State Budget — H. 3720: Local Government Fund (LGF) Increase Proposed!
The Senate Finance Committee began working on the budget this week. Most of their work involved discussions of provisos. They will take up monetary allocations next week.
Senator Vincent Sheheen discussed a proposal that would significantly increase the funding of the LGF. The Senator suggested taking the House retirement system proposal, which provides an allocation that covers 1 percent of the retirement system local government employers’ increase, and instead appropriating the money to the LGF. The House proposal represented a $32 million appropriation. Senator Sheheen’s proposal routes more money to county and city governments because the 1 percent appropriation to the retirement system includes other employers. Many members of the Finance Committee seemed interested in Senator Sheheen’s idea. Please thank Senator Sheheen and ask your Senator to support increasing the recurring money in the LGF!
The House appropriated $83.5 million from nonrecurring funds in the Capital Reserve Fund for the state and local FEMA match for Hurricane Matthew and the Pinnacle Mountain Fire. Almost 60 percent of this money will go back to local governments. Senate Finance will discuss this funding next week.
Provisos of Interest
Flexibility Proviso — Senate Finance adopted the House amended version of the County Flexibility Proviso. The amendment excludes the assessment for indigent medical care from being reduced. It is not too late to call your senator and ask that this be amended back! This proviso change is the height of hypocrisy. The General Assembly consistently ignores the Aid to Subdivisions Act, but expects counties to pay their state agency the full statutory amount.
Roads Transfer Proviso — This proviso allows a county to pass a resolution indicating its conditions, willingness, and desire to accept roads from the state system and assume the maintenance thereof. SCDOT and any county electing to participate must enter into a written agreement clarifying which roads the county will accept and how much money SCDOT will transfer to the county to maintain the roads. Senate Finance deleted this proviso so it could be further discussed in conference committee.
Indigent Defense Screening — This proviso (117.142) requires the Commission for Indigent Defense and the Judicial Department Court Administration Program to consult with the Summary Court Judges Association and the Clerks of Courts Association on issues regarding screening applicants for public defenders. Indigent Defense and Court Administration are to make recommendations to the General Assembly by December 1, 2017, regarding the requirements of verifying indigence, who should conduct the screening, and what resources are needed to properly screen applicants. The proviso was included in the budget that passed the House and was adopted by Senate Finance.
Dealer Tag Proviso — This proviso allows a person or entity that sells 10 cars in a calendar year to apply for two dealer tags. Current law requires a dealer to sell 20 cars in a year before they can receive dealer tags. Senate Finance adopted this proviso.
Assessment of Property after Catastrophic Weather Event — The House adopted this proviso (117.138) which states that any improvement made to real property or personal property used as a residence, such as a mobile home or manufactured housing unit, damaged during the October 2015 flood, is not considered an improvement and does not require an appraisal. This provision only applies if the improvements made to the property were funded by the US Department of Housing and Urban Development Block Grant - Disaster Recovery program or if, at the discretion of the county and using qualifications determined by the county, the improvements were made with the assistance of a volunteer organization active in disaster recovery. The Finance Committee amended the proviso to include property damaged in Hurricane Matthew.
The property tax value of property affected by this proviso shall remain the same unless an assessable transfer of interest occurs. No refund is allowed on account of values adjusted because of the proviso.
H. 3516, which among other things raises the gas tax 2 cents per year for six years, remains on the Senate’s contested calendar where it is pending second reading. Once debate begins on the bill, Senator Davis may introduce an amendment that would give counties the option to accept the transfer of roads from the state system.
State Retirement System — H. 3726
The State Retirement System bill is likely headed to conference committee.
The most significant difference between the House and Senate versions of the bill is a Senate amendment which states that when the system no longer has an unfunded liability, all new employees must participate in a defined contribution retirement plan.
Both the House and Senate versions increase and cap SCRS employee contribution rates at 9 percent.
