2019 Legislative Session Wrap-Up
Nearly 2,500 bills and resolutions were filed during the 2019 legislative session. While many of the most concerning bills did not pass, this year was the first half of the two-year session and anything that did not pass this year could become law next year.
Below is an overview of the most consequential bills that did and did not pass during this session.
Bills that didn’t pass
S.780: Instituting tolls to pay for new roads
This bill would allow the Department of Transportation (DOT) to impose tolls in order to finance nearly any type of road project – including new road construction, interstate widening, non-interstate road reconstruction, bridge replacement, etc.
Moreover, the DOT would no longer be required to remove the toll after the project was paid for. The bill would also strike current law tying toll revenue only to the project on which it was imposed, and revenue from a toll road could be used to finance “improvements to the highway corridor.”
S.780 bypassed committee and was placed directly on the Senate floor calendar the same day it was filed.
Status: Senate floor calendar
H.3757: Data warehouse
This bill would create a massive data collecting system to track children from preschool through the workforce (and possibly beyond). Data would be pulled from a number of agencies, including the Department of Education, Department of Social Services, Department of Commerce, institutions of higher education, and more. The bill would allow any other state agency to be brought into the database as deemed necessary by lawmakers.
The database is part of a large project that would pose numerous privacy threats. Even aside from its problematic goal – to help meet the needs of the state’s economy and to improve the workforce delivery system – the potential for abuse creates a massive risk for citizens’ privacy.
Status: Passed the House
S.679 & H.4332: Authorizing more state debt for economic development
Two bills would expand the possible use of economic development bonds, which are backed by the taxpayers’ personal property. Currently, these bonds can be issued for anything from land acquisition to employee training. This bill would add “freight transportation” to that list.
More importantly, the legislation would also create a subcategory of economic development projects – “strategic infrastructure projects” – which are not subject to the job creation and capital investment requirements that companies must usually meet for bonds to be issued.
H.3045 & H.4203: Mandating donor disclosure for non-electioneering communications, regulating political speech
H.3045 would define “independent expenditure committee” as any group that spends over $500 on election communications, and would require the disclosure of the group’s major donors. As “election communications” would include communications that support or attack a candidate within 45 days of an election, this could regulate political speech that is not campaign speech, particularly given that the primary season in South Carolina overlaps the legislative session.
H.4203 would revise the definition of “committee” struck by the state Supreme Court in 2010 for being overly broad. Committees are subject to a plethora of regulations in the Ethics Act, and accordingly should be narrowly defined in order to regulate only campaign speech, not issue advocacy. Both of these bills are broadly written with key terms left undefined, and the regulations would be triggered by expenditures too small to carry a major public concern of quid pro quo. As such, this legislation could have a chilling effect on constitutionally protected political speech.
Status: House Judiciary Committee
S.139: Constitutional carry
Four bills would allow individuals to carry a handgun, whether concealed or not, without a permit. It would still be against the law to carry into law enforcement buildings, courtrooms, public schools, hospitals, etc. Currently, South Carolina residents must obtain a permit in order to carry a handgun, which must be concealed in public.
These bills are known commonly as “Constitutional Carry” legislation. At least 16 other states have passed similar laws.
One of the bills (S.139) was recalled from committee and placed on the Senate Calendar during the final days of session. It could be taken up next year.
H.3275: Seizure of weapons without due process
Known as “red flag” legislation, H.3275 would allow a judge to order the seizure of an individual’s firearms and ammunition, even if no crime is committed. If a solicitor, assistant solicitor, or two police officers bring a complaint to the judge that an individual is a risk to himself or others, the judge could issue the warrant to confiscate the firearms. Only after the weapons and ammunition were taken would the owner would get a hearing in probate court. If at the hearing the judge decides the gun owner poses a risk of imminent injury to himself or others, the state could hold the guns for up to a year, and the court would notify the Department of Mental Health.
At least five other bills filed this year threaten the Second Amendment, which can be viewed here. None of these bills made it out of committee.
