Friday Report - September 18, 2020
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Revenue, Finance, and Economic Development
The Senate and House met on Tuesday and Wednesday pursuant to the Sine Die Resolution. They both held perfunctory sessions on Thursday, but will return next Tuesday. The items of interest to county governments are discussed below.
1. The Budget Bill and Local Government Fund
The Senate adopted the Finance Committee’s amendment to H. 5201, the Appropriations Bill.
H. 5201 authorizes an additional $100 million to state and local governments in Phase II of the CARES Act authorizations. It also continues funding state government at the level provided for in the earlier Continuing Resolution (Act 135 of 2020, H. 3411) until June 30, 2021. While the majority of the state will continue to operate at the levels of funding from the previous fiscal year, the Senate plan would appropriate $11,687,035 to the Local Government Fund. This is full funding of the Local Government Fund per the new statutory formula. Please thank your Senators for supporting this budget plan for the remainder of FY 2020-21.
The Senate budget plan would also make the following relevant one-time appropriations:
$70,000,000 - Department of Administration: COVID-19 Response Reserve Account
$4,159,050 - State Election Commission: Poll Worker Stipend. The State Election Commission would distribute these funds within 10 days of the effective date of the Act to county election commissions to fund the one-time, supplemental $175 stipend for each poll manager or clerk serving for the November 2020 General Election. The Revenue and Fiscal Affairs Office would determine the amount to be provided to each county election office. After accounting for the additional stipend, a county election commission may use any surplus to purchase PPE, cover costs associated with absentee voting, and towards safety of statewide elections. Any unexpended funds must be returned to the State Election Commission.
$20,000,000 - Statewide Employee Benefits: State Employee COVID-19 Hazard Pay Bonus. To qualify for the bonus, a state employee must have:
a) been in a direct line position that provided direct services to the public or customers during the pandemic;
b) physically reported to the workplace all or most of the working days during the pandemic between March 19, 2020, until the start of Phase 2 of the Re-Entry Plan for State Employees on July 6, 2020;
c) continuous state service from March 1, 2020 through September 1, 2020;
d) been an active employee as of September 1, 2020 and on the date of distribution of the bonus; and
e) an annual salary of $50,000 or less as of September 1, 2020.
$17,888,242 - Department of Mental Health: Veterans Nursing Home Construction
In addition, the budget plan would extend the provisos contained in Act 135 of 2020 and also include the following relevant provisos:
Furloughed Employee Retirement: Participating employers in the SCRS or PORS that are not state agencies implementing furlough programs on or after March 1, 2020, may make any employee and employer contributions necessary to ensure that a furloughed employee’s retirement benefits were not interrupted as a result of the furlough.
PEBA COVID-19 Return to Work Extension: For FY 20-21, the earnings limitation imposed pursuant to Section 9-1-1790 and Section 9-11-90 does not apply to retired members of the SCRS or PORS who return to covered employment to participate in the state’s public health preparedness and response to COVID-19.
PEBA State Health Plan: Employer and subscriber premiums for Plan Year 2021 shall remain the same as in Plan Year 2020.Copayments for participants shall remain the same in Plan Year 2021 as in Plan Year 2020.
First Responder COVID-19 PTSD Treatment:
- $250,000 to the Department of Labor, Licensing and Regulation, State Fire Marshal’s Office for first responder PTSD treatment. LLR would distribute the funds to the SC Firefighter Assistance Support Team to reimburse firefighters and emergency medical technicians who incur mental injury as a result of a critical incident during the scope of employment for actual out-of-pocket expenses not covered through workers’ compensation claims and or insurance.
- $250,000 to SLED for first responder PTSD treatment. The funds would disburse through the SC Law Enforcement Assistance Program to reimburse law enforcement officers who incur mental injury as a result of a critical incident during the scope of employment for actual out-of-pocket expenses not covered through workers’ compensation claims and or insurance.
Office of Regulatory Staff: Establish the Office of Broadband as a program within the agency to receive federal and state funds, provide grant oversight, and broadband mapping and planning.
Unemployment Trust Fund. The funds allocated to the Department of Employment and Workforce for the Unemployment Trust Fund from the CARES Act Coronavirus Relief Fund shall be utilized to offset the unexpected losses to the Unemployment Trust Fund between March 1, 2020, and December 30, 2020, resulting from the pandemic and to set the total effective rates for 2021 rate classes at the same total effective rates as 2020 rate classes.
One Percent (1%) Increase to Employer Contribution to SCRS and PORS: Remains suspended for all of FY 2020-21.
The Senate further amended H. 5201 by amending Provisos dealing with the membership of the Coordinating Council for Economic Development, and the flowage rights and easements of the New Savannah Bluff Lock and Dam. They also amended a Proviso that would require all colleges, universities, and technical colleges to report the active number of COVID-19 cases on campus and the cumulative number of cases on their website with weekly updates. Finally, the bill earmarks $5,000,000 of the $10,000,000 to the Department of Parks, Recreation, and Tourism to support recovery through the Emerging Destination Marketing Program and the Undiscovered SC Program with $50,000 going to each of the eleven regional tourism offices.
Any provisions contained in Act 91 of 2019 (the Appropriations Act) or Act 135 of 2020 (the Continuing Resolution) that are in conflict with the Senate budget amendment would be suspended. H. 5201 as amended was given third reading and returned to the House. Please ask your House members to include full local government funding in any appropriations bill they consider.
