Issue 6-17 - February 17, 2017

Friday, February 17, 2017 10:58:00 AM Categories: Business License LGF Retirement
State Retirement System H. 3726

Ways and Means Committee passed H. 3726, the House version of the State Retirement System bill, out this week. The bill will be on the House calendar next week.

The bill increases and caps SCRS employee contribution rates at 9 percent. 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.

According to Revenue and Fiscal Affairs, local government employer contributions 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 for the next six fiscal years.

The bill reduces the unfunded amortization schedule from 30 years to 20 and reduces the annual rate of return from investments 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 allows the General Assembly to allocate money to relieve the employers’ increased share.

Please contact your House members and ask that money be appropriated in the budget to pay for these increased costs. Otherwise, property taxpayers will be on the hook for repairing the retirement system!

Proviso Subcommittee and the Local Government Fund

The proviso subcommittee met this week and adopted several provisos. One significant amendment to the County Flexibility Proviso was made and needs your immediate attention!

The flexibility proviso was amended to exclude the assessment for indigent medical care from being reduced.

Proviso 113.7 currently states that a political subdivision receiving aid from the LGF may reduce its support to any state mandated program or requirement by up to a percentage equal to the percentage reduction in the actual amount appropriated to the LGF, as compared to the amount required to be appropriated pursuant to §6-27-30. Already excluded are Administrative Law Judges and their offices, Court of Appeals and their offices, Circuit and Family Courts and their offices, Magistrates and their offices, Masters in Equity and their offices, Probate Courts and their offices, Public Defenders and their offices, Solicitors and their offices, and the Supreme Court and its offices.

Please call your House member and ask that this “exclusion” be deleted. There is no flexibility when you exclude any mandate that costs an agency money!

Another proviso of interest passed by the subcommittee is:

117.cwe. (Catastrophic Weather Event) This proviso states that any improvements made to real property or personal property used as a residence, such as a mobile home or manufactured housing unit, damaged during the 2015 flood, after the flood and before July 1, 2018, is not considered an improvement and does not require an appraisal.

Property tax assessors are to conform the values of applicable property, but no refunds are to be issued.

Local Government Fund: Please continue to support SCAC’s position:

“Support amending the Local Government Fund Formula to set the base funding level at $223.2 million with a yearly increase in the fund that corresponds with the growth in the State General Fund up to 5 percent. Also, standardize a list of state mandates that all counties are responsible for in order to quantify the need for the LGF.”

Please contact the members of the House and ask that they move last year’s nonrecurring appropriation to the base AND increase the LGF by the same percentage as this year’s general fund growth!

Business License Bill H. 3650

H. 3650, the “South Carolina Business License Tax Standardization Act”, was placed on the House calendar this week. It could come up for debate in the House next week.

The bill requires a county or municipality that has a business license tax to accept a standard business license application provided by the Secretary of State. Additionally, a county or municipality with a business license must adopt, by ordinance, a Standardized Business License Class Schedule as provided by the Secretary of State. However, county council may adopt additional subclassifications. Counties or municipalities with a business license tax must provide access to businesses for the reporting, calculation, and payment of business license taxes through a Business License Tax Portal managed by the Secretary of State, if such a portal becomes available.

The bill exempts several items from gross income, including:

  • sales tax paid by a contractor on building materials or supplies;
  • sales tax paid on the purchase of materials or supplies which become a component of a product manufactured, produced, or constructed for sale;
  • revenue received from reimbursements from clients or customers in which the business charges no fee or interest for providing funds upfront to a client or customer;
  • the amount paid to a subcontractor by a general contractor on a governmental contract;
  • the trade-in value of a vehicle, equipment, or merchandise;  and
  • 25 percent of revenue collected outside of the county or municipality where the business maintains its principal business license.
Legislation of Interest

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 is pending second reading on the House calendar.

Freedom of Information Act (FOIA) Rewrite — H. 3352. H. 3352 was amended by the House Judiciary Committee to clarify that state and federal laws provide exemptions to FOIA in addition to the exemptions found in the act. The House adjourned debate on the bill until March 8th.

Manufacturing or Industrial Nuisances — H. 3653 & S. 323. These bills prohibit 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. A House LCI subcommittee gave H. 3653 a favorable report and it will be on the House LCI Committee’s next agenda. A Senate LCI subcommittee carried over S. 323 for further testimony at its next meeting, which has not been scheduled.

Clerks of Court and CWP’s — S. 324. This bill allows active and retired clerks of courts who possess a valid concealed weapons permit to carry a concealable weapon anywhere within the state. S. 324 received a favorable report by a Senate Judiciary subcommittee and will be on the Senate Judiciary Committee’s next agenda.

