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Friday Reports — April 2009

Issue 15-09 — April 24, 2009
Issue 14-09 — April 17, 2009
Issue 13-09 — April 10, 2009
Issue 12-09 — April 3, 2009

Issue 15-09 — April 24, 2009

Local Government Fund Cut by $50 Million — H. 3581

H. 3581 was brought up for debate this Thursday and in the end given second reading. This allows the General Assembly to suspend the Local Government Fund (LGF) formula and will likely result in a $50 million cut below what the formula requires. The actual amount of the cut in the LGF formula amount will be determined next week, when the line items of the budget are debated and adopted. Whether the amount is more or less than the $50 million proposed by the Finance Committee is yet to be determined.

There was an amendment offered by Sen. Mike Rose to allow counties to reduce funding to state agencies by the same percentage as any cut in the LGF. That amendment was tabled on a vote of 22-20.

The vote on second reading was also a close one. Despite a determined effort, lead primarily by Sen. Yancey McGill, H. 3581 was given second reading by a vote of 23-19. A copy of both roll call votes is attached. H. 3581 will be up for third reading next week.

Please take time to thank those senators voting to support the LGF formula or to give counties some flexibility in funding state agencies, AND to ask them to oppose any increase in the LGF cut. It is important to acknowledge those senators' support, even in an effort which came up short of the necessary votes to carry the day.

Next week will be given over primarily to budget debate on the floor of the Senate and another bill, S. 577, related to the federal stimulus funds.

Probate Judge Autonomy — H. 3844

H. 3844 would allow the probate judge to set their budget; and—if there was not agreement on the final version of the budget adopted by the county council—the probate judge could sue the council at the S.C. Supreme Court, with the county paying all of the costs whether the judge won or not. The second major effect of H. 3844 is to allow the probate judge to set all aspects of the personnel policy for employees in the probate court. The two most significant risks are adoption of a policy not in compliance with federal labor law—resulting in significant lawsuits—and judgements for which there is no insurance.

H. 3844 was considered by a House Judiciary subcommittee and received a favorable report to the full House Judiciary Committee, which will consider it next Tuesday. The subcommittee first tabled the bill, and then reconsidered at the urging of its chairman.

Please contact the members of the House Judiciary Committee and ask them to send H. 3844 back to subcommittee.

Revenue and Finance Items of Interest

Assessable Transfers of Interest/Point of Sale – H. 3272 and S. 435. H. 3272 was given third reading in the House and is in Senate Finance Committee. S. 435 is still in a Senate Finance subcommittee, and it appears likely to be scheduled for another hearing shortly. SCAC has been working to contact senators to explain the consequences of these bills. The Senate Finance subcommittee members are Sens. Tom Alexander, chairman; Dick Elliott; Danny Verdin and Nikki Setzler.
Assessable Transfer of Interest (ATI) Upon Inheritance – H. 3130. This bill provides that an Assessable Transfer of Interest (ATI) does not occur when property is inherited or is conveyed to a trust and the beneficiaries are the settlor’s spouse or children. The House Judiciary gave H. 3130 a favorable report, and it is now pending on the House calendar. There is not a fiscal impact statement on H. 3130.
Accommodations and Hospitality Fee Bonds – S. 304. S. 304 puts specific language in the code to clearly allow the pledge of local accommodations and hospitality fees revenue for bond repayment. The bill gives counties a cheaper borrowing option than lease-purchase and does not change the list of uses for these funds. S. 304 received a favorable report from a House Ways and Means subcommittee and will be on the next House Ways and Means Committee agenda.
Seamless Renewal of Capital Project Sales Tax – S. 360. This bill changes the amount of time for which the tax may be imposed from seven to eight years for original impositions; and until April 30 of an odd-number year, not to exceed seven years, for a reimposition. S. 360 also allows a referendum at a time other than a general election for reimposition of a capital projects tax adopted before June of 2009. The bill was amended in a Ways and Means subcommittee to exclude any tax on unprepared foods for capital projects taxes voted on after the effective date of the act. S. 360 received a favorable report with the amendment and will be on the next House Ways and Means Committee agenda.
Boat Tax Assessment Ratio – S. 405. S. 405 clarifies that a houseboat which qualifies for a 4 or 6 percent assessment ratio cannot also receive a reduction in the value of the boat pursuant to §12-37-220(B)(38)(b). That section authorizes county council to exempt 42.75 percent of the value of a boat from the property tax. The bill also authorizes county council to make a boat taxable in their county after its presence in this state for a total of 90 days or 180 days. A Finance subcommittee reported the bill out favorably with amendment, but the Finance Committee adjourned debate on the bill.
Tax Notification for a Mobile Home – S. 412. As amended in subcommittee, S. 412 requires a certificate of title to a mobile home to contain a statement advising a purchaser of a mobile home to consult with the appropriate county taxing official to determine if there are back taxes due. The bill also requires a bill of sale for a mobile home to contain a place for the seller to certify, under penalty of perjury, that there are no taxes due on the mobile home. This bill was given a favorable report by the Finance Committee and was briefly taken up on the Senate floor, but carried over because of questions.
HOA Liens Survive a Tax Sale – S. 277. S. 277 as originally drafted would have made a judgment lien obtained by a homeowners' association (HOA) superior to all claims of creditors against the property, if the judgment lien arose from an unsatisfied assessment or other obligation of the property owner to the HOA. A Senate Banking and Insurance subcommittee deleted the original language and amended the legislation to state that a judgment lien obtained by an HOA may not be extinguished by a tax sale. This would mean that a winning bidder could owe an obligation to an HOA after a tax sale deed passes. S. 277 will be before the full Senate Banking and Insurance Committee at its next meeting.

