Capitol Update Archive

June 2 – June 6

Ethics Conference Report Passes House, Filibustered in Senate

The conference committee on H.3945 (the “ethics bill”) released their conference report to the House and Senate on Thursday June 5th, the last day of session. The report covered in detail on the SCPC website, contained one positive provision in the form of private income source disclosure, and multiple negative provisions. The negative provisions include allowing legislators to spend campaign funds on nearly whatever they desire, and creating a committee to determine which ethics violations are criminal.

The House passed the conference bill by a wide margin and with limited debate. In contrast, the bill was the subject of far more discussion in the Senate. While some members expressed a desire to pass the conference bill on Thursday, Senator Lee Bright (R – Spartanburg) held up the bill in the final hour and a half of session before the Senate was forced to adjourn at 5 p.m. The conference report will be taken up by the Senate again during the Sine Die extended session beginning Tuesday June 17th.

Budget Passes with Little Debate, Big Lawmaker Pay Raise

Lawmakers were able to avoid the scrutiny of a public conference committee on the budget by having the Finance leaders of both the House and Senate work out a deal for the House to approve a large budget amendment to the Senate version, in which the Senate in turn concurred with the House version. The amendment passed the House with little debate, and the Senate concurred in turn with little debate—and with only 10 senators voting against.

The House amendment did include a proviso providing for a $1,000/year increase for lawmakers’ in-district pay—a de facto $12,000 raise for lawmakers. Different from the proviso first passed in the Senate, the proviso makes the $1,000 increase “opt-out” rather than “opt-in”—making it even more likely that the vast majority of lawmakers will take the increase. However, this proviso is not actually allocated any funding in the budget, which as The Nerve points out, is unconstitutional. Rep. Brian White (R – Anderson) even admitted this increase was not funded when asked about it on the House floor, calling it an “unfunded mandate.”

At the end of the day, both chambers approved a $25 billion+ budget full of corporate welfare, pork, agency budget increases, and pay raises for themselves. All of this after ignoring the state law requiring joint public hearings on the governor’s budget, avoiding public scrutiny by avoiding a conference committee through dealing behind the scenes, and little debate on the final version of the budget.

Clemson Enterprise Division/University of Charleston bill goes to Conference Committee

The much altered S.535 came before the Senate this week as expected. As discussed in state house happenings this week, the bill which was originally an attempt to give Clemson University eminent domain like powers has been transformed into a vehicle to create the “University of Charleston.” The University of Charleston proposal would essentially designate the College of Charleston a research university and thereby create some new graduate programs at the institution. This proposal is a thinly disguised state gift (in the form of free training) for certain corporate interests, but nevertheless many members of the Charleston delegation are heavily pushing the bill.

Ultimately, the House passed a version of S.535 containing the University of Charleston provision, but the Senate voted to non-concur with the House’s amendments Wednesday after Senator Harvey Peeler (R – Cherokee) spoke passionately against the way some members of the House and Senate tried to push the bill through the legislative process so quickly. The bill will now go to a conference committee and should return to the House and Senate floor during Sine Die extended session.

Other Notable Bill Progress

S.516 the Read to Succeed Act was enrolled for ratification and needs the governor’s signature to become law.

S.459 a statewide texting ban was enrolled for ratification and needs the governor’s signature to become law.

S.985 the “Fairness in Lodging Act” covered in SCPC’s regulation bill tab was enrolled for ratification and needs the governor’s signature to become law.

H.3644 a massive expansion of tax credits for clean energy manufacturing and other activities, discussed in SCPC’s tax favors tab, was enrolled for ratification and needs the governor’s signature to become law.

MAY 26-30

House, Senate Leaders Keep Budget Debate Out of Public Sight

Instead of having the usual conference committee debate between the House and Senate versions of the budget, leaders on both sides have been trying to work out a budget deal in order to avoid having a conference committee debate—which would be open to the public. Why would they try to do this out of public view? The likely answer is that they can more easily sneak in lawmaker pay-raises and pork without the scrutiny that would otherwise be put on a conference committee.

Next Tuesday, the House will likely attempt to make amendments to the budget that were agreed upon beforehand by Senate and House leaders so that the Senate would then concur with whatever the House does to the budget—thus avoiding a public conference committee.

Conference Committee Set for “Ethics Reform” Bill

Wednesday, conference committee members were appointed to hash out the differences between the House and Senate versions of H.3945. Representatives Delleney, Bannister, and Weeks, and Senators Rankin, Hutto, and Hayes met in the conference committee’s first meeting Thursday, but did nothing but schedule their next meeting for next Tuesday at 9:30.

The House version is much longer, and contains a “Speaker Protection” provision that would give the House Speaker firepower to fight his grand jury investigation. Moreover, it creates a grand new legislatively controlled commission that would investigate ethics violations of all three branches of government, and send findings back to the current respective jurisdictions do determine punishment. The Senate version is much smaller, but does contain private income disclosure for lawmakers in most situations. It does not attempt to fix lawmaker self-policing through the House and Senate Ethics Committees (House version doesn’t fix the problem either, but attempts to make the illusion that it does).

University of Charleston bill Attached to Clemson Enterprise Division

On Thursday, Representatives Brian White (R – Anderson) and Leon Stavrinakis (D – Charleston) successfully introduced an amendment to include the University of Charleston bill within S.535 the Clemson Enterprise Division bill.

As covered in SCPC’s education bill tab, the Enterprise Division bill has already received significant amendments that altered the legislation from its original purpose of granting unchecked eminent domain type powers to Clemson University. The version of the bill which existed prior to Thursday’s amendment was a simple attempt to streamline the approval process for university projects.

Unfortunately, Thursday’s amendment is a step in the wrong direction for this legislation. The University of Charleston bill, now attached to S.535, is little more than a thinly veiled corporate welfare program. The University of Charleston proposal as explained by SCPC’s own Barton Swaim is an attempt to provide a new state funded graduate programs at the College of Charleston. The program would likely be in computer engineering, a training area that the Boeing Corporation has indicated it would like a Charleston area university to provide. In other words, the bill is little more than an attempt to subsidize the training costs of a firm that South Carolina and the federal government already subsidize in numerous other ways.

The amended version of S.535 is scheduled for third reading in the house next week after which it will move to the Senate on Tuesday or Wednesday. Debate should be expected in the Senate as some Senate leaders have rightfully expressed opposition to the University of Charleston proposal.

DERP/Solar Leasing Heads to Governor

S.1189 the solar leasing bill, turned into yet another avenue for utility cost recovery (consumer rate hikes), received a final vote in the Senate on Wednesday and now heads to the Governor. The House amended the bill slightly last week, but all the core components (more cost recovery, requirement of certificate to engage in solar leasing, caps on solar provided electricity) discussed in the bill summary on SCPC’s regulation tabremain.

Bill to Eliminate Brewpub Brewing Restrictions Passes House, Senate

H.3512, a bill designed to allow the use of coupons in the purchase of alcoholic liquor, to prohibit sale of alcoholic liquor between retail dealers, and to relax regulations currently in place on breweries and brewpubs, was amended in conference committee Tuesday. The bill was amended to include language that would eliminate all current restrictions on the amount of beer breweries can produce and sell on site, including the five hundred thousand barrel limit proposed in S.1230, the “Stone” bill. H.3512 will also allow breweries to purchase and sell other brands of beer for on-site consumption, provided that the beer is purchased through the “three tier system”, or basically through a licensed wholesaler. The bill still contains provisions allowing retail sellers to sell alcohol on Election Day and to offer discounts on alcoholic liquors and other non-alcoholic items, while also prohibiting sales from one retail dealer to another and the sale of alcohol on Christmas Day. Tuesday’s amendments were decent steps toward removing government intrusion in the economy (at least in a small way), as breweries will face fewer restrictions on doing what they do best, brewing and selling their own beer.

It was suggested in the committee meeting that the bill, in its current form, will bring Stone Brewing Co. to the Palmetto State. Although there is definitely good reason to celebrate over the changes made to the bill in conference committee, the people of South Carolina ought to be cautiously optimistic, as committee members described Stone Brewing Co. as a “steady girlfriend”, which may mean that they are open to providing taxpayer money via the state Deal Closing Fund or other program in order to seal the deal that would bring Stone Brewing Co. to South Carolina. On Wednesday, both the House and Senate approved the changes made to the bill in conference committee. As it currently stands, H.3512 is waiting on approval from Governor Haley.

Notable Bill Progress

S.569the “Competitive Insurance Act” covered in SCPC’s tax favors tab was enrolled for ratification and only needs the governor’s signature to become law.

S.459, a bill to enact a statewide ban on texting while driving for either all drivers (Senate version) or drivers with learners permits or restricted licenses (House version), was sent to a conference committee.

S.828 was enrolled for ratification and heads to the governor for signature. As reported by The Nerve the bill, would exempt the city of Greenville from having to repay $7 million in state bonds when and if it sells its TD Convention Center, provided the proceeds are put toward construction of a new convention center.

MAY 19-23

Harrell Case Continues to Develop

On Monday the Attorney General filed with the South Carolina Supreme Court to appeal the misguided ruling issued by Judge Casey Manning in relation to the state grand jury’s investigation into public corruption allegations against House Speaker Bobby Harrell. Along with the petition for appeal, the Attorney General’s office submitted a writ that laid out exhaustive and unanswerable arguments showing the grand jury and the Attorney General have the proper authority to investigate and prosecute legislators respectively.

In response to the writ the state Supreme Court has stated that (pending the appeal) Judge Manning’s order that the grand jury immediately cease its investigation is automatically stayed. The Court is set to hear arguments on June 24th at 2:30 PM. The importance of this case cannot be stressed enough. The potential consequences of a misguided ruling are enormous.

House Passes “Ethics Bill” with Speaker Protection Provision

This week, the House made changes to the “ethics reform bill,” H.3945, that recently came out of the Judiciary Committee and eventually passed it unanimously. The House amended the bill to actually give themselves more control over a newly created “Commission on Ethics Enforcement and Disclosure,” and they kept the “Speaker Protection” provision originally put in in subcommittee. More details on the bill that passed can be found here. The Senate will likely vote Tuesday to not concur with the House version, in which case a conference committee will be created to potentially hash out a compromise between Senate and House versions of the bill.

Sine Die Resolution Passes the House, Referred to Judiciary Committee in Senate

On Tuesday the House passed a sine die resolution that will allow the house to return after the sessions set end date of June 5th. Under the resolution the House and Senate will return June 17th, 18th, and 19th to take up vetoes, budget bills, conference reports, and appointments. If necessary the Speaker of the House and Senate President Pro Tem may call the House and Senate to return again after the 19th to address a more limited set of issues, including budgetary matters. The resolution passed the House on Tuesday and was referred to the Senate Judiciary Committee on Wednesday.

Previously Covered Bills Move Forward in the House

The House passed a number of significant bills this week (mostly negative) that now require either senate concurrence with amendments, or only the Governor’s signature to become law. The passed bills include,

  • S.1036 the “Dental Sedation Act” sponsored by Senator Cleary (R. Georgetown), a dentist, and covered in SCPC’s regulation tab. (Requires Governor’s signature.)
  •  S.1189 the Solar Leasing/Distributed Energy Resource Program Bill covered in the regulation tab. (Requires Senate concurrence with amendments.)
  • S.569the “Competitive Insurance Act” which subsidizes coastal living, as explained in the tax favors tab. (Requires Senate concurrence with amendments.)
  • S.1035 the CBD oil bill, covered in the healthcare bills tab. (Requires Governor’s signature.)
  • H.3893 which requires the General Assembly to approve statewide education assessments. (Requires Governor’s signature.)
  • S.839 the industrial hemp bill, covered in our regulation tab and written about more extensively here. (Requires Governor’s signature.)
May 12-May 16

Senate Debates, Approves Budget

The Senate gave final approval to the budget Wednesday afternoon. Unsurprisingly, by the time of the budget’s final vote, no significant cuts were made. Tuesday, the Senate did vote to cut the $1,000/month increase for in-district expenses for each lawmaker (pushed for in the Senate Finance budget by Senator Leatherman (R-Florence), and moved that money to the Local Government Fund. The next day, Senator Cleary (R-Georgetown) proposed an amendment to bring back the effective $12,000/year pay raise for lawmakers, but made it optional. Despite vocal opposition from Senator Thurmond (R-Charleston), and despite the Senate voting down this pay raise with enthusiasm just the day before, the Senate approved this optional $12,000 pay raise on a 25-20 vote. It’s important to note that their current $1,000 pay for in-district expenses is already optional, but they nearly all take it.