Status: House Judiciary Committee
H.3759 & S.419: Reshaping public education
These massive education omnibus bills approach the education system as a “workforce delivery system,” (a term used in last year’s proposed data warehouse) in which schools are less about educating students, and more about supplying businesses with qualified workers.
For instance, they would create a new unaccountable state board to monitor the “education and workforce pipeline.” The board would collect data on reading and math scores, high school graduation rates, college enrollment, and job attainment. It even goes so far as to track the percentage of South Carolina residents, up to age 65, who have college degrees or received certain work certification.
The bills would also create a “career pathways” system that could begin as early as kindergarten. Under this system, a number of state agencies, such the Department of Education, Department of Commerce, and Department of Employment and Workforce would align the k-12 education system with state and regional “workforce needs,” among other things.
The bills would make several other changes including, but not limited to: (1) raising the base teacher salary to $35,000 (2) adding new literacy tests in elementary school and (3) requiring elementary school teachers to pass a new “rigorous test.”
It should be noted that the Senate version was amended in some form during subcommittee. However, the amended language has not been published or adopted by the full committee.
S.1: Stripping some of the governors’ interim appointment power
S.1 would undercut the governor’s power to make interim appointments when the legislature is not in session. If this bill becomes law, the governor will not be able to make any interim appointments if a) the office became vacant before the previous legislative session, or b) if the Senate rejected his previous appointee. This creates an unreasonably narrow window for when interim appointments can be made.
For instance, say an office becomes vacant during the summer (after session has ended) and the governor makes an interim appointment shortly thereafter. If the Senate rejects his appointee (or simply doesn’t take a vote) when they return the following year, the governor cannot appoint anyone else to that position on an interim basis. This could leave central government positions vacant for an extended period of time. S.1 is a direct attack by the legislative branch on the governor’s constitutional duty to administer state government.
Status: Passed the Senate
S.259: A fund to acquire private property to turn into floodplains
This bill would create the “South Carolina Resilience Revolving Fund” for the purpose of acquiring properties to turn into floodplains (an undefined term) or open spaces. The fund would provide grants and low interest loans to local governments, state agencies, and environmentalist constructs called land trusts.
These entities could use such funds for home buyouts and floodplain restoration – defined as “any activity” toward returning the land to its “natural state.” To be eligible for buyout, the home must have suffered flooding-related damage of over $1,000 twice in ten years – a remarkably low bar. The property would not have to be turned into a floodplain, however; it could also be converted to open space with an easement to prohibit any future development.
Status: Passed the Senate
S.227: Allowing certain counties to impose a property tax
S.227 (and identical bills S.113, H.3168 and H.3457) would allow the 60 municipalities in South Carolina that do not currently have a property tax to impose one. State law currently limits how much the local property tax rate (called “millage”) can be increased by using rates from the previous year. Therefore, if a municipality doesn’t already have a millage rate, it can’t impose one.
Under this bill, any municipality without a property tax (or any new municipalities created after January 1 of this year) could now do so. The initial tax would be capped at a rate sufficient to generate one-third of the previous year’s general fund expenses. After its imposition, the tax would be subject to the increase limits in current law.
H.3968: Eliminating civil asset forfeiture
This bill would ban civil asset forfeiture, which occurs when government confiscates property that is suspected of being connected to a crime, with or without a criminal conviction (or even charge). Under this bill, property could only be forfeited (1) after a conviction and (2) when asset forfeiture is an explicit penalty for the crime committed. The bill also places parameters on the types of property that could be forfeited, stating that proceeds and property must be “derived directly” from or used in the commission of a crime.
A few exceptions would allow the state to temporarily seize someone’s property during the criminal process, such as during an arrest or if the state believes the property is in danger of being destroyed.
Status: House Judiciary Committee
H.3307: Creating a searchable database for property seized through asset forfeiture
This bill would require the Prosecution Coordination Commission to maintain a list of all property seized by a law enforcement agency, including when the property was taken, the crime prompting the seizure, the property’s market value, and the category of forfeiture (criminal or civil).