Annexation

Annexation – H. 3774 and H. 3074. The House Judiciary Committee took up two annexation bills this week. H. 3774 prohibits a municipality from requiring a utility customer to agree to be annexed into the city before providing utility services. H. 3074 provides that when a municipality annexes property in a county that has a land use or zoning plan or policy, plan regulation, or ordinance and its density allowance is greater than the county allows, the county density requirement must remain in effect for two years. The Judiciary Committee adjourned debate on both bills.
Annexation – H. 3253. The House Judiciary Special Laws subcommittee announced its intention to take up this annexation bill. This is the same bill which was before the General Assembly last year. Among many things, the bill: requires a plan of services prior to an annexation, an analysis of the annexation’s impact upon road maintenance, a study of land use plan compatibility and grants counties standing to challenge an annexation.

Land Use Items

Surface Water Withdrawal Permits – S. 452. This bill proposes expansion of the current DHEC regulatory system for surface water withdrawals from rivers, lakes and streams by creating a permitting program, which could be funded by application fees. Several counties may be subject to this bill’s proposed permitting system and fees, if they use surface water. Permitting processes, exemptions and restrictions for surface water withdrawers have been proposed in this bill. The bill was passed by a Senate Ag subcommittee this week with an understanding that DNR and DHEC would work out a few remaining details—relating to which of these agencies would deal with re-permitting upon exhaustion of a permittee’s surface water withdrawal contingency plan contained in the bill.
Care of Livestock and Poultry – S. 453. This bill was designed to protect confined feeding operations from local regulation. As passed by the Senate, local zoning was protected and land regulations concerning pig facilities and slaughter houses were unchanged. At the request of the Farm Bureau, the House Agriculture Committee is proposing an amendment to ban future stormwater or sediment control fees on farm lands. The amendment grandfathers current fees. The bill is on the House floor and should be up for debate on Tuesday, April 28. SCAC is opposing the amendment.
Billboards – H. 3814 and S. 166. These bills deal with a pilot project by the Department of Transportation and the Federal Highway Administration to reduce the number of non-conforming billboards along interstates. The program will be limited to I-95 and I-26 and will allow the placement of a new high definition, digital billboard in exchange for the removal of two existing billboards. Local laws concerning signs and billboards will be respected; and according to agreements, a local government will have to sign-off on activity. S. 166 received second reading in the Senate. H. 3814 was given a favorable report by the House Education and Public Works Committee.
Regulation of Forestry Activities – H. 3651 and S. 494. Both bills received action this week and are identical after the adoption of amendments worked out in the Senate Fish, Game and Forestry Committee. SCAC has appeared on both bills. In conversations with counties, we have encountered no negative comments concerning the bills as amended. Amendments have been adopted to protect zoning and developmental regulations. The legislation narrowly pertains to forestry activities on forest lands.
Sex Offender Residences – H. 3087. This bill provides that a local government may not enact an ordinance that either expands or contracts the boundaries of the areas in which a sex offender may or may not reside. SCAC supported amending the bill to allow local governments to further restrict sex offender residency, but it was rejected. The House Judiciary Committee passed the bill out favorably with no amendments, and it is now pending second reading on the House calendar.

Clerk of Court and Register Issues

County Clerk of Court, Auditor and Treasurer Qualifications – H. 3071. This bill proposes qualifications, which do not currently exist in state law, for the office of county clerk of court, auditor and treasurer. As passed by subcommittee, H. 3071 set forth two alternative eligibility requirements for persons holding any of these county offices: 1) a four-year bachelor’s degree, OR 2) at least four years of experience in the areas these offices are responsible for—grandfathering existing officials. SCAC raised concerns about getting pre-clearance from the Department of Justice as required by the Voting Rights Act. This week, the House Judiciary Committee sent H. 3071 back to subcommittee for further study.
Foreclosure Database – H. 3848. This legislation creates a foreclosure database in the Office of the Secretary of State. This electronic database will house statewide foreclosure information—including the address, the name of the transaction agent or mortgagor, and tax map number of the mortgage premises of all foreclosed properties. The legislation requires the clerk of court or register of deeds to enter this foreclosure data in the database, once the database is operational. There is no fiscal impact statement for H. 3848, and there was considerable discussion of moving the database from the Secretary of State’s office and of ways to pay for implementation.

Election Items

Petition Candidates – H. 3746 and S. 590. H. 3746 prohibits a person who voted in a primary from signing a petition for a candidate to run in the general election following that primary. The House Judiciary Committee gave H. 3746 a favorable report, and it is now pending on the House calendar. The Senate subcommittee handling the companion bill, S. 590, did not meet this week.
Early Voting – H. 3608. This bill would establish voting centers to allow voters to vote early outside of their voting precinct. A House Judiciary subcommittee amended the bill by removing a provision that would have allowed same day voter registration and voting. The House Judiciary Committee further amended the bill to limit the number of days for early voting from 15 to 3 days (Thursday, Friday and Saturday) prior to the election date. H. 3608 is pending on the House calendar.

SCAC’s 42nd Annual Conference: July 30–Aug. 2, Hilton Head Marriott

Brochures for SCAC’s 42nd Annual Conference were mailed to all county officials this past Wednesday. Registration is available online. Brochures for the J. Mitchell Graham Memorial Award Competition will be mailed within the next two weeks.

NACo Steering Committee Nominations

Do you want a voice in creating the national legislative policies of the National Association of Counties? Then consider filling out a NACo nomination form to be appointed to one of their 11 steering committees. The nomination process for membership on NACo policy steering committees is underway. As a steering committee member, you are responsible for debating and creating national policies and priorities affecting counties and serve as NACo’s front line in their grassroots efforts.

Committees meet at the NACo legislative and annual conferences and one other time during the year. You will be responsible for your own travel. Please contact Kathy Williams at the SCAC offices, if you would like to receive a nomination form. Completed forms must be received by SCAC no later than Friday, June 12. The nominations will be processed by SCAC and forwarded to NACo for approval by the NACo President after the NACo Annual Conference in July. Appointments will be announced in September.