H. 3210 now appears to be the vehicle for Phase II of the CARES Act authorizations. Phase II includes expenditures incurred or expected to be incurred between July 1, 2020 and December 30, 2020. The Senate version of the bill does the following:
- State and local governments and independent colleges and universities: $115,000,000
- Unemployment Trust Fund: $420,000,000
- DHEC – Statewide COVID-19 Testing and Monitoring: $73,022,613
- MUSC – Statewide COVID-19: $20,150,000
- Non-profit Relief Programs – Grants: $20,000,000
- Minority Business Relief Grants: $20,000,000
The Senate version would require counties to submit applications for reimbursement on or before November 15, 2020. It also would expressly require counties to coordinate expenditure reimbursements through, and in consultation with, the Department of Administration and the grant manager by submitting information “sufficient to identify other COVID-19 related funding that they are receiving, regardless of the source, and provide a detailed accounting of how the funding is being used.” Additionally, the Senate version provides that for FY 2020-21, the earning limitation does not apply to SCRS or SCPORS participants who return to covered employment in response to COVID-19.
- State and local governments and independent colleges and universities: $130,000,000
- Unemployment Trust Fund: $450,000,000
- DHEC – Statewide COVID-19 Testing and Monitoring: $73,022,613
- MUSC – Statewide COVID-19: $20,150,000
- Non-profit Relief Programs – Grants: $25,000,000
- Small and Minority Business Relief Grants: $50,000,000
The House version requires counties to apply for reimbursements in the same manner as described in Act 142. Both versions allow the Executive Budget Office to provide any leftover funds to county governments based on a priority list. The House insisted on the House amendments and appointed Reps. Murrell Smith, Clyburn, and Finlay to the conference committee. The Senate in turn appointed Sens. Alexander, Sheheen, and Davis. The conference committee will likely announce a meeting schedule next week.
3. Other Bills of Interest
Absentee Ballots – H. 5305. As amended by the Senate, H. 5305 allows a person to use COVID-19 as an excuse to vote by absentee ballot in the 2020 general election. Completed applications for absentee ballots must be received by the county board of elections and voter registration before 5:00 p.m. on Saturday, October 24, 2020, if submitted by mail; 5:00 p.m. on Friday, October 30, 2020, if submitted in-person, or by a voter’s authorized representative; or 5:00 p.m. on Monday, November 2, 2020, for a voter who appears in-person to vote absentee at the county office of elections and voter registration. If a voter is admitted to a hospital as an emergency patient from Friday, October 30, 2020, through Tuesday, November 3, 2020, an immediate family member may obtain an application for absentee ballot on Election Day, complete it, deliver it to the patient to vote, and then personally carry it back to the county office. County offices must allow for in-office absentee voting beginning on October 5, 2020.
In addition, H. 5305 allows county boards of election and registration to begin the process of examining the return-addressed envelopes at 7:00 a.m. on Sunday, November 1, 2020. They can then begin tabulating absentee ballots on Tuesday, November 3, 2020, at 7:00 a.m. However, the results of the absentee ballot tabulation must not be publicly reported until after the polls are closed. The Election Commission is charged with establishing an aggressive voter education program regarding these provisions. The provisions of H. 5305 will only apply to the 2020 general election. The House concurred in the Senate amendments and the Governor has signed the bill into law.
Property Assessment — S. 545. This bill originally required the Department of Revenue to follow certain North American classification system manual provisions. It also repealed a provision relating to the appraisal and assessment of personal property of businesses under the jurisdiction of the county auditor, which SCAC opposes. A compromise amendment at the request of SCAC was adopted to create a form, with input from all interested parties, that would be consistent with the state form that the Department of Revenue utilizes. Currently, the form utilized by each county varies. This agreement preserves the auditor’s authority to assess this property, an SCAC policy position. The House further amended the bill to ensure that businesses receiving loans under the Paycheck Protection Program (PPP loans) would have the loans excluded from gross income for state income tax purposes as well as mirror state deductions with any allowable federal deductions of expenses associated with the forgiven PPP loans. S.545 is pending third reading on the House calendar.
Nursing Home Resident 4 Percent Assessment – S. 207. S. 207 allows a person who is receiving the four percent owner-occupied assessment ratio and becomes a patient of a nursing home or community residential care facility to retain the four percent assessment ratio while they are a patient of the facility. The person must intend on returning to their home and may not rent the home out for more than 72 days in any calendar year.
On the House floor, an amendment was offered to provide a property tax exemption for all property of nonprofit housing corporations or instrumentalities of these corporations, including leasehold interests in and improvements to the property, as long as the property is devoted to providing housing to low income or very low income residents; however, the safe harbor provisions of Revenue Procedure 96-32 issued by the IRS must be satisfied to qualify for the exemption. The House adopted the amendment and gave S.207 second reading.
Rollback Taxes – H. 3596. This bill initially reduced the amount of rollback taxes due when agricultural property is changed to another use from five years to one year. Last year, the House amended H. 3596 to reduce rollback taxes from five years to three years. Senate Finance also amended the bill. That amendment encompasses the three-year term as a compromise and clarifies the triggering mechanism(s) for rollback taxes as it appears that the process varies in each county. This week, the Senate made a technical amendment to the bill and gave the bill second and third readings. The bill has been sent back to the House for concurrence or non-concurrence in the Senate amendments.
Farm Structures — H. 4327. This bill as amended by the Senate exempts structures without a commercial kitchen that are used in agritourism activity and accommodate 300 or fewer guests from the latest applicable Building Code requirement of installing a sprinkler system. The Senate gave the bill third reading and H. 4327 has been returned to the House to concur or non-concur in the Senate amendments.