Weekly Legislative Update. March 19 – 21, 2019

What they did

This week, both the House and Senate appropriations committees passed legislation to give taxpayer-backed incentives to the Carolina Panthers. The companion bills would add special definitions of key terms (like “new job” and “full time”) to the job development tax credit law – specifically so the professional football team can qualify for the tax credit. (SCPC analysis)

On Tuesday of this week, the Senate Santee Cooper Committee heard from Santee Cooper, although the utility had come to the meeting unprepared to answer many of the Senators’ questions. The following day, a Senate resolution (S.678) allowing the Governor to sell the publicly owned utility was filed. This resolution would hand the entire process of soliciting bids over to the executive branch with the Governor as the final authority on the sale. This bill was taken up immediately in the Senate Finance Committee, but has not passed. Meanwhile, a similar resolution (H.4287) was filed in the House, but this resolution leaves the Santee Cooper Joint Committee in charge of soliciting and selecting bids, with lawmakers getting the final vote.

Finally, a Senate subcommittee passed S.366 (the Compassionate Care Act). This bill allows the production, sale and distribution of medical cannabis under a strict set of regulations. The bill will now be heard by the full committee. The Senate Finance Committee also passed S.530, a massive bill amending the state procurement code. This bill is now on the Senate floor calendar.

Meanwhile in the House, a bill (H.3355) to outlaw holding a cellphone while driving was debated and returned to committee – essentially killing the bill. H.3145 – a bill to give the Office of Regulatory Staff audit power over electric cooperatives, and to impose disclosure and transparency requirements on them – was amended and passed by the House. Finally, the House concurred with the Senate’s amendments to H.3595, a bill to increase the Industry Partnership Fund – which is funded by dollar-for-dollar tax credits and spent by the South Carolina Research Authority.

What they said

Discussing lawmakers’ economic development efforts (in a meeting regarding the proposed incentives for the Carolina Panthers), Sen. Darrell Jackson said:

“At some point, I would love to get some objective analysis about does it really payoff, and how much does it payoff.”

In 2010 – nearly 2.5 years after the Boeing incentive deal passed – The Nerve reported that state officials – including the Department of Revenue, the Department of Commerce, and other economic development officials – were either unable or unwilling to provide specific information regarding the outcome of taxpayers’ investments, such as how many jobs had been created to date.

This is unfortunately common: economic development deals in South Carolina are notoriously non-transparent and unaccountable. Taxpayers rarely know how much they are spending and for what, and rarely is there any follow-up to measure the benefit of their “investment.” Unsurprisingly, many of these incentivized companies end up failing.

What they filed

Lawmakers filed a number of concerning bills this week. H.4258 would create a state 401(k) retirement plan for private employees that would be administered by the State Treasurer. It should go without saying that the state has no place in the private sector retirement business.

S.679 would allow economic development bond debt for freight projects, and would – for certain projects – lift the requirement that the company actually has to create jobs (SCPC analysis). Economic development bonds are general obligation – which means they are ultimately backed by taxpayers’ personal property.

Another bill – H.4249 – would allow law enforcement to collect retirement and salary at the same time (a practice which contributed largely to the pension deficit). S.691 would expand job tax credits for newly created “port enhancement zones.”

In addition to the resolutions to sell Santee Cooper noted above, three other utility regulatory bills were filed. H.4260 would tweak the regulations over the utility industry without imposing any real reform. It would impose ethical and conflict-of-interest regulations on all utilities, including Santee Cooper and the electrical cooperatives, but the bill would also exempt Public Utilities Review Committee (PURC) members from limits and regulations on ex parte communication. This would have the effect of giving certain lawmakers direct access to utility regulators. The bill would also amend the composition of the PURC – but without ending its legislative majority. This bill passed a House subcommittee this week, and will be heard by the full committee next week.

H.4261 would require Santee Cooper to obtain the Public Service Commission’s (PSC) approval for any additional generation facilities, and would impose public notice and disclosure requirements prior to any rate increase. The bill would also create a legislatively controlled Santee Cooper oversight commission, and would completely replace the Santee Cooper board of directors. This bill also passed subcommittee. Finally, S.697 would prohibit the Governor from selling Santee Cooper or entering a Santee Cooper management agreement without lawmakers’ consent on the bid in question.

To view the full list of newly filed bills, click here.

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