage the exploitation of the CON process as a means of delaying projects; and, revisions in contested cases to allow for a form of “loser pays” where prevailing parties are entitled to recover attorney’s fees and other costs incurred. The legislation establishes a review process for projects costing less than $7 million that were initiated between July 1, 2013, and April 14, 2014, during the period when the Certificate of Need Program was not being implemented, to determine which projects merit a Certificate of Need. The legislation includes sunset provisions that eliminate the CON Program on January 1, 2018.

The House made appointments to a conference committee to address its differences with the Senate on H.3663. This joint resolution establishes an INTERIM GOVERNING AUTHORITY FOR SOUTH CAROLINA STATE UNIVERSITY in order to address the school’s financial crisis and academic accreditation issues and ensure the continuing viability of the institution.

The House returned S.11, a bill ENHANCING PUBLIC NOTICE REQUIREMENTS FOR GOVERNMENT MEETINGS under the state’s Freedom of Information Act, to the Senate with amendments. The legislation clarifies that an agenda is required for all meetings of a public body and provides that this agenda must be publicly accessible and posted online if the public body maintains a website. The legislation provides that, once a meeting agenda has been posted, no items may be added without affording the public an additional twenty‑four hours’ notice. After the meeting begins, an action item may only be added to the agenda if two‑thirds of the members present and voting agree that emergency circumstances exist that require the new item to be added to the agenda. The twenty-four hour notice requirement for adding items to an agenda is also imposed upon legislative committee meetings.

The House approved and sent the Senate H.3152. The legislation establishes a limit on general fund appropriations for a fiscal year set at the total amount of the general fund revenue estimate as of February 15, 2015, for fiscal year 2015-2016, increased annually and cumulatively by a percentage determined by population increases and increases in inflation as expressed by the consumer price index. A SPENDING LIMIT RESERVE FUND is established to receive all surplus general fund revenues in excess of the spending limit. The Spending Limit Reserve Fund must first be used to address any revenue shortfalls and then any remaining balance may be appropriated for, or used to offset revenue reductions for, the following list of priorities: temporary tax reductions; infrastructure improvements ranging from highway, rail, water, air, and other transportation facilities to basic government facilities, services, and installations such as water, sewer, and public sector communications; school buildings; school buses; and expenses incurred by the state as a result of natural or other disasters declared by the President of the United States. The legislation provides for the appropriation of fund revenues after these priorities are met and requires that appropriation of Spending Limit Reserve Fund revenues must be made by a joint resolution originating in the House of Representatives. The legislation excludes constitutional and statutory requirements from the new spending limit and provides for the limitation to be suspended for a fiscal year for a specific amount upon a special vote of the General Assembly. The legislation provides that this limit first applies for Fiscal Year 2016-2017.

The House approved and sent the Senate H.3147, the “SOUTH CAROLINA GIVING BACK TO OUR VETERANS ACT” legislation that provides a South Carolina income tax deduction for all military retirement benefits attributable to active duty service in the United States Armed Forces. The deduction is gradually phased in under a three-year schedule so that a full deduction for military retirement benefits is provided for taxable years beginning after 2016.

The House approved and sent the Senate H.3149, a bill to provide for a ninety‑day PROPERTY TAX GRACE PERIOD FOR DEPLOYED MILITARY SERVICE MEMBERS. The legislation requires counties, upon application of the taxpayer, to extend the date for filing returns and the payment of property taxes for persons serving with the United States Armed Forces or National Guard in or near a hazard duty zone. The deferment begins on the tax due date and ends ninety days after the last date of deployment. No interest may be charged during the deployment unless the tax is not paid within the ninety‑day grace period.

The House amended, approved, and sent the Senate H.3154, the “SOUTH CAROLINA UNIFORM MILITARY AND OVERSEAS VOTERS ACT” legislation to better facilitate the casting of absentee ballots in elections by deployed military and other overseas voters.

The House approved and sent the Senate H.3156, the “UNIFORM DEPLOYED PARENTS CUSTODY AND VISITATION ACT”. The legislation establishes protocols to address issues of custodial responsibility that arise when a parent in the uniformed Armed Services is deployed, including provisions for temporary child custody orders and agreements that are put in place during the time of deployment.

The House approved and sent the Senate H.3548, a bill establishing NOTIFICATION REQUIREMENTS FOR CHILD ABUSE AND NEGLECT ALLEGATIONS INVOLVING ACTIVE MILITARY FAMILIES.   The legislation establishes requirements for department of social services reports of alleged child abuse and neglect involving a child of an active military family to be made to designated military authorities at military installations.

The House approved S.391, a bill revising eligibility criteria for IN-STATE HIGHER EDUCATION TUITION RATES FOR VETERANS AND THEIR DEPENDENTS, and enrolled the legislation for ratifications. Implementation of these provisions at the state level is necessary to allow for eligibility under federal G.I. Bill provisions. The legislation provides that active duty military personnel may be charged less than the undergraduate tuition rate for South Carolina residents for courses that are presented on a distance basis, regardless of residency. Also a covered individual enrolled in a public institution of higher education and receiving educational assistance are entitled to pay in-state tuition and fees without regard to the length of time the covered individual has resided in this State. Such a covered individual is defined as a veteran who served ninety days or longer on active duty in the Uniformed Service of the United States, their respective Reserve forces, and the National Guard and who enrolls within three years of discharge; or a person who is entitled to and receiving certain federal assistance by virtue of the person’s relationship to the veteran. A covered individual must live in this State while enrolled at the in-state institution.