In both bills, employer contribution rates are increased to 13.56 percent for FY 17-18. The employer contribution rate will then increase 1 percent every year until FY 22-23, rising to 18.56 percent. PORS (Police Officers Retirement System) employee contribution rates are increased and capped at 9.75 percent. PORS employer rates are increased to 16.24 percent for FY 17-18 and increase 1 percent every year, rising to 21.24 percent in FY 22-23. The unfunded amortization schedule is reduced from 30 years to 20, and the annual rate of return from investments is reduced from 7.5 percent to 7.25 percent. A new annual rate of return must be set in 2021 and every four years thereafter.
The bill also allows the General Assembly to allocate money to relieve the employers’ increased share, which the House did (1 percent for local governments) in its version of the budget.
According to RFA, local government employer contributions (counties, cities, and school districts) would increase by $67,400,000 in FY 17-18, and by an additional $33,700,000 each year in FY 18-19 through FY 22-23, for a total of $235,800,000 over the next six fiscal years.
Property Tax Bills in Ways and Means
The following bills are likely to be heard by Ways and Means Committee this week:
Rolling Back Rollback Taxes — H. 3786. This bill amends the code to only allow for one year of rollback tax when agriculture use is converted to another use. Currently, rollback taxes are five years. The bill has a fiscal impact of $8.5 million.
Assessment Ratio in Probate — H. 3093. This legislation states that when an owner receiving the 4 percent assessment ratio dies, the property shall continue to be assessed at 4 percent until the deceased's estate is closed, or upon recording of a deed or deed of distribution out of the estate. The property may not be rented.
Affordable Housing Loophole Creation — H. 3867. Currently, there is a property tax exemption for all property of nonprofit housing corporations or solely-owned instrumentalities of these corporations which is devoted to providing housing to low or very low income residents. This bill would eliminate the requirement that the instrumentalities be “solely-owned” by a nonprofit and appears to exempt all low income housing property owned by any partnership that includes a nonprofit housing corporation, even if the nonprofit only held 1 percent of the partnership.
Legislation of Interest
Freedom of Information Act (FOIA) Rewrite — H. 3352. The House adopted the committee amendment to clarify that state and federal laws provide exemptions to FOIA in addition to the exemptions found in the act. H. 3352 received third reading and has been sent to the Senate.
Dealer Tags — S. 488. S. 488 allows a person whose vehicle is being serviced by a car dealer to drive a dealer-owned loaner vehicle displaying a dealer tag. The vehicle displaying the tag must be part of a manufacturer program. Currently, only dealership employees and prospective drivers can drive a vehicle displaying a dealer tag. S. 488 also increases the amount of dealer tags from two for the first 20 and one for every additional 15 vehicles sold in a year by allowing a dealer to purchase two tags for each additional 15 vehicles sold. The estimated fiscal impact of this increase allowed for all car dealers is over $8 million if all dealers received the maximum amount of tags. SCAC staff is working with stakeholders on an amendment to S. 488 to significantly reduce the fiscal impact. S. 488 is pending second reading on the Senate calendar.
Dealer Tags Part Two — H. 3933. H. 3933 allows a dealer with a service department to purchase two additional dealer tags to use for dealer-owned vehicles driven by persons getting their vehicle serviced by the dealer. H. 3933 received a favorable report from a House Education and Public Works subcommittee and it will be considered at the full committee’s next meeting.
Cost of Animal Care Act — S. 3. This bill provides that an entity with custody of an animal because the animal‘s owner has been accused of a crime against the animal may petition the magistrates court requesting the accused to deposit funds into an account to pay for the animal’s care. Senate Agriculture Committee amended the bill to provide that the accused can avoid paying costs associated with the animal if they surrender the animal. The accused can only avoid the costs after surrender and will still be liable for all costs up to the point of surrender. The committee adopted some other technical amendments and gave S. 3 a favorable report as amended.