Other amendments to the budget were discussed but not approved, like Senator Bright’s (R-Spartanburg) amendment to cut funding to many local pork items that were thrown into the budget Thursday May 8th and to move that money towards transportation. Sen. Bright spoke in favor of this on the Senate floor, saying he had senators come to him after May 8th’s session to tell them they didn’t even know what they were voting on.

An amendment to expand Medicaid eligibility to the extent provided in the Affordable Care Act was not approved. However, the Senate did approve an amendment to create a study committee to look into alternative ways to still collect federal ACA money and use it in a different way like Arkansas’ “private option.” Regardless of how the state used the money, taking Medicaid expansion money would still expand state government and its budget for years to come.

When the House votes to not concur with the Senate budget, a conference committee will be created to make a compromise on the two budgets and create one single budget for each house to vote on and send to the governor.

Ethics Bill Moves to Contested Calendar

When the amended version of H.3945 the “Ethics” Bill came before the house floor on Wednesday a large number of House members requested debate on the bill thereby moving the bill to the contested calendar. It’s unclear at what point the bill will be addressed on the House floor again.

CBD Oil Bill Amended, and Passes Third Reading in the House

S.1035, Tom Davis’ (R. Beaufort) bill to allow patients with certain forms of epilepsy to be prescribed CBD oil (a non-psychoactive derivate of the cannabis plant) received an amendment on Wednesday. The amendment creates a study committee to develop a plan for the sale and use of medical marijuana in the event the Drug Enforcement Administration ever declassifies marijuana as a controlled substance. Following the amending of the bill S.1035 passed second reading in the house on Wednesday and third reading on Thursday. The bill will now be sent back to the Senate which will either concur with the House amendments or reject them and send the bill to a conference committee.

H.3512 Amended to Include Intent of Multiple Alcohol Bills, Goes to Conference Committee

H.3512, a bill designed to allow the use of coupons in the purchase of alcoholic liquor and to prohibit sale of alcoholic liquor between retail dealers was amended on the House floor on Wednesday. The bill was amended to include the provisions of S.1230 (covered in our regulation tab) the “Stone” bill which would allow brewpubs to brew up to 500,000 barrels of beer annually and sell that beer to wholesale retailers. H.3512 was then further amended to include the provisions of H.3539 a bill that would allow the sale of alcohol on election days.     

Following the amendment of H.3512 the bill was returned to the Senate (prior to these amendments the bill had already passed both houses). On Thursday the Senate voted to non-concur with the amendments and send H.3512 to a conference committee. Restricting the sale of alcohol between retailers seems an arbitrary restriction on commerce, but it’s safe to say H.3512 was improved by Wednesday’s amendments.

Hemp Bill Passes Second Reading in the House

S.839, a bill to allow the cultivation of industrial hemp (and covered in our regulation tab) passed second reading in the House on Wednesday. The bill passed by more than a 2 to 1 margin but not before Representative Gary Smith (R. Greenville) attempted and failed to both adjourn debate on the bill and adjourn the entire house before a vote could be taken.

As we have written previously, Hemp is an enormously useful plant that was considered a cash crop in the past and can be turned into a variety of goods such as rope, paper, fuel, foods and more. The continued progress of this bill should be applauded.

What to Look for This Week

After not debating the ethics reform/politician protection bill H.3945, the House may take it up next week and vote on whether or not to accept the Judiciary Committee amendment.

In the Senate, H.3412, the road funding bill, will likely be up for debate as it’s on special order. The original version of this bill was problematic and the current version isn’t any better. As explained by Jamie Murguia in The Nerve, the current bill transforms the state vehicle sales tax into an equivalent fee and then diverts a portion of this revenue that previously went to the general fund to the Department of  Transportation. In turn, the Department of Transportation will transfer half of the new revenue to the Infrastructure Bank (SIB) which can bond the fee revenue into new debt. Giving the SIB the power to issue more debt for unnecessary new construction is bad enough, but another forthcoming amendment to H.3412 may attempt to raise the state’s gas tax. Last Thursday, Sen. Bright vowed to fight a likely amendment that would include a gas tax increase when the bill and amendments come up. SCPC has written before on how the state can address its transportation woes without raising taxes, but many legislators seem incapable of such prioritizing. The Policy Council will be following the bill closely going forward.

April 28-May 2

Action Picks Up in the House and Senate before Crossover Deadline

The bill crossover deadline—the point at which bills not passed by one chamber may be considered by the other—was May 1st, so there was a more concerted effort to actually debate and vote on legislation this week compared to others.

Senate Amends, Gives 2nd Reading to “Common Core Bill”

Wednesday the Senate to strike the language of H.3893 and insert the language of S.1145 since H.3893 had already passed one chamber. They then moved S.1145 back to committee. In recent weeks, lawmakers publicized this bill as the “anti-Common Core bill;” however, the bill didn’t mention Common Core once and provided no provisions to direct the state to adopt different standards. Instead, the bill provided for a “review” of the current standards by June of 2016 and required that any new standards not developed by the SC Dept. of Education receive General Assembly approval.

Thursday, Senator Larry Grooms (R-Berkley) proposed an amendment to H.3893 that would require a review of English and Math standards by no later than January 1st 2015 and for new “college and career ready” standards to be implemented by the following school year (2015-16). The amendment and entire bill were given 2nd reading in the Senate, and after a 3rd reading vote, it will move back to the House. While the bill couldn’t stop the state from implementing standards very similar to Common Core, this would at least be a decent first step in reclaiming some state power over academic standards. However, to be truly free from federal control, South Carolina must become less reliant on federal education funds that tie the state to education regulations decided by the federal government. By providing the state still must have “college and career ready” standards, lawmakers are implying that they still want to be reliant on these federal dollars that come with federal regulations.

Transportation Funding Bill Placed on Special Order in the Senate

H.3412 was placed on special order in the Senate on Wednesday. We wrote about this transportation bill back in March of last year, shortly after it was passed by the House. Back then H.3412 attempted to increase road funding by dedicating the already dedicated vehicle sales tax revenue to the state non-federal aid highway fund. The current version now on special order has been amended by a Senate committee to serve as a vehicle for a gas tax increase—according to Senator Lee Bright (R-Spartanburg) who said so on the Senate floor. While the bill itself on the State House website doesn’t appear to have a mandatory gas tax increase, the version of the bill found in the April 2nd Senate Journal does aim to increase the gas tax by tying it to the consumer price index, a measure of inflation.

Solar Leasing/Utility Cronyism passes the Senate

S.1189 passed third reading in the Senate on Wednesday. S.1189 is nearly identical to the amended version of S.536 (the once promising solar leasing bill). Like the amended version of S.536, S.1189 allows companies to engage in solar leasing without having to register as utilities, but it also allows utilities to apply for cost recovery (government approved energy rate increases on customers) for renewable energy investments made as part of a “distributed energy resource program”. Under the bill, solar leasing firms are also required to obtain a certificate from the Office of Regulatory Staff before engaging in solar leasing.

The bill’s passage of the Senate before the May 1st crossover deadline means S.1189 can still become law this year if passed by the House.

Bill protecting Electronic Devices from Warrantless Searches Passes the House

H.4791 passed third reading in the house on Wednesday. H.4791, as discussed in SCPC’s individual liberties bill tab, prohibits government entities from searching seized electronic devices without a warrant or from obtaining geolocation data revealing the past, present, or future location of an electronic device without a warrant. Several exemptions exist such as when permission is given by an owner to track a stolen device, or exigent circumstances exist “that would cause a reasonable person to believe that a search is necessary to prevent physical harm to the officers or other persons, the destruction of evidence, or the escape of a suspect”. In the case of the exigent circumstances clause being invoked, law enforcement would have to notify a court of record within two business days of the search being performed.

Although there are still some exceptions to the law, H.4791 would take an important step in the right direction of protecting citizen’s civil liberties. The bill passed the House before the legislative crossover deadline and can become law this year if passed by the Senate.

After Several Requests for Debate, “Politician Protection Act” Effectively Dead

When H.5072 came up on the uncontested calendar, a bipartisan cast of 40 representatives requested debate on the bill one-by-one. By putting it on the contested calendar, the bill will have a much more difficult time getting through the approval process. The House Speaker moved for all requests for debate on H.5072 to be put on its companion constitutional amendment proposal to effectively remove the power of the Attorney General, H.5073. With no objection, the same was done to H.5073.

House Concurs to Senate Amendments on the Microenterprise Development Act

On Thursday the House voted to concur with the amended version of H.3125 (the Microenterprise Development Act) passed by the Senate. In its current form, H.3125 maintains its original special interest purpose of giving grants to microloan delivery organizations which provide loans to small business. However, the current version (as discussed in previous edition of capital update) also creates a Clean Energy Industry Manufacturing Market Development Advisory Commission to last two years and issue two reports. The reports would include information on the job development potential of clean energy manufacturing and recommendations for incentives to the industry. Now the bill only needs the Governor’s signature to become law.

House Subcommittee Amends Ethics Bill

The Constitutional Laws Subcommittee of the House Judiciary Committee met on Thursday to again discuss the ethics bill – H.3945.

The main amendment adopted was the Delleney amendment which concerns the creation of a new ethics commission consisting of four legislators (two from each body picked by Senate President and the House Speaker), four judges picked by the Supreme Court, and four members of the public picked by the governor. The new ethics commission will have investigative powers only. If no violation occurred, no report would be issued. If it determines an ethics violation occurred, it will issue a public report and then refer the case to either the House or Senate Ethics Committee; however, their findings would be non-binding and if the House or Senate Ethics Committee disagrees with the findings then there would be no ethics violation.

Representative Bannister proposed an amendment dealing with campaign funds and their use which was also adopted. The main purpose of his amendment was to provide lawmakers a chance to cure misuse of campaign funds. If candidates or lawmakers misuse under $2,000 of their campaign funds, and they have not committed this violation before, they’d be given a chance to reimburse their campaign and avoid an ethics violation. Anything above $2,000 is not afforded this protection. This would also not affect any currently pending ethics cases, only cases that arise after the bill is potentially passed. Bannister did not discuss the potential amendments he brought up in the last meeting, regarding removing criminal violations and penalties from the ethics code and moving them to the criminal code. A draft of the bill as amended by the Judiciary committee should be available Friday.

State Dept. of Education Briefs EOC on Common Core Assessments

As we predicted, the subject of Common Core assessment made its way onto the Education Oversight Committee meeting Monday, as the State Dept. of Education briefed the committee on what’s recently happened with Smarter Balanced assessments and what the options going forward are. As explained by representatives of the Dept. of Education, South Carolina is no longer in the Smarter Balanced Consortium after actions taken by State Superintendent Zais. The Dept. of Education, EOC, and State Board must now act to adopt new standards-aligned assessment to be taken by students in South Carolina public schools.

Also explained was how South Carolina was able to leave the consortium. Previously, signatures of the Governor, State Superintendent, and Chair of the State Board of Education were required to leave. However, Smarter Balanced changed this policy
to require only the Superintendent’s signature, so only Zais’s signature was required to leave the consortium. Zais iterated that although the state is no longer in the consortium, it can still, if it wishes to, use their assessments.

According to the Dept. of Education, members of the EOC and State board will assist the Dept. of Education in the Request for Proposal (RFP) process in finding a different Common Core –aligned test to purchase for the state’s use. The assessment, assuming the law doesn’t change, will still require the approval from the EOC and State Board after its selection in the RFP process.