'Can't Wait to Get Your Friday Report or Missed Your E-mail Version This Week?

The Friday Report is usually available on the web by 3 p.m. on Friday. The Friday Report can also be sent to you directly via e-mail. We also use this e-mail list for Legislative Alerts. If you stop getting the e-mail version of the Friday Report, call us. We may have an old e-mail address that is no longer valid.

Newly-Introduced Legislation

Note: If you would like copies of any of the bills or if you would like to offer comments to the SCAC staff, please call us toll-free at 1-800-922-6081, fax to 1 (803) 252-0379 or send e-mail. You can view or download bills by clicking on the bill number.

House Bills

H. 3890 – Prohibits future outdoor advertising sign construction within 2,500 feet of a cemetery or structure, site or district that has been identified as having historical or landmark significance.

H. 3902 – Allows sheriffs to increase their fees for certain services, and deletes the provision of the law that allows a sheriff or sheriff’s deputy to charge the same amount as a constable for the service or execution of papers issued by a magistrate.

H. 3903 – Authorizes the Department of Motor Vehicles to issue “I Support Libraries” special license plates.

H. 3919 – Establishes the South Carolina Housing Commission.

H. 3921 – Requires a person swearing out a warrant for presentment of a fraudulent check to also obtain a fingerprint exemplar from the person presenting the check as prima facie evidence of the identity of the person presenting the check.

H. 3924 – Provides that no property owner may be held liable for damages caused by the resulting smoke of a prescribed fire, unless gross negligence is proven.

H. 3940 – Provides an additional “state ‘on’ indicator” for purposes of unemployment benefits.

H. 3943 – Authorizes public officers to participate in the lottery.

H. 3947 – Enacts the “21^st Century Government Efficiency Act.”

H. 3948 – Incorporates legal immigrants and illegal immigrants in the definition of employee for purposes of workers’ compensation.

H. 3952 – Provides for a six-month moratorium on the foreclosure and accrual of interest for residential real estate in this state.

H. 3953 – Allows a state tax credit for employers hiring an unemployed individual who is receiving unemployment compensation benefits.

H. 3954 – Provides a procedure by which certain county offices and the governing body of a county may be elected in non-partisan elections.

H. 3957 – Provides that where an oyster factory is located on a navigable river, DHEC is authorized to use qualified county personnel in the county where the river is located to assist in monitoring water quality and other environmental standards.

H. 3963 – Provides that the local school match must be referred to as the “Index of Support” until the Twenty-First Century Foundation Program is implemented, and that new funds appropriated to education must be used to fully fund the program and pupil weightings beginning in 2010.

H. 3966 – Requires the assessment ratio for a principal residence to remain at 4 percent until the end of the calendar year following the year in which the homeowner vacates the property and is attempting to sell it.

H. 3967 – Clarifies the circumstances under which a subpoena may be issued while investigating a crime to obtain records of certain entities that issue credit cards and provide other services.

Senate Bills

S. 725 – Enacts the “Temporary Emergency Act for Corrections.”

S. 726 – Authorizes the Department of Probation, Pardon, and Parole Services to implement early parole termination, if funds are lacking to operate the parole system.

S. 728 – Revises tax credits under the Textiles Communities Revitalization Act.

S. 729 – Authorizes the General Assembly to meet after the adjournment date of June 4, 2009 for such matters as taking up gubernatorial vetoes or completing the budget.

S. 735 – Authorizes a county to reduce its support of a state mandated program to a percentage equal to the percentage reduction in Aid to Subdivision for that county.

S. 736 – Prohibits a person’s name from appearing on a ballot for a seat in the General Assembly unless they have filed and paid all income taxes, satisfied all judgments, liens, and any penalties for failure to pay taxes for the last 10 years.

S. 737 – Prohibits a person’s name from appearing on a ballot for a state or county elected office unless they have filed and paid all income taxes, satisfied all judgments, liens, and any penalties for failure to pay taxes for the last 10 years.

S. 738 – Provides that the Governor cannot appoint a person to a board or office unless the person has filed and paid all required federal and state income tax returns, judgments, liens, or other penalties for failure to pay taxes when due during the previous 10 years.

S. 745 – Authorizes the Department of Motor Vehicles to issue “I Support Libraries” special license plates.

S. 748 – Provides that a public or privately-owned water utility operating within a five-mile radius of a landfill shall supply a water line and provide water to the landfill.

Issue 14-09 — April 17, 2009

The House was on furlough this week, but will be back next week. The Senate was in session and spent most of its time in Finance Committee working to put a budget together. It is anticipated that the full Senate will begin work on the budget next Wednesday.

Local Government Fund Cut by $50 Million: Senate Finance Chooses
to Raise Property Taxes, Reduce Key Government Services, and
Layoff County Employees to Balance Budget — H. 3581

The Senate Finance Committee reported H. 3581 last night that allows the General Assembly to reduce the Local Government Fund in the budget. They also passed a budget which reflects a $50 million cut to the Local Government Fund.

Neither the House nor the Senate allowed public testimony for H. 3581, so local governments have had no opportunity to express the devastating consequences of the committee’s action. The Finance Committee did not take a recorded vote on H. 3581. Sen. Yancey McGill expressed his desire at full committee to find funds to replenish the fund.

Counties should not be required to sustain this cut, which amounts to a "double dip" taking of local government dollars, to balance the state budget. Please contact your Senators this weekend. Ask that they object to consideration of H. 3581 and that they vote to defeat the bill when and if it is brought forward!

Ask your Senators to personally object to H. 3581 when it appears on the calendar for consideration. This is our LAST, BEST HOPE to stop this bill.

