Friday Report - June 3, 2021

The House Ways and Means Committee met this week to take up the budget bill (H. 4100) as amended by the Senate. The Committee made several changes along with some additional provisos that will be discussed below. Pursuant to the Sine Die Resolution (H. 4285), the House will take up the budget bill as amended by the Ways and Means Committee when the General Assembly convenes on June 8th.

As a reminder, the US Department of the Treasury has launched its portal for counties to access their allocation of the Coronavirus State and Local Fiscal Recovery Funds as authorized by the American Rescue Plan. Treasury’s guidance on how these funds may be used is also available on their website. Please note that the first Interim Report for your county is due to Treasury by August 31, 2021. Also, SCAC will be hosting a virtual meeting with representatives from NACo on June 10, 2021 at 2 PM to answer questions you may have about how to access and/or utilize these funds.

H. 4100 – State Budget.

The House Ways and Means Committee gave a favorable report on an updated version of the budget. The Committee made several modifications to the line-item part of the budget but kept the increase in the Local Government Fund (LGF) of $17.92 million statewide. This represents full funding to the LGF including all back funding that was imperiled because of the state operating under a Continuing Resolution in light of the ongoing pandemic. The Committee also kept the library per capita raise in funding from $2 to $2.25, an SCAC policy position. The Committee also included $71.4 million in their version of the budget to cover a 3 percent base pay increase for all state employees.

Other funding of note in the Ways and Means Committee’s budget includes

• $10 million for the Rural County Stabilization Fund (discussed below)
• $15 million for destination specific tourism
• $5 million for tourism advertising
• $3.784 million for the Firefighter Cancer Benefit Plan
• $50 million to County Transportation Committees for road improvement projects
• $8 million to SCDOT for litter pickup
• $500,000 for PTSD treatment for first responders
• $10 million for broadband expansion
• $50 million to the Office of Resiliency for Disaster Relief
• $3.5 million under Rural Infrastructure Authority for a Water and Sewer Regionalization Fund.

Please thank the members of the House Ways and Means Committee for keeping their promise to counties and working to return much needed funding to county government throughout the state.

Provisos Added by the Ways and Means Committee.

113.rcsf – Rural County Stabilization Fund. Due to the recent census and the shifting of population into the state and throughout the state, this year’s LGF distribution will be different than last year’s. As a result, many rural counties who did not see a population growth as high as 5.35 percent would lose a substantial amount of money under the current distribution model. The House Ways and Means Committee recognized this and put $10 million into a Rural County Stabilization Fund in their most recent version of the budget which was passed out of Committee on Wednesday. Under this proviso, any county that has a population growth, as determined by the 2020 Census, of less than 5.35 percent since the 2010 Census shall be eligible to receive monies from the fund as follows:

1. a baseline of $300,000 to each eligible county;
2. an additional $100,000 to eligible counties with a population between 50,000 and
   99,999;
3. an additional $200,000 to eligible counties with a population of more than 100,000.

After disbursal of funds, any monies remaining shall be distributed to each eligible county on a pro rata basis. In the event the amount of funds in the Fund is not sufficient to provide monies to counties according to the above formula, the amounts distributed to counties shall be reduced on a pro rata basis.

34.sfsp – Single Family Structure Permits. This proviso would allow DHEC to issue special permits for the construction of single-family habitable structures seaward of the baseline so long as the structures are new construction on a vacant lot, the neighboring lots are occupied by single-family homes, and no construction takes place on an active beach. The fee for the permit would be $1,500 and no other restriction or limitations on such single-family habitable structures will apply.

34.sp – Solar Projects. This proviso directs DHEC to submit regulations relating to the end-of-life management of solar panels and energy storage batteries on solar projects and to offer guidance on the proper methods for decommissioning solar projects that are in excess of 13 acres. The proviso also requires DHEC to collaborate with stakeholders regarding the solid waste classification, preferred management methods, and necessary infrastructure that may be needed to develop cost-effective means of transporting solar panels and energy storage system batteries for refurbishment, recycling, or disposal.

Before implementing the regulations, DHEC must also determine if financial assurance requirements are necessary for the decommissioning of solar projects in excess of 13 acres and whether manufacturer stewardship programs for the recycling of solar panels and batteries should be established for applications other than utility-scale solar projects. In addition to quarterly reports, DHEC would be required to submit a final report with findings, including stakeholder input, to the Chairman of the Senate Judiciary Committee and the Chairman of the House Labor, Commerce and Industry Committee no later than June 30, 2022.