Senate Finance Committee Approves Budget, Debate Set for Next Week

The Senate Finance Committee met Wednesday night to make final changes to the budget after being incapable of completing a balanced budget over the past week or two. Public budget documents are not yet available, but should be by Monday of next week before the Senate begins debate on the budget. However, we do know that the Committee approved what is effectively a $12,000 annual pay increase for all state lawmakers, $24.5 million to expand full-day pre-k, and a 1.5 percent pay raise for state employees.

April 14-18

House on Vacation, Senate Meets for Two Days

This week the House took the first week of a two-week furlough. The Senate, meanwhile, passed a bill on special order dealing with county elections. Next on the special order agenda is S.1145, a bill identical to the amended versions of S.300 and S.888 – the bills that that would withdraw South Carolina from Smarter Balanced (the Common Core-aligned tests) and require legislative approval of new academic standards that aren’t developed by the state Department of Education.

The bill does nothing to remove the state from Common Core, and any new standardized test the state chooses must be aligned to Common Core – so long as the state keeps those standards. The Senate, along with the House, will be on furlough next week.

The Senate Finance Committee took up the House version of the budget, but no final vote appears to have emerged.

Superintendent Zais Claims Power to Withdraw State from Smarter Balanced

Less than a week after the State Board of Education voted not to withdraw the state from the Smarter Balance testing consortium, Monday, State Superintendent Mick Zais issued a letter stating that the authority to exit the consortium lies solely with him. The letter sums up his reasoning: “Since the State Board approved the assessment program in regulation, the State Board cannot mandate a change in the assessment program by a one-vote process alone.  Until a regulation is promulgated, the decision of the State Board with regard to the assessment program is not final.”

To better understand the latest happenings with Smarter Balanced, how it relates to Common Core, and what the current options of the state are, click here.

South Carolina Ranks 31st in Economic Outlook

The annual ALEC Rich States, Poor States report issued this week ranked South Carolina 31st in the nation in Economic Outlook. Among the many variables, South Carolina’s high income tax rate, lack of income tax progressivity, property and sales tax burden, and debt service as a share of tax revenue brought down the state’s ranking to be among the bottom half of the country. As the numbers suggest, there is nothing “conservative” about our state’s economic policies.

April 07-11

House Tries to Strip Attorney General of Constitutional Duties

On Wednesday, the House introduced a bill, H.5072, that would allow the House and Senate to authorize a special prosecutor to investigate “alleged” violations of ethics laws by constitutional officers – for example, the Attorney General. (The prosecutorial appointee would also be empowered to investigate “other officers,” a term referring to the heads of several executive departments and members of other boards and commissions – it does not, as far as we can tell, include legislators.) If authorized, the special prosecutor would be appointed jointly by the Senate President Pro Tem and the House Speaker. The prosecutor would also be entitled to the full resources and use of the state grand jury.

Since this bill would violate the state constitution, legislators have introduced another bill, H.5073, to create a ballot proposition to amend the constitution. The amendment, if passed, would strike constitutional language that gives the Attorney General all of his legal powers.

This bill is of course being introduced at a time when the House Speaker is under investigation for public corruption by the Attorney General’s Office, and the Speaker is openly trying to have the Attorney General thrown off the case.

In another suspicious move, H.5072 was introduced “without reference,” meaning it does not have to go through the committee process before it can be voted on. In essence the bill is being fast tracked. H.5072 came up on the house calendar on Thursday, but Representative Kris Crawford (R-Florence) raised the 24-hour rule (designed to give members time to read bills before voting on them). That means the House will not address the bill until members return from a two-week furlough.

The Speaker denies involvement with these two bills. We leave readers to make up their minds.

While H.5072 was introduced with 85 co-sponsors, legislators have begun removing their names as SCPC and media outlets have begun pointing out what exactly this bill would do, and the ethical conflicts that surround it. A number of individual lawmakers have requested to be removed as sponsors, and on Thursday, South Carolina Democrat strategist Tyler Jones announced all Democrats currently sponsoring the bill would be removing their names as sponsors.

SCPC’s standalone analysis of the bill can be found here.

House Committee Makes Revisions to Ethics Bill

In Tuesday’s subcommittee meeting, House members made a significant amendment to the Senate version ofH.3945. The amendment, introduced by Representative Greg Delaney (R- Chester), creates a new ethics commission made up of four lawmakers (two from the House, two from the Senate), four executive branch appointees, and four judicial appointees. The new commission would have the power to both investigate and punish public officials (legislative and executive branch members) accused of ethics violations. This might give the appearance of reform, but it would still allow legislators to sit in judgment of their friends and colleagues. Members of the committee acknowledged that the Senate wouldn’t accept the changes made by this new amendment but passed it anyway.

For more on that meeting, click here.

On Thursday, the subcommittee addressed a number of more minor issues in H.3945. There seemed to be a prevailing dislike for most Senate language differing from the language passed by the House. As a result, all the Senate’s provisions discussed were either deleted from the bill or designated to be replaced with newly drafted House language.

Senate provisions that were deleted included: language on paid campaign endorsements, federal campaign contributions to state campaigns, and requiring those under investigation by an ethics committee or the Ethics Commission to, under certain circumstances, pay the cost of the investigation. Senate provisions designated to be replaced by new House language included language on: electioneering, independent expenditures, consultants, campaign bank records, and ethics penalties.

Latest on the Smarter Balanced/Common Core Saga

Last week, the state Department of Education announced that it would take steps to withdraw from Smarter Balanced – the federally funded Common Core-aligned test. On Wednesday, however, the Board of Education, which along with the EOC has the actual authority over choosing academic standards, voted 4-9 not to adopt the Department’s recommendation to withdraw from Smarter Balanced.

Thursday, the House passed H.3893, a companion bill to three Senate bills that, as amended, would among other things maintain Common Core standards in the state, withdraw from Smarter Balanced (and use a different Common Core-aligned test), and require legislative approval of new standards not developed by the state. One of the Senate bills, S.1145, was set for special order Thursday.

So where does this leave parents, teachers, and students? In a sense of confusion. From the very beginning, the Common Core standards were imposed on the state with little to no input from parents. Officials even ignored state law requiring parent involvement in the standards adoption process by “modifying” procedures to conform to the Common Core adoption process.

For our in depth analysis of Common Core in South Carolina, click here.

Senate Finance Committee Dispenses Favors and Begins Budget Work

The Senate Finance Committee met on Tuesday to discuss several bills highlighted by SCPC in the past, and to begin work on the Senate Finance version of the state budget. Bills discussed by the commission included S.569 the “Competitive Insurance Act” (included in SCPC’s 2013 edition of Best and Worst of the General Assembly) andH.3125, the “Microenterprise Development Act” (covered in SCPC’s “tax favors” bill tab).

While discussing S.569, members of the subcommittee discussed one of the negative provisions of the bill: it would offer favors to property insurance companies whose coastal market share of homeowner’s insurance is 80 percent of their statewide market share. But that’s not the only anti-market provision in the bill. One provision, for instance, directs an increased share of the state’s premium tax revenues to the Hurricane Damage Mitigation Program (a program providing grants to coastal residents who weather proof their homes). This is, in effect, old-fashioned wealth redistribution. The committee passed the bill with a favorable report.

H.3125, which provides grants to microloan organizations that provide microloans to microenterprises, also passed with a favorable report as amended. Before passage, the bill was amended to include language creating a “Clean Energy Advisory Commission” that would issue a report on how state government could grow the clean energy industry. This amendment, though accepted, appears to have no relation to the bill and was likely attached as a favor. The added amendment is similar to another bill S.525 previously covered by SCPC.

The committee’s budget discussion was limited to provisos for the Department of Education. The committee appeared to adopt, through proviso, a large part of the governor’s education plan with only minor changes. The committee also included language to continue the state’s one school choice program; an $8 million capped scholarship tax credits program for special needs children. The language adopted for the scholarship tax credits program was largely similar to last year’s language, with a few technical clarifications. SCPC will continue to cover the budget as it further develops.

March 31-April 4

Senate Takes Up “Read to Succeed”

This week, the Senate debated S.516 – the Read to Succeed Act – the first bill on special order on the Senate calendar. The legislation would, among other things, essentially codify the “reading coaches” portion of the governor’s education spending plan, establish summer reading camps, and hold back students who fail to achieve adequate reading scores on standardized tests (with few exceptions).

Differing from the action on previous special order bills, the “ethics” bill, H.3945, and especially the anti-commandeering bill, H.3101, was the sense of urgency shown by Senate leadership to (publicly) debate the bill. It took weeks during the beginning of session to get a vote on H.3945, and that was after many short legislative session days – along with several long meetings behind closed doors. When H.3101 was on the table, Senate leadership was quick to adjourn many days and certainly had no motivation to come in early to debate it.

In the case of S.516, however, Senate leaders – primarily Majority Leader Harvey Peeler and President Pro-Tempore John Courson, who are sponsors of the bill – were eager to move forward with it. Senator Courson motioned to have the Senate meet on Wednesday at 10:00 a.m. (they usually meet at 2:00 p.m. that day). Some senators protested, saying they either already had scheduled meetings with constituents or important committee meetings scheduled for that time. Despite protest, the Senate voted to meet at 10:00.

With time running down on this year’s legislative session, the Senate will continue debate on S.516 next week, holding off any debate on bills related to Common Core, the Affordable Care Act, or tax cuts.

Energy Cronysim Advances again, Bridge Clubs Approved

The Senate Judiciary Committee met on Tuesday to continue discussion of two utility cost recovery bills, and a large mix of other bills. Both of the cost recovery bills passed with extremely limited debate and only one dissenting vote. Both S.1011 and S.536, as we noted earlier, would allow utilities to increase energy rates on consumers (with PSC approval) to make up for the cost of renewable energy investments. As long as energy prices are dictated by the government, consumers can expect approved rate hikes for unwise investments to continue.

The committee also passed S.779, introduced by Senator Tom Davis (R. Beaufort). That bill clarifies that clubs that gather to play games such as canasta, mahjong, and bridge without wagering are not illegal. The proposal was prompted when a SLED officer forced a retirement community to shut down a bridge club on the grounds that it was, well, illegal. S.779 passed with little debate and no dissenting votes.

House Approves one Cannabis Related bill, Rejects Another

On Wednesday, the House of Representatives passed H.4803, a companion bill to S.1035, the “Medical Cannabis Therapeutic Treatment Research Act.” Each of the acts would approve clinical trials for the use of Cannabidiol (a non-psychoactive derivative of the cannabis plant) for the treatment of patients with certain severe forms of epilepsy. As we have said before, South Carolina has too many state-imposed barriers to health care freedom as it is: there’s no reason to maintain an unnecessary restriction.

Shortly after passing H.4803, the House turned to S.839, a bill that would legalize industrial hemp production. We have pointed out before that hemp can be made into a variety of useful products and is derived from a relative of the cannabis plant that possesses little to no THC (the psychoactive component in marijuana). Some House members either didn’t know or didn’t care about these points: more than five members requested debate, which moved the bill to the contested calendar. S.839 cannot move off the contested calendar unless enough members withdraw their request for debate, so that the total number of requests for debate is less than five. Bills on the contested calendar are only addressed each day once the House finishes with bills on the uncontested calendar. Frequently the House adjourns before making it to the contested calendar, so placing a bill there is a practically effective way to make sure it isn’t debated or voted on. S.839 easily passed through the Senate but will likely have a much harder time in the House.

March 24-28, 2014

House Sends Ethics Bill to Judiciary Committee

The House voted Wednesday to send H.3945, the “ethics” bill amended by the Senate, to the House Judiciary Committee where it will be taken up in a special subcommittee. The key differences between the House and Senate versions would be that the Senate version has a stronger private income disclosure provision, and that the Senate version leaves the issue of “self-policing” alone, while the House actually makes that process worse. If anything, the Senate version is now more of an “income disclosure” bill rather than a fake attempt at full ethics reform, which the House version appears to be.