The points to be made include:

The LGF will drop significantly in next year’s budget under the statutory formula, reflecting the drop in the state general fund occurring this year. The state general fund is expected to be about $1.2 billion less than the previous year. This equates to a roughly $50 million drop in the LGF under the statutory formula.
Show the Senators what amount of cut the county receives as a result of the House budget from the attached sheet.
Explain the impact of the $50 million LGF cut in terms of the total property tax millage increase necessary to offset the cut and in terms of what impact solely using budget cuts would be. The attached sheet shows the distribution of the cut and millage increase necessary to offset the cut. Not all counties have the option to completely offset the cut through the millage rate, because the rate caps have no exception for the LGF cut.
Explain the impact of the House LGF cut in terms of basic service reduction to the citizens. Only you can tell the Senators what the potential service impact would be in your county after the county budget is impacted by the LGF cut. Many areas of spending are subject to minimum funding levels in state statutes and budget provisos and cannot be cut.
There is no reduction in the obligations the state places on counties to fund state agencies—including DHEC, DSS, DHHS, indigent defense, circuit court support, magistrate court support, the Department of Probation Pardon and Parole, etc. Some state agencies have already asked for increases in local funding.
Counties still have other mandates—such as maintaining an animal shelter, long-term storage of DNA evidence, the Medically Indigent Assistance Program, long-term public records storage in climate-controlled space, victim services, etc.
Counties will have to pay increases in ordinary expenses such as jail costs, State Health Insurance premiums, workers’ comp premiums, etc.
Let the Senators know how your reserve funds are obligated (tied to outstanding bonds or to avoid tax anticipation notes, etc.) and how little of that reserve is really available to use. Remind them that using reserve funds to pay for recurring expenses led to the reduction of the state’s bond rating, and the same is expected if the county were to use reserve funds to fill a revenue gap.

Other Actions of Interest:

Proviso 47.14: This proviso requires a person applying for a court appointed attorney in a termination of parental rights (TPR), abuse and neglect, or other civil court action to pay a $40 application fee. The clerk of court, or other appropriate official, is required to collect the application fee and remit the proceeds to the Commission on Indigent Defense on a monthly basis. The Finance Committee adopted this proviso.
Proviso 80C.6: This proviso states that a person who is eligible to participate in the state health and dental insurance plans as a council member of a participating county—and who is also eligible to participate as the spouse of a covered employee or retiree—may choose to participate in the insurance plans as either an employee or a spouse, but not both. The Finance Committee adopted this proviso.
Proviso 85.1: This proviso, which provides for the salary supplements for clerks of court, probate judges, coroners, sheriffs, register of deed, auditors and treasurers was amended to provide that a county can reduce the expenditures in the operation of these officials' offices—after consultation with the officers—without any required corresponding reduction in the county's state Aid to Subdivisions distribution. Currently, §8-15-65 states: "To the extent that compensation for these officers is reduced by a county or there is any other reduction of expenditures in the operations of their offices, a corresponding reduction must be made in the distribution otherwise due the county pursuant to Chapter 27 of Title 6, the State Aid to Subdivisions Act." (Emphasis added.) The proviso is intended to allow county council the ability to reduce expenditures in these offices for a one-year period. This proviso was also amended to exempt the salary supplements for clerks of court, probate judges, sheriffs, register of deeds, coroners, auditors and treasurers from across-the-board cuts mandated by the Budget and Control Board or General Assembly. The Finance committee adopted this proviso.
Proviso 86.2: States that for FY 2009-10, counties of this state may transfer funds among appropriated state revenues as needed to ensure the delivery of services. It appears that this proviso is authorizing county council to spend earmarked money appropriated by the state as if that money were unencumbered. This House-passed proviso was deleted by the Finance Committee.
Proviso 86.3: This proviso amends the quarterly distribution amounts for the Local Government Fund. The amount of the first quarterly distribution for each entity shall equal the amount of the last quarterly distribution for FY 2008-09. The next three will be distributed in equal amounts, reflecting any reduction in the Aid to Subdivisions allocation. This proviso is intended to help reduce the necessity of tax anticipation notes by ensuring a predictable amount of revenue in the first quarter of the fiscal year. The Finance Committee adopted this proviso.
Proviso 89.72: This proviso authorizes the State Office of Victim Assistance (SOVA) to perform programmatic reviews for any entity which receives victim assistance money—primarily fine assessments—to ensure that victim fine money is spent in accordance with the statute. The Finance Committee adopted this proviso.
Proviso 89.111: Senate Finance did not adopt this House-passed proviso, which prohibits any new applications to enter the TERI program as of July 1, 2009. It is likely, however, that this proviso will be reintroduced on the Senate floor.

Assessable Transfers of Interest (ATI)/Point of Sale — H. 3272 and S. 435

H. 3272 has not passed the House, but will certainly receive third reading when they return next week. S. 435 is still in a Senate Finance subcommittee, and it appears likely to be scheduled for another hearing shortly. SCAC has been working to contact Senators to explain the consequences of these bills. Continued contact with your Senator is advisable. The Senate Finance subcommittee members are Sens. Tom Alexander, chairman; Dick Elliott; Danny Verdin and Nikki Setzler.