The House approved and sent the Senate H.3979, a bill REVISING THE JUDICIAL MERIT SELECTION PROCESS that is used in the election of judges by the General Assembly. The legislation provides for all the candidates for a judgeship found qualified by the Judicial Merit Selection Commission to be submitted to the General Assembly for consideration in a judicial election rather than the list of only the three candidates that the commission found to be most qualified.

The House amended, approved, and sent the Senate H.3710, a bill providing for a MULTIPLE LOT REAL PROPERTY TAX DISCOUNT EXTENSION. The legislation extends the multiple lot real property tax discount that has been provided to property developers to allow for an additional three years of eligibility in certain circumstances so that it would apply for property tax years beginning after 2011 and before 2019.

The House amended, approved, and sent the Senate H.3725, a bill REVISING TAX CREDITS FOR THE REHABILITATION OF ABANDONED BUILDINGS AND HISTORIC STRUCTURES. The legislation includes criteria for a state‑owned abandoned building that affords tax credit eligibility for rehabilitating a building of a certain size abandoned for more than five years that was most recently owned by the State, or an agency, instrumentality, or political subdivision of the State. The legislation revises tax credit provisions for rehabilitating certified historic structures to provide that a taxpayer may elect a twenty‑five percent tax credit in lieu of the current ten percent tax credit, not to exceed one million dollars for each certified historic structure. A three-year, rather than a five-year, write-off period is established for the tax credits for rehabilitation expenses of abandoned buildings and historic structures.

The House approved and sent the Senate H.3259, a bill providing for an EXPANSION OF SOUTH CAROLINA RETAIL FACILITIES REVITALIZATION ACT ELIGIBILITY. The legislation revises the South Carolina Retail Facilities Revitalization Act, so as to reduce the minimum square footage requirement for an eligible site from forty thousand square feet to twenty‑five thousand square feet.

The House amended, approved, and sent the Senate H.3874, a bill establishing provisions for a RENEWABLE ENERGY INCOME TAX CREDIT for a taxpayer that constructs, purchases, or leases renewable energy property located on the Environmental Protection Agency’s National Priority List, National Priority List Equivalent Sites, and related removal actions, located in the state of South Carolina. The legislation provides for an income tax credit equal to thirty‑five percent of the cost, including the cost of installation, of putting into service certain solar, geothermal, biomass, wind energy, hydroelectric, and other renewable energy facilities subject to certain caps and stipulations based upon the type of facility. A sunset provision is included so that the credits will only be available through 2016.

The House approved and sent the Senate H.3113, a bill providing for the INCLUSION OF ENVIRONMENTAL REMEDIATION UNDER COUNTY TAX INCREMENT FINANCING REDEVELOPMENT PROJECT COSTS. The legislation revises redevelopment project cost provisions of the Tax Increment Financing Act for Counties so as to provide that property assembly costs also include the cost of environmental remediation.

The House amended, approved, and sent the Senate H.3313, a bill relating to the RECLASSIFICATION OF REAL PROPERTY FOR TAX PURPOSES. The legislation provides that, when calculating roll‑back tax due on a parcel of real property changed from agricultural to commercial or residential use, the value used for platted green space or open space use of the parcel, if such use is ten percent or more of the parcel, must be valued based on the green space or open space use. The legislation provides that, after a parcel of real property has undergone an assessable transfer of interest, delinquent property tax and penalties assessed because the property was improperly classified as owner‑occupied residential property while owned by the transferor are solely a personal liability of the transferor and do not constitute a lien on the property and are not enforceable against the property after the assessable transfer of interest if the transferee is a bona fide purchaser for value without notice. Under the legislation, these provisions that taxes and penalties assessed because of misclassification of real property remain the obligation of the property owner at the time of the misclassification rather than the responsibility of the buyer of the property would apply not only to property sales but also to trust distributions and property settlements in divorces.

The House amended, approved, and sent the Senate H.3568, a bill establishing a SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS USED IN HOMES FOR THE NEEDY BY NONPROFIT ORGANIZATIONS. This bill provides a state sales tax exemption for construction materials used by a nonprofit organization to build, rehabilitate, or repair a home for the benefit of an individual or family in need. The legislation also revises the sales tax exemption provided for aviation parts and supplies.

The House amended, approved, and sent the Senate H.3062, a bill establishing a SALES TAX EXEMPTION FOR CLOTHING DONATED TO NEEDY CHILDREN. The legislation establishes a sales tax exemption for children’s clothing sold to a private charitable organization for the sole purpose of distribution, at no cost, to needy children who are eligible for free meals under the National School Lunch Program of the United States Department of Agriculture. Sunset provisions are included so that the sales tax exemption will expire at the end of 2020.

The House amended, approved, and sent the Senate H.3768, a bill providing for the “SOUTH CAROLINA ABLE SAVINGS PROGRAM” to establish savings accounts as a means of empowering individuals with a disability and their families to save private funds to support the individual with a disability. The legislation establishes the Savings Program Trust Fund and Savings Expense Trust Fund and provides guidelines to the State Treasurer for the maintenance of these accounts. The legislation allows for state implementation that coordinates with the federal Achieving Better Life Experience (ABLE) Act of 2014.