101.bppa – Veterans’ Base Protection Plan Allocation. This proviso provides that funds appropriated to the Department of Veterans’ Affairs for the Base Protection Plan may be allocated to items including, but not limited to: land acquisition, recreational purposes, educational purposes, and facilities for military personnel. Eligible recipients are counties and municipalities with federal military installations.

108.rsr – Retirement System Review. This proviso directs the Public Employee Benefit Authority to contract with an outside entity to review and evaluate the status of the South Carolina Retirement Systems. Among other things, the review must include an in-depth study of the Retirement Systems Investment Commission’s investment performance, a schedule of potential cash and benefit offers to existing employees, and an estimate of recognized unfunded liability amounts based on these offers.

117.hef – Homestead Exemption Fund. This proviso suspends Section 11-11-156(C) of the Code for Fiscal Year 2021-2022. This Section would require counties to provide an additional exemption credit with monies left over in the Homestead Exemption Fund at the end of a Fiscal Year. By suspending this section, counties will not be required to administer this one-time additional credit.

117.mht – Mental Health Transport. The House Ways and Means Committee appropriated $1 million in their version of the budget to assist in the transportation of mental health patients into custody or admission to a public or private hospital, mental health clinic, or mental health facility. Under the proviso, the Director of the Department of Mental Health (DMH) shall work with the State Fiscal Accountability Authority to develop and issue a Request for Proposals for an Alternative Transportation Program (Program) to provide transportation services for nonviolent individuals requiring immediate hospitalization. The second part of the proviso requires DMH to begin a pilot program and includes the requirements that must be a part of the Program.

118.tc – Abandoned Buildings Tax Credit. For the income tax year that begins in the current fiscal year, rehabilitation expenses made at a property that is located within half a mile of a public university with an enrollment of at least 30,000 students in a business district that has a commercial vacancy rate of at least 10 percent qualify for tax credit provided for in the Abandoned Buildings Revitalization Act. The proviso also lays out other requirements that must be met in order to receive the tax credit and requires the municipality or county in which the building site is located to certify the building site pursuant to Section 12-67-160(A), making appropriate adjustments to such certification to be consistent with the proviso.

63.ssp – School Resource Officers. This proviso moves school resource officers from the South Carolina Department of Education to the Department of Public Safety (DPS) and funds a resource officer for every school. DPS shall provide the funding directly to the local law enforcement agency to pay for the cost of the law enforcement officer that will serve as a full-time school resource officer. Local law enforcement agencies must report the number of full- and part-time school resources officers quarterly.

109.9 – Accommodation Tax. This proviso adds fire safety and emergency medical services to the proviso that allows Horry County to set aside up to one third of the total allocation of accommodation taxes returned to cover policing activities during events held in May and December that significantly increase the burden of law enforcement and other first responders and require additional resources to ensure public safety during those events.

117.ahm – Affordable Housing. This proviso provides that local and state tax collection for handling and construction materials are exempt on an affordable housing development of at least 140 units serving 30 – 80 percent Area Medium Income tenants in an area with at least a 50 percent poverty rate.

113.str – Short-Term Rentals. This proviso prohibits a local government from enacting or enforcing an ordinance that prohibits short-term rentals unless the political subdivision provides financial incentives for the purchase and rental of affordable housing and zoning allowances in exchange for an affordable covenant of at least 20 years. A violation of this proviso would result in a county losing its Local Government Fund distribution.

117.ngcu – Nighttime Golf Cart Use. This proviso provides that a county may adopt an ordinance to allow the operation of golf carts at night on roads that are adjacent to a municipality that has approved nighttime golf cart use.

Other Items of Interest

Call for NACo Policy Steering Committee Nominations

Do you want a voice in creating the national legislative policies of the National Association of Counties (NACo)? Consider filling out the NACo nomination form to be appointed to one of the policy steering committees. As a steering committee member, you are responsible for developing national policies and priorities affecting counties and serve as NACo’s frontline for 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 and conference expenses. To learn more about NACo’s steering committees and legislative development process, visit NACo’s website.

Completed forms must be submitted to SCAC by Friday, June 25. 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 and NACo will contact the committee members directly. If you have any questions regarding the NACo Policy Steering Committee nomination process, please contact Anna Berger with SCAC at 1-800-922-6081 or via aberger@scac.sc.