An amendment outright banning civil asset forfeiture was inserted in the bill during debate but later removed. The bill as passed by the House only includes the searchable database.
Status: Passed the House
S.110: Creating another legislative guarantee to refinance utility debt
S.110 would authorize a new ratepayer charge to back a refinancing of SCANA’s debt. Under this bill, the Public Service Commission (PSC – the utility regulatory body accountable to lawmakers) could authorize SCANA to refinance its remaining debt from the failed nuclear project through a process called “securitization.”
Essentially, SCANA would issue new bonds through a “special purpose entity” (such as an LLC), and charge a new ratepayer fee to pay those bonds. Once the PSC issued the securitization order, it could not amend or terminate that order or the new ratepayer charge (except to ensure the necessary amount is collected) – much like the Base Load Review Act, which tied regulators’ hands in favor of the utilities.
The bill would also create a legislative covenant with the bondholders that protects the ratepayer charge from (1) future legislative action, (2) action by the PSC, and (3) any reduction until the refinanced debt is paid.
Status: Senate Judiciary Committee
S.366 & H.3660: Legalizing medical cannabis
Two bills would legalize the sale and consumption of medical cannabis, while heavily regulating the process. Cannabis treatment would only be available for patients suffering from a “debilitating medical condition,” which includes things like terminal illness or severe chronic pain. Patients would also need to obtain an identification card from the state and permission from their physician. Once qualified, a patient may purchase cannabis from any licensed dispensary – limited to a fourteen-day supply.
The number of distribution licenses is also capped under the bill. For instance, the state may only issue 15 cultivation licenses, 30 processing facility licenses, and one dispensary license for every twenty pharmacies operating in the state. Each would require the applicant to pay an unspecified fee.
Lastly, it creates the Medical Cannabis Advisory Board that would seat doctors, a cannabis expert, a cannabis card holder, and several others. Its biggest responsibility would be adding new conditions to the list of qualifying medical conditions.
H.4258: State retirement plan for private employees
This bill would create a state retirement plan for private employees. The 401(K)-style plan, called the “Palmetto Work and Save Plan”, would be available for employees of private businesses, nonprofits, and even those who are self-employed. However, individuals who work for private businesses would be automatically enrolled unless they opted out, and the default employee contribution would be 6% of the individual’s paycheck.
It is unclear why lawmakers would propose a state-administered retirement plan when such programs already exist in the private sector. Moreover, the automatic enrollment of individuals – and assigning them a contribution rate – is a highly troubling policy, as is the potential for using tax dollars to initially fund components of the plan, particularly given the $81.9 billion deficit in the state employee pension plan.
Status: House Ways and Means Committee
S.283: Exempting universities from state oversight
This bill would allow public universities to establish entities called “auxiliary divisions” or “enterprise divisions.” These divisions’ capital projects (and their financing) would enjoy significant exemptions from state oversight.
While universities’ acquisitions and projects are subject to supervision by the Commission on Higher Education (CHE), the State Fiscal Accountability Authority (SFAA), the Joint Bond Review Committee (JBRC) and/or the Department of Administration, enterprise/auxiliary divisions would dodge much of this oversight.
The Senate Finance Committee, moreover, added language exempting public universities themselves from general state government personnel policies and laws, and from oversight by the CHE over capital improvement projects. It should be noted that the CHE has given significant pushback on higher education spending and debt proposals, and that lawmakers have been attempting to remove the CHE’s oversight for the last several years.
Status: Senate floor calendar
S.298: Increasing higher education spending
This bill would increase higher education spending, tweak financial aid policy, and crack down on student loan defaults.
First, it establishes a higher education funding formula that ties university and college appropriations to General Fund revenues. For example, if the General Fund revenues are projected to increase, lawmakers would have to increase funding to colleges and universities by that same percentage (not to exceed 5%). If revenue were to decrease, however, lawmakers could only cut higher education funding by that same percentage – although they would not be required to.