The House amended, approved, and sent the Senate H.3083, the “SOUTH CAROLINA OVERDOSE PREVENTION ACT”. The legislation establishes provisions that allow protection from legal liability for prescribing, dispensing, and administering an opioid antidote to individuals who may be at risk of an opioid drug overdose.

The House approved and sent the Senate H.3799, a bill providing for the RECOGNITION OF CONCEALED WEAPONS PERMITS ISSUED IN NEIGHBORING STATES. The legislation makes provisions for South Carolina to automatically recognize concealed weapon permits for carrying handguns issued by Georgia and North Carolina. Currently, South Carolina has established CWP reciprocity with North Carolina, but not Georgia.

The House amended, approved, and sent the Senate H.3682, the “BAD FAITH ASSERTION OF PATENT INFRINGEMENT ACT”. The legislation responds to the activities of so-called patent trolls who purchase and enforce various patent rights against accused infringers without actually manufacturing any goods or providing any services that are based on the patent in question. Even when claims of infringement on intellectual property lack merit, those accused of patent infringement may be inclined to pay a license fee that is demanded rather than face the expense and uncertainty of defending the ownership of their intellectual property through litigation. The legislation establishes provisions making it unlawful to make a bad faith assertion of patent infringement. The legislation establishes criteria for determining which demands for payment of license fees or threats of litigation constitute bad faith assertions of patent infringement, and provides legal remedies for those targeted by such practices. The Attorney General is authorized to act upon violations.

The House amended, approved, and sent the Senate H.3215, a joint resolution creating a temporary legislative ALIMONY REFORM STUDY COMMITTEE to examine the state’s alimony laws including such issues as the length, amount, and consistency of alimony awards. Composed of three members of the House of Representatives appointed by the Chairman of the House Judiciary Committee and three members of the Senate appointed by the Chairman of the Senate Judiciary Committee, the study committee is charged with reporting its findings and recommendations to the General Assembly by December 31, 2015, at which time the study committee must be dissolved.

The House amended, approved, and sent the Senate H.3248, a bill creating a temporary “STUDY COMMITTEE ON HOMEOWNERS ASSOCIATIONS” to review laws, policies, practices, and procedures regarding homeowners associations including such matters as: disclosure of governing documents to prospective buyers; education for homeowners and board members; manager certification or licensing; the time period for developer control of an association; and the need for a comprehensive or uniform planned community act. The legislation provides for the composition of the study committee and requires it to make a report of its recommendations to the General Assembly by December 31, 2015, at which time the study committee must be dissolved.

The House approved and sent the Senate H.3002, a bill establishing the CAPITOL POLICE FORCE. The legislation provides for multiple authorities currently responsible for security in various jurisdictions in and around the Capitol Complex to be consolidated within a single Capitol Police Force to provide a clear chain of command in providing police protection for the State House, the capitol grounds and nearby areas, the legislative and other government buildings at the capitol, and the South Carolina Supreme Court Building, as well as for employees and visitors on the premises. The legislation creates the Capitol Police Force Committee, consisting of the Sergeant at Arms of the Senate, the Sergeant at Arms of the House of Representatives, the Marshal of the Supreme Court, and the Director of General Services as a nonvoting member, and establishes the committee’s duties, including the appointment of the newly-created position of Chief of the Capitol Police Force who serves at the pleasure of the committee. The Sergeants at Arms and Marshal retain responsibilities regarding their respective legislative and judicial chambers, offices, and meetings. Portions of the Department of Public Safety and the Bureau of Protective Services that provide security at the Capitol Complex are transferred to the new Capitol Police Force, but the consolidation excludes those responsible for protecting the Governor and gubernatorial offices and staff.   The legislation establishes the authority for officers to make arrests and perform other law enforcement duties. The legislation authorizes the acceptance of grants and other revenue for funding security at the capitol, requires annual training provided by the State Law Enforcement Division, and provides for coordination with other jurisdictions in criminal investigations and other security matters.

The House approved and sent the Senate H.3512, a bill providing AUTHORIZATION FOR SCHOOL DISTRICTS TO OFFER DISPLAYS, GREETINGS, AND INSTRUCTION ASSOCIATED WITH TRADITIONAL WINTER CELEBRATIONS. The legislation provides that a school district may educate students about the history, customs, and symbols of traditional winter celebrations, and may allow students and district staff to offer traditional greetings, such as “Happy Hanukkah”, “Happy Holidays”, and “Merry Christmas”, in conjunction with providing this education. The legislation authorizes a school district to display on school property scenes or symbols of traditional winter celebrations, such as menorahs, nativity scenes, and Christmas trees, so long as the display meets criteria for showcasing multiple religions or incorporating secular symbols alongside religious symbols. These displays must not include a message that encourages adherence to a particular religious belief.

The House amended, approved and sent the Senate H.3560, a bill revising TEACHER DISMISSAL provisions. Notably, the legislation affords school districts the option of making use of new authority to delegate the conduct of evidentiary hearings to qualified hearing officers. The legislation provides for appeals of school board decisions to be made to the Administrative Law Court (ALC) rather than to the court of common pleas.

The House amended, approved, and sent the Senate H.3882, a bill relating to SCHOOL BUS DRIVER EXAMINATIONS. The legislation expands eligibility for those who are authorized to perform the physical examinations required of school bus drivers so that exams might be more readily available.

