What’s coming in 2018, part two: Prefiled legislation
Over the past few weeks lawmakers in both the House and the Senate have been prefiling new bills for consideration in the upcoming session. Next year is the second half of a two-year session, which means any bills that did not pass in 2017 are still in play for the 2018 session (click here for an overview of the 2017 bills to watch when session starts).
Some of the most significant legislative issues for the upcoming year are energy, ethics and education. Along with bills focused on those areas, lawmakers have filed additional regulations, tax favors, expansions of government, etc. – all of which are typical for a South Carolina legislative session, in addition to the topics du jour.
Below is a brief overview of the new 2018 bills, which we will continue to track as they progress through the legislative process.
In addition to the bills that constitute the legislative leadership’s official response to the energy crisis (analyzed here and here), there are a number of other bills tackling different areas of the energy industry and regulatory structure. H.4414 would allow the governor to appoint the Public Service Commission (PSC), while H.4415 would make the PSC elected by the general public. While both approaches would lessen legislative power in varying degrees, neither abolishes the Public Utilities Review Committee (PURC), which is a primary source of legislative control.
Other bills include H.4421, which would establish a statewide net metering program to expand the installation and use of solar power; H.4425, an omnibus bill that amends the Base Load Review Act, places the utilities consumer advocate under the attorney general, and requires the implementation of energy efficiency programs; and H.4401, which would require the House speaker and Senate president pro tem to hire industry experts to advise on selling the state’s share of the V.C. Summer nuclear project.
One very concerning bill would prevent SCANA from awarding lavish severance packages to utility executives – an egregious overreach of government into a private business’s internal affairs. Quite simply, government has no right to dictate how much a company may pay its employees – even if government has a responsibility to protect the ratepayers from being forced to back a private company’s investment decisions.
Ethics and Campaign Finance
The topic of ethics reform received very little attention in the 2017 session, but that is likely to change in 2018. Four bills would prohibit lawmakers from accepting contributions from utilities – a provision that sounds good, but would do little to change actual behavior in the State House. Another bill, H.4381, would place legislative caucus ethics under the jurisdiction of the legislative ethics committees – which would simply expand legislative self-policing.
H.4396 is yet another attempt to create an Office of FOIA Review – a new judicial branch under the Administrative Law Court that would oversee the Freedom of Information Act (FOIA) appeals and challenges that are currently the jurisdiction of the circuit court. Other bills include S.806, which creates a campaign account auditing department under the Ethics Commission; H.4443, which increases campaign account disclosure requirements for political candidates; and H.4498 and H.4499, which would require attorney general elections to be publicly funded.
These bills focus primarily on elections, campaign finance reform and lobbyist income rather than the root of legislative corruption in Columbia – the law’s failure to require the disclosure of government sources of income, and the system of legislative self-policing that insulates lawmakers from most accountability.
A number of education-related bills would increase school micromanagement from the State House with various new mandates and requirements. H.4386 would require the installation of metal detectors in public schools, while H.4387 would require teachers to have CPR training. H.4434 would require schools to screen for dyslexia for grades K-2, and a pair of bills – H.4447 and H.4388 – would place heavy manufacturing course requirements on high schools.
On the positive side, S.826 would allow school districts to set their own start date, and S.830 would require the General Assembly to fund the base student cost before funding any additional K-12 programs in the state budget. Of course, there are a number of sound budgetary practices required by state law that are routinely ignored by lawmakers, so the latter bill may not prompt any major change even if passed.
Reform and Restructuring
There is very little good news in this category. Most of the prefiled restructuring bills would institute major expansions of government or would increase legislative power.
S.794 and S.795 would create a brand-new state agency – the Department of Children’s Services – while S.805 would create the Department of Children’s Advocacy. S.840 would create the Department of Early Development and Education. S.797 and S.798 would transfer state government functions away from the Department of Administration under the governor to the Department of Commerce and the State Fiscal Accountability Authority (formerly known as the Budget and Control Board). And S.785 would revise the membership of the Consumer Affairs Commission to give legislative leaders more control.
Two other bills, S.816 and S.817, would impose term limits on legislators. This not quite the major reform that some might imagine. The problem with South Carolina state government isn’t long serving legislators; it’s the fact that our current structure of government allows the legislature to dominate the other branches.
Taxes and Tax Credits
Over the past year, a House committee has been looking at the porous South Carolina tax code with the goal of making it fairer for all South Carolinians. While the committee has yet to file any official solutions, the other tax-related bills filed over the course of the current two-year session do not bode well for taxpayers or the goal of a fairer, simpler tax code.
This year’s prefiles include S.759, creating an additional property tax exemption for brain and spinal cord injuries; S.837, creating tax credits for business owners who invest at least $250,000 in their own businesses; H.4431, expanding the alternative energy installation tax credit; and H.4524, creating a tax credit for installing diaper changing stations in private businesses.
H.4430 would allow taxpayers to have their car value appraisals adjusted by submitting an alternate appraisal. This idea has merit, but the bill would allow the Department of Revenue to select and approve the dealers authorized to perform alternate appraisals.
Most of the more egregious spending bills were filed last year, but there are several new bills worthy of note. S.756 would create a new slush fund called the “Disabled Self-employment Development Trust Fund” and offer a tax credit for contributing to it. S.792 would appropriate aircraft property taxes to the state aviation fund (the author of that bill is the executive director and CEO of the Charleston County Aviation Authority).
One bill would require the Department of Revenue (DOR) to compile a report every two years on the impact of economic incentives, thereby creating more accountability to the practice of offering taxpayer-funded economic development. South Carolina currently has no such mechanism in place.
Many of the barriers to healthcare choice in South Carolina are due to state regulations rather than federal legislation and mandates. Several prefiled bills would only increase those regulations rather than lessening the burden on healthcare providers. For example, H.4495 would prevent hospitals from charging uninsured patients higher fees than insured patients; H.4490 would require manufacturers of diabetes medication to provide extensive reports to the Department of Health and Human Services (DHEC); and H.4487 would allow DHEC to classify drugs as a controlled substance on an emergency basis.
H.4489 would exempt kidney centers from the onerous requirements of obtaining a certificate of need (CON) to build new facilities, offer new services, etc. But doing so for only one type of healthcare facility, rather than repealing the CON requirements for the whole industry, is essentially a government stimulus initiative that handpicks an industry winner.
The most egregious healthcare-related bill would create Health Enterprise Zones. Local non-profits would develop a plan for addressing healthcare needs in their zone, and the state would provide government assistance to implement it. We will analyze this bill at length in another piece, but suffice it to say that the bill is aimed more at politics than solutions. It spends taxpayer dollars to further subsidize targeted healthcare initiatives, and does nothing to eliminate the real barrier to high-quality, low-cost healthcare: High regulation that stifles competition and innovation.
Every legislative session sees additional occupational licensing and industry regulation bills. This year’s prefiled bills include additional regulations relating to pawnbrokers, tattoo facilities, tanning salons, body piercing, and funeral processions. S.787 would increase the permissible distance between funeral home managers’s residences and their funeral homes from twenty-five to fifty miles instead of lifting the requirement altogether, while S.819 contains a host of regulations designed to encourage recycling.
This is a brief overview of the legislation that was prefiled before the session begins January 9. Numerous other bills will be filed during the session, and we will continue to monitor and analyze the significant pieces of legislation in the days to come. If you would like to receive updates on the important issues as they arise, click here to subscribe to our mailing list.