​General Assembly Actions Impact Small Business

The Aiken Chamber works daily to help build and diversify the economy, aid the profitability of our members, and represent members’ interests in governmental and legislative issues.
 
We know that decisions made at the State House directly impact the Aiken business community. At the conclusion of the 122nd South Carolina General Assembly we asked members of the Aiken Legislative Delegation to provide a short update on the issues affecting small business.

Sen. Tom Young, Jr. (R) 
District 24
PO Box 651
Aiken, SC 29802
(803) 649-0000
TomYoung@scsenate.gov
​1. Base Load Review Act Reform and Rate Relief:  The biggest issue the General Assembly faced this session involved the fallout from the failed V.C. Summer Nuclear Project.  On June 27, the General Assembly repealed the Base Load Review Act for any future utility projects; enacted new ratepayer protections; and created the state consumer advocate to work on behalf of the public as to utility issues.  Legislation also clarifies what the Public Service Commission must consider when determining whether a regulated utility has acted with caution, care, and diligence.  Finally, the General Assembly enacted a nearly 85% temporary rate reduction as to the portion of electric bills that SCE&G customers pay monthly toward the failed V.C. Summer project.
 
2. Workforce Development:  One of the greatest challenges facing our state and others is preparing the workforce necessary to meet the needs of business and industry in a variety of fields from complex manufacturing to high tech service sector operations.  The General Assembly provided funding for critical needs workforce training in high demand science and technology jobs; for equipment to train additional workers; and for certain workforce scholarships and grants.  Also, the prescription drug and opioid crisis directly affects our workforce and many businesses.  The General Assembly passed several bills this session aimed at combatting the opioid epidemic.
 
3. Regulatory Relief:   Earlier this year, a local small business owner shared with me the problems and penalties she encountered with an antiquated law and accompanying regulation requiring all businesses – regardless of size -- to have a written vacation policy on file with the S.C. Department of Employment & Workforce.  When I inquired more about it, I learned that most small businesses, many larger ones, and State Chamber of Commerce representatives were not aware of the requirement.  I filed S.1027 to change state law so that the vacation policy filing requirements do not apply to any business in this state with less than 50 employees.  The legislation passed on the last day of the regular session and was enacted as of May 17. 
​Sen. Nikki G. Setzler (D)
​District 26
PO Box 6036
West Columbia, SC 29169
(803) 796-1285
NikkiSetzler@scsenate.gov
1. Tax Conformity - S.1258, H.5341 have been introduced  
While South Carolinians will benefit from an estimated $1.6 billion of federal income tax cuts, according to RFA, if SC “fully conforms” to the TCJA, state income taxes would increase by $204 million (net), with ordinary individual taxpayers actually facing a $246 million tax hike.  

S.1258, The South Carolina Taxpayer Protection and Relief Act, as proposed, adopts several new business friendly provisions, including the increased “expensing limits” enacted by the TCJA, which increases the current limit to $1 million, and increases the phase-out threshold to $2.5 million, as well as adopts taxpayer friendly provisions related to small business accounting. It also decouples from the new federal 20% deduction for creation pass through income but preserves the state’s already advantageous tax treatment of pass through businesses. This saves these businesses almost $250 million. 

While legislation was filed this session, it has yet to be considered by the Senate Finance Committee. The General Assembly will have to take a very close look at state individual and corporate income taxes this upcoming session so that we treat SC taxpayers in a fair manner without imposing a disproportionate burden on a particular sector of taxpayer.  


2. SCE&G Nuclear Legislation- S954 and H4375 
I continued to represent the interests of small businesses by serving as chairman of the conference committee that worked on S. 954 and H. 4375.  These two bills relate to the legislature’s efforts to assist the ratepayers with respect to SCE&G’s failed efforts to construct two new nuclear reactors.  The bills are key in ensuring that SCE&G is forced to be accountable to their ratepayers for the unfair charges they continue to collect for utility generation that will never be realized.