The House amended, approved, and sent the Senate H.3430, a bill PROHIBITING SALES AND INSTALLATION OF UNSAFE USED TIRES. The legislation establishes prohibitions on the installation of unsafe used tires onto a passenger car or light truck and sales of such tires in this state. The legislation establishes criteria for the damage, wear, or defects used to classify a used tire as unsafe. Exemptions are provided for businesses selling used tires for retreading, sellers of vehicles that have tires already mounted on them, and tires intended solely for agricultural use or for off the road industrial use. A violation is a misdemeanor subject to a fine of up to five hundred dollars.

The House approved and sent the Senate H.3891, a bill revising MOTOR VEHICLE RENTAL COMPANY FEES as a means of encouraging rental companies to title and register their vehicle fleets in this state. The legislation replaces current provisions for motor vehicle rental company surcharges with new provisions that authorize a company renting motor vehicles to consumers under rental agreements for periods of ninety days or less to charge a vehicle license fee that is separately stated on rental contract to recover the costs that the motor vehicle rental company incurs for licensing, titling, registering, plating, and inspecting of its rental vehicles as well as taxes paid in connection with registering its rental vehicles. The legislation includes authority for rental companies to charge other separately stated fees such as airport access fees, airport concession fees, and all applicable taxes. The vehicle license fee authorized by this legislation is subject to state and local sales and use tax in the manner and to the same extent as the fee charged for the lease or rental of the rental vehicle.

The House approved and sent the Senate H.3788, a bill to provide for the INCLUSION OF MOTORCYCLES WITHIN MOTOR VEHICLE EXPRESS WARRANTY PROVISIONS. The legislation revises the definitions of the terms “motor vehicle” and a “new motor vehicle” in provisions governing the enforcement of motor vehicle express warranties to include motorcycles and certain other motorcycle three‑wheel vehicles.

The approved S.358 and enrolled the bill for ratification. The legislation allows for a more expansive SUSPENSION OF VEHICULAR REQUIREMENTS during declared states of emergency in order to allow trucks to engage in roadside clean-up efforts such as those necessitated by last year’s ice storms. The legislation provides that requirements relating to registration, permitting, length, width, weight, and load are suspended for commercial and utility vehicles traveling on non-interstate routes for up to one hundred twenty days, provided the vehicles do not exceed a gross weight of ninety thousand pounds and do not exceed a width of twelve feet. Requirements relating to time of service suspensions for commercial and utility vehicles traveling on interstate and non-interstate routes are suspended for up to thirty days, unless extended for additional periods.

The House approved and sent the Senate H.4056, a bill to counter FRAUDULENT ARRANGEMENTS FOR SECURING DEPARTMENT OF TRANSPORTATION CONTRACTS. The legislation provides that a contractor or contracting firm shall not be qualified to participate in Department of Transportation contracts as a prime contractor or subcontractor, if: (1) the contractor or contracting firm is owned, in whole or in part, by a trust that benefits a person or firm who has been disqualified for bidding on department contracts, or a disqualified person’s family; or (2) the disqualified person or firm provides financial support or loans to the contractor or contracting firm.

The House amended, approved, and sent the Senate H.3910, a bill relating to TIDELANDS AND WETLANDS MINOR CONSTRUCTION ACTIVITIES. The legislation provides for a three-year statute of limitations on enforcement violations on minor development activities. The legislation also provides exceptions when the alleged violator knowingly or intentionally withheld information regarding the alleged violation. Failure to obtain required permits and modifications before commencing development activities must be considered to be an act of concealment. This legislation applies to all enforcement actions pending as of January 1, 2015 and all future enforcement actions.

The House amended, approved, and sent the Senate H.3917, legislation PROHIBITING TATTOOS AND PIERCINGS FOR PETS. The legislation prohibits the piercing or tattooing of a companion animal except for when conducted by veterinarians for purposes of providing a means of identification or supplying a medical benefit. The legislation defines a companion animal as any animal that is kept inside a residential dwelling and any dog or cat regardless of where it is kept. The definition does not include livestock, fowl, or any wild animal. A violation is a misdemeanor subject to a fine of up to one thousand dollars and/or imprisonment for up to thirty days.

The House approved and sent the Senate H.3911, a bill addressing the REISSUANCE OF LICENSE PLATES. The legislation revises the interval in which the Department Of Motor Vehicles must reissue a license plate from six years to ten years.

The House amended, approved, and sent the Senate H.3927, a bill relating to SPECIAL AND SOUVENIR LICENSE PLATES. The legislation provides authority for the Department of Motor Vehicles to issue special organizational souvenir license plates and accommodates the personalization special license plates and souvenir plates.

The House approved and sent the Senate H.3549, a bill providing authorization for the Department of Motor Vehicles to issue DELTA WATERFOWL SPECIAL LICENSE PLATES.

The House approved and sent the Senate H.3880, a bill that increases the membership of the MIGRATORY WATERFOWL COMMITTEE from nine to ten by adding a designee of Delta Waterfowl of South Carolina who is not a paid employee.

The House approved and sent to the Senate H.3562, a bill enacting the “LOCAL OPTION SCHOOL OPERATING MILLAGE PROPERTY TAX CREDIT ACT” that addresses issues in Beaufort County. The legislation provides authority for a county governing body, with referendum approval, to impose a one percent sales tax the revenue of which is used to provide a credit against property tax levied in the county for school operations. The legislation provides that the tax may be rescinded by referendum initiated by a petition of fifteen percent of the qualified electors of the county or by ordinance if the governing body of the county determines that changes in state law providing for the financing of school operations make the original purpose of the tax impossible to accomplish under the existing law.