Second, the bill makes notable changes to the distribution of financial aid funding, favoring needs-based scholarships at the expense of merit-based scholarships. Tuition assistance for students attending for private colleges would be eliminated.
Finally, it requires the SFAA to find a vendor to administer a “Student Loan Default Aversion and Financial Literacy Program.” For context, at least two South Carolina colleges are at risk of losing their eligibility to participate in federal student loan/grant programs due to high student loan default rates (read more).
It should be noted that this bill also contains the enterprise division language found in S.283.
Status: Senate floor calendar
Bills that passed
H.4243: Tax incentives for the Carolina Panthers
First, it amends the jobs tax credit law to make the Panthers eligible to receive the credit and exempts the team from new job creation requirements. The jobs tax credit can be anywhere from $750-$25,000 per new job created (depending on where the team locates), and can be claimed against 50% of the owner’s personal or corporate income tax or insurance premium tax liability. Eligibility for the jobs tax credit automatically triggers another incentive – the jobs development credit, which eligible companies can claim for up to fifteen years and which can be as much as the company’s entire withholding tax amount paid to the state.
Second, the bill exempts professional sports teams from county and municipal business license fees and taxes, and lastly, it protects their property from municipal annexation without prior written consent of the team.
It’s worth noting that this legislation also drastically increases the available tax credits for lower income counties from $8,000 to $25,000 per job in “Tier IV” counties, and $4,000 to $20,250 per job in “Tier III” counties (click here to view the county tier map).
For a full overview of the Panthers incentive deal, click here.
H.4287: Process for selling Santee Cooper
H.4287 creates a process for exploring the sale of state-owned utility Santee Cooper. The Department of Administration will oversee the process of collecting binding offers and will evaluate the bids. At the end of the process, the department will present lawmakers with three offers: one to purchase Santee Cooper, one to manage Santee Cooper, and a proposal from Santee Cooper itself outlining future reforms should lawmakers decide not to sell. Professional experts hired by the department to analyze the bids will select which sale and management offers should be presented to lawmakers.
Before the final bids are presented, the entire bidding and negotiating process is to remain strictly confidential – not even the Governor is allowed access to any of the information. (This conflicts with the state Constitution, which allows the Governor to require information from any state agency at any time.)
If sold, funds from the sale would be deposited in to a new fund separate and distinct from the General Fund. Lawmakers would need to pass separate legislation to spend the funds. Suffice it to say that this is very far from a transparent, accountable process that serves the taxpayers instead of legislators.
H.3145: State oversight for electric cooperatives
This law subjects electric cooperatives to state oversight, increases transparency requirements, and imposes basic ethics guidelines for board members.
This represents a major change in utility policy, as cooperatives have not been subject subject to state oversight. Under this legislation, the Office of Regulatory Staff (ORS) will audit electric cooperatives in order to ensure compliance with the law, and the Public Service Commission will have jurisdiction to resolve compliance disputes between the ORS and the cooperatives. In the past, individuals with complaints could appeal to the courts, but there was no mechanism in place otherwise to make sure the laws were followed (other than by ratepayers, who elect the boards).
This legislation also requires a number of transparency measures. For example, each cooperative must post on its website a breakdown of board member compensation, including daily per diem amount, compensation for all meetings attended, and food, travel and entertainment reimbursements.
Finally, H.3145 imposes basic ethics rules on board members, similar to those for lawmakers and public officials. This prohibits board members from using their position to secure an economic gain (other than authorized compensation) or from getting a family member a job with the cooperative.
H.3137 – Altering the Local Government Fund
This law lifts the requirement that the Local Government Fund (LGF) receive 4.5% of last year’s general fund revenues. Instead, LGF funding will be increased or decreased by the same percentage the general fund is projected to increase, but capped at 5%. Note that any increase here is not tied to a budget surplus per se, but rather to growth in recurring dollars.
Whether this is the right amount of funding for local governments is unclear. A proper approach to revising the LGF funding formula would be to survey the state mandates for local governments and determine how much state money is necessary to cover them.