The House Judiciary Constitutional Laws Subcommittee will take up the bill Wednesday, April 2nd either one and a half hours or one half hour after adjournment of the House (depending on whether they recede for lunch) in Blatt Building Room 516.

ACA Anti-Commandeering Bills Introduced

Wednesday, two bills (one in the House, one in the Senate) aimed at slowing the implementation of the Affordable Care Act in South Carolina were introduced. S.1164, sponsored by senators Davis, Bright, Bryant, and Young, is nearly identical to Sen. Davis’s strike-and-insert amendment to H.3101 that was ruled non-germane to the bill, with a few additional modifications.

The House version on the other hand, H.4979 introduced by Rep. Chumley (original sponsor of H.3101) and others contains much of the same language as Sen. Davis’s amendment but with one major omission—transparency in ACA grants. This provision, which is contained in S.1164, puts every federal dollar attached to the ACA through a grueling transparency process in which agencies must publicly display the specific stipulations that come with taking these federal grants—like new regulations, jobs lost, new costs, etc. Without this provision any anti-commandeering bill would be weakened as there are many hidden funds—and funds exempted in the bill like Medicaid funds—that would still be coming into the state with no public knowledge of the sovereignty that is effectively being given up in the process.

Senators Sets Their Legislative Priorities, Not Yours

On Tuesday, the Senate voted to put S.866, a bill dealing with county voting and election structure, on special order, putting it on a higher priority list over every other bill besides the Read to Succeed bill already on special order. It didn’t go without a fight from a few senators, notably Sen. Shane Martin (R- Spartanburg) who used the Senate rules to his advantage to take up nearly the whole time in the motion period when speaking in opposition to putting the bill on special order.

“Veterans” of the Senate use the Senate rules to their advantage whether it’s to filibuster an amendment, waste time in general, push a bill through passage or to kill a bill altogether. Just two weeks ago a mixture of Senate rules were used, particularly the “germaneness” Point of Order, to the advantage of Senate “veterans” to kill Sen. Tom Davis’s amendment to H.3101 and to effectively kill the bill without actually having to vote on his amendment.

Senate Judiciary Committee Passes Regulatory Reform, Debates Utility Subsidies

The Senate Judiciary Committee met Wednesday and after some debate passed S.256 – a bill that would require regulations receive favorable votes from both houses of the General Assembly before they obtain the force of law. While legislative approval isn’t the most proven form of slowing regulatory growth (sunset provisions are), it would still be a laudable improvement over the current system which allows executive agencies to usurp the lawmaking power. At the same meeting, legislators debated but ultimately carried over S.1011 which would instruct the Public Service Commission to provide advance cost recovery (approved rate hikes) for utilities investing in wind power.

More details on the meeting can be found here.

EOC Subcommittee Debates Evolution, Read to Succeed, Accountability

The Education Oversight Committee Academic Standards & Assessments Subcommittee met on Monday to discuss pre-k through post-high school literacy initiative recommendations from the EOC, High School Biology Standard H.B.5, which relates to evolution, and the EOC cyclical review of the accountability system.

The EOC Special Reading Subcommittee and Public Awareness Subcommittee had already approved recommendations relating to literacy initiatives at their January 27 meeting. Some of those initiatives have been included in proposed legislation (H.3994 and S.516)—known as “Read to Succeed.” Some of the approved initiatives include statewide mandatory readiness assessments for all students entering 5K and mandatory retention for students who score at the lowest level of PASS ELA (English-Language Arts) during their third grade year. Kevin Smith, Research Alliance Manager with the Florida Center for Reading at Florida State University, stressed the benefit emphasis on literacy and reading skills has had on students in Florida. The approved EOC recommendations drew heavily from the system Florida currently has in place.

The committee also briefly discussed a finding of their cyclical review that states that academic performance of students in public schools is measured and reported by two accountability systems (federal and state) that give conflicting messages to parents, educators and communities. Essentially the federal system, No Child Left Behind, and the state system, the Education Accountability Act of 1998, have different methods to calculate accountability scores. The committee is still working on a method to fix the conflicting message from both assessment systems. The committee approved a motion to send the cyclical review to the full committee to review and hash out the remaining issues.

Lastly, the committee debated High School Biology Standard H.B.5 which states that students must demonstrate an understanding of biological evolution. EOC member Senator Mike Fair (R- Greenville) asserted his position against the teaching of evolution, and EOC member Mr. Phillip Bowers proposed adjusting the standard so it did not indicate evolution is the only valid idea on how life created. Dr. Robert Dillon, a biology professor at the College of Charleston, gave testimony supporting the standard as is, arguing the concept is a fundamental building block of understanding biology. The committee approved a motion to send the standard to the full committee with no recommendation in order for Senator Fair to have a chance to work with members of the SC Board of Education and supporters of the standard to work out a compromise.

March 17-21, 2014

Bill to Slow ObamaCare Implementation Killed in Senate

After three weeks of deliberation in the Senate, the final debate on H.3101 occurred on Wednesday evening. After some discussion on perfecting amendments to Senator Tom Davis’s anti-commandeering strike-and-insert amendment, a vote for cloture was taken (which would prohibit any more amendments from being proposed, and prompt a 20 minute debate-limit on each remaining amendment before an up-or-down vote is taken on the final bill). After last week’s cloture vote failed to get the 3/5 needed, this cloture vote passed.

For the details of what happened, and a little history on the hypocritical “non-germane” claim, click here.

The Senate finally did vote on the House version of H.3101, which contained plenty of loopholes without the amendment. The bill failed with a 9-33 vote.

Senator Cleary’s “Political Spin”

Senator Cleary attempted on Thursday to put a transportation plan (H.3412) on special order before the Senate. If successful, this would have meant H.3412 would have been given preference by receiving discussion before other bills scheduled on the calendar. The attempt failed, and with good reason. We have analyzed the H.3412 before, and found it lacking the reforms needed to fix our transportation funding system.

Apparently Senator Cleary agrees with our conclusion (though likely for different reasons) on S.14, a rival bill to H.3412. He stated on the Senate floor Wednesday that S.14 would not solve the problem and merely would make for good “political spin.” It’s true S.14 wouldn’t solve South Carolina’s infrastructure woes, but neither would H.3412 because neither bill forces proper priorities on infrastructure expenditures.

H.3412 would simply rob Peter to pay Paul by moving a funding source marked for education to transportation instead. S.14 operates on a similar mechanism, dedicating a percentage of all General Fund revenues to the Department of Transportation and the Infrastructure Bank. South Carolina’s transportation problems won’t truly be solved until the Infrastructure Bank is abolished and state law forces prioritization of maintenance spending over new construction.

Energy Cronyism, DERP, Efforts Move Forward

A Senate Judiciary subcommittee met Wednesday to discuss two bills related to the burgeoning renewable energy market. The first, S.1011 is a subsidy to wind power research and development. The bill instructs the legislatively controlled public service commission to offer unspecified incentives and allow cost recovery (passing costs on to consumer through rate increases) to energy suppliers who invest in offshore wind research and development. The bill received a very brief synopsis at the beginning of the subcommittee meeting and was immediately passed by a unanimous vote.

The second bill discussed, S.536, was originally a simple attempt to allow solar leasing, a process by which solar companies lease solar panels to residents and install the panels to residents’ homes, free of charge; in exchange residents pay the company for the power they use generated by the panels. We say “originally” because testimony was given by representatives of both current utility and renewable energy interests that indicated they were nearly done working out new compromise legislation. The proposed strike-and-insert amendment to the bill would make a number of significant changes, few of them positive. Under the proposed changes, utilities would be able to participate in a new program known as the Distributed Energy Resource Program (DERP). A utility participating in the DERP would submit a plan to participate in the renewables market and if approved by the public service commission would be eligible for cost recovery for investments made in that market.

The strike-and-insert had yet to be drafted but the committee indicated they would be ready to pass it as soon as it was. What started as a simple free market reform has becoming nothing more than another crony program in South Carolina’s government controlled energy market.

Bill Update

Senator Tom Davis’s bill to authorize (under certain circumstances) research on cannabidiol for medical purposes received a favorable vote in the full Senate Medical Affairs Committee, with an amendment, and now moves to full Senate.

March 10-14, 2014

Senate Continues Debate on ObamaCare Anti-Commandeering Bill

The Senate continued debate this week on Sen. Tom Davis’s Anti-Commandeering strike-and-insert amendment to H.3101 – formally known as the “nullification” bill. As we point out in our most recent analysis of the bill, neither the version that passed the House nor Senator Davis’s amendment attempts to nullify anything. The amended bill, however, contains a stronger basis on which states are not compelled to enforce federal law, as well as a strict transparency process that every federal dollar attached to the Affordable Care Act must go through to get approved – including an up-or-down vote from lawmakers.

Contending against the amendment, some senators claimed that those who are opposed to the ACA oppose it only because they don’t like President Obama, and that by putting ACA funds through a transparency process, a “burden” is put on universities and other entities that want to bring down federal tax dollars. Detractors brought up amendments to delete many provisions of the amendment, but these amendments were successfully tabled (in effect, defeated).

Sen. Davis and others in favor of the bill correctly argued that the proposal would not stop those federal funds coming to universities as long as it goes through a process that reveals all regulatory strings attached to the money, and the legislature approves them.

While Sen. Davis had the floor Thursday, Sen. Harvey Peeler moved to end debate and set a time for a vote to occur on the bill – a motion that would require a three-fifths vote. The vote did not get the amount needed to pass, with 21 in favor and 20 against. The vote was close and could be indicative of what an up-or-down vote on the amendment might look like, with Davis and other Republicans voting in favor of closing debate and voting, and Democrats and a few Republicans voting against. In any case, it will likely be a close vote when the time comes.

Budget Passes the House

The House of Representatives passed H.4701, the budget bill on third reading, Wednesday. The House version of the bill is scarcely distinguishable from the $25 billion budget passed by the House Ways and Means Committee. What minor amendments were passed did nothing significant to change the four big drivers of the budget, Health and Human Services (working to grow Medicaid rolls), K-12 Education, Higher Education, and Transportation.

As is typical, almost every section of the budget passed with near unanimous votes. The one item in the budget or rather not in the budget that received the bulk of debate was a combined $70,000 reduction (less than .00001 percent of the budget) in appropriations to the College of Charleston and USC upstate. The $70,000 is the same amount the universities planned to use to purchase required freshman reading books containing gay themes. Legislators are content to argue over such trivialities but refuse to give serious discussion to cutting back on the growth of the budget drivers or returning any funds to taxpayers.

Two Identical Common Core Continuation Bills Move to Full Senate

The Senate Education Committee met Wednesday to take up S.300 as amended in subcommittee. The version considered would leave Common Core standards in place for English and Math and have the standards evaluated no later than 2018 – meaning there’s definitely no guarantee that the State Board of Education and Education Oversight Committee (EOC) would get rid of Common Core standards after the 1-2 year long review process. Moreover, the bill would require legislative approval for new standards not developed by the South Carolina Dept. of Education, replace the use of Smarter Balanced Common Core-aligned tests with another Common Core-aligned test, and provide stipulations prohibiting the transfer of certain student data to the federal government (data-mining).

The bottom line would be, however, that South Carolina would continue to be a Common Core state with no definitive end-date.

Sen. Mike Fair offered up another strike-and-insert amendment similar to the one approved in subcommittee, with the main differences being (according to what he said in the meeting, the actual amendment is not publicly posted) changes to the Smarter Balanced Replacement process and changes to the anti-data-mining provision. The committee approved this amendment.

Before taking up the entire bill as amended, Senator Hayes contended that the bill as amended would likely be ruled in the full Senate not germane to the original version of the bill that would have prohibited the use of Common Core standards completely. Senator Grooms, the sponsor of the original bill, voiced opposition to carrying over the bill and placing the exact same amendment on another bill that would be more likely to be ruled germane. In the end, the committee voted favorably on S.300 – with a minority report from Senator Hutto, and then inserted the same strike-and-insert amendment to S.888 – a bill that by itself would require legislative approval of out-of-state standards – and voted favorably on it as well, thus sending two identical bills to the full Senate.