The House approved S.673 and enrolled the bill for ratification. The legislation provides AUTHORIZATION FOR A HOSPITAL PUBLIC SERVICE DISTRICT TO ENTER INTO A LEASE AGREEMENT.

The House amended, approved, and sent the Senate H.4012, a bill to provide AUTHORIZATION FOR A HOSPITAL PUBLIC SERVICE DISTRICT TO ENTER INTO A LEASE AGREEMENT.

The House approved and sent the Senate H.3025, a bill providing AUTHORIZATION TO CARRY A CONCEALED WEAPON WITHOUT A PERMIT.    In making its revisions, the legislation retains most of the current provisions relating to concealed weapons, including: the issuance of concealed weapons permits by the State Law Enforcement Division; the posting of notification that allows a business owner to prohibit concealed weapons on the premises; the homeowner permission required for carrying a concealed weapon into a private residence; and a list of places where concealed weapons are not allowed such as schools, daycare facilities, courthouses, and the meeting places of government bodies. The legislation incorporates within these provisions authority for someone to carry a concealed handgun lawfully in public without having to obtain a concealed weapons permit. These new provisions for carrying a concealed weapon apply only to those individuals who may legally purchase a firearm from a properly licensed and certified firearms dealer. The legislation also provides for South Carolina to honor valid out-of-state permits to carry concealable weapons that are held by residents of other states. With the adoption of these provisions for HONORING OUT-OF-STATE CONCEALED WEAPONS PERMITS, the legislation eliminates the current protocol for establishing CWP reciprocity with other states.

The House approved and sent the Senate H.3343, a bill addressing METHODS OF EUTHANASIA IN ANIMAL SHELTERS. The legislation disallows the use of lethal gas for euthanasia in animal shelters and makes provisions for the use of sodium pentobarbital and other substances that are recognized by the American Veterinary Medical Association as being clinically proven to be as humane.

“Sooey! Sooey!” – Our Preferred State Bond Approval Method

Bonds have been the talk of the General Assembly in recent weeks.

First we had the $500 million bond section attached to the end of the recent House budget bill. It came as a surprise to many of us and after considerable debate about the vetting process and validity of each project, the bond section was removed before the final budget vote. The House leadership made the right choice.

Now we have another bond bill arising from the murky depths of the Senate. Unlike the House version, it was not a surprise. Instead, after criticizing the House budgeting process, Sen. Hugh Leatherman announced it publicly in the Senate as you can see here. He went on to invite his fellow Senators and state agencies to add projects to the list . . . yes, the potential list. It closely resembles the House version that died as you can see on an evolving 2015 Senate Bond List.

As an aside, bond is just another word for debt. Governments usually issue bonds for long-term projects like highways or buildings. If your government issues bonds to pay for ongoing expenses, then run for your fiscal life as a big tax hike is likely looming behind you.

Bonds are not necessarily bad. Issuing debt for capital improvements makes sense for specific projects especially when interest rates are low. Like all public expenditures of taxes (in this case – interest, issuance costs and the commitment of future tax revenue) care must be taken that the project is needed, the process is transparent and the total outstanding debt remains low. Remember, our debt level has a direct impact on our state credit rating.

For lawmakers, bonds also come with a vetting process. This process was not followed in the House and the Senate appears to have ignored it also.

Title 2 Chapter 47 of the South Carolina code of laws specifies the process in which state bonds should be approved through the Joint Bond Review Committee. The curious may look here to read the entire chapter.

The code specifies that the JBRC establish funding priorities for bonds and report the priorities to the General Assembly –

SECTION 2-47-35. Establishment of funding priorities.

Section effective until July 1, 2015. See, also, section effective July 1, 2015.

No project authorized in whole or in part for capital improvement bond funding under the provisions of Act 1377 of 1968, as amended, may be implemented until funds can be made available and until the Joint Bond Review Committee, in consultation with the Budget and Control Board, establishes priorities for the funding of the projects. The Joint Bond Review Committee shall report its priorities to the members of the General Assembly within thirty days of the establishment of the funding priorities.

HISTORY: 1986 Act No. 547, § 3.

The code goes on to specify what information must be submitted to the JBRC when a bond is requested –

SECTION 2-47-40. Information to be furnished by agencies and institutions.

Section effective until July 1, 2015. See, also, section effective July 1, 2015.

To assist the State Budget and Control Board (the Board) and the Joint Bond Review Committee (the Committee) in carrying out their respective responsibilities, any agency or institution requesting or receiving funds from any source for use in the financing of any permanent improvement project, as a minimum, shall provide to the Board, in such form and at such times as the Board, after review by the Committee, may prescribe: (a) a complete description of the proposed project; (b) a statement of justification for the proposed project; (c) a statement of the purposes and intended uses of the proposed project; (d) the estimated total cost of the proposed project; (e) an estimate of the additional future annual operating costs associated with the proposed project; (f) a statement of the expected impact of the proposed project on the five-year operating plan of the agency or institution proposing the project; (g) a proposed plan of financing the project, specifically identifying funds proposed from sources other than capital improvement bond authorizations; and (h) the specification of the priority of each project among those proposed.

