Weekly Legislative Update – March 10 – 12, 2020

Happenings SC State House
What they did:

This week, the House passed a $32 billion budget – the largest budget in state history. However, they only debated around $10 billion of that spending and merely rubberstamped the acceptance of over $9 billion of federal dollars, without asking what strings are attached to those dollars or how state policy will be affected by the federal government as a result.

While lawmakers had an extra $1.8 billion to spend this year, House budget writers only opted to return $128 million – around 7% of the extra revenue – to the taxpayers. This would be in the form of a non-refundable $100 tax credit, but only for taxpayers whose state tax liability is at least $100 (after credits). Taxpayers who pay less than $100 in state taxes will not receive a tax credit

However, yesterday Governor McMaster asked the General Assembly to immediately allocate up to $45 million of the state’s surplus dollars to the Department of Health and Environmental Control (DHEC) to help prevent the COVID-19 outbreak in South Carolina. Governor McMaster suggested deducting those funds from the taxpayer rebate instead of from the over $51 million of surplus funds aimed at pork projects or programs (such as $19 million for another convention center in Greenville, and $10 million in “film incentives” for the motion picture industry).

We will be publishing an overview of the House budget next week, but for now a few of the highlights include:

  • The data warehouse bill, inserted as a budget proviso. This would create a massive data collecting system that tracks children from preschool through the workforce (and possibly beyond). The warehouse would be a tool for state economic planners to shape South Carolina’s emerging workforce (students). In fact, previous versions of this proposal referred to state public schools as the “workforce delivery system.” This language was passed as individual legislation by the House last year, but the bill stalled in the Senate. 
  • An extra $100 million for roads, despite a surplus of $500 million from gas-tax-hike revenues currently sitting in the DOT’s Infrastructure Maintenance Trust Fund.
  • An additional $71 million for employee benefits – specifically, increased funding for the insolvent state pension, and increased costs for employee health insurance.
  • $120 million redirected from debt service to school district building improvements, instructional materials, and career and technology education centers


The Senate’s Santee Cooper “reform” plan

Meanwhile the Senate released its plan for the reformation of Santee Cooper, after rejecting NextEra’s purchase offer, Dominion’s management offer, and Santee Cooper’s own reform plan last week. The Senate reform bill, S.1163, essentially constitutes a complete legislative takeover – the board would be suspended and replaced with an interim board of legislative appointees, and permanent board members going forward would be screened and elected by the General Assembly. The bill also attempts to institute some ratemaking transparency and oversight measures, while reaffirming Santee Cooper’s bond covenants – a concession that until the debt is paid, there is no way to force rates to go down or even to truly regulate the process of setting rates. 

The bill gives various oversight roles to the Public Service Commission, the Office of Regulatory Staff, a temporary legislative oversight committee, and a permanent legislative oversight commission – all of which consist of either legislators or legislative appointees. (Exception: the governor would appoint one member of the temporary oversight committee – a minor concession that is meaningless against a whole committee-full of lawmakers’ appointees.)

In summary, the Senate’s Santee Cooper reform plan is not to work toward selling the state-owned utility in an accountable, transparent manner, or to make Santee Cooper accountable to its taxpayer-owners, but to extend and solidify the legislative monopoly over the utility regulatory system. This system of legislative control over every aspect of utility regulation is entirely responsible for the failed V.C. Summer nuclear project and billions in ratepayer-backed debt driving up Santee Cooper’s rates.

Other Senate activity:

Another Senate committee advanced S.1071, which would create a new supplemental insurance policy for professional and volunteer firefighters diagnosed with cancer. To be eligible, the firefighter must have served with a SC fire department for at least five years, and have been actively serving within the ten years previous to the diagnosis. The plan would be funded from the proceeds of the currently-imposed premium tax on fire insurance companies. A related bill (S.753) would redirect a portion of funding for local fire districts to the “V-SAFE” program, which issues grants for equipment, vehicles and training to volunteer/half-volunteer fire departments.

The full Senate passed a number of bills, including the following: 

  • S.994 – Paying Lee County transportation officials out of gas-tax funds for attending their meetings (read more). (Awaiting consideration in the House)
  • H.3998 – Creating a new tax credit for the construction of low-income housing projects over the next ten years. Credit is equal to the federal low-income housing tax credit. (Awaiting the governor’s signature)
  • H.3485 – Imposing a new fee on recipients of the historic building rehabilitation tax credit. Fee goes to a new grant fund for historic preservation, administered by the Department of Archives and History. (Returned to the House with amendments)
  • H.5034 – Requiring all Charleston County school board members to run for reelection in November; board members would be elected from single districts instead of county-wide. (Awaiting third reading in the Senate)

..

What they filed:

This week, in addition to the Santee Cooper “reform” proposal detailed previously, lawmakers filed legislation (S.1160) requiring the Department of Commerce to publish the “clawback” provisions (requirements that the company return its economic development incentives if it does not meet its obligations) in all economic development programs it administers, and requiring a biannual report of all the triggered clawbacks and the progress on obtaining repayments. This policy would institute a much-needed layer of accountability and transparency to the state’s economic incentive approach.

S.1161 would require all health insurance plans to waive cost-sharing requirements for COVID-19 testing. 

S.1156 would make it illegal to transport a pig in South Carolina unless the pig is accompanied by “an official form of identification.” This bill would also ban the importation of all but one pig species (the “Sus scrofa species”) and completely prohibit the possession of live wild hogs.

Finally, H.5390 would exempt smaller higher education construction and improvement projects from the full regulatory approval process. Specifically, research university projects costing $5 million or less would not be considered “permanent improvement projects.” For all other higher education institutions, the threshold would be $2 million.

To view the full list of this week’s newly filed bills, click here.

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