The General Assembly overrode Governor McMaster’s veto of H4375, which temporarily cut SCE&G’s electric rates by 15 percent.  It is estimated that this will save the utility's customers $260 million on their power bills through the end of the year. The temporary rate cut remains in effect until the Public Service Commission's December ruling. Another key component of this legislation is that it creates a state consumer advocate's office to fight for ratepayers against utility rate hikes. Plus this bill repeals the Base Load Review Act.

3. Budget- H4950 
According to a recent report by ReadyNation and MissionReady, 62 percent of South Carolina’s jobs in 2020 will require postsecondary education of some kind, while only 55 percent of South Carolinians will have that required level of education. This critical skills gap needs to be addressed and career and technical education provides an excellent opportunity for advanced education that aligns with the needs of South Carolina’s workforce. 

Because of the necessity to address this skills gap, I’ve continued to support funding the ReadySC program through the budget. I also supported appropriating $11 million to fund high demand job skill training equipment. 
Rep. Bart T. Blackwell (R) 
District 81
PO Box 6658
Aiken, SC 29804
(803) 648-1826
bartblackwell@schouse.gov

1. The most significant legislative issue during the 122nd Session of the South Carolina General Assembly, affecting businesses large and small, has been the General Assembly’s response to the failed nuclear reactor project at V.C. Summer.  Within weeks of the project’s termination in 2017, the South Carolina House formed the House Utility Rate Payer Protection Committee (HURPC) on which I served. 

Our investigation of this disaster resulted in six significant pieces of legislation designed to repeal the Base Load Review Act (BLRA), restructure the Office of Regulatory Staff (ORS), reform the Public Service Commission (PSC), establish a consumer advocate for utility issues, and to provide rate relief to the individual and business ratepayer. After considerable legislative effort, to include an override of the Governor’s veto, Act 258 became law incorporating all of the above reforms and establishing an interim 15% reduction in utility rates.

2. House bill 3653 (Act 132), relating to nuisance suits filed against manufacturing and industrial operations, became law with the Governor’s signature this past February.  This important business protection prohibits landowners from alleging a manufacturing or industrial facility, or expansion of such a facility, is a public or private nuisance provided the facility commenced operations before the landowner alleging the nuisance acquired, moved onto, or improved the affected property.  As absurd as it may seem, some businesses have been subjected to legal action by property owners who moved near an existing operation and then later filed action claiming this facility to be a nuisance.  

3. Another important business protection, sponsored by Senator Shane Massey, became law in April of 2017.  Senate bill 218 (Act 3) prohibits a political subdivision (city, county, school district, etc.) from mandating that an employer operating within that subdivision offer a specific employee benefit.  This is a preemptive measure in response to a trend in certain areas of our country wherein municipalities are requiring local businesses to offer enhanced health, disability, or personal leave benefits. 
Rep. William "Bill" Clyburn (D)
​District 82
​​664 Edrie Street
Aiken, SC 29801
(803) 649-6167
Repclyburn@aol.com
​1. As you know, South Carolina, like all states, is experiencing a crisis of opiod abuse.  These extremely addictive drugs, often given as pain relief, have wreaked havoc.  And when it affects so many people, it affects our workers.  The General Assembly passed significant and comprehensive legislation seeking to stem this crisis: 
  • A seven-day supply limitation on initial prescriptions of an opiod medication for acute pain management or postoperative pain management
  • Drug courts have access to prescription monitoring program information
  • Requirements that must be met before prescribing opiod analgesics to minors 
  • Opiod abuse education in public secondary schools 
  • Tamper-resistant prescription pads
  • State prescription monitoring program system to provide prescription report cards to health care practitioners who prescribe controlled substances to inform them about their prescribing trends compared to other practitioners.
2. SURETY BONDS FOR GENERAL AND MECHANICAL LICENSURE APPLICANTS (H. 4612). Rather than providing financial statements showing a minimum net worth, this legislation affords applicants for general and mechanical licensure the option of satisfying financial requirements by providing a surety bond in an amount of two times the required net worth for the applicant's license group. The surety bond option is offered as a means of accommodating those who operate under an employee option stock program arrangement which makes it difficult to satisfy minimum asset requirements. I supported the passage of this bill.