All institutions of higher learning shall submit permanent improvement project proposal and justification statements to the Board through the Commission on Higher Education which shall forward all such statements and all supporting documentation received to the Board together with its comments and recommendations. The recommendations of the Commission on Higher Education, among other things, shall include all of the permanent improvement projects requested by the several institutions listed in the order of priority deemed appropriate by the Commission on Higher Education without regard to the sources of funds proposed for the financing of the projects requested.

The Board shall forward a copy of each project proposal and justification statement and supporting documentation received together with the Board’s recommendations on such projects to the Committee for its review and action. The recommendations of the Commission on Higher Education shall be included in the materials forwarded to the Committee by the Board.

No provision in this section or elsewhere in this chapter, shall be construed to limit in any manner the prerogatives of the Committee and the General Assembly with regard to recommending or authorizing permanent improvement projects and the funding such projects may require.

The above paragraph notwithstanding, nowhere does the code establish the “fill the trough and yell sooey” method that we saw in the above linked video.

Of course, in the old days, that is how they did it. Maybe we should not care about the priorities of the state or whether the debt will be used as intended.

Maybe we should just hold our noses and vote for it as one newspaper editor recently advised me that I should have done with the road funding bill. We could also cover our mouths, ears, eyes . . .

I cannot suspend my disbelief long enough to not ask questions.

24 April 2015 – House Week in Review

The following narrative explains legislation passed by the House for the week being reported. This narrative is created by House staff and does not present the information with a partisan view.

The House of Representatives amended and gave second reading approval to H.3025, a bill providing AUTHORIZATION TO CARRY A CONCEALED WEAPON WITHOUT A PERMIT. In making its revisions, the legislation retains most of the current provisions relating to concealed weapons, including: the issuance of concealed weapons permits by the State Law Enforcement Division; the posting of notification that allows a business owner to prohibit concealed weapons on the premises; the homeowner permission required for carrying a concealed weapon into a private residence; and a list of places where concealed weapons are not allowed such as schools, daycare facilities, courthouses, and the meeting places of government bodies. The legislation incorporates within these provisions authority for someone to carry a concealed handgun lawfully in public without having to obtain a concealed weapons permit. These new provisions for carrying a concealed weapon apply only to those individuals who may legally purchase a firearm from a properly licensed and certified firearms dealer. The legislation also provides for South Carolina to honor valid out-of-state permits to carry concealable weapons that are held by residents of other states. With the adoption of these provisions for HONORING OUT-OF-STATE CONCEALED WEAPONS PERMITS, the legislation eliminates the current protocol for establishing CWP reciprocity with other states.

The House returned H.3663 to the Senate with amendments. This joint resolution establishes an INTERIM GOVERNING AUTHORITY FOR SOUTH CAROLINA STATE UNIVERSITY in order to address the school’s financial crisis and academic accreditation issues and ensure the continuing viability of the institution. The legislation removes the members of S.C. State’s Board of Trustees and transfers oversight and control of the institution to a seven-member Interim Board of Trustees composed of the designees of the five members of the State Fiscal Accountability Authority (the Governor, Treasurer, Comptroller General, Chairman of the Senate Finance Committee, and Chairman of the House Ways and Means Committee), one member appointed by the chairman of the House Ways and Means Higher Education and Technical Colleges Subcommittee, and one member appointed by the chairman of the Senate Finance Higher Education Subcommittee. The Interim Board is solely responsible for the selection, periodic evaluation, and retention or termination of the university’s president. The Interim Board serves up to June 30, 2018, or until the General Assembly elects a new, restructured South Carolina State University Board of Trustees whose members are to serve staggered terms in order to maintain consistency and preserve institutional knowledge.

The House amended, approved, and sent the Senate H.3539, a bill to provide for the “JAMES B. EDWARDS CIVICS EDUCATION INITIATIVE” which requires, as part of the high school curriculum United States Government required credits, that public school students take the United States citizenship civics test that the United States Citizenship and Immigration Services administers to prospective citizens to demonstrate knowledge and understanding of the fundamentals of American history and the principles and form of the United States government. Students are not required to pass this civics test, but those who do receive at least a passing grade may be recognized by the school district. Each public school, including charter schools, must report the percentage of students at or above the designated passing score on the test for inclusion on the school’s report card.

The House amended, approved, and sent the Senate H.3353, a joint resolution to provide for a GENERAL EDUCATIONAL DEVELOPMENT (GED) CAMP PILOT PROGRAM. The legislation provides for the State Department of Education to establish, beginning with the 2015-2016 school year, a two-year pilot program to develop, implement, support, and monitor General Educational Development (GED) Camps that provide a volunteer-based system to assist people who do not have a high school diploma in earning their GED certificates and advancing to such personal goals as higher education, the military, or an occupation.

The House amended, approved, and sent the Senate H.3534, a bill EXPANDING ELIGIBILITY FOR PARTICIPATION IN THE SOUTH CAROLINA HIGHER EDUCATION EXCELLENCE ENHANCEMENT PROGRAM that is funded with Education Lottery proceeds for the purpose of enhancing the educational opportunities of low-income and educationally disadvantaged students. The legislation expands the criteria for institutions eligible to participate in the South Carolina Higher Education Excellence Enhancement Program so as to include: an institution that offers at least one nonsectarian program at the baccalaureate level; an institution with a predominately female enrollment; and an institution that receives Title III funding and is accredited by an accrediting organization recognized by the United States Department of Education. Provisions are included for the Commission on Higher Education to conduct an annual review of funds allocated to schools to ensure that they are being used appropriately.