Land Use Items

Surface Water Withdrawal Permits – S. 452. This bill proposes expansion of the current DHEC regulatory system for surface water withdrawals from rivers, lakes and streams by creating a permitting program that may be funded by application fees. Several counties may be surface water withdrawers and, therefore, subject to this bill’s proposed permitting system. Permitting processes, exemptions and restrictions for surface water withdrawers have been proposed in this bill. S. 452 was carried over in a Senate Ag subcommittee this week due to disagreement among industry, DNR, and other interests over permitting standards—such as determination of minimum stream flow requirements. However, there is still interest in moving this bill forward. We need any input you may have on S. 452 as soon as possible. The Senate Ag subcommittee is scheduled to meet again next week. The subcommittee members are Sens. Verdin, chairman; Campbell; Knotts; Bright; Leventis; Campsen; Davis; Hutto; Sheheen and Mulvaney.
Regulation of Forestry Activities – S. 494. This bill will be before the full Fish, Game and Forestry Committee next week with a proposed amendment. The amendment would define development, forest land and forest activities. It would restrict a local government from enforcing an ordinance, rule, regulation, resolution or permit related to forestry activities on forest land. Some of the activities impacted would include harvesting, controlled burning, fertilizing and forest road construction. The amendment protects local regulation of development, ordinances necessary to comply with federal or state law (stormwater run-off, etc.), planning, permitting and zoning. This bill may impact forestry or tree ordinances in 10 counties. We have not received any comments on S. 494.
Planning Decision School Input – S. 249. The Senate Judiciary Committee tabled S. 249 this week. S. 249 would have required the planning commission to get input from school district officials for proposed residential developments larger than 25 acres or those with a density greater than the average in the district.

Jail Records and Expungement — H. 3022

A Senate Judiciary subcommittee gave a favorable report to H. 3022, which deals with expungement of criminal records. H. 3022 was amended with a provision to allow local detention facilities to retain medical records of inmates for three years after an expungement order. The records must be kept under seal and opened only upon a court order for litigation purposes. H. 3022 will be before the Senate Judiciary Committee at its next meeting.

Elections Items

Petition Candidates – S. 590. This bill prohibits a person who voted in a primary from signing a petition for a candidate to run in the general election following that primary. A Senate Judiciary subcommittee listened to testimony, but took no action on the bill. It appears that the bill will be amended to address the process of verifying voters who sign a petition.
No Excuse Voting – S. 252. This bill authorizes no excuse, early voting. A Senate Judiciary subcommittee took testimony, but no vote on this bill. While it appears that the consensus favors early voting, the details on how to implement the process are still being worked out with several amendments pending. One concern is cost.
Ballots – S. 334. S. 334 is a catchall election bill that among other things provides that a candidate’s name may only appear once on the ballot for the same office. Like S. 252, S. 334 also contains a provision for no excuse, early voting. For the same reasons, the Senate Judiciary subcommittee listened to testimony, but took no action on this bill.
Photo Voter ID – H. 3418. This bill requires a voter to produce a valid state or federal photo ID card in order to vote. After much testimony, a Senate Judiciary subcommittee took no vote on this bill in order to gather data on the amount of voters that would be affected by it.

Registration Details for SCAC's Annual Conference — July 30–Aug. 2, 2009

View conference flyer

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Newly-Introduced Legislation

Senate Bills

S. 692 – Extends the deadline date requiring solicitors to implement a traffic education program from July 1, 2009 to July 1, 2010.

S. 699 – Enacts the “Financial Accountability Act” to require counties to have annual financial audits and provide copies of these audits to the State Treasurer.

S. 706 – Allows counties to invest in obligations of a corporation, state or political subdivision denominated in U.S. dollars, if the obligations bear an investment grade rating of at least two nationally-recognized rating services.

S. 710 – Enacts the “Federal Educational Tax-Credit Bond Implementation Act.”

S. 717 – Provides a sales and property tax exemption for a facility owned by a tax exempt organization investing at least $20 million over three years in the facility for researching the impact of natural hazards such as wind and earthquakes upon buildings in this state.

S. 718 – Authorizes magistrates to order restitution in an amount not to exceed the civil jurisdictional amount for magistrates court.

S. 720 – Provides that all unemployed, insured workers must participate in a drug screening program to maintain eligibility for unemployment benefits.

S. 722 – Requires a person publicly elected to an office to serve at least 50 percent of the term, before he/she is eligible to offer for another elected office.

S. 723 – Eliminates the exception to the prohibition of the use of campaign funds for one office to further the candidacy of the same person for a different office.

Issue 13-09 — April 10, 2009

The House is on furlough next week, but the Senate will be back in full swing.

State Budget Work: Local Government Fund Remains in Peril — H. 3581

Given the situation with the Governor on federal stimulus funds, the Senate Finance Committee is preparing to write the state budget without including any stimulus funds. There will be a second, or supplemental, budget bill containing appropriations of stimulus funds. If agreement is reached on the use of the stimulus funds, the funding of the items in the supplemental budget would then take place. At this time, there is no word about the Local Government Fund (LGF) as to which of these budgets the funding for the LGF would be placed in or at what level. Contacting the Governor to remind him of the importance of the LGF to local services would be appropriate. The Governor’s Office telephone number is (803) 734-2100. Also, there has been no word on scheduling H. 3581 for a hearing or action by Senate Finance Committee. Keeping in touch with the members of the Senate on the status of the LGF would also be advisable.

Governor's Executive Order Regarding Stimulus Spending

Executive Order 2009-03 and a letter from the Governor are attached. In that order, Gov. Sanford has created a task force to be chaired by the Comptroller General "to coordinate efforts among state and local government entities to maintain transparency, accountability, and consistency with the [federal stimulus act] in the spending of funds." The Governor has ordered "all State and local governmental entities that apply for, receive, or otherwise administer programs receiving funds from the [federal stimulus act] to provide the Task Force with such documents as it deems necessary to ensure that stimulus funds are expended, awarded, or otherwise distributed prudently, ethically, efficiently, and consistent with state and federal law." Please review both documents. If you have questions or concerns regarding this order, the Governor’s office contacts are Jeff Schilz, Policy Director and Staff Attorney, at (803) 734-5225 and Bob Frisina at (803) 734-5223.

Assessable Transfers of Interest (ATI)/Point of Sale — H. 3272 and S. 435

H. 3272 has not yet passed the House, but will certainly receive third reading when they return. S. 435 is still in a Senate Finance subcommittee, and it appears likely to be scheduled for another hearing shortly. SCAC has been working to contact senators to explain the consequences of these bills. Continued contact with your senator is advisable. The Senate Finance subcommittee members are Sens. Tom Alexander, chairman; Dick Elliott; Danny Verdin and Nikki Setzler.