Magistrates’ Exams — S. 90. This bill extends the validity of the magistrates’ eligibility exam results. The results would be valid for one year before and two years after the time the appointment is to be made. Under current law, the results are valid for six months before and six months after the appointment is to be made. The bill received third reading in the Senate and was sent to the House.

Magistrates’ Jurisdiction — S. 118. This bill increases the magistrates’ civil jurisdiction from $7,500 to $10,000. The bill was given second reading in the Senate.

Campaign Contributions — S. 107. This bill, among other things, increases campaign contribution limits. Originally, the bill increased the contribution limits from $3,500 to $5,000 for statewide campaigns and $1,000 to $2,000 for local campaigns. These limits would be adjusted in odd-numbered years based on CPI. Senate Judiciary amended the bill to keep the limits for local office at $1,000 while still being adjusted for CPI. Senate bill 107 was set for special order on the Senate calendar.

Internet Sales Tax — S. 214. This bill requires a retailer who has internet sales in excess of $10,000 in the preceding 12 months to obtain a retail license. They are then required to collect and remit sales tax on all items sold in this state. Senate bill 214 received third reading in the Senate and was sent to the House.

Attorney Access for Inmates — H. 3278. This bill provides that a state or local detention facility cannot prohibit an in-person meeting between an inmate and his attorney, but the meeting cannot disrupt the facility’s security or normal operations. H. 3278 is pending second reading, but the House adjourned debate until next week.

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. Due to several concerns raised by the Department, the Senate Corrections and Penology Committee recommitted S. 271 to the subcommittee for additional research.

Webinar: Ethics Act — New Income Disclosure Requirements

Please join us on Thursday, February 23, 2017, at 10 a.m. as SCAC hosts a webinar to help county officials understand new income disclosure requirements of the Ethics, Government Accountability, and Campaign Reform Act. Michael Burchstead, General Counsel for the SC State Ethics Commission, will provide an overview of the ethics act, common violations, and new income disclosure requirements for the Statement of Economic Interest.

Register here.


Newly-Introduced Legislation

View/Download Full Text for Newly-Introduced Legislation

Note: If you would like to offer comments to the SCAC staff, please call us toll-free at 1-800-922-6081, fax to (803) 252-0379, or send an email. You can also go to www.scstatehouse.gov and click on "Legislation," then "Introduced Legislation."

Senate Bills

S. 396 – Provides that an entity authorized to conduct a referendum, ballot measure, or nonpartisan election, shall conduct the election on the first Tuesday following the first Monday in November in each even-numbered year.

S. 407 – Enacts the “South Carolina Agribusiness and Rural Jobs Act.”

S. 409 – Provides that the application fee for public defender services must be collected by the public defender’s office and waivers of the fee must also be obtained through the public defender’s office.

S. 412 – Increases the tax credit for community development corporations and community development financial institutions from 33 percent of amounts invested to 100 percent of amounts invested.

S. 415 – Clarifies the probate court’s authority on various issues, including a probate judge’s ability to waive filing fees for indigent persons in the same manner as other civil cases.

S. 420 – Eliminates roll-back taxes.

S. 426 – Enacts the “Municipal Tax Relief Act” by allowing a municipality to impose a sales and use tax not to exceed one percent, subject to a referendum, for municipal tax relief or to defray debt service for certain authorized projects.

S. 435 – Increases the fee for the execution of a bail bond from $25 to $100 or 5 percent, whichever is greater.

House Bills

H. 3739 – Clarifies that the Department of Transportation does not have the authority to prevent or materially limit a public water system’s utilization of property located within a state transportation improvement project's right-of-way for water and sewer construction, maintenance, and operations.

H. 3744 – Revises the method of setting a base salary for magistrates and provides additional supplements to full-time chief and assistant chief magistrates. Also adds a $15 assessment to all civil filings in magistrate's court to help fund these cost increases.

H. 3750 – Provides that criminal cases where the penalty does not exceed three years, rather than one year, may be transferred from general sessions court.

H. 3775 – Allows a person 21 years or older born in this state who has had an original birth certificate removed from the county files due to adoption or paternity determination to receive a copy of that birth certificate and any evidence of adoption or paternity determination held with the original record.

H. 3783 – Restores the former method of overriding the millage cap by a positive majority and restores some other property tax provisions that were in place prior to Act 388 of 2006, but also eliminates point of sale as an event that can change the valuation of property for tax purposes.

H. 3785 – Revises the circumstances under which a video recording of the incident and breath test site of a person charged with driving under the influence of alcohol or other illegal substance is required.

H. 3786 – Limits rollback taxes to one year when land classified as agricultural real property is applied to another use.

H. 3789 – Enacts the “South Carolina Youth Challenge Academy and South Carolina Jobs Challenge Program Expungement Act.”