The House amended, approved, and sent the Senate H.3890, a bill revising the authority for FORGIVING SCHOOL DAYS MISSED BECAUSE OF SNOW, EXTREME WEATHER CONDITIONS, OR OTHER DISRUPTIONS. Under the legislation, a local school district is authorized, through a majority vote of its board of trustees, to waive make-up requirements for up to three days missed because of snow, extreme weather conditions, or other disruptions requiring schools to close. The State Board of Education is authorized to grant waivers for up to an additional three days beyond the three days forgiven by the local school district. Currently, the forgiveness of missed school days requires an approval of some kind from the General Assembly.

The House returned H.3877, a joint resolution AUTHORIZING A SCHOOL DISTRICT TO FORGIVE UP TO THREE DAYS MISSED DURING THE 2014-2015 SCHOOL YEAR DUE TO INCLEMENT WEATHER, to the Senate with amendments. A district may not, however, grant these waivers of make-up requirements until it has exhausted all statutorily required make-up days remaining on the 2014-2015 school calendar.

The House amended and gave second reading approval to H.3343, a bill addressing METHODS OF EUTHANASIA IN ANIMAL SHELTERS. The legislation disallows the use of lethal gas for euthanasia in animal shelters and makes provisions for the use of sodium pentobarbital and other substances that are recognized by the American Veterinary Medical Association as being clinically proven to be as humane.

The House approved S.237 and enrolled the legislation for ratification. The joint resolution provides for a continuation of the “STUDY COMMITTEE ON EXPUNGEMENT OF CRIMINAL OFFENSES” until December 31, 2015.

The House approved S.376, relating to a COUNTY AVIATION COMMISSION OR AUTHORITY, and enrolled the bill for ratification. The legislation makes clarifications regarding voting and non-voting members and provides for changes and appointments of membership on a single county aviation commission or authority.

The House amended, approved, and sent the Senate H.3304, a bill creating the LANDRUM FIRE AND RESCUE DISTRICT in Greenville and Spartanburg Counties as a multi-county special purpose district.

The Road Funding Bill Vote – By The Numbers

The road funding bill proposed by the bi-partisan House transportation study committee passed by a vote of 87 – 20. I voted against it.

The bill does the following:

  • Lowers the gas tax by 6 cents per gallon and adds a sales tax to the wholesale price of gasoline. At the current wholesale price, it is the equivalent of raising the gas tax by 10 cents per gallon. This new formula is expected to raise an extra $427,000,000 per year.
  • Reduces individual income taxes by moving the tax brackets up. The new brackets are expected to reduce income taxes by $50,000,000 after a two year phase-in.
  • Grants authority to the Governor to appoint Department of Transportation Commissioners. The commissioners would then appoint the Secretary of Transportation. All of the appointments are subject to legislative approval.

Except for the income tax reduction, these changes were proposed by the bi-partisan study committee and were introduced to the Ways & Means Committee. The bill was amended in W&M to add a $50 million income tax cut. No other amendments were offered in W&M.

The bill then came up for debate before the full House of Representatives. There were only 16 amendments offered. Only one amendment passed. It was offered by Rep. Russell Ott (D) and directed the state highway fund to transfer $25 million from the fund and split it evenly between the transportation committees of each county. The funds must be used only for repairs on state roads within the county.

Of the 16 amendments offered, two were offered by Democrats and 14 were offered by Republicans.

The other amendment offered by a Democrat would have returned the governance of DOT back to the way it was years ago. Back then, commissioners were elected from each judicial district instead of each congressional district. This amendment would have doubled the number of commissioners. It failed 51 to 48.

The remaining 14 amendments were offered by Republicans. None passed.

Rep. Todd Atwater offered an amendment to give the Governor total control of DOT. It was voted down 65 to 38.

Rep. Neal Collins offered an amendment to increase the income tax cut from $50 million to $220 million. It was voted down 71 to 31.

Rep. Joshua Putnam attempted to eliminate sales tax exemptions and redirect the funds to roads thereby eliminating the need for any tax increase. It was tabled.

Rep. Rick Quinn and I developed an amendment together. He concentrated on extending more flexibility to the counties by giving them the opportunity to offer a referendum to impose up to a 6 cent per gallon tax on gasoline.

I designed a more meaningful income tax cut. The amendment eliminated the 7% and 6% top rates and dropped the top rate to 5.75% over a 10 year period. This would have made us the same as North Carolina. At the end of ten years, it would have cut $896 million from the state budget. I also put in a trigger to suspend the tax cut for one year should we encounter another steep economic decline like we did in the Great Recession. The trigger would have kept the tax cut where it was and then restart it after a year.

Our amendment was voted down 66 to 37. Of the 66 who voted against the income tax cut, 36 were Republicans and 30 were Democrats. Of the 37 who voted for the income tax cut, 36 were Republicans with 1 Democrat.

I voted against the bill because it did nothing well. Keeping a commission structure but having commissioners appointed by the Governor and who represent congressional boundaries makes no sense. Dropping the gas tax and swapping it with a sales tax further destabilizes revenue flow. The income tax cut was anemic at best.