Land Use Items

Surface Water Withdrawal Permits – S. 452. This bill proposes a DHEC regulatory system for surface water withdrawals from rivers, lakes and streams. Several counties would be subject to this bill’s proposed permitting system. Permitting processes, exemptions and restrictions have been proposed in the bill. A Senate Ag subcommittee has now turned its attention toward a possible fee structure for permits to withdraw surface water to fund the proposed system. The subcommittee asked that DHEC meet with interested parties, including counties, to make recommendations regarding a possible fee structure. There is interest in moving this bill forward as quickly as possible, so we need any input you may have on this soon. A Senate Ag subcommittee is scheduled to meet Tuesday, April 14, at 9 a.m. in Room 308 of the Gressette Senate Office Building. The subcommittee members are Sens. Verdin, chairman; Campbell; Knotts; Bright; Leventis; Campsen; Davis; Hutto; Sheheen and Mulvaney.
Regulation of Forestry Activities – S. 494. This bill received a favorable report, with proposed amendments, before a Fish, Game and Forestry subcommittee. SCAC met with committee staff and the proponents of the bill and worked out some amendments. Because of this meeting, the bill is better than it was; but, it still contains language that could nullify the enforcement of ordinances in 10 counties as they impact forestry activities. SCAC went on record in opposition, because of the possible impact upon ordinances. The proposed amendment is still being crafted, but it will not grandfather existing ordinances.

DOR Tax Items – H. 3722

H. 3722 mainly contains technical cleanup provisions to the state tax code. Few of the provisions in the original bill related to county taxation. The House amended the bill on the floor to include some provisions of interest to county government. These include:

Section 34 adds §12-37-220(51) to exempt from property taxes all property used in the operation of a facility with a capital investment of $20 million or more at a single site that is owned by a tax exempt organization—when the facility is principally used for researching and testing the impact of natural hazards upon building materials.
Section 35 authorizes counties to postpone the implementation of a countywide reassessment for an additional year beyond the delay authorized in §12-43-217.
Section 37 amends §12-37-220(B)(33) to exempt from property taxes all personal property—including aircraft—owned by a company with two or more specially equipped planes that are used for the transportation of specialized cargo. Because "specially equipped," and "specialized cargo" are not defined, this section has a potentially huge fiscal impact.
Section 38 adds §4-1-180 to authorize counties to designate a portion or all of a multi-county business park for extraordinary commercial facilities. "Extraordinary commercial facilities" that would qualify under this section would be commercial facilities—including facilities for the retail sale of goods—which make a new capital investment of at least $100 million within the designated economic development site, create at least 1,000 new jobs, and have total sales tax receipts at a rate of $6 million dollars each year.

Moody’s Investors Service Places Negative Outlook
on Municipal Bonds Nationwide

This week, Moody’s issued a Special Comment announcing that all bonds issued by counties, cities, school districts and special districts nationwide are assigned a negative outlook for the next year to 18 months, due to national economic and credit conditions. In the publication, they cite four credit rating factors of particular concern: market volatility; industrial sectors at particular risk; volatile and declining revenue sources; and expenditures that are legally mandated for the time period of the negative outlook. If your county is considering the issue of bonds during the next two years, it would be worth consulting your bond counsel or ratings analyst early in the process to see how this ratings outlook might affect your entity’s credit rating and borrowing costs.

Chief Justice Toal’s Memo Regarding New Court Creation

Justice Toal has issued a memo regarding the creation of new local courts. In the memo, she states that creation of local courts is in violation of both articles V and VIII of the South Carolina Constitution. Further, she states that local ordinance violations are to be heard and disposed of in magistrates courts.

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Issue 12-09 — April 3, 2009

The House is on furlough the next two weeks; and the Senate is in recess next week, although there may be some Senate subcommittee meetings. Needless to say, the Governor’s decision to request stimulus money—or not—has been about the only focus of the Senate this week.

State Budget Work: Local Government Fund Remains in Peril — H. 3581

The Senate Finance Committee discussed budget plans, assuming that the Governor does not accept the stimulus package this week. This exercise required them to cut roughly $350 million from their budget. Although no formal action was taken, the committee suggested that the bulk of the cut would be in K-12, higher education and health services, because those are the segments of the budget which got most of the stimulus money. It has been stated by many senators that if the Governor refuses the stimulus, then the Senate will look to the Local Government Fund (LGF) as a mechanism to fund these priorities. Rumors have been rampant with talk of "zeroing" out the LGF, a $125 million cut, the same cuts as the House passed or even less than the House cut. It is important to stay in touch with the members of the Senate about the LGF, and let the SCAC staff know any information you hear from senators. The personal visits and calls made by county officials this week were a big help on this issue. Thanks for your extra effort.

H. 3581 suspends the LGF statutory provision, which allowed the LGF to be cut $50 million in the House version of the budget. If H. 3581 can be stopped in the Senate, then the LGF must be funded at the statutory formula rate. If the Senate passes H. 3581, the amount of the LGF cut could grow at any time, and it will be much easier to suspend the formula in future years.

Assessable Transfers of Interest (ATI)/Point of Sale — H. 3272 and S. 435

H. 3272 – The House gave second reading to H. 3272 after substantial debate. The bil cannot be sent to the Senate, until it receives third reading when the House returns on Tuesday, April 21.

The House rewrote H. 3272 on the floor. The rewritten bill delays the recognition of an ATI until the year of reassessment implementation and limits the increase in the taxable value of the property to the previous owner’s capped tax value plus 15 percent—although the language of the rewritten bill is less than clear. For example: A house with a capped tax value of $100,000 is sold for $200,000 in 2010. The new owner is then taxed on a value of $100,000 until the implementation of the next reassessment. At reassessment, the tax value becomes $200,000 plus any increase due to reassessment since the ATI (capped at 15 percent) for a maximum value of $230,000. The rollback millage calculation would then wash out any revenue increase which might be received.