Senate Medical Affairs Subcommittee Passes Cannabidiol Research Bill

The Senate Medical Affairs Subcommittee met on Thursday morning to discuss among other things, S.1035 – Sen. Davis’ bill to legalize (under certain circumstances) and conduct research on cannabidiol for medical purposes – and S.1036 Sen. Cleary’s Dental Sedation Act.

Much of the meeting focused on Sen. Davis’ bill with public testimony from a number of witnesses. Multiple parents testified about their children suffering from epilepsy and claimed that cannabidiol offers them and their children the hope of relieving the symptoms of epilepsy where other drugs and treatments have failed. This proposal is a positive step towards removing a regulatory barrier that prevents doctors and patients from choosing the best course of treatment for the patient’s medical needs.

Testimony was also received from the Lab Director of the South Carolina Law Enforcement Division (SLED). The Lab Director stated he was concerned about how the bill would change the definition of marijuana to accommodate cannabidiol. Sen. Davis indicated he had talked with SLED about the issue and planned to work with them on the bill before passage to assuage their concerns. Following testimony, the committee rejected several minor amendments to the bill and passed S.1035 out from the subcommittee with a favorable report.

Senator Cleary’s bill received far less discussion. The bill as we have discussed before would impose new requirements and regulations on dentists who perform a medium to full level of sedation at their offices. The Policy Council has mentioned before the incentives dentists face to provide quality care, and expressed concern about the possible competition stifling effects of S.1036.

The Dental sedation Act was improved slightly during the committee meeting by an amendment which exempted Nurse Anesthetists from the bill’s regulations as they are already licensed and regulated under other laws.

Bill Update

The bill to allow cultivation of industrial hemp, S.839, received third reading in the Senate and now moves to the House. Thus far, the bill is not as “controversial” as some may have initially though, as the bill has gone through the Senate committee process and full Senate votes with little to no opposition.

March 3-7, 2014

Senate Takes Up Bill to Combat Obamacare

The long-awaited debate on H.3101, formally known as the “nullification” bill, finally arrived Tuesday on the Senate floor. The bill originally passed the House and was set for special order in the Senate last year. Sen. Tom Davis chaired a special subcommittee that held public hearings over the bill, and after deliberation offered a strike-and-insert amendment to the bill. While the amendment has the same overall intent of the bill that passed the House – attempting to stop (or at least slow down) the implementation of the Affordable Care Act (ACA) in South Carolina – there are some key significant changes that would help solidify the bill.

Unlike the House version, the Senate amendment uses the doctrine of anti-commandeering. As upheld by the Supreme Court in Printz v. United States, states are not obligated to use their own assets to enforce federal regulatory programs (like the ACA). The Davis amendment prohibits the state from enforcing certain provisions of the ACA; there are several exceptions, however, including ACA regulations that are woven into South Carolina’s Medicaid program. The amendment would also provide that the state not set up a state-run health care exchange or expand Medicaid to the extent authorized by the ACA.

Given that there is nothing the state can do to stop certain aspects of the ACA like the individual mandate (and given the exceptions to certain aspects of ACA the amendment allows the state to enforce), perhaps the most important provision of the amendment is the one requiring that federal ACA dollars be treated on a contractual basis (as first envisioned by the Policy Council). In short, all funding in any way attached to the ACA would have to go through a rigorous transparency process in which the state must publicly enumerate precisely the ways  in state agencies are proposing to cede authority to Washington in exchange for federal money. All ACA-attached funds would need up-or-down approval by the legislature.

(For more details on the bill, and its differences from the House version, click here.)

No votes were taken on the amendment this week. The amendment must be first voted on before the entire bill can be voted on.

House Delays Move on Ethics Bill

After the Senate amended and approved its version of the ethics bill last week, the bill was re-introduced in the House Wednesday, delayed an extra day as the “24 hour” rule was invoked, and wasn’t taken up Thursday as the House adjourned before it got to the bill.

The House can still propose an amendment to the bill sent over by the Senate and return it to the Senate with said amendment. However, the House can also choose to non-concur (disagree) with the Senate version – ultimately insisting that the Senate agree to the bill passed by the House. It would be expected that if the House chooses the latter option, the Senate would also insist on the version it passed and a conference committee would be established to reach a compromise. The biggest difference between the bills is that the House version pretends to end “self-policing” without actually doing so by creating a 16-member committee – half of which are lawmakers, the other half are appointed by lawmakers – to investigate lawmaker ethical violations, while the Senate version avoids making changes to the current system at all. Both versions provide for private income source disclosure; however, the House version contains a $2,500 threshold for disclosure.

Subcommittee Carries Over Bill to Allow Out-of-State Health Insurance Companies in SC

The Senate Banking and Insurance Subcommittee met on Wednesday to discuss S.886, which would allow out-of-state insurance companies to offer health insurance policies in South Carolina. Senator Cromer (chairman), the only subcommittee member to attend the meeting, swiftly moved to carry the bill over with no testimony from the public.

The bill explicitly says, “The Department of Insurance shall authorize out-of-state insurers to offer health insurance policies in this state.” It provides furthermore that these insurers shall not be required to offer or provide state-mandated benefits required by South Carolina, but that they must offer benefits and comply with laws given in their own respective states.

Allowing out-of-state health insurance companies to provide service in our state without its added burden of regulations would be a small, but needed step in removing barriers to health care freedom. We’ll continue to update on this bill as it moves through the legislative process.

Other Bill Updates

  • The bill to legalize the cultivation of industrial hemp was discussed in the Senate Thursday. Senators on both sides of the aisle spoke in favor of the bill, arguing that it would help the state’s agriculture industry compete against other near-by states that have already legalized the cultivation of this useful crop. Sen. John Scott moved to carry over the bill.
  • S.985, the “fairness in lodging act,” passed the Senate Finance Committee with a favorable report on Tuesday with Senator Peeler the lone dissenting vote. The bill would give counties the option of issuing new penalties to individuals renting out residential properties and not paying accommodation taxes.
  • S.525, the clean energy advisory bill, passed the Senate Finance Committee with a favorable report on Tuesday. In addition to creating a clean energy advisory committee, S.525 would lower investment thresholds needed to apply for clean energy manufacturing tax credits. The bill received several minor amendments before passage that would provide for the grandfathering of certain credits beyond a 2020 deadline and allow DOR to consult with the State Energy Office. Senator Bryant issued a dissenting minority report on the bill.
  • Since the Senate Education Committee did not meet this week, no action was taken on S.300 – the “anti-Common Core” bill turned “Common Core continuation” bill by recent amendment in subcommittee.
February 24-28, 2014

Senate Passes Far from “Comprehensive” Ethics Bill

Thursday afternoon, the Senate passed H.3945 – also known as the ethics bill. In its final version, the bill contained provisions requiring private income source disclosure for lawmakers, as well as changes to campaign finance laws and minor changes to lobbyist regulations and an additional requirement for consultants. Missing from the bill is a provision removing lawmakers’ abilities to investigate and punish themselves in their respective legislative ethics committees.

Of course, private income source disclosure would be a great step towards revealing potential conflicts of interest, and South Carolinians have been pushing for it for years. At the same time, the bill isn’t comprehensive, and citizens should be wary of any rhetoric coming from politicians claiming the bill to be a “historic” and “sweeping” reform of our ethics laws. It isn’t.

The bill now moves on to the House where lawmakers will decide whether or not to concur with the Senate’s bill. If not, the bill will move to a conference committee.

Next on the Senate’s agenda will be H.3101.

Anti-Common Core Bill Turns into Common Core Continuation Bill

The Senate K-12 Education Subcommittee met Wednesday to take up S.300 – the bill originally written to end the use of Common Core standards in South Carolina. Last week, Senator Mike Fair introduced a strike-and-insert amendment in subcommittee that would, among other things, keep the use of Common Core for English and Math until at least 2016 when the standards would be reviewed, prohibit the use of Smarter Balanced Common Core-aligned tests, and require legislative approval for any new standards not developed by the South Carolina Department of Education. After some fairly heated discussion between senators and Department of Education staff on the implications of switching tests, the subcommittee amended the strike-and-insert amendment again to move the review of the state’s standards to 2018 instead of 2016, and then voted in favor of the newly amended bill.

If this bill were to pass the General Assembly, Common Core would be here to stay for at least five more years. The bill now moves on to full Senate Education Committee.

Sales and Income Tax Subcommittee Passes Mixed Bag of Bills

At a Senate Sales and Income Tax Subcommittee meeting on Thursday, senators passed three bills. The first, S.1033, would exempt out-of-state businesses that perform work or services in South Carolina during a declared state disaster from having to register or pay state and local taxes.

The second bill discussed and passed was the so called fairness in lodging act. We have already said the main purpose of this bill is protectionism. The bill allows counties to impose new penalties on individuals who rent their property and fail to get a license to do so, or who fail to pay accommodations taxes. Several senators and witnesses testified that some property owners who rent their property short term and pay accommodations taxes had complained of competition that aren’t paying their taxes. Thus, the thinking goes, it’s only fair that all short-term renters be forced to get a license and pay special taxes.

This non-compliance issue wasn’t a problem until the advent of certain internet sites that let users advertise the property they wish to rent for a small fee. Previously, property owners who wished to temporally rent their property would most often go through a company with a physical location in the state that would help the potential renter obtain a license and would then advertise their rental property. Naturally, the rental agencies aren’t too fond of their new internet competition and would like to see it cracked down on; in fact, a member one such group testified in favor of the bill. In short, if what we’re looking for is fairness, the easiest path isn’t more regulation – it’s repeal of license requirements and accommodation taxes. The repeal approach would open up the market to more mutually beneficial transactions and it avoids the problem of enforcement the current bill faces, as pointed out by Sen. Peeler. But fairness isn’t what’s really being sought here; instead it’s protection for already licensed rental property owners and rental agencies.

The third bill, S.525, would have created the Clean Energy Industry Manufacturing Market Development Advisory Council. The bill would create the advisory council to issue reports to the governor and General Assembly on how to grow the clean energy manufacturing industry in South Carolina. More significant for the near term, the bill would lower the investment thresholds needed for clean energy component manufacturers to receive targeted tax favors in the form of credits. The committee amended the bill on Thursday to turn the advisory council into a temporary committee, but the tax favors were left intact.

This proposal is cloaked in environmental language, but it’s little more than another special interest tax favor. Even the representatives of the South Carolina Clean Energy Business Alliance, testifying in favor of the bill, admitted they were more interested in jobs and economic development than any environmental concerns. They even cited the cozy relationship between the state and the tire and aerospace industries, indicating they’d like to enjoy a similar favored status with the Department of Commerce. Sadly, flagrant cronyism is no longer something to be ashamed of.

County “Rubbish in Yard” Bill Moves Forward

A bill to authorize counties to implement laws requiring property owners to keep their lots clear of “rubbish, debris, and other unhealthy and unsightly material or conditions” was taken up in a House 3M subcommittee Wednesday. All parties present spoke in favor of the bill, including representatives in the subcommittee and spokespersons from the South Carolina Association of Counties and Municipal Association of South Carolina. The bill was unanimously approves and now moves on to full committee.

Senate Committee Debates Local Ordinances Regulating Speeding

The Senate Transportation Subcommittee met Wednesday to discuss local ordinances regulating speeding traffic violations. The debate centered on questions of whether political subdivisions of the state have the authority to establish local speeding ordinances, if the fines and fees collected are being remitted to the state as required by law, and if further auditing of political subdivisions’ practice of issuing speeding tickets and assessing fines is needed.

According to the subcommittee, media reports have indicated that some political subdivisions have enacted local ordinances on speeding, referred to as “careless/thoughtless operation” ordinances, that differ from state law and that typically involve no points being assessed toward a driver’s record, but instead impose higher fines. The subcommittee also referenced evidence that some political subdivisions are not remitting the appropriate amount of fines and fees collected from speeding violations to the State Treasurer in order to keep the funds for their own use. Witnesses with ties to the South Carolina Sherriff’s Association and Criminal Justice Academy argued that the withholding of funds by political subdivisions reduces the appropriations for the Criminal Justice Academy and makes it difficult to plan and budget for the academy.