3. The General Assembly passed but the Governor VETOED S. 1043, revising and extending tax incentives available for the REVITALIZATION OF ABANDONED BUILDINGS and textile mill sites. I supported the passage of this bill.

4. Also, the General Assembly passed legislation authorizing the state's Technical Colleges to offer an APPLIED BACCALAUREATE IN MANUFACTURING DEGREE if the degree is approved first by the Board for Technical and Comprehensive Education and then the Commission on Higher Education. I supported the passage of this bill.
Rep. William "Bill" Hixon (R)
District 83
PO Box 7927
North Augusta, SC 29861
(803) 279-8855
​bill@hixonco.com
I am continuing to work diligently on the SC House Agriculture, Natural Resources, and Environmental Affairs Committee as well as the House Committee on Legislative Oversight. Both committees are handling a lot of important issues. Our House Oversight Committee is reviewing the operations, procedures, workload, reputation, customer service skills, and a host of other operational issues for every state agency. As a small business owner, how our state agencies assist our citizens remains foremost in my mind at all times. 

The General Assembly continues to be confronted with many important issues each session. I continue to work across party lines so that the important issues to all South Carolinians can be addressed in a helpful way.  To me, the three pieces of legislation that benefit small business owners that come to mind are summarized below.

We have passed rate relief for all electric utility customers, 
protected manufacturing and industrial sites from being labelled nuisances so that they can get the work done that needs doing instead of having to defend frivolous lawsuits or complaints, 
and have better protected business owners from defective construction projects by allowing general contractors to post surety bonds before they can get their licenses to do contracting work.
​
Of course, we always have more work to do in the General Assembly. I always enjoy my conversations with business owners and citizens in Aiken and Edgefield counties.  I am happy to hear from them about how I can best be of additional assistance to them.

Here are summaries of the three Acts I have mentioned above:
Act 258 is legislation REDUCING MONTHLY CHARGES TO SCE&G CUSTOMERS and REPEALING THE BASE LOAD REVIEW ACT GOING FORWARD.  The bill enables new electricity rates for customers of SCANA Corporation’s South Carolina Electric and Gas which effectively  reduce SCE&G customer bills by 15% of the increases that had previously been imposed in recent years under the Base Load Review Act to finance the failed V.C. Summer nuclear power project in Fairfield County.  The legislation repeals provisions of the Base Load Review Act prospectively so that utilities would no longer be able to make use of the provisions of this legislation to finance the construction of power generation projects with fees imposed on the electric bills of ratepayers.  The repeal does not apply to pending legal matters.  Existing disputes about the application of the Base Load Review Act will continue to be settled through administrative decisions of the Public Service Commission and judicial rulings from the courts.  The legislation includes new definitions that provide detail on what constitutes imprudent actions of utilities under the Base Load Review Act. It also sets up operations of a consumer advocate to intervene on behalf of utility customers.

Act 132 imposes LIMITATIONS ON NUISANCE CLAIMS AGAINST MANUFACTURING AND INDUSTRIAL PLANTS.  Addressing situations where urban growth has prompted residential development to expand into previously outlying areas where established industrial facilities have been operating, this Act imposes limitations on nuisance claims limiting nearby residents from bringing frivolous actions against pre-existing industrial, manufacturing, transportation, and warehousing facilities that are complying with environmental permits and are lawfully operating.  Affording legal protections like those already provided for agricultural operations, the legislation codifies the common law doctrine of ‘coming to the nuisance’ as a means of protecting economic development.