H. 3272, as given second reading, undoes the policy decision made by the voters in the constitutional changes of Act 388. The constitution adopted a "tax me on the value I paid for the property, not unrealized gains" policy. The ATI valuation in the constitution protects current residents and owners from a shift of the property tax burden allowing revenue growth through the ATI mechanism’s growth in tax base valuations, instead of relying solely on increases in millage to grow revenue. The bottom line effect of H. 3272 is to be a reverse impact fee—shifting the burden of property taxes to existing homeowners.

A second effect of H. 3272 is to put new investment in new homes and commercial property at a disadvantage when compared to existing homes and commercial properties that get the benefit of previous owner’s capped tax value until the next reassessment—which can be up to five years. This is because newly-constructed homes, apartment complexes and commercial properties would be taxed on 100 percent of their fair market value, while a purchaser of existing structures would be taxed on the previous owner’s capped value.

View Roll Call Vote #1

View Roll Call Vote #2

S. 435 – There were no further subcommittee meetings on S. 435 this week.

Clerk of Court, Auditor and Treasurer Qualifications — H. 3071

H. 3071 proposes qualification requirements for the offices of clerk of court, auditor and treasurer. The bill originally set forth two alternative eligibility requirements for persons holding any of these county offices: 1) a four-year, bachelor’s degree OR 2) at least ten years of experience in the areas these offices are responsible for. This bill passed a House Judiciary subcommittee with an amendment to reduce the experience criteria to four years and "grandfather" current office holders. SCAC raised concerns about this bill having trouble getting pre-clearance by the U.S. Department of Justice, as required by the U.S. Voting Rights Act. H. 3071 will be before the House Judiciary Committee at its next meeting.

Finance and Revenue Items

Local Option Tourism Development Fee – S. 483. This bill would allow a county or a municipality in that county that collects at least $14 million in state accommodations tax revenues (currently, this is only Horry) to impose a one percent sales tax to be used for tourism promotion, property tax rollback and capital projects promoting tourism. S. 483 has been enrolled for ratification.
Spec Homes Tax Exemption – H. 3018. This bill would exempt the value of a home built, but not sold, for up to three years. The House gave H. 3018 third reading, and it is now in the Senate.
Accommodations and Hospitality Tax Bonds – S. 304. S. 304 puts specific language in the code to allow the pledge of local accommodations and hospitality tax revenue for bonds. This is a more economical way to use the funds for construction borrowing to build tourist facilities. This bill was recalled from Ways and Means Committee and placed on the House calendar; however, after some debate on the House floor, the bill was recommitted to the Ways and Means Committee.
DOR Tax Items – H. 3722. This bill contains a number of miscellaneous tax items. Several floor amendments added economic development incentive tweaks related to aircraft, an environmental hazards lab and a provision to allow counties to delay implementation of reassessment. A copy of the bill will be sent out for review.

Elections Items

Referendum Dates – H. 3579. This bill originally established quarterly election dates for conducting referenda or other ballot questions. H. 3579 was amended to require all bond referenda or ballot questions to be held on the first Tuesday following the first Monday in November in a year. The House gave third reading to H. 3579, and it is now in the Senate.
Poll Managers – H. 3464. H. 3464 would allow poll managers to work outside of their resident county as long as they are otherwise qualified. The House Judiciary Committee amended the bill to authorize college students to work as poll managers outside of their resident county, as long as they are registered to vote. H. 3464 received third reading in the House and is pending before the Senate Judiciary Committee.
Petition Candidates – H. 3746 and S. 590. H. 3746 prohibits a person who voted in a primary from signing a petition for a candidate to run in the general election following that primary. H. 3746 was on the House Judiciary Committee agenda, but the committee did not meet this week. The companion bill, S. 590, is pending before a Senate Judiciary subcommittee which took testimony, but did not take any action on the bill due to time constraints.
No Excuse Voting – S. 252. This bill authorizes no excuse early voting. A Senate Judiciary subcommittee took testimony but no vote on this bill, due to time constraints.
Ballots – S. 334. H. 334 is a catchall election bill that, among other things, provides that a candidate’s name may only appear once on the ballot for the same office. A Senate Judiciary subcommittee took testimony but no vote on this bill, due to time constraints.
Photo Voter ID – H. 3418. This bill requires a voter to produce a valid state or federal photo ID card in order to vote. A Senate Judiciary subcommittee took no action on this bill, due to time restraints.
Early Voting – H. 3608. This bill would establish voting centers to allow voters to vote early outside of their voting precinct. The committee amended the bill by removing a provision that would have allowed same day voter registration and voting. H. 3608 was on the House Judiciary Committee agenda this week, but the committee did not meet.