The main objective of the meeting was to identify if there is a problem and discuss possible solutions to the problem. Some ideas proposed included creating statewide uniform ordinances and fines for “careless operation,” increased auditing (possibly by the Criminal Justice Academy) of the number of tickets written and fines collected and remitted to the state by political subdivisions, and revocation of municipal charters for failure to remit all required fines and fees to the State Treasurer. The subcommittee agreed that further debate of the issue is needed with input from the car insurance industry, as well as the State Treasurer and Auditor.

Banking and Insurance Committee Approves Further Subsidizing of Coastal Living

The Senate Banking and Insurance Committee met Wednesday and approved S.569 to be sent to the full Senate. This bill, which we have documented before in our annual guide, Best and Worst of the General Assembly, gives new tax credits to insurance companies whose home insurance portfolios are made up largely of coastal properties. The bill also redirects millions of dollars currently going to the General Fund in order to increase the size of a program that offers tax credits to individuals who weatherize their homes.  Concurrent with passage, the committee amended S.569 to include a directive for a study on the feasibility of creating a South Carolina-specific hurricane model. Currently the Department of Insurance approves property insurance premiums using a slightly changed Florida Hurricane model.

The amendment to look into improving the models used by South Carolina government is a positive development. However, outside of this one improvement the bill merely serves to grow existing bad policy. As we have written before, subsidizing coastal insurance redistributes income from inland taxpayers to coastal residents, and encourages the building of property in large risk areas by hiding the true cost of insurance. Lawmakers should be seeking to allow market signals to come through rather than muffling them further.

In a final flourish, the committee passed a resolution that memorialized Congress to go back on reforms they recently made to a national flood insurance subsidy program.

Industrial Hemp Bill Update

A bill that would legalize the production of industrial hemp – S.839 – received a unanimous favorable vote in the Senate Agriculture and Natural Resources Committee and now moves to the full Senate.

February 17-21, 2014

Ethics Bill Debated in Secret

Thursday marked the fourth legislative day in a row that the Senate met in secret to discuss a compromise on H.3945 –the “ethics” bill. Thursday afternoon during one of the few times that the Senate was meeting in public, Senator Larry Martin announced that while there seemed to be a consensus that private income disclosure should stay in the bill, senators couldn’t agree on independent investigations of lawmakers. After meeting in secret again, the senators came out again to announce that since they still couldn’t come to a compromise and agreed to simply remove any changes to lawmaker investigations and keep the status quo – lawmakers policing themselves – in place. The bill was approved (with an unwritten strike-and-insert amendment) on second reading and will be up for third and final reading next week. The bill can still be amended when it comes up for debate. (Read more about these secretive meetings and proposed amendments here.)

Senate Committee Kills Bill Expanding Second Amendment Rights

The Senate Judiciary Committee took up S.115, the “constitutional carry” bill previously carried over two weeks prior.  As amended, the bill would allow citizens not convicted of violent crime to carry firearms publicly without a state government-issued Concealed Weapons Permit (CWP). Many senators voiced concern over the bill to its sponsor, Sen. Lee Bright, including Sen. Hembree, who expressed concerns over the definition of “violent crime.” The bill as amended, he argued, referenced part of the state code that defined violent crime, and there are many other crimes not under its definition – mass destruction causing death, for example – that wouldn’t be included in the bill’s current wording. Sen. Bright expressed willingness to amend the bill to include these other violent crimes; he didn’t know they weren’t included under the state code’s definition.

The majority of senators clearly had no intention of strengthening the bill in order to make it more likely to pass, and were far more interested in pointing out granular flaws. The majority of concerns expressed by senators like Hembree, McElveen, Coleman, Kimpson, Thurmond and Larry Martin were red herring arguments, bringing up scenarios that would never occur in reality or saying the bill is hypocritical since it still “technically” infringes on Second Amendment rights.

Speaking in support of the bill, Sen. Corbin stated (paraphrasing) “It boils down to the nature of man. There is evil in this world and there is good. What this bill does is give the good the chance to compete against evil.”

When the bill came up for vote, only four voted in favor of passing the bill out of committee: Sens. Shane Martin, Lee Bright, Tom Corbin, and Katrina Shealy. The 17 others in the committee voted against.

Agriculture Subcommittee Approves Bill Allowing Industrial Hemp Cultivation

In a meeting on Thursday that was both concise and refreshing for the rationality displayed, a Senate Agriculture subcommittee passed out S.839 with a favorable report. Most of the minutes of the meeting were taken up by testimony from a Wayne Borders the president of the local chapter of NORML (National Organization for the Reform of Marijuana Laws). Mr. Borders made many of the same comments that the Policy Council has made in our piece on industrial hemp. Specifically, Mr. Borders mentioned the size of the hemp industry, the many useful products that can be made from hemp, the difference between hemp and marijuana, and the biological foolishness of attempting to grow marijuana alongside hemp.

Following Mr. Borders’ comments, Sen. Hembree referenced a similar legislative proposal that became law in Kentucky in recent years. Sen. Hembree indicated that he had talks with individuals, including law enforcement officers, who had experience with the Kentucky law and had found no problems with it. The subcommittee approved S.839 with a favorable report by unanimous vote.

Common Core Prohibition Bill to No Longer Prohibit Common Core

The K-12 Education Subcommittee met Wednesday to discuss bills related to Common Core, most notably, S.300, which, as originally written, would prohibit the use of Common Core academic standards in South Carolina. The strike-and-insert amendment proposed by Sen. Mike Fair, however, would remove this flat-out prohibition from the bill, while adding several provisions, including those borrowed from two bills already filed. The subcommittee did not take action on the strike-and-insert amendment in order for senators to have time to read and discuss it with school officials in their districts. Read more on the proposed amendment here.

Ways and Means Rubber Stamps Subcommittee-Approved Provisos

The full House Ways and Means Committee met Tuesday to discuss and vote on provisos suggested for inclusion in the 2014-15 state budget. The committee considered proviso recommendations from seven subcommittees that came in the form of packets. All but four of the proviso recommendations contained in these packets (each contained multiple pages of recommendations) were adopted in short order by the committee. The four proviso recommendations that weren’t immediately adopted were carried over.

Included in the adopted provisos was one we discussed last week that would allow the state to strip localities of law enforcement certification if they fail to give the state an appropriate share of ticket revenue. This proviso was actually strengthened by replacing the phrase “may withdraw law enforcement certification” with “shall withdraw law enforcement certification.” This threatening of localities for revenue coincides with the state failing to meet its legal requirements to fully fund the local government fund as we pointed out last week.

The committee also adopted a proviso we discussed that would attempt to stop Common Core by prohibiting the expenditure of funds of standards not developed by the State Department of Education. As we have previously noted, such a proviso would be powerless because of the agreement made by the state with the Common Core initiative. That agreement prohibits revisions to more than 15 percent of the standards.

Out of the provisos discussed that were independent of the subcommittee packets one of the most contentious would have required universities to draft value statements. This proviso, which failed, sparked a testy debate between Reps. Cobb-Hunter and Gary Smith. In short, lawmakers were happy to debate trivial provisos, but other provisos that could harm localities and citizens received not a word of discussion.

Ways and Means Approves Budget 

House Ways and Means passed the first legislative version of the budget on Thursday. There was little public debate as the committee was quick to approve the respective sections of the budget presented by the various W&M subcommittees. Continuing a trend, the budget is about $1.5 billon larger than last year. Items in the budget include $23 million for state employee pay raises, $12 million for school buses, and $37 million for the Commerce Department’s company luring deal closing fund.

We’ll provide more details on the budget as it moves forward.

February 10-14, 2014

House on Furlough, Senate Snowed Out Again

This week the House took a scheduled furlough, while the Senate session was canceled due to weather. Although it was a  quiet week on the State House grounds, a few important things did happen while the rest of the state was busy battling ice and snow.

Education Oversight Committee Approves (Most) of New Science Standards

The EOC met Monday to, among other things, take action on new Science standards recently approved by State Board of Education. The EOC Subcommittee on Standards and Assessments sent these standards without recommendation to the full EOC two weeks prior. At the time, Sen. Mike Fair voiced concern over a small section of the standards regarding “natural selection,” and after discussion back and forth, the EOC unanimously voted to approve all standards except the section referring to natural selection – which was sent back to the EOC subcommittee to be taken up separately.

Also of note, self-employed insurance broker David Whittemore was unanimously voted to be the new EOC chair, replacing Neil Robinson who will carry out the rest of his term on the EOC through this year’s legislative session.

This meeting took place the same day The Nerve reported on the multi-million dollar cost Common Core tests will be to the state, South Carolina’s active role in the SMARTER Balanced assessments consortium, and the questionable legality of the South Carolina Deptartment of Education continuing the implementation of these assessments without approval from the EOC.

Provisos, Provisos, Provisos

The House Ways and Means Proviso Subcommittee met Tuesday to take up provisos – budget amendments that show up in Part 1B of the budget (used often to sneak in pork spending). Among the several provisos approved was one to take away law-enforcement certification from local governments that don’t give the state its share of traffic ticket revenues. Especially during the budget debate last year, Sen. Shane Martin and others have drawn attention to the fact that the state does not routinely fund the Local Government Fund to the extent it is supposed to by law. Unfortunately, if this proviso is included with the final budget without the additional local government funding, cities and counties will likely ramp up traffic fines and make an even more concerted effort to police for profit – as many already do – in order to make up for lost “revenue” that would then go to the state.

Another proviso would prohibit the state from expending funds to revise or adopt academic standards that weren’t developed by the South Carolina Department of Education. While perhaps ostensibly an attempt to inhibit implementation of Common Core, this proviso would do nothing to stop Common Core’s implementation in the state. Common Core was already adopted three and a half years ago by the State Board and EOC, and the state can’t make any revisions to the standards aside from the 15 percent its ‘allowed’ to revise per the state’s agreement with the Common Core initiative. SMARTER Balanced assessments, on the other hand – the Common Core-aligned tests the State Board (but not yet the EOC) has signed on to – will cost the state millions. This proviso would seem to have no affect on these Common Core assessments.

This aside, it wouldn’t be bad policy to prohibit funding the revising or adopting out-of-state standards in the future. Provisos are just not an effective tool to do so as these budget amendments are only in force for one year. This policy would have to be passed in a separate law, not the annual appropriations bill.

Governor Credits Lawmakers, Not Grassroots, for Restaurant Carry Bill

On Tuesday, Governor Haley spoke before signing S.308, better known as the restaurant carry bill. Although the bill did end up passing with overwhelming votes in the House and Senate, its passage did not happen easily: it was held up during last year’s session. The governor thanked and credited several legislators, as well as the out-of-state National Rifle Association, for assisting the passage of the bill. Not mentioned or credited were the numerous South Carolinian grassroots groups that did the work on the ground to get a clean bill (one without increased fees or curfews) passed.

February 3-7, 2014

Legislature Returns, Elects Some Judges, Not Much Else

Senate Meets on Ethics Bill in Secret

The Senate was expected to spend time on the ethics bill, H.3945, but it wasn’t discussed at all on lawmakers’ first day back. Instead, Senator Shane Martin motioned to change the order of the day to bring up H.3101 – the bill aimed at stopping ObamaCare in South Carolina. By the time Sen. Tom Davis spoke on the status of making a strike-and-insert amendment to H.3101 and Sen. Martin’s motion was voted down, an hour had passed and the Senate adjourned for the day. (Why? Because the South Carolina Arts Alliance was hosting a Legislative Appreciation Luncheon at the Capitol City Club.)

The Senate did entertain some discussion on the ethics bill Wednesday: many lawmakers expressed concerns over private income disclosure and the power of a newly structured Ethics Commission to investigate lawmakers.