Act 217 authorizes SURETY BONDS FOR GENERAL AND MECHANICAL LICENSURE APPLICANTS.  Rather than requiring financial statements from general contractor and mechanical license applicants showing a minimum net worth, this legislation affords them the option of satisfying financial requirements by providing a surety bond in an amount of two times the required net worth for that applicant’s licensing group.  The surety bond option is offered as a means of accommodating those who operate under an employee option stock program arrangement which makes it difficult to satisfy minimum asset requirements.
Rep. Ronald "Ronnie" Young (R) 
220  Deerwood Drive
North Augusta, SC 29841
(803) 593-4745
​ronnieyoung@schouse.gov
​As of May 10, the legislature concluded its regular session as defined by the state constitution. I have worked diligently to fulfill my promises to streamline state government, balance the budget, and protect utility ratepayers, among many other priorities. However, there is still work to be done. The House and the Senate through conference committees have negotiated final outcomes for a budget agreement, federal conformity of the state tax code, and reforms to protect electric utility ratepayers.
H.4977 – Governor and Lieutenant Governor Restructuring, formalizes the 2012 voter-approved constitutional amendment that ends the practice of electing the governor and lieutenant governor separately. This year, 2018, will be the first year in which the party nominees for governor will select a lieutenant governor candidate as a running mate. This was passed by the House and Senate and signed by the governor.
H.4375 – Ratepayer Protection, drops the 18% nuclear surcharge on SCE&G customers’ bills to 0% while giving direction to the Public Service Commission to keep rates as low as possible moving forward. The legislation also halts the implementation of the Base Load Review Act and guarantees that no future projects can recover costs under the law abused by SCE&G.  This went to a Senate/House Conference Committee that negotiated the rate at 3.9% rather than 0%.
Regarding opioid abuse prevention, we have addressed several issues that will help monitor this situation even better; such as, H.3819 – Prescription Requirements for Minors, which establishes requirements related to prescribing opioid analgesics to minors; H.3822, Controlled Substance Schedules, which adds Code Commissioner for Controlled Substance Scheduling Update; H.3826 – Tamper Proof Prescription Pads that requires written prescriptions to be written on tamper-resistant prescription pads that meet the counterfeit-resistant standards required by the Centers for Medicare and Medicaid Services for prescriptions.
​
Rep. Bill Taylor (R)
District 86
PO Box 2646
Aiken, SC 29802
(803) 270-2012
BillTaylor@schouse.gov
​1. Unquestionably, the single biggest issue the legislature dealt with this year has been the response of the nuclear financial meltdown caused by the shutdown of construction on the V.C. Summers nuclear reactors. Electric ratepayers of SCE&G have been paying billions of dollars to fund that ill-fated construction project. The House of Representatives took the lead in investigating the fiasco and passing a series of bills that would provide rate relief to both businesses and residential users. Thankfully, on the last day of June House-Senate conferees hammered out comprehensive legislation that temporarily cuts SCE&G's electric rates by 15-percent. That saves utility's customers some $260 million on their power bills through the end of the year. The comprehensive legislation included a number of critical elements: 
Repeals most of the Base Load Review Act (that's a HUGE step forward!)
  • Reforms the Public Service Commission and the Office of Regulatory Staff (ORS)
  • Creates a consumer advocate for ratepayers 
  • Allows for long term rate relief by defining the terms of "prudent" and "imprudent" (critical legal terms going forward)
  • Gives ORS the tools needed to access confidential documents of utilities and subpoena powers
  • Eliminates the July 12, 2018 deadline whereby the PSC must make a decision on the SCANA-Dominion merger giving the PSC time for a thorough review
  • Establishes a new timeline for the PSC to make a decision by December 21, 2018
2. As a member of the House Tax Reform Committee, I have continued to advocate for substantial tax reform to provide relief for small and large businesses. Property taxes place an outrageously high burden on businesses. The goal is a tax system that is fairer and flatter. Talking about tax reform is easy; accomplishing it is difficult because of the complex web of interrelated taxation and the many special interests who work to save their tax advantage. As we move forward in 2019, I hope small business owners will take time to help us push for true tax reform in South Carolina.
 
3. One bill that can be helpful to small businesses is H.4628, The Telephone Privacy Protection Act. Signed into law in May by Gov. McMaster, this legislation helps level the playing field for small businesses by placing better restriction on telephone solicitors and marketers who spoof numbers and try to mislead consumers through fraudulent phone techniques. This has become a prevalent technique by some national firms.