Probate Court — S. 415. This is a comprehensive bill that among other things, revises Title 62, Article 5 of the Probate Code, dealing with conservatorships and guardianships. The bill also gives probate judges the authority to waive filing fees for indigent persons. S. 415 is pending second reading on the Senate calendar.
Inmate Funeral Transport — S. 271. This bill would allow an inmate whom the Department of Corrections determines is not a security risk to attend the funeral of a family member or visit a hospitalized family member whose death is imminent. The Department may engage the services of the local sheriff where the funeral or hospital is located to provide security and transportation for the inmate. For its services, the sheriff’s department may collect the cost of security and transportation for the inmate from a third party such as a family member or from the inmate’s trust account. The Senate gave S. 271 third reading and sent it to the House.
Piping Procurement — H. 3652. H. 3652 requires an engineer to consider all piping material in determining the requirements for water supply, wastewater, stormwater, or storm drainage projects when state funds are used. This is a national effort by the PVC pipe industry to get a competitive edge in the bidding process for public projects where state funds are used, as PVC pipe generally costs less than the other types of piping materials. H. 3652 also allows a county to use the piping material that they currently have in their inventory. H. 3652 received third reading in the House and was sent to the Senate.
Coroner Qualifications — H. 3019. This bill originally provided that a coroner elected without meeting the statutory requirements for being a coroner could remain coroner if he completes the requirements within a year of being elected. The House Judiciary Committee amended H. 3019 to require the coroner’s office to employ a medical examiner or a deputy coroner who meets the qualifications if the coroner doesn’t meet the statutory requirements for being a coroner when elected. H. 3019 is pending second reading on the House calendar.
Coroner’s Supplement — S. 170. This bill requires each county coroner to convene a Child Fatality Review Team to review cases of children under the age of 18 who have died in the county. The bill also provides a supplement of at least $35,000 annually to each coroner. This supplement is contingent upon state appropriation or “financial support from other sources.” After paying each coroner’s supplement, any excess amounts from the funding source is to be disbursed to coroners in an amount pursuant to a formula based on county population. S.170 is pending second reading on the Senate contested calendar.
No Application for Ag Use — H. 3463. This bill states that if property was assessed as agricultural property or assessed as farm machinery and equipment in 2016, the property must continue to be assessed with the same assessment ratio unless a change of use occurs. Therefore, no application will be required for ag use when a transfer occurs. The House adopted an amendment to provide that “buildings” assessed as farm buildings pursuant to 12-43-220(b) in 2016, must also be assessed with the same ratio unless a change of use occurs. The bill received third reading in the House and was sent to the Senate.
C-PACE — S. 261. This bill creates a mechanism for a commercial property owner or non-profit to receive a private loan for energy efficiency or water conservation measures. The loan is repaid through billings on the property tax bill. S. 261 is pending third reading in the Senate.
Manufacturing or Industrial Nuisances — H. 3653. H. 3653 prohibits a political subdivision from adopting an ordinance or resolution that declares a manufacturing or industrial facility, or an expansion of such a facility, that is operating in accordance with state law to be a nuisance. H. 3653 received third reading in the House and was sent to the Senate.
Employee Benefits — S. 218. This bill provides that a political subdivision may not establish, mandate or otherwise require an employee benefit in employment relationships to which they are not a party. The House gave S. 218 third reading and it has been sent to the Governor for ratification.
Special Elections — H. 3685 & H. 3150. H. 3685 extends the special election calendar dates to comply with federal voting laws that require ballots to be mailed to members of the military and overseas citizens 45 days before the election date. H. 3150 requires a municipality to hold an election to fill a vacancy even if only one candidate has filed for the office to be filled. Currently, an election does not have to be held by a municipality if there is a single candidate for the office. Both bills are pending second reading on the House calendar.