The ethics bill was presumably discussed Thursday, but if it was, the public has no idea what was actually said. Once the Senate got to the bill, Sen. Campsen stated that he and his colleagues tried to work on the bill the previous night, but they failed to come to an agreement. He suggested that the Senate start going through all of the smaller amendments on the table. Sen. Courson then motioned for the Senate to enter executive session, the motion was adopted, and the public was ordered to leave the chambers. The Senate spent an extended period in executive session, and once the session ended, senators adjourned.

Unprecedented Supreme Court Justice Election

It’s rare that a state Supreme Court chief justice should be challenged for re-election, and rarer still that the election come down to a vote.  (Ordinarily candidates drop out before the vote is taken.)  Yet on Wednesday a Joint Assembly of the House and Senate met to vote on Justices Jean Toal and Costa Pleicones. Toal won with a vote of 95-74.

Perhaps more important, however, was the public’s unprecedented interest in the election, and the first glimpse by many into how their judges are elected (by the legislature) and blatant conflicts of interest that can arise through that process. South Carolina is the only state in the nation in which the legislature is involved in both the nominating and appointment process of state judges and one of only two (Tennessee) in which the Judicial nominating committee is appointed by the legislature.

In Committee: Guns, Common Core, Corporate Welfare, and More

Lawmakers Consider Constitutional Carry Bill

On Tuesday, the Senate Judiciary Committee met to discuss several bills, most notably S.115 – the “South Carolina Constitutional Carry Act.” If passed, law-abiding citizens would be able to lawfully carry weapons with or without a permit. After a fairly substantial debate between the bill’s sponsors, Sens. Lee Bright and Shane Martin, and opponents of the bill such as Sens. Larry Martin and John Scott, a motion to table the bill (essentially killing it) failed by a vote of 10-10. The committee then voted instead to carry over the bill, meaning the committee will have to take it up again. Read more about the bill and what lawmakers had to say about it in this week’s “My Last Nerve” column.

The bill will come up again on Tuesday, February 11, at 3:00.

Common Core “Debated” 3.5 Years after Approval

On Wednesday, the Senate K-12 Subcommittee heard from presenters on either side of the Common Core debate. Each side had three presenters and roughly 30 minutes to present their arguments in front of a large crowd, the vast majority of which were against Common Core. Detractors argued, as we have, that Common Core has been pushed by the federal government while states like South Carolina willingly gave up their power over their own education standards in exchange for Race to the Top Funds and No Child Left Behind Waivers. Others explained in more detail about the lackluster quality of the Common Core Standards themselves.

Proponents argued for the most part that Common Core hasn’t been getting in the way of education in South Carolina schools, it would cost the state too much money to switch the standards now after they’ve mostly been implemented, and that Common Core produces students that are “college and career ready” for jobs available in the state.

Common Core standards are scheduled for full implementation next school year, although Common Core-aligned assessments have not yet been approved by the Education Oversight Committee. Read about this subcommittee  discussion in more detail here.

Department of Commerce Asks for More Corporate Welfare

The Ways and Means Subcommittee on Economic Development and Natural Resources heard requests for more money from the Department of Commerce and Rural Infrastructure Authority (RIA) Tuesday. Bobby Hitt with the Department of Commerce boasted, among other things, that his department has created 15,000 new jobs for the future (although they don’t actually track created jobs). Hitt asked for $25 million for the Deal Closing Fund – the fund used to hand out tax dollars to companies to lure them to the state – because that’s how much it’s received in the past, and he would like it to be recurring (usually the Closing Fund is replenished from a variety of areas including the General Fund, Capital Reserve Fund, and budget provisos). He failed to mention, however, that this was only the very recent past.

The Closing Fund did not receive anywhere near $25 million until Fiscal Year 2012-13, when it received an additional $10 million from the Mortgage Settlement Fund – a settlement that awarded states a total of $25 billion (South Carolina received $30 million) to assist those whose homes were improperly foreclosed upon during the mortgage crisis. Clearly it was a far stretch to argue $10 million going to a corporate welfare fund would help those who suffered in the housing crisis, but that didn’t matter. In any case, Hitt also asked for an additional $5 million one-time allocation for ensuring sites for new businesses are ready and to help recruit new businesses.

RIA Director Bonnie Ammons asked for an additional $5.6 million in additional recurring funds to bring the total to $7 million – which is consistent with the agency’s written budget request, as reported by The Nerve.  Ammons argued that the agency is trying to help rural areas in crisis mode and trying to “bridge the funding gap” for critical infrastructure. Moreover, she said that they’ve developed a five-year distribution plan for the funding already available, but they’ve decided they need more funds to do what is needed in the plan.

Education Subcommittee Meets to Consider More of the Same

The Education and Public Works K-12 Subcommittee meeting met on Tuesday to discuss several education reform bills. Among those bills discussed were a reauthorization of the First Steps to School Readiness program with minor changes, and the Read to Succeed Act that would create “reading camps” and a state reading proficiency plan.

The First Steps bill was quickly amended and passed with a favorable report after some brief favorable testimony. The Read to Succeed Act met with a far greater level of rhetorical resistance, mostly centered on a provision that would retain students in the third grade if they had not achieved third grade level reading proficiency. Despite the debate the Read to Succeed Act also passed with a minor amendment (unrelated to the retention policy) and a favorable report without any “nay” votes.

The unfortunate truth is that despite the controversy around one of these bills, and the seeming wide level of support for another, neither of the proposals will bring about reform. We’ve examined the effects of pre-school programs in South Carolina, and we’ve examined the effects of increased funding for public schools. Both measures disappoint when it comes to improving academic outcomes – surely the only consideration that matters. Truly meaningful reform must include a way for students and educators to step outside the standardized approaches that currently shackle public education.

January 27-31, 2014

General Assembly Takes the Week Off

While lawmakers have failed to take any action to legally shorten their legislative session, Mother Nature took action on her own to shorten it by one week: Sen. Courson and Speaker Harrell announced Monday that their respective bodies would not meet during the week due to inclement weather. Most committee meetings were cancelled as well. This means debate on the ethics bill in the Senate will have to wait until Tuesday of next week. Although scores of amendments on the bill are still on the table, Sen. Larry Martin mentioned last week that he and others would discuss a compromise over the weekend. And with another week to discuss the bill behind closed doors, there’s a chance the bill will pass quickly.

EOC Remains in Gridlock over Common Core and Science Assessments

The Education Oversight Committee (EOC) Subcommittee on Standards and Assessments met Monday to discuss the new science standards that were recently approved by the State Board of Education. Members of the subcommittee were surprised to hear that if the standards were approved in March, they wouldn’t be in full effect until the 2016-17 school year, since that’s when the assessments for the standards would be ready. Charmeka Childs with the State Department of Education explained that, since these science standards are state developed, the state has full control over the development of the assessments. The time table is different from Common Core implementation, since the assessments the State Board approved to use for those standards — SMARTER Balanced — are made by the group of governing states of the SMARTER Balanced consortium.

Sen. Mike Fair stated that if the EOC doesn’t take action on approving SMARTER Balanced, then the State Department of Education would continue to move forward with implementing the assessments and that the General Assembly should take action to stop the state from using those assessments. One teacher at the meeting made the point that confusion over assessments at the state level is creating confusion among teachers: it appears, she said, that the EOC and many legislators are trying to change the standards and assessments while teachers have already begun basing their professional development and modules around SMARTER Balanced assessments.

The subcommittee sent the science standards without recommendation (neutral stance) to the full EOC to be taken up next month.

Senator Leatherman Wants to Raise the Gas Tax

Senator Hugh Leatherman told listeners at the North Eastern Strategic Alliance Review and Resources Conference on Monday that he favors of an increase in South Carolina’s gas tax. Sen. Leatherman contended that raising the gas tax was a necessary step toward fixing South Carolina’s infrastructure. Leatherman’s support of a tax increase carries significant weight, since his powers as Finance Committee Chairman give him large influence over which bills succeed or fail in the Senate, particularly bills that affect revenue.

Governor Haley, for her part, vowed in her State of the State speech to veto any gas tax increase.

Policies like this one are not new for the Senate Finance chairman. Leatherman’s support was critical in passing last year’s road bill, which transferred $50 million to the State Infrastructure Bank to be bonded into $500 million of debt, which could be spent on any projects the bank desired.  Gov. Haley signed off on this bill and even touted it as an accomplishment in her State of the State address — though without telling the full story.

As we’ve routinely contended, new funding sources are not needed to repair South Carolina’s roads. What South Carolina needs is to prioritize repairs over new construction: the opposite of the state’s current policy.

New Study Ranks South Carolina Low in Incentive Transparency

new report has found that South Carolina ranks 45th in the nation (fifth from last) on transparency in corporate welfare agreements. South Carolina received only one point out of a possible hundred for listing job development credits corporations get to create jobs. Multiple factors contributed to South Carolina’s low score including:

  • Lack of reporting on the number of jobs created by companies receiving job credits, or the amount of the subsidies received by each company.
  • No information on which companies receive funds from the Coordinating Council for Economic Development or the amount of funds each company receives.

South Carolina government has its reasons for not disclosing this information. Likely, one of the largest reasons is the failure of incentives to produce any significant economic growth. Policy Council President Ashley Landessrecently pointed out that no information is ever provided on what companies fail to meet their job creation goals (which are a condition of certain incentives) or if the funds given to these companies are ever recouped.

The truth is that if incentives were eliminated, South Carolina would have the funds to significantly reduce or even eliminate taxes like the state income tax. The current system fails to deliver prosperity, but this won’t affect its popularity among many politicians. As it stands, elected officials can gamble with public resources taking credit for any economic gain and avoiding the blame for any losses. Until transparency is achieved, don’t expect politicians’ attitudes to change.

January 20 – 24, 2014

Second Amendment Victory, Legislature Moves on DOA, Begins Ethics Debate

A Major Victory for South Carolinians

After being approved with minor amendments in the Senate last week, S.308 was taken up on the House floor Wednesday and Thursday and opposed by a small, but vocal, minority of representatives. The bill passed easily Thursday 90-18. If signed into law by the governor, South Carolina will no longer be one of three states with a blanket prohibition on CWP holders to carry firearms in establishments with alcohol.

Restructuring-In-Name-Only Approved by Both Chambers

Final approval of the Department of Administration bill – inaccurately known as “government restructuring” legislation – was given Tuesday in the House and Senate. The final bill does not, as The Nerve explained, restructure government in a way that creates true separation of powers. Instead, it replaces the Budget and Control Board (BCB) with the State Fiscal Accountability Authority – made up of the same five members and with the same powers over procurement and bonding decisions.

The bill passed fairly quickly – and unanimously – in the House, even with spoken admissions by lawmakers that the bill would merely rename the BCB while making minor changes elsewhere. In the Senate, however, the bill’s passage was held up by Sen. Shane Martin, who spoke in opposition of the bill. In essence, he argued that this bill is like “putting lipstick on a pig” and asked fellow Senators how difficult it will be for them to go back to their constituents and tell them, “yes, we passed a restructuring bill, but no, it didn’t make the real changes you wanted.”

After requesting to speak to the governor, and being granted that request, Martin reluctantly gave up the floor and the bill was put to a vote. Sens. Bryant, Bright, Shane Martin, and Thurmond were the only lawmakers to vote against the bill.

Senate Takes Up “Ethics” Bill

This week, the Senate took up the “ethics reform” bill H.3945 that was put on special order at the end of last year’s session. While Gov. Haley pleaded with the Senate in her State of the State address not to water down the “strongest ethics reform bill in a generation,” the bill is unfortunately already watered down. While the bill does contain fairly strong provisions on the disclosure of private income sources, nothing is done to prohibit the House and Senate ethics committees from policing their own members. Whereas the State Ethics Commission would have the power to do initial investigations of lawmakers, the committees would still have the authority to punish their own members. Moreover, a proposed amendment would allow legislators to make appointments to the Commission, ensuring that it would no longer be an independent authority.