Land Use and Nuisance Items

Regulation of Forestry Activities – S. 494. This bill received a favorable report, with proposed amendments, before a Fish Game and Forestry subcommittee. SCAC met with committee staff and proponents of the bill on Tuesday to work out some amendments. Because of this meeting, the bill is better than it was, but it still contains language that could nullify the enforcement of ordinances in 10 counties as they impact forestry activities. SCAC went on record as opposition, because of the possible impact on ordinances. The proposed amendment is still being crafted, but it will not grandfather existing ordinances.
Landfill Moratorium – S. 324. This bill has passed the Senate with an amendment. The effect of the amendment is to allow the permitting processes to continue for existing landfills, but stop permits from being issued for large, proposed "mega" landfills. The bill also contains language that would allow Williamsburg County (which is under a consent order to close its existing landfill) to open a replacement facility. The moratorium is for two years or until new regulations are promulgated dealing with tonnage limits.
Adhesion Contracts – H. 3774. This bill prohibits annexation in exchange for utility service provisions in city water contracts. This legislation was reported favorably by a House Judiciary subcommittee.
Annexation Land Use – H. 3074. When an annexation occurs and the County has a land use plan that calls for a lower density use, the municipality must not reclassify to greater density for two years. This bill was reported favorably by a House Judiciary subcommittee with a proposed amendment changing five years to two years.
Surface Water Withdrawal Permits – S. 452. This bill proposes a DHEC regulatory system for surface water withdrawals from rivers, lakes and streams. Several counties would be subject to the bill’s proposed permitting system. Permitting processes, exemptions and restrictions have been proposed in the bill, but a Senate Ag subcommittee has now turned its attention toward possible fee structuring in order to fund this proposed system. The subcommittee has asked that DHEC meet with interested parties, including counties, in order to make recommendations regarding a possible fee structure. There seems to be quite a bit of interest in seeing this bill reach the Senate floor as quickly as possible, so we need any input you may have on this soon.
Sex Offender Residences – H. 3087. This bill provides that a local government may not enact an ordinance that either expands or contracts the boundaries of the areas in which a sex offender may or may not reside. SCAC supported amending the bill to allow local governments to further restrict sex offender residency. A House Judiciary subcommittee passed the bill out favorably with no amendments, and it will be before the House Judiciary Committee at its next meeting.

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Newly-Introduced Legislation

House Bills

H. 3816 – Authorizes counties to issue traffic warning citations that carry a fine of not more than $80, and that 90 percent of the fine may be retained by the county.

H. 3828 – Enacts the “Community Schools Investment Act.”

H. 3829 – Provides that a person receiving public assistance must submit to certain random drug tests.

H. 3831 – Exempts a landlord from certain written notice requirements, if the tenant is evicted for failing to pay rent or incurring damages exceeding the amount of the security deposit.

H. 3832 – Provides that a magistrate who is a licensed attorney in this state must be paid a base salary equal to 55 percent of a circuit court judge’s salary for the state’s immediately previous fiscal year.

H. 3833 – Amends the constitution to provide procedures for recalling and removing a person holding a statewide-elected constitutional office.

H. 3834 – Prohibits a county from declaring a business a public nuisance, if the county does not allow off-duty law enforcement officers to be hired by private entities to provide security services.

H. 3836 – Prohibits a county by ordinance from using no more than half of the revenues from the local hospitality tax on transportation needs.

H. 3838 – Provides a property tax exemption for owner-occupied residential property for property tax year 2009, in an amount equal to 15 percent of the fair market value of the property.

H. 3839 – Enacts the “Municipal Finance Oversight Act of 2009.”

H. 3840 – Revises certain provisions of the S.C. Code of Laws pertaining to tax matters.

H. 3844 – Provides that the Probate Judge in a county shall have absolute control over their office—including budgeted funds, employee classifications, compensation and promotions.

H. 3845 – Increases the time from which a person can make a motion for a new trial in magistrate court from five days to 10 days.

H. 3847 – Allows a tenant to make a utility payment for a landlord and deduct this amount from the tenant’s next rent payment.

H. 3853 – Creates a middle court system.

H. 3854 – Amends certain provisions of the S.C. Code of Laws pertaining to tax matters.

H. 3856 – Excludes public infrastructure projects from the limitations on disposition of Heritage Trust property.

H. 3858 – Prohibits a school district from discriminating against a student based upon religious viewpoint.

H. 3859 – Adopts the “Agreement Among the States to Elect the President by National Popular Vote.”

H. 3862 – Enacts the “South Carolina Inclusionary Zoning Act.”

H. 3864 – Enacts the “Innocence Protection Act.”

H. 3865 – Provides that an employee may be granted a specified amount of additional paid leave each year for attending certain elementary and secondary school conferences and activities.

H. 3870 – Enacts the “South Carolina Entrepreneurial Success Fund Act.”

H. 3878 – Establishes a joint study committee on the consolidation of state agencies.

H. 3884 – Provides that certain statements made during a custodial interrogation must be video recorded.

H. 3885 – Allows counties to designate all or a portion of a multi-county park as a “Designated Economic Development Site” for extraordinary commercial facilities.

H. 3887 – Provides that a school district with an average daily membership of 6,500 students or less may enter certain financing agreements through Dec. 31, 2012.

Senate Bills

S. 635 – Provides for the circumstances when a loan to a candidate is considered a contribution.

S. 642 – Provides that a person under the age of 18 may not use a cell phone while operating a motor vehicle.

S. 644 – Authorizes the Court of Appeals to hear appeals directly from Probate Court.

S. 651 – Provides that a person owning a time share interest must be given the opportunity for a period of at least seven consecutive days to reserve and use the facility during his unit week.

S. 652 – Requires professional fundraising counsel, solicitors and commercial venturers to maintain lists of donors from campaigns and solicitations conducted by the solicitor.

S. 654 – Establishes a separate clerk of court and register of deeds for Lancaster County.

S. 658 – Enacts the “South Carolina Fiscal Accountability Act.”

S. 660 – Increases the waiting time from one to five years before a person leaving a public office can serve as a lobbyist.

S. 668 – Establishes Christmas Eve as a legal state holiday.

S. 674 – Establishes the “Seventy-Two Hour Budget Rule.”

S. 681 – Provides that the director of the state optional retirement program shall designate no more than two companies to provide annuity contracts, mutual fund accounts or similar investment products.

Ratification of Acts

The following bills have been passed by both chambers and are now before the Governor for signature or veto:

(R. 7) S. 432. Extends the time of existence for the Sentencing Reform Commission from June 1, 2009, to Feb. 1, 2010.

(R. 11) S. 483. Enacts the “Local Option Tourism Development Fee Act.”

(R. 15) H. 3463. Deletes the provisions under current law requiring electronic traffic tickets to be printed in specific colors.

South Carolina Association of Counties

In This Section

Friday Reports — April 2009