Crime Victim Services — S. 289. This bill is an attempt to consolidate victim services by creating the South Carolina Crime Victim Services Division within the Office of the Attorney General. The Division will ensure that victims throughout the state have access to the same services, regardless of where they reside. S. 289 is pending second reading on the Senate calendar.
Right to Parent Act — H. 3538. H. 3538 would enact the “Persons with Disabilities Right to Parent Act” to require the DSS, law enforcement, family, and probate courts to protect the parenting rights of people with disabilities during child custody, child protection, and probate guardianship proceedings. The purpose of this legislation is to ensure that anyone with a disability isn’t denied the right to parent, custody, or visitation with a child because they are disabled. H. 3538 passed the House and is in the Senate.
Veterans’ Affairs Complaints — H. 3428. This bill gives the Director of the Division of Veterans’ Affairs the authority to receive and respond to complaints of county veterans’ affairs officers. The Director will forward a complaint and any disciplinary recommendations, including removal of the county officer, to the legislative delegation to make a final determination. H. 3428 received a favorable report by the House 3M Committee and is pending second reading on the House calendar.
Veterans’ Affairs Officers Qualifications — H. 3469. This bill provides that a county veterans’ affairs officer must be a veteran who served on active duty for more than 24 months and was released with an honorable discharge. If the officer is a veteran who served less than 24 months active duty, the discharge must be from service-connected disability. Those who are not veterans would no longer be eligible for this position. A House 3M subcommittee amended the bill to have these qualifications also apply to the state Director of Veterans’ Affairs. The amendment also includes a grandfather provision to allow non-veterans currently serving as a county veterans’ affairs officer to hold their position until 2021. The full 3M committee failed to adopt these amendments and adjourned debate due to concerns over the prohibition of allowing non-veterans to serve as a county veterans’ affairs officer.
In-state Tuition for Veterans — H. 3034. This bill eliminates the time limits of eligibility for certain recipients of transferred veterans’ benefits who are eligible for in-state tuition. The House recalled the bill from committee and adopted an amendment to expand the eligibility for this benefit. H. 3034 was given third reading and sent to the Senate.
Fitness to Stand Trial — H. 3829. Current law states if a person is unfit to stand trial, but likely to become fit, then the court shall order the person to be hospitalized for up to 60 days. This bill will allow an order for hospitalization for up to six months. The Department of Mental Health is to house these individuals. A House Criminal Laws subcommittee adjourned debate on H. 3829 to obtain more information and will likely take the bill up at its next meeting.
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S. 565 — Creates the offense of “Endangerment of a Highway Worker” along with penalties for this offense.
S. 579 — Provides that all state and county regulatory agencies should enforce the same building codes.
S. 580 — Provides that a child cannot be detained in an adult jail for more than six hours, even if they have been waived to general sessions to be tried as an adult. Also decreases the length of time a child may be held for violation of a court order regarding a status offense.
H. 4020 — For purposes of condemnation proceedings, requires the condemnor to provide notice to the landowner of application for an ex parte order to gain entry.
H. 4027 — For purposes of the ethics provisions, revises the definition of “business with which he is associated.”
H. 4029 — Requires the Department of Revenue to follow certain North American Classification System Manual provisions when assessing the property of merchants and other related businesses, and repeals §12-39-70 relating to appraising and assessing personal property of businesses under the jurisdiction of the county auditor.
H. 4033 — Creates the offense of “Endangerment of a Highway Worker” along with penalties for this offense.
H. 4034 — Removes the Freedom of Information Act exemption for members of the General Assembly and their immediate staff.
H. 4035 — Allows individuals not subject to income tax withholding to claim income tax credit under the High Growth Small Business Job Creation Act, if they make a qualifying investment in a qualified business.
H. 4040 — Requires a specified level of competence for sign interpreters used by county hospitals and detention centers.
H. 4041 — Prohibits the portion of the motor fuel user fee credited to DOT from being used for employee compensation, new road construction projects, or being transferred to the SC Transportation Infrastructure Bank.