I also voted against the bill because of what was missing. I anticipated more substance to be added to the study committee proposal as it went through the W&M Committee. That did not happen. The bill contained nothing about reforming, auditing or bringing transparency to DOT. The bill did not acknowledge the effect of electric cars and hybrids that use little to no gasoline. The bill did not seem to be a product of the 21st century.

A lobbyist asked if I would vote for the bill. I asked him if he had a minimum standard that the bill should meet before he thought it a good bill. He replied no. He asked if I could just vote for it no matter how bad it was. I said no.

The General Assembly addresses road funding every 25 years or so. Since tax bills are required to start in the House, we have a responsibility to produce the best possible solution at the outset. We did not do that.

The bill now limps over to the Republican controlled Senate where they have already devised a road plan that raises almost $1 billion in new fees and taxes with no income tax relief. We expect them to add those provisions to the House bill.

The Senate has also started drafting a $750 million bond bill to replace the one that conservatives defeated in the House a few weeks ago. It seems that monsters are rising on that side of the flat earth that we call the General Assembly.

House Road Plan Debate – Snatching Defeat from the Jaws of Victory

An edited version of this piece originally ran in The Greenville News last Sunday. The following has been expanded over the newspaper version.

In spite of being firmly in the 21st century, South Carolina’s political history remains contemporary and constant with us.

Our compulsion to stumble over our past becomes magnified in the actions of the General Assembly. To the political novice, some elected members seem almost bit players on a stage set by regional conflict and directed by an ancient fealty to an older one partyism. Ideological belief makes little difference, except to a few character actors, and to a few, Republican Party membership means little more than belonging to the guild.

Our legislative session started in January with new House leadership and a Governor fresh from a decisive second-term election. Some in state politics thought that an era of good feelings might emerge. An era where the age-old rivalries between the Governor and General Assembly would be banished for a season and long overdue promises of Republican solutions might finally be delivered.

Instead, we have endured weeks of public rancor between the General Assembly’s leadership and Governor – all Republicans. They have disagreed over issues as varied as ethics reform, bond indebtedness and, most important to the average citizen, a plan to fix our roads.

The rancor culminated with a suggestion from our Governor that anyone dealing with the General Assembly should take a good shower afterwards. Some members felt the honor of their positions had been insulted. Maybe we should refer those members to the 1838 edition of The Code of Honor written by former South Carolina Governor John Lyde Wilson. At least the old code duello might keep comments off of Facebook.

In this self-inflicted political tension, the South Carolina House will begin debating legislation to repair our roads. Using the plan developed by the bi-partisan House transportation study committee, the debate will cover several important areas – who will oversee our Department of Transportation (SCDOT), how much new revenue does SCDOT really need, who will pay the additional revenue, and will our workers receive any offsetting income tax relief.

Though better late than never, the General Assembly should have found a solution to this crisis before our roads fell into such disrepair and before we accumulated a significant unfunded liability in the form of deferred road maintenance. The SCDOT estimates that $21 billion in additional tax revenue will be needed over the next 20 years – or $1 billion per year – to bring our roads up to a good condition.

The bi-partisan plan does not adequately reform the oversight of SCDOT. Effective oversight cannot be accomplished using a commissioner-influenced system. The Governor should have the authority to appoint a Secretary of Transportation who reports directly to her and who can reform SCDOT into a 21st century transportation agency. A group of legislatively controlled commissioners can only muddle the reforms.

The Governor should be held accountable by the General Assembly for all revenue, including any new taxes, spent by SCDOT. Our roads crisis demands some increase in revenue to reverse our slide into complete decay. SCDOT may need more in the future, but it would be fiscally foolish to give them an additional $1 billion per year before the Governor presents a reform plan. Our current Secretary of Transportation has said that an increase of $400 million per year would allow SCDOT to bring our current system up to an acceptable condition without initiating any new projects.

The bi-partisan plan cuts the gas tax and shifts the difference to a sales tax based on the wholesale price of gas. In effect, it shifts revenue from a stable, fair and visible revenue stream to an unstable, unfair and hidden revenue stream. Our roads system receives the vast majority of funding from our gas tax. It was last increased 25 years ago to 16.75 cents per gallon. Inflation and an expanded road system have devalued the effectiveness of the current tax rate. Increasing the current gas tax by an additional 10 cents per gallon tax would raise around $400 million per year. It would be politically foolish to pass a confusing tax swap when a simple increase in the gas tax would yield an adequate amount of revenue.

The bi-partisan plan offers a nominal amount of income tax relief – about $48 per filer – to offset the road tax increase. We have an unfair and antiquated tax system. Our sales tax system has over 80 exemptions for various groups and industries. We actually exempt more revenue than we collect. The income tax structure allows 40 percent of those who file an income tax return to pay zero taxes. These two systems shift most of our overall state tax burden to our working population. The tax swap provision in the bi-partisan bill forces our workers to shoulder even more of the tax burden and further confuses our tax system. Having never benefited from any meaningful income tax relief, our workers deserve more than a $48 reduction.

During her State of the State address our Governor communicated a simple plan to repair our roads. It included a gas tax increase, meaningful income tax relief and a governance plan to increase oversight of SCDOT. She promised to work with the General Assembly, and more pointedly, members of her own party, toward finding common ground and to not veto the final bill if common ground was reached. As the House considers amendments to the bi-partisan plan, we should remember that success will be much easier if we work with our Governor to create that Republican era of good feelings that has eluded us so far.

Tommy Stringer