At the time the bill was first discussed this week, there were 54 proposed amendments to the bill. While some were withdrawn, the Senate is still on Amendment 1.

TransformSC Co-Chairs Questioned on Common Core

On Wednesday, the Senate Education Committee heard from TransformSC co-chairs Pamela Lackey and Mike Brenan, presidents of AT&T and BB&T respectively. TransformSC is a “business-led initiative” and, according to its own documents, has the goal to “create a new system of learning that will produce graduates ready to compete in a global knowledge economy,” and views “education and economic development as a continuum.” As reported on by one of our policy analysts who attended a TransformSC summit in September, the initiative seems intended to move the state away from a “one-size fits all” education system, while at the same time having strict standards and making no strident effort to promote school choice. Moreover, the initiative in many ways sounds more like a workforce development program than an educational program.

After giving the TransformSC presentation to the committee, the co-chairs were very hesitant to say anything definitive regarding Common Core. Sen. Brad Hutto, a member of the committee, stated to Lackey, “What you just articulated is exactly what Common Core was designed to do.” Lackey responded, “TransformSC has not taken a position on Common Core … what we’re for are rigorous standards.” Bringing up the fact that the committee will soon be taking up S.300 – a bill to prohibit Common Core standards in the state – Sen. Larry Martin asked, “Does it matter if we change the standards?” Lackey replied, “I don’t know the answer to that.” And finally, Sen. Setzler tried to phrase the question in a different way, saying, “You’re the president of the state Chamber (of Commerce). The Chamber has endorsed Common Core.” Lackey responded saying that that was correct, but that TransformSC has not endorsed it.

Education Committee Chairman Sen. Courson mentioned that the committee will meet next week to hear from 3 speakers on either side of the Common Core debate in regards to S.300. As well intentioned as that bill may be, we’ve previously explained, in order to truly keep sovereignty over state academic standards, more must be done to put accountability over these decisions in one branch of government.

Pharmacist-Sponsored Health Care Regulation Bill Debated in Subcommittee

The House Subcommittee on Health Insurance met on Wednesday to discuss a bill, H.3489, that would enforce new regulations affecting the medical laboratory scientists industry. The bill would allow the state to regulate education and certification requirements for individuals seeking medical laboratory scientist certification with the creation of a new Board of Clinical Laboratory Science. Individuals seeking certification would be required to possess a four-year bachelor’s degree from a regionally accredited college or university, complete clinical training, pass a nationally recognized certification examination and satisfy continuing education requirements.

The bill’s sponsor, Rep. Kit Spires, is a pharmacist and a frequent sponsor of legislation regulating the pharmaceutical and health care industries. These would seem to be conflicts of interest, albeit technically legal ones. Add H.3489 to the list.

As we have mentioned before, this kind of regulation is often motivated by those in an industry who wish to prevent the growth of new competition. Lawmakers in the subcommittee, as well as the SC Hospital Association, voiced other concerns with the bill. Subcommittee chairman Kris Crawford questioned why supporters came to lawmakers to solve the perceived problem first, while private organizations that already regulate accreditation wish for the government to raise the standards for them. Rep. Sandifer also raised concerns regarding government setting employment standards instead of letting employers take responsibility for ensuring employees are properly certified and qualified for the job. Supporters of the bill, however, cited the need for higher education and certification to ensure patient safety and care provided.

No further action was taken on the bill, but there will be another subcommittee meeting on it.

Moving Along Tax Increases and Tax Favors

The Senate Subcommittee on Sales and Income Taxation met Thursday and passed multiple bills with favorable reports – moving them to the full senate finance committee. The majority of these bills either ease the enactment of new taxes on average citizens or provide tax favors to special interests.

S.940, a bill related to S.911, was passed with a favorable report after being amended. The bill would exempt counties from a requirement of collecting $7 million in accommodations taxes before they can impose a 1 percent sales tax for education purposes. The original bill would have prohibited the imposition of the tax if the county already had more than a 2 percent sales tax; the amended version raises that cap to 3 percent. In short, the bill makes increasing county sales taxes easier and was passed with little debate.

Other special interest bills also cruised to passage with favorable reports. S.828, as reported by The Nerve, would exempt the city of Greenville from having to repay $7 million in state bonds when and if it sells its TD Convention Center, provided the proceeds are put toward construction of a new convention center. The subcommittee also examined S.402 and S.329, which would create new tax credits for electric cars and solar energy installations respectively. All of these tax favors were passed with minimal debate. Ultimately, the favorable report on these bills continues an ignominious trend in South Carolina of punishing the average citizen with tax policy and rewarding special interests with it.

January 13-17, 2014

Renaming the Budget and Control Board, restaurants and guns, more cosmetology regs, bills as vehicles, etc.

They’re Back

On Tuesday Lawmakers returned to Columbia to begin the second year of the 120th session of the South Carolina General Assembly. Bills proposed last year can still be considered this year since the state has a two-year session – including three bills scheduled as priorities in the Senate: S.308 (“restaurant carry”), H.3945 (ethics) and H.3101 (ObamaCare “nullification”) – all on special order, meaning they’ll be debated sooner. The “government restructuring” bill is also expected to get plenty of attention as it began this week in conference committee. 

“The Budget and Control Board Renaming Act of 2014”?

The conference committee on S.22, the Department of Administration “government restructuring” bill, held a meeting that lasted no longer than ten minutes at around 10:30 on Thursday morning (it was actually scheduled for 9:30, but the official meeting didn’t start until several legislators quietly worked out a deal – note the photo). A compromise on the bill was approved and signed by the committee later that day.

As we explained during last session, both the Senate and House versions of the bill were weak and didn’t provide anything like the kind of accountability and separation of powers the bill’s supporters claimed.

Although we can’t confirm specific details because the final version is not yet posted, according to media reports and lawmakers at the meeting, the final bill includes the Senate’s version of procurement authority and the House version of deficit reduction authority. What makes the bill “restructuring in name only” is the fact that power over procurement and bonding authority – the power to contract with the private sector and the power to approve bonds – are transferred from the Budget and Control Board (which would be “eliminated”) to a newly created “Fiscal Accountability Authority.” Aside from having those two powers in common, the two entities consist of the exact same members: the governor, state treasurer, comptroller general, and the chairmen of the House and Senate budget committees. Thus, South Carolina will still have the same unaccountable hybrid board of the same members from both the executive and legislative branches making decisions on state procurement and bonding – only with a different name.

 Restaurant Carry First on Senate Agenda

The last day of session ended with the Senate debating S.308, so that’s right where the Senate started on Tuesday and continued through Thursday. The bill has passed both the Senate and House, but not in the same format. The amended House version was what the debate centered on this week. As we’ve reported here, this bill is far less controversial than some in the news media are reporting. If passed, Concealed Weapon Permit (CWP) holders would still not be legally allowed to consume alcohol while carrying in restaurants and wouldn’t be allowed to carry firearms into restaurants that post signs prohibiting firearms. South Carolina is currently only one of three states that impose an across-the-board prohibition on CWP holders carrying firearms into establishments that serve alcohol.

While Democratic senators generally objected to the passage of the bill throughout the week, it was finally passed with minor amendments and sent back to the House for a vote.

 Watch Out for Senators Using Bills as “Vehicles”

Late last session, Senator Leatherman proposed S.731, which would mandate the annual transfer of $50 million from the Dept. of Transportation to the Transportation Infrastructure Bank, where it could be bonded to result in up to $1 billion. Although the bill was quickly pushed through the Senate Finance Committee (which Leatherman chairs), it failed to make the cross-over deadline (i.e. the date by which bills have to make it from one chamber to the other). However, the legislature used H.3360, a transportation bill that originally showed no sign of being a major transportation spending bill, as a “vehicle” and tacked on the wording of S.731 as an amendment to the bill. That bill was passed by both chambers and signed into law by the governor.

On Tuesday, Sen. Leatherman made a motion to recommit S.731 to his Finance Committee (taking the bill off the calendar and sending it back to committee). Senator Setzler then asked why they don’t just keep it on the calendar so they can use it as a “vehicle” later. Leatherman replied, “If we need a vehicle, we’ll send it back out,” and the motion passed. So what does all this legislative talk mean? Lawmakers frequently gut legislation of similar subject matter that is further along in the debate process and replace it with the contents of a bill that for some reason (either due to objections by other lawmakers, or procedural reasons) hasn’t gotten as far into the process – in other words, a bill further in the process becomes the “vehicle” for whatever law the leadership in the General Assembly wants to push through. We’ll be keeping an eye on S.731 as lawmakers may certainly try to use it as a mechanism to spend and bond more tax dollars on transportation.

On Wednesday, the “South Carolina New Market Jobs Act” (S.892), a bill pre-filed in December filled with language about tax credits for certain types of businesses, was transferred from the Senate Committee on Banking and Insurance to the Senate Finance Committee. History tells us that when bills are transferred to the Senate Finance Committee, it is sent either for the purpose of dying in committee or, what is more likely in this particular case, for legislative leadership to amend the bill and move it swiftly through the lawmaking process. The subject matter of this bill would make this bill the perfect vehicle to add on specific tax favors, grants, and bonds to particular companies.

Governor Proposes Biggest Budget in State History

On Monday, Governor Nikki Haley unveiled her executive budget, which at roughly $25 billion when including un-budgeted federal food stamp funds, would be the largest state budget in South Carolina history, continuing a budgetary trend. The governor’s budget is what many would consider “liberal” not only for its size, but also for the items it emphasized.

The governor’s budget contained significant increases to education funding and to the Department of Health and Human Services (DHHS, the agency that administers Medicaid) but no suggestion of structural reform for these agencies and services. The reform proposals Haley did include along with her budget will do little to solve the issues they are intended to address. The governor proposed eliminating the 6 percent income tax bracket that would save three quarters of South Carolina taxpayers a negligible $29 per year. Haley also proposed dedicating the “money tree” – newfound revenue between November and May, an annual average of $106.9 million – to transportation each year. This money it was stated could be bonded up to $737 million a year. This “reform” would leave South Carolina millions in debt without addressing our true transportation problem of favoring construction over maintenance.

The executive budget would also use the capital reserve fund as a slush fund for any desired spending, and spending every dollar available rather than setting aside some funds to return to taxpayers.

The General Assembly is legally obligated to meet in joint open session to consider the governor’s budget by February 4th at the absolute latest, as required by section 11-11-90 of the state law code. However, lawmakers will almost certainly ignore the governor’s budget and flout the law as they do every year, and give taxpayers no say on how their money is spent.

Licensing Committee Likely to Impose More Cosmetology Regulations

The Senate Subcommittee on Labor Licensing and Industry met on Wednesday to discuss proposed regulations affecting the cosmetology profession and industry. Two regulations were considered; the first would allow the issuance of administrative citations for those who violate cosmetology regulations, and the second updated many of the specific practices required of licensed cosmetologists including a provision that would require managers of salons to also be licensed cosmetologists.

The first regulation was passed with little discussion, and according to its proponents it would be beneficial to those fined as under the new regulation as they would no longer have to appear before the cosmetology board to resolve a citation. The second regulation was met with more resistance as the necessity of several of its provisions were called into question. Senator Massey in particular questioned the necessity of requiring salon managers to be licensed cosmetologists, and expressed concern about how such regulations could reduce competition. Ultimately, the committee carried over the second regulation and indicated they would approve it with a favorable recommendation from Labor Licensing and Regulation (LLR) Director Holly Pisarik.

We have noted before how issuance of licensing laws and regulations are most often motivated not by concern for consumers, but by the desire of those established in the industry to prevent the growth of new competition. These regulations typically raise costs for consumers without raising the quality of service. True to form, the only individuals speaking to the committee on these proposed regulations were either members of LLR or licensed members of the cosmetology industry. Further, outside of the harmful effects of the regulation itself, the abdication by the Senate subcommittee of its responsibilities of evaluating proposed regulations is disturbing. If members of the Senate will simply approve a regulation because it has a favorable recommendation from a bureaucracy and industry representatives, what is the purpose of having them approve regulations at all?